-----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, ISEsQNYqf3dxfKzLti/UvNKTcESl/U5xb4xh2tbsSizZuVmuUXWaTc3oyEbzSgc8 zySfYVD0E5nc3/gHdCeBCQ== 0001035704-99-000023.txt : 19990118 0001035704-99-000023.hdr.sgml : 19990118 ACCESSION NUMBER: 0001035704-99-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990115 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990115 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: SEC FILE NUMBER: 000-05550 FILM NUMBER: 99507252 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 FORM 8-K 1 UNITED STATES 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: January 15, 1999 Date of Earliest Event Reported: December 31, 1998 TCI COMMUNICATIONS, INC. ----------------------------------------------------- (Exact name of Registrant as specified in its charters) State of Delaware ---------------------------------------------- (State or other jurisdiction of incorporation) 0-20421 84-1260157 - ------------------------ ----------------------------------- (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 2 Item 2. Disposition of Assets Effective December 31, 1998, TCI Communications, Inc. ("TCIC") and Time Warner, Inc., Time Warner Entertainment Company, L.P. and Time Warner Entertainment Advance/Newhouse (collectively, "Time Warner") formed a 50-50 joint venture (the "Joint Venture"). TCIC and Time Warner each contributed cable television systems in Houston, Texas and portions of Southern Texas serving approximately 540,000 customers to the Joint Venture. In addition, the parties to the Joint Venture transferred debt aggregating $1.3 billion to the Joint Venture, of which $637 million was transferred by TCIC. The amount of debt transferred to the Joint Venture by each party was based on arm's-length negotiations between the parties. Time Warner will manage the Joint Venture. The press release announcing the formation of the Joint Venture is included as Exhibit 99.1 to this Current Report on Form 8-K. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Pro Forma Financial Information TCI Communications, Inc. and Subsidiaries: Condensed Pro Forma Balance Sheet, September 30, 1998 (unaudited) Condensed Pro Forma Statement of Operations, Nine months ended September 30, 1998 (unaudited) Condensed Pro Forma Statement of Operations, Year ended December 31, 1997 (unaudited) Notes to Condensed Pro Forma Financial Statements, September 30, 1998 (unaudited) (c) Exhibits (99.1) TCIC press release dated January 4, 1999 3 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: January 15, 1999 TELE-COMMUNICATIONS, INC. (Registrant) By: /s/ Stephen M. Brett ---------------------------------- Stephen M. Brett Executive Vice President 4 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Condensed Pro Forma Financial Statements September 30, 1998 (unaudited) The following unaudited condensed pro forma balance sheet of TCIC, dated as of September 30, 1998, assumes that the Joint Venture (see note 1) had occurred as of such date. The following unaudited condensed pro forma statements of operations of TCIC for the nine months ended September 30, 1998 and the year ended December 31, 1997 assume that the Joint Venture, the IP-VI Transfer (see note 2) and the Cablevision Transaction (see note 3) had occurred as of January 1, 1997. The unaudited pro forma results do not purport to be indicative of the results of operations that would have been obtained if the Joint Venture, the IP-VI Transfer and the Cablevision Transaction had occurred as of January 1, 1997. These condensed pro forma financial statements of TCIC should be read in conjunction with the historical financial statements and the related notes thereto of TCIC. 1 5 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Condensed Pro Forma Balance Sheet (unaudited)
September 30, 1998 ------------------------------------------------------ TCIC Contribution to TCIC historical Joint Venture (1)(4) pro forma Assets ---------- --------------------- --------- amounts in millions Restricted cash, receivables and other current assets $ 814 (13) 801 Investment in Cablevision Systems Corporation ("CSC"), accounted for under the equity method 574 -- 574 Investments in other affiliates accounted for under the equity method and related receivables 588 90 678 Property and equipment, net of accumulated depreciation 6,309 (267) 6,042 Franchise costs, intangibles and other assets, net of amortization 12,809 (465) 12,344 -------- -------- -------- $ 21,094 (655) 20,439 ======== ======== ======== Liabilities and Stockholders' Equity Payables and accruals $ 1,236 (18) 1,218 Debt 12,244 (637) 11,607 Deferred income taxes 5,355 -- 5,355 Other liabilities 284 -- 284 -------- -------- -------- Total liabilities 19,119 (655) 18,464 -------- -------- -------- Minority interests 668 -- 668 Redeemable preferred stock 232 -- 232 Company-obligated mandatorily redeem- able preferred securities of subsidiary trusts holding solely subordinated debt securities of the Company 1,500 -- 1,500 Common stockholder's deficit: Class A common stock 1 -- 1 Class B common stock -- -- -- Additional paid-in capital 1,800 -- 1,800 Accumulated other comprehensive earnings 44 -- 44 Accumulated deficit (956) -- (956) Investment in Tele-Communications, Inc. ("TCI"), at cost (1,144) -- (1,144) Due from related parties (170) -- (170) -------- -------- -------- (425) -- (425) -------- -------- -------- $ 21,094 (655) 20,439 ======== ======== ========
See accompanying notes to unaudited condensed pro forma financial statements. 2 6 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Condensed Pro Forma Statement of Operations (unaudited)
Nine months ended September 30, 1998 -------------------------------------------------------------------------------- IP-VI Transaction (2) Cablevision Transaction (3) ------------------------------- ------------------------------- Contribution of Kentucky Contribution of TCIC Systems to Pro forma NJ/NY Systems Pro forma historical IP-VI adjustments To New CSC adjustments ---------- ---------- ----------- --------------- ----------- amounts in millions, except per share amounts Revenue $ 4,429 (64) -- (80) -- Operating, selling, general and administrative expenses, Year 2000 costs and stock compensation (2,698) 40 -- 43 -- Depreciation and amortization (1,079) 15 -- 14 -- ---------- ------------ ---------- ------------- ---------- Operating income 652 (9) -- (23) -- Interest expense (728) 21 -- 7 -- Share of losses of CSC (89) -- -- -- (41) (6) Share of losses of other affiliates, net (3) -- (3) (5) -- -- Other income, net 314 (2) -- -- -- ---------- ------------ ---------- ------------- ---------- Earnings before income taxes 146 10 (3) (16) (41) Income tax expense (145) (4) 1 (8) 4 16 (8) ---------- ------------ ---------- ------------- ---------- Net earnings (loss) 1 6 (2) (12) (25) Dividend requirements on preferred stocks (7) -- -- -- -- ---------- ------------ ---------- ------------- ---------- Net loss attributable to common stockholder $ (6) 6 (2) (12) (25) ========== ============ ========== ============= ==========
Nine months ended September 30, 1998 --------------------------------------------- Joint Venture (1) ------------------------------- Contribution to Pro forma TCIC Joint Venture (4) adjustments pro forma ----------------- ----------- --------- amounts in millions, except per share amounts Revenue (191) -- 4,094 Operating, selling, general and administrative expenses, Year 2000 costs and stock compensation 104 -- (2,511) Depreciation and amortization 40 -- (1,010) ------------- ----------- ---------- Operating income (47) -- 573 Interest expense 36 -- (664) Share of losses of CSC -- -- (130) Share of losses of other affiliates, net -- 6 (7) -- Other income, net -- -- 312 ------------- ----------- ---------- Earnings before income taxes (11) 6 91 Income tax expense 4 (2) (8) (126) ------------- ----------- ---------- Net earnings (loss) (7) 4 (35) Dividend requirements on preferred stocks -- -- (7) ------------- ----------- ---------- Net loss attributable to common stockholder (7) 4 (42) ============= =========== ==========-
See accompanying notes to unaudited condensed pro forma financial statements. 3 7 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Condensed Pro Forma Statement of Operations (unaudited)
Year ended December 31, 1997 -------------------------------------------------------------------------------- IP-VI Transaction (2) Cablevision Transaction (3) ------------------------------- ------------------------------- Contribution of Kentucky Contribution of TCIC Systems to Pro forma NJ/NY Systems Pro forma historical IP-VI adjustments To New CSC adjustments ---------- ---------- ----------- --------------- ----------- amounts in millions, except per share amounts Revenue $ 6,167 (185) -- (428) -- Operating, cost of sales, selling, general and administrative expenses, stock compensation and restructuring charges (3,546) 102 -- 231 -- Depreciation and amortization (1,393) 39 -- 75 -- ---------- ------------- ---------- ------------- -------- Operating income 1,228 (44) -- (122) -- Interest expense (1,064) 57 -- 39 -- Share of losses of CSC -- -- -- -- (182) (6) Share of losses of other affiliates, net (54) 1 (3) (5) -- -- Other expense, net (209) 2 -- 1 -- ---------- ------------- ---------- ------------- -------- Loss before income taxes (99) 16 (3) (82) (182) Income tax benefit 39 (7) 1 (8) 20 71 (8) ---------- ------------- ---------- ------------- -------- Net loss (60) 9 (2) (62) (111) Dividend requirements on preferred stocks (10) -- -- -- -- ---------- ------------- ---------- ------------- -------- Net loss attributable to common stockholder $ (70) 9 (2) (62) (111) ========== ============= ========== ============== =========
Year ended December 31, 1997 --------------------------------------------- Joint Venture (1) ------------------------------- Contribution to Pro forma TCIC Joint Venture (4) adjustments pro forma ----------------- ----------- --------- amounts in millions, except per share amounts Revenue (244) -- 5,310 Operating, cost of sales, selling, general and administrative expenses, stock compensation and restructuring charges 134 -- (3,079) Depreciation and amortization 45 -- (1,234) ------------- ---------- ------------ Operating income (65) -- 997 Interest expense 48 -- (920) Share of losses of CSC -- -- (182) Share of losses of other affiliates, net -- 9 (7) (47) Other expense, net -- -- (206) ------------- ---------- ------------ Loss before income taxes (17) 9 (358) Income tax benefit 7 (4) (8) 127 ------------- ---------- ------------ Net loss (10) 5 (231) Dividend requirements on preferred stocks -- -- (10) ------------- ---------- ------------ Net loss attributable to common stockholder (10) 5 (241) ============= ========== ============
See accompanying notes to unaudited condensed pro forma financial statements. 4 8 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Notes to Condensed Pro Forma Financial Statements September 30, 1998 (unaudited) (1) Effective December 31, 1998, TCI Communications, Inc. ("TCIC") and Time Warner, Inc., Time Warner Entertainment Company, L.P. and Time Warner Entertainment Advance/Newhouse (collectively, "Time Warner") formed a 50-50 joint venture (the "Joint Venture"). TCIC and Time Warner each contributed cable television systems in Houston, Texas and portions of Southern Texas serving approximately 540,000 customers to the Joint Venture. In addition, the parties to the Joint Venture transferred debt aggregating $1.3 billion to the Joint Venture, of which $637 million was transferred by TCIC. The amount of debt transferred to the Joint Venture by each party was based on arm's-length negotiations between the parties. Time Warner will manage the Joint Venture. The accompanying condensed pro forma financial statements reflect the effects of TCIC's contribution to the Joint Venture. The effect on TCIC of Time Warner's contribution to the Joint Venture was not significant to TCIC pursuant to Rule 3-05 of Regulation S-X, accordingly, the accompanying condensed pro forma financial statements do not reflect the effects of Time Warner's contribution to the Joint Venture. (2) On April 30, 1998 (the "InterMedia Closing Date"), TCI IP-VI, LLC ("TCI LLC"), a limited liability company wholly-owned by subsidiaries of TCI, transferred to InterMedia Capital Partners VI, L.P. ("IP-VI"), a Delaware limited partnership, and certain of its affiliates, cable television systems owned and operated by TCIC serving, as of March 31, 1998, approximately 435,000 basic customers. The transfer (the "IP-VI Transfer") was completed pursuant to the terms of a Contribution Agreement dated as of October 30, 1997, by and among TCI TKR of Southern Kentucky, Inc., TCI TKR of Northern Kentucky, Inc., TCI TKR of Jefferson County, Inc. TCI Cablevision of Kentucky, Inc., TCI Cablevision of North Central Kentucky, Inc., TCI of North Central Kentucky, Inc., TCI of Lexington, Inc. and TCI of Radcliff, Inc. (collectively the "TCI Parties") and InterMedia Capital Management VI, L.P., as amended. The systems transferred were located in and around the following Kentucky communities: Dawson Springs, Providence, St. Charles, Caldwell County, Hopkins County, Webster County, Shepherdsville, Danville, Lexington, Radcliff, Warren County, Bowling Green, Oakland, Plum Springs, Smith's Grove, Woodburn, Louisville, Boone County, Campbell County, Kenton County and Newport (the "Kentucky Systems"). IP-VI and its affiliates also assumed rights and obligations under a programming rights agreement with Satellite Services, Inc., an affiliate of TCIC. TCI LLC received a 49.005% limited partnership interest in IP-VI, and IP-VI assumed approximately $812 million in debt associated with the Kentucky Systems. Leo J. Hindery, Jr., the President and Chief Executive Officer of TCIC, and William R. Fitzgerald, an Executive Vice President of TCIC, are on the advisory board of IP-VI. Mr. Hindery also owns a .495% limited partnership interest in IP-VI. Additionally, the TCI Parties, TCI LLC and CVC Keep Well LLC, an affiliate of TCIC, have agreed to take certain steps to support compliance by subsidiaries of IP-VI with their payment obligations under senior credit facilities, up to a total contingent commitment of approximately $490 million. 5 9 TCI COMMUNICATIONS, INC. AND SUBSIDIARIES (A Subsidiary of Tele-Communications, Inc.) Notes to Condensed Pro Forma Financial Statements September 30, 1998 (unaudited) (3) On March 4, 1998 (the "CSC Closing Date"), TCIC transferred to CSC Parent Corporation, a Delaware corporation (to be known immediately after the closing as Cablevision Systems Corporation) ("New CSC"), cable television systems owned and operated by TCIC serving approximately 830,000 subscribers, as of January 31, 1998. The systems transferred were located in Union, Mercer, Monmouth, Somerest, Middlesex, Morris, Sussex, Bergen and Passaic counties in New Jersey and in Rockland, Suffolk and Westchester counties in New York (the "NJ/NY Systems"). In addition to its ownership interest in the NJ/NY Systems, New CSC will hold all of the common stock of the former Cablevision Systems Corporation (to be known immediately after the closing as CSC Holdings, Inc.). The NJ/NY Systems were transferred either directly by the transfer of the assets of such cable systems or indirectly by the transfer of partnership interests or capital stock in the entities owning such cable systems, in exchange for approximately 48.9 million shares of Class A common stock, par value $0.01 per share, of New CSC representing an approximate 33% common equity ownership interest in New CSC and assumption by New CSC of certain liabilities, including approximately $669 million in debt, relating to the cable television systems transferred by TCIC to New CSC. Such exchange was made pursuant to the terms of the Contribution and Merger Agreement dated as of June 6, 1997, as amended and restated by the Amended and Restated Contribution and Merger Agreement dated as of June 6, 1997, by and among TCIC, New CSC, and certain affiliates of New CSC (the "Cablevision Transaction"). The amount of the consideration payable in the Cablevision Transaction was based on arm's-length negotiations between the parties. (4) Represents TCIC's contribution of cable television systems to the Joint Venture and the transfer of $637 million of debt to the Joint Venture. (5) Represents TCIC's proportionate share of IP-VI's pro forma losses for the applicable period up to the Intermedia Closing Date, including the amortization, over an estimated 20 year life, of the difference between the recorded value of TCIC's investment in IP-VI and TCIC's proportionate share of IP-VI's pro forma net assets. (6) Represents TCIC's proportionate share of New CSC's pro forma losses for the applicable period, up to the CSC Closing Date, including the amortization, over an estimated 10 year life, of the difference between the fair value of consideration received and TCI's proportionate share of New CSC's net deficiency. (7) Represents TCIC's proportionate share of losses for the cable television systems contributed and the debt transferred by TCIC to the Joint Venture. TCIC has not included in this amount the proportionate share of losses for the cable television systems contributed and the debt transferred by Time Warner to the Joint Venture, as such contribution was not significant to TCIC pursuant to Rule 3-05 of Regulation S-X. (8) Represents the estimated tax effect of the pro forma adjustments, assuming an effective tax rate of 39%. 6 10 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- (99.1) TCIC press release dated January 4, 1999
EX-99.1 2 TCIC PRESS RELEASE DATED JANUARY 4, 1999 1 EXHIBIT (99.1) FOR IMMEDIATE RELEASE January 4, 1999 Contacts: TCI Media Relations, Katina Vlahadamis or LaRae Marsik (303) 267-5273 Time Warner Cable, Michael Luftman (203) 328-0613 TCIC AND TIME WARNER FORM TEXAS PARTNERSHIP SERVING APPROXIMATELY ONE MILLION CUSTOMERS ENGLEWOOD, CO/STAMFORD, CT - TCI Communications, Inc. (TCIC), the cable television systems arm of Tele-Communications, Inc. (TCI), and Time Warner Inc., Time Warner Entertainment Company, L.P. and Time Warner Entertainment Advance/Newhouse (collectively, Time Warner) announced today that they have successfully formed a 50-50 joint venture that serves over one million customers in the Houston, Texas area and portions of Southern Texas. TCIC contributed its Houston area systems and systems in Southern Texas serving approximately 540,000 customers to the joint venture, while Time Warner contributed systems in Houston, El Paso, and certain systems in Southern Texas serving approximately 540,000 customers. Time Warner will manage the combined properties. A few small systems expected to be part of the transaction were not included in this closing pending final regulatory approvals. The transaction will result in a reduction of approximately $640 million of debt currently held by Time Warner Inc. that will be transferred to the joint venture. TCI's debt will be reduced by approximately $640 million that will also be transferred to the joint venture. Additional terms of the agreement were not disclosed. Tele-Communications, Inc. is traded through the TCI Group, the TCI Ventures Group and the Liberty Media Group common stocks. The Series A and Series B TCI Group common stocks are traded on the National Market tier of the Nasdaq Stock Market under the symbols of TCOMA and TCOMB, respectively. Time Warner Cable serves 12 million customers across the United States with 80 percent of them in systems of 100,000 subscribers or more. It is a division of Time Warner Entertainment. -----END PRIVACY-ENHANCED MESSAGE-----