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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, 1995
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
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Commission file number: 0-13807
CABLE TV FUND 12-B, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-0969999
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(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(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
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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 (Section 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.
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DOCUMENTS INCORPORATED BY REFERENCE: None
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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.
Since the sale of the cable television system serving areas in and
around Augusta, Georgia (the "Augusta System") as described below, the
Partnership does not directly own any cable television systems. The
Partnership's sole asset is its 9 percent interest in the Venture. The Venture
also recently sold one of its cable television systems as described below and
now owns the cable television systems serving Palmdale, Lancaster and Rancho
Vista and the military installation of Edwards Air Force Base, all in California
(the "Palmdale/Lancaster System") and Albuquerque, New Mexico (the "Albuquerque
System"). See Item 2. The Palmdale/Lancaster System and the Albuquerque System
may collectively be referred to as the "Systems."
DISPOSITIONS OF CABLE TELEVISION SYSTEMS. On October 20, 1995, the
Partnership sold the Augusta System to Jones Cable Holdings, Inc. ("JCH"), a
wholly owned subsidiary of the General Partner, for a sales price of
$142,618,000, subject to working capital adjustments. The sales price
represented the average of three separate, independent appraisals of the Augusta
System. The transaction was approved by approximately 75 percent of the
Partnership's limited partners in a vote of the limited partners held in August
1995. The Partnership subsequently paid all of its indebtedness and distributed
the net sale proceeds to its partners of record as of September 30, 1995. The
limited partners of the Partnership, as a group, received $95,179,375 from the
net sale proceeds and the General Partner received $13,220,625 from the net sale
proceeds. The distribution to the limited partners of the Partnership equated to
approximately $1,714 for each $1,000 invested in the Partnership.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH 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 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 is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in April
1996. The Partnership also will distribute in April 1996 $1,200,000 of proceeds
remaining from the sale of the Augusta System, of which $900,000 will be
distributed to limited partners and $300,000 will be distributed to the General
Partner. These April 1996 distributions will give 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 returned to the limited partners from the Augusta System sale
during 1995. 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.
On February 29, 1996, JCH consummated an agreement with Time Warner
Entertainment-Advance/Newhouse Partnership ("TWEAN"), an unaffiliated cable
television system operator, pursuant to which JCH conveyed the Tampa System,
along with certain other cable television systems owned by JCH, and cash in the
amount of $3,500,000, subject to normal closing adjustments, to TWEAN in
exchange for the cable television systems serving Andrews Air Force Base,
Capitol Heights, Cheltenham, District Heights, Fairmount Heights,
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Forest Heights, Morningside, Seat Pleasant, Upper Marlboro, and portions of
Prince George's County, all in Maryland, and a portion of Fairfax County,
Virginia.
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The Systems
also offer a package that includes the basic service channels and the tier
services.
The Systems also offer premium services to their subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service on
a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. At December 31, 1995,
the Systems' monthly basic service rates ranged from $7.95 to $14.50, monthly
basic and tier ("basic plus") service rates ranged from $15.00 to $23.27 and
monthly premium services ranged from $2.75 to $12.95 per premium service. In
addition, the Venture earns revenues from the Systems' pay-per-view programs and
advertising fees. Related charges may include a nonrecurring installation fee
that ranges from $1.99 to $50.00; however, from time to time the Systems have
followed the common industry practice of reducing or waiving the installation
fee during promotional periods. Commercial subscribers such as hotels, motels
and hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation. Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty. For
the year ended December 31, 1995, of the total fees received by the Systems,
basic service and tier service fees accounted for approximately 63% of total
revenues, premium service fees accounted for approximately 15% of total
revenues, pay-per-view fees were approximately 3% of total revenues, advertising
fees were approximately 8% of total revenues and the remaining 11% of total
revenues came principally from equipment rentals, installation fees and program
guide sales. The Venture is dependent upon the timely receipt of service fees to
provide for maintenance and replacement of plant and equipment, current
operating expenses and other costs of the Systems.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. These franchises typically contain many conditions, such as time
limitations on commencement and completion of construction, conditions of
service, including the number of channels, types of programming and
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the provision of free service to schools and certain other public institutions,
and the maintenance of insurance and indemnity bonds. The provisions of local
franchises are subject to federal regulation.
The Venture holds 15 franchises relating to the Palmdale/Lancaster
System and the Albuquerque System. These franchises provide for the payment of
fees to the issuing authorities and generally range from 3% to 5% of the gross
revenues of a cable television system. The 1984 Cable Act prohibits franchising
authorities from imposing annual franchise fees in excess of 5% of gross
revenues and also permits the cable television system operator to seek
renegotiation and modification of franchise requirements if warranted by changed
circumstances.
The Venture has never had a franchise revoked. The Venture's franchise
expiration dates range from January 1999 to February 2007. It is anticipated
that the Venture's remaining cable television systems will be sold before any
franchises need to be renewed
COMPETITION. Cable television systems currently experience competition
from several sources. A potential source of significant competition is Direct
Broadcast Satellite ("DBS") services that use video compression technology to
increase channel capacity and provide packages of movies, network and other
program services that are competitive with those of cable television systems.
Two companies offering DBS services began operations in 1994, and two other
companies offering DBS service recently began operations. In addition, a joint
venture has won the right to provide a DBS service through a FCC spectrum
auction. Not all subscribers terminate cable television service upon acquiring a
DBS system. The General Partner has observed that a number of DBS subscribers
also elect to subscribe to cable television service in order to obtain the
greatest variety of programming on multiple television sets, including local
video services programming not available through DBS service.
Although neither the Venture nor the General Partner has yet
encountered competition from a telephone company providing video services as a
cable operator or video dialtone operator, it is anticipated that the cable
television systems owned or managed by the General Partner will face such
competition in the near future. Legislation recently enacted into law will make
it possible for companies with considerable resources to enter the business. For
example, in February 1996, one of the regional Bell operating companies entered
into an agreement to acquire the nation's third largest cable television
company. Additionally, several telephone companies have begun seeking cable
television franchises from local governmental authorities as a consequence of
litigation which successfully challenged the constitutionality of the cable
television/telephone company cross-ownership rules. The General Partner cannot
predict at this time when and to what extent telephone companies will provide
cable television service within service areas in competition with cable
television systems owned or managed by the General Partner. The General Partner
is aware of the following imminent competition from telephone companies:
Ameritech, one of the seven regional Bell operating companies, which provides
telephone service in a multi-state region including Illinois, has just obtained
a franchise that will allow it to provide cable television service in
Naperville, Illinois, a community currently served by a cable system owned by
one of the cable television systems managed by the General Partner. Chesapeake
and Potomac Telephone Company of Virginia and Bell Atlantic Video Service
Company, both subsidiaries of Bell Atlantic, another of the regional Bell
operating companies, have announced their intention to build a cable television
system in Alexandria, Virginia in competition with a cable television system
owned by the General Partner. Bell Atlantic is preparing for the operation of a
telecommunications and video business in northern Virginia, including the
Alexandria metropolitan area. The FCC has granted GTE Virginia's application for
authority to construct, operate, own and maintain video dialtone facilities in
northern Virginia, including in the service area of a cable television system
owned by the General Partner. To date, GTE has not begun construction of a video
distribution system. The entry of telephone companies as direct competitors
could adversely affect the profitability and market value of the General
Partner's owned and managed systems.
Additional competition is present from several sources, including the
following: Master Antenna Television and Satellite Master Antenna Television
systems that serve multi-unit dwellings such as condominiums, apartment
complexes, motels, hotels and private residential communities; private cable
television/telephonic companies that have secured exclusive contracts to provide
video and telephony services to multi-unit dwellings
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and similar complexes; and multichannel, multipoint distribution service
("MMDS") systems, commonly called wireless cable which generally focus on
providing service to residents of rural areas. In addition, the FCC has
established a new wireless telecommunications service known as Personal
Communications Service ("PCS") that would provide portable non-vehicular mobile
communications services similar to that available from cellular telephone
companies, but at a lower cost. Several cable television multiple system
operators hold or have requested experimental licenses from the FCC to test PCS
technology.
REGULATION AND LEGISLATION. The cable industry is regulated under the
Telecommunications Act of 1996 (the "1996 Act"), the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") and the Cable
Communications Policy Act of 1984 (the "1984 Cable Act") and the regulations
implementing these statutes. The Federal Communications Commission (the "FCC")
has promulgated regulations covering such areas as the registration of cable
television systems and other communications businesses, carriage of television
broadcast programming, consumer education and lockbox enforcement, origination
cablecasting and sponsorship identification, children's programming, the
regulation of basic cable and cable programming service rates in areas where
cable television systems are not subject to effective competition, signal
leakage and frequency use, technical performance, maintenance of various
records, equal employment opportunity, and antenna structure notification,
marking and lighting. In addition, cable operators periodically are required to
file various informational reports with the FCC. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of administrative
sanctions, such as the revocation of FCC licenses needed to operate certain
transmission facilities often used in connection with cable operations. State or
local franchising authorities, as applicable, also have the right to enforce
various regulations, impose fines or sanctions, issue orders or seek revocation
subject to the limitations imposed upon such franchising authorities by federal,
state and local laws and regulations. Several states have assumed regulatory
jurisdiction of the cable television industry, and it is anticipated that other
states will do so in the future. To the extent the cable television industry
begins providing telephone service, additional state regulations will be applied
to the cable television industry. Cable television operations are subject to
local regulation insofar as systems operate under franchises granted by local
authorities.
The following is a summary of federal laws and regulations materially
affecting the cable television industry, and a description of state and local
laws with which the cable industry must comply.
Telecommunications Act of 1996. The 1996 Act, which became law on
February 28, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
effective March 31, 1999 and the cable programming service tier of small cable
operators (those that provide service to 50,000 or fewer subscribers) effective
immediately. The 1996 Act also revised the procedures for filing a cable
programming service tier rate complaint and adds a new effective competition
test.
The most far-reaching changes in the communications business will
result from the telephony provisions of the 1996 Act. The statute expressly
preempts any legal barriers to competition in the local telephone business that
previously existed in state and local laws and regulations. Many of these
barriers had been lifted by state actions over the last few years, but the 1996
Act completes the task. The 1996 Act also establishes new requirements for
maintaining and enhancing universal telephone service and new obligations for
telecommunications providers to maintain privacy of customer information. The
1996 Act establishes uniform
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requirements and standards for entry, competitive carrier interconnection and
unbundling of LEC monopoly services.
The 1996 Act repealed the cable television/telephone cross-ownership
ban adopted in the 1984 Cable Act. The federal cross-ownership ban was
particularly important to the cable industry because telephone companies already
own certain facilities such as poles, ducts and associated rights of way. While
this ban had been overturned by several courts, formal removal of the ban ended
the last legal constraints on telephone company plans to enter the cable market.
Under the 1996 Act, telephone companies in their capacity as common carriers now
may lease capacity to others to provide cable television service. Telephone
companies have the option of providing video service as cable operators or
through "open video systems" ("OVS"), a regulatory regime that may provide more
flexibility than traditional cable service. The 1996 Act exempts OVS operators
from many of the regulatory obligations that currently apply to cable operators,
such as rate regulation and franchise fees, although other requirements are
still applicable. OVS operators, although not subject to franchise fees as
defined by the 1992 Cable Act, are subject to fees charged by local franchising
authorities or other governmental entities in lieu of franchise fees. (Under
certain circumstances, cable operators also will be able to offer service
through open video systems.) In addition, the 1996 Act eliminated the
requirement that telephone companies file Section 214 applications (applications
to provide video dialtone services) with the FCC before providing video service.
This limits the opportunity of cable operators to mount challenges at the FCC
regarding telephone company entry into the video market. The 1996 Act also
contains restrictions on buying out incumbent cable operators in a telephone
company's service area, especially in suburban and urban markets.
Other parts of the 1996 Act also will affect cable operators. Under the
1996 Act, the FCC is required to revise the current pole attachment rate
formula. This revision will result in an increase in the rates paid by entities,
including cable operators, that provide telecommunication services. The rates
will be phased in after a five-year period. (Cable operators that provide only
cable services will be unaffected.) Under the V-chip provisions of the 1996 Act,
cable operators and other video providers are required to pass along any program
rating information that programmers include in video signals. Cable operators
also are subject to new scrambling requirements for sexually explicit
programming, and cable operators that provide Internet access or other online
services are subject to the new indecency limitations for computer services. In
addition, cable operators that provide Internet access or other online services
are subject to the new indecency limitations for computer services, although
these provisions already have been challenged in court, and the courts have
preliminarily enjoined the enforcement of these content-based provisions.
Under the 1996 Act, a franchising authority may not require a cable
operator to provide telecommunications services or facilities, other than an
institutional network, as a condition to a grant, renewal or transfer of a cable
franchise, and franchising authorities are preempted from regulating
telecommunications services provided by cable operators and from requiring cable
operators to obtain a franchise to provide such services. The 1996 Act also
repealed the 1992 Cable Act's anti-trafficking provision, which generally
required the holding of cable television systems for three years.
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Partnership in particular. The FCC shortly will
be undertaking numerous rulemaking proceedings to interpret and implement the
1996 Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Partnership.
Cable Television Consumer Protection and Competition Act of 1992. The
1992 Cable Act, which became effective on December 4, 1992, caused significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally mandated a greater degree of regulation
of the cable television industry. Under the 1992 Cable Act's definition of
effective competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, became subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allowed the
FCC to regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising
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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 General Partner on behalf of the
Partnership reduced rates charged for certain regulated services in the
Partnership's cable systems effective September 1, 1993. These reductions
resulted in some decrease in Partnership 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, however, 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 generally required 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. Further rate reductions for
cable systems whose rates are below the revised benchmark levels, as well as
reductions that would require operators to reduce rates below benchmark levels
in order to achieve a 17 percent rate reduction, were held in abeyance pending
completion of cable system cost studies. The FCC recently requested some of
these "low price" systems to complete cost study questionnaires. After review of
these questionnaires, the FCC could decide to permanently defer any further rate
reductions, or require the additional 7 percent rate roll back for some or all
of these systems. The FCC has also adopted its proposed upgrade methodology by
which operators would be permitted to recover the costs of upgrading their
plant.
After analyzing the effects of the two methods of rate regulation, the
Partnership and the Venture elected to file cost-of-service showings in all of
their systems. The General Partner anticipates no further reduction in revenues
or operating income before depreciation and amortization resulting from the
FCC's rate regulations. At this time, the regulatory authorities have not
approved the cost-of-service showings.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge subscribers
for new cable programming services. In addition to the present formula for
calculating the permissible rate for new services, the FCC instituted a
three-year flat fee mark-up plan for charges relating to new channels of cable
programming services. Commencing on January 1, 1995, cable system operators may
charge for new channels of cable programming services added after May 14, 1994
at a rate of up to 20 cents per channel, but may not make adjustments to monthly
rates totaling more than $1.20 plus an additional 30 cents for programming
license fees per subscriber over the first two years of the three-year period
for these new services. Operators may charge an additional 20 cents in the third
year only for channels added in that year plus the costs for the programming.
Operators electing to use the 20 cent per channel adjustment may not also take a
7.5 percent mark-up on programming cost increases, which is permitted under the
FCC's current rate regulations. The FCC has requested further comment as to
whether cable operators should continue to receive the 7.5 percent mark-up on
increases in license fees on existing programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price the NPT as they elect so
long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators do
not remove programming services from existing tiers and offer them on the NPT.
In September 1995, the FCC authorized a new, alternative method of
implementing rate adjustments which will allow cable operators to increase rates
for programming annually on the basis of projected increases in external costs
(inflation, costs for programming, franchise-related obligations and changes in
the number of regulated channels) rather than on the basis of cost increases
incurred in the preceding calendar quarter. Operators that elect not to recover
all of their accrued external costs and inflation pass-throughs each year may
recover them (with interest) in subsequent years.
In December 1995, the FCC adopted final cost-of-service rate
regulations requiring, among other things, cable operators to exclude 34 percent
of system acquisition costs related to intangible and tangible assets used to
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provide regulated services. The FCC also reaffirmed the industry-wide 11.25
percent after tax rate of return on an operator's allowable rate base, but
initiated a further rulemaking in which it proposes to use an operator's actual
debt cost and capital structure to determine an operator's cost of capital or
rate of return. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services are indexed for inflation, and operators
are permitted to increase rates in response to increases in costs beyond their
control, such as taxes and increased programming costs.
The United States Court of Appeals for the District of Columbia Circuit
recently upheld the FCC's rate regulations implemented pursuant to the 1992
Cable Act, but ruled that the FCC impermissibly failed to permit cable operators
to adjust rates for certain cost increases incurred during the period between
the date the 1992 Cable Act was passed through the initial date of rate
regulation. The FCC has not yet implemented the court's ruling.
There have been several lawsuits filed by cable operators and
programmers in federal court challenging various aspects of the 1992 Cable Act
including its 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. On December 12, 1995, the three-judge federal district court
again upheld the must-carry rules' validity. This decision has been appealed to
the United States Supreme Court.
In 1993, a federal district court 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. The
FCC's regulations relating to the carriage of indecent programming, which were
recently upheld by the United States Court of Appeals for the District of
Columbia, have been appealed to the United States Supreme Court.
Franchising. The responsibility for franchising or other authorization
of cable television systems is left to state and local authorities. There are,
however, several provisions in the 1984 Cable Act that govern the terms and
conditions under which cable television systems provide service. These include
uniform standards and policies that are applicable to cable television operators
seeking renewal of a cable television franchise. The procedures established
provide for a formal renewal process should the franchising authority and the
cable television operator decline to use an informal procedure. A franchising
authority unable to make a preliminary determination to renew a franchise is
required to hold a hearing in which the operator has the right to participate.
In the event a determination is made not to renew the franchise at the
conclusion of the hearing, the franchising authority must provide the operator
with a written decision stating the specific reasons for non-renewal. Generally,
the franchising authority can finally decide not to renew a franchise only if it
finds that the cable operator has not substantially complied with the material
terms of the present franchise, has not provided reasonable service in light of
the community's needs, does not have the financial, legal or technical ability
to provide the services being proposed for the future, or has not presented a
reasonable proposal for future service. A final decision of non-renewal by the
franchising authority is appealable in court.
A provision of the 1996 Act preempts franchising authorities from
regulating telecommunications services provided by cable operators and from
requiring cable operators to obtain a franchise to provide such services. A
franchising authority may not require a cable operator to provide
telecommunications services or facilities, other than an institutional network,
as a condition to a grant, renewal or transfer of a cable franchise.
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GENERAL. The Venture's business consists of providing cable television
services to a large number of customers, the loss of any one of which would have
no material effect on the Venture's business. Each of the Systems has had some
subscribers who later terminated the service. Terminations occur primarily
because people move to another home or to another city. In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service. The amount of past due accounts in the Systems is
not significant. The General Partner's policy with regard to past due accounts
is basically one of disconnecting service before a past due account becomes
material.
The Venture does not depend to any material extent on the availability
of raw materials; it carries no significant amounts of inventory and it has no
material backlog of customer orders. The Partnership has no employees because
all properties are managed by employees of the General Partner. The General
Partner has engaged in research and development activities relating to the
provision of new services but the amount of the Venture's funds expended for
such research and development has never been material.
Compliance with federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Venture.
ITEM 2. PROPERTIES
The cable television systems owned by the Venture are described below:
Ownership SYSTEM ACQUISITION DATE
--------- ------ ----------------
Cable TV Fund 12-B, Ltd., Cable TV Palmdale/Lancaster System April 1986
Fund 12-C, Ltd. and Cable TV Fund Albuquerque System August 1986
12-D, Ltd. own a 9%, 15% and 76%
interest, respectively, through
their interest in Cable TV Fund
12-BCD Venture
The following sets forth (i) the monthly basic plus service rates
charged to subscribers and (ii) the number of basic subscribers and pay units
for the Systems. The monthly basic service rates set forth herein represent,
with respect to systems with multiple headends, the basic service rate charged
to the majority of the subscribers within the system. In cable television
systems, basic subscribers can subscribe to more than one pay TV service. Thus,
the total number of pay services subscribed to by basic subscribers are called
pay units. As of December 31, 1995, the Palmdale/Lancaster System operated cable
plant passing approximately 90,800 homes, representing an approximate 68%
penetration rate, and the Albuquerque System operated cable plant passing
approximately 223,800 homes, representing an approximate 49% penetration rate.
Figures for numbers of subscribers and homes passed are compiled from the
General Partner's records and may be subject to adjustments.
At December 31,
-------------------------------------------
PALMDALE/LANCASTER SYSTEM 1995 1994 1993
- ------------------------- ---- ---- ----
Monthly basic plus service rate $23.27 $21.77 $21.77
Basic subscribers 61,993 59,702 56,372
Pay units 46,699 46,214 39,928
9
10
At December 31,
-------------------------------------------
ALBUQUERQUE SYSTEM 1995 1994 1993
- ------------------ ---- ---- ----
Monthly basic plus service rate $22.85 $21.35 $21.00
Basic subscribers 109,911 106,835 98,555
Pay units* 57,189 58,838 67,462
* The decrease in pay units between 1993 and 1994 was primarily due to
the conversion of The Disney Channel from a premium service to a basic
plus service.
ITEM 3. LEGAL PROCEEDINGS
On September 20, 1995, a civil action entitled David Hirsch, on behalf
of himself and all others similarly situated, Plaintiff, vs. Jones Intercable,
Inc., Defendant, was filed in the District Court, County of Arapahoe, State of
Colorado (Case No. 95-CV-1800). The plaintiff has brought the action as a
purported class action on behalf of himself and all other limited partners of
Fund 12-D against the General Partner seeking to recover damages caused by the
General Partner's alleged breaches of its fiduciary duties to the limited
partners of Fund 12-D in connection with the sale of the Tampa System and the
subsequent exchange of the Tampa System with an unaffiliated cable television
system operator in return for systems owned by that operator. The plaintiff also
seeks certain equitable and injunctive relief. On January 25, 1996, the
plaintiff filed an amended complaint and request for a jury trial. On February
20, 1996, the General Partner filed a Motion to Dismiss the Amended Complaint on
the ground that it fails to state a claim upon which relief can be granted as a
matter of law. The General Partner believes that it has meritorious defenses,
and the General Partner intends to defend this lawsuit vigorously.
On November 17, 1995, a civil action entitled Martin Ury, derivatively
on behalf of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV
Fund 12-D, Ltd., Plaintiff vs. 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, was filed in the District Court,
County of Arapahoe, State of Colorado (Case No. 95-CV-2212). The plaintiff, a
limited partner of Fund 12-D, has brought the action as a derivative action on
behalf of the three partnerships that comprise the Venture against the General
Partner seeking to recover damages caused by the General Partner's alleged
breaches of its fiduciary duties to the Venture and to the three partnerships
that comprise the Venture (and their respective limited partners) in connection
with the sale of the Tampa System and the subsequent exchange of the Tampa
System with an unaffiliated cable television system operator in return for
systems owned by that operator. On February 1, 1996, the General Partner filed a
Motion to Dismiss the Complaint on the ground that it fails to state a claim
upon which relief can be granted as a matter of law. The Motion also asserts
that the plaintiff does not have standing to bring a claim on behalf of Fund
12-B and Fund 12-C and their respective limited partners. The General Partner
believes that it has meritorious defenses, and the General Partner intends to
defend this lawsuit vigorously.
Pursuant to the indemnification provisions of Section 9.6 of the
Partnership's limited partnership agreement, the General Partner may be entitled
to indemnification from the Partnership for its legal fees and expenses, and for
any amounts paid in settlement, in defending the above-described lawsuits. The
General Partner cannot determine at this time whether such amounts will be
material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In August 1995, a special vote of the limited partners of the
Partnership was conducted through the mails on behalf of the Partnership by the
General Partner for the purpose of obtaining limited partner approval of the
sale to the General Partner or one of its wholly owned subsidiaries, of the
Augusta System for $142,618,000 in cash, subject to normal closing adjustments.
Limited partners of record at the close of business on July 31, 1995 were
entitled to notice of, and to participate in, this vote of limited partners. Of
the 111,035 limited partnership interests entitled to vote, 83,087 interests, or
74.8 percent, voted to approve the transaction, 1,310 interests, or 1.2 percent,
voted against the transaction, 939 interests, or .8 percent, abstained from
voting and 25,699 interests,
10
11
or 23 percent, did not vote on the proposal. The sale of the Augusta System
closed on October 20, 1995. See Item 1, Business.
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. As of February 15, 1996, the number of equity security
holders in the Partnership was 8,079.
11
12
Item 6. Selected Financial Data
For the Year Ended December 31,
------------------------------------------------------------------------------------
Cable TV Fund 12-B, Ltd. 1995 1994 1993 1992 1991
- ------------------------ ------------- ---------- ----------- ----------- -----------
C>
Revenues $ 24,308,934 26,956,006 $26,975,209 $25,369,064 $22,434,854
Depreciation and Amortization 8,263,976 9,380,877 8,897,796 8,415,058 8,003,545
Operating Income 602,125 249,558 1,816,948 1,937,255 1,205,903
Equity in Net Loss of Cable
Television Joint Venture (1,021,236) (1,182,039) (1,063,449) (1,336,385) (1,636,665)
Net Income (Loss) 89,473,978 (a) (3,368,245) (1,463,979) (2,300,652) (4,003,891)
Net Income (Loss) per Limited
Partnership Unit 797.76 (a) (30.03) (13.05) (20.51) (35.70)
Weighted Average Number of Limited
Partnership Units Outstanding 111,035 111,035 111,035 111,035 111,035
General Partner's Deficit (12,630,037) (304,152) (270,470) (255,830) (232,823)
Limited Partners' Capital 11,073,735 17,673,872 21,008,435 22,457,774 24,735,419
Total Assets 1,269,060 60,347,311 66,085,025 70,507,101 74,521,239
Debt - 39,959,041 43,831,074 46,797,508 48,725,591
General Partner Advances - 112,495 163,266 289,033 215,769
(a) Net income resulted primarily from the sale of the Augusta System by Cable
TV Fund 12-B, Ltd. in October 1995.
For the Year Ended December 31,
---------------------------------------------------------------------------------
Cable TV Fund 12-BCD Venture 1995 1994 1993 1992 1991
- ---------------------------- ------------ ------------ ------------- ------------ ------------
Revenues $101,399,697 $ 92,823,076 $ 89,131,530 $ 83,567,527 $ 78,049,505
Depreciation & Amortization 26,666,735 24,809,654 25,772,299 30,793,053
Operating Income (Loss) 4,127,622 289,904 779,887 (1,087,963) (4,930,588)
Net Loss (11,124,567) (12,876,242) (11,584,416) (14,884,365) (17,828,600)
Partners' Capital (Deficit) (29,730,318) (18,605,751) (5,729,509) 5,854,907 20,739,272
Total Assets 163,486,029 170,675,914 169,670,552 175,554,620 185,834,366
Debt 180,770,267 180,402,748 167,698,697 160,440,488 156,131,618
Jones Intercable, Inc. Advances 4,198,739 616,810 188,430 511,646 4,606,840
12
13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CABLE TV FUND 12-B, LTD.
RESULTS OF OPERATIONS
On October 20, 1995, Cable TV Fund 12-B, Ltd. (the "Partnership") sold
the Augusta System, which was the Partnership's only directly held system, to
Jones Cable Holdings, Inc., a wholly owned subsidiary of the General Partner;
therefore, meaningful comparisons of revenues, operating expenses, management
fees and allocated overhead from the General Partner and depreciation and
amortization expense cannot be made. The Partnership continues to own a 9
percent interest in Cable TV Fund 12- BCD Venture (the "Venture").
FINANCIAL CONDITION
On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc. ("JCH"), a wholly owned subsidiary of the General Partner,
for a sales price of $142,618,000, subject to working capital adjustments. The
sales price represented the average of three separate, independent appraisals
of the Augusta System. The Partnership subsequently paid all of its
indebtedness and distributed the net sale proceeds to its partners of record as
of September 30, 1995. The limited partners of the Partnership, as a group,
received $95,179,375 from the net sale proceeds and the General Partner
received $13,220,625 from the net sale proceeds. The distribution to the
limited partners of the Partnership equated to approximately $1,714 for each
$1,000 invested in the Partnership. A vote of the limited partners of the
Partnership was conducted for the purpose of obtaining limited partner approval
of the sale of the Augusta System. The transaction was approved by the holders
of 74.8 percent of the limited partnership interests of the Partnership.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH 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 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 is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in March
1996. The Partnership also will distribute in April 1996 $1,200,000 of
proceeds remaining from the sale of the Augusta System, of which $900,000 will
be distributed to limited partners and $300,000 will be distributed to the
General Partner. These distributions will give 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 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.
Due to the sale of the Augusta System in October 1995, the Partnership
has no further liquidity needs.
13
14
CABLE TV FUND 12-BCD VENTURE
RESULTS OF OPERATIONS
1995 compared to 1994
Revenues of Cable TV Fund 12-BCD Venture (the "Venture") increased
$8,576,621, or approximately 9 percent, to $101,399,697 in 1995 from
$92,823,076 in 1994. At December 31, 1995, the Venture's systems had 236,866
basic subscribers compared to 227,950 basic subscribers at December 31, 1994,
an increase of approximately 4 percent. This increase in basic subscribers
accounted for approximately 39 percent of the increase in revenues. Basic
service rate increases accounted for approximately 37 percent of the increase
in revenues. No other single factor significantly affected the increase in
revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture's cable television systems. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses in the Venture's systems increased $2,220,438, or
approximately 4 percent, to $58,351,692 in 1995 from $56,131,254 in 1994.
Operating expenses represented approximately 58 percent and approximately 60
percent of revenues in 1995 and in 1994, respectively. The increase in
operating expenses was due to increases in subscriber related costs,
programming fees, property tax expenses and advertising related costs, which
were partially offset by decreases in personnel related costs. No other single
factor significantly affected the increase in operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc.
increased $661,384, or approximately 6 percent, to $12,253,648 in 1995 from
$11,592,264 in 1994 due to the increase in revenues, upon which such fees and
allocations are based.
Depreciation and amortization expense increased $1,857,081, or
approximately 7 percent, to $26,666,735 in 1995 from $24,809,654 in 1994. This
increase was due to the increase in the Venture's depreciable asset base.
The Venture's operating income increased $3,837,718 to $4,127,622 in
1995 from $289,904 in 1994. This increase was the result of increases in
revenues exceeding the increases in operating expenses, management fees and
allocated overhead from Jones Intercable, Inc. and depreciation and
amortization expenses.
The cable television industry generally measures the financial
performance of a cable television system in terms of cash flow or operating
income before depreciation and amortization. The value of a cable television
system is often determined using multiples of cash flow. This measure is not
intended to be a substitute or improvement upon the items disclosed on the
financial statements, rather it is included because it is an industry standard.
Operating income before depreciation and amortization increased $5,694,799, or
approximately 23 percent, to $30,794,357 in 1995 from $25,099,558 in 1994.
This increase was due to the increase in revenues exceeding the increase in
operating expenses and management fees and allocated overhead from Jones
Intercable, Inc.
Interest expense increased $2,190,557, or approximately 17 percent, to
$15,347,250 in 1995 from $13,156,693 in 1994 due to higher interest rates and
higher outstanding balances on interest bearing obligations in 1995.
Net loss decreased $1,751,675, or approximately 14 percent, to
$11,124,567 in 1995 from $12,876,242 in 1994 due to the factors discussed
above.
1994 compared to 1993
Revenues of the Venture increased $3,691,546, or approximately 4
percent, to $92,823,076 in 1994 from $89,131,530 in 1993. At December 31, 1994,
the Venture's systems had 227,950 basic subscribers compared to 213,072 basic
subscribers at December 31, 1993, an increase of approximately 7 percent. This
increase in basic subscribers accounted for approximately 37 percent of the
increase in revenues. Increases in advertising sales activity accounted for
approximately 28 percent of the increase in revenues. Increases in premium
service and pay-per-view revenues accounted for approximately 27 percent of the
increase. The increase in revenues would have been greater but for the
reduction in
14
15
basic rates due to new basic rate regulations issued by the FCC in May 1993
with which the Venture complied effective September 1, 1993. No other single
factor significantly affected the increase in revenues.
Operating expenses in the Venture's systems increased $4,057,270, or
approximately 8 percent, to $56,131,254 in 1994 from $52,073,984 in 1993.
Operating expenses represented approximately 60 percent and approximately 58
percent of revenues in 1994 and in 1993, respectively. The increase in
operating expenses was due to increases in subscriber related costs,
programming fees and marketing related costs. No other single factor
significantly affected the increase in operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc.
increased $1,086,904, or approximately 10 percent, to $11,592,264 in 1994 from
$10,505,360 in 1993 due to the increase in revenues, upon which such fees and
allocations are based, and an increase in allocated expenses from Jones
Intercable, Inc. Jones Intercable, Inc. experienced increases in expenses in
1994.
Depreciation and amortization expense decreased $962,645, or
approximately 4 percent, to $24,809,654 in 1994 from $25,772,299 in 1993. This
decrease was due to the maturation of the Venture's asset base.
The Venture's operating income decreased $489,983, or approximately 63
percent, to $289,904 in 1994 from $779,887 in 1993. This decrease was the
result of increases in operating expenses and management fees and allocated
overhead from Jones Intercable, Inc. exceeding the increases in revenues and
was offset by the decreases in depreciation and amortization expenses.
Operating income before depreciation and amortization decreased
$1,452,628, or approximately 5 percent, to $25,099,558 in 1994 from $26,552,186
in 1993. This decrease was due to the increase in operating expenses and
management fees and allocated overhead from Jones Intercable, Inc. exceeding
the increase in revenues.
Interest expense increased $1,288,625, or approximately 11 percent, to
$13,156,693 in 1994 from $11,868,068 in 1993 due to higher interest rates and
higher outstanding balances on interest bearing obligations in 1994.
Net loss increased $1,291,826, or approximately 11 percent, to
$12,876,242 in 1994 from $11,584,416 in 1993 due to the factors discussed
above.
FINANCIAL CONDITION
For the twelve months ended December 31, 1995, the Venture generated
net cash from operating activities totaling approximately $18,100,250, which
was available to fund capital expenditures and non-operating costs. Capital
expenditures for the Venture totaled approximately $21,500,000 during 1995.
Service drops to homes accounted for approximately 41 percent of the capital
expenditures. New plant construction accounted for approximately 19 percent of
the capital expenditures. Approximately 10 percent of capital expenditures was
for converters. The remaining expenditures related to various system
enhancements. These capital expenditures were funded primarily from cash
generated from operations and borrowings from the General Partner. Expected
capital expenditures for 1996 are approximately $15,200,000. Service drops to
homes are anticipated to account for approximately 43 percent. Approximately
31 percent of budgeted capital expenditures is for new plant construction. The
remainder of the expenditures are 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 borrowings from the
Venture's amended credit facility. The General Partner believes that the
Venture has sufficient sources of capital available from cash generated from
operations and borrowings under its credit facility to meet its presently
anticipated needs.
On August 11, 1995, the Venture entered into a purchase and sale
agreement pursuant to which it agreed to sell its Tampa, Florida system (the
"Tampa System") to the General Partner for a sales price of $110,395,667,
subject to working capital adjustments. The General Partner assigned its
rights and obligations under the purchase and sale agreement to Jones Cable
Holdings, Inc., a wholly owned subsidiary of the General Partner. Closing of
this sale occurred on February 28, 1996. The sales price represented the
average of three separate, independent appraisals of the fair market value of
the Tampa System. The net sales proceeds were used to make a $55,000,000
distribution to the Venture's partners, with the remainder of the proceeds used
to reduce the Venture's debt. The net sales proceeds were distributed as
follows: Fund 12-B received $5,049,000; Fund 12-C received $8,404,000 and Fund
12-D received $41,547,000.
15
16
The Venture's debt arrangements at December 31, 1995 consisted of
$93,000,000 of Senior Notes placed with a group of institutional lenders and an
$87,000,000 credit facility with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent and a
final maturity date of March 31, 2000. The Senior Notes call for payments of
interest only through March 1996, with interest and accelerating amortization
of principal payments required for the four years thereafter. In February
1996, the Venture was required to make a principal repayment of approximately
$33,650,000 from proceeds received from the sale of the Tampa System. The
Senior Notes carry a "make-whole" payment, which is a prepayment penalty, in
the event the notes are prepaid prior to maturity. The make-whole payment
protects the lenders in the event that prepaid funds are reinvested at a rate
below 8.64 percent. The Venture was required to pay a make-whole payment in
February 1996 of approximately $2,217,000. Principal and interest payments due
in 1996 are expected to be funded from cash on hand, cash generated from
operations and borrowings under the Venture's new credit facility, as discussed
below. Installments due on the Senior Notes, subsequent to the February 1996
repayment, each year for the five year period ended December 31, 2000 are:
$3,956,656, $7,913,313, $11,869,968, $15,826,624 and $19,783,282, respectively.
The balance outstanding on the Venture's credit agreement at
December 31, 1995 was $87,000,000. However, upon the sale of the Tampa System
and, as required under the Venture's credit facility, $22,000,000 of the sale
proceeds were used to reduce amounts outstanding under its credit facility,
leaving $65,000,000 outstanding. In February 1996, the Venture increased the
amount available to $120,000,000 to meet the Venture's long-term financing
requirements. The amended credit facility matures on December 31, 1999 or, at
the Venture's option, on December 31, 2004. In the event the Venture elects
the latter maturity date, the credit facility shall amortize in consecutive
quarterly amounts. Interest on the amended credit facility is at the Venture's
option of the London Interbank Offered Rate plus .625 percent to 1.375 percent,
the Base Rate plus 0 percent to .375 percent or the Certificate of Deposit Rate
plus .75 percent to 1.50 percent.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
At December 31, 1995, amounts payable to the General Partner totaled
$4,198,739. By February 1996, this balance had increased to approximately
$5,100,000, which amount was repaid to the General Partner with borrowings from
the Venture's amended credit facility.
The General Partner believes that cash generated from operations and
borrowings from the Venture's amended credit facility will be sufficient to
fund capital expenditures and other liquidity needs of the Venture.
REGULATION AND LEGISLATION
The Venture has filed cost-of-service showings in response to
rulemakings concerning the 1992 Cable Act for its systems and thus anticipates
no further reductions in rates in these systems. The cost-of-service showings
have not yet received final approvals from regulatory authorities, however, and
there can be no assurance that the Venture's cost-of-service showings will
prevent further rate reductions in these systems until such final approvals are
received.
The Telecommunications Act of 1996 (the "1996 Act"), which became law
on February 8, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
including the Venture effective March 31, 1999 and the cable programming
service tier of "small" cable operators in systems providing service to 50,000
or fewer subscribers effective immediately. The 1996 Act also revised the
procedures for filing cable programming service tier rate complaints and adds a
new effective competition test.
16
17
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Venture in particular. The FCC will be
undertaking numerous rulemaking proceedings to interpret and implement the 1996
Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Venture. See Item 1.
17
18
Item 8. Financial Statements
CABLE TV FUND 12-B, LTD. AND
CABLE TV FUND 12-BCD VENTURE
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
INDEX
Page
----------------------
12-B 12-BCD
---- ------
Report of Independent Public Accountants 19 29
Balance Sheets 20 30
Statements of Operations 22 32
Statements of Partners' Capital (Deficit) 23 33
Statements of Cash Flows 24 34
Notes to Financial Statements 25 35
18
19
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, 1995 and
1994, and the related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1995.
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, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1996.
19
20
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
-----------------------------------
ASSETS 1995 1994
------ ------------- ------------
CASH $ 204,822 $ 3,782,989
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$79,128 at December 31, 1994 - 860,247
Closing adjustments receivable 1,064,238 -
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost - 78,503,036
Less- accumulated depreciation - (37,429,022)
------------- ------------
- 41,074,014
Franchise costs, net of accumulated amortization of $25,063,424
at December 31, 1994 - 14,051,348
------------- ------------
Total investment in cable television properties - 55,125,362
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES - 578,713
------------- ------------
Total assets $ 1,269,060 $ 60,347,311
============= ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
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21
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
-------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
- ------------------------------------------- ------------ -------------
LIABILITIES:
Debt $ - $ 39,959,041
Loss in excess of investment in cable television
joint venture 2,825,362 1,804,126
Accounts payable-
Trade - 63,438
General Partner - 112,495
Accrued liabilities - 924,648
Subscriber prepayments - 113,843
------------ -------------
Total liabilities 2,825,362 42,977,591
------------ -------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Distributions (13,220,625) -
Accumulated earnings (deficit) 13,363,097 (305,152)
------------ -------------
143,472 (304,152)
------------ -------------
Limited Partners-
Net contributed capital (111,035 units outstanding at
December 31, 1995 and 1994) 47,645,060 47,645,060
Distributions (95,179,375) -
Accumulated earnings (deficit) 45,834,541 (29,971,188)
------------ -------------
(1,699,774) 17,673,872
------------ -------------
Total liabilities and partners' capital (deficit) $ 1,269,060 $ 60,347,311
============ =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
21
22
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
----------- ------------ -----------
REVENUES $24,308,934 $26,956,006 $26,975,209
COSTS AND EXPENSES:
Operating expenses 12,587,594 13,932,687 13,054,665
Management fees and allocated overhead from
General Partner 2,855,239 3,392,884 3,205,800
Depreciation and amortization 8,263,976 9,380,877 8,897,796
----------- ------------ -----------
OPERATING INCOME 602,125 249,558 1,816,948
----------- ------------ -----------
OTHER INCOME (EXPENSE):
Interest expense (2,160,430) (2,555,513) (2,343,606)
Gain on sale of cable television system 91,692,928 - -
Other, net 360,591 119,749 126,128
----------- ------------ -----------
Total other income (expense), net 89,893,089 (2,435,764) (2,217,478)
----------- ------------ -----------
INCOME (LOSS) BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE 90,495,214 (2,186,206) (400,530)
EQUITY IN NET LOSS OF CABLE
TELEVISION JOINT VENTURE (1,021,236) (1,182,039) (1,063,449)
----------- ------------ -----------
NET INCOME (LOSS) $89,473,978 $(3,368,245) $(1,463,979)
=========== ============ ===========
ALLOCATION OF NET INCOME (LOSS):
General Partner $13,668,249 $ (33,682) $ (14,640)
=========== ============ ===========
Limited Partners $75,805,729 $(3,334,563) $(1,449,339)
=========== ============ ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 682.72 $ (30.03) $ (13.05)
=========== ============ ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 111,035 111,035 111,035
=========== ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
22
23
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
For the Year Ended December 31,
-----------------------------------------------
1995 1994 1993
------------- ------------ ------------
GENERAL PARTNER:
Balance, beginning of year $ (304,152) $ (270,470) $ (255,830)
Distributions (13,220,625) - -
Net income (loss) for year 13,668,249 (33,682) (14,640)
------------- ------------ ------------
Balance, end of year $ 143,472 $ (304,152) $ (270,470)
============= ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ 17,673,872 $ 21,008,435 $ 22,457,774
Distributions (95,179,375) - -
Net income (loss) for year 75,805,729 (3,334,563) (1,449,339)
------------- ------------ ------------
Balance, end of year $ (1,699,774) $ 17,673,872 $ 21,008,435
============= ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
23
24
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
------------- ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 89,473,978 $ (3,368,245) $(1,463,979)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 8,263,976 9,380,877 8,897,796
Equity in net loss of cable television joint venture 1,021,236 1,182,039 1,063,449
Gain on sale of cable television system (91,692,928) - -
Decrease (increase) in receivables (203,991) 151,493 (109,776)
Decrease (increase) in deposits, prepaid expenses
and deferred charges 578,713 (211,913) 119,594
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (1,101,929) (250,791) 134,104
Decrease in amount due General Partner (112,495) (50,771) (125,767)
------------- ------------ -----------
Net cash provided by operating activities 6,226,560 6,832,689 8,515,421
------------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,063,686) (4,034,659) (4,096,862)
Proceeds from sale of cable television system 142,618,000 - -
------------- ------------ -----------
Net cash provided by (used in)
investing activities 138,554,314 (4,034,659) (4,096,862)
------------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 111,262 124,133 74,766
Repayment of debt (40,070,303) (3,996,166) (3,041,200)
Distribution to General Partner (13,220,625) - -
Distributions to Limited Partners (95,179,375) - -
------------- ------------ -----------
Net cash used in financing activities (148,359,041) (3,872,033) (2,966,434)
------------- ------------ -----------
Increase (decrease) in cash (3,578,167) (1,074,003) 1,452,125
Cash, beginning of year 3,782,989 4,856,992 3,404,867
------------- ------------ -----------
Cash, end of year $ 204,822 $ 3,782,989 $ 4,856,992
============= ============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,423,008 $ 2,806,739 $ 2,374,601
============= ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
24
25
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. (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, as discussed below. 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 acquired certain cable television
systems in New Mexico, California and Florida during 1986. The Venture
incurred losses of $11,124,567, $12,876,242 and $11,584,416 in 1995, 1994 and
1993, respectively, of which $1,021,236, $1,182,039 and $1,063,449 was
allocated to the Partnership during 1995, 1994 and 1993, respectively.
Sales of Cable Television Systems
On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc. ("JCH"), a wholly- owned subsidiary of the General
Partner, for a sales price of $142,618,000, subject to working capital
adjustments. The sales price represented the average of three separate,
independent appraisals of the Augusta System. The Partnership subsequently
paid all of its indebtedness and distributed the net sales proceeds to its
partners of record as of September 30, 1995. The limited partners of the
Partnership, as a group, received $95,179,375 from the net sales proceeds and
the General Partner received $13,220,625 from the net sales proceeds. The
distribution to the limited partners of the Partnership equated to
approximately $1,714 for each $1,000 invested in the Partnership. A vote of
the limited partners of the Partnership was conducted for the purpose of
obtaining limited partner approval of the sale of the Augusta System. The
transaction was approved by the holders of 74.8 percent of the limited
partnership interests of the Partnership. The Partnership retains its
ownership interest in the Venture.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH 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 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 is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in March
1996. The Partnership also will distribute in April 1996 $1,200,000 of
proceeds remaining from the sale of the Augusta System, of which $900,000 will
be distributed to limited partners and $300,000 will be distributed to the
General Partner. These distributions will give 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 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.
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.
25
26
The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership are 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 are also prepared on the accrual
basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires 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.
Investment in Cable Television Joint Venture
The Partnership's investment in the Venture is accounted for under the
equity method due to the Partnership's influence on the Venture as a General
Partner. The operations of the Venture are significant to the Partnership and
should be reviewed in conjunction with these financial statements. Reference
is made to the accompanying financial statements of the Venture on pages 30 to
40.
Property, Plant and Equipment
Depreciation of property, plant and equipment was provided primarily
using the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 12 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements were capitalized and
maintenance and repairs were charged to expense as incurred.
Intangible Assets
Costs assigned to franchises were being amortized using the
straight-line method over the following remaining estimated useful lives:
Franchise costs 3 - 8 years
Revenue Recognition
Subscriber prepayments were initially deferred and recognized as
revenue when earned.
26
27
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
The General Partner managed the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the years ended December 31, 1995, 1994 and 1993 (excluding the
Partnership's 9 percent interest in the Venture) were $1,215,447, $1,347,800
and $1,348,760, respectively.
Any partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to the General Partner. Any distributions other than interest
income on limited partnership subscriptions earned prior to the acquisition of
the Partnership's first cable television system or from cash flow, such as from
the sale or refinancing of a system or upon dissolution of the Partnership,
will be made as follows: first, to the limited partners in an amount which,
together with all prior distributions, will equal the amount initially
contributed by the limited partners; the balance, 75 percent to the limited
partners and 25 percent to the General Partner.
The Partnership 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 Partnership. 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 Partnership's revenues to the total
revenues of all systems owned or managed by the General Partner and certain of
its subsidiaries. Systems owned by the General Partner and all other systems
owned by partnerships for which Intercable is the General Partner are also
allocated a proportionate share of these expenses. The General Partner
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Reimbursements by the Partnership to the General
Partner for allocated overhead and administrative expenses (excluding the
Partnership's 9 percent interest in the Venture) were $1,639,792, $2,045,084
and $1,857,040 in 1995, 1994, and 1993, respectively.
The Partnership was charged interest during 1995 at an average
interest rate of 10.51 percent on the amounts due the General Partner, which
approximated the General Partner's weighted average cost of borrowing. Total
interest charged to the Partnership by the General Partner was $1,243, $9,903
and $-0- in 1995, 1994 and 1993, respectively.
Payments to/from Affiliates for Programming Services
The Partnership received programming from Superaudio, Mind Extension
University, Jones Computer Network and Product Information Network, all of
which are affiliates of the General Partner.
Payments to Superaudio totaled $32,307, $39,929 and $40,882 in 1995,
1994 and 1993, respectively. Payments to Mind Extension University totaled
$34,378, $36,178 and $23,769 in 1995, 1994 and 1993, respectively. Payments to
Jones Computer Network, which initiated service in 1994, totaled $68,641 and
$5,373 in 1995 and 1994, respectively.
The Partnership received a commission from Product Information Network
based on a percentage of advertising sales and number of subscribers. Product
Information Network, which initiated service in 1994, paid commissions to the
Partnership totaling $59,971 and $24,531 in 1995 and 1994, respectively.
(4) 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 are 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 are 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.
27
28
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.
(5) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective years are
presented below:
For the Year Ended December 31,
---------------------------------------------
1995 1994 1993
----------- ----------- -----------
Maintenance and repairs $ 176,793 $ 169,466 $ 151,258
=========== =========== ===========
Taxes, other than income and payroll taxes $ 194,676 $ 232,068 $ 232,174
=========== =========== ===========
Advertising $ 258,709 $ 212,018 $ 136,524
=========== =========== ===========
Depreciation of property, plant and equipment $ 5,984,399 $ 6,695,385 $ 6,212,303
=========== =========== ===========
Amortization of intangible assets $ 2,279,577 $ 2,685,492 $ 2,685,493
=========== =========== ===========
28
29
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, 1995 and
1994, and the related statements of operations, partners' deficit and cash
flows for each of the three years in the period ended December 31, 1995. 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.
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-BCD Venture as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1996.
29
30
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
---------------------------------------
ASSETS 1995 1994
------ -------------- ---------------
CASH AND CASH EQUIVALENTS $ 1,384,794 $ 4,391,602
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of $486,392
and $339,139 at December 31, 1995 and 1994, respectively 4,464,773 3,807,271
Affiliated entity 159,137 159,137
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 294,472,892 272,998,315
Less- accumulated depreciation (155,826,572) (135,711,082)
-------------- ---------------
138,646,320 137,287,233
Franchise costs, net of accumulated amortization of $54,815,515 and
$48,828,848 at December 31, 1995 and 1994, respectively 12,233,128 18,219,795
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $1,433,228 and $1,280,756 at December 31, 1995
and 1994, respectively 4,623,200 4,775,672
-------------- ---------------
Total investment in cable television properties 155,502,648 160,282,700
DEPOSITS, PREPAID EXPENSES AND DEFERRED
CHARGES 1,974,677 2,035,204
-------------- ---------------
Total assets $ 163,486,029 $ 170,675,914
============== ===============
The accompanying notes to financial statements
are an integral part of these balance sheets.
30
31
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
-------------------------------------
LIABILITIES AND PARTNERS' DEFICIT 1995 1994
--------------------------------- ------------- -------------
LIABILITIES:
Debt $ 180,770,267 $ 180,402,748
Accounts payable-
Trade 301,619 491,846
Jones Intercable, Inc. 4,198,739 616,810
Accrued liabilities 7,427,814 7,125,482
Subscriber prepayments 517,908 644,779
------------- -------------
Total liabilities 193,216,347 189,281,665
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' DEFICIT:
Contributed capital 135,490,944 135,490,944
Accumulated deficit (165,221,262) (154,096,695)
------------- -------------
(29,730,318) (18,605,751)
------------- -------------
Total liabilities and partners' deficit $ 163,486,029 $ 170,675,914
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
31
32
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
For the Year Ended December 31,
---------------------------------------------------
1995 1994 1993
------------- ------------- -------------
REVENUES $101,399,697 $ 92,823,076 $89,131,530
COSTS AND EXPENSES:
Operating expenses 58,351,692 56,131,254 52,073,984
Management fees and allocated overhead from
Jones Intercable, Inc. 12,253,648 11,592,264 10,505,360
Depreciation and amortization 26,666,735 24,809,654 25,772,299
------------- ------------- -------------
OPERATING INCOME 4,127,622 289,904 779,887
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (15,347,250) (13,156,693) (11,868,068)
Other, net 95,061 (9,453) (496,235)
------------- ------------- -------------
Total other income (expense), net (15,252,189) (13,166,146) (12,364,303)
------------- ------------- -------------
NET LOSS $ (11,124,567) $ (12,876,242) $ (11,584,416)
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
32
33
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' DEFICIT
For the Year Ended December 31,
-----------------------------------------------
1995 1994 1993
------------ ------------- -------------
CABLE TV FUND 12-B, LTD. (9%):
Balance, beginning of year $ (1,804,126) $ (622,087) $ 441,362
Net loss for year (1,021,236) (1,182,039) (1,063,449)
------------ ------------- -------------
Balance, end of year $ (2,825,362) $ (1,804,126) $ (622,087)
============ ============= =============
CABLE TV FUND 12-C, LTD. (15%):
Balance, beginning of year $ (3,002,488) $ (1,035,256) $ 734,611
Net loss for year (1,699,611) (1,967,232) (1,769,867)
------------ ------------- -------------
Balance, end of year $ (4,702,099) $ (3,002,488) $ (1,035,256)
============ ============= =============
CABLE TV FUND 12-D, LTD. (76%):
Balance, beginning of year $(13,799,137) $ (4,072,166) $ 4,678,934
Net loss for year (8,403,720) (9,726,971) (8,751,100)
------------ ------------- -------------
Balance, end of year $(22,202,857) $ (13,799,137) $ (4,072,166)
============ ============= =============
TOTAL:
Balance, beginning of year $(18,605,751) $ (5,729,509) $ 5,854,907
Net loss for year (11,124,567) (12,876,242) (11,584,416)
------------ ------------- -------------
Balance, end of year $(29,730,318) $ (18,605,751) $ (5,729,509)
============ ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
33
34
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
----------------------------------------------------
1995 1994 1993
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (11,124,567) $ (12,876,242) $ (11,584,416)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization