FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] 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: 0-13193
CABLE TV FUND 12-A, LTD.
(Exact name of registrant as specified in its charter)
Colorado 84-0968104
-------- ----------
(State of Organization) (IRS Employer
Identification No.)
c/o Comcast Corporation, 1500 Market Street, (215) 665-1700
Philadelphia, Pennsylvania 19102-2148 --------------
(Address of principal executive office (Registrant's telephone no.
and Zip Code) 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 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
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes x No
----- -----
Aggregate market value of the voting stock held by non-affiliates of the
registrant: [Not applicable]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.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. _____
DOCUMENTS INCORPORATED BY REFERENCE: None
(50073)
This Annual Report on Form 10-K is for the year ending December 31,
1999. This Annual Report modifies and supersedes documents filed by the
Partnership prior to the filing of this Annual Report. The Securities and
Exchange Commission (the "SEC") allows the Partnership to "incorporate by
reference" into this Annual Report information that it files with the SEC, which
means that the Partnership can disclose important information to limited
partners by referring them directly to those documents. Information incorporated
by reference is considered to be part of this Annual Report. In addition,
information that the Partnership files with the SEC in the future will
automatically update and supersede information contained in this Annual Report.
Certain information contained in this Annual Report contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts, included in
this Annual Report that address activities, events or developments that the
Partnership or the General Partner expects, believes or anticipates will or may
occur in the future are forward-looking statements. These forward-looking
statements are based upon certain assumptions and are subject to risks and
uncertainties. Actual events or results may differ from those discussed in the
forward-looking statements as a result of various factors.
PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 12-A, Ltd. (the "Partnership") is a
Colorado limited partnership. Comcast JOIN Holdings, Inc., a Delaware
corporation, is the general partner of the Partnership (the "General Partner").
The Partnership was formed for the purpose of acquiring and operating cable
television systems.
The Partnership has sold all of its cable television systems. The
Partnership owned and operated the cable television systems serving areas in and
around Fort Myers, Florida, until their sale in July 1998. The Partnership also
owned and operated the cable television systems serving areas in and around Lake
County, Illinois (the "Lake County System") and Orland Park and Park Forest,
Illinois (the "Orland Park System"), until their sale in December 1998. Although
the sale of the Lake County System and the Orland Park System represented the
sale of the only remaining operating assets of the Partnership, the Partnership
will not be dissolved until the pending litigation in which the Partnership is a
named defendant has been resolved and terminated.
NEW GENERAL PARTNER. On April 7, 1999, Comcast Corporation ("Comcast")
completed the acquisition of a controlling interest in Jones Intercable, Inc.
("Jones Intercable"), the Partnership's general partner until March 2, 2000, as
discussed below. As of December 31, 1999, Comcast owned approximately 2.9
million shares of Jones Intercable's Common Stock and approximately 13.8 million
shares of Jones Intercable's Class A Common Stock, representing 39.6% of the
economic interest and 48.3% of the voting interest in Jones Intercable. Comcast
contributed its shares in Jones Intercable to its wholly owned subsidiary,
Comcast Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9
million shares of Common Stock of Jones Intercable owned by Comcast Cable
represented shares having the right to elect approximately 75% of the Board of
Directors of Jones Intercable. As of April 7, 1999, Jones Intercable became a
consolidated public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On
2
March 2, 2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a
wholly owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. References in this Annual Report to "the General
Partner" refer to Comcast JOIN Holdings, Inc. The General Partner shares
corporate offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
DISPOSITION OF CABLE TELEVISION SYSTEMS. On December 4, 1998, the
Partnership sold its Lake County System and its Orland Park System to an
unaffiliated party for $86,000,000. From the proceeds of the sales, the
Partnership repaid all of its indebtedness, paid a brokerage fee, settled
working capital adjustments, deposited $2,604,000 into an interest-bearing
indemnity escrow account and distributed the remaining sale proceeds of
$63,204,100 to its partners of record as of December 4, 1998. This distribution
provided the limited partners, as a group, with $47,403,075, or an approximate
return of $456 for each $500 limited partnership interest, or $912 for each
$1,000 invested in the Partnership. Pursuant to the terms of the Partnership's
limited partnership agreement, Jones Intercable received a general partner
distribution of $15,801,025 from the net sale proceeds.
The $2,604,000 of the sale proceeds placed in the interest-bearing
indemnity escrow account remained in escrow from the closing date until December
14, 1999 as security for the Partnership's agreement to indemnify the buyer
under the asset purchase agreement. The escrow period has expired and the
Partnership received the escrowed funds plus interest in December 1999 because
no claims were made on the escrowed funds by the buyer. From the escrowed funds,
the Partnership repaid its remaining liabilities in the first quarter of 2000
and it will hold the balance in reserve to cover the administrative expenses of
the Partnership until the Partnership is liquidated and dissolved.
Because transferees of limited partnership interests following the
record date for the distribution of the proceeds from the sale of the Lake
County System and the Orland Park System (December 4, 1998) would not be
entitled to any distributions from the Partnership, a transfer of limited
partnership interests following such record date would have no economic value.
The General Partner therefore has determined that, pursuant to the authority
granted to it by the Partnership's limited partnership agreement, the General
Partner will approve no transfers of limited partnership interests after
December 4, 1998.
ITEM 2. PROPERTIES
------------------
As of December 31, 1999, the Partnership does not own any cable
television systems.
ITEM 3. LEGAL PROCEEDINGS
-------------------------
In July 1999, Jones Intercable, each of its subsidiaries that serve 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 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.
3
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.
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------
None.
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 December 31, 1999, the number of equity security
holders in the Partnership was 6,928.
4
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
For the Year Ended December 31,
---------------------------------------------------------------------------
Cable TV Fund 12-A, Ltd. 1999 1998 1997 1996 1995
- ------------------------ ----------- ------------ ------------ ------------ ------------
Revenues $ -- $ 29,603,007 $ 36,986,475 $ 34,485,280 $ 32,080,534
Depreciation and Amortization -- 5,435,511 7,152,481 7,279,700 7,146,711
Operating Income -- 3,599,212 4,830,338 2,749,310 2,369,663
Net Income (Loss) (1,514,191) 160,130,348(a) 3,044,075 988,478 379,266
Net Income (Loss) per Limited
Partnership Unit (10.92) 1,247.91(a) 28.98 9.41 3.61
Weighted Average Number of Limited
Partnership Units Outstanding 104,000 104,000 104,000 104,000 104,000
General Partner's Capital (Deficit) 126,747 505,294 (328,014) (358,455) (368,340)
Limited Partners' Capital 380,240 1,515,884 12,277,344 9,263,710 8,285,117
Total Assets 2,725,686 2,604,000 37,049,738 38,472,570 36,825,106
Debt -- -- 23,272,240 27,179,908 26,736,382
Jones Intercable Advances 2,218,699 582,822 -- -- 373,311
(a) Net income resulted primarily from the sales of the Lake County System
and the Orland Park System in December 1998 and the Fort Myers System
in July 1998.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -----------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The following discussion contains, in addition to historical
information, forward-looking statements that are based upon certain assumptions
and are subject to a number of risks and uncertainties.
FINANCIAL CONDITION
- -------------------
The Partnership sold the Lake County System and the Orland Park System,
its only remaining operating assets, in December 1998. From the proceeds of the
sales, the Partnership repaid all of its indebtedness, paid a brokerage fee,
settled working capital adjustments, deposited $2,604,000 into an
interest-bearing indemnity escrow account and distributed the remaining net sale
proceeds to its partners.
The $2,604,000 of the sale proceeds placed in an interest-bearing
indemnity escrow account remained in escrow until December 14, 1999, as security
for the Partnership's agreement to indemnify the buyer under the asset purchase
agreement. No claims were made on the escrowed funds by the buyer. The escrowed
funds plus interest, which totaled $2,725,686, were returned to the Partnership
in December 1999. From the escrowed funds, the Partnership repaid its remaining
liabilities, which totaled $2,218,699 at December 31, 1999, during the first
quarter of 2000 and it will retain the balance to cover the administrative
expenses of the Partnership. The Partnership will not be dissolved until after
the pending litigation in which the Partnership is a named defendant has been
resolved and terminated.
RESULTS OF OPERATIONS
- ---------------------
The Partnership conducted no operations in 1999; therefore, a
discussion of results of operations would not be meaningful. Other expense of
$1,495,373 incurred during 1999 primarily related to various costs associated
with the sale of the Partnership's systems and the administration of the
Partnership.
ITEM 8. FINANCIAL STATEMENTS
- -----------------------------
The audited financial statements of the Partnership for the year ended
December 31, 1999 follow.
5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of Cable TV Fund 12-A, Ltd.:
We have audited the accompanying balance sheets of CABLE TV FUND 12-A,
LTD. (a Colorado limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, partners' capital (deficit) and cash flows for
each of the three years in the period ended December 31, 1999. 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-A,
Ltd. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 3, 2000.
6
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
December 31,
------------------------------
ASSETS 1999 1998
------ ------------- -------------
CASH $ 2,725,686 $ --
PROCEEDS FROM SALE IN INTEREST-BEARING ESCROW ACCOUNT -- 2,604,000
------------- -------------
Total assets $ 2,725,686 $ 2,604,000
============= =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Jones Intercable advances $ 2,218,699 $ 582,822
------------- -------------
Total liabilities 2,218,699 582,822
------------- -------------
COMMITMENTS AND CONTINGENCIES (NOTE 5)
PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Distributions (29,514,625) (29,514,625)
Accumulated earnings 29,640,372 30,018,919
------------- -------------
126,747 505,294
------------- -------------
Limited Partners-
Net contributed capital (104,000 units outstanding at
December 31, 1999 and 1998) 44,619,655 44,619,655
Distributions (140,543,875) (140,543,875)
Accumulated earnings 96,304,460 97,440,104
------------- -------------
380,240 1,515,884
------------- -------------
Total liabilities and partners' capital $ 2,725,686 $ 2,604,000
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
7
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
For the Year Ended December 31,
-----------------------------------------------
1999 1998 1997
------------ ------------- -------------
REVENUES $ -- $ 29,603,007 $ 36,986,475
COSTS AND EXPENSES:
Operating expenses -- 17,285,682 21,035,811
Management fees and allocated overhead
from Jones Intercable -- 3,282,602 3,967,845
Depreciation and amortization -- 5,435,511 7,152,481
------------ ------------- -------------
OPERATING INCOME -- 3,599,212 4,830,338
------------ ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (140,504) (1,408,822) (1,765,957)
Interest income on escrowed proceeds 121,686 -- --
Gain on sales of cable television systems -- 157,796,552 --
Other, net (1,495,373) 143,406 (20,306)
------------ ------------- -------------
Total other income (expense), net (1,514,191) 156,531,136 (1,786,263)
------------ ------------- -------------
NET INCOME (LOSS) $ (1,514,191) $ 160,130,348 $ 3,044,075
============ ============= =============
ALLOCATION OF NET INCOME (LOSS):
General Partner $ (378,547) $ 30,347,933 $ 30,441
============ ============= =============
Limited Partners $ (1,135,644) $ 129,782,415 $ 3,013,634
============ ============= =============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (10.92) $ 1,247.91 $ 28.98
============ ============= =============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 104,000 104,000 104,000
============ ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
8
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
For the Year Ended December 31,
-------------------------------------------------------------------------
1999 1998 1997
------------- ------------- -------------
GENERAL PARTNER:
Balance, beginning of year $ 505,294 $ (328,014) $ (358,455)
Distributions -- (29,514,625) --
Net income (loss) for year (378,547) 30,347,933 30,441
------------- ------------- -------------
Balance, end of year $ 126,747 $ 505,294 $ (328,014)
============= ============= =============
LIMITED PARTNERS:
Balance, beginning of year $ 1,515,884 $ 12,277,344 $ 9,263,710
Distributions -- (140,543,875) --
Net income (loss) for year (1,135,644) 129,782,415 3,013,634
------------- ------------- -------------
Balance, end of year $ 380,240 $ 1,515,884 $ 12,277,344
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
9
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
For the Year Ended December 31,
-----------------------------------------------
1999 1998 1997
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (1,514,191) $ 160,130,348 $ 3,044,075
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization -- 5,435,511 7,152,481
Gain on sales of cable television systems -- (157,796,552) --
Decrease (increase) in trade receivables -- 1,197,527 (512,075)
Decrease (increase) in deposits, prepaid expenses and
other assets -- 497 (667,749)
Decrease in accounts payable, accrued
liabilities and subscriber prepayments -- (1,828,168) (559,239)
Increase in Jones Intercable advances 1,635,877 582,822 --
------------- ------------- -------------
Net cash provided by operating activities 121,686 7,721,985 8,457,493
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net -- (4,924,343) (6,405,819)
Proceeds from sale of cable television systems, net of escrow
and brokerage fees -- 188,496,000 --
Decrease in proceeds from sale in escrow 2,604,000 -- --
Franchise renewal costs -- (10,000) (131,550)
------------- ------------- -------------
Net cash provided by (used in) investing activities 2,604,000 183,561,657 (6,537,369)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- 130,619 237,422
Repayment of debt -- (23,402,859) (4,145,090)
Distribution to Jones Intercable -- (29,514,625) --
Distribution to limited partners -- (140,543,875) --
------------- ------------- -------------
Net cash used in financing activities -- (193,330,740) (3,907,668)
------------- ------------- -------------
Increase (decrease) in cash 2,725,686 (2,047,098) (1,987,544)
Cash, beginning of year -- 2,047,098 4,034,642
------------- ------------- -------------
Cash, end of year $ 2,725,686 $ -- $ 2,047,098
============= ============= =============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ -- $ 1,539,441 $ 1,949,049
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
10
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 12-A, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on January 2, 1985, under a public program sponsored by
Jones Intercable, Inc. ("Jones Intercable"). The Partnership was formed to
acquire, construct, develop and operate cable television systems. The
Partnership owned and operated the cable television systems serving areas in and
around Ft. Myers, Florida (the "Fort Myers System"), until their sale in July
1998. The Partnership also owned and operated the cable television systems
serving areas in and around Lake County, Illinois (the "Lake County System") and
Orland Park and Park Forest, Illinois (the "Orland Park System"), until their
sale in December 1998. The Partnership will not be dissolved until after the
pending litigation in which the Partnership is a named defendant has been
resolved and terminated. (See Note 5)
New General Partner
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, the Partnership's
general partner until March 2, 2000, as discussed below. As of December 31,
1999, Comcast owned approximately 2.9 million shares of Jones Intercable's
Common Stock and approximately 13.8 million shares of Jones Intercable's Class A
Common Stock, representing 39.6% of the economic interest and 48.3% of the
voting interest in Jones Intercable. Comcast contributed its shares in Jones
Intercable to its wholly owned subsidiary, Comcast Cable Communications, Inc.
("Comcast Cable"). The approximately 2.9 million shares of Common Stock of Jones
Intercable owned by Comcast Cable represented shares having the right to elect
approximately 75% of the Board of Directors of Jones Intercable. As of April 7,
1999, Jones Intercable became a consolidated public company subsidiary of
Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On March 2,
2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a wholly
owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. References in these Notes to "the General Partner"
refer to Comcast JOIN Holdings, Inc. The General Partner shares corporate
offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
Sales of Cable Television Systems
On December 4, 1998, the Partnership sold the Lake County System and
the Orland Park System, its only remaining operating assets, to an unaffiliated
party for an aggregate sales price of $86,000,000. From the proceeds of the
sales, the Partnership repaid all of its indebtedness, including $19,912,500
borrowed under its term loan, paid a brokerage fee of $2,150,000 to The
Intercable Group, Ltd. ("The Intercable Group"), a subsidiary of Jones
Intercable, settled working capital adjustments, deposited $2,604,000 into an
interest-bearing indemnity escrow account and distributed the remaining net sale
proceeds of $63,204,100 to its partners. Pursuant to the terms of the
Partnership's limited partnership agreement, because the limited partners
already had received a return of their initial capital contributions, the net
sale
11
proceeds were allocated 75 percent to the limited partners ($47,403,075)
and 25 percent to Jones Intercable ($15,801,025). The limited partner
distribution of $47,403,075, provided the Partnership's limited partners an
approximate return of $456 for each $500 limited partnership interest, or $912
for each $1,000 invested in the Partnership.
The $2,604,000 of the sale proceeds placed in an interest-bearing
indemnity escrow account remained in escrow until December 14, 1999, as security
for the Partnership's agreement to indemnify the buyer under the asset purchase
agreement. No claims were made on the escrowed funds by the buyer. The escrowed
funds plus interest, which totaled $2,725,686, were returned to the Partnership
in December 1999. From the escrowed funds, the Partnership repaid its remaining
liabilities, which totaled $2,218,699 at December 31, 1999, during the first
quarter of 2000, and it will retain the balance to cover the administrative
expenses of the Partnership.
On July 15, 1998, the Partnership sold the Fort Myers System to an
unaffiliated cable television system operator for an aggregate sales price of
$110,000,000. From the sale proceeds, the Partnership paid a brokerage fee to
The Intercable Group, totaling $2,750,000, settled working capital adjustments
and distributed the remaining net sale proceeds of $106,854,400 to its partners
of record as of the closing date of the sale of the Fort Myers System. Pursuant
to the terms of the Partnership's limited partnership agreement, from the net
sale proceeds the Partnership first returned to the limited partners the capital
they initially contributed to the Partnership ($52,000,000) and the remainder
was allocated 75 percent to the limited partners ($41,140,800) and 25 percent to
Jones Intercable ($13,713,600). The limited partner distribution of $93,140,800,
which was made in August 1998, provided the Partnership's limited partners an
approximate return of $895 for each $500 limited partnership interest, or $1,790
for each $1,000 invested in the Partnership.
Contributed Capital
-------------------
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contributions to partnership capital.
The general partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership were allocated 99 percent to
the limited partners and 1 percent to the general partner, except for income or
gain from the sale or disposition of cable television properties, which was
allocated to the partners based upon the 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 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.
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 system 5 - 15 years
Equipment and tools 5 - 7 years
Office furniture and equipment 3 - 5 years
Buildings 30 years
Vehicles 3 - 4 years
12
Replacements, renewals and improvements were capitalized and
maintenance and repairs were charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation were written off as certain assets became fully depreciated and
were no longer in service.
Intangible Assets
-----------------
Costs assigned to franchises were amortized using the straight-line
method over remaining estimated useful lives ranging from one to three years.
Revenue Recognition
-------------------
Subscriber prepayments were initially deferred and recognized as
revenue when earned.
Reclassifications
-----------------
Certain prior years amounts were reclassified to conform to the 1999
presentation.
(3) TRANSACTIONS WITH JONES INTERCABLE AND AFFILIATES
-------------------------------------------------
Brokerage Fees
--------------
The Intercable Group performed brokerage services for the Partnership.
For brokering the sale of the Lake County System and the Orland Park System in
December 1998, The Intercable Group earned $2,150,000, or 2.5 percent of the
sales price. For brokering the sale of the Fort Myers System in July 1998, The
Intercable Group earned $2,750,000, or 2.5 percent of the sales price.
Management Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------
Jones Intercable 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. Jones
Intercable did not receive a management fee after December 4, 1998. Management
fees for the years ended December 31, 1998 and 1997 were $1,480,150 and
$1,849,324, respectively.
Any 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 partner
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 100 percent of the amount initially contributed to the
Partnership capital by the limited partners; the balance, 75 percent to the
limited partners and 25 percent to the general partner.
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 costs were charged to
operating costs during the periods that the Partnership operated its cable
television systems. Subsequent to the sale of the Partnership's final cable
television system, such costs were charged to other expense. Reimbursements by
the Partnership to Jones Intercable for overhead and administrative expenses
were $44,452, $1,802,452 and $2,118,521 in 1999, 1998 and 1997, respectively.
The Partnership was charged interest during 1999 at an average interest
rate of 7.18 percent on the amounts due Jones Intercable, which approximated
Jones Intercable's weighted average cost of borrowing. Total interest charged to
the Partnership by Jones Intercable was $140,504, $8,484 and $10,621 for the
years ended December 31, 1999, 1998 and 1997, respectively.
13
Payments to/from Affiliates for Programming Services
----------------------------------------------------
Prior to the sales of its cable television systems in 1998, the
Partnership received programming from Superaudio, Knowledge TV, Inc., Jones
Computer Network, Ltd., Great American Country, Inc. and Product Information
Network, all of which were affiliates of Jones Intercable until April 7, 1999
(see Note 1).
Payments to Superaudio totaled $51,538 and $56,338 in 1998 and 1997,
respectively. Payments to Knowledge TV, Inc. totaled $53,628 and $62,670 in 1998
and 1997, respectively. Payments to Jones Computer Network, Ltd., whose service
was discontinued in April 1997, totaled $42,153 in 1997. Payments to Great
American Country, Inc. totaled $53,628 and $66,264 in 1998 and 1997,
respectively.
Prior to the sales of its cable television systems in 1998, the
Partnership received a commission from Product Information Network based on a
percentage of advertising revenue and number of subscribers. Product Information
Network paid commissions to the Partnership totaling $64,420 and $99,103 in 1998
and 1997, 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 Jones
Intercable.
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 recorded income
or loss, the tax liability of the general and limited partners would likely be
changed accordingly.
(5) COMMITMENTS AND CONTINGENCIES
-----------------------------
In July 1999, Jones Intercable, each of its subsidiaries that
serve 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 percent 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 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.
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. 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.
14
(6) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information is presented below:
For the Year Ended December 31,
-------------------------------------------------
1999 1998 1997
--------- ---------- ----------
Maintenance and repairs $ - $ 200,915 $ 327,787
========= ========== ==========
Taxes, other than income and payroll taxes $ - $ 340,306 $ 453,498
========= ========== ==========
Advertising $ - $ 284,397 $ 390,116
========= ========== ==========
Depreciation of property, plant and equipment $ - $5,095,270 $6,569,840
========= ========== ==========
Amortization of intangible assets $ - $ 340,241 $ 582,641
========= ========== ==========
15
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
--------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
PART III.
---------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-----------------------------------------------------------
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below. Directors of the General Partner serve until the
next annual meeting of the General Partner and until their successors shall be
elected and qualified.
RALPH J. ROBERTS is Chairman of the General Partner's Board of
Directors. Mr. Roberts served as Chairman of Jones Intercable, Inc.'s Board of
Directors from April 1999 until its merger with the General Partner in March
2000. Mr. Roberts has served as a director of Comcast Corporation and as the
Chairman of its Board of Directors for more than five years. Mr. Roberts has
been the President and a director of Sural Corporation, a privately held
investment company that is Comcast Corporation's controlling shareholder, for
more than five years. Mr. Roberts is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. Mr. Roberts is the father of
Brian L. Roberts. He is 80 years old.
BRIAN L. ROBERTS is President and a director of the General Partner.
Mr. Roberts served as President and a director of Jones Intercable, Inc. from
April 1999 until its merger with the General Partner in March 2000. Mr. Roberts
has served as the President and as a director of Comcast Corporation for more
than five years. Mr. Roberts also serves as Vice President and as a director of
Sural Corporation. He also is a director of Comcast Cable Communications, Inc.,
Comcast LCI Holdings, Inc., At Home Corporation and The Bank of New York
Company, Inc. Mr. Roberts is a son of Ralph J. Roberts. He is 40 years old.
LAWRENCE S. SMITH is Executive Vice President and a director of the
General Partner. Mr. Smith served as an Executive Vice President and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Smith has served as an Executive Vice President of
Comcast Corporation since December 1995. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Smith is
also a director of Comcast Cable Communications, Inc. and Comcast LCI Holdings,
Inc. He is 52 years old.
STANLEY L. WANG is Executive Vice President and Secretary and a
director of the General Partner. Mr. Wang served as Senior Vice President and
Secretary and a director of Jones Intercable, Inc. from April 1999 until its
merger with the General Partner in March 2000. Mr. Wang has served as an
Executive Vice President of Comcast Corporation since February 2000. Prior to
that time, he served as Senior Vice President of Comcast Corporation for more
than five years. Mr. Wang also has served as Secretary of Comcast Corporation
for more than five years. Mr. Wang is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. He is 59 years old.
JOHN R. ALCHIN is Executive Vice President and Treasurer of the General
Partner. Mr. Alchin served as Senior Vice President and Treasurer and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Alchin has served as an Executive Vice President of
Comcast Corporation since February 2000. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Alchin also
has served as Treasurer of Comcast Corporation for more than five years. Mr.
Alchin is the Principal Financial Officer of the General Partner and of Comcast
Corporation. He is 51 years old.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Each of the
directors and executive officers of the General Partner were directors and
executive officers of Jones Intercable prior to its merger with the General
Partner on March 2, 2000. Jones Intercable was the general partner of the
Partnership prior to March 2, 2000. These persons became directors and executive
officers of Jones Intercable on April 7, 1999, the date Comcast acquired a
controlling interest in Jones Intercable. These persons failed to file on a
timely basis reports disclosing their ownership of limited partnership interests
of the Partnership as required by Section 16(a) of the Securities
16
Exchange Act of 1934. The reports, when filed, disclosed that these persons own
no limited partnership interests of the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
-------------------------------
The Partnership has no employees; however, various personnel are
required to administer the financial, tax and legal affairs of the Partnership
and to maintain the books and records of the Partnership. Such personnel are
employed by Comcast and, pursuant to the terms of the limited partnership
agreement of the Partnership, the costs of such employment are charged by
Comcast to the Partnership. See ITEM 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
---------------------------------------------------------------------
As of December 31, 1999, no person or entity owned more than 5% of the
limited partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------
The Partnership reimburses its general partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
benefits paid to corporate personnel. Such personnel provide administrative,
tax, accounting, legal and investor relations services to the Partnership. The
Partnership will continue to reimburse its general partner for actual time spent
on Partnership business by employees of Comcast until the Partnership is
liquidated and dissolved. During the year ended December 31, 1999, such
reimbursements totaled $44,452.
The Partnership is charged interest on amounts advanced by its general
partner. The interest rate in 1999 was at an average of 7.18%, which
approximated Jones Intercable's weighted average cost of borrowing. During the
year ended December 31, 1999, such interest charges totaled $140,504.
The Partnership paid no management fees or brokerage fees or
programming services fees to affiliates during 1999 and it is expected that the
Partnership will never again pay management fees or brokerage fees or
programming service fees.
17
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
------------------------------------------------------------------------
(a) 1. See index to financial statements for the list of
financial statements and exhibits thereto filed as part
of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement for Cable TV Fund 12-A,
Ltd. (Incorporated by reference from the Partnership's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1985.)
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in Philadelphia,
Pennsylvania.
CABLE TV FUND 12-A, LTD.,
a Colorado limited partnership
By: Comcast JOIN Holdings, Inc.,
a Delaware corporation, its general
partner
By: /s/ Brian L. Roberts
-----------------------------------
Brian L. Roberts
Dated: March 22, 2000 President; Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: /s/ Ralph J. Roberts
------------------------------------
Ralph J. Roberts
Dated: March 22, 2000 Chairman; Director
By: /s/ Brian L. Roberts
------------------------------------
Brian L. Roberts
President; Director
Dated: March 22, 2000 (Principal Executive Officer)
By: /s/ Lawrence S. Smith
------------------------------------
Lawrence S. Smith
Dated: March 22, 2000 Executive Vice President; Director
By: /s/ Stanley L. Wang
------------------------------------
Stanley L. Wang
Dated: March 22, 2000 Executive Vice President; Secretary;
Director
By: /s/ John R. Alchin
------------------------------------
John R. Alchin
Executive Vice President; Treasurer
Dated: March 22, 2000 (Principal Financial Officer)
By: /s/ Lawrence J. Salva
------------------------------------
Lawrence J. Salva
Senior Vice President
Dated: March 22, 2000 (Principal Accounting Officer)
19