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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended
JUNE 30, 2002
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________ to ___________
Commission File Number 0-14206
CABLE TV FUND 12-D, LTD.
Exact name of registrant as specified in charter
Colorado 84-1010423
- ----------------------------------- -----------------------------
State of organization I.R.S. employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
- --------------------------------------------------------------------------------
Address of principal executive office
(215) 665-1700
- --------------------------------------------------------------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -------
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
CONDENSED BALANCE SHEET
-----------------------
(Unaudited)
June 30, December 31,
ASSETS 2002 2001
------ ------------- -------------
Cash ................................................ $1,442,765 $1,465,097
------------- -------------
Total assets ................................. $1,442,765 $1,465,097
============= =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Advances from affiliates ......................... $37,458 $9,942
------------- -------------
Total liabilities ............................ 37,458 9,942
------------- -------------
Commitments and Contingencies (Note 3)
PARTNERS' CAPITAL:
General Partner-
Contributed capital .............................. 1,000 1,000
Distributions .................................... (21,153,765) (21,153,765)
Accumulated earnings ............................. 21,504,094 21,516,556
------------- -------------
351,329 363,791
------------- -------------
Limited Partners-
Net contributed capital (237,339 units outstanding
at June 30, 2002 and December 31, 2001) ........ 102,198,175 102,198,175
Distributions .................................... (182,130,796) (182,130,796)
Accumulated earnings ............................. 80,986,599 81,023,985
------------- -------------
1,053,978 1,091,364
------------- -------------
Total liabilities and partners' capital ...... $1,442,765 $1,465,097
============= =============
See notes to condensed financial statements.
1
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
CONDENSED STATEMENT OF OPERATIONS
---------------------------------
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income ...................... $5,647 $19,113 $11,854 $43,296
Administrative expenses and other, net (36,458) (104,539) (61,702) (148,798)
--------- --------- --------- ---------
NET LOSS ................................ ($30,811) ($85,426) ($49,848) ($105,502)
========= ========= ========= =========
ALLOCATION OF NET LOSS:
General Partner ...................... ($7,703) ($21,357) ($12,462) ($26,376)
========= ========= ========= =========
Limited Partners ..................... ($23,108) ($64,069) ($37,386) ($79,126)
========= ========= ========= =========
NET LOSS PER LIMITED PARTNERSHIP UNIT ... ($0.10) ($0.27) ($0.16) ($0.33)
--------- --------- --------- ---------
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING ........ 237,339 237,339 237,339 237,339
========= ========= ========= =========
See notes to condensed financial statements.
2
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
CONDENSED STATEMENT OF CASH FLOWS
---------------------------------
(Unaudited)
Six Months Ended
June 30,
2002 2001
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .................................... ($49,848) ($105,502)
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase in advances from affiliates .... 27,516 43,463
----------- -----------
Net cash used in operating activities . (22,332) (62,039)
Cash, beginning of period ...................... 1,465,097 1,613,430
----------- -----------
Cash, end of period ............................ $1,442,765 $1,551,391
=========== ===========
See notes to condensed financial statements.
3
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(Unaudited)
(1) The condensed balance sheet as of December 31, 2001 has been derived from
the audited balance sheet as of that date. The condensed balance sheet as of
June 30, 2002, the condensed statement of operations for the three and six
months ended June 30, 2002 and 2001, and the condensed statement of cash flows
for the six months ended June 30, 2002 and 2001 have been prepared by Cable TV
Fund 12-D, Ltd. (the "Partnership") and have not been audited by the
Partnership's independent auditors. In the opinion of management, all
adjustments necessary to present fairly the financial position, results of
operations and cash flows as of June 30, 2002 and for all periods presented have
been made.
Certain information and note disclosures normally included in the
Partnership's annual financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted. These condensed financial statements should be read in conjunction with
the financial statements and notes thereto included in the Partnership's
December 31, 2001 Annual Report on Form 10-K filed with the Securities and
Exchange Commission. The results of operations for the interim periods presented
are not necessarily indicative of operating results for the full year.
The Partnership owns no properties directly. The Partnership has
continued in existence because of pending litigation in which the Partnership is
a party. It cannot be predicted when the Partnership will be dissolved.
(2) The Partnership reimburses its general partner for certain administrative
expenses. These expenses represent the salaries and related benefits paid for
corporate personnel. Such personnel provide administrative, accounting, tax,
legal and investor relations services to the Partnership. Such services, and
their related costs, are necessary to the administration of the Partnership
until the Partnership is dissolved. Such charges were included in administrative
expenses and other, net in the accompanying condensed statement of operations.
Reimbursements made to the general partner by the Partnership for administrative
expenses for the three months ended June 30, 2002 and 2001 and for the six
months ended June 30, 2002 and 2001 were $7,680, $24,932, $27,291 and $61,610,
respectively.
(3) Litigation Challenging Jones Intercable's Acquisitions of the Albuquerque
and Palmdale Systems
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund 12-C,
Ltd., Cable TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture, plaintiff v.
Jones Intercable, Inc., defendant and Cable TV Fund 12-C, Ltd., Cable TV Fund
12-D, Ltd. and Cable TV Fund 12-BCD Venture, nominal defendants (U.S. District
Court, District of Colorado, Civil Action No. 99-WM-1155) (the "City
Partnership" case) brought by City Partnership Co., a limited partner of the
named partnerships. The plaintiff's complaint alleges that Jones Intercable
breached its fiduciary duty to the plaintiff and to the other limited partners
of the partnerships and to the Venture in connection with the Venture's sale of
the Palmdale, California cable communications system (the "Palmdale System") to
a subsidiary of Jones Intercable in December 1998. The complaint alleges that
Jones Intercable acquired the Palmdale System at an unfairly low price that did
not accurately reflect the market value of the Palmdale System. The plaintiff
also alleges that the proxy solicitation materials delivered to the limited
partners of the partnerships in connection with the votes of the limited
partners on the Venture's sale of the Palmdale System contained inadequate and
misleading information concerning the fairness of the transaction, which the
plaintiff claims caused Jones Intercable to breach its fiduciary duty of candor
to the limited partners and which the plaintiff claims constituted acts and
omissions in violation of Section 14(a) of the Securities Exchange Act of 1934,
as amended. Plaintiff also claims that Jones Intercable breached the contractual
provision of the partnerships' limited partnership agreements requiring that the
sale price be determined by the average of three separate, independent
appraisals, challenging both the independence and the currency of the
appraisals. The complaint finally seeks declaratory injunctive relief to prevent
Jones Intercable from making use of the partnerships' funds to finance Jones
Intercable's defense of this litigation.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP and
Madison/AG Partnership Value Partners II, plaintiffs v. Jones Intercable, Inc.
and Glenn R. Jones, defendants, and Cable TV Fund 12-B, Ltd., Cable TV Fund
12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund
14-B, Ltd., nominal defendants (U.S. District Court, District of Colorado, Civil
Action No. 99-B-1508) (the "Gramercy Park" case) brought as a class and
derivative action by limited partners of the named partnerships. The plaintiffs'
complaint alleges that the defendants made false and misleading statements to
the limited partners of the named
4
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)
---------------------------------------------------
(Unaudited)
partnerships in connection with the solicitation of proxies and the votes of the
limited partners on the sales of the Palmdale System, the Albuquerque, New
Mexico cable communications system (the "Albuquerque System"), the Littlerock,
California cable communications system (the "Littlerock System") and the Calvert
County, Maryland cable communications system (the "Calvert County System") by
the named partnerships to Jones Intercable or one of its subsidiaries in
violation of Sections 14 and 20 of the Securities Exchange Act of 1934, as
amended. The plaintiffs specifically allege that the proxy statements delivered
to the limited partners in connection with the limited partners' votes on these
sales were false, misleading and failed to disclose material facts necessary to
make the statements made not misleading. The plaintiffs' complaint also alleges
that the defendants breached their fiduciary duties to the plaintiffs and to the
other limited partners of the named partnerships and to the named partnerships
in connection with the various sales of the Albuquerque System, the Palmdale
System, the Littlerock System and the Calvert County System to subsidiaries of
Jones Intercable. The complaint alleges that Jones Intercable acquired these
cable communications systems at unfairly low prices that did not accurately
reflect the market values of the systems. The plaintiffs seek on their own
behalf and on behalf of all other limited partners compensatory and nominal
damages, the costs and expenses of the litigation, including reasonable
attorneys' and experts' fees, and punitive and exemplary damages.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs v.
Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B,
Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A,
Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court,
District of Colorado, Civil Action No. 99-WM-1702) ("Schumacher") brought as a
class and derivative action by three limited partners of the named partnerships.
The substance of the Schumacher plaintiffs' complaint is similar to the
allegations raised in the Gramercy Park case.
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs v. Jones
Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B, Ltd.,
Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and
Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court, District of
Colorado, Civil Action No. 99-B-1778) ("Margolin") brought as a class and
derivative action by three limited partners of the named partnerships. The
substance of the Margolin plaintiffs' complaint is similar to the allegations
raised in the Gramercy Park case.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging Jones
Intercable's acquisitions of the Albuquerque, Palmdale, Littlerock and Calvert
County Systems because these cases involve common questions of law and fact. The
cases are presented as both class and derivative actions. In June 2001, the
plaintiffs filed a motion for class certification. In August 2001, the General
Partner filed a brief in opposition to plaintiffs' motion for class
certification. A hearing on the motion was held in October 2001. If the
plaintiffs' motion for class certification is denied, the cases would proceed
only as derivative actions.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims for
damages, and the General Partner intends to defend these lawsuits vigorously.
Litigation Relating to Limited Partnership List Requests
In July 1999, Jones Intercable, each of its subsidiaries that served as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest Properties,
LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs v. Jones
Intercable, Inc., et al., defendants (Superior Court, Los Angeles County, State
of California, Case No. BC 213632).
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied
5
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS (Concluded)
---------------------------------------------------
(Unaudited)
covenant of good faith and fair dealing owed to the plaintiffs as limited
partners, a breach of Jones Intercable's fiduciary duty owed to the plaintiffs
as limited partners and tortious interference with prospective economic
advantage. Plaintiffs allege that Jones Intercable's failure to provide them
with the partnership lists prevented them from making their tender offers and
that they have been injured by such action in an amount to be proved at trial,
but not less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs leave to amend their complaint to attempt to cure the deficiencies in
the pleadings. The plaintiffs filed their first amended complaint in January
2000. Defendants demurred to the amended complaint in March 2000. In May 2000,
the Court sustained the defendants' demurrers without leave to amend as to all
plaintiffs except KM Investments, the sole plaintiff that was a limited partner
in any of the partnerships, thereby dismissing all claims on the merits except
those of KM Investments. In August 2000, all plaintiffs except KM Investments
appealed this ruling to the California State Court of Appeal for the Second
Appellate District. In June 2001, the appellate court ruled that all of the
plaintiffs have standing to bring the action, and the trial court's judgment was
reversed. The case is now proceeding to discovery and a trial is set for October
2002.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims for
damages, and the General Partner intends to defend this lawsuit vigorously.
Since the events described above, the trial of the matter entitled
Everest Cable Investors, LLC, et al., plaintiffs v. Jones Intercable, Inc., et
al., defendants (Superior Court, Los Angeles County, State of California, Case
No. BC 213632) has been rescheduled for January 2003.
6
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The only asset of the Partnership at June 30, 2002 was its cash on
hand, which is being held in reserve to pay the Partnership's administrative
expenses until the Partnership is dissolved. The Partnership has continued in
existence because of pending litigation in which the Partnership is a party. It
cannot be predicted when the Partnership will be dissolved.
RESULTS OF OPERATIONS
- ---------------------
Administrative expenses and other, net in the accompanying condensed
statement of operations represents various costs associated with the
administration of the Partnership.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Refer to Note 3 to our condensed financial statements included in this
Quarterly Report on Form 10-Q for a discussion of recent developments related to
our legal proceedings.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
99.1 Certifications of Chief Executive Officer and
Co-Chief Financial Officers of Cable TV Fund 12-D,
Ltd. pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
b) Reports on Form 8-K
(i) We filed a Current Report on Form 8-K under Items 4
and 7(c) dated June 24, 2002 announcing a change in
the Partnership's certifying accountant.
7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLE TV FUND 12-D, LTD.
BY: COMCAST CABLE COMMUNICATIONS, INC.
-----------------------------------
General Partner
By: /s/ Lawrence J. Salva
-----------------------------------
Lawrence J. Salva
Senior Vice President
(Principal Accounting Officer)
Dated: August 14, 2002
8