<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: 0-13807
CABLE TV FUND 12-B, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-0969999
- --------------------------------------------------------------------------------
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 (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
----- -----
<PAGE> 2
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------ ------------- ------------
<S> <C> <C>
CASH $ 2,098,102 $ 3,782,989
TRADE RECEIVABLES, less allowance for doubtful
receivables of $135,492 and $79,128 at September 30, 1995
and December 31, 1994, respectively 1,232,700 860,247
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 82,140,059 78,503,036
Less - accumulated depreciation (42,815,685) (37,429,022)
------------ ------------
39,324,374 41,074,014
Franchise costs, net of accumulated amortization
of $27,077,543 and $25,063,424 at September 30, 1995
and December 31, 1994, respectively 12,037,229 14,051,348
Loss in excess of investment in cable television
joint venture (2,636,421) (1,804,126)
------------ ------------
Total investment in cable television properties 48,725,182 53,321,236
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 526,178 578,713
------------ ------------
Total assets $ 52,582,162 $ 58,543,185
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE> 3
CABLE TV FUND 12-B, 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 $ 36,234,191 $ 39,959,041
Accounts payable-
Trade 16,482 63,438
General Partner - 112,495
Accrued liabilities 910,976 924,648
Subscriber prepayments 118,042 113,843
------------ ------------
Total liabilities 37,279,691 41,173,465
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (325,824) (305,152)
------------ ------------
(324,824) (304,152)
------------ ------------
Limited Partners-
Net contributed capital (111,035 units
outstanding at September 30, 1995 and
December 31, 1994) 47,645,060 47,645,060
Accumulated deficit (32,017,765) (29,971,188)
------------ ------------
15,627,295 17,673,872
------------ ------------
Total liabilities and partners' capital (deficit) $ 52,582,162 $ 58,543,185
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE> 4
CABLE TV FUND 12-B, 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 $7,459,775 $6,732,337 $21,823,096 $20,138,118
COSTS AND EXPENSES:
Operating expenses 3,692,214 3,479,443 10,934,278 10,365,067
Management fees and allocated overhead
from General Partner 877,537 801,397 2,596,694 2,484,771
Depreciation and amortization 2,467,646 2,332,843 7,438,282 7,002,644
---------- ---------- ----------- -----------
OPERATING INCOME 422,378 118,654 853,842 285,636
---------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (654,185) (675,491) (2,220,532) (1,834,091)
Other, net 36,545 38,810 131,736 61,515
---------- ---------- ----------- -----------
Total other income (expense), net (617,640) (636,681) (2,088,796) (1,772,576)
---------- ---------- ----------- -----------
LOSS BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE (195,262) (518,027) (1,234,954) (1,486,940)
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE (257,337) (260,777) (832,295) (843,467)
---------- ---------- ----------- -----------
NET LOSS $ (452,599) $ (778,804) $(2,067,249) $(2,330,407)
========== ========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (4,526) $ (7,788) $ (20,672) $ (23,304)
========== ========== =========== ===========
Limited Partners $ (448,073) $ (771,016) $(2,046,577) $(2,307,103)
========== ========== =========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (4.04) $ (6.95) $ (18.43) $ (20.78)
========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 111,035 111,035 111,035 111,035
========== ========== =========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE> 5
CABLE TV FUND 12-B, 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 $(2,067,249) $(2,330,407)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 7,438,282 7,002,644
Decrease in amount due General Partner (112,495) (163,266)
Equity in net loss of cable television joint venture 832,295 843,467
Decrease (increase) in trade receivables (372,453) 166,387
Decrease (increase) in prepaid expenses and other assets 15,035 (94,261)
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (56,429) (279,070)
----------- -----------
Net cash provided by operating activities 5,676,986 5,145,494
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,637,023) (2,674,331)
----------- -----------
Net cash used in investing activities (3,637,023) (2,674,331)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 95,842 17,501
Repayment of debt (3,820,692) (2,998,334)
----------- -----------
Net cash used in financing activities (3,724,850) (2,980,833)
----------- -----------
Decrease in cash (1,684,887) (509,670)
Cash, beginning of period 3,782,989 4,856,992
----------- -----------
Cash, end of period $ 2,098,102 $ 4,347,322
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,239,681 $ 1,836,368
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE> 6
CABLE TV FUND 12-B, 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-B, Ltd.
(the "Partnership") at September 30, 1995 and December 31, 1994 and 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.
During the periods covered by this report, the Partnership owned and
operated the cable television system serving certain areas in and around
Augusta, Georgia (the "Augusta System"). The Augusta System was sold on
October 20, 1995. In addition, the Partnership continues to own an approximate
9 percent interest in Cable TV Fund 12-BCD Venture (the "Venture"). The
Venture owns and operates the cable television systems serving certain areas in
and around Albuquerque, New Mexico; Palmdale, California; and Tampa, Florida.
(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 (excluding
the Partnership's approximate 9 percent interest in the Venture) were $372,989
and $1,091,155, respectively, compared to $336,617 and $1,006,906,
respectively, for the similar 1994 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 corporate 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 overhead costs are allocated
based on revenues of the partnership as a percentage of the total revenues of
owned and managed systems of the General Partner. 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
(excluding the Partnership's approximate 9 percent interest in the Venture)
were $504,548 and $1,505,539, respectively, compared to $464,780 and
$1,477,865, respectively, for the similar 1994 periods.
(3) On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc., a wholly-owned subsidiary of the General Partner, for a
sales price of $142,618,000, subject to working capital adjustments. The sales
price represented the average of three separate, independent appraisals of the
Augusta System. The Partnership subsequently paid all of its indebtedness and
distributed the net sale proceeds to its partners of record as of September 30,
1995. The limited partners of the Partnership, as a group, received
$95,179,375 from the net sale proceeds and the General Partner received
$13,220,625 from the net sale proceeds. The distribution to the limited
partners of the Partnership equated to approximately $1,714 for each $1,000
invested in the Partnership. A vote of the limited partners of the Partnership
was conducted for the purpose of obtaining limited partner approval of the sale
of the Augusta System. The transaction was approved by the holders of 74.8
percent of the limited partnership interests of the Partnership. The
Partnership retains its ownership interest in the Venture. The pro forma
effect of the sale of the Augusta System on the results of the Partnership's
operations for the nine month periods ended September 30, 1995 and 1994,
assuming the transaction had occurred at the beginning of the periods, is
presented in the following unaudited tabulation:
6
<PAGE> 7
<TABLE>
<CAPTION>
For the Nine Months Ended September 30, 1995
---------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $21,823,096 $(21,823,096) $ -
=========== ============ ============
Operating Income $ 853,842 $ (853,842) $ -
=========== ============ ============
Net Income (Loss) $(2,067,249) $ 1,234,954 $ (832,295)
=========== ============ ============
<CAPTION>
For the Nine Months Ended September 30, 1994
---------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $20,138,118 $(20,138,118) $ -
=========== ============ ============
Operating Income $ 285,636 $ (285,636) $ -
=========== ============ ============
Net Income (Loss) $(2,330,407) $ 1,486,940 $ (843,467)
=========== ============ ============
</TABLE>
(4) In August 1995, the Venture entered into a purchase and sale agreement
pursuant to which it agreed to sell its Tampa, Florida system (the "Tampa
System") to the General Partner for a sales price of $110,395,667, subject to
working capital adjustments. This price is the average of three separate,
independent appraisals of the fair market value of the Tampa System. The
General Partner has assigned its rights and obligations under the purchase and
sale agreement to Jones Cable Holdings, Inc., a wholly owned subsidiary of the
General Partner. Closing of the sale is expected to occur during the first
half of 1996. Although the Venture's current debt arrangements do not allow
the Venture to make distributions, on November 8, 1995, the General Partner
accepted commitments from two commercial banks that will, subject to
negotiation of satisfactory documentation, amend the Venture's existing debt
arrangements to permit a $55,200,000 distribution to the Venture's partners.
The Partnership's portion of this distribution would be approximately
$5,067,000, of which approximately $3,800,000 would be distributed to limited
partners and $1,267,000 would be distributed to the General Partner. This
distribution will give the Partnership's limited partners an approximate return
of $68 for each $1,000 invested in the Partnership. This amount is in addition
to the $1,714 for each $1,000 invested in the Partnership returned to the
limited partners from the Augusta System sale. Because the Tampa System does
not constitute all or substantially all of the Venture's assets, no vote of the
limited partners of the Partnership is required in connection with this
transaction. Jones Cable Holdings, Inc. expects to acquire and then to
transfer the Tampa System, along with certain other properties that it will
acquire from other managed partnerships, to an unaffiliated cable television
system operator during the first half of 1996, as discussed below.
On August 11, 1995, the General Partner entered into an asset exchange
agreement (the "TWEAN Exchange Agreement") with Time Warner
Entertainment-Advance/Newhouse Partnership ("TWEAN"), an unaffiliated cable
television system operator. Pursuant to the TWEAN Exchange Agreement, Jones
Cable Holdings, Inc. will convey to TWEAN the Tampa System along with certain
other properties and cash in the amount of $3,500,000, subject to normal
closing adjustments. In return, Jones Cable Holdings, Inc. will receive from
TWEAN the cable television systems serving Andrews Air Force Base, Capitol
Heights, Cheltenham, District Heights, Fairmount Heights, Forest Heights,
Morningside, Seat Pleasant, Upper Marlboro, and portions of Prince George's
County, all in Maryland, and portions of Fairfax County, Virginia.
The pro forma effect of the sale of the Tampa System on the results of
the Venture's operations for the nine month periods ended September 30, 1995
and 1994, assuming the transaction had occurred at the beginning of the
periods, is presented in the following unaudited tabulation:
7
<PAGE> 8
<TABLE>
<CAPTION>
For the Nine Months Ended September 30, 1995
---------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $75,237,447 $(21,240,827) $ 53,996,620
=========== ============ ============
Operating Income $ 2,458,031 $ (622,489) $ 1,835,542
=========== ============ ============
Net Income (Loss) $(9,107,269) $ 2,376,752 $ (6,730,517)
=========== ============ ============
<CAPTION>
For the Nine Months Ended September 30, 1994
---------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $68,690,849 $(19,402,978) $ 49,287,871
=========== ============ ============
Operating Income $ 514,588 $ (68,797) $ 445,791
=========== ============ ============
Net Income (Loss) $(9,188,068) $ 2,303,590 $ (6,884,478)
=========== ============ ============
</TABLE>
(5) Summarized financial information regarding the Venture is presented
below.
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS September 30, 1995 December 31, 1994
------ ------------------ -----------------
<S> <C> <C>
Cash and accounts receivable $ 5,043,252 $ 8,358,010
Investment in cable television properties 156,250,703 160,282,700
Other assets 1,876,528 2,035,204
------------- -------------
Total assets $ 163,170,483 $ 170,675,914
============= =============
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL September 30, 1995 December 31, 1994
--------------------------------- ------------------ -----------------
<S> <C> <C>
Debt $ 180,699,799 $ 180,402,748
Payables and accrued liabilities 1,924,025 2,911,778
Partners' contributed capital 102,198,175 102,198,175
Accumulated deficit (121,651,516) (114,836,787)
------------- -------------
Total liabilities and partners' capital $ 163,170,483 $ 170,675,914
============= =============
</TABLE>
8
<PAGE> 9
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 $ 25,684,165 $ 23,044,158 $ 75,237,447 $ 68,690,849
Operating expenses (15,089,829) (13,917,034) (43,747,151) (41,274,181)
Management fees and allocated overhead
from General Partner (2,966,946) (2,716,895) (8,925,505) (8,413,202)
Depreciation and amortization (6,742,379) (5,955,556) (20,106,760) (18,488,878)
------------ ------------ ------------ ------------
Operating income 885,011 454,673 2,458,031 514,588
Interest expense (3,678,727) (3,364,650) (11,594,350) (9,680,988)
Other, net (50,399) 69,457 29,050 (21,668)
------------ ------------ ------------ ------------
Net loss $ (2,844,115) $ (2,840,520) $ (9,107,269) $ (9,188,068)
============ ============ ============ ============
</TABLE>
Management fees paid to Jones Intercable, Inc. by the Venture totaled
$1,284,208 and $3,761,872, for the three and nine months ended September 30,
1995, respectively, and $1,152,208 and $3,434,542, for the three and nine
months ended September 30, 1994, respectively. Reimbursements for overhead and
administrative expenses paid to the General Partner by the Venture totaled
$1,682,738 and $5,163,633 for the three and nine months ended September 30,
1995, respectively, and $1,564,687 and $4,978,660, for the three and nine
months ended September 30, 1994, respectively. Management fees paid by the
Venture and attributable to the Partnership totaled $117,890 and $345,340 for
the three and nine month periods ended September 30, 1995, respectively, and
$105,773 and $315,291 for the three and nine month periods ended September 30,
1994, respectively. Reimbursements for overhead and administrative expenses
paid by the Venture and attributable to the Partnership totaled $154,475 and
$474,022 for the three and nine month periods ended September 30, 1995,
respectively, and $143,638 and $457,041 for the three and nine month periods
ended September 30, 1994, respectively.
9
<PAGE> 10
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership
On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc., a wholly-owned subsidiary of the General Partner, for a
sales price of $142,618,000, subject to working capital adjustments. The sales
price represented the average of three separate, independent appraisals of the
Augusta System. The Partnership subsequently paid all of its indebtedness and
distributed the net sale proceeds to its partners of record as of September 30,
1995. The limited partners of the Partnership, as a group, received
$95,179,375 from the net sale proceeds and the General Partner received
$13,220,625 from the net sale proceeds. The distribution to the limited
partners of the Partnership equated to approximately $1,714 for each $1,000
invested in the Partnership. A vote of the limited partners of the Partnership
was conducted for the purpose of obtaining limited partner approval of the sale
of the Augusta System. The transaction was approved by the holders of 74.8
percent of the limited partnership interests of the Partnership. The
Partnership retains its ownership interest in the Venture. Refer to Note 3 of
the Notes to Unaudited Financial Statements for the pro forma effect of the
sale of the Augusta System on the results of the Partnership's operations for
the nine month periods ended September 30, 1995 and 1994.
The Venture
The Partnership owns an approximate 9 percent interest in Cable TV
Fund 12-BCD Venture (the "Venture"). The Partnership's investment in the
Venture, accounted for under the equity method, decreased by $832,295 during
the nine months ended September 30, 1995. This decrease represents the
Partnership's proportionate share of losses generated by the Venture. These
losses are expected to continue during the remainder of 1995.
For the nine months ended September 30, 1995, the Venture generated
net cash from operating activities totaling approximately $12,440,000, which is
available to fund capital expenditures and non-operating costs. Capital
expenditures for the Venture totaled approximately $15,754,000 during the first
nine months of 1995. These capital improvements were funded by cash on hand,
cash generated from operations, borrowings from the Venture's credit facility,
and advances from the General Partner. Service drops to homes accounted for
approximately 49 percent of capital expenditures. Approximately 23 percent
were for an upgrade of the Albuquerque system. The remaining expenditures
related to various system enhancements in all of the Venture's systems.
Expected capital expenditures for the remainder of 1995 are approximately
$1,200,000. Service drops to homes are anticipated to account for
approximately 61 percent of the expenditures. The remainder of the
expenditures relates to 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, if necessary, in its discretion,
advances from the General Partner.
In August 1995, the Venture entered into a purchase and sale agreement
pursuant to which it agreed to sell its Tampa, Florida system (the "Tampa
System") to the General Partner for a sales price of $110,395,667, subject to
working capital adjustments. This price is the average of three separate,
independent appraisals of the fair market value of the Tampa System. The
General Partner has assigned its rights and obligations under the purchase and
sale agreement to Jones Cable Holdings, Inc., a wholly owned subsidiary of the
General Partner. Closing of the sale is expected to occur during the first
half of 1996. Although the Venture's current debt arrangements do not allow
the Venture to make distributions, on November 8, 1995, the General Partner
accepted commitments from two commercial banks that will, subject to
negotiation of satisfactory documentation, amend the Venture's existing debt
arrangements to permit a $55,200,000 distribution to the Venture's partners.
The Partnership's portion of this distribution would be approximately
$5,067,000, of which approximately $3,800,000 would be distributed to limited
partners and $1,267,000 would be distributed to the General Partner. This
distribution will give the Partnership's limited partners an approximate return
of $68 for each $1,000 invested in the Partnership. This amount is in addition
to the $1,714 for each $1,000 invested in the Partnership returned to the
limited partners from the Augusta System sale. Because the Tampa System does
not constitute all or substantially all of the Venture's assets, no vote of the
limited partners of the Partnership is required in connection
10
<PAGE> 11
with this transaction. Jones Cable Holdings, Inc. expects to acquire and then
to transfer the Tampa System, along with certain other properties that it will
acquire from other managed partnerships, to an unaffiliated cable television
system operator during the first half of 1996, as discussed below.
On August 11, 1995, the General Partner entered into an asset exchange
agreement (the "TWEAN Exchange Agreement") with Time Warner
Entertainment-Advance/Newhouse Partnership ("TWEAN"), an unaffiliated cable
television system operator. Pursuant to the TWEAN Exchange Agreement, Jones
Cable Holdings, Inc. will convey to TWEAN the Tampa System along with certain
other properties and cash in the amount of $3,500,000, subject to normal
closing adjustments. In return, Jones Cable Holdings, Inc. will receive from
TWEAN the cable television systems serving Andrews Air Force Base, Capitol
Heights, Cheltenham, District Heights, Fairmount Heights, Forest Heights,
Morningside, Seat Pleasant, Upper Marlboro, and portions of Prince George's
County, all in Maryland, and portions of Fairfax County, Virginia.
The Venture's debt arrangements currently consist of $93,000,000 of
Senior Notes placed with a group of institutional lenders and an $87,000,000
credit agreement with a group of commercial bank lenders. However, as
discussed above, the General Partner has accepted commitments from two
commercial banks to amend the Venture's existing debt arrangements. The
amendment will permit the Venture to distribute approximately $55,200,000 of
the Tampa System's sale proceeds and it will provide the Venture with
additional liquidity.
The Senior Notes have a fixed interest rate of 8.64 percent and a
maturity date of March 31, 2000. The Senior Notes call for interest only
payments through March 1996, 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
that protects the lenders in the event that prepaid funds are reinvested at a
rate below 8.64 percent.
The balance outstanding on the Venture's existing credit agreement at
September 30, 1995 was $87,000,000. Under terms of this credit facility, the
loan will convert to a term loan on March 31, 1996 with quarterly installments
beginning September 30, 1996 and a final payment due March 31, 2000. However,
the proposed amendment discussed above will amend the existing amortization
schedule such that the amended credit facility will mature on December 31, 1999
with no principal payments required prior to such date. Interest on the
amended credit facility shall be at the Venture's option of the London
Interbank Offered Rate plus .0625 percent to 1.125 percent or the Base Rate
plus 0 percent to .125 percent. The effective interest rates on amounts
outstanding on the Venture's existing credit facility as of September 30, 1995
and 1994 were 7.38 percent and 6.44 percent, respectively.
Both lending facilities are equal, and will continue to be equal, in
standing with the other, and both are equally secured by the assets of the
Venture.
The General Partner presently believes that cash flows from operations
and, in its discretion, advances from the General Partner, will be sufficient
to fund capital expenditures and other liquidity needs of the Venture until the
refinancing of the debt arrangements and the closing of the sale of the Tampa
System.
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 Venture 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 Venture'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 Venture.
11
<PAGE> 12
RESULTS OF OPERATIONS
The Partnership
As discussed above, on October 20, 1995, the Partnership sold the
Augusta System; accordingly, results of operations are presented for the
Venture only.
The Venture
Revenues in the Venture's systems totaled $25,684,165 for the three
months ended September 30, 1995 compared to $23,044,158 for the three months
ended September 30, 1994, an increase of $2,640,007, or approximately 11
percent. For the nine month periods ended September 30, revenues totaled
$75,237,447 in 1995 compared to $68,690,849 in 1994, an increase of $6,546,598,
or approximately 10 percent. Since September 30, 1994, the Venture has added
12,431 basic subscribers representing an increase of approximately 6 percent.
Basic subscribers increased to 235,248 at September 30, 1995 from 222,817 at
September 30, 1994. This increase in the subscriber base accounted for
approximately 32 and 41 percent, respectively, of the three and nine month
increases in revenues. Basic service rate adjustments accounted for
approximately 33 percent and pay per view revenue accounted for approximately
21 percent of the three month increase. Basic service rate adjustments
primarily accounted for the remainder of the increases for the nine month
period. No other single factor significantly affected the increases 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 in the Venture's systems totaled $15,089,829 for
the three months ended September 30, 1995 compared to $13,917,034 for the
similar 1994 period, an increase of $1,172,795, or approximately 8 percent.
For the nine month periods ended September 30, operating expenses totaled
$43,747,151 in 1995 compared to $41,274,181 in 1994, an increase of $2,472,970,
or approximately 6 percent. Operating expenses represented 59 percent and 58
percent of revenues for the three and nine months ended September 30, 1995,
respectively, compared to 60 percent for the three and nine months ended
September 30, 1994. Increased programming costs primarily accounted for the
increases in operating expenses for the three and nine month periods ended
September 30, 1995. No other individual factor contributed significantly to
the increases in operating expenses.
Management fees and allocated overhead from the General Partner
totaled $2,966,946 for the three months ended September 30, 1995 compared to
$2,716,895 for the similar 1994 period, an increase of $250,051, or
approximately 9 percent. For the nine month periods ended September 30,
management fees and allocated overhead from the General Partner totaled
$8,925,505 in 1995 compared to $8,413,202 in 1994, an increase of $512,303, or
approximately 6 percent. These increases were primarily due to the increases
in revenues, upon which such management fees are based, as well as increases in
allocated expenses from the General Partner. The General Partner has
experienced increases in expenses, a portion of which is allocated to the
Venture.
Depreciation and amortization expense totaled $6,742,379 for the
quarter ended September 30, 1995 compared to $5,955,556 for the quarter ended
September 30, 1994, an increase of $786,823, or approximately 13 percent. For
the nine month periods ended September 30, depreciation and amortization
totaled $20,106,760 in 1995 compared to $18,488,878 in 1994, an increase of
$1,617,882, or approximately 9 percent. These increases were due primarily to
capital additions during 1994.
The Venture reported operating income of $885,011 for the three month
period ended September 30, 1995 compared to operating income of $454,673 for
the similar 1994 period, an increase of $430,338. For the nine month periods
ended September 30, the Venture's operating income totaled $2,458,031 in 1995
compared to $514,588 in 1994, an increase of $1,943,443. These increases were
due to the increases in revenues exceeding the increases in operating expenses,
management fees and allocated overhead expenses 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
12
<PAGE> 13
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 totaled $7,627,390 for the quarter ended
September 30, 1995 compared to $6,410,229 for the similar 1994 period, an
increase of $1,217,161, or approximately 19 percent. For the nine month
periods ended September 30, operating income before depreciation and
amortization totaled $22,564,791 in 1995 compared to $19,003,466 in 1994, an
increase of $3,561,325, or approximately 19 percent. 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 totaled $3,678,727 for the three months ended
September 30, 1995 compared to $3,364,650 for the similar 1994 period, an
increase of $314,077, or approximately 9 percent. For the nine month periods
ended September 30, interest expense totaled $11,594,350 in 1995 compared to
$9,680,988 in 1994, an increase of $1,913,362, or approximately 20 percent.
These increases were due primarily to higher balances on interest bearing
obligations and higher effective interest rates.
Net loss totaled $2,844,115 for the three months ended September 30,
1995 compared to $2,840,520 for the similar 1994 period, an increase of $3,595.
For the nine month periods ended September 30, net loss totaled $9,107,269 in
1995 compared to $9,188,068 in 1994, a decrease of $80,799. These changes were
due to the factors discussed above. Net losses are expected to continue.
13
<PAGE> 14
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
On September 20, 1995, a civil action titled David Hirsch, on behalf
of himself and all others similarly situated, Plaintiff vs. Jones Intercable,
Inc., Defendant, was filed in the District Court, County of Arapahoe, State of
Colorado (Case No. 95-CV-1800). These legal proceedings relate to the August
1995 purchase and sale agreement between the Cable TV Fund 12-BCD Venture (the
"Venture"), a Colorado joint venture in which Cable TV Fund 12-B, Ltd., Cable
TV Fund 12-C, Ltd., and Cable TV Fund 12-D, Ltd., Colorado limited
partnerships, are general partners, and Jones Intercable, Inc. ("Intercable"),
pursuant to which the Venture agreed to sell to Intercable the Tampa, Florida
cable television system (the "Tampa System") owned by the Venture. Intercable
is the general partner of each of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C,
Ltd. and Cable TV Fund 12-D, Ltd. The plaintiff, a limited partner in Cable TV
Fund 12- D, Ltd., has brought the action styled as a class action on behalf of
himself and all other limited partners of Cable TV Fund 12-D, Ltd. against
Intercable seeking to recover damages caused by Intercable's alleged breaches
of its fiduciary duties to the limited partners of Cable TV Fund 12-D, Ltd. in
connection with the sale of the Tampa System by the Venture to Intercable. The
complaint also requests unspecified injunctive relief. Intercable believes
that it has meritorious defenses, and Intercable intends to defend this lawsuit
vigorously.
Item 4. Submission of Matters to a Vote of Security Holders
In August 1995, a special vote of the limited partners of Cable TV
Fund 12-B, Ltd. (the "Partnership") was conducted through the mails on behalf
of the Partnership by Jones Intercable, Inc., the general partner of the
Partnership, for the purpose of obtaining limited partner approval of the sale,
to Jones Intercable, Inc. or one of its wholly-owned subsidiaries, of the
Augusta, Georgia cable television system owned by the Partnership, for
$142,618,000 in cash, subject to normal closing adjustments. Limited partners
of record at the close of business on July 31, 1995 were entitled to notice of,
and to participate in, this vote of limited partners. Of the 111,035 limited
partnership interests entitled to vote, 83,087 interests, or 74.8 percent,
voted to approve the transaction, 1,310 interests, or 1.2 percent, voted
against the transaction, 939 interests, or .8 percent, abstained from voting
and 25,699 interests, or 23 percent, did not vote on the proposal. The
transaction that was the subject of the vote closed on October 20, 1995.
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 September 20, 1995 reported that in
August 1995, Cable TV Fund 12-BCD Venture (the "Venture"), a
Colorado joint venture in which Cable TV Fund 12-B, Ltd., Cable TV
Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd., Colorado limited
partnerships, are general partners, entered into a purchase and
sale agreement pursuant to which the Venture agreed to sell the
Tampa, Florida cable television system (the "Tampa System") to
Jones Intercable, Inc. ("Intercable"). Intercable is the general
partner of each of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C,
Ltd. and Cable TV Fund 12-D, Ltd. Closing of the purchase of the
Tampa System by Intercable is expected to occur in early 1996.
Upon closing, Intercable anticipates exchanging the Tampa System
with an unaffiliated cable television operator in return for
systems owned by that operator. On September 20, 1995, a civil
action entitled David Hirsch, on behalf of himself and all others
similarly situated, Plaintiff vs. Jones Intercable, Inc.,
Defendant, was filed in the District Court, County of Arapahoe,
State of Colorado (Case No. 95-CV-1800). The Plaintiff has brought
the action as a class action on behalf of himself and all other
limited partners of Cable TV Fund 12-D, Ltd. (the "Partnership")
against Intercable seeking to recover damages caused by
Intercable's alleged breaches of its fiduciary duties to the
limited partners of the Partnership in connection with the sale to
Intercable of the Tampa System. The complaint also requests
unspecified injunctive relief. Intercable believes that it has
meritorious defenses, and Intercable intends to defend this lawsuit
vigorously.
14
<PAGE> 15
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-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
-----------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 14, 1995
15
<PAGE> 16
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> 2,098,102
<SECURITIES> 0
<RECEIVABLES> 1,232,700
<ALLOWANCES> (135,492)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 82,140,059
<DEPRECIATION> (42,815,685)
<TOTAL-ASSETS> 52,582,162
<CURRENT-LIABILITIES> 1,045,500
<BONDS> 36,234,191
<COMMON> 0
0
0
<OTHER-SE> 15,302,471
<TOTAL-LIABILITY-AND-EQUITY> 52,582,162
<SALES> 0
<TOTAL-REVENUES> 21,823,096
<CGS> 0
<TOTAL-COSTS> 20,969,254
<OTHER-EXPENSES> (131,736)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,220,532
<INCOME-PRETAX> (2,067,249)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,067,249)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,067,249)
<EPS-PRIMARY> (18.43)
<EPS-DILUTED> (18.43)
</TABLE>
