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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-16200
CABLE TV FUND 14-B, LTD.
------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1024658
(State of Organization) (IRS Employer Identification No.)
c/o Comcast Corporation, 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148 (215) 665-1700
(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of
the Act: Limited Partnership Interests
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes x No
------ ------
Aggregate market value of the voting stock held by non-affiliates of the
registrant: [Not applicable]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
------
DOCUMENTS INCORPORATED BY REFERENCE: None
This Annual Report on Form 10-K is for the year ending December 31,
1999. This Annual Report modifies and supersedes documents filed by the
Partnership prior to the filing of this Annual Report. The Securities and
Exchange Commission (the "SEC") allows the Partnership to "incorporate by
reference" into this Annual Report information that it files with the SEC, which
means that the Partnership can disclose important information to limited
partners by referring them directly to those documents. Information incorporated
by reference is considered to be part of this Annual Report. In addition,
information that the Partnership files with the SEC in the future will
automatically update and supersede information contained in this Annual Report.
Certain information contained in this Annual Report contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts, included in
this Annual Report that address activities, events or developments that the
Partnership or the General Partner expects, believes or anticipates will or may
occur in the future are forward-looking statements. These forward-looking
statements are based upon certain assumptions and are subject to risks and
uncertainties. Actual events or results may differ from those discussed in the
forward-looking statements as a result of various factors.
PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 14-B, Ltd. (the "Partnership") is a
Colorado limited partnership. Comcast JOIN Holdings, Inc., a Delaware
corporation, is the general partner of the Partnership (the "General Partner").
The Partnership was formed for the purpose of acquiring and operating cable
television systems. The Partnership no longer owns any cable television systems.
In January 1999, the Partnership sold its last operating asset, the cable
television system serving the areas in and around Littlerock, California (the
"Littlerock System"). Although the sale of the Littlerock System represented the
sale of the last remaining operating asset of the Partnership, the Partnership
will not be dissolved until all pending litigation relating to the Partnership
has been resolved and terminated.
NEW GENERAL PARTNER. On April 7, 1999, Comcast Corporation ("Comcast")
completed the acquisition of a controlling interest in Jones Intercable, Inc.
("Jones Intercable"), the Partnership's general partner until March 2, 2000, as
discussed below. As of December 31, 1999, Comcast owned approximately 2.9
million shares of Jones Intercable's Common Stock and approximately 13.8 million
shares of Jones Intercable's Class A Common Stock, representing 39.6% of the
economic interest and 48.3% of the voting interest in Jones Intercable. Comcast
contributed its shares in Jones Intercable to its wholly owned subsidiary,
Comcast Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9
million shares of Common Stock of Jones Intercable owned by Comcast Cable
represented shares having the right to elect approximately 75% of the Board of
Directors of Jones Intercable. As of April 7, 1999, Jones Intercable became a
consolidated public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On March 2,
2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a wholly
owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. References in this Annual Report to "the General
Partner" refer to Comcast JOIN Holdings, Inc.
2
The General Partner shares corporate offices with Comcast at 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
DISPOSITION OF CABLE TELEVISION SYSTEM BY THE PARTNERSHIP. In January
1999, the Partnership sold the Littlerock System to a subsidiary of Jones
Intercable for a sales price of $10,720,400. The sales price represented the
average of three separate, independent appraisals of the fair market value of
the Littlerock System. From the proceeds of the Littlerock System's sale, the
Partnership settled working capital adjustments and retained $1,000,000 of the
sale proceeds for a reserve for the administrative expenses of the Partnership,
including expenses the Partnership may incur related to pending litigation,
repaid all of its indebtedness and then the Partnership distributed the
remaining sale proceeds of $9,985,361 to its limited partners of record as of
January 29, 1999. This distribution was made in February 1999. Because the
distributions to the limited partners from the sales of the Partnership's cable
systems did not return to the limited partners 125 percent of the capital
initially contributed by the limited partners to the Partnership, Jones
Intercable did not receive a general partner distribution from the Littlerock
System's sale proceeds. Limited partners received $38 for each $500 limited
partnership interest, or $76 for each $1,000 invested in the Partnership, from
the Partnership's net proceeds of the Littlerock System's sale. Taking into
account all distributions made from the sales of the Partnership's cable
television systems, the limited partners of the Partnership have received $432
for each $500 limited partnership interest, or $864 for each $1,000 invested in
the Partnership.
Because transferees of limited partnership interests following the
record date for the distribution of the Littlerock System's sale proceeds
(January 29, 1999) would not be entitled to any distributions from the
Partnership, a transfer of limited partnership interests following such record
date would have no economic value. The General Partner therefore has determined
that, pursuant to the authority granted to it by the Partnership's limited
partnership agreement, the General Partner will approve no transfers of limited
partnership interests after January 29, 1999.
ITEM 2. PROPERTIES
------------------
As of December 31, 1999, the Partnership does not own any cable
television systems.
ITEM 3. LEGAL PROCEEDINGS
-------------------------
LITIGATION CHALLENGING JONES INTERCABLE'S ACQUISITION OF THE LITTLEROCK SYSTEM
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund 14-B,
-------------------------------------------------------------------
Ltd., plaintiff v. Jones Intercable, Inc., defendant and Cable TV Fund 14-B,
- ----------------------------------------------------------------------------
Ltd., nominal defendant (U.S. District Court, District of Colorado, Civil Action
- -----------------------
No. 99-WM-1051) brought by City Partnership Co., a limited partner of the
Partnership. The plaintiff's complaint alleges that Jones Intercable breached
its fiduciary duty to the plaintiff and to the other limited partners of the
Partnership in connection with the Partnership's sale of the Littlerock System
to a subsidiary of Jones Intercable in January 1999. The complaint alleges that
Jones Intercable acquired the Littlerock System at an unfairly low price that
did not accurately reflect the market value of the Littlerock System. The
plaintiff also alleges that the proxy solicitation materials delivered to the
limited partners of the Partnership in connection with the vote of the limited
partners on the Partnership's sale of the Littlerock System contained inadequate
and misleading information concerning the fairness of the transaction, which the
plaintiff claims caused Jones Intercable to breach its fiduciary duty of candor
to the limited partners and which the plaintiff claims constituted acts and
omissions in violation of Section 14(a) of the Securities Exchange Act of 1934,
as amended. Plaintiff also claims that Jones Intercable breached the contractual
provision of the Partnership's limited partnership agreement requiring that the
sale price be determined by the average of three separate, independent
appraisals, challenging both the independence and the currency of the
appraisals. The complaint finally seeks declaratory injunctive relief to prevent
Jones Intercable from making use of the Partnership's funds to finance Jones
Intercable's defense of this litigation. Jones Intercable has filed motions to
dismiss certain of the plaintiff's claims for relief. The General Partner
believes that the procedures followed by Jones Intercable in conducting the vote
of the limited partners of the Partnership on the sale of the
3
Littlerock System, including the fairness opinion in the proxy statement
delivered to the limited partners of the Partnership, were proper and that
Partnership's sale of the Littlerock System at a price determined by averaging
three separate, independent appraisals was in accordance with the express
provisions of the Partnership's limited partnership agreement. The General
Partner intends to defend this lawsuit vigorously.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP and
--------------------------------------------------------------
Madison/AG Partnership Value Partners II, plaintiffs v. Jones Intercable, Inc.
- ------------------------------------------------------------------------------
and Glenn R. Jones, defendants, and Cable TV Fund 12-B, Ltd., Cable TV Fund
- ---------------------------------------------------------------------------
12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund
- --------------------------------------------------------------------------------
14-B, Ltd., nominal defendants (U.S. District Court, District of Colorado, Civil
- ------------------------------
Action No. 99-B-1508)("Gramercy Park") brought as a class and derivative action
by limited partners of the named partnerships. The plaintiffs' complaint alleges
that the defendants made false and misleading statements to the limited partners
of the named partnerships in connection with the solicitation of proxies and the
votes of the limited partners on the sales of the Albuquerque, Palmdale,
Littlerock and Calvert County cable communication systems by the named
partnerships to Jones Intercable or one of its subsidiaries in violation of
Sections 14 and 20 of the Securities Exchange Act of 1934, as amended. The
plaintiffs specifically allege that the proxy statements delivered to the
limited partners in connection with the limited partners' votes on these sales
were false, misleading and failed to disclose material facts necessary to make
the statements made not misleading. The plaintiffs' complaint also alleges that
the defendants breached their fiduciary duties to the plaintiffs and to the
other limited partners of the named partnerships and to the named partnerships
in connection with the various sales of the Albuquerque, Palmdale, Littlerock
and Calvert County cable communications systems to subsidiaries of Jones
Intercable. The complaint alleges that Jones Intercable acquired these cable
communications systems at unfairly low prices that did not accurately reflect
the market values of the systems. The plaintiffs seek on their own behalf and on
behalf of all other limited partners compensatory and nominal damages, the costs
and expenses of the litigation, including reasonable attorneys' and experts'
fees, and punitive and exemplary damages.
In August 1999, Jones Intercable was named a defendant in a case
captioned William Barzler, plaintiff v. Jones Intercable, Inc. and Glenn R.
--------------------------------------------------------------------
Jones, defendants and Cable TV Fund 14-B, Ltd., nominal defendant (U.S.
- ---------------------------------------------------------------------
District Court, District of Colorado, Civil Action No. 99-B-1604)("Barzler")
brought as a class and derivative action by a limited partner of the named
partnership. The substance of the plaintiff's complaint is similar to the
allegations raised in the Gramercy Park case except that it relates only to
-------------
the sale of the Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Sheryle Trainer, plaintiff v. Jones Intercable, Inc. and Glenn R.
-------------------------------------------------------------------
Jones, defendants, and Cable TV Fund 14-B, Ltd., nominal defendant (U.S.
- ---------------------------------------------------------------------
District Court, District of Colorado, Civil Action No. 99-B-1751)("Trainer")
brought as a class and derivative action by a limited partner of the named
partnership. The substance of the plaintiff's complaint is similar to the
allegations raised in the Gramercy Park case except that it relates only to the
sale of the Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs
------------------------------------------------------------------
v. Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B,
- --------------------------------------------------------------------------------
Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A,
- -----------------------------------------------------------------------------
Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court,
- -----------------------------------------------------
District of Colorado, Civil Action No. 99-WM-1702)("Schumacher") brought as a
class and derivative action by three limited partners of the named partnerships.
The substance of the plaintiffs' complaint is similar to the allegations raised
in the Gramercy Park case.
-------------
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs v. Jones
----------------------------------------------------------------------
Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B, Ltd.,
- -----------------------------------------------------------------------------
Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and
- --------------------------------------------------------------------------------
Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court, District of
- --------------------------------------------
Colorado, Civil Action No. 99-B-1778)("Margolin") brought as a class and
derivative action by three limited partners of the named partnerships. The
substance of the plaintiffs' complaint is similar to the allegations raised in
the Gramercy Park case.
-------------
4
The General Partner believes that the procedures followed by Jones
Intercable in conducting the votes of the limited partners of the various
partnerships on the sales of the Albuquerque, Palmdale, Littlerock and Calvert
County systems and the disclosures in the proxy statements delivered to the
limited partners in connection with the limited partners' votes on these sales
were proper and complete, and the General Partner believes that the various sale
transactions were fair because they were at prices determined by averaging three
separate, independent appraisals of the various cable communications systems
sold in accordance with the express provisions of the partnerships' limited
partnership agreements. The General Partner intends to defend these lawsuits
vigorously.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging Jones
Intercable's acquisitions of the Albuquerque, Palmdale, Littlerock and Calvert
County systems because these cases involve common questions of law and fact.
LITIGATION RELATING TO LIMITED PARTNERSHIP LIST REQUESTS
In July 1999, Jones Intercable, each of its subsidiaries that serve as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest
-------------------------------------
Properties, LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs
- -------------------------------------------------------------------------------
v. Jones Intercable, Inc., et al., defendants (Superior Court, Los Angeles
- ---------------------------------------------
County, State of California, Case No. BC 213632).
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied covenant of good faith and fair dealing
owed to the plaintiffs as limited partners, a breach of Jones Intercable's
fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege that Jones
Intercable's failure to provide them with the partnership lists prevented them
from making their tender offers and that they have been injured by such action
in an amount to be proved at trial, but not less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs leave to amend their complaint to attempt to cure the deficiencies in
the pleadings. The plaintiffs filed their first amended complaint in January
2000.
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. The General Partner believes that the defendants
have defenses to the plaintiffs' claims for relief and challenges to the
plaintiffs' claims for damages, and the General Partner intends to defend this
lawsuit vigorously.
5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of December 31, 1999, the number of equity security
holders in the Partnership was 15,450.
6
ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31,
------------------------------------------------------------------------------------
Cable TV Fund 14-B, Ltd.(a) 1999 1998 1997 1996 1995
- --------------------------- -------------- ------------- ------------- ------------- -------------
Revenues $ 237,069 $ 15,524,182 $ 40,929,333 $ 37,768,924 $ 34,443,760
Depreciation and Amortization 75,588 5,571,215 14,070,460 13,474,568 14,265,096
Operating Income (Loss) 19,245 (443,961) (258,143) (1,165,250) (2,684,818)
Minority Interest in Consolidated
(Income) Loss -- (22,599,271) 626,089 815,252 1,104,003
Net Income (Loss) 4,890,713(c) 70,865,360(b) (3,543,869) (4,470,043) (6,108,952)
Net Income (Loss) per Limited
Partnership Unit 18.70(c) 268.29(b) (13.42) (16.93) (23.14)
Weighted Average Number of Limited
Partnership Units Outstanding 261,353 261,353 261,353 261,353 261,353
General Partner's Deficit -- (2,721) (749,411) (713,972) (669,272)
Limited Partners' Capital 571,208 5,668,577 38,417,913 41,926,343 46,351,686
Total Assets 571,028 5,781,669 99,133,735 105,915,409 111,850,697
Debt -- 25,981 54,185,513 56,656,424 56,241,715
Jones Intercable Advances -- 835,015 449,094 1,896,049
(a) Cable TV Fund 14-B, Ltd.'s selected financial data historically includes
the consolidated amounts of Cable TV Fund 14-A/B Venture.
(b) Net income resulted primarily from the sale of the Surfside System by
Cable TV Fund 14-B, Ltd. in June 1998 and from the sale of the Broward
System by Cable TV Fund 14-A/B Venture in March 1998.
(c) Net income resulted primarily from the sale of the Littlerock System by
Cable TV Fund 14-B, Ltd., in January 1999.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion contains, in addition to historical
information, forward-looking statements that are based upon certain assumptions
and are subject to a number of risks and uncertainties.
FINANCIAL CONDITION
The Partnership owned the Littlerock System until its sale on January
29, 1999. The Partnership owned the Surfside System until its sale on June 30,
1998. The Partnership also owned a 73 percent interest in Cable TV Fund 14-A/B,
Ltd. (the "Venture"). The Venture sold its only asset, the Broward System, on
March 31, 1998, and the Venture was liquidated and dissolved in October 1998.
The accompanying financial statements historically include 100 percent of the
accounts of the Partnership and those of the Venture, reduced by the 27 percent
minority interest in the Venture owned by Cable TV Fund 14-A Ltd.
On January 29, 1999, the Partnership sold the Littlerock System to a
subsidiary of Jones Intercable for $10,720,400. Upon the closing of the sale of
the Littlerock System, the Partnership retained a portion of the sale proceeds
for a reserve for the continuing administrative expenses of the Partnership,
repaid all of its indebtedness and then distributed the net sale proceeds of
$9,985,361 to the Partnership's limited partners of record as of January 29,
1999. This distribution was made in February 1999. Such distribution represented
approximately $38 for each $500 limited partnership interest, or $76 for each
$1,000 invested in the Partnership. Because the distributions to the limited
partners from the sales of the Broward System, the Surfside System and the
Littlerock System did not return 125 percent of the capital initially
contributed by the limited partners to the Partnership, Jones Intercable did not
receive a general partner distribution from the Littlerock System's sale
proceeds.
Taking into account the distribution from prior system sales and the
distribution from the sale of the Littlerock System, the limited partners of the
Partnership have received a total of $432 for each $500 limited partnership
interest, or $864 for each $1,000 invested in the Partnership.
7
Although the sale of the Littlerock System represented the sale of the
only remaining cable television system of the Partnership, the Partnership will
not be dissolved until after all pending litigation relating to the Partnership
is finally resolved and terminated (see note 7).
RESULTS OF OPERATIONS
Due to the Littlerock System sale on January 29, 1999, which was the
Partnership's last remaining operating asset, a full discussion of the results
of operations would not be meaningful. For the period ended December 31, 1999,
the Partnership had total revenues of $237,069 and generated operating income of
$19,245. Other expense of $612,631 incurred in 1999 primarily related to various
costs associated with the sale of the Partnership's Littlerock System and the
administration of the Partnership. Because of the gain of $5,492,858 on the sale
of the Littlerock System, the Partnership realized net income of $4,890,713, or
$18.70 per limited partnership interest, for the year ended December 31, 1999.
ITEM 8. FINANCIAL STATEMENTS
The audited financial statements of the Partnership for the year ended
December 31, 1999 follow.
8
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-B, Ltd.:
We have audited the accompanying consolidated balance sheets of CABLE
TV FUND 14-B, Ltd. (a Colorado limited partnership) and subsidiary as of
December 31, 1999 and 1998, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the three
years in the period ended December 31, 1999. 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 14-B,
Ltd. and subsidiary as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 3, 2000.
9
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------
ASSETS 1999 1998
------ ----------- -----------
CASH $ -- $ 23,538
RECEIVABLE FROM JONES INTERCABLE 571,208 --
TRADE RECEIVABLES, less allowance for doubtful receivables of
$7,468 at December 31, 1998 -- 157,760
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost -- 9,100,340
Less- accumulated depreciation -- (4,471,718)
----------- -----------
-- 4,628,622
Franchise costs and other intangible assets, net of accumulated
amortization of $1,979,620 at December 31, 1998 -- 652,940
----------- -----------
Total investment in cable television properties -- 5,281,562
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES -- 318,809
----------- -----------
Total assets $ 571,208 $ 5,781,669
=========== ===========
The accompanying notes to consolidated financial statements are
an integral part of these consolidated balance sheets.
10
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
December 31,
------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1999 1998
------------------------------------------- ------------- -------------
LIABILITIES:
Debt $ -- $ 25,981
Accounts payable and accrued liabilities -- 89,832
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Total liabilities -- 115,813
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,000) (3,721)
------------- -------------
-- (2,721)
------------- -------------
Limited Partners-
Net contributed capital (261,353 units
outstanding at December 31, 1999 and 1998) 112,127,301 112,127,301
Accumulated deficit 1,297,274 (3,590,718)
Distributions (112,853,367) (102,868,006)
------------- -------------
571,208 5,668,577
------------- -------------
Total liabilities and partners' capital (deficit) $ 571,208 $ 5,781,669
============= =============
The accompanying notes to consolidated financial
statements are an integral part of these
consolidated balance sheets.
11
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
REVENUES $ 237,069 $ 15,524,182 $ 40,929,333
COSTS AND EXPENSES:
Operating expenses 115,608 8,688,064 22,717,178
Management fees and allocated overhead from
Jones Intercable 26,628 1,708,864 4,399,838
Depreciation and amortization 75,588 5,571,215 14,070,460
------------ ------------ ------------
OPERATING INCOME (LOSS) 19,245 (443,961) (258,143)
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (8,759) (1,250,752) (3,903,254)
Gain on sales of cable television systems 5,492,858 97,500,303 --
Other, net (612,631) (2,340,959) (8,561)
------------ ------------ ------------
Total other income (expense), net 4,871,468 93,908,592 (3,911,815)
------------ ------------ ------------
CONSOLIDATED INCOME (LOSS) BEFORE
MINORITY INTEREST 4,890,713 93,464,631 (4,169,958)
MINORITY INTEREST IN CONSOLIDATED
(INCOME) LOSS -- (22,599,271) 626,089
------------ ------------ ------------
NET INCOME (LOSS) $ 4,890,713 $ 70,865,360 $ (3,543,869)
============ ============ ============
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 2,721 $ 746,690 $ (35,439)
============ ============ ============
Limited Partners $ 4,887,992 $ 70,118,670 $ (3,508,430)
============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 18.70 $ 268.29 $ (13.42)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 261,353 261,353 261,353
============ ============ ============
The accompanying notes to consolidated financial
statements are an integral part of these
consolidated statements.
12
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
-----------------------------------------------
1999 1998 1997
------------- ------------- -------------
GENERAL PARTNER:
Balance, beginning of year $ (2,721) $ (749,411) $ (713,972)
Net income (loss) for year 2,721 746,690 (35,439)
------------- ------------- -------------
Balance, end of year $ -- $ (2,721) $ (749,411)
============= ============= =============
LIMITED PARTNERS:
Balance, beginning of year $ 5,668,577 $ 38,417,913 $ 41,926,343
Net income (loss) for year 4,887,992 70,118,670 (3,508,430)
Distributions (9,985,361) (102,868,006) --
------------- ------------- -------------
Balance, end of year $ 571,208 $ 5,668,577 $ 38,417,913
============= ============= =============
The accompanying notes to consolidated financial
statements are an integral part of these
consolidated statements.
13
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Year Ended December 31,
------------------------------------------------
1999 1998 1997
------------- ------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,890,713 $ 70,865,360 $ (3,543,869)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization 75,588 5,571,215 14,070,460
Gain on sales of cable television systems (5,492,858) (97,500,303) --
Minority interest in consolidated income (loss) -- 22,599,271 (626,089)
Decrease in trade receivables, net 157,760 1,312,533 607,200
Increase in receivable from Jones Intercable (571,208) -- --
Decrease (increase) in deposits, prepaid expenses and
deferred charges 316,356 (91,324) (722,481)
Decrease in accounts payable and
accrued liabilities and subscriber prepayments (89,832) (2,097,142) (526,726)
------------- ------------- -------------
Net cash provided by (used in) operating activities (713,481) 659,610 9,258,495
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (19,115) (2,802,645) (7,840,186)
Payment of deferred brokerage fee -- (920,000) --
Proceeds from sales of cable television systems 10,720,400 186,712,500 --
------------- ------------- -------------
Net cash provided by (used in) investing activities 10,701,285 182,989,855 (7,840,186)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- 2,010,948 1,541,111
Repayment of debt (25,981) (56,170,480) (4,012,022)
Increase (decrease) in transaction with affiliates -- (835,015) 385,921
Distributions to limited partners (9,985,361) (102,868,006) --
Distribution to joint venture partner -- (25,937,002) --
------------- ------------- -------------
Net cash used in financing activities (10,011,342) (183,799,555) (2,084,990)
------------- ------------- -------------
Decrease in cash (23,538) (150,090) (666,681)
Cash, beginning of year 23,538 173,628 840,309
------------- ------------- -------------
Cash, end of year $ -- $ 23,538 $ 173,628
============= ============= =============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ -- $ 1,753,571 $ 4,136,822
============= ============= =============
The accompanying notes to consolidated financial
statements are an integral part of these
consolidated statements.
14
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 14-B, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on September 9, 1987, under a public program sponsored
by Jones Intercable, Inc. ("Jones Intercable"). The Partnership was formed to
acquire, construct, develop and operate cable television systems.
Formation of Joint Venture
On January 8, 1988, Cable TV Fund 14-A, Ltd. ("Fund 14-A") and the
Partnership formed Cable TV Fund 14-A/B Venture (the "Venture"). Fund 14-A
contributed $18,975,000 to the capital of the Venture for a 27 percent ownership
interest and the Partnership contributed $51,025,000 to the capital of the
Venture for a 73 percent ownership interest. The Venture was liquidated and
dissolved in October 1998 (discussed below).
Cable Television System Acquisitions
The Partnership acquired the cable television system serving Surfside,
South Carolina (the "Surfside System") in 1988 and the cable television system
serving Littlerock, California (the "Littlerock System") in 1989. The Venture
acquired the cable television system serving areas in and around Broward County,
Florida (the "Broward System") in 1988.
New General Partner
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, the Partnership's
general partner until March 2, 2000, as discussed below. As of December 31,
1999, Comcast owned approximately 2.9 million shares of Jones Intercable's
Common Stock and approximately 13.8 million shares of Jones Intercable's Class A
Common Stock, representing 39.6% of the economic interest and 48.3% of the
voting interest in Jones Intercable. Comcast contributed its shares in Jones
Intercable to its wholly owned subsidiary, Comcast Cable Communications, Inc.
("Comcast Cable"). The approximately 2.9 million shares of Common Stock of Jones
Intercable owned by Comcast Cable represented shares having the right to elect
approximately 75% of the Board of Directors of Jones Intercable. As of April 7,
1999, Jones Intercable became a consolidated public company subsidiary of
Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On March 2,
2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a wholly
owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. Comcast JOIN Holdings, Inc. shares corporate offices
with Comcast at 1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
Cable Television System Sales
On March 31, 1998, the Venture sold the Broward System to an
unaffiliated third party for $140,000,000. From the proceeds of the Broward
System sale, the Venture settled working capital adjustments, repaid the
outstanding balance on its credit facility, which totaled $39,902,968 at March
31, 1998 and paid a brokerage fee of $3,420,216. The Venture then distributed
the remaining net sale proceeds of $95,708,056 to the two constituent
partnerships of the Venture in proportion to their ownership interests in the
Venture. Accordingly, the Partnership received 73 percent of the net sale
proceeds, or $69,771,054. The Partnership distributed its net sale proceeds to
its limited partners of record as of March 31, 1998. Such distribution
represented
15
approximately $267 for each $500 limited partnership interest, or $534 for each
$1,000 invested in the Partnership. Because the distributions to the limited
partners from the sale of the Broward System did not return to the limited
partners 125 percent of the capital initially contributed to the Partnership by
the limited partners, Jones Intercable did not receive any general partner
distribution from the Broward System's sale. Because the Broward System
represented the only asset of the Venture, the Venture was liquidated and
dissolved in October 1998.
On June 30, 1998, the Partnership sold the Surfside System to an
unaffiliated third party for $51,500,000. Upon the closing of the sale of the
Surfside System, the Partnership retained a portion of the sale proceeds for
working capital purposes, repaid all of its indebtedness, paid a brokerage fee
totaling $1,287,500, paid a deferred acquisition fee of $920,000 and then
distributed the net sale proceeds of approximately $33,096,952 to the
Partnership's limited partners of record as of June 30, 1998. This distribution
was made in August 1998. Such distribution represented approximately $127 for
each $500 limited partnership interest, or $254 for each $1,000 invested in the
Partnership. Because the distributions to the limited partners from the sale of
the Broward System and the Surfside System did not return to the limited
partners 125 percent of the capital initially contributed by the limited
partners to the Partnership, Jones Intercable did not receive a general partner
distribution from the Surfside System's sale proceeds.
On January 29, 1999, the Partnership sold the Littlerock System to a
subsidiary of Jones Intercable for $10,720,400. Upon the closing of the sale of
the Littlerock System, the Partnership retained a portion of the sale proceeds
for a reserve for the continuing administrative expenses, repaid all of its
indebtedness and then distributed the net sale proceeds of approximately
$9,985,361 to the Partnership's limited partners of record as of January 29,
1999. This distribution was made in February 1999. Such distribution represented
approximately $38 for each $500 limited partnership interest, or $76 for each
$1,000 invested in the Partnership. Because the distributions to the limited
partners from the sales of the Broward System, the Surfside System and the
Littlerock System did not return 125 percent of the capital initially
contributed by the limited partners to the Partnership, Jones Intercable did not
receive a general partner distribution from the Littlerock System's sale
proceeds.
Taking into account the distribution from the prior system sales and
the distribution from the sale of the Littlerock System, the limited partners of
the Partnership have received a total of $432 for each $500 limited partnership
interest, or $864 for each $1,000 invested in the Partnership.
Although the sale of the Littlerock System represented the sale of the
only remaining cable television system of the Partnership, the Partnership will
not be dissolved until after all pending litigation relating to the Partnership
is finally resolved and terminated (see note 7).
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 contribution to partnership capital.
Jones Intercable 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 Jones Intercable, except for income or
gain from the sale or disposition of cable television properties, which are
allocated to the partners based upon the formula set forth in the Partnership's
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 consolidated 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 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.
16
Principles of Consolidation
As a result of the Partnership's ownership interest in the Venture of
73 percent until it was liquidated and dissolved, the accompanying consolidated
financial statements historically present the Partnership's and the Venture's
financial condition on a consolidated basis with the ownership interest of Fund
14-A in the Venture shown as a minority interest. The Venture did not have any
ownership interest in the Surfside System or Littlerock System. These systems
were owned 100 percent by the Partnership. All interpartnership accounts and
transactions have been eliminated.
Property, Plant and Equipment
Depreciation was provided using the straight-line method over the
following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 - 7 years
Office furniture and equipment 3 - 5 years
Buildings 30 years
Vehicles 3 - 4 years
Replacements, renewals and improvements were capitalized and
maintenance and repairs were charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation were written off as certain assets became fully depreciated and
were no longer in service.
Intangible Assets
Costs assigned to franchises and costs in excess of interests in net
assets purchased were amortized using the straight-line method over the
following estimated useful lives:
Franchise costs 1 - 10 years
Costs in excess of interests in net assets purchased 29 - 31 years
(3) TRANSACTIONS WITH JONES INTERCABLE AND AFFILIATES
Brokerage Fees
The Intercable Group, Ltd. performed brokerage services for the
Partnership. For brokering the acquisition of the Surfside System for the
Partnership, The Intercable Group, Ltd. earned a fee totaling $1,920,000, or 4
percent of the purchase price, during the year ended December 31, 1988, of which
$920,000 had been deferred until the sale of the Surfside System on June 30,
1998. For brokering the sales of the Broward System and the Surfside System, The
Intercable Group, Ltd. earned fees totaling $3,500,000 and $1,287,500,
respectively, or 2.5 percent of the respective purchase prices, for the year
ended December 31, 1998.
Management Fees, Distribution Ratios and Reimbursements
Jones Intercable managed the Partnership and the Venture and received a
fee for its services equal to 5 percent of the gross revenues of the Partnership
and the Venture, excluding revenues from the sale of cable television systems or
franchises. Jones Intercable has not received and will not receive a management
fee after January 29, 1999. Management fees paid to Jones Intercable by the
Partnership and the Venture for the years ended December 31, 1999, 1998 and 1997
were $11,854, $776,209 and $2,046,467, respectively.
Any partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) were allocated 99 percent to the limited partners
and 1 percent to the general partner. Any distributions other than interest
income on limited partner subscriptions earned prior to the acquisition of the
Partnership's first cable television system or from cash flow, such as from the
sale or refinancing of a system or upon dissolution of the Partnership, were
made as follows: first, to the limited partners in an amount which, together
with all prior distributions, will equal 125 percent of the amount initially
contributed to the Partnership capital by the limited partners; the balance, 75
percent to the limited partners and 25 percent to the general partner.
17
The Partnership reimburses its general partner for certain
administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel. Such personnel provide administrative,
accounting, tax, legal and investor relations services to the Partnership. Such
services, and their related costs, are necessary to the administration of the
Partnership until the Partnership is dissolved. Such costs were charged to
operating costs during the periods that the Partnership operated its cable
television systems. Subsequent to the sale of the Partnership's final cable
television system, such costs were charged to other expense. Reimbursements made
to Jones Intercable for allocated overhead and administrative expenses during
the years ended December 31, 1999, 1998 and 1997 were $82,371, $932,655 and
$2,353,371, respectively.
The Partnership was charged interest during 1999 at an average interest
rate of 7.18 percent on the amounts due Jones Intercable, which approximated
Jones Intercable's weighted average cost of borrowing. Total interest charged to
the Partnership by Jones Intercable was $8,699, $17,658 and $2,678, for the
years ended December 31, 1999, 1998 and 1997, respectively.
Payments to/from Affiliates for Programming Services
Prior to the sale of the Littlerock System the Partnership received
programming from Superaudio, Knowledge TV, Inc., Jones Computer Network, Ltd.,
Great American Country, Inc. and Product Information Network, all of which were
affiliates of Jones Intercable until April 7, 1999. (see Note 1)
Payments to Superaudio by the Partnership totaled $450, $23,402 and
$57,469 in 1999, 1998 and 1997, respectively. Payments to Knowledge TV, Inc. by
the Partnership totaled $415, $26,403 and $63,921 in 1999, 1998 and 1997,
respectively. Payments to Jones Computer Network, Ltd., whose service was
discontinued in April 1997, totaled $14,633 in 1997. Payments by the Partnership
to Great American Country, Inc. totaled $360, $24,623 and $22,309 in 1999, 1998
and 1997.
Prior to the sale of the Littletock System the Partnership received
commissions from Product Information Network based on a percentage of
advertising revenue and number of subscribers. Product Information Network paid
commissions to the Partnership totaling $14, $51,065 and $125,785 in 1999, 1998
and 1997, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1999 and 1998,
consisted of the following:
1999 1998
--------- -----------
Cable distribution systems $ -- $ 8,863,348
Equipment and tools -- 123,119
Office furniture and equipment -- 36,771
Buildings -- 15,597
Vehicles -- 61,505
Land -- --
--------- -----------
-- 9,100,340
Less - accumulated depreciation -- (4,471,718)
--------- -----------
Total $ -- $ 4,628,622
========= ===========
(5) DEBT
Debt consisted of the following: December 31,
-----------------------
1999 1998
--------- -----------
Capital lease obligations $ -- 25,981
--------- -----------
Total $ -- $ 25,981
========= ===========
(6) INCOME TAXES
18
Income taxes have not been recorded in the accompanying consolidated
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 income reported to the partners is different from that reported
in the consolidated 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
income and the net income reported in the consolidated statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
-----------------------------
Litigation Challenging Jones Intercable's Acquisition of the Littlerock System
- ------------------------------------------------------------------------------
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund 14-B,
-------------------------------------------------------------------
Ltd., plaintiff v. Jones Intercable, Inc., defendant and Cable TV Fund 14-B,
- ----------------------------------------------------------------------------
Ltd., nominal defendant (U.S. District Court, District of Colorado, Civil Action
- -----------------------
No. 99-WM-1051) brought by City Partnership Co., a limited partner of the
Partnership. The plaintiff's complaint alleges that Jones Intercable breached
its fiduciary duty to the plaintiff and to the other limited partners of the
Partnership in connection with the Partnership's sale of the Littlerock System
to a subsidiary of Jones Intercable in January 1999. The complaint alleges that
Jones Intercable acquired the Littlerock System at an unfairly low price that
did not accurately reflect the market value of the Littlerock System. The
plaintiff also alleges that the proxy solicitation materials delivered to the
limited partners of the Partnership in connection with the vote of the limited
partners on the Partnership's sale of the Littlerock System contained inadequate
and misleading information concerning the fairness of the transaction, which the
plaintiff claims caused Jones Intercable to breach its fiduciary duty of candor
to the limited partners and which the plaintiff claims constituted acts and
omissions in violation of Section 14(a) of the Securities Exchange Act of 1934,
as amended. Plaintiff also claims that Jones Intercable breached the contractual
provision of the Partnership's limited partnership agreement requiring that the
sale price be determined by the average of three separate, independent
appraisals, challenging both the independence and the currency of the
appraisals. The complaint finally seeks declaratory injunctive relief to prevent
Jones Intercable from making use of the Partnership's funds to finance Jones
Intercable's defense of this litigation. Jones Intercable has filed motions to
dismiss certain of the plaintiff's claims for relief. The General Partner
believes that the procedures followed by Jones Intercable in conducting the vote
of the limited partners of the Partnership on the sale of the Littlerock System,
including the fairness opinion in the proxy statement delivered to the limited
partners of the Partnership, were proper and that Partnership's sale of the
Littlerock System at a price determined by averaging three separate, independent
appraisals was in accordance with the express provisions of the Partnership's
limited partnership agreement. The General Partner intends to defend this
lawsuit vigorously.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP and
--------------------------------------------------------------
Madison/AG Partnership Value Partners II, plaintiffs v. Jones Intercable, Inc.
- ------------------------------------------------------------------------------
and Glenn R. Jones, defendants, and Cable TV Fund 12-B, Ltd., Cable TV Fund
- ---------------------------------------------------------------------------
12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund
- --------------------------------------------------------------------------------
14-B, Ltd., nominal defendants (U.S. District Court, District of Colorado, Civil
- ------------------------------
Action No. 99-B-1508) ("Gramercy Park") brought as a class and derivative action
by limited partners of the named partnerships. The plaintiffs' complaint alleges
that the defendants made false and misleading statements to the limited partners
of the named partnerships in connection with the solicitation of proxies and the
votes of the limited partners on the sales of the Albuquerque, Palmdale,
Littlerock and Calvert County cable communication systems by the named
partnerships to Jones Intercable or one of its subsidiaries in violation of
Sections 14 and 20 of the Securities Exchange Act of 1934, as amended. The
plaintiffs specifically allege that the proxy statements delivered to the
limited partners in connection with the limited partners' votes on these sales
were false, misleading and failed to disclose material facts necessary to make
the statements made not misleading. The plaintiffs' complaint also alleges that
the defendants breached their fiduciary duties to the plaintiffs and to the
other limited partners of the named partnerships and to the named partnerships
in connection with the various sales of the Albuquerque, Palmdale, Littlerock
and Calvert County cable communications systems to subsidiaries of Jones
Intercable. The complaint alleges that Jones Intercable acquired these cable
communications systems at unfairly low prices that did not accurately reflect
the market values of the systems. The plaintiffs seek on their own behalf and on
behalf of all other limited partners compensatory and nominal damages, the costs
and expenses of the litigation, including reasonable attorneys' and experts'
fees, and punitive and exemplary damages.
In August 1999, Jones Intercable was named a defendant in a case
captioned William Barzler, plaintiff v. Jones Intercable, Inc. and Glenn R.
-----------------------------------------------------------------
Jones, defendants and Cable TV Fund 14-B, Ltd., nominal defendant (U.S. District
- -----------------------------------------------------------------
Court, District of Colorado,
19
Civil Action No. 99-B-1604) ("Barzler") brought as a class and derivative action
by a limited partner of the named partnership. The substance of the plaintiff's
complaint is similar to the allegations raised in the Gramercy Park case except
-------------
that it relates only to the sale of the Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Sheryle Trainer, plaintiff v. Jones Intercable, Inc. and Glenn R.
-----------------------------------------------------------------
Jones, defendants, and Cable TV Fund 14-B, Ltd., nominal defendant (U.S.
- ------------------------------------------------------------------
District Court, District of Colorado, Civil Action No. 99-B-1751) ("Trainer")
brought as a class and derivative action by a limited partner of the named
partnership. The substance of the plaintiff's complaint is similar to the
allegations raised in the Gramercy Park case except that it relates only to the
-------------
sale of the Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs v.
--------------------------------------------------------------------
Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B,
- -----------------------------------------------------------------------------
Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A,
- -----------------------------------------------------------------------------
Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court,
- -----------------------------------------------------
District of Colorado, Civil Action No. 99-WM-1702) ("Schumacher") brought as a
class and derivative action by three limited partners of the named partnerships.
The substance of the plaintiffs' complaint is similar to the allegations raised
in the Gramercy Park case.
-------------
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs v. Jones
----------------------------------------------------------------------
Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B, Ltd.,
- -----------------------------------------------------------------------------
Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and
- --------------------------------------------------------------------------------
Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court, District of
- --------------------------------------------
Colorado, Civil Action No. 99-B-1778) ("Margolin") brought as a class and
derivative action by three limited partners of the named partnerships. The
substance of the plaintiffs' complaint is similar to the allegations raised in
the Gramercy Park case.
-------------
The General Partner believes that the procedures followed by Jones
Intercable in conducting the votes of the limited partners of the various
partnerships on the sales of the Albuquerque, Palmdale, Littlerock and Calvert
County systems and the disclosures in the proxy statements delivered to the
limited partners in connection with the limited partners' votes on these sales
were proper and complete, and the General Partner believes that the various sale
transactions were fair because they were at prices determined by averaging three
separate, independent appraisals of the various cable communications systems
sold in accordance with the express provisions of the partnerships' limited
partnership agreements. The General Partner intends to defend these lawsuits
vigorously.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging Jones
Intercable's acquisitions of the Albuquerque, Palmdale, Littlerock and Calvert
County systems because these cases involve common questions of law and fact.
Litigation Relating to Limited Partnership List Requests
- --------------------------------------------------------
In July 1999, Jones Intercable, each of its subsidiaries that serve as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest Properties,
-------------------------------------------------
LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs v. Jones
- ----------------------------------------------------------------------------
Intercable, Inc., et al., defendants (Superior Court, Los Angeles County, State
- ------------------------------------
of California, Case No. BC 213632).
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied covenant of good faith and fair dealing
owed to the plaintiffs as limited partners, a breach of Jones Intercable's
fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege that Jones
Intercable's failure to provide them with the partnership lists prevented them
from making their tender offers and that they have been injured by such action
in an amount to be proved at trial, but not less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs' leave to amend their complaint to attempt to cure the deficiencies
in the pleadings. The plaintiffs filed their first amended complaint in January
2000.
20
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. The General Partner believes that the defendants
have defenses to the plaintiffs' claims for relief and challenges to the
plaintiffs' claims for damages, and the General Partner intends to defend this
lawsuit vigorously.
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
For the Year Ended December 31,
------------------------------------
1999 1998 1997
---------- ---------- ----------
Maintenance and repairs $ 198 $ 115,925 $ 310,652
========== ========== ==========
Taxes, other than income and payroll taxes $ 5,069 $ 193,790 $ 696,477
========== ========== ==========
Advertising $ 63 $ 119,868 $ 306,273
========== ========== ==========
Depreciation of property, plant and equipment $ 61,589 $3,091,813 $6,816,082
========== ========== ==========
Amortization of intangible assets $ 13,999 $2,479,402 $7,254,378
========== ========== ==========
21
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below. Directors of the General Partner serve until the
next annual meeting of the General Partner and until their successors shall be
elected and qualified.
RALPH J. ROBERTS is Chairman of the General Partner's Board of
Directors. Mr. Roberts served as Chairman of Jones Intercable, Inc.'s Board of
Directors from April 1999 until its merger with the General Partner in March
2000. Mr. Roberts has served as a director of Comcast Corporation and as the
Chairman of its Board of Directors for more than five years. Mr. Roberts has
been the President and a director of Sural Corporation, a privately held
investment company that is Comcast Corporation's controlling shareholder, for
more than five years. Mr. Roberts is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. Mr. Roberts is the father of
Brian L. Roberts. He is 80 years old.
BRIAN L. ROBERTS is President and a director of the General Partner.
Mr. Roberts served as President and a director of Jones Intercable, Inc. from
April 1999 until its merger with the General Partner in March 2000. Mr. Roberts
has served as the President and as a director of Comcast Corporation for more
than five years. Mr. Roberts also serves as Vice President and as a director of
Sural Corporation. He also is a director of Comcast Cable Communications, Inc.,
Comcast LCI Holdings, Inc., At Home Corporation and The Bank of New York
Company, Inc. Mr. Roberts is a son of Ralph J. Roberts. He is 40 years old.
LAWRENCE S. SMITH is Executive Vice President and a director of the
General Partner. Mr. Smith served as an Executive Vice President and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Smith has served as an Executive Vice President of
Comcast Corporation since December 1995. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Smith is
also a director of Comcast Cable Communications, Inc. and LCI Holdings, Inc. He
is 52 years old.
STANLEY L. WANG is Executive Vice President and Secretary and a
director of the General Partner. Mr. Wang served as Senior Vice President and
Secretary and a director of Jones Intercable, Inc. from April 1999 until its
merger with the General Partner in March 2000. Mr. Wang has served as an
Executive Vice President of Comcast Corporation since February 2000. Prior to
that time, he served as Senior Vice President of Comcast Corporation for more
than five years. Mr. Wang also has served as Secretary of Comcast Corporation
for more than five years. Mr Wang is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. He is 59 years old.
JOHN R. ALCHIN is Executive Vice President and Treasurer of the General
Partner. Mr. Alchin served as Senior Vice President and Treasurer and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Alchin has served as an Executive Vice President of
Comcast Corporation since February 2000. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Alchin also
has served as Treasurer of Comcast Corporation for more than five years. Mr.
Alchin is the Principal Financial Officer of the General Partner and of Comcast
Corporation. He is 51 years old.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Each of the
directors and executive officers of the General Partner were directors and
executive officers of Jones Intercable prior to its merger with the General
Partner on March 2, 2000. Jones Intercable was the general partner of the
Partnership prior to March 2, 2000. These persons became directors and executive
officers of Jones Intercable on April 7, 1999, the date Comcast acquired a
controlling interest in Jones Intercable. These persons failed to file on a
timely basis reports
22
disclosing their ownership of limited partnership interests of the Partnership
as required by Section 16(a) of the Securities Exchange Act of 1934. The
reports, when filed, disclosed that these persons own no limited partnership
interests of the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership does not have any employees; however, various personnel
are required to administer the financial, tax and legal affairs of the
Partnership and to maintain the books and records of the Partnership. Such
personnel are employed by Comcast, and the costs of such employment are charged
by Comcast to the Partnership. See ITEM 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
As of December 31, 1999, no person or entity owned more than 5% of the
limited partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership reimburses its general partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
benefits paid to corporate personnel. Such personnel provide administrative,
accounting, legal and investor relations services to the Partnership. The
Partnership will continue to reimburse its general partner for actual time spent
on Partnership business by employees of Comcast until the Partnership is
liquidated and dissolved. During the year ended December 31, 1999, such
reimbursements totaled $82,371.
Prior to the sale of the Littlerock System, the Partnership paid a
management fee to its general partner equal to 5% of the Partnership's gross
revenues from system operations. During the year ended December 31, 1999, such
management fees totaled $11,854. It is expected that the Partnership will never
again pay management fees.
The Partnership is charged interest on amounts advanced by its general
partner. The interest rate in 1999 was at an average of 7.18%, which
approximated Jones Intercable's weighted average cost of borrowing. During the
year ended December 31, 1999, such interest charges totaled $8,699.
Prior to the sale of the Littlerock System, the Partnership paid
programming service fees to affiliates of Jones Intercable. The amount of such
programming service fees paid to affiliates during 1999 were not material. It is
expected that the Partnership will never again pay programming service fees.
The Partnership paid no brokerage fees to affiliates during 1999 and it
is expected that the Partnership will never again pay brokerage fees.
23
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) 1. See index to financial statements for the list of financial statements
and exhibits thereto filed as part of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement for Cable TV Fund 14-B, Ltd.
(Incorporated by reference from the Partnership's Annual
Report on Form 10-K for fiscal year ended December 31,
1987.)
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None.
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in Philadelphia,
Pennsylvania.
CABLE TV FUND 14-B, LTD.,
a Colorado limited partnership
By: Comcast JOIN Holdings, Inc.,
a Delaware corporation,
its general partner
By: /s/ Brian L. Roberts
------------------------------
Brian L. Roberts
Dated: March 22, 2000 President; Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: /s/ Ralph J. Roberts
------------------------------
Ralph J. Roberts
Dated: March 22, 2000 Chairman; Director
By: /s/ Brian L. Roberts
------------------------------
Brian L. Roberts
President; Director
Dated: March 22, 2000 (Principal Executive Officer)
By: /s/ Lawrence S. Smith
------------------------------
Lawrence S. Smith
Dated: March 22, 2000 Executive Vice President;
Director
By: /s/ Stanley L. Wang
------------------------------
Stanley L. Wang
Dated: March 22, 2000 Executive Vice President;
Secretary; Director
By: /s/ John R. Alchin
------------------------------
John R. Alchin
Executive Vice President;
Treasurer
Dated: March 22, 2000 (Principal Financial Officer)
By: /s/ Lawrence J. Salva
------------------------------
Lawrence J. Salva
Senior Vice President
Dated: March 22, 2000 (Principal Accounting Officer)
25