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, 1999.
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from_________________to_________________.
Commission File Number 0-15378
CABLE TV FUND 14-A, LTD.
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Exact name of registrant as specified in charter
Colorado 84-1024657
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State of organization I.R.S. employer I.D.#
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
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Address of principal executive office
(215) 665-1700
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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-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
June 30, December 31,
ASSETS 1999 1998
------ ------------- -------------
CASH $ 835,302 $ 357,145
PROCEEDS FROM SALE IN ESCROW 1,914,720 -
TRADE RECEIVABLES, less allowance for doubtful receivables of
$53,312 and $127,439 at June 30, 1999 and December 31, 1998,
respectively 210,976 454,788
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 34,755,303 93,032,212
Less-accumulated depreciation (23,540,233) (57,669,712)
------------ ------------
11,215,070 35,362,500
Franchise costs and other intangible assets, net of accumulated
amortization of $17,191 and $12,840,171 at June 30, 1999
and December 31, 1998, respectively 1,718 1,541,203
------------ ------------
Total investment in cable television properties 11,216,788 36,903,703
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 677,668 757,085
------------ ------------
Total assets $ 14,855,454 $ 38,472,721
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1999 1998
------------------------------------------- ------------- -------------
LIABILITIES:
Debt $ 143,522 $ 23,432,210
General Partner advances - 365,829
Trade accounts payable and accrued liabilities 2,121,842 2,625,673
Subscriber prepayments 32,611 123,905
------------ ------------
Total liabilities 2,297,975 26,547,617
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,000) (25,635)
------------ ------------
- (24,635)
------------ ------------
Limited Partners-
Net contributed capital (160,000 units outstanding
at June 30, 1999 and December 31, 1998) 68,722,000 68,722,000
Accumulated earnings 24,741,548 3,259,808
Distributions (80,906,069) (60,032,069)
------------ ------------
12,557,479 11,949,739
------------ ------------
Total liabilities and partners' capital (deficit) $ 14,855,454 $ 38,472,721
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
REVENUES $ 3,355,354 $ 5,874,300 $ 9,392,482 $ 11,511,006
COSTS AND EXPENSES:
Operating expenses 2,992,012 3,766,324 6,873,550 7,297,732
Management fees and allocated
overhead from General Partner 320,157 652,173 972,458 1,260,384
Depreciation and amortization 1,073,124 2,160,009 3,340,864 4,117,966
------------ ------------ ------------ ------------
OPERATING LOSS (1,029,939) (704,206) (1,794,390) (1,165,076)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (140,232) (414,774) (525,301) (830,186)
Gain on sales of cable television systems 8,560,194 - 24,424,435 -
Other, net (165,405) 2,064 (598,369) 169,982
------------ ------------ ------------ ------------
Total other income (expense), net 8,254,557 (412,710) 23,300,765 (660,204)
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE EQUITY IN
NET INCOME OF CABLE
TELEVISION JOINT VENTURE 7,224,618 (1,116,916) 21,506,375 (1,825,280)
EQUITY IN NET INCOME OF CABLE
TELEVISION JOINT VENTURE - 486,106 - 22,502,893
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 7,224,618 $ (630,810) $ 21,506,375 $ 20,677,613
============ ============ ============ ============
ALLOCATION OF NET INCOME
(LOSS):
General Partner $ - $ - $ 24,635 $ 72,389
============ ============ ============ ============
Limited Partners $ 7,224,618 $ (630,810) $21,481,740 $20,605,224
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 45.15 $ (3.94) $ 134.26 $ 128.79
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 160,000 160,000 160,000 160,000
============ ============ ============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Six Months Ended
June 30,
----------------------------
1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21,506,375 $ 20,677,613
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,340,864 4,117,966
Equity in net income of cable television joint venture - (22,502,893)
Gain on sales of cable television systems (24,424,435) -
Decrease in trade receivables 243,812 80,230
Increase in deposits, prepaid expenses and
deferred charges (193,161) (98,169)
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (595,125) (149,680)
Decrease in General Partner advances (365,829) (253,405)
------------ ------------
Net cash provided by (used in) operating activities (487,499) 1,871,662
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (1,340,531) (2,758,900)
Proceeds from sales of cable television systems, net of
brokerage fees and escrow proceeds 46,468,875 -
Distribution from Joint Venture - 25,484,569
------------ ------------
Net cash provided by investing activities 45,128,344 22,725,669
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 800,000 750,000
Repayment of debt (24,088,688) (67,466)
Distributions to limited partners (20,874,000) (25,484,569)
------------ ------------
Net cash used in financing activities (44,162,688) (24,802,035)
------------ ------------
Increase (decrease) in cash 478,157 (204,704)
Cash, beginning of period 357,145 363,032
------------ ------------
Cash, end of period $ 835,302 $ 158,328
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 653,835 $ 995,084
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a complete presentation of the Balance Sheets
and Statements of Operations and Cash Flows in conformity with generally
accepted accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Cable TV Fund 14-A, Ltd.
(the "Partnership") at June 30, 1999 and December 31, 1998 and its Statements of
Operations for the three and six month periods ended June 30, 1999 and 1998 and
its Statements of Cash Flows for the six month periods ended June 30, 1999 and
1998. Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
The Partnership owned and operated the cable television system serving the
areas in and around Calvert County, Maryland (the "Calvert County System") until
its sale on July 6, 1999. The Partnership also owned and operated the cable
television system serving the areas in and around Buffalo, Minnesota (the
"Buffalo System") until its sale on March 29, 1999 and the Partnership owned and
operated the cable television system serving the areas in and around Naperville,
Illinois (the "Naperville System") until its sale on May 6, 1999. In addition,
the Partnership owned a 27 percent interest in the Cable TV Fund 14-A/B Venture
(the "Venture"). The Venture owned and operated the cable television system
serving certain areas in Broward County, Florida (the "Broward System") until
its sale on March 31, 1998. Jones Intercable, Inc., a publicly held Colorado
corporation, is the "General Partner" of the Partnership.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in the General Partner. As of April 7, 1999, Comcast
owned approximately 12.8 million shares of the General Partner's Class A Common
Stock and approximately 2.9 million shares of the General Partner's Common
Stock, representing approximately 37% of the economic interest and 47% of the
voting interest in the General Partner. Also on that date, Comcast contributed
its shares in the General Partner to Comcast's wholly owned subsidiary, Comcast
Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9 million
shares of Common Stock of the General Partner owned by Comcast represents
approximately 57% of the outstanding Common Stock, which class of stock is
entitled to elect 75% of the Board of Directors of the General Partner. As a
result of this transaction, the General Partner is now a consolidated public
company subsidiary of Comcast Cable.
Also on April 7, 1999, the bylaws of the General Partner were amended to
establish the size of the General Partner's Board of Directors as a range from
eight to thirteen directors and the board was reconstituted so as to have eight
directors and the following directors of the General Partner resigned: Robert E.
Cole, Josef J. Fridman, James J. Krejci, James B. O'Brien, Raphael M. Solot,
Robert Kearney, Howard O. Thrall, Siim Vanaselja, Sanford Zisman and Glenn R.
Jones. In addition, Donald L. Jacobs resigned as a director elected by the
holders of Class A Common Stock and was elected by the remaining directors as a
director elected by the holders of Common Stock. The remaining directors elected
the following persons to fill the vacancies on the board created by such
resignations: Ralph J. Roberts, Brian L. Roberts, John R. Alchin, Stanley Wang
and Lawrence S. Smith. All of the newly elected directors, with the exception of
Mr. Jacobs, are officers of Comcast. Also on April 7, 1999, the following
executive officers of the General Partner resigned: Glenn R. Jones, James B.
O'Brien, Ruth E. Warren, Kevin P. Coyle, Cynthia A. Winning, Elizabeth M.
Steele, Wayne H. Davis and Larry W. Kaschinske. The following persons were
appointed as executive officers of the General Partner on April 7, 1999: Ralph
J. Roberts, Brian L. Roberts, Lawrence S. Smith, John R. Alchin and Stanley
Wang.
Comcast is principally engaged in the development, management and
operation of broadband cable networks and in the provision of content through
programming investments. Comcast Cable is principally engaged in the
development, management and operation of broadband cable networks. The address
of Comcast's principal office is 1500 Market Street, Philadelphia, Pennsylvania
19102-2148, which is also now the address of the General Partner's principal
office. The address of Comcast Cable's principal office is 1201 Market Street,
Suite 2201, Wilmington, Delaware 19801.
(2) The General Partner 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 for the three and six month periods ended June 30, 1999
(excluding the Partnership's interest in the Venture) were $167,768 and
$469,624, respectively, compared to $293,715 and $575,550, respectively,
for the comparable 1998 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing services
and other corporate related facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, tax, legal and investor
relations services to the Partnership. Such services, and their related costs,
are necessary to the operation of the Partnership and would have been incurred
by the Partnership if it was a stand alone entity. 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 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 believes
that the methodology used in allocating overhead and administrative expenses is
reasonable. Reimbursements made to the General Partner by the Partnership for
allocated overhead and administrative expenses for the three and six month
periods ended June 30, 1999 (excluding the Partnership's interest in the
Venture) were $152,389 and $502,834, respectively, compared to $358,458 and
$684,834, respectively, for the comparable 1998 periods.
(3) On March 29, 1999, the Partnership sold the Buffalo System to an
unaffiliated party for a sales price of $26,605,000, subject to customary
closing adjustments. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
March 1999. From the sale proceeds, the Partnership paid $13,500,000 outstanding
on its revolving credit facility, paid a brokerage fee to The Intercable Group,
Ltd. ("The Intercable Group"), a subsidiary of the General Partner, totaling
$665,125, representing 2.5 percent of the sales price, for acting as a broker in
this transaction, settled working capital adjustments and deposited $1,200,000
into an indemnity escrow account. The remaining net sale proceeds of $10,874,000
were distributed to the Partnership's limited partners of record as of March 29,
1999, in April 1999. This distribution gave the Partnership's limited partners
an approximate return of $68 for each $500 limited partnership interest, or $136
for each $1,000 invested in the Partnership. Because the distribution to the
limited partners from the sale of the Buffalo System, together with all prior
distributions, did not return to the limited partners 125 percent of the capital
initially contributed to the Partnership by the limited partners, the General
Partner did not receive a general partner distribution from the sale of the
Buffalo System.
6
For a period of 90 days following the closing date, $1,200,000 of the sale
proceeds remained in an interest-bearing escrow account as security for the
Partnership's agreement to indemnify the purchaser under the asset purchase
agreement. The escrow period expired on June 27, 1999, and claims totaling
$30,000 were made on the escrowed funds by the purchaser. From the escrowed
funds, the Partnership will make a distribution to the Partnership's limited
partners. This distribution is expected to be made in the third quarter of 1999.
(4) On May 6, 1999, the Partnership sold the Naperville System to an
unaffiliated party for a sales price of $23,000,000, subject to customary
closing adjustments. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
December 1998. From the sale proceeds, the Partnership paid the $10,350,000
balance outstanding on its revolving credit facility, paid a brokerage fee to
The Intercable Group totaling $575,000, representing 2.5 percent of the sales
price, for acting as a broker in this transaction, settled working capital
adjustments, and then deposited $696,000 into an interest-bearing indemnity
escrow account. The remaining net sale proceeds of $10,000,000 were distributed
to the Partnership's limited partners of record as of May 6, 1999, in May 1999.
This distribution gave the Partnership's limited partners an approximate return
of $62.50 for each $500 limited partnership interest, or $125 for each $1,000
invested in the Partnership. Because the distributions to the limited partners
from the sale of the Naperville System and the Buffalo System, together with all
prior distributions, did not return to the limited partners 125 percent of the
capital initially contributed to the Partnership by the limited partners, the
General Partner did not receive a general partner distribution from the sale of
the Naperville System.
In connection with the sale of the Naperville System, on March 5, 1999 the
Partnership entered into a signal and service agreement with the cable company
that purchased the system. Pursuant to the terms of this agreement, the
purchaser provided certain services to the Partnership relating to the
operations of the Naperville System from March 5, 1999 until the closing of the
sale, which occurred May 6, 1999. The Partnership paid the purchaser fees and
expense reimbursements related to this agreement and the Partnership indemnified
the purchaser in connection with the services it provided to the Partnership.
The management fees and expense reimbursements that the Partnership otherwise
would have paid to the General Partner were reduced to offset the fees and
expenses paid to the purchaser of the system pursuant to the signal and service
agreement.
The $696,000 of sale proceeds placed in the interest-bearing indemnity
escrow account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties to be made about the Naperville System in the
asset purchase agreement. Any amounts remaining from this interest-bearing
indemnity escrow account and not claimed by the buyer at the end of the escrow
period, plus interest earned on the escrowed funds, will be returned to the
Partnership. From this amount, the Partnership will pay any remaining
liabilities, it will retain funds necessary to cover the administrative expenses
of the Partnership and it will then distribute the balance, if any, to the
Partnership's partners. Because the distribution to the limited partners from
the sale of the Calvert County System, together with all prior distributions,
will return to the limited partners more than 125 percent of the capital
initially contributed to the Partnership by the limited partners, the General
Partner will be entitled to receive a distribution from the escrowed proceeds.
(5) On July 6, 1999, the Partnership sold the Calvert County System to a
subsidiary of the General Partner for a sales price of $39,388,667, subject to
customary closing adjustments. The purchase price was determined by the average
of three separate independent appraisals of the fair market value of the Calvert
County System. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
March and April 1999. From the sale proceeds, based upon financial information
as of June 30, 1999, the Partnership will pay certain fees and expenses of the
transaction, it will retain funds necessary to cover the administrative expenses
of the Partnership and it will distribute the remaining net sale proceeds of
approximately $38,306,000 to the Partnership's partners of record as of the
closing date of the sale of the Calvert County System. This distribution is
expected to be made in the third quarter of 1999. The limited partners, as a
group, will receive $33,503,000, and the General Partner will receive a
$4,803,000 general partner distribution from the net sale proceeds; thus, the
limited partners will receive approximately $209 for each $500 limited
partnership interest, or $418 for each $1,000 invested in the Partnership from
the sale of the Calvert County System. There is no assurance, however, that the
actual distribution will equal these amounts.
Taking into account all distributions from prior sales (excluding escrowed
proceeds) and the anticipated distribution of the net proceeds from the sale of
the Calvert County System, the General Partner expects that the limited partners
of the Partnership will receive approximately $715 for each $500 limited
partnership interest, or $1,430 for each $1,000 invested in the Partnership.
7
Although the sale of the Calvert County System represented the sale of the
only remaining operating asset of the Partnership, the Partnership will not be
dissolved until all proceeds from escrow have been distributed and the pending
litigation in which the Partnership is a named defendant has been resolved and
terminated (See Part II, Item 1).
(6) In July 1999, the Court of Appeals of Maryland issued a decision in
United Cable Television of Baltimore, Ltd. Partnership v. Burch holding that to
- ---------------------------------------------------------------
the extent that a charge assessed customers who were delinquent in payment of
their cable bills exceeded the 6 percent maximum interest rate prescribed by the
Constitution of the State of Maryland, such charge was not enforceable. The
Court ordered the cable company to make appropriate refunds to subscribers.
While the Partnership was not a party to that litigation and believes that it
has meritorious defenses to similar actions filed on behalf of subscribers in
Calvert County, Maryland, nevertheless a decision by a court in these actions
based solely upon the premise set forth in Burch could have an adverse effect
-----
upon the financial statements of the Partnership.
8
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership sold two of its systems in 1997 and the Venture sold its
Broward System in March 1998. The Partnership sold its Buffalo System in March
1999, it sold its Naperville System in May 1999 and it sold its Calvert County
System in July 1999.
Buffalo System
--------------
On March 29, 1999, the Partnership sold the Buffalo System to an
unaffiliated party for a sales price of $26,605,000, subject to customary
closing adjustments. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
March 1999. From the sale proceeds, the Partnership paid $13,500,000 outstanding
on its revolving credit facility, paid a brokerage fee to The Intercable Group
totaling $665,125, representing 2.5 percent of the sales price, for acting as a
broker in this transaction, settled working capital adjustments and deposited
$1,200,000 into an indemnity escrow account. The remaining net sale proceeds of
$10,874,000 were distributed to the Partnership's limited partners of record as
of March 29, 1999, in April 1999. This distribution gave the Partnership's
limited partners an approximate return of $68 for each $500 limited partnership
interest, or $136 for each $1,000 invested in the Partnership. Because the
distribution to the limited partners from the sale of the Buffalo System,
together with all prior distributions, did not return to the limited partners
125 percent of the capital initially contributed to the Partnership by the
limited partners, the General Partner did not receive a general partner
distribution from the sale of the Buffalo System.
For a period of 90 days following the closing date, $1,200,000 of the sale
proceeds remained in an interest-bearing escrow account as security for the
Partnership's agreement to indemnify the purchaser under the asset purchase
agreement. The escrow period expired on June 27, 1999, and claims totaling
$30,000 were made on the escrowed funds by the purchaser. From the escrowed
funds, the Partnership will make a distribution to the Partnership's limited
partners. This distribution is expected to be made in the third quarter of 1999.
Naperville System
-----------------
On May 6, 1999, the Partnership sold the Naperville System to an
unaffiliated party for a sales price of $23,000,000, subject to customary
closing adjustments. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
December 1998. From the sale proceeds, the Partnership paid the $10,350,000
balance outstanding on its revolving credit facility, paid a brokerage fee to
The Intercable Group totaling $575,000, representing 2.5 percent of the sales
price, for acting as a broker in this transaction, settled working capital
adjustments, and then deposited $696,000 into an interest-bearing indemnity
escrow account. The remaining net sale proceeds of $10,000,000 were distributed
to the Partnership's limited partners of record as of May 6, 1999, in May 1999.
This distribution gave the Partnership's limited partners an approximate return
of $62.50 for each $500 limited partnership interest, or $125 for each $1,000
invested in the Partnership. Because the distributions to the limited partners
from the sale of the Naperville System and the Buffalo System, together with all
prior distributions, did not return to the limited partners 125 percent of the
capital initially contributed to the Partnership by the limited partners, the
General Partner did not receive a general partner distribution from the sale of
the Naperville System.
In connection with the sale of the Naperville System, on March 5, 1999 the
Partnership entered into a signal and service agreement with the cable company
that purchased the system. Pursuant to the terms of this agreement, the
purchaser provided certain services to the Partnership relating to the
operations of the Naperville System from March 5, 1999 until the closing of the
sale, which occurred May 6, 1999. The Partnership paid the purchaser fees and
expense reimbursements related to this agreement and the Partnership indemnified
the purchaser in connection with the services it provided to the Partnership.
The management fees and expense reimbursements that the Partnership otherwise
would have paid to the General Partner were reduced to offset the fees and
expenses paid to the purchaser of the system pursuant to the signal and service
agreement.
9
The $696,000 of sale proceeds placed in the interest-bearing indemnity
escrow account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties to be made about the Naperville System in the
asset purchase agreement. Any amounts remaining from this interest-bearing
indemnity escrow account and not claimed by the buyer at the end of the escrow
period, plus interest earned on the escrowed funds, will be returned to the
Partnership. From this amount, the Partnership will pay any remaining
liabilities, it will retain funds necessary to cover the administrative expenses
of the Partnership and it will then distribute the balance, if any, to the
Partnership's partners. Because the distribution to the limited partners from
the sale of the Calvert County System, together with all prior distributions,
will return to the limited partners more than 125 percent of the capital
initially contributed to the Partnership by the limited partners, the General
Partner will be entitled to receive a distribution from the escrowed proceeds.
Calvert County System
---------------------
On July 6, 1999, the Partnership sold the Calvert County System to a
subsidiary of the General Partner for a sales price of $39,388,667, subject to
customary closing adjustments. The purchase price was determined by the average
of three separate independent appraisals of the fair market value of the Calvert
County System. This sale was approved by the holders of a majority of the
limited partnership interests in a vote conducted by the General Partner in
March and April 1999. From the sale proceeds, based upon financial information
as of June 30, 1999, the Partnership will pay certain fees and expenses of the
transaction, it will retain funds necessary to cover the administrative expenses
of the Partnership and it will distribute the remaining net sale proceeds of
approximately $38,306,000 to the Partnership's partners of record as of the
closing date of the sale of the Calvert County System. This distribution is
expected to be made in the third quarter of 1999. The limited partners, as a
group, will receive $33,503,000, and the General Partner will receive a
$4,803,000 general partner distribution from the net sale proceeds; thus, the
limited partners will receive approximately $209 for each $500 limited
partnership interest, or $418 for each $1,000 invested in the Partnership from
the sale of the Calvert County System. There is no assurance, however, that the
actual distribution will equal these amounts.
Taking into account all distributions from prior sales (excluding escrowed
proceeds) and the anticipated distribution of the net proceeds from the sale of
the Calvert County System, the General Partner expects that the limited partners
of the Partnership will receive approximately $715 for each $500 limited
partnership interest, or $1,430 for each $1,000 invested in the Partnership.
Although the sale of the Calvert County System represented the sale of the
only remaining operating asset of the Partnership, the Partnership will not be
dissolved until all proceeds from escrow have been distributed and the pending
litigation in which the Partnership is a named defendant has been resolved and
terminated (See Part II, Item 1).
For the six months ended June 30, 1999, capital expenditures totaled
approximately $1,341,000 for all of the Partnership's systems. Approximately 46
percent of the expenditures related to construction of service drops to
subscribers' homes. Approximately 37 percent of the expenditures related to new
plant construction associated with new homes passed in all of the Partnership's
systems. The remainder was for other capital expenditures to maintain the value
of the Partnership's Calvert County System until it was sold. These expenditures
were funded by borrowings under the Partnership's credit facility and cash on
hand.
The Partnership was a party to a revolving credit facility. The revolving
credit facility required that one-half of the proceeds from the Buffalo System
sale be used to reduce amounts outstanding and that the credit facility be
repaid in full on the next system sale. The Partnership repaid $13,500,000 upon
the closing of the sale of the Buffalo System on March 29, 1999, and it repaid
the remaining balance of $10,350,000 upon the sale of the Naperville System on
May 6, 1999. Interest on the revolving credit facility's outstanding balance was
at the Partnership's option of the London Interbank Offered Rate plus 1.125
percent, the Certificate of Deposit Rate plus 1.25 percent or the Base Rate plus
.125 percent. The effective interest rate on amounts outstanding as of June 30,
1998 was 6.83 percent.
Because the Partnership has sold all of its assets and further
distributions, if any, will be made to the limited partners of record as of the
closing date of the sale of the Partnership's last remaining cable television
system, new limited partners would not be entitled to any distributions from the
Partnership and transfers of limited partnership interests would have no
economic or practical value. The General Partner therefore has determined, in
accordance with the authority granted to it under Section 3.5 of the
Partnership's limited partnership agreement, that it will not process any
transfers of limited partnership interests in the Partnership during the
remainder of the Partnership's term.
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RESULTS OF OPERATIONS
- ---------------------
Due to the Calvert County System sale on July 6, 1999, which was the
Partnership's last remaining operating asset, a discussion of results of
operations would not be meaningful. The Partnership will be liquidated and
dissolved upon the final distribution of any amounts remaining from the
interest-bearing indemnity escrow accounts and upon the resolution and
termination of the pending litigation.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In July 1999, Jones Intercable, Inc., each of its subsidiaries that serve
as general partners of managed public partnerships and most of its managed
public partnerships, including the Partnership, were named defendants in a case
styled 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.
C213638). Plaintiffs, all of which are affiliated with each other, are in the
business of, among other things, investing in limited partnerships that own and
operate cable television systems. Plaintiffs allege that one of the plaintiffs
has been a limited partner or has obtained a valid power-of-attorney from a
limited partner in each of Jones Intercable, Inc.'s managed public partnerships
and that they had formed a coordinated plan amongst themselves to acquire up to
4.9% of the limited partnership interests in each of Jones Intercable, Inc.'s
managed public partnerships during the latter half of 1996. Plaintiffs'
complaint alleges that they were frustrated in this purpose by Jones Intercable,
Inc.'s refusal to provide plaintiffs with lists of the names and addresses of
the limited partners of Jones Intercable, Inc.'s managed public partnerships.
The complaint alleges that Jones Intercable Inc.'s actions constituted a breach
of contract, a breach of Jones Intercable, Inc.'s implied covenant of good faith
and fair dealing owed to the plaintiffs as limited partners, a breach of Jones
Intercable, Inc.'s fiduciary duty owed to the plaintiffs as limited partners and
tortious interference with prospective economic advantage. Plaintiffs allege
that Jones Intercable, Inc.'s failure to provide them with the partnership lists
prevented them from making their tender offers and the plaintiffs claim that
they have been injured by such action in an amount to be proved at trial, but
not less than $17 million. Given the fact that this case was only recently filed
and that the time for Jones Intercable, Inc.'s response to the complaint has not
yet expired, Jones Intercable, Inc. has not yet responded to this complaint.
Jones Intercable, Inc. believes, however, that it and the defendant subsidiaries
and managed public partnerships have defenses to the plaintiffs' claims for
relief, and Jones Intercable, Inc. intends to defend this lawsuit vigorously
both on its own behalf and on behalf of its subsidiaries and its managed public
partnerships.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
Report on Form 8-K dated March 29, 1999, filed April 2, 1999,
reported that on March 29, 1999, the Partnership sold the Buffalo
System to an unaffiliated party for a sales price of $26,605,000,
subject to customary closing adjustments.
Report on Form 8-K dated April 7, 1999, filed April 15, 1999,
reported that on April 7, 1999, Comcast Corporation completed the
acquisition of a controlling interest in the General Partner.
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SIGNATURES
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-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Lawrence S. Smith
-----------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
-----------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: August 16, 1999
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