<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 30, 1995.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _________ to ________.
Commission File Number: 0-13193
CABLE TV FUND 12-A, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-0968104
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
Address of principal executive office
(303) 792-3111
-----------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 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
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CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------ ------------- -------------
<S> <C> <C>
CASH $ 200,753 $ 578,657
TRADE RECEIVABLES, less allowance for
doubtful receivables of $40,003 and $32,813
at September 30, 1995 and December 31, 1994,
respectively 474,333 374,817
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 76,898,826 72,891,760
Less-accumulated depreciation (45,257,897) (40,728,415)
------------- -------------
31,640,929 32,163,345
Franchise costs, net of accumulated amortization
of $20,768,422 and $20,131,554 at September 30, 1995
and December 31, 1994, respectively 2,583,700 3,220,568
Subscriber lists, net of accumulated amortization
of $11,585,526 and $11,411,057 at September 30, 1995
and December 31, 1994, respectively 25,339 199,808
------------- -------------
Total investment in cable
television properties 34,249,968 35,583,721
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 355,814 187,946
------------- -------------
Total assets $ 35,280,868 $ 36,725,141
============= =============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE> 3
CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------- ------------
<S> <C> <C>
LIABILITIES:
Debt $ 26,729,758 $ 26,402,399
Accounts payable-
Trade 53,102 30,848
General Partner - 1,305,933
Accrued liabilities 881,746 1,317,298
Subscriber prepayments 130,947 131,152
------------ ------------
Total liabilities 27,795,553 29,187,630
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (373,655) (373,133)
------------ ------------
(372,655) (372,133)
------------ ------------
Limited Partners-
Net contributed capital (104,000 units
outstanding at September 30, 1995 and
December 31, 1994) 44,619,655 44,619,655
Accumulated deficit (36,761,685) (36,710,011)
------------ ------------
7,857,970 7,909,644
------------ ------------
Total liabilities and
partners' capital (deficit) $ 35,280,868 $ 36,725,141
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE> 4
CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------------
1995 1994 1995 1994
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES $7,884,435 $7,209,550 $ 23,788,788 $ 21,814,073
COSTS AND EXPENSES:
Operating expenses 4,703,889 4,394,735 14,058,482 12,844,800
Management fees and
allocated overhead
from General Partner 932,749 863,600 2,861,409 2,713,707
Depreciation and
amortization 1,740,832 1,690,755 5,377,584 5,293,546
---------- ---------- ----------- ------------
OPERATING INCOME 506,965 260,460 1,491,313 962,020
---------- ---------- ----------- ------------
OTHER INCOME (EXPENSE):
Interest expense (492,393) (413,595) (1,532,779) (1,210,774)
Other, net 64,621 (70,436) (10,730) (145,654)
---------- ---------- ----------- ------------
Total other income
(expense), net (427,772) (484,031) (1,543,509) (1,356,428)
---------- ---------- ----------- ------------
NET INCOME (LOSS) $ 79,193 $ (223,571) $ (52,196) $ (394,408)
========== ========== ============ ============
ALLOCATION OF NET
INCOME (LOSS):
General Partner $ 792 $ (2,236) $ (522) $ (3,944)
========== ========== ============ ============
Limited Partners $ 78,401 $ (221,335) $ (51,674) $ (390,464)
========== ========== ============ ============
NET INCOME (LOSS) PER
LIMITED PARTNERSHIP UNIT $ .75 $ (2.13) $ (.50) $ (3.76)
========== ========== ============ ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 104,000 104,000 104,000 104,000
========== ========== ============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE> 5
CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
---------------------------------
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (52,196) $ (394,408)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 5,377,584 5,293,546
Amortization of interest rate protection contract 37,503 37,503
Decrease (increase) in trade receivables (99,516) 171,530
Increase in deposits, prepaid expenses and
deferred charges (242,136) (11,167)
Increase (decrease) in amount due General Partner (1,305,933) 1,014,775
Decrease in trade accounts payable,
accrued liabilities and subscriber prepayments (413,503) (185,544)
------------ ------------
Net cash provided by operating activities 3,301,803 5,926,235
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,007,066) (3,667,852)
------------ ------------
Net cash used in investing activities (4,007,066) (3,667,852)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 28,571,560 49,816
Repayment of debt (28,244,201) (3,475,845)
------------ ------------
Net cash provided by (used in) financing activities 327,359 (3,426,029)
------------ ------------
Decrease in cash (377,904) (1,167,646)
Cash, beginning of period 578,657 1,610,187
------------ ------------
Cash, end of period $ 200,753 $ 442,541
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,520,439 $ 1,220,742
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE> 6
CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Cable TV Fund 12-A, Ltd.
(the "Partnership") at September 30, 1995 and December 31, 1994, its Statements
of Operations for the three and nine month periods ended September 30, 1995 and
1994 and its Statements of Cash Flows for the nine month periods ended
September 30, 1995 and 1994. Results of operations for these periods are not
necessarily indicative of results to be expected for the full year.
The Partnership owns and operates the cable television systems serving
areas in and around Fort Myers, Florida; Lake County, Illinois; and Orland
Park/Park Forest, Illinois.
(2) Jones Intercable, Inc. (the "General Partner"), a publicly held
Colorado corporation, manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the three and nine month periods ended September 30, 1995 were
$394,222 and $1,189,439, respectively, compared to $360,478 and $1,090,704,
respectively, for the similar 1994 periods.
The Partnership 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
the Partnership. Allocations of personnel costs are based primarily on actual
time spent by employees of the General Partner with respect to each partnership
managed. Remaining expenses are allocated based on the pro rata relationship
of the Partnership's revenues to the total revenues of all systems owned or
managed by the General Partner, and certain of its subsidiaries. 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. Amounts charged the Partnership by the General Partner for
allocated overhead and administrative expenses for the three and nine month
periods ended September 30, 1995 were $538,527 and $1,671,970, respectively,
compared to $503,122 and $1,623,003, respectively, for the similar 1994
periods.
6
<PAGE> 7
CABLE TV FUND 12-A, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
For the nine months ended September 30, 1995, the Partnership
generated net cash from operating activities totaling approximately $3,302,000,
which is available to fund capital expenditures and non-operating costs.
Capital expenditures totaled approximately $4,007,000 during the first nine
months of 1995. Approximately 44 percent of these expenditures related to the
construction of service drops to subscribers' homes. Approximately 19 percent
of these expenditures related to the construction of new cable plant and
approximately 10 percent of these expenditures was for pay security equipment.
The remaining expenditures were used for various enhancements in the
Partnership's systems. Funding for these expenditures was provided by cash on
hand, cash generated from operations and borrowings under the credit facility.
Anticipated capital expenditures for the remainder of 1995 are approximately
$800,000. Approximately 30 percent is expected to be used to continue
construction of new cable plant and approximately 27 percent will be used for
the construction of service drops to subscribers' homes. The remainder of
anticipated expenditures is expected to be used for various enhancements in all
of the Partnership's systems. Funding for these expenditures is expected to be
provided by cash generated from operations and borrowings available under the
Partnership's credit facility discussed below.
On January 30, 1995, the Partnership entered into a $30,000,000
revolving credit facility and repaid the then- outstanding balance of
$26,125,000 under its previous term loan. Under terms of the agreement, the
revolving credit facility will expire on December 31, 1996, at which time the
then-outstanding balance will convert to a term loan. The term loan will be
payable in 20 consecutive quarterly installments that will commence on March
31, 1997. At September 30, 1995, $26,500,000 was outstanding under this credit
facility, leaving $3,500,000 of available borrowings. Generally, interest
payable on amounts borrowed under the revolving credit facility is at the
Partnership's option of Prime or a fixed rate defined as the London InterBank
Offered Rate (LIBOR) plus 1 percent. The effective interest rates on
outstanding obligations as of September 30, 1995 and 1994 were 6.91 percent and
6.25 percent, respectively.
In January 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $15,000,000. The
Partnership paid a fee of $150,000. The agreement protects the Partnership
from a three month LIBOR interest rate that exceeds 7 percent for three years
from the date of the agreement.
The General Partner believes that the Partnership has sufficient
sources of capital from cash on hand, cash generated from operations and
borrowings available under its credit facility to meet its presently
anticipated needs.
Regulatory Matters
The FCC's rate regulations related to the 1992 Cable Act contain
provisions for increasing rates for added channels, external costs and
inflation. The Partnership has been able to adjust rates recently under such
provisions. Such adjustments, together with a reduction in the cost of
implementing the 1992 Cable Act compared to such costs in prior periods, are
expected to cause the Partnership's revenue and cash flow to increase in fiscal
1996.
Currently, there is legislation before Congress which, if enacted,
would significantly change the regulatory environment in which the cable
industry operates. Such legislation may eliminate rate regulation and allow
telephone companies and others much broader entry into the cable television
business and, in turn, may allow cable operators into the telephone and other
telecommunications businesses. While the General Partner is encouraged by
provisions of the legislation, it is too early to assess the impact such
legislation, if enacted, would have on the Partnership.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $674,885, or approximately 9
percent, to $7,884,435 for the three month period ended September 30, 1995 from
$7,209,550 for the comparable 1994 period. Revenues of the Partnership
increased $1,974,715, or approximately 9 percent, to $23,788,788 for the nine
month period ended September 30, 1995 from $21,814,073 for the comparable 1994
period. The Partnership added approximately 4,410 basic subscribers since
7
<PAGE> 8
September 30, 1994, an increase of approximately 6 percent. The number of
basic subscribers totaled 72,355 at September 30, 1995 compared to 67,945 at
September 30, 1994. The increase in the number of basic subscribers accounted
for approximately 46 percent and 51 percent, respectively, of the increase in
revenues for the three and nine month periods. Basic service rate adjustments
implemented in all of the Partnership's systems accounted for approximately 31
percent and 32 percent, respectively, of the increase for the three and nine
month periods. No other individual factor was significant to the increase in
revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses increased $309,154, or approximately 7 percent, to
$4,703,889 for the three month period ended September 30, 1995 from $4,394,735
for the comparable 1994 period. Operating expenses represented approximately
60 percent of revenue for the third quarter of 1995 compared to approximately
61 percent of revenue for the same period in 1994. Operating expenses
increased $1,213,682, or approximately 9 percent, to $14,058,482 for the nine
month period ended September 30, 1995 from $12,844,800 for the comparable 1994
period. This expense represented approximately 59 percent of revenue for the
nine month periods ended September 30, 1995 and 1994. Increases in programming
costs accounted for approximately 78 percent and 61 percent of the increase in
operating expenses for the three and nine month periods ended September 30,
1995, respectively, and were due, in part, to the increase in the subscriber
base. No other individual factor was significant to the increase in operating
expenses.
Management fees and allocated overhead from the General Partner
increased $69,149, or approximately 8 percent, to $932,749 for the three month
period ended September 30, 1995 from $863,600 for the comparable 1994 period.
Management fees and allocated overhead from the General Partner increased
$147,702, or approximately 5 percent, to $2,861,409 for the nine month period
ended September 30, 1995 from $2,713,707 for the comparable 1994 period. These
increases were due to an increase in revenues, upon which such management fees
are based, as well as an increase in expenses allocated from the General
Partner. The General Partner has experienced increases in expenses, a portion
of which are allocated to the Partnership.
Depreciation and amortization expense increased $50,077, or
approximately 3 percent, to $1,740,832 for the three month period ended
September 30, 1995 from $1,690,755 for the comparable 1994 period.
Depreciation and amortization increased $84,038, or approximately 2 percent, to
$5,377,584 for the nine month period ended September 30, 1995 from $5,293,546
for the comparable 1994 period. These increases were due to additions to the
Partnership's depreciable asset base.
Operating income increased $246,505, to $506,965 for the three month
period ended September 30, 1995 from $260,460 for 1994. For the nine month
periods, operating income increased $529,293, or approximately 55 percent, to
$1,491,313 in 1995 from $962,020 in 1994. These increases were due to the
increases in revenues exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner and
depreciation and amortization expense.
The cable television industry generally measures the performance of a
cable television system in terms of cash flow or operating income before
depreciation and amortization. The value of a cable television system is often
determined using multiples of cash flow. This measure is not intended to be a
substitute or improvement upon the items disclosed on the financial statements,
rather it is included because it is an industry standard. Operating income
before depreciation and amortization increased $296,582, or approximately 15
percent, to $2,247,797 for the three months ended September 30, 1995 from
$1,951,215 for the similar period in 1994. Operating income before
depreciation and amortization increased $613,331, or approximately 10 percent,
to $6,868,897 for the nine month period ended September 30, 1995 from
$6,255,566 for the comparable 1994 period. These increases were due to the
increases in revenues exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner.
Interest expense increased $78,798, or approximately 19 percent, to
$492,393 for the three month period ended September 30, 1995 from $413,595 for
the comparable 1994 period. Interest expense increased $322,005, or
approximately 27 percent, to $1,532,779 for the nine month period ended
September 30, 1995 from $1,210,774 for the comparable 1994 period. These
increases were due to higher effective interest rates and higher outstanding
balances on interest bearing obligations.
8
<PAGE> 9
The Partnership recorded net income of $79,193 for the three month
period ended September 30, 1995, compared to a net loss of $223,571 for the
comparable 1994 period. The Partnership recorded net losses of $52,196 and
$394,408 for the nine month periods ended September 30, 1995 and 1994,
respectively. These changes are due to the factors discussed above.
9
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Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements 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.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 13, 1995
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 200,753
<SECURITIES> 0
<RECEIVABLES> 514,336
<ALLOWANCES> (40,003)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 76,898,826
<DEPRECIATION> (45,257,897)
<TOTAL-ASSETS> 35,280,868
<CURRENT-LIABILITIES> 1,065,795
<BONDS> 26,729,758
<COMMON> 0
0
0
<OTHER-SE> 7,485,315
<TOTAL-LIABILITY-AND-EQUITY> 35,280,868
<SALES> 0
<TOTAL-REVENUES> 23,788,788
<CGS> 0
<TOTAL-COSTS> 22,297,475
<OTHER-EXPENSES> 10,730
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,532,779
<INCOME-PRETAX> (52,196)
<INCOME-TAX> 0
<INCOME-CONTINUING> (52,196)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (52,196)
<EPS-PRIMARY> (.50)
<EPS-DILUTED> 0
</TABLE>
