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, 1999.
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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 .
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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. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
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Address of principal executive office
(215) 665-1700
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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.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
June 30, December 31,
ASSETS 1999 1998
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Proceeds from sale in escrow $ 2,672,355 $ 2,604,000
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Total assets $ 2,672,355 $ 2,604,000
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LIABILITIES AND PARTNERS' CAPITAL
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LIABILITIES:
Accounts payable and accrued liabilities $ 2,127,179 $ 582,822
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Total liabilities $ 2,127,179 $ 582,822
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PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Distributions (29,514,625) (29,514,625)
Accumulated earnings 30,004,159 30,018,919
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490,534 505,294
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Limited Partners-
Net contributed capital (104,000 units outstanding at
June 30, 1999 and December 31, 1998) 44,619,655 44,619,655
Distributions (140,543,875) (140,543,875)
Accumulated earnings 95,978,862 97,440,104
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54,642 1,515,884
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Total liabilities and partners' capital $ 2,672,355 $ 2,604,000
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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 STATEMENTS OF OPERATIONS
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For the Three Months Ended For the Six Months Ended
June 30, June 30,
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1999 1998 1999 1998
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REVENUES $ - $10,077,189 $ - $19,985,317
COSTS AND EXPENSES:
Operating expenses - 5,543,227 - 10,994,187
Management fees and allocated overhead
from General Partner - 1,108,615 - 2,172,751
Depreciation and amortization - 1,867,500 - 3,664,470
------------ ----------- ----------- -----------
OPERATING INCOME - 1,557,847 - 3,153,909
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OTHER INCOME (EXPENSE):
Interest expense (36,148) (412,043) (69,813) (819,814)
Interest income on escrowed proceeds 29,295 - 58,590 -
Other, net (732,406) (425,797) (1,464,779) (368,087)
----------- ----------- ----------- -----------
Total other income
(expense), net (739,259) (837,840) (1,476,002) (1,187,901)
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NET INCOME (LOSS) $ (739,259) $ 720,007 $(1,476,002) $ 1,966,008
============ =========== =========== ===========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ (7,393) $ 7,200 $ (14,760) $ 19,660
============ =========== =========== ===========
Limited Partners $ (731,866) $ 712,807 $(1,461,242) $ 1,946,348
============ =========== =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (7.04) $ 6.85 $ (14.05) $ 18.71
============ =========== =========== =============
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.
3
CABLE TV FUND 12-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Six Months Ended
June 30,
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1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,476,002) $1,966,008
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization - 3,664,470
Decrease (increase) in trade receivables (68,355) 799,967
Increase in deposits, prepaid expenses and
deferred charges - (493,557)
Increase (decrease) in accounts payable and accrued liabilities
and subscriber prepayments 1,544,357 (64,141)
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Net cash provided by operating activities - 5,872,747
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net - (2,623,298)
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Net cash used in investing activities - (2,623,298)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt - (2,136,588)
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Net cash used in financing activities - (2,136,588)
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Increase in cash - 1,112,861
Cash, beginning of period - 2,047,098
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Cash, end of period $ - $3,159,959
============ ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 818,500
============ ==========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 12-A, LTD.
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(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 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, 1999 and December 31, 1998 and its Statements of
Operations for the three and six month periods ended June 30, 1999 and 1998 and
its Statements of Cash Flows for the six month periods ended June 30, 1999 and
1998.
The Partnership owned and operated the cable television systems serving
areas in and around Fort Myers, Florida, until their sale in July 1998. The
Partnership also owned and operated the cable television systems serving areas
in and around Lake County, Illinois (the "Lake County System") and Orland Park
and Park Forest, Illinois (the "Orland Park System"), until their sale in
December 1998. Jones Intercable, Inc., a publicly held Colorado corporation, is
the "General Partner" and manages the Partnership.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in the General Partner. As of April 7, 1999, Comcast
owned approximately 12.8 million shares of the General Partner's Class A Common
Stock and approximately 2.9 million shares of the General Partner's Common
Stock, representing approximately 37% of the economic interest and 47% of the
voting interest in the General Partner. Also on that date, Comcast contributed
its shares in the General Partner to Comcast's wholly owned subsidiary, Comcast
Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9 million
shares of Common Stock of the General Partner owned by Comcast represents
approximately 57% of the outstanding Common Stock, which class of stock is
entitled to elect 75% of the Board of Directors of the General Partner. As a
result of this transaction, the General Partner is now a consolidated public
company subsidiary of Comcast Cable.
Also on April 7, 1999, the bylaws of the General Partner were amended to
establish the size of the General Partner's Board of Directors as a range from
eight to thirteen directors and the board was reconstituted so as to have eight
directors and the following directors of the General Partner resigned: Robert E.
Cole, Josef J. Fridman, James J. Krejci, James B. O'Brien, Raphael M. Solot,
Robert Kearney, Howard O. Thrall, Siim Vanaselja, Sanford Zisman and Glenn R.
Jones. In addition, Donald L. Jacobs resigned as a director elected by the
holders of Class A Common Stock and was elected by the remaining directors as a
director elected by the holders of Common Stock. The remaining directors elected
the following persons to fill the vacancies on the board created by such
resignations: Ralph J. Roberts, Brian L. Roberts, John R. Alchin, Stanley Wang
and Lawrence S. Smith. All of the newly elected directors, with the exception of
Mr. Jacobs, are officers of Comcast. Also on April 7, 1999, the following
executive officers of the General Partner resigned: Glenn R. Jones, James B.
O'Brien, Ruth E. Warren, Kevin P. Coyle, Cynthia A. Winning, Elizabeth M.
Steele, Wayne H. Davis and Larry W. Kaschinske. The following persons were
appointed as executive officers of the General Partner on April 7, 1999: Ralph
J. Roberts, Brian L. Roberts, Lawrence S. Smith, John R. Alchin and Stanley
Wang.
Comcast is principally engaged in the development, management and
operation of broadband cable networks and in the provision of content through
programming investments. Comcast Cable is principally engaged in the
development, management and operation of broadband cable networks. The address
of Comcast's principal office is 1500 Market Street, Philadelphia, Pennsylvania
19102-2148, which is also now the address of the General Partner's principal
office. The address of Comcast Cable's principal office is 1201 Market Street,
Suite 2201, Wilmington, Delaware 19801.
(2) On December 4, 1998, the Partnership sold the Lake County System and the
Orland Park System, its only remaining operating assets, to an unaffiliated
party for an aggregate sales price of $86,000,000. The Partnership repaid all of
its indebtedness, paid a brokerage fee to The Intercable Group, Ltd., a
subsidiary of the General Partner, settled working capital adjustments,
deposited $2,604,000 into an indemnity escrow account and distributed the
remaining net sale proceeds to its partners.
The $2,604,000 of the sale proceeds placed in the interest-bearing
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 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 plus interest earned on the escrowed funds will be returned to the
Partnership. From this amount, the Partnership will pay its remaining
liabilities, which totaled $2,127,179 at June 30, 1999, it will retain funds
necessary to cover the administrative expenses of the Partnership and it will
then distribute the balance, if any, to the Partnership's partners. Any such
distribution would be made 75 percent to the limited partners of record as of
December 4, 1998 and 25 percent to the General Partner. The Partnership will
continue in existence at least until any amounts remaining from the indemnity
escrow account have been distributed.
Although the sale of the Lake County System and the Orland Park System
represented the sale of the only remaining operating assets of the Partnership,
the Partnership will not be dissolved until all proceeds from escrow have been
distributed and the pending litigation in which the Partnership is a named
defendant has been resolved and terminated (See Part II, Item 1).
(3) The General Partner manages the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the three and six month periods ended June 30, 1998 were $503,859 and
$999,266, respectively. The General Partner has not received and will not
receive a management fee after December 4, 1998.
The Partnership will continue to reimburse the General Partner for certain
administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel. Such personnel provide administrative,
accounting, tax, legal and investor relations services to the Partnership. Such
services, and their related costs, are necessary to the administration of the
Partnership. Reimbursements by the Partnership to the General Partner for
overhead and administrative expenses for the three and six month periods ended
June 30, 1999 were $14,541 and $25,955, respectively, compared to $604,756 and
$1,173,485, respectively, for the similar 1998 periods.
5
CABLE TV FUND 12-A, LTD.
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(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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On December 4, 1998, the Partnership sold the Lake County System and the
Orland Park System, its only remaining operating assets, to an unaffiliated
party for an aggregate sales price of $86,000,000. The Partnership repaid all of
its indebtedness, paid a brokerage fee to The Intercable Group, Ltd., settled
working capital adjustments, deposited $2,604,000 into an indemnity escrow
account and distributed the remaining net sale proceeds to its partners.
The $2,604,000 of the sale proceeds placed in the interest-bearing
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 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 plus interest earned on the escrowed funds will be returned to the
Partnership. From this amount, the Partnership will pay its remaining
liabilities, which totaled $2,127,179 at June 30, 1999, it will retain funds
necessary to cover the administrative expenses of the Partnership and it will
then distribute the balance, if any, to the Partnership's partners. Any such
distribution would be made 75 percent to the limited partners of record as of
December 4, 1998 and 25 percent to the General Partner. The Partnership will
continue in existence at least until any amounts remaining from the indemnity
escrow account have been distributed.
Although the sale of the Lake County System and the Orland Park System
represented the sale of the only remaining operating assets of the Partnership,
the Partnership will not be dissolved until all proceeds from escrow have been
distributed and the pending litigation in which the Partnership is a named
defendant has been resolved and terminated (See Part II, Item 1).
Because the Partnership has sold all of its assets and further
distributions, if any, will be made to the limited partners of record as of the
closing date of the sale of the Partnership's last remaining cable television
system, new limited partners would not be entitled to any distributions from the
Partnership and transfers of limited partnership interests would have no
economic or practical value. The General Partner therefore has determined, in
accordance with the authority granted to it under Section 3.5 of the
Partnership's limited partnership agreement, that it will not process any
transfers of limited partnership interests in the Partnership during the
remainder of the Partnership's term.
RESULTS OF OPERATIONS
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Due to the Partnership's sale of the Orland Park System and Lake County
System on December 4, 1998, which were the Partnership's last remaining
operating assets, a discussion of results of operations would not be meaningful.
Other expense of $1,464,779 incurred in the first six months of 1999 related to
various costs associated with the sale of the Partnership's systems.
6
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
In July 1999, the General Partner, each of its subsidiaries that serve
as general partners of managed public partnerships and most of its managed
public partnerships, including the Partnership, were named defendants in a case
styled Everest Cable Investors, LLC, Everest Properties, LLC, Everest Properties
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II, LLC and KM Investments, LLC, plaintiffs v. Jones Intercable, Inc., et al.,
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defendants (Superior Court, Los Angeles County, State of California, Case No.
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C213638). Plaintiffs, all of which are affiliated with each other, are in the
business of, among other things, investing in limited partnerships that own and
operate cable television systems. Plaintiffs allege that one of the plaintiffs
has been a limited partner or has obtained a valid power-of-attorney from a
limited partner in each of the General Partner's managed public partnerships and
that they had formed a coordinated plan amongst themselves to acquire up to 4.9%
of the limited partnership interests in each of the General Partner's managed
public partnerships during the latter half of 1996. Plaintiffs' complaint
alleges that they were frustrated in this purpose by the General Partner's
refusal to provide plaintiffs with lists of the names and addresses of the
limited partners of the General Partner's managed public partnerships. The
complaint alleges that the General Partner's actions constituted a breach of
contract, a breach of the General Partner's implied covenant of good faith and
fair dealing owed to the plaintiffs as limited partners, a breach of the General
Partner's fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege that the
General Partner's failure to provide them with the partnership lists prevented
them from making their tender offers and the plaintiffs claim that they have
been injured by such action in an amount to be proved at trial, but not less
than $17 million. Given the fact that this case was only recently filed and that
the time for the General Partner's response to the complaint has not yet
expired, the General Partner has not yet responded to this complaint. The
General Partner believes, however, that it and the defendant subsidiaries and
managed public partnerships have defenses to the plaintiffs' claims for relief,
and the General Partner intends to defend this lawsuit vigorously both on its
own behalf and on behalf of its subsidiaries and its managed public
partnerships.
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 April 7, 1999, filed on April 15,
1999, reported that on April 7, 1999, Comcast Corporation completed
the acquisition of a controlling interest in the General Partner.
7
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/ Lawrence S. Smith
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Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
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Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: August 16, 1999
8