<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 June 30, 1994
( ) 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 0-14206
Cable TV Fund 12-D, LTD.
- - --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010423
- - --------------------------------------------------------------------------------
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 (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
<PAGE> 2
CABLE TV FUND 12-D
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------- -------------
<S> <C> <C>
ASSETS
------
CASH $ 8,806,667 $ 1,962,657
RECEIVABLES:
Trade receivables, less allowance for
doubtful receivables of $357,337 and $265,542
at June 30, 1994 and December 31, 1993,
respectively 2,909,628 2,954,487
Affiliated entity 159,137 159,137
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 259,640,265 251,810,225
Less- accumulated depreciation (126,587,178) (117,498,465)
------------- -------------
133,053,087 134,311,760
Franchise costs, net of accumulated amortization
of $45,918,847 and $43,008,846 at June 30, 1994
and December 31, 1993, respectively 20,629,796 23,539,797
Subscriber lists, net of accumulated amortization
of $32,743,306 and $32,420,504 at June 30, 1994
and December 31, 1993, respectively - 322,802
Cost in excess of interest in net assets purchased,
net of accumulated amortization of $1,204,520 and
$1,128,284 at June 30, 1994 and December 31, 1993,
respectively 4,851,908 4,928,144
------------- -------------
Total investment in cable
television properties 158,534,791 163,102,503
DEPOSITS, PREPAID EXPENSES AND DEFFERRED ASSETS 1,244,217 1,491,768
------------- -------------
Total assets $ 171,654,440 $ 169,670,552
============= =============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
2
<PAGE> 3
CABLE TV FUND 12-D
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------- --------------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
LIABILITIES:
Debt $ 177,374,993 $ 167,698,697
Accounts payable-
Trade 501,367 830,408
General Partner - 188,430
Accrued liabilities 5,076,313 6,003,390
Subscriber prepayments 778,824 679,136
------------- -------------
Total liabilities 183,731,497 175,400,061
------------- -------------
MINORITY INTEREST IN JOINT VENTURE (3,209,786) (1,657,343)
------------- -------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,112,206) (1,064,255)
------------- -------------
(1,111,206) (1,063,255)
------------- -------------
Limited Partners-
Net contributed capital
(237,339 units outstanding at
June 30, 1994 and December 31, 1993) 102,198,175 102,198,175
Accumulated deficit (109,954,240) (105,207,086)
-------------- -------------
(7,756,065) (3,008,911)
-------------- -------------
Total liabilities and partners'
capital (deficit) $ 171,654,440 $ 169,670,552
============== =============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
3
<PAGE> 4
CABLE TV FUND 12-D
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ---------------------------
1994 1993 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES $23,239,439 $22,658,790 $45,646,691 $ 44,597,933
COSTS AND EXPENSES:
Operating, general and
administrative expense 13,998,347 12,897,982 27,357,147 25,500,482
Management fees and
allocated overhead
from General Partner 2,859,308 2,573,009 5,696,307 5,052,045
Depreciation and
amortization 6,106,215 6,242,395 12,533,322 12,834,910
----------- ----------- ----------- ------------
OPERATING INCOME 275,569 945,404 59,915 1,210,496
----------- ----------- ----------- ------------
OTHER INCOME (EXPENSE):
Interest expense (3,294,996) (3,004,966) (6,316,338) (6,004,076)
Other, net (76,167) (198,259) (91,125) (541,867)
----------- ----------- ----------- ------------
Total other income
(expense), net (3,371,163) (3,203,225) (6,407,463) (6,545,943)
----------- ----------- ----------- ------------
CONSOLIDATED LOSS (3,095,594) (2,257,821) (6,347,548) (5,335,447)
MINORITY INTEREST IN
CONSOLIDATED LOSS 757,080 552,218 1,552,443 1,304,944
----------- ----------- ----------- ------------
NET LOSS $(2,338,514) $(1,705,603) $(4,795,105) $ (4,030,503)
=========== =========== =========== ============
ALLOCATION OF NET LOSS:
General Partner $ (23,385) $ (17,056) $ (47,951) $ (40,305)
=========== =========== =========== ============
Limited Partners $(2,315,129) $(1,688,547) $(4,747,154) $ (3,990,198)
=========== =========== =========== ============
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (9.75) $ (7.11) $ (20.00) $ (16.81)
=========== =========== =========== ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 237,339 237,339 237,339 237,339
=========== =========== =========== ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
4
<PAGE> 5
CABLE TV FUND 12-D
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
-------------------------------
1994 1993
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,795,105) $(4,030,503)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 12,533,322 12,834,910
Minority interest in consolidated net loss (1,552,443) (1,304,944)
Decrease in trade receivables 44,859 17,262
Decrease in deposits, prepaid expenses
and other assets 111,981 62,447
Decrease in amount due General Partner (188,430) (511,646)
Decrease in accounts payable, accrued liabilities
and subscriber prepayments (1,156,430) (3,355,329)
------------ -----------
Net cash provided by operating activities 4,997,754 3,712,197
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (7,830,040) (6,749,681)
Proceeds from the sale of cable
television system - -
------------ -----------
Net cash used in investing activities (7,830,040) 6,749,681
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 10,690,716 5,664,708
Repayment of debt (1,014,420) (2,134,843)
------------ -----------
Net cash provided by financing activies 9,676,296 3,529,865
------------ -----------
Increase in cash 6,844,010 492,381
Cash, beginning of period 1,962,657 1,368,051
------------ -----------
Cash, end of period $ 8,806,667 $ 1,860,432
============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 6,161,378 $ 6,032,676
============ ===========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
5
<PAGE> 6
CABLE TV FUND 12-D
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED 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-D (the "Partnership") at June 30, 1994 and
December 31, 1993 and its Statements of Operations and Cash Flows for the
three and six month periods ended June 30, 1994 and June 30, 1993. Results
of operations for these periods are not necessarily indicative of results
to be expected for the full year.
The accompanying consolidated financial statements include 100 percent
of the accounts of the Partnership and those of Cable TV Fund 12-BCD
Venture (the "Venture") including the cable television systems serving
Palmdale, California, Albuquerque, New Mexico and Tampa, Florida reduced by
the approximate 24 percent minority interest in the Venture. All
interpartnership accounts and transactions have been eliminated.
(2) Jones Intercable, Inc., a publicly held Colorado corporation (the
"General Partner"), manages the Partnership and the Venture and receives 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 for the three and six month periods ended
June 30, 1994 were $1,161,972 and $2,282,335, respectively, as compared to
$1,132,939 and $2,229,897, respectively, for the similar 1993 periods.
The Venture reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the
salaries and related benefits paid to 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 based upon actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining overhead costs are
allocated based on revenues and/or assets managed for the partnership.
Effective December 1, 1993, the allocation method was changed to be based
only on revenue, which the General Partner believes provides a more
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 by the Venture to the General Partner for allocated overhead
and administrative expenses for the three and six month periods ended
June 30, 1994 were $1,697,336 and $3,413,972, respectively, as compared to
$1,440,070 and $2,822,148, respectively, for the similar 1993 periods.
6
<PAGE> 7
CABLE TV FUND 12-D
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Capital expenditures for the Venture totalled approximately $7,830,000
during the first six months of 1994. These capital additions were funded
by cash generated from operations and borrowings from the Venture's credit
facility. Service drops to homes accounted for approximately 34 percent of
the expenditures for the first six months. Approximately 18 percent of
these expenditures were for the upgrade of cable television plant. The
remaining expenditures related to various system enhancements in all the
Venture's systems. Expected capital expenditures for the remainder of 1994
are approximately $18,000,000. The upgrade of cable television plant in
the Albuquerque system is expected to account for approximately 38 percent
of the capital additions. Service drops to homes are anticipated to
account for approximately 18 percent of the expected expenditures. The
remainder of the expenditures is for various system enhancements in all of
the Venture's systems. Funding for these expenditures is expected to be
provided by cash on hand, cash generated from operations and, if available,
borrowings from the Venture's credit facility.
During the first quarter of 1992, the Venture renegotiated its debt
arrangements, which increased the maximum amount of debt available at that
time to $183,000,000. Such debt arrangements consist of $93,000,000 of
Senior Notes placed with a group of institutional lenders and a
renegotiated $90,000,000 revolving 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 penalty for prepayment of the notes prior to maturity. The
make-whole premium protects the lenders in the event that the funds are
reinvested at a rate below 8.64 percent, and is calculated per the note
agreement.
The revolving credit period on the Venture's $90,000,000 credit
facility expired on March 31, 1994. The then-outstanding balance of
$84,300,000 converted to a term loan payable in quarterly installments
which began June 30, 1994 with a final payment due on March 31, 2000. The
Venture repaid $758,700 of this loan in the second quarter. The General
Partner is currently negotiating to extend the revolving credit period.
The regulatory matters discussed below may adversely effect the General
Partner's ability to renegotiate this matter. If the renegotiation of the
credit facility is not completed, the Venture will have to rely on cash on
hand, cash generated from operations and advances from the General Partner,
in its discretion, to fund principal payments and capital expenditures.
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 June 30, 1994 and
1993 were 6.1 percent and 5.10 percent respectively.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
The Venture borrowed funds from its credit facility to provide
liquidity during renegotiation of its credit facility.
Subject to the regulatory matters discussed below and assuming
successful renegotiation of its credit facility, the Venture has sufficient
sources of capital available in its ability to generate cash from
operations and to borrow under its credit facility to meet its presently
anticipated needs.
7
<PAGE> 8
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 allows for a greater degree of regulation of
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 and managed by the Partnership, 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 Partnership reduced rates charged
for certain regulated services effective September 1, 1993. These
reductions resulted in some decrease in revenues and operating income
before depreciation and amortization; however the decrease was not as
severe as originally anticipated. The General Partner has undertaken
actions to mitigate a portion of these reductions primarily through (a) new
service offerings in some systems, (b) product re-marketing and re-
packaging and (c) marketing efforts directed at non-subscribers.
On February 22, 1994, the FCC adopted several additional rate orders
including an order which revised its earlier-announced regulatory scheme
with respect to rates. The FCC's new regulations will 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. However, the FCC held
rate reductions abeyance in certain systems. 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.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services
are justified and reasonable using cost-of-service standards. The FCC
established an interim industry-wide 11.25 percent permitted rate of
return, and requested comments on whether this standard and other interim
cost-of-service standards should be made permanent. The FCC also
established a presumption that acquisition costs above a system's book
value should be excluded from the rate base, but the FCC will consider
individual showings to rebut this presumption. The need for special rate
relief will also be considered by the FCC if an operator demonstrates that
the rates set by a cost-of-service proceeding would constitute confiscation
of investment, and that, absent a higher rate, the credit necessary to
operate and to attract investment could not be maintained. The FCC will
establish a uniform system of accounts for operators that elect cost-of-
service rate regulation, and the FCC has adopted affiliate transaction
regulations. The FCC also proposed adopting a productivity factor to be
offset against future inflation increases to be applied regardless of which
form of regulation is used, cost of service or benchmark regulation. After
a rate has been set pursuant to a cost-of-service showing, rate increases
for regulated services will be indexed for inflation, and operators will
also be permitted to increase rates in response to increases in costs
beyond their control, such as taxes and increased programming costs.
The Venture has elected to file cost-of-service showings in all of its
systems. The General Partner anticipates no further reduction in revenues
or operating income before depreciation and amortization.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the
statutory requirements. These new rules allow a local commercial broadcast
television station to elect whether to demand that a cable system carry its
signal or to require the cable system to negotiate with the station for
"retransmission consent." A cable system is generally required to devote
up to one-third of its activated channel capacity for the mandatory
carriage of local commercial broadcast television stations, and non-
commercial television stations are also given mandatory carriage rights,
although such stations are not given the option to negotiate retransmission
consent for the carriage of their signals by cable systems. Additionally,
cable systems also are required to obtain retransmission consent from all
commercial television stations (except for commercial satellite-delivered
independent "superstations"), which do not elect mandatory carriage,
commercial radio stations and, in some instances, low-power television
stations carried by cable systems.
8
<PAGE> 9
The retransmission consent rules went into effect on October 6, 1993.
Throughout all cable television systems owned by the Partnership no
television stations withheld their consent to retransmission of their
signal. Certain other broadcast signals are being carried pursuant to
extensions, and the General Partner expects to finally conclude
retransmission consent negotiations with those remaining stations without
having to terminate the distribution of any of those signals. However,
there can be no assurance that such will occur. If any broadcast station
currently being carried pursuant to an extension is dropped, there could be
a negative effect on the system in which it is dropped if a significant
number of subscribers in such system were to disconnect their service.
However, in most cases, only one broadcaster in any market is being carried
pursuant to an extension arrangement, and the dropping of such broadcaster,
were that to occur, is not expected to have a negative effect on the
system.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable
Act, including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States
Supreme Court. The United States Supreme Court vacated the lower court
decision on June 27, 1994 and remanded the case to the district court for
further development of a factual record. The Court's majority determined
that the must-carry rules were content neutral, but that it was not yet
proven that the rules were needed to preserve the economic health of the
broadcasting industry. In the interim, the must-carry rules will remain in
place during the pendency of the proceedings in district court. In 1993, a
Federal district court for the District of Columbia upheld provisions of
the 1992 Cable Act concerning rate regulation, retransmission consent,
restrictions on vertically integrated cable television operators and
programmers, mandatory carriage of programming on commercial leased
channels and public, educational and governmental access channels and the
exemption for municipalities from civil damage liability arising out of
local regulation of cable services. The 1992 Cable Act's provisions
providing for multiple ownership limits for cable operators and advance
notice of free previews for certain programming services have been found
unconstitutional, and these decisions have been appealed. In November
1993, the United States Court of Appeals for the District of Columbia held
that the FCC's regulations implemented pursuant to Section 10 of the 1992
Cable Act, which permit cable operators to ban indecent programming on
public, educational or governmental access channels or leased access
channels, were unconstitutional, but the court has agreed to reconsider its
decision. All of these decisions construing provisions of the 1992 Cable
Act and the FCC's implementing regulations have been or are expected to be
appealed.
RESULTS OF OPERATIONS
Revenues in the Venture's systems increased $580,649, or approximately
3 percent, from $22,658,790 for the three months ended June 30, 1993 to
$23,239,439 for the second quarter of 1994. For the six month periods
ended June 30, revenues increased $1,048,758 , or approximately 2 percent,
from $44,597,933 in 1993 to $45,646,691 in 1994. The increases in revenue
were primarily due to increases in basic subscribers. The Venture had an
increase of basic subscribers of 10,929, or approximately 5 percent, from
208,474 at June 30, 1993 to 219,403 at June 30, 1994. The increases in
revenue were also due to an increase in pay units of 8,219, or
approximately 5 percent, from 150,960 at June 30, 1993 to 159,179 at June
30, 1994. The increases in revenues were partially due to an increase in
ad sales revenue.The increases in revenues would have been greater but for
the reduction in basic rates as mandated by the FCC in May 1993. No other
single factor significantly affected the increase in revenue.
Operating, general and administrative expense in the Venture's systems
increased $1,100,365, or approximately 9 percent, from $12,897,982 for the
three months ended June 30, 1993 to $13,998,347 for the second quarter of
1994. For the six month periods, operating, general and administrative
expense increased $1,856,665, or approximately 7 percent, from $25,500,482
for the six months ended June 30, 1993 to $27,357,147 for the similar 1994
period. Operating, general and administrative expense represented 60
percent of revenue for the three and six month periods ended June 30, 1994,
compared to 57 percent for the three and six month periods ended June 30,
1993. Increases in programming costs accounted for approximately 60
percent and 50 percent, respectively, of the three and six month increases.
No other
9
<PAGE> 10
individual factor contributed significantly to the increases in operating,
general and administrative expense. Management fees and allocated overhead
from the General Partner increased $286,299, or approximately 11 percent,
from $2,573,008 for the three month ended June 30, 1993 to $2,859,309 for
the similar period in 1994. For the six month period, management fees and
allocated overhead from the General Partner increased $644,262, or
approximately 13 percent, from $25,500,482 for the six months ended June
30, 1993 to $27,357,147 for the similar period in 1994. These increases
are due to the increase in revenues, upon which such fees and allocations
are based and an increase in expense allocated from the General Partner.
The General Partner has experienced increases in expenses including
personnel costs and reregulation costs.
Depreciation and amortization expense decreased $136,180, or
approximately 2 percent, from $6,242,395 for the second quarter of 1993 to
$6,106,215 for the second quarter of 1994. For the six month periods,
depreciation and amortization expense decreased $301,588 or approximately 2
percent, from $12,834,910 for the first six months of 1993 to $12,533,322
for the similar period in 1994. These decreases are due primarily to
maturation of the Venture's intangible asset base.
The Venture recorded operating income of $275,568 and $59,915,
respectively, for the three and six month periods ended June 30, 1994,
compared to operating income of $945,404 and $1,210,496, respectively, for
the three and six months periods ended June 30, 1993. This change is the
result of the increases in operating, general and administrative expenses
and management fees and allocated overhead from the General Partner
exceeding the increase in revenues and the decreases in depreciation and
amortization expense. Operating income before depreciation and
amortization decreased $806,015, or approximately 11 percent, from
$7,187,799 for the three months ended June 30, 1993 to $6,381,784 in 1994.
For the six month periods, operating income before depreciation and
amortization decreased $1,452,169, or approximately 10 percent, from
$14,045,406 for the six months ended June 30, 1993 to $12,593,237 in 1994.
These decreases are due to the increases in operating, general and
administrative expense and management fees and allocated overhead from the
General Partner exceeding the increases in revenue. The decreases in
operating income before depreciation and amortization reflect the current
operating environment of the cable television industry. The FCC rate
regulations under the 1992 Cable Act have caused revenues to increase more
slowly than in prior years. In turn, this has caused certain expenses which
are a function of revenue, such as franchise fees, copyright fees and
management fees to increase more slowly than in prior years. However, other
operating costs such as programming fees, salaries and benefits, and
marketing costs as well as certain costs incurred by the General Partner,
which are allocated to the Partnership, continue to increase. This situation
has led to reductions in operating income before depreciation and amortization
as a percent of revenue ("Operating Margin"). Such reductions in Operating
Margins may continue in the near term as the Partnership and the General
Partner incur cost increases (due to, among other things, programming fees,
reregulation and competition), that exceed increases in revenue. The
General Partner will attempt to mitigate a portion of these reductions
through (a) rate adjustments; (b) new service offerings; (c) product re-
marketing and re-packaging and (d) targeted non-subscriber acquisition
marketing.
For the three month periods ended June 30, 1994 and 1993, interest
expense increased $290,030, or approximately 10 percent, from $3,004,966,
to $3,294,996 due primarily to higher interest rates and higher outstanding
balances on interest-bearing obligations. For the six month periods,
interest expense increased $312,262, or approximately 5 percent, from
$6,004,076 to $6,316,338, due to higher interest rates and higher
outstanding balances on interest bearing obligations. The Venture incurred
other expense of $76,167 and $91,125, respectively, for the three and six
months ended June 30, 1994, compared to $198,259 and $541,867,
respectively, for 1993. This decrease was due primarily to litigation-
related legal costs incurred for a matter that was settled in February
1993.
The Venture's consolidated loss increased $837,773, or approximately
37 percent, from 2,257,821 for the three months ended June 30, 1993 to
$3,095,594 in 1994. For the six month periods, net loss increased
$1,012,101, or approximately 19 percent, from $5,335,447 in 1993 to
$6,347,548 in 1994. Such losses are expected to continue in the future.
10
<PAGE> 11
PART II - OTHER INFORMATION
None.
11
<PAGE> 12
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-D
BY: JONES INTERCABLE, INC.
General Partner
By: /s/ KEVIN P. COYLE
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 10, 1994
12
