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 March 31, 1999
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or
[_] Transition report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number 0-16200
CABLE TV FUND 14-B, LTD.
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Exact name of registrant as specified in charter
Colorado #84-1024658
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State of organization I.R.S. employer I.D. #
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
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1999 1998
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CASH $1,381,221 $ 23,538
TRADE RECEIVABLES, less allowance for doubtful receivables of
$-0- and $7,468 at March 31, 1999 and December 31, 1998,
respectively - 157,760
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost - 9,100,340
Less- accumulated depreciation - (4,471,718)
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- 4,628,622
Franchise costs and other intangible assets, net of accumulated
amortization of $-0- and $1,979,620 at March 31, 1999
and December 31, 1998, respectively - 652,940
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Total investment in cable television properties - 5,281,562
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES - 318,809
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Total assets $1,381,221 $ 5,781,669
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The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
2
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1999 1998
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LIABILITIES:
Debt $ - $ 25,981
General Partner advances 684,783 -
Trade accounts payable and accrued liabilities - 89,832
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Total liabilities 684,783 115,813
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,000) (3,721)
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- (2,721)
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Limited Partners-
Net contributed capital (261,353 units
outstanding at March 31, 1999 and
December 31, 1998) 112,127,301 112,127,301
Distributions (112,853,367) (102,868,006)
Accumulated earnings (deficit) 1,422,504 (3,590,718)
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696,438 5,668,577
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Total liabilities and partners' capital (deficit) $ 1,381,221 $ 5,781,669
============== ==============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
3
CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
--------------------------------
1999 1998
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REVENUES $ 237,069 $ 10,536,074
COSTS AND EXPENSES:
Operating expenses 115,608 5,985,741
Management fees and allocated overhead from General Partner 26,628 1,135,996
Depreciation and amortization 75,588 3,670,505
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OPERATING INCOME (LOSS) 19,245 (256,168)
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OTHER INCOME (EXPENSE):
Interest expense (8,254) (971,605)
Gain on sale of cable television system 5,492,858 82,465,154
Other, net (487,906) (587,846)
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Total other income (expense), net 4,996,698 80,905,703
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CONSOLIDATED INCOME BEFORE MINORITY INTEREST 5,015,943 80,649,535
MINORITY INTEREST IN CONSOLIDATED INCOME - (22,016,787)
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NET INCOME $ 5,015,943 $ 58,632,748
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ALLOCATION OF NET INCOME:
General Partner $ 2,721 $ 749,411
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Limited Partners $ 5,013,222 $ 57,883,337
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NET INCOME PER LIMITED PARTNERSHIP UNIT $ 19.18 $ 221.48
============ =============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 261,353 261,353
============ =============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
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1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,015,943 $ 58,632,748
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 75,588 3,670,505
Gain on sale of cable television system (5,492,858) (82,465,154)
Minority interest in consolidated income - 22,016,787
Decrease in trade receivables, net 157,760 902,137
Decrease in deposits, prepaid expenses and
deferred charges 316,356 13,026
Increase in General Partner advances 684,783 56,862
Decrease in trade accounts payable and accrued
liabilities and subscriber prepayments (89,832) (1,507,092)
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Net cash provided by operating activities 667,740 1,319,819
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (19,115) (1,626,556)
Proceeds from sale of cable television system 10,720,400 133,388,432
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Net cash provided by investing activities 10,701,285 131,761,876
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 1,900,000
Repayment of debt (25,981) (40,110,978)
Distributions to limited partners (9,985,361) (68,554,431)
Increase in accrued distributions to limited partners - 68,554,431
Distribution to joint venture partner - (25,484,569)
Increase in accrued distribution to joint venture partner - 25,484,569
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Net cash used in financing activities (10,011,342) (38,210,978)
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Increase in cash 1,357,683 94,870,717
Cash, beginning of period 23,538 173,628
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Cash, end of period $ 1,381,221 $ 95,044,345
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 1,379,302
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The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED 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-B, Ltd.
(the "Partnership") at March 31, 1999 and December 31, 1998 and its Statements
of Operations and Cash Flows for the three month periods ended March 31, 1999
and 1998.
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"), to acquire, own and operate
cable television systems in the United States. Cable TV Fund 14-A, Ltd. ("Fund
14-A") is the other partnership that was formed pursuant to the Program. The
Partnership owned the cable television system serving Littlerock, California
(the "Littlerock System") until its sale on January 29, 1999. The Partnership
owned the cable television system serving Surfside, South Carolina (the
"Surfside System") until its sale on June 30, 1998. The Partnership also owned a
73 percent interest in Cable TV Fund 14-A/B Venture (the "Venture"). The
Venture sold its only asset, the cable television system serving certain areas
in Broward County, Florida (the "Broward System"), on March 31, 1998, and the
Venture was liquidated and dissolved in October 1998. The accompanying financial
statements historically include 100 percent of the accounts of the Partnership
and those of the Venture, reduced by the 27 percent minority interest in the
Venture owned by Fund 14-A. All interpartnership accounts and transactions have
been eliminated.
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in the General Partner. Comcast now owns
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) On January 29, 1999, the Partnership sold the Littlerock System to a
subsidiary of the General Partner for $10,720,400, subject to customary closing
adjustments. The sale was approved by the holders of a majority of the limited
partnership interests of the Partnership. Upon the closing of the sale of the
Littlerock System, the Partnership retained $1,000,000 of the sale proceeds for
a reserve for expenses that the Partnership may incur related to then-pending
litigation, repaid all of its indebtedness (including $380,466 in advances from
the General Partner and capital lease obligations of
6
$25,981) and then distributed the net sale proceeds of $9,985,361 to the
Partnership's limited partners of record as of January 29, 1999. This
distribution was made in February 1999. Such distribution represented
approximately $38 for each $500 limited partnership interest, or $76 for each
$1,000 invested in the Partnership. Because the distributions to the limited
partners from the sales of the Broward System, the Surfside System and the
Littlerock System did not return 125 percent of the capital initially
contributed by the limited partners to the Partnership, the General Partner did
not receive a general partner distribution from the Littlerock System's sale
proceeds.
Taking into account the distributions from prior system sales and the
distribution from the sale of the Littlerock System, the limited partners of the
Partnership have received a total of $432 for each $500 limited partnership
interest, or $864 for each $1,000 invested in the Partnership.
In January 1999, City Partnership Co. ("Plaintiff"), a limited partner
of the Partnership, filed a class action complaint in the District Court,
Arapahoe County, State of Colorado (Case No. 99-CV-0150) naming the General
Partner as defendant. Plaintiff, on its behalf and on behalf of all other
persons who are limited partners of the Partnership, challenged the terms of the
sale of the Littlerock System to an affiliate of the General Partner. The
General Partner filed a motion to dismiss the class action complaint on the
grounds that the plaintiff could only bring the action derivatively and not as a
class action. The court granted the Company's motion to dismiss in April 1999.
There can be no assurance, however, that the plaintiff will not refile its
complaint as a derivative action.
Although the sale of the Littlerock System represented the sale of the
only remaining cable television system of the Partnership, the Partnership will
not be dissolved until after the recently dismissed litigation challenging the
Partnership's January 1999 sale of its Littlerock System to an affiliate of the
General Partner is finally resolved and terminated.
(3) The General Partner manages the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid to the General Partner by the Partnership and the Venture for the
three month periods ended March 31, 1999 and 1998 were $11,854 and $526,804,
respectively. The General Partner has not received and will not receive a
management fee after January 29, 1999.
The Partnership will continue to reimburse the 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. Reimbursements made to the General Partner by
the Partnership and the Venture for overhead and administrative expenses for the
three month periods ended March 31, 1999 and 1998 were $14,774 and $609,192,
respectively.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
- -------------------
The Partnership owned the Littlerock System until its sale on January
29, 1999 and the Surfside System until its sale on June 30, 1998. The
Partnership also owned a 73 percent interest in the Venture until its
liquidation and dissolution in October 1998. The accompanying financial
statements historically include 100 percent of the accounts of the Partnership
and those of the Venture, reduced by the 27 percent minority interest in the
Venture owned by Fund 14-A.
On January 29, 1999, the Partnership sold the Littlerock System to a
subsidiary of the General Partner for $10,720,400, subject to customary closing
adjustments. The sale was approved by the holders of a majority of the limited
partnership interests of the Partnership. Upon the closing of the sale of the
Littlerock System, the Partnership retained $1,000,000 of the sale proceeds for
a reserve for expenses that the Partnership may incur related to then-pending
litigation, repaid all of its indebtedness (including $380,466 in advances from
the General Partner and capital lease obligations of $25,981) and then
distributed the net sale proceeds of $9,985,361 to the Partnership's limited
partners of record as of January 29, 1999. This distribution was made in
February 1999. Such distribution represented approximately $38 for each $500
limited partnership interest, or $76 for each $1,000 invested in the
Partnership. Because the distributions to the limited partners from the sales of
the Broward System, the Surfside System and the Littlerock System did not return
125 percent of the capital initially contributed by the limited partners to the
Partnership, the General Partner did not receive a general partner distribution
from the Littlerock System's sale proceeds.
Taking into account the distributions from prior system sales and the
distribution from the sale of the Littlerock System, the limited partners of the
Partnership have received a total of $432 for each $500 limited partnership
interest, or $864 for each $1,000 invested in the Partnership.
In January 1999, City Partnership Co. ("Plaintiff"), a limited partner
of the Partnership, filed a class action complaint in the District Court,
Arapahoe County, State of Colorado (Case No. 99-CV-0150) naming the General
Partner as defendant. Plaintiff, on its behalf and on behalf of all other
persons who are limited partners of the Partnership, challenged the terms of the
sale of the Littlerock System to an affiliate of the General Partner. The
General Partner filed a motion to dismiss the class action complaint on the
grounds that the plaintiff could only bring the action derivatively and not as a
class action. The court granted the Company's motion to dismiss in April 1999.
There can be no assurance, however, that the plaintiff will not refile its
complaint as a derivative action.
Although the sale of the Littlerock System represented the sale of the
only remaining cable television system of the Partnership, the Partnership will
not be dissolved until after the recently dismissed litigation challenging the
Partnership's January 1999 sale of its Littlerock System to an affiliate of the
General Partner is finally resolved and terminated.
RESULTS OF OPERATIONS
- ---------------------
Due to the Littlerock System sale on January 29, 1999, which was the
Partnership's last remaining operating asset, a full discussion of the results
of operations would not be meaningful. For the period ended March 31, 1999, the
Partnership had total revenues of $237,069 and generated operating income of
$19,245. Other expenses of $487,906 and $587,846 incurred in the first quarter
of 1999 and 1998, respectively, related to various costs associated with the
sales of the Partnership's and Venture's systems. Because of the gain of
$5,492,858 on the sale of the Littlerock System, the Partnership realized net
income of $5,015,943, or $19.18 per limited partnership unit, for the three
months ended March 31, 1999.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In January 1999, City Partnership Co. ("Plaintiff"), a limited
partner of the Partnership, filed a class action complaint in the
District Court, Arapahoe County, State of Colorado (Case No. 99-CV-
0150) naming the General Partner as defendant. Plaintiff, on its behalf
and on behalf of all other persons who are limited partners of the
Partnership, challenged the terms of the sale of the Littlerock System
to an affiliate of the General Partner. The General Partner filed a
motion to dismiss the class action complaint on the grounds that the
plaintiff could only bring the action derivatively and not as a class
action. The court granted the Company's motion to dismiss in April
1999. There can be no assurance, however, that the plaintiff will not
refile its complaint as a derivative action.
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 January 29, 1999, filed in February
1999, reported that on January 29, 1999 the Partnership sold the
Littlerock System to a subsidiary of the General Partner for
$10,720,400, subject to customary closing adjustments.
9
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-B, 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: May 14, 1999
10