<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
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 No. 0-15745
AMERICAN CABLE TV INVESTORS 4, LTD.
--------------------------------------------------------
(Exact name of Registrant as specified in its charter)
State of Colorado 84-1013221
- ------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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
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,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Balance Sheets
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
Assets amounts in thousands
- ------
<S> <C> <C>
Cash and cash equivalents (note 4) $ 6,873 4,216
Amounts due from related parties (note 5) 132 2,717
Funds held in escrow (note 6) 2,025 2,025
------- ---------
$ 9,030 8,958
======= =========
Liabilities and Partners' Equity
- --------------------------------
Accounts payable $ 9 9
Accrued expenses 4 76
------- ---------
Total liabilities 13 85
------- ---------
Partners' equity:
General partner 1,858 1,822
Limited partners 7,159 7,051
------- ---------
Total partners' equity 9,017 8,873
------- ---------
Contingency (note 6)
$ 9,030 8,958
======= =========
</TABLE>
See accompanying notes to financial statements.
I-1
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Statements of Operations
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
-------- -------- ------- -------
amounts in thousands,
except unit amounts
<S> <C> <C> <C> <C>
General and administrative expenses $ (37) (7) (125) (132)
Gain on sale of cable television
system, net of $510,000 of costs
and expenses related to 1995
operations (note 2) -- -- -- 99,700
Interest expense -- -- -- (10)
Interest income 128 171 269 424
Minority interest's share of losses
of Newport News Cablevision, Ltd.
("Newport News") -- (8) -- (39,915)
-------- ------- ------- -------
Net earnings $ 91 156 144 60,067
======== ======= ======= =======
Net earnings per limited partnership
unit $ .57 0.97 .90 421.02
======== ======= ======= =======
Limited partnership units outstanding 120,005 120,005 120,005 120,005
======== ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
I-2
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Statement of Partners' Equity
Six months ended June 30, 1997
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
General Limited
partner partners Total
------- -------- -------
amounts in thousands
<S> <C> <C> <C>
Balance at January 1, 1997 $1,822 7,051 8,873
Net earnings 36 108 144
------ ------ ------
Balance at June 30, 1997 $1,858 7,159 9,017
====== ====== ======
</TABLE>
See accompanying notes to financial statements.
I-3
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Statements of Cash Flows
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------
1997 1996
--------- ---------
amounts in thousands
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 144 60,067
Adjustments to reconcile net earnings to net
cash provided by (used in) operating
activities:
Gain on sale of cable television system -- (100,210)
Minority interest's share of earnings of
Newport News -- 39,915
Changes in operating assets and
liabilities, net of effects from sale
of cable television system:
Net change in receivables, prepaid
expenses, and other assets -- 863
Net change in accounts payable,
accrued expenses, subscriber
advance payments and converter
deposits, and amounts due
to/from related parties 2,513 (9,431)
------- --------
Net cash provided by (used in)
operating activities 2,657 (8,796)
------- --------
Cash flows from investing activities:
Capital expended for property and equipment -- (36)
Proceeds from sale of cable television system,
net of disposition fees paid -- 113,218
------- --------
Net cash provided by investing
activities -- 113,182
------- --------
Cash flows from financing activities:
Repayments of debt -- (24,255)
Distributions to partners -- (88,609)
Distribution to minority owners of Newport
News -- (33,696)
Change in cash overdraft -- (5,930)
------- --------
Net cash used in financing
activities -- (152,490)
------- --------
Net increase (decrease) in cash and
cash equivalents 2,657 (48,104)
Cash and cash equivalents:
Beginning of period 4,216 48,104
------- --------
End of period $ 6,873 --
======= ========
</TABLE>
See accompanying notes to financial statements.
I-4
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Notes to Financial Statements
June 30, 1997
(unaudited)
(1) Basis of Financial Statement Preparation
----------------------------------------
The accompanying unaudited financial statements include the
accounts of American Cable TV Investors 4, Ltd. ("ACT 4")
and Newport News prior to its liquidation. Newport News was
formed for the purpose of acquiring, developing and
operating the cable television system located in and around
Newport News, Virginia (the "Newport News System"). ACT 4
and Newport News are collectively referred to herein as the
Partnership. As a result of the sale of the Newport News
Systems, Newport News was liquidated during the fourth
quarter of 1996. ACT 4 had a 60% ownership interest in
Newport News. American Cable TV Investors 5, Ltd. ("ACT
5"), an affiliate, owned the 40% minority interest in
Newport News.
The Partnership is no longer engaged in the cable television
business and is currently seeking to make a final
determination of its liabilities so that liquidating
distributions can be made in connection with its
dissolution. See notes 2 and 6.
TCI Cablevision Associates, Inc. ("Cablevision") is the
managing agent of the Partnership and owns 100% of the
common stock of a general partner of the general partner of
ACT 4. Cablevision is an indirect majority-owned subsidiary
of Tele-Communications, Inc. ("TCI").
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
The accompanying financial statements are unaudited. In the
opinion of management, all adjustments (consisting only of
normal recurring accruals) have been made which are
necessary to present fairly the financial position of the
Partnership as of June 30, 1997 and its results of
operations for the six months ended June 30, 1997 and 1996.
The results of operations for any interim period are not
necessarily indicative of the results for the entire year.
These financial statements should be read in conjunction
with the financial statements and related notes thereto
included in ACT 4's December 31, 1996 Annual Report on Form
10-K.
(continued)
I-5
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Notes to Financial Statements
(2) Sales Transaction
-----------------
The Newport News System was sold on January 1, 1996 to Cox
Communications Rhode Island, Inc. ("Cox"), an unaffiliated
third party, for cash proceeds of $121,886,000 (the "Newport
News Sale"). Pursuant to the terms of the sale agreement,
$5,000,000 of the sales price was placed in escrow (the
"Newport News Escrow") and was subject to any indemnifiable
claims made by Cox through September 27, 1996. During the
fourth quarter of 1996, the Newport News Escrow, plus
accrued interest of $170,000, was released to Newport News.
The Partnership had a 60% ownership interest in Newport
News. Accordingly, ACT 4 received $53,684,000 of the net
cash proceeds (after satisfaction of transaction costs and
Newport News' liabilities) from the Newport News Sale in
1996.
The gain on the Newport News Sale has been reduced by
$510,000 to reflect certain of Newport News' operating costs
and expenses which were incurred in 1995 but which were
reflected in the 1996 financial records of Newport News.
The Newport News Sale was approved by the Limited Partners
of ACT 4 at a special meeting that occurred on June 20,
1995.
In connection with the Newport News Sale, Newport News used
most of the cash proceeds to (i) pay a disposition fee of
$3,668,000 ($2,751,000 to Cablevision and $917,000 to
Presidio Cable IV Corp. ("PCC")), (ii) repay debt and
related accrued interest of $24,306,000 and (iii) make cash
distributions to ACT 4 and ACT 5 of $53,684,000 and
$35,789,000, respectively. The Partnership used proceeds
from the Newport News Sale and previous sales transactions
to make initial distributions to its general and limited
partners of $7,606,000 and $81,003,000 ($675 per Unit),
respectively, in January 1996.
(3) Allocation of Net Earnings and Net Losses
-----------------------------------------
Pursuant to ACT 4's limited partnership agreement, net
earnings and net losses of ACT 4 are to be allocated 1% to
the general partners and 99% to the limited partners until
the limited partners have received cumulative distributions
equal to their original capital contributions ("Payback").
After the limited partners have received distributions equal
to Payback, the allocations of net earnings and net losses
shall be 25% to the general partner and 75% to the limited
partners.
Earnings per limited partnership unit is calculated by
dividing the net earnings attributable to the limited
partners by the number of limited partnership units
outstanding during the period. ACT 4's aforementioned
January 1996 distributions allowed limited partners to
achieve Payback. As such, Payback was deemed to have
occurred in connection with the consummation of the Newport
News Sale. Accordingly, the limited partners' share of
earnings for the six months ended June 30, 1997 have been
allocated using the post-Payback percentages set forth
above. The limited partners' share of earnings for the six
months ended June 30, 1996 includes $22,578,000 allocated
prior to achieving Payback and $27,946,000 allocated after
achieving Payback.
(continued)
I-6
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Notes to Financial Statements
(4) Supplemental Disclosure of Cash Flow Information
------------------------------------------------
The Partnership considers investments with initial
maturities of six months or less to be cash equivalents. At
June 30, 1997, $6,873,000 of the Partnership's cash and cash
equivalents was invested in money market funds.
The Partnership is exposed to credit loss in the event of
non-performance by the other parties to such financial
instruments. However, the Partnership does not anticipate
non-performance by the other parties.
Cash paid by the Partnership for interest was none and
$62,000 during the six months ended June 30, 1997 and 1996,
respectively.
(5) Transactions with Related Parties
---------------------------------
The Partnership reimburses Cablevision for direct out-of-
pocket and indirect expenses allocable to the Partnership
and for certain personnel employed on a full- or part-time
basis to perform accounting, marketing, technical or other
services. Such reimbursements amounted to $18,000 for each
of the six months ended June 30, 1997 and 1996.
The Partnership was obligated to pay a disposition fee equal
to 3% (2-1/4% to Cablevision and 3/4% to PCC) of the gross
proceeds from the sale of any of its cable television
systems. Such fee was due and payable at the time the cable
system was sold if the consideration received was greater
than its adjusted cost, as defined in ACT 4's limited
partnership agreement. Newport News paid disposition fees
of $3,668,000 during 1996 in connection with the Newport
News Sale. ACT 4's share of Newport News' aggregate
disposition fee was $2,201,000. See note 2.
Amounts due to related parties, which represent non-interest-
bearing payables to TCI and its affiliates, consist of the
net effect of cash advances and certain intercompany expense
allocations.
Amounts due from related parties bear interest at variable
rates (5.3% at June 30, 1997). During the six months ended
June 30, 1997 and 1996, interest earned on amounts due from
TCI and its affiliates was $162,000 and none, respectively.
(6) Contingency
-----------
In May 1996, Citizens Century Cable Television Venture
("Citizens-Century"), the buyer of the Partnership's cable
television system which was located in and around Chino,
California (the "Chino System"), filed a claim for a breach
of warranty in connection with the sale of the Chino System
by ACT 4. Citizens-Century has not submitted to ACT 4 an
estimate of the cost associated with such claim. The claim
for indemnification has had and will continue to have the
effect of delaying the release of funds held in escrow from
the sale of the Chino System (the "Chino Escrow"). In
addition, any successful indemnification claim will have the
effect of reducing the amount of the Chino Escrow ultimately
released to ACT 4.
I-7
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
Management's Discussion and Analysis of
- ---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
The following discussion should be read in conjunction with
the accompanying statements and ACT 4's December 31, 1996 Annual
Report on Form 10-K.
Material Changes in Results of Operations
-----------------------------------------
The Partnership is no longer engaged in the cable television
business and is currently seeking to make a final determination
of its liabilities so that liquidating distributions can be made
in connection with its dissolution. For additional information,
see notes 2 and 6 to the accompanying financial statements. The
Partnership's results of operations for the three and six months
ended June 30, 1997 and 1996 are primarily comprised of general
and administrative ("G&A") expenses, interest income and the
minority interest's share of Newport News' net earnings. The
Partnership's G&A expenses are comprised primarily of costs
associated with the administration of the Partnership. In
addition, the Partnership's results of operations for the six
months ended June 30, 1996 reflect the gain from the Newport News
Sale. The gain from the Newport News Sale has been reduced by
$510,000 to reflect certain of Newport News' operating costs and
expenses which were incurred in 1995 but which were reflected in
the 1996 financial records of Newport News. See note 2 to the
accompanying financial statements.
Interest income decreased $43,000 and $155,000 during the
three and six months ended June 30, 1997 as compared to the
corresponding prior year periods. Such decreases are primarily
due to a decrease in the average balance of the Partnership's
interest-earning assets (primarily cash and cash equivalents).
Material Changes in Financial Condition
---------------------------------------
ACT 4 anticipates that it will make liquidating
distributions in connection with its dissolution as soon as
possible following the final determination and satisfaction of
the Partnership's liabilities, but not prior to the release of
funds from the Chino Escrow. In May 1996, Citizens-Century filed
a claim for a breach of warranty in connection with the sale of
the Chino System. Citizens-Century has not submitted to ACT 4 an
estimate of the cost associated with such claim. The claim for
indemnification has had and will continue to have the effect of
delaying the release of funds from the Chino Escrow. In
addition, any successful indemnification claim will have the
effect of reducing the amount of the Chino Escrow ultimately
released to ACT 4.
I-8
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits:
(27 ) Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter ended
June 30, 1997 - none
II-1
<PAGE>
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.
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
By: IR-TCI PARTNERS IV, L.P.,
Its General Partner
By: TCI VENTURES FOUR, INC.,
A General Partner
Date: August 11, 1997 By: /s/ Gary K. Bracken
Gary K. Bracken
Vice President and Controller
(Principal Accounting Officer)
II-2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,873
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,030
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,017
<TOTAL-LIABILITY-AND-EQUITY> 9,030
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 144
<INCOME-TAX> 0
<INCOME-CONTINUING> 144
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144
<EPS-PRIMARY> .90<F1>
<EPS-DILUTED> 0
<FN>
<F1>EPS-PRIMARY REPRESENTS NET EARNINGS PER LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>
