<PAGE>
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 March 31, 1996.
--------------
[ ] 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
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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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1
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
------ ----------------- -----------------
<S> <C> <C>
CASH $ 522,612 $ 1,307,723
TRADE RECEIVABLES, less allowance for
doubtful receivables of $48,820 and $100,732
at March 31, 1996 and December 31, 1995, respectively 758,218 914,397
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 79,743,842 78,674,556
Less- accumulated depreciation (48,330,870) (46,771,823)
------------ ------------
31,412,972 31,902,733
Franchise costs and other intangible assets, net of
accumulated amortization of $32,792,348 at
March 31, 1996 and $32,573,148 at
December 31, 1995, respectively 2,170,639 2,389,839
------------ ------------
Total investment in cable television properties 33,583,611 34,292,572
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 443,388 310,414
------------ ------------
Total assets $ 35,307,829 $ 36,825,106
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
------------------------------------------- ------------- -------------
<S> <C> <C>
LIABILITIES:
Debt $ 26,204,499 $ 26,736,382
Accounts payable - General Partner 27,647 373,311
Trade accounts payable and accrued liabilities 798,540 1,674,946
Subscriber prepayments 142,764 123,690
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Total liabilities 27,173,450 28,908,329
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (367,164) (369,340)
------------ ------------
(366,164) (368,340)
------------ ------------
Limited Partners-
Net contributed capital (104,000 units
outstanding at March 31, 1996 and
December 31, 1995) 44,619,655 44,619,655
Accumulated deficit (36,119,112) (36,334,538)
------------ ------------
8,500,543 8,285,117
------------ ------------
Total liabilities and partners' capital (deficit) $ 35,307,829 $ 36,825,106
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------------------------
1996 1995
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<S> <C> <C>
REVENUES $8,560,741 $7,863,598
COSTS AND EXPENSES:
Operating expenses 5,092,122 4,687,708
Management fees and allocated overhead from
General Partner 1,010,167 994,806
Depreciation and amortization 1,790,555 1,833,974
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OPERATING INCOME 667,897 347,110
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OTHER INCOME (EXPENSE):
Interest expense (454,352) (522,613)
Other, net 4,057 (26,605)
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Total other income (expense), net (450,295) (549,218)
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NET INCOME (LOSS) $ 217,602 $ (202,108)
========== ==========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 2,176 $ (2,021)
========== ==========
Limited Partners $ 215,426 $ (200,087)
========== ==========
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $2.07 $(1.92)
========== ==========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 104,000 104,000
========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 217,602 $ (202,108)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,790,555 1,833,974
Amortization of interest rate protection contract -- 12,501
Decrease in trade receivables 156,179 73,748
Increase in deposits, prepaid expenses and deferred charges (145,282) (205,336)
Decrease in amount due General Partner (345,664) (1,305,933)
Decrease in trade accounts payable and accrued
liabilities and subscriber prepayments (857,332) (712,240)
----------- ------------
Net cash provided by (used in) operating activities 816,058 (505,394)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (1,069,286) (1,027,437)
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Net cash used in investing activities (1,069,286) (1,027,437)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- 28,015,986
Repayment of debt (531,883) (26,178,454)
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Net cash provided by (used in) financing activities (531,883) 1,837,532
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Increase (decrease) in cash (785,111) 304,701
Cash, beginning of period 1,307,723 578,657
----------- ------------
Cash, end of period $ 522,612 $ 883,358
=========== ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 706,776 $ 453,443
=========== ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
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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 March 31, 1996 and December 31, 1995 and its Statements of
Operations and Cash Flows for the three month periods ended March 31, 1996 and
1995. 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 month periods ended March 31, 1996 and 1995 were $428,037 and $393,180,
respectively.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for 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 the
General Partner 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
the Partnership to the General Partner for allocated overhead and administrative
expenses for the three month periods ended March 31, 1996 and 1995 were $582,130
and $601,626, respectively.
6
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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 three month period ended March 31, 1996, the Partnership used net
cash from operating activities totaling approximately $816,000, which is
available to fund capital expenditures and non-operating costs. Capital
expenditures totaled approximately $1,069,000 during the first three months of
1996. Approximately 50 percent of these expenditures related to the construction
of service drops to subscribers' homes. Approximately 21 percent of these
expenditures related to the construction of new cable plant. 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 Partnership's credit facility. Anticipated
capital expenditures for the remainder of 1996 are approximately $5,037,000.
Approximately 38 percent will be used for the construction of service drops to
subscribers' homes and approximately 25 percent is expected to be used to
continue construction of new cable plant. 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.
The Partnership is a party to a $30,000,000 revolving credit facility that
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 March 31, 1996,
$26,000,000 was outstanding under this credit facility, leaving $4,000,000 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 plus 1 percent. The
effective interest rates on outstanding obligations as of March 31, 1996 and
1995 were approximately 6.28 percent and approximately 7.19 percent,
respectively.
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.
REGULATION AND LEGISLATION
- --------------------------
The Partnership has filed cost-of-service showings in response to
rulemakings concerning the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act") for its Orland Park, Illinois and
Fort Myers, Florida systems and thus anticipates no further reductions in rates
in these systems. The cost-of-service showings have not yet received final
approvals from regulatory authorities, however, and there can be no assurance
that the Partnership's cost-of-service showings will prevent further rate
reductions in these systems until such final approvals are received.
The Telecommunications Act of 1996 (the "1996 Act"), which became law on
February 8, 1996, substantially revised the Communications Act of 1934, as
amended, including the Cable Communications Policy Act of 1984 and the 1992
Cable Act, and has been described as one of the most significant changes in
communications regulation since the original Communications Act of 1934. The
1996 Act is intended, in part, to promote substantial competition in the
telephone local exchange and in the delivery of video and other services. As a
result of the 1996 Act, local telephone companies (also known as local exchange
carriers or "LECs") and other service providers are permitted to provide video
programming, and cable television operators are permitted entry into the
telephone local exchange market. The FCC is required to conduct rulemaking
proceedings over the next several months to implement various provisions of the
1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
effective March 31, 1999 and the cable programming service tier of "small" cable
operators in systems providing service to 50,000 or fewer subscribers effective
immediately. The 1996 Act also revised the procedures for filing cable
programming service tier rate complaints and adds a new effective competition
test.
7
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It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Partnership in particular. The FCC will be
undertaking numerous rulemaking proceedings to interpret and implement the 1996
Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Partnership.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership increased $697,143, or approximately 9 percent,
to $8,560,741 for the three month period ended March 31, 1996 from $7,863,598
for the comparable 1995 period. An increase in the number of basic subscribers
accounted for approximately 41 percent of the increase in revenues. The
Partnership added 3,879 basic subscribers since March 31, 1996, an increase of
approximately 5 percent. Basic subscribers totaled 78,389 at March 31, 1996
compared to 74,510 at March 31, 1995. Basic service rate adjustments implemented
in all of the Partnership's systems accounted for approximately 41 percent of
the increase and advertising revenue accounted for approximately 18 percent of
the increase in revenues. 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 $404,414, or approximately 9 percent, to
$5,092,122 for the three month period ended March 31, 1996 compared to
$4,687,708 for the comparable 1995 period. Operating expenses represented
approximately 59 percent of revenues for the three month period ended March 31,
1996 compared to approximately 60 percent of revenues for the comparable 1995
period. An increase in programming fees accounted for approximately 57 percent
of the increase in operating expenses and was due, in part, to the increase in
the subscriber base. Increases in advertising expenses, which were due, in
part, to the increase in advertising activity, accounted for approximately 16
percent of the increase in operating expenses. No other individual factors
contributed significantly to the increase in operating expenses.
Management fees and allocated overhead from the General Partner increased
$15,361, or approximately 2 percent, to $1,010,167 for the three month period
ended March 31, 1996 compared to $994,806 for the comparable 1995 period. This
increase was due primarily to the increase in revenues, upon which such fees are
based.
Depreciation and amortization expense decreased $43,419, or approximately 2
percent, to $1,790,555 for the three month period ended March 31, 1996 compared
to $1,833,974 for the comparable 1995 period. This decrease was due to the
maturation of the Partnership's depreciable asset base.
Operating income increased $320,787, or approximately 92 percent, to
$667,897 for the three month period ended March 31, 1996 compared to $347,110
for the comparable 1995 period. This increase was due to the increase in
revenues and decrease in depreciation and amortization expense exceeding the
increases in operating expenses and management fees and allocated overhead from
the General Partner.
The cable television industry generally measures the financial 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 $277,368, or approximately 13
percent, to $2,458,452 for the three month period ended March 31, 1996 compared
to $2,181,084 for the comparable 1995 period. This increase was due to the
increase in revenues exceeding increases in operating expenses and management
fees and allocated overhead from the General Partner.
Interest expense decreased $68,261, or approximately 13 percent, to
$454,352 for the three month period ended March 31, 1996 compared to $522,613
for the comparable 1995 period. This decrease was due to lower effective
interest rates and lower outstanding balances on interest bearing obligations.
The Partnership recognized net income of $217,602 for the three month
period ended March 31, 1996 compared to a net loss of $202,108 for the
comparable 1995 period. This change was due to the factors discussed above.
8
<PAGE>
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
9
<PAGE>
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: May 13, 1996
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 522,612
<SECURITIES> 0
<RECEIVABLES> 758,218
<ALLOWANCES> (48,820)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 79,743,842
<DEPRECIATION> (48,330,870)
<TOTAL-ASSETS> 35,307,829
<CURRENT-LIABILITIES> 968,951
<BONDS> 26,204,499
0
0
<COMMON> 0
<OTHER-SE> 8,500,543
<TOTAL-LIABILITY-AND-EQUITY> 35,307,829
<SALES> 0
<TOTAL-REVENUES> 8,560,741
<CGS> 0
<TOTAL-COSTS> 7,892,844
<OTHER-EXPENSES> (4,057)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 454,352
<INCOME-PRETAX> 217,602
<INCOME-TAX> 0
<INCOME-CONTINUING> 217,602
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 217,602
<EPS-PRIMARY> 2.07
<EPS-DILUTED> 2.07
</TABLE>
