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, 1997.
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
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Commission File Number: 0-13193
CABLE TV FUND 12-A, LTD.
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Exact name of registrant as specified in charter
Colorado #84-0968104
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State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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Address of principal executive office
(303) 792-3111
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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
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CABLE TV FUND 12-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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June 30, December 31,
ASSETS 1997 1996
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CASH $ 3,290,862 $ 4,034,642
TRADE RECEIVABLES, less allowance for
doubtful receivables of $33,589 and $35,573
at June 30, 1997 and December 31, 1996, respectively 894,132 685,452
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 82,929,733 80,190,860
Less- accumulated depreciation (51,690,518) (48,417,981)
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31,239,215 31,772,879
Franchise costs and other intangible assets, net of
accumulated amortization of $33,607,541 and $33,337,684
at June 30, 1997 and December 31, 1996, respectively 1,419,016 1,688,873
------------ ------------
Total investment in cable television properties 32,658,231 33,461,752
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 557,496 290,724
------------ ------------
Total assets $ 37,400,721 $ 38,472,570
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 12-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1997 1996
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LIABILITIES:
Debt $ 25,179,765 $ 27,179,908
Trade accounts payable and accrued liabilities 1,730,969 2,261,358
Subscriber prepayments 200,574 126,049
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Total liabilities 27,111,308 29,567,315
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (345,613) (359,455)
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(344,613) (358,455)
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Limited Partners-
Net contributed capital (104,000 units
outstanding at June 30, 1997 and
December 31, 1996) 44,619,655 44,619,655
Accumulated deficit (33,985,629) (35,355,945)
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10,634,026 9,263,710
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Total liabilities and partners' capital (deficit) $ 37,400,721 $ 38,472,570
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
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CABLE TV FUND 12-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ----------- -----------
REVENUES $9,317,589 $8,620,487 $18,581,019 $17,181,228
COSTS AND EXPENSES:
Operating expenses 5,307,575 5,120,877 10,535,119 10,212,999
Management fees and allocated overhead
from General Partner 949,201 984,072 2,053,718 1,994,239
Depreciation and amortization 1,797,856 1,794,112 3,652,721 3,588,364
---------- ---------- ----------- -----------
OPERATING INCOME 1,262,957 721,426 2,339,461 1,385,626
---------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (445,400) (409,123) (901,978) (863,475)
Other, net 6,259 998 (53,325) 8,752
---------- ---------- ----------- -----------
Total other income
(expense), net (439,141) (408,125) (955,303) (854,723)
---------- ---------- ----------- -----------
NET INCOME $ 823,816 $ 313,301 $ 1,384,158 $ 530,903
========== ========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $ 8,238 $ 3,133 $ 13,842 $ 5,309
========== ========== =========== ===========
Limited Partners $ 815,578 $ 310,168 $ 1,370,316 $ 525,594
========== ========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 7.84 $ 2.98 $ 13.18 $ 5.05
========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 104,000 104,000 104,000 104,000
========== ========== =========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Six Months Ended
June 30,
--------------------------
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,384,158 $ 530,903
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,652,721 3,575,780
Decrease (increase) in trade receivables (208,680) 260,883
Decrease (increase) in deposits, prepaid expenses and
deferred charges (377,099) 31,868
Increase (decrease) in General Partner advances - (373,311)
Decrease in trade accounts payable and accrued liabilities
and subscriber prepayments (455,864) (377,203)
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Net cash provided by operating activities 3,995,236 3,648,920
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (2,738,873) (2,678,697)
Franchise renewal - (25,000)
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Net cash used in investing activities (2,738,873) (2,703,697)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 75,633 -
Repayment of debt (2,075,776) (1,759,601)
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Net cash used in financing activities (2,000,143) (1,759,601)
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Decrease in cash (743,780) (814,378)
Cash, beginning of period 4,034,642 1,307,723
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Cash, end of period $ 3,290,862 $ 493,345
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 924,273 $ 1,121,994
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The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Cable TV Fund 12-A, Ltd. (the
"Partnership") at June 30, 1997 and December 31, 1996, its Statements of
Operations for the three and six month periods ended June 30, 1997 and 1996 and
its Statements of Cash Flows for the six month periods ended June 30, 1997 and
1996. Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
The Partnership owns and operates the cable television systems serving
areas in and around Fort Myers, Florida; Lake County, Illinois; and Orland
Park/Park Forest, Illinois.
(2) Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation, manages the Partnership and receives a fee for its services equal
to 5 percent of the gross revenues of the Partnership, excluding revenues from
the sale of cable television systems or franchises. Management fees for the
three and six month periods ended June 30, 1997 were $465,879 and $929,051,
respectively, compared to $431,024 and $859,061, respectively, for the similar
1996 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing services
and other facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity. Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner with respect to each
partnership managed. Remaining expenses are 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 for the three and six month periods ended June 30, 1997 were $483,322
and $1,124,667, respectively, compared to $553,048 and $1,135,178, respectively,
for the similar 1996 periods.
(3) Certain prior year amounts have been reclassified to conform to 1997
presentation.
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CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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FINANCIAL CONDITION
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It is the General Partner's publicly announced policy that it intends to
liquidate its managed partnerships, including the Partnership, as opportunities
for sales of partnership cable television systems arise in the marketplace over
the next several years. In accordance with the General Partner's policy, the
Partnership's systems have been marketed for sale and the General Partner is
continuing to seek out opportunities to sell the Partnership's systems. There is
no assurance as to the timing or terms of any sales.
For the six month period ended June 30, 1997, the Partnership generated net
cash from operating activities totaling approximately $3,995,236, which is
available to fund capital expenditures and non-operating costs. Capital
expenditures totaled approximately $2,739,000 during the first six months of
1997. Approximately 40 percent of these expenditures related to the construction
of service drops to subscribers' homes. Approximately 26 percent of these
expenditures related to the construction of new cable plant associated with new
homes passed. The remaining expenditures were used for various enhancements in
the Partnership's systems. Funding for these expenditures was provided by cash
on hand and cash generated from operations. Anticipated capital expenditures for
the remainder of 1997 are approximately $3,371,000. Approximately 34 percent is
expected to be used to continue construction of new cable plant and
approximately 32 percent will be used for the construction of service drops to
subscribers' homes. The remainder of anticipated expenditures is expected to be
used for various enhancements in all of the Partnership's systems. These capital
expenditures are necessary to maintain the value of the Partnership's systems
until they are sold. Funding for these expenditures is expected to be provided
by cash on hand and cash generated from operations.
As of June 30, 1997, $24,975,000 was outstanding under the Partnership's
term loan agreement, which is payable in 20 consecutive quarterly installments
that began on March 31, 1997. A total of $2,025,000 in principal payments was
paid during the six months ended June 30, 1997. These payments were funded from
cash on hand and cash generated from operations. Payments of $2,025,000 due
during the remainder of 1997 are expected to be funded from cash on hand and
cash generated from operations. Generally, interest payable on the outstanding
balance is at the Partnership's option of Prime or a fixed rate defined as the
London Interbank Offered Rate plus 1 percent. The effective interest rates on
outstanding obligations as of June 30, 1997 and 1996 were 6.76 percent and 6.38
percent, respectively.
The General Partner believes that the Partnership has sufficient sources of
capital from cash on hand and cash generated from operations to meet its
presently anticipated needs.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership increased $697,102, or approximately 8 percent,
to $9,317,589 for the three month period ended June 30, 1997 from $8,620,487 for
the comparable 1996 period. Revenues of the Partnership increased $1,399,791, or
approximately 8 percent, to $18,581,019 for the six month period ended June 30,
1997 from $17,181,228 for the comparable 1996 period. An increase in the number
of basic subscribers combined with basic service rate increases implemented in
the Partnership's systems primarily accounted for the increase in revenues.
Basic service rate increases accounted for approximately 54 percent and 55
percent, respectively, of the increase in revenues for the three and six month
periods ended June 30, 1997 and an increase in the number of basic subscribers
accounted for approximately 25 percent and 27 percent, respectively, of the
increase in revenues for the three and six month periods ended June 30, 1997.
The number of basic subscribers increased by 2,517 subscribers, or approximately
3 percent, to 77,994 at June 30, 1997 from 75,477 at June 30, 1996. No other
individual factor was significant to the increase in revenues.
Operating expenses consist primarily of costs associated with the operation
and administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.
7
Operating expenses increased $186,698, or approximately 4 percent, to
$5,307,575 for the three month period ended June 30, 1997 from $5,120,877 for
the comparable 1996 period. Operating expenses increased $334,614, or
approximately 3 percent, to $10,547,613 for the six month period ended June 30,
1997 from $10,212,999 for the comparable 1996 period. Increases in programming
fees partially offset by a decrease in marketing and advertising expenses
primarily accounted for the increase in operating expenses for the three and six
month periods. These expenses represented approximately 57 percent and 59
percent of revenues for the three and six month periods ended June 30, 1997 and
1996, respectively. No other individual factor was significant to the increase
in operating expenses.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). 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 cash flow increased
$510,404, or approximately 15 percent, to $4,010,014 for the three month period
ended June 30, 1997 from $3,499,610 for the similar period in 1996. Operating
cash flow increased $1,077,671, or approximately 15 percent, to $8,045,900 for
the six month period ended June 30, 1997 from $6,968,229 for the comparable 1996
period. These increases were due to increases in revenues exceeding the
increases in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$34,871, or approximately 4 percent, to $949,201 for the three month period
ended June 30, 1997 from $984,072 for the comparable 1996 period. This decrease
was due to a decrease in allocated expenses from the General Partner. Management
fees and allocated overhead from the General Partner increased $59,479, or
approximately 3 percent, to $2,053,718 for the six month period ended June 30,
1997 from $1,994,239 for the comparable 1996 period. This increase was due to
the increase in revenues, upon which such management fees are based, which was
offset in part, by a decrease in allocated expenses from the General Partner.
Depreciation and amortization expense increased $3,744, or less than 1
percent, to $1,797,856 for the three month period ended June 30, 1997 from
$1,794,112 for the comparable 1996 period. Depreciation and amortization expense
increased $64,357, or approximately 2 percent, to $3,652,721 for the six month
period ended June 30, 1997 from $3,588,364 for the comparable 1996 period. These
increases were due to additions to the Partnership's depreciable asset base.
Operating income increased $541,531, or approximately 75 percent, to
$1,262,957 for the three month period ended June 30, 1997 from $721,426 for the
comparable period in 1996. This increase was due to the increase in revenues and
decrease in management fees and allocated overhead from the General Partner
exceeding the increases in operating expenses and depreciation and amortization
expense. Operating income increased $953,835, or approximately 69 percent, to
$2,339,461 for the six month period ended June 30, 1997, from $1,385,626 for the
comparable period in 1996. This increase was due to the increase in revenues
exceeding the increases in operating expenses, management fees and allocated
overhead from the General Partner and depreciation and amortization expense.
Interest expense increased $36,277, or approximately 9 percent, to $445,400
for the three month period ended June 30, 1997 from $409,123 for the comparable
1996 period. Interest expense increased $38,503, or approximately 4 percent, to
$901,978 for the six month period ended June 30, 1996 from $863,475 for the
comparable 1996 period. These increases were due to higher effective interest
rates on interest bearing obligations.
The Partnership recognized net income of $823,816 for the three month
period ended June 30, 1997, compared to net income of $313,301 for the
comparable 1996 period. The Partnership recognized net income of $1,371,664 for
the six month period ended June 30, 1997, compared to net income of $530,903 for
the comparable 1996 period. These increases were due to the factors discussed
above.
8
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLE TV FUND 12-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
-----------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 13, 1997
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