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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(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, 1995
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: 0-15378
CABLE TV FUND 14-A, LTD.
(Exact name of registrant as specified in its charter)
Colorado 84-1024657
(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309
(Address of principal executive office and Zip Code)
(303) 792-3111
(Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
Interests
Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes x No
--- ---
Aggregate market value of the voting stock held by non-affiliates of the
registrant: 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 registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
---
DOCUMENTS INCORPORATED BY REFERENCE: None
(21602)
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 14-A, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 14 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). Cable TV Fund 14-B, Ltd. ("Fund 14-B") is the other
partnership that was formed pursuant to the Program. The Partnership and Fund
14-B formed a general partnership known as Cable TV Fund 14-A/B Venture (the
"Venture"), in which the Partnership owns a 27 percent interest and Fund 14-B
owns a 73 percent interest. The Partnership and the Venture were formed for the
purpose of acquiring and operating cable television systems.
The Partnership directly owns cable television systems serving the
areas in and around Turnersville, New Jersey (the "Turnersville System"),
Buffalo, Minnesota (the "Buffalo System"), Naperville, Illinois (the "Naperville
System"), Calvert County, Maryland (the "Calvert County System") and certain
communities in Central Illinois (the "Central Illinois System"). The Venture
owns the cable television system serving certain areas in Broward County,
Florida (the "Broward County System"). See Item 2. The Turnersville System,
Buffalo System, Naperville System, Calvert County System, Central Illinois
System and Broward County System may collectively be referred to as the
"Systems."
PROPOSED DISPOSITION OF CABLE TELEVISION SYSTEM. In March 1996, the
Partnership entered into an agreement to sell the Turnersville System to an
unaffiliated party for a sales price totaling approximately $84,500,000, subject
to closing adjustments that potentially could reduce the sales price to
$80,500,000. Closing of this sale is expected to occur in the second half of
1996. Upon the consummation of the proposed sale of the Turnersville System, the
Partnership will distribute at least $20,000,000 to its limited partners, repay
any amounts due to the General Partner, and, as required under the terms of the
Partnership's credit facility, use the balance of the sale proceeds to repay a
portion of the Partnership's bank indebtedness. Because this distribution of
$20,000,000 will not return 125% of the amount initially contributed to the
Partnership by the limited partners, the General Partner will not receive a
distribution on the sale of the Turnersville System. The Jones Group, Ltd., a
subsidiary of the General Partner, will receive a brokerage fee of 2.5% of the
sales price for acting as a broker in this transaction. Because the Turnersville
System does not represent a sale of all or substantially all of the
Partnership's assets, no vote of the limited partners of the Partnership is
required to approve this sale.
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service, premium
service, 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 entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes 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, and the
cable television operators buy tier programming from these networks. The Systems
also offer a package that includes the basic service channels and the tier
services.
The 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
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more expensive than the basic service or tier service programming, and
consequently cable operators price premium service separately when sold to
subscribers.
The Systems also offer to subscribers 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.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. At December 31, 1995,
the Systems' monthly basic service rates ranged from $4.95 to $14.70, monthly
basic and tier ("basic plus") service rates ranged from $16.95 to $24.16. and
monthly premium services ranged from $1.00 to $12.95 per premium service. In
addition, the Partnership and the Venture earn revenues from the Systems'
pay-per-view programs and advertising fees. Related charges may include a
nonrecurring installation fee that ranges from $1.99 to $43.30; 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, 1995, of the total
fees received by the Systems, basic service and tier service fees accounted for
approximately 61% of total revenues, premium service fees accounted for
approximately 18% of total revenues, pay-per-view fees were approximately 3% of
total revenues, advertising fees were approximately 7% of total revenues and the
remaining 11% of total revenues came principally from equipment rentals,
installation fees and program guide sales. The Partnership and the Venture 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.
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. These franchises typically contain many conditions, such as time
limitations on commencement and completion of construction, conditions of
service, including the number of channels, types of programming and the
provision of free service to schools and certain other public institutions, and
the maintenance of insurance and indemnity bonds. The provisions of local
franchises are subject to federal regulation.
The Partnership directly holds 47 franchises, and the Venture holds 9
franchises. These franchises provide for the payment of fees to the issuing
authorities and generally range from 3% to 5% of the gross revenues of a cable
television system. The 1984 Cable Act prohibits franchising authorities from
imposing annual franchise fees in excess of 5% of gross revenues and also
permits the cable television system operator to seek renegotiation and
modification of franchise requirements if warranted by changed circumstances.
Neither the Partnership nor the Venture has ever had a franchise
revoked. The Partnership's franchise expiration dates currently range from
March 1996 to October 2010, and the Venture's franchise expiration dates
currently range from March 1998 to December 2024. The original expiration date
of the Waterford Township franchise (the "Waterford Franchise") in the
Turnersville System was December 18, 1995. The terms of the franchise renewal
have been agreed upon, but the renewal has not yet been formally approved. Under
New Jersey law, the authority to operate a cable system continues
notwithstanding the expiration of a franchise so long as the renewal process is
ongoing, and the renewal process for the Waterford Franchise is ongoing. The
General Partner believes that the Waterford Franchise and all of the 4 other
franchises expiring in 1996 will be renewed in due course. Some of the issues
involved in recent renewal negotiations include rate regulation, customer
service standards, cable plant upgrade or replacement and shorter terms of
franchise agreements.
COMPETITION. Cable television systems currently experience competition
from several sources. A potential source of significant competition is Direct
Broadcast Satellite ("DBS") services that use video compression technology to
increase channel capacity and provide packages of movies, network and other
program services that are competitive with those of cable television systems.
Two companies offering DBS services began
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operations in 1994, and two other companies offering DBS service recently began
operations. In addition, a joint venture has won the right to provide a DBS
service through a FCC spectrum auction. Not all subscribers terminate cable
television service upon acquiring a DBS system. The General Partner has observed
that a number of DBS subscribers also elect to subscribe to cable television
service in order to obtain the greatest variety of programming on multiple
television sets, including local video services programming not available
through DBS service.
Although neither the Partnership, the Venture nor the General Partner
has yet encountered competition from a telephone company providing video
services as a cable operator or video dialtone operator, it is anticipated that
the cable television systems owned or managed by the General Partner will face
such competition in the near future. Legislation recently enacted into law will
make it possible for companies with considerable resources to enter the
business. For example, in February 1996, one of the regional Bell operating
companies entered into an agreement to acquire the nation's third largest cable
television company. In addition, several telephone companies have begun seeking
cable television franchises from local governmental authorities as a consequence
of litigation that successfully challenged the constitutionality of the cable
television/telephone company cross-ownership services. The General Partner
cannot predict at this time when and to what extent telephone companies will
provide cable television service within service areas in competition with cable
television systems owned or managed by the General Partner.
The General Partner is aware of the following imminent competition from
telephone companies: Ameritech New Media, Inc. ("Ameritech"), a wholly owned
subsidiary of Ameritech Corporation, one of the seven regional Bell operating
companies, which provides telephone service in a multi-state region including
Illinois, has just obtained a franchise that will allow it to provide cable
television service in Naperville, Illinois, a community currently served by the
Partnership's Naperville System. If Ameritech begins providing cable
television service in Naperville, this competition could have a material
adverse effect on the Naperville System's revenues, cash flow and fair market
value. The General Partner is taking prudent steps necessary to meet this
potential competition from Ameritech; however, there can be no assurance that
the Partnership will have the resources required to meet the competitive
threat posed by Ameritech. In February 1996, the General Partner, on behalf of
the Partnership, requested modification of the Naperville System's franchise
under the terms of the federal law that permits cable television system
operators to request modification of a franchise when the continued delivery
of cable service pursuant to the franchise becomes commercially impracticable.
The modifications requested relate to various services and subsidies required
of the Partnership in its franchise that are not required of Ameritech under
its franchise. The basis for the modification request is that Ameritech is not
being required to provide many of the services and subsidies imposed on the
Partnership and thus Ameritech will be at a competitive advantage vis a vis
the Partnership. In addition, as disclosed in detail in Item 3. Legal
Proceedings, the Partnership has filed suit against Ameritech and the City of
Naperville charging that the City of Naperville granted a franchise to
Ameritech on terms more favorable and less burdensome than the Partnership's
franchise in violation of Illinois law. The lawsuit seeks a declaration from
the court that the Ameritech franchise is void and it seeks to enjoin the City
of Naperville and Ameritech from taking any further actions pursuant to the
Ameritech franchise, including construction of a cable television system by
Ameritech, until a valid franchise is issued to Ameritech in accordance with
the Illinois law that prohibits cities from issuing second cable television
franchises under terms or conditions more favorable or less burdensome to the
applicant than those required under the existing cable television franchise.
Chesapeake and Potomac Telephone Company of Virginia and Bell Atlantic
Video Service Company, both subsidiaries of Bell Atlantic, another of the
regional Bell operating companies, have announced their intention to build a
cable television system in Alexandria, Virginia in competition with a cable
television system owned by the General Partner. Bell Atlantic is preparing for
the operation of a telecommunications and video business in northern Virginia,
including the Alexandria metropolitan area. The FCC has granted GTE Virginia's
application for authority to construct, operate, own and maintain video dialtone
facilities in northern Virginia, including in the service area of a cable
television system owned by the General Partner. To date, GTE has not begun
construction of a video distribution system. The entry of telephone companies as
direct competitors could adversely affect the profitability and market value of
the General Partner's owned and managed systems.
Additional competition is present from several sources, including the
following: Master Antenna Television and Satellite Master Antenna Television
systems that serve multi-unit dwellings such as condominiums, apartment
complexes, motels, hotels and private residential communities; private cable
television/telephonic companies that have secured exclusive contracts to provide
video and telephony services to multi-unit dwellings and similar complexes; and
multichannel, multipoint distribution service ("MMDS") systems, commonly called
wireless cable which generally focus on providing service to residents of rural
areas. In addition, the FCC has established a new wireless telecommunications
service known as Personal Communications Service ("PCS") that would provide
portable non-vehicular mobile communications services similar to that available
from cellular telephone companies, but at a lower cost. Several cable television
multiple system operators hold or have requested experimental licenses from the
FCC to test PCS technology.
REGULATION AND LEGISLATION. The cable industry is regulated under the
Telecommunications Act of 1996 (the "1996 Act"), the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") and the Cable
Communications Policy Act of 1984 (the "1984 Cable Act") and the regulations
implementing these statutes. The Federal Communications Commission (the "FCC")
has promulgated regulations covering such areas as the registration of cable
television systems and other communications businesses, carriage of television
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broadcast programming, consumer education and lockbox enforcement, origination
cablecasting and sponsorship identification, children's programming, the
regulation of basic cable and cable programming service rates in areas where
cable television systems are not subject to effective competition, signal
leakage and frequency use, technical performance, maintenance of various
records, equal employment opportunity, and antenna structure notification,
marking and lighting. In addition, cable operators periodically are required to
file various informational reports with the FCC. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of administrative
sanctions, such as the revocation of FCC licenses needed to operate certain
transmission facilities often used in connection with cable operations. State or
local franchising authorities, as applicable, also have the right to enforce
various regulations, impose fines or sanctions, issue orders or seek revocation
subject to the limitations imposed upon such franchising authorities by federal,
state and local laws and regulations. Several states have assumed regulatory
jurisdiction of the cable television industry, and it is anticipated that other
states will do so in the future. To the extent the cable television industry
begins providing telephone service, additional state regulations will be applied
to the cable television industry. Cable television operations are subject to
local regulation insofar as systems operate under franchises granted by local
authorities.
The following is a summary of federal laws and regulations materially
affecting the cable television industry, and a description of state and local
laws with which the cable industry must comply.
Telecommunications Act of 1996. The 1996 Act, which became law on
February 28, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
effective March 31, 1999 and the cable programming service tier of small cable
operators (those that provide service to 50,000 or fewer subscribers) effective
immediately. The 1996 Act also revised the procedures for filing a cable
programming service tier rate complaint and adds a new effective competition
test.
The most far-reaching changes in the communications business will
result from the telephony provisions of the 1996 Act. The statute expressly
preempts any legal barriers to competition in the local telephone business that
previously existed in state and local laws and regulations. Many of these
barriers had been lifted by state actions over the last few years, but the 1996
Act completes the task. The 1996 Act also establishes new requirements for
maintaining and enhancing universal telephone service and new obligations for
telecommunications providers to maintain privacy of customer information. The
1996 Act establishes uniform requirements and standards for entry, competitive
carrier interconnection and unbundling of LEC monopoly services.
The 1996 Act repealed the cable television/telephone cross-ownership
ban adopted in the 1984 Cable Act. The federal cross-ownership ban was
particularly important to the cable industry because telephone companies already
own certain facilities such as poles, ducts and associated rights of way. While
this ban had been overturned by several courts, formal removal of the ban ended
the last legal constraints on telephone company plans to enter the cable market.
Under the 1996 Act, telephone companies in their capacity as common carriers now
may lease capacity to others to provide cable television service. Telephone
companies have the option of providing video service as cable operators or
through "open video systems" ("OVS"), a regulatory regime that
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may provide more flexibility than traditional cable service. The 1996 Act
exempts OVS operators from many of the regulatory obligations that currently
apply to cable operators, such as rate regulation and franchise fees, although
other requirements are still applicable. OVS operators, although not subject to
franchise fees as defined by the 1992 Cable Act, are subject to fees charged by
local franchising authorities or other governmental entities in lieu of
franchise fees. (Under certain circumstances, cable operators also will be able
to offer service through open video systems.) In addition, the 1996 Act
eliminated the requirement that telephone companies file Section 214
applications (applications to provide video dialtone services) with the FCC
before providing video service. This limits the opportunity of cable operators
to mount challenges at the FCC regarding telephone company entry into the video
market. The 1996 Act also contains restrictions on buying out incumbent cable
operators in a telephone company's service area, especially in suburban and
urban markets.
Other parts of the 1996 Act also will affect cable operators. Under the
1996 Act, the FCC is required to revise the current pole attachment rate
formula. This revision will result in an increase in the rates paid by entities,
including cable operators, that provide telecommunication services. The rates
will be phased in after a five-year period. (Cable operators that provide only
cable services will be unaffected.) Under the V-chip provisions of the 1996 Act,
cable operators and other video providers are required to pass along any program
rating information that programmers include in video signals. Cable operators
also are subject to new scrambling requirements for sexually explicit
programming, and cable operators that provide Internet access or other online
services are subject to the new indecency limitations for computer services. In
addition, cable operators that provide Internet access or other online services
are subject to the new indecency limitations for computer services, although
these provisions already have been challenged in court, and the courts have
preliminarily enjoined the enforcement of these content-based provisions.
Under the 1996 Act, a franchising authority may not require a cable
operator to provide telecommunications services or facilities, other than an
institutional network, as a condition to a grant, renewal or transfer of a cable
franchise, and franchising authorities are preempted from regulating
telecommunications services provided by cable operators and from requiring cable
operators to obtain a franchise to provide such services. The 1996 Act also
repealed the 1992 Cable Act's anti-trafficking provision, which generally
required the holding of cable television systems for three years.
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Partnership in particular. The FCC shortly will
be undertaking numerous rulemaking proceedings to interpret and implement the
1996 Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Partnership.
Cable Television Consumer Protection and Competition Act of 1992. The
1992 Cable Act, which became effective on December 4, 1992, caused significant
changes to the regulatory environment in which the cable television industry
operates. The 1992 Cable Act generally mandated 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, became subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allowed 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. The FCC's rules became effective on September 1,
1993.
In compliance with these rules, the General Partner on behalf of the
Partnership reduced rates charged for certain regulated services in the
Partnership's cable systems effective September 1, 1993. These reductions
resulted in some decrease in Partnership revenues and operating income before
depreciation and amortization; however, the decrease was not as severe as
originally anticipated. The General Partner has undertaken actions to mitigate a
portion of these reductions primarily through (a) new service offerings in some
systems, (b) product re-marketing and re-packaging and (c) marketing efforts
directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory scheme
with respect to rates. The FCC's new regulations
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generally required rate reductions, absent a successful cost-of-service showing,
of 17 percent of September 30, 1992 rates, adjusted for inflation, channel
modifications, equipment costs, and increases in programming costs. Further rate
reductions for cable systems whose rates are below the revised benchmark levels,
as well as reductions that would require operators to reduce rates below
benchmark levels in order to achieve a 17 percent rate reduction, were held in
abeyance pending completion of cable system cost studies. The FCC recently
requested some of these "low price" systems to complete cost study
questionnaires. After review of these questionnaires, the FCC could decide to
permanently defer any further rate reductions, or require the additional 7
percent rate roll back for some or all of these systems. The FCC has also
adopted its proposed upgrade methodology by which operators would be permitted
to recover the costs of upgrading their plant.
After analyzing the effect of the two methods of rate regulation, the
Partnership elected to file cost-of-service showings for the Buffalo System, the
Naperville System and the Calvert County System. The General Partner therefore
anticipates no further reductions in revenues or operating income before
depreciation and amortization of these three systems resulting from the FCC's
rate regulations. At this time, the regulatory authorities have not approved the
cost-of-service showings, and there can be no assurance that the Partnership's
cost-of-service showings will prevent further rate reductions until such final
approval is received. The Partnership and the Venture complied with the
benchmark regulations and reduced rates in the Turnersville System, the Central
Illinois System and the Broward County System.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge subscribers
for new cable programming services. In addition to the present formula for
calculating the permissible rate for new services, the FCC instituted a
three-year flat fee mark-up plan for charges relating to new channels of cable
programming services. Commencing on January 1, 1995, cable system operators may
charge for new channels of cable programming services added after May 14, 1994
at a rate of up to 20 cents per channel, but may not make adjustments to monthly
rates totaling more than $1.20 plus an additional 30 cents for programming
license fees per subscriber over the first two years of the three-year period
for these new services. Operators may charge an additional 20 cents in the third
year only for channels added in that year plus the costs for the programming.
Operators electing to use the 20 cent per channel adjustment may not also take a
7.5 percent mark-up on programming cost increases, which is permitted under the
FCC's current rate regulations. The FCC has requested further comment as to
whether cable operators should continue to receive the 7.5 percent mark-up on
increases in license fees on existing programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price the NPT as they elect so
long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators do
not remove programming services from existing tiers and offer them on the NPT.
In September 1995, the FCC authorized a new, alternative method of
implementing rate adjustments which will allow cable operators to increase rates
for programming annually on the basis of projected increases in external costs
(inflation, costs for programming, franchise-related obligations and changes in
the number of regulated channels) rather than on the basis of cost increases
incurred in the preceding calendar quarter. Operators that elect not to recover
all of their accrued external costs and inflation pass-throughs each year may
recover them (with interest) in subsequent years.
In December 1995, the FCC adopted final cost-of-service rate
regulations requiring, among other things, cable operators to exclude 34 percent
of system acquisition costs related to intangible and tangible assets used to
provide regulated services. The FCC also reaffirmed the industry-wide 11.25
percent after tax rate of return on an operator's allowable rate base, but
initiated a further rulemaking in which it proposes to use an operator's actual
debt cost and capital structure to determine an operator's cost of capital or
rate of return. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services are indexed for inflation, and operators
are permitted to increase rates in response to increases in costs beyond their
control, such as taxes and increased programming costs.
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The United States Court of Appeals for the District of Columbia Circuit
recently upheld the FCC's rate regulations implemented pursuant to the 1992
Cable Act, but ruled that the FCC impermissibly failed to permit
cable operators to adjust rates for certain cost increases incurred during the
period between the date the 1992 Cable Act was passed through the initial date
of rate regulation. The FCC has not yet implemented the court's ruling.
There have been several lawsuits filed by cable operators and
programmers in federal court challenging various aspects of the 1992 Cable Act
including its provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on June
27, 1994 and remanded the case to the district court for further development of
a factual record. On December 12, 1995, the three-judge federal district court
again upheld the must-carry rules' validity. This decision has been appealed to
the United States Supreme Court.
In 1993, a federal district court upheld provisions of the 1992 Cable
Act concerning rate regulation, retransmission consent, restrictions on
vertically integrated cable television operators and programmers, mandatory
carriage of programming on commercial leased channels and public, educational
and governmental access channels and the exemption for municipalities from civil
damage liability arising out of local regulation of cable services. The 1992
Cable Act's provisions providing for multiple ownership limits for cable
operators and advance notice of free previews for certain programming services
have been found unconstitutional and these decisions have been appealed. The
FCC's regulations relating to the carriage of indecent programming, which were
recently upheld by the United States Court of Appeals for the District of
Columbia, have been appealed to the United States Supreme Court.
Franchising. The responsibility for franchising or other authorization
of cable television systems is left to state and local authorities. There are,
however, several provisions in the 1984 Cable Act that govern the terms and
conditions under which cable television systems provide service. These include
uniform standards and policies that are applicable to cable television operators
seeking renewal of a cable television franchise. The procedures established
provide for a formal renewal process should the franchising authority and the
cable television operator decline to use an informal procedure. A franchising
authority unable to make a preliminary determination to renew a franchise is
required to hold a hearing in which the operator has the right to participate.
In the event a determination is made not to renew the franchise at the
conclusion of the hearing, the franchising authority must provide the operator
with a written decision stating the specific reasons for non-renewal. Generally,
the franchising authority can finally decide not to renew a franchise only if it
finds that the cable operator has not substantially complied with the material
terms of the present franchise, has not provided reasonable service in light of
the community's needs, does not have the financial, legal or 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.
A provision of the 1996 Act preempts franchising authorities from
regulating telecommunications services provided by cable operators and from
requiring cable operators to obtain a franchise to provide such services. A
franchising authority may not require a cable operator to provide
telecommunications services or facilities, other than an institutional network,
as a condition to a grant, renewal or transfer of a cable franchise.
GENERAL. The Partnership's and the Venture's 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 Partnership's or the
Venture's 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.
8
9
Neither the Partnership nor the Venture depends to any material extent
on the availability of raw materials; it carries no significant amounts of
inventory and it has no material backlog of customer orders. The Partnership has
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 Partnership's or
the Venture's 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 protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership or the Venture.
ITEM 2. PROPERTIES
The cable television systems owned by the Partnership and the Venture
are described below:
Ownership SYSTEM ACQUISITION DATE
--------- ------ ----------------
Cable TV Fund 14-A, Ltd. Turnersville System May 1987
Buffalo System September 1987
Naperville System September 1987
Calvert County System September 1987
Central Illinois System May 1991
Cable TV Fund 14-A/B Venture Broward County System March 1988
The following sets forth (i) the monthly basic plus service rates
charged to subscribers and (ii) the number of basic subscribers for the Systems.
The monthly basic service rates set forth herein represent, with respect to
systems with multiple headends, the basic service rate charged to the majority
of the subscribers within the system. In cable television systems, basic
subscribers can subscribe to more than one pay TV service. Thus, the total
number of pay services subscribed to by basic subscribers are called pay units.
As of December 31, 1995, the Turnersville System operated cable plant passing
approximately 45,900 homes, representing an approximate 77% penetration rate;
the Buffalo System operated cable plant passing approximately 21,000 homes,
representing an approximate 52% penetration rate; the Naperville System operated
cable plant passing approximately 39,500 homes, representing an approximate 69%
penetration rate; the Calvert System operated cable plant passing approximately
22,900 homes, representing an approximate 71% penetration rate, the Central
Illinois System operated cable plant passing approximately 22,300 homes,
representing an approximate 68% penetration rate and the Broward County System
operated cable plant passing approximately 89,100 homes, representing an
approximate 55% penetration rate. Figures for numbers of subscribers 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,
-----------------------------------
BUFFALO SYSTEM 1995 1994 1993
- -------------- ---- ---- ----
Monthly basic plus service rate $21.50 $20.00 $20.00
Basic subscribers 11,039 9,567 7,929
Pay units 7,313 7,305 6,657
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At December 31,
--------------------------
CALVERT COUNTY SYSTEM 1995 1994 1993
- --------------------- ------ ------ ------
Monthly basic plus service rate $26.63 $25.36 $23.75
Basic subscribers 16,454 15,428 14,391
Pay units 17,893 16,034 15,935
At December 31,
--------------------------
CENTRAL ILLINOIS SYSTEM 1995 1994 1993
- ----------------------- ------ ------ ------
Monthly basic plus service rate $18.71 $17.21 $20.25
Basic subscribers 15,390 14,616 13,830
Pay units 12,292 11,713 9,878
At December 31,
--------------------------
NAPERVILLE SYSTEM 1995 1994 1993
- ----------------- ------ ------ ------
Monthly basic plus service rate $23.87 $23.87 $23.87
Basic subscribers 27,464 25,063 22,925
Pay units 17,360 17,636 17,430
At December 31,
--------------------------
TURNERSVILLE SYSTEM 1995 1994 1993
- ------------------- ------ ------ ------
Monthly basic plus service rate $21.16 $19.66 $21.07
Basic subscribers 35,523 33,961 32,426
Pay units 36,934 36,462 35,035
CABLE TV FUND 14-A/B VENTURE
At December 31,
--------------------------
BROWARD COUNTY SYSTEM 1995 1994 1993
- --------------------- ------ ------ ------
Monthly basic plus service rate $24.16 $23.56 $24.00
Basic subscribers 49,654 47,819 45,515
Pay units 42,167 41,270 37,684
ITEM 3. LEGAL PROCEEDINGS
On March 12, 1996, a civil action entitled Cable TV Fund 14-A. Ltd.
d/b/a Jones Intercable, Plaintiff vs. Ameritech New Media, Inc. and the City of
Naperville, Illinois, Defendants was filed in the Circuit Court for DuPage
County, Illinois, County Department, Chancery Division (Case No. 96MR0192). The
Partnership filed this complaint for injunctive and declaratory relief to
challenge the City of Naperville's grant, on February 6, 1996, of a cable
television franchise to Ameritech New Media, Inc. ("Ameritech"). The terms of
the Ameritech cable television franchise are materially different from, and
materially more favorable to Ameritech than, the terms of the cable television
franchise granted to the Partnership. The Partnership's complaint relies upon
an Illinois law that provides that franchising authorities may grant additional
cable television franchises provided only that such additional cable television
franchises contain terms and conditions no more favorable or less burdensome to
the applicant than those required under the existing cable television
franchise. The Partnership's complaint seeks a declaration of the court that
the Ameritech franchise is void and without legal effect and it seeks to enjoin
the City of Naperville and Ameritech from any further actions pursuant to the
franchise granted to Ameritech by the City of Naperville on February 6, 1996,
including construction of a cable television system, until a valid franchise is
issued to Ameritech. The defendants have not yet responded to the complaint.
10
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1996, the number of equity security
holders in the Partnership was 12,312.
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Item 6. Selected Financial Data
For the Year Ended December 31,
------------------------------------------------------------------------------------------
Cable TV Fund 14-A, Ltd. 1995 1994 1993 1992 1991
- ------------------------ ----------- ----------- ----------- ------------ -------------
Revenues $44,094,802 $40,442,268 $38,916,469 $ 36,315,757 $ 31,250,151
Depreciation and Amortization 14,459,479 14,826,256 15,197,677 15,464,984 14,187,245
Operating Loss (1,459,868) (3,323,006) (3,562,804) (4,065,858) (4,515,550)
Equity in Net Loss of
Cable Television Joint Venture (1,104,003) (1,468,218) (1,277,358) (1,676,435) (2,178,493)
Net Loss (8,536,167) (9,472,910) (8,608,115) (10,382,060) (11,647,299)
Net Loss per Limited Partnership Unit (52.82) (58.61) (53.26) (64.24) (72.07)
Weighted average number of
Limited Partnership Units outstanding 160,000 160,000 160,000 160,000 160,000
General Partner's
Deficit (702,440) (617,078) (522,349) (436,268) (332,447)
Limited Partners' Capital (Deficit) (918,403) 7,532,402 16,910,583 25,432,617 35,710,856
Total Assets 82,900,838 87,556,346 94,106,926 106,808,479 114,829,803
Debt 80,726,793 77,425,047 75,601,829 79,386,274 77,970,342
General Partner Advances 887,215 706,579 58,974 457,354 -
For the Year Ended December 31,
---------------------------------------------------------------------------------------
Cable TV Fund 14-A/B Venture 1995 1994 1993 1992 1991
- ---------------------------- ----------- ----------- ----------- ----------- -----------
Revenues $23,469,505 $22,183,524 $22,068,952 $20,212,867 $18,366,881
Depreciation and Amortization 8,774,507 9,188,994 9,352,808 9,971,915 10,472,621
Operating Loss (753,422) (2,661,198) (2,324,939) (3,293,133) (4,361,200)
Net Loss (4,073,811) (5,417,779) (4,713,500) (6,186,107) (8,038,720)
Partners' Capital 17,990,152 22,063,963 27,481,742 32,195,242 38,381,349
Total Assets 62,447,556 66,597,460 72,315,816 80,404,133 85,533,244
Debt 40,530,652 42,271,921 43,461,730 46,908,409 46,037,691
Jones Intercable, Inc. Advances 2,206,959 354,179 57,920 125,873 16,705
12
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CABLE TV FUND 14-A, LTD.
RESULTS OF OPERATIONS
1995 Compared to 1994-
Revenues of Cable TV Fund 14-A, Ltd. (the "Partnership") totaled
$44,094,802 for 1995 compared to $40,442,268 in 1994, an increase of
$3,652,534, or approximately 9 percent. Increases in the subscriber base and
premium subscriptions accounted for approximately 53 percent of the increase.
The number of basic subscribers totaled 105,870 at December 31, 1995 compared
to 98,635 at December 31, 1994, an increase of 7,235, or approximately 7
percent. Premium service subscriptions totaled 91,792 at December 31, 1995
compared to 89,150 at December 31, 1994, an increase of 2,642, or approximately
3 percent. Rate increases during the first quarter of 1995 accounted for
approximately 20 percent of the increase in revenues for 1995. An increase in
advertising sales accounted for approximately 18 percent of the increase in
revenues. No other individual factor was significant to the increase in
revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses totaled $25,719,534 for 1995 compared to
$23,811,465 in 1994, an increase of $1,908,069, or approximately 8 percent.
Operating expenses represented 58 percent of revenues in 1995 compared to 59
percent in 1994. Increases in programming fees and advertising sales related
expenses primarily accounted for the increase in operating expenses. The
increases in programming fees were due, in part, to the increase in the
subscriber base. The increase in advertising sales related expenses was due,
in part, to the increase in advertising sales activity. No other individual
factor was significant to the increase in revenues.
Management fees and allocated overhead from the General Partner
totaled $5,375,657 for 1995 compared to $5,127,553 in 1994, an increase of
$248,104, or approximately 5 percent. The increase was due to the increase in
revenues, upon which such fees and allocations are based, and increases in
allocated expenses from the General Partner.
Depreciation and amortization expense totaled $14,459,479 for 1995
compared to $14,826,256 in 1994, a decrease of $366,777, or approximately 2
percent, primarily due to the maturation of a portion of the intangible asset
base.
Operating loss totaled $1,459,868 for 1995 compared to $3,323,006 in
1994, a decrease of $1,863,138, or approximately 56 percent, due to the
increase in revenues and the decrease in depreciation and amortization expense
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner.
The cable television industry generally measures the financial
performance of a cable television system in terms of cash flow or operating
income before depreciation and amortization. The value of a cable television
system is often determined using multiples of cash flow. This measure is not
intended to be a substitute or improvement upon the items disclosed on the
financial statements, rather it is included because it is an industry standard.
Operating income before depreciation and amortization expense totaled
$12,999,611 for 1995 compared to $11,503,250 in 1994, an increase of
$1,496,361, or approximately 13 percent, due to the increase in revenues
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner.
Interest expense totaled $6,001,497 for 1995 compared to $4,498,227 in
1994, an increase of $1,503,270, or approximately 33 percent, due primarily to
higher outstanding balances on interest bearing obligations in 1995.
Loss before equity in net loss of cable television joint venture
totaled $7,432,164 for 1995 compared to $8,004,692 in 1994, a decrease of
$572,528, or approximately 7 percent, primarily due to the decrease in
operating loss.
1994 Compared to 1993-
Revenues of the Partnership totaled $40,442,268 in 1994 compared to
$38,916,469 in 1993, an increase of $1,525,799, or approximately 4 percent. An
increase in the subscriber base primarily accounted for the increase in
revenues. Basic subscribers increased 7,134, or approximately 8 percent, from
91,501 at December 31, 1993 to 98,635 at December 31, 1994. The increase in
13
14
revenues would have been greater but for reductions in basic rates due to basic
rate regulations issued by the FCC in April 1993 and February 1994 with which
the Partnership complied effective September 1993 and July 1994, respectively.
No other individual factor was significant to the increase in revenues.
Operating expenses totaled $23,811,465 in 1994 compared to $22,598,241
in 1993, an increase of $1,213,224, or approximately 5 percent. Operating
expenses represented 59 percent of revenue in 1994 compared to 58 percent in
1993. Increases in programming fees primarily accounted for the increase in
expenses. The increases in programming fees were due, in part, to the increase
in the basic subscriber base. No other factor was significant to the increase
in operating expenses.
Management fees and allocated overhead from the General Partner
totaled $5,127,553 in 1994 compared to $4,683,355 in 1993, an increase of
$444,198, or approximately 9 percent. This increase was due to the increase in
revenues, upon which such management fees and allocated overhead are based, and
increases in allocated expenses from the General Partner during 1994.
Depreciation and amortization expense totaled $14,826,256 in 1994
compared to $15,197,677 in 1993, a decrease of $371,421, or approximately 2
percent, primarily due to the maturation of a portion of the tangible asset
base and the intangible asset base.
Operating loss totaled $3,323,006 in 1994 compared to $3,562,804 in
1993, a decrease of $239,798, or approximately 7 percent, due primarily to the
increase in revenues and the decrease in depreciation and amortization expense.
Operating income before depreciation and amortization totaled
$11,503,250 in 1994 compared to $11,634,873 in 1993, a decrease of $131,623, or
approximately 1 percent, due to the increases in operating expenses and
management fees and allocated overhead from the General Partner exceeding the
increase in revenues.
Interest expense totaled $4,498,227 in 1994 compared to $3,726,237 in
1993, an increase of $771,990, or approximately 21 percent, due primarily to
higher effective interest rates and higher outstanding balances on interest
bearing obligations.
Loss before equity in net loss of cable television joint venture
totaled $8,004,692 in 1994 compared to $7,330,757 in 1993, or approximately 9
percent, due primarily to the increase in interest expense.
In addition to the systems owned directly, the Partnership owns a 27
percent interest in Cable TV Fund 14-A/B Venture (the "Venture"). See
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the Venture for details pertaining to the Venture's operations.
FINANCIAL CONDITION
During 1995, the Partnership generated net cash from operating
activities totaling $7,301,687, which was available to fund capital
expenditures and non-operating costs. Capital expenditures for the
Partnership's directly owned systems totaled approximately $10,737,000 during
1995. Approximately 32 percent was for new plant construction and
approximately 18 percent of these expenditures was attributable to construction
of service drops to subscribers' homes. The remainder of the expenditures
related to various enhancements throughout the Partnership's operating systems.
These expenditures were funded primarily from cash generated from operations
and borrowings under the Partnership's revolving credit facility.
Budgeted capital expenditures for 1996 are approximately $9,581,000.
Approximately 35 percent of the total capital expenditures will be used for new
plant construction in all of the Partnership's systems. Approximately 12
percent will relate to construction of service drops to subscribers' homes.
The remainder of the anticipated expenditures are for various enhancements in
all of the Partnership's systems. Funding for the improvements is expected to
come from cash on hand, cash generated from operations, and, in its discretion,
advances from the General Partner.
In March 1996, the Partnership entered into an agreement to sell the
Turnersville System to an unaffiliated party for a sales price totaling
approximately $84,500,000, subject to closing adjustments that potentially
could reduce the sales price to $80,500,000. Closing of this sale is expected
to occur in the second half of 1996. Upon the consummation of the proposed
sale of the Turnersville System, the Partnership will make a distribution of at
least $20,000,000 of the net sales proceeds to its limited partners, repay any
amounts due to the General Partner and, as required under the terms of the
Partnership's credit facility, the balance will be used to repay a portion of
the Partnership's bank indebtedness. Because this distribution will not return
125 percent of the amount initially contributed to the Partnership by the
limited partners, the General Partner will not receive a distribution on the
sale of the Turnersville System. The Jones Group, Ltd., a subsidiary of the
General Partner, will receive a brokerage fee of 2.5 percent of the sales price
for acting as a broker in this transaction. Because the Turnersville System
does not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership is required to
approve this sale.
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15
Ameritech, which provides telephone service in a multi-state region
including Illinois, has obtained a franchise that will allow it to provide
cable television service in Naperville, Illinois, a community currently served
by the Partnership's Naperville System. If Ameritech takes steps to begin
providing cable television service in Naperville, this competition could have a
material adverse effect on the Naperville System's revenues, cash flow and fair
market value. It could also have an adverse impact on the Partnership's
ability to sell the Naperville System. The General Partner is taking prudent
steps necessary to meet this potential competition from Ameritech and to
safeguard the value of the Naperville System.
During July 1994, the Partnership entered into an $80,000,000
revolving credit facility. At December 31, 1995, $80,000,000 was outstanding
under this agreement. The revolving credit facility converts to a term loan on
September 30, 1996, at which time the then-outstanding balance is payable in
quarterly installments through March 31, 2002. Payments due during 1996 total
$2,000,000 and will be funded from cash on hand, cash generated from operations
and proceeds from the sale of the Turnersville System. Interest on the
outstanding principal balance is at the Partnership's option of the Prime rate
plus 1/4 percent or the Certificate of Deposit rate plus 1-3/8 percent or the
London Interbank Offered Rate plus 1-1/4 percent.
Because the balance on the Partnership's credit facility is at its
maximum of $80,000,000, the Partnership will need to rely on cash on hand, cash
generated from operations and, in its discretion, advances from the General
Partner, to meet its anticipated liquidity and capital needs. Upon the sale of
the Partnership's Turnersville System, the Partnership will repay a portion of
the balance outstanding on its credit facility. This reduction in debt will
provide liquidity and the Partnership should have sufficient sources of capital
to meet its anticipated needs.
In addition to those systems owned directly by it, the Partnership
owns a 27 percent interest in the Venture. The Partnership's investment in
this cable television joint venture, accounted for under the equity method,
decreased by $1,104,003 compared to the December 31, 1994 balance. This
decrease represents the Partnership's proportionate share of losses generated
by the Venture during 1995.
REGULATION AND LEGISLATION
The Partnership has filed cost-of-service showings in response to
rulemakings concerning the 1992 Cable Act for its Turnersville, New Jersey;
Buffalo, Minnesota; Naperville, Illinois and Calvert County, Maryland systems
and thus anticipates no further reductions in rates in these systems. The
cost-of-service showings have not yet received final approvals from regulatory
authorities, however, and there can be no assurance that the Partnership's
cost-of-service showings will prevent further rate reductions in these systems
until such final approvals are received.
The Telecommunications Act of 1996 (the "1996 Act"), which became law
on February 8, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
including the Partnership effective March 31, 1999 and the cable programming
service tier of "small" cable operators in systems providing service to 50,000
or fewer subscribers effective immediately. The 1996 Act also revised the
procedures for filing cable programming service tier rate complaints and adds a
new effective competition test.
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Partnership in particular. The FCC will be
undertaking numerous rulemaking proceedings to interpret and implement the 1996
Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Partnership. See Item 1.
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CABLE TV FUND 14-A/B VENTURE
RESULTS OF OPERATIONS
1995 Compared to 1994-
Revenues of the Venture's Broward County System increased $1,285,981,
or approximately 6 percent, to $23,469,505 in 1995 from $22,183,524 in 1994.
The Venture added 1,835 basic subscribers in 1995, an increase of approximately
4 percent. This increase in basic subscribers accounted for approximately 44
percent of the increases in revenue. Increases in premium service revenue
accounted for approximately 25 percent of the increases in revenue and basic
service rate adjustments accounted for approximately 11 percent of the
increases in revenue. No other individual factor significantly affected the
increase in revenues.
Operating expense decreased $258,229, or approximately 2 percent, to
$12,620,209 in 1995 from $12,878,438 in 1994. Operating expenses represented
54 percent of revenue in 1995, compared to 58 percent in 1994. The decrease in
operating expenses was due primarily to decreases in personnel and marketing
related expenses, which were partially offset by increases in programming fees
and office related expenses. No other individual factor significantly affected
the increase in operating expense.
Management fees and allocated overhead from Jones Intercable, Inc.
("Intercable") increased $50,921, or approximately 2 percent, to $2,828,211 in
1995 from $2,777,290 in 1994 primarily due to the increase in revenues upon
which such fees and allocations are based.
Depreciation and amortization expense decreased $414,487, or
approximately 5 percent, to $8,774,507 in 1995 from $9,188,994 in 1994. The
decrease in depreciation and amortization expense was attributable to the
maturation of the Venture's asset base.
Operating loss decreased $1,907,776, or approximately 72 percent, to
$753,422 in 1995 from $2,661,198 in 1994. This decrease was due to the
increase in revenues and the decreases in operating and depreciation and
amortization expenses exceeding the increase in management fees and allocated
overhead from Intercable.
Operating income before depreciation and amortization expense
increased $1,493,289, or approximately 23 percent, to $8,021,085 in 1995 from
$6,527,796 in 1994 due to the increases in revenues and decreases in operating
expenses exceeding the increase in management fees and allocated overhead from
Intercable.
Interest expense increased $643,490, or approximately 24 percent, to
$3,371,524 in 1995 from $2,728,034 in 1994 due to higher outstanding balances
on interest bearing obligations in 1995.
Net loss decreased $1,343,968, or approximately 25 percent, to
$4,073,811 in 1995 from $5,417,779 in 1994. These losses were primarily the
result of the factors discussed above.
1994 Compared to 1993-
Revenues of the Venture's Broward County System increased $114,572, or
less than l percent, to $22,183,524 in 1994 from $22,068,952 in 1993.
Increases in advertising sales revenues and home shopping revenues were
primarily responsible for the increase in revenues. The increase in revenues
would have been greater but for the reduction in basic rates due to the basic
rate regulations issued by the FCC in April 1993 and February 1994 with which
the Venture complied effective September 1993 and July 1994, respectively. No
other individual factor significantly affected the increase in revenues.
Operating expense increased $538,923, or approximately 4 percent, to
$12,878,438 in 1994 from $12,339,515 in 1993. Operating expenses represented
58 percent of revenue in 1994, compared to 56 percent in 1993. The increase in
operating expenses was due primarily to increases in programming fees and
advertising sales expenses. No other individual factor significantly affected
the increase in operating expense.
Management fees and allocated overhead from Intercable increased
$75,722, or approximately 3 percent, to $2,777,290 in 1994 from $2,701,568 in
1993 primarily due to an increase in allocated expenses from Intercable.
Depreciation and amortization expense decreased $163,814, or
approximately 2 percent, to $9,188,994 in 1994 from $9,352,808 in 1993. The
decrease in depreciation and amortization expense is attributable to the
maturation of the Venture's asset base.
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17
Operating loss increased $336,259, or approximately 14 percent, to
$2,661,198 in 1994 from $2,324,939 in 1993. This increase is due to the
increase in operating expenses and management fees and allocated overhead from
Jones Intercable, Inc. exceeding the increase in revenues and the decrease in
depreciation and amortization expense.
Operating income before depreciation and amortization expense
decreased $500,073, or approximately 7 percent, to $6,527,796 in 1994 from
$7,027,869 in 1993 due to the increases in operating expenses and management
fees and allocated overhead from Jones Intercable, Inc. exceeding the increase
in revenues.
Interest expense increased $277,362, or approximately 11 percent, to
$2,728,034 in 1994 from $2,450,672 in 1993 due to higher effective interest
rates on interest bearing obligations.
Net loss increased $704,279, or approximately 15 percent, to
$5,417,779 in 1994 from $4,713,500 in 1993. The increase was primarily
attributable to the increase in operating loss and the increase in interest
expense. These losses were primarily the result of the factors discussed
above.
FINANCIAL CONDITION
For the twelve months ended December 31, 1995, the Venture generated
net cash from operating activities totaling $3,909,198 which is available to
fund capital expenditures and non-operating costs. The Venture expended
approximately $3,900,000 on capital additions during 1995. Cable television
plant extensions accounted for approximately 49 percent of these expenditures.
The construction of service drops to homes and rebuilds accounted for
approximately 19 percent and 8 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 generated from
operations. The Venture plans to expend approximately $4,200,000 for capital
additions in 1996. Of this total, approximately 37 percent will relate to the
construction of service drops to homes and approximately 36 percent is for
cable television plant extensions. 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, cash
generated from operations and, in its discretion, advances from the General
Partner.
The balance outstanding on the Venture's term loan at December 31,
1995 was $40,365,468. 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 1995 totaled $1,755,000. Installments due during 1996 total
$3,510,000. Funding for these installments is expected to come from cash on
hand, cash generated from operations and, in its discretion, advances from
Intercable. Interest is at the Venture's option of Prime plus 1/4 percent,
the London Interbank Offered Rate plus 1-1/4 percent or the Certificate of
Deposit rate plus 1-3/8 percent. The effective interest rate on amounts
outstanding as of December 31, 1995 and 1994 was 7.17 percent for both periods.
Because the Venture's credit facility is now a term loan, the Venture
will rely on cash generated from operations and, in its discretion, advances
from the General Partner for its liquidity needs until its credit facility is
amended.
REGULATION AND LEGISLATION
The Telecommunications Act of 1996 (the "1996 Act"), which became law
on February 8, 1996, substantially revised the Communications Act of 1934, as
amended, including the 1984 Cable Act and the 1992 Cable Act, and has been
described as one of the most significant changes in communications regulation
since the original Communications Act of 1934. The 1996 Act is intended, in
part, to promote substantial competition in the telephone local exchange and in
the delivery of video and other services. As a result of the 1996 Act, local
telephone companies (also known as local exchange carriers or "LECs") and other
service providers are permitted to provide video programming, and cable
television operators are permitted entry into the telephone local exchange
market. The FCC is required to conduct rulemaking proceedings over the next
several months to implement various provisions of the 1996 Act.
Among other provisions, the 1996 Act modified the 1992 Cable Act by
deregulating the cable programming service tier of large cable operators
including the Venture effective March 31, 1999 and the cable programming
service tier of "small" cable operators in systems providing service to 50,000
or fewer subscribers effective immediately. The 1996 Act also revised the
procedures for filing cable programming service tier rate complaints and adds a
new effective competition test.
17
18
It is premature to predict the specific effects of the 1996 Act on the
cable industry in general or the Venture in particular. The FCC will be
undertaking numerous rulemaking proceedings to interpret and implement the 1996
Act. It is not possible at this time to predict the outcome of those
proceedings or their effect on the Venture. See Item 1.
18
19
Item 8. Financial Statements
CABLE TV FUND 14-A, LTD. AND
CABLE TV FUND 14-A/B VENTURE
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
INDEX
Page
-----------------
14-A 14-A/B
---- ------
Report of Independent Public Accountants 20 31
Balance Sheets 21 32
Statements of Operations 23 34
Statements of Partners' Capital (Deficit) 24 35
Statements of Cash Flows 25 36
Notes to Financial Statements 26 37
19
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-A, Ltd.:
We have audited the accompanying balance sheets of CABLE TV FUND 14-A,
LTD. (a Colorado limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund 14-A,
Ltd. as of December 31, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
April 1, 1996.
20
21
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
------------------------------------
ASSETS 1995 1994
------ ------------- --------------
CASH $ 293,179 $ 426,979
TRADE RECEIVABLES, less allowance for doubtful receivables of
$75,209 and $74,176 at December 31, 1995 and 1994, respectively 1,328,715 1,070,581
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 128,171,454 117,434,221
Less- accumulated depreciation (67,771,303) (57,090,363)
------------- -------------
60,400,151 60,343,858
Franchise costs, net of accumulated amortization of $25,328,423 and
$22,417,029 at December 31, 1995 and 1994, respectively 8,810,239 11,721,633
Subscriber lists, net of accumulated amortization of $8,984,086 and
$8,390,402 at December 31, 1995 and 1994, respectively 672,264 1,265,948
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $892,784 and $776,420 at December 31, 1995
and 1994, respectively 5,900,474 6,016,838
Investment in cable television joint venture 4,779,072 5,883,075
------------- -------------
Total investment in cable television properties 80,562,200 85,231,352
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 716,744 827,434
------------- -------------
Total assets $ 82,900,838 $ 87,556,346
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
21
22
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
---------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------ ------------
LIABILITIES:
Debt $ 80,726,793 $ 77,425,047
Accounts payable-
Trade 57,598 165,894
General Partner 887,215 706,579
Accrued liabilities 2,717,040 2,238,657
Subscriber prepayments 133,035 104,845
------------ ------------
Total liabilities 84,521,681 80,641,022
------------ -----------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (703,440) (618,078)
------------ ------------
(702,440) (617,078)
------------ ------------
Limited Partners-
Net contributed capital (160,000 units outstanding at
December 31, 1995 and 1994) 68,722,000 68,722,000
Accumulated deficit (69,640,403) (61,189,598)
------------ ------------
(918,403) 7,532,402
------------ ------------
Total liabilities and partners' capital (deficit) $ 82,900,838 $ 87,556,346
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
22
23
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
----------- ----------- -----------
REVENUES $44,094,802 $40,442,268 $38,916,469
COSTS AND EXPENSES:
Operating expenses 25,719,534 23,811,465 22,598,241
Management fees and allocated overhead from
General Partner 5,375,657 5,127,553 4,683,355
Depreciation and amortization 14,459,479 14,826,256 15,197,677
----------- ----------- -----------
OPERATING LOSS (1,459,868) (3,323,006) (3,562,804)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (6,001,497) (4,498,227) (3,726,237)
Other, net 29,201 (183,459) (41,716)
----------- ----------- -----------
Total other income (expense) (5,972,296) (4,681,686) (3,767,953)
----------- ----------- -----------
LOSS BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE (7,432,164) (8,004,692) (7,330,757)
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE (1,104,003) (1,468,218) (1,277,358)
----------- ----------- -----------
NET LOSS $(8,536,167) $(9,472,910) $(8,608,115)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (85,362) $ (94,729) $ (86,081)
=========== =========== ===========
Limited Partners $(8,450,805) $(9,378,181) $(8,522,034)
=========== =========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (52.82) $ (58.61) $ (53.26)
=========== =========== ===========
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.
23
24
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
-------------------------------------------------------
1995 1994 1993
----------- ------------ ------------
GENERAL PARTNER:
Balance, beginning of year $ (617,078) $ (522,349) $ (436,268)
Net loss for year (85,362) (94,729) (86,081)
------------ ------------ ------------
Balance, end of year $ (702,440) $ (617,078) $ (522,349)
=========== ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ 7,532,402 $ 16,910,583 $ 25,432,617
Net loss for year (8,450,805) (9,378,181) (8,522,034)
----------- ------------ ------------
Balance, end of year $ (918,403) $ 7,532,402 $ 16,910,583
============ ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
24
25
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
------------------------------------------------------
1995 1994 1993
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,536,167) $ (9,472,910) $ (8,608,115)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 14,459,479 14,826,256 15,197,677
Equity in net loss of cable television joint venture 1,104,003 1,468,218 1,277,358
Amortization of interest rate protection contract 16,667 16,668 60,031
Increase in trade receivables (258,134) (132,111) (115,166)
Increase in deposits, prepaid expenses
and deferred charges (63,074) (699,666) (17,764)
Increase in trade accounts payable, accrued
liabilities and subscriber prepayments 398,277 451,507 89,387
Increase (decrease) in advances from General Partner 180,636 647,605 (398,380)
------------ ------------ ------------
Net cash provided by operating activities 7,301,687 7,105,567 7,485,028
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (10,737,233) (8,978,588) (7,007,208)
------------ ------------ ------------
Net cash used in investing activities (10,737,233) (8,978,588) (7,007,208)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 3,546,885 77,661,002 116,518
Repayment of debt (245,139) (75,837,784) (3,900,963)
Purchase of interest rate protection contract - - (50,000)
------------ ------------ ------------
Net cash provided by (used in)
financing activities 3,301,746 1,823,218 (3,834,445)
------------ ------------ ------------
Decrease in cash (133,800) (49,803) (3,356,625)
Cash, beginning of year 426,979 476,782 3,833,407
------------ ------------ ------------
Cash, end of year $ 293,179 $ 426,979 $ 476,782
============ ============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 5,740,361 $ 4,339,995 $ 3,900,545
============ ============ ============
The accompanying notes to financial statements
are an integral part of these statements.
25
26
CABLE TV FUND 14-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 14-A, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on February 6, l987, under a public program sponsored
by Jones Intercable, Inc. ("Intercable"), a publicly held Colorado corporation.
The Partnership was formed to acquire, construct, develop and operate cable
television systems. Intercable is the "General Partner" and manager of the
Partnership. Intercable and its subsidiaries also own and operate cable
television systems. In addition, Intercable manages cable television systems
for other limited partnerships for which it is general partner and, also, for
other affiliated entities.
On January 8, 1988, the Partnership and Cable TV Fund 14-B, Ltd.
formed Cable TV Fund 14-A/B Venture (the "Venture"), to acquire the cable
television system serving areas in and around Broward County, Florida. The
Partnership contributed $18,975,000 to the capital of the Venture for 27
percent ownership interest and Cable TV Fund 14-B, Ltd. contributed
$51,025,000 to the capital of the Venture for 73 percent ownership interest.
Contributed Capital, Commissions and Syndication Costs
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contribution to partnership capital.
Intercable purchased its interest in the Partnership by contributing
$1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99 percent to
the limited partners and 1 percent to Intercable, except for income or gain
from the sale or disposition of cable television properties, which will be
allocated to the partners based upon the formula set forth in the Partnership's
agreement and interest income earned prior to the first acquisition by the
Partnership of a cable television system, which was allocated 100 percent to
the limited partners.
Cable Television System Acquisitions and Formation of the Venture
The Partnership 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. In
1991, the Partnership purchased additional cable television systems serving
certain communities in central Illinois (the "Central Illinois System").
The Partnership 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. Other system
acquisition costs were capitalized and charged to distribution systems, except
for the Central Illinois System which were charged to intangible assets.
Proposed Cable Television System Sales
In March 1996, the Partnership entered into an agreement to sell the
Turnersville System to an unaffiliated party for a sales price totaling
approximately $84,500,000, subject to closing adjustments that potentially
could reduce the sales price to $80,500,000. Closing of this sale is expected
to occur in the second half of 1996. Upon the consummation of the proposed
sale of the Turnersville System, the Partnership will make a distribution of at
least $20,000,000 of the net sales proceeds to its limited partners, repay any
amounts due to the General Partner and, as required under the terms of the
Partnership's credit facility, the balance will be used to repay a portion of
the Partnership's bank indebtedness. Because this distribution will not return
125 percent of the amount initially contributed to the Partnership by the
limited partners, the General Partner will not receive a distribution on the
sale of the Turnersville System. The Jones Group, Ltd., a subsidiary of the
General Partner, will receive a brokerage fee of 2.5 percent of the sales price
for acting as a broker in this transaction. Because the Turnersville System
does not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership is required to
approve this sale.
26
27
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on the
accrual basis of accounting in accordance with generally accepted accounting
principles. The Partnership's tax returns are also prepared on the accrual
basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Investment in Cable Television Joint Venture
In addition to its wholly owned systems, the Partnership owns a 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 $4,073,811, $5,417,779 and $4,713,500 in
1995, 1994 and 1993, respectively, of which $1,104,003, $1,468,218 and
$1,277,358, respectively, was allocated to the Partnership. The investment is
accounted for on the equity method. The operations of the Venture are
significant to the Partnership and should be reviewed in conjunction with these
financial statements. Reference is made to the accompanying financial
statements of the Venture on pages 32 to 40.
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided primarily
using the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 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 - 4 years
Subscriber lists 4 years
Costs in excess of interests in net assets purchased 31 - 36 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
1995 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
Intercable manages the Partnership 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 Intercable by the Partnership for the years ended December 31, 1995, 1994,
and 1993 (exclusive of the Partnership's 27 percent interest in the Venture)
were $2,204,740, $2,022,113 and $1,945,823, respectively.
27
28
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 Intercable. Any distributions other than interest income on limited partner
subscriptions earned prior to the acquisition of the Partnership's first cable
television system or from cash flow, such as from the sale or refinancing of a
system or upon dissolution of the Partnership, will be made as follows: first,
to the limited partners in an amount which, together with all prior
distributions, will equal 125 percent of the amount initially contributed to
the Partnership capital by the limited partners; the balance, 75 percent to the
limited partners and 25 percent to Intercable.
The Partnership reimburses Intercable for certain allocated overhead
and administrative expenses. These expenses represent the salaries and
benefits paid to corporate personnel, rent, data processing services and other
corporate related facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services to
the Partnership. Allocations of personnel costs are based primarily on actual
time spent by employees of Intercable with respect to each partnership managed.
Remaining expenses are allocated based on the pro rata relationship of the
Partnership's revenues to the total revenues of all systems owned or managed by
Intercable and certain of its subsidiaries. Systems owned by Intercable and
all other systems owned by partnerships for which Intercable is the general
partner are also allocated a proportionate share of these expenses. Intercable
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Reimbursements made to Intercable by the Partnership
for allocated overhead and administrative expenses (exclusive of the
Partnership's 27 percent interest in the Venture) were $3,170,917, $3,105,440
and $2,737,532 in 1995, 1994 and 1993, respectively.
The Partnership was charged interest during 1995 at an average
interest rate of 10.5 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged to the
Partnership by Intercable was $23,107, $43,708 and $1,029 for the years ended
December 31, 1995, 1994 and 1993, respectively.
Payments to/from Affiliates for Programming Services
The Partnership receives programming from Superaudio, Mind Extension
University, Jones Computer Network and Product Information Network, all of
which are affiliates of Intercable.
Payments to Superaudio totaled $54,644, $51,858 and $50,655 in 1995,
1994 and 1993, respectively. Payments to Mind Extension University totaled
$61,431, $51,389 and $32,659 in 1995, 1994 and 1993, respectively. Payments to
Jones Computer Network, which initiated service in 1994, totaled $65,248 and
$21,344 in 1995 and 1994, respectively.
The Partnership receives a commission from Product Information Network
based on a percentage of advertising revenue and number of subscribers.
Product Information Network, which initiated service in 1994, paid commissions
to the Partnership totaling $77,790 and $42,223 in 1995 and 1994, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1995 and 1994,
consisted of the following:
December 31,
---------------------------------
1995 1994
------------- -------------
Cable distribution systems $ 116,916,533 $ 107,439,862
Equipment and tools 4,130,430 3,601,207
Office furniture and equipment 1,644,051 1,471,959
Buildings 2,393,755 2,339,942
Vehicles 2,698,904 2,193,470
Land 387,781 387,781
------------- -------------
128,171,454 117,434,221
Less - accumulated depreciation (67,771,303) (57,090,363)
------------- -------------
$ 60,400,151 $ 60,343,858
============= =============
28
29
(5) DEBT
Debt consists of the following:
December 31,
---------------------------------------
1995 1994
------------- --------------
Lending institutions-
Revolving credit and term loan $ 80,000,000 $ 76,900,000
Capital lease obligations 726,793 525,047
------------ ------------
$ 80,726,793 $ 77,425,047
============ ============
During July 1994, the Partnership entered into an $80,000,000
revolving credit facility. At December 31, 1995, $80,000,000 was outstanding
under this agreement. The revolving credit facility converts to a term loan on
September 30, 1996, at which time the then-outstanding balance is payable in
quarterly installments through March 31, 2002. Payments due during 1996 total
$2,000,000 and will be funded from cash on hand, cash generated from operations
and proceeds from the sale of the Turnersville System. Interest on the
outstanding principal balance is at the Partnership's option of the Prime rate
plus 1/4 percent or the Certificate of Deposit rate plus 1-3/8 percent or the
London Interbank Offered Rate plus 1-1/4 percent.
On January 12, 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $5,000,000. The Partnership
paid a fee of $50,000 for this coverage. The agreement expired in January
1996. The agreement protected the Partnership from LIBOR interest rates that
exceeded 7 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, 2000, and thereafter, respectively, are: $2,218,038,
$4,218,038, $10,218,038, $14,072,679, $18,000,000 and $32,000,000. At December
31, 1995, substantially all of the Partnership's property, plant and equipment
secured the above indebtedness.
At December 31, 1995, the carrying amount of the Partnership's
long-term debt did not differ significantly from the estimated fair value of
the financial instruments. The fair value of the Partnership's long-term debt
is estimated based on the discounted amount of future debt service payments
using rates of borrowing for a liability of similar risk.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by the General
Partner.
The Partnership's tax returns, the qualification of the Partnership as
such for tax purposes, and the amount of distributable partnership income or
loss are subject to examination by federal and state taxing authorities. If
such examinations result in changes with respect to the Partnership's
qualification as such, or in changes with respect to the Partnership's recorded
income or loss, the tax liability of the general and limited partners would
likely be changed accordingly.
Taxable loss reported to the partners is different from that reported
in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
The Partnership has filed cost-of-service showings in response to
rulemakings concerning the 1992 Cable Act for its Turnersville, New Jersey;
Buffalo, Minnesota; Naperville, Illinois and Calvert County, Maryland systems
and thus anticipates no further reductions in rates in these systems. The
cost-of-service showings have not yet received final approvals from regulatory
authorities, however, and there can be no assurance that the Partnership's
cost-of-service showings will prevent further rate reductions in these systems
until such final approvals are received.
29
30
The Partnership rents office and other facilities under various
long-term lease arrangements. Rent paid under such lease arrangements totaled
$242,084, $233,251 and $250,526, respectively, for the years ended December 31,
1995, 1994 and 1993. Minimum commitments under operating leases for the five
years in the period ending December 31, 2000, and thereafter are as follows:
1996 $289,262
1997 278,794
1998 234,884
1999 146,506
2000 9,000
Thereafter 3,000
--------
$961,446
========
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
Year Ended December 31,
----------------------------------------------
1995 1994 1993
------------ ---------- ------------
Maintenance and repairs $ 761,244 $ 754,314 $ 840,307
============ ========== ============
Taxes, other than income and payroll taxes $ 213,244 $ 162,029 $ 155,727
============ ========== ============
Advertising $ 694,205 $ 688,611 $ 621,377
============ ========== ============
Depreciation of property, plant and equipment $ 10,706,143 $9,957,440 $ 10,131,923
============ ========== ===========
Amortization of intangible assets $ 3,753,336 $4,868,816 $ 5,065,754
============ ========== ============
30
31
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, 1995 and
1994, and the related statements of operations, partners' capital and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the General Partners'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund
14-A/B Venture as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
April 1, 1996.
31
32
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
---------------------------------
ASSETS 1995 1994
------ ------------- -------------
CASH $ 371,870 $ 254,974
TRADE RECEIVABLES, less allowance for doubtful receivables of
$102,006 and $95,444 at December 31, 1995 and 1994, respectively 1,093,967 601,185
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 52,012,981 48,109,168
Less- accumulated depreciation (24,307,885) (20,972,255)
------------- -------------
27,705,096 27,136,913
Franchise costs, net of accumulated amortization of $34,427,136 and
$30,414,475 at December 31, 1995 and 1994, respectively 13,215,364 17,228,025
Subscriber lists, net of accumulated amortization of $9,461,332 and
$8,745,434 at December 31, 1995 and 1994, respectively 2,259,068 2,974,966
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $4,189,656 and $3,649,056 at December 31, 1995
and 1994, respectively 17,434,410 17,975,010
------------- -------------
Total investment in cable television properties 60,613,938 65,314,914
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 367,781 426,387
------------- -------------
Total assets $ 62,447,556 $ 66,597,460
============= =============
The accompanying notes to financial statements
are an integral part of these balance sheets.
32
33
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
December 31,
-------------------------------
LIABILITIES AND PARTNERS' CAPITAL 1995 1994
--------------------------------- ------------ ------------
LIABILITIES:
Debt $ 40,530,652 $ 42,271,921
Accounts payable-
Trade 12,901 60,525
Jones Intercable, Inc. 2,206,959 354,179
Accrued liabilities 1,209,112 1,350,465
Subscriber prepayments 497,780 496,407
------------ ------------
Total liabilities 44,457,404 44,533,497
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL:
Contributed capital 70,000,000 70,000,000
Accumulated deficit (52,009,848) (47,936,037)
------------ ------------
17,990,152 22,063,963
------------ ------------
Total liabilities and partners' capital $ 62,447,556 $ 66,597,460
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
33
34
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
----------------------------------------------------
1995 1994 1993
----------- ----------- -----------
REVENUES $23,469,505 $22,183,524 $22,068,952
COSTS AND EXPENSES:
Operating expenses 12,620,209 12,878,438 12,339,515
Management fees and allocated overhead from
Jones Intercable, Inc. 2,828,211 2,777,290 2,701,568
Depreciation and amortization 8,774,507 9,188,994 9,352,808
----------- ----------- -----------
OPERATING LOSS (753,422) (2,661,198) (2,324,939)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (3,371,524) (2,728,034) (2,450,672)
Other, net 51,135 (28,547) 62,111
----------- ----------- -----------
Total other income (expense) (3,320,389) (2,756,581) (2,388,561)
----------- ----------- -----------
NET LOSS $(4,073,811) $(5,417,779) $(4,713,500)
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
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35
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Year Ended December 31,
----------------------------------------------------
1995 1994 1993
----------- ------------ ------------
CABLE TV FUND 14-A, LTD. (27%):
Balance, beginning of year $ 5,883,075 $ 7,351,293 $ 8,628,651
Net loss for year (1,104,003) (1,468,218) (1,277,358)
----------- ----------- -----------
Balance, end of year $ 4,779,072 $ 5,883,075 $ 7,351,293
=========== =========== ===========
CABLE TV FUND 14-B, LTD. (73%):
Balance, beginning of year $16,180,888 $20,130,449 $23,566,591
Net loss for year (2,969,808) (3,949,561) (3,436,142)
----------- ----------- -----------
Balance, end of year $13,211,080 $16,180,888 $20,130,449
=========== =========== ===========
TOTAL:
Balance, beginning of year $22,063,963 $27,481,742 $32,195,242
Net loss for year (4,073,811) (5,417,779) (4,713,500)
----------- ----------- -----------
Balance, end of year $17,990,152 $22,063,963 $27,481,742
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
35
36
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------------------------------------
1995 1994 1993
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,073,811) $(5,417,779) $(4,713,500)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 8,774,507 9,188,994 9,352,808
Amortization of interest rate protection agreement 82,085 82,080 82,080
Decrease (increase) in trade receivables (492,782) 225,591 (253,001)
Decrease (increase) in deposits, prepaid expenses
and deferred charges (193,197) (206,491) 13,218
Increase (decrease) in accounts payable, accrued
liabilities and subscriber prepayments (187,604) 592,973 139,815
----------- ----------- -----------
Net cash provided by operating activities 3,909,198 4,465,368 4,621,420
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (3,903,813) (3,630,545) (3,040,155)
----------- ----------- -----------
Net cash used in investing activities (3,903,813) (3,630,545) (3,040,155)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 108,593 71,380 159,493
Repayment of debt (1,849,862) (1,261,189) (3,606,172)
Purchase of interest rate protection contract - - (246,250)
Increase (decrease) in advances from Jones Intercable, Inc. 1,852,780 296,259 (67,953)
---------- ----------- -----------
Net cash provided by (used in)
financing activities 111,511 (893,550) (3,760,882)
---------- ----------- -----------
Increase (decrease) in cash 116,896 (58,727) (2,179,617)
Cash, beginning of year 254,974 313,701 2,493,318
----------- ----------- -----------
Cash, end of year $ 371,870 $ 254,974 $ 313,701
============ ============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 3,467,008 $ 2,454,391 $ 2,333,869
============ ============ ===========
The accompanying notes to financial statements
are an integral part of these statements.
36
37
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 Fund 14-A, Ltd. and Cable TV Fund 14-B,
Ltd. (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 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 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Property, Plant and Equipment
Depreciation is provided using the straight-line method over the
following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
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38
Intangible Assets
Costs assigned to franchises, subscriber lists and costs in excess of
interests in net assets purchased are amortized using the straight-line method
over the following remaining estimated useful lives:
Franchise costs 1 - 7 years
Subscriber lists 3 years
Costs in excess of interests in net assets purchased 33 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized as
revenue when earned.
(3) TRANSACTIONS WITH AFFILIATES
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, 1995, 1994 and
1993 were $1,173,475, $1,109,176 and $1,103,448, 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 Intercable with respect to each entity managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture's revenues to the total revenues of all systems owned or managed by
Intercable and certain of its subsidiaries. Systems owned by Intercable and
all other systems owned by partnerships for which Intercable is the general
partner are also allocated a proportionate share of these expenses. Intercable
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Reimbursements made to Intercable by the Venture for
allocated overhead and administrative expenses during the years ended December
31, 1995, 1994 and 1993 were $1,654,736, $1,668,114 and $1,598,120,
respectively.
The Venture was charged interest during 1995 at an average interest
rate of 10.51 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged to the
Venture by Intercable was $155,659, $960 and $2,361 for the years ended
December 31, 1995, 1994 and 1993, respectively.
Payments to/from Affiliates for Programming Services
The Venture receives programming from Superaudio, Mind Extension
University, Jones Computer Network and Product Information Network, all of
which are affiliates of Intercable.
Payments to Superaudio totaled $30,171, $30,631 and $30,018 in 1995,
1994 and 1993, respectively. Payments to Mind Extension University totaled
$32,268, $27,751 and $17,451 in 1995, 1994 and 1993, respectively. Payments to
Jones Computer Network, which initiated service in 1994, totaled $-0- and
$5,694 in 1995 and 1994, respectively.
The Venture receives a commission from Product Information Network
based on a percentage of advertising revenue and number of subscribers.
Product Information Network, which initiated service in 1994, paid commissions
to the Venture totaling $23,430 and $23,856 in 1995 and 1994, respectively.
38
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(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1995 and 1994,
consisted of the following:
December 31,
--------------------------------
1995 1994
------------ ------------
Cable distribution systems $ 45,655,600 $ 41,905,039
Equipment and tools 1,749,450 1,676,058
Office furniture and equipment 1,150,940 1,117,198
Buildings 1,869,631 1,865,476
Vehicles 856,493 814,530
Land 730,867 730,867
------------ ------------
52,012,981 48,109,168
Less - accumulated depreciation (24,307,885) (20,972,255)
------------ ------------
$ 27,705,096 $ 27,136,913
============ ============
(5) DEBT
Debt consists of the following:
December 31,
--------------------------------
1995 1994
------------- ------------
Lending institutions-
Revolving credit and term loan $ 40,365,468 $ 42,120,468
Capital lease obligations 165,184 151,453
------------ ------------
$ 40,530,652 $ 42,271,921
============ ============
The balance outstanding on the Venture's term loan at December 31,
1995 was $40,365,468. 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 1995 totaled $1,755,000. Installments due during 1996 total
$3,510,000. Funding for these installments is expected to come from cash on
hand, cash generated from operations and, in its discretion, advances from
Intercable. Interest is at the Venture's option of Prime plus 1/4 percent,
the London Interbank Offered Rate ("LIBOR") plus 1-1/4 percent or the
Certificate of Deposit rate plus 1-3/8 percent. The effective interest rate
on amounts outstanding as of December 31, 1995 and 1994 was 7.17 percent for
both periods.
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 protected the Venture from LIBOR
interest rates that exceeded 7 percent for three years from the date of the
agreement. The fee was being charged to interest expense over the life of the
agreement using the straight-line method. The agreement expired in January
1996.
Installments due on debt principal for each of the five years in the
period ending December 31, 2000 and thereafter, respectively, are: $3,559,555,
$4,729,555, $4,729,555, $27,511,987, $-0- and $-0-. At December 31, 1995,
substantially all of the Venture's property, plant and equipment secured the
above indebtedness.
At December 31, 1995, the carrying amount of the Venture's long-term
debt did not differ significantly from the estimated fair value of the
financial instruments. The fair value of the Venture's long-term debt is
estimated based on the discounted amount of future debt service payments using
rates of borrowing for a liability of similar risk.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners of Cable TV Fund 14-A,
Ltd. and Cable TV Fund 14-B, Ltd.
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40
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.
(7) COMMITMENTS AND CONTINGENCIES
Office and other facilities are rented under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $22,680, $49,856
and $46,521, respectively for the years ended December 31, 1995, 1994 and 1993.
Minimum commitments under operating leases for each of the five years in the
period ending December 31, 2000 and thereafter are as follows:
1996 $32,243
1997 6,996
1998 1,166
1999 -
2000 -
Thereafter -
-------
$40,405
=======
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
Year Ended December 31,
----------------------------------------------
1995 1994 1993
---------- ---------- -----------
Maintenance and repairs $ 204,878 $ 238,893 $ 238,163
========== ========== ==========
Taxes, other than income and payroll taxes $ 268,757 $ 258,369 $ 265,331
========== ========== ==========
Advertising $ 152,727 $ 157,998 $ 95,211
========== ========== ==========
Depreciation of property, plant and equipment $3,429,925 $3,315,438 $3,468,602
========== ========== ==========
Amortization of intangible assets $5,344,582 $5,873,556 $5,884,206
========== ========== ==========
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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 Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below.
Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer
Derek H. Burney 56 Vice Chairman of the Board
James B. O'Brien 46 President and Director
Ruth E. Warren 46 Group Vice President/Operations
Kevin P. Coyle 44 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
George H. Newton 61 Group Vice President/Telecommunications
Timothy J. Burke 45 Group Vice President/Taxation/Administration
Raymond L. Vigil 49 Group Vice President/Human Resources and Director
Cynthia A. Winning 44 Group Vice President/Marketing
Elizabeth M. Steele 44 Vice President/General Counsel/Secretary
Larry W. Kaschinske 36 Controller
Robert E. Cole 63 Director
William E. Frenzel 67 Director
Donald L. Jacobs 57 Director
James J. Krejci 54 Director
John A. MacDonald 42 Director
Raphael M. Solot 62 Director
Daniel E. Somers 48 Director
Howard O. Thrall 48 Director
Robert B. Zoellick 42 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 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 and present member of the Board of
Directors and the Executive Committee of the National Cable Television
Association. He also is on the Executive Committee of Cable in the Classroom, an
organization dedicated to education via cable. Additionally, in March 1991, Mr.
Jones was appointed to the Board of Governors for the American Society for
Training and Development, and in November 1992 to the Board of Education Council
of the National Alliance of Business. Mr. Jones is also a founding member of the
James Madison Council of the Library of Congress. Mr. Jones 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 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; the Women in Cable
Accolade in 1990 in recognition of support of this organization; the Most
Outstanding Corporate Individual Achievement award from the International
Distance Learning Conference; the Golden Plate Award
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from the American Academy of Achievement for his advances in distance education;
the Man of the Year named by the Denver chapter of the Achievement Rewards for
College Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and
Cable's Hall of Fame.
Mr. Derek H. Burney was appointed a Director of the General Partner on
December 20, 1994 and Vice Chairman of the Board of Directors on January 31,
1995. Mr. Burney joined BCE Inc., Canada's largest telecommunications company,
in January 1993 as Executive Vice President, International. He has been the
Chairman of Bell Canada International Inc., a subsidiary of BCE, since January
1993 and, in addition, has been Chief Executive Officer of BCI since July 1993.
Prior to joining BCE, Mr. Burney served as Canada's ambassador to the United
States from 1989 to 1992. Mr. Burney also served as chief of staff to the Prime
Minister of Canada from March 1987 to January 1989 where he was directly
involved with the negotiation of the U.S. - Canada Free Trade Agreement. In July
1993, he was named an Officer of the Order of Canada. Mr. Burney is chairman of
Bell Cablemedia plc. He is a director of Mercury Communications Limited,
Videotron Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor
Inc., Maritime Telegraph and Telephone Company, Limited, Moore Corporation
Limited and Northbridge Programming Inc.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982. Prior to being elected President and a Director
of the General Partner in December 1989, Mr. O'Brien served as a Division
Manager, Director of Operations Planning/Assistant to the CEO, Fund Vice
President and Group Vice President/Operations. Mr. O'Brien was appointed to the
General Partner's Executive Committee in August 1993. As President, he is
responsible for the day-to-day operations of the cable television systems
managed and owned by the General Partner. Mr. O'Brien is a board member of Cable
Labs, Inc., the research arm of the U.S. cable television industry. He also
serves as a director of the Cable Television Administration and Marketing
Association and as a director of the Walter Kaitz Foundation, a foundation that
places people of ethnic minority groups in positions with cable television
systems, networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations of
the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner in
August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. George H. Newton joined the General Partner in January 1996 as
Group Vice President/Telecommunications. Prior to joining the General Partner,
Mr. Newton was President of his own consulting business, Clear Solutions, and
since 1994 Mr. Newton has served as a Senior Advisor to Bell Canada
International. From 1990 to 1993, Mr. Newton served as the founding Chief
Executive Officer and Managing Director of Clear Communications, New Zealand,
where he established an alternative telephone company in New Zealand. From 1964
to 1990, Mr. Newton held a wide variety of operational and business assignments
with Bell Canada International.
Mr. 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.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with
42
43
USWest. Prior to USWest, Mr. Vigil worked in various human resources posts over
a 14-year term with the IBM Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994, Ms.
Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten national
retail department store chains. From 1981 to 1986, Ms. Winning was the Director
of Marketing Services for Daniels & Associates cable television operations, as
well as the Western Division Marketing Director for Capital Cities Cable. Ms.
Winning also serves as a board member of Cities in Schools, a dropout
intervention/prevention program.
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division, was promoted to
Assistant Controller in 1990 and named Controller in August 1994.
Mr. Robert E. Cole was appointed a Director of the General Partner in
March 1996. Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern California, Oregon, Washington and
Alaska. From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar Life
Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of PMI
Inc., a third party lender serving the special needs of Corporate Owned Life
Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and
co-founder of a specialty investment banking firm that provided services to
finance the ownership and growth of emerging companies, productive assets and
real property. Mr. Cole is a Certified Financial Planner and a former United
States Naval Aviator.
Mr. William E. Frenzel was appointed a Director of the General Partner
on April 11, 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the
Brookings Institution, a research organization located in Washington D. C. Until
his retirement in January 1991, Mr. Frenzel served for twenty years in the
United States House of Representatives, representing the State of Minnesota,
where he was a member of the House Ways and Means Committee and its Trade
Subcommittee, the Congressional Representative to the General Agreement on
Tariffs and Trade (GATT), the Ranking Minority Member on the House Budget
Committee and a member of the National Economic Commission. Mr. Frenzel also
served in the Minnesota Legislature for eight years. He is a Distinguished
Fellow of the Tax Foundation, Vice Chairman of the Eurasia Foundation, a Board
Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual Funds
and Chairman of the Japan-America Society of Washington.
Mr. Donald L. Jacobs was appointed a Director of the General Partner on
April 11, 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General Manager
of the Defense Systems Group and prior to his appointment as Group General
Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW. During
his career, Mr. Jacobs served on several corporate, professional and civic
boards.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology, International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and was Group Vice President of the
General Partner. He also served as an officer of Jones Futurex, Inc., a
subsidiary of the General Partner engaged in manufacturing and marketing data
encryption devices, Jones Interactive, 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
43
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services until leaving the General Partner in May 1994. Mr. Krejci has been a
Director of the General Partner since August 1987.
Mr. John A. MacDonald was appointed a Director of the General Partner
on November 8, 1995. Mr. MacDonald is Executive Vice President of Business
Development and Chief Technology Officer of Bell Canada International Inc. Prior
to joining Bell Canada in November 1994, Mr. MacDonald was President and Chief
Executive Officer of The New Brunswick Telephone Company, Limited, a post he had
held since March of that year. Prior to March 1994, Mr. MacDonald was with NBTel
for 17 years serving in various capacities, including Market Planning Manager,
Corporate Planning Manager, Manager of Systems Planning and Development and
General Manager, Chief Engineer and General Manager of Engineering and
Information Systems and Vice President of Planning. Mr. MacDonald was the former
Chairman of the New Brunswick section of the Institute of Electrical and
Electronic Engineers and also served on the Federal Government's Information
Highway Advisory Council. Mr. MacDonald is Chairman of MediaLinx Interactive
Inc. and Stentor Canadian Network Management and is presently a Governor of the
Montreal Exchange. He also serves on the Board of Directors of Tele-Direct
(Publications) Inc., Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie
Inc., and is a member of the University of New Brunswick Venture Campaign
Cabinet.
Mr. Raphael M. Solot was appointed a Director of the General Partner in
March 1996. Mr. Solot is an attorney licensed to practice law in the State of
Colorado. Mr. Solot has practiced law in the State of Colorado as a sole
practitioner since obtaining his Juris Doctor degree from the University of
Colorado in 1964.
Mr. Daniel E. Somers was initially appointed a Director of the General
Partner on December 20, 1994. Mr. Somers resigned as a Director on December 31,
1995, at the time he was elected Chief Executive Officer of Bell Cablemedia. Mr.
Somers was reinstated as a Director of the General Partner on February 2, 1996.
From January 1992 to January 1995, Mr. Somers worked as senior Vice President
and Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He is
also a Director of certain of its affiliates. Mr. Somers currently serves as
Chief Executive Officer of Bell Cablemedia. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was the President and
Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a
member of the North American Society of Corporate Planning, the Financial
Executives Institution and the Financial Analysts Federation.
Mr. Howard O. Thrall was appointed a Director of the General Partner on
March 6, 1996. Mr. Thrall had previously served as a Director of the General
Partner from December 1988 to December 1994. Since September 1993, Mr. Thrall
has served as Vice President of Sales, Asian Region, for World Airways, Inc.
From 1984 until August 1993, Mr. Thrall was with the McDonnell Douglas
Corporation, where he concluded as a Regional Vice President, Commercial
Marketing with the Douglas Aircraft Company subsidiary. Mr. Thrall is also a
management and international marketing consultant, having completed assignments
with First National Net, Inc., Cheong Kang Associated (Korea), Aero Investment
Alliance, Inc. and Western Real Estate Partners.
Mr. Robert B. Zoellick was appointed a Director of the General Partner
on April 11, 1995. Mr. Zoellick is Executive Vice President, General Counsel and
Corporate Secretary of Fannie Mae, a federally chartered and stockholder-owned
corporation that is the largest housing finance investor in the United States.
From August 1992 to January 1993, Mr. Zoellick served as Deputy Chief of Staff
of the White House and Assistant to the President. From May 1991 to August 1992,
Mr. Zoellick served concurrently as the Under Secretary of State for Economic
and Agricultural Affairs and as Counselor of the Department of State, a post he
assumed in March 1989. From 1985 to 1988, Mr. Zoellick served at the Department
of Treasury in a number of capacities, including Counselor to the Secretary. Mr.
Zoellick received the Alexander Hamilton and Distinguished Service Awards,
highest honors of the Departments of Treasury and State, respectively. The
German Government awarded him the Knight Commanders Cross for his work on
Germany unification. Mr. Zoellick currently serves on the boards of the Council
on Foreign Relations, the Congressional Institute, the German Marshall Fund of
the U.S., the European Institute, the National Bureau of Asian Research, the
American Council on Germany and the Overseas Development Council.
44
45
Christopher J. Bowick, Cynthia A. Winning and Larry W. Kaschinske are
executive officers of the General Partner; Raymond L. Vigil is an executive
officer and a director of the General Partner; and Derek H. Burney, John A.
MacDonald and Daniel E. Somers are directors of the General Partner. Reports by
these persons with respect to the ownership of limited partnership interests in
the Partnership required by Section 16(a) of the Securities Exchange Act of
1934, as amended, were not filed within the required time. None of these
individuals own any limited partnership interests in the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate the Systems. Such personnel are employed by the General
Partner and, the cost of such employment is charged by the General Partner to
the Partnership or the Venture 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 of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnership and the Venture. The General Partner believes that the
terms of such transactions are generally as favorable as could be obtained by
the Partnership and the Venture from unaffiliated parties. This determination
has been made by the General Partner in good faith, but none of the terms were
or will be negotiated at arm's-length and there can be no assurance that the
terms of such transactions have been or will be as favorable as those that could
have been obtained by the Partnership or the Venture from unaffiliated parties.
The General Partner charges a management fee, and the General Partner
is reimbursed for certain allocated overhead and administrative expenses. These
expenses represent the salaries and benefits paid to corporate personnel, rent,
data processing services and other corporate facilities costs. Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Partnership and the Venture. Allocations of personnel
costs are based primarily on actual time spent by employees of the General
Partner with respect to each partnership managed. Remaining expenses are
allocated based on the pro rata relationship of the Partnership's revenues to
the total revenues of all systems owned or managed by the General Partner and
certain of its subsidiaries. Systems owned by the General Partner and all other
systems owned by partnerships for which Jones Intercable, Inc. is the general
partner, are also allocated a proportionate share of these expenses.
The General Partner also advances funds and charges interest on the
balance payable. The interest rate charged approximates the General Partner's
weighted average cost of borrowing.
The Systems receives stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the General Partner, and computer video
programming from Jones Computer Network, Ltd., an affiliate of the General
Partner, for fees based upon the number of subscribers receiving the
programming.
Product Information Network ("PIN"), an affiliate of the General
Partner, provides advertising time for third parties on the Systems. In
consideration, the revenues generated from the third parties are shared between
45
46
PIN and the Venture. During the year ended December 31, 1995, the Partnership
received revenues from PIN of $77,790, and the Venture received revenues from
PIN of $23,430.
The charges to the Partnership and to the Venture for related party
transactions are as follows for the periods indicated:
At December 31,
--------------------------------------
Cable TV Fund 14-A 1995 1994 1993
- ------------------ ---- ---- ----
Management fees $2,204,740 $2,022,113 $1,945,823
Allocation of expenses 3,170,917 3,105,440 2,737,532
Interest expense 23,107 43,708 1,069
Amount of advances outstanding 887,215 706,579 58,974
Highest amount of advances outstanding 887,215 1,004,121 457,354
Programming fees:
Superaudio 54,644 51,858 50,655
Mind Extension University 61,431 51,389 32,659
Jones Computer Network 65,248 21,344 -0-
At December 31,
--------------------------------------
Cable TV Fund 14-A/B Venture 1995 1994 1993
- ---------------------------- ---- ---- ----
Management fees $1,173,475 $1,109,176 $1,103,448
Allocation of expenses 1,654,736 1,668,114 1,598,120
Interest expense 155,659 960 2,361
Amount of advances outstanding 2,206,959 354,179 57,920
Highest amount of advances outstanding 2,206,959 354,179 125,873
Programming fees:
Superaudio 30,171 30,631 30,018
Mind Extension University 32,268 27,751 17,451
Jones Computer Network -0- 5,694 -0-
46
47
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)1. See index to financial statements for the list of financial
statements and exhibits thereto filed as part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreements for Cable TV Fund 14-A, Ltd. (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 the Big Cypress
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.2 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). (2)
10.1.3 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)
10.1.4 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Cooper City,
Florida (Fund 14-A/B).(10)
10.1.5 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Dania, Florida
(Fund 14-A/B). (3)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Davie, Florida
(Fund 14-A/B). (3)
10.1.7 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). (2)
10.1.8 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). (2)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Lauderdale
Lakes, Florida (Fund 14-A/B). (3)
10.1.10 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)
10.1.11 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). (4)
10.1.12 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Chanute Air
Force Base, Illinois (Fund 14-A). (4)
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Chatsworth, Illinois (Fund 14-A). (4)
47
48
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Chenoah, Illinois (Fund 14-A). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Clinton, Illinois (Fund 14-A). (4)
10.1.16 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)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Fairbury, Illinois (Fund 14-A). (4)
10.1.18 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). (10)
10.1.19 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Forest, Illinois (Fund 14-A). (4)
10.1.20 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). (4)
10.1.21 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Leroy, Illinois (Fund 14-A). (4)
10.1.22 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Illinois (Fund 14-A). (4)
10.1.23 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)
10.1.24 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Pesotum, Illinois (Fund 14-A). (4)
10.1.25 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Rantoul, Illinois (Fund 14-A). (4)
10.1.26 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)
10.1.27 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Tolono, Illinois (Fund 14-A).(10)
10.1.28 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)
10.1.29 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)
10.1.30 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for St. Mary's
County, Maryland (Fund 14-A). (5)
10.1.31 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)
48
49
10.1.32 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)
10.1.33 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)
10.1.34 Copy of Ordinance No. 1200 dated 3/5/90 relating to the City of
Big Lake franchise (Fund 14- A). (5)
10.1.35 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)
10.1.36 Copy of Ordinance dated 4/16/90 relating to the Buffalo franchise
(Fund 14-A). (5)
10.1.37 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)
10.1.38 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)
10.1.39 Copy of Ordinance No. 10.044 dated 1/16/90 relating to the Dassel
franchise (Fund 14-A). (5)
10.1.40 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)
10.1.41 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)
10.1.42 Copy of Ordinance No. 0-90-01 dated 3/20/90 relating to the Delano
franchise (Fund 14-A). (5)
10.1.43 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)
10.1.44 Copy of Ordinance No. 90-3 dated 2/26/90 relating to the City of
Elk River franchise (Fund 14-A). (5)
10.1.45 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Hassan, Minnesota (Fund 14-A). (2)
10.1.46 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)
10.1.47 Copy of Ordinance No. 38 dated 3/5/90 relating to the City of
Maple Lake franchise (Fund 14- A). (5)
10.1.48 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)
10.1.49 Copy of Ordinance No. 183 dated 2/26/90 relating to the City of
Monticello franchise (Fund 14-A). (5)
49
50
10.1.50 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)
10.1.51 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)
10.1.52 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)
10.1.53 Resolutions 90-14 and 90-15 dated 4/10/90 relating to the City of
Rockford franchise (Fund 14-A). (5)
10.1.54 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Rockford, Minnesota (Fund 14-A). (2)
10.1.55 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)
10.1.56 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)
10.1.57 Copy of Ordinance No. 178 relating to the City of Watertown
franchise (Fund 14-A). (5)
10.1.58 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)
10.1.49 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)
10.1.60 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)
10.1.61 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)
10.1.62 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)
10.1.63 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)
10.1.64 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)
10.1.65 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). (5)
10.2.1 Credit Agreement dated as of July 21, 1994 among Cable TV Fund
14-A and The Bank of Nova Scotia, as agent for various lenders.
(Fund 14-A) (9)
10.2.2 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) (6)
50
51
10.2.3 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) (6)
10.2.4 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) (6)
10.2.5 Third Letter Amendment dated June 30, 1994 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) (9)
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)
10.3.3 Asset Purchase Agreement dated as of March 28, 1996, between Cable
TV Fund 14-A, Ltd. and Lenfest Atlantic, Inc.
27 Financial Data Schedule
- ----------
(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, 1990 (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 the Annual Report on Form 10-K for
fiscal year ended December 31, 1990 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(5) Incorporated by reference from Registrant's Report on Form 10-K
for fiscal year ended December 31, 1992.
(6) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1993 (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 the Annual Report on Form 10-K for
fiscal year ended December 31, 1994 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(10) Incorporated by reference from Registrant's Report on Form 10-K
for fiscal year ended December 31, 1994 (Commission File No.
0-15378)
(b) Reports on Form 8-K None.
51
52
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.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
-------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 25, 1996 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, 1996 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
-------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 25, 1996 (Principal Financial Officer)
By: /s/ Larry Kaschinske
-------------------------------
Larry Kaschinske
Controller
Dated: March 25, 1996 (Principal Accounting Officer)
By: /s/ James B. O'Brien
-------------------------------
James B. O'Brien
Dated: March 25, 1996 President and Director
By: /s/ Raymond L. Vigil
-------------------------------
Raymond L. Vigil
Dated: March 25, 1996 Group Vice President and Director
By: /s/ Derek H. Burney
-------------------------------
Derek H. Burney
Dated: March 25, 1996 Director
52
53
By:
---------------------------
Robert E. Cole
Dated: Director
By: /s/ William E. Frenzel
---------------------------
William E. Frenzel
Dated: March 25, 1996 Director
By: /s/ Donald L. Jacobs
---------------------------
Donald L. Jacobs
Dated: March 25, 1996 Director
By: /s/ James J. Krejci
---------------------------
James J. Krejci
Dated: March 25, 1996 Director
By: /s/ John A. MacDonald
---------------------------
John A. MacDonald
Dated: March 25, 1996 Director
By:
---------------------------
Raphael M. Solot
Dated: Director
By: /s/ Daniel E. Somers
---------------------------
Daniel E. Somers
Dated: March 25, 1996 Director
By: /s/ Howard O. Thrall
---------------------------
Howard O. Thrall
Dated: March 25, 1996 Director
By: /s/ Robert B. Zoellick
---------------------------
Robert B. Zoellick
Dated: March 25, 1996 Director
(21602)
53
54
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
4.1 Limited Partnership Agreements for Cable TV Fund 14-A, Ltd. (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 the Big Cypress
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.2 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). (2)
10.1.3 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)
10.1.4 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Cooper City,
Florida (Fund 14-A/B). (10)
10.1.5 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Dania, Florida
(Fund 14-A/B). (3)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Davie, Florida
(Fund 14-A/B). (3)
10.1.7 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). (2)
10.1.8 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). (2)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Lauderdale
Lakes, Florida (Fund 14-A/B). (3)
10.1.10 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)
10.1.11 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). (4)
10.1.12 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Chanute Air
Force Base, Illinois (Fund 14-A). (4)
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Chatsworth, Illinois (Fund 14-A). (4)
55
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Chenoah, Illinois (Fund 14-A). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Clinton, Illinois (Fund 14-A). (4)
10.1.16 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)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Fairbury, Illinois (Fund 14-A). (4)
10.1.18 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). (10)
10.1.19 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Forest, Illinois (Fund 14-A). (4)
10.1.20 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). (4)
10.1.21 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Leroy, Illinois (Fund 14-A). (4)
10.1.22 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Illinois (Fund 14-A). (4)
10.1.23 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)
10.1.24 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Pesotum, Illinois (Fund 14-A). (4)
10.1.25 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Rantoul, Illinois (Fund 14-A). (4)
10.1.26 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)
10.1.27 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Tolono, Illinois (Fund 14-A). (10)
10.1.28 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)
10.1.29 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)
10.1.30 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for St. Mary's
County, Maryland (Fund 14-A). (5)
10.1.31 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)
56
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
10.1.32 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)
10.1.33 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)
10.1.34 Copy of Ordinance No. 1200 dated 3/5/90 relating to the City of
Big Lake franchise (Fund 14- A). (5)
10.1.35 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)
10.1.36 Copy of Ordinance dated 4/16/90 relating to the Buffalo franchise
(Fund 14-A). (5)
10.1.37 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)
10.1.38 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)
10.1.39 Copy of Ordinance No. 10.044 dated 1/16/90 relating to the Dassel
franchise (Fund 14-A). (5)
10.1.40 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)
10.1.41 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)
10.1.42 Copy of Ordinance No. 0-90-01 dated 3/20/90 relating to the Delano
franchise (Fund 14-A). (5)
10.1.43 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)
10.1.44 Copy of Ordinance No. 90-3 dated 2/26/90 relating to the City of
Elk River franchise (Fund 14-A). (5)
10.1.45 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Hassan, Minnesota (Fund 14-A). (2)
10.1.46 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)
10.1.47 Copy of Ordinance No. 38 dated 3/5/90 relating to the City of
Maple Lake franchise (Fund 14- A). (5)
10.1.48 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)
10.1.49 Copy of Ordinance No. 183 dated 2/26/90 relating to the City of
Monticello franchise (Fund 14-A). (5)
57
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
10.1.50 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)
10.1.51 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)
10.1.52 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)
10.1.53 Resolutions 90-14 and 90-15 dated 4/10/90 relating to the City of
Rockford franchise (Fund 14-A). (5)
10.1.54 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Rockford, Minnesota (Fund 14-A). (2)
10.1.55 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)
10.1.56 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)
10.1.57 Copy of Ordinance No. 178 relating to the City of Watertown
franchise (Fund 14-A). (5)
10.1.58 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)
10.1.49 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)
10.1.60 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)
10.1.61 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)
10.1.62 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)
10.1.63 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)
10.1.64 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)
10.1.65 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). (5)
10.2.1 Credit Agreement dated as of July 21, 1994 among Cable TV Fund
14-A and The Bank of Nova Scotia, as agent for various lenders.
(Fund 14-A) (9)
10.2.2 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) (6)
58
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
10.2.3 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) (6)
10.2.4 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) (6)
10.2.5 Third Letter Amendment dated June 30, 1994 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) (9)
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)
10.3.3 Asset Purchase Agreement dated as of March 29, 1995, between Cable
TV Fund 14-A, Ltd. and Lenfest Atlantic, Inc.
27 Financial Data Schedule
- ----------
(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, 1990 (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 the Annual Report on Form 10-K for
fiscal year ended December 31, 1990 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(5) Incorporated by reference from Registrant's Report on Form 10-K
for fiscal year ended December 31, 1992.
(6) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1993 (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 the Annual Report on Form 10-K for
fiscal year ended December 31, 1994 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(10) Incorporation by reference from Registrant's Annual Report on
Form 10-K for fiscal year ended December 31, 1994 (Commission
File No. 0-15378).