FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number: 0-13807
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.)
c/o Comcast Corporation
1500 Market Street,
Philadelphia, PA 19102-2148 (215) 665-1700
- ---------------------------------------- ------------------------------------
(Address of principal executive office (Registrant's telephone no.
and Zip Code) 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 registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has 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: [Not Applicable]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE: None
CABLE TV FUND 12-B, LTD.
2001 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Item 1 Business............................................................. 1
Item 2 Properties........................................................... 1
Item 3 Legal Proceedings.................................................... 1
Item 4 Submission of Matters to a Vote of Security Holders.................. 3
PART II
Item 5 Market for the Registrant's Common Stock and
Related Security Holder Matters...................................... 3
Item 6 Selected Financial Data.............................................. 3
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................ 3
Item 8 Financial Statements................................................. 4
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.............................................25
PART III
Item 10 Directors and Executive Officers of the Registrant...................25
Item 11 Executive Compensation...............................................25
Item 12 Security Ownership of Certain Beneficial Owners and Managers.........25
Item 13 Certain Relationships and Related Transactions.......................26
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K......26
SIGNATURES....................................................................27
This Annual Report on Form 10-K is for the year ending December 31, 2001.
This Annual Report modifies and supersedes documents filed by the Partnership
prior to the filing of this Annual Report. The Securities and Exchange
Commission (the "SEC") allows the Partnership to "incorporate by reference" into
this Annual Report information that it files with the SEC, which means that the
Partnership can disclose important information to limited partners by referring
them directly to those documents. Information incorporated by reference is
considered to be part of this Annual Report. In addition, information that the
Partnership files with the SEC in the future will automatically update and
supersede information contained in this Annual Report. Certain information
contained in this Annual Report contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, included in this Annual Report that
address activities, events or developments that the Partnership or the General
Partner expects, believes or anticipates will or may occur in the future are
forward-looking statements. These forward-looking statements are based upon
certain assumptions and are subject to risks and uncertainties. Actual events or
results may differ from those discussed in the forward-looking statements as a
result of various factors.
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"). Comcast Cable Communications, Inc., a Delaware corporation, is the
General Partner of the Partnership (the "General Partner"). Cable TV Fund 12-C,
Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") are other
partnerships that were formed pursuant to the 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% interest,
Fund 12-C owns a 15% interest and Fund 12-D owns a 76% interest. The Partnership
and the Venture were formed for the purpose of acquiring and operating cable
television systems. The Partnership no longer owns any cable television systems.
The Partnership owns a 9% interest in the Venture. The Venture no longer owns
any cable television systems.
General Partner. On April 7, 1999, Comcast Corporation ("Comcast")
completed the acquisition of a controlling interest in Jones Intercable, Inc.
("Jones Intercable"), the Partnership's general partner until March 2, 2000. In
December 1999, Comcast and Jones Intercable entered into a definitive merger
agreement pursuant to which Comcast agreed to acquire all of the outstanding
shares of Jones Intercable not yet owned by Comcast. On March 2, 2000, Jones
Intercable was merged with and into Comcast JOIN Holdings, Inc., a wholly owned
subsidiary of Comcast. As a result of this transaction, Jones Intercable no
longer exists and Comcast JOIN Holdings, Inc. continued as the surviving
corporation of the merger. On August 1, 2000, Comcast JOIN Holdings, Inc. was
merged with and into Comcast Cable Communications, Inc. ("Comcast Cable"), a
wholly owned subsidiary of Comcast. Comcast Cable is now the General Partner of
the Partnership. References in this Annual Report to "the General Partner" refer
to Comcast Cable. The General Partner shares corporate offices with Comcast at
1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
ITEM 2. PROPERTIES
As of December 31, 2001, neither the Partnership nor the Venture owned any
cable television systems.
ITEM 3. LEGAL PROCEEDINGS
Litigation Challenging Jones Intercable's Acquisitions of the Albuquerque and
Palmdale Systems
In June 1999, Jones Intercable was named a defendant in a case captioned
City Partnership Co., derivatively on behalf of Cable TV Fund 12-C, Ltd., Cable
TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture, plaintiff v. Jones
Intercable, Inc., defendant and Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D,
Ltd. and Cable TV Fund 12-BCD Venture, nominal defendants (U.S. District Court,
District of Colorado, Civil Action No. 99-WM-1155) (the "City Partnership" case)
brought by City Partnership Co., a limited partner of the named partnerships.
The plaintiff's complaint alleges that Jones Intercable breached its fiduciary
duty to the plaintiff and to the other limited partners of the partnerships and
to the Venture in connection with the Venture's sale of the Palmdale, California
cable communications system (the "Palmdale System") to a subsidiary of Jones
Intercable in December 1998. The complaint alleges that Jones Intercable
acquired the Palmdale System at an unfairly low price that did not accurately
reflect the market value of the Palmdale System. The plaintiff also alleges that
the proxy solicitation materials delivered to the limited partners of the
partnerships in connection with the votes of the limited partners on the
Venture's sale of the Palmdale System contained inadequate and misleading
information concerning the fairness of the transaction, which the plaintiff
claims caused Jones Intercable to breach its fiduciary duty of candor to the
limited partners and which the plaintiff claims constituted acts and omissions
in violation of Section 14(a) of the Securities Exchange Act of 1934, as
amended. Plaintiff also claims that Jones Intercable breached the contractual
provision of the partnerships' limited partnership agreements requiring that the
sale price be determined by the average of three separate, independent
appraisals, challenging both the independence and the currency of the
appraisals. The complaint finally seeks declaratory injunctive relief to prevent
Jones Intercable from making use of the partnerships' funds to finance Jones
Intercable's defense of this litigation.
In August 1999, Jones Intercable was named a defendant in a case captioned
Gramercy Park Investments, LP, Cobble Hill Investments, LP and Madison/AG
Partnership Value Partners II, plaintiffs v. Jones Intercable, Inc. and Glenn R.
Jones, defendants, and Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable
TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd.,
nominal defendants (U.S. District Court, District of Colorado, Civil Action No.
99-B-1508) (the "Gramercy Park" case) brought as a class and derivative action
by limited partners of the named partnerships. The plaintiffs' complaint alleges
that the defendants made false and misleading statements to the limited partners
of the named partnerships in connection with the solicitation of proxies and the
votes of the limited partners on the sales of the Palmdale System, the
Albuquerque, New Mexico cable communications system (the "Albuquerque System"),
the Littlerock, California cable communications system (the "Littlerock System")
and the Calvert County, Maryland cable communications system (the "Calvert
County System") by the named partnerships to Jones Intercable or one of its
subsidiaries in violation of Sections 14 and 20 of the Securities Exchange Act
of 1934, as amended. The plaintiffs specifically allege that the proxy
statements delivered to the limited partners in connection with the limited
partners' votes on these sales were false, misleading and failed to disclose
material facts necessary to make the statements made not misleading. The
plaintiffs' complaint also alleges that the defendants breached their fiduciary
duties to the plaintiffs and to the other limited partners of the named
partnerships and to the named partnerships in connection with the various sales
of the Albuquerque System, the Palmdale System, the Littlerock System and the
Calvert County System to subsidiaries of Jones Intercable. The complaint alleges
that Jones Intercable acquired these cable communications systems at unfairly
low prices that did not accurately reflect the market values of the systems. The
plaintiffs seek on their own behalf and on behalf of all other limited partners
compensatory and nominal damages, the costs and expenses of the litigation,
including reasonable attorneys' and experts' fees, and punitive and exemplary
damages.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs v.
Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B,
Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A,
Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court,
District of Colorado, Civil Action No. 99-WM-1702) ("Schumacher") brought as a
class and derivative action by three limited partners of the named partnerships.
The substance of the Schumacher plaintiffs' complaint is similar to the
allegations raised in the Gramercy Park case.
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs v. Jones
Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B, Ltd.,
Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and
Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court, District of
Colorado, Civil Action No. 99-B-1778) ("Margolin") brought as a class and
derivative action by three limited partners of the named partnerships. The
substance of the Margolin plaintiffs' complaint is similar to the allegations
raised in the Gramercy Park case.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging Jones
Intercable's acquisitions of the Albuquerque, Palmdale, Littlerock and Calvert
County Systems because these cases involve common questions of law and fact. The
cases are presented as both class and derivative actions. In June 2001, the
plaintiffs filed a motion for class certification. In August 2001, the General
Partner filed a brief in opposition to plaintiffs' motion for class
certification. A hearing on the motion was held in October 2001. If the
plaintiffs' motion for class certification is denied, the cases would proceed
only as derivative actions.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims for
damages, and the General Partner intends to defend these lawsuits vigorously.
Litigation Relating to Limited Partnership List Requests
The Partnership was a defendant in a case captioned Everest Cable
Investors, LLC, et al., plaintiffs v. Jones Intercable, Inc., et al., defendants
(Superior Court, Los Angeles County, State of California, Case No. BC 213632)
originally filed in July 1999. Plaintiffs alleged that certain of them formed a
venture to acquire limited partnership interests in the Partnership and that
plaintiffs were frustrated in this purpose by Jones Intercable's alleged refusal
to provide plaintiffs with a list of the names and addresses of the limited
partners of the Partnership. Plaintiffs alleged that their failure to obtain the
partnership list prevented them from making a tender offer for the Partnership's
limited partnership interests causing them economic loss. None of the plaintiffs
is a limited partner of the Partnership but one of the plaintiffs alleged that
it held a power of attorney from a limited partner of the Partnership. The trial
court found that a holder of a power of attorney is not a real party in interest
capable of suing on the rights of the principal
2
and thus dismissed the case against the Partnership. The plaintiffs chose not to
appeal this ruling of the trial court and thus the Partnership is no longer a
party to this litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
While the Partnership is publicly held, there is no public market for the
limited partnership interests, and it is not expected that a market will develop
in the future. As of December 31, 2001, the number of equity security holders in
the Partnership was 7,373.
ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31,
-------------------------------------------------------------------------
Cable TV Fund 12-B, Ltd. 2001 2000 1999 1998 1997
- ------------------------ ---------- ---------- ---------- ---------- ----------
Equity in Net Income (Loss) of Cable
Television Joint Venture........... $ $6,352 ($9,648) $22,468,979 ($440,479)
Net (Loss) Income....................... (55,116) (60,232) (38,335) 22,413,631 (1) (440,479)
Net (Loss) Income per Limited
Partnership Unit................... (.37) (.41) (.26) 155.36 (1) (3.93)
Weighted Average Number of Limited
Partnership Units Outstanding...... 111,035 111,035 111,035 111,035 111,035
General Partner's Capital (Deficit)..... 17,397 31,176 46,234 55,818 (193,733)
Limited Partners' Capital (Deficit)..... 52,190 93,527 138,701 167,452 (2,343,055)
Total Assets............................ 73,307 140,393 213,622 6,357,594 55,348
General Partner Advances................ 3,720 15,690 28,687
For the Year Ended December 31,
-------------------------------------------------------------------------
Cable TV Fund 12-BCD Venture 2001 2000 1999 1998 1997
- ------------------------------- ---------- ---------- ---------- ---------- ----------
Revenues................................ $ $ $ $59,492,754 $82,675,018
Depreciation and Amortization........... 16,500,689 21,837,251
Operating Income........................ 3,924,809 6,129,688
Net Income (Loss)....................... 69,191 (105,094) 243,722,979(1) (4,798,248)
Partners' Capital (Deficit)............. 2,327,155 2,432,249 (27,189,730)
Total Assets............................ 2,327,155 69,325,751 124,269,504
Debt 144,308,462
<FN>
(1) Net income resulted primarily from the sale of the Albuquerque System and
the Palmdale System by the Venture in June 1998 and December 1998,
respectively.
</FN>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion contains, in addition to historical information,
forward-looking statements that are based upon certain assumptions and are
subject to a number of risks and uncertainties.
3
FINANCIAL CONDITION
Cable TV Fund 12-B, Ltd.
The Partnership owns a 9 percent interest in the Venture. The investment in
cable television joint venture was accounted for under the equity method. The
Venture was liquidated in 2000 (see below). The only asset of the Partnership at
December 31, 2001 was its cash on hand of approximately $73,000, which will be
held in reserve and used to pay the administrative expenses of the Partnership
until it is dissolved.
Taking into account all distributions that have been made, the
Partnership's limited partners have received $1,032 for each $500 limited
partnership interest, or $2,064 for each $1,000 invested in the Partnership.
Cable TV Fund 12-BCD Venture
The Venture sold the Albuquerque System and the Palmdale System to a
subsidiary of Jones Intercable in 1998. Since the sale of the Palmdale System
represented the sale of the only remaining operating asset of the Venture, the
Venture was liquidated in 2000.
RESULTS OF OPERATIONS
The Venture was liquidated in 2000 and the Partnership conducted no
operations in 2001 or 2000; therefore, a discussion of results of operations
would not be meaningful. Administrative and other expense, net incurred by the
Partnership of $58,153 in 2001 and $66,584 in 2000 primarily related to various
costs associated with the administration of the Partnership. Prior to its
liquidation, the Venture earned interest income of $69,191 in 2000 on its cash
balance on hand and its cash was distributed to its Venture partners. Other
expense incurred by the Venture of $381,802 in 1999 primarily related to various
costs associated with the administration of the Venture. The Partnership is
expected to be dissolved when the remaining litigation against it is concluded.
Until that time, administrative expenses will continue to be incurred.
ITEM 8. FINANCIAL STATEMENTS
The audited financial statements of the Partnership as of December 31, 2001
and 2000 and for the three years in the period ended December 31, 2001 follow.
4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 12-B, Ltd.:
We have audited the accompanying balance sheet of CABLE TV FUND 12-B, LTD.
(a Colorado limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partners' capital and cash flows for each of
the three years in the period ended December 31, 2001. 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 auditing standards generally
accepted in the United States. 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, 2001 and 2000, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN, LLP
Denver, Colorado,
March 26, 2002.
5
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
BALANCE SHEET
December 31,
ASSETS 2001 2000
------ --------------- ---------------
Cash $73,307 $140,393
--------------- ---------------
Total assets.................................................. $73,307 $140,393
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Advances from affiliates.......................................... $3,720 $ 15,690
--------------- ---------------
Total liabilities............................................. 3,720 15,690
--------------- ---------------
Commitments and Contingencies (Note 5)
PARTNERS' CAPITAL:
General Partner-
Contributed capital............................................... 1,000 1,000
Distributions..................................................... (19,696,268) (19,696,268)
Accumulated earnings.............................................. 19,712,665 19,726,444
--------------- ---------------
17,397 31,176
--------------- ---------------
Limited Partners-
Net contributed capital (111,035 units outstanding
at December 31, 2001 and 2000).................................. 47,645,060 47,645,060
Distributions..................................................... (114,620,017) (114,620,017)
Accumulated earnings.............................................. 67,027,147 67,068,484
--------------- ---------------
52,190 93,527
--------------- ---------------
Total liabilities and partners' capital....................... $73,307 $140,393
=============== ===============
See notes to financial statements.
6
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
STATEMENT OF OPERATIONS
Year Ended December 31,
2001 2000 1999
-------------- -------------- --------------
INCOME (EXPENSE):
Interest expense......................................... $ $ ($649)
Interest income.......................................... 3,037
Administrative expenses and other, net................... (58,153) (66,584) (28,038)
------------- ------------- -------------
(55,116) (66,584) (28,687)
------------- ------------- -------------
EQUITY IN NET INCOME (LOSS) OF CABLE
TELEVISION JOINT VENTURE................................. 6,352 (9,648)
------------- ------------- -------------
NET LOSS.................................................... ($55,116) ($60,232) ($38,335)
============= ============= =============
ALLOCATION OF NET LOSS:
General Partner.......................................... ($13,779) ($15,058) ($9,584)
============= ============= =============
Limited Partners......................................... ($41,337) ($45,174) ($28,751)
============= ============= =============
NET LOSS PER LIMITED PARTNERSHIP UNIT....................... ($0.37) ($0.41) ($0.26)
============= ============= =============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING........................................ 111,035 111,035 111,035
============= ============= =============
See notes to financial statements.
7
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
Year Ended December 31,
2001 2000 1999
------------- ------------- -------------
GENERAL PARTNER:
Balance, beginning of year............................. $31,176 $46,234 $55,818
Net loss............................................... (13,779) (15,058) (9,584)
------------- ------------- -------------
Balance, end of year................................... $17,397 $31,176 $46,234
============= ============= =============
LIMITED PARTNERS:
Balance, beginning of year............................. $93,527 $138,701 $167,452
Net loss............................................... (41,337) (45,174) (28,751)
------------- ------------- -------------
Balance, end of year................................... $52,190 $93,527 $138,701
============= ============= =============
See notes to financial statements.
8
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
STATEMENT OF CASH FLOWS
For the Year Ended December 31,
2001 2000 1999
------------- ------------- --------------
OPERATING ACTIVITIES:
Net loss................................................... ($55,116) ($60,232) ($38,335)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in net (income) loss of Cable Television
Joint Venture........................................ (6,352) 9,648
(Decrease) increase in advances from affiliates........ (11,970) (12,997) 28,687
------------- ------------- --------------
Net cash used in operating activities................ (67,086) (79,581)
------------- ------------- --------------
INVESTING ACTIVITIES:
Distribution from Cable Television Joint Venture........... 219,974 6,134,324
------------- ------------- --------------
Net cash provided by investing activities............ 219,974 6,134,324
------------- ------------- --------------
FINANCING ACTIVITIES:
Distribution to limited partners........................... (6,134,324)
------------- ------------- --------------
Net cash used in financing activities................ (6,134,324)
------------- ------------- --------------
(Decrease) increase in cash................................... (67,086) 140,393
Cash, beginning of year....................................... 140,393
------------- ------------- --------------
Cash, end of year............................................. $73,307 $140,393
============= ============= ==============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid.............................................. $59 $649
============= ============= ==============
See notes to financial statements.
9
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. ("Fund 12-B" or the "Partnership"), a Colorado
limited partnership, was formed on June 5, 1985, under a public program
sponsored by Jones Intercable, Inc. ("Jones Intercable"). 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 in 1995.
Formation of Joint Venture
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 owned the cable
television systems serving Tampa, Florida (the "Tampa System"),
Albuquerque, New Mexico (the "Albuquerque System"), and Palmdale,
California (the "Palmdale System"). Prior to 1999, the Venture sold all
of its cable television systems. The Venture was liquidated in 2000 and
therefore, the Partnership has no investment in the Venture at December
31, 2001.
General Partner
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, the
Partnership's general partner until March 2, 2000. In December 1999,
Comcast and Jones Intercable entered into a definitive merger agreement
pursuant to which Comcast agreed to acquire all of the outstanding
shares of Jones Intercable not yet owned by Comcast. On March 2, 2000,
Jones Intercable was merged with and into Comcast JOIN Holdings, Inc.,
a wholly owned subsidiary of Comcast. As a result of this transaction,
Jones Intercable no longer exists and Comcast JOIN Holdings, Inc.
continued as the surviving corporation of the merger. On August 1,
2000, Comcast JOIN Holdings, Inc. was merged with and into Comcast
Cable Communications, Inc. ("Comcast Cable"), a wholly owned subsidiary
of Comcast. Comcast Cable is now the General Partner of the
Partnership. References in these Notes to "the General Partner" refer
to Comcast Cable. The General Partner shares corporate offices with
Comcast at 1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
Contributed Capital
The capitalization of the Partnership is set forth in the accompanying
Statement of Partners' Capital. No limited partner is obligated to make
any additional contributions to partnership capital.
Jones Intercable purchased its general partner interest in the
Partnership by contributing $1,000 to partnership capital. Comcast
Cable now owns this general partner interest.
All profits and losses of the Partnership were 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 were 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.
Taking into account all distributions that have been made to the
Partnership from these sales, the Partnership's limited partners have
received $1,032 for each $500 limited partnership interest, or $2,064
for each $1,000 limited partnership interest.
10
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States. The Partnership's tax returns were also
prepared on the accrual basis.
Management Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires 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 was accounted for under the
equity method due to the Partnership's influence on the Venture as the
general partner.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Venture and the
Partnership considered all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Distribution Ratios and Reimbursements
Any partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and
interest payments and cash expenses) were 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, were
made as follows: first, to the limited partners in an amount which,
together with all prior distributions, equaled the amount initially
contributed by the limited partners; the balance, 75 percent to the
limited partners and 25 percent to the General Partner.
The Partnership reimburses its general partner for certain
administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel. Such personnel provide
administrative, accounting, tax, legal and investor relations services
to the Partnership. Such services, and their related costs, are
necessary to the administration of the Partnership until the
Partnership is dissolved. Reimbursements made to the General Partner by
the Partnership for administrative expenses were $13,291 and $16,893 in
2001 and 2000, respectively. Reimbursements made to the General Partner
by the Venture for overhead and administrative expenses were $101,073
in 1999, of which $9,279 was attributable to the Partnership. Such
charges were included in operating costs in the accompanying Statement
of Operations during the periods that the Venture operated its cable
television systems. Subsequent to the sale of the Venture's final cable
television system, such charges were included in Administrative
expenses and other, net in the accompanying Statement of Operations.
(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
11
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
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.
(5) COMMITMENTS AND CONTINGENCIES
Litigation Challenging Jones Intercable's Acquisitions of the
Albuquerque and Palmdale Systems
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund
12-C, Ltd., Cable TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture,
plaintiff v. Jones Intercable, Inc., defendant and Cable TV Fund 12-C,
Ltd., Cable TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture,
nominal defendants (U.S. District Court, District of Colorado, Civil
Action No. 99-WM-1155) (the "City Partnership" case) brought by City
Partnership Co., a limited partner of the named partnerships. The
plaintiff's complaint alleges that Jones Intercable breached its
fiduciary duty to the plaintiff and to the other limited partners of
the partnerships and to the Venture in connection with the Venture's
sale of the Palmdale, California cable communications system (the
"Palmdale System") to a subsidiary of Jones Intercable in December
1998. The complaint alleges that Jones Intercable acquired the Palmdale
System at an unfairly low price that did not accurately reflect the
market value of the Palmdale System. The plaintiff also alleges that
the proxy solicitation materials delivered to the limited partners of
the partnerships in connection with the votes of the limited partners
on the Venture's sale of the Palmdale System contained inadequate and
misleading information concerning the fairness of the transaction,
which the plaintiff claims caused Jones Intercable to breach its
fiduciary duty of candor to the limited partners and which the
plaintiff claims constituted acts and omissions in violation of Section
14(a) of the Securities Exchange Act of 1934, as amended. Plaintiff
also claims that Jones Intercable breached the contractual provision of
the partnerships' limited partnership agreements requiring that the
sale price be determined by the average of three separate, independent
appraisals, challenging both the independence and the currency of the
appraisals. The complaint finally seeks declaratory injunctive relief
to prevent Jones Intercable from making use of the partnerships' funds
to finance Jones Intercable's defense of this litigation.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP
and Madison/AG Partnership Value Partners II, plaintiffs v. Jones
Intercable, Inc. and Glenn R. Jones, defendants, and Cable TV Fund
12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable
TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants
(U.S. District Court, District of Colorado, Civil Action No. 99-B-1508)
(the "Gramercy Park" case) brought as a class and derivative action by
limited partners of the named partnerships. The plaintiffs' complaint
alleges that the defendants made false and misleading statements to the
limited partners of the named partnerships in connection with the
solicitation of proxies and the votes of the limited partners on the
sales of the Palmdale System, the Albuquerque, New Mexico cable
communications system (the "Albuquerque System"), the Littlerock,
California cable communications system (the "Littlerock System") and
the Calvert County, Maryland cable communications system (the "Calvert
County System") by the named partnerships to Jones Intercable or one of
its subsidiaries in violation of Sections 14 and 20 of the Securities
Exchange Act of 1934, as amended. The plaintiffs specifically allege
that the proxy statements delivered to the limited partners in
connection with the limited partners' votes on these sales were false,
misleading and failed to disclose material facts necessary to make the
statements made not misleading. The plaintiffs' complaint also alleges
that the defendants breached their fiduciary duties to the plaintiffs
and to the other limited partners of the named partnerships and to the
named partnerships in connection with the various sales of the
Albuquerque System, the Palmdale System, the Littlerock System and the
Calvert County System to subsidiaries of Jones Intercable. The
complaint alleges that Jones Intercable acquired these cable
communications systems at unfairly low prices that did not accurately
reflect the market values of the systems. The plaintiffs seek on their
own behalf and on behalf of all other limited partners compensatory and
nominal damages, the costs and expenses of the litigation, including
reasonable attorneys' and experts' fees, and punitive and exemplary
damages.
12
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
In September 1999, Jones Intercable was named a defendant in a
case captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas,
plaintiffs v. Jones Intercable, Inc. and Glenn R. Jones, defendants and
Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D,
Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal
defendants (U.S. District Court, District of Colorado, Civil Action No.
99-WM-1702) ("Schumacher") brought as a class and derivative action by
three limited partners of the named partnerships. The substance of the
Schumacher plaintiffs' complaint is similar to the allegations raised
in the Gramercy Park case.
In September 1999, Jones Intercable was named a defendant in a
case captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren,
plaintiffs v. Jones Intercable, Inc. and Glenn R. Jones, defendants and
Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D,
Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal
defendants (U.S. District Court, District of Colorado, Civil Action No.
99-B-1778) ("Margolin") brought as a class and derivative action by
three limited partners of the named partnerships. The substance of the
Margolin plaintiffs' complaint is similar to the allegations raised in
the Gramercy Park case.
In November 1999, the United States District Court for the
District of Colorado entered an order consolidating all of the cases
challenging Jones Intercable's acquisitions of the Albuquerque,
Palmdale, Littlerock and Calvert County Systems because these cases
involve common questions of law and fact. The cases are presented as
both class and derivative actions. In June 2001, the plaintiffs filed a
motion for class certification. In August 2001, the General Partner
filed a brief in opposition to plaintiffs' motion for class
certification. A hearing on the motion was held in October 2001. If the
plaintiffs' motion for class certification is denied, the cases would
proceed only as derivative actions.
The General Partner believes that the defendants have defenses to
the plaintiffs' claims for relief and challenges to the plaintiffs'
claims for damages, and the General Partner intends to defend these
lawsuits vigorously.
Litigation Relating to Limited Partnership List Requests
The Partnership was a defendant in a case captioned Everest Cable
Investors, LLC, et al., plaintiffs v. Jones Intercable, Inc., et al.,
defendants (Superior Court, Los Angeles County, State of California,
Case No. BC 213632) originally filed in July 1999. Plaintiffs alleged
that certain of them formed a venture to acquire limited partnership
interests in the Partnership and that plaintiffs were frustrated in
this purpose by Jones Intercable's alleged refusal to provide
plaintiffs with a list of the names and addresses of the limited
partners of the Partnership. Plaintiffs alleged that their failure to
obtain the partnership list prevented them from making a tender offer
for the Partnership's limited partnership interests causing them
economic loss. None of the plaintiffs is a limited partner of the
Partnership but one of the plaintiffs alleged that it held a power of
attorney from a limited partner of the Partnership. The trial court
found that a holder of a power of attorney is not a real party in
interest capable of suing on the rights of the principal and thus
dismissed the case against the Partnership. The plaintiffs chose not to
appeal this ruling of the trial court and thus the Partnership is no
longer a party to this litigation.
13
CABLE TV FUND 12-B, LTD.
- ------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
(6) UNAUDITED SUPPLEMENTARY DATA
Selected unaudited quarterly financial information is presented below:
First Second Third Fourth Total
2001 Quarter Quarter Quarter Quarter Year
------------ ------------ ------------ ------------ ------------
Equity in net income of cable
television joint venture............. $ $ $ $ $
Net loss................................ (8,747) (30,260) (5,425) (10,684) (55,116)
Net loss per limited partnership unit... (.06) (.20) (.04) (.07) (.37)
Weighted average number of limited
partnership units outstanding........ 111,035 111,035 111,035 111,035 111,035
First Second Third Fourth Total
2000 Quarter Quarter Quarter Quarter Year
------------ ------------ ------------ ------------ ------------
Equity in net income of cable
television joint venture............. $ $3,024 $3,328 $ $6,352
Net loss................................ (18,135) (14,579) (5,877) (21,641) (60,232)
Net loss per limited partnership unit... (.12) (.10) (.04) (.15) (.41)
Weighted average number of limited
partnership units outstanding........ 111,035 111,035 111,035 111,035 111,035
14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- ----------------------------------------
To the Partners of Cable TV Fund 12-BCD Venture:
We have audited the accompanying balance sheet of CABLE TV FUND 12-BCD
VENTURE (a Colorado general partnership) as of December 31, 2000 and 1999, and
the related statements of operations, partners' capital and cash flows for each
of the three years in the period ended December 31, 2000. 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 auditing standards generally
accepted in the United States. 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, 2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN, LLP
Denver, Colorado,
February 23, 2001.
15
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
BALANCE SHEET
December 31,
ASSETS 2000 1999
------ --------------- ---------------
Cash and cash equivalents.............................................. $ $302
Receivable from affiliates............................................. 2,326,853
--------------- ---------------
Total assets.................................................... $ $2,327,155
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Commitments and Contingencies (Note 5)
PARTNERS' CAPITAL:
Contributed capital................................................. $135,490,944 $135,490,944
Distributions....................................................... (271,497,346) (269,101,000)
Accumulated earnings................................................ 136,006,402 135,937,211
--------------- ---------------
2,327,155
--------------- ---------------
Total liabilities and partners' capital......................... $ $2,327,155
=============== ===============
See notes to financial statements.
16
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
STATEMENT OF OPERATIONS
For the Year Ended December 31,
2000 1999 1998
------------- ------------- -------------
REVENUES.................................................... $ $ $59,492,754
COSTS AND EXPENSES:
Operating expenses....................................... 32,547,366
Management fees and allocated
overhead from Jones Intercable......................... 6,519,890
Depreciation and amortization............................ 16,500,689
------------- ------------- -------------
OPERATING INCOME............................................ 3,924,809
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense......................................... (7,031,582)
Interest income.......................................... 69,191 276,708
Gain on sales of cable television systems................ 248,449,739
Other, net............................................... (381,802) (1,619,987)
------------- ------------- -------------
Total other income (expense), net.................... 69,191 (105,094) 239,798,170
------------- ------------- -------------
NET INCOME (LOSS)........................................... $69,191 ($105,094) $243,722,979
============= ============= =============
See notes to financial statements.
17
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
For the Year Ended December 31,
2000 1999 1998
---------------- ---------------- ---------------
CABLE TV FUND 12-B, LTD. (9%):
Balance, beginning of year...................... $213,622 $223,270 ($2,592,136)
Net income (loss) for year...................... 6,352 (9,648) 22,468,979
Distributions................................... (219,974) (19,653,573)
---------------- ---------------- ---------------
Balance, end of year............................ $ $213,622 $223,270
================ ================ ===============
CABLE TV FUND 12-C, LTD. (15%):
Balance, beginning of year...................... $355,536 $371,594 ($4,313,801)
Net income (loss) for year...................... 10,572 (16,058) 37,395,261
Distributions................................... (366,108) (32,709,866)
---------------- ---------------- ---------------
Balance, end of year............................ $ $355,536 $371,594
================ ================ ===============
CABLE TV FUND 12-D, LTD. (76%):
Balance, beginning of year...................... $1,757,997 $1,837,385 ($20,283,793)
Net income (loss) for year...................... 52,267 (79,388) 183,858,739
Distributions................................... (1,810,264) (161,737,561)
---------------- ---------------- ---------------
Balance, end of year............................ $ $1,757,997 $1,837,385
================ ================ ===============
TOTAL:
Balance, beginning of year...................... $2,327,155 $2,432,249 ($27,189,730)
Net income (loss) for year...................... 69,191 (105,094) 243,722,979
Distributions................................... (2,396,346) (214,101,000)
---------------- ---------------- ---------------
Balance, end of year............................ $ $2,327,155 $2,432,249
================ ================ ===============
See notes to financial statements.
18
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
STATEMENT OF CASH FLOWS
For the Year Ended December 31,
2000 1999 1998
--------------- --------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $69,191 ($105,094) $243,722,979
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.......................... 16,500,689
Gain on sales of cable television systems.............. (248,449,739)
Decrease in trade receivables, net..................... 4,456,904
Decrease in deposits, prepaid expenses
and deferred charges................................. 1,625,590
Decrease in accounts payable and accrued liabilities
and subscriber prepayments........................... (18,000) (7,083,021)
Transactions with affiliates........................... 2,326,853 (2,376,604)
--------------- --------------- ---------------
Net cash provided by (used in) operating activities.. 2,396,044 (2,499,698) 10,773,402
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net.................... (12,774,851)
Proceeds from sales of cable television systems............ 361,168,467
--------------- --------------- ---------------
Net cash provided by investing activities............ 348,393,616
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings................................... 12,236,298
Repayment of debt.......................................... (156,544,760)
Distribution to limited partners........................... (50,481,940) (90,101,856)
Distribution to general partner............................ (21,153,765)
Distribution to venture partners........................... (2,396,346) (16,343,811) (36,019,628)
--------------- --------------- ---------------
Net cash used in financing activities................ (2,396,346) (66,825,751) (291,583,711)
--------------- --------------- ---------------
(Decrease) increase in cash................................... (302) (69,325,449) 67,583,307
Cash, beginning of year....................................... 302 69,325,751 1,742,444
--------------- --------------- ---------------
Cash, end of year............................................. $ $302 $69,325,751
=============== =============== ===============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid.............................................. $ $ $9,296,224
=============== =============== ===============
NON-CASH TRANSACTIONS:
Accrued distributions...................................... $ $ $66,825,751
=============== =============== ===============
See notes to financial statements.
19
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. ("Fund 12-B"), Cable TV
Fund 12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund
12-D") (collectively, 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. The Venture owned the
cable television systems serving Tampa, Florida (the "Tampa System"),
Albuquerque, New Mexico (the "Albuquerque System") and Palmdale,
California (the "Palmdale System"). The Venture was liquidated in 2000
but it will not be dissolved until after all pending litigation
relating to the Venture has been resolved and terminated.
New General Partner
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, Inc. ("Jones
Intercable") the general partner of Fund 12-B, Fund 12-C and Fund 12-D
until March 2, 2000. In December 1999, Comcast and Jones Intercable
entered into a definitive merger agreement pursuant to which Comcast
agreed to acquire all of the outstanding shares of Jones Intercable not
yet owned by Comcast. On March 2, 2000, Jones Intercable was merged
with and into Comcast JOIN Holdings, Inc., a wholly owned subsidiary of
Comcast. As a result of this transaction, Jones Intercable no longer
exists and Comcast JOIN Holdings, Inc. continued as the surviving
corporation of the merger. On August 1, 2000, Comcast JOIN Holdings,
Inc. was merged with and into Comcast Cable Communications, Inc.
("Comcast Cable"), an indirect wholly owned subsidiary of Comcast.
Comcast Cable is now the general partner of Fund 12-B, Fund 12-C and
Fund 12-D. References in these Notes to "the General Partner" refer to
Comcast Cable. The General Partner shares corporate offices with
Comcast at 1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
Cable Television System Sales by the Venture
On June 30, 1998, the Venture sold the Albuquerque System to a
subsidiary of Jones Intercable. The sales price of the Albuquerque
System was $222,963,267. This sales price represented the average of
three separate independent appraisals of the fair market value of the
Albuquerque System. Upon the sale of the Albuquerque System, the
Venture repaid its outstanding Senior Notes balance of $41,544,890 plus
accrued interest, plus a make whole premium of $1,332,823 and, as
permitted by an amendment to the Venture's credit facility, the Venture
distributed $125,000,000 to the three constituent partnerships of the
Venture in proportion to their ownership interests in the Venture. The
remaining proceeds were used to repay a portion of the outstanding
balance and accrued interest on its credit facility. The $125,000,000
was distributed as follows: Fund 12-B received $11,474,475; Fund 12-C
received $19,097,217 and Fund 12-D received $94,428,308.
On December 31, 1998, the Venture sold the Palmdale System to a
subsidiary of Jones Intercable for a sales price of $138,205,200. The
Venture repaid all of its remaining indebtedness, retained $2,500,000
of the sale proceeds for a reserve for the administrative expenses of
the Partnership, including expenses that the Venture and its
constituent partnerships may incur related to pending litigation,
settled working capital adjustments and distributed the remaining sale
proceeds of $89,101,000 to the three constituent partnerships of the
Venture in proportion to their ownership interests in the Venture. The
$89,101,000 was distributed as follows: Fund 12-B received $8,179,098;
Fund 12- C received $13,612,649 and Fund 12-D received $67,309,253.
Contributed Capital
The capitalization of the Venture is set forth in the accompanying
Statements of Partners' Capital (Deficit).
20
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
All Venture distributions, including those made from cash flow, from
the sale or refinancing of Partnership property and on dissolution of
the Venture, are 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%
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States. The Venture's tax returns were also
prepared on the accrual basis.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires 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.
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 with the
2000 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
Jones Intercable managed the Venture and received 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. Jones Intercable did not receive a management fee after
December 31, 1998. Management fees paid to Jones Intercable by the
Venture were $2,974,638 during 1998.
The Venture reimbursed its general partner for certain administrative
expenses. These expenses represent the salaries and related benefits
paid for corporate personnel. Such personnel provide administrative,
accounting, tax, legal and investor relations services to the Venture
and its constituent partnerships. Such services, and their related
costs, are necessary to the administration of the Venture and its
constituent partnerships until they are dissolved. Reimbursements made
to the general partner by the Venture for overhead and administrative
expenses were $101,073 and $3,545,252 in 1999 and 1998, respectively.
Such charges were included in operating costs in the accompanying
Statements of Operations during the periods that the Venture operated
its cable television systems. Subsequent to the sale of the Venture's
final cable television system, such charges were included in Other, net
in the accompanying Statements of Operations.
Payments to/from Affiliates for Programming Services
Prior to the sale of its cable television systems in 1998, the Venture
received programming from Superaudio, Knowledge TV, Inc., Great
American Country, Inc. and Product Information Network, all of which
were affiliates of Jones Intercable until April 7, 1999 (see Note 1).
Payments to Superaudio, Knowledge TV, Inc, and Great American Country,
Inc., by the Venture totaled $90,778 $97,965 and $91,227, respectively,
in 1998.
21
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
Prior to the sale of its cable television systems in 1998, the Venture
received a commission from Product Information Network based on a
percentage of advertising sales and number of subscribers. Product
Information Network paid commissions to the Venture totaling $193,110
in 1998.
(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 Venture are prepared and filed by
the general partner.
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 income or loss, the tax liability of the general and limited
partners would likely be changed accordingly.
(5) COMMITMENTS AND CONTINGENCIES
Litigation Challenging Jones Intercable's Acquisitions of the
Albuquerque and Palmdale Systems
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund
12-C, Ltd., Cable TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture,
plaintiff v. Jones Intercable, Inc., defendant and Cable TV Fund 12-C,
Ltd., Cable TV Fund 12-D, Ltd. and Cable TV Fund 12-BCD Venture,
nominal defendants (U.S. District Court, District of Colorado, Civil
Action No. 99-WM-1155) brought by City Partnership Co., a limited
partner of the named partnerships. The plaintiff's complaint alleges
that Jones Intercable breached its fiduciary duty to the plaintiff and
to the other limited partners of the partnerships and to the Venture in
connection with the Venture's sale of the Palmdale, California cable
television system (the "Palmdale System") to a subsidiary of Jones
Intercable in December 1998. The complaint alleges that Jones
Intercable acquired the Palmdale System at an unfairly low price that
did not accurately reflect the market value of the Palmdale System. The
plaintiff also alleges that the proxy solicitation materials delivered
to the limited partners of the partnerships in connection with the
votes of the limited partners on the Venture's sale of the Palmdale
System contained inadequate and misleading information concerning the
fairness of the transaction, which the plaintiff claims caused Jones
Intercable to breach its fiduciary duty of candor to the limited
partners and which the plaintiff claims constituted acts and omissions
in violation of Section 14(a) of the Securities Exchange Act of 1934,
as amended. Plaintiff also claims that Jones Intercable breached the
contractual provision of the partnerships' limited partnership
agreements requiring that the sale price be determined by the average
of three separate, independent appraisals, challenging both the
independence and the currency of the appraisals. The complaint finally
seeks declaratory injunctive relief to prevent Jones Intercable from
making use of the partnerships' funds to finance Jones Intercable's
defense of this litigation.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP
and Madison/AG Partnership Value Partners II, plaintiffs v. Jones
Intercable, Inc. and Glenn R. Jones, defendants, and Cable TV Fund
12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable
TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants
(U.S. District Court, District of Colorado, Civil Action No. 99-B-1508)
("Gramercy Park") brought as a class and derivative action by limited
partners of the named partnerships. The plaintiffs' complaint alleges
that the defendants made false and misleading statements to the limited
partners of the named partnerships in connection with the solicitation
of proxies and the votes of the limited partners on the sales of the
Albuquerque, Palmdale, Littlerock and Calvert County cable
communication systems by the named partnerships to Jones Intercable or
one of its subsidiaries in violation of Sections 14 and 20 of the
Securities Exchange Act of 1934, as amended. The plaintiffs
specifically allege that the proxy statements delivered to the limited
partners in connection with the limited partners' votes on these sales
were false, misleading and failed to disclose material facts necessary
to make the statements made not misleading. The plaintiffs' complaint
also alleges that the defendants breached their fiduciary duties to the
plaintiffs and to the other
22
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
limited partners of the named partnerships and to the named
partnerships in connection with the various sales of the Albuquerque,
Palmdale, Littlerock and Calvert County cable communications systems to
subsidiaries of Jones Intercable. The complaint alleges that Jones
Intercable acquired these cable communications systems at unfairly low
prices that did not accurately reflect the market values of the
systems. The plaintiffs seek on their own behalf and on behalf of all
other limited partners compensatory and nominal damages, the costs and
expenses of the litigation, including reasonable attorneys' and
experts' fees, and punitive and exemplary damages.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas,
plaintiffs v. Jones Intercable, Inc. and Glenn R. Jones, defendants and
Cable TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D,
Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal
defendants (U.S. District Court, District of Colorado, Civil Action No.
99-WM-1702) ("Schumacher") brought as a class and derivative action by
three limited partners of the named partnerships. The substance of the
plaintiffs' complaint is similar to the allegations raised in the
Gramercy Park case.
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs
v. Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV
Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd.,
Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd., nominal
defendants (U.S. District Court, District of Colorado, Civil Action No.
99-B-1778) ("Margolin") brought as a class and derivative action by
three limited partners of the named partnerships. The substance of the
plaintiffs' complaint is similar to the allegations raised in the
Gramercy Park case.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging
Jones Intercable's acquisitions of the Albuquerque, Palmdale,
Littlerock and Calvert County systems because these cases involve
common questions of law and fact. During 2000, the District Court
denied Jones Intercable's pending motions to dismiss these cases, and,
in February 2001, a scheduling conference was held among the parties to
this litigation at which the District Court set deadlines for the
various activities in these cases. No discovery has yet occurred, but
discovery is expected to begin in 2001 and continue into 2002.
The General Partner believes that the procedures followed by Jones
Intercable in conducting the votes of the limited partners of the
various partnerships on the sales of the Albuquerque, Palmdale,
Littlerock and Calvert County systems and the disclosures in the proxy
statements delivered to the limited partners in connection with the
limited partners' votes on these sales were proper and complete, and
the General Partner believes that the various sale transactions were
fair because they were at prices determined by averaging three
separate, independent appraisals of the various cable communications
systems sold in accordance with the express provisions of the
partnerships' limited partnership agreements. The General Partner
intends to defend these lawsuits vigorously.
Litigation Relating to Limited Partnership List Requests
In July 1999, Jones Intercable, each of its subsidiaries that served as
general partners of Jones Intercable's managed partnerships and most of
Jones Intercable's managed partnerships, including the Partnership,
were named defendants in a case captioned Everest Cable Investors, LLC,
Everest Properties, LLC, Everest Properties II, LLC and KM Investments,
LLC, plaintiffs v. Jones Intercable, Inc., et al., defendants (Superior
Court, Los Angeles County, State of California, Case No. BC 213632). In
March 2000, Jones Intercable was merged with and into Comcast JOIN
Holdings, Inc., a wholly owned subsidiary of Comcast Corporation. In
August 2000, Comcast JOIN Holdings, Inc. was merged with and into
Comcast Cable Communications, Inc., an indirect wholly owned subsidiary
of Comcast Corporation. As a result of these transactions, Jones
Intercable no longer exists and Comcast Cable Communications, Inc. is
now the general partner or the parent of the managing general partner
of each of the defendant partnerships.
23
CABLE TV FUND 12-BCD VENTURE
- ----------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9 percent of the limited partnership interests in each of the managed
partnerships named as defendants, and that plaintiffs were frustrated
in this purpose by Jones Intercable's alleged refusal to provide
plaintiffs with lists of the names and addresses of the limited
partners of these partnerships. The complaint alleges that Jones
Intercable's actions constituted a breach of contract, a breach of
Jones Intercable's implied covenant of good faith and fair dealing owed
to the plaintiffs as limited partners, a breach of Jones Intercable's
fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege
that Jones Intercable's failure to provide them with the partnership
lists prevented them from making their tender offers and that they have
been injured by such action in an amount to be proved at trial, but not
less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs'
complaint and a hearing on this matter was held in October 1999. In
December 1999, the Court sustained the defendants' demurrers in part
but the Court gave the plaintiffs' leave to amend their complaint to
attempt to cure the deficiencies in the pleadings. The plaintiffs filed
their first amended complaint in January 2000. Defendants demurred to
the amended complaint in March 2000. In May 2000, the Court sustained
the defendants' demurrers without leave to amend as to all plaintiffs
except KM Investments, the sole plaintiff that was a limited partner in
any of the partnerships, thereby dismissing all claims on the merits
except those of KM Investments. By a stipulation of the parties entered
by the Court in July 2000, the claims of KM Investments were stayed and
a final judgment as to claims of the other plaintiffs were entered,
thereby facilitating an appeal in the action without the need for
pretrial, and potentially trial, proceedings as to KM Investments
alone. In August 2000, all plaintiffs except KM Investments filed a
notice of appeal of the judgment of the Court. Briefing in that appeal,
which is to the California State Court of Appeal for the Second
Appellate District, is now underway. The appellants' brief was filed in
January 2001 and respondents' responsive brief was filed in March 2001.
Appellants now have the opportunity to file a reply brief and the Court
of Appeal will schedule an oral argument on the matter.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims
for damages, and the General Partner intends to defend this lawsuit
vigorously.
(6) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
For the Year Ended December 31,
2000 1999 1998
------------ ------------ -------------
Maintenance and repairs........................... $ $ $394,740
============ ============ =============
Taxes, other than income and payroll taxes........ $ $ $711,408
============ ============ =============
Advertising....................................... $ $ $1,260,705
============ ============ =============
Depreciation of property, plant and equipment..... $ $ $14,207,696
============ ============ =============
Amortization of intangible assets................. $ $ $2,292,993
============ ============ =============
24
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 as of
December 31, 2001 is set forth below. Directors of the General Partner serve
until the next annual meeting of the General Partner and until their successors
shall be elected and qualified.
Ralph J. Roberts has served as Chairman of the General Partner's Board of
Directors since April 1999. Mr. Roberts has served as a Director of Comcast
Corporation and as the Chairman of its Board of Directors for more than five
years. Mr. Roberts is the father of Brian L. Roberts. He is 81 years old.
Brian L. Roberts has served as Vice Chairman of the General Partner's Board
of Directors since April 1999. Mr. Roberts has served as the President and as a
Director of Comcast Corporation for more than five years. Mr. Roberts also
serves as Manager of Sural Corporation, a privately held investment company that
is Comcast Corporation's controlling shareholder. Mr. Roberts is the Principal
Executive Officer of the General Partner and of Comcast Corporation. He is also
a Director of the Bank of New York. Mr. Roberts is a son of Ralph J. Roberts. He
is 42 years old.
Lawrence S. Smith has served as Executive Vice President and a Director of
the General Partner since April 1999. Mr. Smith has served as an Executive Vice
President of Comcast Corporation for more than five years. He is 54 years old.
Stanley L. Wang has served as Executive Vice President - Law and
Administration, Secretary and a Director of the General Partner since January
2000. Prior to that time, Mr. Wang served as a Senior Vice President and
Secretary and a Director of the General Partner since April 1999. Mr. Wang was
named Executive Vice President - Law and Administration of Comcast Corporation
in January 2000. Prior to that time, he served as a Senior Vice President and
Secretary and General Counsel of Comcast Corporation for more than five years.
He is 61 years old.
John R. Alchin has served as Executive Vice President and Treasurer of the
General Partner since January 2000. Prior to that time, Mr. Alchin served as a
Senior Vice President and Treasurer and a Director of the General Partner since
April 1999. Mr. Alchin was named an Executive Vice President of Comcast
Corporation in January 2000. Prior to that time, he served as a Senior Vice
President and Treasurer of Comcast Corporation for more than five years. Mr.
Alchin is the Principal Financial Officer of the General Partner and of Comcast
Corporation. He is 53 years old.
Lawrence J. Salva joined Comcast Corporation in January 2000 as Senior Vice
President and Chief Accounting Officer. Prior to that time, Mr. Salva was a
national accounting consulting partner in the public accounting firm of
PricewaterhouseCoopers for more than five years. Mr. Salva is a Senior Vice
President and the Principal Accounting Officer of the General Partner. He is 45
years old.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are required
to administer the financial, tax and legal affairs of the Partnership and to
maintain the books and records of the Partnership. Such personnel are employed
by Comcast and, pursuant to the terms of the limited partnership agreement of
the Partnership, the costs of such employment are charged by Comcast to the
Partnership. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
As of December 31, 2001, no person or entity owned more than 5% of the
limited partnership interests of the Partnership.
25
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership and the Venture reimburse the Partnership's general partner for
certain allocated overhead and administrative expenses. These expenses represent
the salaries and benefits paid to corporate personnel. Such personnel provide
administrative, tax, accounting, legal and investor relations services to the
Partnership and the Venture. The Partnership and the Venture will continue to
reimburse the Partnership's general partner for actual time spent on Partnership
and Venture business by employees of Comcast until the Partnership and the
Venture are liquidated and dissolved. During the years ended December 31, 2001
and 2000, such reimbursements made by the Partnership totaled $13,291 and
$16,893, respectively. Reimbursements made to the General Partner by the Venture
for overhead and administrative expenses were $101,073 in 1999, of which $9,279
was attributable to the Partnership. The Venture made no such reimbursements in
2001 or 2000.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following financial statements of ours are included in Part II, Item 8:
Independent Auditors' Report...........................................5
Balance Sheet--December 31, 2001 and 2000..............................6
Statement of Operations--Years
Ended December 31, 2001, 2000 and 1999.................................7
Statement of Partners' Capital--
Years Ended December 31, 2001, 2000 and 1999...........................8
Statement of Cash Flows--Years
Ended December 31, 2001, 2000 and 1999.................................9
Notes to Financial Statements.........................................10
(b) The following financial statement schedules required to be filed by Items 8
and 14(d) of Form 10-K are included in Part IV:
None
(c) Reports on Form 8-K:
None
(d) Exhibits filed herewith:
4.1 Limited Partnership Agreement for Cable TV Fund 12-B, Ltd
(Incorporated by reference from the Partnership's Annual Report on
Form 10-K for the fiscal year ended December 31, 1985).
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. (Incorporated by reference from the
Partnership's Annual Report on form 10-K for the fiscal year ended
December 31, 1987).
99.1 Arthur Andersen LLP Representations for Cable TV Fund 12-B, Ltd. dated
as of March 26, 2002.
26
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 in Philadelphia,
Pennsylvania.
CABLE TV FUND 12-B, LTD.,
a Colorado limited partnership
By: Comcast Cable Communications, Inc.,
a Delaware corporation, its general
partner
By: /s/ Brian L. Roberts
--------------------------------------
Brian L. Roberts
Dated: March 29, 2002 Vice Chairman; Director
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/ Ralph J. Roberts
--------------------------------------
Ralph J. Roberts
Dated: March 29, 2002 Chairman; Director
By: /s/ Brian L. Roberts
--------------------------------------
Brian L. Roberts
Vice Chairman; Director
Dated: March 29, 2002 (Principal Executive Officer)
By: /s/ Lawrence S. Smith
--------------------------------------
Lawrence S. Smith
Dated: March 29, 2002 Executive Vice President; Director
By: /s/ Stanley L. Wang
--------------------------------------
Stanley L. Wang
Executive Vice President; Secretary;
Dated: March 29, 2002 Director
By: /s/ John R. Alchin
--------------------------------------
John R. Alchin
Executive Vice President; Treasurer
Dated: March 29, 2002 (Principal Financial Officer)
By: /s/ Lawrence J. Salva
--------------------------------------
Lawrence J. Salva
Senior Vice President
Dated: March 29, 2002 (Principal Accounting Officer)
27