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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 -------------
Commission file number: 0-15378
CABLE TV FUND 14-A, LTD.
(Exact name of registrant as specified in its charter)
Colorado 84-1024657
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(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 (Registrant's telephone no.
and Zip Code) including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes x No
------ --------
Aggregate market value of the voting stock held by non-affiliates of the
registrant: [Not applicable]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
----------
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-A, 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 has sold all of its cable television
systems. Although the sale of the Partnership's three remaining cable
television systems during 1999 represented the sale of the Partnership's last
remaining operating assets, the Partnership will not be dissolved until
the 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. The General Partner shares
corporate offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
2
DISPOSITIONS OF CABLE TELEVISION SYSTEMS BY THE PARTNERSHIP
Buffalo System. On March 29, 1999, the Partnership sold the cable
television system serving Buffalo, Minnesota (the "Buffalo System") to an
unaffiliated party for a sales price of $26,605,000. From the sale proceeds, the
Partnership repaid a portion of its revolving credit facility, paid a brokerage
fee, settled working capital adjustments and deposited $1,200,000 into an
interest-bearing indemnity escrow account. The remaining net sale proceeds of
$10,874,000 were distributed in April 1999 to the Partnership's limited partners
of record as of the closing date of the sale of the Buffalo System. This
distribution from the sale of the Buffalo System represented $68 for each $500
limited partnership interest, or $136 for each $1,000 invested in the
Partnership. Because the distribution to the limited partners from the sale of
the Buffalo System, together with all prior distributions, did not return to the
limited partners more than 125 percent of the capital initially contributed to
the Partnership by the limited partners, all of the net proceeds from the sale
of the Buffalo System were distributed to the limited partners and Jones
Intercable did not receive a general partner distribution from the sale of the
Buffalo System. Until August 1999, $1,200,000 of the sale proceeds remained in
escrow as security for the Partnership's agreement to indemnify the buyer under
the asset purchase agreement. The escrow period expired and claims of
approximately $30,000 were made by the buyer. The Partnership distributed the
escrow amount plus interest less the claims amount to the limited partners in
December 1999.
Naperville System. On May 7, 1999, the Partnership sold the cable
television system serving Naperville, Illinois (the "Naperville System") to an
unaffiliated party for a sales price of $22,545,875. From the sale proceeds, the
Partnership repaid the balance outstanding on its revolving credit facility,
paid a brokerage fee, settled working capital adjustments and deposited $696,000
into an interest-bearing indemnity escrow account. The remaining net sale
proceeds of $10,000,000 were distributed in May 1999 to the Partnership's
limited partners of record as of the closing date of the sale of the Naperville
System. This distribution gave the Partnership's limited partners an approximate
return of $62.50 for each $500 limited partnership interest, or $125 for each
$1,000 invested in the Partnership. Because the distribution to the limited
partners from the sale of the Naperville System, together with all prior
distributions, did not return to the limited partners 125 percent of the capital
initially contributed to the Partnership by the limited partners, all of the net
proceeds from the sale of the Naperville System were distributed to the limited
partners and Jones Intercable did not receive a general partner distribution
from the sale of the Naperville System. The $696,000 of the sale proceeds placed
in the interest-bearing indemnity escrow account remained in escrow until
December 14, 1999 as security for the Partnership's agreement to indemnify the
buyer under the asset purchase agreement. The escrow period has expired and the
Partnership received the escrowed funds plus interest in December 1999 because
no claims were made on the escrowed funds by the buyer. From the escrowed funds,
the Partnership repaid its remaining liabilities in the first quarter of 2000
and it will hold the balance in reserve to cover the administrative expenses of
the Partnership until the Partnership is liquidated and dissolved.
Calvert County System. On July 6, 1999, the Partnership sold the cable
television system serving Calvert County, Maryland (the "Calvert County System")
to a subsidiary of Jones Intercable, for a sales price of $39,388,667. The
purchase price was determined by the average of three separate independent
appraisals of the fair market value of the Calvert County System. From the sale
proceeds, the Partnership paid certain fees and expenses of the transaction and
distributed a portion of the net sale proceeds of approximately $30,813,524 to
the Partnership's partners of record as of the closing date of the sale of the
Calvert County System. Because at the time of the Calvert County System's sale,
the distributions made to the limited partners from the Calvert County System
sale and from prior sales of cable television systems returned to the limited
partners more than 125 percent of the amounts originally contributed to the
Partnership by the limited partners, Jones Intercable received a general partner
distribution from the proceeds of the sale of the Calvert County System. The
limited partners, as a group, received $27,587,007 from the sale of the Calvert
County System and Jones Intercable received a general partner distribution of
$3,226,517 from the net sale proceeds. The limited partner distribution from the
sale of the Calvert County System represented $172 for each $500 limited
partnership interest, or $344 for each $1,000 invested in the Partnership.
3
Because transferees of limited partnership interests following the
record date for the distribution of the proceeds from the sale of the Calvert
County System (July 6, 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 July 6, 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 CALVERT COUNTY
SYSTEM
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 September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs v.
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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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------
None.
5
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 11,234.
6
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
For the Year Ended December 31,
----------------------------------------------------------------------------------------
Cable TV Fund 14-A, Ltd. 1999 1998 1997 1996 1995
- ------------------------ ---------- ----------- ----------- ----------- -----------
Revenues $9,552,731 $23,458,429 $26,642,247 $47,808,719 $44,094,802
Depreciation and Amortization 3,386,239 8,662,922 10,111,635 14,627,726 14,459,479
Operating Loss (1,821,096) (3,048,163) (2,713,383) (397,890) (1,459,868)
Equity in Net Income (Loss) of
Cable Television Joint Venture - 22,599,271 (626,089) (815,252) (1,104,003)
Net Income (Loss) 49,772,176(a) 18,214,158(b) 62,735,041(c) (7,371,183) (8,536,167)
Net Income (Loss) per Limited
Partnership Unit 276.97(a) 113.54(b) 387.70(c) (45.61) (52.82)
Weighted Average Number of
Limited Partnership Units Outstanding 160,000 160,000 160,000 160,000 160,000
General Partner's Capital (Deficit) 2,205,820 (24,635) (72,389) (776,152) (702,440)
Limited Partners' Capital (Deficit) 6,617,460 11,949,739 19,267,904 (8,215,874) (918,403)
Total Assets 19,674,576 38,472,721 44,982,801 79,343,054 82,900,838
Debt - 23,432,210 22,773,095 85,424,507 80,726,793
Jones Intercable Advances 6,205,737 365,829 489,313 352,232 887,215
(a) Net income resulted primarily from the sales of the Buffalo System in March
1999, the Naperville System in May 1999 and the Calvert County System in
July 1999 by Cable TV Fund 14-A, Ltd.
(b) Net income resulted primarily from the sale of the Broward System in March
1998 by Cable TV Fund 14-A/B Venture.
(c) Net income resulted primarily from the sales of the Turnersville System in
January 1997 and the Central Illinois System in June 1997 by Cable TV Fund
14-A, Ltd.
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 sold its Buffalo System in March 1999, it sold its
Naperville System in May 1999 and it sold its Calvert County System in July
1999, which represented its remaining operating assets.
Buffalo System
--------------
On March 29, 1999, the Partnership sold the Buffalo System to an
unaffiliated party for a sales price of $26,605,000. From the sale proceeds, the
Partnership repaid a portion of the balance outstanding on its revolving credit
facility, paid a brokerage fee, settled working capital adjustments and
deposited $1,200,000 into an interest-bearing indemnity escrow account. The
remaining net sale proceeds of $10,874,000 were distributed in April 1999 to the
Partnership's limited partners of record as of the closing date of the sale of
the Buffalo System. This distribution from the sale of the Buffalo System
represented $68 for each $500 limited partnership interest, or $136 for each
$1,000 invested in the Partnership. Because the distribution to the limited
partners from the sale of the Buffalo System, together with all prior
distributions, did not return to the limited partners 125 percent of the capital
initially contributed to the Partnership by the limited partners, all of the net
proceeds from the sale of the Buffalo System were distributed to the limited
partners and Jones Intercable did not receive a general partner distribution
from the sale of the Buffalo System.
Until August 1999, $1,200,000 of sale proceeds remained in an
interest-bearing indemnity escrow account as security for the Partnership's
agreement to indemnify the buyer under the asset purchase agreement. The escrow
period expired and claims of $30,539 were made on the escrowed funds by the
buyer. The Partnership paid the buyer's claims and then distributed the escrowed
funds plus interest, which totaled $1,186,476, to the Partnership's limited
partners in December 1999.
7
Naperville System
On May 7, 1999, the Partnership sold the Naperville System to an
unaffiliated party for a sales price of $22,545,875. From the sale proceeds, the
Partnership repaid the balance outstanding on its revolving credit facility,
paid a brokerage fee, settled working capital adjustments and then deposited
$696,000 into an interest-bearing indemnity escrow account. The remaining net
sale proceeds of $10,000,000 were distributed in May 1999 to the Partnership's
limited partners of record as of the closing date of the sale of the Naperville
System. This distribution gave the Partnership's limited partners an approximate
return of $62.50 for each $500 limited partnership interest, or $125 for each
$1,000 invested in the Partnership. Because the distribution to the limited
partners from the sale of the Naperville System, together with all prior
distributions, did not return to the limited partners 125 percent of the capital
initially contributed to the Partnership by the limited partners, all of the net
proceeds from the sale of the Naperville System were distributed to the limited
partners and Jones Intercable did not receive a general partner distribution
from the sale of the Naperville System.
The $696,000 of sale proceeds placed in an interest-bearing indemnity
escrow account remained in escrow until December 14, 1999, as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. No claims were made on the escrowed funds by the buyer. The escrowed
funds plus interest, which totaled $714,647, were returned to the Partnership in
December 1999. From the escrowed funds, the Partnership paid certain liabilities
and it will hold the balance in reserve to cover the administrative expenses of
the Partnership.
Calvert County System
On July 6, 1999, the Partnership sold the Calvert County System to a
subsidiary of Jones Intercable for a sales price of $39,388,667. The purchase
price was determined by the average of three separate independent appraisals of
the fair market value of the Calvert County System. From the sale proceeds, the
Partnership paid certain fees and expenses of the transaction, retained funds
necessary to cover the administrative expenses of the Partnership and
distributed a portion of the net sale proceeds totaling $30,813,524 to the
Partnership's partners of record as of the closing date of the sale of the
Calvert County System. The limited partners as a group, received $27,587,007 of
this amount. This distribution to the limited partners gave the Partnership's
limited partners an approximate return of $172 for each $500 limited partnership
interest, or $344 for each $1,000 invested in the Partnership. Because at the
time of the Calvert County System's sale, the distributions made to the limited
partners from the Calvert County System sale and from prior sales of cable
television systems returned to the limited partners more than 125 percent of the
amounts originally contributed to the Partnership by the limited partners, Jones
Intercable received a general partner distribution of $3,226,517 from the
proceeds of the sale of the Calvert County System.
Although the sale of the Calvert County System represented the sale of
the only remaining operating asset of the Partnership, the Partnership will not
be dissolved until the pending litigation relating to the Partnership has been
resolved and terminated. (See Note 7.)
RESULTS OF OPERATIONS
1999 Compared to 1998
Due to the Calvert County System sale on July 6, 1999, which was the
Partnership's last remaining operating asset, a discussion of results of
operations would not be meaningful. For the period ended December 31, 1999, the
Partnership had total revenues of $9,552,731 and generated an operating loss of
$1,821,096. Because of the gain of $52,198,917 on the sales of the Buffalo
System, the Naperville System and the Calvert County System, the Partnership
realized net income of $49,772,176 during 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-A, Ltd.:
We have audited the accompanying balance sheets of CABLE TV FUND 14-A,
LTD. (a Colorado limited partnership) as of December 31, 1999 and 1998, and the
related 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-A,
Ltd. as of December 31, 1999 and 1998, and the results of its operations and its
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-A, LTD.
------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
December 31,
-----------------------------------
ASSETS 1999 1998
------ ----------- ------------
CASH $ 19,674,576 $ 357,145
TRADE RECEIVABLES, less allowance for doubtful receivables of
$127,439 at December 31, 1998 - 454,788
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost - 93,032,212
Less- accumulated depreciation - (57,669,712)
----------- -----------
- 35,362,500
Franchise costs and other intangible assets, net of accumulated
amortization of $12,840,171 at December 31, 1998 - 1,541,203
----------- -----------
Total investment in cable television properties - 36,903,703
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES - 757,085
----------- -----------
Total assets $ 19,674,576 $ 38,472,721
=========== ===========
The accompanying notes to financial statements
are an integral part of these balance sheets.
10
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1999 1998
------------------------------------------- ------------- ------------
LIABILITIES:
Debt $ - $23,432,210
Jones Intercable advances 6,205,737 365,829
Accrued distribution to Jones Intercable 3,226,517 -
Trade accounts payable and accrued liabilities 1,419,042 2,625,673
Subscriber prepayments - 123,905
------------ ----------
Total liabilities 10,851,296 26,547,617
------------ ----------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated earnings (deficit) 5,431,337 (25,635)
Distribution (3,226,517) -
------------ ----------
2,205,820 (24,635)
------------ ----------
Limited Partners-
Net contributed capital (160,000 units outstanding at
December 31, 1999 and 1998) 68,722,000 68,722,000
Accumulated earnings 47,575,012 3,259,808
Distributions (109,679,552) (60,032,069)
------------ ----------
6,617,460 11,949,739
------------ ----------
Total liabilities and partners' capital (deficit) $ 19,674,576 $38,472,721
============ ==========
The accompanying notes to financial statements
are an integral part of these balance sheets.
11
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
---------------------------------------------------------
1999 1998 1997
------------ ----------- -----------
REVENUES $ 9,552,731 $23,458,429 $26,642,247
COSTS AND EXPENSES:
Operating expenses 7,007,117 15,199,086 16,385,590
Management fees and allocated overhead from
Jones Intercable 980,471 2,644,584 2,858,405
Depreciation and amortization 3,386,239 8,662,922 10,111,635
------------ ----------- ------------
OPERATING LOSS (1,821,096) (3,048,163) (2,713,383)
------------ ----------- ------------
OTHER INCOME (EXPENSE):
Interest expense (466,398) (1,641,112) (1,923,226)
Gain on sales of cable television systems 52,198,917 - 69,973,972
Other, net (139,247) 304,162 (1,976,233)
------------ ----------- ------------
Total other income (expense), net 51,593,272 (1,336,950) 66,074,513
------------ ----------- ------------
INCOME (LOSS) BEFORE EQUITY IN NET INCOME (LOSS)
OF CABLE TELEVISION JOINT VENTURE 49,772,176 (4,385,113) 63,361,130
EQUITY IN NET INCOME (LOSS) OF CABLE TELEVISION
JOINT VENTURE - 22,599,271 (626,089)
------------ ----------- ------------
NET INCOME $ 49,772,176 $18,214,158 $ 62,735,041
============ =========== ============
ALLOCATION OF NET INCOME:
General Partner $ 5,456,972 $ 47,754 $ 703,763
============ =========== ============
Limited Partners $ 44,315,204 $18,166,404 $ 62,031,278
============ =========== ============
NET INCOME PER LIMITED PARTNERSHIP UNIT $ 276.97 $ 113.54 $ 387.70
============ =========== ============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 160,000 160,000 160,000
============ =========== ============
The accompanying notes to financial statements
are an integral part of these statements.
12
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
------------------------------------------------------
1999 1998 1997
------------- ----------- ---------
GENERAL PARTNER:
Balance, beginning of year $ (24,635) $ (72,389) $(776,152)
Net income for year 5,456,972 47,754 703,763
Distribution (3,226,517) - -
------------- ------------ -----------
Balance, end of year $ 2,205,820 $ (24,635) $(72,389)
============= =========== ========
LIMITED PARTNERS:
Balance, beginning of year $ 11,949,739 $ 19,267,904 $(8,215,874)
Net income for year 44,315,204 18,166,404 62,031,278
Distributions (49,647,483) (25,484,569) (34,547,500)
------------- ------------ -----------
Balance, end of year $ 6,617,460 $ 11,949,739 $19,267,904
============= ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
13
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
------------------------------------------------------------
1999 1998 1997
-------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 49,772,176 $18,214,158 $62,735,041
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 3,386,239 8,662,922 10,111,635
Equity in net (income) loss of cable television
joint venture - (22,599,271) 626,089
Gain on sales of cable television systems (52,198,917) - (69,973,972)
Decrease in trade receivables 454,788 476,584 210,957
Decrease (increase) in deposits, prepaid expenses
and deferred charges 2,399,227 627,811 (454,813)
Increase (decrease) in trade accounts payable and
accrued liabilities and subscriber prepayments (1,330,536) 224,700 (33,463)
Increase (decrease) in Jones Intercable advances 5,839,908 (123,484) 137,081
-------------- ------------- -------------
Net cash provided by operating activities 8,322,885 5,483,420 3,358,555
-------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (1,340,531) (6,600,855) (8,016,393)
Proceeds from sales of cable television systems, net
of brokerage fees and escrow proceeds 85,414,770 - 100,962,760
Distributions from Joint Venture - 25,937,002 -
-------------- ------------- -------------
Net cash provided by investing activities 84,074,239 19,336,147 92,946,367
-------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 800,000 1,694,890 36,894,399
Repayment of debt (24,232,210) (1,035,775) (99,545,811)
Distributions to limited partners (49,647,483) (25,484,569) (34,547,500)
----------- ----------- -----------
Net cash used in financing activities (73,079,693) (24,825,454) (97,198,912)
-------------- ------------- -------------
Increase (decrease) in cash 19,317,431 (5,887) (893,990)
Cash, beginning of year 357,145 363,032 1,257,022
-------------- ------------- -------------
Cash, end of year $ 19,674,576 $ 357,145 $ 363,032
============== ============= =============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 678,639 $ 1,642,848 $ 2,375,177
============== ============= =============
NON-CASH TRANSACTIONS:
Accrued distribution to Jones Intercable $ 3,226,517 $ - $ -
============== ============= =============
The accompanying notes to financial statements
are an integral part of these statements.
14
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 14-A, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on February 6, 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.
On January 8, 1988, the Partnership and Cable TV Fund 14-B, Ltd. ("Fund
14-B") formed Cable TV Fund 14-A/B Venture (the "Venture"), to acquire the cable
television system serving areas in and around Broward County, Florida (the
"Broward System"). The Partnership contributed $18,975,000 to the capital of the
Venture for a 27 percent ownership interest and Fund 14-B contributed
$51,025,000 to the capital of the Venture for a 73 percent ownership interest.
As discussed below, the Venture sold the Broward System on March 31, 1998.
Because the Broward System represented the only asset of the Venture, the
Venture was liquidated and dissolved in October 1998.
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. References in these Notes to "the General Partner"
refer to Comcast JOIN Holdings, Inc. The General Partner shares corporate
offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
Cable Television System Acquisitions
The Partnership acquired the cable television systems serving certain
areas in and around the communities of Turnersville, New Jersey (the
"Turnersville System"); Buffalo, Minnesota (the "Buffalo System"); Naperville,
Illinois (the "Naperville System"); and Calvert County, Maryland (the "Calvert
County System") in 1987. In 1991, the Partnership purchased additional cable
television systems serving certain communities in rural central Illinois (the
"Central Illinois System").
15
Cable Television System Sales
Buffalo System
On March 29, 1999, the Partnership sold the Buffalo System to an
unaffiliated party for a sales price of $26,605,000. From the sale proceeds, the
Partnership paid $13,500,000 outstanding on its revolving credit facility, paid
a brokerage fee to The Intercable Group, Ltd. ("The Intercable Group"), a
subsidiary of Jones Intercable, totaling $665,125, representing 2.5 percent of
the sales price, for acting as a broker in this transaction, settled working
capital adjustments and deposited $1,200,000 into an interest-bearing indemnity
escrow account. The remaining net sale proceeds of $10,874,000 were distributed
in April 1999 to the Partnership's limited partners of record as of the closing
date of the sale of the Buffalo System. This distribution from the sale of the
Buffalo System represented $68 for each $500 limited partnership interest, or
$136 for each $1,000 invested in the Partnership. Because the distribution to
the limited partners from the sale of the Buffalo System, together with all
prior distributions, did not return to the limited partners 125 percent of the
capital initially contributed to the Partnership by the limited partners, all of
the net proceeds from the sale of the Buffalo System were distributed to the
limited partners and Jones Intercable did not receive a general partner
distribution from the sale of the Buffalo System.
Until August 1999, $1,200,000 of sale proceeds remained in an
interest-bearing indemnity escrow account as security for the Partnership's
agreement to indemnify the buyer under the asset purchase agreement. The escrow
period expired and claims of $30,539 were made on the escrowed funds by the
buyer. The Partnership paid the buyer's claims and then distributed the escrowed
funds plus interest, which totaled $1,186,476, to the Partnership's limited
partners in December 1999.
Naperville System
On May 7, 1999, the Partnership sold the Naperville System to an
unaffiliated party for a sales price of $22,545,875. From the sale proceeds, the
Partnership paid the $10,350,000 balance outstanding on its revolving credit
facility, paid a brokerage fee to The Intercable Group totaling $563,647,
representing 2.5 percent of the sales price, for acting as a broker in this
transaction, settled working capital adjustments, and then deposited $696,000
into an interest-bearing indemnity escrow account. The remaining net sale
proceeds of $10,000,000 were distributed in May 1999 to the Partnership's
limited partners of record as of the closing date of the sale of the Naperville
System. This distribution gave the Partnership's limited partners an approximate
return of $62.50 for each $500 limited partnership interest, or $125 for each
$1,000 invested in the Partnership. Because the distribution to the limited
partners from the sale of the Naperville System, together with all prior
distributions, did not return to the limited partners 125 percent of the capital
initially contributed to the Partnership by the limited partners, all of the net
proceeds from the sale of the Naperville System were distributed to the limited
partners and Jones Intercable did not receive a general partner distribution
from the sale of the Naperville System.
The $696,000 of sale proceeds placed in an interest-bearing indemnity
escrow account remained in escrow until December 14, 1999, as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. No claims were made on the escrowed funds by the buyer. The escrowed
funds plus interest, which totaled $714,647, were returned to the Partnership in
December 1999. From the escrowed funds, the Partnership paid certain liabilities
and it will hold the balance in reserve to cover the administrative expenses of
the Partnership.
Calvert County System
On July 6, 1999, the Partnership sold the Calvert County System to a
subsidiary of Jones Intercable for a sales price of $39,388,667. From the sale
proceeds, the Partnership paid certain fees and expenses of the transaction,
retained funds necessary to cover the administrative expenses of the Partnership
and distributed a portion of the net sale proceeds of approximately $30,813,524
to the Partnership's partners of record as of the closing date of the sale of
the Calvert County System. The limited partners, as a group, received
$27,587,007 of this amount. This distribution to the limited partners gave the
Partnership's limited partners an approximate return of $172 for each $500
limited partnership interest, or $344 for each $1,000 invested in the
Partnership. Because at the time of the Calvert County System's sale, the
distributions made to the limited partners from the Calvert County System sale
and from prior sales of cable television systems returned to the limited
partners more than 125 percent of the amounts originally contributed to the
Partnership by the limited partners, Jones Intercable received a general partner
distribution of $3,226,517 from the proceeds of the sale of the Calvert County
System.
Although the sale of the Calvert County System represented the sale of
the only remaining operating asset of the Partnership, the Partnership will not
be dissolved until the pending litigation relating to the Partnership has been
resolved and terminated. (See Note 7.)
16
Broward System
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 repaid the outstanding balance on its credit facility,
paid a brokerage fee to The Intercable Group, settled working capital
adjustments and then distributed $95,708,056 to the two constituent partnerships
of the Venture in proportion to their ownership interests in the Venture.
Accordingly, the Partnership received 27 percent of the net sale proceeds, or
$25,937,002. In April 1998, the Partnership distributed $25,484,569, its net
sale proceeds, to its limited partners of record as of March 31, 1998 and the
Partnership retained $452,433 for working capital purposes. Because the Broward
System represented the only asset of the Venture, the Venture was liquidated and
dissolved in October 1998.
Central Illinois System
On June 30, 1997, the Partnership sold the Central Illinois System to
an unaffiliated party for a sales price of $20,005,280. The Partnership repaid
$9,800,000 of the balance outstanding on its credit facility, paid a brokerage
fee of $502,500 to The Intercable Group, settled working capital adjustments and
distributed $9,547,500 of the sale proceeds to its limited partners in July
1997. Such distribution represented approximately $60 for each $500 limited
partnership interest, or $120 for each $1,000 invested in the Partnership.
Because the distributions to the limited partners from the sales of the
Turnersville System in January 1997 and the Central Illinois System in June 1997
did not return 125 percent of the capital initially contributed to the
Partnership by the limited partners, Jones Intercable did not receive a general
partner distribution from the proceeds of the sale of the Central Illinois
System.
Turnersville System
On January 10, 1997, the Partnership sold the Turnersville System to an
unaffiliated party for a sales price of $84,500,000. From the sale proceeds, the
Partnership repaid $57,387,500 of the balance outstanding on its credit
facility, paid a brokerage fee of $2,112,500 to The Intercable Group, settled
working capital adjustments and distributed $25,000,000 of the sale proceeds to
its limited partners in July 1997. Such distribution represented approximately
$156 for each $500 limited partnership interest, or $312 for each $1,000
invested in the Partnership. Because the $25,000,000 distribution to the limited
partners did not return 125 percent of the capital initially contributed to the
Partnership by the limited partners, Jones Intercable did not receive a general
partner distribution from the proceeds of the sale of the Turnersville System.
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.
The general partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99 percent to
the limited partners and 1 percent to the general partner, except for income or
gain from the sale or disposition of cable television properties, which will be
allocated to the partners based upon the formula set forth in the Partnership's
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 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.
17
Investment in Cable Television Joint Venture
The Partnership owned a 27 percent interest in the Venture through a
capital contribution made in March 1988 of $18,975,000. The Venture acquired the
Broward System in March 1988. The Venture reported net income of $83,036,505 in
1998, of which $22,599,271 was allocated to the Partnership, and the Partnership
also received distributions totaling $25,937,002 from the Venture's sale of the
Broward System. The Venture incurred a loss of $2,310,292 in 1997, of which
$626,089 was allocated to the Partnership. The investment was accounted for on
the equity method. The Venture sold the Broward System on March 31, 1998 and the
Venture was liquidated and dissolved in October 1998.
Property, Plant and Equipment
Depreciation of property, plant and equipment was provided primarily
using the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 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 become fully depreciated and
were no longer in service.
Intangible Assets
Costs assigned to intangible assets were amortized using the
straight-line method over the following remaining estimated useful lives:
Franchise costs 1 - 11 years
Costs in excess of interests in net assets purchased 29 years
Revenue Recognition
Subscriber prepayments were initially deferred and recognized as
revenue when earned.
(3) TRANSACTIONS WITH JONES INTERCABLE AND AFFILIATES
Brokerage Fees
The Intercable Group performed brokerage services for the Partnership
and the Venture. For brokering the Partnership's sales of the Buffalo System and
the Naperville System, The Intercable Group earned fees totaling $665,125 and
$563,647, respectively, or 2.5 percent of the respective sales prices, for the
year ended December 31, 1999. For brokering the Venture's sale of the Broward
System, The Intercable Group earned a $3,500,000 fee, or 2.5 percent of the
sales price, for the year ended December 31, 1998. For brokering the
Partnership's sales of the Turnersville System and the Central Illinois System,
The Intercable Group earned fees totaling $2,112,500 and $502,500, respectively,
or 2.5 percent of the respective sales prices, for the year ended December 31,
1997.
Management Fees, Distribution Ratios and Reimbursements
Jones Intercable managed the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises, until the sale
of its Calvert County System on July 6, 1999. Jones Intercable has not received
and will not receive a management fee after July 6, 1999. Management fees for
the years ended December 31, 1999, 1998 and 1997 were $477,637, $1,172,921 and
$1,332,112, respectively.
Any distributions made from cash flow (defined as cash receipts derived
from routine operations, less debt principal and interest payments and cash
expenses) are allocated 99 percent to the limited partners and 1 percent to the
general partner. Any
18
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, will be 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.
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 by the Partnership for overhead and administrative expenses
during the years ended December 31, 1999, 1998 and 1997 were $538,880,
$1,471,663 and $1,526,293, respectively.
The Partnership was charged interest during 1999 at an average interest
rate of 7.18 percent on the amounts due to Jones Intercable, which approximated
Jones Intercable's weighted average cost of borrowing. Total interest charged to
the Partnership by Jones Intercable was $11,371, $3,728 and $2,783 for the years
ended December 31, 1999, 1998 and 1997, respectively.
Payments to/from Affiliates for Programming Services
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 totaled $13,332, $39,430 and $40,647 in 1999,
1998 and 1997, respectively. Payments to Knowledge TV, Inc. totaled $11,871,
$40,959 and $46,123 in 1999, 1998 and 1997, respectively. Payments to Jones
Computer Network, Ltd., whose service was discontinued in April 1997, totaled
$22,173 in 1997. Payments to Great American Country, Inc. totaled $11,573,
$32,421 and $28,314 in 1999, 1998 and 1997, respectively.
The Partnership received a commission from Product Information Network
based on a percentage of advertising revenue and number of subscribers. Product
Information Network paid commissions to the Partnership totaling $17,583,
$63,159 and $87,685 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:
December 31,
------------------------
1999 1998
---------- ------------
Cable distribution systems $ -- $ 88,196,420
Equipment and tools -- 2,620,566
Office furniture and equipment -- 832,850
Buildings -- 199,109
Vehicles -- 1,111,342
Land -- 71,925
---------- ------------
-- 93,032,212
Less - accumulated depreciation -- (57,669,712)
---------- ------------
$ -- $ 35,362,500
========== ============
19
(5) DEBT
----
December 31,
-----------------------
Debt consisted of the following: 1999 1998
---------- -----------
Lending institutions-
Revolving credit and term loan $ -- $23,050,000
Capital lease obligations -- 382,210
---------- -----------
$ -- $23,432,210
========== ===========
The Partnership was a party to a revolving credit facility. The
Partnership repaid $13,500,000 upon the closing of the sale of the Buffalo
System on March 29, 1999, and it repaid the remaining balance of $10,350,000
upon the sale of the Naperville System on May 6, 1999. Interest on the revolving
credit facility's outstanding balance was at the Partnership's option of the
London Interbank Offered Rate plus 1.125 percent, the Certificate of Deposit
Rate plus 1.25 percent or the Base Rate plus .125 percent.
(6) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by Jones
Intercable.
The Partnership's tax returns, the qualification of the Partnership as
such for tax purposes, and the amount of distributable partnership income or
loss are subject to examination by federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's 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 (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 income and
the net income reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
-----------------------------
Litigation Challenging Jones Intercable's Acquisition of the Calvert
-----------------------------------------------------------------------
County System
-------------
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 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
- -----------------------------------------------------
20
(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.
-------------
Jones Intercable 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 Jones Intercable 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. Jones Intercable 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 percent of the limited partnership interests in each of the managed
partnerships named as defendants, and that plaintiffs were frustrated in this
purpose by Jones Intercable's alleged refusal to provide plaintiffs with lists
of the names and addresses of the limited partners of these partnerships. The
complaint alleges that Jones Intercable's actions constituted a breach of
contract, a breach of Jones Intercable's implied covenant of good faith and fair
dealing owed to the plaintiffs as limited partners, a breach of Jones
Intercable's fiduciary duty owed to the plaintiffs as limited partners and
tortious interference with prospective economic advantage. Plaintiffs allege
that Jones Intercable's failure to provide them with the partnership lists
prevented them from making their tender offers and that they have been injured
by such action in an amount to be proved at trial, but not less than $17
million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs' leave to amend their complaint to attempt to cure the deficiencies
in the pleadings. The plaintiffs filed their first amended complaint in January
2000.
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.
21
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
Year Ended December 31,
------------------------------------------
1999 1998 1997
---------- ---------- ----------
Maintenance and repairs $ 85,583 $ 286,265 $ 346,054
========== ========== ==========
Taxes, other than income and payroll taxes $ 63,218 $ 167,877 $ 158,832
========== ========== ==========
Advertising $ 73,491 $ 160,601 $ 420,665
========== ========== ==========
Depreciation of property, plant and equipment $3,064,396 $7,706,654 $7,626,491
========== ========== ==========
Amortization of intangible assets $ 321,843 $ 956,268 $2,485,144
========== ========== ==========
22
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 Comcast 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 disclosing
23
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 has no employees; however, various personnel are
required to administer the financial, tax and legal affairs of the Partnership.
Such personnel are employed by Comcast and, pursuant to the terms of the limited
partnership agreement of the Partnership, the costs of such employment are
charged by Comcast to the Partnership. See ITEM 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
As of December 31, 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. The Partnership will continue
to reimburse its general partner for actual time spent on Partnership business
by the employees of Comcast until the Partnership is liquidated and dissolved.
During the year ended December 31, 1999, such reimbursements totaled $538,880.
Prior to the sales of the Partnership's cable television systems, 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 $477,637. It is expected that
the Partnership will never again pay management fees.
An affiliate of Jones Intercable performed brokerage services for the
Partnership in connection with the Partnership's sales of the Buffalo System and
the Naperville System and was paid brokerage fees totaling $665,125 and
$563,647, respectively, or 2.5% of the respective sale prices, during the year
ended December 31, 1999. It is expected that the Partnership will never again
pay brokerage 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 $11,371.
Prior to the sales of the Partnership's cable television systems, the
Partnership paid programming service fees to affiliates of Jones Intercable. The
amounts 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.
24
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-A, Ltd.
(incorporated by reference from the Partnership's Report on Form 10-K
for the fiscal year ended December 31, 1987)
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
25
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-A, 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)
26