AMERICAN CABLE TV INVESTORS 5 LTD - 10-K Annual Report

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1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

[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 [NO FEE REQUIRED]
For the transition period from _____ to _____

Commission File No. 0-16784

AMERICAN CABLE TV INVESTORS 5, LTD.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)

State of Colorado 84-1048934
- --------------------------------- ---------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

9197 South Peoria Street
Englewood, Colorado 80112
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (720) 875-4000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
200,005 Limited Partnership Units Sold to Investors at $500 per Unit

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 of the Securities Exchange Act of 1934
during the preceding 12 months; and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [ ]

State the aggregate market value of the voting stock held by non-affiliates
of the Registrant. N/A

2

AMERICAN CABLE TV INVESTORS 5, LTD.
1999 ANNUAL REPORT ON FORM 10-K

Table of Contents

Page
----
PART I

Item 1. Business ......................................................................... I-1

Item 2. Properties ....................................................................... I-3

Item 3. Legal Proceedings ................................................................ I-3

Item 4. Submission of Matters to a Vote of Security Holders .............................. I-3

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters .................................................... II-1

Item 6. Selected Financial Data .......................................................... II-1

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................................ II-3

Item 8. Financial Statements and Supplementary Data ...................................... II-9

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ............................................ II-9

PART III

Item 10. Directors and Executive Officers of the Registrant ............................... III-1

Item 11. Executive Compensation ........................................................... III-3

Item 12. Security Ownership of Certain Beneficial Owners
and Management ................................................................. III-3

Item 13. Certain Relationships and Related Transactions ................................... III-3

PART IV

Item 14. Exhibits, Financial Statements and Financial Statement
Schedules, and Reports on Form 8-K ............................................. IV-1

3

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

PART I.

Item 1. Business.

(a) General Development of Business

American Cable TV Investors 5, Ltd. ("ACT 5" or the "Partnership") is a
Colorado limited partnership that was formed in December of 1986 for the purpose
of acquiring, developing and operating cable television systems. The
Partnership's general partner is IR-TCI Partners V, L.P. ("IR-TCI" or the
"General Partner"), a Colorado limited partnership. At December 31, 1999, the
general partner of IR-TCI was TCI Ventures Five, Inc. ("TCIV 5"), a subsidiary
of TCI Cablevision Associates, Inc. ("Cablevision"). The limited partner of
IR-TCI is Cablevision Equities VI, a limited partnership whose partners are
certain former officers and key employees of the predecessor of Cablevision.
Cablevision is an indirect subsidiary of AT&T Broadband, LLC ("AT&T Broadband"),
formerly Tele-Communications, Inc., and is the managing agent of the
Partnership. Prior to its January 17, 1996 withdrawal, Integrated Cable Corp. V
("ICC"), an indirect subsidiary of Presidio Capital Corp. ("Presidio") also
served as a general partner of IR-TCI. In accordance with the terms of the
IR-TCI limited partnership agreement, TCIV 5 elected to continue the business of
IR-TCI. The withdrawal of ICC has not had and is not expected to have a material
effect on the Partnership's results of operations or financial condition.

On March 9, 1999, AT&T Corp. ("AT&T") acquired AT&T Broadband in a merger
(the "AT&T Merger"). In the AT&T Merger, AT&T Broadband became a subsidiary of
AT&T. The AT&T Merger has not had and is not expected to have a material effect
on the Partnership's results of operations or financial condition.

In its public offering that was conducted from May of 1987 to February of
1989, the Partnership sold 200,005 limited partnership units at a price of $500
per unit ("Unit").

The Partnership had a 40% ownership interest in Newport News Cablevision
Associates, L.P., and its subsidiary Newport News Cablevision, Ltd.
(collectively, "Newport News"). Newport News owned and operated the cable system
located in and around Newport News, Virginia (the "Newport News System").
American Cable TV Investors 4, Ltd., an affiliate, owned the 60% majority
interest in Newport News. The Newport News System was sold to an unaffiliated
third party for cash proceeds of $121,886,000 on January 1, 1996 (the "Newport
News Sale"). The Partnership's share of the cash proceeds from the sale of the
Newport News System was used to fund a distribution to ACT 5's limited partners
("Limited Partners") of $165 per Unit in 1996.

During 1997, ACT 5 sold three of its cable television systems in three
separate transactions. The cable television systems were located in and around
(i) Shelbyville and Manchester, Tennessee (the "Southern Tennessee System"),
(ii) St. Mary's County, Maryland (the "St. Mary's System") and (iii) Lower
Delaware (the "Lower Delaware System") (collectively, the "1997 Sales
Transactions"). The 1997 Sales Transactions were approved by the Limited
Partners at a special meeting that occurred on March 26, 1997. The cash proceeds
from the 1997 Sales Transactions were used to fund a distribution to the Limited
Partners of $370 per Unit in 1997.

I-1

4

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

General Development of Business (continued)

On December 7, 1999, the Partnership consummated the sale of its remaining
cable television system serving subscribers located in and around Riverside,
California (the "Riverside System") to Century Exchange LLC ("Century"), a
subsidiary of Adelphia Communications Corporation, for an unadjusted sales price
of $33 million (the "Riverside Sale"). The Riverside Sale was approved by the
Limited Partners at a special meeting that occurred on December 11, 1998. In
accordance with the terms of the asset purchase agreement relating to the
Riverside Sale, $1.5 million of the sales price has been placed in escrow for
180 days in order to satisfy any indemnifiable claims which may be made by
Century. In connection with the Riverside Sale, Century and the Partnership
waived the condition to closing that all required consents be obtained prior to
closing the Riverside Sale, as such condition related to the transfer to Century
of the franchise agreement between the Partnership and the City of Moreno Valley
that authorizes the Partnership to provide cable television service to
subscribers located in and around Moreno Valley, California (the "Moreno
Franchise Agreement"). Accordingly, all of the Riverside System's cable
television assets other than the Moreno Franchise Agreement were transferred to
Century on December 7, 1999. Consent to transfer the Moreno Franchise Agreement
to Century has not yet been obtained. In connection with the Riverside Sale, the
Partnership entered into a management agreement with Century pursuant to which
Century will be entitled to all net cash flows generated by the portion of the
Riverside System that is subject to the Moreno Franchise Agreement until such
time as the City of Moreno Valley approves the transfer of the Moreno Franchise
Agreement from the Partnership to Century. Upon receipt of such approval from
the City of Moreno Valley, the Moreno Franchise Agreement will be transferred to
Century post-closing and the management agreement will be terminated.

The Partnership anticipates that a distribution will be made to its General
Partner and Limited Partners of $410,000 and $40,601,000 ($203 per Unit for
Limited Partners of record as of April 1, 2000), respectively, in the second
quarter of 2000.

On December 7, 1999, AT&T Broadband and Century contributed cable
television systems to a joint venture (the "Joint Venture") that combined
multiple cable television systems in Southern California. Among those systems to
be contributed to the Joint Venture by AT&T Broadband was the cable television
system serving customers in Redlands, California (the "Redlands System"). The
Riverside System was among those systems that was contributed to the Joint
Venture by Century. AT&T Broadband has an approximate 25% interest in the Joint
Venture, which is managed by Century. AT&T Broadband, through certain of its
subsidiaries, owns a 100% ownership interest IR-TCI.

As a result of the Riverside Sale, the Partnership is no longer actively
engaged in the cable television business and is currently seeking to make a
final determination of its liabilities so that liquidating distributions can be
made in connection with its dissolution. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."

(b) Financial Information about Industry Segments

Not applicable.

I-2

5

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

(c) Narrative Description of Business

Not meaningful.

(d) Financial Information about Foreign and Domestic Operations and Export
Sales

Not applicable.

Item 2. Properties.

Not meaningful.

Item 3. Legal Proceedings.

Late Fee Litigation. On February 17, 1999, in the Circuit Court for the
fourteenth judicial district at Manchester, Coffee County, Tennessee, the
Partnership was named in a certified class action entitled Johnny Clouse v.
American Cable TV Investors 5 Ltd., et al concerning late fee charges and
practices. The Partnership's Southern Tennessee System charged late fees to
customers who did not pay their cable bills on time. This late fee case
challenges the amount of the late fees and the practices under which they were
imposed. The Plaintiff raises claims under state consumer protection statutes,
other state statutes, and the common law. The plaintiff generally alleges that
the late fees charged by the cable system were not reasonably related to the
costs incurred by the cable systems as a result of the late payment. On March
17, 2000, the parties entered into a settlement agreement that is subject to
approval by the court. Management believes that such settlement agreement will
not have a material adverse effect upon the financial condition of the
Partnership. This case will not be reported on in the future.

City Partnership Co. on behalf of itself and all others similarly situated
and derivatively on behalf of American Cable TV Investors 5, Ltd., a Colorado
limited partnership, plaintiff v. IR-TCI Partners V, L.P., TCI Ventures Five,
Inc., Tele-Communications, Inc., Lehman Brothers, Inc. and Jack Langer,
Defendants, and American Cable TV Investors 5, Ltd., a Colorado limited
partnership, nominal defendants. On November 2, 1999 this action was filed in
the United States District Court for the District of Colorado, Civil Action No.
99-N-2122. The Partnership was served in this action on December 6, 1999. This
purported class action and derivative action asserts claims against the Company
for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of
1934 and breach of fiduciary duty in connection with the sale of the Riverside
System to Century Communications Corp. On February 10, 2000, the Defendants
filed motions to dismiss Plaintiff's complaint. The Court has not yet ruled on
such motions. No Defendant to date has filed an answer to the Complaint, and a
statutory stay of discovery is in effect pending the Court's determination of
the pending motions. Based upon the limited facts available, management believes
that, although no assurance can be given as to the outcome of this action, the
ultimate disposition should not have a material adverse effect upon the
financial condition of the Partnership.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

I-3

6

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

PART II.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

In its public offering that was conducted from May 1987 to February 1989,
the Partnership sold 200,005 Units to the public at a price of $500 per Unit. At
December 31, 1999, there were approximately 11,734 Unit holders.

Although the Units are freely transferable, no public trading market for
the Units exists. To the extent that an informal or secondary market exists, the
Limited Partners may only be able to sell Units at a substantial discount from
the Units' proportionate share of the estimated market value of the underlying
net assets of the Partnership.

The Partnership used most of its share of the net proceeds from the Newport
News Sale to make distributions in 1996 to Presidio, TCIV 5 and the Limited
Partners of $67,000, $266,000 and $33,001,000 ($165 per Unit for Limited
Partners of record as of January 1, 1996), respectively. The Partnership used
most of the net proceeds from the sale of the Southern Tennessee, St. Mary's and
Lower Delaware Systems to make distributions in 1997 to Presidio, TCIV 5 and the
Limited Partners of $149,000, $598,000 and $74,002,000 ($370 per Unit for
Limited Partners of record as of July 1, 1997), respectively.

The Partnership anticipates that a distribution will be made to its General
Partner and Limited Partners of $410,000 and $40,601,000 ($203 per unit for
Limited Partners of record as of April 1, 2000), respectively, in the second
quarter of 2000.

Item 6. Selected Financial Data.

Selected financial data related to the Partnership's financial condition
and results of operations for the five years ended December 31, 1999 are
summarized as follows (such information should be read in conjunction with the
Partnership's financial statements included elsewhere herein):

SUMMARY BALANCE SHEET DATA:

December 31,
-------------------------------------------------------
1999 (1) 1998 1997 (2) 1996 1995
-------- ------ -------- ------ ------
amounts in thousands

Cash and cash equivalents $49,067 16,134 16,400 4,729 2,132
Property and equipment, net $ -- 7,814 8,261 38,732 39,794
Franchise costs and other intangibles,
net $ -- 5,597 7,963 28,877 37,050
Total assets $51,457 30,501 35,578 73,209 79,936
Debt $ -- -- -- 7,500 8,700
Partners' equity $49,306 28,447 28,941 60,137 57,840
Units outstanding 200 200 200 200 200

II-1

7

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

SUMMARY STATEMENT OF OPERATIONS DATA:

Years ended December 31,
----------------------------------------------------------------
1999 (1) 1998 1997 (2) 1996 1995
-------- ------ -------- ------ ------
amounts in thousands, except per Unit amounts

Revenue $ 9,456 9,542 16,255 28,108 26,196
Operating loss $ (1,060) (1,044) (2,352) (4,556) (4,867)
Interest expense $ -- -- (135) (302) (925)
Interest income $ 982 752 1,947 494 81
Share of earnings (losses) of
Newport News $ -- -- -- 39,995 (652)
Gain on sale of cable television
systems $ 20,937 -- 44,093 -- --
Net earnings (loss) $ 20,859 (494) 43,553 35,631 (6,164)
Net earnings (loss) per Unit $ 103.25 (2.45) 215.58 176.37 (30.51)
Distributions per Unit $ -- -- 370 165 --

- ------------

(1) The December 31, 1999 summary balance sheet and summary statement of
operations data reflect the effect of the Riverside Sale. As a result of
the Riverside Sale, the Partnership's statement of operations for the year
ended December 31, 1999 includes eleven months of operating results for the
Riverside System. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - General".

(2) The December 31, 1997 summary balance sheet data and summary statement of
operations data reflect the effects of the 1997 Sales Transactions. As a
result of the 1997 Sales Transactions, the Partnership's statement of
operations for the year ended December 31, 1997 includes (i) three months
of operating results for the Southern Tennessee and St. Mary's Systems,
(ii) six months of operating results for the Lower Delaware System and
(iii) twelve months of operating results for the Riverside System. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - General".

II-2

8

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

General

AT&T Merger. On March 9, 1999, AT&T acquired AT&T Broadband in a merger. In
the AT&T Merger, AT&T Broadband became a subsidiary of AT&T. The AT&T Merger has
not had and is not expected to have a material effect on the Partnership's
results of operations or financial condition.

Asset Sales. On April 1, 1997, the Partnership sold the Southern Tennessee
System to Rifkin Acquisition Partners, L.L.L.P. ("Rifkin") for an adjusted sales
price of $19,647,000. Pursuant to the asset purchase agreement for the sale of
the Southern Tennessee System, $494,000 of such sales price was placed in escrow
(the "Southern Tennessee Escrow") and was subject to indemnifiable claims made
by Rifkin through March 31, 1998. Prior to March 31, 1998, Rifkin filed a claim
against the Southern Tennessee Escrow relating to a class action lawsuit filed
by a customer challenging late fee charges with respect to the Southern
Tennessee System. On September 14, 1999, Rifkin sold the Southern Tennessee
System to an affiliate of Charter Communications, Inc. ("Charter"). In
connection with such sale, Charter was assigned the rights to the
indemnification claim. Such claim has had and will continue to have the effect
of delaying the release of the Southern Tennessee Escrow. In addition, such
claim may have the effect of reducing the amount of the Southern Tennessee
Escrow ultimately released to ACT 5.

On April 16, 1997, the Partnership sold the St. Mary's System to Gans
Multimedia Partnership ("Gans") for an adjusted sales price of $30,547,000 (the
"St. Mary's Sale"). Pursuant to the asset purchase agreement for the St. Mary's
Sale, $766,000 of such sales price was placed in escrow (the "St. Mary's
Escrow") and was subject to indemnifiable claims made by Gans through April 15,
1998. The St. Mary's Escrow was released to ACT 5 during the second quarter of
1998. ACT 5 received interest of $39,000 in conjunction with the release of the
St. Mary's Escrow.

On June 24, 1997, the Partnership sold the Lower Delaware System to
Mediacom Delaware LLC ("Mediacom") for an adjusted sales price of $42,191,000
(the "Lower Delaware Sale"). Pursuant to the asset purchase agreement for the
Lower Delaware Sale, $1,077,000 of such sales price was placed in escrow (the
"Lower Delaware Escrow") and was subject to indemnifiable claims made by
Mediacom through June 23, 1998. The Lower Delaware Escrow was released to ACT 5
during the third quarter of 1998. ACT 5 received interest of $57,000 in
conjunction with the release of the Lower Delaware Escrow.

The 1997 Sales Transactions were approved by the Limited Partners at a
special meeting that occurred on March 26, 1997. The Partnership used proceeds
from the 1997 Sales Transactions to pay disposition fees of $2,778,000 to
Cablevision, repay debt and related accrued interest of $8,652,000, and make
distributions to its General Partner and Limited Partners of $747,000 and
$74,002,000 ($370 per Unit for Limited Partners of record as of July 1, 1997),
respectively.

II-3

9

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

General (continued)

On December 7, 1999, the Partnership consummated the sale of its remaining
cable television system serving subscribers located in and around Riverside,
California to Century for an unadjusted sales price of $33 million. The
Riverside Sale was approved by the Limited Partners at a special meeting that
occurred on December 11, 1998. In accordance with the terms of the asset
purchase agreement relating to the Riverside Sale, $1.5 million of the sales
price has been placed in escrow for 180 days in order to satisfy any
indemnifiable claims which may be made by Century. In connection with the
Riverside Sale, Century and the Partnership waived the condition to closing that
all required consents be obtained prior to closing the Riverside Sale, as such
condition related to the transfer to Century of the franchise agreement between
the Partnership and the City of Moreno Valley that authorizes the Partnership to
provide cable television service to subscribers located in and around Moreno
Valley, California. Accordingly, all of the Riverside System's cable television
assets other than the Moreno Franchise Agreement were transferred to Century on
December 7, 1999. Consent to transfer the Moreno Franchise Agreement to Century
has not yet been obtained. In connection with the Riverside Sale, the
Partnership entered into a management agreement with Century pursuant to which
Century will be entitled to all net cash flows generated by the portion of the
Riverside System that is subject to the Moreno Franchise Agreement until such
time as the City of Moreno Valley approves the transfer of the Moreno Franchise
Agreement from the Partnership to Century. Upon receipt of such approval from
the City of Moreno Valley, the Moreno Franchise Agreement will be transferred to
Century post-closing and the management agreement will be terminated.

The Partnership anticipates that a distribution will be made to its General
Partner and Limited Partners of $410,000 and $40,601,000 ($203 per Unit for
Limited Partners of record as of April 1, 2000), respectively, in the second
quarter of 2000.

On December 7, 1999, AT&T Broadband, an affiliate of the Partnership, and
Century contributed cable television systems to the Joint Venture that combined
multiple cable television systems in Southern California. Among those systems to
be contributed to the Joint Venture by AT&T Broadband was the Redlands System.
The Riverside System was among those systems that was contributed to the Joint
Venture by Century. AT&T Broadband has an approximate 25% interest in the Joint
Venture, which is managed by Century.

As a result of the Riverside Sale, the Partnership is no longer actively
engaged in the cable television business and is currently seeking to make a
final determination of its liabilities so that liquidating distributions can be
made in connection with its dissolution. See "Liquidity and Capital Resources."

II-4

10

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Year 2000. During 1999, AT&T Broadband, in its capacity as the indirect
parent of the managing agent of the Partnership, completed its enterprise-wide,
comprehensive efforts to assess and remediate the Partnership's computer systems
and related software and equipment to ensure such systems, software and
equipment recognize, process and store information in the year 2000 and
thereafter. AT&T Broadband allocated expenses to the Partnership totaling
$114,000 during 1999 in connection with the year 2000 remediation efforts for
the Partnership. In addition, the Partnership incurred capital expenditures of
$56,000 during 1999 in connection with year 2000 remediation efforts. The
Partnership did not experience any significant problems with the changeover to
the year 2000.

Results of Operations

Material Changes in Results of Operations - 1999 compared to 1998

Revenue decreased $86,000 or 1% during the year ended December 31, 1999, as
compared to the corresponding prior year period. Such decrease was primarily
attributable to the timing of the Riverside Sale and was partially offset by an
increase in revenue from cable customers prior to the Riverside Sale.

Programming expense increased $132,000 or 6% for the year ended December
31, 1999, as compared to the corresponding prior year period. Such increase was
primarily due to higher programming rates and was partially offset by the effect
of the Riverside Sale.

Operating expenses increased $41,000 or 3% for the year ended December 31,
1999, as compared to the corresponding prior year period. Such increase was
primarily due to the net effects of higher labor costs associated with increased
levels of customer service, increased launch and development costs related to
the roll-out of digital video products and a decrease in expenses due to the
timing of the Riverside Sale.

Selling, general and administrative ("SG&A") expenses increased $41,000 or
1% for the year ended December 31, 1999, as compared to the corresponding prior
year period. Such increase was primarily attributable to higher salaries and
benefits associated with increased levels of customer service and increased
launch and development costs related to the roll-out of digital video products
and higher management fees. Such increase was partially offset by the effect of
the Riverside Sale and a decrease in legal expenses.

Year 2000 costs include fees and other expenses allocated from AT&T
Broadband in connection with AT&T Broadband's comprehensive efforts to review
and correct the Partnership's computer systems, equipment and related software
to ensure readiness for the year 2000. See discussion under "General - Year
2000" above.

Depreciation and amortization decreased $398,000 or 10% for the year ended
December 31, 1999, as compared to the corresponding prior year period. Such
decrease was primarily attributable to the timing of the Riverside Sale. In
addition, amortization expense for 1998 included $92,000 attributable to the
year ended December 31, 1997.

II-5

11

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Material Changes in Results of Operations - 1998 compared to 1997

The decreases in the Partnership's revenue and operating costs and expenses
for the year ended December 31, 1998, as compared to the corresponding prior
year period, resulted primarily from the timing of the 1997 Sales Transactions.
See "General - Asset Sales" above.

Revenue decreased $6,713,000 or 41% during the year ended December 31,
1998, as compared to the corresponding prior year period. Such decrease was
primarily attributable to the timing of the 1997 Sales Transactions. Revenue for
Riverside increased $910,000 or 11% for the year ended December 31, 1998, as
compared to the corresponding prior year period. Revenue from Riverside's
customers accounted for $367,000 of such increase, due to the net effect of a
$469,000 increase in basic revenue, a $185,000 increase in revenue from digital
products and a $287,000 decrease in traditional premium revenue. Riverside
experienced a 7% increase in its average basic rate, a 2% increase in the
average number of basic customers, a 5% decrease in its average rate for
traditional premium services, and a 2% decrease in the average number of
traditional premium subscriptions during the year ended December 31, 1998, as
compared to the corresponding prior year period. Advertising sales increased
$270,000 and other revenue accounted for the remaining increase in revenue.

Programming expense decreased $1,453,000 or 40% for the year ended December
31, 1998, as compared to the corresponding prior year period. Such decrease was
primarily attributable to the timing of the 1997 Sales Transactions. Programming
expense for Riverside increased $108,000 or 5% during the year ended December
31, 1998, as compared to the corresponding prior year period. Such increase was
primarily attributable to higher programming rates.

Operating expenses decreased $661,000 or 35% for the year ended December
31, 1998, as compared to the corresponding prior year period. Such decrease was
primarily attributable to the timing of the 1997 Sales Transactions. Operating
expenses for Riverside increased $367,000 or 44% for the year ended December 31,
1998, as compared to the corresponding prior year period. The 1998 increase was
primarily due to increased labor costs related to the hiring of additional
operating personnel in conjunction with Riverside's efforts to increase the
number of customers who subscribe to digital video services.

SG&A expenses decreased $2,726,000 or 45% during the year ended December
31, 1998, as compared to the corresponding prior year period. Such decrease was
primarily attributable to the timing of the 1997 Sales Transactions. Exclusive
of the effects of the 1997 Sales Transactions, SG&A expenses for the Partnership
increased $258,000 or 8% for the year ended December 31, 1998, as compared to
the corresponding prior year period. The 1998 increase was due to increased
costs relating to costs associated with the negotiation and Limited Partner
approval of the Riverside Sale and the launch of digital products.

Depreciation and amortization decreased $3,181,000 or 45% during the year
ended December 31, 1998, as compared to the corresponding prior year period.
Such decrease was primarily attributable to the timing of the 1997 Sales
Transactions. Depreciation and amortization for Riverside increased $126,000 or
4% for the year ended December 31, 1998, as compared to the corresponding prior
year period. The 1998 increase for Riverside was primarily attributable to
capital expenditures.

II-6

12

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Other Income (Expense)

The Partnership used cash proceeds from the Southern Tennessee Sale to
repay all amounts outstanding under its bank credit facility and to terminate
such facility during 1997. Accordingly, the Partnership did not incur any
interest expense after 1997.

Interest income increased $230,000 or 31% and decreased $1,195,000 or 61%
during the years ended December 31, 1999 and 1998, respectively, as compared to
the corresponding prior year periods. The increase in 1999 is due to an increase
in the average balance of the Partnership's cash and cash equivalents resulting
primarily from cash proceeds received in connection with the Riverside Sale. The
decrease in 1998 was due to a decrease in the average balance of the
Partnership's cash and cash equivalents, primarily due to the distribution of
cash proceeds related to the 1997 Sales Transactions during the third quarter of
1997.

During the first quarter of 1998, the Partnership expensed $202,000 of
deferred loan costs that were related to debt that was repaid in 1997.

The Partnership recorded a gain from the Riverside Sale of $20,937,000
during the year ended December 31, 1999 and recorded gains from the 1997 Sales
Transactions aggregating $44,093,000 during the year ended December 31, 1997.

Inflation did not have a significant impact on the Partnership's financial
condition or results of operations during the three-year period ended December
31, 1999.

Liquidity and Capital Resources

At December 31, 1999, the Partnership held cash and cash equivalents of
$49,067,000. During the year ended December 31, 1999, the Partnership received
net cash proceeds from the Riverside Sale of $31,832,000. The Partnership
anticipates that a distribution will be made to its General Partner and Limited
Partners of $410,000 and $40,601,000 ($203 per Unit for Limited Partners of
record as of April 1, 2000), respectively, in the second quarter of 2000. The
Partnership anticipates that it will make liquidating distributions in
connection with its dissolution as soon as possible following the final
determination and satisfaction of the Partnership's liabilities.

As previously described under "General - Asset Sales", pursuant to the
terms of the asset purchase agreement relating to the Riverside Sale, $1.5
million of the sales price was placed in escrow for 180 days in order to satisfy
any indemnifiable claims which may be made by Century.

II-7

13

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Liquidity and Capital Resources (continued)

As previously described under "General - Asset Sales", pursuant to the
asset purchase agreement for the sale of the Southern Tennessee System, $494,000
of the sales price for the Southern Tennessee System was placed in escrow and
was subject to indemnifiable claims for up to one year following consummation of
the sale of the Southern Tennessee System. Prior to its release, Rifkin filed a
claim against the Southern Tennessee Escrow relating to a class action lawsuit
filed by a customer challenging late fee charges with respect to the Southern
Tennessee System. On September 14, 1999, Rifkin sold the Southern Tennessee
System to an affiliate of Charter. In connection with such sale, Charter was
assigned the rights to the indemnification claim. Such claim has had and will
continue to have the effect of delaying the release of the Southern Tennessee
Escrow. In addition, such claim may have the effect of reducing the amount of
the Southern Tennessee Escrow ultimately released to ACT 5.

On November 2, 1999 a limited partner of ACT 5 filed suit in United States
District Court for the District of Colorado against the General Partner of ACT
5. The lawsuit also names certain affiliates of the General Partner as
defendants. The lawsuit alleges that the defendants violated disclosure
requirements under the Securities Exchange Act of 1934 in connection with
soliciting limited partner approval of the Riverside Sale and that certain
defendants breached their fiduciary duty in connection with the Riverside Sale.

Section 21 of the Partnership Agreement provides that the General Partner
and its affiliates, subject to certain conditions set forth in more detail in
the Partnership Agreement, are entitled to be indemnified for any liability or
loss incurred by them by reason of any act performed or omitted to be performed
by them in connection with the business of ACT 5, provided that the General
Partner determines, in good faith, that such course of conduct was in the best
interests of ACT 5 and did not constitute proven fraud, negligence, breach of
fiduciary duty or misconduct. In this regard, it is anticipated that legal fees
incurred by the defendants with respect to the above lawsuit will be paid by ACT
5.

The claim against the Southern Tennessee Escrow and the above described
lawsuit may have the effect of delaying any final liquidating distributions of
the Partnership.

At December 31, 1999, the Partnership had $613,000 of unclaimed
distribution checks payable to certain Limited Partners which were written on a
bank account which was subsequently closed. Such checks will either be reissued
to such Limited Partners or released to the respective state of such Limited
Partners' last known residence upon dissolution of the Partnership.

During the year ended December 31, 1999, the Partnership expended $1.0
million for capital expenditures.

II-8

14

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Item 8. Financial Statements and Supplementary Data.

The financial statements of the Partnership are filed under this item
beginning on Page II-10. All financial statement schedules are omitted as they
are not required or are not applicable.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

II-9

15

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Independent Auditors' Report

The Partners
American Cable TV Investors 5, Ltd.:

We have audited the accompanying balance sheets of American Cable TV Investors
5, Ltd. (a Colorado limited partnership) as of December 31, 1999 and 1998, and
the related statements of operations, partners' equity, and cash flows for each
of the years in the three-year period ended December 31, 1999. These financial
statements are the responsibility of the Partnership'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.

As discussed in note 2 to the financial statements, the Partnership sold
substantially all of its cable television assets and is currently in the process
of determining its final liabilities so that liquidating distributions can be
made.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Cable TV Investors 5,
Ltd. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
1999, in conformity with generally accepted accounting principles.

KPMG LLP

Denver Colorado
March 3, 2000

II-10

16

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Balance Sheets

December 31, 1999 and 1998

(See note 2)

1999 1998
------- -------
amounts in thousands

Assets

Cash and cash equivalents $49,067 16,134

Trade and other receivables 396 389
Less allowance for doubtful accounts -- 8
------- -------
396 381
------- -------

Property and equipment:
Cable distribution systems -- 18,610
Support equipment and buildings -- 1,473
------- -------
-- 20,083
Less accumulated depreciation -- 12,269
------- -------
-- 7,814
------- -------

Franchise costs -- 24,649
Less accumulated amortization -- 19,052
------- -------
-- 5,597
------- -------

Funds held in escrow (note 2) 1,994 494

Other assets -- 81
------- -------

$51,457 30,501
======= =======

(continued)

II-11

17

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Balance Sheets, continued

(See note 2)

1999 1998
-------- --------
amounts in thousands

Liabilities and Partners' Equity

Accounts payable $ 1 53

Accrued liabilities 302 222

Unclaimed limited partner distribution checks 613 639

Amounts due to related parties (note 3) 1,235 1,140
-------- --------

Total liabilities 2,151 2,054
-------- --------

Partners' equity (deficit):
General partner (2,808) (3,017)
Limited partners 52,114 31,464
-------- --------

Total partners' equity 49,306 28,447
-------- --------

Commitments and contingencies (notes 2, 3 and 4) $ 51,457 30,501
======== ========

See accompanying notes to financial statements.

II-12

18

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Statements of Operations

Years ended December 31, 1999, 1998 and 1997

(See note 2)

1999 1998 1997
-------- -------- --------
amounts in thousands,
except per unit amounts

Revenue $ 9,456 9,542 16,255

Operating costs and expenses:
Programming (primarily from related parties - note 3) 2,333 2,201 3,654
Operating (including allocations
from related parties - note 3) 1,252 1,211 1,872
Selling, general and administrative (including charges
and allocations from related parties - note 3) 3,397 3,356 6,082
Year 2000 costs 114 -- --
Depreciation 1,424 1,559 2,690
Amortization 1,996 2,259 4,309
-------- -------- --------

Total operating expenses 10,516 10,586 18,607
-------- -------- --------

Operating loss (1,060) (1,044) (2,352)

Other income (expense):
Interest expense -- -- (135)
Interest income 982 752 1,947
Write-off of deferred loan costs -- (202) --
Gain on sale of cable television systems (note 2) 20,937 -- 44,093
-------- -------- --------

21,919 550 45,905
-------- -------- --------

Net earnings (loss) $ 20,859 (494) 43,553
======== ======== ========

Net earnings (loss) per limited partnership
unit ("Unit") $ 103.25 (2.45) 215.58
======== ======== ========

See accompanying notes to financial statements.

II-13

19

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Statements of Partners' Equity

Years ended December 31, 1999, 1998 and 1997

(See note 2)

General Limited
partner partners Total
------- -------- -------
amounts in thousands

Balance at January 1, 1997 $(2,701) 62,838 60,137

Distribution (note 2) (747) (74,002) (74,749)

Net earnings 436 43,117 43,553
------- ------- -------

Balance at December 31, 1997 (3,012) 31,953 28,941

Net loss (5) (489) (494)
------- ------- -------

Balance at December 31, 1998 (3,017) 31,464 28,447

Net earnings 209 20,650 20,859
------- ------- -------

Balance at December 31, 1999 $(2,808) 52,114 49,306
======= ======= =======

See accompanying notes to financial statements.

II-14

20

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Statements of Cash Flows

Years ended December 31, 1999, 1998 and 1997

(See note 2)

1999 1998 1997
-------- -------- --------
amounts in thousands

Cash flows from operating activities:
Net earnings (loss) $ 20,859 (494) 43,553
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,420 3,818 6,999
Write-off of deferred loan costs -- 202 --
Gain on sale of cable television systems (20,937) -- (44,093)
Changes in operating assets and
liabilities, net of effects from sale of
cable television systems:
Net change in receivables
and other assets 34 (47) 164
Net change in accounts
payable, accrued
liabilities and amounts due
to related parties (1,247) (4,583) 2,907
-------- -------- --------

Net cash provided by (used in)
operating activities 2,129 (1,104) 9,530
-------- -------- --------

Cash flows from investing activities:
Capital expended for property and equipment (1,028) (1,073) (1,188)
Proceeds from sale of cable television systems, net of disposition fees paid
and funds held in escrow 31,832 1,843 87,270
Other investing activities -- 68 18
-------- -------- --------

Net cash provided by investing
activities $ 30,804 838 86,100
-------- -------- --------

(continued)

II-15

21

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Statements of Cash Flows, continued

Years ended December 31, 1999, 1998 and 1997

(See note 2)

1999 1998 1997
------- ------- -------
amounts in thousands

Cash flows from financing activities:
Borrowings of debt $ -- -- 1,000
Repayments of debt -- -- (8,500)
Distributions to partners -- -- (74,749)
Change in cash overdraft -- -- (1,710)
------- ------- -------

Net cash used in
financing activities -- -- (83,959)
------- ------- -------

Net change in cash and
cash equivalents 32,933 (266) 11,671

Cash and cash
equivalents:

Beginning of year 16,134 16,400 4,729
------- ------- -------

End of year $49,067 16,134 16,400
======= ======= =======

See accompanying notes to financial statements.

II-16

22

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

December 31, 1999, 1998 and 1997

(1) Summary of Significant Accounting Policies

Organization

American Cable TV Investors 5, Ltd. ("ACT 5" or the "Partnership") is a
Colorado limited partnership that was formed in December of 1986 for the
purpose of acquiring, developing, and operating cable television systems.
The Partnership had a 40% ownership interest in Newport News, which also
was formed in 1986 for the purpose of acquiring, developing and operating a
cable television system located in and around Newport News, Virginia (the
"Newport News System"). American Cable TV Investors 4, Ltd. ("ACT 4"), an
affiliate, owned the 60% majority interest in Newport News. As a result of
the sale of the Newport News System on January 1, 1996, Newport News was
liquidated in 1996.

The Partnership's general partner is IR-TCI Partners V, L.P. ("IR-TCI" or
the "General Partner"), a Colorado limited partnership. At December 31,
1999, the general partner of IR-TCI was TCI Ventures Five, Inc. ("TCIV 5"),
a subsidiary of TCI Cablevision Associates, Inc. ("Cablevision"). The
limited partner of IR-TCI is Cablevision Equities VI, a limited partnership
whose partners are certain former officers and key employees of the
predecessor of Cablevision. Cablevision is an indirect subsidiary of AT&T
Broadband, LLC ("AT&T Broadband"), formerly Tele-Communications, Inc., and
is the managing agent of the Partnership. Prior to its January 17, 1996
withdrawal, Integrated Cable Corp. V ("ICC"), an indirect subsidiary of
Presidio Capital Corp. ("Presidio"), also served as a general partner of
IR-TCI. In accordance with the terms of the IR-TCI limited partnership
agreement, TCIV 5 elected to continue the business of IR-TCI. The
withdrawal of ICC has not had and is not expected to have a material effect
on the Partnership's results of operations or financial condition.

In its public offering that was conducted from May of 1987 to February of
1989, the Partnership sold 200,005 limited partnership units to the public
resulting in gross proceeds of $100,002,500.

On March 9, 1999, AT&T Corp. ("AT&T") acquired AT&T Broadband in a merger
(the "AT&T Merger"). In the AT&T Merger, AT&T Broadband became a subsidiary
of AT&T. The AT&T Merger has not had and is not expected to have a material
effect on the Partnership's results of operations or financial condition.

As further described in note 2, the Partnership has sold substantially all
of its cable television assets.

(continued)

II-17

23

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

Allocation of Net Earnings and Net Losses

Net earnings and net losses shall be allocated 99% to ACT 5's limited
partners ("Limited Partners") and 1% to the General Partner and
distributions of Cash from Operations, Sales or Refinancings (all as
defined in the Partnership's limited partnership agreement) shall be
distributed 99% to the Limited Partners and 1% to the General Partner until
cumulative distributions to the Limited Partners equal the Limited
Partners' aggregate contributions ("Payback"), plus 6% per annum. After the
Limited Partners have received distributions equal to Payback plus 6% per
annum, the allocations of net earnings, net losses and credits, and
distributions of Cash from Operations, Sales or Refinancings shall be 25%
to the General Partner and 75% to the Limited Partners. Although ACT 5's
September 1997 distributions of proceeds from the sales of certain of its
cable television systems allowed Limited Partners to achieve Payback,
Limited Partners have not yet received a 6% return on their aggregate
contributions. Distributions from the Riverside Sale will not allow Limited
Partners to achieve Payback; therefore, amounts will continue to be
allocated 99% to the Limited Partners and 1% to the General Partner. See
note 2.

Cash and Cash Equivalents

Cash and cash equivalents consist of investments which are readily
convertible into cash and have maturities of three months or less at the
time of acquisition.

At December 31, 1999 and 1998, $46,631,000 and $15,761,000 of the
Partnership's cash and cash equivalents were invested in money market
funds, respectively. The Partnership is exposed to credit loss in the event
of non-performance by the other parties to such financial instruments.
However, the Partnership does not anticipate non-performance by the other
parties.

Cash paid by the Partnership for interest was none during the years ended
December 31, 1999 and 1998 and $152,000 during the year ended December 31,
1997.

Property and Equipment

Property and equipment was stated at cost, which included an allocation of
the acquisition costs of cable television systems. Depreciation was
computed using the straight-line method over the estimated useful lives of
the assets, which ranged from 3 to 20 years.

Repairs and maintenance were charged to operations, and renewals and
additions, including labor and overhead related to installations and
interest costs related to construction, were capitalized. Capitalized
interest costs were not significant in any of the periods presented in the
accompanying financial statements.

(continued)

II-18

24

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

At the time of ordinary retirements, sales, or other dispositions of part
of a cable television system, the depreciated cost and cost of removal of
such property were charged to accumulated depreciation, and salvage value,
if any, was credited thereto. The net book value of assets retired or
disposed of as a result of major rebuilds and lost converters was charged
to depreciation expense in the period of disposition. Gains or losses were
only recognized in connection with the disposition of properties in their
entirety.

Franchise Costs

Franchise costs represented the difference between the acquisition cost of
a cable television system and amounts allocated to the tangible assets.
Franchise costs were amortized using the straight-line method over the
remaining terms of the franchise agreements at the time of acquisition,
which ranged from 3 to 15 years.

Impairment of Long-Lived Assets

The Partnership periodically reviewed the carrying amounts of property,
plant and equipment and its intangible assets to determine whether current
events or circumstances warranted adjustments to such carrying amounts. If
an impairment adjustment was deemed necessary, such loss was measured by
the amount that the carrying value of such assets exceeded their fair
value.

Revenue Recognition

Revenue for customer fees, equipment rental, advertising, pay-per-view
programming and revenue sharing agreements was recognized in the period
that services were delivered. Installation revenue was recognized in the
period the installation services were provided to the extent of direct
selling costs. Any remaining amount was deferred and recognized over the
estimated average period that subscribers were expected to remain connected
to the system.

Net Earnings (Loss) Per Unit

Net earnings (loss) per Unit is calculated by dividing net earnings (loss)
attributable to the Limited Partners by the number of Units outstanding
during the period. The number of Units outstanding for each of the years in
the three-year period ended December 31, 1999 was 200,005.

(continued)

II-19

25

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

Income Taxes

No provision has been made for income tax expense or benefit in the
accompanying financial statements as the earnings or losses of the
Partnership are reported in the respective income tax returns of the
partners.

The Partnership had taxable earnings of $13.1 million, $1.0 million and
$40.2 million for the years ended December 31, 1999, 1998 and 1997,
respectively.

Estimates

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 at
the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.

Reclassifications

Certain amounts have been reclassified for comparability with the 1999
presentation.

(2) Asset Sales

On April 1, 1997, the Partnership sold the cable television system in and
around Shelbyville and Manchester, Tennessee (the "Southern Tennessee
System" or "Southern Tennessee") to Rifkin Acquisition Partners, L.L.L.P.
("Rifkin") for an adjusted sales price of $19,647,000 (the "Southern
Tennessee Sale"). Pursuant to the asset purchase agreement for the Southern
Tennessee Sale, $494,000 of such sales price was placed in escrow (the
"Southern Tennessee Escrow") and was subject to indemnifiable claims by
Rifkin through March 31, 1998. Prior to March 31, 1998, Rifkin filed a
claim against the Southern Tennessee Escrow relating to a class action
lawsuit filed by a customer challenging late fee charges with respect to
the Southern Tennessee System. On September 14, 1999, Rifkin sold the
Southern Tennessee System to an affiliate of Charter Communications, Inc.
("Charter"). In connection with such sale, Charter was assigned the rights
to the indemnification claim. Such claim has had and will continue to have
the effect of delaying the release of the Southern Tennessee Escrow. In
addition, such claim may have the effect of reducing the amount of the
Southern Tennessee Escrow ultimately released to ACT 5.

On April 16, 1997, the Partnership sold the cable television system located
in and around St. Mary's County, Maryland ("St. Mary's") to Gans Multimedia
Partnership ("Gans") for an adjusted sales price of $30,547,000 (the "St.
Mary's Sale"). Pursuant to the asset purchase agreement for the St. Mary's
Sale, $766,000 of such sales price was placed in escrow (the "St. Mary's
Escrow") and was subject to indemnifiable claims by Gans through April 15,
1998. The St. Mary's Escrow was released to ACT 5 during the second quarter
of 1998. ACT 5 received interest of $39,000 in conjunction with the release
of the St. Mary's Escrow.

(continued)

II-20

26

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

On June 24, 1997, the Partnership sold the cable television system located
in and around Lower Delaware ("Lower Delaware") to Mediacom Delaware LLC
("Mediacom") for an adjusted sales price of $42,191,000 (the "Lower
Delaware Sale"). Pursuant to the asset purchase agreement for the Lower
Delaware Sale, $1,077,000 of such sales price was placed in escrow (the
"Lower Delaware Escrow") and was subject to indemnifiable claims by
Mediacom through June 23, 1998. The Lower Delaware Escrow was released to
ACT 5 during the third quarter of 1998. ACT 5 received interest of $57,000
in conjunction with the release of the Lower Delaware Escrow.

The Partnership used proceeds from the 1997 Sales Transactions to pay
disposition fees of $2,778,000 to Cablevision, repay debt and related
accrued interest of $8,652,000, and make distributions to its General
Partner and Limited Partners during the third quarter of 1997 of $747,000
and $74,002,000 ($370 per Unit for Limited Partners of record as of July 1,
1997), respectively.

On December 7, 1999, the Partnership consummated the sale of its remaining
cable television system serving subscribers located in and around
Riverside, California (the "Riverside System") to Century Exchange LLC
("Century"), a subsidiary of Adelphia Communications Corporation, for an
unadjusted sale price of $33 million (the "Riverside Sale"). The Riverside
Sale was approved by the Limited Partners at a special meeting that
occurred on December 11, 1998. In accordance with the terms of the asset
purchase agreement relating to the Riverside Sale, $1.5 million of the
sales price has been placed in escrow for 180 days in order to satisfy any
indemnifiable claims which may be made by Century. In connection with the
Riverside Sale, Century and the Partnership waived the condition to closing
that all required consents be obtained prior to closing the Riverside Sale,
as such condition related to the transfer to Century of the franchise
agreement between the Partnership and the City of Moreno Valley that
authorizes the Partnership to provide cable television service to
subscribers located in and around Moreno Valley, California (the "Moreno
Franchise Agreement"). Accordingly, all of the Riverside System's cable
television assets other than the Moreno Franchise Agreement were
transferred to Century on December 7, 1999. Consent to transfer the Moreno
Franchise Agreement to Century has not yet been obtained. In connection
with the Riverside Sale, the Partnership entered into a management
agreement with Century pursuant to which Century will be entitled to all
net cash flows generated by the portion of the Riverside System that is
subject to the Moreno Franchise Agreement until such time as the City of
Moreno Valley approves the transfer of the Moreno Franchise Agreement from
the Partnership to Century. Upon receipt of such approval from the City of
Moreno Valley, the Moreno Franchise Agreement will be transferred to
Century post-closing and the management agreement will be terminated.

The Partnership anticipates that a distribution will be made to its General
Partner and Limited Partners of $410,000 and $40,601,000 ($203 per Unit for
Limited Partners of record as of April 1, 2000), respectively, in the
second quarter of 2000.

(continued)

II-21

27

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

As a result of the Riverside Sale, the Partnership is no longer actively
engaged in the cable television business and is currently seeking to make a
final determination of its liabilities so that liquidating distributions
can be made in connection with its dissolution.

On December 7, 1999, AT&T Broadband and Century contributed cable
television systems to a joint venture (the "Joint Venture") that combined
multiple cable television systems in Southern California. Among those
systems to be contributed to the Joint Venture by AT&T Broadband was the
cable television system serving customers in Redlands, California (the
"Redlands System"). The Riverside System was among those systems to be
contributed to the Joint Venture by Century. AT&T Broadband has an
approximate 25% interest in the Joint Venture, which is managed by Century.
AT&T Broadband, through certain of its subsidiaries, owns a 100% interest
in IR-TCI.

(3) Transactions with Related Parties

The Partnership purchases programming services from affiliates of AT&T
Broadband. The charges, which generally approximate such affiliates' cost
and are based upon the number of customers served by the Partnership,
aggregated $2,333,000, $2,201,000 and $3,647,000 in 1999, 1998 and 1997,
respectively.

The Partnership has a management agreement with Cablevision whereby
Cablevision is responsible for performing all services necessary for the
management of the Partnership's cable television systems. As compensation
for these services, the Partnership pays a management fee equal to 6% of
gross revenue, as defined in the management agreement. Such fees amounted
to $567,000, $573,000 and $975,000 during the years ended December 31,
1999, 1998 and 1997, respectively.

The Partnership also reimburses Cablevision for direct out-of-pocket and
indirect expenses allocable to the Partnership and for certain personnel
employed on a full- or part-time basis to perform accounting, marketing,
technical or other services. Such reimbursements amounted to $273,000,
$207,000 and $297,000 in 1999, 1998 and 1997, respectively.

Riverside shared office facilities, personnel and certain distribution
assets with the Redlands System. As a result, the majority of Riverside's
operating and administrative salaries and expenses were charged to
Riverside based upon Riverside's estimated utilization of such office
facilities and personnel. During the years ended December 31, 1999, 1998
and 1997, Riverside's operating and administrative salaries and expenses
aggregated $2,578,000, $2,402,000 and $2,216,000, respectively.

(continued)

II-22

28

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

ACT 5 is obligated to pay a disposition fee to Cablevision equal to 3% of
the gross proceeds from the sale of any cable television system owned by
ACT 5. This fee is due and payable at the time the cable television system
is sold if the consideration received is greater than its adjusted cost, as
defined in ACT 5's limited partnership agreement. In connection with the
Riverside Sale, disposition fees of $1,000,000 were paid to Cablevision
subsequent to December 31, 1999. Such amount is included in amounts due to
related parties at December 31, 1999. In connection with the 1997 Sales
Transactions, disposition fees of $2,778,000 were paid to Cablevision.

Amounts due to related parties, which represent non-interest-bearing
payables to AT&T Broadband and its affiliates, consist of the net effect of
cash advances and certain intercompany expense charges.

Amounts due from related parties bear interest at variable rates (5.0% at
December 31, 1999 and 1998). Interest earned on amounts due from AT&T
Broadband and its affiliates was none and $120,000 during the years ended
December 31, 1999 and 1998, and was not significant for the year ended
December 31, 1997.

(4) Commitments and Contingencies

On November 2, 1999 a limited partner of ACT 5 filed suit in United States
District Court for the District of Colorado against the General Partner of
ACT 5. The lawsuit also names certain affiliates of the General Partner as
defendants. The lawsuit alleges that the defendants violated disclosure
requirements under the Securities Exchange Act of 1934 in connection with
soliciting limited partner approval of the Riverside Sale and that certain
defendants breached their fiduciary duty in connection with the Riverside
Sale. On February 10, 2000, the Defendants filed motions to dismiss
Plaintiff's complaint. The Court has not yet ruled on such motions. No
Defendant to date has filed an answer to the Complaint, and a statutory
stay of discovery is in effect pending the Court's determination of the
pending motions. Based upon the limited facts available, management
believes that, although no assurance can be given as to the outcome of this
action, the ultimate disposition should not have a material adverse effect
upon the financial condition of the Partnership.

Section 21 of the Partnership Agreement provides that the General Partner
and its affiliates, subject to certain conditions set forth in more detail
in the Partnership Agreement, are entitled to be indemnified for any
liability or loss incurred by them by reason of any act performed or
omitted to be performed by them in connection with the business of ACT 5,
provided that the General Partner determines, in good faith, that such
course of conduct was in the best interests of ACT 5 and did not constitute
proven fraud, negligence, breach of fiduciary duty or misconduct. In this
regard, it is anticipated that legal fees incurred by the defendants with
respect to the above lawsuit will be paid by ACT 5.

(continued)

II-23

29

AMERICAN CABLE TV INVESTORS 5, LTD.
(A Colorado Limited Partnership)

Notes to Financial Statements

The claim against the Southern Tennessee Escrow as described in note 2 and
the above described lawsuit may have the effect of delaying any final
liquidating distributions of the Partnership.

The Partnership leased certain property and equipment under operating
leases. The Partnership's lease expense aggregated $132,000, $146,000 and
$344,000 in 1999, 1998 and 1997, respectively, including $3,000, $4,000 and
$82,000 paid under pole rental agreements which were terminable on short
notice by either party. Riverside's lease expense aggregated $132,000,
$146,000 and $214,000 in 1999, 1998 and 1997, respectively, including
$3,000, $4,000 and $19,000 paid under pole rental agreements in 1999, 1998
and 1997, respectively.

(5) Year 2000 Costs

During 1999, AT&T Broadband, in its capacity as the indirect parent of the
managing agent of the Partnership, completed its enterprise-wide
comprehensive efforts to assess and remediate the Partnership's computer
systems and related software and equipment to ensure such systems, software
and equipment recognize, process and store information in the year 2000 and
thereafter. AT&T Broadband allocated expenses to the Partnership totaling
$114,000 during 1999 in connection with the year 2000 remediation efforts
for the Partnership. In addition, the Partnership incurred capital
expenditures of $56,000 during 1999 in connection with year 2000
remediation efforts. The Partnership did not experience any significant
problems with the changeover to the year 2000.

II-24

30

AMERICAN CABLE TV INVESTORS 5, LTD.

PART III.

Item 10. Directors and Executive Officers of the Registrant.

As the Partnership has no directors or officers of its own, all of the
Partnership's major decisions are made by IR-TCI whose general partner is TCIV
5. Until its withdrawal by letter dated January 17, 1996, ICC was also a general
partner of the General Partner.

The Partnership has entered into a management agreement with Cablevision,
pursuant to which Cablevision is responsible for managing the day-to-day
operations of the Partnership.

As of January 21, 2000, the following executive officers and directors of
TCIV 5 operate IR-TCI:

Name Position
---- --------

William R. Fitzgerald (1) President and Director of TCIV 5 since November 1998. Executive Vice
Born May 20, 1957 President and Chief Operating Officer for Operations and Administration
of AT&T Broadband since August 1999. Executive Vice President and Chief
Operating Officer of AT&T Broadband from March 1999 to August 1999.
Chief Operating Officer of TCIC from November 1998 to March 1999,
Executive Vice President of TCIC from December 1997 to March 1999 and
Senior Vice President of TCIC from March 1996 to December 1997. Serves
as a Vice President of various AT&T Broadband subsidiaries; and was
Senior Vice President and Partner in Daniels & Associates, a brokerage
and investment banking company from 1988 to 1996.

Daniel E. Somers (1) Director of TCIV 5 since January 2000. Director, President and Chief
Born December 9, 1947 Executive Officer of AT&T Broadband since December 1999. Senior
Executive Vice President and Chief Financial Officer of AT&T since April
1997. Serves as a President and Director of many of AT&T Broadband's
subsidiaries. Chairman and Chief Executive Officer of Bell Cablemedia,
plc, of London from 1995 to 1997. From 1992 to 1995, Mr. Somers was
Executive Vice President and Chief Financial Officer for Bell Canada,
International, Inc. after having been President of Radio Atlantic
Holdings, Ltd.

Michael P. Huseby Vice President and Treasurer of TCIV 5 since January 2000. Executive
Born November 14, 1954 Vice President, Chief Financial Officer and Treasurer of AT&T
Broadband since January 2000. Serves as a Vice President, Treasurer and
Director of various AT&T Broadband subsidiaries. Mr. Huseby was a
Partner in Andersen Worldwide from 1990 to December 1999.

III-1

31

AMERICAN CABLE TV INVESTORS 5, LTD.

Terrel E. Davis Vice President and Secretary of TCIV 5 since January 2000. Senior
Born March 24, 1953 Vice President and Assistant Secretary of AT&T Broadband since March
1999. Senior Vice President and Assistant Secretary of TCIC from May 1998
to March 1999. Associate General Counsel of AT&T Broadband from 1992 to
March 1999; and Vice President and Secretary or Vice President and
Assistant Secretary of most of AT&T Broadband's subsidiaries.

Arthur C. Belanger (1) Director of TCIV 5 since June 1996. Prior to his retirement in
Born November 23, 1925 January 1992, Mr. Belanger was Executive Vice President and Chief
Operating Officer of United Artists Communications, Inc.

Paul F. Schonewolf (1) Director of TCIV 5 since June 1996. Mr. Schonewolf is the President of
Born February 9, 1937 Hamilton County/Gore Mt. Cable TV, Inc., a cable company serving six
upstate New York communities. From 1987 to 1993 he was President of
Schomann Entertainment Corp., which owned and operated cable television
companies in New York, Vermont, New Hampshire and Pennsylvania. From 1986
to 1994 he was President of PFS Communications, a consulting company
serving the cable television industry.

(1) Directors of TCIV 5 serve until their successors are appointed and
qualified.

There are no family relations, of first cousin or closer, among the
individuals named above, by blood, marriage or adoption.

During the past five years, none of the persons named above has had any
involvement in such legal proceedings as would be material to an evaluation of
that person's ability or integrity, except as noted above.

Pursuant to section 16(a) of the Securities Exchange Act of 1934, as
amended, the officers and directors of the General Partner are required to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers and directors are required by regulation
of the Commission to furnish the Partnership with copies of all Section 16(a)
forms filed.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Partnership believes that, during the fiscal
year ended December 31, 1999, all applicable filing requirements were complied
with, except that Messrs. Somers, Huseby and Davis each filed one Form 3 late.

III-2

32

AMERICAN CABLE TV INVESTORS 5, LTD.

Item 11. Executive Compensation.

The Partnership pays no direct compensation to the individuals named above,
but instead pays for their services through management and other fees paid to
Cablevision. See "Certain Relationships and Related Transactions" below.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

No General or Limited Partner of the Partnership owns more than 5% of the
Units.

None of the individuals referred to in Item 10 above owns (i) any Units of
the Partnership or (ii) more than 1% of the outstanding shares of AT&T Corp.,
the ultimate parent and owner, directly or indirectly, of all of the voting
stock of TCIV 5.

Item 13. Certain Relationships and Related Transactions.

The Partnership purchases programming services from affiliates of AT&T
Broadband. In 1999, the charges, which generally approximate such affiliates'
cost and are based upon the number of subscribers served by the Partnership,
aggregated $2,333,000.

Under a management agreement with Cablevision, the Partnership is charged a
management fee of 6% of gross revenue, as defined in the management agreement.
Such fees aggregated $567,000 in 1999. Cablevision is also reimbursed for direct
out-of-pocket and indirect expenses allocable to the Partnership, and for
certain personnel employed on a full- or part-time basis to perform accounting,
marketing, technical, or other services. Such reimbursements aggregated $273,000
in 1999.

AT&T Broadband allocated expenses to the Partnership totaling $114,000
during 1999 in connection with the year 2000 remediation efforts for the
Partnership.

Riverside shared office facilities, personnel and certain distribution
assets with the Redlands System. As a result, the majority of Riverside's
operating and administrative salaries and expenses were allocated based upon
Riverside's estimated utilization of such office facilities and personnel.
During the year ended December 31, 1999, Riverside's operating and
administrative salaries and expenses aggregated $2,578,000.

In connection with the Riverside Sale, disposition fees of $1,000,000 were
paid to Cablevision subsequent to December 31, 1999. Such amount is included in
amounts due to related parties at December 31, 1999.

On December 7, 1999, AT&T Broadband and Century contributed cable
television systems to the Joint Venture that combined multiple cable television
systems in Southern California. The Riverside System was among those systems
that was contributed to the Joint Venture by Century, and the Redlands System
was among those systems contributed by AT&T Broadband. AT&T Broadband has an
approximate 25% interest in the Joint Venture, which is managed by Century.

At December 31, 1999, the Partnership owed $1,235,000 to AT&T Broadband and
its affiliates. Such amounts are non-interest-bearing and consist of the net
effect of cash advances and certain intercompany expense allocations.

III-3

33

AMERICAN CABLE TV INVESTORS 5, LTD.

PART IV.

Item 14. Exhibits, Financial Statements and Financial Statement Schedules and
Reports on Form 8-K.

(a) (1) Financial Statements Page
----

Included in Part II of this Report:

Independent Auditors' Report II-10

Balance Sheets, December 31, 1999 and 1998 II-11

Statements of Operations,
Years ended December 31, 1999, 1998 and 1997 II-13

Statements of Partners' Equity,
Years ended December 31, 1999, 1998 and 1997 II-14

Statements of Cash Flows,
Years ended December 31, 1999, 1998 and 1997 II-15

Notes to Financial Statements,
December 31, 1999, 1998 and 1997 II-17

(a) (2) Financial Statement Schedules

All schedules are omitted as they are not required or are not applicable.

IV-1

34

AMERICAN CABLE TV INVESTORS 5, LTD.

(a) (3) Exhibits

The following exhibits are incorporated by reference herein (according
to the number assigned to them in Item 601 of Regulation S-K), as noted:

3 - Articles of Incorporation and Bylaws:

Limited Partnership Agreement, incorporated by reference to Exhibit A
to Prospectus filed pursuant to Rule 424(b) as part of
Registration Statement 33-12064.

Limited Partnership Agreement of General Partner, incorporated by
reference to the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1987 (Commission File Number 0-16784).

10 - Material Contracts:

Management Agreement between Cablevision and the Partnership,
incorporated by reference to the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1987 (Commission File
Number 0-16784).

Acquisition and Disposition Services Agreement between Cablevision and
the Partnership, incorporated by reference to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1987
(Commission File Number 0-16784).

Consulting Agreement, re: the Partnership between Cablevision and
Presidio, incorporated by reference to the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1987
(Commission File Number 0-16784).

Asset Purchase Agreement by and between American Cable TV Investors 5,
Ltd. and Gans Multimedia Partnership dated as of November 27,
1996, incorporated by reference to the Partnership's Current
Report on Form 8-K filed February 11, 1997.

Asset Purchase Agreement by and between American Cable TV Investors 5,
Ltd. and Rifkin Acquisition Partners, L.L.L.P. dated as of
November 29, 1996, incorporated by reference to the Partnership's
Current Report on Form 8-K filed February 11, 1997.

Asset Purchase Agreement by and between American Cable TV Investors 5,
Ltd. and Mediacom LLC dated as of December 24, 1996, incorporated
by reference to the Partnership's Current Report on Form 8-K
filed February 11, 1997.

Asset Purchase Agreement by and between American Cable TV Investors 5,
Ltd. and Century Communications Corp. dated as of August 12,
1998, incorporated by reference to the Partnership's Current
Report on Form 8-K filed August 27, 1998.

IV-2

35

AMERICAN CABLE TV INVESTORS 5, LTD.

10 - Materials contracts, continued:

First Amendment, dated as of November 11, 1998, to Asset Purchase
Agreement dated as of August 12, 1998, by and among American
Cable TV Investors 5, Ltd. and Century Communications Corp.,
incorporated by reference to the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1998 (Commission File
Number 0-16784).

Waiver and Indemnification Agreement by and between American Cable TV
Investors 5, Ltd. and Adelphia Communications Corporation dated
December 7, 1999.

27 - Financial Data Schedule.

(b) Reports on Form 8-K filed during the quarter ended December 31, 1999:

Date of Report Items Reported Financial Statements Filed
-------------- -------------- --------------------------

December 21, 1999 Item 2 None

IV-3

36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

AMERICAN CABLE TV INVESTORS 5, LTD., A Colorado Limited Partnership
By: IR-TCI PARTNERS V, L.P., Its General Partner

By: TCI VENTURES FIVE, INC., Its General Partner

By: /s/ William R. Fitzgerald March 30, 2000
--------------------------------------
William R. Fitzgerald
President and Director - TCI Ventures Five, Inc.
(Principal Executive Officer)

Pursuant to the Securities Exchange Act of 1934, this report has been signed by
the following persons on behalf of the Partnership and in the capacities and on
the dates indicated:

Signature Date
--------- ----

/s/ William R. Fitzgerald March 30, 2000
- ------------------------------------------------
William R. Fitzgerald
President and Director - TCI Ventures Five, Inc.
(Principal Executive Officer)

/s/ Daniel E. Somers March 30, 2000
- ------------------------------------------------
Daniel E. Somers
Director - TCI Ventures Five, Inc.

/s/ Michael P. Huseby March 30, 2000
- ------------------------------------------------
Michael P. Huseby
Vice President and Treasurer - TCI Ventures Five, Inc.
(Chief Financial Officer)
(Principal Accounting Officer)

/s/ Terrel E. Davis March 30, 2000
- ------------------------------------------------
Terrel E. Davis
Vice President and Secretary - TCI Ventures Five, Inc.

IV-4

37

/s/ Arthur C. Belanger March 30, 2000
- ------------------------------------------------
Arthur C. Belanger
Director - TCI Ventures Five, Inc.

IV-5

38

EXHIBIT INDEX

Exhibit
Number Description
- ------ -----------

3 - Articles of Incorporation and Bylaws:

Limited Partnership Agreement, incorporated by reference to
Exhibit A to Prospectus filed pursuant to Rule 424(b)
as part of Registration Statement 33-12064.

Limited Partnership Agreement of General Partner,
incorporated by reference to the Partnership's Annual
Report on Form 10-K for the year ended December 31,
1987 (Commission File Number 0-16784).

10 - Material Contracts:

Management Agreement between Cablevision and the
Partnership, incorporated by reference to the
Partnership's Annual Report on Form 10-K for the year
ended December 31, 1987 (Commission File Number
0-16784).

Acquisition and Disposition Services Agreement between
Cablevision and the Partnership, incorporated by
reference to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1987 (Commission
File Number 0-16784).

Consulting Agreement, re: the Partnership between
Cablevision and Presidio, incorporated by reference to
the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1987 (Commission File Number
0-16784).

Asset Purchase Agreement by and between American Cable TV
Investors 5, Ltd. and Gans Multimedia Partnership dated
as of November 27, 1996, incorporated by reference to
the Partnership's Current Report on Form 8-K filed
February 11, 1997.

Asset Purchase Agreement by and between American Cable TV
Investors 5, Ltd. and Rifkin Acquisition Partners,
L.L.L.P. dated as of November 29, 1996, incorporated by
reference to the Partnership's Current Report on Form
8-K filed February 11, 1997.

Asset Purchase Agreement by and between American Cable TV
Investors 5, Ltd. and Mediacom LLC dated as of December
24, 1996, incorporated by reference to the
Partnership's Current Report on Form 8-K filed February
11, 1997.

Asset Purchase Agreement by and between American Cable TV
Investors 5, Ltd. and Century Communications Corp.
dated as of August 12, 1998, incorporated by reference
to the Partnership's Current Report on Form 8-K filed
August 27, 1998.

First Amendment, dated as of November 11, 1998, to Asset
Purchase Agreement dated as of August 12, 1998, by and
among American Cable TV Investors 5, Ltd. and Century
Communications Corp., incorporated by reference to the
Partnership's Annual Report on Form 10-K for the year
ended December 31, 1998 (Commission File Number
0-16784).

Waiver and Indemnification Agreement by and between American
Cable TV Investors 5, Ltd. and Adelphia Communications
Corporation dated December 7, 1999.

27 - Financial Data Schedule.