<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 September 30, 1998
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)
Balance Sheets
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
-------------------- -------------------
Assets amounts in thousands
- ------
<S> <C> <C>
Cash and cash equivalents (note 3) $ 7,554 7,310
Amounts due from related parties (note 4) -- 121
Funds held in escrow (note 5) 2,025 2,025
-------------------- -------------------
$ 9,579 9,456
==================== ===================
Liabilities and Partners' Equity
- --------------------------------
Accrued liabilities $ 191 232
Partners' equity:
General partner 1,951 1,910
Limited partners 7,437 7,314
-------------------- -------------------
Total partners' equity 9,388 9,224
-------------------- -------------------
Contingency (note 5)
$ 9,579 9,456
==================== ===================
</TABLE>
See accompanying notes to financial statements.
I-1
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
Statements of Operations
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
----------------------------------- ---------------------------------
1998 1997 1998 1997
----------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
General and administrative expenses $ (80) (51) (171) (176)
Interest income 106 98 307 367
Reversal of excess accrued liabilities -- 117 28 117
----------------- --------------- ---------------- --------------
Net earnings $ 26 164 164 308
================= =============== ================ ==============
Net earnings per limited partnership
unit ("Unit") $ 0.16 1.02 1.02 1.92
================= =============== ================ ==============
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)
Statement of Partners' Equity
Nine months ended September 30, 1998
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
General Limited
partner partners Total
--------------- --------------- ------------
<S> <C> <C> <C>
amounts in thousands
Balance at January 1, 1998 $ 1,910 7,314 9,224
Net earnings 41 123 164
--------------- --------------- ------------
Balance at September 30, 1998 $ 1,951 7,437 9,388
=============== =============== ============
</TABLE>
See accompanying notes to financial statements.
I-3
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
Statements of Cash Flows
(unaudited)
(see note 1)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-----------------------------------
1998 1997
----------------- ---------------
<S> <C> <C>
amounts in thousands
(see note 3)
Cash flows from operating activities:
Net earnings $ 164 308
Adjustment to reconcile net earnings to net cash provided by
operating activities:
Reversal of excess accrued liabilities (28) (117)
Changes in operating assets and liabilities:
Net change in accounts payable, accrued liabilities and
amounts due to/from related parties 108 2,564
----------------- ---------------
Net cash provided by operating activities 244 2,755
----------------- ---------------
Cash flows from investing activities -- --
----------------- ---------------
Cash flow from financing activities:
Change in cash overdraft -- 61
----------------- ---------------
Net change in cash and cash equivalents 244 2,816
Cash and cash equivalents:
Beginning of period 7,310 4,216
----------------- ---------------
End of period $ 7,554 7,032
================= ===============
</TABLE>
See accompanying notes to financial statements.
I-4
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
Notes to Financial Statements
September 30, 1998
(unaudited)
(1) Basis of Financial Statement Preparation
----------------------------------------
The accompanying unaudited financial statements include the accounts of
American Cable TV Investors 4, Ltd. ("ACT 4" or the "Partnership"). ACT 4
was formed for the purpose of acquiring, developing and operating cable
television systems. During 1995 and 1996, ACT 4 sold all of its cable
television assets. Accordingly, 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 note 5.
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 September 30, 1998 and its results of operations
for the nine months ended September 30, 1998 and 1997. 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, 1997
Annual Report on Form 10-K.
(2) 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. Payback occurred in 1996.
Accordingly, the limited partners' share of earnings for the nine months
ended September 30, 1998 and 1997, have been allocated using the post-
Payback percentages set forth above.
Earnings per Unit is calculated by dividing the net earnings attributable
to the limited partners by the number of Units outstanding during the
period.
(continued)
I-5
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
Notes to Financial Statements
(3) Supplemental Disclosure of Cash Flow Information
------------------------------------------------
The Partnership considers investments with maturities of three months or
less to be cash equivalents. At September 30, 1998, $7,366,000 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.
(4) 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 $27,000 for
each of the nine months ended September 30, 1998 and 1997.
Amounts due from related parties bear interest at variable rates (5.5% at
September 30, 1998). Interest earned on amounts due from TCI and its
affiliates was not significant for the nine months ended September 30,
1998. During the nine months ended September 30, 1997, interest earned on
amounts due from TCI and its affiliates was $163,000.
(5) 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 by ACT 4 in connection with the sale of the Chino
System. The Partnership is working with Citizens-Century to resolve such
claim. However, the Partnership is unable to determine the ultimate cost
of such claim, if any, or when such claim will be resolved. 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-6
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
Management's Discussion and Analysis of
- ---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
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 note 5 to the accompanying financial statements. The
Partnership's results of operations for the three and nine month periods ended
September 30, 1998 and 1997 include (i) general and administrative ("G&A")
expenses and (ii) interest income. The Partnership's G&A expenses are comprised
primarily of costs associated with the administration of the Partnership. The
Partnership's results of operations for the nine months ended September 30, 1998
and 1997 also reflect the reversal of certain amounts which were accrued in
prior periods.
Interest income increased $8,000 and decreased $60,000 during the three and
nine month periods ended September 30, 1998, respectively, as compared to the
corresponding prior year periods. Such changes are primarily due to fluctuations
in the average balance of the Partnership's interest-bearing 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 by ACT 4 in connection with the sale of the Chino System. The
Partnership is working with Citizens-Century to resolve such claim. However, the
Partnership is unable to determine the ultimate cost of such claim, if any, or
when such claim will be resolved. 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-7
<PAGE>
AMERICAN CABLE TV INVESTORS 4, LTD.
(A Colorado Limited Partnership)
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 September 30, 1998
- 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: October 30, 1998 By: /s/ Ann M. Koets
-------------------------------
Ann M. Koets
Vice President
II-2
<PAGE>
EXHIBIT INDEX
-------------
The following exhibits are filed herewith or are incorporated by reference
herein (according to the number assigned to them in Item 601 of Regulation S-K)
as noted:
(27) American Cable TV Investors 4, LTD. Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,554
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,579
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,388
<TOTAL-LIABILITY-AND-EQUITY> 9,579
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 164
<INCOME-TAX> 0
<INCOME-CONTINUING> 164
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 164
<EPS-PRIMARY> 1.02<F1>
<EPS-DILUTED> 0
<FN>
<F1>EPS-PRIMARY REPRESENTS NET EARNINGS PER LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
