-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D01UfvaxK+c5qpLEcMBJd+IU39NBUR/qx55dFFpaPDQpfIX2Wd+Wok2X1ve+7ghD UIAcI/mx5TRBSqhKspj70A== 0000096903-96-000004.txt : 19961218 0000096903-96-000004.hdr.sgml : 19961218 ACCESSION NUMBER: 0000096903-96-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961217 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19961217 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS INC CENTRAL INDEX KEY: 0000096903 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 840588868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05550 FILM NUMBER: 96681988 BUSINESS ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PKWY CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3032675500 MAIL ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PKWY CITY: ENGLEWOOD STATE: CO ZIP: 80111 FORMER COMPANY: FORMER CONFORMED NAME: TELE COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 17, 1996 Date of Earliest Event Reported: December 4, 1996 TCI COMMUNICATIONS, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) State of Delaware --------------------------------------------- (State or other jurisdiction of incorporation) 0-5550 84-0588868 - ----------------------- ---------------------------------- (Commission File Number) (I.R.S. Employer Identification No.) 5619 DTC Parkway Englewood Colorado 80111 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 267-5500 Item 5. Other Events. ------------- On December 4, 1996, Tele-Communications, Inc. ("TCI") distributed (the "Distribution") to the holders of shares of the TCI Group Common Stock of all of the issued and outstanding common stock of TCI Satellite Entertainment, Inc. ("Satellite"). At the time of the Distribution, Satellite was a Delaware corporation and a direct wholly-owned subsidiary of TCI Communications, Inc. ("TCIC" or the "Company"). The Distribution was effected as a tax-free dividend to, and did not involve the payment of any consideration by, the holders of TCI Group Common Stock. Prior to the Distribution, TCI caused to be transferred to Satellite, or one or more of Satellite's subsidiaries, certain assets and businesses (and the related liabilities) of the TCI Group constituting all of TCI's interests in the business of distributing multichannel programming services in the United States direct to the home via medium power or high power broadcast satellite, including the rental and sale of customer premises equipment relating thereto. Item 7. Financial Statements, Pro Forma Financial Information ----------------------------------------------------- and Exhibits. ------------- (a) Financial Statements None. (b) Pro Forma Financial Information Condensed Pro Forma Combined Balance Sheet, September 30, 1996 (unaudited) Condensed Pro Forma Combined Statement of Operations, Nine months ended September 30, 1996 (unaudited) Condensed Pro Forma Combined Statement of Operations, Year ended December 31, 1995 (unaudited) Notes to Condensed Pro Forma Combined Financial Statements, September 30, 1996 (unaudited) (c) Exhibits None. 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 hereunto duly authorized. Date: December 17, 1996 TCI COMMUNICATIONS, INC. (Registrant) By:/s/ Stephen M. Brett Stephen M. Brett Senior Vice President TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Condensed Pro Forma Combined Financial Statements September 30, 1996 (unaudited) The following unaudited condensed pro forma combined balance sheet of TCI Communications, Inc., dated as of September 30, 1996, assumes that the Distribution (see note 1) had occurred as of such date. Additionally, the following unaudited condensed pro forma combined statements of operations of TCIC for the nine months ended September 30, 1996 and the year ended December 31, 1995 assume that the acquisition by TCIC of all the common stock of a subsidiary of Viacom, Inc. ("VII Cable") (the "VII Cable Acquisition") (see note 2) and the Distribution had occurred as of January 1, 1995. The unaudited pro forma results do not purport to be indicative of the results of operations that would have been obtained if the VII Cable Acquisition and the Distribution had occurred as of January 1, 1995. These condensed pro forma combined financial statements of TCIC should be read in conjunction with the historical financial statements and the related notes thereto of TCIC. TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Condensed Pro Forma Combined Balance Sheet (unaudited)
September 30, 1996 ------------------------------------ TCIC Satellite TCIC Historical Distribution(1) Pro forma ----------- -------------- --------- amounts in millions Assets - ------ Cash and receivables $ 281 (24) 257 Note receivable from Satellite -- 250 250 Investment in affiliates and related receivables 1,472 (30) 1,442 Property and equipment, net of accumulated depreciation 8,368 (1,136) 7,232 Franchise costs and other assets, 15,184 -- 15,184 net of amortization ------ ------ ------ $25,305 (940) 24,365 ======= ====== ====== Liabilities and Stockholder's Equity - ------------------------------------ Payables and accruals $1,379 (460) 919 Debt 14,491 -- 14,491 Deferred income taxes 5,491 (23) 5,468 Other liabilities 69 -- 69 ------ ----- ----- Total liabilities 21,430 (483) 20,947 ------ ----- ------ Minority interests 821 -- 821 Redeemable preferred stock 232 -- 232 Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of the Company 1,000 -- 1,000 Common stockholder's equity: Class A common stock 1 -- 1 Class B common stock -- -- -- Additional paid-in capital 3,679 (457) 3,222 Unrealized holding gains for available-for-sale securities 4 -- 4 Accumulated deficit (630) -- (630) Investment in TCI (1,143) -- (1,143) Intercompany receivable (89) -- (89) ------ ----- ------- 1,822 (457) 1,365 ------ ----- ------- $25,305 (940) 24,365 ------- ----- --------
See accompanying notes to unaudited condensed pro forma combined financial statements. TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Condensed Pro Forma Combined Statement of Operations (unaudited)
Nine months ended September 30, 1996 -------------------------------------------------- TCIC Satellite VII Cable Pro forma TCIC Historical Distribution(1) Historical(2) Adjustments(2) Pro forma ---------- --------------- ------------- -------------- --------- amounts in millions Revenue $4,554 (300) 293 (1)(3) 4,546 Operating, selling, general and administrative expenses and compensation relating to stock appreciation rights (2,900) 294 (189) -- (2,795) Depreciation and amortization (1,039) 87 (52) (14)(4) (1,018) ------- ---- ----- ------- ------ Operating income 615 81 52 (15) 733 Interest expense (760) -- (31) (46)(5) (837) Interest income 31 19 2 -- 52 Share of losses of affiliates, net (150) 1 -- -- (149) Other income (expense), net (89) -- 1 (18)(6) (106) ------ ------ ----- ----- ----- Earnings (loss) before income taxes (353) 101 24 (79) (307) Income tax benefit (expense) 93 (31) (13) 12 (7) 61 ------ ------ ----- ---- ---- Net earnings (loss) (260) 70 11 (67) (246) Preferred stock dividend requirements (7) -- -- -- (7) Net earnings (loss) attributable to common stockholder $(267) 70 11 (67) (253) ======= ====== ====== ====== =====
See accompanying notes to unaudited condensed pro forma combined financial statements. TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Condensed Pro Forma Combined Statement of Operations (unaudited)
Year ended December 31, 1995 ---------------------------------------------------- TCIC Satellite VII Cable Pro forma TCIC Historical Distribution(1) Historical(2) Adjustments(2) Pro forma ---------- ---------------- ------------- -------------- --------- amounts in millions Revenue $5,118 (209) 442 (2)(3) 5,349 Operating, selling, general and administrative expenses and compensation relating to stock appreciation rights (3,092) 214 (279) -- (3,157) Depreciation and amortization (1,223) 56 (82) (36)(4) (1,285) ------- ---- ------ ----- ------ Operating income 803 61 81 (38) 907 Interest expense (962) -- (48) (84)(5) (1,094) Interest income 34 25 -- -- 59 Share of losses of affiliates, net (43) 9 -- -- (34) Other income (expense), (1) -- 34 (27)(3) (25) net (31)(6) ------ ----- ----- ---- ----- Earnings (loss) before income taxes (169) 95 67 (180) (187) Income tax benefit (expense) 49 (32) (33) 45(7) 29 ------ ----- ----- ---- ----- Net earnings (loss) $ (120) 63 34 (135) (158) ) ====== ===== ===== ===== ======
See accompanying notes to unaudited condensed pro forma combined financial statements. TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Notes to Condensed Pro Forma Combined Financial Statements September 30, 1996 (unaudited) (1) On December 4, 1996, TCI completed the Distribution by TCI to the holders of shares of the TCI Group common stock of all of the issued and outstanding common stock of Satellite. At the time of the Distribution, Satellite was a Delaware corporation and a direct wholly-owned subsidiary of TCIC. The Distribution was effected as a tax-free dividend to, and did not involve the payment of any consideration by, the holders of TCI Group common stock. Prior to the Distribution, TCI caused to be transferred to Satellite, or one or more of Satellite's subsidiaries, certain assets and businesses (and the related liabilities) of the TCI Group constituting all of TCI's interests in the business of distributing multichannel programming services in the United States direct to the home via medium power or high power broadcast satellite, including the rental and sale of customer premises equipment relating thereto. On the date of the Distribution, Satellite issued to TCIC a promissory note in the principal amount of $250 million, representing a portion of Satellite's intercompany balance owed to TCIC on that date. The remainder of such intercompany balance was assumed by TCI on the date of the Distribution in the form of a capital contribution to Satellite. Such promissory note will bear interest at the rate of 10% per annum and will mature on September 30, 2001. Such interest income to TCIC, amounting to $25 million per annum, has been reflected in the accompanying condensed proforma combined statements of operations. (2) On July 31, 1996, pursuant to certain agreements entered into among TCIC, TCI, Viacom International Inc. and Viacom, Inc. ("Viacom"), TCIC acquired all of the common stock of VII Cable which, at the time of such acquisition, owned Viacom's cable systems and related assets. The transaction was structured as a tax-free reorganization in which VII Cable initially transferred all of its non- cable assets, as well as all of its liabilities other than current liabilities, to a new subsidiary of Viacom ("New Viacom Sub"). VII Cable also transferred to New Viacom Sub the proceeds (the "Loan Proceeds") of a $1.7 billion loan facility (the "Loan Facility") arranged by TCIC, TCI and VII Cable. Following these transfers, VII Cable retained cable assets with a value at closing of approximately $2.326 billion and the obligation to repay the Loan Proceeds borrowed under the Loan Facility. Neither Viacom nor New Viacom Sub has any obligation with respect to repayment of the Loan Proceeds. (continued) TCI COMMUNICATIONS, INC. AND SUBSIDIARIES Notes to Condensed Pro forma Combined Financial Statements Prior to the consummation of the VII Cable Acquisition, Viacom offered to the holders of shares of Viacom Class A Common Stock and Viacom Class B Common Stock (collectively, "Viacom Common Stock") the opportunity to exchange (the "Exchange Offer") a portion of their shares of Viacom Common Stock for shares of Class A Common Stock, par value $100 per share, of VII Cable ("VII Cable Class A Stock"). Immediately following the completion of the Exchange Offer, TCIC acquired from VII Cable shares of VII Cable Class B Common Stock (the "Share Issuance") in exchange for $350 million (which was used to reduce VII Cable's obligations under the Loan Facility). At the time of the Share Issuance, the VII Cable Class A Stock received by Viacom stockholders pursuant to the Exchange Offer automatically converted into 5% Class A Senior Cumulative Exchangeable Preferred Stock (the "Exchangeable Preferred Stock") of VII Cable with a stated value of $100 per share. The cost to acquire VII Cable was approximately $2.326 billion, consisting of the Loan Proceeds and the $626 million aggregate par value of the VII Cable Exchangeable Preferred Stock. The accompanying unaudited pro forma condensed combined statements of operations do not reflect potential cost savings attributable to (i) economics of scale which may be realized in connection with purchases of programming and equipment or (ii) consolidation of certain operating and administrative functions including the elimination of duplicative facilities and personnel. (3) Reflects the conveyance to New Viacom Sub of certain nonmaterial assets, liabilities and related results of operations of VII Cable, including for the year ended December 31, 1995, a pre-tax gain of $27 million from the sale of marketable securities and a provision for income taxes of $11 million. (4) Represents amortization of VII Cable's allocated excess purchase price, based upon a weighted average life of 40 years for franchise costs. The valuations and other studies which will provide the basis of the allocation of the cost to acquire VII Cable have not yet been completed and, consequently, the purchase accounting adjustments made in connection with the development of the unaudited condensed pro forma combined financial statements are preliminary. (5) Represents assumed additional interest expense (after taking into consideration interest expense reflected in the historical VII Cable operations) incurred by the Company on the borrowings of the Loan Proceeds. Solely for the purposes of this presentation, the Company has assumed an interest rate of 7.50% and 7.78% for the seven months ended July 31, 1996 and for the year ended December 31, 1995, respectively, based upon historical interest rates adjusted for terms of the Loan Facility. (6) Reflects a 5.0% cumulative annual dividend on the $626 million of VII Cable Exchangeable Preferred Stock included in minority share of losses of consolidated subsidiaries. (7) Reflects the estimated income tax effect of the pro forma adjustments. The effective income tax rate on a pro forma basis is adversely affected by the amortization of excess acquisition costs, which are assumed not to be deductible for tax purposes. -----END PRIVACY-ENHANCED MESSAGE-----