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
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _______________
Commission File Number 0-14206
CABLE TV FUND 12-D, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010423
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D. #
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
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 ___
___
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, December 31,
ASSETS 1998 1997
- ------ ------------- -------------
CASH AND CASH EQUIVALENTS $ 122,093,970 $ 1,742,444
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$125,448 and $404,821 at June 30, 1998 and December 31, 1997,
respectively 1,215,808 4,456,904
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 76,764,620 218,189,145
Less- accumulated depreciation (39,614,242) (113,368,132)
------------ ------------
37,150,378 104,821,013
Franchise costs and other intangible assets, net of accumulated
amortization of $34,851,855 and $63,250,091 at
June 30, 1998 and December 31, 1997, respectively 926,798 7,791,062
------------ -------------
Total investment in cable television properties 38,077,176 112,612,075
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,522,880 5,458,081
------------ -------------
Total assets $162,909,834 $ 124,269,504
============ =============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
2
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1998 1997
------------------------------------------ -------------- -------------
LIABILITIES:
Debt $ 51,922,252 $ 144,308,462
Accrued distribution to limited partners 90,101,856 -
Accrued distributions to Joint Venture Partners 26,781,019 -
Trade accounts payable and accrued liabilities 1,207,525 6,726,286
Subscriber prepayments 130,473 424,486
------------- ------------
Total liabilities 170,143,125 151,459,234
------------- ------------
MINORITY INTEREST IN JOINT VENTURE (2,024,183) (6,905,937)
------------- ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated capital (deficit) 8,597,269 (109,581)
Distributions (4,326,452) -
------------- ------------
4,271,817 (108,581)
------------- ------------
Limited Partners-
Net contributed capital (237,339 units outstanding
at June 30, 1998 and December 31, 1997) 102,198,175 102,198,175
Accumulated capital (deficit) 19,969,756 (80,826,387)
Distributions (131,648,856) (41,547,000)
------------- ------------
(9,480,925) (20,175,212)
------------- ------------
Total liabilities and partners' deficit $ 162,909,834 $124,269,504
============= ============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
3
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
------------ ----------- ------------ -----------
REVENUES $ 22,166,611 $21,138,684 $ 43,079,053 $40,849,909
COSTS AND EXPENSES:
Operating expenses 12,159,234 11,733,343 23,667,531 22,687,208
Management fees and
allocated overhead
from Jones Intercable, Inc. 2,451,333 2,109,915 4,635,262 4,425,981
Depreciation and
amortization 6,166,414 4,866,372 12,024,948 9,664,919
------------ ----------- ------------ -----------
OPERATING INCOME 1,389,630 2,429,054 2,751,312 4,071,801
------------ ----------- ------------ -----------
OTHER INCOME (EXPENSE):
Interest expense (2,740,844) (2,729,243) (5,415,956) (5,420,505)
Gain on sale of cable television
system 147,792,730 - 147,792,730 -
Other, net (121,563) (332,410) (171,647) (244,544)
------------ ----------- ------------ -----------
Total other income
(expense), net 144,930,323 (3,061,653) 142,205,127 (5,665,049)
------------ ----------- ------------ -----------
CONSOLIDATED NET
INCOME (LOSS) 146,319,953 (632,599) 144,956,439 (1,593,248)
MINORITY INTEREST IN
CONSOLIDATED NET
(INCOME) LOSS (35,786,934) 154,721 (35,453,446) 389,677
------------ ----------- ------------ -----------
NET INCOME (LOSS) $110,533,019 $ (477,878) $109,502,993 $(1,203,571)
============ =========== ============ ===========
ALLOCATION OF NET
INCOME (LOSS):
General Partner $ 8,717,150 $ (4,779) $ 8,706,850 $ (12,036)
============ =========== ============ ===========
Limited Partners $101,815,869 $ (473,099) $100,796,143 $(1,191,535)
============ =========== ============ ===========
NET INCOME (LOSS) PER
LIMITED PARTNERSHIP UNIT $ 428.99 $ (1.99) $ 424.69 $ (5.02)
============ =========== ============ ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 237,339 237,339 237,339 237,339
============ =========== ============ ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
4
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
For the Six Months Ended
June 30,
----------------------------
1998 1997
------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 109,502,993 $ (1,203,571)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 12,024,948 9,664,919
Gain on sale of cable television system (147,792,730) -
Minority interest in consolidated income (loss) 35,453,446 (389,677)
Decrease (increase) in trade receivables 3,241,096 (827,345)
Decrease (increase) in deposits, prepaid expenses and
deferred charges 2,806,890 (2,201,375)
Increase (decrease) in trade accounts payable and accrued
liabilities and subscriber prepayments (5,812,774) 1,166,272
------------- -----------
Net cash provided by operating activities 9,423,869 6,209,223
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (10,199,452) (8,632,688)
Proceeds from sale of cable television system 222,963,267 -
------------- -----------
Net cash provided by (used in) investing activities 212,763,815 (8,632,688)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 10,208,143 9,112,302
Repayment of debt (103,927,176) (5,433,326)
Distributions to limited partners (90,101,856) -
Increase in accrued distribution to limited partners 90,101,856 -
Distribution to General Partner (4,326,452) -
Distributions to Joint Venture Partners (30,571,692) -
Increase in accrued distribution to Joint Venture Partners 26,781,019 -
------------- -----------
Net cash provided by (used in) financing activities (101,836,158) 3,678,976
------------- -----------
Increase in cash and cash equivalents 120,351,526 1,255,511
Cash and cash equivalents, beginning of period 1,742,444 1,514,773
------------- -----------
Cash and cash equivalents, end of period $ 122,093,970 $ 2,770,284
============= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 7,600,533 $ 5,407,828
============= ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
5
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED 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-D, Ltd.
(the "Partnership") at June 30, 1998 and December 31, 1997, its results of
operations for the three and six month periods ended June 30, 1998 and 1997 and
its 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 accompanying consolidated financial statements include 100 percent
of the accounts of the Partnership and those of Cable TV Fund 12-BCD Venture
(the "Venture") reduced by the 24 percent minority interest in the Venture. All
interpartnership accounts and transactions have been eliminated. The Venture
owns and operates the cable television system serving the areas in and around
Palmdale, California (the "Palmdale System"). As discussed below, the Venture's
cable television system serving the areas in and around Albuquerque, New Mexico
(the "Albuquerque System") was sold on June 30, 1998.
(2) Jones Intercable, Inc. (the "General Partner"), a publicly held
Colorado corporation, manages the Partnership and the Venture and receives a fee
for its services equal to 5 percent of the gross revenues of the Venture,
excluding revenues from the sale of cable television systems or franchises.
Management fees paid to the General Partner for the three and six month periods
ended June 30, 1998 were $1,108,331 and $2,153,953, respectively, compared to
$1,056,934 and $2,042,495, respectively, for the comparable periods in 1997.
The Venture 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 corporate facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services to
the Venture. Such services, and their related costs, are necessary to the
operation of the Venture and would have been incurred by the Venture if it was a
stand alone entity. Allocations of personnel costs are based upon actual time
spent by employees of the General Partner with respect to each entity managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture'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 Jones Intercable,
Inc. 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. Allocated overhead and
administrative expenses allocated to the Venture by the General Partner for the
three and six month periods ended June 30, 1998 were $1,343,002 and $2,481,309,
respectively, compared to $1,052,981 and $2,383,486, respectively, for the
comparable periods in 1997.
(3) On June 30, 1998, the Venture sold the Albuquerque System to the
General Partner. The sales price of the Albuquerque System was $222,963,267,
subject to normal working capital closing adjustments. This price represented
the average of three separate, independent appraisals of the fair market value
of the Albuquerque System.
Upon the sale of the Albuquerque System, the Venture repaid its
outstanding Senior Notes balance of $41,544,890 plus accrued interest, plus a
make whole premium of $1,332,823 and, pursuant to an amendment to the Venture's
credit facility, the Venture distributed $125,000,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The remaining proceeds were used to repay a portion of the outstanding
balance and accrued interest on its credit facility. The Partnership received
$94,428,308, or 76 percent of the $125,000,000 distribution, which the
Partnership distributed to its partners of record as of the closing date of the
sale of the Albuquerque System. This distribution was made in July 1998. The
limited partners of the Partnership, as a group, received $90,101,856 and the
General Partner received $4,326,452. Such distribution represents $380 for each
$500 limited partnership interest, or $760 for each $1,000 invested in the
Partnership.
6
In March 1998, the Venture entered into a purchase and sale agreement to
sell the Palmdale System to the General Partner for a sales price of
$138,205,200, subject to customary closing adjustments. This sales price
represents the average of three separate independent appraisals of the fair
market value of the Palmdale System. The closing of this sale is subject to a
number of conditions, including the approval of the holders of a majority of the
limited partnership interests in each of the three partnerships that comprise
the Venture and necessary governmental and other third party consents. The
General Partner is conducting a vote of the limited partners on the sale of the
Palmdale System in the third quarter of 1998. Closing is expected to occur in
the fourth quarter of 1998.
Upon consummation of the proposed sale of the Palmdale System, based upon
financial information as of June 30, 1998, the Venture will settle working
capital adjustments, repay all of its remaining indebtedness, which totaled
approximately $51,922,000, and then the Venture will distribute the remaining
sale proceeds of $87,581,654 to the three constituent partnerships of the
Venture in proportion to their ownership interests in the Venture. The
Partnership will receive approximately $66,161,502, or 76 percent of the
$87,581,654 distribution, which the Partnership will distribute to its partners
of record as of the closing date of the sale of the Palmdale System. This
distribution is expected to be made before year end 1998. Because the limited
partners will have already received distributions in an amount in excess of the
capital initially contributed to the Partnership by the limited partners, taking
into account the distribution to the limited partners from the sale of the
Albuquerque System, the net proceeds from the Palmdale System's sale will be
distributed 75 percent to the limited partners ($49,621,127) and 25 percent to
the General Partner ($16,540,375). Limited partners will receive $209 for each
$500 limited partnership interest, or $418 for each $1,000 invested in the
Partnership, from the Partnership's portion of the net proceeds of the Palmdale
System's sale. Since the Palmdale System will represent the only remaining asset
of the Venture, the Venture and the Partnership will be liquidated and dissolved
after the sale of the Palmdale System.
Taking into account the distributions from the sale of the Albuquerque
System and the proposed sale of the Palmdale System, together with all prior
distributions, the General Partner expects that the Partnership's limited
partners will receive $764 for each $500 limited partnership interest, or $1,528
for each $1,000 invested in the Partnership, at the time the Partnership is
liquidated and dissolved.
The pro forma effect of the sale of the Albuquerque System on the results
of the Venture's operations for the six months ended June 30, 1998 and 1997,
assuming the transaction had occurred on January 1, 1997, are presented in the
following tabulations.
For the Six Months Ended June 30, 1998
-------------------------------------------
Unaudited
Pro Forma Pro Forma
As Reported Adjustments Balance
------------- -------------- ------------
REVENUES $ 43,079,053 $ (27,681,131) $15,397,922
============ ============= ===========
OPERATING INCOME (LOSS) $ 2,751,312 $ (1,054,815) $ 1,696,497
============ ============= ===========
CONSOLIDATED INCOME (LOSS) $144,956,439 $(145,181,031) $ (224,592)
============ ============= ===========
For the Six Months Ended June 30, 1997
-------------------------------------------
Unaudited
Pro Forma Pro Forma
As Reported Adjustments Balance
------------ ------------- -----------
REVENUES $ 40,849,909 $ (26,253,572) $14,596,337
============ ============= ===========
OPERATING INCOME (LOSS) $ 4,071,801 $ (2,024,920) $ 2,046,881
============ ============= ===========
CONSOLIDATED INCOME (LOSS) $ (1,593,248) $ 1,736,551 $ 143,303
============ ============= ===========
7
CABLE TV FUND 12-D, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
On June 30, 1998, the Venture sold the Albuquerque System to the General
Partner. The sales price of the Albuquerque System was $222,963,267, subject to
normal working capital adjustments. This price represented the average of three
separate independent appraisals of the fair market value of the Albuquerque
System.
Upon the sale of the Albuquerque System, the Venture repaid its outstanding
Senior Notes balance of $41,544,890 plus accrued interest, plus a make whole
premium of $1,332,823 and, pursuant to an amendment to the Venture's credit
facility, the Venture distributed $125,000,000 to the three constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. The remaining proceeds were used to repay a portion of the outstanding
balance and accrued interest on its credit facility. The Partnership received
$94,428,308, or 76 percent of the $125,000,000 distribution, which the
Partnership distributed to its partners of record as of the closing date of the
sale of the Albuquerque System. This distribution was made in July 1998. The
limited partners of the Partnership, as a group, received $90,101,856 and the
General Partner received $4,326,452. Such distribution represents $380 for each
$500 limited partnership interest, or $760 for each $1,000 invested in the
Partnership.
In March 1998, the Venture entered into a purchase and sale agreement to
sell the Palmdale System to the General Partner for a sales price of
$138,205,200, subject to customary closing adjustments. This sales price
represents the average of three separate independent appraisals of the fair
market value of the Palmdale System. The closing of this sale is subject to a
number of conditions, including the approval of the holders of a majority of the
limited partnership interests in each of the three partnerships that comprise
the Venture and necessary governmental and other third party consents. The
General Partner is conducting a vote of the limited partners on the sale of the
Palmdale System in the third quarter of 1998. Closing is expected to occur in
the fourth quarter of 1998.
Upon consummation of the proposed sale of the Palmdale System, based upon
financial information as of June 30, 1998, the Venture will settle working
capital adjustments, repay all of its remaining indebtedness, which totaled
approximately $51,922,000, and then the Venture will distribute the remaining
sale proceeds of $87,581,654 to the three constituent partnerships of the
Venture in proportion to their ownership interests in the Venture. The
Partnership will receive approximately $66,161,502, or 76 percent of the
$87,581,654 distribution, which the Partnership will distribute to its partners
of record as of the closing date of the sale of the Palmdale System. This
distribution is expected to be made before year end 1998. Because the limited
partners will have already received distributions in an amount in excess of the
capital initially contributed to the Partnership by the limited partners, taking
into account the distribution to the limited partners from the sale of the
Albuquerque System, the net proceeds from the Palmdale System's sale will be
distributed 75 percent to the limited partners ($49,621,127) and 25 percent to
the General Partner ($16,540,375). Limited partners will receive $209 for each
$500 limited partnership interest, or $418 for each $1,000 invested in the
Partnership, from the Partnership's portion of the net proceeds of the Palmdale
System's sale. Since the Palmdale System will represent the only remaining asset
of the Venture, the Venture and the Partnership will be liquidated and dissolved
after the sale of the Palmdale System.
Taking into account the distributions from the sale of the Albuquerque
System and the proposed sale of the Palmdale System, together with all prior
distributions, the General Partner expects that the Partnership's limited
partners will receive $764 for each $500 limited partnership interest, or $1,528
for each $1,000 invested in the Partnership, at the time the Partnership is
liquidated and dissolved.
For the six months ended June 30, 1998, the Venture generated net cash from
operating activities totaling $9,423,869, which was available to fund capital
expenditures and non-operating costs. Capital expenditures for the Venture
totaled $10,199,452 for the six months ended June 30, 1998. Capital
expenditures in the Albuquerque System totaled $7,136,952. Of the Albuquerque
System's capital expenditures, approximately 41 percent was for service drops to
subscribers' homes, approximately 27 percent was for cable plant extensions
related to new homes passed and the remainder was for other capital expenditures
to maintain the value of the Albuquerque System until it was sold. Capital
8
expenditures in the Palmdale System totaled $3,062,500. Of the Palmdale
System's capital expenditures, approximately 47 percent was for service drops to
subscribers' homes, approximately 17 percent was for cable plant extensions
related to new homes passed and the remainder was for other capital expenditures
to maintain the value of the Palmdale System until it is sold. These capital
expenditures were funded primarily from cash generated from operations and
borrowings from the Venture's credit facility. Budgeted capital expenditures
for the Palmdale System for the remainder of 1998 are approximately $1,842,200,
of which approximately 35 percent is for service drops to subscribers' homes,
approximately 20 percent is for cable plant extensions related to new homes
passed and the remainder is for other capital expenditures to maintain the value
of the Palmdale System. Depending upon the timing of the closing of the sale of
the Palmdale System, the Venture will make only the portion of the 1998 budgeted
capital expenditures scheduled to be made during the Venture's continued
ownership of the Palmdale System. Funding for these expenditures is expected to
be provided by cash on hand, cash generated from operations and borrowings from
the Venture's credit facility. The Venture is obligated to conduct its business
in the ordinary course until the Palmdale System is sold.
On June 30, 1998, in conjunction with the sale of the Albuquerque System,
the Senior Notes' balance of $41,544,890 plus accrued interest was repaid in
full together with a make whole premium of $1,332,823.
Pursuant to an amendment that became effective on the date of the
Albuquerque sale, the Venture repaid $54,000,000 on its credit facility, and the
commitment was reduced to $55,000,000. The balance outstanding on the Venture's
credit facility at June 30, 1998 was $51,630,620, leaving $3,369,380 available
for future needs. At the Venture's option, the credit facility will be payable
in full on December 31, 2000, or will convert to a term loan that matures on
December 31, 2005 payable in consecutive quarterly amounts. Upon the sale of
the Palmdale System, the Venture will repay the then-outstanding balance of the
credit facility. Interest on the credit facility is at the Venture's option of
the London Interbank Offered Rate plus 1.125 percent, the Prime Rate plus .125
percent, or the Certificate of Deposit Rate plus 1.25 percent. The effective
interest rates on amounts outstanding on the Venture's credit facility as of
June 30, 1998 and 1997 were 6.81 percent and 7.01 percent, respectively.
The Venture has sufficient sources of capital available through its ability
to generate cash from operations and borrowings under its credit facility to
meet its needs until the Palmdale System is sold.
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
Venture's customers. In addition, the General Partner will assess the Venture's
options regarding repair or replacement of affected equipment during this
testing. The General Partner believes that the financial impact will not be
material.
9
RESULTS OF OPERATIONS
- ---------------------
Results of operations of the Albuquerque System and the Palmdale System for
the three and six months ended June 30, 1998 and 1997, respectively, are
summarized below:
For the Three Months Ended June 30:
Albuquerque System
--------------------------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ------------
Revenues $14,201,062 $13,505,138 $ 695,924 5%
Operating expenses 7,644,600 7,494,692 149,908 2%
----------- ----------- ------------ ------------
Operating cash flow 6,556,462 6,010,446 546,016 9%
Management fees and allocated
overhead from Jones Intercable, Inc. 1,570,128 1,347,937 222,191 16%
Depreciation and amortization 4,400,613 3,508,144 892,469 25%
----------- ----------- ----------- ------------
Operating income $ 585,721 $ 1,154,365 $ (568,644) (49%)
============ =========== =========== ============
Palmdale System
-------------------------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ------------
Revenues $ 7,965,549 $ 7,633,546 $ 332,003 4%
Operating expenses 4,514,634 4,238,651 275,983 7%
----------- ----------- ----------- ------------
Operating cash flow 3,450,915 3,394,895 56,020 2%
Management fees and allocated
overhead from Jones Intercable, Inc. 881,205 761,978 119,227 16%
Depreciation and amortization 1,765,801 1,358,228 407,573 30%
----------- ----------- ----------- ------------
Operating income $ 803,909 $ 1,274,689 $ (470,780) (37%)
=========== =========== =========== ============
Total
-----------------------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ------------
Revenues $22,166,611 $21,138,684 $ 1,027,927 5%
Operating expenses 12,159,234 11,733,343 425,891 4%
----------- ----------- ----------- ------------
Operating cash flow 10,007,377 9,405,341 602,036 6%
Management fees and allocated
overhead from Jones Intercable, Inc. 2,451,333 2,109,915 341,418 16%
Depreciation and amortization 6,166,414 4,866,372 1,300,042 27%
----------- ----------- ----------- ------------
Operating income $ 1,389,630 $ 2,429,054 $(1,039,424) (43%)
=========== =========== =========== ============
10
For the Six Months Ended June 30:
Albuquerque System
--------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ----------
Revenues $27,681,131 $26,253,572 $ 1,427,559 5%
Operating expenses 15,048,723 14,451,399 597,324 4%
----------- ----------- ----------- ----------
Operating cash flow 12,632,408 11,802,173 830,235 7%
Management fees and allocated
overhead from Jones Intercable, Inc. 2,978,588 2,843,781 134,807 5%
Depreciation and amortization 8,599,005 6,933,472 1,665,533 24%
----------- ----------- ----------- ----------
Operating income $ 1,054,815 $ 2,024,920 $ (970,105) (48%)
=========== =========== =========== ==========
Palmdale System
---------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ----------
Revenues $15,397,922 $14,596,337 $ 801,585 5%
Operating expenses 8,618,808 8,235,809 382,999 5%
----------- ----------- ----------- ----------
Operating cash flow 6,779,114 6,360,528 418,586 7%
Management fees and allocated
overhead from Jones Intercable, Inc. 1,656,674 1,582,200 74,474 5%
Depreciation and amortization 3,425,943 2,731,447 694,496 25%
----------- ----------- ----------- ----------
Operating income $ 1,696,497 $ 2,046,881 $ (350,384) (17%)
=========== =========== =========== ==========
Total
--------------------------------------------------
1998 1997 Inc/(Dec) % Inc/(Dec)
----------- ----------- ----------- ----------
Revenues $43,079,053 $40,849,909 $ 2,229,144 5%
Operating expenses 23,667,531 22,687,208 980,323 4%
----------- ----------- ----------- ----------
Operating cash flow 19,411,522 18,162,701 1,248,821 7%
Management fees and allocated
overhead from Jones Intercable, Inc. 4,635,262 4,425,981 209,281 5%
Depreciation and amortization 12,024,948 9,664,919 2,360,029 24%
----------- ----------- ----------- ----------
Operating income $ 2,751,312 $ 4,071,801 $(1,320,489) (32%)
=========== =========== =========== ==========
Revenues in the Albuquerque System and the Palmdale System increased
$1,027,927, or approximately 5 percent, to $22,166,611 for the three months
ended June 30, 1998 from $21,138,684 for the comparable period in 1997.
Revenues increased $2,229,144, or approximately 5 percent, to $43,079,053 for
the six months ended June 30, 1998 from $40,849,909 for the comparable period in
1997. These increases in revenues were due primarily to basic service rate
increases and an increase in basic subscribers. Basic service rate increases
accounted for approximately 63 percent and 68 percent of the increase in
revenues for the three and six months ended June 30, 1998. The increase in the
number of basic subscribers accounted for approximately 24 percent and 27
percent of the increases in revenues for the three and six months ended June 30,
1998. Basic subscribers increased 2,549 subscribers, or approximately 2
percent, to 178,872
11
subscribers for the six months ended June 30, 1998, from 176,323 subscribers for
the comparable period in 1997. No other individual factor significantly affected
the increase in revenues.
Operating expenses consist primarily of costs associated with the operation
and administration of the Venture's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.
Operating expenses in the Albuquerque System and the Palmdale System
increased $425,891, or approximately 4 percent, to $12,159,234 for the three
months ended June 30, 1998 from $11,733,343 for the comparable period in 1997.
Operating expenses increased $980,323, or approximately 4 percent, to
$23,667,531 for the six months ended June 30, 1998 from $22,687,208 for the
comparable period in 1997. The increases in operating expenses were primarily
due to increases in programming costs and advertising sales costs. No other
individual factor contributed significantly to the increase in operating
expenses. Operating expenses represented 55 percent of revenues for the three
and six months ended June 30, 1998 and 56 percent of revenues for the three and
six months ended June 30, 1997.
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
$602,036, or approximately 6 percent, to $10,007,377 for the three months ended
June 30, 1998 from $9,405,341 for the comparable period in 1997. Operating cash
flow increased $1,248,821, or approximately 7 percent, to $19,411,522 for the
six months ended June 30, 1998 from $18,162,701 for the comparable period in
1997. These increases were due to the increases in revenues exceeding the
increases in operating expenses.
Management fees and allocated overhead from the General Partner increased
$341,418, or approximately 16 percent, to $2,451,333 for the three months ended
June 30, 1998 from $2,109,915 for the comparable period in 1997. This increase
was primarily due to the timing of certain expenses allocated from Jones
Intercable, Inc. Management fees and allocated overhead from the General
Partner increased $209,281, or approximately 5 percent, to $4,635,262 for the
six months ended June 30, 1998 from $4,425,981 for the comparable period in
1997. This increase was primarily due to the increases in revenues, upon which
such management fees and allocations are based.
Depreciation and amortization expense increased $1,300,042, or
approximately 27 percent, to $6,166,414 for the three months ended June 30, 1998
from $4,866,372 for the comparable period in 1997. Depreciation and amortization
expense increased $2,360,029, or approximately 24 percent, to $12,024,948 for
the six months ended June 30, 1998 from $9,664,919 for the comparable period in
1997. These increases were due to a change in the estimated lives of certain
assets.
The Venture's operating income decreased $1,039,424, or approximately 43
percent, to $1,389,630 for the three months ended June 30, 1998 from $2,429,054
for the comparable period in 1997. The Venture's operating income decreased
$1,320,489, or approximately 32 percent, to $2,751,312, for the six months ended
June 30, 1998 compared to $4,071,801 for the comparable period in 1997. These
decreases were due to the increases in management fees and allocated overhead
from the General Partner and depreciation and amortization expense exceeding the
increases in cash flow.
Interest expense increased $11,601 to $2,740,844 for the three months ended
June 30, 1998 from $2,729,243 for the comparable period in 1997. Interest
expense decreased $4,549 to $5,415,956 for the six months ended June 30, 1998
from $5,420,505 for the comparable period in 1997.
The Venture recognized a gain of $147,792,730 related to the sale of the
Albuquerque System in June 1998. No similar gain was recognized in the first
six months of 1997.
The Venture reported net income of $110,533,019 for the three months ended
June 30, 1998 compared to a net loss of $477,878 for the comparable period in
1997. The Venture reported net income of $109,502,993 for the six months ended
June 30, 1998 compared to a net loss of $1,203,571 for the comparable period in
1997. These changes were primarily due to the gain on the sale of the
Albuquerque System.
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PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The sale of the Albuquerque System was subject to the approval of the holders of
a majority of the limited partnership interests of the Partnership. Limited
partners of record at the close of business on March 15, 1998 were entitled to
notice of, and to participate in, this vote of limited partners. Following are
the results of the vote of the limited partners for the Albuquerque System sale:
No. of
Interests Approved Against Abstained Did Not Vote
Entitled to --------------- ------------- ------------ ----------------
Vote No. % No. % No. % No. %
----------- --- --- --- --- --- --- --- ---
Albuquerque System Sale 237,339 147,257 62.1 3,245 1.3 2,799 1.2 84,038 35.4
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 June 30, 1998 reported that on June 30, 1998,
the Venture sold the Albuquerque System for a sales price of $222,963,267
to Jones Communications of New Mexico, Inc., an indirect subsidiary of
Jones Intercable, Inc., the General Partner.
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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-D, 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, 1998
14