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, 1998.
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[_] 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.
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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
---------------------------------
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.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
June 30, December 31,
ASSETS 1998 1997
------ ------------ ------------
CASH $ 3,159,959 $ 2,047,098
TRADE RECEIVABLES, less allowance for doubtful receivables of
$73,193 and $47,572 at June 30, 1998 and December 31, 1997,
respectively 397,560 1,197,527
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 89,219,977 86,596,679
Less- accumulated depreciation (57,948,176) (54,740,733)
------------ ------------
31,271,801 31,855,946
Franchise costs and other intangible assets, net of accumulated
amortization of $34,155,475 and $33,880,137 at June 30, 1998
and December 31, 1997, respectively 1,002,632 1,277,970
------------ ------------
Total investment in cable television properties 32,274,433 33,133,916
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 983,065 671,197
------------ ------------
Total assets $ 36,815,017 $ 37,049,738
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1998 1997
------------------------------------------- ------------ ------------
LIABILITIES:
Debt $ 21,135,652 $ 23,272,240
Trade accounts payable and accrued liabilities 1,609,393 1,690,998
Subscriber prepayments 154,634 137,170
------------ ------------
Total liabilities 22,899,679 25,100,408
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (309,354) (329,014)
------------ ------------
(308,354) (328,014)
------------ ------------
Limited Partners-
Net contributed capital (104,000 units outstanding at
June 30, 1998 and December 31, 1997) 44,619,655 44,619,655
Accumulated deficit (30,395,963) (32,342,311)
------------ ------------
14,223,692 12,277,344
------------ ------------
Total liabilities and partners' capital (deficit) $ 36,815,017 $ 37,049,738
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
REVENUES $10,077,189 $9,317,589 $19,985,317 $18,581,019
COSTS AND EXPENSES:
Operating expenses 5,543,227 5,307,575 10,994,187 10,535,119
Management fees and allocated overhead
from General Partner 1,108,615 949,201 2,172,751 2,053,718
Depreciation and amortization 1,867,500 1,797,856 3,664,470 3,652,721
----------- ---------- ----------- -----------
OPERATING INCOME 1,557,847 1,262,957 3,153,909 2,339,461
----------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (412,043) (445,400) (819,814) (901,978)
Other, net (425,797) 6,259 (368,087) (53,325)
----------- ---------- ----------- -----------
Total other income
(expense), net (837,840) (439,141) (1,187,901) (955,303)
----------- ---------- ----------- -----------
NET INCOME $ 720,007 $ 823,816 $ 1,966,008 $ 1,384,158
=========== ========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $ 7,200 $ 8,238 $ 19,660 $ 13,842
=========== ========== =========== ===========
Limited Partners $ 712,807 $ 815,578 $ 1,946,348 $ 1,370,316
=========== ========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $6.85 $7.84 $18.71 $13.18
=========== ========== =========== ===========
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
----------------------------------
For the Six Months Ended
June 30,
-------------------------
1998 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,966,008 $ 1,384,158
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,664,470 3,652,721
Decrease (increase) in trade receivables 799,967 (208,680)
Increase in deposits, prepaid expenses and
deferred charges (493,557) (377,099)
Decrease in trade accounts payable and accrued liabilities
and subscriber prepayments (64,141) (455,864)
----------- -----------
Net cash provided by operating activities 5,872,747 3,995,236
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (2,623,298) (2,738,873)
----------- -----------
Net cash used in investing activities (2,623,298) (2,738,873)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 75,633
Repayment of debt (2,136,588) (2,075,776)
----------- -----------
Net cash used in financing activities (2,136,588) (2,000,143)
----------- -----------
Increase (decrease) in cash 1,112,861 (743,780)
Cash, beginning of period 2,047,098 4,034,642
----------- -----------
Cash, end of period $ 3,159,959 $ 3,290,862
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 818,500 $ 924,273
=========== ===========
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
---------------------------------------
(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 complete 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, 1998 and December 31, 1997, its Statements of
Operations for the three and six month periods ended June 30, 1998 and 1997 and
its Statements of Cash Flows for the six month periods ended June 30, 1998 and
1997. 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 Lake County, Illinois (the "Lake County System") and Orland
Park/Park Forest, Illinois (the "Orland Park System"). The Partnership sold the
cable television system serving areas in and around Fort Myers, Florida (the
"Fort Myers System") on July 15, 1998. See Note 3.
(2) On July 15, 1998, the Partnership sold the Fort Myers System to an
unaffiliated cable television system operator for a sales price of $110,000,000,
subject to customary closing adjustments. From the proceeds, the Partnership
paid a brokerage fee to The Jones Group, Ltd., a subsidiary of the General
Partner, totaling $2,750,000, representing 2.5 percent of the sales price, for
acting as a broker in this transaction, retained a portion of the proceeds for
working capital purposes and distributed the remaining net sale proceeds of
approximately $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 the General Partner
($13,713,600). The total limited partner distribution of $93,140,800, which will
be distributed in August 1998, will give 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. Because the sale of the Fort Myers
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership was required to
approve this sale.
The pro forma effect of the sale of the Fort Myers System on the results of
the Venture's operations for the six months ended June 30, 1998 and June 30,
1997, assuming the transaction had occurred at the beginning of each year, is
presented in the following unaudited tabulation:
For the Three Months Ended June 30, 1998
----------------------------------------
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------- ----------
Revenues $19,985,317 $(10,472,916) $9,512,401
=========== ============ ==========
Operating Income $ 3,153,909 $ (2,055,440) $1,098,469
=========== ============ ==========
Net Income $ 1,966,008 $ (1,278,060) $ 687,948
=========== ============ ==========
6
For the Three Months Ended June 30, 1997
----------------------------------------
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------ ----------
Revenues $18,581,019 $(9,751,896) $8,829,123
=========== =========== ==========
Operating Income $ 2,339,461 $(1,353,897) $ 985,564
=========== =========== ==========
Net Income $ 1,384,158 $ (939,178) $ 444,980
=========== =========== ==========
(3) On July 10, 1998, the Partnership entered into an asset purchase agreement
to sell its Lake County System and Orland Park System to an unaffiliated party
for an aggregate sales price of $86,000,000, subject to customary closing
adjustments. Closing of the sale, which is expected to occur in the fourth
quarter of 1998, is subject to several conditions, including necessary
governmental and other third party consents. In addition, because the Lake
County System and Orland Park System constitute all of the remaining assets of
the Partnership, the sale must be approved by the owners of a majority of the
limited partner's interests of the Partnership. The General Partner expects to
conduct a vote of the limited partners on the proposed sale of these systems in
the third quarter of 1998. Upon the closing of the proposed sale of the Lake
County System and Orland Park System, based upon financial information as of
June 30, 1998, the Partnership will repay all of its indebtedness, including
$20,925,000 borrowed under its term loan and capital lease obligations totaling
$76,821, pay a brokerage fee to The Jones Group, Ltd. totaling $2,150,000,
representing 2.5 percent of the sales price, for acting as a broker in this
transaction, settle working capital adjustments, and then deposit $2,604,000
into an indemnity escrow account. The remaining net sale proceeds of
approximately $63,282,500 will be distributed to the Partnership's partners of
record as of the closing date of the sale of the Lake County System and Orland
Park System. Because the limited partners will have received total distributions
equal to the capital they initially contributed to the Partnership, the net sale
proceeds will be allocated 75 percent to the limited partners ($47,461,875) and
25 percent to the General Partner ($15,820,625). Based upon financial
information as of June 30, 1998, this distribution will give 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.
Taking into account the distribution from the sale of the Fort Myers System
and the anticipated distributions from the sales of the Lake County System and
the Orland Park System, excluding escrowed proceeds, the Partnership's limited
partners will have received a total of $1,351 for each $500 limited partnership
interest, or $2,702 for each $1,000 invested in the Partnership at the time the
Partnership is liquidated and dissolved.
The $2,604,000 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties to be made about the Lake County System and the
Orland Park System in the asset purchase agreement. Any amounts remaining from
this indemnity escrow account and not claimed by the buyer at the end of the
escrow period will be returned to and distributed by the Partnership. Any such
distribution would be made 75 percent to the limited partners and 25 percent to
the General Partner. If the entire $2,604,000 escrow amount is available, the
limited partners would receive $1,953,000 and the General Partner would receive
$651,000. This limited partner distribution would represent $19 for each $500
limited partnership interest, or $38 for each $1,000 invested in the
Partnership. The Partnership will continue in existence at least until any
amounts remaining from the indemnity escrow account have been distributed. Since
the Lake County System and the Orland Park System represent the remaining assets
of the Partnership, the Partnership will be liquidated and dissolved upon the
final distribution of any amounts remaining from the indemnity escrow account.
If any disputes with respect to indemnification arise, the Partnership would not
be dissolved until such disputes were resolved, which could result in the
Partnership continuing in existence beyond 1999.
(4) Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation, is the "General Partner" and 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,
1998 were $503,859 and $999,266, respectively, compared to $465,879 and
$929,051, respectively, for the similar 1997 periods.
7
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, 1998 and 1997 were
$604,756 and $1,173,485, respectively, compared to $483,322 and $1,124,667,
respectively, for the similar 1997 periods.
8
CABLE TV FUND 12-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
On July 15, 1998, the Partnership sold the Fort Myers System to an
unaffiliated cable television system operator for a sales price of $110,000,000,
subject to customary closing adjustments. From the proceeds, the Partnership
paid a brokerage fee to The Jones Group, Ltd., a subsidiary of the General
Partner, totaling $2,750,000, representing 2.5 percent of the sales price, for
acting as a broker in this transaction, retained a portion of the proceeds for
working capital purposes and distributed the remaining net sale proceeds of
approximately $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 the General Partner
($13,713,600). The total limited partner distribution of $93,140,800, which will
be distributed in August 1998, will give 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. Because the sale of the Fort Myers
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership was required to
approve this sale.
On July 10, 1998, the Partnership entered into an asset purchase agreement
to sell its Lake County System and Orland Park System to an unaffiliated party
for an aggregate sales price of $86,000,000, subject to customary closing
adjustments. Closing of the sale, which is expected to occur in the fourth
quarter of 1998, is subject to several conditions, including necessary
governmental and other third party consents. In addition, because the Lake
County System and Orland Park System constitute all of the remaining assets of
the Partnership, the sale must be approved by the owners of a majority of the
limited partner's interests of the Partnership. The General Partner expects to
conduct a vote of the limited partners on the proposed sale of these systems in
the third quarter of 1998. Upon the closing of the proposed sale of the Lake
County System and Orland Park System, based upon financial information as of
June 30, 1998, the Partnership will repay all of its indebtedness, including
$20,925,000 borrowed under its term loan and capital lease obligations totaling
$76,821, pay a brokerage fee to The Jones Group, Ltd. totaling $2,150,000,
representing 2.5 percent of the sales price, for acting as a broker in this
transaction, settle working capital adjustments, and then deposit $2,604,000
into an indemnity escrow account. The remaining net sale proceeds of
approximately $63,282,500 will be distributed to the Partnership's partners of
record as of the closing date of the sale of the Lake County System and Orland
Park System. Because the limited partners will have received total distributions
equal to the capital they initially contributed to the Partnership, the net sale
proceeds will be allocated 75 percent to the limited partners ($47,461,875) and
25 percent to the General Partner ($15,820,625). Based upon financial
information as of June 30, 1998, this distribution will give 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.
Taking into account the distribution from the sale of the Fort Myers System
and the anticipated distributions from the sales of the Lake County System and
the Orland Park System, excluding escrowed proceeds, the Partnership's limited
partners will have received a total of $1,351 for each $500 limited partnership
interest, or $2,702 for each $1,000 invested in the Partnership at the time the
Partnership is liquidated and dissolved.
The $2,604,000 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties to be made about the Lake County System and the
Orland Park System in the asset purchase agreement. Any amounts remaining from
this indemnity escrow account and not claimed by the buyer at the end of the
escrow period will be returned to and distributed by the Partnership. Any such
distribution would be made 75 percent to the limited partners and 25 percent to
the General Partner. If the entire $2,604,000 escrow amount is available, the
limited partners would receive $1,953,000 and the General Partner would receive
$651,000. This limited partner distribution would represent $19 for each $500
limited partnership interest, or $38 for each $1,000 invested in the
Partnership. The Partnership will continue in existence at least until any
amounts remaining from the indemnity escrow account have been distributed. Since
the Lake County System and
9
the Orland Park System represent the remaining assets of the Partnership, the
Partnership will be liquidated and dissolved upon the final distribution of any
amounts remaining from the indemnity escrow account. If any disputes with
respect to indemnification arise, the Partnership would not be dissolved until
such disputes were resolved, which could result in the Partnership continuing in
existence beyond 1999.
For the six month period ended June 30, 1998, the Partnership generated net
cash from operating activities totaling approximately $5,873,000, which is
available to fund capital expenditures and non-operating costs. Capital
expenditures totaled approximately $2,623,000 during the first six months of
1998. Approximately 46 percent of these expenditures related to the construction
of service drops to subscribers' homes. Approximately 29 percent of these
expenditures related to the construction of new cable plant associated with new
homes passed. The remaining expenditures were also used to maintain the value of
the Partnership's systems. Funding for these expenditures was provided by cash
generated from operations. Anticipated capital expenditures for the remainder of
1998 are approximately $1,849,000. Approximately 39 percent is expected to be
used to continue construction of new cable plant associated with new homes
passed and approximately 29 percent will be used for the construction of service
drops to subscribers' homes. The remaining anticipated expenditures are expected
to be used to maintain the value of the Partnership's systems until they are
sold. Depending upon the timing of the sale of the Lake County System and Orland
Park System, the Partnership likely will only make the 1998 budgeted capital
expenditures expected to be made during the Partnership's continued ownership of
the Lake County System and Orland Park System. Funding for these expenditures is
expected to be provided by cash on hand and cash generated from operations. The
Partnership is obligated to conduct its business in the ordinary course until
the Lake County System and Orland Park System are sold.
As of June 30, 1998, $20,925,000 was outstanding under the Partnership's
term loan agreement, which is payable in consecutive quarterly installments
through December 31, 2001. A total of $2,025,000 in principal payments was paid
during the first half of 1998. This payment was funded from cash on hand and
cash generated from operations. The term loan will be repaid in full upon the
close of the sale of the Partnership's systems, which is expected to occur in
the fourth quarter of 1998. Remaining principal payments for 1998 total
$2,025,000 and will be paid in quarterly installments of $1,012,500 on September
30, 1998 and December 31, 1998, respectively, 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, 1998 and 1997 were 6.69 percent and 7.10
percent, respectively.
The Partnership has sufficient sources of capital from cash on hand and
cash generated from operations to meet its presently anticipated needs.
The Year 2000 issue is the result of many computer programs being written
such that they will malfunction when reading a year of "00." This problem could
cause system failure or miscalculations causing disruptions of business
processes.
The General Partner has initiated an assessment of its computer
applications to determine the extent of the problem. Based on this assessment,
the General Partner has determined that the majority of its computer
applications supporting business processes, including accounting and billing,
are designed to handle the Year 2000 appropriately.
The General Partner is currently focusing its efforts on the impact of the
Year 2000 issue on service delivery. The General Partner has established an
internal team to address this issue. The General Partner is identifying and
testing all date-sensitive equipment involved in delivering service to the
Partnership's customers. In addition, the General Partner will assess the
Partnership's options regarding repair or replacement of affected equipment
during this testing. The General Partner believes that the financial impact
will not be material.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership increased $759,600, or approximately 8 percent,
to $10,077,189 for the three month period ended June 30, 1998 from $9,317,589
for the comparable 1997 period. Revenues of the Partnership increased
$1,404,298, or approximately 8 percent, to $19,985,317 for the six month period
ended June 30, 1998 from $18,581,019 for the comparable 1997 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 60 percent
and 63 percent, respectively, of the increase in revenues for the three and six
month periods ended June 30, 1998 and an increase in the number of basic
subscribers accounted for approximately
10
10 percent and 11 percent, respectively, of the increase in revenues for the
three and six month periods ended June 30, 1998. The number of basic subscribers
increased by 1,071 subscribers, or approximately 1 percent, to 79,065 at June
30, 1998 from 77,994 at June 30, 1997. 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.
Operating expenses increased $235,652, or approximately 4 percent, to
$5,543,227 for the three month period ended June 30, 1998 from $5,307,575 for
the comparable 1997 period. Operating expenses increased $459,068, or
approximately 4 percent, to $10,994,187 for the six month period ended June 30,
1998 from $10,535,119 for the comparable 1997 period. These increases were
primarily due to increases in programming fees. No other individual factor was
significant to the increase in operating expenses. These expenses represented
approximately 55 and 57 percent of revenues for the three and six month periods
ended June 30, 1998 and 1997, respectively.
The cable television industry generally measures the 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 $523,948, or
approximately 13 percent, to $4,533,962 for the three month period ended June
30, 1998 from $4,010,014 for the similar period in 1997. Operating cash flow
increased $945,230, or approximately 12 percent, to $8,991,130 for the six month
period ended June 30, 1998 from $8,045,900 for the comparable 1997 period. These
increases were due to increases in revenues exceeding the increases in operating
expenses.
Management fees and allocated overhead from the General Partner increased
$159,414, or approximately 17 percent, to $1,108,615 for the three month period
ended June 30, 1998 from $949,201 for the comparable 1997 period. Management
fees and allocated overhead from the General Partner increased $119,033, or
approximately 6 percent, to $2,172,751 for the six month period ended June 30,
1997 from $2,053,718 for the comparable 1997 period. These increases were due to
the increase in revenues, upon which such management fees and allocations are
based, and the timing of certain expenses allocated from Intercable.
Depreciation and amortization expense increased $69,644, or approximately 4
percent, to $1,867,500 for the three month period ended June 30, 1998 from
$1,797,856 for the comparable 1997 period. Depreciation and amortization expense
increased $11,749 to $3,664,470 for the six month period ended June 30, 1998
from $3,652,721 for the comparable 1997 period. These increases were due to
additions to the Partnership's depreciable asset base.
Operating income increased $294,890, or approximately 23 percent, to
$1,557,847 for the three month period ended June 30, 1998 from $1,262,957 for
the comparable 1997 period. Operating income increased $814,448, or
approximately 35 percent, to $3,153,909 for the six month period ended June 30,
1998, from $2,339,461 for the comparable 1997 period. These increases were due
to the increases in operating cash flow exceeding the increases in management
fees and allocated overhead from the General Partner and depreciation and
amortization expense.
Interest expense decreased $33,357, or approximately 7 percent, to $412,043
for the three month period ended June 30, 1998 from $445,400 for the comparable
1997 period. Interest expense decreased $82,164, or approximately 9 percent, to
$819,814 for the six month period ended June 30, 1997 from $901,978 for the
comparable 1997 period. These decreases were due to lower outstanding balances
on interest bearing obligations.
The Partnership reported other expense of $425,797 for the three month
period ended June 30, 1998 compared to other income of $6,259 for the comparable
1997 period. This change was primarily the result of write-offs of certain
advertising receivables during the second quarter of 1998.
Net income decreased $103,809 to $720,007 for the three month period ended
June 30, 1998 compared to $823,816 for the comparable 1997 period. Net income
increased $581,850, or approximately 42 percent, to $1,966,008 for the six month
period ended June 30, 1998, compared to $1,384,158 for the comparable 1997
period. These changes were due to the factors discussed above.
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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
Report on Form 8-K dated July 30, 1998 reported that on July 15,
1998, Cable TV Fund 12-A, Ltd. sold the cable television system
serving subscribers in the community of Fort Myers, Florida, all in
the State of Florida, to an unaffiliated party for a sales price of
$110,000,000, subject to customary closing adjustments.
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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 12, 1998
13