1
FORM 10-K
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, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
------------- ------------
Commission file number: 0-13807
CABLE TV FUND 12-B, LTD.
------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0969999
-------- ----------
(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
--------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)
of the Act: Limited Partnership Interests
Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes x No
----- -----
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
-----
DOCUMENTS INCORPORATED BY REFERENCE: None
2
PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 12-B, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 12 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). Cable TV Fund 12-A, Ltd. ("Fund 12-A"), Cable TV Fund 12-C,
Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") are the other
partnerships that were formed pursuant to that Program. In 1986, the
Partnership, Fund 12-C and Fund 12-D formed a general partnership known as Cable
TV Fund 12-BCD Venture (the "Venture"), in which the Partnership owns a 9
percent interest, Fund 12-C owns a 15 percent interest and Fund 12-D owns a 76
percent interest. The Partnership and the Venture were formed for the purpose of
acquiring and operating cable television systems.
Since the sale of the cable television system serving areas in and
around Augusta, Georgia (the "Augusta System") as described below, the
Partnership does not directly own any cable television systems. The
Partnership's sole asset is its 9 percent interest in the Venture. The Venture
also recently sold one of its cable television systems as described below and
now owns the cable television systems serving Palmdale, Lancaster and Rancho
Vista and the military installation of Edwards Air Force Base, all in California
(the "Palmdale/Lancaster System") and Albuquerque, New Mexico (the "Albuquerque
System"). See Item 2. The Palmdale/Lancaster System and the Albuquerque System
may collectively be referred to as the "Systems."
DISPOSITIONS OF CABLE TELEVISION SYSTEMS. On October 20, 1995, the
Partnership sold the Augusta System to Jones Cable Holdings, Inc. ("JCH"), a
wholly owned subsidiary of the General Partner, for a sales price of
$142,618,000, subject to working capital adjustments. The sales price
represented the average of three separate, independent appraisals of the Augusta
System. The transaction was approved by approximately 75 percent of the
Partnership's limited partners in a vote of the limited partners held in August
1995. The Partnership subsequently paid all of its indebtedness and distributed
the net sale proceeds to its partners of record as of September 30, 1995. The
limited partners of the Partnership, as a group, received $95,179,375 from the
net sale proceeds and the General Partner received $13,220,625 from the net sale
proceeds. The distribution to the limited partners of the Partnership equated to
approximately $1,714 for each $1,000 invested in the Partnership.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH for a
sales price of $110,395,667, subject to normal working capital closing
adjustments. This price represented the average of three separate, independent
appraisals of the fair market value of the Tampa System. Because the Venture's
debt arrangements did not allow the Venture to make distributions on the sale of
Venture assets, in February 1996 the Venture's debt arrangements were amended to
permit a $55,000,000 distribution to the Venture's partners from the sale
proceeds, and the balance of the sale proceeds were used to reduce Venture
indebtedness. The Partnership's portion of this distribution is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in April
1996. The Partnership also will distribute in April 1996 $1,200,000 of proceeds
remaining from the sale of the Augusta System, of which $900,000 will be
distributed to limited partners and $300,000 will be distributed to the General
Partner. These April 1996 distributions will give the Partnership's limited
partners an approximate return of $84 for each $1,000 invested in the
Partnership. This amount is in addition to the $1,714 for each $1,000 invested
in the Partnership returned to the limited partners from the Augusta System sale
during 1995. Because the Tampa System did not constitute all or substantially
all of the Venture's assets, no vote of the limited partners of the Partnership
was required in connection with this transaction.
On February 29, 1996, JCH consummated an agreement with Time Warner
Entertainment-Advance/Newhouse Partnership ("TWEAN"), an unaffiliated cable
television system operator, pursuant to which JCH conveyed the Tampa System,
along with certain other cable television systems owned by JCH, and cash in the
amount of $3,500,000, subject to normal closing adjustments, to TWEAN in
exchange for the cable television systems serving Andrews Air Force Base,
Capitol Heights, Cheltenham, District Heights, Fairmount Heights,
2
3
Forest Heights, Morningside, Seat Pleasant, Upper Marlboro, and portions of
Prince George's County, all in Maryland, and a portion of Fairfax County,
Virginia.
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. At December 31, 1995,
the Systems' monthly basic service rates ranged from $7.95 to $14.50, monthly
basic and tier ("basic plus") service rates ranged from $15.00 to $23.27 and
monthly premium services ranged from $2.75 to $12.95 per premium service. In
addition, the Venture earns revenues from the Systems' pay-per-view programs and
advertising fees. Related charges may include a nonrecurring installation fee
that ranges from $1.99 to $50.00; however, from time to time the Systems have
followed the common industry practice of reducing or waiving the installation
fee during promotional periods. Commercial subscribers such as hotels, motels
and hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation. Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty. For
the year ended December 31, 1995, of the total fees received by the Systems,
basic service and tier service fees accounted for approximately 63% of total
revenues, premium service fees accounted for approximately 15% of total
revenues, pay-per-view fees were approximately 3% of total revenues, advertising
fees were approximately 8% of total revenues and the remaining 11% of total
revenues came principally from equipment rentals, installation fees and program
guide sales. The Venture 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.
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. These franchises typically contain many conditions, such as time
limitations on commencement and completion of construction, conditions of
service, including the number of channels, types of programming and
3
4
the provision of free service to schools and certain other public institutions,
and the maintenance of insurance and indemnity bonds. The provisions of local
franchises are subject to federal regulation.
The Venture holds 15 franchises relating to the Palmdale/Lancaster
System and the Albuquerque System. These franchises provide for the payment of
fees to the issuing authorities and generally range from 3% to 5% of the gross
revenues of a cable television system. The 1984 Cable Act prohibits franchising
authorities from imposing annual franchise fees in excess of 5% of gross
revenues and also permits the cable television system operator to seek
renegotiation and modification of franchise requirements if warranted by changed
circumstances.
The Venture has never had a franchise revoked. The Venture's franchise
expiration dates range from January 1999 to February 2007. It is anticipated
that the Venture's remaining cable television systems will be sold before any
franchises need to be renewed
COMPETITION. Cable television systems currently experience competition
from several sources. A potential source of significant competition is Direct
Broadcast Satellite ("DBS") services that use video compression technology to
increase channel capacity and provide packages of movies, network and other
program services that are competitive with those of cable television systems.
Two companies offering DBS services began operations in 1994, and two other
companies offering DBS service recently began operations. In addition, a joint
venture has won the right to provide a DBS service through a FCC spectrum
auction. Not all subscribers terminate cable television service upon acquiring a
DBS system. The General Partner has observed that a number of DBS subscribers
also elect to subscribe to cable television service in order to obtain the
greatest variety of programming on multiple television sets, including local
video services programming not available through DBS service.
Although neither the Venture nor the General Partner has yet
encountered competition from a telephone company providing video services as a
cable operator or video dialtone operator, it is anticipated that the cable
television systems owned or managed by the General Partner will face such
competition in the near future. Legislation recently enacted into law will make
it possible for companies with considerable resources to enter the business. For
example, in February 1996, one of the regional Bell operating companies entered
into an agreement to acquire the nation's third largest cable television
company. Additionally, several telephone companies have begun seeking cable
television franchises from local governmental authorities as a consequence of
litigation which successfully challenged the constitutionality of the cable
television/telephone company cross-ownership rules. The General Partner cannot
predict at this time when and to what extent telephone companies will provide
cable television service within service areas in competition with cable
television systems owned or managed by the General Partner. The General Partner
is aware of the following imminent competition from telephone companies:
Ameritech, one of the seven regional Bell operating companies, which provides
telephone service in a multi-state region including Illinois, has just obtained
a franchise that will allow it to provide cable television service in
Naperville, Illinois, a community currently served by a cable system owned by
one of the cable television systems managed by the General Partner. Chesapeake
and Potomac Telephone Company of Virginia and Bell Atlantic Video Service
Company, both subsidiaries of Bell Atlantic, another of the regional Bell
operating companies, have announced their intention to build a cable television
system in Alexandria, Virginia in competition with a cable television system
owned by the General Partner. Bell Atlantic is preparing for the operation of a
telecommunications and video business in northern Virginia, including the
Alexandria metropolitan area. The FCC has granted GTE Virginia's application for
authority to construct, operate, own and maintain video dialtone facilities in
northern Virginia, including in the service area of a cable television system
owned by the General Partner. To date, GTE has not begun construction of a video
distribution system. The entry of telephone companies as direct competitors
could adversely affect the profitability and market value of the General
Partner's owned and managed systems.
Additional competition is present from several sources, including the
following: Master Antenna Television and Satellite Master Antenna Television
systems that serve multi-unit dwellings such as condominiums, apartment
complexes, motels, hotels and private residential communities; private cable
television/telephonic companies that have secured exclusive contracts to provide
video and telephony services to multi-unit dwellings
4
5
and similar complexes; and multichannel, multipoint distribution service
("MMDS") systems, commonly called wireless cable which generally focus on
providing service to residents of rural areas. In addition, the FCC has
established a new wireless telecommunications service known as Personal
Communications Service ("PCS") that would provide portable non-vehicular mobile
communications services similar to that available from cellular telephone
companies, but at a lower cost. Several cable television multiple system
operators hold or have requested experimental licenses from the FCC to test PCS
technology.
REGULATION AND LEGISLATION. The cable industry is regulated under the
Telecommunications Act of 1996 (the "1996 Act"), the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") and the Cable
Communications Policy Act of 1984 (the "1984 Cable Act") and the regulations
implementing these statutes. The Federal Communications Commission (the "FCC")
has promulgated regulations covering such areas as the registration of cable
television systems and other communications businesses, carriage of television
broadcast programming, consumer education and lockbox enforcement, origination
cablecasting and sponsorship identification, children's programming, the
regulation of basic cable and cable programming service rates in areas where
cable television systems are not subject to effective competition, signal
leakage and frequency use, technical performance, maintenance of various
records, equal employment opportunity, and antenna structure notification,
marking and lighting. In addition, cable operators periodically are required to
file various informational reports with the FCC. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of administrative
sanctions, such as the revocation of FCC licenses needed to operate certain
transmission facilities often used in connection with cable operations. State or
local franchising authorities, as applicable, also have the right to enforce
various regulations, impose fines or sanctions, issue orders or seek revocation
subject to the limitations imposed upon such franchising authorities by federal,
state and local laws and regulations. Several states have assumed regulatory
jurisdiction of the cable television industry, and it is anticipated that other
states will do so in the future. To the extent the cable television industry
begins providing telephone service, additional state regulations will be applied
to the cable television industry. Cable television operations are subject to
local regulation insofar as systems operate under franchises granted by local
authorities.
The following is a summary of federal laws and regulations materially
affecting the cable television industry, and a description of state and local
laws with which the cable industry must comply.
Telecommunications Act of 1996. The 1996 Act, which became law on
February 28, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
effective March 31, 1999 and the cable programming service tier of small cable
operators (those that provide service to 50,000 or fewer subscribers) effective
immediately. The 1996 Act also revised the procedures for filing a cable
programming service tier rate complaint and adds a new effective competition
test.
The most far-reaching changes in the communications business will
result from the telephony provisions of the 1996 Act. The statute expressly
preempts any legal barriers to competition in the local telephone business that
previously existed in state and local laws and regulations. Many of these
barriers had been lifted by state actions over the last few years, but the 1996
Act completes the task. The 1996 Act also establishes new requirements for
maintaining and enhancing universal telephone service and new obligations for
telecommunications providers to maintain privacy of customer information. The
1996 Act establishes uniform
5
6
requirements and standards for entry, competitive carrier interconnection and
unbundling of LEC monopoly services.
The 1996 Act repealed the cable television/telephone cross-ownership
ban adopted in the 1984 Cable Act. The federal cross-ownership ban was
particularly important to the cable industry because telephone companies already
own certain facilities such as poles, ducts and associated rights of way. While
this ban had been overturned by several courts, formal removal of the ban ended
the last legal constraints on telephone company plans to enter the cable market.
Under the 1996 Act, telephone companies in their capacity as common carriers now
may lease capacity to others to provide cable television service. Telephone
companies have the option of providing video service as cable operators or
through "open video systems" ("OVS"), a regulatory regime that may provide more
flexibility than traditional cable service. The 1996 Act exempts OVS operators
from many of the regulatory obligations that currently apply to cable operators,
such as rate regulation and franchise fees, although other requirements are
still applicable. OVS operators, although not subject to franchise fees as
defined by the 1992 Cable Act, are subject to fees charged by local franchising
authorities or other governmental entities in lieu of franchise fees. (Under
certain circumstances, cable operators also will be able to offer service
through open video systems.) In addition, the 1996 Act eliminated the
requirement that telephone companies file Section 214 applications (applications
to provide video dialtone services) with the FCC before providing video service.
This limits the opportunity of cable operators to mount challenges at the FCC
regarding telephone company entry into the video market. The 1996 Act also
contains restrictions on buying out incumbent cable operators in a telephone
company's service area, especially in suburban and urban markets.
Other parts of the 1996 Act also will affect cable operators. Under the
1996 Act, the FCC is required to revise the current pole attachment rate
formula. This revision will result in an increase in the rates paid by entities,
including cable operators, that provide telecommunication services. The rates
will be phased in after a five-year period. (Cable operators that provide only
cable services will be unaffected.) Under the V-chip provisions of the 1996 Act,
cable operators and other video providers are required to pass along any program
rating information that programmers include in video signals. Cable operators
also are subject to new scrambling requirements for sexually explicit
programming, and cable operators that provide Internet access or other online
services are subject to the new indecency limitations for computer services. In
addition, cable operators that provide Internet access or other online services
are subject to the new indecency limitations for computer services, although
these provisions already have been challenged in court, and the courts have
preliminarily enjoined the enforcement of these content-based provisions.
Under the 1996 Act, a franchising authority may not require a cable
operator to provide telecommunications services or facilities, other than an
institutional network, as a condition to a grant, renewal or transfer of a cable
franchise, and franchising authorities are preempted from regulating
telecommunications services provided by cable operators and from requiring cable
operators to obtain a franchise to provide such services. The 1996 Act also
repealed the 1992 Cable Act's anti-trafficking provision, which generally
required the holding of cable television systems for three years.
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Partnership in particular. The FCC shortly will
be undertaking numerous rulemaking proceedings to interpret and implement the
1996 Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Partnership.
Cable Television Consumer Protection and Competition Act of 1992. The
1992 Cable Act, which became effective on December 4, 1992, caused significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally mandated 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, became subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allowed the
FCC to regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising
6
7
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 on behalf of the
Partnership reduced rates charged for certain regulated services in the
Partnership's cable systems effective September 1, 1993. These reductions
resulted in some decrease in Partnership 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 required rate
reductions, absent a successful cost-of-service showing, of 17 percent of
September 30, 1992 rates, adjusted for inflation, channel modifications,
equipment costs, and increases in programming costs. Further rate reductions for
cable systems whose rates are below the revised benchmark levels, as well as
reductions that would require operators to reduce rates below benchmark levels
in order to achieve a 17 percent rate reduction, were held in abeyance pending
completion of cable system cost studies. The FCC recently requested some of
these "low price" systems to complete cost study questionnaires. After review of
these questionnaires, the FCC could decide to permanently defer any further rate
reductions, or require the additional 7 percent rate roll back for some or all
of these systems. The FCC has also adopted its proposed upgrade methodology by
which operators would be permitted to recover the costs of upgrading their
plant.
After analyzing the effects of the two methods of rate regulation, the
Partnership and the Venture elected to file cost-of-service showings in all of
their systems. The General Partner anticipates no further reduction in revenues
or operating income before depreciation and amortization resulting from the
FCC's rate regulations. At this time, the regulatory authorities have not
approved the cost-of-service showings.
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, cable system 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 percent 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 percent 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 the NPT 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.
In September 1995, the FCC authorized a new, alternative method of
implementing rate adjustments which will allow cable operators to increase rates
for programming annually on the basis of projected increases in external costs
(inflation, costs for programming, franchise-related obligations and changes in
the number of regulated channels) rather than on the basis of cost increases
incurred in the preceding calendar quarter. Operators that elect not to recover
all of their accrued external costs and inflation pass-throughs each year may
recover them (with interest) in subsequent years.
In December 1995, the FCC adopted final cost-of-service rate
regulations requiring, among other things, cable operators to exclude 34 percent
of system acquisition costs related to intangible and tangible assets used to
7
8
provide regulated services. The FCC also reaffirmed the industry-wide 11.25
percent after tax rate of return on an operator's allowable rate base, but
initiated a further rulemaking in which it proposes to use an operator's actual
debt cost and capital structure to determine an operator's cost of capital or
rate of return. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services are indexed for inflation, and operators
are permitted to increase rates in response to increases in costs beyond their
control, such as taxes and increased programming costs.
The United States Court of Appeals for the District of Columbia Circuit
recently upheld the FCC's rate regulations implemented pursuant to the 1992
Cable Act, but ruled that the FCC impermissibly failed to permit cable operators
to adjust rates for certain cost increases incurred during the period between
the date the 1992 Cable Act was passed through the initial date of rate
regulation. The FCC has not yet implemented the court's ruling.
There have been several lawsuits filed by cable operators and
programmers in federal court challenging various aspects of the 1992 Cable Act
including its 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. On December 12, 1995, the three-judge federal district court
again upheld the must-carry rules' validity. This decision has been appealed to
the United States Supreme Court.
In 1993, a federal district court 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 and these decisions have been appealed. The
FCC's regulations relating to the carriage of indecent programming, which were
recently upheld by the United States Court of Appeals for the District of
Columbia, have been appealed to the United States Supreme Court.
Franchising. The responsibility for franchising or other authorization
of cable television systems is left to state and local authorities. There are,
however, several provisions in the 1984 Cable Act that govern the terms and
conditions under which cable television systems provide service. These include
uniform standards and policies that are applicable to cable television operators
seeking renewal of a cable television franchise. The procedures established
provide for a formal renewal process should the franchising authority and the
cable television operator decline to use an informal procedure. A franchising
authority unable to make a preliminary determination to renew a franchise is
required to hold a hearing in which the operator has the right to participate.
In the event a determination is made not to renew the franchise at the
conclusion of the hearing, the franchising authority must provide the operator
with a written decision stating the specific reasons for non-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 present franchise, has not provided reasonable service in light of
the community's needs, does not have the financial, legal or 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.
A provision of the 1996 Act preempts franchising authorities from
regulating telecommunications services provided by cable operators and from
requiring cable operators to obtain a franchise to provide such services. A
franchising authority may not require a cable operator to provide
telecommunications services or facilities, other than an institutional network,
as a condition to a grant, renewal or transfer of a cable franchise.
8
9
GENERAL. The Venture'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 Venture'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 Venture 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 Venture'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
Venture.
ITEM 2. PROPERTIES
The cable television systems owned by the Venture are described below:
Ownership SYSTEM ACQUISITION DATE
--------- ------ ----------------
Cable TV Fund 12-B, Ltd., Cable TV Palmdale/Lancaster System April 1986
Fund 12-C, Ltd. and Cable TV Fund Albuquerque System August 1986
12-D, Ltd. own a 9%, 15% and 76%
interest, respectively, through
their interest in Cable TV Fund
12-BCD Venture
The following sets forth (i) the monthly basic plus service rates
charged to subscribers and (ii) the number of basic subscribers and pay units
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. 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, 1995, the Palmdale/Lancaster System operated cable
plant passing approximately 90,800 homes, representing an approximate 68%
penetration rate, and the Albuquerque System operated cable plant passing
approximately 223,800 homes, representing an approximate 49% penetration rate.
Figures for numbers of subscribers and homes passed are compiled from the
General Partner's records and may be subject to adjustments.
At December 31,
-------------------------------------------
PALMDALE/LANCASTER SYSTEM 1995 1994 1993
- ------------------------- ---- ---- ----
Monthly basic plus service rate $23.27 $21.77 $21.77
Basic subscribers 61,993 59,702 56,372
Pay units 46,699 46,214 39,928
9
10
At December 31,
-------------------------------------------
ALBUQUERQUE SYSTEM 1995 1994 1993
- ------------------ ---- ---- ----
Monthly basic plus service rate $22.85 $21.35 $21.00
Basic subscribers 109,911 106,835 98,555
Pay units* 57,189 58,838 67,462
* The decrease in pay units between 1993 and 1994 was primarily due to
the conversion of The Disney Channel from a premium service to a basic
plus service.
ITEM 3. LEGAL PROCEEDINGS
On September 20, 1995, a civil action entitled David Hirsch, on behalf
of himself and all others similarly situated, Plaintiff, vs. Jones Intercable,
Inc., Defendant, was filed in the District Court, County of Arapahoe, State of
Colorado (Case No. 95-CV-1800). The plaintiff has brought the action as a
purported class action on behalf of himself and all other limited partners of
Fund 12-D against the General Partner seeking to recover damages caused by the
General Partner's alleged breaches of its fiduciary duties to the limited
partners of Fund 12-D in connection with the sale of the Tampa System and the
subsequent exchange of the Tampa System with an unaffiliated cable television
system operator in return for systems owned by that operator. The plaintiff also
seeks certain equitable and injunctive relief. On January 25, 1996, the
plaintiff filed an amended complaint and request for a jury trial. On February
20, 1996, the General Partner filed a Motion to Dismiss the Amended Complaint on
the ground that it fails to state a claim upon which relief can be granted as a
matter of law. The General Partner believes that it has meritorious defenses,
and the General Partner intends to defend this lawsuit vigorously.
On November 17, 1995, a civil action entitled Martin Ury, derivatively
on behalf of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV
Fund 12-D, Ltd., Plaintiff vs. Jones Intercable, Inc., Defendant and Cable TV
Fund 12-BCD Venture, Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and
Cable TV Fund 12-D, Ltd., Nominal Defendants, was filed in the District Court,
County of Arapahoe, State of Colorado (Case No. 95-CV-2212). The plaintiff, a
limited partner of Fund 12-D, has brought the action as a derivative action on
behalf of the three partnerships that comprise the Venture against the General
Partner seeking to recover damages caused by the General Partner's alleged
breaches of its fiduciary duties to the Venture and to the three partnerships
that comprise the Venture (and their respective limited partners) in connection
with the sale of the Tampa System and the subsequent exchange of the Tampa
System with an unaffiliated cable television system operator in return for
systems owned by that operator. On February 1, 1996, the General Partner filed a
Motion to Dismiss the Complaint on the ground that it fails to state a claim
upon which relief can be granted as a matter of law. The Motion also asserts
that the plaintiff does not have standing to bring a claim on behalf of Fund
12-B and Fund 12-C and their respective limited partners. The General Partner
believes that it has meritorious defenses, and the General Partner intends to
defend this lawsuit vigorously.
Pursuant to the indemnification provisions of Section 9.6 of the
Partnership's limited partnership agreement, the General Partner may be entitled
to indemnification from the Partnership for its legal fees and expenses, and for
any amounts paid in settlement, in defending the above-described lawsuits. The
General Partner cannot determine at this time whether such amounts will be
material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In August 1995, a special vote of the limited partners of the
Partnership was conducted through the mails on behalf of the Partnership by the
General Partner for the purpose of obtaining limited partner approval of the
sale to the General Partner or one of its wholly owned subsidiaries, of the
Augusta System for $142,618,000 in cash, subject to normal closing adjustments.
Limited partners of record at the close of business on July 31, 1995 were
entitled to notice of, and to participate in, this vote of limited partners. Of
the 111,035 limited partnership interests entitled to vote, 83,087 interests, or
74.8 percent, voted to approve the transaction, 1,310 interests, or 1.2 percent,
voted against the transaction, 939 interests, or .8 percent, abstained from
voting and 25,699 interests,
10
11
or 23 percent, did not vote on the proposal. The sale of the Augusta System
closed on October 20, 1995. See Item 1, Business.
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, 1996, the number of equity security
holders in the Partnership was 8,079.
11
12
Item 6. Selected Financial Data
For the Year Ended December 31,
------------------------------------------------------------------------------------
Cable TV Fund 12-B, Ltd. 1995 1994 1993 1992 1991
- ------------------------ ------------- ---------- ----------- ----------- -----------
C>
Revenues $ 24,308,934 26,956,006 $26,975,209 $25,369,064 $22,434,854
Depreciation and Amortization 8,263,976 9,380,877 8,897,796 8,415,058 8,003,545
Operating Income 602,125 249,558 1,816,948 1,937,255 1,205,903
Equity in Net Loss of Cable
Television Joint Venture (1,021,236) (1,182,039) (1,063,449) (1,336,385) (1,636,665)
Net Income (Loss) 89,473,978 (a) (3,368,245) (1,463,979) (2,300,652) (4,003,891)
Net Income (Loss) per Limited
Partnership Unit 797.76 (a) (30.03) (13.05) (20.51) (35.70)
Weighted Average Number of Limited
Partnership Units Outstanding 111,035 111,035 111,035 111,035 111,035
General Partner's Deficit (12,630,037) (304,152) (270,470) (255,830) (232,823)
Limited Partners' Capital 11,073,735 17,673,872 21,008,435 22,457,774 24,735,419
Total Assets 1,269,060 60,347,311 66,085,025 70,507,101 74,521,239
Debt - 39,959,041 43,831,074 46,797,508 48,725,591
General Partner Advances - 112,495 163,266 289,033 215,769
(a) Net income resulted primarily from the sale of the Augusta System by Cable
TV Fund 12-B, Ltd. in October 1995.
For the Year Ended December 31,
---------------------------------------------------------------------------------
Cable TV Fund 12-BCD Venture 1995 1994 1993 1992 1991
- ---------------------------- ------------ ------------ ------------- ------------ ------------
Revenues $101,399,697 $ 92,823,076 $ 89,131,530 $ 83,567,527 $ 78,049,505
Depreciation & Amortization 26,666,735 24,809,654 25,772,299 30,793,053
Operating Income (Loss) 4,127,622 289,904 779,887 (1,087,963) (4,930,588)
Net Loss (11,124,567) (12,876,242) (11,584,416) (14,884,365) (17,828,600)
Partners' Capital (Deficit) (29,730,318) (18,605,751) (5,729,509) 5,854,907 20,739,272
Total Assets 163,486,029 170,675,914 169,670,552 175,554,620 185,834,366
Debt 180,770,267 180,402,748 167,698,697 160,440,488 156,131,618
Jones Intercable, Inc. Advances 4,198,739 616,810 188,430 511,646 4,606,840
12
13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CABLE TV FUND 12-B, LTD.
RESULTS OF OPERATIONS
On October 20, 1995, Cable TV Fund 12-B, Ltd. (the "Partnership") sold
the Augusta System, which was the Partnership's only directly held system, to
Jones Cable Holdings, Inc., a wholly owned subsidiary of the General Partner;
therefore, meaningful comparisons of revenues, operating expenses, management
fees and allocated overhead from the General Partner and depreciation and
amortization expense cannot be made. The Partnership continues to own a 9
percent interest in Cable TV Fund 12- BCD Venture (the "Venture").
FINANCIAL CONDITION
On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc. ("JCH"), a wholly owned subsidiary of the General Partner,
for a sales price of $142,618,000, subject to working capital adjustments. The
sales price represented the average of three separate, independent appraisals
of the Augusta System. The Partnership subsequently paid all of its
indebtedness and distributed the net sale proceeds to its partners of record as
of September 30, 1995. The limited partners of the Partnership, as a group,
received $95,179,375 from the net sale proceeds and the General Partner
received $13,220,625 from the net sale proceeds. The distribution to the
limited partners of the Partnership equated to approximately $1,714 for each
$1,000 invested in the Partnership. A vote of the limited partners of the
Partnership was conducted for the purpose of obtaining limited partner approval
of the sale of the Augusta System. The transaction was approved by the holders
of 74.8 percent of the limited partnership interests of the Partnership.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH for a
sales price of $110,395,667, subject to normal working capital closing
adjustments. This price represented the average of three separate, independent
appraisals of the fair market value of the Tampa System. Because the Venture's
debt arrangements did not allow the Venture to make distributions on the sale
of Venture assets, in February 1996 the Venture's debt arrangements were
amended to permit a $55,000,000 distribution to the Venture's partners from the
sale proceeds, and the balance of the sale proceeds were used to reduce Venture
indebtedness. The Partnership's portion of this distribution is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in March
1996. The Partnership also will distribute in April 1996 $1,200,000 of
proceeds remaining from the sale of the Augusta System, of which $900,000 will
be distributed to limited partners and $300,000 will be distributed to the
General Partner. These distributions will give the Partnership's limited
partners an approximate return of $84 for each $1,000 invested in the
Partnership. This amount is in addition to the $1,714 for each $1,000 invested
in the Partnership returned to the limited partners from the Augusta System
sale. Because the Tampa System did not constitute all or substantially all of
the Venture's assets, no vote of the limited partners of the Partnership was
required in connection with this transaction.
Due to the sale of the Augusta System in October 1995, the Partnership
has no further liquidity needs.
13
14
CABLE TV FUND 12-BCD VENTURE
RESULTS OF OPERATIONS
1995 compared to 1994
Revenues of Cable TV Fund 12-BCD Venture (the "Venture") increased
$8,576,621, or approximately 9 percent, to $101,399,697 in 1995 from
$92,823,076 in 1994. At December 31, 1995, the Venture's systems had 236,866
basic subscribers compared to 227,950 basic subscribers at December 31, 1994,
an increase of approximately 4 percent. This increase in basic subscribers
accounted for approximately 39 percent of the increase in revenues. Basic
service rate increases accounted for approximately 37 percent of the increase
in revenues. No other single factor significantly affected the increase in
revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture's cable television systems. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses in the Venture's systems increased $2,220,438, or
approximately 4 percent, to $58,351,692 in 1995 from $56,131,254 in 1994.
Operating expenses represented approximately 58 percent and approximately 60
percent of revenues in 1995 and in 1994, respectively. The increase in
operating expenses was due to increases in subscriber related costs,
programming fees, property tax expenses and advertising related costs, which
were partially offset by decreases in personnel related costs. No other single
factor significantly affected the increase in operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc.
increased $661,384, or approximately 6 percent, to $12,253,648 in 1995 from
$11,592,264 in 1994 due to the increase in revenues, upon which such fees and
allocations are based.
Depreciation and amortization expense increased $1,857,081, or
approximately 7 percent, to $26,666,735 in 1995 from $24,809,654 in 1994. This
increase was due to the increase in the Venture's depreciable asset base.
The Venture's operating income increased $3,837,718 to $4,127,622 in
1995 from $289,904 in 1994. This increase was the result of increases in
revenues exceeding the increases in operating expenses, management fees and
allocated overhead from Jones Intercable, Inc. and depreciation and
amortization expenses.
The cable television industry generally measures the financial
performance of a cable television system in terms of cash flow or operating
income before depreciation and amortization. The value of a cable television
system is often determined using multiples of cash flow. This measure is not
intended to be a substitute or improvement upon the items disclosed on the
financial statements, rather it is included because it is an industry standard.
Operating income before depreciation and amortization increased $5,694,799, or
approximately 23 percent, to $30,794,357 in 1995 from $25,099,558 in 1994.
This increase was due to the increase in revenues exceeding the increase in
operating expenses and management fees and allocated overhead from Jones
Intercable, Inc.
Interest expense increased $2,190,557, or approximately 17 percent, to
$15,347,250 in 1995 from $13,156,693 in 1994 due to higher interest rates and
higher outstanding balances on interest bearing obligations in 1995.
Net loss decreased $1,751,675, or approximately 14 percent, to
$11,124,567 in 1995 from $12,876,242 in 1994 due to the factors discussed
above.
1994 compared to 1993
Revenues of the Venture increased $3,691,546, or approximately 4
percent, to $92,823,076 in 1994 from $89,131,530 in 1993. At December 31, 1994,
the Venture's systems had 227,950 basic subscribers compared to 213,072 basic
subscribers at December 31, 1993, an increase of approximately 7 percent. This
increase in basic subscribers accounted for approximately 37 percent of the
increase in revenues. Increases in advertising sales activity accounted for
approximately 28 percent of the increase in revenues. Increases in premium
service and pay-per-view revenues accounted for approximately 27 percent of the
increase. The increase in revenues would have been greater but for the
reduction in
14
15
basic rates due to new basic rate regulations issued by the FCC in May 1993
with which the Venture complied effective September 1, 1993. No other single
factor significantly affected the increase in revenues.
Operating expenses in the Venture's systems increased $4,057,270, or
approximately 8 percent, to $56,131,254 in 1994 from $52,073,984 in 1993.
Operating expenses represented approximately 60 percent and approximately 58
percent of revenues in 1994 and in 1993, respectively. The increase in
operating expenses was due to increases in subscriber related costs,
programming fees and marketing related costs. No other single factor
significantly affected the increase in operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc.
increased $1,086,904, or approximately 10 percent, to $11,592,264 in 1994 from
$10,505,360 in 1993 due to the increase in revenues, upon which such fees and
allocations are based, and an increase in allocated expenses from Jones
Intercable, Inc. Jones Intercable, Inc. experienced increases in expenses in
1994.
Depreciation and amortization expense decreased $962,645, or
approximately 4 percent, to $24,809,654 in 1994 from $25,772,299 in 1993. This
decrease was due to the maturation of the Venture's asset base.
The Venture's operating income decreased $489,983, or approximately 63
percent, to $289,904 in 1994 from $779,887 in 1993. This decrease was the
result of increases in operating expenses and management fees and allocated
overhead from Jones Intercable, Inc. exceeding the increases in revenues and
was offset by the decreases in depreciation and amortization expenses.
Operating income before depreciation and amortization decreased
$1,452,628, or approximately 5 percent, to $25,099,558 in 1994 from $26,552,186
in 1993. This decrease was due to the increase in operating expenses and
management fees and allocated overhead from Jones Intercable, Inc. exceeding
the increase in revenues.
Interest expense increased $1,288,625, or approximately 11 percent, to
$13,156,693 in 1994 from $11,868,068 in 1993 due to higher interest rates and
higher outstanding balances on interest bearing obligations in 1994.
Net loss increased $1,291,826, or approximately 11 percent, to
$12,876,242 in 1994 from $11,584,416 in 1993 due to the factors discussed
above.
FINANCIAL CONDITION
For the twelve months ended December 31, 1995, the Venture generated
net cash from operating activities totaling approximately $18,100,250, which
was available to fund capital expenditures and non-operating costs. Capital
expenditures for the Venture totaled approximately $21,500,000 during 1995.
Service drops to homes accounted for approximately 41 percent of the capital
expenditures. New plant construction accounted for approximately 19 percent of
the capital expenditures. Approximately 10 percent of capital expenditures was
for converters. The remaining expenditures related to various system
enhancements. These capital expenditures were funded primarily from cash
generated from operations and borrowings from the General Partner. Expected
capital expenditures for 1996 are approximately $15,200,000. Service drops to
homes are anticipated to account for approximately 43 percent. Approximately
31 percent of budgeted capital expenditures is for new plant construction. The
remainder of the expenditures are for various system enhancements in all of the
Venture's systems. Funding for these expenditures is expected to be provided
by cash on hand, cash generated from operations and borrowings from the
Venture's amended credit facility. The General Partner believes that the
Venture has sufficient sources of capital available from cash generated from
operations and borrowings under its credit facility to meet its presently
anticipated needs.
On August 11, 1995, the Venture entered into a purchase and sale
agreement pursuant to which it agreed to sell its Tampa, Florida system (the
"Tampa System") to the General Partner for a sales price of $110,395,667,
subject to working capital adjustments. The General Partner assigned its
rights and obligations under the purchase and sale agreement to Jones Cable
Holdings, Inc., a wholly owned subsidiary of the General Partner. Closing of
this sale occurred on February 28, 1996. The sales price represented the
average of three separate, independent appraisals of the fair market value of
the Tampa System. The net sales proceeds were used to make a $55,000,000
distribution to the Venture's partners, with the remainder of the proceeds used
to reduce the Venture's debt. The net sales proceeds were distributed as
follows: Fund 12-B received $5,049,000; Fund 12-C received $8,404,000 and Fund
12-D received $41,547,000.
15
16
The Venture's debt arrangements at December 31, 1995 consisted of
$93,000,000 of Senior Notes placed with a group of institutional lenders and an
$87,000,000 credit facility with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent and a
final maturity date of March 31, 2000. The Senior Notes call for payments of
interest only through March 1996, with interest and accelerating amortization
of principal payments required for the four years thereafter. In February
1996, the Venture was required to make a principal repayment of approximately
$33,650,000 from proceeds received from the sale of the Tampa System. The
Senior Notes carry a "make-whole" payment, which is a prepayment penalty, in
the event the notes are prepaid prior to maturity. The make-whole payment
protects the lenders in the event that prepaid funds are reinvested at a rate
below 8.64 percent. The Venture was required to pay a make-whole payment in
February 1996 of approximately $2,217,000. Principal and interest payments due
in 1996 are expected to be funded from cash on hand, cash generated from
operations and borrowings under the Venture's new credit facility, as discussed
below. Installments due on the Senior Notes, subsequent to the February 1996
repayment, each year for the five year period ended December 31, 2000 are:
$3,956,656, $7,913,313, $11,869,968, $15,826,624 and $19,783,282, respectively.
The balance outstanding on the Venture's credit agreement at
December 31, 1995 was $87,000,000. However, upon the sale of the Tampa System
and, as required under the Venture's credit facility, $22,000,000 of the sale
proceeds were used to reduce amounts outstanding under its credit facility,
leaving $65,000,000 outstanding. In February 1996, the Venture increased the
amount available to $120,000,000 to meet the Venture's long-term financing
requirements. The amended credit facility matures on December 31, 1999 or, at
the Venture's option, on December 31, 2004. In the event the Venture elects
the latter maturity date, the credit facility shall amortize in consecutive
quarterly amounts. Interest on the amended credit facility is at the Venture's
option of the London Interbank Offered Rate plus .625 percent to 1.375 percent,
the Base Rate plus 0 percent to .375 percent or the Certificate of Deposit Rate
plus .75 percent to 1.50 percent.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
At December 31, 1995, amounts payable to the General Partner totaled
$4,198,739. By February 1996, this balance had increased to approximately
$5,100,000, which amount was repaid to the General Partner with borrowings from
the Venture's amended credit facility.
The General Partner believes that cash generated from operations and
borrowings from the Venture's amended credit facility will be sufficient to
fund capital expenditures and other liquidity needs of the Venture.
REGULATION AND LEGISLATION
The Venture has filed cost-of-service showings in response to
rulemakings concerning the 1992 Cable Act for its systems and thus anticipates
no further reductions in rates in these systems. The cost-of-service showings
have not yet received final approvals from regulatory authorities, however, and
there can be no assurance that the Venture's cost-of-service showings will
prevent further rate reductions in these systems until such final approvals are
received.
The Telecommunications Act of 1996 (the "1996 Act"), which became law
on February 8, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
including the Venture effective March 31, 1999 and the cable programming
service tier of "small" cable operators in systems providing service to 50,000
or fewer subscribers effective immediately. The 1996 Act also revised the
procedures for filing cable programming service tier rate complaints and adds a
new effective competition test.
16
17
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Venture in particular. The FCC will be
undertaking numerous rulemaking proceedings to interpret and implement the 1996
Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Venture. See Item 1.
17
18
Item 8. Financial Statements
CABLE TV FUND 12-B, LTD. AND
CABLE TV FUND 12-BCD VENTURE
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
INDEX
Page
----------------------
12-B 12-BCD
---- ------
Report of Independent Public Accountants 19 29
Balance Sheets 20 30
Statements of Operations 22 32
Statements of Partners' Capital (Deficit) 23 33
Statements of Cash Flows 24 34
Notes to Financial Statements 25 35
18
19
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-B, Ltd.:
We have audited the accompanying balance sheets of CABLE TV
FUND 12-B, LTD. (a Colorado limited partnership) as of December 31, 1995 and
1994, and the related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Cable TV
Fund 12-B, Ltd. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1996.
19
20
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
-----------------------------------
ASSETS 1995 1994
------ ------------- ------------
CASH $ 204,822 $ 3,782,989
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$79,128 at December 31, 1994 - 860,247
Closing adjustments receivable 1,064,238 -
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost - 78,503,036
Less- accumulated depreciation - (37,429,022)
------------- ------------
- 41,074,014
Franchise costs, net of accumulated amortization of $25,063,424
at December 31, 1994 - 14,051,348
------------- ------------
Total investment in cable television properties - 55,125,362
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES - 578,713
------------- ------------
Total assets $ 1,269,060 $ 60,347,311
============= ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
20
21
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
-------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
- ------------------------------------------- ------------ -------------
LIABILITIES:
Debt $ - $ 39,959,041
Loss in excess of investment in cable television
joint venture 2,825,362 1,804,126
Accounts payable-
Trade - 63,438
General Partner - 112,495
Accrued liabilities - 924,648
Subscriber prepayments - 113,843
------------ -------------
Total liabilities 2,825,362 42,977,591
------------ -------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Distributions (13,220,625) -
Accumulated earnings (deficit) 13,363,097 (305,152)
------------ -------------
143,472 (304,152)
------------ -------------
Limited Partners-
Net contributed capital (111,035 units outstanding at
December 31, 1995 and 1994) 47,645,060 47,645,060
Distributions (95,179,375) -
Accumulated earnings (deficit) 45,834,541 (29,971,188)
------------ -------------
(1,699,774) 17,673,872
------------ -------------
Total liabilities and partners' capital (deficit) $ 1,269,060 $ 60,347,311
============ =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
21
22
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
----------- ------------ -----------
REVENUES $24,308,934 $26,956,006 $26,975,209
COSTS AND EXPENSES:
Operating expenses 12,587,594 13,932,687 13,054,665
Management fees and allocated overhead from
General Partner 2,855,239 3,392,884 3,205,800
Depreciation and amortization 8,263,976 9,380,877 8,897,796
----------- ------------ -----------
OPERATING INCOME 602,125 249,558 1,816,948
----------- ------------ -----------
OTHER INCOME (EXPENSE):
Interest expense (2,160,430) (2,555,513) (2,343,606)
Gain on sale of cable television system 91,692,928 - -
Other, net 360,591 119,749 126,128
----------- ------------ -----------
Total other income (expense), net 89,893,089 (2,435,764) (2,217,478)
----------- ------------ -----------
INCOME (LOSS) BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE 90,495,214 (2,186,206) (400,530)
EQUITY IN NET LOSS OF CABLE
TELEVISION JOINT VENTURE (1,021,236) (1,182,039) (1,063,449)
----------- ------------ -----------
NET INCOME (LOSS) $89,473,978 $(3,368,245) $(1,463,979)
=========== ============ ===========
ALLOCATION OF NET INCOME (LOSS):
General Partner $13,668,249 $ (33,682) $ (14,640)
=========== ============ ===========
Limited Partners $75,805,729 $(3,334,563) $(1,449,339)
=========== ============ ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 682.72 $ (30.03) $ (13.05)
=========== ============ ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 111,035 111,035 111,035
=========== ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
22
23
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
For the Year Ended December 31,
-----------------------------------------------
1995 1994 1993
------------- ------------ ------------
GENERAL PARTNER:
Balance, beginning of year $ (304,152) $ (270,470) $ (255,830)
Distributions (13,220,625) - -
Net income (loss) for year 13,668,249 (33,682) (14,640)
------------- ------------ ------------
Balance, end of year $ 143,472 $ (304,152) $ (270,470)
============= ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ 17,673,872 $ 21,008,435 $ 22,457,774
Distributions (95,179,375) - -
Net income (loss) for year 75,805,729 (3,334,563) (1,449,339)
------------- ------------ ------------
Balance, end of year $ (1,699,774) $ 17,673,872 $ 21,008,435
============= ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
23
24
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
------------- ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 89,473,978 $ (3,368,245) $(1,463,979)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 8,263,976 9,380,877 8,897,796
Equity in net loss of cable television joint venture 1,021,236 1,182,039 1,063,449
Gain on sale of cable television system (91,692,928) - -
Decrease (increase) in receivables (203,991) 151,493 (109,776)
Decrease (increase) in deposits, prepaid expenses
and deferred charges 578,713 (211,913) 119,594
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (1,101,929) (250,791) 134,104
Decrease in amount due General Partner (112,495) (50,771) (125,767)
------------- ------------ -----------
Net cash provided by operating activities 6,226,560 6,832,689 8,515,421
------------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,063,686) (4,034,659) (4,096,862)
Proceeds from sale of cable television system 142,618,000 - -
------------- ------------ -----------
Net cash provided by (used in)
investing activities 138,554,314 (4,034,659) (4,096,862)
------------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 111,262 124,133 74,766
Repayment of debt (40,070,303) (3,996,166) (3,041,200)
Distribution to General Partner (13,220,625) - -
Distributions to Limited Partners (95,179,375) - -
------------- ------------ -----------
Net cash used in financing activities (148,359,041) (3,872,033) (2,966,434)
------------- ------------ -----------
Increase (decrease) in cash (3,578,167) (1,074,003) 1,452,125
Cash, beginning of year 3,782,989 4,856,992 3,404,867
------------- ------------ -----------
Cash, end of year $ 204,822 $ 3,782,989 $ 4,856,992
============= ============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,423,008 $ 2,806,739 $ 2,374,601
============= ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
24
25
CABLE TV FUND 12-B, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 12-B, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on June 5, 1985, under a public program sponsored by
Jones Intercable, Inc. The Partnership was formed to acquire, construct,
develop and operate cable television systems. The Partnership owned and
operated the cable television system serving the areas in and around Augusta,
Georgia (the "Augusta System") until it was sold, as discussed below. Jones
Intercable, Inc. ("Intercable"), a publicly held Colorado corporation, is the
"General Partner" and manages the Partnership. The General Partner and its
subsidiaries also own and operate cable television systems. In addition, the
General Partner manages cable television systems for other limited partnerships
for which it is general partner and, also, for affiliated entities.
The Partnership owns a 9 percent interest in Cable TV Fund 12-BCD
Venture (the "Venture"), through a capital contribution made to the Venture in
April 1986 of $12,437,500. The Venture acquired certain cable television
systems in New Mexico, California and Florida during 1986. The Venture
incurred losses of $11,124,567, $12,876,242 and $11,584,416 in 1995, 1994 and
1993, respectively, of which $1,021,236, $1,182,039 and $1,063,449 was
allocated to the Partnership during 1995, 1994 and 1993, respectively.
Sales of Cable Television Systems
On October 20, 1995, the Partnership sold the Augusta System to Jones
Cable Holdings, Inc. ("JCH"), a wholly- owned subsidiary of the General
Partner, for a sales price of $142,618,000, subject to working capital
adjustments. The sales price represented the average of three separate,
independent appraisals of the Augusta System. The Partnership subsequently
paid all of its indebtedness and distributed the net sales proceeds to its
partners of record as of September 30, 1995. The limited partners of the
Partnership, as a group, received $95,179,375 from the net sales proceeds and
the General Partner received $13,220,625 from the net sales proceeds. The
distribution to the limited partners of the Partnership equated to
approximately $1,714 for each $1,000 invested in the Partnership. A vote of
the limited partners of the Partnership was conducted for the purpose of
obtaining limited partner approval of the sale of the Augusta System. The
transaction was approved by the holders of 74.8 percent of the limited
partnership interests of the Partnership. The Partnership retains its
ownership interest in the Venture.
On February 28, 1996, the Venture sold the cable television system
serving areas in and around Tampa, Florida (the "Tampa System") to JCH for a
sales price of $110,395,667, subject to normal working capital closing
adjustments. This price represented the average of three separate, independent
appraisals of the fair market value of the Tampa System. Because the Venture's
debt arrangements did not allow the Venture to make distributions on the sale
of Venture assets, in February 1996 the Venture's debt arrangements were
amended to permit a $55,000,000 distribution to the Venture's partners from the
sale proceeds, and the balance of the sale proceeds were used to reduce Venture
indebtedness. The Partnership's portion of this distribution is approximately
$5,049,000, of which approximately $3,787,000 will be distributed to limited
partners and $1,262,000 will be distributed to the General Partner in March
1996. The Partnership also will distribute in April 1996 $1,200,000 of
proceeds remaining from the sale of the Augusta System, of which $900,000 will
be distributed to limited partners and $300,000 will be distributed to the
General Partner. These distributions will give the Partnership's limited
partners an approximate return of $84 for each $1,000 invested in the
Partnership. This amount is in addition to the $1,714 for each $1,000 invested
in the Partnership returned to the limited partners from the Augusta System
sale. Because the Tampa System did not constitute all or substantially all of
the Venture's assets, no vote of the limited partners of the Partnership was
required in connection with this transaction.
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.
25
26
The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99 percent to
the limited partners and 1 percent to the General Partner, except for income or
gain from the sale or disposition of cable television properties, which will be
allocated to the partners based upon a formula set forth in the partnership
agreement, and interest income earned prior to the first acquisition by the
Partnership of a cable television system, which was allocated 100 percent to
the limited partners.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on the
accrual basis of accounting in accordance with generally accepted accounting
principles. The Partnership's tax returns are also prepared on the accrual
basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Investment in Cable Television Joint Venture
The Partnership's investment in the Venture is accounted for under the
equity method due to the Partnership's influence on the Venture as a General
Partner. The operations of the Venture are significant to the Partnership and
should be reviewed in conjunction with these financial statements. Reference
is made to the accompanying financial statements of the Venture on pages 30 to
40.
Property, Plant and Equipment
Depreciation of property, plant and equipment was provided primarily
using the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 12 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements were capitalized and
maintenance and repairs were charged to expense as incurred.
Intangible Assets
Costs assigned to franchises were being amortized using the
straight-line method over the following remaining estimated useful lives:
Franchise costs 3 - 8 years
Revenue Recognition
Subscriber prepayments were initially deferred and recognized as
revenue when earned.
26
27
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
The General Partner managed the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the years ended December 31, 1995, 1994 and 1993 (excluding the
Partnership's 9 percent interest in the Venture) were $1,215,447, $1,347,800
and $1,348,760, respectively.
Any partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to the General Partner. Any distributions other than interest
income on limited partnership subscriptions earned prior to the acquisition of
the Partnership's first cable television system or from cash flow, such as from
the sale or refinancing of a system or upon dissolution of the Partnership,
will be made as follows: first, to the limited partners in an amount which,
together with all prior distributions, will equal the amount initially
contributed by the limited partners; the balance, 75 percent to the limited
partners and 25 percent to the General Partner.
The Partnership reimbursed the General Partner for certain allocated
overhead and administrative expenses. These expenses represented the salaries
and related benefits paid for corporate personnel, rent, data processing
services and other corporate facilities costs. Such personnel provided
engineering, marketing, administrative, accounting, legal and investor
relations services to the Partnership. Allocations of personnel costs were
based primarily on actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining expenses were allocated based
on the pro rata relationship of the Partnership's revenues to the total
revenues of all systems owned or managed by the General Partner and certain of
its subsidiaries. Systems owned by the General Partner and all other systems
owned by partnerships for which Intercable is the General Partner are also
allocated a proportionate share of these expenses. The General Partner
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Reimbursements by the Partnership to the General
Partner for allocated overhead and administrative expenses (excluding the
Partnership's 9 percent interest in the Venture) were $1,639,792, $2,045,084
and $1,857,040 in 1995, 1994, and 1993, respectively.
The Partnership was charged interest during 1995 at an average
interest rate of 10.51 percent on the amounts due the General Partner, which
approximated the General Partner's weighted average cost of borrowing. Total
interest charged to the Partnership by the General Partner was $1,243, $9,903
and $-0- in 1995, 1994 and 1993, respectively.
Payments to/from Affiliates for Programming Services
The Partnership received programming from Superaudio, Mind Extension
University, Jones Computer Network and Product Information Network, all of
which are affiliates of the General Partner.
Payments to Superaudio totaled $32,307, $39,929 and $40,882 in 1995,
1994 and 1993, respectively. Payments to Mind Extension University totaled
$34,378, $36,178 and $23,769 in 1995, 1994 and 1993, respectively. Payments to
Jones Computer Network, which initiated service in 1994, totaled $68,641 and
$5,373 in 1995 and 1994, respectively.
The Partnership received a commission from Product Information Network
based on a percentage of advertising sales and number of subscribers. Product
Information Network, which initiated service in 1994, paid commissions to the
Partnership totaling $59,971 and $24,531 in 1995 and 1994, respectively.
(4) INCOME TAXES
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by the General
Partner.
The Partnership's tax returns, the qualification of the Partnership as
such for tax purposes, and the amount of distributable partnership income or
loss are subject to examination by federal and state taxing authorities. If
such examinations result in changes with respect to the Partnership's
qualification as such, or in changes with respect to the Partnership's recorded
income or loss, the tax liability of the general and limited partners would
likely be changed accordingly.
27
28
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.
(5) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective years are
presented below:
For the Year Ended December 31,
---------------------------------------------
1995 1994 1993
----------- ----------- -----------
Maintenance and repairs $ 176,793 $ 169,466 $ 151,258
=========== =========== ===========
Taxes, other than income and payroll taxes $ 194,676 $ 232,068 $ 232,174
=========== =========== ===========
Advertising $ 258,709 $ 212,018 $ 136,524
=========== =========== ===========
Depreciation of property, plant and equipment $ 5,984,399 $ 6,695,385 $ 6,212,303
=========== =========== ===========
Amortization of intangible assets $ 2,279,577 $ 2,685,492 $ 2,685,493
=========== =========== ===========
28
29
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-BCD Venture:
We have audited the accompanying balance sheets of CABLE TV FUND
12-BCD VENTURE (a Colorado general partnership) as of December 31, 1995 and
1994, and the related statements of operations, partners' deficit and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the General Partners'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund
12-BCD Venture as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1996.
29
30
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
---------------------------------------
ASSETS 1995 1994
------ -------------- ---------------
CASH AND CASH EQUIVALENTS $ 1,384,794 $ 4,391,602
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of $486,392
and $339,139 at December 31, 1995 and 1994, respectively 4,464,773 3,807,271
Affiliated entity 159,137 159,137
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 294,472,892 272,998,315
Less- accumulated depreciation (155,826,572) (135,711,082)
-------------- ---------------
138,646,320 137,287,233
Franchise costs, net of accumulated amortization of $54,815,515 and
$48,828,848 at December 31, 1995 and 1994, respectively 12,233,128 18,219,795
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $1,433,228 and $1,280,756 at December 31, 1995
and 1994, respectively 4,623,200 4,775,672
-------------- ---------------
Total investment in cable television properties 155,502,648 160,282,700
DEPOSITS, PREPAID EXPENSES AND DEFERRED
CHARGES 1,974,677 2,035,204
-------------- ---------------
Total assets $ 163,486,029 $ 170,675,914
============== ===============
The accompanying notes to financial statements
are an integral part of these balance sheets.
30
31
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
-------------------------------------
LIABILITIES AND PARTNERS' DEFICIT 1995 1994
--------------------------------- ------------- -------------
LIABILITIES:
Debt $ 180,770,267 $ 180,402,748
Accounts payable-
Trade 301,619 491,846
Jones Intercable, Inc. 4,198,739 616,810
Accrued liabilities 7,427,814 7,125,482
Subscriber prepayments 517,908 644,779
------------- -------------
Total liabilities 193,216,347 189,281,665
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' DEFICIT:
Contributed capital 135,490,944 135,490,944
Accumulated deficit (165,221,262) (154,096,695)
------------- -------------
(29,730,318) (18,605,751)
------------- -------------
Total liabilities and partners' deficit $ 163,486,029 $ 170,675,914
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
31
32
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
For the Year Ended December 31,
---------------------------------------------------
1995 1994 1993
------------- ------------- -------------
REVENUES $101,399,697 $ 92,823,076 $89,131,530
COSTS AND EXPENSES:
Operating expenses 58,351,692 56,131,254 52,073,984
Management fees and allocated overhead from
Jones Intercable, Inc. 12,253,648 11,592,264 10,505,360
Depreciation and amortization 26,666,735 24,809,654 25,772,299
------------- ------------- -------------
OPERATING INCOME 4,127,622 289,904 779,887
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (15,347,250) (13,156,693) (11,868,068)
Other, net 95,061 (9,453) (496,235)
------------- ------------- -------------
Total other income (expense), net (15,252,189) (13,166,146) (12,364,303)
------------- ------------- -------------
NET LOSS $ (11,124,567) $ (12,876,242) $ (11,584,416)
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
32
33
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' DEFICIT
For the Year Ended December 31,
-----------------------------------------------
1995 1994 1993
------------ ------------- -------------
CABLE TV FUND 12-B, LTD. (9%):
Balance, beginning of year $ (1,804,126) $ (622,087) $ 441,362
Net loss for year (1,021,236) (1,182,039) (1,063,449)
------------ ------------- -------------
Balance, end of year $ (2,825,362) $ (1,804,126) $ (622,087)
============ ============= =============
CABLE TV FUND 12-C, LTD. (15%):
Balance, beginning of year $ (3,002,488) $ (1,035,256) $ 734,611
Net loss for year (1,699,611) (1,967,232) (1,769,867)
------------ ------------- -------------
Balance, end of year $ (4,702,099) $ (3,002,488) $ (1,035,256)
============ ============= =============
CABLE TV FUND 12-D, LTD. (76%):
Balance, beginning of year $(13,799,137) $ (4,072,166) $ 4,678,934
Net loss for year (8,403,720) (9,726,971) (8,751,100)
------------ ------------- -------------
Balance, end of year $(22,202,857) $ (13,799,137) $ (4,072,166)
============ ============= =============
TOTAL:
Balance, beginning of year $(18,605,751) $ (5,729,509) $ 5,854,907
Net loss for year (11,124,567) (12,876,242) (11,584,416)
------------ ------------- -------------
Balance, end of year $(29,730,318) $ (18,605,751) $ (5,729,509)
============ ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
33
34
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
----------------------------------------------------
1995 1994 1993
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (11,124,567) $ (12,876,242) $ (11,584,416)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 26,666,735 24,809,654 25,772,299
Increase in trade receivables (657,502) (852,784) (147,286)
Increase in deposits, prepaid
expenses and deferred charges (351,579) (694,816) (434,700)
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (14,766) 749,173 (1,234,645)
Increase (decrease) in amount due
Jones Intercable, Inc. 3,581,929 428,380 (323,216)
------------- ------------- -------------
Net cash provided by operating activities 18,100,250 11,563,365 12,048,036
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (21,474,577) (21,338,471) (18,711,639)
Franchise settlement - (500,000) -
------------- ------------- -------------
Net cash used in investing activities (21,474,577) (21,838,471) (18,711,639)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 882,431 16,268,610 11,954,437
Repayment of debt (514,912) (3,564,559) (4,696,228)
------------- ------------- -------------
Net cash provided by financing activities 367,519 12,704,051 7,258,209
------------- ------------- -------------
Increase (decrease) in cash and cash equivalents (3,006,808) 2,428,945 594,606
Cash and cash equivalents, beginning of year 4,391,602 1,962,657 1,368,051
------------- ------------- -------------
Cash and cash equivalents, end of year $ 1,384,794 $ 4,391,602 $ 1,962,657
============= ============= =============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 15,331,071 $ 12,450,869 $ 12,141,838
============= ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
34
35
CABLE TV FUND 12-BCD VENTURE
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
On March 17, 1986, Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd.
and Cable TV Fund 12-D, Ltd. (the "Venture Partners") formed Cable TV Fund
12-BCD Venture (the "Venture"). The Venture was formed for the purpose of
acquiring certain cable television systems serving Tampa, Florida; Albuquerque,
New Mexico; and Palmdale, California. Jones Intercable, Inc. ("Intercable"),
the "General Partner" of each of the Venture Partners, manages the Venture.
Intercable and its subsidiaries also own and operate cable television systems.
In addition, Intercable manages cable television systems for other limited
partnerships for which it is general partner and, also, for affiliated
entities.
Contributed Capital
The capitalization of the Venture is set forth in the accompanying
statements of partners' deficit.
All Venture distributions, including those made from cash flow, from
the sale or refinancing of Partnership property and on dissolution of the
Venture, shall be made to the Venture Partners in proportion to their
approximate respective interests in the Venture as follows:
Cable TV Fund 12-B, Ltd. 9%
Cable TV Fund 12-C, Ltd. 15%
Cable TV Fund 12-D, Ltd. 76%
---
100%
===
Venture Sale of Cable Television System
As of December 31, 1995, the Venture owned and operated the cable
television systems serving certain areas in and around Tampa, Florida,
Albuquerque, New Mexico and Palmdale, California.
The Venture's acquisitions were accounted for as purchases with the
individual purchase prices allocated to tangible and intangible assets based
upon an independent appraisal. The method of allocation of purchase price was
as follows: first, to the fair value of the net tangible assets acquired;
second, to the value of subscriber lists; third, to franchise costs; and
fourth, to costs in excess of interests in net assets purchased. Brokerage
fees paid to an affiliate of Intercable and other system acquisition costs were
capitalized and included in the cost of intangible assets.
On August 11, 1995, the Venture entered into a purchase and sale
agreement pursuant to which it agreed to sell its Tampa, Florida system (the
"Tampa System") to the General Partner for a sales price of $110,395,667,
subject to working capital adjustments. The General Partner assigned its
rights and obligations under the purchase and sale agreement to Jones Cable
Holdings, Inc., a wholly owned subsidiary of the General Partner. Closing of
this sale occurred on February 28, 1996. The sales price represented the
average of three separate, independent appraisals of the fair market value of
the Tampa System. The net sales proceeds were used to make a $55,000,000
distribution to the Venture's partners, with the remainder of the proceeds used
to reduce the Venture's debt. The net sales proceeds were distributed as
follows: Fund 12-B received $5,049,000; Fund 12-C received $8,404,000 and Fund
12-D received $41,547,000
35
36
The pro forma effect of the sale of the Tampa System on the results of
the Venture's operations for the years ended December 31, 1995 and 1994,
assuming the transaction had occurred at the beginning of the years, is
presented in the following unaudited tabulation:
For the Year Ended December 31, 1995
-----------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
Revenues $ 101,399,697 $(28,700,128) $ 72,699,569
============= ============ ============
Operating Income $ 4,127,622 $ (1,090,628) $ 3,036,994
============= ============ ============
Net Loss $ (11,124,567) $ 2,899,019 $ (8,225,548)
============= ============ ============
For the Year Ended December 31, 1994
----------------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
Revenues $ 92,823,076 $(26,122,731) $ 66,700,345
============= ============ ============
Operating Income $ 289,904 $ 48,392 $ 338,296
============= ============ ============
Net Loss $ (12,876,242) $ 4,102,399 $ (8,773,843)
============= ============ ============
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles. The Venture's tax returns are also prepared on the accrual basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Property, Plant and Equipment
Depreciation is provided using the straight-line method over the
following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
36
37
Intangible Assets
Costs assigned to franchises and costs in excess of interests in net
assets purchased are amortized using the straight-line method over the
following remaining estimated useful lives:
Franchise costs 2 - 5 years
Costs in excess of interests in net assets purchased 30 - 31 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized as
revenue when earned.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Venture considers
all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
Reclassifications
Certain prior year amounts have been reclassified to conform to the
1995 presentation.
(3) TRANSACTIONS WITH JONES INTERCABLE, INC. AND AFFILIATES
Management Fees and Reimbursements
Intercable manages the Venture and receives a fee for its services
equal to 5 percent of the gross revenues of the Venture, excluding revenues
from the sale of cable television systems or franchises. Management fees paid
to Intercable for the years ended December 31, 1995, 1994 and 1993 were
$5,069,985, $4,641,154 and $4,456,577, respectively.
The Venture reimburses Intercable for certain allocated overhead and
administrative expenses. These expenses represent the salaries and related
benefits paid to corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Allocations of personnel costs are based primarily on actual time
spent by employees of Intercable with respect to each entity managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture's revenues to the total revenues of all systems owned or managed by
Intercable and certain of its subsidiaries. Systems owned by Intercable and
all other systems owned by partnerships for which Intercable is the general
partner are also allocated a proportionate share of these expenses. Intercable
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Overhead and administrative expenses allocated to the
Venture by Intercable during the years ended December 31, 1995, 1994 and 1993
were $7,183,663, $6,951,110 and $6,048,783, respectively.
The Venture was charged interest during 1995 at an average interest
rate of 10.51 percent on the amounts due Intercable, which approximated
Intercable's cost of borrowing. Total interest charged to the Venture by
Intercable was $220,743, $33,627 and $15,477 during 1995, 1994 and 1993,
respectively.
Payments to/from Affiliates for Programming Services
The Venture receives programming from Superaudio, Mind Extension
University, Jones Computer Network and Product Information Network, all of
which are affiliates of Intercable.
Payments to Superaudio totaled $135,861, $135,346 and $134,179 in
1995, 1994, and 1993, respectively. Payments to Mind Extension University
totaled $145,598, $124,043 and $79,002 in 1995, 1994 and 1993, respectively.
Payments to Jones Computer Network, which initiated service in 1994, totaled
$283,339 and $71,961 in 1995 and 1994, respectively.
37
38
The Venture receives a commission from Product Information Network
based on a percentage of advertising sales and number of subscribers. Product
Information Network, which initiated service in 1994, paid commissions to the
Venture totaling $212,844 and $81,592 in 1995 and 1994, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1995 and 1994,
consisted of the following:
December 31,
----------------------------------
1995 1994
------------- -------------
Cable distribution system $ 267,586,574 $ 248,337,681
Equipment and tools 8,630,758 7,721,861
Office furniture and equipment 3,402,683 3,014,125
Buildings 8,262,351 7,695,925
Vehicles 5,639,556 5,277,753
Land 950,970 950,970
------------- -------------
294,472,892 272,998,315
Less-accumulated depreciation (155,826,572) (135,711,082)
------------- -------------
$ 138,646,320 $ 137,287,233
============= =============
(5) DEBT
----
Debt consists of the following:
December 31,
----------------------------------
1995 1994
------------- -------------
Lending institutions-
Revolving credit and term loan $ 87,000,000 $ 86,541,300
Senior secured notes 93,000,000 93,000,000
Capital lease obligations 770,267 861,448
------------- -------------
$ 180,770,267 $ 180,402,748
============= =============
The Venture's debt arrangements at December 31, 1995 consisted of
$93,000,000 of Senior Notes placed with a group of institutional lenders and an
$87,000,000 credit facility with a group of commercial bank lenders.
The Senior Notes have a fixed interest rate of 8.64 percent and a
final maturity date of March 31, 2000. The Senior Notes call for payments of
interest only through March 1996, with interest and accelerating amortization
of principal payments required for the four years thereafter. In February
1996, the Venture was required to make a principal repayment of approximately
$33,650,000 from proceeds received from the sale of the Tampa System. The
Senior Notes carry a "make-whole" payment, which is a prepayment penalty, in
the event the notes are prepaid prior to maturity. The make-whole payment
protects the lenders in the event that prepaid funds are reinvested at a rate
below 8.64 percent. The Venture was required to pay a make-whole payment in
February 1996 of approximately $2,217,000. Principal and interest payments due
in 1996 are expected to be funded from cash on hand, cash generated from
operations and borrowings under the Venture's new credit facility, as discussed
below. Installments due on the Senior Notes, subsequent to the February 1996
repayment, each year for the five year period ended December 31, 2000 are:
$3,956,656, $7,913,313, $11,869,968, $15,826,624 and $19,783,282, respectively.
The balance outstanding on the Venture's credit agreement at December
31, 1995 was $87,000,000. However, upon the sale of the Tampa System and, as
required under the Venture's credit facility, $22,000,000 of the sale proceeds
were used to reduce amounts outstanding under its credit facility, leaving
$65,000,000 outstanding. In February 1996, the Venture increased the amount
available to $120,000,000 to meet the Venture's long-term financing
requirements. The amended credit facility matures on December 31, 1999 or, at
the Venture's option, on December 31, 2004. In the event
38
39
the Venture elects the latter maturity date, the credit facility shall amortize
in consecutive quarterly amounts. Interest on the amended credit facility is
at the Venture's option of the London Interbank Offered Rate plus .625 percent
to 1.375 percent, the Base Rate plus 0 percent to .375 percent or the
Certificate of Deposit Rate plus .75 percent to 1.50 percent.
Both lending facilities are equal in standing with the other, and both
are equally secured by the assets of the Venture.
During 1992 and 1994, the Venture incurred costs associated with
renegotiating its debt arrangements. These costs were capitalized and are
being amortized using the straight-line method over the life of the debt
agreements.
Installments due on debt principal for each of the five years in the
period ending December 31, 2000 and thereafter, respectively, are:
$14,261,080, $18,721,080, $25,356,080, $31,837,027, $90,595,000 and $-0-,
respectively.
At December 31, 1995, the carrying amount of the Venture's long-term
debt did not differ significantly from the estimated fair value of the
financial instruments. The fair value of the Venture's long-term debt is
estimated based on the discounted amount of future debt service payments using
rates of borrowing for a liability of similar risk.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners of Cable TV Fund 12-B,
Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd.
The Venture's tax returns, the qualification of the Venture as such
for tax purposes, and the amount of distributable income or loss, are subject
to examination by federal and state taxing authorities. If such examinations
result in changes with respect to the Venture's qualification as such, or in
changes with respect to the Venture's recorded loss, the tax liability of the
Venture's general partners would likely be changed accordingly.
Taxable losses reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
allowed under generally accepted accounting principles and the expense allowed
for tax purposes under the Modified Accelerated Cost Recovery System (MACRS).
There are no other significant differences between taxable income or losses and
the net losses reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
On September 20, 1995, a civil action entitled David Hirsch, on behalf
of himself and all others similarly situated, Plaintiff vs. Jones Intercable,
Inc., Defendant, was filed in the District Court, County of Arapahoe, State of
Colorado (Case No. 95-CV-1800). The plaintiff has brought the action as a
purported class action on behalf of himself and all other limited partners of
Cable TV Fund 12-D, Ltd. against the General Partner seeking to recover damages
caused by the General Partner's alleged breaches of its fiduciary duties to the
limited partners of Cable TV Fund 12-D, Ltd. in connection with the sale of the
Tampa System and the subsequent exchange of the Tampa System with an
unaffiliated cable television system operator in return for systems owned by
that operator. The plaintiff also seeks certain equitable and injunctive
relief. On January 25, 1996, the Plaintiff filed an amended complaint and
request for a jury trial. On February 20, 1996, the General Partner filed a
Motion to Dismiss the Amended Complaint on the ground that it fails to state a
claim upon which relief can be granted as a matter of law. The General Partner
believes that it has meritorious defenses, and the General Partner intends to
defend this lawsuit vigorously.
On November 17, 1995, a civil action entitled Martin Ury, derivatively
on behalf of Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV
Fund 12-D, Ltd., Plaintiff vs. Jones Intercable, Inc., Defendant and Cable TV
Fund 12-BCD Venture, Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and
Cable TV Fund 12-D, Ltd. Nominal Defendants, was filed in the District Court,
County of Arapahoe, State of Colorado (Case No. 95-CV-2212). The plaintiff, a
limited partner of Cable TV Fund 12-D, Ltd., has brought the action as a
derivative action on behalf of the three partnerships that comprise the Venture
against the General Partner seeking to recover damages caused by the General
Partner's alleged breaches of its fiduciary duties to the Venture and to the
three partnerships that comprise the Venture (and their respective limited
partners) in connection with the sale to the General Partner of the Tampa
System and the subsequent exchange of the Tampa System with an unaffiliated
cable television system operator in return for systems owned by that operator.
On February 1, 1996, the General Partner filed a Motion to Dismiss the
Complaint on the ground that it fails to state a claim upon which relief can be
granted as a matter of law. The Motion also asserts that the plaintiff
39
40
does not have standing to bring a claim on behalf of Cable TV Fund 12-B, Ltd.
and Cable TV Fund 12-C, Ltd. and their respective limited partners. The
General Partner believes that it has meritorious defenses, and the General
Partner intends to defend this lawsuit vigorously.
Pursuant to the indemnification provisions of Section 9.6 of the
limited partnership agreements of each of the three partnerships that comprise
the Venture, the General Partner may be entitled to indemnification from the
partnerships for its legal fees and expenses, and for any amounts paid in
settlement, in defending the above-described lawsuits. The General Partner
cannot determine at this time whether such amounts will be material.
The Venture has filed cost-of-service showings in response to
rulemakings concerning the 1992 Cable Act for its systems and thus anticipates
no further reductions in rates in these systems. The cost-of-service showings
have not yet received final approvals from regulatory authorities, however, and
there can be no assurance that the Venture's cost-of- service showings will
prevent further rate reductions in these systems until such final approvals are
received.
Office and other facilities are rented under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $331,963,
$345,531 and $454,229, respectively, for the years ended December 31, 1995,
1994 and 1993. Minimum commitments under operating leases for the five years
in the period ending December 31, 2000 and thereafter are as follows:
1996 $ 405,576
1997 408,017
1998 430,962
1999 343,783
2000 343,783
Thereafter 1,249,808
----------
$3,181,929
==========
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective years is
presented below:
For the Year Ended December 31,
------------------------------------------------
1995 1994 1993
----------- ----------- ------------
Maintenance and repairs $ 1,182,963 $ 1,214,978 $ 1,119,086
=========== =========== ============
Taxes, other than income
and payroll taxes $ 1,286,357 $ 1,380,350 $ 1,470,476
=========== =========== ============
Advertising $ 1,298,497 $ 1,275,772 $ 1,022,289
=========== =========== ============
Depreciation of property,
plant and equipment $20,285,166 $18,362,998 $ 18,772,872
=========== =========== ============
Amortization of intangible
assets $ 6,381,569 $ 6,446,656 $ 6,999,427
=========== =========== ============
40
41
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.
Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer
Derek H. Burney 56 Vice Chairman of the Board
James B. O'Brien 46 President and Director
Ruth E. Warren 46 Group Vice President/Operations
Kevin P. Coyle 44 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
George H. Newton 61 Group Vice President/Telecommunications
Timothy J. Burke 45 Group Vice President/Taxation/Administration
Raymond L. Vigil 49 Group Vice President/Human Resources and Director
Cynthia A. Winning 44 Group Vice President/Marketing
Elizabeth M. Steele 44 Vice President/General Counsel/Secretary
Larry W. Kaschinske 36 Controller
Robert E. Cole 63 Director
William E. Frenzel 67 Director
Donald L. Jacobs 57 Director
James J. Krejci 54 Director
John A. MacDonald 42 Director
Raphael M. Solot 62 Director
Daniel E. Somers 48 Director
Howard O. Thrall 48 Director
Robert B. Zoellick 42 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 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 and the Executive Committee of the National Cable Television
Association. He also is on the Executive Committee of Cable in the Classroom, an
organization dedicated to education via cable. Additionally, in March 1991, Mr.
Jones was appointed to the Board of Governors for the American Society for
Training and Development, and in November 1992 to the Board of Education Council
of the National Alliance of Business. Mr. Jones is also a founding member of the
James Madison Council of the Library of Congress. 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; the Women in Cable
Accolade in 1990 in recognition of support of this organization; the Most
Outstanding Corporate Individual Achievement award from the International
Distance Learning Conference; the Golden Plate Award
41
42
from the American Academy of Achievement for his advances in distance education;
the Man of the Year named by the Denver chapter of the Achievement Rewards for
College Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and
Cable's Hall of Fame.
Mr. Derek H. Burney was appointed a Director of the General Partner on
December 20, 1994 and Vice Chairman of the Board of Directors on January 31,
1995. 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 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 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 ethnic minority groups 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. George H. Newton joined the General Partner in January 1996 as
Group Vice President/Telecommunications. Prior to joining the General Partner,
Mr. Newton was President of his own consulting business, Clear Solutions, and
since 1994 Mr. Newton has served as a Senior Advisor to Bell Canada
International. From 1990 to 1993, Mr. Newton served as the founding Chief
Executive Officer and Managing Director of Clear Communications, New Zealand,
where he established an alternative telephone company in New Zealand. From 1964
to 1990, Mr. Newton held a wide variety of operational and business assignments
with Bell Canada International.
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
42
43
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.
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. Robert E. Cole was appointed a Director of the General Partner in
March 1996. Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern California, Oregon, Washington and
Alaska. From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar Life
Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of PMI
Inc., a third party lender serving the special needs of Corporate Owned Life
Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and
co-founder of a specialty investment banking firm that provided services to
finance the ownership and growth of emerging companies, productive assets and
real property. Mr. Cole is a Certified Financial Planner and a former United
States Naval Aviator.
Mr. William E. Frenzel was appointed a Director of the General Partner
on April 11, 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the
Brookings Institution, a research organization located in Washington D. C. Until
his retirement in January 1991, Mr. Frenzel served for twenty years in the
United States House of Representatives, representing the State of Minnesota,
where he was a member of the House Ways and Means Committee and its Trade
Subcommittee, the Congressional Representative to the General Agreement on
Tariffs and Trade (GATT), the Ranking Minority Member on the House Budget
Committee and a member of the National Economic Commission. Mr. Frenzel also
served in the Minnesota Legislature for eight years. He is a Distinguished
Fellow of the Tax Foundation, Vice Chairman of the Eurasia Foundation, a Board
Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual Funds
and Chairman of the Japan-America Society of Washington.
Mr. Donald L. Jacobs was appointed a Director of the General Partner on
April 11, 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General Manager
of the Defense Systems Group and prior to his appointment as Group General
Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW. During
his career, Mr. Jacobs served on several corporate, professional and civic
boards.
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 was Group Vice President of the
General Partner. He also served as an officer of Jones Futurex, Inc., a
subsidiary 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, and several of its subsidiaries engaged in the provision of
telecommunications
43
44
services until leaving the General Partner in May 1994. Mr. Krejci has been a
Director of the General Partner since August 1987.
Mr. John A. MacDonald was appointed a Director of the General Partner
on November 8, 1995. Mr. MacDonald is Executive Vice President of Business
Development and Chief Technology Officer of Bell Canada International Inc. Prior
to joining Bell Canada in November 1994, Mr. MacDonald was President and Chief
Executive Officer of The New Brunswick Telephone Company, Limited, a post he had
held since March of that year. Prior to March 1994, Mr. MacDonald was with NBTel
for 17 years serving in various capacities, including Market Planning Manager,
Corporate Planning Manager, Manager of Systems Planning and Development and
General Manager, Chief Engineer and General Manager of Engineering and
Information Systems and Vice President of Planning. Mr. MacDonald was the former
Chairman of the New Brunswick section of the Institute of Electrical and
Electronic Engineers and also served on the Federal Government's Information
Highway Advisory Council. Mr. MacDonald is Chairman of MediaLinx Interactive
Inc. and Stentor Canadian Network Management and is presently a Governor of the
Montreal Exchange. He also serves on the Board of Directors of Tele-Direct
(Publications) Inc., Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie
Inc., and is a member of the University of New Brunswick Venture Campaign
Cabinet.
Mr. Raphael M. Solot was appointed a Director of the General Partner in
March 1996. Mr. Solot is an attorney licensed to practice law in the State of
Colorado. Mr. Solot has practiced law in the State of Colorado as a sole
practitioner since obtaining his Juris Doctor degree from the University of
Colorado in 1964.
Mr. Daniel E. Somers was initially appointed a Director of the General
Partner on December 20, 1994. Mr. Somers resigned as a Director on December 31,
1995, at the time he was elected Chief Executive Officer of Bell Cablemedia. Mr.
Somers was reinstated as a Director of the General Partner on February 2, 1996.
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. Mr. Somers currently serves as
Chief Executive Officer of Bell Cablemedia. 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. Howard O. Thrall was appointed a Director of the General Partner on
March 6, 1996. Mr. Thrall had previously served as a Director of the General
Partner from December 1988 to December 1994. Since September 1993, Mr. Thrall
has served as Vice President of Sales, Asian Region, for World Airways, Inc.
From 1984 until August 1993, Mr. Thrall was with the McDonnell Douglas
Corporation, where he concluded as a Regional Vice President, Commercial
Marketing with the Douglas Aircraft Company subsidiary. Mr. Thrall is also a
management and international marketing consultant, having completed assignments
with First National Net, Inc., Cheong Kang Associated (Korea), Aero Investment
Alliance, Inc. and Western Real Estate Partners.
Mr. Daniel E. Somers was initially appointed a Director of the General
Partner on December 20, 1994. Mr. Somers resigned as a Director on December 31,
1995, at the time he was elected Chief Executive Officer of Bell Cablemedia. Mr.
Somers was reinstated as a Director of the General Partner on February 2, 1996.
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. Mr. Somers currently serves as
Chief Executive Officer of Bell Cablemedia. 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 B. Zoellick was appointed a Director of the General Partner
on April 11, 1995. Mr. Zoellick is Executive Vice President, General Counsel and
Corporate Secretary of Fannie Mae, a federally chartered and stockholder-owned
corporation that is the largest housing finance investor in the United States.
44
45
From August 1992 to January 1993, Mr. Zoellick served as Deputy Chief of Staff
of the White House and Assistant to the President. From May 1991 to August 1992,
Mr. Zoellick served concurrently as the Under Secretary of State for Economic
and Agricultural Affairs and as Counselor of the Department of State, a post he
assumed in March 1989. From 1985 to 1988, Mr. Zoellick served at the Department
of Treasury in a number of capacities, including Counselor to the Secretary. Mr.
Zoellick received the Alexander Hamilton and Distinguished Service Awards,
highest honors of the Departments of Treasury and State, respectively. The
German Government awarded him the Knight Commanders Cross for his work on
Germany unification. Mr. Zoellick currently serves on the boards of the Council
on Foreign Relations, the Congressional Institute, the German Marshall Fund of
the U.S., the European Institute, the National Bureau of Asian Research, the
American Council on Germany and the Overseas Development Council.
Christopher J. Bowick, Cynthia A. Winning and Larry W. Kaschinske are
executive officers of the General Partner; Raymond L. Vigil is an executive
officer and a director of the General Partner; and Derek H. Burney, John A.
MacDonald and Daniel E. Somers are directors of the General Partner. Reports by
these persons with respect to the ownership of limited partnership interests in
the Partnership required by Section 16(a) of the Securities Exchange Act of
1934, as amended, were not filed within the required time. None of these
individuals own any limited partnership interests in the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate the cable television systems owned by the Venture. Such
personnel are employed by the General Partner and, the cost of such employment
is charged by the General Partner to the Venture as a direct reimbursement item.
See Item 13.
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 Venture. The General Partner believes that the terms of such
transactions are generally as favorable as could be obtained by the Venture 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 Venture from
unaffiliated parties.
The General Partner charges a management fee, and the General Partner
is reimbursed for certain allocated overhead and administrative expenses. These
expenses represent the salaries and benefits paid to corporate personnel, rent,
data processing services and other corporate facilities costs. Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each partnership managed. Remaining expenses are allocated based on the pro
rata relationship of the Partnership's revenues to the total revenues of all
systems owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which 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. The interest rate charged approximates the General Partner's
weighted average cost of borrowing.
The Systems receives 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
45
46
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 between
PIN and the Venture. During the year ended December 31, 1995, the Partnership
received revenues from PIN of $59,971, and the Venture received revenues from
PIN of $212,844.
The charges to the Partnership and to the Venture for related party
transactions are as follows for the periods indicated:
At December 31,
------------------------------------------------
Cable TV Fund 12-B, Ltd. 1995 1994 1993
- ------------------------ ---- ---- ----
Management fees $1,215,448 $1,347,800 $1,348,760
Allocation of expenses 1,639,791 2,045,084 1,857,040
Interest expense -0- 9,903 -0-
Amount of advances outstanding -0- 112,495 163,266
Highest amount of advances outstanding 44,161 163,266 289,033
Programming fees:
Superaudio 32,307 39,929 40,882
Mind Extension University 34,378 36,178 23,769
Jones Computer Network 68,641 5,373 -0-
At December 31,
------------------------------------------------
Cable TV Fund 12-BCD 1995 1994 1993
- -------------------- ---- ---- ----
Management fees $5,069,985 $4,461,154 $4,456,577
Allocation of expenses 7,183,663 6,951,110 6,048,783
Interest expense 220,743 33,627 15,477
Amount of advances outstanding 4,198,739 616,810 188,430
Highest amount of advances outstanding 4,574,572 929,508 511,646
Programming fees:
Superaudio 135,861 135,346 134,179
Mind Extension University 145,598 124,043 79,002
Jones Computer Network 283,339 71,961 -0-
46
47
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a)1. See index to financial statements for list of financial statements
and exhibits thereto filed as a part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreement for Cable TV Fund 12-B. (1)
4.2 Joint Venture Agreement of Cable TV Fund 12-BCD Venture dated as of
March 17, 1986, among Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C,
Ltd. and Cable TV Fund 12-D, Ltd. (2)
10.1.1 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Edwards Air Force
Base, California (Fund 12-BCD). (3)
10.1.2 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Lancaster, California (Fund 12-BCD). (4)
10.1.3 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Unincorporated
portions of Los Angeles County, California (Fund 12-BCD). (4)
10.1.4 Copy of Los Angeles County Code regarding cable tv system
franchises (Fund 12-BCD). (5)
10.1.5 Copy of Ordinance 90-0118F dated 10/29/90 granting a cable
television franchise to Fund 12-BCD (Fund 12-BCD). (5)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Green
Valley/Elizabeth Lake/Leona Valley unincorporated areas of Los
Angeles County, California (Fund 12-BCD). (2)
10.1.7 Ordinance 88-0166F dated 10/4/88 amending the franchise described
in 10.1.5 (Fund 12-BCD). (5)
10.1.8 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Palmdale, California (Fund 12-BCD). (5)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Albuquerque, New Mexico (Fund 12-BCD). (4)
10.1.10 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Bernalillo, New Mexico (Fund 12-BCD). (4)
47
48
10.1.11 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Bernalillo, New Mexico (Fund 12-BCD). (4)
10.1.12 Resolution No. 12-14-87 dated 12/14/87 authorizing the assignment
of the franchise to Fund 12-BCD. (5)
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Bosque Farms, New Mexico (Fund 12-BCD). (4)
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Corrales, New Mexico (Fund 12-BCD). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Kirtland Air
Force Base, New Mexico (Fund 12-BCD). (5)
10.1.16 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Los Ranchos, New Mexico (Fund 12-BCD). (4)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Sandoval, New Mexico (Fund 12-BCD). (4)
10.1.18 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Valencia, New Mexico (Fund 12-BCD). (4)
10.1.19 Resolution No. 88-23 dated 2/14/88 authorizing assignment of the
franchise to Fund 12-BCD. (5)
10.2.1 Note Purchase Agreement dated as of March 31, 1992 between Cable TV
Fund 12-BCD Venture and the Noteholders
10.2.2 Amendment No. 1 dated as of March 31, 1994 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.3 Amendment No. 2 dated as of September 30, 1994 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.4 Amendment No. 3 dated as of February 12, 1996 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.5 Second Amended and Restated Credit Agreement by and among Cable TV
Fund 12-BCD Venture, various banks, Corestates Bank, N.A. and
Societe Generale, as Managing Agents and Corestates Bank, N.A., as
Administrative Agent dated February 12, 1996.
48
49
10.3.1 Purchase and Sale Agreement dated as of March 29, 1988 by and
between Cable TV Fund 12-BCD Venture as Buyer and Video Company as
Seller. (6)
10.3.2 Purchase and Sale Agreement dated 9/20/91 and amendments thereto
between Cable TV Fund 12-BCD Venture as Seller and Falcon Classic
Cable Income Properties, L.P. (Fund 12-BCD). (7)
10.3.3 Purchase and Sale Agreement dated 2/22/95 between Cable TV Fund
12-B, Ltd. and Jones Intercable, Inc. (8)
10.3.4 Assignment and Assumption Agreement dated as of October 20, 1995
between Jones Intercable, Inc. and Jones Cable Holdings, Inc. (9)
10.3.5 Purchase and Sale Agreement dated as of August 11, 1995 between
Cable TV Fund 12-BCD Venture and Jones Intercable, Inc. (10)
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 Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(2) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1987 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(3) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1994 (Commission File No.
0-13193).
(4) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1986 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(5) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1992 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(6) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1988 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(7) Incorporated by reference from the Forms 8-K of Fund 12-B, Fund
12-C and Fund 12-D dated 4/6/92 (Commission File Nos. 0-13193,
0-13964 and 0-14206, respectively).
(8) Incorporated by reference from the Form 8-K of Cable TV Fund 12-B,
Ltd. dated 3/10/95 (Commission File No. 0-13193).
(9) Incorporated by reference from the Form 8-K of Cable TV Fund 12-B,
Ltd. dated 11/1/95 (Commission File No. 0-13193).
(10) Incorporated by reference from the Annual Report on Form 10-K for
fiscal year ended May 31, 1995 of Jones Intercable, Inc.
(Commission File No. 1-9953)
49
50
(b) Reports on Form 8-K.
A Current Report on Form 8-K (Commission File No. 0-13193), dated
November 1, 1995, describing the sale of the Augusta System was
filed with the Securities and Exchange Commission on November 2,
1995.
A Current Report on Form 8-K (Commission File No. 0-13193), dated
December 4, 1995, describing certain litigation regarding the
proposed sale of the Tampa System was filed with the Securities and
Exchange Commission on December 5, 1995.
A Current Report on Form 8-K (Commission File No. 0-13193), dated
March 13. 1996. describing the sale of the Tampa System was filed
with the Securities and Exchange Commission on March 14, 1996.
50
51
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CABLE TV FUND 12-B, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/Glenn R. Jones
---------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 25, 1996 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 25, 1996 (Principal Executive Officer)
By: /s/Kevin P. Coyle
---------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 25, 1996 (Principal Financial Officer)
By: /s/Larry Kaschinske
---------------------------------
Larry Kaschinske
Controller
Dated: March 25, 1996 (Principal Accounting Officer)
By: /s/James B. O'Brien
---------------------------------
James B. O'Brien
Dated: March 25, 1996 President and Director
By: /s/Raymond L. Vigil
---------------------------------
Raymond L. Vigil
Dated: March 25, 1996 Group Vice President and Director
By: /s/Derek H. Burney
---------------------------------
Derek H. Burney
Dated: March 25, 1996 Director
51
52
By:
---------------------------------
Robert E. Cole
Dated: Director
By: /s/William E. Frenzel
---------------------------------
William E. Frenzel
Dated: March 25, 1996 Director
By: /s/Donald L. Jacobs
---------------------------------
Donald L. Jacobs
Dated: March 25, 1996 Director
By: /s/James J. Krejci
---------------------------------
James J. Krejci
Dated: March 25, 1996 Director
By: /s/John A. MacDonald
---------------------------------
John A. MacDonald
Dated: March 25, 1996 Director
By:
---------------------------------
Raphael M. Solot
Dated: Director
By: /s/Daniel E. Somers
---------------------------------
Daniel E. Somers
Dated: March 25, 1996 Director
By: /s/Howard O. Thrall
---------------------------------
Howard O. Thrall
Dated: March 25, 1996 Director
By: /s/Robert B. Zoellick
---------------------------------
Robert B. Zoellick
Dated: March 25, 1996 Director
52
53
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------- ------------------- ----
4.1 Limited Partnership Agreement for Cable TV Fund 12-B. (1)
4.2 Joint Venture Agreement of Cable TV Fund 12-BCD Venture dated as of
March 17, 1986, among Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C,
Ltd. and Cable TV Fund 12-D, Ltd. (2)
10.1.1 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Edwards Air Force
Base, California (Fund 12-BCD). (3)
10.1.2 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Lancaster, California (Fund 12-BCD). (4)
10.1.3 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Unincorporated
portions of Los Angeles County, California (Fund 12-BCD). (4)
10.1.4 Copy of Los Angeles County Code regarding cable tv system
franchises (Fund 12-BCD). (5)
10.1.5 Copy of Ordinance 90-0118F dated 10/29/90 granting a cable
television franchise to Fund 12-BCD (Fund 12-BCD). (5)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Green
Valley/Elizabeth Lake/Leona Valley unincorporated areas of Los
Angeles County, California (Fund 12-BCD). (2)
10.1.7 Ordinance 88-0166F dated 10/4/88 amending the franchise described
in 10.1.5 (Fund 12-BCD). (5)
10.1.8 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Palmdale, California (Fund 12-BCD). (5)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Albuquerque, New Mexico (Fund 12-BCD). (4)
10.1.10 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Bernalillo, New Mexico (Fund 12-BCD). (4)
54
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------- ------------------- ----
10.1.11 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Bernalillo, New Mexico (Fund 12-BCD). (4)
10.1.12 Resolution No. 12-14-87 dated 12/14/87 authorizing the assignment
of the franchise to Fund 12-BCD. (5)
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Bosque Farms, New Mexico (Fund 12-BCD). (4)
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Corrales, New Mexico (Fund 12-BCD). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Kirtland Air
Force Base, New Mexico (Fund 12-BCD). (5)
10.1.16 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Los Ranchos, New Mexico (Fund 12-BCD). (4)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Sandoval, New Mexico (Fund 12-BCD). (4)
10.1.18 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Valencia, New Mexico (Fund 12-BCD). (4)
10.1.19 Resolution No. 88-23 dated 2/14/88 authorizing assignment of the
franchise to Fund 12-BCD. (5)
10.2.1 Note Purchase Agreement dated as of March 31, 1992 between Cable TV
Fund 12-BCD Venture and the Noteholders
10.2.2 Amendment No. 1 dated as of March 31, 1994 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.3 Amendment No. 2 dated as of September 30, 1994 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.4 Amendment No. 3 dated as of February 12, 1996 to the Note Purchase
Agreement dated as of March 31, 1992 between Cable TV Fund 12-BCD
Venture and the Noteholders
10.2.5 Second Amended and Restated Credit Agreement by and among Cable TV
Fund 12-BCD Venture, various banks, Corestates Bank, N.A. and
Societe Generale, as Managing Agents and Corestates Bank, N.A., as
Administrative Agent dated February 12, 1996.
55
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------- ------------------- ----
10.3.1 Purchase and Sale Agreement dated as of March 29, 1988 by and
between Cable TV Fund 12-BCD Venture as Buyer and Video Company as
Seller. (6)
10.3.2 Purchase and Sale Agreement dated 9/20/91 and amendments thereto
between Cable TV Fund 12-BCD Venture as Seller and Falcon Classic
Cable Income Properties, L.P. (Fund 12-BCD). (7)
10.3.3 Purchase and Sale Agreement dated 2/22/95 between Cable TV Fund
12-B, Ltd. and Jones Intercable, Inc. (8)
10.3.4 Assignment and Assumption Agreement dated as of October 20, 1995
between Jones Intercable, Inc. and Jones Cable Holdings, Inc. (9)
10.3.5 Purchase and Sale Agreement dated as of August 11, 1995 between
Cable TV Fund 12-BCD Venture and Jones Intercable, Inc. (10)
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 Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(2) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1987 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(3) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1994 (Commission File No.
0-13193).
(4) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1986 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(5) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1992 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(6) Incorporated by reference from Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1988 (Commission File Nos.
0-13193, 0-13807, 0-13964 and 0-14206).
(7) Incorporated by reference from the Forms 8-K of Fund 12-B, Fund
12-C and Fund 12-D dated 4/6/92 (Commission File Nos. 0-13193,
0-13964 and 0-14206, respectively).
(8) Incorporated by reference from the Form 8-K of Cable TV Fund 12-B,
Ltd. dated 3/10/95 (Commission File No. 0-13193).
(9) Incorporated by reference from the Form 8-K of Cable TV Fund 12-B,
Ltd. dated 11/1/95 (Commission File No. 0-13193).
(10) Incorporated by reference from the Annual Report on Form 10-K for
fiscal year ended May 31, 1995 of Jones Intercable, Inc.
(Commission File No. 1-9953)