<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
-------------- --------------
Commission File Number: 0-13964
CABLE TV FUND 12-C, LTD.
- - --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-0970000
- - --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
Address of principal executive office
(303) 792-3111
-----------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
<PAGE> 2
CABLE TV FUND 12-C, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------- ------------
<S> <C> <C>
ASSETS $ - $ -
------ ============= ============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
LIABILITIES:
Loss in excess of investment in cable
television joint venture $ 3,549,441 $ 3,002,488
Accounts payable-affiliated entities 159,137 159,137
------------- ------------
Total liabilities 3,708,578 3,161,625
------------- ------------
PARTNERS' DEFICIT:
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (242,482) (237,012)
------------- ------------
(241,482) (236,012)
------------- ------------
Limited Partners-
Net contributed capital (47,626 units outstanding at
March 31, 1995 and December 31, 1994) 19,998,049 19,998,049
Accumulated deficit (23,465,145) (22,923,662)
------------- ------------
(3,467,096) (2,925,613)
------------- ------------
Total liabilities and partners' deficit $ - $ -
============= ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE> 3
CABLE TV FUND 12-C, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------
1995 1994
---------- ----------
<S> <C> <C>
EQUITY IN NET LOSS OF CABLE TELEVISION JOINT VENTURE $ (546,953) $ (485,479)
---------- ----------
NET LOSS $ (546,953) $ (485,479)
========== ==========
ALLOCATION OF NET LOSS:
General Partner $ (5,470) $ (4,855)
========== ==========
Limited Partners $ (541,483) $ (480,624)
========== ==========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (11.37) $ (10.09)
========== ==========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 47,626 47,626
========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
<PAGE> 4
CABLE TV FUND 12-C, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(546,953) $(485,479)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Equity in net loss of cable
television joint venture 546,953 485,479
--------- ---------
Net cash provided by operating activities - -
--------- ---------
Net change in cash - -
Cash, beginning of period - -
--------- ---------
Cash, end of period $ - $ -
========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ -
========= =========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE> 5
CABLE TV FUND 12-C, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Cable TV Fund 12-C, Ltd.
(the "Partnership") at March 31, 1995 and December 31, 1994 and its Statements
of Operations and Cash Flows for the three month periods ended March 31, 1995
and March 31, 1994. Results of operations for these periods are not
necessarily indicative of results to be expected for the full year. The
Partnership owns an approximate 15 percent interest in Cable TV Fund 12-BCD
Venture (the "Venture"). The Venture owns and operates the cable television
systems serving Palmdale, California; Albuquerque, New Mexico; and Tampa,
Florida.
(2) Jones Intercable, Inc., a publicly held Colorado corporation (the
"General Partner"), manages the Partnership and receives a fee for its services
equal to 5 percent of the gross revenues of the Partnership, excluding revenues
from the sale of cable television systems or franchises. The Partnership owns
no properties directly. It holds cable television systems only through its
investment in the Venture. Management fees paid by the Venture to the General
Partner during the three month periods ended March 31, 1995 and 1994
(attributable to the Partnership's approximate 15 percent interest in the
Venture) were $184,544, and $171,169, respectively.
The Venture reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid for corporate personnel, rent, data processing
services, and other corporate facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Allocations of personnel costs are
primarily based on actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining overhead costs are allocated
based upon total revenues, which the General Partner believes provides an
accurate method of allocation. Systems owned by the General Partner and all
other systems owned by partnerships for which Jones Intercable, Inc. is the
general partner are also allocated a proportionate share of these expenses.
The General Partner believes that the methodology used in allocating overhead
and administrative expenses is reasonable. Reimbursements made by the Venture
to the General Partner for allocated overhead and administrative expenses
during the three month periods ended March 31, 1995 and 1994 (attributable to
the Partnership's approximate 15 percent interest in the Venture) were $278,847
and $262,130, respectively. See Note 3 for disclosure of the total management
fees and allocated overhead and administrative expenses paid by the Venture.
5
<PAGE> 6
(3) Summarized financial information regarding the Venture is presented
below.
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS March 31, 1995 December 31, 1994
------ -------------- -----------------
<S> <C> <C>
Cash and accounts receivable $ 8,160,989 $ 8,358,010
Investment in cable television properties 157,911,215 160,282,700
Other assets 1,875,731 2,035,204
-------------- -------------
Total assets $ 167,947,935 $ 170,675,914
============== =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 180,752,790 $ 180,402,748
Payables and accrued liabilities 2,511,051 2,911,778
Partners' contributed capital 102,198,175 102,198,175
Accumulated deficit (117,514,081) (114,836,787)
-------------- -------------
Total liabilities and partners' capital $ 167,947,935 $ 170,675,914
============== =============
</TABLE>
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
---------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Revenues $ 24,158,092 $ 22,407,252
Operating expenses (14,088,828) (13,358,800)
Management fees and allocated overhead
from General Partner (3,033,059) (2,836,999)
Depreciation and amortization (6,683,999) (6,427,107)
------------ ------------
Operating income (loss) 352,206 (215,654)
Interest expense, net (3,945,142) (3,021,342)
Other, net 13,403 (14,958)
------------ ------------
Net loss $ (3,579,533) $ (3,251,954)
============ ============
</TABLE>
Management fees paid to the General Partner by the Venture totaled
$1,207,905 and $1,120,363, respectively, for the three month periods ended
March 31, 1995 and 1994. Reimbursements for overhead and administrative
expenses paid to the General Partner by the Venture totaled $1,825,154 and
$1,716,636, respectively, for the three month periods ended March 31, 1995 and
1994.
6
<PAGE> 7
CABLE TV FUND 12-C, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership owns an approximate 15 percent interest in the
Venture. The investment in cable television joint venture, accounted for under
the equity method, has decreased by $546,953 when compared to the December 31,
1994 balance. This decrease represents the Partnership's proportionate share
of losses generated by the Venture for the first quarter of 1995. These losses
are expected to continue for the remainder of 1995.
For the three months ended March 31, 1995, the Venture generated net
cash from operating activities totaling $4,334,542, which is available to fund
capital expenditures and non-operating costs. Capital expenditures for the
Venture totaled approximately $3,569,000 during the first quarter of 1995.
These capital additions were funded by cash generated from operations,
borrowings from the Venture's credit facility, and advances from the General
Partner. Service drops to homes accounted for approximately 45 percent of the
first quarter capital expenditures. The remaining expenditures related to
various system enhancements in all the Venture's systems. Expected capital
expenditures for the remainder of 1995 are approximately $16,355,000. The
upgrade of cable television plant in the Albuquerque system is expected to
account for approximately 23 percent of the capital additions. Service drops
to homes are anticipated to account for approximately 22 percent of the
expected expenditures. The remainder of the expenditures relates to various
system enhancements in all of the Venture's systems. Funding for these
expenditures is expected to be provided by cash generated from operations and,
if necessary, advances from the General Partner.
The Venture's debt arrangements consist of $93,000,000 of Senior Notes
placed with a group of institutional lenders and an $87,000,000 credit
agreement with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent and a
maturity date of March 31, 2000. The Senior Notes call for interest only
payments for the first four years, with interest and accelerating amortization
of principal payments for the next four years. Interest is payable
semi-annually. The Senior Notes carry a "make-whole" premium, which is a
prepayment penalty, if the notes are prepaid prior to maturity. The make-whole
premium protects the lenders in the event that prepaid funds are reinvested at
a rate below 8.64 percent, and is calculated per the note agreement.
In September 1994, the General Partner completed negotiations to
increase the commitment to $87,000,000 and extend the revolving credit period.
The balance outstanding at March 31, 1995 was the full $87,000,000. Under the
new terms of this credit facility, the loan will convert to a term loan on
March 31, 1996 with quarterly installments beginning June 30, 1996 and a final
payment due March 31, 2000. Interest is at the Venture's option of LIBOR plus
1.25 percent to 1.75 percent, the CD rate plus 1.375 percent to 1.875 percent
or the Base Rate plus 0 percent to .50 percent. The effective interest rates
on amounts outstanding on the Venture's term credit facility as of March 31,
1995 and 1994 were 8.4 percent and 5.0 percent, respectively.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
Regulation and Legislation
Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally imposes a greater degree of regulation on the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States, including those
owned by the Venture, are subject to rate regulation of basic cable services.
In addition, the 1992 Cable Act allows the FCC to regulate rates for non-basic
service tiers other than premium services in response to complaints filed by
franchising authorities and/or cable subscribers. In April 1993, the FCC
adopted regulations governing rates for basic and non-basic services. The
FCC's rules became effective on September 1, 1993. In compliance with these
rules, the Venture reduced rates charged for certain regulated services
effective September 1, 1993.
7
<PAGE> 8
On February 22, 1994, however, the FCC adopted several additional rate
orders including orders which revised its earlier-announced regulatory scheme
with respect to rates and established interim cost-of-service regulations. The
FCC's February 22, 1994 regulations generally require rate reductions, absent a
successful cost-of-service showing, of 17 percent of September 30, 1992 rates,
adjusted for inflation, channel modifications, equipment costs, and increases
in programming costs. The new regulations became effective on May 15, 1994,
but operators could elect to defer rate reductions to July 14, 1994, so long as
they made no changes in their rates and did not restructure service offerings
between May 15 and July 14.
The Venture has filed cost-of-service showings in all of its systems
and anticipates no further reductions in rates. Such cost-of-service showings
have not yet received final approval from franchising authorities, however, and
there can be no assurance that the Partnership's and the Venture's
cost-of-service showings will prevent further rate reductions until such final
approvals are received.
RESULTS OF OPERATIONS
Revenues in the Augusta System totaled $6,991,658 for the three months
ended March 31, 1995, compared to $6,624,776 for the similar 1994 period, an
increase of $366,882, or approximately 6 percent. This increase was due
primarily to increases in the number of basic subscribers. Basic subscribers
increased 1,647, or approximately 2 percent, from 64,933 at March 31, 1994 to
66,580 at March 31, 1995. No other individual factor was significant to the
increase in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expense totaled $3,700,432 for the first three months of
1995 compared to $3,398,516 for the comparable 1994 period, an increase of
$301,916, or approximately 9 percent. Operating expense represented 53 percent
of revenue in 1995 and 51 percent of revenue in 1994. Increases in programming
fees and marketing expenses, due in part to the increase in the subscriber
base, accounted for approximately 70 percent and 29 percent, respectively, of
the increase in expense. No other individual factor contributed significantly
to the increase in operating expenses. Management fees and allocated overhead
from the General Partner totaled $870,012 for the first three months of 1995
compared to $835,432 for the comparable 1994 period, an increase of $34,580, or
approximately 4 percent. The increase in management fees and allocated
overhead from the General Partner is due to the increase in revenue, upon which
such fees and allocations are based, and an increase in allocated expenses from
the General Partner. The General Partner has experienced increases in
expenses, including personnel expenses, a portion of which is allocated to the
Partnership.
Depreciation and amortization expense totaled $2,488,109 for the three
months ended March 31, 1995, compared to $2,337,737 for the similar 1994
period, an increase of $150,372, or approximately 6 percent. The increase is
due to capital additions during 1994.
The Partnership recorded an operating loss of $66,895 for the first
three months of 1995 compared to operating income of $53,091 for the first
three months of 1994 due to the increases in operating expenses, management
fees and allocated overhead from the General Partner and depreciation and
amortization expense exceeding the increase in revenues. Operating income
before depreciation and amortization totaled $2,421,215 for the three months
ended March 31, 1995 compared to $2,390,828 for the comparable 1994 period, an
increase of $30,387, or approximately 1 percent. This increase is due to the
increase in revenues exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner.
The Partnership has experienced a reduction in operating income before
depreciation and amortization as a percent of revenue ("Operating Margin").
This reduction is due to FCC rate regulations under the 1992 Cable Act which
have caused revenue to increase more slowly than otherwise would have been the
case. In turn, this has caused certain expenses, such as franchise fees,
copyright fees and management fees to increase more slowly than otherwise would
have been the case. However, other operating costs such as programming fees,
salaries and benefits, and marketing costs as well as costs incurred by the
General Partner, a portion of which are allocated to the Partnership, continue
to increase at historical rates. The General Partner will attempt to mitigate
a portion of these reductions through (a) new service offerings; (b) product
re-marketing and re-packaging and (c) marketing efforts directed at
non-subscribers.
8
<PAGE> 9
Interest expense totaled $786,044 for the first quarter of 1995,
compared to $558,614 for the similar 1994 period, an increase of $227,430, or
approximately 41 percent. This increase was primarily due to higher effective
interest rates despite a lower outstanding balance on the Partnership's credit
facility. Loss before equity in net loss of cable television joint venture
totaled $799,138 for the first three months of 1995, compared to $471,275 for
the comparable 1994 period, an increase of $327,863. The increase is the
result of the factors discussed above.
Net loss increased $1,032,579, or approximately 32 percent, from
$3,251,954 to $4,284,533 for the three months ending March 31, 1994 and 1995,
respectively, due to the factors discussed above. These losses are expected to
continue in the future.
9
<PAGE> 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLE TV FUND 12-C
BY: JONES INTERCABLE, INC.
General Partner
By: /s/ Kevin P. Coyle
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: May 12, 1995
11
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Page
- - ----------- ----------- ----
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 3,816,216
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (3,816,216)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 654,591
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (654,591)
<INCOME-TAX> 0
<INCOME-CONTINUING> (654,591)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (654,591)
<EPS-PRIMARY> (13.61)
<EPS-DILUTED> (13.61)
</TABLE>
