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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[x] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended
JUNE 30, 2002
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _____________
Commission File Number 0-16200
CABLE TV FUND 14-B, LTD.
Exact name of registrant as specified in charter
Colorado 84-1024658
- --------------------------------- ----------------------------
State of organization I.R.S. employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
- --------------------------------------------------------------------------------
Address of principal executive office
(215) 665-1700
- --------------------------------------------------------------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -------
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
CONDENSED BALANCE SHEET
-----------------------
(Unaudited)
June 30, December 31,
ASSETS 2002 2001
------ ------------- -------------
Cash ................................................ $207,006 $230,893
------------- -------------
Total assets ................................. $207,006 $230,893
============= =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Advances from affiliates ......................... $44,429 $11,125
------------- -------------
Total liabilities ............................ 44,429 11,125
------------- -------------
Commitments and Contingencies (Note 3)
PARTNERS' CAPITAL:
General Partner-
Contributed capital .............................. 1,000 1,000
Accumulated deficit .............................. (1,000) (1,000)
------------- -------------
------------- -------------
Limited Partners-
Net contributed capital (261,353 units outstanding
at June 30, 2002 and December 31, 2001) ........ 112,127,301 112,127,301
Distributions .................................... (112,853,367) (112,853,367)
Accumulated earnings ............................. 888,643 945,834
------------- -------------
162,577 219,768
------------- -------------
Total liabilities and partners' capital ...... $207,006 $230,893
============= =============
See notes to condensed financial statements.
1
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
CONDENSED STATEMENT OF OPERATIONS
---------------------------------
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- ---------
OTHER INCOME (EXPENSE):
Interest income ...................... $873 $4,361 $1,881 $10,794
Administrative expenses and other, net (43,429) (55,494) (59,072) (104,902)
-------- -------- -------- ---------
NET LOSS ................................ ($42,556) ($51,133) ($57,191) ($94,108)
======== ======== ======== =========
ALLOCATION OF NET LOSS:
General Partner ...................... $ $ $ $
======== ======== ======== =========
Limited Partners ..................... ($42,556) ($51,133) ($57,191) ($94,108)
======== ======== ======== =========
NET LOSS PER LIMITED PARTNERSHIP UNIT ... ($0.16) ($0.20) ($0.22) ($0.36)
======== ======== ======== =========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING ........ 261,353 261,353 261,353 261,353
======== ======== ======== =========
See notes to condensed financial statements.
2
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
CONDENSED STATEMENT OF CASH FLOWS
---------------------------------
(Unaudited)
Six Months Ended
June 30,
2002 2001
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................ ($57,191) ($94,108)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase (decrease) in advances from affiliates . 33,304 (15,743)
--------- ---------
Net cash used in operating activities ......... (23,887) (109,851)
Cash, beginning of period .............................. 230,893 395,531
--------- ---------
Cash, end of period .................................... $207,006 $285,680
========= =========
See notes to condensed financial statements.
3
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(Unaudited)
(1) The condensed balance sheet as of December 31, 2001 has been derived from
the audited balance sheet as of that date. The condensed balance sheet as of
June 30, 2002, the condensed statement of operations for the three and six
months ended June 30, 2002 and 2001, and the condensed statement of cash flows
for the six months ended June 30, 2002 and 2001 have been prepared by Cable TV
Fund 14-B, Ltd. (the "Partnership") and have not been audited by the
Partnership's independent auditors. In the opinion of management, all
adjustments necessary to present fairly the financial position, results of
operations and cash flows as of June 30, 2002 and for all periods presented have
been made.
Certain information and note disclosures normally included in the
Partnership's annual financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted. These condensed financial statements should be read in conjunction with
the financial statements and notes thereto included in the Partnership's
December 31, 2001 Annual Report on Form 10-K filed with the Securities and
Exchange Commission. The results of operations for the interim periods presented
are not necessarily indicative of operating results for the full year.
The Partnership owns no properties directly. The Partnership has
continued in existence because of pending litigation in which the Partnership is
a party. It cannot be predicted when the Partnership will be dissolved.
(2) The Partnership reimburses its general partner for certain administrative
expenses. These expenses represent the salaries and related benefits paid for
corporate personnel. Such personnel provide administrative, accounting, tax,
legal and investor relations services to the Partnership. Such services, and
their related costs, are necessary to the administration of the Partnership
until the Partnership is dissolved. Such charges were included in administrative
expenses and other, net in the accompanying condensed statement of operations.
Reimbursements made to the general partner by the Partnership for administrative
expenses for the three months ended June 30, 2002 and 2001 and for the six
months ended June 30, 2002 and 2001 were $12,859, $20,684, $27,000 and $50,739,
respectively.
(3) Litigation Challenging Jones Intercable's Acquisition of the Littlerock
System
In June 1999, Jones Intercable was named a defendant in a case
captioned City Partnership Co., derivatively on behalf of Cable TV Fund 14-B,
Ltd., plaintiff v. Jones Intercable, Inc., defendant and Cable TV Fund 14-B,
Ltd., nominal defendant (U.S. District Court, District of Colorado, Civil Action
No. 99-WM-1051) (the "City Partnership case") brought by City Partnership Co., a
limited partner of the Partnership. The plaintiff's complaint alleges that Jones
Intercable breached its fiduciary duty to the plaintiff and to the other limited
partners of the Partnership in connection with the Partnership's sale of the
Littlerock System to a subsidiary of Jones Intercable in January 1999. The
complaint alleges that Jones Intercable acquired the Littlerock System at an
unfairly low price that did not accurately reflect the market value of the
Littlerock System. The plaintiff also alleges that the proxy solicitation
materials delivered to the limited partners of the Partnership in connection
with the vote of the limited partners on the Partnership's sale of the
Littlerock System contained inadequate and misleading information concerning the
fairness of the transaction, which the plaintiff claims caused Jones Intercable
to breach its fiduciary duty of candor to the limited partners and which the
plaintiff claims constituted acts and omissions in violation of Section 14(a) of
the Securities Exchange Act of 1934, as amended. Plaintiff also claims that
Jones Intercable breached the contractual provision of the Partnership's limited
partnership agreement requiring that the sale price be determined by the average
of three separate, independent appraisals, challenging both the independence and
the currency of the appraisals. The complaint finally seeks declaratory
injunctive relief to prevent Jones Intercable from making use of the
Partnership's funds to finance Jones Intercable's defense of this litigation.
In August 1999, Jones Intercable was named a defendant in a case
captioned Gramercy Park Investments, LP, Cobble Hill Investments, LP and
Madison/AG Partnership Value Partners II, plaintiffs v. Jones Intercable, Inc.
and Glenn R. Jones, defendants, and Cable TV Fund 12-B, Ltd., Cable TV Fund
12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and Cable TV Fund
14-B, Ltd., nominal defendants (U.S. District Court, District of Colorado, Civil
Action No. 99-B-1508) (the "Gramercy Park" case) brought as a class and
derivative action by limited partners of the named partnerships. The plaintiffs'
complaint alleges that the defendants made false and misleading statements to
the limited partners of the named partnerships in connection with the
solicitation of proxies and the votes of the limited partners on the sales of
the Palmdale System, the Albuquerque, New Mexico cable communications system
(the "Albuquerque System"), the Littlerock, California cable communications
system (the "Littlerock System") and the Calvert County, Maryland cable
communications system (the "Calvert County System") by the named partnerships to
Jones Intercable or one of its subsidiaries in violation of Sections 14 and 20
of the Securities Exchange Act of 1934, as amended. The plaintiffs specifically
allege that the proxy statements
4
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)
---------------------------------------------------
(Unaudited)
delivered to the limited partners in connection with the limited
partners' votes on these sales were false, misleading and failed to disclose
material facts necessary to make the statements made not misleading. The
plaintiffs' complaint also alleges that the defendants breached their fiduciary
duties to the plaintiffs and to the other limited partners of the named
partnerships and to the named partnerships in connection with the various sales
of the Albuquerque System, the Palmdale System, the Littlerock System and the
Calvert County System to subsidiaries of Jones Intercable. The complaint alleges
that Jones Intercable acquired these cable communications systems at unfairly
low prices that did not accurately reflect the market values of the systems. The
plaintiffs seek on their own behalf and on behalf of all other limited partners
compensatory and nominal damages, the costs and expenses of the litigation,
including reasonable attorneys' and experts' fees, and punitive and exemplary
damages.
In August 1999, Jones Intercable was named a defendant in a case
captioned William Barzler, plaintiff v. Jones Intercable, Inc. and Glenn R.
Jones, defendants and Cable TV Fund 14-B, Ltd., nominal defendant (U.S. District
Court, District of Colorado, Civil Action No. 99-B-1604) ("Barzler") brought as
a class and derivative action by a limited partner of the named partnership. The
substance of the Barzler plaintiff's complaint is similar to the allegations
raised in the Gramercy Park case except that it relates only to the sale of the
Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Sheryle Trainer, plaintiff v. Jones Intercable, Inc. and Glenn R.
Jones, defendants, and Cable TV Fund 14-B, Ltd., nominal defendant (U.S.
District Court, District of Colorado, Civil Action No. 99-B-1751) ("Trainer")
brought as a class and derivative action by a limited partner of the named
partnership. The substance of the Trainer plaintiff's complaint is similar to
the allegations raised in the Gramercy Park case except that it relates only to
the sale of the Littlerock System by the Partnership.
In September 1999, Jones Intercable was named a defendant in a case
captioned Mary Schumacher, Charles McKenzie and Geraldine Lucas, plaintiffs v.
Jones Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B,
Ltd., Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A,
Ltd. and Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court,
District of Colorado, Civil Action No. 99-WM-1702) ("Schumacher") brought as a
class and derivative action by three limited partners of the named partnerships.
The substance of the Schumacher plaintiffs' complaint is similar to the
allegations raised in the Gramercy Park case.
In September 1999, Jones Intercable was named a defendant in a case
captioned Robert Margolin, Henry Wahlgren and Joan Wahlgren, plaintiffs v. Jones
Intercable, Inc. and Glenn R. Jones, defendants and Cable TV Fund 12-B, Ltd.,
Cable TV Fund 12-C, Ltd., Cable TV Fund 12-D, Ltd., Cable TV Fund 14-A, Ltd. and
Cable TV Fund 14-B, Ltd., nominal defendants (U.S. District Court, District of
Colorado, Civil Action No. 99-B-1778) ("Margolin") brought as a class and
derivative action by three limited partners of the named partnerships. The
substance of the Margolin plaintiffs' complaint is similar to the allegations
raised in the Gramercy Park case.
In November 1999, the United States District Court for the District of
Colorado entered an order consolidating all of the cases challenging Jones
Intercable's acquisitions of the Albuquerque, Palmdale, Littlerock and Calvert
County Systems because these cases involve common questions of law and fact. The
cases are presented as both class and derivative actions. In June 2001, the
plaintiffs filed a motion for class certification. In August 2001, the General
Partner filed a brief in opposition to plaintiffs' motion for class
certification. A hearing on the motion was held in October 2001. If the
plaintiffs' motion for class certification is denied, the cases would proceed
only as derivative actions.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims for
damages, and the General Partner intends to defend these lawsuits vigorously.
Litigation Relating to Limited Partnership List Requests
In July 1999, Jones Intercable, each of its subsidiaries that served as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest Properties,
LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs v. Jones
Intercable, Inc., et al, defendants (Superior Court, Los Angeles County, State
of California, Case No. BC 213632).
5
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS (Concluded)
---------------------------------------------------
(Unaudited)
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied covenant of good faith and fair dealing
owed to the plaintiffs as limited partners, a breach of Jones Intercable's
fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege that Jones
Intercable's failure to provide them with the partnership lists prevented them
from making their tender offers and that they have been injured by such action
in an amount to be proved at trial, but not less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs leave to amend their complaint to attempt to cure the deficiencies in
the pleadings. The plaintiffs filed their first amended complaint in January
2000. Defendants demurred to the amended complaint in March 2000. In May 2000,
the Court sustained the defendants' demurrers without leave to amend as to all
plaintiffs except KM Investments, the sole plaintiff that was a limited partner
in any of the partnerships, thereby dismissing all claims on the merits except
those of KM Investments. In August 2000, all plaintiffs except KM Investments
appealed this ruling to the California State Court of Appeal for the Second
Appellate District. In June 2001, the appellate court ruled that all of the
plaintiffs have standing to bring the action, and the trial court's judgment was
reversed. The case is now proceeding to discovery and a trial is set for October
2002.
The General Partner believes that the defendants have defenses to the
plaintiffs' claims for relief and challenges to the plaintiffs' claims for
damages, and the General Partner intends to defend this lawsuit vigorously.
Since the events described above, the trial of the matter entitled
Everest Cable Investors, LLC, et al., plaintiffs v. Jones Intercable, Inc., et
al., defendants (Superior Court, Los Angeles County, State of California, Case
No. BC 213632) has been rescheduled for January 2003.
6
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The only asset of the Partnership at June 30, 2002 was its cash on
hand, which is being held in reserve to pay the Partnership's administrative
expenses until the Partnership is dissolved. The Partnership has continued in
existence because of pending litigation in which the Partnership is a party. It
cannot be predicted when the Partnership will be dissolved.
RESULTS OF OPERATIONS
- ---------------------
Administrative expenses and other, net in the accompanying condensed
statement of operations represents various costs associated with the
administration of the Partnership.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Refer to Note 3 to our condensed financial statements included in this
Quarterly Report on Form 10-Q for a discussion of recent developments related to
our legal proceedings.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
99.1 Certifications of Chief Executive Officer and
Co-Chief Financial Officers of Cable TV Fund 14-B,
Ltd. pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code.
b) Reports on Form 8-K
(i) We filed a Current Report on Form 8-K under Items 4
and 7(c) dated June 24, 2002 announcing a change in
the Partnership's certifying accountant.
7
SIGNATURE
Pursuant to the requirements 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-B, LTD.
BY: COMCAST CABLE COMMUNICATIONS, INC.
-----------------------------------
General Partner
By: /s/ Lawrence J. Salva
-----------------------------------
Lawrence J. Salva
Senior Vice President
(Principal Accounting Officer)
Dated: August 14, 2002
8