<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<TABLE>
<CAPTION>
<C><S>
(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, 1998.
[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to .
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</TABLE>
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 (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 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 1998 1997
------ ------------- ------------
<S> <C> <C>
CASH $ 1,929,970 $ 2,047,098
TRADE RECEIVABLES, less allowance for doubtful receivables of
$19,806 and $47,572 at September 30, 1998 and December 31, 1997,
respectively 151,940 1,197,527
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 41,350,726 86,596,679
Less- accumulated depreciation (25,537,148) (54,740,733)
------------- ------------
15,813,578 31,855,946
Franchise costs and other intangible assets, net of accumulated
amortization of $6,696,478 and $33,880,137 at September 30, 1998
and December 31, 1997, respectively 149,833 1,277,970
------------ ------------
Total investment in cable television properties 15,963,411 33,133,916
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,333,519 671,197
------------ ------------
Total assets $ 19,378,840 $ 37,049,738
============ ============
</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>
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1998 1997
- ------------------------------------------- ------------- ------------
<S> <C> <C>
LIABILITIES:
Debt $ 19,976,445 $ 23,272,240
Trade accounts payable and accrued liabilities 895,815 1,690,998
Subscriber prepayments 63,191 137,170
------------ ------------
Total liabilities 20,935,451 25,100,408
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit 12,155,989 (329,014)
Distributions (13,713,600) -
------------ ------------
(1,556,611) (328,014)
------------ ------------
Limited Partners-
Net contributed capital (104,000 units outstanding at
September 30, 1998 and December 31, 1997) 44,619,655 44,619,655
Accumulated deficit 48,521,145 (32,342,311)
Distributions (93,140,800) -
------------ ------------
- 12,277,344
------------ ------------
Total liabilities and partners' capital (deficit) $ 19,378,840 $ 37,049,738
============ ============
</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 For the Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1998 1997 1998 1997
------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $ 5,927,227 $8,981,771 $25,912,544 $27,562,790
COSTS AND EXPENSES:
Operating expenses 3,786,381 5,176,249 14,780,568 15,711,368
Management fees and allocated overhead
from General Partner 630,768 935,674 2,803,519 2,989,392
Depreciation and amortization 1,084,242 1,713,515 4,748,712 5,366,236
------------ ---------- ----------- -----------
OPERATING INCOME 425,836 1,156,333 3,579,745 3,495,794
------------ ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (357,811) (441,868) (1,177,625) (1,343,846)
Gain on sale of cable television system 90,423,474 - 90,423,474 -
Other, net 890,952 (8,932) 522,865 (62,257)
------------ ---------- ----------- -----------
Total other income (expense), net 90,956,615 (450,800) 89,768,714 (1,406,103)
------------ ---------- ----------- -----------
NET INCOME $ 91,382,451 $ 705,533 $93,348,459 $ 2,089,691
============ ========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $12,465,343 $ 7,055 $12,485,003 $ 20,897
=========== ========== =========== ===========
Limited Partners $78,917,108 $ 698,478 $80,863,456 $ 2,068,794
=========== ========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 758.82 $ 6.72 $ 777.53 $ 19.89
=========== ========== =========== ===========
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
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
-----------------------------
1998 1997
------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 93,348,459 $ 2,089,691
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,748,712 5,366,236
Gain on sale of cable television system (90,423,474) -
Decrease (increase) in trade receivables 1,045,587 (32,244)
Increase in deposits, prepaid expenses and
deferred charges (1,044,883) (456,490)
Decrease in trade accounts payable and accrued
liabilities and subscriber prepayments (869,162) (599,349)
------------- -----------
Net cash provided by operating activities 6,805,239 6,367,844
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,022,172) (4,408,888)
Proceeds from sale of cable television system, net of
brokerage fees 107,250,000 -
------------- -----------
Net cash provided by (used in) investing activities 103,227,828 (4,408,888)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 12,225 141,217
Repayment of debt (3,308,020) (3,111,215)
Distributions (106,854,400) -
------------- -----------
Net cash used in financing activities (110,150,195) (2,969,998)
------------- -----------
Decrease in cash (117,128) (1,011,042)
Cash, beginning of period 2,047,098 4,034,642
------------- -----------
Cash, end of period $ 1,929,970 $ 3,023,600
============= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,179,415 $ 1,512,590
============= ===========
</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 complete 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, 1998 and December 31, 1997, its Statements
of Operations for the three and nine month periods ended September 30, 1998 and
1997 and its Statements of Cash Flows for the nine month periods ended September
30, 1998 and 1997. 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 Lake County, Illinois (the "Lake County System") and Orland
Park/Park Forest, Illinois (the "Orland Park System"). The Partnership sold the
cable television system serving areas in and around Fort Myers, Florida (the
"Fort Myers System") on July 15, 1998. See Note 2.
(2) On July 15, 1998, the Partnership sold the Fort Myers System to an
unaffiliated cable television system operator for a sales price of $110,000,000,
subject to customary closing adjustments. From the proceeds, the Partnership
paid a brokerage fee to The Jones Group, Ltd., a subsidiary of the General
Partner, totaling $2,750,000, representing 2.5 percent of the sales price, for
acting as a broker in this transaction, retained a portion of the proceeds for
working capital purposes and distributed the remaining net sale proceeds of
approximately $106,854,400 to its partners of record as of the closing date of
the sale of the Fort Myers System. Pursuant to the terms of the Partnership's
limited partnership agreement, from the net sale proceeds the Partnership first
returned to the limited partners the capital they initially contributed to the
Partnership ($52,000,000) and the remainder was allocated 75 percent to the
limited partners ($41,140,800) and 25 percent to the General Partner
($13,713,600). The total limited partner distribution of $93,140,800, which was
distributed in August 1998, will give the Partnership's limited partners an
approximate return of $895 for each $500 limited partnership interest, or $1,790
for each $1,000 invested in the Partnership. Because the sale of the Fort Myers
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership was required to
approve this sale.
The pro forma effect of the sale of the Fort Myers System on the results of
the Partnership's operations for the nine months ended September 30, 1998 and
September 30, 1997, assuming the transaction had occurred at the beginning of
each year, is presented in the following unaudited tabulation:
For the Nine Months Ended September 30, 1998
--------------------------------------------
<TABLE>
<CAPTION>
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------- -----------
<S> <C> <C> <C>
Revenues $25,912,544 $(11,555,338) $14,357,206
=========== ============ ===========
Operating Income $ 3,579,745 $ (1,905,599) $ 1,674,146
=========== ============ ===========
Net Income $93,348,459 $(92,285,941) $ 1,062,518
=========== ============ ===========
</TABLE>
6
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For the Nine Months Ended September 30, 1997
--------------------------------------------
<TABLE>
<CAPTION>
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------- -----------
<S> <C> <C> <C>
Revenues $27,562,790 $(14,347,825) $13,214,965
=========== ============ ===========
Operating Income $ 3,495,794 $ (1,909,311) $ 1,586,483
=========== ============ ===========
Net Income $ 2,089,691 $ (1,824,960) $ 264,731
=========== ============ ===========
</TABLE>
(3) On July 10, 1998, the Partnership entered into an asset purchase agreement
to sell its Lake County System and Orland Park System to an unaffiliated party
for an aggregate sales price of $86,000,000, subject to customary closing
adjustments. Closing of the sale, which is expected to occur in the fourth
quarter of 1998, is subject to several conditions, including necessary
governmental and other third party consents. The sale has been approved by the
owners of a majority of the limited partnership interests of the Partnership.
Upon the closing of the proposed sale of the Lake County System and Orland Park
System, based upon financial information as of September 30, 1998, the
Partnership will repay all of its indebtedness, including $19,912,500 borrowed
under its term loan and capital lease obligations totaling $63,945, pay a
brokerage fee to The Jones Group, Ltd. totaling $2,150,000, representing 2.5
percent of the sales price, for acting as a broker in this transaction, settle
working capital adjustments, and then deposit $2,604,000 into an indemnity
escrow account. The remaining net sale proceeds of approximately $63,725,975
will be distributed to the Partnership's partners of record as of the closing
date of the sale of the Lake County System and Orland Park System. Because the
limited partners will have received total distributions equal to the capital
they initially contributed to the Partnership, the net sale proceeds will be
allocated 75 percent to the limited partners ($47,794,481) and 25 percent to the
General Partner ($15,931,494). Based upon financial information as of September
30, 1998, this distribution will give the Partnership's limited partners an
approximate return of $460 for each $500 limited partnership interest, or $920
for each $1,000 invested in the Partnership.
Taking into account the distribution from the sale of the Fort Myers System
and the anticipated distributions from the sales of the Lake County System and
the Orland Park System, excluding escrowed proceeds, the Partnership's limited
partners will have received a total of $1,355 for each $500 limited partnership
interest, or $2,710 for each $1,000 invested in the Partnership at the time the
Partnership is liquidated and dissolved.
The $2,604,000 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow from the closing date until November 15, 1999 as
security for the Partnership's agreement to indemnify the buyer under the asset
purchase agreement. The Partnership's primary exposure, if any, will relate to
the representations and warranties to be made about the Lake County System and
the Orland Park System in the asset purchase agreement. Any amounts remaining
from this indemnity escrow account and not claimed by the buyer at the end of
the escrow period will be returned to and distributed by the Partnership. Any
such distribution would be made 75 percent to the limited partners and 25
percent to the General Partner. If the entire $2,604,000 escrow amount is
available, the limited partners would receive $1,953,000 and the General Partner
would receive $651,000. This limited partner distribution would represent $19
for each $500 limited partnership interest, or $38 for each $1,000 invested in
the Partnership. The Partnership will continue in existence at least until any
amounts remaining from the indemnity escrow account have been distributed.
Since the Lake County System and the Orland Park System represent the remaining
assets of the Partnership, the Partnership will be liquidated and dissolved upon
the final distribution of any amounts remaining from the indemnity escrow
account, most likely in the fourth quarter of 1999. If any disputes with
respect to indemnification arise, the Partnership would not be dissolved until
such disputes were resolved, which could result in the Partnership continuing in
existence beyond 1999.
(4) Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation, is the "General Partner" and 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, 1998 were $296,361 and $1,295,627, respectively, compared to $449,089 and
$1,378,140, respectively, for the similar 1997 periods.
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
7
<PAGE>
services to the Partnership. Such services, and their related costs, are
necessary to the operations of the Partnership and would have been incurred by
the Partnership if it was a stand alone entity. 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 Intercable 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 and nine month
periods ended September 30, 1998 and 1997 were $334,407 and $1,507,892,
respectively, compared to $486,585 and $1,611,252, respectively, for the similar
1997 periods.
8
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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
- -------------------
On July 15, 1998, the Partnership sold the Fort Myers System to an
unaffiliated cable television system operator for a sales price of $110,000,000,
subject to customary closing adjustments. From the proceeds, the Partnership
paid a brokerage fee to The Jones Group, Ltd., a subsidiary of the General
Partner, totaling $2,750,000, representing 2.5 percent of the sales price, for
acting as a broker in this transaction, retained a portion of the proceeds for
working capital purposes and distributed the remaining net sale proceeds of
approximately $106,854,400 to its partners of record as of the closing date of
the sale of the Fort Myers System. Pursuant to the terms of the Partnership's
limited partnership agreement, from the net sale proceeds the Partnership first
returned to the limited partners the capital they initially contributed to the
Partnership ($52,000,000) and the remainder was allocated 75 percent to the
limited partners ($41,140,800) and 25 percent to the General Partner
($13,713,600). The total limited partner distribution of $93,140,800, which was
distributed in August 1998, will give the Partnership's limited partners an
approximate return of $895 for each $500 limited partnership interest, or $1,790
for each $1,000 invested in the Partnership. Because the sale of the Fort Myers
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership was required to
approve this sale.
On July 10, 1998, the Partnership entered into an asset purchase agreement
to sell its Lake County System and Orland Park System to an unaffiliated party
for an aggregate sales price of $86,000,000, subject to customary closing
adjustments. Closing of the sale, which is expected to occur in the fourth
quarter of 1998, is subject to several conditions, including necessary
governmental and other third party consents. The sale has been approved by the
owners of a majority of the limited partnership interests of the Partnership.
Upon the closing of the proposed sale of the Lake County System and Orland Park
System, based upon financial information as of September 30, 1998, the
Partnership will repay all of its indebtedness, including $19,912,500 borrowed
under its term loan and capital lease obligations totaling $63,945, pay a
brokerage fee to The Jones Group, Ltd. totaling $2,150,000, representing 2.5
percent of the sales price, for acting as a broker in this transaction, settle
working capital adjustments, and then deposit $2,604,000 into an indemnity
escrow account. The remaining net sale proceeds of approximately $63,725,975
will be distributed to the Partnership's partners of record as of the closing
date of the sale of the Lake County System and Orland Park System. Because the
limited partners will have received total distributions equal to the capital
they initially contributed to the Partnership, the net sale proceeds will be
allocated 75 percent to the limited partners ($47,794,481) and 25 percent to the
General Partner ($15,931,494). Based upon financial information as of September
30, 1998, this distribution will give the Partnership's limited partners an
approximate return of $460 for each $500 limited partnership interest, or $920
for each $1,000 invested in the Partnership.
Taking into account the distribution from the sale of the Fort Myers System
and the anticipated distributions from the sales of the Lake County System and
the Orland Park System, excluding escrowed proceeds, the Partnership's limited
partners will have received a total of $1,355 for each $500 limited partnership
interest, or $2,710 for each $1,000 invested in the Partnership at the time the
Partnership is liquidated and dissolved.
The $2,604,000 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow from the closing date until November 15, 1999 as
security for the Partnership's agreement to indemnify the buyer under the asset
purchase agreement. The Partnership's primary exposure, if any, will relate to
the representations and warranties to be made about the Lake County System and
the Orland Park System in the asset purchase agreement. Any amounts remaining
from this indemnity escrow account and not claimed by the buyer at the end of
the escrow period will be returned to and distributed by the Partnership. Any
such distribution would be made 75 percent to the limited partners and 25
percent to the General Partner. If the entire $2,604,000 escrow amount is
available, the limited partners would receive $1,953,000 and the General Partner
would receive $651,000. This limited partner distribution would represent $19
for each $500 limited partnership interest, or $38 for each $1,000 invested in
the Partnership. The Partnership will continue in existence at least until any
amounts remaining from the indemnity escrow account have been distributed.
Since the Lake County System and the Orland Park System represent the remaining
assets of the Partnership, the Partnership will be liquidated and dissolved upon
the final distribution of any amounts remaining from the indemnity escrow
account, most likely in the fourth quarter of
9
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1999. If any disputes with respect to indemnification arise, the Partnership
would not be dissolved until such disputes were resolved, which could result in
the Partnership continuing in existence beyond 1999.
For the nine month period ended September 30, 1998, the Partnership
generated net cash from operating activities totaling approximately $6,805,000,
which is available to fund capital expenditures and non-operating costs.
Capital expenditures totaled approximately $4,022,000 during the first nine
months of 1998. Approximately 45 percent of these expenditures related to the
construction of service drops to subscribers' homes. Approximately 29 percent
of these expenditures related to the construction of new cable plant associated
with new homes passed. The remaining expenditures were also used to maintain
the value of the Partnership's systems. Funding for these expenditures was
provided by cash generated from operations. Anticipated capital expenditures
for the remainder of 1998 are approximately $985,000. Approximately 41 percent
is expected to be used to continue construction of new cable plant associated
with new homes passed and approximately 23 percent will be used for the
construction of service drops to subscribers' homes. The remaining anticipated
expenditures are expected to be used to maintain the value of the Partnership's
systems until they are sold. Depending upon the timing of the sale of the Lake
County System and Orland Park System, the Partnership likely will only make the
1998 budgeted capital expenditures expected to be made during the Partnership's
continued ownership of the Lake County System and Orland Park System. Funding
for these expenditures is expected to be provided by cash on hand and cash
generated from operations. The Partnership is obligated to conduct its business
in the ordinary course until the Lake County System and Orland Park System are
sold.
As of September 30, 1998, $19,912,500 was outstanding under the
Partnership's term loan agreement, which is payable in consecutive quarterly
installments through December 31, 1999. A total of $3,037,500 in principal
payments was paid during the first nine months of 1998. This payment was funded
from cash on hand and cash generated from operations. The term loan will be
repaid in full upon the close of the sale of the Partnership's systems, which is
expected to occur in the fourth quarter of 1998. If the sale of the
Partnership's systems does not close in fourth quarter 1998, then the remaining
principal payment for 1998 that totals $1,012,500 will be paid on December 31,
1998, from cash on hand and cash generated from operations. Generally, interest
payable on the outstanding balance 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 September 30, 1998 and
1997 were 6.60 percent and 6.69 percent, respectively.
The Partnership has sufficient sources of capital from cash on hand and
cash generated from operations to meet its presently anticipated needs.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership decreased $3,054,544, or approximately 34
percent, to $5,927,227 for the three month period ended September 30, 1998 from
$8,981,771 for the comparable 1997 period. Revenues of the Partnership
decreased $1,650,246, or approximately 6 percent, to $25,912,544 for the nine
month period ended September 30, 1998 from $27,562,790 for the comparable 1997
period. These decreases were due to the sale of the Fort Myers System.
Disregarding the effect of the Fort Myers System sale, revenues would have
increased $458,963, or approximately 10 percent, to $4,844,805 for the three
month period ended September 30, 1998 from $4,385,842 for the comparable 1997
period. Revenues would have increased $1,142,241, or approximately 9 percent,
to $14,357,206 for the nine month period ended September 30, 1998 from
$13,214,965 for the comparable 1997 period. An increase in the number of basic
subscribers combined with basic service rate increases implemented in the
Partnership's systems primarily accounted for the increases in revenues. Basic
service rate increases accounted for approximately 45 percent and 54 percent,
respectively, of the increase in revenues for the three and nine month periods
ended September 30, 1998 and an increase in the number of basic subscribers
accounted for approximately 20 percent and 25 percent, respectively, of the
increase in revenues for the three and nine month periods ended September 30,
1998. The number of basic subscribers increased by 1,190 subscribers, or
approximately 3 percent, to 42,927 at September 30, 1998 from 41,737 at
September 30, 1997. No other individual factor was significant to the increase
in revenues.
Operating expenses consist primarily of costs associated with the operation
and 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 marketing expenses.
Operating expenses decreased $1,389,868, or approximately 27 percent, to
$3,786,381 for the three month period ended September 30, 1998 from $5,176,249
for the comparable 1997 period. Operating expenses decreased $930,800, or
10
<PAGE>
approximately 6 percent, to $14,780,568 for the nine month period ended
September 30, 1998 from $15,711,368 for the comparable 1997 period. These
decreases were due to the sale of the Fort Myers System. Disregarding the effect
of the Fort Myers System sale, operating expenses would have increased $287,177,
or approximately 11 percent, to $2,833,145 for the three month period ended
September 30, 1998 from $2,545,968 for the comparable 1997 period. Operating
expenses would have increased $585,256, or approximately 7 percent, to
$8,496,391 the nine month period ended September 30, 1998 from $7,911,135 for
the comparable 1997 period. These increases were primarily due to increases in
programming fees. No other individual factor was significant to the increase in
operating expenses. These expenses represented approximately 59 and 58 percent
of revenues, respectively, for the three month periods ended September 30, 1998
and 1997, and 60 percent for both the nine month periods ended September 30,
1998 and 1997.
The cable television industry generally measures the performance of a cable
television system in terms of operating cash flow (revenues less operating
expenses). 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 cash flow decreased $1,664,676, or
approximately 44 percent, to $2,140,846 for the three month period ended
September 30, 1998 from $3,805,522 for the similar period in 1997. Operating
cash flow decreased $719,446, or approximately 6 percent, to $11,131,976 for the
nine month period ended September 30, 1998 from $11,851,422 for the comparable
1997 period. These decreases were due to the sale of the Fort Myers System.
Disregarding the effect of the Fort Myers System sale, operating cash flow would
have increased $171,786, or approximately 9 percent, to $2,011,660 for the three
month period ended September 30, 1998 from $1,839,874 for the comparable 1997
period. Operating cash flow would have increased $556,985, or approximately 11
percent, to $5,860,815 for the nine month period ended September 30, 1998 from
$5,303,830 for the comparable 1997 period. These increases were due to the
increases in revenues exceeding the increases in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$304,906, or approximately 33 percent, to $630,768 for the three month period
ended September 30, 1998 from $935,674 for the comparable 1997 period.
Management fees and allocated overhead from the General Partner decreased
$185,873, or approximately 6 percent, to $2,803,519 for the nine month period
ended September 30, 1997 from $2,989,392 for the comparable 1997 period. These
decreases were due to the sale of the Fort Myers System. Disregarding the
effect of the Fort Myers System sale, management fees and allocated overhead
from the General Partner would have increased $67,152, or approximately 15
percent, to $524,902 for the three month period ended September 30, 1998 from
$457,750 for the comparable 1997 period. Management fees and allocated overhead
from the General Partner would have increased $116,622, or approximately 8
percent, to $1,575,789 for the nine month period ended September 30, 1998 from
$1,459,167 for the comparable period. These increases were due to the increase
in revenues, upon which such management fees and allocations are based, and the
timing of certain expenses allocated from Intercable.
Depreciation and amortization expense decreased $629,273, or approximately
37 percent, to $1,084,242 for the three month period ended September 30, 1998
from $1,713,515 for the comparable 1997 period. Depreciation and amortization
expense decreased $617,524 to $4,748,712 for the nine month period ended
September 30, 1998 from $5,366,236 for the comparable 1997 period. These
decreases were due to the sale of the Fort Myers System. Disregarding the
effect of the Fort Myers System sale, depreciation and amortization expense
would have increased $129,877, or approximately 17 percent, to $911,082 for the
three month period ended September 30, 1998 from $781,205 for the comparable
1997 period. Depreciation and amortization expense would have increased
$352,700, or approximately 16 percent, to $2,610,880 for the nine month period
ended September 30, 1998 from $2,258,180 for the comparable 1997 period. These
increases were due to additions to the Partnership's depreciable asset base.
Operating income decreased $730,497, or approximately 63 percent, to
$425,836 for the three month period ended September 30, 1998 from $1,156,333 for
the comparable 1997 period. Operating income increased $83,951, or
approximately 2 percent, to $3,579,745 for the nine month period ended September
30, 1998, from $3,495,794 for the comparable 1997 period. Disregarding the
effect of the Fort Myers System sale, operating income would have decreased
$25,243, or approximately 4 percent, to $575,676 for the three month period
ended September 30, 1998 from $600,919 for the comparable 1997 period. The
decrease in operating income for the three month period was due to the increase
in management fees and allocated overhead from the General Partner and the
increase in depreciation and amortization expense exceeding the increase in
operating cash flow. Operating income would have increased $87,663, or
approximately 6 percent, to $1,674,146 for the nine month period ended September
30, 1998 from $1,586,483 for the comparable 1997 period. The increase in
operating income for the nine month period was due to the increase in operating
cash flow exceeding the increases in management fees and allocated overhead from
the General Partner and the increase in depreciation and amortization expense.
11
<PAGE>
Interest expense decreased $84,057, or approximately 19 percent, to
$357,811 for the three month period ended September 30, 1998 from $441,868 for
the comparable 1997 period. Interest expense decreased $166,221, or
approximately 12 percent, to $1,177,625 for the nine month period ended
September 30, 1997 from $1,343,846 for the comparable 1997 period. These
decreases were due to lower outstanding balances on interest bearing
obligations.
The Partnership reported a gain on the sale of the Fort Myers System of
$90,423,474 in the first nine months of 1998. No similar gain was reported in
the comparable period of 1997.
The Partnership reported net income of $91,382,451 for the three months
ended September 30, 1998 compared to $705,533 for the similar 1997 period. The
Partnership reported net income of $93,348,459 for the nine months ended
September 30, 1998 compared to $2,089,691 for the similar 1997 period. These
changes were primarily due to the gain reported in 1998 compared to 1997 as
discussed above.
12
<PAGE>
Part II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The sale of the Lake County System and the Orland Park System was subject to the
approval of the holders of a majority of the limited partnership interests of
the Partnership. A vote of the limited partners was conductd by the General
Partner by mail in September and October 1998. Limited partners of record at
the close of business on August 31, 1998 were entitled to notice of, and to
participate in, this vote of limited partners. Following are the final results
of the vote of the limited partners:
<TABLE>
<CAPTION>
No. of
Interests
Entitled to Approved Against Abstained Did Not Vote
Vote No. % No. % No. % No. %
----------- ---- --- ---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lake County System and
the Orland Park System Sale 104,000 71,321 68.6 448 .4 558 .5 31,673 30.5
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
Report on Form 8-K dated July 30, 1998 reported that on July 15,
1998, Cable TV Fund 12-A, Ltd. sold the cable television system
serving subscribers in the community of Fort Myers, Florida, all in
the State of Florida, to an unaffiliated party for a sales price of
$110,000,000, subject to customary closing adjustments.
13
<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: November 13, 1998
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,929,970
<SECURITIES> 0
<RECEIVABLES> 151,940
<ALLOWANCES> 19,806
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,350,726
<DEPRECIATION> 25,537,148
<TOTAL-ASSETS> 19,378,840
<CURRENT-LIABILITIES> 959,006
<BONDS> 19,976,445
0
0
<COMMON> 0
<OTHER-SE> 1,556,611
<TOTAL-LIABILITY-AND-EQUITY> 19,378,840
<SALES> 0
<TOTAL-REVENUES> 25,912,544
<CGS> 0
<TOTAL-COSTS> 22,332,799
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,177,625
<INCOME-PRETAX> 93,348,459
<INCOME-TAX> 0
<INCOME-CONTINUING> 93,348,459
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,348,459
<EPS-PRIMARY> 777.53
<EPS-DILUTED> 777.53
</TABLE>
