ITEM 1. BUSINESS -----------------
THE PARTNERSHIP. Cable TV Fund 12-B, Ltd. (the "Partnership") is a Colorado limited partnership that was formed pursuant to the public offering of limited partnership interests in the Cable TV Fund 12 Limited Partnership Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the "General Partner"). Cable TV Fund 12-A, Ltd. ("Fund 12-A"), Cable TV Fund 12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") are the other partnerships that were formed pursuant to that Program. In 1986, the Partnership, Fund 12-C and Fund 12-D formed a general partnership known as Cable TV Fund 12-BCD Venture (the "Venture"), in which the Partnership owns a 9 percent interest, Fund 12-C owns a 15 percent interest and Fund 12-D owns a 76 percent interest. The Partnership and the Venture were formed for the purpose of acquiring and operating cable television systems.
The Partnership does not directly own any cable television systems. The Partnership's sole asset is its 9 percent interest in the Venture. The Venture 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 System") and Albuquerque, New Mexico (the "Albuquerque System"). See Item 2.
ITEM 2. PROPERTIES -------------------
The cable television systems owned by the Venture are described below:
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, 1996, the Palmdale System operated cable plant passing approximately 92,900 homes, with an approximate 68% penetration rate, and the Albuquerque System operated cable plant passing approximately 231,300 homes, with an approximate 48% penetration rate. Figures for numbers of subscribers and homes passed are compiled from the General Partner's records and may be subject to adjustments.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS --------------------------
David Hirsch, derivatively on behalf of Cable TV Fund 12-B, Ltd., ----------------------------------------------------------------- Cable TV Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd. v. Jones Intercable, Inc. - ------------------------------------------------------------------------------- (Arapahoe County District Court, Colorado, Case No. 95-CV-1800, Division 3) ("Hirsch"); Jonathan Fussner and Eileen Fussner, derivatively on behalf of Cable - -------- -------------------------------------------------------------------- TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd. v. - ---------------------------------------------------------------------------- Jones Intercable, Inc. (Arapahoe County District Court, Colorado, Case No. 96- - ---------------------- CV-1672, Division 3) ("Fussner"). -------
On September 20, 1995, the General Partner was named as a defendant in a Complaint filed by David Hirsch, who is a limited partner in Fund 12-D. On January 25, 1996, the General Partner was served with an Amended Class Action Complaint and Request for Jury Trial. On February 19, 1996, the General Partner filed a Motion to Dismiss the Amended Complaint arguing that the action was improperly brought as a class action. The General Partner argued that the plaintiff could only bring the action as a derivative claim and that because the elements of a derivative claim had not been properly pleaded, the Amended Complaint should be dismissed. After briefing on this motion, the Court entered an Order on June 24, 1996 granting the General Partner's Motion to Dismiss, and on July 25, 1996, the Court entered a further Order allowing plaintiff to file another Amended Complaint. On July 31, 1996, plaintiff Hirsch filed a Second Amended Complaint.
Plaintiff Hirsch's Second Amended Complaint alleges that he is a limited partner in Fund 12-D and that he now purports to bring this case as a derivative action on behalf of the Partnership, Fund 12-C and Fund 12-D. The suit relates to the purchase by JCH from the Venture of the Tampa System and the subsequent trade of the Tampa System, along with other cable systems, to Time Warner for certain of Time Warner's cable systems. JCH was authorized to purchase the Tampa System from the Venture pursuant to the terms of the limited partnership agreements of the Partnership, Fund 12-C and Fund 12-D.
Also on July 31, 1996, the same lawyers who represent Mr. Hirsch filed a Verified Complaint on behalf of Jonathan Fussner and Eileen Fussner as referenced above. The Fussners also are joint owners of limited partnership interests in Fund 12-D and their Verified Complaint is identical in all substantive respects to the Hirsch Second Amended Complaint. On December 13, ------ 1996, the Court consolidated the Hirsch and Fussner actions. ------ -------
The Second Amended Complaint in Hirsch and the Verified Complaint in ------ Fussner allege that the General Partner breached its fiduciary duty to the - ------- plaintiffs and the other limited partners of the Partnership, Fund 12-C and Fund 12-D and the Venture in connection with JCH's purchase of the Tampa System and the trade of that system to Time Warner. The Hirsch and Fussner Complaints also ------ ------- set forth a claim for unjust enrichment and for breach of the implied covenant of good faith and fair dealing. Among other things, the plaintiffs assert that JCH paid an inadequate price for the Tampa System, even though the agreed-upon price was the average of three separate appraisals, as required by the applicable partnership agreements. The Hirsch and Fussner cases are now styled ------ ------- as derivative actions and also seek a trial by jury. The plaintiffs in Hirsch ------ and Fussner seek an unspecified amount of damages, including punitive damages, ------- an award of attorneys' fees and certain equitable relief.
On August 13, 1996, the General Partner filed a Motion to Dismiss the breach of fiduciary duty and unjust enrichment claims in the Hirsch and Fussner ------ ------- actions. On February 6, 1997, after briefing on this motion, the Court denied the General Partner's Motion to Dismiss. The General Partner's Answer to the Complaints in
Hirsch and Fussner was filed on February 25, 1997 and generally denied the - ------ ------- substantive allegations in the Complaint and asserted a number of affirmative defenses. There is no trial date set in these cases, and there has been no discovery conducted by the parties to date.
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. v. 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 (Arapahoe - ---------------------------------------------------------------- County District Court, Colorado, Case No. 95-CV-2212, Division 5) ("Ury"). ---
On November 17, 1995, plaintiff Martin Ury filed a Complaint against the General Partner in the above-referenced action in Arapahoe County District Court. Plaintiff Ury is a limited partner in Fund 12-D. He purports to bring this case as a derivative action on behalf of the Partnership, Fund 12-C and Fund 12-D. As in Hirsch and Fussner, discussed above, this case relates to ------ ------- JCH's purchase of the Tampa System and the Time Warner exchange.
The substantive allegations of the Ury Complaint are substantially --- similar to the allegations in the Hirsch Second Amended Complaint and the ------ Fussner Verified Complaint. The plaintiff in Ury alleges that the General - ------- --- Partner breached its fiduciary duties to the limited partnerships and their limited partners in connection with JCH's purchase of the Tampa System from the Venture. Specifically, the plaintiff alleges that JCH paid an inadequate price for the Tampa System, even though the agreed upon price was the average of three separate appraisals, as required by the applicable limited partnership agreements. The Complaint seeks damages in an unspecified amount on behalf of the three limited partnerships and an award of attorneys' fees. The Complaint does not seek a jury trial or punitive damages.
On February 1, 1996, the General Partner filed a Motion to Dismiss the Complaint on the ground that it fails to state a claim against the General Partner upon which relief can be granted. The thrust of the General Partner's motion was that the General Partner cannot be liable for breach of fiduciary duty because it acted in accordance with the terms of the limited partnership agreements in arranging for JCH's purchase of the Tampa System. The General Partner also argued that plaintiff does not have standing to assert a derivative claim on behalf of the Partnership or Fund 12-C, since he is only a limited partner in Fund 12-D. On July 12, 1996, the Court denied the General Partner's Motion to Dismiss. The General Partner filed its Answer in this case on July 29, 1996, generally denying the substantive allegations in the Complaint, asserting a number of affirmative defenses and requesting a trial by jury. A Case Management Order has been entered by the Court, setting the case for a two- week jury trial commencing on September 22, 1997. The parties have made certain voluntary disclosures pursuant to Rule 26 of the Colorado Rules of Civil Procedure, and discovery has begun, although no depositions have been taken to date.
Because these cases are in their very early stages, it is not possible at this time to present a realistic evaluation of the probability of a favorable or unfavorable outcome.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ------------------------------------------------------------
None.
PART II. --------
ITEM 5.
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. During 1996, a limited partner of the Partnership conducted a "limited tender offer" for interests in the Partnership at a price of $54 per interest. As of February 14, 1997, the number of equity security holders in the Partnership was 7,814.
Item 6.
Item 6. Selected Financial Data - --------------------------------
(a) Net income resulted primarily from the sale of the Augusta System by Cable TV Fund 12-B, Ltd. in October 1995.
(b) Net income resulted primarily from the sale of the Tampa System by Cable TV Fund 12-BCD Venture in February 1996.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations - -------------
The following discussion of the financial condition and results of operations of Cable TV Fund 12-B, Ltd. (the "Partnership") and Cable TV Fund 12- BCD Venture (the "Venture") contain, in addition to historical information, forward-looking statements that are based upon certain assumptions and are subject to a number of risks and uncertainties. The Partnership's and Venture's actual results may differ significantly from the results predicted in such forward-looking statements.
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 is accounted for under the equity method. The Partnership's share of losses generated by the Venture have exceeded The Partnership's initial investment in the Venture; therefore, the investment is classified as a liability. This liability decreased by $673,705, which represents the Partnership's share of income generated by the Venture for the year ended December 31, 1996, reduced by the distribution from the Venture.
On February 28, 1996, the Venture sold the cable television system serving areas in and around Tampa, Florida (the "Tampa System") to Jones Cable Holdings, Inc. ("JCH"), a wholly owned subsidiary of the General Partner, 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 originally 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 was approximately $5,049,000, of which approximately $3,787,000 was distributed to limited partners and $1,262,000 was distributed to the General Partner in March 1996. The Partnership also then distributed $1,200,000 of proceeds remaining from the sale of the Augusta System, of which $900,000 was distributed to limited partners and $300,000 was distributed to the General Partner. These distributions gave 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.
Cable TV Fund 12-BCD Venture - - ----------------------------
It is the General Partner's publicly announced policy that it intends to liquidate its managed limited partnerships, including the partnerships that comprise the Venture, as opportunities for sales of partnership cable television systems arise in the marketplace over the next several years. In accordance with the General Partner's policy, the Venture sold the Tampa System in February 1996. No specific dates or terms have yet been set for the sale of the remainder of the Venture's systems.
On February 28, 1996, the Venture sold the Tampa System to JCH. The sales price of the Tampa System was $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. 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 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.
For the year ended December 31, 1996, the Venture generated net cash from operating activities totaling $4,632,835 which was available to fund capital expenditures and non-operating costs. Capital expenditures for the Venture totaled approximately $17,474,000 during 1996. New plant construction accounted for approximately 46 percent of the capital expenditures. Service drops to homes accounted for approximately 29 percent of the capital expenditures. The remaining expenditures related to various system enhancements. These capital expenditures were funded primarily from cash generated from operations, advances from Jones Intercable, Inc. and borrowings from the Venture's credit facility. Expected capital expenditures for 1997 are approximately $16,052,000. Service drops to homes are anticipated to account for approximately 27 percent. Rebuild construction is anticipated to account for 21 percent. New plant construction is anticipated to account for 17 percent. The remainder of the expenditures are for various system enhancements in all of the
Venture's systems. These capital expenditures are necessary to maintain the value of the Venture's systems. Funding for these expenditures is expected to be provided by cash on hand, cash generated from operations and borrowings from the Venture's credit facility.
The Venture's debt arrangements at December 31, 1996 consisted of $55,393,187 of Senior Notes placed with a group of institutional lenders and a $120,000,000 credit facility with a group of commercial bank lenders. The Senior Notes and credit facility are equal in standing with the other, and both are equally secured by the assets of the Venture.
The Senior Notes have a fixed interest rate of 8.64 percent and a final maturity date of March 31, 2000. The Senior Notes required payments of interest only to March 1996, with interest and accelerating principal payments required for the four years thereafter, payable semi-annually in March and September. Principal payments of approximately $7,385,758 due in 1997 are expected to be funded from cash on hand, cash generated from operations and borrowings from the Venture's credit facility. 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.
In February 1996, the Venture was required by the terms of its then-existing $87,000,000 credit facility to make a principal repayment of $22,000,000 from proceeds received from the sale of the Tampa System. Simultaneously with the sale of the Tampa System, the Venture amended this credit facility to increase the amount available to $120,000,000 to meet the Venture's long-term financing requirements. The balance outstanding on the Venture's amended credit facility at December 31, 1996 was $82,130,620, leaving $37,869,380 available for future needs. At the Venture's option, the credit facility is payable in full on December 31, 1999 or converts to a term loan that matures on December 31, 2004 payable in consecutive quarterly amounts. Interest on the amended credit facility is at the Venture's option of the London Interbank Offered Rate plus 1.25 percent, the Prime Rate plus .125 percent or the Certificate of Deposit Rate plus 1.125 percent. The effective interest rates on amounts outstanding on the Venture's credit facility as of December 31, 1996 and 1995 were 6.90 percent and 7.41 percent, respectively.
The Venture has sufficient sources of capital available through its ability to generate cash from operations and borrowings under its credit facility to meet its presently anticipated operating needs.
RESULTS OF OPERATIONS - ---------------------
Cable TV Fund 12-B, Ltd. - - ------------------------
On October 20, 1995, 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. The Partnership's continuing operations are represented by its 9 percent interest in the Venture. Thus, Management's Discussion and Analysis of Financial Condition and Results of Operations of the Venture should be consulted for pertinent comments regarding the Partnership's performance.
Cable TV Fund 12-BCD Venture - - ----------------------------
1996 compared to 1995 ---------------------
Revenues of the Venture decreased $19,035,945, or approximately 19 percent, to $82,363,752 in 1996 from $101,399,697 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of the Tampa System sale, revenues increased $4,778,991, or approximately 7 percent, to $77,478,560 in 1996 from $72,699,569 in 1995. Basic service rate increases implemented in the Venture's systems combined with an increase in the number of basic service subscribers primarily accounted for the increase in revenues. Basic service rate increases accounted for approximately 39 percent of the increase in basic service revenues in 1996. An increase in the number of basic service subscribers in the Albuquerque System and the Palmdale System accounted for approximately 31 percent of the increase in basic service revenues for 1996. The number of basic service subscribers increased by 3,744 subscribers, or approximately 2 percent, to 175,648 subscribers in 1996 from 171,904 subscribers in 1995. No other individual factors were significant to the increases in revenues.
Operating expenses consist primarily of costs associated with the operation and 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 marketing expenses.
Operating expenses decreased $9,620,510, or approximately 17 percent, to $48,731,182 in 1996 from $58,351,692 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of this sale, operating expenses increased $3,608,831, or approximately 9 percent, to $44,278,384 in 1996 from $40,669,553 in 1995. Operating expenses represented 57 percent and 56 percent, respectively, of revenues for 1996 and 1995. An increase in programming fees primarily accounted for the increase in operating expenses. No other factor contributed significantly to the increase in operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc. decreased $2,644,195, or approximately 22 percent, to $9,609,453 in 1996 from $12,253,648 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of this sale, management fees and allocated overhead from Jones Intercable, Inc. increased $230,923, or approximately 3 percent, to $9,032,388 in 1996 from $8,801,465 in 1995. This increase was due to the increase in revenues, upon which such management fees are based.
Depreciation and amortization expense decreased $4,673,189, or approximately 18 percent, to $21,993,546 in 1996 from $26,666,735 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of this sale, depreciation and amortization expense increased $810,250, or approximately 4 percent, to $21,001,808 in 1996 from $20,191,558 in 1995. This increase was due to capital additions in 1996.
The Venture's operating income decreased $2,098,051, or approximately 51 percent, to $2,029,571 in 1996 from $4,127,622 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of this sale, operating income increased $128,987, or approximately 4 percent, to $3,165,980 in 1996 from $3,036,993 in 1995. This increase was due to the increase in revenues exceeding the increases in operating expenses, management fees and allocated overhead from Jones Intercable, Inc. and depreciation and amortization expense.
The cable television industry generally measures the financial performance of a cable television system in terms of operating income before depreciation and amortization. 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 decreased $6,771,240, or approximately 22 percent, to $24,023,117 in 1996 from $30,794,357 in 1995. This decrease was due to the sale of the Tampa System. Disregarding the effect of this sale, operating income before depreciation and amortization increased $939,237, or approximately 4 percent, to $24,167,788 in 1996 from $23,228,551 in 1995. This increase was due to the increase in revenue exceeding the increases in operating expenses and management fees and allocated overhead from Jones Intercable, Inc.
Interest expense decreased $4,127,956, or approximately 27 percent, to $11,219,294 in 1996 from $15,347,250 in 1995. This decrease in interest expense was primarily due to the lower outstanding balance and lower effective interest rates on the Venture's interest bearing obligations. A portion of the proceeds from the sale of the Tampa System was used to repay a portion of the Venture's debt.
The Venture recognized a gain of $71,914,391 related to the sale of the Tampa System in February 1996. No similar gain was recognized in 1995.
The Venture recognized net income of $62,338,836 in 1996 compared to a net loss of $11,124,567 in 1995. This change was primarily due to the gain on the sale of the Tampa System.
1995 compared to 1994 ---------------------
Revenues 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 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 the increase in revenue exceeding the increases in operating expenses, management fees and allocated overhead from Jones Intercable, Inc. and depreciation and amortization expenses.
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.
Item 8.
Item 8. Financial Statements - -----------------------------
CABLE TV FUND 12-B, LTD. AND ---------------------------- CABLE TV FUND 12-BCD VENTURE ----------------------------
FINANCIAL STATEMENTS --------------------
AS OF DECEMBER 31, 1996 AND 1995 --------------------------------
INDEX -----
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, 1996 and 1995, and the related statements of operations, partners' capital (deficit) and cash flows for each of the three years in the period ended December 31, 1996. 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, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado, March 7, 1997.
CABLE TV FUND 12-B, LTD. ------------------------ (A Limited Partnership)
BALANCE SHEETS --------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) - -------------------------------------------
LIABILITIES: Loss in excess of investment in cable television joint venture $ 2,151,657 $ 2,825,362 ----------- ----------
Total liabilities 2,151,657 2,825,362 ----------- ----------
The accompanying notes to financial statements are an integral part of these balance sheets.
CABLE TV FUND 12-B, LTD. ------------------------ (A Limited Partnership)
STATEMENTS OF OPERATIONS ------------------------
The accompanying notes to financial statements are an integral part of these statements.
CABLE TV FUND 12-B, LTD. ------------------------ (A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) -----------------------------------------
The accompanying notes to financial statements are an integral part of these statements.
CABLE TV FUND 12-B, LTD. ------------------------ (A Limited Partnership)
STATEMENTS OF CASH FLOWS ------------------------
The accompanying notes to financial statements are an integral part of these statements.
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 owns certain cable television systems in New Mexico and California. The Venture recognized income of $62,338,836 in 1996 and incurred losses of $11,124,567 and $12,876,242 in 1995 and 1994, respectively, of which income of $5,722,705, and losses of $1,021,236 and $1,182,039 were allocated to the Partnership during 1996, 1995 and 1994, 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 originally 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 was distributed to limited partners and $1,262,000 was distributed to the General Partner in March 1996. The Partnership also then distributed $1,200,000 of proceeds remaining from the sale of the Augusta System, of which $900,000 was distributed to limited partners and $300,000 was distributed to the General Partner. These distributions gave 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.
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:
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 estimated useful lives:
Franchise costs 2 - 5 years
(3) INCOME TAXES ------------
Income taxes have not been recorded in the accompanying financial statements because they accrue directly to the partners. The federal and state income tax returns of the Partnership are prepared and filed by the General Partner.
The Partnership's tax returns, the qualification of the Partnership as such for tax purposes, and the amount of distributable partnership income or loss are subject to examination by federal and state taxing authorities. If such examinations result in changes with respect to the Partnership's qualification as such, or in changes with respect to the Partnership's recorded income or loss, the tax liability of the general and limited partners would likely be changed accordingly.
Taxable loss reported to the partners is different from that reported in the statements of operations due to the difference in depreciation recognized under generally accepted accounting principles and the expense allowed for tax purposes under the Modified Accelerated Cost Recovery System (MACRS). There are no other significant differences between taxable loss and the net loss reported in the statements of operations.
(4) COMMITMENTS AND CONTINGENCIES -----------------------------
David Hirsch, derivatively on behalf of Cable TV Fund 12-B, Ltd., Cable ----------------------------------------------------------------------- TV Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd. v. Jones Intercable, Inc. - ------------------------------------------------------------------------ (Arapahoe County District Court, Colorado, Case No. 95-CV-1800, Division 3) ("Hirsch"); Jonathan Fussner and Eileen Fussner, derivatively on behalf of Cable - -------- -------------------------------------------------------------------- TV Fund 12-B, Ltd., Cable TV Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd. v. - ---------------------------------------------------------------------------- Jones Intercable, Inc. (Arapahoe County District Court, Colorado, Case No. 96- - ---------------------- CV-1672, Division 3) ("Fussner"). -------
On September 20, 1995, Intercable was named as a defendant in a Complaint filed by David Hirsch, who is a limited partner in Cable TV Fund 12-D, Ltd. On January 25, 1996, Intercable was served with an Amended Class Action Complaint and Request for Jury Trial. On February 19, 1996, Intercable filed a Motion to Dismiss the Amended Complaint arguing that the action was improperly brought as a class action. Intercable argued that the plaintiff could only bring the action as a derivative claim and that because the elements of a derivative claim had not been properly pleaded, the Amended Complaint should be dismissed. After briefing on this motion, the Court entered an Order on June 24, 1996 granting Intercable's Motion to Dismiss, and on July 25, 1996, the Court entered a further Order allowing plaintiff to file another Amended Complaint. On July 31, 1996, plaintiff Hirsch filed a Second Amended Complaint.
Plaintiff Hirsch's Second Amendment Complaint alleges that he is a limited partner in Fund 12-D and that he now purports to bring this case as a derivative action on behalf of the Partnership, Fund 12-C and Fund 12-D. The suit relates to the purchase by JCH from the Venture of the Tampa System and the subsequent trade of the Tampa System, along with other cable systems, to Time Warner for certain of Time Warner's cable systems. JCH was authorized to purchase the Tampa System from the Venture pursuant to the terms of the limited partnership agreements of the Partnership, Fund 12-C and Fund 12-D.
Also on July 31, 1996, the same lawyers who represent Mr. Hirsch filed a Verified Complaint on behalf of Jonathan Fussner and Eileen Fussner as referenced above. The Fussners also are joint owners of limited partnership units in Fund 12-D and their Verified Complaint is identical in all substantive respects to the Hirsch Second Amended Complaint. On December 13, 1996, the ------ Court consolidated the Hirsch and Fussner actions. ------ -------
The Second Amended Complaint in Hirsch and the Verified Complaint in ------ Fussner allege that Intercable breached its fiduciary duty to the plaintiff and - ------- the other limited partners of the Partnership, Fund 12-C and Fund 12-D and the Venture in connection with JCH's purchase of the Tampa System and the trade of that system to Time Warner. The Hirsch and Fussner Complaints also set forth a ------ ------- claim for unjust enrichment and for breach of the implied covenant of good faith and fair dealing. Among other things, the plaintiffs assert that JCH paid an inadequate price for the Tampa System, even though the agreed-upon price was the average of three separate appraisals, as required by the applicable partnership agreements. The Hirsch and Fussner cases are now styled as derivative actions ------ ------- and also seek a trial by jury. The plaintiffs in Hirsch and Fussner seek an ------ ------- unspecified amount of damages, including punitive damages, an award of attorneys' fees, and certain equitable relief.
On August 13, 1996, Intercable filed a Motion to Dismiss the breach of fiduciary duty and unjust enrichment claims in the Hirsch and Fussner actions. ------ ------- On February 6, 1997, after briefing on this motion, the Court denied Intercable's Motion to Dismiss. Intercable's Answer to the Complaints in Hirsch ------ and Fussner was filed on February 25, -------
1997 and generally denied the substantive allegations in the Complaint and asserted a number of affirmative defenses. There is no trial date set in these cases, and there has been no discovery conducted by the parties to date.
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. v. 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 (Arapahoe - ---------------------------------------------------------------- County District Court, Colorado, Case No. 95-CV-2212, Division 5) ("Ury"). ---
On November 17, 1995, plaintiff Martin Ury filed a Complaint against Intercable in the above-referenced action in Arapahoe County District Court. Plaintiff Ury is a limited partner in Fund 12-D. He purports to bring this case as a derivative action on behalf of the Partnership, Fund 12-C and Fund 12-D. As in Hirsch and Fussner, discussed above, this case relates to JCH's purchase ------ ------- of the Tampa System and the Time Warner exchange.
The substantive allegations of the Ury Complaint are substantially --- similar to the allegations in the Hirsch Second Amended Complaint and Fussner ------ ------- Verified Complaint. The plaintiff in Ury alleges that Intercable breached its --- fiduciary duties to the limited partnership and its limited partners in connection with JCH's purchase of the Tampa System from the Venture. Specifically, the plaintiff alleges that JCH paid an inadequate price for the Tampa System, even though the agreed upon price was the average of three separate appraisals, as required by the applicable limited partnership agreements. The Complaint seeks damages in an unspecified amount on behalf of the three limited partnerships and an award of attorneys fees. The Complaint does not seek a jury trial or punitive damages.
On February 1, 1996, Intercable filed a Motion to Dismiss the Complaint on the ground that it fails to state a claim against Intercable upon which relief can be granted. The thrust of Intercable's motion was that Intercable cannot be liable for breach of fiduciary duty because it acted in accordance with the terms of the limited partnership agreements in arranging for JCH's purchase of the Tampa System. Intercable also argued that plaintiff does not have standing to assert a derivative claim on behalf of the Partnership or Fund 12-C, since he is only a limited partner in Fund 12-D. On July 12, 1996, the Court denied Intercable's Motion to Dismiss. Intercable filed its Answer in this case on July 29, 1996, generally denying the substantive allegations in the Complaint, asserting a number of affirmative defenses, and requesting a trial by jury. A Case Management Order has been entered by the Court, setting the case for a two-week jury trial commencing on September 22, 1997. The parties have made certain voluntary disclosures pursuant to Rule 26 of the Colorado Rules of Civil Procedure, and discovery is at the very early stages, although no depositions have been taken to date.
Pursuant to the indemnification provisions of Section 9.6 of the limited partnership agreements of each of the three partnerships that comprise the Venture, Intercable 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. Intercable cannot determine at this time whether such amounts will be material.
(5) SUPPLEMENTARY PROFIT AND LOSS INFORMATION -----------------------------------------
Supplementary profit and loss information for the respective years are presented below:
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, 1996 and 1995, and the related statements of operations, partners' deficit and cash flows for each of the three years in the period ended December 31, 1996. 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, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado, March 7, 1997.
CABLE TV FUND 12-BCD VENTURE ---------------------------- (A General Partnership)
BALANCE SHEETS --------------
The accompanying notes to financial statements are an integral part of these balance sheets.
CABLE TV FUND 12-BCD VENTURE ---------------------------- (A General Partnership)
BALANCE SHEETS --------------
The accompanying notes to financial statements are an integral part of these balance sheets.
CABLE TV FUND 12-BCD VENTURE ---------------------------- (A General Partnership)
STATEMENTS OF OPERATIONS ------------------------
The accompanying notes to financial statements are an integral part of these statements.
CABLE TV FUND 12-BCD VENTURE ---------------------------- (A General Partnership)
STATEMENTS OF PARTNERS' DEFICIT -------------------------------
The accompanying notes to financial statements are an integral part of these statements.
CABLE TV FUND 12-BCD VENTURE ---------------------------- (A General Partnership)
STATEMENTS OF CASH FLOWS ------------------------
The accompanying notes to financial statements are an integral part of these statements.
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 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 ---------------------------------------
On February 28, 1996, the Venture sold the Tampa System to Jones Cable Holdings, Inc., a wholly owned subsidiary of Intercable. The sales price of the Tampa System was $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. 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 net sales proceeds were distributed as follows: Fund 12-B received $5,409,000; Fund 12-C received $8,404,000 and Fund 12-D received $41,547,000.
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, 1996 and 1995, assuming the transaction had occurred at the beginning of the years, is presented in the following unaudited tabulation:
(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.
Purchase Price Allocation -------------------------
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.
Property, Plant and Equipment -----------------------------
Depreciation is provided using the straight-line method over the following estimated service lives:
Replacements, renewals and improvements are capitalized and maintenance and repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated depreciation are written off as certain assets become fully depreciated and are no longer in service.
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 1 - 4 years Costs in excess of interests in net assets purchased 29 - 30 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 1996 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, 1996, 1995 and 1994 were $4,118,188, $5,069,985 and $4,641,154, respectively.
The Venture reimburses Intercable for certain allocated overhead and administrative expenses. These expenses represent the salaries and related benefits paid for corporate personnel, rent, data processing services and other corporate facilities costs. Such personnel provide engineering, marketing, administrative, accounting, legal and investor relations services to the Venture. Such services, and their related costs, are necessary to the operations of the Venture and would have been incurred by the Venture if it was a stand alone entity. 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, 1996, 1995 and 1994 were $5,491,265, $7,183,663 and $6,951,110, respectively.
Payments to/from Affiliates for Programming Services ----------------------------------------------------
The Venture receives programming from Superaudio, Jones Education Company, Great American Country, Inc. and Product Information Network, all of which are affiliates of Intercable.
Payments to Superaudio totaled $116,710, $135,861 and $135,346 in 1996, 1995, and 1994, respectively. Payments to Jones Education Company totaled $374,709, $428,937 and $196,004 in 1996, 1995 and 1994, respectively. Payments to Great American Country, Inc., which initiated service in 1996, totaled $141,753 in 1996.
The Venture receives 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 $191,011, $212,844 and $81,592 in 1996, 1995 and 1994, respectively.
The Venture was charged interest during 1996 at an average rate of 8.58 percent on the amounts due the General Partner, which approximated the General Partner's weighted average cost of borrowing. Total interest charged to the Venture by the General Partner was $-0-, $220,743 and $33,627 in 1996, 1995 and 1994, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT -----------------------------
Property, plant and equipment as of December 31, 1996 and 1995, consisted of the following:
The Venture's debt arrangements at December 31, 1996 consisted of $55,393,187 of Senior Notes placed with a group of institutional lenders and a $120,000,000 credit facility with a group of commercial bank lenders. The Senior Notes and credit facility are equal in standing with the other, and both are equally secured by the assets of the Venture.
The Senior Notes have a fixed interest rate of 8.64 percent and a final maturity date of March 31, 2000. The Senior Notes required payments of interest only to March 1996, with interest and accelerating principal payments required for the four years thereafter, payable semi-annually in March and September. 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 payments due for each of the five years in the period ending December 31, 2001 and thereafter, are: $7,385,758, $11,078,637, $36,928,792, $-0-, $-0- and $-0-, respectively.
In February 1996, the Venture was required by the terms of its then-existing $87,000,000 credit facility to make a principal repayment of $22,000,000 from proceeds received from the sale of the Tampa System. Simultaneously with the sale of the Tampa System, the Venture amended this credit facility to increase the amount available to $120,000,000 to meet the Venture's long-term financing requirements. The balance outstanding on the Venture's amended credit facility at December 31, 1996 was $82,130,620, leaving $37,869,380 available for future needs. At the Venture's option, the credit facility is payable in full on December 31, 1999 or converts to a term loan that matures on December 31, 2004 payable in consecutive quarterly amounts. Installments due on debt principal of the credit facility for each of the five years in the period ending December 31, 2001 and thereafter, respectively, are: $-0-, $-0-, $-0-, $8,213,062, $20,532,655 and $53,384,903, respectively. Interest on the amended credit facility is at the Venture's option of the London Interbank
Offered Rate plus 1.25 percent, the Prime Rate plus .125 percent or the Certificate of Deposit Rate plus 1.125 percent. The effective interest rates on amounts outstanding on the Venture's credit facility as of December 31, 1996 and 1995 were 6.90 percent and 7.41 percent, respectively.
During 1992, 1994 and 1996, 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.
At December 31, 1996, 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 Fund 12-B, Fund 12-C and Fund 12-D.
The Venture's tax returns, the qualification of the Venture as such for tax purposes, and the amount of distributable income or loss, are subject to examination by federal and state taxing authorities. If such examinations result in changes with respect to the Venture's qualification as such, or in changes with respect to the Venture's recorded loss, the tax liability of the Venture's general partners would likely be changed accordingly.
Taxable losses reported to the partners is different from that reported in the statements of operations due to the difference in depreciation allowed under generally accepted accounting principles and the expense allowed for tax purposes under the Modified Accelerated Cost Recovery System (MACRS). There are no other significant differences between taxable income or losses and the net losses reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES -----------------------------
Office and other facilities are rented under various long-term lease arrangements. Rent paid under such lease arrangements totaled $373,169, $331,963 and $345,531, respectively, for the years ended December 31, 1996, 1995 and 1994. Minimum commitments under operating leases for the five years in the period ending December 31, 2001 and thereafter are as follows:
1997 $518,779 1998 531,324 1999 396,315 2000 345,715 2001 345,046 Thereafter 911,200 ---------- $3,048,379 ==========
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION -----------------------------------------
Supplementary profit and loss information for the respective years is presented below:
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON --------------------------------------------------------- ACCOUNTING AND FINANCIAL DISCLOSURE -----------------------------------
None.
PART III. ---------
ITEM 10.
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. Directors of the General Partner serve until the next annual meeting of the General Partner and until their successors shall be elected and qualified.
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 member of the Board of Directors and the Executive Committee of the National Cable Television Association. Additionally, Mr. Jones is a member of the Board of Governors for the American Society for Training and Development, and a member of 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 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 President's Award from the Cable Television Public Affairs Association in recognition of Jones International's educational efforts through Mind Extension University (now Knowledge TV); the Donald G. McGannon Award for the advancement of minorities and women in cable from the United Church of Christ Office of Communications; 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 Cableforce 2000 Accolade awarded by Women in Cable in recognition of the General Partner's innovative employee programs; the Most Outstanding Corporate Individual Achievement Award from the International Distance Learning Conference for his contributions to distance education; the Golden Plate Award 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 in December 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 also a director of Bell Cablemedia plc, Mercury Communications Limited, Videotron Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and Telephone Company, Limited, Moore Corporation Limited, Northbridge Programming Inc. and certain subsidiaries of Bell Canada International.
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 the Vice Chairman and a director of the Cable Television Administration and Marketing Association and as a director and a member of the Executive Committee 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. Raymond L. Vigil joined the General Partner in June 1993 as Group Vice President/Human Resources. Previous to joining the General Partner, Mr. Vigil served as Executive Director of Learning with USWest. Prior to USWest, Mr. Vigil worked in various human resources posts over a 14-year term with the IBM Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice President/Marketing in December 1994. Previous to joining the General Partner, Ms. Winning served since 1994 as the President of PRS Inc.,
Denver, Colorado, a sports and event marketing company. From 1979 to 1981 and from 1986 to 1994, Ms. Winning served as the Vice President and Director of Marketing for Citicorp Retail Services, Inc., a provider of private-label credit cards for ten national retail department store chains. From 1981 to 1986, Ms. Winning was the Director of Marketing Services for Daniels & Associates cable television operations, as well as the Western Division Marketing Director for Capital Cities Cable. Ms. Winning also serves as a board member of Cities in Schools, a dropout intervention/prevention program.
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, named Controller in August 1994 and was elected Vice President/Controller in June 1996.
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 in April 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 in April 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 subsidiaries of Jones International, Ltd. 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 in November 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 and has practiced law for 31 years with an emphasis on franchise, corporate and partnership law and complex litigation.
Mr. Howard O. Thrall was appointed a Director of the General Partner in March 1996. Mr. Thrall had previously served as a Director of the General Partner from December 1988 to December 1994. Mr. Thrall is Senior Vice President-Corporate Development for First National Net, Inc., a leading service provider for the mortgage banking industry, and he heads First National Net's Washington, D.C. regional office. From September 1993 through July 1996, Mr. Thrall served as Vice President of Sales, Asian Region, for World Airways, Inc. headquartered at the Washington Dulles International Airport. 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 an active management and international marketing consultant, having completed assignments with McDonnell Douglas Aerospace, JAL Trading, Inc., Technology Solutions Company, Cheong Kang Associated (Korea), Aero Investment Alliance, Inc. and Western Real Estate Partners, among others.
Mr. Siim A. Vanaselja was appointed a Director of the General Partner in August 1996. Mr. Vanaselja joined BCE Inc., Canada's largest telecommunications company, in February 1994 as Assistant Vice-President, International Taxation. In June 1994, he was appointed Assistant Vice-President and Director of Taxation, and in February 1995, Mr. Vanaselja was appointed Vice-President, Taxation. On August 1, 1996, Mr. Vanaselja was appointed the Chief Financial Officer of Bell Canada International Inc., a subsidiary of BCE Inc. Prior to joining BCE Inc. and since August 1989, Mr. Vanaselja was a partner in the Toronto office of KPMG Peat Marwick Thorne. Mr. Vanaselja has been a member of the Institute of Chartered Accountants of Ontario since 1982 and is a member of the Canadian Tax Foundation, the Tax Executives Institute and the International Fiscal Association.
Mr. Sanford Zisman was appointed a director of the General Partner in June 1996. Mr. Zisman is a member of the law firm, Zisman & Ingraham, P.C. of Denver, Colorado and has practiced law for 31 years, with an emphasis on tax, business and estate planning and probate administration. Mr. Zisman currently serves as a member of the Board of Directors of Saint Joseph Hospital, the largest hospital in Colorado, and he has served as Chairman of the Board, Chairman of the Finance Committee and Chairman of the Strategic Planning Committee of the hospital. Since 1992, he has also served on the Board of Directors of Maxim Series Fund, Inc., a subsidiary of Great-West Life Assurance Company.
Mr. Robert B. Zoellick was appointed a Director of the General Partner in April 1995. Mr. Zoellick is Executive Vice President for Housing and Law of Fannie Mae, a federally chartered and stockholder-owned corporation that is the largest housing finance investor in the United States. 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 Alliance Capital, Said
Holdings, 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, the American Institute for Contemporary German Studies and the Overseas Development Council.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION --------------------------------
The Partnership has no employees; however, various personnel are required to operate the Systems. Such personnel are employed by the General Partner and, pursuant to the terms of the limited partnership agreement of the Partnership, the cost of such employment is charged by the General Partner to the Partnership as a direct reimbursement item. See Item 13.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS ----------------------------------------------------------------------
As of March 4, 1997, no person or entity owned more than 5 percent of the limited partnership interests of the Partnership.
ITEM 13.
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.
TRANSACTIONS WITH THE GENERAL PARTNER
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 Venture'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.
TRANSACTIONS WITH AFFILIATES
Jones Education Company ("JEC") is owned 63% by Jones International, Ltd. ("International"), an affiliate of the General Partner, 9% by Glenn R. Jones, 12% by Bell Canada International Inc. ("BCI") and 16% by the General Partner. JEC operates two television networks, JEC Knowledge TV and Jones Computer Network. JEC Knowledge TV provides programming related to computers and technology; business, careers and finance; health and wellness; and global culture and languages. Jones Computer Network provides programming focused primarily on computers and technology. JEC sells its programming to certain cable television systems owned or managed by the General Partner.
The Great American Country network provides country music video programming to certain cable television systems owned or managed by the General Partner. This network is owned and operated by Great American Country, Inc., a subsidiary of Jones International Networks, Ltd., an affiliate of International.
Jones Galactic Radio, Inc. is a company now owned by Jones International Networks, Ltd., an affiliate of International. Superaudio, a joint venture between Jones Galactic Radio, Inc. and an unaffiliated entity, provides satellite programming to certain cable television systems owned or managed by the General Partner.
The Product Information Network Venture (the "PIN Venture") is a venture among a subsidiary of Jones International Networks, Ltd., an affiliate of International, and two unaffiliated cable system operators. The PIN Venture operates the Product Information Network ("PIN"), which is a 24-hour network that airs long-form advertising generally known as "infomercials." The PIN Venture generally makes incentive payments of approximately 60% of its net advertising revenue to the cable systems that carry its programming. Most of the General Partner's owned and managed systems carry PIN for all or part of each day. Revenues received by the Venture from the PIN Venture relating to the Venture's owned cable television systems totaled approximately $191,011 for the year ended December 31, 1996.
The charges to the Venture for related party transactions are as follows for the periods indicated:
PART IV. --------
ITEM 14.
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)
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 (11)
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 (11)
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 (11)
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 (11)
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. (11)
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)
(11) Incorporated by reference from the Annual Report on Form 10-K for fiscal year ended December 31, 1995 of Cable TV Fund 12- B, Ltd. (Commission File No. 0-13807)
(b) Reports on Form 8-K.
None.
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 24, 1997 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 24, 1997 (Principal Executive Officer)
By: /s/ Kevin P. Coyle _________________________________ Kevin P. Coyle Group Vice President/Finance Dated: March 24, 1997 (Principal Financial Officer)
By: /s/ Larry Kaschinske _________________________________ Larry Kaschinske Vice President/Controller Dated: March 24, 1997 (Principal Accounting Officer)
By: /s/ James B. O'Brien _________________________________ James B. O'Brien Dated: March 24, 1997 President and Director
By: /s/ Derek H. Burney _________________________________ Derek H. Burney Dated: March 24, 1997 Director
By: /s/ Robert E. Cole _________________________________ Robert E. Cole Dated: March 24, 1997 Director
By: /s/ William E. Frenzel _________________________________ William E. Frenzel Dated: March 24, 1997 Director
By: /s/ Donald L. Jacobs _________________________________ Donald L. Jacobs Dated: March 24, 1997 Director
By: /s/ James J. Krejci _________________________________ James J. Krejci Dated: March 24, 1997 Director
By: _________________________________ John A. MacDonald Dated: March 24, 1997 Director
By: /s/ Raphael M. Solot _________________________________ Raphael M. Solot Dated: March 24, 1997 Director
By: _________________________________ Howard O. Thrall Dated: March 24, 1997 Director
By: /s/ Siim A. Vanaselja _________________________________ Siim A. Vanaselja Dated: March 24, 1997 Director
By: /s/ Sanford Zisman _________________________________ Sanford Zisman Dated: March 24, 1997 Director
By: /s/ Robert B. Zoellick _________________________________ Robert B. Zoellick Dated: March 24, 1997 Director