<PAGE> 1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to ______
<TABLE>
<S> <C> <C> <C>
Commission file number:
Cable TV Fund 12-A, Ltd.: 0-13193 Cable TV Fund 12-B, Ltd.: 0-13807
Cable TV Fund 12-C, Ltd.: 0-13964 Cable TV Fund 12-D, Ltd.: 0-14206
</TABLE>
CABLE TV FUND 12-A, LTD.
CABLE TV FUND 12-B, LTD.
CABLE TV FUND 12-C, LTD.
CABLE TV FUND 12-D, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Cable TV Fund 12-A, Ltd.: 84-0968104
Cable TV Fund 12-B, Ltd.: 84-0969999
Cable TV Fund 12-C, Ltd.: 84-0970000
Colorado Cable TV Fund 12-D, Ltd.: 84-1010423
-------- --------------------------------------------
(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- --------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:None
Securities registered pursuant to Section 12(g) of the Act: Limited
Partnership Interests
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes x No
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE> 2
PART I.
ITEM 1. BUSINESS
THE PARTNERSHIPS. Cable TV Fund 12-A, Ltd. ("Fund 12-A"), Cable TV
Fund 12-B, Ltd. ("Fund 12-B"), Cable TV Fund 12-C, Ltd. ("Fund 12-C"), and
Cable TV Fund 12-D, Ltd. ("Fund 12-D") (collectively, the "Partnerships") are
Colorado limited partnerships that were formed during the public offering of
limited partnership interests in the Cable TV Fund 12 Limited Partnership
Program, which was sponsored by Jones Intercable, Inc., a Colorado corporation
(the "General Partner"). The Partnerships are engaged in the acquisition,
construction, development and operation of cable television systems in five
states. Fund 12-A owns cable television systems serving the areas in and
around Lake County, Orland Park and Park Forest, Illinois (the "Northern
Illinois System") and Ft. Myers, Florida (the "Ft. Myers System"). Fund 12-B
directly owns a cable television system serving Augusta, Georgia (the "Augusta
System"). Fund 12-B, Fund 12-C and Fund 12-D formed a general partnership
known as Cable TV Fund 12-BCD Venture (the "Venture"), in which Fund 12-B owns
a 9 percent interest, Fund 12-C owns a 15 percent interest and Fund 12-D owns a
76 percent interest. The Venture owns the cable television systems serving
Palmdale, Lancaster and Rancho Vista and the military installation of Edwards
Airforce Base, all in California (the "Palmdale/Lancaster System");
Albuquerque, New Mexico (the "Albuquerque System") and Tampa, Florida (the
"Tampa System"). See Item 2. The Northern Illinois System, Ft. Myers System,
Augusta System, Palmdale/Lancaster System, Albuquerque System and Tampa System
may collectively be referred to as the "Systems."
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service,
premium service, pay-per-view programs and packages including several of these
services at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites.
Basic service also usually includes programs originated locally by the system,
which may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or
entertainment nature. FM radio signals are also frequently distributed to
subscribers as part of the basic service.
The Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act") contains new broadcast signal carriage requirements, and
the Federal Communications Commission ("FCC") has adopted regulations
implementing these statutory carriage requirements. These new rules allow
local commercial broadcast television stations either to elect required
carriage ("must carry") status or to require a cable system to negotiate for
"retransmission consent rights." The deadline for the negotiation of
agreements for retransmission consent was October 6, 1993. No broadcast
stations carried on
-2-
<PAGE> 3
Partnership-owned cable television systems that elected retransmission consent
have withheld consent to the retransmission of their signals. However, certain
of these broadcast stations are being carried pursuant to temporary extensions
of retransmission consent authority provided by the stations. Although there
is no assurance that the General Partner will be able to conclude
retransmission negotiations with all of these stations, the General Partner
expects to reach agreements without having to terminate the carriage of any
signal. If a broadcast station currently being carried pursuant to a temporary
extension is dropped and if a significant number of a system's subscribers were
to disconnect their service because of such action, there could be a negative
impact on the system. However, because in most cases only one station in any
market is being carried pursuant to an extension agreement, termination of one
station's carriage would not be expected to have a material adverse effect on
any system.
In most systems, tier services are also offered on an optional basis
to subscribers. Those channels generally include most of the cable networks
such as Entertainment and Sports Programming Network (ESPN), Cable News Network
(CNN), Turner Network Television (TNT), Family Channel, Discovery and others.
The systems also offer a package that includes the basic service channels and
the tier services.
Cable television systems also offer premium services to their
subscribers, which consist of feature films, sporting events and other special
features that are presented without commercial interruption. The cable
television operators buy premium programming from suppliers such as HBO,
Showtime, Cinemax or others at a cost based on the number of subscribers the
cable operator serves. Premium service programming usually is significantly
more expensive than the basic service or tier service programming, and
consequently cable operators price premium service separately when sold to
subscribers.
New cable television services have been introduced as the cable
television industry has developed and increased its penetration level. One
relatively new service currently being marketed by many cable television
operators is pay-per-view programming. Pay-per-view is a service that allows
subscribers to receive single programs, frequently consisting of motion
pictures that have recently completed their theatrical exhibitions and major
sporting events, and to pay for such service on a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. As of September 1,
1993, as a result of the requirements of the 1992 Cable Act, the Systems' rate
structures for cable programming services and equipment were revised. As of
December 31, 1993, the Systems' monthly basic service rates ranged from $7.95
to $14.25 and basic and tier ("basic plus") service rates ranged from $15.00 to
$23.20 for residential subscribers. Charges for additional outlets were
eliminated, and charges for remote controls and converters were "unbundled"
from the programming service rates. The Systems' monthly rates for premium
services range from $2.00 to $11.95 per premium service. In addition, the
Partnerships earn revenues from the Systems' pay-per-view programs and
advertising fees. Related charges may include a nonrecurring installation fee
that ranges from $5.00 to $50.00; however, from time to time the
-3-
<PAGE> 4
Systems have followed the common industry practice of reducing or waiving the
installation fee during promotional periods. Commercial subscribers such as
hotels, motels and hospitals are charged a nonrecurring connection fee that
usually covers the cost of installation. Except under the terms of certain
contracts with commercial subscribers and residential apartment and condominium
complexes, the subscribers are free to discontinue the service at any time
without penalty. For the year ended December 31, 1993, of the total fees
received by the Systems, basic service and tier service fees accounted for
approximately 66% of total revenues, premium service fees accounted for
approximately 16% of total revenues, pay-per-view fees were approximately 2% of
total revenues, advertising fees were approximately 6% of total revenues and
the remaining 10% of total revenues came principally from equipment rentals,
installation fees and program guide sales. The Partnerships are dependent upon
the timely receipt of service fees to provide for maintenance and replacement
of plant and equipment, current operating expenses and other costs of the
Systems.
The Partnerships' business consists of providing cable television
services to a large number of customers, the loss of any one of which would
have no material effect on the Partnerships' business. Each of the Systems has
had some subscribers who later terminated the service. Terminations occur
primarily because people move to another home or to another city. In other
cases, people terminate on a seasonal basis or because they no longer can
afford or are dissatisfied with the service. The amount of past due accounts
in the Systems is not significant. The General Partner's policy with regard to
past due accounts is basically one of disconnecting service before a past due
account becomes material.
The Partnerships do not depend to any material extent on the
availability of raw materials; they carry no significant amounts of inventory
and they have no material backlog of customer orders. The Partnerships have no
employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development
activities relating to the provision of new services but the amount of the
Partnerships' funds expended for such research and development has never been
material.
Compliance with federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment
or otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnerships.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. The Systems' franchises require that franchise fees ranging from
2% of basic revenues to 5% of gross revenues of the cable system be paid to the
governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools be
provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2. for a range of
franchise expiration dates of the Systems.)
-4-
<PAGE> 5
The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the Cable Television Consumer
Protection and Competition Act of 1992 also makes several procedural changes to
the process under which a cable operator seeks to enforce renewal rights. See
Item 1. Regulation and Legislation. Generally, the franchising authority can
decide not to renew a franchise only if it finds that the cable operator has
not substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have
the financial, legal and technical ability to provide the services being
proposed for the future, or has not presented a reasonable proposal for future
service. A final decision of non-renewal by the franchising authority is
appealable in court. The General Partner and its affiliates recently have
experienced lengthy negotiations with some franchising authorities for the
granting of franchise renewals and transfers. Some of the issues involved in
recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of a Partnership to renew a franchise, or lengthy
negotiations or litigation involving the renewal process could have an adverse
impact on the business of a Partnership. The inability of a Partnership to
transfer a franchise could have an adverse impact on the ability of a
Partnership to accomplish its investment objectives.
COMPETITION. The Systems face competition from a variety of
alternative entertainment media, such as: Multichannel Multipoint Distribution
Service ("MMDS"), which is often called a "wireless cable service" and is a
microwave service authorized to transmit television signals and other
communications on a complement of channels, which when combined with
instructional fixed television and other channels, is able to provide a
complement of television signals potentially competitive with cable television
systems; Satellite Master Antenna Television System ("SMATV"), commonly called
a "private" cable television system, which is a system wherein one central
antenna is used to receive signals and deliver them to, for example, an
apartment complex; and Television Receive-Only Earth Stations ("TVRO"), which
are satellite receiving antenna dishes that are used by "backyard users" to
receive satellite delivered programming directly in their homes. Programming
services sell their programming directly to owners of TVROs as well as through
third parties. The competition from MMDS and TVRO potentially diminishes the
pool of subscribers to the Systems because persons who subscribe to MMDS
services or who own backyard satellite dishes are not likely to subscribe to
all of the Systems' cable television services.
In the near future, the Systems will also face competition from direct
satellite to home transmission ("DBS"). DBS can provide to individuals on a
wide-scale basis premium channel services and specialized programming through
the use of high-powered DBS satellites that transmit such programming to a
rooftop or side-mounted antenna. There are currently no DBS operators in the
areas served by the Systems. DBS systems' ability to compete with the cable
television industry will depend on, among other factors, the ability to obtain
access to
-5-
<PAGE> 6
programming and the availability of reception equipment at reasonable prices.
The first DBS satellite was recently launched, and it is anticipated that DBS
services will become available throughout the United States during 1994.
The Systems also face competition from video cassette rental outlets
and movie theaters in the Systems' service areas. The General Partner believes
the preponderance of video cassette recorder ("VCR") ownership in the Systems'
service areas may be a positive rather than a negative factor because
households that have VCRs are attracted to non-commercial programming delivered
by the Systems, such as movies and sporting events on cable television, that
they can tape at their convenience.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an
"overbuild"), with potential loss of revenues to the operator of the original
cable television system. Other than as described below, the Systems currently
face no direct competition from other cable television operators.
Although the Partnerships have not yet encountered competition from a
telephone company entering into the cable television business, the
Partnerships' Systems could potentially face competition from telephone
companies doing so. Bell Atlantic, a regional Bell operating company ("RBOC"),
has announced its intention, if permitted by the courts, to build a cable
television system in Alexandria, Virginia, and has won a lawsuit to obtain such
authority. The case is on appeal. The General Partner currently owns and
manages the cable television system in Alexandria, Virginia. Another RBOC,
Ameritech, has also indicated its intention to build and operate a cable
television system in Naperville, Illinois, a location where the General Partner
manages a system on behalf of one of its managed limited partnerships. Other
RBOCs have indicated their intention to enter the cable television market, and
have filed lawsuits similar to the one being pursued by Bell Atlantic and
Ameritech. Widespread competition through overbuilds by RBOCs could have a
negative impact on companies like the General Partner that are already
established cable television system operators.
COMPETITION FOR SUBSCRIBERS IN THE PARTNERSHIPS' SYSTEMS. Following
is a summary of competition from MMDS, SMATV and TVRO operators in the
Partnerships' franchise areas.
Albuquerque System Two SMATV operators serve approximately
3,190 units in trailer parks and
apartments.
Augusta System Two SMATV operators serve two apartment
complexes; one TVRO dealer principally
operates in areas which are not serviced
by cable.
-6-
<PAGE> 7
Ft. Myers System One MMDS operator provides negligible
competition; five SMATV operators provide
service to motels and an occasional
apartment complex; and twelve TVRO dealers
serve a customer base that is confined
primarily to rural areas.
Northern Illinois System The General Partner is not aware of any
MMDS or TVRO satellite dish dealers in the
system's service area. There are a limited
number of SMATV operators in the system's
service area, but they do not provide
significant competition.
Palmdale/Lancaster System No MMDS operators; numerous SMATV operators
provide some competition in several
apartment complexes, hotels, motels,
trailer parks and two hospitals. There are
numerous TVRO dealers in the service area.
Approximately 2% of the homes in the
service area have TVRO systems.
Tampa System One MMDS operator provides minimal
competition; ten SMATV operators provide
moderate competition; thirty TVRO dealers
provide minimal competition.
REGULATION AND LEGISLATION. The cable television industry is
regulated through a combination of the Federal Communications Commission
("FCC"), some state governments, and most local governments. In addition, the
Copyright Act of 1976 imposes copyright liability on all cable television
systems. Cable television operations are subject to local regulation insofar
as systems operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation effected significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, are subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allows the
FCC to regulate rates for non-basic service tiers other than premium services
in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services and ordered an interim freeze on these rates
effective on April 15, 1993. The rate freeze recently was extended by the FCC
until the earlier of May 15, 1994, or the date on which a cable system's basic
service rate is regulated by a franchising authority. The FCC's
-7-
<PAGE> 8
rate regulations became effective on September 1, 1993. On February 22, 1994,
the FCC announced a revision of its rate regulations which it believes will
generally result in a further reduction of rates for basic and non-basic
services.
The 1992 Cable Act encourages competition with existing cable systems
by allowing municipalities, which are otherwise legally qualified, to own and
operate their own cable systems without having to obtain a franchise; prevents
franchising authorities from granting exclusive franchises; or unreasonably
refusing to award additional franchises covering an existing cable system's
service area. The 1992 Cable Act also makes several procedural changes to the
process under which a cable operator seeks to enforce renewal rights which
could make it easier in some cases for a franchising authority to deny renewal.
The 1992 Cable Act prohibits the common ownership of cable systems and
co-located MMDS or SMATV systems, and absent certain exceptions, the sale or
transfer of ownership of a cable system within 36 months after its acquisition
or initial construction. The 1992 Cable Act also precludes video programmers
affiliated with cable companies from favoring cable operators over competitors
and requires such programmers to sell their programs to other multichannel
video distributors. This provision may limit the ability of cable program
suppliers to offer exclusive programming arrangements with cable companies and
could affect the volume discounts that program suppliers currently offer to the
General Partner in its capacity as a multiple system operator. The 1992 Cable
Act has eliminated the latitude of operators to set rates for commercially
leased access channels and requires that leased access rates be set according
to a formula determined by the FCC.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable television system carry its
signal, or to require the cable television system to negotiate with the station
for "retransmission consent." A cable television system is generally required
to devote up to one-third of its activated channel capacity for the mandatory
carriage of local commercial broadcast television stations, and non-commercial
television stations are also given mandatory carriage rights, although such
stations are not given the option to negotiate retransmission consent for the
carriage of their signals by cable television systems. Additionally, cable
television systems also are required to obtain retransmission consent from all
"distant" commercial television stations (except for commercial
satellite-delivered independent "superstations"), commercial radio stations and
certain low-power television stations carried by cable television systems. See
Item 1. Cable Television Services.
There have been several lawsuits filed by cable television operators
and programmers in Federal court challenging various aspects of the 1992 Cable
Act, including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulation,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutional validity of the mandatory signal carriage requirements of the
1992 Cable Act. That decision has been appealed directly to the United States
Supreme Court. Appeals have
-8-
<PAGE> 9
been filed in the Federal appellate court challenging the validity of the FCC's
retransmission consent rules.
Ownership and Market Structure. The FCC rules and federal law
generally prohibit the direct or indirect common ownership, operation, control
or interest in a cable television system, on the one hand, and a local
television broadcast station whose television signal reaches any portion of the
community served by the cable television system, on the other hand. The FCC
recently lifted its ban on the cross-ownership of cable television systems by
broadcast networks. The FCC revised its regulations to permit broadcast
networks to acquire cable television systems serving up to 10% of the homes
passed in the nation, and up to 50% of the homes passed in a local market.
Neither the Partnerships nor the General Partner has any direct or indirect
ownership, operation, control or interest in a television broadcast station, or
a telephone company, and they are thus presently unaffected by the
cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. This statutory provision has recently been challenged on
constitutional grounds by Bell Atlantic, one of the RBOCs. The court held
that the 1984 Cable Act cross-ownership provision is unconstitutional, and it
issued an order enjoining the United States Justice Department from enforcing
the cross-ownership ban. The National Cable Television Association, an
industry group of which the General Partner is a member, has appealed this
landmark decision, and the case could ultimately be reviewed by the United
States Supreme Court. This federal cross-ownership rule is particularly
important to the cable industry since these telephone companies already own
certain facilities needed for cable television operation, such as poles, ducts
and associated rights-of-way.
The FCC has conducted a comprehensive proceeding examining whether and
under what circumstances telephone companies should be allowed to provide cable
television services, including video programming, to their customers. The FCC
has concluded that under the 1984 Cable Act interexchange carriers (such as
AT&T, which provide long distance services) are not subject to the restrictions
which bar the provision of cable television service by local exchange carriers.
In addition, the FCC concluded that neither a local exchange carrier providing
a video dialtone service nor its programming suppliers leasing the dialtone
service are required to obtain a cable television franchise. This
determination has been appealed. If video dialtone services become widespread
in the future, cable television systems
-9-
<PAGE> 10
could be placed at a competitive disadvantage because cable television systems
are required to obtain local franchises to provide cable television service and
must comply with a variety of obligations under such franchises.
The FCC has tentatively concluded that construction and operation of
technologically advanced, integrated broadband networks by carriers for the
purpose of providing video programming and other services would constitute good
cause for waiver of the cable/telephone cross-ownership prohibitions. In July
1989, the FCC granted a California telephone company a waiver of the cross-
ownership restrictions based on a showing of "good cause," but the FCC's
decision was reversed on appeal, and as a result of this decision, the FCC may
be required to follow a stricter policy in granting such waivers in the future.
As part of the same proceeding, the FCC recommended that Congress
amend the 1984 Cable Act to allow Local Exchange Carriers ("LECs") to provide
their own video programming services over their facilities. The FCC recently
decided to loosen ownership and affiliation restrictions currently applicable
to telephone companies, and has proposed to increase the numerical limit on the
population of areas qualifying as "rural" and in which LECs can provide cable
service without a FCC waiver.
Legislation is pending in Congress which would permit the LECs to
provide cable television service within their own operating areas conditioned
on establishing separate video programming affiliates. The legislation would
generally prohibit, however, telephone companies from acquiring cable systems
within their own operating areas. The legislation would also enable cable
television companies and others, subject to regulatory safeguards, to offer
telephone services by eliminating state and local barriers to entry.
ITEM 2. PROPERTIES
The cable television systems owned at December 31, 1993 by the
Partnerships are described below.
-10-
<PAGE> 11
<TABLE>
<CAPTION>
FUND SYSTEM ACQUISITION DATE
---- ------ ----------------
<S> <C> <C>
Cable TV Fund 12-A, Ltd. Northern Illinois System May 1985
Ft. Myers System May 1985
Cable TV Fund 12-B, Ltd. Augusta System August 1985
Cable TV Fund 12-B, Ltd., Cable TV Palmdale/Lancaster System April 1986
Fund 12-C, Ltd. and Cable TV Fund Albuquerque System August 1986
12-D, Ltd. own a 9%, 15% and 76% Tampa System December 1986
interest, respectively, through
their general partner interest in
Cable TV Fund 12-BCD Venture
</TABLE>
The following tables set forth (i) the monthly basic plus service
rates charged to subscribers, (ii) the number of basic subscribers and pay
units, (iii) the number of homes passed by cable plant, (iv) the miles of cable
plant and (v) the range of franchise expiration dates for the cable television
systems owned and operated by the Partnerships. The monthly basic plus service
rates set forth herein represent, with respect to systems with multiple
headends, the basic plus service rate charged to the majority of the
subscribers within the system. While the charge for basic plus service may
have increased in some cases as a result of the FCC's rate regulations, overall
revenues to the Partnerships may have decreased due to the elimination of
charges for additional outlets and certain equipment. In cable television
systems, basic subscribers can subscribe to more than one pay TV service.
Thus, the total number of pay services subscribed to by basic subscribers are
called pay units. Figures for numbers of subscribers, miles of cable plant and
homes passed are compiled from the General Partner's records and may be subject
to adjustments.
<TABLE>
<CAPTION>
At December 31,
---------------
LAKE COUNTY, ILLINOIS 1993 1992 1991
---------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $22.13 $21.95 $19.95
Basic subscribers 15,216 14,179 13,267
Pay units 12,091 11,900 12,097
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 21,869 and 300, respectively. Franchise expiration dates range from
March 1996 to June 2001.
-11-
<PAGE> 12
<TABLE>
<CAPTION>
At December 31,
---------------
ORLAND PARK, ILLINOIS 1993 1992 1991
---------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $22.51 $21.95 $19.95
Basic subscribers 11,395 10,592 9,929
Pay units 9,598 10,612 9,204
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 16,751 and 262, respectively. Franchise expiration date is August
1994. The renewal of this franchise is currently being negotiated.
<TABLE>
<CAPTION>
At December 31,
---------------
PARK FOREST, ILLINOIS 1993 1992 1991
---------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $22.51 $21.95 $19.95
Basic subscribers 5,480 5,494 5,375
Pay units 5,407 6,197 5,413
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 9,182 and 81, respectively. Franchise expiration date is November
1995.
<TABLE>
<CAPTION>
At December 31,
---------------
FT. MYERS, FLORIDA 1993 1992 1991
------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $19.52 $17.95 $17.00
Basic subscribers 35,284 34,997 34,465
Pay units 22,303 23,273 18,952
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 64,507 and 664, respectively. Franchise expiration dates range from
December 1999 to January 2002.
<TABLE>
<CAPTION>
At December 31,
---------------
AUGUSTA, GEORGIA 1993 1992 1991
----------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $21.77 $19.95 $17.95
Basic subscribers 64,173 62,730 60,428
Pay units 50,847 52,965 50,648
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 100,100 and 1,602, respectively. Franchise expiration dates range
from December 1998 to October 2003.
<TABLE>
<CAPTION>
At December 31,
---------------
PALMDALE/LANCASTER, CALIFORNIA 1993 1992 1991
------------------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $21.77 $20.00 $19.25
Basic subscribers 56,372 53,947 53,323
Pay units 39,928 38,753 33,825
</TABLE>
-12-
<PAGE> 13
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 85,768 and 937, respectively. Franchise expiration dates range from
September 1994 to October 2005. Any franchises expiring in 1994 are in the
process of franchise renewal negotiations.
<TABLE>
<CAPTION>
At December 31,
---------------
ALBUQUERQUE, NEW MEXICO 1993 1992 1991
------------------------ ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $21.00 $20.00 $18.95
Basic subscribers 98,555 92,916 91,266
Pay units 67,462 62,919 63,819
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 200,500 and 2,202, respectively. Franchise expiration dates range
from January 1999 to August 2001.
<TABLE>
<CAPTION>
At December 31,
---------------
TAMPA, FLORIDA 1993 1992 1991
--------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $21.63 $19.25 $19.25
Basic subscribers 58,145 58,711 57,315
Pay units 47,771 45,419 42,717
</TABLE>
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 127,800 and 1,093, respectively. The Tampa franchise expires in
December 1997. The City of Tampa has notified the Venture of its belief that
the Venture is not in compliance with certain provisions of the franchise
agreement. Specifically, the City has claimed that the Venture is not in
compliance with local origination programming requirements, institutional
network requirements, and other facilities, equipment and service obligations
under the franchise. The Venture has responded to the claim with a detailed
demonstration that many of the City's claims are erroneous and that the
remaining unmet obligations should be modified. The City of Tampa and the
Venture have reached an agreement in principle with respect to the settlement
of the franchise dispute. A definitive settlement agreement is in the process
of being negotiated.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates
of the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics (AMC), Arts &
Entertainment (ARTS), Black Entertainment Network (BET), C-SPAN, The Discovery
Channel (DISC), Lifetime (LIFE), Entertainment Sports Network (ESPN), Home
Shopping Network (HSN), Mind Extension University (MEU), Music Television
(MTV), Nickelodeon (NICK), Turner Network Television (TNT), The Nashville
Network (TNN), Video Hits One (VH-1), and superstations WOR, WGN and
-13-
<PAGE> 14
TBS. The Partnerships' Systems also provide a selection, which varies by
system, of premium channel programming (e.g., Bravo (BRVO), Cinemax (CMAX), The
Disney Channel (DISN), Encore (ENC), Home Box Office (HBO), Showtime (SHOW) and
The Movie Channel (TMC)).
ITEM 3. LEGAL PROCEEDINGS
On July 15, 1992, the General Partner received a Civil Investigative
Demand (the "CID") from the Department of Justice ("DOJ") in connection with
an investigation to determine whether there is or has been a violation of
Section 2 of the Sherman Act as a consequence of the General Partner's alleged
refusal to carry a television broadcast station on cable television systems.
The interrogatories and document requests included in the CID request
information relating to systems owned or managed by the General Partner in
Los Angeles County, and elsewhere, including the Palmdale/Lancaster System
owned by the Venture. Specific reference is made in the CID to KHIZ,
Channel 64. The General Partner has responded to a variety of requests for
information and documents from the DOJ but has had no communication from the
DOJ since March 1992.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
While the Partnerships are all publicly held, there is no public
market for the limited partnership interests and it is not expected that a
market will develop in the future. As of March 1, 1994, the approximate number
of equity security holders was:
<TABLE>
<CAPTION>
FUND NUMBER OF RECORD HOLDERS
---- ------------------------
<S> <C>
Fund 12-A 7,905
Fund 12-B 8,100
Fund 12-C 3,625
Fund 12-D 18,295
</TABLE>
-14-
<PAGE> 15
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------------------------------------
Cable TV Fund 12-A 1993 1992 1991 1990 1989
- ------------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $28,963,726 $26,693,028 $24,322,600 $21,610,617 $19,097,703
Depreciation and Amortization 7,840,193 7,528,805 9,042,280 8,051,904 8,527,441
Operating Income (Loss) 1,196,824 514,394 (1,263,012) 181,347 (1,789,762)
Net Loss (409,726) (1,583,447) (3,898,842) (3,450,329) (5,682,387)
Net Loss per Limited
Partnership Unit (3.90) (15.07) (37.11) (32.84) (54.09)
Weighted average number of
Limited Partnership Units
outstanding 104,000 104,000 104,000 104,000 104,000
General Partner's Deficit (367,208) (363,111) (347,277) (308,289) (273,786)
Limited Partners' Capital 8,397,258 8,802,887 10,370,500 14,230,354 17,646,180
Total Assets 39,297,990 43,071,609 45,479,809 49,842,381 52,914,889
Debt 29,724,530 32,813,067 34,291,172 33,768,635 33,090,297
General Partner Advances 220,722 261,348 - 375,488 97,831
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------------------------------------------------------
Cable TV Fund 12-BCD 1993 1992 1991 1990 1989
- -------------------- -------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 89,131,530 $ 83,567,527 $78,049,505 $69,945,109 $ 60,262,644
Depreciation & Amortization 25,651,237 26,764,820 30,793,053 29,972,282 29,281,471
Operating Income (Loss) 900,949 (1,087,963) (4,930,588) (6,260,721) (13,113,663)
Net Loss (11,584,416) (14,884,365) (17,828,600) (21,459,885) (27,867,230)
General Partners' Capital
(Deficit) (5,729,509) 5,854,907 20,739,272 38,567,872 60,027,757
Total Assets 169,670,552 175,554,620 185,834,366 196,991,456 200,723,865
Debt 167,698,697 160,440,488 156,131,618 151,051,428 132,143,756
Jones Intercable, Inc. Advances 188,430 511,646 4,606,840 1,228,418 722,843
</TABLE>
** The above financial information represents the consolidated operations
of Cable TV Fund 12-BCD Venture, in which Cable TV Fund 12-D has an
approximate 76 percent equity interest.
16
<PAGE> 17
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CABLE TV FUND 12-A
Results of Operations
1993 Compared to 1992 -
Revenues of Fund 12-A increased $2,270,698, or approximately 9
percent, from $26,693,028 in 1992 to $28,963,726 in 1993. During 1993, Fund
12-A added approximately 1,923 basic subscribers, an increase of 3 percent.
This increase in basic subscribers accounted for approximately 28 percent of
the increase in revenues. An increase in advertising revenues accounted for
approximately 24 percent of the increase in revenues. Basic service rate
adjustments implemented in all of Fund 12-A's systems accounted for
approximately 17 percent of the increase in revenues. The increase in revenues
would have been greater but for the reduction in basic rates due to new basic
rate regulations issued by the FCC in May 1993 with which Fund 12-A complied
effective September 1, 1993. In addition, on February 22, 1994, the FCC
announced a further rulemaking which, when implemented, could reduce rates
further. No other individual factor was significant to the increase in
revenues.
Operating, general and administrative expense increased $991,718, or
approximately 6 percent, from $15,492,913 in 1992 to $16,484,631 in 1993.
Operating, general and administrative expense represented 57 percent of revenue
in 1993 compared to 58 percent in 1992. Programming fees, advertising and
plant related costs primarily accounted for the increase. These increases
were offset, in part, by a decrease in copyright fees. There were no other
individual factors that contributed significantly to the increase. Management
fees and allocated overhead from the General Partner increased $285,162, or
approximately 9 percent, from $3,156,916 in 1992 to $3,442,078 in 1993. This
increase was due to the increase in revenues, upon which such fees and
allocations are based, and an increase in expenses allocated from the General
Partner. Depreciation and amortization expense increased $311,388, or
approximately 4 percent, from $7,528,805 in 1992 to $7,840,193 in 1993. This
increase was due to additions in Fund 12- A's asset base.
Operating income increased $682,430 to $1,196,824 in 1993 compared to
$514,394 in 1992. This was due to the fact that revenue growth exceeded the
increases in operating, general and administrative expense, management fees and
allocated overhead from the General Partner and depreciation and amortization
expense. Operating income before depreciation and amortization increased
$993,818, or approximately 12 percent, from $8,043,199 in 1992 to $9,037,017 in
1993. The increase was due to the fact that revenue growth exceeded the
increases in operating, general and administrative expense, management fees and
allocated overhead from the General Partner.
Interest expense decreased $302,642, or approximately 16 percent, from
$1,864,954 in 1992 to $1,562,312 in 1993. This decrease was due primarily to
lower effective interest rates and lower outstanding balances on interest
bearing obligations. Other expense decreased $188,649 from $232,887 in 1992 to
$44,238 in 1993. Such expense was primarily due to allocated depreciation from
affiliated entities. Net loss decreased $1,173,721, or approximately 74
percent, from $1,583,447 in 1992 to $409,726 in 1993. This decrease is due to
the factors discussed above. Fund 12-A's losses are expected to continue in
the future.
1992 Compared to 1991 -
Revenues of Fund 12-A increased $2,370,428, or approximately 10
percent, from $24,322,600 in 1991 to $26,693,028 in 1992. Basic service rate
adjustments implemented in all of Fund 12-A's systems accounted for
approximately 43 percent of the increase in revenues. During 1992, Fund 12-A
added approximately 2,220 basic subscribers, an increase of 4 percent. This
increase in basic subscribers accounted for approximately 39 percent of the
increase. In addition, Fund 12-A added approximately 6,316 pay units which
accounted for approximately 14 percent of the increase in revenues.
Operating, general and administrative expense increased $1,650,299, or
approximately 12 percent, from $13,842,614 in 1991 to $15,492,913 in 1992.
Operating, general and administrative expense represented 58 percent of revenue
in 1992 compared to 57 percent in 1991. Programming fees accounted for
approximately 29 percent of the increase in expense and was due, in part, to
the increases in the subscriber base. Personnel related expense accounted for
approximately 32 percent of the increase. There were no other individual
factors that contributed significantly to the
17
<PAGE> 18
increase. Management fees and allocated overhead from the General Partner
increased $456,198, or approximately 17 percent, from $2,700,718 in 1991 to
$3,156,916 in 1992. This increase was due to the increase in revenues, upon
which such fees and allocations are based, and an increase in expenses
allocated from the General Partner. Depreciation and amortization expense
decreased $1,513,475, or approximately 17 percent, from $9,042,280 in 1991 to
$7,528,805 in 1992. This decrease is due to the maturation of Fund 12-A's
asset base.
Fund 12-A recorded operating income of $514,394 in 1992 compared to an
operating loss of $1,263,012 in 1991. This was due to the fact that revenue
growth exceeded the increases in operating, general and administrative expense
and management fees and allocated overhead from the General Partner, as well as
the decrease in depreciation and amortization expense. Operating income before
depreciation and amortization increased $263,931, or approximately 3 percent,
from $7,779,268 in 1991 to $8,043,199 in 1992. The increase was due to the
fact that revenue growth exceeded the increases in operating, general and
administrative expense and management fees and allocated overhead from the
General Partner.
Interest expense decreased $785,801, or approximately 30 percent, from
$2,650,755 in 1991 to $1,864,954 in 1992. This decrease is due primarily to
lower effective interest rates on interest bearing obligations. Other expense
increased $247,812 from income of $14,925 in 1991 to expense of $232,887 in
1992 due primarily to the allocated depreciation from related entities that
provide advertising sales, warehouse and converter repair services to Fund
12-A. Net loss decreased $2,315,395, or approximately 59 percent, from
$3,898,842 in 1991 to $1,583,447 in 1992. These decreases in net losses are
due to the factors discussed above.
Financial Condition
Capital expenditures totalled approximately $3,639,000 in 1993.
Approximately 37 percent of these expenditures related to rebuild projects in
all of Fund 12-A's systems. Approximately 31 percent of these expenditures
related to plant extensions in all of Fund 12-A's systems. The remaining
expenditures were used for various enhancements in all of Fund 12-A's systems.
Funding for these expenditures was provided by cash generated from operations.
Fund 12-A anticipates capital expenditures of approximately $5,189,000
in 1994. Plant extensions in all of Fund 12-A's systems are expected to
account for approximately 34 percent of these expenditures, and service drops
to homes are anticipated to account for approximately 20 percent. The
remainder of the anticipated expenditures is for various enhancements in all of
Fund 12- A's systems. The actual level of capital expenditures will depend, in
part, upon the General Partner's determination as to the proper scope and
timing of such expenditures in light of the FCC's announcement of a further
rulemaking regarding the 1992 Cable Act on February 22, 1994 and Fund 12-A's
liquidity position. Funding for these expenditures is expected to be provided
by cash on hand and cash generated from operations.
During March 1990, the General Partner renegotiated Fund 12-A's
$35,000,000 credit facility, extending the revolving credit period to June 30,
1992, at which time the then-outstanding balance of $34,000,000 converted to a
term loan. The term loan is payable in 20 consecutive quarterly installments
that commenced on September 30, 1992. Payments in 1993 totaled $3,000,000. At
December 31, 1993, $29,500,000 was outstanding under this term loan. Payments
due in 1994 total $4,500,000. Fund 12-A intends to fund these payments with
cash on hand and cash generated from operations. The General Partner is
currently negotiating to reduce amortization payments in order to provide
liquidity for capital expenditures. Generally, interest payable on amounts
borrowed under the term loan is at Fund 12-A's option of prime plus 1/2 percent
or a fixed rate defined as the CD rate plus 1-1/4 percent or the Euro-Rate plus
1-1/4 percent. On January 12, 1993, Fund 12-A entered into an interest rate
cap agreement covering outstanding debt obligations of $15,000,000. The
agreement protects Fund 12-A from interest rates that exceed 7 percent for
three years from the date of the agreement.
Subject to the regulatory matters discussed below and assuming
successful renegotiation of Fund 12-A's credit facility, of which there can be
no assurance, the General Partner believes that Fund 12-A has sufficient
sources of capital from cash on hand and cash generated from operations to meet
its presently anticipated needs.
18
<PAGE> 19
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. This legislation has effected significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally allows for a greater degree of
regulation of the cable television industry. Under the 1992 Cable Act's
definition of effective competition, nearly all cable television systems in the
United States, including those owned and managed by the General Partner, are
subject to rate regulation of basic cable services. In addition, the 1992
Cable Act allows the FCC to regulate rates for non-basic service tiers other
than premium services in response to complaints filed by franchising
authorities and/or cable subscribers. In April 1993, the FCC adopted
regulations governing rates for basic and non-basic services. These
regulations, with which Fund 12-A complied, became effective on September 1,
1993. See Item 1 for further discussion of the provisions of the 1992 Cable
Act.
Based on the General Partner's assessment of the FCC's rulemakings
concerning rate regulation under the 1992 Cable Act, Fund 12-A reduced the
rates it charged for certain regulated services. On an annualized basis, such
rate reductions will result in an estimated reduction in Fund 12-A's revenue of
approximately $1,800,000, or approximately 6 percent, and a decrease in
operating income before depreciation and amortization of approximately
$1,600,000, or approximately 12 percent. In addition, on February 22, 1994,
the FCC announced a further rulemaking which, when implemented, could reduce
rates further. Based on the foregoing, the General Partner believes that the
new rate regulations will have a negative effect on Fund 12-A's revenues and
operating income before depreciation and amortization. The General Partner has
undertaken actions to mitigate a portion of these reductions primarily through
(a) new service offerings, (b) product re-marketing and re-packaging and (c)
marketing directed at non- subscribers. To the extent such reductions are not
mitigated, the values of Fund 12-A's cable television systems, which are
calculated based on cash flow, could be adversely impacted. In addition, such
reductions could adversely effect the General Partner's ability to renegotiate
Fund 12-A's credit facility.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
cable systems. The retransmission consent rules went into effect on October 6,
1993. In the cable television systems owned by Fund 12-A, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
19
<PAGE> 20
CABLE TV FUND 12-BCD VENTURE
Results of Operations
1993 Compared to 1992
Revenues of Cable TV Fund 12-BCD Venture (the "Venture") increased
$5,564,003, or approximately 7 percent, from $83,567,527 in 1992 to $89,131,530
in 1993. Between December 31, 1992 and 1993, the Venture added 7,498 basic
subscribers, an increase of approximately 4 percent. This increase in basic
subscribers accounted for approximately 32 percent of the increase in revenues.
Basic service rate adjustments were responsible for approximately 38 percent of
the increase in revenues. Advertising sales revenue accounted for
approximately 12 percent of the increase in revenues. Increases in pay per
view revenue accounted for approximately 14 percent of the increase. The
increase in revenues would have been greater but for the reduction in basic
rates due to new basic rate regulation issued by the FCC in May 1993 with which
the Venture complied effective September 1, 1993. In addition, on February 22,
1994, the FCC announced a further rulemaking which, when implemented, could
reduce rates further. No other single factor significantly affected the
increase in revenues.
Operating, general and administrative expenses in the Venture's
systems increased $3,941,804, or approximately 8 percent, from $48,132,180 in
1992 to $52,073,984 in 1993. Operating, general and administrative expense
represented 58 percent of revenue in 1993 and in 1992. The increase in
operating, general and administrative expense was due to increases in
subscriber related costs, programming fees and marketing related costs. No
other single factor significantly affected the increase in operating, general
and administrative expenses. Management fees and allocated overhead from Jones
Intercable, Inc. increased $746,870, or approximately 8 percent, from
$9,758,490 in 1992 to $10,505,360 in 1993 due to the increase in revenues, upon
which such fees and allocations are based, and an increase in allocated
expenses. Depreciation and amortization expense decreased $1,113,583, or
approximately 4 percent, from $26,764,820 in 1992 to $25,651,237 in 1993. The
decrease is due to the maturation of the Venture's asset base.
The Venture recorded operating income of $900,949 for 1993 compared to
an operating loss of $1,087,963 for 1992. This change is the result of
increases in revenue and the decreases in depreciation and amortization
expenses exceeding the increases in operating, general and administrative
expenses and management fees and allocated overhead from Jones Intercable Inc.
Operating income before depreciation and amortization increased $875,329, or
approximately 3 percent, from $25,676,857 in 1992 to $26,552,186 in 1993. This
increase is due to the increase in revenues exceeding the increase in
operating, general, and administrative expenses and administrative fees and
allocated overhead from Jones Intercable, Inc.
Interest expense decreased $33,744, or less than 1 percent, from
$12,022,874 in 1992 to $11,989,130 in 1993 due to lower interest rates on
interest bearing obligations, which were offset, in part, by higher balances on
such obligations. The Venture recorded other expense of $556,309 in 1993
compared to other expense of $2,708,833 in 1992. The 1992 expense primarily
represented the Sunbelt litigation settlement as discussed in Note 6 of notes
to financial statements of the Venture. The settlement was accrued by the
Venture in 1992 and paid by the Venture in March 1993.
Net loss decreased $3,299,949, or approximately 22 percent, from
$14,884,365 in 1992 to $11,584,416 in 1993 due to the factors discussed above.
These losses are expected to continue in the future.
1992 Compared to 1991
Revenues of the Venture increased $5,518,022, or approximately 7
percent, from $78,049,505 in 1991 to $83,567,527 in 1992. Between December 31,
1991 and 1992, the Venture added 3,670 basic subscribers, an increase of
approximately 2 percent. This increase in basic subscribers accounted for
approximately 17 percent of the increase in revenues. Basic service rate
adjustments were responsible for approximately 46 percent of the increase in
revenues. Advertising sales revenue accounted for approximately 14 percent of
the increase in revenues. Increases in equipment rental revenue accounted for
approximately 13 percent of the increase. No other single factor significantly
affected the increase in revenues.
20
<PAGE> 21
Operating, general and administrative expenses in the Venture's
systems increased $4,487,834, or approximately 10 percent, from $43,644,346 in
1991 to $48,132,180 in 1992. Operating, general and administrative expense
represented 58 percent of revenue in 1992 compared to 56 percent in 1991. The
increase in operating, general and administrative expense was due to increases
in personnel related costs, programming fees and property taxes, which were
partially offset by decreases in marketing related costs and copyright fees.
No other single factor significantly affected the increase in operating,
general and administrative expenses. Management fees and allocated overhead
from Jones Intercable, Inc. increased $1,215,796, or approximately 14 percent,
from $8,542,694 in 1991 to $9,758,490 in 1992 due to the increase in revenues,
upon which such fees and allocations are based, and an increase in allocated
expenses from Jones Intercable, Inc. Depreciation and amortization expense
decreased $4,028,233, or approximately 13 percent, from $30,793,053 in 1991 to
$26,764,820 in 1992. The decrease is due to the maturation of the Venture's
asset base.
Operating loss decreased $3,842,625, or approximately 78 percent, from
$4,930,588 in 1991 to $1,087,963 in 1992 as a result of the increase in
revenues and the decreases in depreciation and amortization exceeding the
increases in operating, general and administrative expenses and management fees
and allocated overhead from Jones Intercable, Inc.
Interest expense decreased $898,899, or approximately 7 percent, from
$12,921,773 in 1991 to $12,022,874 in 1992 due primarily to lower interest
rates on interest bearing obligations, despite higher balances on such
obligations. The Venture recorded other expense of $2,708,833 in 1992 compared
to other income of $23,761 in 1991. This increase was due to the Sunbelt
litigation settlement as discussed above. This settlement was paid by the
Venture in March 1993.
Net loss decreased $2,944,235, or approximately 17 percent, from
$17,828,600 in 1991 to $14,884,365 in 1992 due primarily to the reductions in
operating loss and interest expense which were offset, in part, by the
litigation settlement discussed above. These losses are the result of the
factors discussed above and are expected to continue in the future.
Financial Condition
Capital expenditures for the Venture totaled approximately $18,711,600
during 1993. Service drops to homes accounted for approximately 29 percent of
the capital expenditures. Approximately 18 percent of these capital
expenditures related to plant extensions in all of the Venture's systems. The
completion of a rebuild of the Venture's Palmdale, California system accounted
for approximately 17 percent of capital expenditures. Approximately 12 percent
of capital expenditures was for fiber upgrades. The remaining expenditures
related to various system enhancements. These capital expenditures were funded
primarily from cash generated from operations and borrowings under the
Venture's credit facility. Expected capital expenditures for 1994 are
approximately $25,914,000. The upgrade of the Albuquerque, New Mexico system
is expected to account for approximately 31 percent. Plant extensions in all
of the Venture's systems are expected to account for approximately 15 percent.
Service drops to homes are anticipated to account for approximately 23 percent.
The remainder of the expenditures are for various system enhancements in all of
the Venture's systems. Funding for these expenditures is expected to be
provided by cash on hand, cash generated from operations and borrowings from
the Venture's credit facility. Subject to the regulatory matters discussed
below and assuming successful renegotiation of its credit facility, the Venture
has sufficient sources of capital available in its ability to generate cash
from operations and to borrow under its credit facility to meet its presently
anticipated needs.
During the first quarter of 1992, the Venture renegotiated its debt
arrangements, which increased the maximum amount of debt available to
$183,000,000. Such new debt arrangements consist of $93,000,000 of Senior
Notes placed with a group of institutional lenders and a renegotiated
$90,000,000 revolving credit agreement with a group of commercial bank lenders.
The Venture used the funds from the Senior Notes to repay approximately
$88,000,000 of the $155,000,000 outstanding on its previous credit facility and
to repay advances from Intercable. The Venture used borrowings under its new
credit facility to repay the remaining balance on its previous credit facility.
The Senior Notes have a fixed interest rate of 8.64 percent and a
final maturity date of March 31, 2000. The Senior Notes call for interest only
payments for the first four years, with interest and accelerating amortization
of principal payments for the next four years. Interest is payable
semi-annually. The Senior Notes carry a "make-whole" premium, which is a
prepayment penalty, if they are prepaid prior to maturity. The make-whole
premium protects the lenders in the event that the funds are reinvested at a
rate below 8.64 percent, and is calculated per the note agreement.
21
<PAGE> 22
The Venture's current revolving credit facility has a maximum amount
available of $90,000,000. As of December 31, 1993, $73,800,000 was outstanding
under the Venture's revolving credit agreement, leaving the Venture with
$16,200,000 of available borrowing capacity until March 31, 1994. The
revolving credit period will expire on March 31, 1994, at which time the
principal balance converts to a term loan payable in quarterly installments
with a final maturity date of March 31, 2000. The General Partner is
negotiating to to extend the revolving credit period for one year. Interest is
at the Venture's option of LIBOR plus 1.25 percent to 1.75 percent, the CD rate
plus 1.375 percent to 1.875 percent or the Base Rate plus 0 percent to .50
percent. An annual commitment fee of .5 percent is required on the unused
portion of the facility until it converts to a term loan.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. This legislation has effected significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally allows for a greater degree of
regulation of the cable television industry. Under the 1992 Cable Act's
definition of effective competition, nearly all cable television systems in the
United States, including those owned and managed by the General Partner, are
subject to rate regulation of basic cable services. In addition, the 1992
Cable Act allows the FCC to regulate rates for non-basic service tiers other
than premium services in response to complaints filed by franchising
authorities and/or cable subscribers. In April 1993, the FCC adopted
regulations governing rates for basic and non-basic services. These
regulations, with which the Venture complied, became effective on September 1,
1993. See Item 1 for further discussion of the provisions of the 1992 Cable
Act.
Based on Intercable's assessment of the FCC's rulemakings concerning
rate regulation under the 1992 Cable Act, the Venture reduced the rates it
charged for certain regulated services. On an annualized basis, such rate
reductions will result in an estimated reduction in the Venture's revenue of
approximately $4,500,000, or approximately 5 percent, and a decrease in
operating income before depreciation and amortization of approximately
$4,300,000, or approximately 10 percent. In addition, on February 22, 1994,
the FCC announced a further rulemaking which, when implemented, could reduce
rates further. Based on the foregoing, the General Partner believes that the
new rate regulations will have a negative effect on the Venture's revenues and
operating income before depreciation and amortization. The General Partner has
undertaken actions to mitigate a portion of these reductions primarily through
(a) new service offerings, (b) product re-marketing and re-packaging and
(c)marketing efforts directed at non- subscribers. To the extent such
reductions are not mitigated, the values of the Venture's cable television
systems, which are calculated based on cash flow, could be adversely impacted.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
cable systems. The retransmission consent rules went into effect on October 6,
1993. In the cable television system owned by the Venture, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions, without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
22
<PAGE> 23
Item 8. Financial Statements
CABLE TV FUND 12
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993 AND 1992
INDEX
<TABLE>
<CAPTION>
Page
-----------------------
12-A 12-BCD Venture
---- --------------
<S> <C> <C>
Report of Independent Public Accountants 24 37
Balance Sheets 25 38
Statements of Operations 27 40
Statements of Partners' Capital (Deficit) 28 41
Statements of Cash Flow 29 42
Notes to Financial Statements 30 43
Schedule V 35 48
Schedule VI 36 49
</TABLE>
23
<PAGE> 24
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-A:
We have audited the accompanying balance sheets of CABLE TV FUND 12-A
(a Colorado limited partnership) as of December 31, 1993 and 1992, and the
related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements and the schedules referred to below are the responsibility
of the General Partner's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund 12-A
as of December 31, 1993 and 1992, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1993,
in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in the index
of financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
March 11, 1994.
24
<PAGE> 25
CABLE TV FUND 12-A
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-------------------------------
ASSETS 1993 1992
------ ------------ ------------
<S> <C> <C>
CASH $ 1,610,187 $ 1,599,111
TRADE RECEIVABLES, less allowance for doubtful receivables of $49,157
and $39,644 at December 31, 1993 and 1992, respectively 492,896 182,187
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 67,276,230 63,637,550
Less- accumulated depreciation (35,137,424) (29,537,024)
------------ ------------
32,138,806 34,100,526
Franchise costs, net of accumulated amortization of $19,132,967 and
$17,837,622 at December 31, 1993 and 1992, respectively 4,219,155 5,514,500
Subscriber lists, net of accumulated amortization of $11,013,590 and
$10,090,679 at December 31, 1993 and 1992, respectively 597,275 1,520,186
------------ ------------
Total investment in cable television properties 36,955,236 41,135,212
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 239,671 155,099
------------ ------------
Total assets $ 39,297,990 $ 43,071,609
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
25
<PAGE> 26
CABLE TV FUND 12-A
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
--------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1993 1992
- ------------------------------------------- ------------ -------------
<S> <C> <C>
LIABILITIES:
Debt $ 29,724,530 $ 32,813,067
Accounts payable-
Trade 36,877 277
General Partner 220,722 261,348
Accrued liabilities 1,109,852 1,327,722
Subscriber prepayments 175,959 229,419
------------ ------------
Total liabilities 31,267,940 34,631,833
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (368,208) (364,111)
------------ ------------
(367,208) (363,111)
------------- ------------
Limited Partners-
Net contributed capital (104,000 units outstanding at
December 31, 1993 and 1992) 44,619,655 44,619,655
Accumulated deficit (36,222,397) (35,816,768)
------------ ------------
8,397,258 8,802,887
------------ ------------
Total liabilities and partners' capital (deficit) $ 39,297,990 $ 43,071,609
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
26
<PAGE> 27
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
1993 1992 1991
------------- -------------- --------------
<S> <C> <C> <C>
REVENUES $28,963,726 $26,693,028 $24,322,600
COSTS AND EXPENSES:
Operating, general and administrative 16,484,631 15,492,913 13,842,614
Management fees and allocated overhead
from General Partner 3,442,078 3,156,916 2,700,718
Depreciation and amortization 7,840,193 7,528,805 9,042,280
----------- ----------- -----------
OPERATING INCOME (LOSS) 1,196,824 514,394 (1,263,012)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,562,312) (1,864,954) (2,650,755)
Other, net (44,238) (232,887) 14,925
----------- ----------- -----------
Total other income (expense), net (1,606,550) (2,097,841) (2,635,830)
----------- ----------- -----------
NET LOSS $ (409,726) $(1,583,447) $(3,898,842)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (4,097) $ (15,834) $ (38,988)
=========== =========== ===========
Limited Partners $ (405,629) $(1,567,613) $(3,859,854)
=========== =========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (3.90) $ (15.07) $ (37.11)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 104,000 104,000 104,000
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
27
<PAGE> 28
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of period $ (363,111) $ (347,277) $ (308,289)
Net loss for period (4,097) (15,834) (38,988)
----------- ---------- ----------
Balance, end of period $ (367,208) $ (363,111) $ (347,277)
=========== =========== ===========
LIMITED PARTNERS:
Balance, beginning of period $8,802,887 $10,370,500 $14,230,354
Net loss for period (405,629) (1,567,613) (3,859,854)
----------- ----------- -----------
Balance, end of period $8,397,258 $ 8,802,887 $10,370,500
========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
28
<PAGE> 29
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
- -
1993 1992 1991
------------ ------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (409,726) $(1,583,447) $(3,898,842)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 7,840,193 7,528,805 9,042,280
Amortization of interest rate protection contract 49,991 15,675 94,050
Decrease (increase) in trade receivables (310,709) (103,360) 136,713
Increase in deposits, prepaid expenses and deferred charges (6.100) (267,995) (240,174)
Increase (decrease) in amount due General Partner (40,626) 261,348 (375,488)
Increase (decrease) in trade accounts payable, accrued
liabilities and subscriber prepayments (234,730) 392,004 (610,779)
----------- ----------- -----------
Net cash provided by operating activities 6,888,293 6,243,030 4,147,760
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,638,680) (3,428,106) (4,842,342)
----------- ----------- -----------
Net cash used in investing activities (3,638,680) (3,428,106) (4,842,342)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 46,448 606,894 1,343,608
Repayment of debt (3,134,985) (2,084,999) (821,071)
Purchase of interest rate protection contract (150,000) - -
----------- ----------- -----------
Net cash provided by (used in)
financing activities (3,238,537) (1,478,105) 522,537
----------- ----------- -----------
Increase (decrease) in cash 11,076 1,336,819 (172,045)
Cash, beginning of period 1,599,111 262,292 434,337
----------- ----------- -----------
Cash, end of period $ 1,610,187 $ 1,599,111 $ 262,292
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,583,758 $ 1,751,207 $ 3,224,793
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
29
<PAGE> 30
CABLE TV FUND 12-A
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 12-A ("Fund 12-A"), a Colorado limited
partnership, was formed on January 2, 1985, under a public program sponsored by
Jones Intercable, Inc. Fund 12-A was formed to acquire, construct, develop and
operate cable television systems. Jones Intercable, Inc., a publicly held
Colorado corporation, is the "General Partner" and manages Fund 12-A. The
General Partner and its subsidiaries also own and operate cable television
systems. In addition, the General Partner manages cable television systems for
other limited partnerships for which it is general partner and, also, for
affiliated entities.
Contributed Capital
The capitalization of Fund 12-A is set forth in the
accompanying statements of partners' capital (deficit). No limited partner is
obligated to make any additional contributions to partnership capital.
The General Partner purchased its interest in Fund 12-A by
contributing $1,000 to partnership capital.
All profits and losses of Fund 12-A are allocated 99 percent
to the limited partners and 1 percent to the General Partner, except for income
or gain from the sale or disposition of cable television properties, which will
be allocated to the partners based upon the formula set forth in the
Partnership Agreement, and interest income earned prior to the first
acquisition by Fund 12-A of a cable television system, which was allocated 100
percent to the limited partners.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. Fund 12-A's tax returns are also prepared on the
accrual basis.
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
<TABLE>
<S> <C>
Distribution systems 5 - 15 years
Buildings 20 years
Equipment and tools 3 - 5 years
Premium television service equipment 5 years
Earth receive stations 5 - 15 years
Vehicles 3 years
Other property, plant
and equipment 5 years
</TABLE>
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
30
<PAGE> 31
Intangible Assets
Costs assigned to franchises and subscriber lists are being
amortized using the straight-line method over the following remaining estimated
useful lives:
<TABLE>
<S> <C>
Franchise costs 1-6 years
Subscriber lists 1-3 years
</TABLE>
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
Reclassification
Certain prior year amounts have been reclassified to conform
to the 1993 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Brokerage Fees
An affiliate of the General Partner performed brokerage
services for Fund 12-A. For brokering the acquisition of cable television
systems for Fund 12-A, The Jones Group, Ltd. is paid a fee equal to 4.5 percent
of the purchase prices. The Jones Group, Ltd. brokered the acquisition of a
SMATV system for Fund 12-A in 1991 and earned a fee of $37,000, or 4 percent of
the acquisition price. No brokerage fees were paid by Fund 12-A in 1992 and
1993.
Management Fees, Distribution Ratios and Reimbursement
The General Partner manages Fund 12-A and receives a fee for
its services equal to 5 percent of the gross revenues of Fund 12-A, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the years ended December 31, 1993, 1992 and 1991 were $1,448,186,
$1,334,651 and $1,216,130, respectively.
Any distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to the General Partner. Any distributions other than from cash
flow, such as from the sale or refinancing of a system or upon dissolution of
the partnership, will be made as follows: first, to the limited partners in an
amount which, together with all prior distributions, will equal the amount
initially contributed to the partnership capital by the limited partners; the
balance, 75 percent to the limited partners and 25 percent to the General
Partner.
Fund 12-A reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses consist primarily of
salaries and benefits paid to corporate personnel, rent, data processing
services and other facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services to
Fund 12-A. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to each partnership
managed. Remaining overhead costs are allocated based on revenues and/or the
cost of assets managed for the partnership. Systems owned by the General
Partner and all other systems owned by partnerships for which Jones Intercable,
Inc. is the general partner are also allocated a proportionate share of these
expenses. The General Partner believes that the methodology used in allocating
overhead and administrative expenses is reasonable. Reimbursements by Fund
12-A to the General Partner for allocated overhead and administrative expenses
were $1,993,892, $1,822,265 and $1,484,588 in 1993, 1992 and 1991,
respectively.
Fund 12-A was charged interest during 1993 an average interest
rate of 10.61 percent on the amounts due the General Partner, which
approximated the General Partner's weighted average cost of borrowing. Total
interest charged Fund 12-A by the General Partner was $1,029, $-0- and $1,071
in 1993, 1992 and 1991, respectively.
31
<PAGE> 32
Payments to Affiliates for Programming Services
The Partnership receives programming from Superaudio and The
Mind Extension University, affiliates of the General Partner. Payments to
Superaudio totaled $45,495, $44,605 and $39,588 in 1993, 1992 and 1991,
respectively. Payments to The Mind Extension University totaled $26,411,
$25,559 and $24,313 in 1993, 1992 and 1991, respectively.
(4) DEBT
<TABLE>
<CAPTION>
Debt consists of the following: December 31,
------------------------------------------
1993 1992
--------------- --------------
<S> <C> <C>
Lending institutions-
Revolving credit and term loan $29,500,000 $32,500,000
Capital lease obligations 224,530 313,067
----------- -----------
$29,724,530 $32,813,067
=========== ===========
</TABLE>
Fund 12-A's credit facility's revolving credit period expired
on June 30, 1992. The credit facility has been converted to a term loan
payable in 20 consecutive quarterly installments. Fund 12-A repaid $3,000,000
of the outstanding balance during 1993. Principal payments required in 1994
are $4,500,000. Generally, interest is at Fund 12-A's option of prime plus 1/2
percent or a fixed rate defined as the CD Rate plus 1-1/4 percent or the
Euro-Rate plus 1-1/4 percent. The effective interest rates on outstanding
obligations as of December 31, 1993 and 1992 were 4.83 percent and 5.13
percent, respectively.
On January 12, 1993, Fund 12-A entered into an interest rate
cap agreement covering outstanding debt obligations of $15,000,000. Fund 12-A
paid an initial fee of $150,000. The agreement protects Fund 12-A for interest
rates that exceed 7 percent for three years from the date of the agreement and
will be charged to interest expense over the life of the agreement using the
straight-line method.
Installments due on all debt principal for each of the five
years in the period ending December 31, 1998, respectively, are: $4,567,359,
$6,067,359, $7,567,359, $11,522,453, and $-0-. At December 31, 1993,
substantially all of Fund 12- A's property, plant and equipment secured the
above indebtedness.
(5) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners. The Federal
and state income tax returns of Fund 12-A are prepared and filed by the General
Partner.
Fund 12-A's tax returns, the qualification of the partnership
as such for tax purposes, and the amount of distributable partnership income or
loss are subject to examination by Federal and state taxing authorities. If
such examinations result in changes with respect to Fund 12-A's recorded income
or loss, the tax liability of the general and limited partners would likely be
changed accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
32
<PAGE> 33
(6) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") which
became effective on December 4, 1992. The 1992 Cable Act generally allows for
a greater degree of regulation in the cable television industry. In April
1993, the FCC adopted regulations governing rates for basic and non-basic
services. These regulations became effective on September 1, 1993. Such
regulations caused reductions in rates for certain regulated services. On
February 22, 1994, the FCC announced a further rulemaking which, when
implemented, could reduce rates further. The General Partner plans to mitigate
a portion of these reductions primarily through (a) new service offerings, (b)
product re-marketing and re-packaging and (c) marketing efforts directed at
non-subscribers.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
cable systems. The retransmission consent rules went into effect on October 6,
1993. In the cable television systems owned by Fund 12-A, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
Fund 12-A rents office and other facilities under various
long-term operating lease arrangements. Rent paid under such lease
arrangements totaled $74,142, $81,669 and $35,060, respectively, for the years
ended December 31, 1993, 1992 and 1991. Minimum commitments for each of the
five years in the period ending December 31, 1998, and thereafter are as
follows:
<TABLE>
<S> <C>
1994 $ 57,220
1995 57,220
1996 47,683
1997 -
1998 -
Thereafter -
-
--------
$162,123
========
</TABLE>
33
<PAGE> 34
(7) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years is presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1993 1992 1991
----------- ----------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ 299,578 $ 282,340 $ 327,165
=========== ========== ==========
Taxes, other than income and payroll taxes $ 331,358 $ 295,517 $ 290,604
=========== ========== ==========
Advertising $ 433,250 $ 494,175 $ 398,798
=========== ========== ==========
Depreciation of property, plant and equipment $ 5,621,938 $5,310,550 $4,830,202
=========== ========== ==========
Amortization of intangible assets $ 2,218,256 $2,218,255 $4,212,078
=========== ========== ==========
</TABLE>
34
<PAGE> 35
CABLE TV FUND 12-A
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Balance at
Beginning of Additions Sales and Other End of
Classification Period at Cost Retirements Changes Period
- -------------- ----------- ---------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ----------------------------
Distribution systems $47,804,628 $2,630,073 $ - $ - $ 50,434,701
Earth receive stations 2,505,230 100,609 - 2,605,839
Premium service equipment 6,724,202 384,062 (16,694) - 7,091,570
Equipment and tools 3,225,575 224,669 - - 3,450,244
Buildings 1,403,984 174,003 - - 1,577,987
Land 422,295 2,069 - - 424,364
Vehicles 372,382 - (5,000) - 367,382
Leasehold improvements and
office furniture and equipment 1,179,254 144,889 - - 1,324,143
----------- ---------- ---------- ---------- ------------
$63,637,550 $3,660,374 $ (21,694) $ - $ 67,276,230
=========== ========== ========== ========== ============
Year Ended December 31, 1992
- ----------------------------
Distribution systems $45,432,384 $2,372,244 $ - $ - $ 47,804,628
Earth receive stations 2,373,785 177,355 (45,910) - 2,505,230
Premium service equipment 6,313,961 518,675 (108,434) - 6,724,202
Equipment and tools 2,878,088 347,487 - - 3,225,575
Buildings 1,395,072 8,912 - - 1,403,984
Land 422,295 - - - 422,295
Vehicles 378,776 21,006 (27,400) - 372,382
Leasehold improvements and
office furniture and equipment 1,015,083 164,171 - - 1,179,254
----------- ---------- ---------- ---------- ------------
$60,209,444 $3,609,850 $ (181,744) $ - $ 63,637,550
=========== ========== ========== ========== ============
Year Ended December 31, 1991
- ----------------------------
Distribution systems $42,015,264 $3,417,120 $ - $ - $ 45,432,384
Earth receive stations 2,314,699 59,086 - - 2,373,785
Premium service equipment 5,606,889 917,934 (210,862) - 6,313,961
Equipment and tools 2,511,326 366,762 - - 2,878,088
Buildings 1,393,561 1,511 - - 1,395,072
Land 422,295 - - - 422,295
Vehicles 365,666 42,084 (28,974) - 378,776
Leasehold improvements and
office furniture and equipment 737,402 277,681 - - 1,015,083
----------- ---------- ---------- ---------- ------------
$55,367,102 $5,082,178 $ (239,836) $ - $ 60,209,444
=========== ========== ========== ========== ============
</TABLE>
35
<PAGE> 36
CABLE TV FUND 12-A
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Amounts Balance at
Beginning of Charged to Sales and Other End of
Classification Period Expense Retirements Changes Period
- -------------- ------------ ---------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ----------------------------
Distribution systems $20,776,045 $3,491,184 $ - $ - $24,267,229
Earth receive stations 1,223,248 198,217 - - 1,421,465
Premium service equipment 4,361,141 912,866 (16,538) - 5,257,469
Equipment and tools 1,680,165 763,082 - - 2,443,247
Buildings 514,352 71,293 - - 585,645
Land - - - - -
Vehicles 294,355 43,586 (5,000) - 332,941
Leasehold improvements and
office furniture and equipment 687,718 141,710 - - 829,428
----------- ---------- ---------- ---------- -----------
$29,537,024 $5,621,938 $ (21,538) $ - $35,137,424
=========== ========== ========== ========== ===========
Year Ended December 31, 1992
- ----------------------------
Distribution systems $16,995,924 $3,780,121 $ - $ - $20,776,045
Earth receive stations 1,069,753 192,597 (39,102) - 1,223,248
Premium service equipment 3,692,370 777,205 (108,434) - 4,361,141
Equipment and tools 1,333,329 346,836 - - 1,680,165
Buildings 444,578 69,774 - - 514,352
Land - - - - -
Vehicles 284,438 37,317 (27,400) - 294,355
Leasehold improvements and
office furniture and equipment 581,018 106,700 - - 687,718
----------- ---------- ---------- --------- -----------
$24,401,410 $5,310,550 $ (174,936) $ - $29,537,024
=========== ========== ========== ========= ===========
Year Ended December 31, 1991
- ----------------------------
Distribution systems $13,814,626 $3,181,298 $ - $ - $16,995,924
Earth receive stations 903,376 166,377 - - 1,069,753
Premium service equipment 2,978,638 924,594 (210,862) - 3,692,370
Equipment and tools 976,806 356,523 - - 1,333,329
Buildings 374,397 70,181 - - 444,578
Land - - - - -
Vehicles 263,284 50,128 (28,974) - 284,438
Leasehold improvements and
office furniture and equipment 499,917 81,101 - - 581,018
----------- ---------- ---------- --------- -----------
$19,811,044 $4,830,202 $ (239,836) $ - $24,401,410
=========== ========== ========== ========= ===========
</TABLE>
36
<PAGE> 37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-BCD Venture:
We have audited the accompanying balance sheets of CABLE TV
FUND 12-BCD VENTURE (a Colorado general partnership) as of December 31, 1993
and 1992, and the related statements of operations, partners' capital and cash
flows for each of the three years in the period ended December 31, 1993. These
financial statements and the schedules referred to below are the responsibility
of the General Partners' management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Cable TV
Fund 12-BCD Venture as of December 31, 1993 and 1992, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The schedules listed in the
index of financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
March 11, 1994.
37
<PAGE> 38
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
----------------------------------------
ASSETS 1993 1992
------ ---------------- --------------
<S> <C> <C>
CASH $ 1,962,657 $ 1,368,051
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of $265,542
and $336,466 at December 31, 1993 and 1992, respectively 2,954,487 2,807,201
Affiliated entity 159,137 159,137
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 251,810,225 233,098,586
Less- accumulated depreciation (117,498,465) (99,076,588)
-------------- -------------
134,311,760 134,021,998
Franchise costs, net of accumulated amortization of $43,008,846 and
$37,205,093 at December 31, 1993 and 1992, respectively 23,539,797 29,343,550
Subscriber lists, net of accumulated amortization of $32,420,504 and
$31,498,364 at December 31, 1993 and 1992, respectively 322,802 1,244,942
Cost in excess of interests in net assets purchased, net of accumulated
amortization of $1,128,284 and $975,812 at December 31, 1993
and 1992, respectively 4,928,144 5,080,616
-------------- -------------
Total investment in cable television properties 163,102,503 169,691,106
DEPOSITS, PREPAID EXPENSES AND DEFERRED
CHARGES 1,491,768 1,529,125
-------------- -------------
Total assets $ 169,670,552 $ 175,554,620
============== =============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
38
<PAGE> 39
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1993 1992
------------------------------------------- ---------------- ----------------
<S> <C> <C>
LIABILITIES:
Debt $ 167,698,697 $ 160,440,488
Accounts payable-
Trade 830,408 136,497
Jones Intercable, Inc. 188,430 511,646
Accrued liabilities 6,003,390 7,879,332
Subscriber prepayments 679,136 731,750
------------- -------------
Total liabilities 175,400,061 169,699,713
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' CAPITAL (DEFICIT):
Contributed capital 135,490,944 135,490,944
Accumulated deficit (141,220,453) (129,636,037)
------------- -------------
(5,729,509) 5,854,907
------------- -------------
Total liabilities and partners' capital (deficit) $ 169,670,552 $ 175,554,620
============= =============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
39
<PAGE> 40
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1993 1992 1991
--------------- ---------------- --------------
<S> <C> <C> <C>
REVENUES $ 89,131,530 $ 83,567,527 $ 78,049,505
COSTS AND EXPENSES:
Operating, general and administrative 52,073,984 48,132,180 43,644,346
Management fees and allocated overhead from
Jones Intercable, Inc. 10,505,360 9,758,490 8,542,694
Depreciation and amortization 25,651,237 26,764,820 30,793,053
------------ ------------ ------------
OPERATING INCOME (LOSS) 900,949 (1,087,963) (4,930,588)
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (11,989,130) (12,022,874) (12,921,773)
Gain on sale of assets 60,074 935,305 -
Other, net (556,309) (2,708,833) 23,761
------------ ------------ ------------
Total other income (expense), net (12,485,365) (13,796,402) (12,898,012)
------------ ------------ ------------
NET LOSS $(11,584,416) $(14,884,365) $(17,828,600)
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
40
<PAGE> 41
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1993 1992 1991
------------- -------------- -------------
<S> <C> <C> <C>
CABLE TV FUND 12-B (9%):
Balance, beginning of period $ 441,362 $ 1,807,747 $ 3,444,412
Net loss for period (1,063,449) (1,366,385) (1,636,665)
------------ ------------ -----------
Balance, end of period $ (622,087) $ 441,362 $ 1,807,747
============= ============= ============
CABLE TV FUND 12-C (15%):
Balance, beginning of period $ 734,611 $ 3,008,644 $ 5,732,498
Net loss for period (1,769,867) (2,274,033) (2,723,854)
------------- ------------- ------------
Balance, end of period $ (1,035,256) $ 734,611 $ 3,008,644
============= ============= ============
CABLE TV FUND 12-D (76%):
Balance, beginning of period $ 4,678,934 $ 15,922,881 $ 29,390,962
Net loss for period (8,751,100) (11,243,947) (13,468,081)
------------- ------------- ------------
Balance, end of period $ (4,072,166) $ 4,678,934 $ 15,922,881
============= ============= ============
TOTAL:
Balance, beginning of period $ 5,854,907 $ 20,739,272 $ 38,567,872
Net loss for period (11,584,416) (14,884,365) (17,828,600)
------------- ------------- ------------
Balance, end of period $ (5,729,509) $ 5,854,907 $ 20,739,272
============= ============= ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
41
<PAGE> 42
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1993 1992 1991
--------------- ---------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(11,584,416) $ (14,884,365) $(17,828,600)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 25,651,237 26,764,820 30,793,053
Gain on sale of cable television system - (935,305) -
Amortization of interest rate protection contract - 263,574 348,192
Amortization of loan fees 121,062 90,797 -
Increase in trade receivables (147,286) (457,715) (72,133)
Increase in deposits, prepaid
expenses and deferred charges (434,700) (2,155,866) (209,151)
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (1,234,645) 4,390,946 (1,787,102)
Increase (decrease) in amount due
Jones Intercable, Inc. (323,216) (4,095,194) 3,378,422
------------- ------------- ------------
Net cash provided by operating activities 12,048,036 8,981,692 14,622,681
------------ ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (18,711,639) (15,777,221) (19,972,510)
Proceeds from the sale of cable television system - 2,620,000 -
------------ ------------- ------------
Net cash used in investing activities (18,711,639) (13,157,221) (19,972,510)
------------ ------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 11,954,437 164,830,973 5,915,549
Repayment of debt (4,696,228) (160,522,104) (835,359)
------------ ------------- ------------
Net cash provided by financing activities 7,258,209 4,308,869 5,080,190
------------ ------------- ------------
Increase (decrease) in cash 594,606 133,340 (269,639)
Cash, beginning of period 1,368,051 1,234,711 1,504,350
------------ ------------- ------------
Cash, end of period $ 1,962,657 $ 1,368,051 $ 1,234,711
============ ============= ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 12,141,838 $ 9,805,956 $ 14,952,117
============ ============= ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
42
<PAGE> 43
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
On March 17, 1986, Cable TV Funds 12-B, 12-C and 12-D (the
"Venture Partners") formed Cable TV Fund 12-BCD Venture (the "Venture"). The
Venture was formed for the purpose of acquiring certain cable television
systems serving Tampa, Florida; Albuquerque, New Mexico; and Palmdale,
California. Jones Intercable, Inc. ("Intercable"), the "General Partner" of
each of the Venture Partners, manages the Venture. Intercable and its
subsidiaries also own and operate cable television systems. In addition,
Intercable manages cable television systems for other limited partnerships for
which it is general partner and, also, for affiliated entities.
Contributed Capital
The capitalization of the Venture is set forth in the
accompanying statements of partners' capital.
All Venture distributions, including those made from cash
flow, from the sale or refinancing of Partnership property and on dissolution
of the Venture, shall be made to the Venture Partners in proportion to their
approximate respective interests in the Partnership as follows:
Cable TV Fund 12-B 9%
Cable TV Fund 12-C 15%
Cable TV Fund 12-D 76%
---
100%
===
Venture Acquisitions and Sales
The Venture owns and operates the cable television systems
serving certain areas in and around Albuquerque, New Mexico; Palmdale,
California; and Tampa, Florida.
On September 20, 1991, the Venture entered into a purchase and
sale agreement with an unaffiliated party to sell the cable television system
serving the area in and around California City, California for $2,620,000.
Closing on this transaction occurred on April 1, 1992. The proceeds were used
to repay a portion of the amounts outstanding under the Venture's credit
facility.
The Venture's acquisitions were accounted for as purchases
with the individual purchase prices allocated to tangible and intangible assets
based upon an independent appraisal. The method of allocation of purchase
price was as follows: first, to the fair value of the net tangible assets
acquired; second, to the value of subscriber lists; third, to franchise costs;
and fourth, to cost in excess of interests in net assets purchased. Brokerage
fees paid to an affiliate of Intercable and other system acquisition costs were
capitalized and included in the cost of intangible assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Venture's tax returns are also prepared on the
accrual basis.
43
<PAGE> 44
Property, Plant and Equipment
Depreciation is provided using the straight-line method over
the following estimated service lives:
Distribution systems 5 - 15 years
Buildings 20 years
Equipment and tools 3 - 5 years
Premium television service equipment 5 years
Earth receive stations 5 - 15 years
Vehicles 3 years
Other property, plant and equipment 5 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to franchises and subscriber lists and cost in
excess of interests in net assets purchased are amortized using the
straight-line method over the following remaining estimated useful lives:
Franchise costs 3 years
Subscriber lists 1 year
Cost in excess of interests in net assets purchased 32 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
(3) TRANSACTIONS WITH JONES INTERCABLE, INC. AND AFFILIATES
Brokerage Fees
The Jones Group, Ltd., an affiliate of the General Partner,
performs brokerage services for the Venture in connection with Venture
acquisitions and sales. For brokering two acquisitions in the Tampa System for
the Venture, The Jones Group, Ltd. was paid fees totaling $13,120, or 4 percent
of the transaction prices, during 1992. Additionally, The Jones Group, Ltd.
received $65,500, or 2.5 percent of the transaction price, during 1992 for
brokering a sale in the Palmdale System. For brokering the acquisitions of two
SMATV systems in the Tampa System for the Venture, The Jones Group, Ltd. was
paid fees totaling $55,400, or 4 percent of the original purchase prices,
during 1991. There were no brokerage fees paid during the year ended December
31, 1993.
Management Fees and Reimbursements
Intercable manages the Venture and receives a fee for its
services equal to 5 percent of the gross revenues of the Venture, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid to Intercable for the years ended December 31, 1993, 1992 and 1991
were $4,456,577, $4,178,376 and $3,902,475, respectively.
The Venture reimburses Intercable for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid to corporate personnel, rent, data processing
services and other corporate facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each entity managed. Remaining overhead costs are allocated based on total
revenues and/or the cost of assets managed for the entity. Systems owned by
Intercable and all other systems owned by partnerships for which Intercable is
the general partner are also allocated a proportionate share of these expenses.
Intercable believes
44
<PAGE> 45
that the methodology used in allocating overhead and administrative expenses is
reasonable. Overhead and administrative expenses allocated to the Venture by
Intercable during the years ended December 31, 1993, 1992 and 1991 were
$6,048,783, $5,580,114 and $4,640,219, respectively.
The Venture was charged interest during 1993 at an average
interest rate of 10.61 percent on the amounts due Intercable, which
approximated Intercable's cost of borrowing. Total interest charged the
Venture by Intercable was $15,477, $126,073 and $171,942 during 1993, 1992 and
1991, respectively.
Payments to Affiliates for Programming Services
The Venture receives programming from Superaudio and The Mind
Extension University, affiliates of Intercable. Payments to Superaudio totaled
$134,179, $132,091 and $120,851 in 1993, 1992, and 1991, respectively.
Payments to The Mind Extension University totaled $79,002, $76,676 and $72,218
in 1993, 1992 and 1991, respectively.
(4) DEBT
<TABLE>
<CAPTION>
Debt consists of the following: December 31,
----------------------------------
1993 1992
------------- ------------
<S> <C> <C>
Lending institutions-
Revolving credit and term loan $ 73,800,000 $ 66,400,000
Senior secured notes 93,000,000 93,000,000
Capital lease obligations 898,697 1,040,488
------------- ------------
$167,698,697 $160,440,488
</TABLE>
During the first quarter of 1992, the Venture renegotiated its
debt arrangements, which increased the maximum amount of debt available to
$183,000,000. The Venture's debt arrangements consist of $93,000,000 of Senior
Notes placed with a group of institutional lenders and a $90,000,000 revolving
credit agreement with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent
and a final maturity date of March 31, 2000. The Senior Notes call for only
interest payments for the first four years, with interest and accelerating
amortization of principal payments for the next four years. Interest is
payable semi-annually. The Senior Notes carry a "make-whole" premium, which is
a prepayment penalty, if they are prepaid prior to maturity. The make-whole
premium protects the lenders in the event that the funds are reinvested at a
rate below 8.64 percent, and is calculated per the note agreement.
The Venture's current revolving credit facility has a maximum
amount available of $90,000,000. As of December 31, 1993, $73,800,000 was
outstanding under the current revolving credit agreement, leaving the Venture
with $16,200,000 of available borrowing capacity until March 31, 1994. The
revolving credit period is scheduled to expire on March 31, 1994, at which time
the principal balance will convert to a term loan payable in quarterly
installments with a final maturity date of March 31, 2000. The General Partner
is negotiating to extend the revolving credit period for one year. Interest is
at the Venture's option of LIBOR plus 1.25 percent to 1.75 percent, the CD rate
plus 1.375 percent to 1.875 percent or the Base Rate plus 0 percent to .50
percent. An annual commitment fee of .5 percent is required on the unused
portion of the facility. The effective interest rates on amounts outstanding
on the Venture's revolving credit facility as of December 31, 1993 and 1992
were 4.08 percent and 5.29 percent, respectively.
Both lending facilities are equal in standing with the other,
and both are equally secured by the assets of the Venture.
45
<PAGE> 46
During 1992, the Venture incurred costs associated with
renegotiating its debt arrangements. These fees were capitalized and are being
amortized over the life of the debt agreements.
During 1988, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of an additional $25,000,000.
The Venture paid a fee of $957,500. The agreement protects the Venture from
interest rates that exceed 10 percent for five years from the date of the
agreement. The fee was charged to interest expense over the life of this
agreement using the straight-line method.
Installments due on debt principal for each of the five years
in the period ending December 31, 1998 and thereafter, respectively, are:
$2,262,209, $4,697,609, $7,945,609, $30,201,870, $36,681,000 and $85,910,400,
respectively.
(5) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners of Cable TV
Funds 12-B, 12-C and 12-D.
The Venture's tax returns, the qualification of the Venture as
such for tax purposes, and the amount of distributable income or loss, are
subject to examination by Federal and state taxing authorities. If such
examinations result in changes with respect to the Venture's qualification as
such, or in changes with respect to the Venture's recorded loss, the tax
liability of the Venture's general partners would likely be changed
accordingly.
Taxable losses reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
allowed under generally accepted accounting principles and the expense allowed
for tax purposes under the Modified Accelerated Cost Recovery System (MACRS).
There are no other significant differences between taxable income or losses and
the net losses reported in the statements of operations.
(6) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation in the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC announced a further rulemaking which, when implemented, could
reduce rates further. The General Partner plans to mitigate a portion of these
reductions primarily through (a) new service offerings, (b) product
re-marketing and re- packaging and (c) marketing efforts directed at
non-subscribers.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
cable systems. The retransmission consent rules went into effect on October 6,
1993. In the cable television systems owned by the Venture, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
46
<PAGE> 47
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions, without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
In February 1993, the General Partner entered into a
settlement agreement related to litigation brought by Sunbelt Television, Inc.
against the Venture in the amount of $2,850,000. As of December 31, 1992, the
Venture had accrued $2,850,000, which was reflected as an increase in other
expense in the 1992 statement of operations. The settlement was paid by the
Venture in March 1993.
Offices and other facilities are rented under various
long-term lease arrangements. Rent paid under such lease arrangements totaled
$454,229, $450,295 and $345,994, respectively, for the years ended December 31,
1993, 1992 and 1991. Minimum commitments under operating leases for the five
years in the period ending December 31, 1998 and thereafter are as follows:
<TABLE>
<S> <C>
1994 $ 504,514
1995 463,103
1996 457,600
1997 460,542
1998 463,879
Thereafter 1,927,432
-----------
$ 4,277,070
===========
</TABLE>
(7) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years is presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Maintenance and repairs $ 1,119,086 $ 1,146,319 $ 1,594,607
============ ============ ============
Taxes, other than income
and payroll taxes $ 1,470,476 $ 1,369,852 $ 956,021
============ ============ ============
Advertising $ 1,022,289 $ 1,090,075 $ 1,628,016
============ ============ ============
Depreciation of property,
plant and equipment $ 18,772,872 $ 18,570,055 $ 21,023,337
============ ============ ============
Amortization of intangible
assets $ 6,878,365 $ 8,194,765 $ 9,769,716
============ ============ ============
</TABLE>
47
<PAGE> 48
CABLE TV FUND 12-BCD VENTURE
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Balance at
Beginning of Additions Sales and Other End of
Classification Period at cost Retirements Changes Period
- -------------- ------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ----------------------------
Cable distribution systems $189,435,971 $12,539,504 $ (41,121) $ - $201,934,354
Buildings 3,371,225 3,034,287 - - 6,405,512
Land 950,970 - - - 950,970
Equipment and tools 6,275,189 1,113,443 (8,500) - 7,380,132
Premium service equipment 20,877,905 1,234,276 (178,920) - 21,933,261
Earth receive stations 8,812,762 817,322 - - 9,630,084
Vehicles 1,493,037 153,873 (124,738) - 1,522,172
Leasehold improvements and
office furniture and equipment 1,881,527 172,213 - - 2,053,740
------------ ----------- ----------- -------- ------------
$233,098,586 $19,064,918 $ (353,279) $ - $251,810,225
============ =========== =========== ========= ============
Year Ended December 31, 1992
- ----------------------------
Cable distribution systems $177,877,168 $13,115,117 $(1,556,314) $ - $189,435,971
Buildings 2,914,286 456,939 - - 3,371,225
Land 947,191 3,779 - - 950,970
Equipment and tools 5,332,647 942,542 - - 6,275,189
Premium service equipment 19,840,474 2,162,551 (1,125,120) - 20,877,905
Earth receive stations 8,614,900 206,365 (8,503) - 8,812,762
Vehicles 1,608,840 138,020 (253,823) - 1,493,037
Leasehold improvements and
office furniture and equipment 1,760,955 120,572 - - 1,881,527
------------ ----------- ----------- -------- ------------
$218,896,461 $17,145,885 $(2,943,760)1 $ - $233,098,586
============ =========== =========== ========= ============
Year Ended December 31, 1991
- ----------------------------
Cable distribution systems $159,934,019 $17,958,119 $ (14,970) $ - $177,877,168
Buildings 2,807,534 106,752 - - 2,914,286
Land 947,191 - - - 947,191
Equipment and tools 4,526,523 807,124 (1,000) - 5,332,647
Premium service equipment 19,443,407 397,067 - - 19,840,474
Earth receive stations 8,057,118 1,033,906 (476,124) - 8,614,900
Vehicles 1,589,605 153,235 (134,000) - 1,608,840
Leasehold improvements and
office furniture and equipment 1,618,554 142,401 - - 1,760,955
------------ ----------- ------------ --------- ------------
$198,923,951 $20,598,604 $ (626,094) $ - $218,896,461
============ =========== ============ ========= ============
</TABLE>
1 Amount primarily represents the sale of the California City, California
cable television system.
48
<PAGE> 49
CABLE TV FUND 12-BCD VENTURE
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Amounts Balance at
Beginning of Charged to Sales and Other End of
Classification Period Expense Retirements Changes Period
- -------------- ------------ ----------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ----------------------------
Cable distribution systems $72,549,901 $14,946,872 $ (38,838) $ - $ 87,457,935
Buildings 824,315 182,593 - - 1,006,908
Land - - - - -
Equipment and tools 3,596,758 889,966 (8,500) - 4,478,224
Premium service equipment 16,565,723 1,828,317 (178,920) - 18,215,120
Earth receive stations 2,847,094 617,343 - - 3,464,437
Vehicles 1,196,549 176,064 (124,737) - 1,247,876
Leasehold improvements and
office furniture and equipment 1,496,248 131,717 - - 1,627,965
----------- ----------- ----------- -------- ------------
$99,076,588 $18,772,872 $ (350,995) $ - $117,498,465
=========== =========== =========== ========== ============
Year Ended December 31, 1992
- ----------------------------
Cable distribution systems $58,787,289 $14,290,562 $ (527,950) $ - $ 72,549,901
Buildings 675,849 148,466 - - 824,315
Land - - - - -
Equipment and tools 2,789,084 807,674 - - 3,596,758
Premium service equipment 15,098,943 2,340,928 (874,148) - 16,565,723
Earth receive stations 2,241,552 608,565 (3,023) - 2,847,094
Vehicles 1,270,445 166,727 (240,623) - 1,196,549
Leasehold improvements and
office furniture and equipment 1,289,115 207,133 - - 1,496,248
----------- ----------- ----------- --------- -------------
$82,152,277 $18,570,055 $(1,645,744)1 $ - $ 99,076,588
=========== =========== =========== ========== =============
Year Ended December 31, 1991
- ----------------------------
Cable distribution systems $43,708,145 $15,094,114 $ (14,970) $ - $ 58,787,289
Buildings 534,179 141,670 - - 675,849
Land - - - - -
Equipment and tools 1,908,874 881,219 (1,009) - 2,789,084
Premium service equipment 11,198,333 3,900,610 - - 15,098,943
Earth receive stations 1,805,466 568,573 (132,487) - 2,241,552
Vehicles 1,256,711 147,734 (134,000) - 1,270,445
Leasehold improvements and
office furniture and equipment 999,698 289,417 - - 1,289,115
----------- ----------- ----------- ---------- -------------
$61,411,406 $21,023,337 $ (282,466) $ - $ 82,152,277
=========== =========== =========== ========== =============
</TABLE>
1 Amount primarily represents the sale of the California City, California
cable television system.
49
<PAGE> 50
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL STATEMENTS
None
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnerships themselves have no officers or directors. Certain
information concerning directors and executive officers of the General Partner
is set forth below.
<TABLE>
<CAPTION>
Name Age Positions with the General Partner
---- --- ----------------------------------
<S> <C> <C>
Glenn R. Jones 63 Chairman of the Board and Chief Executive Officer
James B. O'Brien 44 President, Chief Operating Officer and Director
Ruth E. Warren 43 Group Vice President/Operations
Kevin P. Coyle 42 Group Vice President/Finance
Christopher J. Bowick 37 Group Vice President/Technology
Timothy J. Burke 42 Group Vice President/Taxation, Administration
Raymond L. Vigil 46 Group Vice President/Human Resources and Director
James J. Krejci 51 Group Vice President and Director
Elizabeth M. Steele 41 Vice President/General Counsel and Secretary
Michael J. Bartolementi 34 Controller
George J. Feltovich 52 Director
Patrick J. Lombardi 45 Director
Howard O. Thrall 46 Director
</TABLE>
Mr. Glenn R. Jones has served as Chairman of the Board of Directors
and Chief Executive Officer of the General Partner since its formation in 1970,
and he was President from June 1984 until April 1988. Mr. Jones was elected a
member of the Executive Committee of the Board of Directors in April 1985. He
is also Chairman of the Board of Directors and Chief Executive Officer of Jones
Spacelink, Ltd., a publicly held cable television company that is a subsidiary
of Jones International, Ltd. and the parent of the General Partner. Mr. Jones
is the sole shareholder, President and Chairman of the Board of Directors of
Jones International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a past and member of the Board of
Directors of the National Cable Television Association and is a former member
of its Executive Committee. Mr. Jones is a past director and member of the
Executive Committee of C-Span. Mr. Jones has been the recipient of several
awards including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society, the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs
Association President's Award in 1990; the Donald G. McGannon award for the
advancement of minorities and women in cable; the STAR Award from American
Women
50
<PAGE> 51
in Radio and Television, Inc., for exhibition of a commitment to the issues and
concerns of women in television and radio; and the Women in Cable Accolade in
1990 in recognition of support of this organization. Mr. Jones is also a
founding member of the James Madison Council of the Library of Congress, is on
the Board of Governors of the American Society of Training and Development and
is a director of the National Alliance of Business.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982 as System Manager, Brighton, Colorado, and was
later promoted to the position of General Manager, Gaston County, North
Carolina. Prior to being elected President and a Director of the General
Partner in December 1989, Mr. O'Brien served as a Division Manager, Director of
Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice
President/Operations. As President, he is responsible for the day-to-day
operations of the cable television systems managed and owned by the General
Partner. Mr. O'Brien is also President and a Director of Jones Cable Group,
Ltd., Jones Global Funds, Inc., and Jones Global Management, Inc., all
affiliates of the General Partner. Mr. O'Brien is a board member of Cable
Labs, Inc., the research arm of the cable television industry. He also serves
as a director of the Cable Television Administration and Marketing Association
and as a director of the Walter Kaitz Foundation.
Ms. Ruth E. Warren joined the General Partner in August 1980 and
served in various capacities, including system manager and Fund Vice President,
since then. Ms. Warren was elected Group Vice President/Operations of the
General Partner in September 1990. Ms. Warren also serves as Vice
President/Operations of Jones Spacelink, Ltd.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990. He is also a
member of the Board of Directors of Jones Spacelink, Ltd.
Mr. Raymond L. Vigil joined the General Partner in April 1993 as Group
Vice President/Human Resources and was elected a Director of the General
Partner in November 1993. Previous to joining the General Partner, Mr. Vigil
served as Executive Director of
51
<PAGE> 52
Learning with USWest from September 1989 to April 1993. Prior to that, Mr.
Vigil worked in various human resources posts over a 14-year term with the IBM
Corporation.
Mr. James J. Krejci joined Jones International, Ltd. in March 1985 as
Group Vice President. He was elected Group Vice President and Director of the
General Partner in August 1987. He is also an officer of Jones Futurex, Inc.,
a subsidiary of Jones Spacelink, Ltd. engaged in manufacturing and marketing
data encryption devices, Jones Information Management, Inc., a subsidiary of
Jones International, Ltd. providing computer data and billing processing
facilities and Jones Lightwave, Ltd., a company owned by Jones International,
Ltd. and Mr. Jones, and several of its subsidiaries engaged in the provision of
telecommunications services. Prior to joining Jones International, Ltd., Mr.
Krejci was employed by Becton Dickinson and Company, a medical products
manufacturing firm.
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. Ms. Steele also is an officer
of Jones Spacelink, Ltd. From August 1980 until joining the General Partner,
Ms. Steele was an associate and then a partner at the Denver law firm of Davis,
Graham & Stubbs, which serves as counsel to the General Partner.
Mr. Michael J. Bartolementi joined the General Partner in September
1984 as an accounting manager and was promoted to Assistant Controller in
September 1985. He was named Controller in November 1990.
Mr. George J. Feltovich was elected a Director of the General Partner
in March 1993. Mr. Feltovich has been a private investor since 1978. Prior to
1978, Mr. Feltovich served as an administrative and legal consultant to various
private and governmental housing programs. Mr. Feltovich was admitted to
practice law in California, Pennsylvania and the District of Columbia and is a
member of the California Bar Association.
Mr. Patrick J. Lombardi has been a Director of the General Partner
since February 1984 and has served as a member of the Audit Committee of the
Board of Directors since February 1985. In September 1985, Mr. Lombardi was
appointed Vice President of The Jones Group, Ltd., and in June 1989 was elected
President of Jones Global Group, Inc., both affiliates of the General Partner.
Mr. Lombardi is President and a director of Jones Financial Group, Ltd., an
affiliate of the General Partner, and Group Vice President/Finance and a
director of Jones International, Ltd.
Mr. Howard O. Thrall was elected a Director of the General Partner in
December 1988 and serves as a member of the Audit Committee and the special
Stock Option Committee, which was established in August of 1992. From 1984
until August 1993, Mr. Thrall was associated with Douglas Aircraft Company, an
aircraft manufacturing firm, most recently as Regional Vice President
Marketing. In September 1993, Mr. Thrall joined World Airways, Inc. as Vice
President of Sales, Asian Region.
52
<PAGE> 53
ITEM 11. EXECUTIVE COMPENSATION
The Partnerships have no employees; however, various personnel are
required to operate the cable television systems owned by the Partnerships.
Such personnel are employed by the General Partner and, pursuant to the terms
of the limited partnership agreements of the Partnerships, the cost of such
employment is charged by the General Partner to the Partnerships as a direct
reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited
partnership interests in any of the Partnerships.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnerships as contemplated by the limited partnership agreements of
the Partnerships and as disclosed in the prospectus for the Partnerships. The
General Partner believes that the terms of such transactions, which are set
forth in the Partnerships' limited partnership agreements, are generally as
favorable as could be obtained by the Partnerships from unaffiliated parties.
This determination has been made by the General Partner in good faith, but none
of the terms were or will be negotiated at arm's-length and there can be no
assurance that the terms of such transactions have been or will be as favorable
as those that could have been obtained by the Partnerships from unaffiliated
parties.
The General Partner charges the Partnerships for management fees, and
the Partnerships reimburse the General Partner for certain allocated overhead
and administrative expenses in accordance with the terms of the limited
partnership agreements of the Partnerships. These expenses consist primarily
of salaries and benefits paid to corporate personnel, rent, data processing
services and other facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services to
the Partnerships. Allocations of personnel costs are based primarily on actual
time spent by employees of the General Partner with respect to each Partnership
managed. Remaining overhead costs are allocated based on revenues and/or the
cost of assets managed for the Partnerships. Systems owned by the General
Partner and all other systems owned by partnerships for which Jones Intercable,
Inc. is the general partner are also allocated a proportionate share of these
expenses.
The General Partner also advances funds and charges interest on the
balance payable from the Partnerships. The interest rate charged the
Partnerships approximates the General Partner's weighted average cost of
borrowing. Affiliates of the General Partner have received amounts from the
Partnerships for performing brokerage services.
53
<PAGE> 54
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, for a fee based upon the number of subscribers receiving
the programming. These systems also receive educational video programming from
Mind Extension University, Inc., an affiliate of the General Partner, for a fee
based upon the number of subscribers receiving the programming.
The charges to the Partnerships for related transactions are as
follows for the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
Cable TV Fund 12-A 1993 1992 1991
------------------- ---- ---- ----
<S> <C> <C> <C>
Management fees $1,448,186 $1,334,651 $1,216,130
Brokerage fees -0- -0- 37,000
Allocation of expenses 1,993,892 1,822,265 1,484,588
Interest expense 1,029 -0- 1,071
Amount of notes and advances outstanding 188,223 261,348 -0-
Highest amount of notes and advances outstanding 261,348 261,348 385,283
Programming fees:
Superaudio 45,495 44,605 39,588
Mind Extension University 26,411 25,559 24,313
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
Cable TV Fund 12-B 1993 1992 1991
------------------- ---- ---- ----
<S> <C> <C> <C>
Management fees $1,348,760 $1,268,453 $1,121,743
Allocation of expenses 1,857,040 1,695,947 1,395,320
Interest expense -0- 29,205 205,339
Amount of notes and advances outstanding 163,266 289,033 215,769
Highest amount of notes and advances outstanding 289,033 289,033 2,607,894
Programming fees:
Superaudio 40,882 40,430 37,199
Mind Extension University 23,769 23,165 22,831
</TABLE>
The activities of Fund 12-C and Fund 12-D are limited to their equity ownership
in the Venture. See the following related party disclosure for the Venture.
54
<PAGE> 55
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
Cable TV Fund 12-BCD 1993 1992 1991
--------------------- ---- ---- ----
<S> <C> <C> <C>
Management fees $4,456,577 $4,178,376 $3,902,475
Brokerage fees -0- 78,620 55,400
Allocation of expenses 6,048,783 5,580,114 4,640,219
Interest expense 15,477 126,073 171,942
Amount of notes and advances outstanding 188,430 511,646 4,606,840
Highest amount of notes and advances outstanding 511,646 5,660,955 4,606,840
Programming fees:
Superaudio 134,179 132,091 120,851
Mind Extension University 79,002 76,676 72,218
</TABLE>
55
<PAGE> 56
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a)1. See index to financial statements at page 23 for
list of financial statements and exhibits thereto
filed as a part of this report.
2. Fund 12-A:
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation of Property,
Plant and Equipment
Fund 12-B:
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation of Property,
Plant and Equipment
Fund 12-D:
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation of Property,
Plant and Equipment
12-BCD Venture
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation of Property,
Plant and Equipment
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreements for Cable TV Funds
12-A, 12-B and 12-C. (1)
4.2 Limited Partnership Agreement of Cable TV Fund 12-D.
(3)
4.3 Joint Venture Agreement of Cable TV Fund 12-BCD
Venture dated as of March 17, 1986, among Cable TV
Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable
TV Fund 12-D, Ltd. (3)
10.1.1 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for Edwards Air Force Base, California
(Fund 12-BCD). (2)
56
<PAGE> 57
10.1.2 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Lancaster, California
(Fund 12-BCD). (2)
10.1.3 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for Unincorporated portions of Los Angeles
County, California (Fund 12-BCD). (2)
10.1.3.1 Copy of Los Angeles County Code regarding cable tv
system franchises (Fund 12- BCD). (8)
10.1.3.2 Copy of Ordinance 90-0118F dated 10/29/90 granting a
cable television franchise to Fund 12-BCD (Fund
12-BCD). (8)
10.1.4 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Green Valley/Elizabeth Lake/Leona
Valley unincorporated areas of Los Angeles County,
California (Fund 12-BCD). (3)
10.1.4.1 Ordinance 88-0166F dated 10/4/88 amending the
franchise described in 10.1.5 (Fund 12-BCD). (8)
10.1.5 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Palmdale, California (Fund
12-BCD). (8)
10.1.6 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Fort Myers, Florida (Fund
12-A). (1)
10.1.7 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for Lee County, Florida (Fund 12-A). (1)
10.1.7.1 Renewal of Permit dated 3/4/92 (Fund 12-A). (8)
10.1.8 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Tampa, Florida (Fund
12-BCD). (1)
10.1.8.1 Resolution No. 1153 dated 10/2/86 authorizing
consent to transfer of the franchise and amendment
to the franchise agreement (Fund 12-BCD). (8)
57
<PAGE> 58
10.1.8.2 Amendment to franchise agreement dated 10/6/86 (Fund
12-BCD). (8)
10.1.8.3 Franchise transfer, acceptance and consent to
transfer dated 10/6/86 (Fund 12- BCD). (8)
10.1.9 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Augusta, Georgia (Fund
12-B). (1)
10.1.10 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Blythe, Georgia (Fund
12-B). (3)
10.1.11 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the County of Burke, Georgia (Fund
12-B). (5)
10.1.12 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated Area of Columbia
County, Georgia (Fund 12-B). (8)
10.1.13 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Hephzibah, Georgia (Fund
12-B). (1)
10.1.14 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated Area of Richmond
County, Georgia (Fund 12-B). (1)
10.1.15 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated portions of Cook
County, Illinois (Fund 12-A). (3)
10.1.16 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Grayslake, Illinois
(Fund 12-A). (1)
10.1.17 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated Area of Lake
County, Illinois (Fund 12-A). (1)
10.1.18 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Libertyville, Illinois
(Fund 12- A). (1)
58
<PAGE> 59
10.1.19 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Mundelein, Illinois
(Fund 12-A). (1)
10.1.20 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Orland Park, Illinois
(Fund 12-A). (1)
10.1.21 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Park Forest, Illinois
(Fund 12-A). (1)
10.1.22 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Wauconda, Illinois
(Fund 12-A). (1)
10.1.23 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Albuquerque, New Mexico
(Fund 12- BCD). (2)
10.1.24 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the County of Bernalillo, New Mexico
(Fund 12- BCD). (2)
10.1.25 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Town of Bernalillo, New Mexico
(Fund 12-BCD). (2)
10.1.25.1 Resolution No. 12-14-87 dated 12/14/87 authorizing
the assignment of the franchise to Fund 12-BCD. (8)
10.1.26 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Bosque Farms, New
Mexico (Fund 12- BCD). (2)
10.1.27 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Corrales, New Mexico
(Fund 12- BCD). (2)
10.1.28 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Kirtland Air Force Base, New
Mexico (Fund 12- BCD). (8)
59
<PAGE> 60
10.1.29 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Los Ranchos, New Mexico
(Fund 12-BCD). (2)
10.1.30 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the County of Sandoval, New Mexico
(Fund 12-BCD). (2)
10.1.31 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the County of Valencia, New Mexico
(Fund 12-BCD). (2)
10.1.31.1 Resolution No. 88-23 dated 2/14/88 authorizing
assignment of the franchise to Fund 12-BCD. (8)
10.2.1 Credit Agreement, dated as of July 15, 1992, between
Cable TV Fund 12-A, Ltd. and Mellon Bank, N.A, for
itself and as agent for various lenders. (8)
10.2.2 Loan and Security Agreement, dated August 29, 1985,
between Cable TV Fund 12-B, Ltd. and The
Philadelphia National Bank, individually and as
agent for various lenders. (1)
10.2.2.1 Amendment No. 1 dated as of August 14, 1986, to Loan
and Security Agreement, dated August 29, 1985,
between Cable TV Fund 12-B, Ltd. and The
Philadelphia National Bank, individually and as
agent for various lenders. (8)
10.2.2.2 Amendment No. 2 dated March 31, 1988 to Loan and
Security Agreement, dated August 29, 1985, between
Cable TV Fund 12-B, Ltd. and The Philadelphia
National Bank, individually and as agent for various
lenders. (8)
10.2.2.3 Amendment No. 3 dated March 29, 1989 to Loan and
Security Agreement, dated August 29, 1985, between
Cable TV Fund 12-B, Ltd. and The Philadelphia
National Bank, individually and as agent for various
lenders. (8)
10.2.2.4 Amendment No. 4 dated November 29, 1991 to Loan and
Security Agreement dated November 1991 between Cable
TV Fund 12-B, Ltd. and Corestates Bank, N.A.
(formerly The Philadelphia National Bank),
individually and as agent for various lenders. (6)
60
<PAGE> 61
10.2.3 Note Purchase Agreement dated as of March 31, 1992
among Fund 12-BCD Venture and various note
purchasers. (8)
10.3.1 Purchase and Sale Agreement dated as of March 29,
1988 by and between Cable TV Fund 12-BCD Venture as
Buyer and Video Company as Seller. (4)
10.3.2 Purchase and Sale Agreement dated 9/20/91 and
amendments thereto between Cable TV Fund 12-BCD
Venture as Seller and Falcon Classic Cable Income
Properties, L.P. (Fund 12-BCD). (7)
__________
(1) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1985 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(2) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1986 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(3) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1987 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(4) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1988 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(5) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1990 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(6) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1991 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(7) Incorporated by reference from the Forms 8-K of Fund
12-B, Fund 12-C and Fund 12- D dated 4/6/92
(Commission File Nos. 0-13193, 0-13964 and 0-14206,
respectively).
(8) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1992 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(b) Reports on Form 8-K.
None.
61
<PAGE> 62
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CABLE TV FUND 12-A, LTD.
CABLE TV FUND 12-B, LTD.
CABLE TV FUND 12-C, LTD.
CABLE TV FUND 12-D, LTD.
Colorado limited partnerships
By: Jones Intercable, Inc.,
their general partner
By: /s/ GLENN R. JONES
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 25, 1994 Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
By: /s/ GLENN R. JONES
-------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 25, 1994 (Principal Executive Officer)
By: /s/ KEVIN P. COYLE
-------------------------------
Kevin P. Coyle
Group Vice President/Finance
and Treasurer
Dated: March 25, 1994 (Principal Financial Officer)
By: /s/ MICHAEL J. BARTOLEMENTI
-------------------------------
Michael J. Bartolementi
Controller
Dated: March 25, 1994 (Principal Accounting Officer)
</TABLE>
62
<PAGE> 63
<TABLE>
<S> <C> <C>
By: /s/ JAMES B. O'BRIEN
--------------------------------------
James B. O'Brien
Dated: March 25, 1994 President and Director
By: /s/ JAMES J. KREJCI
--------------------------------------
James J. Krejci
Group Vice President
Dated: March 25, 1994 and Director
By: /s/ PATRICK J. LOMBARDI
--------------------------------------
Patrick J. Lombardi
Dated: March 25, 1994 Director
By: /s/ RAYMOND L. VIGIL
--------------------------------------
Raymond L. Vigil
Dated: March 25, 1994 Director
By:
--------------------------------------
George J. Feltovich
Dated: Director
By:
--------------------------------------
Howard O. Thrall
Dated: Director
</TABLE>
63
