CABLE TV FUND 12-B LTD, 10-K405, 1999-03-30

CABLE TV FUND 12-B LTD
10-K405, 1999-03-30
RADIOTELEPHONE COMMUNICATIONS

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<PAGE>

FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to

Commission file number: 0-13807

CABLE TV FUND 12-B, LTD.
------------------------
(Exact name of registrant as specified in its charter)

Colorado 84-0969999
-------- ----------
(State of Organization) (IRS Employer Identification No.)

P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- --------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone
no. including area code)

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
Interests

Indicate by check mark whether the registrants, (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:

Yes x No
----- -----

Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
-----

DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>

Certain information contained in this Form 10-K Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements, other than statements of
historical facts, included in this Form 10-K Report that address activities,
events or developments that the Partnership or the General Partner expects,
believes or anticipates will or may occur in the future are forward-looking
statements. These forward-looking statements are based upon certain assumptions
and are subject to risks and uncertainties. Actual events or results may differ
from those discussed in the forward-looking statements as a result of various
factors.

PART I.
-------

ITEM 1. BUSINESS
-----------------

The Partnership. Cable TV Fund 12-B, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 12 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). Cable TV Fund 12-A, Ltd. ("Fund 12-A"), Cable TV Fund 12-C,
Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") are the other
partnerships that were formed pursuant to that Program. In 1986, the
Partnership, Fund 12-C and Fund 12-D formed a general partnership known as Cable
TV Fund 12-BCD Venture (the "Venture"), in which the Partnership owns a 9
percent interest, Fund 12-C owns a 15 percent interest and Fund 12-D owns a 76
percent interest. The Partnership and the Venture were formed for the purpose
of acquiring and operating cable television systems.

The Partnership does not own any cable television systems. The
Partnership's sole asset is its 9 percent interest in the Venture. Following
the disposition in December 1998 of its only remaining cable television system,
the Venture no longer owns any cable television systems. Until December 31,
1998, the Venture owned the cable television system serving Palmdale, Lancaster
and Rancho Vista and the military installation of Edwards Air Force Base, all in
California (the "Palmdale System") and until June 30, 1998, the Venture owned
the cable television system serving areas in and around Albuquerque, New Mexico
(the "Albuquerque System"). See Dispositions of Cable Television Systems below.

It is anticipated that Comcast Corporation ("Comcast") will acquire a
controlling interest in the General Partner during April 1999. As a result of
this transaction, it is expected that the current management of the General
Partner and a majority of the Board of Directors of the General Partner will be
replaced by Comcast.

Dispositions of Cable Television Systems.

Albuquerque System. On June 30, 1998, the Venture sold the
------------------
Albuquerque System to an indirect subsidiary of the General Partner for a sales
price of $222,963,267. The sales price represented the average of three
separate independent appraisals of the fair market value of the Albuquerque
System. The sale was approved by the holders of a majority of the limited
partnership interests of the Partnership, Fund 12-C and Fund 12-D.

Upon the sale of the Albuquerque System, the Venture repaid its
outstanding Senior Notes balance of $41,544,890 plus accrued interest, plus a
make whole premium of $1,332,823 and, as permitted under an amendment to the
Venture's credit facility, the Venture distributed $125,000,000 to the
Partnership, Fund 12-C and Fund 12-D in proportion to their ownership interests
in the Venture. The remaining proceeds were used to repay a portion of the
outstanding balance and accrued interest on the Venture's credit facility. The
Partnership received $11,474,475, or 9 percent of the $125,000,000 distribution,
which the Partnership distributed to its partners of record as of June 30, 1998.
This distribution was made to the limited partners in July 1998. Because the
limited partners had already received distributions in an amount in excess of
the capital initially contributed to the Partnership by the limited partners,
the net proceeds from the Albuquerque System's sale were distributed 75 percent
to the limited partners ($8,605,856) and 25 percent to the General Partner
($2,868,619). The distribution to the limited partners represented $77.50 for
each $500 limited partnership interest, or $155 for each $1,000 invested in the
Partnership.

2
<PAGE>

Palmdale System. On December 31, 1998, the Venture sold the Palmdale
---------------
System to an indirect subsidiary of the General Partner for a sales price of
$138,205,200, subject to customary closing adjustments. The sales price
represented the average of three separate independent appraisals of the fair
market value of the Palmdale System. The sale was approved by the holders of a
majority of the limited partnership interests of the Partnership, Fund 12-C and
Fund 12-D.

On December 24, 1998, a limited partner of Fund 12-C and Fund 12-D
filed a class action complaint naming the General Partner as defendant.
Plaintiff, on its behalf and on behalf of all other persons who are limited
partners of the Partnership, Fund 12-C and Fund 12-D, is challenging the terms
of the sale of the Palmdale System to an affiliate of the General Partner. The
case is in a very preliminary stage, but the General Partner believes that the
terms of the sale were in accordance with the requirements of relevant limited
partnership agreement provisions. See Item 3. Legal Proceedings.

From the proceeds of the Palmdale System's sale, the Venture settled
working capital adjustments, repaid all of its remaining indebtedness, which
totaled $51,265,690, retained $2,500,000 to cover expenses that the Venture and
its constituent partnerships may incur in connection with pending litigation
challenging the Venture's sale of its Tampa, Florida cable television system
(See Item 3. Legal Proceedings) and the class action lawsuit challenging the
Venture's sale of the Palmdale System (See Item 3. Legal Proceedings), and then
the Venture distributed the remaining sale proceeds of $89,101,000 to the
Partnership, Fund 12-C and Fund 12-D in proportion to their ownership interests
in the Venture. The Partnership received approximately $8,179,098, or 9 percent
of the $89,101,000 distribution, which the Partnership distributed to its
partners of record as of December 31, 1998. This distribution was made to the
limited partners in January 1999. Because the limited partners have already
received distributions in an amount in excess of the capital initially
contributed to the Partnership by the limited partners, the net proceeds from
the Palmdale System's sale were distributed 75 percent to the limited partners
($6,134,324) and 25 percent to the General Partner ($2,044,774). Limited
partners received $55 for each $500 limited partnership interest, or $110 for
each $1,000 invested in the Partnership, from the Partnership's portion of the
net proceeds of the Palmdale System's sale.

Taking into account all distributions that have been made, the limited
partners of the Partnership have received $1,032 for each $500 limited
partnership interest, or $2,064 for each $1,000 invested in the Partnership.

Although the sale of the Palmdale System represented the sale of the
remaining cable television system of the Venture and thus the only remaining
operating asset of the Partnership, the Venture and the Partnership will not be
dissolved until the Tampa litigation and the Palmdale litigation are finally
resolved and terminated. The Tampa litigation and the Palmdale litigation may
require the continuation of the Venture and the Partnership for several years
after 1999.

Because transferees of limited partnership interests following the
record date for the distribution of the Palmdale System's sale proceeds
(December 31, 1998) would not be entitled to any distributions from the
Partnership, a transfer of limited partnership interests following such record
date would have no economic value. The General Partner therefore has determined
that, pursuant to the authority granted to it by the Partnership's limited
partnership agreement, the General Partner will approve no transfers of limited
partnership interests after December 31, 1998.

ITEM 2. PROPERTIES
-------------------

As of December 31, 1998, neither the Partnership nor the Venture owned any
cable television systems.

3
<PAGE>

ITEM 3. LEGAL PROCEEDINGS
--------------------------

David Hirsch, Marty, Inc. Pension Plan (By its trustee and
----------------------------------------------------------
beneficiary, Martin Ury) and Jonathan Fussner and Eileen Fussner, derivatively
- ------------------------------------------------------------------------------
on behalf of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV
- ----------------------------------------------------------------------------
Fund 12-D, Ltd., plaintiffs v. Jones Intercable, Inc. defendant, and Cable TV
- -----------------------------------------------------------------------------
Fund 12-BCD Venture, Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and
- ---------------------------------------------------------------------------
Cable TV Fund 12-D, Ltd., nominal defendants (Arapahoe County District Court,
- --------------------------------------------
Colorado, Case No. 96-CV-1800, Division 3) is a derivative action filed on
behalf of the Partnership, Fund 12-C and Fund 12-D. The consolidated complaint
generally alleges that the General Partner breached its fiduciary duty to the
plaintiffs and to the other limited partners of the Partnership, Fund 12-C and
Fund 12-D and the Venture in connection with the Venture's sale of its Tampa,
Florida cable television system (the "Tampa System") to a subsidiary of the
General Partner and the subsequent trade of the Tampa System to Time Warner
Advance/Newhouse Partnership. The consolidated complaint also sets forth a
claim for breach of contract and a claim for breach of the implied covenant of
good faith and fair dealing. Among other things, the plaintiffs assert that the
subsidiary of the General Partner that acquired the Tampa System paid an
inadequate price for the Tampa System. The price paid for the Tampa System was
determined by the average of three separate, independent appraisals of the Tampa
System's fair market value as required by the limited partnership agreements of
the Partnership, Fund 12-C and Fund 12-D. The plaintiffs have challenged the
adequacy and independence of the appraisals. The consolidated complaint seeks
damages in an unspecified amount and an award of attorneys' fees, and the
complaint also seeks punitive damages and certain equitable relief.

The General Partner has filed its answer to the consolidated complaint
and has generally denied the substantive allegations in the complaint and has
asserted a number of affirmative defenses. The General Partner intends to
defend this lawsuit vigorously.

In August 1997, the General Partner moved for summary judgment in its
favor on the ground that plaintiffs did not make demand on the General Partner
for the relief they seek before commencing their lawsuits or show that such a
demand would have been futile. In January 1998, the Court (1) held that
plaintiffs did not make demand before commencing their lawsuits or show that
such demand would have been futile, (2) stayed the consolidated case and vacated
the February 1998 trial date, (3) ordered that plaintiffs make a demand on the
General Partner and that the General Partner appoint an independent counsel to
review, consider and report on that demand, (4) ordered that the independent
counsel be appointed at the March 1998 meeting of the General Partner's Board of
Directors and (5) ordered that the independent counsel be subject to the
approval of the Court. The Court set a new trial date for October 1998 in the
event that the case was not resolved through the independent counsel process or
otherwise. In March 1998, the General Partner's Board of Directors appointed an
independent counsel. The plaintiffs did not object to the General Partner's
choice, and the Court approved the General Partner's choice of independent
counsel. During the period March through May 1998, the independent counsel met
several times with the attorneys representing the plaintiffs and the General
Partner, and he also reviewed a great quantity of written materials. The
independent counsel issued his report on August 3, 1998, which concluded that
the plaintiffs' claims are not meritorious and are not supported by a
preponderance of the evidence. The independent counsel further determined that
the General Partner "did not breach a fiduciary duty" owed to the plaintiffs or
to the partnerships and the Venture and that the General Partner "did not commit
any impropriety in connection with" the Venture's sale of the Tampa System. The
independent counsel specifically found that the three appraisals of the Tampa
System were independent and objective and met the requirements of the
partnership agreements. He further noted that the General Partner had met its
fiduciary duties of fairness and full disclosure to the partnerships and the
Venture. On August 5, 1998, the General Partner moved to dismiss or for summary
judgment in its favor based on the report of independent counsel, a motion the
plaintiffs opposed. On September 11, 1998, the Court denied the General
Partner's motion to dismiss or for summary judgment based on the report of
independent counsel. The Court then set a new trial date for May 3, 1999. The
General Partner subsequently submitted a motion for reconsideration of the
Court's denial of the General Partner's motion to dismiss or for summary
judgment based on the report of the independent counsel. The Court has denied
such motion. The General Partner then filed an interlocutory appeal of the
Court's rulings to the Colorado Supreme Court. On February 1, 1999, the
Colorado Supreme Court issued an Order requiring the plaintiffs to show cause
why the General Partner's request for dismissal or summary judgment should not
be granted, and staying all proceedings in the trial court until the General
Partner's appeal is resolved.

4
<PAGE>

City Partnership Co., Plaintiff, vs. Jones Intercable, Inc. (District
-----------------------------------------------------------
Court, Arapahoe County, State of Colorado, Case No. 98-CV-4493). In December
1998, City Partnership Co., a limited partner of Fund 12-C and Fund 12-D, filed
a class action complaint naming the General Partner as defendant. Plaintiff, on
its behalf and on behalf of all other persons who are limited partners of the
Partnership, Fund 12-C and Fund 12-D, is challenging the terms of the sale of
the Palmdale System to an affiliate of the General Partner. This case is in a
very preliminary stage, but the General Partner believes that the terms of the
sale were in accordance with the requirements of relevant limited partnership
agreement provisions. The General Partner intends to defend this lawsuit
vigorously.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

The sale of the Palmdale 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 conducted by the General Partner by mail in
November and December 1998. Limited partners of record as of the close of
business on November 12, 1998 were entitled to notice of, and to participate in,
this vote of limited partners. Following are the results of the vote of the
limited partners:

<TABLE>
<CAPTION>
No. of Interests
Entitled to Vote Approved Against Abstained Did Not Vote
- ---------------- -------------- ------------ ------------ --------------
No. % No. % No. % No. %
------ ------ ----- ----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
111,035 66,215 59.63 1,198 1.08 1,223 1.10 42,399 38.19
</TABLE>

PART II.
--------

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
-------------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------

While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. During 1998, partners of the Partnership conducted
"limited tender offers" for interests in the Partnership at prices ranging from
$53 to $85 per interest. As of February 16, 1999, the number of equity security
holders in the Partnership was 7,382.

5
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------------------------------------------------
Cable TV Fund 12-B, Ltd. 1998 1997 1996 1995 1994
- ------------------------ --------------- ------------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ - $ 24,308,934 $ 26,956,006
Depreciation and Amortization - - - 8,263,976 9,380,877
Operating Income - - - 602,125 249,558
Equity in Net Income (Loss) of Cable
Television Joint Venture 22,468,979 (440,479) 5,722,705 (1,021,236) (1,182,039)
Net Income (Loss) 22,413,631/(c)/ (440,479) 5,722,705/(b)/ 89,473,978 /(a)/ (3,368,245)
Net Income (Loss) per Limited
Partnership Unit 155.36/(c)/ (3.93) 40.47/(b)/ 682.72/(a)/ (30.03)
Weighted Average Number of Limited
Partnership Units Outstanding 111,035 111,035 111,035 111,035 111,035
General Partner's Capital (Deficit) 55,818 (193,733) (189,328) 143,472 (304,152)
Limited Partners' Capital (Deficit) 167,452 (2,343,055) (1,906,981) (1,699,774) 17,673,872
Total Assets 6,357,594 55,348 55,348 1,269,060 60,347,311
Debt - - - - 39,959,041
General Partner Advances - - - - 112,495

<CAPTION>
For the Year Ended December 31,ember 31,
------------------------------------------------------------------------------
Cable TV Fund 12-BCD Venture 1998 1997 1996 1995 1994
- ---------------------------- --------------- ------------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $59,492,754 $ 82,675,018 $ 82,363,752 $101,399,697 $ 92,823,076
Depreciation and Amortization 16,500,689 21,837,251 22,142,809 26,666,735 24,809,654
Operating Income 3,924,809 6,129,688 1,880,308 4,127,622 289,904
Net Income (Loss) 243,722,979/(c)/ (4,798,248) 62,338,836/(b)/ (11,124,567) (12,876,242)
Partners' Capital (Deficit) 2,432,249 (27,189,730) (22,391,482) (29,730,318) (18,605,751)
Total Assets 69,325,751 124,269,504 120,899,336 163,486,029 170,675,914
Debt - 144,308,462 138,345,878 180,770,267 180,402,748
Jones Intercable, Inc. Advances - - - 4,198,739 616,810
</TABLE>

/(a)/ Net income resulted primarily from the sale of the Augusta System by
Cable TV Fund 12-B, Ltd. in October 1995.

/(b)/ Net income resulted primarily from the sale of the Tampa System by Cable
TV Fund 12-BCD Venture in February 1996.

/(c)/ Net income resulted primarily from the sale of the Albuquerque System and
the Palmdale System by Cable TV Fund 12-BCD Venture in June 1998 and
December 1998, respectively.

6
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------- -----------------------------------------------------------------------
OF OPERATIONS
-------------

The following discussion of the financial condition and results of
operations of Cable TV Fund 12-B, Ltd. (the "Partnership") and Cable TV Fund 12-
BCD Venture (the "Venture") contains, in addition to historical information,
forward-looking statements that are based upon certain assumptions and are
subject to a number of risks and uncertainties. The Partnership's and Venture's
actual results may differ significantly from the results predicted in such
forward-looking statements.

FINANCIAL CONDITION
- -------------------

Cable TV Fund 12-B, Ltd. -
- ------------------------

The Partnership owns a 9 percent interest in the Venture. The investment
in cable television joint venture is accounted for under the equity method. The
Partnership's investment increased $2,815,406 for the year ended December 31,
1998, which represents the Partnership's share of earnings by the Venture
reduced by distributions received.

Cable TV Fund 12-BCD Venture -
- ----------------------------

Upon the sale of the Albuquerque System, the Venture repaid its outstanding
Senior Notes balance of $41,544,890 plus accrued interest, plus a make whole
premium of $1,332,823 and, as permitted by an amendment to the Venture's credit
facility, the Venture distributed $125,000,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The remaining proceeds were used to repay a portion of the outstanding
balance and accrued interest on its credit facility. The Partnership received
$11,474,475, or 9 percent of the $125,000,000 distribution, which the
Partnership distributed to its partners of record as of the closing date of the
sale of the Albuquerque System. This distribution was made to the limited
partners in July 1998. Because the limited partners had already received
distributions in an amount in excess of the capital initially contributed to the
Partnership by the limited partners, the net proceeds from the Albuquerque
System's sale were distributed 75 percent to the limited partners and 25 percent
to the General Partner. The limited partners of the Partnership, as a group,
received $8,605,856 and the General Partner received $2,868,619. Such
distribution represented $77.50 for each $500 limited partnership interest, or
$155 for each $1,000 invested in the Partnership.

Upon the sale of the Palmdale System, the Venture repaid all of its
remaining indebtedness, which totaled approximately $51,265,690, retained
$2,500,000 to cover expenses that the Venture and its constituent partnerships
may incur related to pending litigation, settled working capital adjustments and
distributed the remaining sale proceeds of $89,101,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The Partnership received $8,179,098, or 9 percent of the $89,101,000
distribution, which the Partnership distributed to its partners of record as of
the closing date of the sale of the Palmdale System. This distribution was made
to the limited partners in January 1999. Because the limited partners had
already received distributions in an amount in excess of the capital initially
contributed to the Partnership by the limited partners, the net proceeds from
the Palmdale System's sale were distributed 75 percent to the limited partners
and 25 percent to the General Partner. The limited partners of the Partnership,
as a group, received $6,134,324 and the General Partner received $2,044,774.
Such distribution represented $55 for each $500 limited partnership interest, or
$110 for each $1,000 invested in the Partnership.

Taking into account all distributions that have been made, the
Partnership's limited partners have received $1,032 for each $500 limited
partnership interest, or $2,064 for each $1,000 invested in the Partnership.

7
<PAGE>

the pending litigation challenging the Venture's February 1996 sale of its
Tampa, Florida cable television system to an affiliate of the General Partner
and the pending litigation challenging the Venture's December 1998 sale of the
Palmdale System to an affiliate of the General Partner are finally resolved and
terminated. These two cases may require the continuation of the Venture and the
Partnership for several years beyond 1999.

Year 2000 Issue
- ---------------

The Year 2000 issue is the result of many computer programs being written
such that they will malfunction when reading a year of "00." This problem could
cause system failure or miscalculations causing disruptions of business
processes. Due to the sales of all of the Venture's remaining cable television
systems in 1998, and the planned liquidation and dissolution of the Partnership,
the Year 2000 issue will not have a material effect on the Partnership.

RESULTS OF OPERATIONS
- ---------------------

Due to the Albuquerque System sale on June 30, 1998 and the Palmdale System
sale on December 31, 1998, which were the Partnership's and Venture's last
remaining operating assets, a full discussion of results of operations would not
be comparable. The Venture had total revenues of $59,492,754 and generated
income from operations of $3,924,809 in 1998. Because of the gains of
$248,449,739 on the sale of the systems, the Venture realized net income of
$243,722,979, of which $22,468,979 was allocated to the Partnership. The
limited partners' net income allocation totaled $17,250,687, or $155.36 per
limited partnership unit, in 1998.

ITEM 8. FINANCIAL STATEMENTS
- -----------------------------

The audited financial statements of the Partnership for the year ended
December 31, 1998 follow.

8
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------

To the Partners of Cable TV Fund 12-B, Ltd.:

We have audited the accompanying balance sheets of CABLE TV FUND 12-B, LTD.
(a Colorado limited partnership) as of December 31, 1998 and 1997, and the
related statements of operations, partners' capital (deficit) and cash flows for
each of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the General Partner's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cable TV Fund 12-B, Ltd. as
of December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
March 12, 1999.

9
<PAGE>

CABLE TV FUND 12-B, LTD.
------------------------
(A Limited Partnership)

BALANCE SHEETS
--------------

December 31,
---------------------------

ASSETS 1998 1997
------ ------------- ------------
<S> <C> <C>
Cash $ - $ 55,348
Distribution receivable 6,134,324 -
Investment in cable television joint venture 223,270 -
------------- ------------

Total assets $ 6,357,594 $ 55,348
============= ============

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
- -------------------------------------------

LIABILITIES:
Loss in excess of investment in cable television
joint venture $ - $ 2,592,136
Accrued distributions 6,134,324 -
------------- ------------

Total liabilities 6,134,324 2,592,136
============= ============

COMMITMENTS AND CONTINGENCIES (Note 4)

PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Distributions (19,696,268) (14,782,875)
Accumulated earnings 19,751,086 14,588,142
------------- ------------

55,818 (193,733)
------------- ------------

Limited Partners-
Net contributed capital (111,035 units outstanding
at December 31, 1998 and 1997) 47,645,060 47,645,060
Distributions (114,620,017) (99,879,837)
Accumulated earnings 67,142,409 49,891,722
------------- ------------

167,452 (2,343,055)
------------- ------------

Total liabilities and partners'
capital (deficit) $ 6,357,594 $ 55,348
============= ============
</TABLE>

The accompanying notes to financial statements
are an integral part of these balance sheets.

10
<PAGE>

CABLE TV FUND 12-B, LTD.
------------------------
(A Limited Partnership)

STATEMENTS OF OPERATIONS
------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------

1998 1997 1996
------------ ---------- ----------
<S> <C> <C> <C>
OTHER EXPENSE $ (55,348) $ - $ -

EQUITY IN NET INCOME (LOSS) OF CABLE
TELEVISION JOINT VENTURE 22,468,979 (440,479) 5,722,705
----------- --------- ----------

NET INCOME (LOSS) $22,413,631 $(440,479) $5,722,705
=========== ========= ==========

ALLOCATION OF NET INCOME (LOSS):
General Partner $ 5,162,944 $ (4,405) $1,229,450
=========== ========= ==========

Limited Partners $17,250,687 $(436,074) $4,493,255
=========== ========= ==========

NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 155.36 $ (3.93) $ 40.47
=========== ========= ==========

WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 111,035 111,035 111,035
=========== ========= ==========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

11
<PAGE>

CABLE TV FUND 12-B, LTD.
------------------------
(A Limited Partnership)

STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------------------

1998 1997 1996
------------- ------------ ------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (193,733) $ (189,328) $ 143,472
Distributions (4,913,393) - (1,562,250)
Net income (loss) for year 5,162,944 (4,405) 1,229,450
------------ ----------- -----------

Balance, end of year $ 55,818 $ (193,733) $ (189,328)
============ =========== ===========

LIMITED PARTNERS:
Balance, beginning of year $ (2,343,055) $(1,906,981) $(1,699,774)
Distributions (14,740,180) - (4,700,462)
Net income (loss) for year 17,250,687 (436,074) 4,493,255
------------ ----------- -----------

Balance, end of year $ 167,452 $(2,343,055) $(1,906,981)
============ =========== ===========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

12
<PAGE>

CABLE TV FUND 12-B, LTD.
------------------------
(A Limited Partnership)

STATEMENTS OF CASH FLOWS
------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
---------------------------------------

1998 1997 1996
------------- ---------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 22,413,631 $(440,479) $ 5,722,705
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Decrease in receivables - - 1,064,238
Equity in net (income) loss of cable television
joint venture (22,468,979) 440,479 (5,722,705)
------------ --------- -----------

Net cash provided by (used in)
operating activities (55,348) - 1,064,238
------------ --------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Distribution from cable television venture 19,653,573 - 5,049,000
------------ --------- -----------

Net cash provided by investing activities 19,653,573 - 5,049,000
------------ --------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to General Partner (4,913,393) - (1,562,250)
Distributions to Limited Partners (14,740,180) - (4,700,462)
------------ --------- -----------

Net cash used in financing activities (19,653,573) - (6,262,712)
------------ --------- -----------

Decrease in cash (55,348) - (149,474)

Cash, beginning of year 55,348 55,348 204,822
------------ --------- -----------

Cash, end of year $ - $ 55,348 $ 55,348
============ ========= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Accrued distributions $ 6,134,324 $ - $ -
============ ========= ===========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

13
<PAGE>

CABLE TV FUND 12-B, LTD.
------------------------
(A Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
-----------------------------

(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------

Formation and Business
----------------------

Cable TV Fund 12-B, Ltd. ("Fund 12-B" or the "Partnership"), a Colorado
limited partnership, was formed on June 5, 1985, under a public program
sponsored by Jones Intercable, Inc. The Partnership was formed to acquire,
construct, develop and operate cable television systems. The Partnership owned
and operated the cable television system serving the areas in and around
Augusta, Georgia (the "Augusta System") until it was sold in 1995. Jones
Intercable, Inc. ("Intercable"), a publicly held Colorado corporation, is the
"General Partner" and manages the Partnership. The General Partner and its
subsidiaries also own and operate cable television systems. In addition, the
General Partner manages cable television systems for other limited partnerships
for which it is general partner and, also, for affiliated entities.

The Partnership owns a 9 percent interest in Cable TV Fund 12-BCD Venture
(the "Venture") through a capital contribution made to the Venture in April 1986
of $12,437,500. The Venture owned certain cable television systems in New
Mexico and California until they were sold on June 30, 1998 and December 31,
1998, respectively. The Venture recognized income of $243,722,979 in 1998,
incurred a loss of $4,798,248 in 1997 and recognized income of $62,338,836 in
1996, of which income of $22,468,979, a loss of $440,479 and income of
$5,722,705 were allocated to the Partnership during 1998, 1997 and 1996,
respectively.

Sales of Cable Television Systems
---------------------------------

On February 28, 1996, the Venture sold the cable television system serving
areas in and around Tampa, Florida (the "Tampa System") to a wholly owned
subsidiary of the General Partner for a sales price of $110,395,667, subject to
normal working capital closing adjustments. This price represented the average
of three separate independent appraisals of the fair market value of the Tampa
System. Because the Venture's debt arrangements did not originally allow the
Venture to make distributions on the sale of Venture assets, in February 1996
the Venture's debt arrangements were amended to permit a $55,000,000
distribution to the Venture's partners from the sale proceeds, and the balance
of the sale proceeds were used to reduce Venture indebtedness. The
Partnership's portion of this distribution was approximately $5,049,000, of
which approximately $3,787,000 was distributed to limited partners and
$1,262,000 was distributed to the General Partner in March 1996. The
Partnership also then distributed $1,200,000 of proceeds remaining from the sale
of the Augusta System, of which $900,000 was distributed to limited partners and
$300,000 was distributed to the General Partner. These distributions gave the
Partnership's limited partners an approximate return of $84 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 previously returned to the limited partners
from the Augusta System sale. Because the Tampa System did not constitute all
or substantially all of the Venture's assets, no vote of the limited partners of
the Partnership was required in connection with this transaction.

Upon the sale of the Albuquerque System, the Venture repaid its outstanding
Senior Notes balance of $41,544,890 plus accrued interest, plus a make whole
premium of $1,332,823 and, as permitted by an amendment to the Venture's credit
facility, the Venture distributed $125,000,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The remaining proceeds were used to repay a portion of the outstanding
balance and accrued interest on its credit facility. The Partnership received
$11,474,475, or 9 percent of the $125,000,000 distribution, which the
Partnership distributed to its partners of record as of the closing date of the
sale of the Albuquerque System. This distribution was made to the limited
partners in July 1998. Because the limited partners had already received
distributions in an amount in excess of the capital initially contributed to the
Partnership by the limited partners, the net proceeds from the Albuquerque
System's sale were distributed 75 percent to the limited partners and 25 percent
to the General Partner. The limited partners of the Partnership, as a group,
received $8,605,856 and the General Partner

14
<PAGE>

received $2,868,619. Such distribution represented $77.50 for each $500 limited
partnership interest, or $155 for each $1,000 invested in the Partnership.

Although the sale of the Palmdale System represented the sale of the only
remaining cable television system of the Venture and thus the only remaining
asset of the Partnership, the Venture and the Partnership will not be dissolved
until after the pending litigation challenging the Venture's February 1996 sale
of the Tampa System to an affiliate of the General Partner and the pending
litigation challenging the Venture's December 1998 sale of the Palmdale System
to an affiliate of the General Partner are finally resolved and terminated.
These two cases may require the continuation of the Venture and the Partnership
for several years beyond 1999.

Contributed Capital
-------------------

The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contributions to partnership capital.

The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.

All profits and losses of the Partnership were allocated 99 percent to the
limited partners and 1 percent to the General Partner, except for income or gain
from the sale or disposition of cable television properties, which will be
allocated to the partners based upon a formula set forth in the partnership
agreement, and interest income earned prior to the first acquisition by the
Partnership of a cable television system, which was allocated 100 percent to the
limited partners.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------

Accounting Records
------------------

The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Partnership's tax returns were also prepared on the accrual basis.

The preparation of financial statements in conformity with generally
accepted accounting principles required the General Partner's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

15
<PAGE>

Investment in Cable Television Joint Venture
--------------------------------------------

The Partnership's investment in the Venture was accounted for under the
equity method due to the Partnership's influence on the Venture as a General
Partner. The operations of the Venture were significant to the Partnership and
should be reviewed in conjunction with these financial statements.

(3) INCOME TAXES
------------

Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership were prepared and filed by the General
Partner.

The Partnership's tax returns, the qualification of the Partnership as such
for tax purposes, and the amount of distributable partnership income or loss
were subject to examination by federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.

Taxable loss reported to the partners is different from that reported in
the statements of operations due to the difference in depreciation recognized
under generally accepted accounting principles and the expense allowed for tax
purposes under the Modified Accelerated Cost Recovery System (MACRS). There are
no other significant differences between taxable loss and the net loss reported
in the statements of operations.

(4) COMMITMENTS AND CONTINGENCIES
-----------------------------

Tampa Litigation
----------------

The General Partner is a defendant in a now-consolidated civil action filed
by limited partners of Cable TV Fund 12-D, Ltd., one of the partners of the
Venture. The case, styled David Hirsch, Marty, Inc. Pension Plan (by its
----------------------------------------------
trustee and beneficiary, Martin Ury) and Jonathan and Eileen Fussner,
- ---------------------------------------------------------------------
derivatively on behalf of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and
- --------------------------------------------------------------------------------
Cable TV Fund 12-D, Ltd., plaintiffs v. Jones Intercable, Inc., defendant, and
- ------------------------------------------------------------------------------
Cable TV Fund 12-BCD Venture, Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd.
- --------------------------------------------------------------------------------
and Cable TV Fund 12-D, Ltd., nominal defendants (District Court, Arapahoe
- ------------------------------------------------
County, State of Colorado, Case No. 96-CV-1800, Division 3), is a derivative
action filed on behalf of Fund 12-B, Cable TV Fund 12-C, Ltd. ("Fund 12-C") and
Cable TV Fund 12-D, Ltd. ("Fund 12-D"). The consolidated complaint generally
alleges that the General Partner breached its fiduciary duty to the plaintiffs
and to the other limited partners of Fund 12-B, Fund 12-C and Fund 12-D and the
Venture in connection with the Venture's sale of the Tampa, Florida cable
television system (the "Tampa System") to a subsidiary of the General Partner
and the subsequent trade of the Tampa System to Time Warner Entertainment
Advance/Newhouse Partnership ("Time Warner"), an unaffiliated cable television
system operator, in exchange for cable television systems owned by Time Warner.
The consolidated complaint also sets forth a claim for breach of contract and a
claim for breach of the implied covenant of good faith and fair dealing. Among
other things, the plaintiffs assert that the subsidiary of the General Partner
that acquired the Tampa System paid an inadequate price for the Tampa System.
The price paid for the Tampa System was determined by the average of three
separate independent appraisals of the Tampa System's fair market value as
required by the limited partnership agreements of Fund 12-B, Fund 12-C and Fund
12-D. The plaintiffs have challenged the adequacy and independence of the
appraisals. The consolidated complaint seeks damages in an unspecified amount
and an award of attorneys' fees, and the complaint also seeks punitive damages
and certain equitable relief.

The General Partner has filed its answer to the consolidated complaint and
has generally denied the substantive allegations in the complaint and has
asserted a number of affirmative defenses. The General Partner intends to
defend this lawsuit vigorously.

16
<PAGE>

counsel be subject to the approval of the court. The court set a new trial date
for October 1998 in the event that the case was not resolved through the
independent counsel process or otherwise. In March 1998, the General Partner's
Board of Directors appointed an independent counsel. The plaintiffs did not
object to the General Partner's choice, and the Court approved the General
Partner's choice of independent counsel. During the period March through May
1998, the independent counsel met several times with the attorneys representing
the plaintiffs and the General Partner, and he also reviewed a great quantity of
written materials. The independent counsel issued his report on August 3, 1998,
which concluded that the plaintiffs' claims are not meritorious and are not
supported by a preponderance of the evidence. The independent counsel further
determined that the General Partner "did not breach a fiduciary duty" owed to
the plaintiffs or to the partnerships and the Venture and that the General
Partner "did not commit any impropriety in connection with" the Venture's sale
of the Tampa System. The independent counsel specifically found that the three
appraisals of the Tampa System were independent and objective and met the
requirements of the partnership agreements. He further noted that the General
Partner had met its fiduciary duties of fairness and full disclosure to the
partnerships and the Venture. On August 5, 1998, the General Partner moved to
dismiss or for summary judgment in its favor based on the report of independent
counsel, a motion the plaintiffs opposed. On September 11, 1998, the Court
denied the General Partner's motion to dismiss or for summary judgment based on
the report of independent counsel. The Court then set a new trial date for May
3, 1999. The General Partner subsequently submitted a motion for reconsideration
of the Court's denial of the General Partner's motion to dismiss or for summary
judgment based on the report of the independent counsel. The Court denied such
motion. The General Partner then filed an interlocutory appeal of the Court's
rulings to the Colorado Supreme Court. On February 1, 1999, the Colorado Supreme
Court issued an order requiring the plaintiffs to show cause why the General
Partner's request for dismissal or summary judgment should not be granted, and
staying all proceedings in the trial court until the General Partner's appeal is
resolved.

Palmdale Litigation
-------------------

In December 1998, City Partnership Co. ("Plaintiff"), a limited partner of
Fund 12-C and Fund 12-D, filed a class action complaint in the District Court,
Arapahoe County, State of Colorado (Case No. 98-CV-4493) naming the General
Partner as defendant. Plaintiff, on its behalf and on behalf of all other
persons who are limited partners of the Partnership, Fund 12-C and Fund 12-D, is
challenging the terms of sale of the Palmdale System to an affiliate of the
General Partner. This case is in a very preliminary stage, but the General
Partner believes that the terms of the sale were in accordance with the
requirements of relevant limited partnership agreement provisions. The General
Partner intends to defend this lawsuit vigorously.

17
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------

To the Partners of Cable TV Fund 12-BCD Venture:

We have audited the accompanying balance sheets of CABLE TV FUND 12-BCD
VENTURE (a Colorado general partnership) as of December 31, 1998 and 1997, and
the related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the General Partners' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cable TV Fund 12-BCD Venture
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
March 12, 1999.

18
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

BALANCE SHEETS
--------------

<TABLE>
<CAPTION>
December 31,
---------------------------

ASSETS 1998 1997
------ ----------- -------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $69,325,751 $ 1,742,444

RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$-0- and $404,821 at December 31, 1998 and 1997,
respectively - 4,456,904

INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost - 218,189,145
Less- accumulated depreciation - (113,368,132)
----------- -------------

- 104,821,013
Franchise costs and other intangible assets, net of accumulated
amortization of $-0- and $63,250,092 at
December 31, 1998 and 1997, respectively - 7,791,062
----------- -------------

Total investment in cable television properties - 112,612,075

DEPOSITS, PREPAID EXPENSES AND DEFERRED
CHARGES - 5,458,081
----------- -------------

Total assets $69,325,751 $ 124,269,504
=========== =============
</TABLE>

The accompanying notes to financial statements
are an integral part of these balance sheets.

19
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

BALANCE SHEETS
--------------

<TABLE>
<CAPTION>
December 31,
------------------------------

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1998 1997
------------------------------------------- ------------- -------------
<S> <C> <C>
LIABILITIES:
Debt $ - $ 144,308,462
Trade accounts payable and accrued liabilities 67,751 6,726,286
Accrued distributions 66,825,751 -
Subscriber prepayments - 424,486
------------- -------------

Total liabilities 66,893,502 151,459,234
------------- -------------

COMMITMENTS AND CONTINGENCIES (Note 7)

PARTNERS' CAPITAL (DEFICIT):
Contributed capital 135,490,944 135,490,944
Distributions (269,101,000) (55,000,000)
Accumulated earnings (deficit) 136,042,305 (107,680,674)
------------- -------------

2,432,249 (27,189,730)
------------- -------------

Total liabilities and partners' capital (deficit) $ 69,325,751 $ 124,269,504
============= =============
</TABLE>

The accompanying notes to financial statements
are an integral part of these balance sheets.

20
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

STATEMENTS OF OPERATIONS
------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------

1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES $ 59,492,754 $ 82,675,018 $ 82,363,752

COSTS AND EXPENSES:
Operating expenses 32,547,366 45,958,487 48,731,182
Management fees and allocated overhead from
Jones Intercable, Inc. 6,519,890 8,749,592 9,609,453
Depreciation and amortization 16,500,689 21,837,251 22,142,808
------------ ------------ ------------

OPERATING INCOME 3,924,809 6,129,688 1,880,308
------------ ------------ ------------

OTHER INCOME (EXPENSE):
Interest expense (7,031,582) (10,934,909) (11,219,294)
Gain on sales of cable television systems 248,449,739 - 71,914,391
Other, net (1,619,987) 6,973 (236,569)
------------ ------------ ------------

Total other income (expense), net 239,798,170 (10,927,936) 60,458,528
------------ ------------ ------------

NET INCOME (LOSS) $243,722,979 $ (4,798,248) $ 62,338,836
============ ============ ============
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

21
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------

1998 1997 1996
-------------- ------------- -------------
<S> <C> <C> <C>
CABLE TV FUND 12-B, LTD. (9%):
Balance, beginning of year $ (2,592,136) $ (2,151,657) $ (2,825,362)
Net income for year 22,468,979 (440,479) 5,722,705
Distributions (19,653,573) - (5,049,000)
------------- ------------ ------------

Balance, end of year $ 223,270 $ (2,592,136) $ (2,151,657)
============= ============ ============

CABLE TV FUND 12-C, LTD. (15%):
Balance, beginning of year $ (4,313,801) $ (3,580,725) $ (4,702,099)
Net income for year 37,395,261 (733,076) 9,525,374
Distributions (32,709,866) - (8,404,000)
------------- ------------ ------------

Balance, end of year $ 371,594 $ (4,313,801) $ (3,580,725)
============= ============ ============

CABLE TV FUND 12-D, LTD. (76%):
Balance, beginning of year $ (20,283,793) $(16,659,100) $(22,202,857)
Net income for year 183,858,739 (3,624,693) 47,090,757
Distributions (161,737,561) - (41,547,000)
------------- ------------ ------------

Balance, end of year $ 1,837,385 $(20,283,793) $(16,659,100)
============= ============ ============

TOTAL:
Balance, beginning of year $ (27,189,730) $(22,391,482) $(29,730,318)
Net income for year 243,722,979 (4,798,248) 62,338,836
Distributions (214,101,000) - (55,000,000)
------------- ------------ ------------

Balance, end of year $ 2,432,249 $(27,189,730) $(22,391,482)
============= ============ ============
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

22
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

STATEMENTS OF CASH FLOWS
------------------------

<TABLE>
<CAPTION>
For the Year Ended December 31,
---------------------------------------------

1998 1997 1996
-------------- ------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 243,722,979 $ (4,798,248) $ 62,338,836
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 16,500,689 21,837,251 22,142,809
Gain on sales of cable television systems (248,449,739) - (71,914,391)
Decrease (increase) in trade receivables 4,456,904 (1,780,658) 1,788,527
Decrease (increase) in deposits, prepaid expenses and
deferred charges 1,625,590 (3,332,261) (2,221,806)
Increase (decrease) in trade accounts payable and
accrued liabilities and subscriber prepayments (7,083,021) 2,205,832 (3,302,401)
Decrease in amount due Jones Intercable, Inc. - - (4,198,739)
------------- ------------ -------------

Net cash provided by operating activities 10,773,402 14,131,916 4,632,835
------------- ------------ -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (12,774,851) (19,866,829) (17,474,134)
Proceeds from sales of cable television systems 361,168,467 - 110,395,667
------------- ------------ -------------

Net cash provided by (used in)
investing activities 348,393,616 (19,866,829) 92,921,533
------------- ------------ -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 12,236,298 15,551,159 72,365,824
Repayment of debt (156,544,760) (9,588,575) (114,790,213)
Distributions to Joint Venture Partners (147,275,249) - (55,000,000)
------------- ------------ -------------

Net cash provided by (used in)
financing activities (291,583,711) 5,962,584 (97,424,389)
------------- ------------ -------------

Increase in cash and cash equivalents 67,583,307 227,671 129,979

Cash and cash equivalents, beginning of year 1,742,444 1,514,773 1,384,794
------------- ------------ -------------

Cash and cash equivalents, end of year $ 69,325,751 $ 1,742,444 $ 1,514,773
============= ============ =============

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 9,296,224 $ 10,776,074 $ 12,370,892
============= ============ =============
Accrued distributions $ 66,825,751 $ - $ -
============= ============ =============
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

23
<PAGE>

CABLE TV FUND 12-BCD VENTURE
----------------------------
(A General Partnership)

NOTES TO FINANCIAL STATEMENTS
-----------------------------

(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------

Formation and Business
----------------------

On March 17, 1986, Cable TV Fund 12-B, Ltd. ("Fund 12-B"), Cable TV Fund
12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D")
(collectively, the "Venture Partners") formed Cable TV Fund 12-BCD Venture (the
"Venture"). The Venture was formed for the purpose of acquiring certain cable
television systems serving Tampa, Florida (the "Tampa System"); Albuquerque, New
Mexico (the "Albuquerque System"); and Palmdale, California (the "Palmdale
System"). Jones Intercable, Inc. ("Intercable"), the "General Partner" of each
of the Venture Partners, manages the Venture. Intercable and its subsidiaries
also own and operate cable television systems. In addition, Intercable manages
cable television systems for other limited partnerships for which it is general
partner and, also, for affiliated entities.

Venture Sales of Cable Television Systems
-----------------------------------------

On February 28, 1996, the Venture sold the Tampa System to a wholly owned
subsidiary of the General Partner. The sales price of the Tampa System was
$110,395,667, subject to normal working capital closing adjustments. This price
represented the average of three separate independent appraisals of the fair
market value of the Tampa System. In February 1996, the Venture's debt
arrangements were amended to permit a $55,000,000 distribution to the Venture's
partners from the sale proceeds, and the balance of the sale proceeds were used
to reduce Venture indebtedness. The net sales proceeds were distributed as
follows: Fund 12-B received $5,409,000; Fund 12-C received $8,404,000 and Fund
12-D received $41,547,000.

On June 30, 1998, the Venture sold the Albuquerque System to a subsidiary
of the General Partner. The sales price of the Albuquerque System was
$222,963,267, subject to normal working capital adjustments. This sales price
represented the average of three separate independent appraisals of the fair
market value of the Albuquerque System. Upon the sale of the Albuquerque
System, the Venture repaid its outstanding Senior Notes balance of $41,544,890
plus accrued interest, plus a make whole premium of $1,332,823 and, as permitted
by an amendment to the Venture's credit facility, the Venture distributed
$125,000,000 to the three constituent partnerships of the Venture in proportion
to their ownership interests in the Venture. The remaining proceeds were used
to repay a portion of the outstanding balance and accrued interest on its credit
facility. The $125,000,000 was distributed as follows: Fund 12-B received
$11,474,475; Fund 12-C received $19,097,217 and Fund 12-D received $94,428,308.

On December 31, 1998, the Venture sold the Palmdale System to a subsidiary
of the General Partner. The sales price of the Palmdale System was
$138,205,200, subject to normal working capital adjustments. This sales price
represented the average of three separate independent appraisals of the fair
market value of the Palmdale System. Upon the sale of the Palmdale System, the
Venture repaid all of its remaining indebtedness, which totaled approximately
$51,265,690, retained $2,500,000 to cover expenses that the Venture and its
constituent partnerships may incur related to pending litigation, and
distributed the remaining sale proceeds of $89,101,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The $89,101,000 was distributed as follows: Fund 12-B received
$8,179,098; Fund 12-C received $13,612,649 and Fund 12-D received $67,309,253.

Although the sale of the Palmdale System represented the sale of the only
remaining cable television system of the Venture, the Venture will not be
dissolved until after the pending litigation challenging the Venture's February
1996 sale of the Tampa System to an affiliate of the General Partner and the
pending litigation challenging the Venture's December 1998 sale of the Palmdale
System to an affiliate of the General Partner are finally resolved and
terminated. These two cases may require the continuation of the Venture for
several years beyond 1999.

Contributed Capital
-------------------

The capitalization of the Venture is set forth in the accompanying
statements of partners' deficit.

24
<PAGE>

All Venture distributions, including those made from cash flow, from the
sale or refinancing of Partnership property and on dissolution of the Venture,
were made to the Venture Partners in proportion to their approximate respective
interests in the Venture as follows:

Cable TV Fund 12-B, Ltd. 9%
Cable TV Fund 12-C, Ltd. 15%
Cable TV Fund 12-D, Ltd. 76%
----
100%
====

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------

Accounting Records
------------------

The accompanying consolidated financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted accounting
principles. The Venture's tax returns were also prepared on the accrual basis.

Property, Plant and Equipment
-----------------------------

Depreciation was provided using the straight-line method over the following
estimated service lives:

<TABLE>
<CAPTION>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 3 - 5 years
Buildings 30 years
Vehicles 3 - 4 years
</TABLE>

Replacements, renewals and improvements were capitalized and maintenance
and repairs are charged to expense as incurred.

Property, plant and equipment and the corresponding accumulated
depreciation were written off as certain assets become fully depreciated and are
no longer in service.

Intangible Assets
-----------------

Costs assigned to franchises and costs in excess of interests in net assets
purchased were amortized using the straight-line method over the following
remaining estimated useful lives:

Franchise costs 10 - 13 years
Costs in excess of interests in net assets
purchased 27 - 28 years

Revenue Recognition
-------------------

Subscriber prepayments were initially deferred and recognized as revenue
when earned.

Cash and Cash Equivalents
-------------------------

For purposes of the Statements of Cash Flows, the Venture considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.

25
<PAGE>

Reclassifications
-----------------

Certain prior year amounts have been reclassified to conform with the 1998
presentation.

(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
----------------------------------------------------

Management Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------

The General Partner managed the Venture and received a fee for its services
equal to 5 percent of the gross revenues of the Venture, excluding revenues from
the sale of cable television systems or franchises. Management fees paid to the
General Partner by the Venture were $2,974,638, $4,133,751 and $4,118,188 during
1998, 1997 and 1996, respectively. The General Partner has not received and
will not receive a management fee after December 31, 1998.

The Venture reimbursed the General Partner for certain allocated overhead
and administrative expenses. These expenses represented the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provided engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Such services, and their related costs, were necessary to the operation
of the Venture and would have been incurred by the Venture if it was a stand
alone entity. Allocations of personnel costs were based primarily on actual time
spent by employees of the General Partner with respect to each entity managed.
Remaining expenses were allocated based on the pro rata relationship of the
Venture'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 was the
general partner were also allocated a proportionate share of these expenses. The
General Partner believes that the methodology used in allocating overhead and
administrative expenses was reasonable. Overhead and administrative expenses
allocated to the Venture by the General Partner were $3,545,252, $4,615,841 and
$5,491,265 in 1998, 1997 and 1996, respectively. The Venture will continue to
reimburse the General Partner for actual time spent on Venture business by
employees of the General Partner until the Venture is liquidated and dissolved,
but the Venture will not bear a revenue-based allocation of overhead and
administrative expenses beyond December 31, 1998.

Payments to/from Affiliates for Programming Services
----------------------------------------------------

The Venture received programming from Superaudio, Knowledge TV, Inc., Jones
Computer Network, Ltd., Great American Country, Inc. and Product Information
Network, all of which are affiliates of the General Partner.

Payments to Superaudio totaled $90,778, $118,032 and $116,710 in 1998, 1997
and 1996, respectively. Payments to Knowledge TV, Inc. totaled $97,965,
$131,277 and $126,665 in 1998, 1997 and 1996, respectively. Payments to Jones
Computer Network, Ltd., whose service was discontinued in April 1997, totaled
$85,543 and $248,044 in 1997 and 1996, respectively. Payments to Great American
Country, Inc. totaled $91,227, $131,863 and $141,753 in 1998, 1997 and 1996,
respectively.

The Venture received a commission from Product Information Network based on
a percentage of advertising sales and number of subscribers. Product
Information Network paid commissions to the Venture totaling $193,110, $199,997
and $191,011 in 1998, 1997 and 1996, respectively.

26
<PAGE>

(4) PROPERTY, PLANT AND EQUIPMENT
-----------------------------

Property, plant and equipment as of December 31, 1998 and 1997, consisted
of the following:

<TABLE>
<CAPTION>
December 31,
----------------------------

1998 1997
------------- -------------
<S> <C> <C>
Cable distribution system $ - $ 199,967,191
Equipment and tools - 5,483,657
Office furniture and equipment - 2,842,973
Buildings - 5,925,072
Vehicles - 3,019,282
Land - 950,970
------------- -------------
- 218,189,145
Less-accumulated depreciation - (113,368,132)
------------- -------------
$ - $ 104,821,013
============= =============

(5) DEBT
----

Debt consisted of the following:
December 31,
----------------------------

1998 1997
------------- -------------
Lending institutions-
Revolving credit and term loan $ - $ 95,630,620
Senior secured notes - 47,479,874
Capital lease obligations - 1,197,968
------------- -------------
$ - $ 144,308,462
============= =============
</TABLE>

The outstanding Senior Notes balance of $41,544,890, plus accrued interest
and a make whole premium of $1,332,823, were repaid upon the sale of the
Albuquerque System. Pursuant to an amendment that became effective on the date
of the Albuquerque System sale, the Venture repaid $54,000,000 on its credit
facility from the proceeds of the Albuquerque System's sale, and the commitment
was reduced to $55,000,000. The $50,530,620 balance outstanding on the
Venture's $55,000,000 credit facility was repaid on December 31, 1998 with
proceeds from the sale of the Palmdale System. Interest on the credit facility
was at the Venture's option of the London Interbank Offered Rate plus 1.125
percent, the Prime Rate plus .125 or the Certificate of Deposit Rate plus 1.25
percent. The effective interest rate on amounts outstanding on the Venture's
credit facility as of December 31, 1997 was 6.91 percent.

At December 31, 1997, the carrying amount of the Venture's long-term debt
did not differ significantly from the estimated fair value of the financial
instruments. The fair value of the Venture's long-term debt is estimated based
on the discounted amount of future cash flows using the Venture's current
incremental rate of borrowing for a similar liability as well as on other
factors.

(6) INCOME TAXES
------------

Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Venture were prepared and filed by the General
Partner.

The Venture's tax returns, the qualification of the Venture as such for tax
purposes, and the amount of distributable income or loss are subject to
examination by federal and state taxing authorities. If such examinations
result in changes with respect to the Venture's qualification as such, or in
changes with respect to the Venture's recorded income or loss, the tax liability
of the general and limited partners would likely be changed accordingly.

27
<PAGE>

Taxable income (losses) reported to the partners is different from that
reported in the consolidated statements of operations due to the difference in
depreciation allowed under generally accepted accounting principles and the
expense allowed for tax purposes under the Modified Accelerated Cost Recovery
System (MACRS). There are no other significant differences between taxable
income or losses and the income (losses) reported in the consolidated statements
of operations.

(7) COMMITMENTS AND CONTINGENCIES
-----------------------------

Office and other facilities were rented under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $205,660,
$384,610 and $373,169, respectively, for the years ended December 31, 1998, 1997
and 1996.

(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------

Supplementary profit and loss information is presented below:

<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------

1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Maintenance and repairs $ 394,740 $ 734,011 $ 1,104,878
=========== =========== ===========

Taxes, other than income
and payroll taxes $ 711,408 $ 873,053 $ 895,669
=========== =========== ===========

Advertising $ 1,260,705 $ 1,288,316 $ 1,183,565
=========== =========== ===========

Depreciation of property,
plant and equipment $14,207,696 $18,824,685 $15,876,902
=========== =========== ===========

Amortization of intangible
assets $ 2,292,993 $ 3,012,566 $ 6,265,907
=========== =========== ===========
</TABLE>

28
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------

None.

PART III.
---------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below. Directors of the General Partner serve until the
next annual meeting of the General Partner and until their successors shall be
elected and qualified.

<TABLE>
<S> <C> <C>
Glenn R. Jones 69 Chairman of the Board and Chief Executive Officer
James B. O'Brien 49 President and Director
Ruth E. Warren 49 Group Vice President/Operations
Kevin P. Coyle 47 Group Vice President/Finance
Cynthia A. Winning 47 Group Vice President/Marketing
Elizabeth M. Steele 47 Vice President/General Counsel/Secretary
Wayne H. Davis 45 Vice President/Engineering
Larry W. Kaschinske 39 Vice President/Controller
Robert E. Cole 66 Director
William E. Frenzel 70 Director
Josef J. Fridman 53 Director
Donald L. Jacobs 60 Director
Robert Kearney 62 Director
James J. Krejci 57 Director
Raphael M. Solot 65 Director
Howard O. Thrall 51 Director
Siim A. Vanaselja 42 Director
Sanford Zisman 59 Director
Robert B. Zoellick 45 Director
</TABLE>

Mr. Glenn R. Jones has served as Chairman of the Board of Directors and Chief
Executive Officer of the General Partner since its formation in 1970, and he was
President from June 1984 until April 1988. Mr. Jones is the sole shareholder,
President and Chairman of the Board of Directors of Jones International, Ltd.
He is also Chairman of the Board of Directors of the subsidiaries of the General
Partner and of certain other affiliates of the General Partner. Mr. Jones has
been involved in the cable television business in various capacities since 1961,
and he is a member of the Board of Directors and of the Executive Committee of
the National Cable Television Association. In addition, Mr. Jones is a member
of the Board and Education Council of the National Alliance of Business. Mr.
Jones is also a founding member of the James Madison Council of the Library of
Congress. Mr. Jones has been the recipient of several awards including: the
Grand Tam Award in 1989, the highest award from the Cable Television
Administration and Marketing Society; the President's Award from the Cable
Television Public Affairs Association in recognition of Jones International's
educational efforts through Mind Extension University (now Knowledge TV); the
Donald G. McGannon Award for the advancement of minorities and women in cable
from the United Church of Christ Office of Communications; the STAR Award from
American Women in Radio and Television, Inc. for exhibition of a commitment to
the issues and concerns of women in television and radio; the Cableforce 2000
Accolade awarded by Women in Cable in recognition of the General Partner's
innovative employee programs; the Most Outstanding Corporate Individual
Achievement Award from the International Distance Learning Conference for his
contributions to distance education; the Golden Plate Award from the American
Academy of Achievement for his advances in distance education; the Man of the
Year named by the Denver chapter of the Achievement Rewards for College
Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and Cable's
Hall of Fame.

29
<PAGE>

Mr. James B. O'Brien, the General Partner's President, joined the General
Partner in January 1982. Prior to being elected President and a director of the
General Partner in December 1989, Mr. O'Brien served as a division manager,
director of operations planning/assistant to the CEO, Fund Vice President and
Group Vice President/Operations. Mr. O'Brien was appointed to the General
Partner's Executive Committee in August 1993. As President, he is responsible
for the day-to-day operations of the cable television systems managed and owned
by the General Partner. Mr. O'Brien is a board member of Cable Labs, Inc., the
research arm of the U.S. cable television industry. He also serves as Chairman
of the Board of Directors of CTAM: The Marketing Society for the Cable
Telecommunications Industry and as an executive director of the Walter Kaitz
Foundation, a foundation that places people of ethnic minority groups in
positions with cable television systems, networks and vendor companies. Mr.
O'Brien's numerous industry recognitions include a CTAM Tami Award for marketing
excellence, a Women In Cable and Telecommunications Accolade Award recognizing
his leadership efforts on behalf of women in the telecommunications industry,
The President's Award for Leadership from the Illinois Cable and
Telecommunications Association and a Lifetime Achievement Award from The
National Association of Minorities in Communications. Additionally, Mr. O'Brien
is a member of The Society of UK Cable Pioneers.

Ms. Ruth E. Warren joined the General Partner in August 1980 and has served in
various operational capacities, including system marketing manager, director of
marketing, assistant division manager, regional vice president and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations
of the General Partner in September 1990. Ms. Warren is a past president of
Women in Cable & Telecommunications and past Chairman of the Women in Cable
Foundation. She serves as the Vice Chair of Five Points Media Center Board and
on the Corporate Advisory Board of Planned Parenthood of the Rocky Mountains and
the Advisory Board for Girls Count. In 1995, Ms. Warren received the Corporate
Business Woman of the Year Award from the Colorado Women's Chamber of Commerce,
and in 1998 Ms. Warren received the Vanguard Award for Distinguished Leadership
from the National Cable Television Association.

Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990. From 1978 to
1981 Mr. Coyle was employed by American Television and Communications (now Time
Warner Cable), and from 1974 to 1978 he was an associate at Haskins & Sells (now
Deloitte & Touche LLP).

Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994,
Ms. Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten national
retail department store chains. From 1981 to 1986, Ms. Winning was the Director
of Marketing Services for Daniels & Associates cable television operations, as
well as the Western Division Marketing Director for Capital Cities Cable.

Ms. Elizabeth M. Steele joined the General Partner in August 1987 as Vice
President/General Counsel and Secretary. From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.

Mr. Wayne H. Davis joined the General Partner in August 1983 and has served in
various technical operations positions, including System Engineering Manager,
Fund Engineering Manager, Senior Director/Technical Operations, and Vice
President/Technical Operations since then. Mr. Davis was elected Vice
President/Engineering in June 1998. He is past Vice President of the Upstate
New York Chapter of the Society of Cable Telecommunications Engineers. Mr.
Davis has received certification from the Society of Cable Telecommunications
Engineers, Broadband Cable Telecommunications Engineering Program and the
National Cable Television Institute's Technology Program.

30
<PAGE>

Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division, was promoted to
Assistant Controller in 1990, named Controller in August 1994 and was elected
Vice President/Controller in June 1996.

Mr. Robert E. Cole was appointed a director of the General Partner in March
1996. Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern California, Oregon, Washington and
Alaska. From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar
Life Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of
PMI Inc., a third party lender serving the special needs of Corporate Owned Life
Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and co-
founder of a specialty investment banking firm that provided services to finance
the ownership and growth of emerging companies, productive assets and real
property. Mr. Cole is a Certified Financial Planner and a former United States
Naval Aviator.

Mr. William E. Frenzel was appointed a director of the General Partner in
April 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the Brookings
Institution, a research organization located in Washington D.C. Until his
retirement in January 1991, Mr. Frenzel served for twenty years in the United
States House of Representatives, representing the State of Minnesota, where he
was a member of the House Ways and Means Committee and its Trade Subcommittee,
the Congressional Representative to the General Agreement on Tariffs and Trade
(GATT), the Ranking Minority Member on the House Budget Committee and a member
of the National Economic Commission. Mr. Frenzel also served in the Minnesota
Legislature for eight years. He is Vice Chairman of the Eurasia Foundation, a
Board Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual
Funds, Logistics Management Institute and Chairman of the Japan-America Society
of Washington.

Mr. Josef J. Fridman was appointed a director of the General Partner in
February 1998. Mr. Fridman is currently Chief Legal Officer of Bell Canada and
of BCE Inc., Canada's largest telecommunications company. Mr. Fridman joined
Bell Canada, a wholly owned subsidiary of BCE Inc., in 1969, and has held
increasingly senior positions with Bell Canada and BCE Inc. since such time.
Mr. Fridman has held his current position since March 1998. Mr. Fridman's
directorships include Alouette Telecommunications Inc., Telesat Canada, TMI
Communications, Inc., Telebec Itee, BCI Telecom Holding Inc. and BCE Corporate
Services Inc. He is a member of the Quebec Bar Association, the Canadian,
American and International Bar Associations and the Lord Reading Law Society.
Mr. Fridman is a governor of the Quebec Bar Foundation.

Mr. Donald L. Jacobs was appointed a director of the General Partner in
April 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General Manager
of the Defense Systems Group and prior to his appointment as Group General
Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW.
During his career, Mr. Jacobs served on several corporate, professional and
civic boards.

Mr. Robert Kearney was appointed a director and a member of the Executive
Committee of the General Partner in July 1997. Mr. Kearney is a retired
executive officer of Bell Canada. Prior to his retirement in December 1993, Mr.
Kearney was the President and Chief Executive Officer of Bell Canada. He served
as Chairman of BCE Canadian Telecom Group in 1994 and as Deputy Chairman of BCI
Management Limited in 1995. He currently serves as a Director of MPACT, a
Canadian electronic commerce company. During his career, Mr. Kearney served in
a variety of capacities in the Canadian, American and International Standards
organizations, and he has served on several corporate, professional and civic
boards.

Mr. James J. Krejci is President and CEO of Comtect International, Inc., a
company in the specialized mobile radio services business, headquartered in
Denver, Colorado. Prior to joining Comtec International, Inc. in February 1998,
Mr. Krejci was President and CEO of Imagelink Technologies, Inc., headquartered
in Boulder, Colorado, from June 1996 to February 1998, and prior to that, he was
President of the International Division of International Gaming Technology, the
world's largest gaming equipment manufacturer, with headquarters in

31
<PAGE>

Reno, Nevada from May 1994 to February 1995. Prior to joining IGT, Mr. Krejci
was Group Vice President of Jones International, Ltd. and was Group Vice
President of the General Partner. He also served as an officer of subsidiaries
of Jones International, Ltd. until leaving the General Partner in May 1994. Mr.
Krejci has been a director of the General Partner since August 1987.

Mr. Raphael M. Solot was appointed a director of the General Partner in
March 1996 and he was elected Vice Chairman of the Board of Directors in
November 1997. Mr. Solot is an attorney and has practiced law for 34 years with
an emphasis on franchise, corporate and partnership law and complex litigation.

Mr. Howard O. Thrall was appointed a director of the General Partner in
March 1996. Mr. Thrall had previously served as a Director of the General
Partner from December 1988 to December 1994. Mr. Thrall is a management and
international marketing consultant, having active assignments with First
National Net, Inc., LEP Technologies, Cheong Kang Associates (Korea), Aero
Investment Alliance, Inc. and Western Real Estate Partners, among others. From
September 1993 through July 1996, Mr. Thrall served as Vice President of Sales,
Asian Region, for World Airways, Inc. headquartered at the Washington Dulles
International Airport. From 1984 until August 1993, Mr. Thrall was with the
McDonnell Douglas Corporation, where he concluded as a Regional Vice President,
Commercial Marketing with the Douglas Aircraft Company subsidiary.

Mr. Siim A. Vanaselja was appointed a director of the General Partner in
August 1996. He is the Chief Financial Officer of BCI Telecom Holding Inc. Mr.
Vanaselja joined BCE Inc., Canada's largest telecommunications company, in
February 1994 as Assistant Vice-President, International Taxation. In June
1994, he was appointed Assistant Vice-President and Director of Taxation, and in
February 1995, Mr. Vanaselja was appointed Vice-President, Taxation. On August
1, 1996, Mr. Vanaselja was appointed the Executive Vice President and Chief
Financial Officer of Bell Canada International Inc., a subsidiary of BCE Inc.
Prior to joining BCE Inc. and since August 1989, Mr. Vanaselja was a partner in
the Toronto office of KPMG Peat Marwick Thorne. Mr. Vanaselja has been a member
of the Institute of Chartered Accountants of Ontario since 1982 and is a member
of the Canadian Tax Foundation, the Tax Executives Institute and the
International Fiscal Association.

Mr. Sanford Zisman was appointed a director of the General Partner in June
1996. Mr. Zisman is a principal in the law firm of Zisman & Ingraham, P.C. of
Denver, Colorado and he has practiced law for 33 years, specializing in the
areas of tax, business and estate planning and probate administration. Mr.
Zisman was a member of the Board of Directors of Saint Joseph Hospital, the
largest hospital in Colorado, from 1991 to 1997, serving at various times as
Chairman of the Board, Chairman of the Finance Committee and Chairman of the
Strategic Planning Committee. Since 1982, he has also served on the Board of
Directors of Maxim Series Fund, Inc., a subsidiary of Great-West Life Assurance
Company.

Mr. Robert B. Zoellick was appointed a director of the General Partner in
April 1995. Mr. Zoellick is the President and CEO of the Center for Strategic
and International Studies (CSIS), an independent, non-profit policy institution
with a staff of 180 people and a $17 million budget. He was the John M. Olin
Professor at the U.S. Naval Academy for the 1997-1998 term. From 1993 through
1997, he was Executive Vice President at Fannie Mae, a federally chartered and
stockholder-owned corporation that is the largest housing finance investor in
the United States. From August 1992 to January 1993, Mr. Zoellick served as
Deputy Chief of Staff of the White House and Assistant to the President. From
May 1991 to August 1992, Mr. Zoellick served concurrently as the Under Secretary
of State for Economic and Agricultural Affairs and as Counselor of the
Department of State, a post he assumed in March 1989. From 1985 to 1988, Mr.
Zoellick served at the Department of Treasury in a number of capacities,
including Counselor to the Secretary. Mr. Zoellick currently serves on the
boards of Alliance Capital and Said Holdings and the Advisory Council of Enron
Corp.

ITEM 11. EXECUTIVE COMPENSATION
--------------------------------

The Partnership has no employees; however, various personnel were required
to operate the systems. Such personnel were employed by the General Partner
and, pursuant to the terms of the limited partnership agreement of

32
<PAGE>

the Partnership, the cost of such employment was charged by the General Partner
to the Partnership as a direct reimbursement item. See Item 13.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
----------------------------------------------------------------------

As of February 16, 1999, no person or entity owned more than 5% of the
limited partnership interests of the Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

Prior to selling the Venture's Albuquerque System and Palmdale System, the
Venture engaged in certain transactions with the General Partner and certain of
its affiliates. The General Partner believes that the terms of such
transactions were generally as favorable as could be obtained by the Venture
from unaffiliated parties. This determination has been made by the General
Partner in good faith, but none of the terms were negotiated at arm's-length and
there can be no assurance that the terms of such transactions have been as
favorable as those that could have been obtained by the Venture from
unaffiliated parties. In the future, the General Partner does not anticipate
engaging in such transactions.

Transactions with the General Partner

The General Partner manages the Venture and, until December 31, 1998, the
date of the sale of the Venture's last remaining cable television system, the
General Partner received a fee for its services equal to 5 percent of the gross
revenues of the Venture, excluding revenues from the sale of cable television
systems or franchises. The General Partner will not receive a management fee
after December 31, 1998.

The Venture reimbursed the General Partner for certain allocated overhead
and administrative expenses. These expenses represented the salaries and
benefits paid to corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provided engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Allocations of personnel costs were based primarily on actual time
spent by employees of the General Partner with respect to each partnership
managed. Remaining expenses were allocated based on the pro rata relationship
of the Venture's revenues to the total revenues of all systems owned or managed
by the General Partner and certain of its subsidiaries. Systems owned by the
General Partner and all other systems owned by partnerships for which Jones
Intercable, Inc. is the general partner were also allocated a proportionate
share of these expenses. The Venture will continue to reimburse the General
Partner for actual time spent on Venture business by employees of the General
Partner until the Venture and its constituent partnerships are liquidated and
dissolved, but the Partnership will not bear a revenue-based allocation of
overhead and administrative expenses beyond December 31, 1998.

The General Partner has from time to time advanced funds to the Venture and
charged interest on the balance payable. The interest rate charged approximated
the General Partner's weighted average cost of borrowing.

Transactions with Jones International, Ltd. and Certain of its Affiliates

Jones International, Ltd. ("International"), a company owned by Glenn R.
Jones, and certain of its subsidiaries provide various services to the Venture,
including affiliation agreements for the distribution of programming owned by
affiliated companies on cable television systems owned by the Venture, as
described below.

Knowledge TV, Inc., a company jointly owned by Mr. Jones, affiliates of
International, the General Partner and BCI Telecom Holdings Inc., a principal
shareholder of the General Partner, operates the television network Knowledge
TV. Knowledge TV provides programming related to computers and technology;
business, careers and finance; health and wellness; and global culture and
languages. Knowledge TV, Inc. provided its programming to the cable television
systems owned by the Venture.

33
<PAGE>

The Great American Country network provided country music video programming
to the cable television systems owned by the Venture. This network is owned and
operated by Great American Country, Inc., a subsidiary of Jones International
Networks, Ltd., an affiliate of the General Partner.

Jones Galactic Radio, Inc. is a subsidiary of Jones International Networks,
Ltd., an affiliate of International. Superaudio, a joint venture between Jones
Galactic Radio, Inc. and an unaffiliated entity, provided audio programming to
the cable television systems owned by the Venture.

The Product Information Network Venture (the "PIN Venture") is a venture
among a subsidiary of Jones International Networks, Ltd., an affiliate of
International, and two unaffiliated cable system operators. The PIN Venture
operates the Product Information Network ("PIN"), which is a 24-hour network
that airs long-form advertising generally known as "infomercials." The PIN
Venture generally makes incentive payments of approximately 60 percent of its
net advertising revenue to the cable systems that carry its programming. Until
December 31, 1998, the Venture's systems carried PIN for all or part of each
day. Revenues received by the Partnership from the PIN Venture relating to the
cable television systems owned by the Venture totaled approximately $193,110 for
the year ended December 31, 1998.

The charges to the Venture for related party transactions are as follows
for the periods indicated:

<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------
Cable TV Fund 12-BCD 1998 1997 1996
- -------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
Management fees $2,974,638 $4,133,751 $4,118,188
Allocation of expenses 3,545,242 $4,615,841 5,491,265
Interest expense 0 0 0
Amount of advances outstanding 0 0 0
Highest amount of advances outstanding 0 0 0
Programming fees:
Knowledge TV, Inc. 97,965 131,277 126,665
Great American Country 91,227 131,863 141,753
Superaudio 90,778 118,032 116,710
</TABLE>

34
<PAGE>

PART IV.
--------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
(a)1. See index to financial statements for list of financial statements and exhibits
thereto filed as a part of this report.

3. The following exhibits are filed herewith.

4.1 Limited Partnership Agreement for Cable TV Fund 12-B. (1)

4.2 Joint Venture Agreement of Cable TV Fund 12-BCD Venture dated as of March 17, 1986,
among Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund 12-D,
Ltd. (2)

10.1 Purchase and Sale Agreement (Albuquerque) dated as of July 28, 1997 between Cable TV
Fund 12-BCD Venture and Jones Intercable, Inc. (3)

10.2 Purchase and Sale Agreement (Palmdale) dated as of March 10, 1998 between Cable TV
Fund 12-BCD Venture and Jones Intercable, Inc. (4)

27 Financial Data Schedule
__________

(1) Incorporated by reference from the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1985 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).

(2) Incorporated by reference from the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).

(3) Incorporated by reference from the Registrant's Schedule 14A (Commission File No.
0-13807) filed with the Securities and Exchange Commission on October 2, 1997.

(4) Incorporated by reference from the Registrant's Schedule 14A (Commission File No.
0-13807) filed with the Securities and Exchange Commission on August 7, 1998.

(b) Reports on Form 8-K.

None.
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35
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

CABLE TV FUND 12-B, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.

By: /s/ Glenn R. Jones
------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 24, 1999 Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By: /s/ Glenn R. Jones
------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 24, 1999 (Principal Executive Officer)

By: /s/ Kevin P. Coyle
------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 24, 1999 (Principal Financial Officer)

By: /s/ Larry Kaschinske
--------------------
Larry Kaschinske
Vice President/Controller
Dated: March 24, 1999 (Principal Accounting Officer)

By: /s/ James B. O'Brien
--------------------
James B. O'Brien
Dated: March 24, 1999 President and Director

By: /s/ Robert E. Cole
------------------
Robert E. Cole
Dated: March 24, 1999 Director

By: /s/ William E. Frenzel
----------------------
William E. Frenzel
Dated: March 24, 1999 Director

36
<PAGE>

By: /s/ Josef J. Fridman
--------------------
Josef J. Fridman
Dated: March 24, 1999 Director

By:
--------------------
Donald L. Jacobs
Dated: March 24, 1999 Director

By: /s/ Robert Kearney
------------------
Robert Kearney
Dated: March 24, 1999 Director

By: /s/ James J. Krejci
-------------------
James J. Krejci
Dated: March 24, 1999 Director

By: /s/ Raphael M. Solot
--------------------
Raphael M. Solot
Dated: March 24, 1999 Director

By: /s/ Howard O. Thrall
--------------------
Howard O. Thrall
Dated: March 24, 1999 Director

By: /s/ Siim A. Vanaselja
---------------------
Siim A. Vanaselja
Dated: March 24, 1999 Director

By: /s/ Sanford Zisman
------------------
Sanford Zisman
Dated: March 24, 1999 Director

By: /s/ Robert B. Zoellick
----------------------
Robert B. Zoellick
Dated: March 24, 1999 Director

<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 6,134,323
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,357,594
<CURRENT-LIABILITIES> 6,134,324
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 223,270
<TOTAL-LIABILITY-AND-EQUITY> 6,357,594
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22,413,631
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,413,631
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,413,631
<EPS-PRIMARY> 155.36
<EPS-DILUTED> 155.36

</TABLE>