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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 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
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 number:
Cable TV Fund 14-A, Ltd.: 0-15378 Cable TV Fund 14-B, Ltd.: 0-16200
CABLE TV FUND 14-A, LTD.
CABLE TV FUND 14-B, LTD.
(Exact name of registrant as specified in their charters)
Cable TV Fund 14-A, Ltd.:84-1024657
Colorado Cable TV Fund 14-B, Ltd.: 84-1024658
(State of Organization) (IRS Employer Identification Nos.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
(Address of principal executive office and Zip Code) (Registrants' telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act:None
Securities registered pursuant to Section 12(g) of the Act:Limited Partnership
Interests
Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days: Yes x No
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Aggregate market value of the voting stock held by non-affiliates of the
registrants: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrants' knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIPS. Cable TV Fund 14-A, Ltd. ("Fund 14-A") and Cable TV
Fund 14-B, Ltd. ("Fund 14-B") are Colorado limited partnerships that were
formed pursuant to the public offering of limited partnership interests in the
Cable TV Fund 14 Limited Partnership Program, which was sponsored by Jones
Intercable, Inc., a Colorado corporation (the "General Partner"). Fund 14-A
and Fund 14-B may collectively be referred to as the "Partnerships." The
Partnerships were formed to acquire, own and operate cable television systems
in the United States. The Partnerships individually own several cable
television systems directly. The Partnerships also formed the Cable TV Fund
14-A/B Venture (the "Venture"), a joint venture through which the Partnerships
own a cable television system. The Venture is owned 27% by Fund 14-A and 73%
by Fund 14-B.
Fund 14-A directly owns the cable television systems serving Buffalo,
Minnesota (the "Buffalo System"), the County of Calvert, Maryland (the "Calvert
County System"), the communities of Bement, Cerro Gordo, Chatsworth, Chenoa,
Clinton, Fairbury, Farmer City, Forrest, Gibson City, Leroy, Monticello,
Pesotum, Rantoul, Thomasborough and Tolono and Chanute Air Force Base, all in
the State of Illinois (the "Central Illinois System"), Naperville, Illinois
(the "Naperville System") and Turnersville, New Jersey (the "Turnersville
System").
Fund 14-B directly owns the cable television systems serving Surfside
Beach, South Carolina, certain portions of unincorporated Georgetown and Horry
Counties, South Carolina and Myrtle Beach Air Force Base (the "Surfside
System") and Little Rock, California (the "Little Rock System").
The Venture owns the cable television system serving the communities
of Cooper City, Dania, Davie, Lauderdale Lakes and unincorporated areas of
Broward County, Florida (the "Broward County System").
The Broward County System, the Buffalo System, the Calvert County
System, the Central Illinois System, the Little Rock System, the Naperville
System, the Surfside System, and the Turnersville System, may collectively be
referred to as the "Systems." See Item 2.
CABLE TELEVISION SERVICES. The Systems offer various types of
programming, which include basic service, tier service, premium services,
pay-per-view programs and packages including several of these services at
combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites.
Basic service also usually includes programs originated locally by the system,
which may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or
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entertainment nature. FM radio signals are also frequently distributed to
subscribers as part of the basic service.
The Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act") contains new broadcast signal carriage requirements, and
the Federal Communications Commission ("FCC") has adopted regulations
implementing these statutory carriage requirements. These new rules allow
local commercial broadcast television stations either to elect required
carriage ("must carry") status or to require a cable system to negotiate for
"retransmission consent rights." The deadline for the negotiation of
agreements for retransmission consent was October 6, 1993. No broadcast
stations carried on Partnership-owned cable television systems that elected
retransmission consent have withheld consent to the retransmission of their
signals. However, certain of these broadcast stations are being carried
pursuant to temporary extensions of retransmission consent authority provided
by the stations. Although there is no assurance that the General Partner will
be able to conclude retransmission negotiations with all of these stations, the
General Partner expects to reach agreements without having to terminate the
carriage of any signal. If a broadcast station currently being carried
pursuant to a temporary extension is dropped and if a significant number of a
system's subscribers were to disconnect their service because of such action,
there could be a negative impact on the system. However, because in most cases
only one station in any market is being carried pursuant to an extension
agreement, termination of one station's carriage would not be expected to have
a material adverse effect on any system.
In most systems, tier services are also offered on an optional basis
to subscribers. Those channels generally include most of the cable networks
such as Entertainment and Sports Programming Network (ESPN), Cable News Network
(CNN), Turner Network Television (TNT), Family Channel, Discovery and others.
The systems also offer a package that includes the basic service channels and
the tier services.
Cable television systems also offer premium services to their
subscribers, which consist of feature films, sporting events and other special
features that are presented without commercial interruption. The cable
television operators buy premium programming from suppliers such as HBO,
Showtime, Cinemax or others at a cost based on the number of subscribers the
cable operator serves. Premium service programming usually is significantly
more expensive than the basic service or tier service programming, and
consequently cable operators price premium service separately when sold to
subscribers.
New cable television services have been introduced as the cable
television industry has developed and increased its penetration level. One
relatively new service currently being marketed by many cable television
operators is pay-per-view programming. Pay-per-view is a service that allows
subscribers to receive single programs, frequently consisting of motion
pictures that have recently completed their theatrical exhibitions and major
sporting events, and to pay for such service on a program-by-program basis.
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REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. As of September 1,
1993, as a result of the requirements of the 1992 Cable Act, the Systems' rate
structures for cable programming services and equipment were revised. As of
December 31, 1993, the Systems' monthly basic service rates ranged from $4.98
to $13.95 and basic and tier ("basic plus") service rates ranged from $14.95 to
$27.02 for residential subscribers. Charges for additional outlets were
eliminated, and charges for remote controls and converters were "unbundled"
from the programming service rates. The Systems' monthly rates for premium
services range from $3.00 to $12.00 per premium service. In addition, the
Partnerships earn revenues from the Systems' pay-per-view programs and
advertising fees. Related charges may include a nonrecurring installation fee
that ranges from $5.00 to $42.45; however, from time to time the Systems have
followed the common industry practice of reducing or waiving the installation
fee during promotional periods. Commercial subscribers such as hotels, motels
and hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation. Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty.
For the year ended December 31, 1993, of the total fees received by the
Systems, basic service and tier service fees accounted for approximately 65% of
total revenues, premium service fees accounted for approximately 18% of total
revenues, pay-per-view fees were approximately 2% of total revenues,
advertising fees were approximately 5% of total revenues and the remaining 10%
of total revenues came principally from equipment rentals, installation fees
and program guide sales. The Partnerships are dependent upon the timely
receipt of service fees to provide for maintenance and replacement of plant and
equipment, current operating expenses and other costs of the Systems.
The Partnerships' business consists of providing cable television
services to a large number of customers, the loss of any one of which would
have no material effect on the Partnerships' business. Each of the Systems has
had some subscribers who later terminated the service. Terminations occur
primarily because people move to another home or to another city. In other
cases, people terminate on a seasonal basis or because they no longer can
afford or are dissatisfied with the service. The amount of past due accounts
in the Systems is not significant. The General Partner's policy with regard to
past due accounts is basically one of disconnecting service before a past due
account becomes material.
The Partnerships do not depend to any material extent on the
availability of raw materials; they carry no significant amounts of inventory
and they have no material backlog of customer orders. The Partnerships have no
employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development
activities relating to the provision of new services but the amount of the
Partnerships' funds expended for such research and development has never been
material.
Compliance with federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment
or otherwise relating to the
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protection of the environment has had no material effect upon the capital
expenditures, earnings or competitive position of the Partnerships.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local
governmental authorities. The Systems' franchises require that franchise fees
ranging from 2% of basic revenues to 5% of gross revenues of the cable system
be paid to the governmental authority that granted the franchise, that certain
channels be dedicated to municipal use, that municipal facilities, hospitals
and schools be provided cable service free of charge and that any new cable
plant be substantially constructed within specific periods. (See Item 2. for a
range of franchise expiration dates of the Systems.)
The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the Cable Television Consumer
Protection and Competition Act of 1992 also makes several procedural changes to
the process under which a cable operator seeks to enforce renewal rights. See
Item 1. Regulation and Legislation. Generally, the franchising authority can
decide not to renew a franchise only if it finds that the cable operator has
not substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have
the financial, legal and technical ability to provide the services being
proposed for the future, or has not presented a reasonable proposal for future
service. A final decision of non-renewal by the franchising authority is
appealable in court. The General Partner and its affiliates recently have
experienced lengthy negotiations with some franchising authorities for the
granting of franchise renewals and transfers. Some of the issues involved in
recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of a Partnership to renew a franchise, or lengthy
negotiations or litigation involving the renewal process could have an adverse
impact on the business of a Partnership. The inability of a Partnership to
transfer a franchise could have an adverse impact on the ability of a
Partnership to accomplish its investment objectives.
COMPETITION. The Systems face competition from a variety of
alternative entertainment media, such as: Multichannel Multipoint Distribution
Service ("MMDS"), which is often called a "wireless cable service" and is a
microwave service authorized to transmit television signals and other
communications on a complement of channels, which when combined with
instructional fixed television and other channels, is able to provide a
complement of television signals potentially competitive with cable television
systems; Satellite Master Antenna Television System ("SMATV"), commonly called
a "private" cable television system, which is a system wherein one central
antenna is used to receive signals and deliver them to, for example, an
apartment complex; and Television Receive-Only Earth Stations ("TVRO"), which
are satellite receiving antenna dishes that are used by "backyard users" to
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receive satellite delivered programming directly in their homes. Programming
services sell their programming directly to owners of TVROs as well as through
third parties. The competition from MMDS and TVRO potentially diminishes the
pool of subscribers to the Systems because persons who subscribe to MMDS
services or who own backyard satellite dishes are not likely to subscribe to
all of the Systems' cable television services.
In the near future, the Systems will also face competition from direct
satellite to home transmission ("DBS"). DBS can provide to individuals on a
wide-scale basis premium channel services and specialized programming through
the use of high-powered DBS satellites that transmit such programming to a
rooftop or side-mounted antenna. There are currently no DBS operators in the
areas served by the Systems. DBS systems' ability to compete with the cable
television industry will depend on, among other factors, the ability to obtain
access to programming and the availability of reception equipment at reasonable
prices. The first DBS satellite was recently launched, and it is anticipated
that DBS services will become available throughout the United States during
1994.
The Systems also face competition from video cassette rental outlets
and movie theaters in the Systems' service areas. The General Partner believes
the preponderance of video cassette recorder ("VCR") ownership in the Systems'
service areas may be a positive rather than a negative factor because
households that have VCRs are attracted to non-commercial programming delivered
by the Systems, such as movies and sporting events on cable television, that
they can tape at their convenience.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an
"overbuild"), with potential loss of revenues to the operator of the original
cable television system. The Systems currently face no direct competition from
other cable television operators.
Although the Partnerships have not yet encountered competition from a
telephone company entering into the cable television business, the
Partnerships' Systems could potentially face competition from telephone
companies doing so. Bell Atlantic, a regional Bell operating company ("RBOC"),
has announced its intention, if permitted by the courts, to build a cable
television system in Alexandria, Virginia, and has won a lawsuit to obtain such
authority. The case is on appeal. The General Partner currently owns and
manages the cable television system in Alexandria, Virginia. Another RBOC,
Ameritech, has also indicated its intention to build and operate a cable
television system in Naperville, Illinois, a location where the General Partner
manages a system on behalf of one of its managed limited partnerships. Other
RBOCs have indicated their intention to enter the cable television market, and
have filed lawsuits similar to the one being pursued by Bell Atlantic and
Ameritech. Widespread competition through overbuilds by RBOCs could have a
negative impact on companies like the General Partner that are already
established cable television system operators.
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COMPETITION FOR SUBSCRIBERS IN THE PARTNERSHIPS' SYSTEMS. Following
is a summary of competition from MMDS, SMATV and TVRO operators in the
Partnerships' franchise areas:
Broward County System: The Venture currently provides cable television service to approximately 200
subscribers in a previously unincorporated portion of Broward County that has recently
been annexed by the city of Hollywood. Another cable television operator provides
cable television service to Hollywood, and, under its franchise, it may also have the
obligation to provide service to residents of the annexed area should it prove to be
economically viable. The General Partner does not believe that the operator will
overbuild this portion of the Broward County System in the foreseeable future. There
are two SMATV operators that target large multiple dwelling units in the beach area of
Dade County, and whose impact on the Broward County System is insignificant.
Buffalo System: One MMDS operator and two SMATV operators provide service to a 40-unit trailer park in
Rockford and a 200-unit trailer park in Dayton. These operators provide minimal
competition.
Calvert County System: Three TVRO dealers sell dishes in the Calvert County System area but they do not
provide significant competition.
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Central Illinois System: No SMATV operators or TVRO dealers; 2 MMDS dealers in the service area provide
little or no competition. The Rantoul service area, which is a small portion of the
Central Illinois System, is overbuilt and serviced by a second cable television
operator, Douglas Communications. Fund 14-A serves approximately 1,950 subscribers in
the Rantoul service area and has a penetration rate of 32%; there are no subscriber
numbers available for the subscribers serviced by Douglas Communications in the Rantoul
area. The subscriber rates are comparable for both companies.
Little Rock System: No MMDS or SMATV operators in the service area. There are approximately 200 TVRO
dealers in the service area. Approximately 3% of the homes in the service area have
TVRO systems.
Naperville System: No MMDS operators in the service area. One TVRO dealer and one SMATV operator serving
four apartment complexes with 2,000 units.
A regional Bell operating company, Ameritech, has indicated its intention to build and
operate a cable television system in Naperville, Illinois.
Surfside System: There is an overbuilder in the Surfside System whose cable passes approximately 500
homes (there are approximately 30,900 homes passed by the Surfside System) and whose
rates are lower than the rates charged by the Surfside System. The Partnership's
penetration rate in the Surfside System is 57%. There are also two small cable
television operators that provide cable television service in the Surfside System's
franchise area. There are SMATV operators and TVRO dealers in the system's service
area that provide minimal competition.
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REGULATION AND LEGISLATION. The cable television industry is
regulated through a combination of the Federal Communications Commission
("FCC"), some state governments, and most local governments. In addition, the
Copyright Act of 1976 imposes copyright liability on all cable television
systems. Cable television operations are subject to local regulation insofar
as systems operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation effected significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, are subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allows the
FCC to regulate rates for non-basic service tiers other than premium services
in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services and ordered an interim freeze on these rates
effective on April 15, 1993. The rate freeze recently was extended by the FCC
until the earlier of May 15, 1994, or the date on which a cable system's basic
service rate is regulated by a franchising authority. The FCC's rate
regulations became effective on September 1, 1993. On February 22, 1994, the
FCC announced a revision of its rate regulations which it believes will
generally result in a further reduction of rates for basic and non-basic
services.
The 1992 Cable Act encourages competition with existing cable systems
by allowing municipalities, which are otherwise legally qualified, to own and
operate their own cable systems without having to obtain a franchise; prevents
franchising authorities from granting exclusive franchises; or unreasonably
refusing to award additional franchises covering an existing cable system's
service area. The 1992 Cable Act also makes several procedural changes to the
process under which a cable operator seeks to enforce renewal rights which
could make it easier in some cases for a franchising authority to deny renewal.
The 1992 Cable Act prohibits the common ownership of cable systems and
co-located MMDS or SMATV systems, and absent certain exceptions, the sale or
transfer of ownership of a cable system within 36 months after its acquisition
or initial construction. The 1992 Cable Act also precludes video programmers
affiliated with cable companies from favoring cable operators over competitors
and requires such programmers to sell their programs to other multichannel
video distributors. This provision may limit the ability of cable program
suppliers to offer exclusive programming arrangements with cable companies and
could affect the volume discounts that program suppliers currently offer to the
General Partner in its capacity as a multiple system operator. The 1992 Cable
Act has eliminated the latitude of operators to set rates for commercially
leased access channels and requires that leased access rates be set according
to a formula determined by the FCC.
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The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable television system carry its
signal, or to require the cable television system to negotiate with the station
for "retransmission consent." A cable television system is generally required
to devote up to one-third of its activated channel capacity for the mandatory
carriage of local commercial broadcast television stations, and non-commercial
television stations are also given mandatory carriage rights, although such
stations are not given the option to negotiate retransmission consent for the
carriage of their signals by cable television systems. Additionally, cable
television systems also are required to obtain retransmission consent from all
"distant" commercial television stations (except for commercial
satellite-delivered independent "superstations"), commercial radio stations and
certain low-power television stations carried by cable television systems. See
Item 1. Cable Television Services.
There have been several lawsuits filed by cable television operators
and programmers in Federal court challenging various aspects of the 1992 Cable
Act, including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulation,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutional validity of the mandatory signal carriage requirements of the
1992 Cable Act. That decision has been appealed directly to the United States
Supreme Court. Appeals have been filed in the Federal appellate court
challenging the validity of the FCC's retransmission consent rules.
Ownership and Market Structure. The FCC rules and federal law
generally prohibit the direct or indirect common ownership, operation, control
or interest in a cable television system, on the one hand, and a local
television broadcast station whose television signal reaches any portion of the
community served by the cable television system, on the other hand. The FCC
recently lifted its ban on the cross-ownership of cable television systems by
broadcast networks. The FCC revised its regulations to permit broadcast
networks to acquire cable television systems serving up to 10% of the homes
passed in the nation, and up to 50% of the homes passed in a local market.
Neither the Partnerships nor the General Partner has any direct or indirect
ownership, operation, control or interest in a television broadcast station, or
a telephone company, and they are thus presently unaffected by the
cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
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The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. This statutory provision has recently been challenged on
constitutional grounds by Bell Atlantic, one of the RBOCs. The court held
that the 1984 Cable Act cross-ownership provision is unconstitutional, and it
issued an order enjoining the United States Justice Department from enforcing
the cross-ownership ban. The National Cable Television Association, an
industry group of which the General Partner is a member, has appealed this
landmark decision, and the case could ultimately be reviewed by the United
States Supreme Court. This federal cross-ownership rule is particularly
important to the cable industry since these telephone companies already own
certain facilities needed for cable television operation, such as poles, ducts
and associated rights-of-way.
The FCC has conducted a comprehensive proceeding examining whether and
under what circumstances telephone companies should be allowed to provide cable
television services, including video programming, to their customers. The FCC
has concluded that under the 1984 Cable Act interexchange carriers (such as
AT&T, which provide long distance services) are not subject to the restrictions
which bar the provision of cable television service by local exchange carriers.
In addition, the FCC concluded that neither a local exchange carrier providing
a video dialtone service nor its programming suppliers leasing the dialtone
service are required to obtain a cable television franchise. This
determination has been appealed. If video dialtone services become widespread
in the future, cable television systems could be placed at a competitive
disadvantage because cable television systems are required to obtain local
franchises to provide cable television service and must comply with a variety
of obligations under such franchises.
The FCC has tentatively concluded that construction and operation of
technologically advanced, integrated broadband networks by carriers for the
purpose of providing video programming and other services would constitute
good cause for waiver of the cable/telephone cross-ownership prohibitions. In
July 1989, the FCC granted a California telephone company a waiver of the
cross-ownership restrictions based on a showing of "good cause," but the FCC's
decision was reversed on appeal, and as a result of this decision, the FCC may
be required to follow a stricter policy in granting such waivers in the future.
As part of the same proceeding, the FCC recommended that Congress
amend the 1984 Cable Act to allow Local Exchange Carriers ("LECs") to provide
their own video programming services over their facilities. The FCC recently
decided to loosen ownership and affiliation restrictions currently applicable
to telephone companies, and has proposed to increase the numerical limit on the
population of areas qualifying as "rural" and in which LECs can provide cable
service without a FCC waiver.
Legislation is pending in Congress which would permit the LECs to
provide cable television service within their own operating areas conditioned
on establishing separate video programming affiliates. The legislation would
generally prohibit, however, telephone companies from acquiring cable systems
within their own operating areas. The legislation
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would also enable cable television companies and others, subject to regulatory
safeguards, to offer telephone services by eliminating state and local barriers
to entry.
ITEM 2. PROPERTIES
The cable television systems owned at December 31, 1993 by the
Partnerships are described below.
FUND SYSTEM ACQUISITION DATE
---- ------ ----------------
CABLE TV FUND 14-A, LTD. Turnersville System May 1987
Buffalo System September 1987
Naperville System September 1987
Calvert County September 1987
Central Illinois May 1991
CABLE TV FUND 14-B, LTD. Surfside System September 1988
Little Rock System November 1989
CABLE TV FUND 14-A/B VENTURE Broward County System March 1988
The following tables set forth (i) the monthly basic plus service
rates charged to subscribers, (ii) the number of basic subscribers and pay
units, (iii) the number of homes passed by cable plant, (iv) the miles of cable
plant and (v) the range of franchise expiration dates for the cable television
systems owned and operated by the Partnerships. The monthly basic plus service
rates set forth herein represent, with respect to systems with multiple
headends, the basic plus service rate charged to the majority of the
subscribers within the system. While the charge for basic plus service may
have increased in some cases as a result of the FCC's rate regulations, overall
revenues to the Partnerships may have decreased due to the elimination of
charges for additional outlets and certain equipment. In cable television
systems, basic subscribers can subscribe to more than one pay TV service.
Thus, the total number of pay services subscribed to by basic subscribers are
called pay units. Figures for numbers of subscribers, miles of cable plant and
homes passed are compiled from the General Partner's records and may be subject
to adjustments.
CABLE TV FUND 14-A, LTD.
At December 31,
---------------
TURNERSVILLE, NEW JERSEY 1993 1992 1991
---- ---- ----
Monthly basic plus service rate $21.07 $19.50 $18.50
Basic subscribers 32,426 31,054 29,691
Pay units 35,035 40,698 31,475
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As of December 31, 1993, the number of homes passed and the miles of cable
plant were 43,400 and 726, respectively. Franchise expiration dates range from
July 1995 to January 2003.
At December 31,
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BUFFALO, MINNESOTA 1993 1992 1991
---- ---- ----
Monthly basic plus service rate $20.00 $19.45 $16.95
Basic subscribers 7,929 7,397 6,697
Pay units 6,657 5,855 4,306
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 19,266 and 409, respectively. Franchise expiration date for all
franchises is September 1999.
At December 31,
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NAPERVILLE, ILLINOIS 1993 1992 1991
---- ---- ----
Monthly basic plus service rate $23.87 $21.45 $19.95
Basic subscribers 22,925 21,157 19,967
Pay units 17,430 16,380 17,160
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 34,921 and 452, respectively. Franchise expiration dates range
from December 1999 to April 2001.
At December 31,
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CALVERT COUNTY, MARYLAND 1993 1992 1991
---- ---- ----
Monthly basic plus service rate $23.75 $22.50 $21.00
Basic subscribers 14,391 13,137 11,878
Pay units 15,935 15,243 15,037
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 22,400 and 679, respectively. Franchise expiration dates range
from July 1999 to January 2001.
At December 31,
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CENTRAL ILLINOIS 1993 1992 1991
---- ---- ----
Monthly basic plus service rate $20.25 $19.25 $17.95
Basic subscribers 13,830 14,690 14,449
Pay units 9,878 9,231 10,133
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 24,570 and 314, respectively. Franchise expiration dates range
from April 1994 to September 2004. Any franchise that expires in 1994 is in
the process of franchise renewal negotiations.
-13-
14
CABLE TV FUND 14-B, LTD.
At December 31,
---------------
Surfside, South Carolina 1993 1992 1991
- ------------------------ ---- ---- ----
Monthly rate basic plus service $ 23.25 $ 20.60 $ 18.95
Basic subscribers 17,770 17,275 17,665
Pay units 10,168 10,422 11,748
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 32,100 and 489, respectively. Franchise expiration dates range
from June 2006 to December 2013.
At December 31,
---------------
Little Rock, California 1993 1992 1991
- ----------------------- ---- ---- ----
Monthly rate basic plus service $ 21.77 $ 20.00 $ 17.95
Basic subscribers 4,875 4,859 4,338
Pay units 4,171 3,717 3,553
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 6,910 and 192, respectively. Franchise expiration date is October
2000.
CABLE TV FUND 14-A/B VENTURE
At December 31,
---------------
BROWARD COUNTY, FLORIDA 1993 1992 1991
- ----------------------- ---- ---- ----
Monthly basic plus service rate $ 24.00 $ 23.95 $ 19.50
Basic subscribers 45,515 42,945 41,153
Pay units 37,684 33,735 33,950
As of December 31, 1993, the number of homes passed and the miles of cable
plant were 89,000 and 938, respectively. Franchise expiration dates range
from July 1994 to December 2024. Any franchise that expires in 1994 is in the
process of franchise renewal negotiations.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates of
the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics (AMC), Arts &
Entertainment (ARTS), Black Entertainment Network (BET), C-SPAN, The Discovery
Channel (DISC), Lifetime (LIFE), Entertainment Sports Network (ESPN), Home
Shopping Network (HSN), Mind Extension University (MEU), Music Television
(MTV), Nickelodeon (NICK), Turner Network Television (TNT), The Nashville
Network (TNN), Video Hits One (VH-1), and superstations WOR, WGN and TBS. The
Partnerships' Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Bravo (BRVO), Cinemax (CMAX), The Disney
Channel (DISN),
-14-
15
Encore (ENC), Home Box Office (HBO), Showtime (SHOW) and The Movie Channel
(TMC)).
ITEM 3. LEGAL PROCEEDINGS
In April 1989, a few months after it had acquired the Surfside System,
Fund 14-B acquired a small cable television system in the Surfside Beach area
from Tritek/Southern Communications, Ltd. At the time of the acquisition,
this system served approximately 1,450 subscribers in the same area as the
Surfside System. In May 1990, the Federal Trade Commission ("FTC") commenced
an investigation into the effect of this acquisition on competition in the
Surfside Beach area. Fund 14-B submitted its response to the FTC's request
for information concerning the acquisition in July 1990. The FTC conducted
recorded interviews with certain employees of the General Partner in September
1991. No further action has been taken by the FTC, although to the best of the
General Partner's knowledge the investigation is still pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
While the Partnerships are 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 March 1, 1994, the approximate number of equity
security holders was:
FUND NUMBER OF RECORD HOLDERS
---- ------------------------
Fund 14-A 12,372
Fund 14-B 16,910
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16
Item 6. Selected Financial Data
For the Year Ended December 31,
-------------------------------
Cable TV Fund 14-A 1993 1992 1991 1990 1989
- ------------------ ---- ---- ---- ---- ----
Revenues $ 38,916,469 $ 36,315,757 $ 31,250,151 $ 25,284,771 $ 21,643,891
Depreciation and Amortization 15,197,677 15,464,984 14,187,245 9,687,471 9,146,476
Operating Loss (3,562,804) (4,065,858) (4,515,550) (417,505) (1,831,304)
Equity in Net Loss of
Cable Television Joint Venture (1,277,358) (1,676,435) (2,178,493) (2,224,512) (2,405,598)
Net Loss (8,608,115) (10,382,060) (11,647,299) (6,690,970) (7,793,906)
Net Loss per Limited Partnership Unit (53.26) (64.24) (72.07) (41.40) (48.22)
Weighted average number of
Limited Partnership Units outstanding 160,000 160,000 160,000 160,000 160,000
General Partner's
Deficit (522,349) (436,268) (332,447) (215,974) (149,064)
Limited Partners' Capital 16,910,583 25,432,617 35,710,856 47,241,682 53,865,742
Total Assets 94,106,926 106,808,479 114,829,803 92,837,214 93,120,361
Debt 75,601,829 79,386,274 77,970,342 43,579,538 35,310,733
General Partner Advances 58,974 457,354 - 324,703 1,639,294
-16-
17
For the Year Ended December 31,
-------------------------------
Cable TV Fund 14-A/B 1993 1992 1991 1990 1989
- -------------------- ---- ---- ---- ---- ----
Revenues $ 22,068,952 $ 20,212,867 $ 18,366,881 $ 16,681,752 $ 14,125,894
Depreciation and Amortization 9,352,808 9,971,915 10,472,621 9,562,081 9,111,567
Operating Loss (2,324,939) (3,293,133) (4,361,200) (3,939,561) (5,044,891)
Net Loss (4,713,500) (6,186,107) (8,038,720) (8,208,530) (8,876,747)
Partners' Capital 27,481,742 32,195,242 38,381,349 46,420,069 54,628,599
Total Assets 72,315,816 80,404,133 85,533,244 92,742,834 93,735,469
Debt 43,461,730 46,908,409 46,037,691 43,533,847 36,771,693
Jones Intercable, Inc. Advances 57,920 125,873 16,705 74,393 176,090
-17-
18
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CABLE TV FUND 14-A
Results of Operations
1993 Compared to 1992-
Revenues of Cable TV Fund 14-A ("Fund 14-A") increased $2,600,712, or
approximately 7 percent, from $36,315,757 in 1992 to $38,916,469 in 1993. An
increase in the subscriber base accounted for approximately 44 percent of the
increase in revenues. Basic subscribers increased 4,066, or approximately 5
percent, from 87,435 at December 31, 1992 to 91,501 at December 31, 1993.
Basic service rate adjustments in the Partnership's systems accounted for
approximately 22 percent of the increase in revenues. An increase in
advertising sales revenues accounted for approximately 16 percent of the
increase in revenues. The increase in revenues would have been greater but for
the reduction in basic rates due to new basic rate regulations issued by the
FCC in May 1993 with which Fund 14-A complied effective September 1, 1993. In
addition, on February 22, 1994, the FCC announced a further rulemaking which,
when implemented, could reduce rates further. No other individual factor was
significant to the increases in revenues.
Operating, general and administrative expenses increased $2,000,422,
or approximately 10 percent, from $20,597,819 in 1992 to $22,598,241 in 1993.
Operating, general and administrative expense represented 58 percent of revenue
in 1993 compared to 57 percent in 1992. Increases in programming fees
accounted for approximately 40 percent of the increase in expenses. Increases
in personnel costs accounted for approximately 20 percent of the increase in
expenses. Increases in advertising sales costs accounted for approximately 14
percent of the increase in expenses. No other factor was significant to the
increase in operating, general and administrative expenses. Management fees
and allocated overhead from the General Partner increased $364,543, or
approximately 8 percent, from $4,318,812 in 1992 to $4,683,355 in 1993. This
increase was due to the increases in revenues, upon which such fees and
allocations are based, and an increase in allocated expense from the General
Partner.
Depreciation and amortization expense decreased $267,307, or
approximately 2 percent, from $15,464,984 in 1992 to $15,197,677 in 1993
primarily due to the maturation of a portion of the intangible asset base.
Operating loss decreased $503,054, or approximately 12 percent, from
$4,065,858 in 1992 to $3,562,804 in 1993 due to the increase in revenues
exceeding the increases in operating, general and administrative expenses and
management fees and allocated overhead from the General Partner as well as the
decrease in depreciation and amortization expense. Operating income before
depreciation and amortization increased $235,747, or approximately 2 percent,
from $11,399,126 in 1992 to $11,634,873 in 1993 due to the increase in revenues
exceeding the increases in operating, general and administrative expenses and
management fees and allocated overhead from the General Partner.
Interest expense decreased $836,116, or approximately 18 percent, from
$4,562,353 in 1992 to $3,726,237 in 1993. This decrease was due primarily to
lower effective interest rates and lower outstanding balances on interest
bearing obligations. Loss before equity in net loss of cable television joint
venture decreased $1,374,868, or approximately 16 percent, from $8,705,625 in
1992 to $7,330,757 in 1993 due primarily to the decrease in operating loss and
the decrease in interest expense. Such losses are expected to continue.
1992 Compared to 1991-
Revenues of Fund 14-A increased $5,065,606, or approximately 16
percent, from $31,250,151 in 1991 to $36,315,757 in 1992. Approximately 41
percent of the increase in revenues is due to the acquisition of the Central
Illinois System on May 30, 1991. Basic service rate adjustments in the first
and second quarter of 1992 accounted for approximately 30 percent of the
increase in revenues. Increases in the basic subscriber base primarily
accounted for the remainder of the increase in revenues.
Operating, general and administrative expenses increased $2,502,733,
or approximately 14 percent, from $18,095,086 in 1991 to $20,597,819 in 1992.
Operating, general and administrative expense represented 57 percent of revenue
in 1992 compared to 58 percent in 1991. Approximately 45 percent of the
increase in expenses is due to the acquisition of the Central Illinois System
on May 30, 1991. Increases in programming fees in the remaining systems
accounted for approximately 28 percent of the increase in expenses. The
increase in programming fees was due in part to the increase in the subscriber
base. No other factor was significant to the increase in operating, general
and administrative expenses. Management fees and allocated overhead from the
-18-
19
General Partner increased $835,442, or approximately 24 percent, from
$3,483,370 in 1991 to $4,318,812 in 1992. Approximately 36 percent of the
increase is attributable to the acquisition of the Central Illinois System.
The remainder of the increase is due to the increases in revenues, upon which
management fees and allocated overhead are based, and an increase in allocated
expense from the General Partner.
Depreciation and amortization expense increased $1,277,739, or
approximately 9 percent, from $14,187,245 in 1991 to $15,464,984 in 1992.
Approximately 78 percent of the increase in expense was due to the acquisition
of the Central Illinois System on May 30, 1991. The remainder of the increase
was due to capital additions during 1991.
Operating loss decreased $449,692, or approximately 10 percent, from
$4,515,550 in 1991 to $4,065,858 in 1992 due to the increase in revenues
exceeding the increases in operating, general and administrative expenses,
management fees and allocated overhead from the General Partner and
depreciation and amortization expense. Operating income before depreciation
and amortization increased $1,727,431, or approximately 18 percent, from
$9,671,695 in 1991 to $11,399,126 in 1992. Approximately 38 percent of the
increase was due to the acquisition of the Central Illinois System on May 30,
1991. The remainder of the increase was due to the increase in revenues
exceeding the increase in operating, general and administrative expenses and
management fees and allocated overhead from the General Partner.
Interest expense decreased $410,317, or approximately 8 percent, from
$4,972,670 in 1991 to $4,562,353 in 1992. This decrease was due primarily to
lower effective interest rates on interest bearing obligations and was offset,
in part, by higher outstanding balances on interest bearing obligations due to
the purchase of the Central Illinois System. Other expense increased $96,828
due to depreciation allocated from related entities that provide advertising
sales, warehouse and converter repair services to Fund 14-A. Loss before
equity in net loss of cable television joint venture decreased $763,181, or
approximately 8 percent, from $9,468,806 in 1991 to $8,705,625 in 1992 due
primarily to the decrease in operating loss and the decrease in interest
expense.
In addition to the systems owned exclusively, Fund 14-A owns an
approximate 27 percent interest in Cable TV Fund 14-A/B Venture (the
"Venture"). See Management's Discussion and Analysis of the Venture for
details pertaining to the Venture's operations.
Financial Condition
Capital expenditures totalled approximately $7,007,000 during 1993.
Approximately 26 percent of these expenditures was attributable to service
drops to homes, approximately 24 percent related to converter replacements,
approximately 18 percent was for new plant construction and approximately 17
percent of these expenditures was for system upgrades and rebuilds in four of
Fund 14- A's operating systems. The remainder of the expenditures related to
various system and plant enhancements throughout Fund 14-A's operating systems.
These expenditures were funded from cash on hand and cash generated from
operations.
Budgeted capital expenditures for 1994 are approximately $9,016,000.
Approximately 34 percent of the total capital expenditures will be used for new
plant construction in all of Fund 14-A's systems. Approximately 24 percent
will relate to service drops to homes. Approximately 18 percent will be used
for system upgrades and rebuilds in all of Fund 14-A's systems. The remainder
of the anticipated expenditures are for various enhancements in all of Fund
14-A's systems. The actual level of capital expenditures will depend, in part,
upon the General Partner's determination as to the proper scope and timing of
such expenditures in light of the FCC's announcement of a further rulemaking
regarding the 1992 Cable Act on February 22, 1994 and Fund 14-A's liquidity
position. Funding for the improvements is expected to come from cash on hand,
cash generated from operations, and, if available, borrowings under a
renegotiated credit facility.
At December 31, 1992, the then-outstanding balance of $79,000,000 on
the Partnership's revolving credit facility converted to a term loan. The term
loan is payable in 26 consecutive quarterly installments which began March 31,
1993. The Partnership repaid $3,665,600 during 1993. Interest on the
outstanding principal balance is at the Partnership's option of prime plus 1/4
percent or a fixed rate defined as the CD rate plus 1-3/8 percent or the London
Interbank Offered Rate plus 1-1/4 percent. Repayments under this term loan
total $5,245,600 for 1994. The General Partner is currently negotiating to
reduce or stop the principal amortization payments, establish a revolving
credit period, and increase the maximum amount available under this credit
facility. If the General Partner is unsuccessful in renegotiating the credit
facility, Fund 14-A may have to reduce anticipated capital expenditures to fund
required principal repayments. Until the credit facility is successfully
renegotiated, Fund 14-A will need to rely on cash on hand, cash generated from
operations and advances from the General Partner to fund principal repayments
and capital expenditures. Advances from the General Partner will be made in
the General Partner's discretion and the General Partner has no obligation to
make advances to Fund 14-A.
-19-
20
During 1988, Fund 14-A entered into an interest rate cap agreement
covering outstanding debt obligations of $10,000,000. Fund 14-A paid a fee of
$383,000. The agreement protects Fund 14-A from interest rates that exceed 10
percent for five years from the date of the agreement and expired in January,
1993. The fee was charged to interest expense over the life of the agreement
using the straight-line method. On June 17, 1991, Fund 14-A entered into an
interest rate cap agreement covering outstanding debt obligations of
$35,000,000. Fund 14-A paid a fee of $157,500. The agreement protects Fund
14-A from LIBOR interest rates that exceed 8.5 percent for two years from the
date of the agreement and expired in May, 1993. The fee was charged to interest
expense over the life of the agreement using the straight-line method. On
January 12, 1993, Fund 14-A entered into an interest rate cap agreement
covering outstanding debt obligations of $5,000,000. Fund 14-A paid a fee of
$50,000. The agreement protects Fund 14-A from interest rates that exceed 7
percent for three years from the date of the agreement. The fee is being
charged to interest expense over the life of the agreement using the
straight-line method.
Subject to the regulatory matters discussed below and assuming
successful renegotiation of Fund 14-A's credit facility, of which there can be
no assurance, the General Partner believes Fund 14-A has sufficient sources of
capital to meet its presently anticipated needs.
In addition to those systems owned exclusively by it, Fund 14-A owns
an approximate 27 percent interest in the Venture. Fund 14-A's investment in
this cable television joint venture, accounted for under the equity method,
decreased by $1,277,358 compared to the December 31, 1992 balance. This
decrease represents Fund 14-A's proportionate share of losses generated by the
Venture during 1993. These losses are anticipated to continue.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. This legislation has effected significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally allows for a greater degree of
regulation of the cable television industry. Under the 1992 Cable Act's
definition of effective competition, nearly all cable television systems in the
United States, including those owned and managed by the General Partner, are
subject to rate regulation of basic cable services. In addition, the 1992
Cable Act allows the FCC to regulate rates for non-basic service tiers other
than premium services in response to complaints filed by franchising
authorities and/or cable subscribers. In April 1993, the FCC adopted
regulations governing rates for basic and non-basic services. These
regulations, with which Fund 14-A complied, became effective on September 1,
1993. See Item 1 for further discussion of the provisions of the 1992 Cable
Act.
Based on the General Partner's assessment of the FCC's rulemakings
concerning rate regulation under the 1992 Cable Act, Fund 14-A reduced the
rates it charged for certain regulated services. On an annualized basis, such
rate reductions will result in an estimated reduction in Fund 14-A's revenue of
approximately $2,250,000, or approximately 5 percent, and a decrease in
operating income before depreciation and amortization of approximately
$2,100,000, or approximately 11 percent. In addition, on February 22, 1994,
the FCC announced a further rulemaking which, when implemented, could reduce
rates further. Based on the foregoing, the General Partner believes that the
new rate regulations will have negative effect on Fund 14-A's revenues and
operating income before depreciation and amortization. The General Partner has
undertaken actions to mitigate a portion of these reductions primarily through
(a) new service offerings, (b) product re-marketing and re-packaging and (c)
marketing efforts directed at non-subscribers. To the extent such reductions
are not mitigated, the values of Fund 14-A's cable television systems, which
are calculated based on cash flow, could be adversely impacted. The FCC's
rulemakings may have a material adverse effect on Fund 14-A's ability to
renegotiate its credit facility.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
the cable systems. The retransmission consent rules went into effect October
6, 1993. In the cable television systems owned by Fund 14-A, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur . If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
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21
CABLE TV FUND 14-A/B VENTURE
Results of Operations
1993 Compared to 1992-
Revenues of the Venture's Broward County System increased $1,856,065,
or approximately 9 percent, from $20,212,867 in 1992 to $22,068,952 in 1993.
Increases in basic and premium subscribers accounted for approximately 48
percent of the increase in revenue. Basic and premium subscribers increased 6
percent and 14 percent, respectively, during 1993. Advertising sales accounted
for approximately 19 percent of the increase in revenues. Basic service rate
adjustments accounted for approximately 15 percent of the increase in revenues.
The increase in revenues would have been greater but for the reduction in basic
rates due to the new basic rate regulations issued by the FCC in May 1993 with
which the Venture complied effective September 1, 1993. In addition, on
February 22, 1994, the FCC announced a further rulemaking which, when
implemented, could reduce rates further. No other individual factor
significantly affected the increase in revenues.
Operating, general and administrative expense increased $1,287,088, or
approximately 12 percent, from $11,052,427 in 1992 to $12,339,515 in 1993.
Operating, general and administrative expenses represented 56 percent of
revenue in 1993, compared to 55 percent in 1992. The increase in operating,
general and administrative expenses was due primarily to increases in
programming fees and marketing expenses. No other individual factor
significantly affected the increase in operating, general and administrative
expense. Management fees and allocated overhead from Jones Intercable, Inc.
increased $219,910, or approximately 9 percent, from $2,481,658 in 1992 to
$2,701,568 in 1993 due to the increase in revenues, upon which such fees and
allocations are based, and an increase in allocated expenses from Jones
Intercable, Inc. Depreciation and amortization expense decreased $619,107, or
approximately 6 percent, from $9,971,915 in 1992 to $9,352,808 in 1993. The
decrease in depreciation and amortization expense is attributable to the
maturation of the Venture's tangible asset base.
Operating loss decreased $968,164, or approximately 29 percent, from
$3,293,133 in 1992 to $2,324,939 in 1993. This decrease is due to the increase
in revenues exceeding the increases in operating, general and administrative
expenses and management fees and allocated overhead from Jones Intercable, Inc.
as well as the decrease in depreciation and amortization expense. Operating
income before depreciation and amortization expense increased $349,087, or
approximately 5 percent, from $6,678,782 in 1992 to $7,027,869 in 1993 due to
the increase in revenues exceeding the increases in operating, general and
administrative expenses and management fees and allocated overhead from Jones
Intercable, Inc.
Interest expense decreased $114,318, or approximately 4 percent, from
$2,564,990 in 1992 to $2,450, 672 in 1993 due to lower effective interest rates
and lower outstanding balances on interest bearing obligations. Net loss
decreased $1,472,607, or approximately 24 percent, from $6,186,107 in 1992 to
$4,713,500 in 1993. The decrease was primarily attributable to the decrease in
operating loss and the decrease in interest expense. These losses were
primarily the result of the factors discussed above and are expected to
continue in the future.
1992 Compared to 1991-
Revenues of the Venture's Broward County System increased $1,845,986,
or approximately 10 percent, from $18,366,881 in 1991 to $20,212,867 in 1992.
Basic service rate adjustments accounted for approximately 51 percent of the
increase in revenues. Increases in basic commercial customers and customer
late fees accounted for approximately 22 percent and 7 percent, respectively,
of the increase in revenues. No other individual factor significantly affected
the increase in revenues.
Operating, general and administrative expense increased $987,683, or
approximately 10 percent, from $10,064,744 in 1991 to $11,052,427 in 1992.
Operating, general and administrative expenses represented 55 percent of
revenue in 1992 and 1991. The increase in operating, general and
administrative expense was due primarily to increases in personnel related
costs and programming fees, which were partially offset by decreases in
marketing expenses. No other individual factor significantly affected the
increase in operating, general and administrative expense. Management fees and
allocated overhead from Jones Intercable, Inc. increased $290,942, or
approximately 13 percent, from $2,190,716 in 1991 to $2,481,658 in 1992 due to
the increase in revenues, upon which such fees and allocations are based, and
an increase in allocated expenses from Jones Intercable, Inc. Depreciation and
amortization expense decreased $500,706, or approximately 5 percent, from
$10,472,621 in 1991 to $9,971,915 in 1992. The decrease in depreciation and
amortization expense was attributable to the maturation of the Venture's
intangible asset base.
-21-
22
Operating loss decreased $1,068,067, or approximately 24 percent, from
$4,361,200 in 1991 to $3,293,133 in 1992. This decrease was due to the
increase in revenues exceeding the increase in operating, general and
administrative expenses, management fees and allocated overhead from Jones
Intercable, Inc. as well as the decrease in depreciation and amortization
expense. Operating income before depreciation and amortization expense
increased $567,361, or approximately 9 percent, from $6,111,421 in 1991 to
$6,678,782 in 1992 due to the increase in revenues exceeding the increases in
operating, general and administrative expenses and management fees and
allocated overhead from Jones Intercable, Inc.
Interest expense decreased $1,078,926, or approximately 30 percent,
from $3,643,916 in 1991 to $2,564,990 in 1992 due to lower effective interest
rates on interest bearing obligations. Net loss decreased $1,852,613, or
approximately 23 percent, from $8,038,720 in 1991 to $6,186,107 in 1992. The
decrease was primarily attributable to the decrease in operating loss and the
decrease in interest expense. These losses were primarily the result of the
factors discussed above.
Financial Condition
The Venture expended approximately $3,040,000 on capital additions
during 1993. Cable television plant extensions accounted for approximately 27
percent of these expenditures. The construction of service drops to homes and
the purchase of converters accounted for approximately 25 percent and 12
percent, respectively, of the expenditures. The remainder of these
expenditures related to various enhancements in the Broward County System.
These capital expenditures were funded from cash on hand and cash generated
from operations. The Venture plans to expend approximately $3,125,000 for
capital additions in 1994. Of this total, approximately 24 percent is for
cable television plant extensions. Approximately 26 percent will relate to the
construction of service drops to homes. Approximately 14 percent will relate
to upgrades and rebuild of the Broward County System. The remainder of the
anticipated expenditures are for various enhancements in the Broward County
System. These capital expenditures are expected to be funded from cash on hand
and cash generated from operations and, if necessary, borrowings under a
renegotiated credit facility, as discussed below.
On December 31, 1992, the then outstanding balance of $46,800,000 on
the Venture's revolving credit facility converted to a term loan. The balance
outstanding on the term loan at December 31, 1993 was $43,290,000. The term
loan is payable in quarterly installments which began March 31, 1993 and is
payable in full by December 31, 1999. Installments paid during 1993 totalled
$3,510,000. Installments due during 1994 total $3,510,000. Funding for these
installments is expected to come from cash on hand and cash generated from
operations. The General Partner is currently negotiating to reduce principal
payments (to provide liquidity for capital expenditures) and to adjust certain
leverage covenants. Interest is at the Venture's option of prime plus 1/2
percent, LIBOR plus 1-1/2 percent or CD rate plus 1-5/8 percent. The effective
interest rates on amounts outstanding as of December 31, 1993 and 1992 were 5.0
percent and 5.48 percent, respectively. In January 1993, the Venture entered
into an interest rate cap agreement covering outstanding debt obligations of
$25,000,000. The Venture paid a fee of $246,250. The agreement protects the
Venture from interest rates that exceeded 7 percent for three years from the
date of the agreement.
Subject to regulatory matters discussed below and the General
Partner's ability to successfully renegotiate the Venture's credit facility,
the General Partner believes that the Venture has sufficient sources of capital
to service its presently anticipated needs.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. This legislation has effected significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally allows for a greater degree of
regulation of the cable television industry. Under the 1992 Cable Act's
definition of effective competition, nearly all cable television systems in the
United States, including those owned and managed by the General Partner, are
subject to rate regulation of basic cable services. In addition, the 1992
Cable Act allows the FCC to regulate rates for non-basic service tiers other
than premium services in response to complaints filed by franchising
authorities and/or cable subscribers. In April 1993, the FCC adopted
regulations governing rates for basic and non-basic services. These
regulations, with which the Venture complied, became effective on September 1,
1993. See Item 1 for further discussion of the provisions of the 1992 Cable
Act.
Based on the General Partner's assessment of the FCC's rulemakings
concerning rate regulation under the 1992 Cable Act, the Venture reduced the
rates it charged for certain regulated services. On an annualized basis, such
rate reductions will result in an estimated reduction in the Venture's revenue
of approximately $1,800,000, or approximately 8 percent, and a decrease in
operating income before depreciation and amortization of approximately
$1,100,000, or approximately 10 percent. In addition, on February 22, 1994,
the FCC announced a further rulemaking which, when implemented, could reduce
rates further. Based on the
-22-
23
foregoing, the General Partner believes that the new rate regulations will have
a negative effect on the Venture's revenues and operating income before
depreciation and amortization. The General Partner has undertaken actions to
mitigate a portion of these reductions primarily through (a) new service
offerings, (b) product re-marketing and re-packaging and (c) marketing efforts
directed at non-subscribers. To the extent such reductions are not mitigated,
the values of the Venture's cable television systems, which are calculated
based on cash flow, could be adversely impacted. In addition, the FCC's
rulemakings may have an adverse effect on the Venture's ability to renegotiate
its credit facility.
-23-
24
Item 8. Financial Statements
CABLE TV FUND 14
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993 and 1992
INDEX
Page
----
14-A 14-A/B
---- ------
Report of Independent Public Accountants 25 38
Balance Sheets 26 39
Statements of Operations 28 41
Statements of Partners' Capital (Deficit) 29 42
Statements of Cash Flows 30 43
Notes to Financial Statements 31 44
Schedule V 36 48
Schedule VI 37 49
-24-
25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-A:
We have audited the accompanying balance sheets of CABLE TV FUND 14-A
(a Colorado limited partnership) as of December 31, 1993 and 1992, and the
related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements and the schedules referred to below are the responsibility
of the General Partner's management. Our responsibility is to express an
opinion on these financial statements and schedules 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
as of December 31, 1993 and 1992, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1993,
in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in the index
of financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
March 11, 1994.
-25-
26
CABLE TV FUND 14-A
(A Limited Partnership)
BALANCE SHEETS
December 31,
------------
ASSETS 1993 1992
------ ---- ----
CASH $ 476,782 $ 3,833,407
TRADE RECEIVABLES, less allowance for doubtful receivables of
$72,862 and $108,464 at December 31, 1993 and 1992, respectively 938,470 823,304
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 108,455,632 101,448,424
Less- accumulated depreciation (47,132,923) (37,002,820)
------------- --------------
61,322,709 64,445,604
Franchise costs, net of accumulated amortization of $18,607,312 and
$14,598,502 at December 31, 1993 and 1992, respectively 15,531,350 19,540,160
Subscriber lists, net of accumulated amortization of $7,510,999 and
$6,570,419 at December 31, 1993 and 1992, respectively 2,145,351 3,085,931
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $660,057 and $543,693 at December 31, 1993 and
1992, respectively 6,133,201 6,249,565
Investment in cable television joint venture 7,351,293 8,628,651
------------- --------------
Total investment in cable television properties 92,483,904 101,949,911
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 207,770 201,857
------------- --------------
Total assets $ 94,106,926 $ 106,808,479
============= ==============
The accompanying notes to financial statements
are an integral part of these balance sheets.
-26-
27
CABLE TV FUND 14-A
(A Limited Partnership)
BALANCE SHEETS
December 31,
------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1993 1992
- ------------------------------------------- ---- ----
LIABILITIES:
Debt $ 75,601,829 $ 79,386,274
Accounts payable-
Trade 106,674 20,942
General Partner 58,974 457,354
Accrued liabilities 1,849,282 1,694,537
Subscriber prepayments 101,933 253,023
------------- --------------
Total liabilities 77,718,692 81,812,130
------------- --------------
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (523,349) (437,268)
------------- --------------
(522,349) (436,268)
------------- --------------
Limited Partners-
Net contributed capital (160,000 units outstanding at
December 31, 1993 and 1992) 68,722,000 68,722,000
Accumulated deficit (51,811,417) (43,289,383)
------------- --------------
16,910,583 25,432,617
------------- --------------
Total liabilities and partners' capital (deficit) $ 94,106,926 $ 106,808,479
============= ==============
The accompanying notes to financial statements
are an integral part of these balance sheets.
-27-
28
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
REVENUES $ 38,916,469 $ 36,315,757 $ 31,250,151
COSTS AND EXPENSES:
Operating, general and administrative 22,598,241 20,597,819 18,095,086
Management fees and allocated overhead from
General Partner 4,683,355 4,318,812 3,483,370
Depreciation and amortization 15,197,677 15,464,984 14,187,245
------------ ------------ ------------
OPERATING LOSS (3,562,804) (4,065,858) (4,515,550)
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (3,726,237) (4,562,353) (4,972,670)
Other, net (41,716) (77,414) 19,414
------------ ------------ ------------
Total other income (expense), net (3,767,953) (4,639,767) (4,953,256)
------------ ------------ ------------
LOSS BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE (7,330,757) (8,705,625) (9,468,806)
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE (1,277,358) (1,676,435) (2,178,493)
------------ ------------ ------------
NET LOSS $ (8,608,115) $(10,382,060) $(11,647,299)
============ ============ ============
ALLOCATION OF NET LOSS:
General Partner $ (86,081) $ (103,821) $ (116,473)
============ ============ ============
Limited Partners $ (8,522,034) $(10,278,239) $(11,530,826)
============ ============ ============
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (53.26) $ (64.24) $ (72.07)
============ ============ ============
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.
-28-
29
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
GENERAL PARTNER:
Balance, beginning of period $ (436,268) $ (332,447) $ (215,974)
Net loss for period (86,081) (103,821) (116,473)
----------- ------------ ------------
Balance, end of period $ (522,349) $ (436,268) $ (332,447)
=========== ============ ============
LIMITED PARTNERS:
Balance, beginning of period $25,432,617 $ 35,710,856 $ 47,241,682
Net loss for period (8,522,034) (10,278,239) (11,530,826)
----------- ------------ ------------
Balance, end of period $16,910,583 $ 25,432,617 $ 35,710,856
=========== ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
-29-
30
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,608,115) $(10,382,060) $(11,647,299)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 15,197,677 15,464,984 14,187,245
Equity in net loss of cable television joint venture 1,277,358 1,676,435 2,178,493
Amortization of interest rate protection contract 60,031 165,348 89,424
Increase (decrease) in advances from General Partner (398,380) 457,354 (324,703)
Decrease (increase) in trade receivables (115,166) (468,179) 378,859
Decrease (increase) in deposits, prepaid expenses
and deferred charges (17,764) 3,040 (147,790)
Increase (decrease) in trade accounts payable, accrued
liabilities and subscriber prepayments 89,387 487,450 (426,213)
------------ ------------ ------------
Net cash provided by operating activities 7,485,028 7,404,372 4,288,016
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of cable television system - - (30,218,057)
Purchase of property and equipment (7,007,208) (5,214,466) (8,240,861)
------------ ------------ ------------
Net cash used in investing activities (7,007,208) (5,214,466) (38,458,918)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 116,518 2,263,542 34,740,708
Repayment of debt (3,900,963) (847,610) (349,904)
Purchase of interest rate protection contract (50,000) - (157,500)
------------ ------------ ------------
Net cash provided by (used in)
financing activities (3,834,445) 1,415,932 34,233,304
---------- ------------ ------------
Increase (decrease) in cash (3,356,625) 3,605,838 62,402
Cash, beginning of period 3,833,407 227,569 165,167
------------ ------------ ------------
Cash, end of period $ 476,782 $ 3,833,407 $ 227,569
============ ============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 3,900,545 $ 4,199,841 $ 5,434,524
============ ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
-30-
31
CABLE TV FUND 14-A
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 14-A ("Fund 14-A"), a Colorado limited
partnership, was formed on February 6, l987, under a public program sponsored
by Jones Intercable, Inc. Fund 14-A was formed to acquire, construct, develop
and operate cable television systems. Jones Intercable, Inc. is the "General
Partner" and manager of Fund 14-A. The General Partner and its subsidiaries
also own and operate cable television systems. In addition, the General
Partner manages cable television systems for other limited partnerships for
which it is general partner and, also, for other affiliated entities.
On January 8, 1988, Fund 14-A and Cable TV 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. Fund 14-A contributed
$18,975,000 to the capital of the Venture for an approximate 27 percent
ownership interest and Cable TV Fund 14-B contributed $51,025,000 of its net
contributed capital for an approximate 73 percent ownership interest.
Contributed Capital, Commissions and Syndication Costs
The capitalization of Fund 14-A 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 Fund 14-A by
contributing $1,000 to partnership capital.
An affiliate of the General Partner, Jones International
Securities, Ltd, received a commission of 10 percent of capital contributions
of the limited partners, from which the affiliate paid all commissions of
participating broker-dealers which sold partnership interests. The General
Partner was reimbursed for all offering costs. Commission costs and
reimbursements to the General Partner for costs of raising partnership capital
were charged to limited partners' capital.
All profits and losses of Fund 14-A 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 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.
Cable Television System Acquisitions and Formation of the Venture
Fund 14-A acquired the cable television systems serving
certain areas in and around the communities of Turnersville, New Jersey,
Buffalo, Minnesota, Naperville, Illinois and Calvert County, Maryland in 1987.
On May 30, 1991, Fund 14-A purchased additional cable television systems
serving certain communities in central Illinois.
Fund 14-A allocated the total contract purchase price of cable
television systems acquired as follows: first, to the fair value of net
tangible assets acquired; second, to the value of subscriber lists and a
noncompete agreement with previous owners; third, to franchise costs; and
fourth, to costs in excess of interests in net assets purchased. Brokerage
fees paid to an affiliate of the General Partner (Note 3) and other system
acquisition costs were capitalized and charged to distribution systems, except
for the Central Illinois System which were charged to intangible assets.
(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. Fund 14-A's tax returns are also prepared on the
accrual basis.
-31-
32
Investment in Cable Television Joint Venture
In addition to its wholly owned systems, Fund 14-A owns an
approximate 27 percent interest in the Venture through a capital contribution
made in March 1988 of $18,975,000. The Venture acquired the Broward County
System in March 1988. The Venture incurred losses of $4,713,500, $6,186,107,
and $8,038,720 in 1993, 1992 and 1991, respectively of which $1,277,358,
$1,676,435, and $2,178,493, respectively, was allocated to Fund 14-A. The
investment is accounted for on the equity method. The operations of the
Venture are significant to Fund 14-A and should be reviewed in conjunction with
these financial statements. Reference is made to the accompanying financial
statements of the Venture on pages 38 to 49.
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
Distribution systems 5 - 15 years
Buildings 20 years
Equipment and tools 3 - 5 years
Premium television service equipment 5 years
Earth receive stations 5 years
Vehicles 3 years
Other property, plant and equipment 5 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to intangible assets are being amortized using
the straight-line method over the following remaining estimated useful lives:
Franchise costs 1 - 6 years
Subscriber lists 6 years
Costs in excess of interests in net assets purchased 33 - 38 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
Reclassification
Certain prior year amounts have been reclassified to conform
to the 1993 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Brokerage Fees
The Jones Group, Ltd., an affiliate of the General Partner,
performs brokerage services for Fund 14-A. For brokering the acquisition of
cable television systems for Fund 14-A, The Jones Group, Ltd. is paid fees
totalling 4 percent of the purchase prices. For brokering the acquisition of
the Central Illinois System for Fund 14-A, The Jones Group, Ltd. was paid fees
totalling $998,960, or 4 percent of the original purchase price, during 1991.
No brokerage fees were paid by Fund 14-A during 1993 and 1992.
Management Fees, Distribution Ratios and Reimbursements
The General Partner manages Fund 14-A and receives 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.
Management fees paid to the General Partner by Fund 14-A for the years ended
December 31, 1993, 1992, and 1991 were $1,945,823, $1,815,788 and $1,562,508,
respectively.
-32-
33
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 distributions other than interest
income on limited partner subscriptions earned prior to the acquisition of Fund
14- A's first cable television system or from cash flow, such as from the sale
or refinancing of a system or upon dissolution of Fund 14-A, 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 Fund 14-A capital by the limited partners; the balance, 75 percent to the
limited partners and 25 percent to the General Partner.
Fund 14-A reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and benefits paid to corporate personnel, rent, data processing and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal, and investor relations services to Fund
14-A. Allocations of personnel costs are based primarily on actual time spent
by employees of the General Partner with respect to each partnership managed.
Remaining overhead costs are allocated based on total revenues and/or the cost
of partnership assets managed. Systems owned by the General Partner and all
other systems owned by partnerships for which Jones Intercable, Inc. is the
general partner are also allocated a proportionate share of these expenses.
The General Partner believes that the methodology used in allocating overhead
and administrative expenses is reasonable. Reimbursements made to the General
Partner by Fund 14-A for allocated overhead and administrative expenses were
$2,737,532, $2,503,024 and $1,920,862 in 1993, 1992 and 1991, respectively.
Fund 14-A was charged interest during 1993 at an average
interest rate of 10.61 percent on the amounts due the General Partner, which
approximated the General Partner's weighted average cost of borrowing. Total
interest charged by the General Partner was $1,029, $10,063 and $9,400 for the
years ended December 31, 1993, 1992 and 1991, respectively.
Payments to Affiliates for Programming Services
Fund 14-A receives programming from Superaudio and The Mind
Extension University, affiliates of the General Partner. Payments to
Superaudio totalled $50,655, $48,754 and $41,743 in 1993, 1992 and 1991,
respectively. Payments to The Mind Extension University totalled $32,659,
$31,361 and $27,542 in 1993, 1992 and 1991, respectively.
(4) DEBT
December 31,
------------
1993 1992
---- ----
Debt consists of the following:
Lending institutions-
Revolving credit and term loan $75,334,400 $79,000,000
Capital lease obligations 267,429 386,274
----------- -----------
$75,601,829 $79,386,274
=========== ===========
During March 1988, Fund 14-A entered into a revolving credit and term
loan agreement with an institutional lender. During May 1991, the General
Partner negotiated an increase in the maximum amount available under this
credit facility to $80,000,000 from $45,000,000 to facilitate the purchase of
the Central Illinois System and extended the revolving credit period to
December 31, 1992. At December 31, 1992, the then-outstanding balance of
$79,000,000 on the Partnership's credit facility converted to a term loan. The
term loan is payable in 26 consecutive quarterly installments which began March
31, 1993. The Partnership repaid $3,665,600 during 1993. Interest on the
outstanding principal balance is at the Partnership's option of prime plus 1/4
percent or a fixed rate defined as the CD rate plus 1-3/8 percent or the London
Interbank Offered Rate plus 1-1/4 percent. Scheduled repayments under this
term loan are $5,245,600 for 1994. The effective interest rates on outstanding
obligations as of December 31, 1993 and 1992 were 4.64 percent and 5.02
percent, respectively.
-33-
34
During 1988, Fund 14-A entered into an interest rate cap agreement
covering outstanding debt obligations of $10,000,000. Fund 14-A paid a fee of
$383,000. The agreement protected Fund 14-A from interest rates that exceeded
10 percent for five years from the date of the agreement and expired in January,
1993. The fee was charged to interest expense over the life of the agreement
using the straight-line method. On June 17, 1991, Fund 14-A entered into an
interest rate cap agreement covering outstanding debt obligations of
$35,000,000. Fund 14-A paid a fee of $157,500. The agreement protected Fund
14-A from LIBOR interest rates that exceeded 8.5 percent for two years from the
date of the agreement and expired in June, 1993. The fee was charged to
interest expense over the life of the agreement using the straight-line method.
On January 12, 1993, Fund 14-A entered into an interest rate cap agreement
covering outstanding debt obligations of $5,000,000. Fund 14-A paid a fee of
$50,000. The agreement protects Fund 14-A from interest rates that exceed 7
percent for three years from the date of the agreement. The fee is being
charged to interest expense over the life of this agreement using the
straight-line method.
Installments due on debt principal for each of the five years in the
period ending December 31, 1998, and thereafter, respectively, are:
$5,325,829, $8,327,829, $11,614,228, $17,564,743, $21,962,000 and $10,807,200.
At December 31, 1993, substantially all of Fund 14-A's property, plant and
equipment secured the above indebtedness.
(5) 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 Fund 14-A are prepared and filed by the General
Partner.
Fund 14-A's tax returns, the qualification of Fund 14-A 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 Fund 14-A's qualification
as such, or in changes with respect to Fund 14-A's recorded income or loss, the
tax liability of the general and limited partners would likely be changed
accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
(6) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation in the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in the rates for certain regulated services. On February 22,
1994, the FCC announced a further rulemaking which, when implemented could
reduce rates further. The General Partner plans to mitigate a portion of these
reductions primarily through (a) new service offerings, (b) product
re-marketing and re-packaging and (c) marketing efforts directed at
non-subscribers.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." Additionally, cable systems also are required to obtain
retransmission consent from all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations"),
commercial radio stations and certain low-power television stations carried by
the cable systems. The retransmission consent rules went into effect October
6, 1993. In the cable television systems owned by Fund 14-A, no broadcast
stations withheld their consent to retransmission of their signal. Certain
broadcast signals are being carried pursuant to extensions offered to the
General Partner by broadcasters, including a one-year extension for carriage of
the CBS station owned and operated by the CBS network in Chicago. The General
Partner expects to conclude retransmission consent negotiations with those
stations whose signals are being carried pursuant to extensions without having
to terminate the distribution of any of those signals. However, there can be
no assurance that such will occur. If any broadcast station currently being
carried pursuant to an extension is dropped, there could be a negative effect
on the system if a significant number of subscribers were to disconnect their
service.
-34-
35
Fund 14-A rents office and other facilities under various
long-term lease arrangements. Rent paid under such lease arrangements totalled
$250,526, $226,896 and $225,725, respectively, for the years ended December 31,
1993, 1992 and 1991. Minimum commitments under operating leases for the five
years in the period ending December 31, 1998, and thereafter are as follows:
1994 $218,161
1995 164,870
1996 151,563
1997 145,813
1998 144,663
Thereafter 145,180
--------
$970,250
========
(7) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
periods is presented below:
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
Maintenance and repairs $ 840,307 $ 764,411 $ 835,776
============ ============ ==========
Taxes, other than income and payroll taxes $ 155,727 $ 179,572 $ 162,806
============ ============ ==========
Advertising $ 621,377 $ 841,721 $ 831,655
============ ============ ==========
Depreciation of property, plant and equipment $ 10,131,923 $ 10,068,794 $9,030,177
============ ============ ==========
Amortization of intangible assets $ 5,065,754 $ 5,396,190 $5,157,068
============ ============ ==========
-35-
36
CABLE TV FUND 14-A
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Column A Column B Column C Column D Column E Column F
Balance at Balance at
Beginning of Additions Sales and Other End of
Classification Period at Cost Retirements Changes Period
- -------------- ------ ------- ----------- ------- ------
Year Ended December 31, 1993
- ----------------------------
Cable distribution systems $ 79,114,692 $ 4,443,620 $ - $ - $ 83,558,312
Land 387,781 - - - 387,781
Equipment and tools 2,950,311 414,720 - - 3,365,031
Premium service equipment 9,917,282 1,800,451 - - 11,717,733
Earth receive stations 7,310,687 286,477 - - 7,597,164
Vehicles 726,012 31,471 - - 757,483
Leasehold improvements
and office furniture 1,041,659 36,469 (6,000) - 1,072,128
------------ ----------- ------------ ------------ ------------
$101,448,424 $ 7,013,208 $ (6,000) $ - $108,455,632
============ =========== ============ ============ ============
Year Ended December 31, 1992
- ----------------------------
Cable distribution systems $ 75,268,388 $ 3,893,107 $ (46,803) $ - $ 79,114,692
Land 337,781 50,000 - - 387,781
Equipment and tools 2,724,668 225,643 - - 2,950,311
Premium service equipment 9,122,833 794,449 - - 9,917,282
Earth receive stations 7,059,369 259,958 (8,640) - 7,310,687
Vehicles 708,656 42,247 (24,891) - 726,012
Leasehold improvements
and office furniture 1,012,263 29,396 - - 1,041,659
------------ ----------- ------------ ------------ ------------
$ 96,233,958 $ 5,294,800 $ (80,334) $ - $101,448,424
============ =========== ============ ============ ============
Year Ended December 31, 1991
- ----------------------------
Cable distribution systems $ 63,346,584 $ 6,729,456 $ - $ 5,192,348 $ 75,268,388
Land 154,524 24,257 - 159,000 337,781
Equipment and tools 2,230,377 343,082 - 151,209 2,724,668
Premium service equipment 6,783,416 847,472 - 1,491,945 9,122,833
Earth receive stations 4,728,450 252,954 - 2,077,965 7,059,369
Vehicles 677,237 30,909 (33,544) 34,054 708,656
Leasehold improvements
and office furniture 856,857 46,275 - 109,131 1,012,263
------------ ----------- ------------ ------------ ------------
$ 78,777,445 $ 8,274,405 $ (33,544) $ 9,215,6521(1) $ 96,233,958
============ =========== ============ ============ ============
1 Amount principally represents the purchase of the Central
Illinois System in May 1991.
-36-
37
CABLE TV FUND 14-A
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Column A Column B Column C Column D Column E Column F
Balance at Amounts Balance at
Beginning of Charged to Sales and Other End of
Classification Period Expense Retirements Changes Period
- -------------- ------ ------- ----------- ------- ------
Year Ended December 31, 1993
- ----------------------------
Cable distribution systems $ 26,493,485 $ 7,345,815 $ - $ 1,180 $ 33,840,480
Land - - - - -
Equipment and tools 1,609,634 495,503 - - 2,105,137
Premium service equipment 6,221,607 1,447,541 - - 7,669,148
Earth receive stations 1,522,055 511,491 - - 2,033,546
Vehicles 501,394 180,270 - - 681,664
Leasehold improvements
and office furniture 654,645 151,303 (3,000) - 802,948
------------ ----------- ------------ ------------ ------------
$ 37,002,820 $10,131,923 $ (3,000) $ 1,180 $ 47,132,923
============ =========== ============ ============ ============
Year Ended December 31, 1992
- ----------------------------
Cable distribution systems $ 19,490,846 $ 7,046,270 $ (43,631) $ - $ 26,493,485
Land - - - - -
Equipment and tools 1,095,872 513,762 - - 1,609,634
Premium service equipment 4,587,484 1,634,123 - - 6,221,607
Earth receive stations 1,028,352 496,343 (2,640) - 1,522,055
Vehicles 326,505 199,780 (24,891) - 501,394
Leasehold improvements
and office furniture 476,129 178,516 - - 654,645
------------ ----------- ------------ ------------ ------------
$ 27,005,188 $10,068,794 $ (71,162) $ - $ 37,002,820
============ =========== ============ ============ ============
Year Ended December 31, 1991
- ----------------------------
Cable distribution systems $ 13,327,677 $ 6,163,169 $ - $ - $ 19,490,846
Land - - - - -
Equipment and tools 622,260 473,612 - - 1,095,872
Premium service equipment 3,017,482 1,570,002 - - 4,587,484
Earth receive stations 596,048 432,304 - - 1,028,352
Vehicles 154,721 205,328 (33,544) - 326,505
Leasehold improvements
and office furniture 290,367 185,762 - - 476,129
------------ ----------- ------------ ------------ ------------
$ 18,008,555 $ 9,030,177 $ (33,544) $ - $ 27,005,188
============ =========== ============ ============ ============
-37-
38
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-A/B Venture:
We have audited the accompanying balance sheets of CABLE TV FUND
14-A/B VENTURE (a Colorado general partnership) as of December 31, 1993 and
1992, and the related statements of operations, partners' capital and cash
flows for each of the three years in the period ended December 31, 1993. These
financial statements and the schedules referred to below are the responsibility
of the General Partner's management. Our responsibility is to express an
opinion on these financial statements and schedules 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/B Venture as of December 31, 1993 and 1992, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in the index
of financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
March 11,1994.
-38-
39
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
----------------------------
ASSETS 1993 1992
------ ------------ ------------
CASH $ 313,701 $ 2,493,318
TRADE RECEIVABLES, less allowance for doubtful receivables of
$60,902 and $58,246 at December 31, 1993 and 1992, respectively 826,776 573,775
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 44,478,623 41,438,468
Less- accumulated depreciation (17,707,316) (14,340,258)
------------ ------------
26,771,307 27,098,210
Franchise costs, net of accumulated amortization of $25,903,735 and
$21,392,995 at December 31, 1993 and 1992, respectively 21,738,765 26,249,505
Subscriber lists, net of accumulated amortization of $7,923,218 and
$7,101,001 at December 31, 1993 and 1992, respectively 3,797,182 4,619,399
Noncompete agreement, net of accumulated amortization of $213,000 and
$202,350 at December 31, 1993 and 1992, respectively - 10,650
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $3,108,456 and $2,567,856 at December 31, 1993
and 1992, respectively 18,515,610 19,056,210
------------ ------------
Total investment in cable television properties 70,822,864 77,033,974
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 352,475 303,066
------------ ------------
Total assets $ 72,315,816 $ 80,404,133
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
-39-
40
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
--------------------------------
LIABILITIES AND PARTNERS' CAPITAL 1993 1992
------------ ------------
LIABILITIES:
Debt $ 43,461,730 $ 46,908,409
Accounts payable-
Trade 14,063 -
Jones Intercable, Inc. 57,920 125,873
Accrued liabilities 832,382 735,358
Subscriber prepayments 467,979 439,251
---------- ----------
Total liabilities 44,834,074 48,208,891
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' CAPITAL:
Contributed capital 70,000,000 70,000,000
Accumulated deficit (42,518,258) (37,804,758)
---------- ----------
27,481,742 32,195,242
---------- ----------
Total liabilities and partners' capital $72,315,816 $80,404,133
========== ==========
The accompanying notes to financial statements
are an integral part of these balance sheets.
-40-
41
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
REVENUES $22,068,952 $20,212,867 $18,366,881
COSTS AND EXPENSES:
Operating, general and administative 12,339,515 11,052,427 10,064,744
Management fees and allocated overhead from
Jones Intercable, Inc. 2,701,568 2,481,658 2,190,716
Depreciation and amortization 9,352,808 9,971,915 10,472,621
----------- ----------- -----------
OPERATING LOSS (2,324,939) (3,293,133) (4,361,200)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (2,450,672) (2,564,990) (3,643,916)
Other, net 62,111 (327,984) (33,604)
----------- ----------- -----------
Total other income (expense), net (2,388,561) (2,892,974) (3,677,520)
----------- ----------- -----------
NET LOSS $(4,713,500) $(6,186,107) $(8,038,720)
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
-41-
42
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Year Ended December 31,
-----------------------------------------------
1993 1992 1991
---------- ---------- ----------
CABLE TV FUND 14-A (27%):
Balance, beginning $ 8,628,651 $10,305,086 $12,483,579
Net loss for period (1,277,358) (1,676,435) (2,178,493)
---------- ---------- ----------
Balance, end of period $ 7,351,293 $ 8,628,651 $10,305,086
========== ========== ==========
CABLE TV FUND 14-B (73%):
Balance, beginning $23,566,591 $28,076,263 $33,936,490
Net loss for period (3,436,142) (4,509,672) (5,860,227)
---------- ---------- ----------
Balance, end of period $20,130,449 $23,566,591 $28,076,263
========== ========== ==========
TOTAL:
Balance, beginning of period $32,195,242 $38,381,349 $46,420,069
Net loss for period (4,713,500) (6,186,107) (8,038,720)
---------- ---------- ----------
Balance, end of period $27,481,742 $32,195,242 $38,381,349
========== ========== ==========
The accompanying notes to financial statements
are an integral part of these statements.
-42-
43
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
---------------------------------------------
1993 1992 1991
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,713,500) $(6,186,107) $(8,038,720)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 9,352,808 9,971,915 10,472,621
Amortization of interest rate protection agreement 82,080 - 68,889
Decrease (increase) in trade receivables (253,001) (332,245) 309,110
Decrease (increase) in deposits, prepaid expenses
and deferred charges 13,218 (215,681) (132,607)
Increase (decrease) in accounts payable, accrued
liabilities and subscriber prepayments 139,815 77,110 (1,617,026)
Increase (decrease) in advances from Jones Intercable, Inc. (67,953) 109,168 (57,688)
----------- ----------- -----------
Net cash provided by operating activities 4,553,467 3,424,160 1,004,579
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,040,155) (2,094,077) (3,595,128)
----------- ----------- -----------
Net cash used in investing activities (3,040,155) (2,094,077) (3,595,128)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 159,493 2,286,081 2,891,613
Repayment of debt (3,606,172) (1,415,363) (387,769)
Purchase of interest rate protection contact (246,250) - -
----------- ----------- -----------
Net cash provided by (used in)
financing activities (3,692,929) 870,718 2,503,844
----------- ----------- -----------
Increase (decrease) in cash (2,179,617) 2,200,801 (86,705)
Cash, beginning of period 2,493,318 292,517 379,222
----------- ----------- -----------
Cash, end of period $ 313,701 $ 2,493,318 $ 292,517
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,333,869 $ 2,502,294 $ 4,100,721
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
-43-
44
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
On January 8, 1988, Cable TV Funds 14-A and 14-B (the "Venture
Partners") formed a Colorado general partnership known as Cable TV Fund 14-A/B
Venture (the "Venture") by contributing $18,975,000 and $51,025,000,
respectively, for approximate 27 percent and 73 percent ownership interests,
respectively. The Venture was formed for the purpose of acquiring the cable
television system serving areas in and around Broward County, Florida (the
"Broward County System").
Jones Intercable, Inc., ("Intercable") general partner of each
of the Venture Partners, manages the Venture. Intercable and its subsidiaries
also own and operate cable television systems. In addition, Intercable manages
cable television systems for other limited partnerships for which it is general
partner and for other affiliated entities.
Contributed Capital
The capitalization of the Venture is set forth in the
accompanying statements of partners' capital.
All Venture distributions, including those made from cash
flow, from the sale or refinancing of Venture property and on dissolution of
the Venture, shall be made to the Venture Partners in proportion to their
approximate 27 and 73 percent interests in the Venture.
Cable Television System Acquisition
The Broward County System acquisition was accounted for as a
purchase with the purchase price allocated to tangible and intangible assets
based upon an independent appraisal. The method of allocation of purchase
price was as follows: first, to the fair value of net tangible assets
acquired; second, to the value of subscriber lists and noncompete agreements
with previous owners; third, to franchise costs; and fourth, to costs in excess
of interests in net assets purchased. Brokerage fees paid to an affiliate of
the General Partner and other system acquisition costs were capitalized and
included in the cost of intangible assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Venture's tax returns are also prepared on the
accrual basis.
Property, Plant and Equipment
Depreciation is provided using the straight-line method over the
following estimated service lives:
Distribution systems 5 - 15 years
Buildings 20 years
Equipment and tools 5 years
Premium television service equipment 5 years
Earth receive stations 5 - 15 years
Vehicles 3 years
Other property, plant and equipment 5 years
Replacements, renewals, and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
-44-
45
Intangible Assets
Costs assigned to franchises, subscriber lists, noncompete
agreement and costs in excess of interests in net assets purchased are
amortized using the straight-line method over the following remaining estimated
useful lives:
Franchise colts 1 - 9 years
Subscriber lists 5 years
Costs in excess of interests in net assets purchased 35 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
(3) TRANSACTIONS WITH AFFILIATES
Brokerage Fees
The Jones Group, Ltd., an affiliate of the General Partner,
performs brokerage services in connection with the acquisition of systems for
the Venture. For brokering the acquisition of a SMATV system in the Broward
County System for the Venture, The Jones Group, Ltd. was paid a fee of $2,456,
or 4 percent of the purchase price, during 1992. There were no brokerage fees
paid in 1993 or 1991.
Management Fees and Reimbursements
Intercable manages the Venture and receives a fee for its
services equal to five percent of the gross revenues of the Venture, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid to Intercable by the Venture for the years ended December 31, 1993,
1992 and 1991 were $1,103,448, $1,010,643 and $918,344, respectively.
The Venture reimburses Intercable for allocated overhead and
administrative expenses. These expenses include salaries and related benefits
paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
accounting, administrative, legal, and investor relations services to the
Venture. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to each entity managed.
Remaining overhead costs are allocated based on revenues and/or the cost of
assets managed for the entity. Systems owned by Intercable and all other
systems owned by partnerships for which Intercable is the general partner are
also allocated a proportionate share of these expenses. Intercable believes
that the methodology used in allocating overhead and administrative expenses is
reasonable. Reimbursements made to Intercable by the Venture for allocated
overhead and administrative expenses during the years ended December 31, 1993,
1992 and 1991 were $1,598,120, $1,471,015 and $1,272,372, respectively.
The Venture was charged interest during 1993 at an average
interest rate of 10.61 percent on the amounts due Intercable, such rate
approximated Intercable's weighted average cost of borrowing. Total interest
charged the Venture by Intercable was $2,361, 10,475 and $4,131 for the years
ended December 31, 1993, 1992 and 1991, respectively.
Payments to Affiliates for Programming Services
The Venture receives programming from Superaudio and The Mind
Extension University, affiliates of Intercable. Payments to Superaudio
totalled $30,018, $28,679 and $25,872 in 1993, 1992 and 1991, respectively.
Payments to The Mind Extension University totalled $17,451, $16,434 and $15,882
in 1993, 1992 and 1991, respectively.
-45-
46
(4) DEBT
Debt consists of the following: December 31,
------------
1993 1992
---- -----
Lending institutions-
Revolving credit and term loan $43,290,000 $46,800,000
Capital lease obligations 171,730 108,409
----------- -----------
$43,461,730 $46,908,409
=========== ===========
On December 31, 1992, the then outstanding balance of
$46,800,000 on the Venture's revolving credit facility converted to a term
loan. The balance outstanding on the term loan at December 31, 1993 was
$43,290,000. The term loan is payable in quarterly installments which began
March 31, 1993 and is payable in full by December 31, 1999. Installments paid
during 1993 totalled $3,510,000. Installments due during 1994 total
$3,510,000. Funding for these installments is expected to come from cash on
hand and cash generated from operations. Intercable is currently negotiating to
reduce principal payments to provide liquidity for capital expenditures.
Interest is at the Venture's option of prime plus 1/2 percent, LIBOR plus 1-1/2
percent or CD rate plus 1-5/8 percent. The effective interest rates on amounts
outstanding as of December 31, 1993 and 1992 were 5.0 percent and 5.48 percent,
respectively
In January 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $25,000,000. The Venture
paid a fee of $246,250. The agreement protects the Venture from interest rates
that exceed 7 percent for three years from the date of the agreement. The fee
is being charged to interest expense over the life of the agreement using the
straight-line method.
On August 22, 1988, the Venture entered into an interest rate
cap agreement covering outstanding debt obligations of $20,000,000. The
Venture paid a fee of $310,000. The agreement protected the Venture from
interest rates that exceeded ten percent for three years from the date of the
agreement. The fee was charged to interest expense over the life of this
agreement using the straight-line method.
Installments due on debt principal for each of the five years
in the period ending December 31, 1998 and thereafter, respectively, are:
$3,561,519, $4,731,519 , $5,901,519, $8,207,173, $9,360,000 and $11,700,000 .
At December 31, 1993, substantially all of the Venture's property, plant and
equipment secured the above indebtedness.
(5) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners of Cable TV
Funds 14-A and 14-B, which are general partners in the Venture.
The Venture's tax returns, the qualification of the Venture as
such for tax purposes, and the amount of distributable Venture income or loss
are subject to examination by Federal and state taxing authorities. If such
examinations result in changes with respect to the Venture's qualification as
such, or in changes with respect to the Venture's recorded income or loss, the
tax liability of the Venture's general partners would likely be changed
accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
-46-
47
(6) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act:") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation in the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in the rates for certain regulated services. On February 22,
1994, the FCC announced a further rulemaking which, when implemented could
reduce rates further. The General Partner plans to mitigate a portion of these
reductions primarily through (a) new service offerings, (b) product
re-marketing and re-packaging and (c) marketing efforts directed at
non-subscribers.
Office and other facilities are rented under various long-term
lease arrangements. Rent paid under such lease arrangements totalled $46,521,
$45,406 and $54,702 respectively for the years ended December 31, 1993, 1992
and 1991. Minimum commitments under operating leases for each of the five
years in the period ending December 31, 1998 and thereafter are as follows:
1994 $ 46,520
1995 46,520
1996 28,507
1997 5,724
1998 1,431
Thereafter -
--------
$128,702
========
(7) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
periods is presented below:
Year Ended December 31,
---------------------------------------
1993 1992 1991
---------- ---------- -----------
Maintenance and repairs $ 238,163 $ 222,104 $ 458,096
========= ========= =========
Taxes, other than income and payroll taxes $ 265,331 $ 259,575 $ 239,642
========= ========= =========
Advertising $ 95,211 $ 155,137 $ 169,287
========= ========= =========
Depreciation of property, plant and equipment $3,468,602 $4,055,759 $3,713,141
========= ========= =========
Amortization of intangible asset $5,884,206 $5,916,156 $6,759,480
========= ========= =========
-47-
48
CABLE TV FUND 14-A/B VENTURE
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Column A Column B Column C Column D Column E Column F
Balance at Balance at
Beginning of Additions Sales and Other End of
Classification Period at Cost Retirements Changes Period
- -------------- ------------ --------- ----------- --------- ---------
Year Ended December 31, 1993
- ----------------------------
Cable distribution systems $32,879,374 $2,620,017 $ - $ - $35,499,391
Land 730,867 - - - 730,867
Equipment and tools 1,655,201 93,443 - - 1,748,644
Premium service equipment 2,125,418 359,027 - - 2,484,445
Earth receive stations 1,020,086 20,326 - - 1,040,412
Buildings 1,816,823 4,143 - - 1,820,966
Vehicles 362,527 - (101,544) - 260,983
Leasehold improvements
and office furniture 848,172 44,743 - - 892,915
----------- ---------- --------- --------- -----------
$41,438,468 $3,141,699 $(101,544) $ - $44,478,623
=========== ========== ========= ========= ===========
Year Ended December 31, 1992
- ----------------------------
Cable distribution systems $31,020,736 $1,858,638 $ - $ - $32,879,374
Land 955,867 - (225,000) - 730,867
Equipment and tools 1,520,754 134,867 420) - 1,655,201
Premium service equipment 2,070,857 54,561 - - 2,125,418
Earth receive stations 975,866 44,220 - - 1,020,086
Buildings 1,658,161 158,662 - - 1,816,823
Vehicles 318,152 44,375 - - 362,527
Leasehold improvements
and office furniture 823,998 24,174 - - 848,172
----------- ---------- --------- --------- -----------
$39,344,391 $2,319,497 $(225,420) $ - $41,438,468
=========== ========== ========= ========= ===========
Year Ended December 31, 1991
- ----------------------------
Cable distribution systems $27,851,073 $3,169,663 $ - $ - $31,020,736
Land 955,867 - - - 955,867
Equipment and tools 1,426,667 94,087 - - 1,520,754
Premium service equipment 1,845,167 255,115 (29,425) - 2,070,857
Earth receive stations 935,144 99,797 (59,075) - 975,866
Buildings 1,532,862 125,299 - - 1,658,161
Vehicles 381,875 5,277 (69,000) - 318,152
Leasehold improvements
and office furniture 820,608 3,390 - - 823,998
----------- ---------- --------- --------- -----------
$35,749,263 $3,752,628 $(157,500) $ - $39,344,391
=========== ========== ========= ========= ===========
-48-
49
CABLE TV FUND 14-A/B VENTURE
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Column A Column B Column C Column D Column E Column F
Balance at Amounts Balance at
Beginning of Charged to Sales and Other End of
Classification Period Expense Retirements Changes Period
- -------------- ------------ ---------- ----------- -------- ----------
Year Ended December 31, 1993
Cable distribution systems $10,438,419 $ 2,644,707 $ - $ - $13,083,126
Land - - - - -
Equipment and too1s 1,027,928 267,329 - - 1,295,257
Premium service equipment 1,569,907 232,291 - - 1,802,198
Earth receive stations 271,438 76,999 - - 348,437
Buildings 190,209 90,859 - - 281,068
Vehicles 289,582 42,983 (101,544) - 231,021
Leasehold improvements
and office furniture 552,775 113,434 - - 666,209
----------- ----------- ---------- ---------- -----------
$14,340,258 $ 3,468,602 $ (101,544) $ - $17,707,316
=========== =========== ========== ========== ===========
Year Ended December 31, 1992
Cable distribution systems $ 7,478,654 $ 2,960,823 $ - $ (1,058) $10,438,419
Land - - - - -
Equipment and tools 721,926 306,338 (336) - 1,027,928
Premium service equipment 1,154,824 415,083 - - 1,569,907
Earth receive stations 185,746 85,692 - - 271,438
Buildings 106,639 83,570 - - 190,209
Vehicles 249,942 39,640 - - 289,582
Leasehold improvements
and office furniture 388,162 164,613 - - 552,775
----------- ----------- ---------- ---------- -----------
$10,285,893 $ 4,055,759 $ (336) $ (1,058) $14,340,258
=========== =========== ========== ========== ===========
Year Ended December 31, 1991
Cable distribution systems $ 4,814,235 $ 2,664,419 $ - $ - $ 7,478,654
Land - - - - -
Equipment and tools 435,023 286,903 - - 721,926
Premium service equipment 803,607 372,815 (21,598) - 1,154,824
Earth receive stations 117,018 80,529 (11,801) - 185,746
Buildings 28,440 78,199 - - 106,639
Vehicles 252,254 66,688 (69,000) - 249,942
Leasehold improvements
and office furniture 224,574 163,588 - - 388,162
----------- ----------- ---------- ---------- -----------
$ 6,675,151 $ 3,713,141 $ (102,399) $ - $10,285,893
=========== =========== ========== ========== ===========
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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 Partnerships themselves have no officers or directors. Certain
information concerning directors and executive officers of the General Partner
is set forth below.
Name Age Positions with the General Partner
---- --- ----------------------------------
Glenn R. Jones 63 Chairman of the Board and Chief Executive Officer
James B. O'Brien 44 President, Chief Operating Officer and Director
Ruth E. Warren 43 Group Vice President/Operations
Kevin P. Coyle 42 Group Vice President/Finance
Christopher J. Bowick 37 Group Vice President/Technology
Timothy J. Burke 42 Group Vice President/Taxation, Administration
Raymond L. Vigil 46 Group Vice President/Human Resources and Director
James J. Krejci 51 Group Vice President and Director
Elizabeth M. Steele 41 Vice President/General Counsel and Secretary
Michael J. Bartolementi 34 Controller
George J. Feltovich 52 Director
Patrick J. Lombardi 45 Director
Howard O. Thrall 46 Director
Mr. Glenn R. Jones has served as Chairman of the Board of Directors
and Chief Executive Officer of the General Partner since its formation in 1970,
and he was President from June 1984 until April 1988. Mr. Jones was elected a
member of the Executive Committee of the Board of Directors in April 1985. He
is also Chairman of the Board of Directors and Chief Executive Officer of Jones
Spacelink, Ltd., a publicly held cable television company that is a subsidiary
of Jones International, Ltd. and the parent of the General Partner. Mr. Jones
is the sole shareholder, President and Chairman of the Board of Directors of
Jones International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a past member of the Board of Directors of
the National Cable Television Association and is a former member of its
Executive Committee. Mr. Jones is a past director and member of the Executive
Committee of C-Span. Mr. Jones has been the recipient of several awards
including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society, the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs
Association President's Award in 1990; the Donald G. McGannon award for
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the advancement of minorities and women in cable; the STAR Award from American
Women in Radio and Television, Inc., for exhibition of a commitment to the
issues and concerns of women in television and radio; and the Women in Cable
Accolade in 1990 in recognition of support of this organization. Mr. Jones is
also a founding member of the James Madison Council of the Library of Congress,
is on the Board of Governors of the American Society of Training and
Development and is a director of the National Alliance of Business.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982 as System Manager, Brighton, Colorado, and was
later promoted to the position of General Manager, Gaston County, North
Carolina. Prior to being elected President and a Director of the General
Partner in December 1989, Mr. O'Brien served as a Division Manager, Director of
Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice
President/Operations. As President, he is responsible for the day-to-day
operations of the cable television systems managed and owned by the General
Partner. Mr. O'Brien is also President and a Director of Jones Cable Group,
Ltd., Jones Global Funds, Inc., and Jones Global Management, Inc., all
affiliates of the General Partner. Mr. O'Brien is a board member of Cable
Labs, Inc., the research arm of the cable television industry. He also serves
as a director of the Cable Television Administration and Marketing Association
and as a director of the Walter Kaitz Foundation.
Ms. Ruth E. Warren joined the General Partner in August 1980 and
served in various capacities, including system manager and Fund Vice President,
since then. Ms. Warren was elected Group Vice President/Operations of the
General Partner in September 1990. Ms. Warren also serves as Vice
President/Operations of Jones Spacelink, Ltd.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990. He is also a
member of the Board of Directors of Jones Spacelink, Ltd.
Mr. Raymond L. Vigil joined the General Partner in April 1993 as Group
Vice President/Human Resources and was elected a Director of the General
Partner in November 1993. Previous to joining the General Partner, Mr. Vigil
served as Executive Director of
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Learning with USWest from September 1989 to April 1993. Prior to that, Mr.
Vigil worked in various human resources posts over a 14-year term with the IBM
Corporation.
Mr. James J. Krejci joined Jones International, Ltd. in March 1985 as
Group Vice President. He was elected Group Vice President and Director of the
General Partner in August 1987. He is also an officer of Jones Futurex, Inc.,
a subsidiary of Jones Spacelink, Ltd. engaged in manufacturing and marketing
data encryption devices, Jones Information Management, Inc., a subsidiary of
Jones International, Ltd. providing computer data and billing processing
facilities and Jones Lightwave, Ltd., a company owned by Jones International,
Ltd. and Mr. Jones, and several of its subsidiaries engaged in the provision
of telecommunications services. Prior to joining Jones International, Ltd.,
Mr. Krejci was employed by Becton Dickinson and Company, a medical products
manufacturing firm.
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. Ms. Steele also is an officer
of Jones Spacelink, Ltd. From August 1980 until joining the General Partner,
Ms. Steele was an associate and then a partner at the Denver law firm of Davis,
Graham & Stubbs, which serves as counsel to the General Partner.
Mr. Michael J. Bartolementi joined the General Partner in September
1984 as an accounting manager and was promoted to Assistant Controller in
September 1985. He was named Controller in November 1990.
Mr. George J. Feltovich was elected a Director of the General Partner
in March 1993. Mr. Feltovich has been a private investor since 1978. Prior to
1978, Mr. Feltovich served as an administrative and legal consultant to various
private and governmental housing programs. Mr. Feltovich was admitted to
practice law in California, Pennsylvania and the District of Columbia and is a
member of the California Bar Association.
Mr. Patrick J. Lombardi has been a Director of the General Partner
since February 1984 and has served as a member of the Audit Committee of the
Board of Directors since February 1985. In September 1985, Mr. Lombardi was
appointed Vice President of The Jones Group, Ltd., and in June 1989 was elected
President of Jones Global Group, Inc., both affiliates of the General Partner.
Mr. Lombardi is President and a director of Jones Financial Group, Ltd., an
affiliate of the General Partner, and Group Vice President/Finance and a
director of Jones International, Ltd.
Mr. Howard O. Thrall was elected a Director of the General Partner in
December 1988 and serves as a member of the Audit Committee and the special
Stock Option Committee, which was established in August of 1992. From 1984
until August 1993, Mr. Thrall was associated with Douglas Aircraft Company, an
aircraft manufacturing firm, most recently as Regional Vice President
Marketing. In September 1993, Mr. Thrall joined World Airways, Inc. as Vice
President of Sales, Asian Region.
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ITEM 11. EXECUTIVE COMPENSATION
The Partnerships have no employees; however, various personnel are
required to operate the cable television systems owned by the Partnerships.
Such personnel are employed by the General Partner and, pursuant to the terms
of the limited partnership agreements of the Partnerships, the cost of such
employment is charged by the General Partner to the Partnerships as a direct
reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited
partnership interests in either of the Partnerships.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnerships as contemplated by the limited partnership agreements of
the Partnerships and as disclosed in the Prospectus for the Partnerships. The
General Partner believes that the terms of such transactions, which are set
forth in the Partnerships' limited partnership agreements, are generally as
favorable as could be obtained by the Partnerships from unaffiliated parties.
This determination has been made by the General Partner in good faith, but none
of the terms were or will be negotiated at arm's-length and there can be no
assurance that the terms of such transactions have been or will be as favorable
as those that could have been obtained by the Partnerships from unaffiliated
parties.
The General Partner charges the Partnerships for management fees, and
the Partnerships reimburse the General Partner for certain allocated overhead
and administrative expenses in accordance with the terms of the limited
partnership agreements of the Partnerships. These expenses consist primarily
of salaries and benefits paid to corporate personnel, rent, data processing
services and other facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services to
the Partnerships. Allocations of personnel costs are based primarily on actual
time spent by employees of the General Partner with respect to each Partnership
managed. Remaining overhead costs are allocated based on revenues and/or the
costs of assets managed for the Partnerships. Systems owned by the General
Partner and all other systems owned by partnerships for which Jones Intercable,
Inc. is the General Partner, are also allocated a proportionate share of these
expenses.
The General Partner also advances funds and charges interest on the
balance payable from the Partnerships. The interest rate charged the
Partnerships approximates the General Partner's weighted average cost of
borrowing. Affiliates of the General Partner have received amounts from the
Partnerships for performing brokerage services.
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54
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, for a fee based upon the number of subscribers receiving
the programming. These systems also receive educational video programming from
Mind Extension University, Inc., an affiliate of the General Partner, for a fee
based upon the number of subscribers receiving the programming.
The charges to the Partnerships for related transactions are as
follows for the periods indicated:
Year Ended December 31,
-----------------------
Cable TV Fund 14-A 1993 1992 1991
- ------------------ ---- ---- ----
Management fees 1,945,823 1,815,788 1,562,508
Brokerage fees -0- -0- 998,960
Allocation of expenses 2,737,532 2,503,024 1,920,862
Interest expense 1,029 10,063 9,400
Amount of notes and advances
outstanding 58,974 457,354 -0-
Highest amount of notes and advances
outstanding 457,354 730,268 503,326
Programming fees:
Superaudio 50,655 48,754 41,743
Mind Extension University 32,659 31,361 27,542
Year Ended December 31,
-----------------------
Cable TV Fund 14-A 1993 1992 1991
- ------------------ ---- ---- ----
Management fees 1,586,750 1,477,993 1,351,380
Brokerage fees -0- 2,456 -0-
Allocation of expenses 2,440,481 2,274,350 1,984,135
Interest expense 2,361 7,219 5,512
Amount of notes and advances
outstanding 29,182 119,337 -0-
Highest amount of notes and advances
outstanding 119,337 858,096 668,085
Programming fees:
Superaudio 46,177 45,603 40,707
Mind Extension University 26,824 26,131 25,005
* Cable TV Fund 14-B's consolidation includes 100% of the Venture.
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Year Ended December 31,
-----------------------
Cable TV Fund 14-A 1993 1992 1991
- ------------------ ---- ---- ----
Management fees 1,103,448 1,010,643 $918,344
Brokerage fees -0- 2,456 -0-
Allocation of expenses 1,598,120 1,471,015 1,272,372
Interest expense 2,361 10,475 4,131
Amount of notes and advances
outstanding 57,920 125,873 16,705
Highest amount of notes and advances
outstanding 125,873 580,654 528,492
Programming fees:
Superaudio 30,018 28,679 25,872
Mind Extension University 17,451 16,434 15,882
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PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)1. See index to financial statements at page 24 for the list of financial statements and exhibits thereto filed as part of
this report.
2. Cable TV Fund 14-A, Ltd.:
Schedule V - Property Plant and Equipment
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment
Cable TV Fund 14-B, Ltd.:
Schedule V - Property Plant and Equipment
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment
Cable TV Fund 14-A/B Venture:
Schedule V - Property Plant and Equipment
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreements for Cable TV Fund 14-A and 14-B. (1)
4.2 Joint Venture Agreement of Cable TV Fund 14-A/B Venture, dated as of January 8, 1988, between Cable TV Fund 14-A, Ltd.
and Cable TV Fund 14-B, Ltd. (1)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Little
Rock, California (Fund 14-B). (3)
10.1.2 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the Big
Cypress Seminole Indian Reservation, Florida (Fund 14-A/B). (4)
10.1.3 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Brighton Seminole Indian Reservation, Florida (Fund 14-A/B). (4)
10.1.4 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
unincorporated portions of Broward County, Florida (Fund 14-A/B). (3)
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10.1.5 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Cooper
City, Florida (Fund 14-A/B). (3)
10.1.6 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Dania,
Florida (Fund 14-A/B). (3)
10.1.7 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Davie,
Florida (Fund 14-A/B). (3)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Hollywood Seminole Indian Reservation, Florida (Fund 14-A/B). (4)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Immokalee Seminole Indian Reservation, Florida (Fund 14-A/B). (4)
10.1.10 Copy of a franchise and related documents thereto granting a community antenna television system franchise for
Lauderdale Lakes, Florida (Fund 14-A/B). (3)
10.1.11 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Bement, Illinois (Fund 14-A). (5)
10.1.12 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Cerro Gordo, Illinois (Fund 14-A). (5)
10.1.13 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Chanute
Air Force Base, Illinois (Fund 14-A). (5)
10.1.14 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the Town
of Chatsworth, Illinois (Fund 14-A). (5)
10.1.15 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Chenoah, Illinois (Fund 14-A). (5)
10.1.16 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Clinton, Illinois (Fund 14-A). (5)
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10.1.17 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
County of Dupage, Illinois (Fund 14-A). (1)
10.1.18 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Fairbury, Illinois (Fund 14-A). (5)
10.1.19 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Farmer City, Illinois (Fund 14-A). (5)
10.1.20 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Forrest, Illinois (Fund 14-A). (5)
10.1.21 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Gibson City, Illinois (Fund 14-A). (5)
10.1.22 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Leroy, Illinois (Fund 14-A). (5)
10.1.23 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Monticello, Illinois (Fund 14-A). (5)
10.1.24 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Naperville, Illinois (Fund 14-A). (1)
10.1.25 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Pesotum, Illinois (Fund 14-A). (5)
10.1.26 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Rantoul, Illinois (Fund 14-A). (5)
10.1.27 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Thomasborough, Illinois (Fund 14-A). (9)
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10.1.28 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Village of Tolono, Illinois (Fund 14-A). (5)
10.1.29 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
County of Will, Illinois (Fund 14-A). (1)
10.1.30 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
County of Calvert, Maryland (Fund 14-A). (1)
10.1.31 Copy of a franchise and related documents thereto granting a community antenna television system franchise for St.
Mary's County, Maryland. (9)
10.1.32 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Southern
Anne Arundel County, Maryland (Fund 14-A). (1)
10.1.33 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Albertville, Minnesota (Fund 14-A). (1)
10.1.34 Copy of a franchise and related documents thereto granting a community antenna television system franchise for City of
Big Lake, Minnesota (Fund 14-A). (1)
10.1.35 Copy of Ordinance No. 1200 dated 3/5/90 relating to the City of Big Lake franchise. (9)
10.1.36 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Buffalo, Minnesota (Fund 14-A). (1)
10.1.37 Copy of Ordinance dated 4/16/90 relating to the Buffalo franchise. (9)
10.1.38 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Cokato, Minnesota (Fund 14-A). (1)
10.1.39 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Dassel, Minnesota (Fund 14-A). (1)
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10.1.40 Copy of Ordinance No. 10.044 dated 1/16/90 relating to the Dassel franchise. (9)
10.1.41 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Dayton, Minnesota (Fund 14-A). (1)
10.1.42 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Delano, Minnesota (Fund 14-A). (1)
10.1.43 Copy of Ordinance No. 0-90-01 dated 3/20/90 relating to the Delano franchise. (9)
10.1.44 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Elk River, Minnesota (Fund 14-A). (1)
10.1.45 Copy of Ordinance No. 90-3 dated 2/26/90 relating to the City of Elk River franchise. (9)
10.1.46 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Hassan, Minnesota (Fund 14-A). (4)
10.1.47 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Maple Lake, Minnesota (Fund 14-A). (1)
10.1.48 Copy of Ordinance No. 38 dated 3/5/90 relating to the City of Maple Lake franchise. (9)
10.1.49 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Monticello, Minnesota (Fund 14-A). (1)
10.1.50 Copy of Ordinance No. 183 dated 2/26/90 relating to the City of Monticello franchise. (9)
10.1.51 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Monticello, Minnesota (Fund 14-A). (1)
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10.1.52 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Ostego, Minnesota (Fund 14-A). (1)
10.1.53 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Rockford, Minnesota (Fund 14-A). (1)
10.1.54 Resolutions 90-14 and 90-15 dated 4/10/90 relating to the City of Rockford franchise. (9)
10.1.55 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the Town
of Rockford, Minnesota (Fund 14-A). (4)
10.1.56 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of St. Michael, Minnesota (Fund 14-A). (1)
10.1.57 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the City
of Watertown, Minnesota (Fund 14-A). (1)
10.1.58 Copy of Ordinance No. 178 relating to the City of Watertown franchise. (9)
10.1.59 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Buena Vista, New Jersey (Fund 14-A). (1)
10.1.60 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Borough of Chesilhurst, New Jersey (Fund 14-A). (1)
10.1.61 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Borough of Folsom, New Jersey (Fund 14-A). (1)
10.1.62 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Monroe, New Jersey (Fund 14-A). (1)
10.1.63 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Washington, New Jersey (Fund 14-A). (1)
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10.1.64 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Waterford, New Jersey (Fund 14-A). (1)
10.1.65 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
Township of Winslow, New Jersey (Fund 14-A). (1)
10.1.66 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
County of Georgetown, South Carolina (Fund 14-B). (9)
10.1.67 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the
County of Horry, South Carolina (Fund 14-B). (2)
10.1.68 Copy of a franchise and related documents thereto granting a community antenna television system franchise for Myrtle
Beach Air Force Base, South Carolina (Fund 14-B). (2)
10.1.69 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the Town
of Pawley's Island, South Carolina (Fund 14-B). (2)
10.1.70 Copy of a franchise and related documents thereto granting a community antenna television system franchise for the Town
of Surfside Beach, South Carolina (Fund 14-B). (9)
10.2.1 Loan Agreement dated as of May 30, 1991 among Cable TV Fund 14-A, Ltd. and Wells Fargo Bank, National Association, as
agent for the various lenders. (Fund 14-A) (9)
10.2.2 Credit Agreement dated as of June 28, 1991 among Cable TV Fund 14-B, Ltd. and Canadian Imperial Bank of Commerce, as
agent for various lenders. (Fund 14-B) (6)
10.2.3 Credit Agreement dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture and The Bank of Nova Scotia, as
agent for various lenders. (Fund 14-A/B)
10.2.4 First Letter Amendment dated June 11, 1990 to Credit Agreement dated as of September 30, 1988 among Cable TV Fund
14-A/B Venture and The Bank of Nova Scotia, as agent for various lenders. (Fund 14-A/B)
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10.2.5 Second Letter Amendment dated May 28, 1992 to Credit Agreement dated as of September 30, 1988 among Cable TV Fund
14-A/B Venture and The Bank of Nova Scotia, as agent for various lenders. (Fund 14-A/B)
10.3.1 Purchase and Sale Agreement dated as of March 31, 1988 by and between Cable TV Fund 14-A/B Venture as Buyer and Jones
Intercable, Inc. as Seller. (Fund 14-A/B) (7)
10.3.2 Purchase and Sale Agreement dated as of May 30, 1991, by and between Jones Intercable, Inc. and Fund 14-A. (Fund 14-A)
(8)
- --------------------
(1) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1987 (Commission
File Nos. 0-15378 and 0-16200)
(2) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1988 (Commission
File Nos. 0-15378 and 0-16200)
(3) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1989 (Commission
File Nos. 0-15378 and 0-16200)
(4) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1990 (Commission
File Nos. 0-15378 and 0-16200)
(5) Incorporated by reference from the Annual Report on Form 10-K for fiscal year ended December 31, 1990 of Jones
Intercable, Inc. (Commission File No. 1-9953)
(6) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1991 (Commission
File Nos. 0-15378 and 0-16200)
(7) Incorporated by reference from Registrants' Reports on Form 8-K dated March 31, 1988 (Commission File Nos. 0-15378 and
0-16200)
(8) Incorporated by reference from Fund 14-A's Report on Form 8-K dated June 12, 1991 (Commission File No. 0-15378).
(9) Incorporated by reference from Registrant's Report on Form 10-K for fiscal year ended December 31, 1992.
(b) Reports on Form 8-K
None.
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64
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CABLE TV FUND 14-A, LTD.
CABLE TV FUND 14-B, LTD.
Colorado limited partnerships
By: Jones Intercable, Inc.,
their general partner
By: /s/ GLENN R. JONES
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 25, 1994 Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ GLENN R. JONES
--------------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 25, 1994 (Principal Executive Officer)
By: /s/ KEVIN P. COYLE
--------------------------------------
Kevin P. Coyle
Group Vice President/Finance
and Treasurer
Dated: March 25, 1994 (Principal Financial Officer)
By: /s/ MICHAEL J. BARTOLEMENTI
--------------------------------------
Michael J. Bartolementi
Controller
Dated: March 25, 1994 (Principal Accounting Officer)
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65
By: /s/ JAMES B. O'BRIEN
--------------------------------------
James B. O'Brien
Dated: March 25, 1994 President and Director
By: /s/ JAMES J. KREJCI
--------------------------------------
James J. Krejci
Group Vice President
Dated: March 25, 1994 and Director
By: /s/ PATRICK J. LOMBARDI
--------------------------------------
Patrick J. Lombardi
Dated: March 25, 1994 Director
By: /s/ RAYMOND L. VIGIL
--------------------------------------
Raymond L. Vigil
Dated: March 25, 1994 Director
By:
--------------------------------------
George J. Feltovich
Dated: Director
By:
--------------------------------------
Howard O. Thrall
Dated: Director
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