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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: 0-13193
CABLE TV FUND 12-A, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-0968104
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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
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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
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DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 12-A, 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-B, Ltd. ("Fund 12-B"), 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 the Program. The Partnership
was formed for the purpose of acquiring and operating cable television systems.
The Partnership owns the cable television systems serving areas in and
around Fort Myers, Florida (the "Fort Myers System"), Lake County, Illinois
(the "Lake County System"), Orland Park and Park Forest, Illinois (the
"Northern Illinois System"). The Fort Myers System, the Lake County System and
the Northern Illinois System may hereinafter collectively be referred to as the
"Systems."
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.
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
cable programming services and equipment have been revised. See Regulation and
Legislation. At December 31, 1994, the Systems' monthly basic service rates
ranged from $9.53 to $11.26, monthly basic and tier ("basic plus") service
rates ranged from $19.52 to $22.51 and monthly premium services ranged from
$3.95 to $11.95 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
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nonrecurring installation fee that ranges from $5.00 to $42.47; 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 67% of total revenues, premium service fees
accounted for approximately 15% of total revenues, pay-per-view fees were
approximately 2% of total revenues, advertising fees were approximately 7% of
total revenues and the remaining 9% 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% 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.)
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
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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 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 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
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same types of services now provided by the telephone industry. See the
additional discussion below regarding the announced plans of Ameritech to build
a cable television system in Naperville, Illinois.
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 operatorsand 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:
Ft. Myers System There is one MMDS operator whose activity has mainly been in
rural areas not serviced by the system. The operator has
recently increased its marketing efforts, but to date the system
has not lost a significant number of subscribers. There are a
few SMATV operators whose operations are limited to commercial
users such as motel operators. There are several TVRO operators
whose operations are confined mainly to rural areas and direct
competition in the system's service area is minimal. There is
another cable television system operating within very close
proximity on the southern portion of the system's service area.
The system and the other operator are both pursuing new
developments along this corridor; however, neither have pursued
service in the other's franchise area. At this time very few
customers have been lost to DBS service.
Northern Illinois System and There is one MMDS operator in the Chicago area; however, this
Lake County System operator has provided minimal competition because the majority of
the system's boundaries fall outside its transmittal area. There
is no competition from SMATV operators. There is one TVRO
operator in the system's service area providing minimal
competition; approximately 70 dishes have been sighted in the
service area. Ameritech has announced plans to build a cable
television system in the Naperville, Illinois area and to extend
into several other communities within the next few years. The
General Partner is uncertain at this time whether Ameritech's
plans include any of the communities located in the Northern
Illinois System.
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.
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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 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 elected to file cost-of-service showings in its Fort Myers System
and Northern Illinois System. The General Partner therefore anticipates no
further reductions in revenues or operating income before depreciation and
amortization of these three systems resulting from the FCC's rate regulations.
At this time, the regulatory authorities have not approved the cost-of-service
showings, and there can be no assurance that the Partnership's cost-of-service
showings will prevent further rate reductions until such final approval is
received. The Partnership complied with the benchmark regulations and further
reduced rates in the Lake County System. The Partnership will continue its
efforts to mitigate the effect of such rate reductions.
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
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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 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 District of Columbia
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.
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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. 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.
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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 telecommunication 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 at December 31, 1994
are described below:
SYSTEM ACQUISITION DATE
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Fort Myers System May 1985
Northern Illinois System and Lake County System May 1985
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 1993 in some cases 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 Systems operated approximately 1,050 miles
of cable plant, passing approximately 126,000 homes, representing an
approximate 67% penetration rate. Figures for numbers of 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,
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LAKE COUNTY, ILLINOIS 1994 1993 1992
--------------------- ---- ---- ----
Monthly basic plus service rate $21.26 $22.13 $21.95
Basic subscribers 17,021 15,216 14,179
Pay units 11,671 12,091 11,900
Franchise expiration dates range from March 1996 to June 2001.
At December 31,
---------------
ORLAND PARK/PARK FOREST, ILLINOIS 1994 1993 1992
--------------------------------- ---- ---- ----
Monthly basic plus service rate $22.51 $22.51 $21.95
Basic subscribers 18,375 16,875 16,086
Pay units 14,996 15,005 16,809
The franchise expiration date for the Village of Orland Park is December 31,
1996. The franchise expiration date for the Village of Park Forest has been
extended to May 1995. The General Partner and the franchise authorities are
currently in the process of negotiating a longer term franchise.
At December 31,
---------------
FT. MYERS, FLORIDA 1994 1993 1992
------------------ ---- ---- ----
Monthly basic plus service rate $19.52 $19.52 $17.95
Basic subscribers 37,144 35,284 34,997
Pay units 25,052 22,303 23,273
9
10
Franchise expiration dates range from December 1999 to January 2002.
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).
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 7,865.
10
11
Item 6. Selected Financial Data
For the Year Ended December 31,
--------------------------------------------------------------------------------
1994 1993 1992 1991 1990
-------------- -------------- -------------- -------------- --------------
Revenues $29,378,010 $28,963,726 $26,693,028 $24,322,600 $21,610,617
Depreciation and Amortization 7,032,177 7,840,193 7,528,805 9,042,280 8,051,904
Operating Income (Loss) 1,377,680 1,196,824 514,394 (1,263,012) 181,347
Net Loss (492,539) (409,726) (1,583,447) (3,898,842) (3,450,329)
Net Loss per Limited Partnership Unit (4.69) (3.90) (15.07) (37.11) (32.84)
Weighted average number of Limited
Partnership Units outstanding 104,000 104,000 104,000 104,000 104,000
General Partner's Deficit (372,133) (367,208) (363,111) (347,277) (308,289)
Limited Partners' Capital 7,909,644 8,397,258 8,802,887 10,370,500 14,230,354
Total Assets 36,725,141 39,297,990 43,071,609 45,479,809 49,842,381
Debt 26,402,399 29,724,530 32,813,067 34,291,172 33,768,635
General Partner Advances 1,305,933 220,722 261,348 - 375,488
11
12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CABLE TV FUND 12-A
Results of Operations
1994 Compared to 1993 -
Revenues of the Partnership increased $414,284, or approximately 1
percent, from $28,963,726 in 1993 to $29,378,010 in 1994. Increases in basic
subscribers primarily accounted for the increase in revenues. The Partnership
added 5,165 basic subscribers in 1994, an increase of approximately 8 percent.
Basic subscribers totalled 67,375 at December 31, 1993, compared to 72,540 at
December 31, 1994. Increases in advertising and pay-per-view revenues also
contributed to the increase in revenue. The increase in revenues would have
been greater but for the reduction in basic rates due to basic rate regulations
issued by the FCC in April 1993 with which the Partnership complied effective
September 1, 1993. No other individual factor was significant to the increase
in revenues.
Operating, general and administrative expense increased $764,364, or
approximately 5 percent, from $16,484,631 in 1993 to $17,248,995 in 1994. This
expense represented 59 percent of revenue in 1994 compared to 57 percent in
1993. Programming fees accounted for approximately 55 percent of the increase
in expense and was due, in part, to the increase in the subscriber base. In
addition, increases in personnel, marketing and advertising expenses were
partially offset by decreases in plant maintenance and copyright expenses. No
other individual factors contributed significantly to the increase. Management
fees and allocated overhead from the General Partner increased $277,080, or
approximately 8 percent, from $3,442,078 in 1993 to $3,719,158 in 1994 due
primarily to an increase in allocated expenses from the General Partner. The
General Partner has experienced increases in expenses, including personnel
costs and reregulation costs. Depreciation and amortization expense decreased
$808,016, or approximately 10 percent, from $7,840,193 in 1993 to $7,032,177 in
1994 due to the maturation of the Partnership's asset base.
Operating income increased $180,856, or approximately 15 percent, from
$1,196,824 in 1993 to $1,377,680 in 1994. This increase was due to the increase
in revenues and the decrease in depreciation and amortization expense.
Operating income before depreciation and amortization decreased $627,160, or
approximately 7 percent, from $9,037,017 in 1993 to $8,409,857 in 1994. This
decrease was due to the increase in operating, general and administrative
expense and management fees and allocated overhead from the General Partner
exceeding the increase in revenue. The decrease in operating income before
depreciation and amortization reflects the current operating environment of the
cable television industry. The FCC rate regulations under the 1992 Cable Act
have caused revenues to increase more slowly than in prior years. In turn,
this has caused certain expenses which are a function of revenue, such as
franchise fees, copyright fees and management fees to increase more slowly than
otherwise would have been the case. However, other operating costs such as
programming fees, salaries and benefits, and marketing costs as well as other
costs incurred by the General Partner, which are allocated to the Partnership,
continue to increase at historical rates. This situation has led to reductions
in operating income before depreciation and amortization as a percent of
revenue ("Operating Margin"). Such reductions in Operating Margins may
continue in the near term as the Partnership and the General Partner incur cost
increases due to, among other things, increases in programming fees, compliance
costs associated with reregulation and competition, that exceed increases in
revenue. The General Partner will attempt to mitigate a portion of these
reductions through (a) new service offerings, (b) product re-marketing and
re-packaging and (c) marketing efforts targeted at non-subscribers.
Interest expense increased $176,682, or approximately 11 percent, from
$1,562,312 in 1993 to $1,738,994 in 1994 due to higher effective interest rates
on interest bearing obligations. Net loss increased $82,813, or approximately
20 percent, from $409,726 in 1993 to $492,539 in 1994 due to factors discussed
above.
1993 Compared to 1992 -
Revenues of the Partnership increased $2,270,698, or approximately 9
percent, from $26,693,028 in 1992 to $28,963,726 in 1993. During 1993, the
Partnership added approximately 1,923 basic subscribers, an increase of 3
percent. This increase in basic subscribers accounted for approximately 28
percent of the increase in revenues. An increase in advertising revenues
accounted for approximately 24 percent of the increase in revenues. Basic
service rate adjustments implemented in all of the Partnership's accounted for
approximately 17 percent of the increase in revenues. The increase in revenues
would have been greater but for the reduction in basic rates due to basic rate
regulations issued by
12
13
the FCC in April 1993 with which the Partnership complied effective September
1, 1993. No other individual factor was significant to the increase in
revenues.
Operating, general and administrative expense increased $991,718, or
approximately 6 percent, from $15,492,913 in 1992 to $16,484,631 in 1993.
Operating, general and administrative expense represented 57 percent of revenue
in 1993 compared to 58 percent in 1992. Programming fees, advertising and
plant related costs primarily accounted for the increase. These increases
were offset, in part, by a decrease in copyright fees. There were no other
individual factors that contributed significantly to the increase. Management
fees and allocated overhead from the General Partner increased $285,162, or
approximately 9 percent, from $3,156,916 in 1992 to $3,442,078 in 1993. This
increase was due to the increase in revenues, upon which such fees and
allocations are based, and an increase in expenses allocated from the General
Partner. Depreciation and amortization expense increased $311,388, or
approximately 4 percent, from $7,528,805 in 1992 to $7,840,193 in 1993. This
increase was due to additions to the Partnership's asset base.
Operating income increased $682,430 to $1,196,824 in 1993 compared to
$514,394 in 1992. This was due to the fact that revenue growth exceeded the
increases in operating, general and administrative expense, management fees and
allocated overhead from the General Partner and depreciation and amortization
expense. Operating income before depreciation and amortization increased
$993,818, or approximately 12 percent, from $8,043,199 in 1992 to $9,037,017 in
1993. The increase was due to the fact that revenue growth exceeded the
increases in operating, general and administrative expense and management fees
and allocated overhead from the General Partner.
Interest expense decreased $302,642, or approximately 16 percent, from
$1,864,954 in 1992 to $1,562,312 in 1993. This decrease was due primarily to
lower effective interest rates and lower outstanding balances on interest
bearing obligations. Other expense decreased $188,649 from $232,887 in 1992 to
$44,238 in 1993. Such expense was primarily due to allocated depreciation from
affiliated entities. Net loss decreased $1,173,721, or approximately 74
percent, from $1,583,447 in 1992 to $409,726 in 1993. This decrease is due to
the factors discussed above. The Partnership's losses are expected to continue
in the future.
Financial Condition
Capital expenditures totalled approximately $5,615,500 in 1994.
Approximately 31 percent of these expenditures related to construction of new
cable plant. Approximately 22 percent of these expenditures related to the
construction of service drops to subscribers' homes. The remaining
expenditures were used for various enhancements in all of the Partnership s
systems. Funding for these expenditures was provided primarily by cash
generated from operations.
The Partnership anticipates capital expenditures of approximately
$4,800,000 in 1995. Service drops to homes are anticipated to account for
approximately 30 percent of these expenditures. Plant extensions in all of the
Partnership's systems are expected to account for approximately 27 percent of
these expenditures. The remainder of the anticipated expenditures is for
various enhancements in all of the Partnership's systems. Funding for these
expenditures is expected to be provided by cash generated from operations.
At June 30, 1992, the then-outstanding balance of $34,000,000 on the
Partnership's $35,000,000 credit facility converted to a term loan. At
December 31, 1994, $26,125,000 was outstanding under this term loan.
Installments paid during 1994 totalled $3,375,000. On January 30, 1995, the
Partnership entered into a new $30,000,000 revolving credit facility and repaid
all amounts outstanding under the former term loan. Under the terms of the new
agreement, the revolving credit facility will expire on December 31, 1996 at
which time the then-outstanding balance will convert to a term loan.
The term loan will be payable in 20 consecutive quarterly installments that
will commence on March 31, 1997. Generally, interest payable on amounts
borrowed under the new revolving credit facility is at the Partnership's
option of Prime or a fixed rate defined as the Euro-Rate plus 1 percent. The
Partnership paid a one-time loan facility fee of $175,000 upon closing of the
new revolving credit facility. This amount is being amortized over the life of
the loan.
In January 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $15,000,000. The
Partnership paid a fee of $150,000. The agreement protects the Partnership
from a three month LIBOR interest rate that exceeds 7 percent for three years
from the date of the agreement.
The General Partner believes that the Partnership has sufficient
sources of capital from cash on hand, cash generated from operations and
borrowings available under its new credit facility to meet its presently
anticipated needs.
13
14
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 cost-of-service showings for the Fort Myers,
Florida and Orland Park, Illinois systems and thus anticipates no further
reductions in rates in these systems. The cost-of-service showings for these
systems have not yet received final approval from franchising authorities,
however, and there can be no assurance that the Partnership's cost-of-service
showings will prevent further rate reductions until such final approvals are
received. The Partnership complied with the February 1994 benchmark
regulations and further reduced rates in the Lake County, Illinois system
effective July 1994. See Item 1 for further discussion of the provisions of
the 1992 Cable Act and the FCC regulations promulgated thereunder.
14
15
Item 8. Financial Statements
CABLE TV FUND 12-A
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
INDEX
Page
-------------
12-A
----
Report of Independent Public Accountants 16
Balance Sheets 17
Statements of Operations 19
Statements of Partners' Capital (Deficit) 20
Statements of Cash Flows 21
Notes to Financial Statements 22
15
16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-A:
We have audited the accompanying balance sheets of CABLE TV
FUND 12-A (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, 1993. 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-A 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.
16
17
CABLE TV FUND 12-A
(A Limited Partnership)
BALANCE SHEETS
December 31,
---------------------------------
ASSETS 1994 1993
------ --------------- --------------
CASH $ 578,657 $ 1,610,187
TRADE RECEIVABLES, less allowance for doubtful receivables of $32,813
and $49,157 at December 31, 1994 and 1993, respectively 374,817 492,896
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 72,891,760 67,276,230
Less- accumulated depreciation (40,728,415) (35,137,424)
------------ ------------
32,163,345 32,138,806
Franchise costs, net of accumulated amortization of $20,131,554
and $19,132,967 at December 31, 1994 and 1993, respectively 3,220,568 4,219,155
Subscriber lists, net of accumulated amortization of $11,411,057
and $11,013,590 at December 31, 1994 and 1993, respectively 199,808 597,275
------------ ------------
Total investment in cable television properties 35,583,721 36,955,236
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 187,946 239,671
------------ ------------
Total assets $ 36,725,141 $ 39,297,990
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
17
18
CABLE TV FUND 12-A
(A Limited Partnership)
BALANCE SHEETS
December 31,
----------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
- ------------------------------------------- --------------- ----------------
LIABILITIES:
Debt $ 26,402,399 $ 29,724,530
Accounts payable-
Trade 30,848 36,877
General Partner 1,305,933 220,722
Accrued liabilities 1,317,298 1,109,852
Subscriber prepayments 131,152 175,959
------------ ------------
Total liabilities 29,187,630 31,267,940
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (373,133) (368,208)
------------ ------------
(372,133) (367,208)
------------ ------------
Limited Partners-
Net contributed capital (104,000 units outstanding at
December 31, 1994 and 1993) 44,619,655 44,619,655
Accumulated deficit (36,710,011) (36,222,397)
------------ ------------
7,909,644 8,397,258
------------ ------------
Total liabilities and partners' capital (deficit) $ 36,725,141 $ 39,297,990
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
18
19
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
----------------------------------------------------------
1994 1993 1992
--------------- ---------------- --------------
REVENUES $29,378,010 $28,963,726 $26,693,028
COSTS AND EXPENSES:
Operating, general and administrative 17,248,995 16,484,631 15,492,913
Management fees and allocated overhead
from General Partner 3,719,158 3,442,078 3,156,916
Depreciation and amortization 7,032,177 7,840,193 7,528,805
----------- ----------- -----------
OPERATING INCOME 1,377,680 1,196,824 514,394
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,738,994) (1,562,312) (1,864,954)
Other, net (131,225) (44,238) (232,887)
----------- ----------- -----------
Total other income (expense) (1,870,219) (1,606,550) (2,097,841)
----------- ----------- -----------
NET LOSS $ (492,539) $ (409,726) $(1,583,447)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (4,925) $ (4,097) $ (15,834)
=========== =========== ===========
Limited Partners $ (487,614) $ (405,629) $(1,567,613)
=========== =========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (4.69) $ (3.90) $ (15.07)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 104,000 104,000 104,000
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
19
20
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
----------------------------------------------------------
1994 1993 1992
--------------- ---------------- --------------
GENERAL PARTNER:
Balance, beginning of period $ (367,208) $ (363,111) $ (347,277)
Net loss for period (4,925) (4,097) (15,834)
---------- ----------- -----------
Balance, end of period $ (372,133) $ (367,208) $ (363,111)
========== =========== ===========
LIMITED PARTNERS:
Balance, beginning of period $8,397,258 $ 8,802,887 $10,370,500
Net loss for period (487,614) (405,629) (1,567,613)
---------- ----------- -----------
Balance, end of period $7,909,644 $ 8,397,258 $ 8,802,887
========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
20
21
CABLE TV FUND 12-A
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
----------------------------------------------------------
1994 1993 1992
--------------- ---------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (492,539) $ (409,726) $(1,583,447)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 7,032,177 7,840,193 7,528,805
Amortization of interest rate protection contract 50,004 49,991 15,675
Decrease (increase) in trade receivables 118,079 (310,709) (103,360)
Increase in deposits, prepaid expenses and deferred charges (43,411) (6,100) (267,995)
Increase (decrease) in amount due General Partner 1,085,211 (40,626) 261,348
Increase (decrease) in trade accounts payable, accrued
liabilities and subscriber prepayments 156,610 (234,730) 392,004
----------- ----------- -----------
Net cash provided by operating activities 7,906,131 6,888,293 6,243,030
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,615,530) (3,638,680) (3,428,106)
----------- ----------- -----------
Net cash used in investing activities (5,615,530) (3,638,680) (3,428,106)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 192,155 46,448 606,894
Repayment of debt (3,514,286) (3,134,985) (2,084,999)
Purchase of interest rate protection contract - (150,000) -
----------- ----------- -----------
Net cash used in financing activities (3,322,131) (3,238,537) (1,478,105)
----------- ----------- -----------
Increase (decrease) in cash (1,031,530) 11,076 1,336,819
Cash, beginning of period 1,610,187 1,599,111 262,292
----------- ----------- -----------
Cash, end of period $ 578,657 $ 1,610,187 $ 1,599,111
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,691,031 $ 1,583,758 $ 1,751,207
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
21
22
CABLE TV FUND 12-A
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 12-A, Ltd. ("the Partnership"), a Colorado
limited partnership, was formed on January 2, 1985, under a public program
sponsored by Jones Intercable, Inc. ("Intercable"). The Partnership was formed
to acquire, construct, develop and operate cable television systems.
Intercable, a publicly held Colorado corporation, is the "General Partner" and
manages the Partnership. 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 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 the 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.
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 system 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.
22
23
Intangible Assets
Costs assigned to franchises and subscriber lists are being
amortized using the straight-line method over the following remaining estimated
useful lives:
Franchise costs 1-5 years
Subscriber lists 1-2 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 Reimbursement
Intercable 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 were $1,468,900,
$1,448,186 and $1,334,651, respectively.
Any 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 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 to the partnership capital by the limited partners; the
balance, 75 percent to the limited partners and 25 percent to Intercable.
The Partnership reimburses Intercable for certain allocated
overhead and administrative expenses. 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 Intercable 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 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. Reimbursements by the Partnership to Intercable for
allocated overhead and administrative expenses were $2,250,258, $1,993,892 and
$1,822,265 in 1994, 1993 and 1992, respectively.
The Partnership was charged interest during 1994 at an average
interest rate of 10 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged the
Partnership by Intercable was $32,220, $1,029 and $-0- in 1994, 1993 and 1992,
respectively.
23
24
Payments to/from Affiliates for Programming Services
The Partnership receives programming from Product Information
Network, Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of Intercable. Payments to Superaudio totalled $45,861, $45,495 and
$44,605 in 1994, 1993 and 1992, respectively. Payments to The Mind Extension
University totalled $41,551, $26,411 and $25,559 in 1994, 1993 and 1992,
respectively. Payments to Jones Computer Network, which initiated service in
1994, totalled $13,199. The Partnership receives a commission from Product
Information Network based on a percentage of advertising revenue and number of
subscribers. Product Information Network, which initiated service in 1994,
paid commissions to the Partnership totalling $16,302 in 1994.
(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 $ 65,152,784 $ 60,132,733
Equipment and tools 2,721,446 2,565,394
Office furniture and equipment 1,532,613 1,324,144
Buildings 1,597,293 1,577,987
Vehicles 1,463,260 1,251,608
Land 424,364 424,364
------------ -------------
Total property, plant and equipment $ 72,891,760 $ 67,276,230
Less: accumulated depreciation $(40,728,415) $ (35,137,424)
------------ -------------
Net property, plant and equipment $ 32,163,345 $ 32,138,806
============ =============
(5) DEBT
Debt consists of the following: December 31,
-----------------------------------
1994 1993
------------ -------------
Lending institutions-
Revolving credit and term loan $ 26,125,000 $ 29,500,000
Capital lease obligations 277,399 224,530
------------ -------------
$ 26,402,399 $ 29,724,530
============ =============
At June 30, 1992, the then-outstanding balance of $34,000,000
on the Partnership's $35,000,000 credit facility converted to a term loan. At
December 31, 1994, $26,125,000 was outstanding under this term loan.
Installments paid during 1994 totalled $3,375,000. On January 30, 1995, the
Partnership entered into a new $30,000,000 revolving credit facility and repaid
all amounts outstanding under the former term loan. Under the terms of the new
agreement, the revolving credit facility will expire on December 31, 1996, at
which time the then-outstanding balance will convert to a term loan. The term
loan will be payable in 20 consecutive quarterly installments that will
commence on March 31, 1997. Generally, interest payable on amounts borrowed
under the new revolving credit facility is at the Partnership's option of
Prime, or a fixed rate defined as the Euro-Rate plus 1 percent. The effective
interest rates on outstanding obligations as of December 31, 1994 and 1993 were
7.33 percent and 4.83 percent, respectively. The Partnership paid a one-time
loan facility fee of $175,000 upon closing of the new revolving credit
facility. This amount is being amortized over the life of the loan.
24
25
In January 1993, the Partnership entered into an interest rate
cap agreement covering outstanding debt obligations of $15,000,000. The
Partnership paid a fee of $150,000. The agreement protects the Partnership
from a three month LIBOR interest rate that exceeds 7 percent for three years
from the date of the agreement.
Installments due on all debt principal for each of the five
years in the period ending December 31, 1999, respectively, are: $83,220,
$83,220, $4,001,970, $3,946,490, $5,225,000 and $13,062,499. 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
Intercable.
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 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 Federal Communications Commission (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
cost-of-service showings for its Fort Myers, Florida and Orland Park, Illinois
systems and thus anticipates no further reductions in rates in these systems.
The cost-of-service showings for these systems have not received final approval
from franchising authorities, however, and there can be no assurance that the
Partnership's cost-of-service showings will prevent rate reductions until such
final approvals are received. The Partnership complied with the February 1994
benchmark regulations and further reduced rates in the Lake County, Illinois
system effective July 1994.
The Partnership rents office and other facilities under
various long-term operating lease arrangements. Rent paid under such lease
arrangements totalled $79,337, $74,142 and $81,669, 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 $ 60,043
1996 50,036
1997 -
1998 -
1999 -
Thereafter -
---------
$ 110,079
=========
25
26
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
Year Ended December 31,
---------------------------------------------
1994 1993 1992
----------- ----------- ----------
Maintenance and repairs $ 315,149 $ 299,578 $ 282,340
=========== =========== ==========
Taxes, other than income and payroll taxes $ 306,902 $ 331,358 $ 295,517
=========== =========== ==========
Advertising $ 485,911 $ 433,250 $ 494,175
=========== =========== ==========
Depreciation of property, plant and equipment $ 5,636,122 $ 5,621,938 $5,310,550
=========== =========== ==========
Amortization of intangible assets $ 1,396,055 $ 2,218,256 $2,218,255
=========== =========== ==========
26
27
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
27
28
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.
28
29
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.
29
30
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
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.
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.
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.
Product Information Network ("PIN"), 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 PIN and the Partnership. During the year ended December 31,
1994, the Partnership received revenues from PIN of $16,302.
The charges to the Partnership for related party transactions are as
follows for the periods indicated:
Cable TV Fund 12-A, Ltd. At December 31,
------------------------ --------------------------------------------------------
1994 1993 1992
------------- ------------ -------------
Management fees $ 1,468,900 $ 1,448,186 $ 1,334,651
Allocation of expenses 2,250,258 1,993,892 1,822,265
Interest expense 32,220 1,029 -0-
Amount of notes and advances outstanding 1,305,933 188,223 261,348
Highest amount of notes and advances outstanding 1,305,933 261,348 261,348
Programming fees:
30
31
Superaudio 45,861 45,495 44,605
Mind Extension University 41,551 26,411 25,559
Jones Computer Network 13,199 -0- -0-
31
32
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 of Cable TV Fund 12-A.
(1)
10.1.1 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the City of Fort Myers, Florida (Fund
12-A). (1)
10.1.2 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for Lee County, Florida (Fund 12-A). (1)
10.1.3 Renewal of Permit dated 3/4/92 (Fund 12-A). (2)
10.1.4 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated portions of Cook
County, Illinois (Fund 12-A). (3)
10.1.5 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Grayslake, Illinois
(Fund 12-A). (1)
10.1.6 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Unincorporated Area of Lake
County, Illinois (Fund 12-A). (1)
10.1.7 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Libertyville, Illinois
(Fund 12-A). (1)
10.1.8 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Mundelein, Illinois
(Fund 12-A). (1)
10.1.9 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Orland Park, Illinois
(Fund 12-A). (1)
10.1.10 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Park Forest, Illinois
(Fund 12-A). (1)
10.1.11 Copy of a franchise and related documents thereto
granting a community antenna television system
franchise for the Village of Wauconda, Illinois
(Fund 12-A). (1)
10.2.1 Credit Agreement, dated as of January 30, 1995,
between Cable TV Fund 12-A, Ltd. and Toronto
Dominion (Texas), Inc., for itself and as agent for
various lenders.
27 Financial Data Schedule
__________
(1) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1985 (Commission File No. 0-13193).
32
33
(2) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1992 (Commission File No. 0-13193).
(3) Incorporated by reference from Registrant's Report
on Form 10-K for the fiscal year ended December 31,
1987 (Commission File Nos. 0-13192, 0-13807, 0-13964
and 0-14206).
(b) Reports on Form 8-K.
None.
33
34
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-A, 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 22, 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 22, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
----------------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 22, 1995 (Principal Financial Officer)
By: /s/ Larry Kaschinske
----------------------------------------
Larry Kaschinske
Controller
Dated: March 22, 1995 (Principal Accounting Officer)
By: /s/ James B. O'Brien
----------------------------------------
James B. O'Brien
Dated: March 22, 1995 President and Director
By: /s/ Raymond L. Vigil
----------------------------------------
Raymond L. Vigil
Dated: March 22, 1995 Group Vice President and Director
By: /s/ Robert S. Zinn
----------------------------------------
Robert S. Zinn
Dated: March 22, 1995 Director
34
35
By: /s/ David K. Zonker
----------------------------------------
David K. Zonker
Dated: March 22, 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
35
36
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
------ ----------- ----
4.1 Limited Partnership Agreement of Cable TV Fund 12-A. (1)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the City of Fort Myers, Florida (Fund 12-A). (1)
10.1.2 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for Lee County, Florida (Fund 12-A). (1)
10.1.3 Renewal of Permit dated 3/4/92 (Fund 12-A). (2)
10.1.4 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Unincorporated portions of Cook County, Illinois (Fund 12-A). (3)
10.1.5 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Grayslake, Illinois (Fund 12-A). (1)
10.1.6 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Unincorporated Area of Lake County, Illinois (Fund 12-A). (1)
10.1.7 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Libertyville, Illinois (Fund 12-A). (1)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Mundelein, Illinois (Fund 12-A). (1)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Orland Park, Illinois (Fund 12-A). (1)
10.1.10 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Park Forest, Illinois (Fund 12-A). (1)
10.1.11 Copy of a franchise and related documents thereto granting a community antenna television
system franchise for the Village of Wauconda, Illinois (Fund 12-A). (1)
10.2.1 Credit Agreement, dated as of January 30, 1995, between Cable TV Fund 12-A, Ltd. and Toronto
Dominion (Texas), Inc., for itself and as agent for various lenders.
27 Financial Data Schedule