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FORM 10-K 405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________ to _____________
Commission file number: 0-13807
CABLE TV FUND 12-B, LTD.
(Exact name of registrant as specified in its charter)
Colorado 84-0969999
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(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited
Partnership Interests
Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes /x/ No / /
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. /x/
DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 12-B, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 12 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). Cable TV Fund 12-A, Ltd. ("Fund 12-A"), Cable TV Fund
12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") are the
other partnerships that were formed pursuant to that Program. In 1986, the
Partnership, Fund 12-C and Fund 12-D formed a general partnership known as
Cable TV Fund 12-BCD Venture (the "Venture"), in which the Partnership owns a 9
percent interest, Fund 12-C owns a 15 percent interest and Fund 12-D owns a 76
percent interest. The Partnership and the Venture were formed for the purpose
of acquiring and operating cable television systems.
The Partnership directly owns a cable television system serving
Augusta, Georgia (the "Augusta System"). The Venture owns the cable television
systems serving Palmdale, Lancaster and Rancho Vista and the military
installation of Edwards Airforce Base, all in California (the
"Palmdale/Lancaster System"); Albuquerque, New Mexico (the "Albuquerque
System") and Tampa, Florida (the "Tampa System"). See Item 2. The Augusta
System, Palmdale/Lancaster System, Albuquerque System and Tampa System may
collectively be referred to as the "Systems."
On February 22, 1995, the General Partner entered into a Purchase and
Sale Agreement (the "Agreement") with the Partnership providing for the sale by
the Partnership to the General Partner of the Augusta System. The purchase
price for the Augusta System is $141,718,000, subject to certain closing
adjustments provided by the Agreement. The purchase price represents the
average of three separate independent appraisals of the fair market value of
the Augusta System. Closing of the sale is conditioned upon a number of
conditions, including the approval of the transaction by the holders of a
majority of the Partnership's limited partnership interests. Subject to the
satisfaction of closing conditions, the transaction is expected to close during
1995.
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service,
premium service, pay-per-view programs and packages including several of these
services at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites.
Basic service also usually includes programs originated locally by the system,
which may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or
entertainment nature. FM radio signals are also frequently distributed to
subscribers as part of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The
Systems also offer a package that includes the basic service channels and the
tier services.
The Systems also offer premium services to their subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at
a cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
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The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service
on a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. In addition,
advertising sales are becoming a significant source of revenues for the
Systems. As a result of the adoption by the FCC of new rules under the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), and several rate regulation orders, the Systems' rate structures for
basic and tier programming services and equipment have been revised. See
Regulation and Legislation. At December 31, 1994, the Systems' monthly basic
service rates ranged from $7.95 to $14.25, monthly basic and tier ("basic
plus") service rates ranged from $15.00 to $23.20 and monthly premium services
ranged from $3.00 to $10.95 per premium service. Charges for additional
outlets have been eliminated, and charges for remote controls and converters
have been "unbundled" from the programming service rates. In addition, the
Partnership earns revenues from the Systems' pay-per-view programs and
advertising fees. Related charges may include a nonrecurring installation fee
that ranges from $1.99 to $50.00; however, from time to time the Systems have
followed the common industry practice of reducing or waiving the installation
fee during promotional periods. Commercial subscribers such as hotels, motels
and hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation. Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty.
For the year ended December 31, 1994, of the total fees received by the
Systems, basic service and tier service fees accounted for approximately 64% of
total revenues, premium service fees accounted for approximately 17% of total
revenues, pay-per-view fees were approximately 2% of total revenues,
advertising fees were approximately 7% of total revenues and the remaining 10%
of total revenues came principally from equipment rentals, installation fees
and program guide sales. The Partnership is dependent upon the timely receipt
of service fees to provide for maintenance and replacement of plant and
equipment, current operating expenses and other costs of the Systems.
The Partnership's business consists of providing cable television
services to a large number of customers, the loss of any one of which would
have no material effect on the Partnership's business. Each of the Systems has
had some subscribers who later terminated the service. Terminations occur
primarily because people move to another home or to another city. In other
cases, people terminate on a seasonal basis or because they no longer can
afford or are dissatisfied with the service. The amount of past due accounts
in the Systems is not significant. The General Partner's policy with regard to
past due accounts is basically one of disconnecting service before a past due
account becomes material.
The Partnership does not depend to any material extent on the
availability of raw materials; it carries no significant amounts of inventory
and it has no material backlog of customer orders. The Partnership has no
employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development
activities relating to the provision of new services but the amount of the
Partnership's funds expended for such research and development has never been
material.
Compliance with Federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment
or otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. The Systems' franchises require that franchise fees ranging from
2% of basic revenues to 5% of gross revenues of the cable system be paid to the
governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools be
provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2 for a range of
franchise expiration dates of the Systems.)
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The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the 1992 Cable Act also made several
procedural changes to the process under which a cable operator seeks to enforce
its renewal rights which could make it easier in some cases for a franchising
authority to deny renewal. Generally, the franchising authority can finally
decide not to renew a franchise only if it finds that the cable operator has
not substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have
the financial, legal and technical ability to provide the services being
proposed for the future, or has not presented a reasonable proposal for future
service. A final decision of non-renewal by the franchising authority is
appealable in court. The General Partner and its affiliates recently have
experienced lengthy negotiations with some franchising authorities for the
granting of franchise renewals and transfers. Some of the issues involved in
recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of the Partnership to renew a franchise, or lengthy
negotiations or litigation involving the renewal process, could have an adverse
impact on the business of the Partnership.
COMPETITION. Cable television systems currently experience
competition from several sources, but two technologies, Multichannel Multipoint
Distribution Service ("MMDS") systems, commonly called wireless cable systems,
and Direct Broadcast Satellite ("DBS") systems, which distribute programming to
home satellite dishes, currently pose the greatest potential threat to the
cable television industry.
MMDS systems will likely focus on providing service to residents of
rural areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some
areas of the country, MMDS systems are now in direct competition with cable
television systems. To date, the Partnership has not lost a significant number
of subscribers, nor a significant amount of revenue, to MMDS operators
competing with its cable television systems.
DBS operators deliver premium channel services and specialized
programming to subscribers by high-powered DBS satellites on a wide-scale
basis, and two major companies began operations in 1994. Subscribers are able
to receive DBS services virtually anywhere in the United States with a rooftop
or wall-mounted antenna. In some instances, DBS systems may serve as a
complement to cable television operations by enabling cable television
operators to offer additional channels of programming without the construction
of additional cable plant. DBS companies use video compression technology to
increase the channel capacity of their satellite systems to provide a wide
variety of program services that are competitive with those of cable television
systems.
Cable television systems also compete with broadcast television,
private cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only Earth
Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings such as
condominiums, apartment complexes and private residential communities, and
TVROs are satellite receiving antenna dishes that are used by "backyard users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service,
the LMDS, sometimes referred to as cellular television, could have the
capability of delivering approximately 50 channels, or if two systems were
combined 100 channels, of video programming to a subscriber's home, which
capacity could be increased by using video compression technology. The General
Partner believes that there are not any current fully operational LMDS systems.
Although the Partnership's Systems have not yet encountered
competition from a telephone company entering into the business of providing
video services to subscribers, the Systems could potentially face competition
from telephone companies doing so. A Federal cross-ownership restriction has
historically limited
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entry into the cable television business by potentially strong competitors such
as telephone companies. This restriction, which is contained in the 1984 Cable
Act, has generally prohibited telephone companies from owning or operating
cable television systems within their own telephone service areas, but several
recent court decisions have eliminated this restriction. In addition, the FCC
is authorizing telephone companies to provide video dialtone service within
their service areas. Legislation is also pending in Congress that would permit
telephone companies to provide video programming thorough separate
subsidiaries. The General Partner cannot predict at this time to what extent
current restrictions will be modified to permit telephone companies to provide
cable television services within their own service areas in competition with
cable television systems. See Regulation and Legislation, Ownership and Market
Structure for a description of the potential participation of the telephone
industry in the delivery of cable television services. Entry into the market
by telephone companies as direct competitors of the Systems could adversely
impact the profitability of the Systems. If a telephone company were to become
a direct competitor of the Partnership in an area served by a Partnership
System, the Partnership could be at a competitive disadvantage because of the
relative financial strength of a telephone company compared to the Partnership.
Depending on a number of factors, such competition could also result in cable
television systems providing the same types of services now provided by the
telephone industry.
The FCC has established a new wireless telecommunications service
known as Personal Communications Service ("PCS"). It is envisioned that PCS
would provide portable non-vehicular mobile communications services similar to
that available from cellular telephone companies, but at a lower cost. PCS
would be delivered by placing numerous microcells in a particular area to be
covered, accessible to both residential and business customers. Because of the
need to link the many microcells necessary to deliver this service
economically, many parties are investigating integration of PCS with cable
television operations. Several cable television multiple systems operators and
others, including affiliates of the General Partner, hold or have requested
experimental licenses from the FCC to test PCS technology. The FCC has
established spectrum auctioning procedures for PCS licenses and the licenses
are being auctioned in a series of auction events.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an
"overbuild"), with potential loss of revenues to the operator of the original
cable television system. The Systems currently face no direct competition from
other cable television operators.
COMPETITION FOR SUBSCRIBERS IN THE PARTNERSHIP'S SYSTEMS. Following
is a summary of current competition from DBS, MMDS, SMATV and TVRO operators in
the Systems' franchise areas:
Augusta System There are no MMDS or SMATV operators in the system's
service area. There are four TVRO operators that provide
service mostly to areas not serviced by the system. DBS
services provide minimal competition at this time.
Albuquerque System There is one MMDS operator who has not as yet launched,
but is believed to be in the position to launch, a 15
channel MMDS service in the system's service area. There
are two SMATV operators that provide minimal competition.
One operator serves about 2,000 residential and mobile
home park units, and the second serves 3 apartment
complexes of approximately 1,000 units. Albuquerque was
a test market for DBS, and approximately 100
customers have been lost to DBS.
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Palmdale/Lancaster System There are no MMDS operators in the system's service area.
There are 6 SMATV operators that service 7,000 units and
8 TVRO operators that provide moderate competition. DBS
marketing has begun in the Palmdale/Lancaster System's
service area, but DBS provides minimal competition at
this time.
Tampa System There is one MMDS operator, a few SMATV operators that
primarily serve multi-unit dwellings and several TVRO
dealers in the Tampa System's service area. These
operators provide minimal competition. DBS marketing has
begun in the Tampa System's service area but provides
minimal competition at this time.
REGULATION AND LEGISLATION. The cable television industry is
regulated through a combination of the Federal Communications Commission
("FCC"), some state governments, and most local governments. In addition, the
Copyright Act of 1976 imposes copyright liability on all cable television
systems. Cable television operations are subject to local regulation insofar
as systems operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, are subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allows the
FCC to regulate rates for non-basic service tiers other than premium services
in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
In compliance with these rules, the General Partner reduced rates
charged for certain regulated services effective September 1, 1993. These
reductions resulted in some decrease in revenues and operating income before
depreciation and amortization; however, the decrease was not as severe as
originally anticipated. The General Partner has undertaken actions to mitigate
a portion of these reductions primarily through (a) new service offerings in
some systems, (b) product re-marketing and re-packaging and (c) marketing
efforts directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory
scheme with respect to rates. The FCC's new regulations generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September
30, 1992 rates, adjusted for inflation, channel modifications, equipment costs,
and increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established
an interim industry-wide 11.25% permitted rate of return, and requested
comments on whether this standard and other interim cost-of-service standards
should be made permanent. The FCC also established a presumption that
acquisition costs above a system's book value should be excluded from the rate
base, but the FCC will consider individual showings to rebut this presumption.
The need for special rate relief will also be considered by the FCC
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if an operator demonstrates that the rates set by a cost-of-service proceeding
would constitute confiscation of investment, and that, absent a higher rate,
the return necessary to operate and to attract investment could not be
maintained. The FCC will establish a uniform system of accounts for operators
that elect cost-of-service rate regulation, and the FCC has adopted affiliate
transaction regulations. After a rate has been set pursuant to a
cost-of-service showing, rate increases for regulated services will be indexed
for inflation, and operators will also be permitted to increase rates in
response to increases in costs beyond their control, such as taxes and
increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
Partnership and the Venture elected to file cost-of-service showings in all of
their systems. The General Partner anticipates no further reduction in
revenues or operating income before depreciation and amortization resulting
from the FCC's rate regulations. At this time, the regulatory authorities have
not approved the cost-of-service showings.
Among other issues addressed by the FCC in its February rate orders
was the treatment of packages of a la carte channels. The FCC in its rate
regulations adopted April 1, 1993, exempted from rate regulation the price of
packages of a la carte channels upon the fulfillment of certain conditions. On
November 10, 1994, the FCC reversed its policy regarding rate regulation of
packages of a la carte services. A la carte services that are offered in a
package will now be subject to rate regulation by the FCC, although the FCC
indicated that it cannot envision circumstances in which any price for a
collective offering of premium channels that have traditionally been offered on
a per-channel basis would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge
subscribers for new cable programming services. In addition to the present
formula for calculating the permissible rate for new services, the FCC
instituted a three-year flat fee mark-up plan for charges relating to new
channels of cable programming services. Commencing on January 1, 1995,
operators may charge for new channels of cable programming services added after
May 14, 1994 at a rate of up to 20 cents per channel, but may not make
adjustments to monthly rates totaling more than $1.20 plus an additional 30
cents for programming license fees per subscriber over the first two years of
the three-year period for these new services. Operators may charge an
additional 20 cents in the third year only for channels added in that year plus
the costs for the programming. Operators electing to use the 20 cent per
channel adjustment may not also take a 7.5% mark-up on programming cost
increases, which is permitted under the FCC's current rate regulations. The
FCC has requested further comment as to whether cable operators should continue
to receive the 7.5% mark-up on increases in license fees on existing
programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they elect
so long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators
do not remove programming services from existing tiers and offer them on the
NPT.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on
June 27, 1994 and remanded the case to the district court for further
development of a factual record. The Supreme Court's majority determined that
the must-carry rules were content neutral, but that it was not yet proven that
the rules were needed to preserve the economic health of the broadcasting
industry. In the interim, the must-carry rules will remain in place during the
pendency of the proceedings in district court. In 1993, a Federal district
court for the District of Columbia upheld provisions of the 1992 Cable Act
concerning rate regulation, retransmission consent, restrictions on vertically
integrated cable television operators and programmers, mandatory carriage of
programming on commercial leased channels and public, educational and
governmental access channels and the exemption for municipalities from civil
damage liability arising out of local regulation of cable services. The 1992
Cable Act's provisions providing for multiple ownership limits for cable
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operators and advance notice of free previews for certain programming services
have been found unconstitutional. In November 1993, the United States Court of
Appeals for the D.C. Circuit held that the FCC's regulations implemented
pursuant to Section 10 of the 1992 Cable Act, which permit cable operators to
ban indecent programming on public, educational or governmental access channels
or leased access channels, were unconstitutional, but the court has agreed to
reconsider its decision. All of these decisions construing provisions of the
1992 Cable Act and the FCC's implementing regulations have been or are expected
to be appealed.
Ownership and Market Structure. The FCC rules and Federal law
generally prohibit the direct or indirect common ownership, operation, control
or interest in a cable television system, on the one hand, and a local
television broadcast station whose television signal reaches any portion of the
community served by the cable television system, on the other hand. The FCC
recently lifted its ban on the cross-ownership of cable television systems by
broadcast networks. The FCC revised its regulations to permit broadcast
networks to acquire cable television systems serving up to 10% of the homes
passed in the nation, and up to 50% of the homes passed in a local market.
Neither the Partnership nor the General Partner has any direct or indirect
ownership, operation, control or interest in a television broadcast station, or
a telephone company, and they are thus presently unaffected by the
cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. Several Federal district courts have struck down the 1984
Cable Act's telco/cross-ownership provision as facially invalid and
inconsistent with the First Amendment. The United States Courts of Appeals for
the Fourth and the Ninth Circuits have upheld the appeals of two of these
district court decisions, and the United States Justice Department is expected
to request the United States Supreme Court to review these two decisions. This
Federal cross-ownership rule is particularly important to the cable industry
since these telephone companies already own certain facilities needed for cable
television operation, such as poles, ducts and associated rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies
to offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint marketing
arrangements. In its video dialtone order, which was part of a comprehensive
proceeding examining whether and under what circumstances telephone companies
should be allowed to provide cable television services, including video
programming to their customers, the FCC concluded that neither the 1984 Cable
Act nor its rules apply to prohibit the interexchange carriers (i.e., long
distance telephone companies such as AT&T) from providing such services to
their customers. Additionally, the FCC also concluded that where a local
exchange carrier ("LEC") makes its facilities available on a common carrier
basis for the provision of video programming to the public, the 1984 Cable Act
does not require the LEC or its programmer customers to obtain a franchise to
provide such service. This aspect of the FCC's video dialtone order was upheld
on appeal by the United States Court of Appeals for the D.C. Circuit. The FCC
recently issued an order reaffirming its initial decision, and this order has
been appealed. Because cable operators are required to bear the costs of
complying with local franchise requirements, including the payment of franchise
fees, the FCC's decision could place cable operators at a competitive
disadvantage vis-a-vis services offered on a common carrier basis over local
telephone company provided facilities. In its Reconsideration Order, the FCC,
among other actions, refused to require telephone companies to justify cost
allocations prior to the construction of video dialtone facilities, and
indicated that it would provide guidance on costs that must be included in
proposed video dialtone tariffs. The FCC also established dual Federal/state
jurisdiction over video dialtone services based on the origination point of the
video dialtone programming service.
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In a separate proceeding, the FCC has proposed to increase the numerical limit
on the population of areas qualifying as "rural" and in which LECs can provide
cable service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of
Proposed Rulemaking in its video dialtone docket. The FCC tentatively
concluded that it should not ban telephone companies from providing their own
video programming over their video dialtone platforms in those areas in which
the cable/telephone cross-ownership rules have been found unconstitutional.
The FCC requested comments on this issue and on further refinements of its
video dialtone regulatory framework concerning, among other issues, telephone
programmer affiliation standards, the establishment of structural safeguards to
prevent cross-subsidization of video dialtone and programming activities, and
the continuation of the FCC's ban prohibiting telephone companies from
acquiring cable systems within their telephone service areas for the provision
of video dialtone services. The FCC will also consider whether a LEC offering
video dialtone service must secure a local franchise if that LEC also engages
in the provision of video programming carried on its video dialtone platform.
The FCC has also proposed to broadly interpret its authority to waive the
cable/telephone cross-ownership ban upon a showing by telephone companies that
they comply with the safeguards which the FCC establishes as a condition of
providing video programming.
A number of bills that would have permitted telephone companies to
provide cable television service within their own service areas were considered
during the last Congress, but none were adopted. These bills would have
permitted the provision of cable television service by telephone companies in
their own service areas conditioned on the establishment of safeguards to
prevent cross-subsidization between telephone and cable television operations
and the provision of telecomunication services by cable television systems.
Similar legislation is expected to be considered by Congress during its current
session. The outcome of these FCC, legislative or court proceedings and
proposals or the effect of such outcome on cable system operations cannot be
predicted.
ITEM 2. PROPERTIES
The cable television systems owned by the Partnership and the Venture
at December 31, 1994 are described below:
FUND SYSTEM ACQUISITION DATE
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Cable TV Fund 12-B, Ltd. Augusta System August 1985
Cable TV Fund 12-B, Ltd., Cable TV Palmdale/Lancaster System April 1986
Fund 12-C, Ltd. and Cable TV Fund Albuquerque System August 1986
12-D, Ltd. own a 9%, 15% and 76% Tampa System December 1986
interest, respectively, through
their interest in Cable TV Fund
12-BCD Venture
The following sets forth (i) the monthly basic plus service rates
charged to subscribers, (ii) the number of basic subscribers and pay units and
(iii) the range of franchise expiration dates for the Systems. The monthly
basic service rates set forth herein represent, with respect to systems with
multiple headends, the basic service rate charged to the majority of the
subscribers within the system. While the charge for basic plus service may
have increased in some cases in 1993 as a result of the FCC's rate regulations,
overall revenues may have decreased due to the elimination of charges for
additional outlets and certain equipment. In cable television systems, basic
subscribers can subscribe to more than one pay TV service. Thus, the total
number of pay services subscribed to by basic subscribers are called pay units.
As of December 31, 1994, the Partnership's system operated approximately 1,600
miles of cable plant, passing approximately 102,000 homes, representing an
approximate 68% penetration rate, and the Venture's systems operated
approximately 4,400 miles of cable plant, passing approximately 424,000 homes,
representing an approximate 55% penetration rate. Figures for numbers of
9
10
subscribers, miles of cable plant and homes passed are compiled from the
General Partner's records and may be subject to adjustments.
At December 31,
-----------------------------------------------
AUGUSTA, GEORGIA 1994 1993 1992
----------------- ------ ------ ------
Monthly basic plus service rate $23.20 $23.20 $19.95
Basic subscribers 66,337 64,173 62,730
Pay units 50,200 50,847 57,965
Franchise expiration dates range from December 1998 to October 2009.
At December 31,
-----------------------------------------------
PALMDALE/LANCASTER, CALIFORNIA 1994 1993 1992
------------------------------- ------ ------ ------
Monthly basic plus service rate $21.77 $21.77 $20.00
Basic subscribers 59,702 56,372 53,947
Pay units 46,214 39,928 39,793
Franchise expiration dates range from February 1999 to October 2005.
At December 31,
-----------------------------------------------
ALBUQUERQUE, NEW MEXICO 1994 1993 1992
------------------------ ------ ------ ------
Monthly basic plus service rate $21.35 $21.00 $20.00
Basic subscribers 106,835 98,555 92,916
Pay units 58,838 67,462 62,919
Franchise expiration dates range from January 1999 to August 2001.
The decrease in pay units between 1993 and 1994 was primarily due to the
conversion of The Disney Channel to a basic plus service.
At December 31,
-----------------------------------------------
TAMPA, FLORIDA 1994 1993 1992
--------------- ------ ------ ------
Monthly basic plus service rate $21.63 $21.63 $19.25
Basic subscribers 61,413 58,145 58,711
Pay units 50,123 47,771 45,419
The Tampa franchise expires in December 1997. In 1990, the City of Tampa
notified the Venture of its belief that the Venture was not in compliance with
certain provisions of the franchise agreement. In September 1994, the City of
Tampa and the Venture entered into a Second Amendment to Franchise Agreement
providing for modifications to the franchise agreement as full and satisfactory
resolution of the outstanding issues.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates of
the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics, Arts &
Entertainment, Black Entertainment Network, C-SPAN, The Discovery Channel,
Lifetime, Entertainment Sports Network, Home Shopping Network, Mind Extension
University, Music Television, Nickelodeon, Turner Network Television, The
Nashville Network, Video Hits One, and superstations WOR, WGN and TBS). The
Partnership's Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Cinemax, Encore, Home Box Office, Showtime
and The Movie Channel).
10
11
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1995, the approximate number of
equity security holders in the Partnership was 8,076.
11
12
Item 6. Selected Financial Data
For the Year Ended December 31,
----------------------------------------------------------------------------------
Cable TV Fund 12-B 1994 1993 1992 1991 1990
- - ------------------ -------------- -------------- -------------- -------------- --------------
Revenues $26,956,006 $26,975,209 $25,369,064 $22,434,854 $19,938,259
Depreciation and Amortization 9,380,877 8,897,796 8,415,058 8,003,545 7,055,545
Operating Income 249,558 1,816,948 1,937,255 1,205,903 1,860,690
Equity in Net Loss of Cable Television
Joint Venture (1,182,039) (1,063,449) (1,336,385) (1,636,665) (1,970,017)
Net Loss (3,368,245) (1,463,979) (2,300,652) (4,003,891) (4,556,190)
Net Loss per Limited Partnership Unit (30.03) (13.05) (20.51) (35.70) (40.62)
Weighted average number of Limited
Partnership Units outstanding 111,035 111,035 111,035 111,035 111,035
General Partner's Deficit (304,152) (270,470) (255,830) (232,823) (192,784)
Limited Partners' Capital 17,673,872 21,008,435 22,457,774 24,735,419 28,699,271
Total Assets 58,543,185 66,085,025 70,507,101 74,521,239 77,924,307
Debt 39,959,041 43,831,074 46,797,508 48,725,591 45,232,743
General Partner Advances 112,495 163,266 289,033 215,769 2,067,861
For the Year Ended December 31,
-----------------------------------------------------------------------------------
Cable TV Fund 12-BCD 1994 1993 1992 1991 1990
- - -------------------- -------------- -------------- -------------- -------------- ---------------
Revenues $ 92,823,076 $ 89,131,530 $ 83,567,527 $78,049,505 $69,945,109
Depreciation & Amortization 24,658,274 25,651,237 26,764,820 30,793,053 29,972,282
Operating Income (Loss) 441,284 900,949 (1,087,963) (4,930,588) (6,260,721)
Net Loss (12,876,242) (11,584,416) (14,884,365) (17,828,600) (21,459,885)
General Partners' Capital (Deficit) (18,605,751) (5,729,509) 5,854,907 20,739,272 38,567,872
Total Assets 170,675,914 169,670,552 175,554,620 185,834,366 196,991,456
Debt 180,402,748 167,698,697 160,440,488 156,131,618 151,051,428
Jones Intercable, Inc. Advances 616,810 188,430 511,646 4,606,840 1,228,418
12
13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CABLE TV FUND 12-B
Results of Operations
1994 Compared to 1993 -
Revenues in the Augusta System decreased $19,203, or less than 1
percent, from $26,975,209 in 1993 to $26,956,006 in 1994. This decrease was
due to the system's compliance with basic rate regulations issued by the FCC in
regard to the 1992 Cable Act that became effective September 1, 1993. The
decrease in revenues would have been greater but for the addition of 2,164
basic subscribers. Basic subscribers totalled 64,173 and 66,337 at December
31, 1993 and 1994, respectively. No other individual factor was significant to
the decrease in revenues.
Operating, general and administrative expense increased $878,022, or
approximately 7 percent, from $13,054,665 in 1993 to $13,932,687 in 1994.
Operating, general and administrative expense represented 48 percent and 52
percent, respectively, of revenues in 1993 and 1994. Increases in programming
fees, due in part to the increase in the subscriber base, accounted for
approximately 47 percent of the increase in expenses. An increase in
advertising sales related expense accounted for approximately 17 percent of the
increase in expenses. No other individual factor contributed significantly to
the increase in operating, general and administrative expenses. Management
fees and allocated overhead from the General Partner increased $187,084, or
approximately 6 percent, from $3,205,800 in 1993 to $3,392,884 in 1994. The
increase was due to an increase in allocated expenses from the General Partner,
although management fees decreased due to the decrease in revenues, upon which
such fees are based. The General Partner has experienced increases in
expenses, including personnel costs and reregulation costs. Depreciation and
amortization increased $483,081, or approximately 5 percent, from $8,897,796 in
1993 to $9,380,877 in 1994 due to capital additions during 1993 and 1994.
Operating income decreased $1,567,390, or approximately 86 percent,
from $1,816,948 in 1993 to $249,558 in 1994 due to the decrease in revenues and
the increases in operating, general and administrative expenses, allocated
overhead from the General Partner and depreciation and amortization expense.
Operating income before depreciation and amortization decreased $1,084,309, or
approximately 10 percent, from $10,714,744 in 1993 to $9,630,435 in 1994 due to
the decrease in revenues and the increases in operating, general and
administrative expenses and allocated overhead from the General Partner.
Interest expense increased $211,907, or approximately 9 percent, from
$2,343,606 in 1993 to $2,555,513 in 1994 due to higher effective interest rates
on interest bearing obligations despite lower balances on such outstanding
obligations. Loss before equity in net loss of cable television joint venture
increased $1,785,676, from $400,530 in 1993 to $2,186,206 in 1994, primarily
due to the decrease in operating income and to the increase in interest
expense. Such losses are the result of the factors discussed above.
1993 Compared to 1992 -
Revenues in the Partnership's Augusta System increased $1,606,145, or
approximately 6 percent, from $25,369,064 in 1992 to $26,975,209 in 1993.
Basic service rate adjustments accounted for approximately 44 percent of the
increase in revenues. An increase in the subscriber base accounted for
approximately 42 percent of the increase in revenues. The Augusta System added
approximately 1,500 basic subscribers between December 31, 1992 and 1993, an
increase of 2 percent. An increase in advertising sales revenues accounted for
approximately 10 percent of the increase in revenues. No other individual
factor was significant to the increase in revenues. The increase in revenue
would have been greater but for the reduction in basic rates due to the basic
rate regulations issued by the FCC in May 1993 with which the Partnership
complied effective September 1, 1993.
Operating, general and administrative expense increased $1,002,314, or
approximately 8 percent, from $12,052,351 in 1992 to $13,054,665 in 1993.
Operating, general and administrative expense represented 48 percent of
revenues in 1993 and 1992. Increases in programming fees, due in part to the
increase in the subscriber base, accounted for approximately 55 percent of the
increase in expenses. An increase in advertising sales related expense, due in
part to the increase in advertising revenues, accounted for approximately 16
percent of the increase in expenses. No other individual factor contributed
significantly to the increase in operating, general and administrative
expenses. Management fees and allocated overhead from the General Partner
increased $241,400, or approximately 8 percent, from $2,964,400 in 1992 to
$3,205,800 in 1993. The increase was due to the increase in revenues, upon
which such fees and allocations are
13
14
based, and an increase in allocated expenses from the General Partner.
Depreciation and amortization increased $482,738, or approximately 6 percent,
from $8,415,058 in 1992 to $8,897,796 in 1993 due to capital additions during
1992 and 1993.
Operating income decreased $120,307, or approximately 6 percent, from
$1,937,255 in 1992 to $1,816,948 in 1993 due to the increases in operating,
general and administrative expense, management fees and allocated overhead from
the General Partner together with depreciation and amortization expense
exceeding the increase in revenue. Operating income before depreciation and
amortization increased $362,431, or approximately 4 percent, from $10,352,313
in 1992 to $10,714,744 in 1993 due to the increase in revenues exceeding the
increases in operating, general and administrative expenses, management fees
and allocated overhead from the General Partner.
Interest expense decreased $546,251, or approximately 19 percent, from
$2,889,857 in 1992 to $2,343,606 in 1993 due primarily to lower effective
interest rates on interest bearing obligations and a lower outstanding balance
on the Partnership's credit facility. Loss before equity in net loss of cable
television joint venture decreased $533,737, or approximately 57 percent, from
$934,267 in 1992 to $400,530 in 1993 primarily due to the decrease in interest
expense and increase in operating income. Such losses are the result of the
factors discussed above.
In addition to the Augusta System owned by it, the Partnership also
owns an approximate 9 percent interest in Cable TV Fund 12-BCD Venture (the
"Venture"). See Management's Discussion and Analysis of the Venture for
details pertaining to its operations.
Financial Condition
On February 22, 1995, the General Partner entered into a Purchase and
Sale Agreement (the "Agreement") with the Partnership, providing for the sale
by the Partnership to the General Partner of the Augusta System. The purchase
price for the Augusta System is $141,718,000, subject to certain closing
adjustments provided by the Agreement. Closing of the sale is subject to a
number of conditions, including the approval of the transaction by the holders
of a majority of the Partnership's limited partnership interests. The purchase
price represents the average of three separate independent appraisals of the
fair market value of the Augusta System. Subject to the satisfaction of
closing conditions, the transaction is expected to close during 1995. The
Partnership will retain its interest in the Venture.
During 1994, capital expenditures totaled approximately $4,035,000 in
the Partnership's Augusta System. Approximately 40 percent of these
expenditures related to the construction of service drops to subscribers'
homes. Approximately 23 percent of these expenditures related to the
construction of new cable plant. The remaining expenditures were for various
system enhancements. Funding for these expenditures was provided by cash on
hand and cash generated from operations. During 1995, the Partnership plans to
expend approximately $4,484,000 for capital additions. Approximately
$1,423,000, or approximately 32 percent, will be used for the construction of
service drops to subscribers homes. Approximately $970,000, or approximately
22 percent, will be used to construct new cable plant. The remainder of the
anticipated expenditures is for various enhancements in the Augusta System.
Funding for these expenditures is expected to be provided by cash on hand and
cash generated from operations. Depending upon the timing of the closing of
the sale of the Augusta System to the General Partner discussed above, the
Partnership likely will make only the portion of the budgeted capital
expenditures scheduled to be made during the Partnership's continued ownership
of the Augusta System.
The balance outstanding on the Partnership's credit facility as of
December 31, 1994 was $39,770,000. On December 31, 1991, the then outstanding
principal balance of $48,500,000 was converted to a term loan payable in 12
consecutive quarterly installments beginning March 31, 1992 and ending December
31, 1994. The Partnership paid $3,880,000 in such installments during 1994.
In December 1994, the General Partner refinanced the credit facility to extend
the life of the term loan to December 31, 1999. The term loan will continue to
be payable in consecutive quarterly installments. Interest on this agreement
is at the Partnership's option of the base rate plus 1/2 percent, where base
rate is defined as the greater of the Prime Rate or the Federal Funds Rate plus
1/2 percent, or the CD rate plus 1-5/8 percent or the London Interbank Offered
Rate plus 1-1/2 percent. This loan is expected to be paid in full upon
closing of the sale of the Augusta System to the General Partner as discussed
above.
In addition to the Augusta System, which is 100 percent owned, the
Partnership owns an approximate 9 percent interest in the Venture. The
Partnership's investment in the Venture, accounted for under the equity method,
decreased by $1,182,039 in 1994 to a deficit of $1,804,126. This decrease
represents the Partnership's proportionate share of losses generated by the
Venture. These losses are expected to continue during the coming year.
14
15
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates.
The Partnership has filed a cost-of-service showing for the Augusta
System and thus anticipates no further reductions in rates. The
cost-of-service showing has not yet received final approval from franchising
authorities, however, and there can be no assurance that the Partnership's
cost-of-service showing will prevent further rate reductions until such final
approval is received. See Item 1 for further discussion of the provisions of
the 1992 Cable Act and the FCC regulations promulgated thereunder.
15
16
CABLE TV FUND 12-BCD VENTURE
Results of Operations
1994 Compared to 1993
Revenues of Cable TV Fund 12-BCD Venture (the "Venture") increased
$3,691,546, or approximately 4 percent, from $89,131,530 in 1993 to $92,823,076
in 1994. Between December 31, 1993 and 1994, the Venture added 14,878 basic
subscribers, an increase of approximately 7 percent. This increase in basic
subscribers accounted for approximately 37 percent of the increase in revenues.
Increases in advertising sales revenue accounted for approximately 28 percent
of the increase in revenues. Increases in premium service and pay-per-view
revenues accounted for approximately 27 percent of the increase. The increase
in revenues would have been greater but for the reduction in basic rates due to
new basic rate regulations issued by the FCC in May 1993 with which the Venture
complied effective September 1, 1993. No other single factor significantly
affected the increase in revenues.
Operating, general and administrative expenses in the Venture's
systems increased $4,057,270, or approximately 8 percent, from $52,073,984 in
1993 to $56,131,254 in 1994. Operating, general and administrative expense
represented 58 percent and 60 percent of revenue in 1993 and in 1994,
respectively. The increase in operating, general and administrative expense
was due to increases in subscriber related costs, programming fees and
marketing related costs. No other single factor significantly affected the
increase in operating, general and administrative expenses. Management fees
and allocated overhead from Jones Intercable, Inc. increased $1,086,904, or
approximately 10 percent, from $10,505,360 in 1993 to $11,592,264 in 1994 due
to the increase in revenues, upon which such fees and allocations are based,
and an increase in allocated expenses from Jones Intercable, Inc. Depreciation
and amortization expense decreased $992,963, or approximately 4 percent, from
$25,651,237 in 1993 to $24,658,274 in 1994. The decrease is due to the
maturation of the Venture's asset base.
The Venture's operating income decreased $459,665 or approximately 51
percent, from $900,949 in 1993 to $441,284 in 1994. This decrease is the
result of increases in operating, general and administrative expenses and
management fees and allocated overhead from Jones Intercable, Inc. exceeding
the increases in revenue and offset by the decreases in depreciation and
amortization expenses. Operating income before depreciation and amortization
decreased $1,452,628, or approximately 5 percent, from $26,552,186 in 1993 to
$25,099,558 in 1994. This decrease is due to the increase in operating,
general, and administrative expenses and management fees and allocated overhead
from Jones Intercable, Inc. exceeding the increase in revenues.
Interest expense increased $1,318,943, or 11 percent, from $11,989,130
in 1993 to $13,308,073 in 1994 due to higher interest rates and higher
outstanding balances on interest bearing obligations.
Net loss increased $1,291,826, or approximately 11 percent, from
$11,584,416 in 1993 to $12,876,242 in 1994 due to the factors discussed above.
1993 Compared to 1992
Revenues of the Venture increased $5,564,003, or approximately 7
percent, from $83,567,527 in 1992 to $89,131,530 in 1993. Between December 31,
1992 and 1993, the Venture added 7,498 basic subscribers, an increase of
approximately 4 percent. This increase in basic subscribers accounted for
approximately 32 percent of the increase in revenues. Basic service rate
adjustments were responsible for approximately 38 percent of the increase in
revenues. Increases in advertising sales revenue accounted for approximately
12 percent of the increase in revenues. Increases in pay-per-view revenue
accounted for approximately 14 percent of the increase. The increase in
revenues would have been greater but for the reduction in basic rates due to
the basic rate regulations issued by the FCC in May 1993 with which the Venture
complied effective September 1, 1993. No other single factor significantly
affected the increase in revenues.
Operating, general and administrative expenses in the Venture's
systems increased $3,941,804, or approximately 8 percent, from $48,132,180 in
1992 to $52,073,984 in 1993. Operating, general and administrative expense
represented 58 percent of revenue in 1993 and in 1992. The increase in
operating, general and administrative expense was due to
16
17
increases in subscriber related costs, programming fees and marketing related
costs. No other single factor significantly due to the increase in revenues,
upon which such fees and allocations are based, and an increase in allocated
expenses from Jones Intercable, Inc. Depreciation and amortization expense
decreased $1,113,583, or approximately 4 percent, from $26,764,820 in 1992 to
$25,651,237 in 1993. The decrease was due to the maturation of the Venture's
asset base.
The Venture recorded operating income of $900,949 for 1993 compared to
an operating loss of $1,087,963 for 1992. This change is the result of
increases in revenue and the decreases in depreciation and amortization
expenses exceeding the increases in operating, general and administrative
expenses and management fees and allocated overhead from Jones Intercable, Inc.
Operating income before depreciation and amortization increased $875,329, or
approximately 3 percent, from $25,676,857 in 1992 to $26,552,186 in 1993. This
increase was due to the increase in revenues exceeding the increase in
operating, general, and administrative expenses and administrative fees and
allocated overhead from Jones Intercable, Inc.
Interest expense decreased $33,744, or less than 1 percent, from
$12,022,874 in 1992 to $11,989,130 in 1993 due to lower interest rates on
interest bearing obligations, which were offset, in part, by higher balances on
such obligations. The 1992 expense primarily represented the Sunbelt
litigation settlement. The settlement was accrued by the Venture in 1992 and
paid by the Venture in March 1993.
Net loss decreased $3,299,949, or approximately 22 percent, from
$14,884,365 in 1992 to $11,584,416 in 1993 due to the factors discussed above.
These losses are expected to continue in the future.
Financial Condition
Capital expenditures for the Venture totaled approximately $21,000,000
during 1994. Service drops to homes accounted for approximately 30 percent of
the capital expenditures. New plant construction accounted for approximately
19 percent of the capital expenditures. Approximately 7 percent of capital
expenditures was for converters. The upgrade of the Venture's Albuquerque, New
Mexico system accounted for approximately 5 percent of capital expenditures.
The remaining expenditures related to various system enhancements. These
capital expenditures were funded primarily from cash generated from operations
and borrowings under the Venture's credit facility. Expected capital
expenditures for 1995 are approximately $20,000,000. Service drops to homes
are anticipated to account for approximately 32 percent. Approximately 23
percent of budgeted capital expenditures is for new plant construction. The
remainder of the expenditures are for various system enhancements in all of the
Venture's systems. 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 has sufficient sources of capital
available in its ability to generate cash from operations and to borrow under
its credit facility to meet its presently anticipated needs.
The Venture's debt arrangements consist of $93,000,000 of Senior Notes
placed with a group of institutional lenders and a revolving credit agreement
with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent and a
final maturity date of March 31, 2000. The Senior Notes call for interest only
payments for the first four years, with interest and accelerating amortization
of principal payments for the next four years. Interest is payable
semi-annually. The Senior Notes carry a "make-whole" premium, which is a
prepayment penalty, if the notes are prepaid prior to maturity. The make-whole
premium protects the lenders in the event that prepaid funds are reinvested at
a rate below 8.64 percent, and is calculated per the note agreement.
The revolving credit period on the Venture's $90,000,000 credit
facility expired on March 31, 1994. The then- outstanding balance of
$84,300,000 converted to a term loan payable in quarterly installments which
began June 30, 1994. The Venture repaid $758,700 of this loan in the second
quarter. In September 1994, however, the General Partner completed
negotiations to extend the revolving credit period and revised the commitment
to $87,000,000. The balance outstanding at December 31, 1994 was $86,541,300.
Under the new terms of this credit facility, the loan will convert to a term
loan on March 31, 1996 with quarterly installments beginning June 30, 1996 and
a final payment due March 31, 2000. Interest is at the Venture's option of
LIBOR plus 1.25 percent to 1.75 percent, the CD rate plus 1.375 percent to
1.875 percent or the Base Rate plus 0 percent to .50 percent. The effective
interest rates on amounts outstanding on the Venture's term credit facility as
of December 31, 1994 and 1993 were 7.26 percent and 5.08 percent, respectively.
17
18
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation in the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates. The
Venture has filed cost-of-service showings for its systems and thus anticipates
no further reductions in rates. The cost-of-service showings have not yet
received final approval from franchising authorities, however, and there can be
no assurance that the Partnership's cost-of-service showing will prevent
further rate reductions until such final approval is received. See Item 1 for
further discussion of the provisions of the 1992 Cable Act and the FCC
regulations promulgated thereunder.
18
19
Item 8. Financial Statements
- - -----------------------------
CABLE TV FUND 12-B AND
----------------------
CABLE TV FUND 12-BCD VENTURE
----------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
INDEX
-----
Page
-----------------------------
12-B 12-BCD
---- ------
Report of Independent Public Accountants 20 31
Balance Sheets 21 32
Statements of Operations 23 34
Statements of Partners' Capital (Deficit) 24 35
Statements of Cash Flows 25 36
Notes to Financial Statements 26 37
19
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of Cable TV Fund 12-B:
We have audited the accompanying balance sheets of CABLE TV
FUND 12-B (a Colorado limited partnership) as of December 31, 1994 and 1993,
and the related statements of operations, partners' capital (deficit) and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Cable TV
Fund 12-B as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
20
21
CABLE TV FUND 12-B
(A Limited Partnership)
BALANCE SHEETS
December 31,
----------------------------------
ASSETS 1994 1993
------ --------------- -------------
CASH $ 3,782,989 $ 4,856,992
TRADE RECEIVABLES, less allowance for doubtful receivables of
$79,128 and $90,839 at December 31, 1994 and 1993, respectively 860,247 1,011,740
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 78,503,036 74,468,377
Less- accumulated depreciation (37,429,022) (30,740,891)
------------ ------------
41,074,014 43,727,486
Franchise costs, net of accumulated amortization of $25,063,424
and $22,377,932 at December 31, 1994 and 1993, respectively 14,051,348 16,736,840
Loss in excess of investment in cable television joint venture (1,804,126) (622,087)
------------ ------------
Total investment in cable television properties 53,321,236 59,842,239
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 578,713 374,054
------------ ------------
Total assets $ 58,543,185 $ 66,085,025
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
21
22
CABLE TV FUND 12-B
(A Limited Partnership)
BALANCE SHEETS
December 31,
------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
- - ------------------------------------------- ------------- -------------
LIABILITIES:
Debt $ 39,959,041 $ 43,831,074
Accounts payable-
Trade 63,438 136,325
General Partner 112,495 163,266
Accrued liabilities 924,648 1,091,860
Subscriber prepayments 113,843 124,535
------------ ------------
Total liabilities 41,173,465 45,347,060
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (305,152) (271,470)
------------ ------------
(304,152) (270,470)
------------ ------------
Limited Partners-
Net contributed capital (111,035 units outstanding at
December 31, 1994 and 1993) 47,645,060 47,645,060
Accumulated deficit (29,971,188) (26,636,625)
------------ ------------
17,673,872 21,008,435
------------ ------------
Total liabilities and partners' capital (deficit) $ 58,543,185 $ 66,085,025
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
22
23
CABLE TV FUND 12-B
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------------------------------------------
1994 1993 1992
---------------- ---------------- ----------------
REVENUES $ 26,956,006 $ 26,975,209 $ 25,369,064
COSTS AND EXPENSES:
Operating, general and administrative 13,932,687 13,054,665 12,052,351
Management fees and allocated overhead from
General Partner 3,392,884 3,205,800 2,964,400
Depreciation and amortization 9,380,877 8,897,796 8,415,058
------------- ------------- -------------
OPERATING INCOME 249,558 1,816,948 1,937,255
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (2,555,513) (2,343,606) (2,889,857)
Other, net 119,749 126,128 18,335
------------- ------------- -------------
Total other income (expense) (2,435,764) (2,217,478) (2,871,522)
------------- ------------- -------------
LOSS BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE (2,186,206) (400,530) (934,267)
EQUITY IN NET LOSS OF CABLE
TELEVISION JOINT VENTURE (1,182,039) (1,063,449) (1,366,385)
------------- ------------- -------------
NET LOSS $ (3,368,245) $ (1,463,979) $ (2,300,652)
============= ============= =============
ALLOCATION OF NET LOSS:
General Partner $ (33,682) $ (14,640) $ (23,007)
============= ============= =============
Limited Partners $ (3,334,563) $ (1,449,339) $ (2,277,645)
============= ============= =============
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (30.03) $ (13.05) $ (20.51)
============= ============= =============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 111,035 111,035 111,035
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
23
24
CABLE TV FUND 12-B
(A Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
---------------------------------------------------------
1994 1993 1992
---------------- ---------------- --------------
GENERAL PARTNER:
Balance, beginning of period $ (270,470) $ (255,830) $ (232,823)
Net loss for period (33,682) (14,640) (23,007)
------------ ------------- -----------
Balance, end of period $ (304,152) $ (270,470) $ (255,830)
============ ============ ===========
LIMITED PARTNERS:
Balance, beginning of period $21,008,435 $22,457,774 $24,735,419
Net loss for period (3,334,563) (1,449,339) (2,277,645)
----------- ----------- -----------
Balance, end of period $17,673,872 $21,008,435 $22,457,774
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
24
25
CABLE TV FUND 12-B
(A Limited Partnership)
STATEMENTS OF CASH FLOW
Year Ended December 31,
----------------------------------------------------------
1994 1993 1992
---------------- ---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,368,245) $(1,463,979) $(2,300,652)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 9,380,877 8,897,796 8,415,058
Amortization of interest rate protection contract - - 33,963
Equity in net loss of cable television joint venture 1,182,039 1,063,449 1,366,385
Decrease (increase) in trade receivables 151,493 (109,776) (302,528)
Decrease (increase) in deposits, prepaid expenses
and deferred charges (211,913) 119,594 (409,048)
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (250,791) 134,104 141,333
Increase (decrease) in amount due General Partner (50,771) (125,767) 73,264
----------- ----------- -----------
Net cash provided by operating activities 6,832,689 8,515,421 7,017,775
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,034,659) (4,096,862) (3,840,518)
----------- ----------- -----------
Net cash used in investing activities (4,034,659) (4,096,862) (3,840,518)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 124,133 74,766 162,465
Repayment of debt (3,996,166) (3,041,200) (2,090,548)
----------- ----------- -----------
Net cash used in financing activities (3,872,033) (2,966,434) (1,928,083)
----------- ----------- -----------
Increase (decrease) in cash (1,074,003) 1,452,125 1,249,174
Cash, beginning of period 4,856,992 3,404,867 2,155,693
----------- ----------- -----------
Cash, end of period $ 3,782,989 $ 4,856,992 $ 3,404,867
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,806,739 $ 2,374,601 $ 2,606,651
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
25
26
CABLE TV FUND 12-B
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 12-B, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on June 5, 1985, under a public program
sponsored by Jones Intercable, Inc. The Partnership was formed to acquire,
construct, develop and operate cable television systems. Jones Intercable,
Inc., a publicly held Colorado corporation, is the "General Partner" and
manages the Partnership. The General Partner and its subsidiaries also own and
operate cable television systems. In addition, the General Partner manages
cable television systems for other limited partnerships for which it is general
partner and, also, for affiliated entities.
In addition to the Augusta, Georgia cable television system,
which it directly owns, the Partnership owns an approximate 9 percent interest
in Cable TV Fund 12-BCD Venture (the "Venture"), through a capital contribution
made to the Venture in April 1986 of $12,437,500. The Venture acquired certain
cable television systems in New Mexico, California and Florida during 1986.
The Venture incurred losses of $12,876,242, $11,584,416 and $14,884,365 in
1994, 1993 and 1992, respectively, of which $1,182,039, $1,063,449 and
$1,366,385 was allocated to the Partnership during 1994, 1993 and 1992,
respectively.
Contributed Capital
The capitalization of the Partnership is set forth in the
accompanying statements of partners' capital (deficit). No limited partner is
obligated to make any additional contributions to partnership capital.
The General Partner purchased its interest in the Partnership
by contributing $1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99
percent to the limited partners and 1 percent to the General Partner, except
for income or gain from the sale or disposition of cable television properties,
which will be allocated to the partners based upon a formula set forth in the
partnership agreement, and interest income earned prior to the first
acquisition by the Partnership of a cable television system, which was
allocated 100 percent to the limited partners.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Partnership's tax returns are also prepared on the
accrual basis.
Investment in Cable Television Joint Venture
The Partnership's investment in the Venture is accounted for
under the equity method due to the Partnership's influence on the Venture as a
General Partner. The operations of the Venture are significant to the
Partnership and should be reviewed in conjunction with these financial
statements. Reference is made to the accompanying financial statements of the
Venture on pages 31 to 41.
26
27
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
Cable distribution systems 5 - 12 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to franchises are being amortized using the
straight-line method over the following remaining estimated useful lives:
Franchise costs 4 - 9 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
The General Partner 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 years ended December 31, 1994, 1993 and 1992 (excluding
the Partnership's nine percent interest in the Venture) were $1,347,800,
$1,348,760 and $1,268,453, respectively.
Any partnership distributions made from cash flow (defined as
cash receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to the General Partner. Any distributions other than interest
income on limited partnership subscriptions earned prior to the acquisition of
the Partnership's first cable television system or from cash flow, such as from
the sale or refinancing of a system or upon dissolution of the Partnership,
will be made as follows: first, to the limited partners in an amount which,
together with all prior distributions, will equal the amount initially
contributed by the limited partners; the balance, 75 percent to the limited
partners and 25 percent to the General Partner.
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 corporate facilities costs. Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Partnership. Allocations of personnel costs are
based primarily on actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining overhead costs are allocated
based on revenues and/or the cost of assets managed for the partnership.
Effective December 1, 1993, the allocation method was changed to be based only
on revenue, which the General Partner believes provides a more accurate method
of allocation. 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. Reimbursements by the Partnership to
the General Partner for allocated overhead and administrative expenses
(excluding the Partnership's nine percent interest in the Venture) were
$2,045,084, $1,857,040, and $1,695,947 in 1994, 1993, and 1992, respectively.
27
28
The Partnership was charged interest on amounts due the
General Partner at a rate which approximated the General Partner's weighted
average cost of borrowing. Total interest charged the Partnership by the
General Partner was $9,903, $-0- and $29,205 in 1994, 1993 and 1992,
respectively.
Payments to/from Affiliates for Programming Services
The Partnership receives programming from Superaudio, The Mind
Extension University and Jones Computer Network, affiliates of the General
Partner. Payments to Superaudio totaled $39,929, $40,882 and $40,430 in 1994,
1993 and 1992, respectively. Payments to The Mind Extension University totaled
$36,178, $23,769 and $23,165 in 1994, 1993 and 1992, respectively. Payments to
Jones Computer Network, which initiated service in 1994, totaled $5,373.
The Partnership receives a commission from Product Information
Network, an affiliate of Intercable, based on a percentage of advertising sales
and number of subscribers. Product Information Network, which initiated
service in 1994, paid commissions to the Partnership totalling $24,531.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and
1993, consisted of the following:
December 31,
----------------------------------------
1994 1993
---------------- -----------------
Cable distribution system $ 74,244,802 $ 70,454,984
Equipment and tools 1,124,216 1,042,724
Office furniture and equipment 996,451 967,465
Buildings 644,202 638,475
Vehicles 1,364,365 1,235,729
Land 129,000 129,000
------------ ------------
78,503,036 74,468,377
Less- accumulated depreciation (37,429,022) (30,740,891)
------------ ------------
$ 41,074,014 $ 43,727,486
============ ============
(5) DEBT
Debt consists of the following: December 31,
---------------------------------------
1994 1993
---------------- ----------------
Lending institutions-
Term loan $39,770,000 $43,650,000
Capital lease obligations 189,041 181,074
----------- -----------
$39,959,041 $43,831,074
=========== ===========
The balance outstanding on the Partnership's credit facility
as of December 31, 1994 was $39,770,000. On December 31, 1991, the then
outstanding principal balance of $48,500,000 was converted to a term loan
payable in 12 consecutive quarterly installments beginning March 31, 1992 and
ending December 31, 1994. The Partnership paid $3,880,000 in such installments
during 1994. In December 1994, the General Partner refinanced the credit
facility to extend the life of the term loan to December 31, 1999. The term
loan will continue to be payable in consecutive quarterly installments.
Interest on this agreement is at the Partnership's option of the base rate plus
1/2 percent, where base rate is defined as the greater of the Prime Rate or the
Federal Funds Rate plus 1/2 percent, or the CD rate plus 1-5/8 percent or the
London Interbank Offered Rate plus 1-1/2 percent. This loan is expected to be
paid in full upon closing of the sale of the Augusta System to the General
Partner as discussed in Note 8.
28
29
The effective interest rates on outstanding obligations as of
December 31, 1994 and 1993 were 7.64 percent and 4.98 percent, respectively.
Installments due on debt principal for each of the five years
in the period ending December 31, 1999, respectively, are: $5,027,962,
$7,016,462, $9,004,962, $8,967,155 and $9,942,500. At December 31, 1994,
substantially all of the Partnership's property, plant and equipment secured
the above indebtedness.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners. The Federal
and state income tax returns of the Partnership are prepared and filed by the
General Partner.
The Partnership's tax returns, the qualification of the
partnership as such for tax purposes, and the amount of distributable
partnership income or loss are subject to examination by Federal and state
taxing authorities. If such examinations result in changes with respect to the
Partnership's qualification as such, or in changes with respect to the
Partnership's recorded income or loss, the tax liability of the general and
limited partners would likely be changed accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") which
became effective on December 4, 1992. The 1992 Cable Act generally allows for
a greater degree of regulation in the cable television industry. In April
1993, the FCC adopted regulations governing rates for basic and non-basic
services. These regulations became effective on September 1, 1993. Such
regulations caused reductions in rates for certain regulated services. On
February 22, 1994, the FCC adopted several additional rate orders including an
order which revised its earlier-announced regulatory scheme with respect to
rates. The Partnership has filed a cost-of-service showing in its Augusta
System and anticipates no further reductions in rates. The cost-of-service
showing has not received final approval from franchising authorities.
The Partnership rents office and other facilities under
various long-term operating lease arrangements. Rent paid under such lease
arrangements totaled $19,907, $19,575 and $19,351, respectively, for the years
ended December 31, 1994, 1993 and 1992. Minimum commitments for each of the
five years in the period ending December 31, 1999, and thereafter are as
follows:
1995 $21,219
1996 16,400
1997 14,400
1998 14,400
1999 7,400
Thereafter 200
-------
$74,019
=======
29
30
(8) SALE OF CABLE TELEVISION SYSTEM
On February 22, 1995, the General Partner entered into a Purchase and
Sale Agreement (the "Agreement") with the Partnership, providing for the sale
by the Partnership to the General Partner of the Augusta System. The purchase
price for the Augusta System is $141,718,000, subject to certain closing
adjustments provided by the Agreement. Closing of the sale is subject to a
number of conditions, including the approval of the transaction by the holders
of a majority of the Partnership's limited partnership interests. The purchase
price represents the average of three separate independent appraisals of the
fair market value of the Augusta System. Subject to the satisfaction of
closing conditions, the transaction is expected to close during 1995. The
Partnership will retain its interest in the Venture.
(9) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years are presented below:
Year Ended December 31,
-------------------------------------------------
1994 1993 1992
-------------- -------------- ------------
Maintenance and repairs $ 169,466 $ 151,258 $ 171,974
=========== =========== ===========
Taxes, other than income and payroll taxes $ 232,068 $ 232,174 $ 224,415
=========== =========== ===========
Advertising $ 212,018 $ 136,524 $ 165,447
=========== =========== ===========
Depreciation of property, plant and equipment $ 6,695,385 $ 6,212,303 $ 5,729,566
=========== =========== ===========
Amortization of intangible assets $ 2,685,492 $ 2,685,493 $ 2,685,492
=========== =========== ===========
30
31
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-BCD Venture:
We have audited the accompanying balance sheets of CABLE TV
FUND 12-BCD VENTURE (a Colorado general partnership) as of December 31, 1994
and 1993, and the related statements of operations, partners' capital (deficit)
and cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the General
Partners' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Cable TV
Fund 12-BCD Venture as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
31
32
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
--------------------------------------------
ASSETS 1994 1993
------ ----------------- ------------------
CASH AND CASH EQUIVALENTS $ 4,391,602 $ 1,962,657
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of $339,139
and $265,542 at December 31, 1994 and 1993, respectively 3,807,271 2,954,487
Affiliated entity 159,137 159,137
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 272,998,315 251,810,225
Less- accumulated depreciation (135,711,082) (117,498,465)
------------- -------------
137,287,233 134,311,760
Franchise costs, net of accumulated amortization of $48,828,848 and
$43,008,846 at December 31, 1994 and 1993, respectively 18,219,795 23,539,797
Subscriber lists, net of accumulated amortization of $32,743,306 and
$32,420,504 at December 31, 1994 and 1993, respectively - 322,802
Cost in excess of interests in net assets purchased, net of accumulated
amortization of $1,280,756 and $1,128,284 at December 31, 1994
and 1993, respectively 4,775,672 4,928,144
------------- -------------
Total investment in cable television properties 160,282,700 163,102,503
DEPOSITS, PREPAID EXPENSES AND DEFERRED
CHARGES 2,035,204 1,491,768
------------- -------------
Total assets $ 170,675,914 $ 169,670,552
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
32
33
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
--------------------------------------
LIABILITIES AND PARTNERS' DEFICIT 1994 1993
--------------------------------- ------------- -------------
LIABILITIES:
Debt $ 180,402,748 $ 167,698,697
Accounts payable-
Trade 491,846 830,408
Jones Intercable, Inc. 616,810 188,430
Accrued liabilities 7,125,482 6,003,390
Subscriber prepayments 644,779 679,136
------------- -------------
Total liabilities 189,281,665 175,400,061
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' DEFICIT:
Contributed capital 135,490,944 135,490,944
Accumulated deficit (154,096,695) (141,220,453)
------------- -------------
(18,605,751) (5,729,509)
------------- -------------
Total liabilities and partners' deficit $ 170,675,914 $ 169,670,552
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
33
34
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
------------------------------------------------------------------
1994 1993 1992
--------------- ---------------- ---------------
REVENUES $ 92,823,076 $ 89,131,530 $ 83,567,527
COSTS AND EXPENSES:
Operating, general and administrative 56,131,254 52,073,984 48,132,180
Management fees and allocated overhead from
Jones Intercable, Inc. 11,592,264 10,505,360 9,758,490
Depreciation and amortization 24,658,274 25,651,237 26,764,820
------------- ------------- -------------
OPERATING INCOME (LOSS) 441,284 900,949 (1,087,963)
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (13,308,073) (11,989,130) (12,022,874)
Gain on sale of assets - - 935,305
Other, net (9,453) (496,235) (2,708,833)
------------- ------------- -------------
Total other income (expense) (13,317,526) (12,485,365) (13,796,402)
------------- ------------- -------------
NET LOSS $ (12,876,242) $ (11,584,416) $ (14,884,365)
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
34
35
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
----------------------------------------------------------------
1994 1993 1992
--------------- ---------------- -----------------
CABLE TV FUND 12-B (9%):
Balance, beginning of year $ (622,087) $ 441,362 $ 1,807,747
Net loss for year (1,182,039) (1,063,449) (1,366,385)
------------- ------------- -------------
Balance, end of year $ (1,804,126) $ (622,087) $ 441,362
============= ============= =============
CABLE TV FUND 12-C (15%):
Balance, beginning of year $ (1,035,256) $ 734,611 $ 3,008,644
Net loss for year (1,967,232) (1,769,867) (2,274,033)
------------- ------------- -------------
Balance, end of year $ (3,002,488) $ (1,035,256) $ 734,611
============= ============= =============
CABLE TV FUND 12-D (76%):
Balance, beginning of year $ (4,072,166) $ 4,678,934 $ 15,922,881
Net loss for year (9,726,971) (8,751,100) (11,243,947)
------------- ------------- -------------
Balance, end of year $ (13,799,137) $ (4,072,166) $ 4,678,934
============= ============= =============
TOTAL:
Balance, beginning of year $ (5,729,509) $ 5,854,907 $ 20,739,272
Net loss for year (12,876,242) (11,584,416) (14,884,365)
------------- ------------- -------------
Balance, end of year $ (18,605,751) $ (5,729,509) $ 5,854,907
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
35
36
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
---------------------------------------------------------------
1994 1993 1992
--------------- ---------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (12,876,242) $ (11,584,416) $ (14,884,365)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 24,658,274 25,651,237 26,764,820
Gain on sale of cable television system - - (935,305)
Amortization of interest rate protection contract - - 263,574
Amortization of loan fees 151,380 121,062 90,797
Increase in trade receivables (852,784) (147,286) (457,715)
Increase in deposits, prepaid
expenses and deferred charges (694,816) (434,700) (2,155,866)
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments 749,173 (1,234,645) 4,390,946
Increase (decrease) in amount due
Jones Intercable, Inc. 428,380 (323,216) (4,095,194)
------------- ------------- ---------------
Net cash provided by operating activities 11,563,365 12,048,036 8,981,692
------------- ------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (21,338,471) (18,711,639) (15,777,221)
Proceeds from the sale of cable television system - - 2,620,000
Franchise settlement (500,000) - -
------------- ------------- ---------------
Net cash used in investing activities (21,838,471) (18,711,639) (13,157,221)
------------- ------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 16,268,610 11,954,437 164,830,973
Repayment of debt (3,564,559) (4,696,228) (160,522,104)
------------- ------------- ---------------
Net cash provided by financing activities 12,704,051 7,258,209 4,308,869
------------- ------------- ---------------
Increase in cash and cash equivalents 2,428,945 594,606 133,340
Cash and cash equivalents, beginning of year 1,962,657 1,368,051 1,234,711
------------- ------------- ---------------
Cash and cash equivalents, end of year $ 4,391,602 $ 1,962,657 $ 1,368,051
============= ============= ===============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 12,450,869 $ 12,141,838 $ 9,805,956
============= ============= ===============
The accompanying notes to financial statements
are an integral part of these statements.
36
37
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
On March 17, 1986, Cable TV Funds 12-B, 12-C and 12-D (the
"Venture Partners") formed Cable TV Fund 12-BCD Venture (the "Venture"). The
Venture was formed for the purpose of acquiring certain cable television
systems serving Tampa, Florida; Albuquerque, New Mexico; and Palmdale,
California. Jones Intercable, Inc. ("Intercable"), the "General Partner" of
each of the Venture Partners, manages the Venture. Intercable and its
subsidiaries also own and operate cable television systems. In addition,
Intercable manages cable television systems for other limited partnerships for
which it is general partner and, also, for affiliated entities.
Contributed Capital
The capitalization of the Venture is set forth in the
accompanying statements of partners' capital (deficit).
All Venture distributions, including those made from cash
flow, from the sale or refinancing of Partnership property and on dissolution
of the Venture, shall be made to the Venture Partners in proportion to their
approximate respective interests in the Partnership as follows:
Cable TV Fund 12-B 9%
Cable TV Fund 12-C 15%
Cable TV Fund 12-D 76%
-----
100%
=====
Venture Acquisitions and Sales
The Venture owns and operates the cable television systems
serving certain areas in and around Albuquerque, New Mexico; Palmdale,
California; and Tampa, Florida.
On September 20, 1991, the Venture entered into a purchase and
sale agreement with an unaffiliated party to sell the cable television system
serving the area in and around California City, California for $2,620,000.
Closing on this transaction occurred on April 1, 1992. The proceeds were used
to repay a portion of the amounts outstanding under the Venture's credit
facility.
The Venture's acquisitions were accounted for as purchases
with the individual purchase prices allocated to tangible and intangible assets
based upon an independent appraisal. The method of allocation of purchase
price was as follows: first, to the fair value of the net tangible assets
acquired; second, to the value of subscriber lists; third, to franchise costs;
and fourth, to cost in excess of interests in net assets purchased. Brokerage
fees paid to an affiliate of Intercable and other system acquisition costs were
capitalized and included in the cost of intangible assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Venture's tax returns are also prepared on the
accrual basis.
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38
Property, Plant and Equipment
Depreciation is provided using the straight-line method over
the following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to franchises and cost in excess of interests
in net assets purchased are amortized using the straight-line method over the
following remaining estimated useful lives:
Franchise costs 2 - 10 years
Cost in excess of interests in net assets purchased 31 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Venture
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
Reclassifications
Certain prior year amounts have been reclassified to conform
to the 1994 presentation.
(3) TRANSACTIONS WITH JONES INTERCABLE, INC. AND AFFILIATES
Brokerage Fees
The Jones Group, Ltd., an affiliate of Intercable, performs
brokerage services for the Venture in connection with Venture acquisitions and
sales. For brokering two acquisitions in the Tampa System for the Venture, The
Jones Group, Ltd. was paid fees totaling $13,120, or 4 percent of the
transaction prices, during 1992. Additionally, The Jones Group, Ltd. received
$65,500, or 2.5 percent of the transaction price, during 1992 for brokering a
sale in the Palmdale System. There were no brokerage fees paid during the
years ended December 31, 1994 and 1993.
Management Fees and Reimbursements
Intercable manages 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 Intercable for the years ended December 31, 1994, 1993 and 1992
were $4,641,154, $4,456,577 and $4,178,376, respectively.
The Venture reimburses Intercable for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid to 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. Allocations of personnel costs are based
primarily on actual time spent by employees of
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Intercable with respect to each entity managed. Remaining overhead costs are
allocated based on total revenues and/or the cost of assets managed for the
entity. Effective December 1, 1993, the allocation method was changed to be
based only on revenue, which Intercable believes provides a more accurate
method of allocation. Systems owned by Intercable and all other systems owned
by partnerships for which Intercable is the general partner are also allocated
a proportionate share of these expenses. Intercable believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Overhead and administrative expenses allocated to the Venture by
Intercable during the years ended December 31, 1994, 1993 and 1992 were
$6,951,110, $6,048,783 and $5,580,114, respectively.
The Venture was charged interest during 1994 at an average
interest rate of 10 percent on the amounts due Intercable, which approximated
Intercable's cost of borrowing. Total interest charged the Venture by
Intercable was $33,627, $15,477 and $126,073 during 1994, 1993 and 1992,
respectively.
Payments to Affiliates for Programming Services
The Venture receives programming from Superaudio, The Mind
Extension University and Jones Computer Network, affiliates of Intercable.
Payments to Superaudio totaled $135,346, $134,179 and $132,091 in 1994, 1993
and 1992, respectively. Payments to The Mind Extension University totaled
$124,043, $79,002 and $76,676 in 1994, 1993 and 1992, respectively. Payments
to Jones Computer Network, which initiated service in 1994, totaled $71,961.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and
1993, consisted of the following:
December 31,
-----------------------------------
1994 1993
--------------- -----------------
Cable distribution system $ 248,337,681 $ 230,055,817
Equipment and tools 7,721,861 6,943,636
Office furniture and equipment 3,014,125 2,490,235
Buildings 7,695,925 6,405,512
Vehicles 5,277,753 4,963,768
Land 950,970 951,257
------------- -------------
272,998,315 251,810,225
Less-accumulated depreciation (135,711,082) (117,498,465)
------------- -------------
$ 137,287,233 $ 134,311,760
============= =============
(5) DEBT
Debt consists of the following: December 31,
-----------------------------------
1994 1993
------------------ --------------
Lending institutions-
Revolving credit and term loan $ 86,541,300 $ 73,800,000
Senior secured notes 93,000,000 93,000,000
Capital lease obligations 861,448 898,697
------------ ------------
$180,402,748 $167,698,697
============ ============
The Venture's debt arrangements consist of $93,000,000 of
Senior Notes placed with a group of institutional lenders and a revolving
credit agreement with a group of commercial bank lenders.
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The Senior Notes have a fixed interest rate of 8.64 percent
and a final maturity date of March 31, 2000. The Senior Notes call for
interest only payments for the first four years, with interest and accelerating
amortization of principal payments for the next four years. Interest is payable
semi-annually. The Senior Notes carry a "make-whole" premium, which is a
prepayment penalty, if the notes are prepaid prior to maturity. The make-whole
premium protects the lenders in the event that prepaid funds are reinvested at
a rate below 8.64 percent, and is calculated per the note agreement.
The revolving credit period on the Venture's $90,000,000
credit facility expired on March 31, 1994. The then- outstanding balance of
$84,300,000 converted to a term loan payable in quarterly installments which
began June 30, 1994. The Venture repaid $758,700 of this loan in the second
quarter. In September 1994, however, the General Partner completed
negotiations to extend the revolving credit period and revised the commitment
to $87,000,000. The balance outstanding at December 31, 1994 was $86,541,300.
Under the new terms of this credit facility, the loan will convert to a term
loan on March 31, 1996 with quarterly installments beginning June 30, 1996 and
a final payment due March 31, 2000. Interest is at the Venture's option of
LIBOR plus 1.25 percent to 1.75 percent, the CD rate plus 1.375 percent to
1.875 percent or the Base Rate plus 0 percent to .50 percent. The effective
interest rates on amounts outstanding on the Venture's term credit facility as
of December 31, 1994 and 1993 were 7.26 percent and 5.08 percent, respectively.
Both lending facilities are equal in standing with the other,
and both are equally secured by the assets of the Venture.
During 1992 and 1994, the Venture incurred costs associated
with renegotiating its debt arrangements. These fees were capitalized and are
being amortized over the life of the debt agreements.
Installments due on debt principal for each of the five years
in the period ending December 31, 1999 and thereafter, respectively, are:
$258,434, $14,247,151, $18,716,325, $25,176,742, $31,723,304 and $90,280,792,
respectively.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners of Cable TV
Funds 12-B, 12-C and 12-D.
The Venture's tax returns, the qualification of the Venture as
such for tax purposes, and the amount of distributable income or loss, are
subject to examination by Federal and state taxing authorities. If such
examinations result in changes with respect to the Venture's qualification as
such, or in changes with respect to the Venture's recorded loss, the tax
liability of the Venture's general partners would likely be changed
accordingly.
Taxable losses reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
allowed under generally accepted accounting principles and the expense allowed
for tax purposes under the Modified Accelerated Cost Recovery System (MACRS).
There are no other significant differences between taxable income or losses and
the net losses reported in the statements of operations.
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(7) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") which
became effective on December 4, 1992. The 1992 Cable Act generally allows for
a greater degree of regulation in the cable television industry. In April
1993, the FCC adopted regulations governing rates for basic and non-basic
services. These regulations became effective on September 1, 1993. Such
regulations caused reductions in rates for certain regulated services. On
February 22, 1994, however, the FCC adopted several additional rate orders
including an order which revised its earlier-announced regulatory scheme with
respect to rates. The Venture has filed cost-of-service showings in all of its
systems and anticipates no further reductions in rates. The cost-of-service
showings have not received final approval from franchising authorities.
Offices and other facilities are rented under various
long-term lease arrangements. Rent paid under such lease arrangements totaled
$345,531, $454,229 and $450,295, respectively, for the years ended December 31,
1994, 1993 and 1992. Minimum commitments under operating leases for the five
years in the period ending December 31, 1999 and thereafter are as follows:
1995 $ 475,957
1996 463,812
1997 461,839
1998 464,903
1999 341,973
Thereafter 1,585,751
----------
$3,794,235
==========
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years is presented below:
Year Ended December 31,
--------------------------------------------------
1994 1993 1992
-------------- -------------- --------------
Maintenance and repairs $ 1,214,978 $ 1,119,086 $ 1,146,319
=========== ============ ============
Taxes, other than income
and payroll taxes $ 1,380,350 $ 1,470,476 $ 1,369,852
=========== ============ ============
Advertising $ 1,275,772 $ 1,022,289 $ 1,090,075
=========== ============ ============
Depreciation of property,
plant and equipment $18,362,998 $ 18,772,872 $ 18,570,055
=========== ============ ============
Amortization of intangible
assets $ 6,295,276 $ 6,878,365 $ 8,194,765
=========== ============ ============
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below.
Name Age Positions with the General Partner
---- --- ----------------------------------
Glenn R. Jones 65 Chairman of the Board and Chief Executive Officer
Derek H. Burney 55 Vice Chairman of the Board
James B. O'Brien 45 President, Chief Operating Officer and Director
Ruth E. Warren 45 Group Vice President/Operations
Kevin P. Coyle 43 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
Timothy J. Burke 44 Group Vice President/Taxation/Administration
Raymond L. Vigil 48 Group Vice President/Human Resources and Director
Cynthia A. Winning 43 Group Vice President/Marketing
Elizabeth M. Steele 43 Vice President/General Counsel/Secretary
Larry W. Kaschinske 35 Controller
James J. Krejci 53 Director
Christine Jones Marocco 39 Director
Daniel E. Somers 47 Director
Robert S. Zinn 58 Director
David K. Zonker 41 Director
Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its formation in 1970, and
he was President from June 1984 until April 1988. Mr. Jones was elected a
member of the Executive Committee of the Board of Directors in April 1985. Mr.
Jones is the sole shareholder, President and Chairman of the Board of Directors
of Jones International, Ltd. He is also Chairman of the Board of Directors of
the subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a past and present member of the Board of
Directors of the National Cable Television Association, and is a former member
of its Executive Committee. Mr. Jones is a past director and member of the
Executive Committee of C-Span. Mr. Jones has been the recipient of several
awards including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society; the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs Association
President's Award in 1990, the Donald G. McGannon award for the advancement of
minorities and women in cable; the STAR Award from American Women in Radio and
Television, Inc. for exhibition of a commitment to the issues and concerns of
women in television and radio; and the Women in Cable Accolade in 1990 in
recognition of support of this organization. Mr. Jones is also a founding
member of the James Madison Council of the Library of Congress and is on the
Board of Governors of the American Society of Training and Development.
Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors in January 1995. He
is also a member of the Executive Committee of the Board of Directors. Mr.
Burney joined BCE Inc., Canada's largest telecommunications company, in January
1993 as Executive Vice President, International. He has been the Chairman of
Bell Canada International Inc., a
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subsidiary of BCE, since January 1993 and, in addition, has been Chief
Executive Officer of BCI since July 1993. Prior to joining BCE, Mr. Burney
served as Canada's ambassador to the United States from 1989 to 1992. Mr.
Burney also served as chief of staff to the Prime Minister of Canada from March
1987 to January 1989 where he was directly involved with the negotiation of the
U.S. - Canada Free Trade Agreement. In July 1993, he was named an Officer of
the Order of Canada. Mr. Burney is chairman of Bell Cablemedia plc. He is a
director of Mercury Communications Limited, Videotron Holdings plc, Tele-Direct
(Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and
Telephone Company, Limited, Moore Corporation Limited and Northbridge
Programming Inc.
Mr. James B. O'Brien, the General Partner's President, joined the General
Partner in January 1982. Prior to being elected President and a Director of
the General Partner in December 1989, Mr. O'Brien served as a Division Manager,
Director of Operations Planning/Assistant to the CEO, Fund Vice President and
Group Vice President/Operations. Mr. O'Brien was appointed to the General
Partner's Executive Committee in August 1993. As President, he is responsible
for the day-to-day operations of the cable television systems managed and owned
by the General Partner. Mr. O'Brien is also President and a Director of Jones
Cable Group, Ltd., Jones Global Funds, Inc. and Jones Global Management, Inc.,
all affiliates of the General Partner. Mr. O'Brien is a board member of Cable
Labs, Inc., the research arm of the U.S. cable television industry. He also
serves as a director of the Cable Television Administration and Marketing
Association and as a director of the Walter Kaitz Foundation, a foundation that
places people of any ethnic minority group in positions with cable television
systems, networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund
Vice President, since then. Ms. Warren was elected Group Vice
President/Operations of the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991 as
Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with USWest. Prior to USWest,
Mr. Vigil worked in various human resources posts over a 14-year term with the
IBM Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994,
Ms. Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten
national retail department store chains. From 1981 to 1986, Ms. Winning was
the Director of Marketing Services for Daniels & Associates cable television
operations, as well as the Western Division Marketing Director for Capital
Cities Cable. Ms. Winning also serves as a board Member of Cities in Schools,
a dropout intervention/prevention program.
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Ms. Elizabeth M. Steele joined the General Partner in August 1987 as Vice
President/General Counsel and Secretary. From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division; was promoted to
Assistant Controller in 1990 and named Controller in August 1994.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and a Group Vice President of the
General Partner. Prior to May 1994, he also served as Group Vice President of
Jones Futurex, Inc., an affiliate of the General Partner engaged in
manufacturing and marketing data encryption devices, Jones Interactive, Inc., a
subsidiary of Jones International, Ltd. providing computer data and billing
processing facilities and Jones Lightwave, Ltd., a company owned by Jones
International, Ltd. and Mr. Jones, which is engaged in the provision of
telecommunications services. Mr. Krejci has been a Director of the General
Partner since August 1987.
Ms. Christine Jones Marocco was appointed a Director of the General
Partner in December 1994. She is the daughter of Glenn R. Jones. Ms. Marocco
is also a director of Jones International, Ltd.
Mr. Daniel E. Somers was appointed a Director of the General Partner in
December 1994 and also serves on the General Partner's Audit Committee. From
January 1992 to January 1995, Mr. Somers worked as Senior Vice President and
Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He
is also a Director of certain of its affiliates. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was the President and
Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a
member of the North American Society of Corporate Planning, the Financial
Executives Institution and the Financial Analysts Federation.
Mr. Robert S. Zinn was appointed a Director of the General Partner in
December 1994. Mr. Zinn joined the General Partner in January 1991 and is a
member of its Legal Department. He is also Vice President/Legal Affairs of
Jones International, Ltd. Prior to joining the General Partner, Mr. Zinn was
in private law practice in Denver, Colorado for over 25 years.
Mr. David K. Zonker was appointed a Director of the General Partner in
December 1994. Mr. Zonker has been the President of Jones International
Securities, Ltd., a subsidiary of Jones International, Ltd. since January 1984
and he has been its Chief Executive Officer since January 1988. From October
1980 until joining Jones International Securities, Ltd. in January 1984, Mr.
Zonker was employed by the General Partner. Mr. Zonker is a member of the
Board of Directors of various affiliates of the General Partner, including
Jones International Securities, Ltd. Mr. Zonker is licensed by the National
Association of Securities Dealers, Inc. and he is a past chairman of the
Investment Program Association, a trade organization based in Washington, D.C.
that promotes direct investments. He is a member of the Board of Trustees of
Graceland College, Lamoni, Iowa; the International Association of Financial
Planners and the American and Colorado Institutes of Certified Public
Accountants.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are required
to operate the cable television systems owned by the Partnership. Such
personnel are employed by the General Partner and, pursuant to the terms of the
limited partnership agreement of the Partnership, the cost of such employment
is charged by the General Partner to the Partnership as a direct reimbursement
item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
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45
No person or entity owns more than 5 percent of the limited partnership
interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnership as contemplated by the limited partnership agreement of
the Partnership. The General Partner believes that the terms of such
transactions are generally as favorable as could be obtained by the Partnership
from unaffiliated parties. This determination has been made by the General
Partner in good faith, but none of the terms were or will be negotiated at
arm's-length and there can be no assurance that the terms of such transactions
have been or will be as favorable as those that could have been obtained by the
Partnership from unaffiliated parties.
The General Partner charges the Partnership a management fee, and the
Partnership reimburses the General Partner for certain allocated overhead and
administrative expenses in accordance with the terms of the limited partnership
agreement of the Partnership. These expenses consist primarily of salaries and
benefits paid to 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. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to the Partnership
managed. Remaining overhead costs are allocated based on revenues and/or the
costs of assets managed for the Partnership. 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 also advances funds and charges interest on the
balance payable from the Partnership. The interest rate charged the
Partnership approximates the General Partner's weighted average cost of
borrowing.
From time to time, The Jones Group, Ltd., an affiliate of the General
Partner, performs brokerage services for the Partnership and the Venture in
connection with Partnership and Venture acquisitions and sales from or to
unaffiliated entities.
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the General Partner, and computer video
programming from Jones Computer Network, Ltd., an affiliate of the General
Partner, for fees based upon the number of subscribers receiving the
programming.
Jones Infomercial Networks, Inc. ("Infomercial"), an affiliate of the
General Partner, provides advertising time for third parties on the Systems.
In consideration, the revenues generated from the third parties are shared
two-thirds and one-third between Infomercial and the Partnership. During the
year ended December 31, 1994, the Partnership received revenues from
Infomercial of $24,531.
The charges to the Partnership for related party transactions are as
follows for the periods indicated:
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At December 31,
-----------------------------------------------------
Cable TV Fund 12-B 1994 1993 1992
------------------- ----------- ---------- -----------
Management fees $1,347,800 $1,348,760 $1,168,453
Allocation of expenses 2,045,084 1,857,040 1,695,947
Interest expense -0- -0- 29,205
Amount of notes and advances outstanding 112,495 163,266 289,033
Highest amount of notes and advances outstanding 163,266 289,033 289,033
Programming fees:
Superaudio 39,929 40,882 40,430
Mind Extension University 36,178 23,769 23,165
Jones Computer Network 5,373 -0- -0-
At December 31,
-----------------------------------------------------
Cable TV Fund 12-BCD 1994 1993 1992
---------------------- ----------- ---------- -----------
Management fees $4,641,154 $4,456,577 $4,178,376
Brokerage fees -0- -0- 78,620
Allocation of expenses 6,951,110 6,048,783 5,580,114
Interest expense 33,627 15,477 126,073
Amount of notes and advances outstanding 616,810 188,430 511,646
Highest amount of notes and advances outstanding 929,508 511,646 5,660,955
Programming fees:
Superaudio 135,346 134,179 132,091
Mind Extension University 124,043 79,002 76,676
Jones Computer Network 71,961 -0- -0-
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PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a)1. See index to financial statements for list of financial statements and exhibits
thereto filed as a part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreement for Cable TV Fund 12-B. (1)
4.2 Joint Venture Agreement of Cable TV Fund 12-BCD Venture dated as of March 17,
1986, among Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund
12-D, Ltd. (2)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Edwards Air Force Base, California (Fund 12-BCD).
10.1.2 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Lancaster, California (Fund 12-BCD).
(3)
10.1.3 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Unincorporated portions of Los Angeles County,
California (Fund 12-BCD). (3)
10.1.4 Copy of Los Angeles County Code regarding cable tv system franchises (Fund 12-
BCD). (4)
10.1.5 Copy of Ordinance 90-0118F dated 10/29/90 granting a cable television franchise
to Fund 12-BCD (Fund 12-BCD). (4)
10.1.6 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Green Valley/Elizabeth Lake/Leona Valley
unincorporated areas of Los Angeles County, California (Fund 12-BCD). (2)
10.1.7 Ordinance 88-0166F dated 10/4/88 amending the franchise described in 10.1.5 (Fund
12-BCD). (4)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Palmdale, California (Fund 12-BCD).
(4)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Tampa, Florida (Fund 12-BCD). (1)
10.1.10 Resolution No. 1153 dated 10/2/86 authorizing consent to transfer of the Tampa
franchise and amendment to the franchise agreement (Fund 12-BCD). (4)
10.1.11 Amendment to Tampa franchise agreement dated 10/6/86 (Fund 12-BCD). (4)
10.1.12 Tampa franchise transfer, acceptance and consent to transfer dated 10/6/86 (Fund
12-BCD). (4)
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10.1.13 Second Amendment to Tampa Franchise Agreement dated September 1, 1994 (Fund 12-
BCD).
10.1.14 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Augusta, Georgia (Fund 12-B). (1)
10.1.15 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Blythe, Georgia (Fund 12-B). (2)
10.1.16 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Burke, Georgia (Fund 12-B). (5)
10.1.17 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Unincorporated Area of Columbia County,
Georgia (Fund 12-B). (4)
10.1.18 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Hephzibah, Georgia (Fund 12-B). (1)
10.1.19 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Unincorporated Area of Richmond County,
Georgia (Fund 12-B). (1)
10.1.20 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Albuquerque, New Mexico (Fund 12-
BCD). (3)
10.1.21 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Bernalillo, New Mexico (Fund 12-
BCD). (3)
10.1.22 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Town of Bernalillo, New Mexico (Fund 12-BCD).
(3)
10.1.23 Resolution No. 12-14-87 dated 12/14/87 authorizing the assignment of the
franchise to Fund 12-BCD. (4)
10.1.24 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Bosque Farms, New Mexico (Fund 12-
BCD). (3)
10.1.25 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Corrales, New Mexico (Fund 12-
BCD). (3)
10.1.26 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Kirtland Air Force Base, New Mexico (Fund 12-
BCD). (4)
10.1.27 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Los Ranchos, New Mexico (Fund 12-
BCD). (3)
48
49
10.1.28 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Sandoval, New Mexico (Fund 12-BCD).
(3)
10.1.29 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Valencia, New Mexico (Fund 12-BCD).
(3)
10.1.30 Resolution No. 88-23 dated 2/14/88 authorizing assignment of the franchise to
Fund 12-BCD. (4)
10.2.1 Loan and Security Agreement, dated August 29, 1985, between Cable TV Fund 12-B,
Ltd. and The Philadelphia National Bank, individually and as agent for various
lenders. (1)
10.2.2 Amendment No. 1 dated as of August 14, 1986, to Loan and Security Agreement,
dated August 29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia
National Bank, individually and as agent for various lenders. (4)
10.2.3 Amendment No. 2 dated March 31, 1988 to Loan and Security Agreement, dated August
29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia National Bank,
individually and as agent for various lenders. (4)
10.2.4 Amendment No. 3 dated March 29, 1989 to Loan and Security Agreement, dated August
29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia National Bank,
individually and as agent for various lenders. (4)
10.2.5 Amendment No. 4 dated November 29, 1991 to Loan and Security Agreement dated
November 1991 between Cable TV Fund 12-B, Ltd. and Corestates Bank, N.A.
(formerly The Philadelphia National Bank), individually and as agent for various
lenders. (6)
10.2.6 Amendment No. 5 dated December 23, 1994 to Loan and Security Agreement dated
November 1991 between Cable TV Fund 12-B, Ltd. and Corestates Bank, N.A.,
individually and as agent for various lenders.
10.2.7 Credit Agreement dated as of March 31, 1992 among Fund 12-BCD Venture and
Corestates Bank, N.A., individually and as agent for various lenders. (4)
10.2.8 Amendment No. 1 dated September 30, 1994 to Credit Agreement dated March 31, 1992
among Fund 12-BCD Venture and Corestates Bank, N.A., individually and as agent
for various lenders.
10.3.1 Purchase and Sale Agreement dated as of March 29, 1988 by and between Cable TV
Fund 12-BCD Venture as Buyer and Video Company as Seller. (7)
10.3.2 Purchase and Sale Agreement dated 9/20/91 and amendments thereto between Cable TV
Fund 12-BCD Venture as Seller and Falcon Classic Cable Income Properties, L.P.
(Fund 12-BCD). (8)
27 Financial Data Schedule
49
50
----------
(1) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1985 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(2) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1987 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(3) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1986 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(4) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1992 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(5) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1990 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(6) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1991 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(7) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1988 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(8) Incorporated by reference from the Forms 8-K of Fund
12-B, Fund 12-C and Fund 12- D dated 4/6/92
(Commission File Nos. 0-13193, 0-13964 and 0-14206,
respectively).
(b) Reports on Form 8-K.
A Current Report on Form 8-K (Commission File No.
0-13807), dated February 23, 1995, describing the
execution of an agreement to sell the Augusta System
was filed with the Securities and Exchange
Commission on February 24, 1995.
50
51
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CABLE TV FUND 12-B, LTD.,
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
-----------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 7, 1995 Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
By: /s/ Glenn R. Jones
------------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 7, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
------------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 7, 1995 (Principal Financial Officer)
By: /s/ Larry Kaschinske
------------------------------------
Larry Kaschinske
Controller
Dated: March 7, 1995 (Principal Accounting Officer)
By: /s/ James B. O'Brien
------------------------------------
James B. O'Brien
Dated: March 7, 1995 President and Director
By: /s/ Raymond L. Vigil
------------------------------------
Raymond L. Vigil
Dated: March 7, 1995 Group Vice President and Director
By: /s/ Robert S. Zinn
------------------------------------
Robert S. Zinn
Dated: March 7, 1995 Director
51
52
By: /s/ David K. Zonker
------------------------------------
David K. Zonker
Dated: March 7, 1995 Director
By:
------------------------------------
Derek H. Burney
Dated: Director
By:
------------------------------------
James J. Krejci
Dated: Director
By:
------------------------------------
Christine Jones Marocco
Dated: Director
By:
------------------------------------
Daniel E. Somers
Dated: Director
52
53
INDEX TO EXHIBITS
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- - ------- ----------- -------
(a)1. See index to financial statements for list of financial statements and exhibits
thereto filed as a part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreement for Cable TV Fund 12-B. (1)
4.2 Joint Venture Agreement of Cable TV Fund 12-BCD Venture dated as of March 17,
1986, among Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund
12-D, Ltd. (2)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Edwards Air Force Base, California (Fund 12-BCD).
10.1.2 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Lancaster, California (Fund 12-BCD).
(3)
10.1.3 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Unincorporated portions of Los Angeles County,
California (Fund 12-BCD). (3)
10.1.4 Copy of Los Angeles County Code regarding cable tv system franchises (Fund 12-
BCD). (4)
10.1.5 Copy of Ordinance 90-0118F dated 10/29/90 granting a cable television franchise
to Fund 12-BCD (Fund 12-BCD). (4)
10.1.6 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Green Valley/Elizabeth Lake/Leona Valley
unincorporated areas of Los Angeles County, California (Fund 12-BCD). (2)
10.1.7 Ordinance 88-0166F dated 10/4/88 amending the franchise described in 10.1.5 (Fund
12-BCD). (4)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Palmdale, California (Fund 12-BCD).
(4)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Tampa, Florida (Fund 12-BCD). (1)
10.1.10 Resolution No. 1153 dated 10/2/86 authorizing consent to transfer of the Tampa
franchise and amendment to the franchise agreement (Fund 12-BCD). (4)
10.1.11 Amendment to Tampa franchise agreement dated 10/6/86 (Fund 12-BCD). (4)
10.1.12 Tampa franchise transfer, acceptance and consent to transfer dated 10/6/86 (Fund
12-BCD). (4)
10.1.13 Second Amendment to Tampa Franchise Agreement dated September 1, 1994 (Fund 12-
BCD).
10.1.14 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Augusta, Georgia (Fund 12-B). (1)
10.1.15 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Blythe, Georgia (Fund 12-B). (2)
10.1.16 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Burke, Georgia (Fund 12-B). (5)
10.1.17 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Unincorporated Area of Columbia County,
Georgia (Fund 12-B). (4)
10.1.18 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Hephzibah, Georgia (Fund 12-B). (1)
10.1.19 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Unincorporated Area of Richmond County,
Georgia (Fund 12-B). (1)
10.1.20 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Albuquerque, New Mexico (Fund 12-
BCD). (3)
10.1.21 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Bernalillo, New Mexico (Fund 12-
BCD). (3)
10.1.22 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Town of Bernalillo, New Mexico (Fund 12-BCD).
(3)
10.1.23 Resolution No. 12-14-87 dated 12/14/87 authorizing the assignment of the
franchise to Fund 12-BCD. (4)
10.1.24 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Bosque Farms, New Mexico (Fund 12-
BCD). (3)
10.1.25 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Corrales, New Mexico (Fund 12-
BCD). (3)
10.1.26 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Kirtland Air Force Base, New Mexico (Fund 12-
BCD). (4)
10.1.27 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Los Ranchos, New Mexico (Fund 12-
BCD). (3)
10.1.28 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Sandoval, New Mexico (Fund 12-BCD).
(3)
10.1.29 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Valencia, New Mexico (Fund 12-BCD).
(3)
10.1.30 Resolution No. 88-23 dated 2/14/88 authorizing assignment of the franchise to
Fund 12-BCD. (4)
10.2.1 Loan and Security Agreement, dated August 29, 1985, between Cable TV Fund 12-B,
Ltd. and The Philadelphia National Bank, individually and as agent for various
lenders. (1)
10.2.2 Amendment No. 1 dated as of August 14, 1986, to Loan and Security Agreement,
dated August 29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia
National Bank, individually and as agent for various lenders. (4)
10.2.3 Amendment No. 2 dated March 31, 1988 to Loan and Security Agreement, dated August
29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia National Bank,
individually and as agent for various lenders. (4)
10.2.4 Amendment No. 3 dated March 29, 1989 to Loan and Security Agreement, dated August
29, 1985, between Cable TV Fund 12-B, Ltd. and The Philadelphia National Bank,
individually and as agent for various lenders. (4)
10.2.5 Amendment No. 4 dated November 29, 1991 to Loan and Security Agreement dated
November 1991 between Cable TV Fund 12-B, Ltd. and Corestates Bank, N.A.
(formerly The Philadelphia National Bank), individually and as agent for various
lenders. (6)
10.2.6 Amendment No. 5 dated December 23, 1994 to Loan and Security Agreement dated
November 1991 between Cable TV Fund 12-B, Ltd. and Corestates Bank, N.A.,
individually and as agent for various lenders.
10.2.7 Credit Agreement dated as of March 31, 1992 among Fund 12-BCD Venture and
Corestates Bank, N.A., individually and as agent for various lenders. (4)
10.2.8 Amendment No. 1 dated September 30, 1994 to Credit Agreement dated March 31, 1992
among Fund 12-BCD Venture and Corestates Bank, N.A., individually and as agent
for various lenders.
10.3.1 Purchase and Sale Agreement dated as of March 29, 1988 by and between Cable TV
Fund 12-BCD Venture as Buyer and Video Company as Seller. (7)
10.3.2 Purchase and Sale Agreement dated 9/20/91 and amendments thereto between Cable TV
Fund 12-BCD Venture as Seller and Falcon Classic Cable Income Properties, L.P.
(Fund 12-BCD). (8)
27 Financial Data Schedule
54
----------
(1) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1985 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(2) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1987 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(3) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1986 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(4) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1992 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(5) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1990 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(6) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1991 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(7) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1988 (Commission File Nos. 0-13193, 0-13807, 0-13964
and 0-14206).
(8) Incorporated by reference from the Forms 8-K of Fund
12-B, Fund 12-C and Fund 12- D dated 4/6/92
(Commission File Nos. 0-13193, 0-13964 and 0-14206,
respectively).