<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number 0-5550
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
(Full title of the Plan)
TELE-COMMUNICATIONS, INC.
(Issuer of the securities held pursuant to the Plan)
5619 DTC Parkway
Englewood, Colorado 80111
(Address of its principal executive office)
<PAGE> 2
REQUIRED INFORMATION
<TABLE>
<CAPTION>
Financial Statements: Page No.
--------------------- --------
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available for Participant
Benefits - December 31, 1994 and 1993 2
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1994 3
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1993 4
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1992 5
Notes to Financial Statements
December 31, 1994, 1993 and 1992 6
Schedule 1 - Plan Investments 11
Schedule 2 - Reportable Transactions 12
Exhibit -
23-Consent of KPMG Peat Marwick LLP
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Plan Committee have duly caused this annual report to be signed
by the undersigned thereunto duly authorized.
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
(Name of Plan)
Date: June 28, 1995 /s/ Bernard W. Schotters
--------------------------------------
Bernard W. Schotters
Vice President - Finance
and Treasurer
and Member of Plan Committee
<PAGE> 3
Independent Auditors' Report
The Plan Committee
United Artists Entertainment
Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for
participant benefits of the United Artists Entertainment Employee Stock
Ownership Plan as of December 31, 1994 and 1993, and the related statements of
changes in net assets available for participant benefits for each of the years
in the three-year period ended December 31, 1994. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for participant benefits of the
United Artists Entertainment Employee Stock Ownership Plan as of December 31,
1994 and 1993, and the changes in net assets available for participant benefits
for each of the years in the three-year period ended December 31, 1994 in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of plan
investments and reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statements
of net assets available for participant benefits and the statements of changes
in net assets available for participant benefits is presented for purposes of
additional analysis rather than to present the net assets available for
participant benefits and changes in net assets available for participant
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
As discussed in note 1, the accompanying financial statements as of and for the
year ended December 31, 1993 have been restated to properly reflect
distributions.
KPMG Peat Marwick LLP
Denver, Colorado
June 23, 1995
1
<PAGE> 4
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for
Participant Benefits
December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993 *
--------------------------------- -------------------------------------
Income Income
Stock Accumulation Stock Accumulation
Fund Fund Total Fund Fund Total
---- ------------ ----- ----- ------------ -----
amounts in thousands
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 23 -- 23 23 3 26
Investments, at market value:
Tele-Communications, Inc. ("TCI"):
Class A common stock
(1,404,000 and 1,349,000
shares, with a cost
of $21,431,000 and
$23,227,000 at December 31,
1994 and 1993, respectively) 30,542 -- 30,542 46,039 -- 46,039
Other (note 3) -- 953 953 -- 1,135 1,135
-------- --- ------ ------ ----- ------
Net assets available for
participant benefits,
including $677,000 and
$727,000 of benefits
payable to participants
in 1994 and 1993,
respectively (note 6) $ 30,565 953 31,518 46,062 1,138 47,200
======== === ====== ====== ===== ======
</TABLE>
* Restated - see note 1.
See accompanying notes to financial statements.
2
<PAGE> 5
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
<TABLE>
<CAPTION>
Year ended December 31, 1994
-------------------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ------------ -----
amounts in thousands
<S> <C> <C> <C>
Net investment income (loss):
Net unrealized depreciation of TCI
common stock (note 4) $ (13,065) -- (13,065)
Realized gain on securities
transactions 118 -- 118
Interest income 2 1 3
--------- ----- --------
Total net investment
income (loss) (12,945) 1 (12,944)
--------- ----- --------
Proceeds received upon settlement
of claim (note 5) 398 -- 398
Distributions to participants (2,943) (63) (3,006)
Transfers to TCI Employee Stock
Purchase Plan (note 2) (7) (123) (130)
--------- ----- --------
Decrease in net assets available
for participant benefits (15,497) (185) (15,682)
Net assets available for participant
benefits:
Beginning of year* 46,062 1,138 47,200
--------- ----- --------
End of year $ 30,565 953 31,518
========= ===== ========
</TABLE>
* Restated - see note 1.
See accompanying notes to financial statements.
3
<PAGE> 6
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
<TABLE>
<CAPTION>
Year ended December 31, 1993*
-----------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ------------ -----
amounts in thousands
<S> <C> <C> <C>
Net investment income:
Net unrealized appreciation
of TCI common stock
(note 4) $ 13,659 -- 13,659
Realized gain on
securities transactions 421 -- 421
Interest income 24 84 108
-------- ----- ------
Total net investment income 14,104 84 14,188
Distributions to participants (3,105) (105) (3,210)
Transfers to TCI Employee
Stock Purchase Plan (note 2) -- (154) (154)
-------- ----- ------
Increase (decrease) in net assets
available for participant benefits 10,999 (175) 10,824
Net assets available for
participant benefits:
Beginning of year 35,063 1,313 36,376
-------- ----- ------
End of year $ 46,062 1,138 47,200
======== ===== ======
</TABLE>
* Restated - see note 1.
See accompanying notes to financial statements.
4
<PAGE> 7
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
<TABLE>
<CAPTION>
Year ended December 31, 1992
--------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ------------ -----
amounts in thousands
<S> <C> <C> <C>
Net investment income:
Net unrealized appreciation of TCI
common stock (note 4) $ 5,325 -- 5,325
Realized gain on securities
transactions 1,937 -- 1,937
Interest income 17 90 107
-------- ----- ------
Total net investment income 7,279 90 7,369
Distributions to participants (17,499) (580) (18,079)
-------- ----- -------
Decrease in net assets available
for participant benefits (10,220) (490) (10,710)
Net assets available for
participant benefits:
Beginning of year 45,283 1,803 47,086
-------- ----- -------
End of year $ 35,063 1,313 36,376
======== ===== =======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 8
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Years ended December 31, 1994, 1993 and 1992
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of the United Artists Entertainment
Employee Stock Ownership Plan (the "Plan") have been prepared on an
accrual basis and present the net assets available for participant
benefits and the changes in those net assets.
Restated 1993 Financial Statements
During 1994, it was determined that the Plan had previously reported its
1993 Stock Fund distributions incorrectly. Accordingly, the Plan has
restated its financial statements as of and for the year ended December
31, 1993. The effect of such restatement is an increase to investment in
TCI Class A common stock of $5,234,000 at December 31, 1993 and a decrease
to distributions to participants and net unrealized appreciation of TCI
common stock of $4,997,000 and $237,000, respectively for the year ended
December 31, 1993.
Management of the Trust Fund
On December 1, 1992, management of the Plan transferred from the
Prudential Bank and Trust Company to the Colorado National Bank
(collectively, the "Trustee").
The Trustee manages a trust fund on behalf of the Plan and has been
granted discretionary authority concerning purchases and sales of
investments. Beginning December 2, 1991, the Trustee could invest up to
100% of the assets of the Stock Fund in TCI's common stock or make other
investments as defined by the Plan, provided that the assets of the Stock
Fund are primarily invested in TCI's common stock. The assets of the
Income Accumulation Fund are invested in interest bearing accounts,
guaranteed income contracts, certificates of deposit, money market funds,
or mutual funds as deemed appropriate by the Plan Committee.
Cash Equivalents
The Plan considers investments with initial maturities of three months or
less to be cash equivalents.
(continued)
6
<PAGE> 9
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Investments
Investments are reflected in the accompanying financial statements at
current market value. Current market value represents the closing prices
for those securities having readily available market quotations and fair
value as determined by the Trustee with respect to other securities. The
values used for TCI Class A common stock were $21.75 and $30.25 per share
at December 31, 1994 and 1993, respectively. The foregoing prices are the
closing market prices of the common stock on those dates. Securities
transactions are accounted for on the trade date. Distributions are
reflected at current market value as of the last day of the calendar month
in which the event requiring distribution occurs. The cost basis of such
shares distributed is determined using the "first-in, first-out" method.
In conjunction with the TCI/UAE Merger (see note 2), the cost basis for
each share of stock then held by the Plan was adjusted to reflect the
merger conversion ratio of 1.02. Such adjustment effectively created a
new cost basis in the TCI Class A common stock of $15.26 per share. Any
gains or losses associated with the stock held by the Plan during 1994,
1993 and 1992 are calculated based on the adjusted cost basis.
Income Taxes
The Plan has received a determination letter from the Internal Revenue
Service dated February 14, 1989, which provides that the Plan, as amended,
is qualified under the provisions of Section 401(a) of the Internal
Revenue Code and is exempt from federal income taxation under Section 501
of such Code.
Plan Expenses
Administrative expenses of the Plan are paid by TCI. Accordingly, such
expenses are not reflected in the accompanying financial statements.
(2) Description of Plan
On December 2, 1991, United Artists Entertainment Company ("UAE") and TCI
Communications, Inc. (formerly Tele-Communications, Inc. or "Old TCI")
consummated a merger (the "TCI/UAE Merger") pursuant to which UAE became a
wholly-owned subsidiary of Old TCI. Under the TCI/UAE Merger agreement,
outstanding shares of UAE's Class A and Class B common stock, including
such shares of stock held by the Plan, were converted into Old TCI Class A
common stock on the basis of 1.02 Old TCI Class A shares for each share of
either class of UAE's common stock. Employees of UAE became employees of
Old TCI and, as such, are entitled to participate in Old TCI's benefit
plan, if eligible. The Plan became "inactive" as of the date of the
TCI/UAE Merger and all participants automatically became fully vested in
all employer contributions. Participant contributions were always fully
vested.
(continued)
7
<PAGE> 10
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
As of January 27, 1994, Old TCI and Liberty Media Corporation ("Liberty")
entered into a definitive agreement to combine the two companies (the
"TCI/Liberty Merger"). The transaction was consummated on August 4, 1994
and was structured as a tax free exchange of Class A and Class B shares of
both companies and preferred stock of Liberty for like shares of a newly
formed holding company, TCI/Liberty Holding Company. In connection with
the TCI/Liberty Merger, Old TCI changed its name to TCI Communications,
Inc. and TCI/Liberty Holding Company changed its name to
Tele-Communications, Inc. Old TCI shareholders received one share of TCI
for each of their shares. Liberty common shareholders received 0.975 of a
share of TCI for each of their common shares. Each share of Old TCI Class
A common stock held by the Plan was converted into one share of TCI Class
A common stock.
Annually participants are given an option to transfer their fund balance
into the TCI Employee Stock Purchase Plan. Such transfers aggregated
$7,000 in the Stock Fund and $123,000 in the Income Accumulation Fund
during 1994 and $154,000 in the Income Accumulation Fund during 1993.
The Plan enabled participating employees to acquire a proprietary interest
in UAE and provided benefits upon retirement. The Plan Committee is
responsible for the management and operation of the Plan.
Employees who had attained the age of 21 were eligible to participate
after one year of service. Participants, who were not defined as highly
compensated employees, could contribute, via payroll deductions, up to 12%
of their annual compensation either on a before-tax or after-tax basis or
a combination thereof. Highly compensated participants were limited to
10% of their annual compensation.
The participants had the choice to invest their contributions in either
the common stock of UAE ("Stock Fund") or an Income Accumulation Fund.
Lump-sum payments received by participants from other qualified plans
could also be deposited into the Plan as "rollover contributions". At
December 31, 1994, 2,239 participants had balances remaining in the Stock
Fund and 430 of those same participants had balances remaining in the
Income Accumulation Fund.
UAE contributed an amount up to 100% (75% for the Income Accumulation
Fund) of each participant's contributions limited to a maximum of 10% of
the participant's annual compensation. UAE's policy was to invest
employer contributions in UAE's common stock. Forfeitures (due to a
participant's termination prior to full vesting) were utilized to reduce
the Company's contributions. There were no contributions or forfeitures
made during 1994, 1993 and 1992 as the Plan was inactive.
Vested benefits become distributable if a participant dies, suffers total
disability, retires, or terminates employment for any other reason.
Benefits are generally payable in a single lump sum equal to the
participant's vested benefits or, upon participant termination, in not
more than five annual installments if the participant's vested benefits
exceed $3,500. Benefits are paid in cash or shares of TCI Class A common
stock.
The Plan provides for "hardship withdrawals" by participants under certain
circumstances, subject to approval by the Plan Committee.
(continued)
8
<PAGE> 11
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(3) Other Investments
Other investments (at market value) at December 31 are summarized as
follows:
<TABLE>
<CAPTION>
1994 1993
------------------------ -------------------------
Income Income
Stock Accumulation Stock Accumulation
Description Fund Fund Fund Fund
----------- ----- ------------ ----- ------------
amounts in thousands
<S> <C> <C> <C> <C>
Prudential Insurance
Company of America
Retirement Annuity $ -- 953 -- 1,135
===== === === =====
</TABLE>
The cost of the above investments approximates their market value at
December 31, 1994 and 1993, respectively.
(4) Change in Unrealized Appreciation (Depreciation)
Unrealized appreciation (depreciation) of TCI's Class A common stock for
the years ended December 31, 1994, 1993 and 1992, is calculated as
follows:
<TABLE>
<CAPTION>
1994 1993* 1992
---- ---- ----
amounts in thousands
<S> <C> <C> <C>
End of year $ 9,111 22,812 9,884
Change in unrealized appreciation
(depreciation) of distributions 636 731 (64)
Less beginning of year (22,812) (9,884) (4,495)
-------- ------ ------
Net unrealized appreciation
(depreciation) of TCI common stock $(13,065) 13,659 5,325
======== ====== ======
</TABLE>
* Restated - see note 1.
(5) Proceeds Received Upon Settlement of Claim
During 1994, the Plan received proceeds related to the settlement of a
claim by former employees of United Artists Theatre Circuit ("UATC") which
Old TCI acquired in the TCI/UAE Merger and subsequently sold in May 1992.
Such employees claimed they did not receive the proper stock valuation
price at the time of the UATC sale in 1992. TCI and UATC settled the
claim and contributed a total of $398,000 to the Plan for the benefit of
the former employees. Such contributions were subsequently distributed to
the former employees in 1994.
(continued)
9
<PAGE> 12
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Reconciliation to Form 5500
The following represents a reconciliation between the Statement of Net
Assets Available for Participant Benefits included in the accompanying
financial statements and the Form 5500 at December 31, 1994 (amounts in
thousands):
<TABLE>
<S> <C>
Net Assets Available for Participant Benefits -
financial statements $ 31,518
Benefits payable to participants (677)
--------
Net Assets Available for Participant Benefits -
Form 5500 $ 30,841
========
</TABLE>
The following represents a reconciliation between distributions to
participants in the Statement of Changes in Net Assets Available for
Participant Benefits included in the accompanying financial statements
and the Form 5500 for the year ended December 31, 1994 (amounts in
thousands):
<TABLE>
<S> <C>
Distributions to participants -
financial statements $ 3,006
Reversal of prior year benefits payable
to participants (727)
Benefits payable to participants 677
--------
Distributions to participants -
Form 5500 $ 2,956
========
</TABLE>
10
<PAGE> 13
Schedule 1
----------
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Plan Investments
December 31, 1994
<TABLE>
<CAPTION>
Shares
or principal
Investment securities amount Cost Market
- --------------------- ------------ ----- ------
amounts in thousands
<S> <C> <C> <C>
Common Stock
TCI Class A common stock 1,404 $ 21,431 $ 30,542
Other Investments
Prudential Insurance Company of
America Retirement Annuity 953 953 953
-------- --------
Total investments $ 22,384 $ 31,495
======== ========
</TABLE>
See accompanying independent auditors' report.
11
<PAGE> 14
Schedule 2
----------
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Reportable Transactions
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Purchases Sales
----------------- --------------------------------
Realized
Shares Cost Shares Proceeds Gain
------ ---- ------ -------- --------
amounts in thousands
<S> <C> <C> <C> <C> <C>
For the year ended:
December 31, 1994 - none
December 31, 1993 - none
December 31,1992:
Prudential Bank and Trust
Short-term U.S. Government
Funds 13,031 $13,031 13,958 $13,958 --
TCI Class A common stock -- -- 788 $13,863 $ 1,937
</TABLE>
See accompanying independent auditors' report.
12
<PAGE> 15
EXHIBIT INDEX
Shown below is the exhibit which is filed as part of this Report -
23-Consent of KPMG Peat Marwick LLP
<PAGE> 1
Exhibit 23
----------
Consent of Independent Auditors
The Plan Committee
United Artists Entertainment
Employee Stock Ownership Plan:
We consent to incorporation by reference in the Registration Statement (No.
33-29955) on Form S-8 of the United Artists Entertainment Stock Ownership Plan
of our report dated June 23, 1995, relating to the United Artists Entertainment
Employee Stock Ownership Plan statements of net assets available for participant
benefits as of December 31, 1994 and 1993, and the related statements of changes
in net assets of the United Artists Entertainment Employee Stock Ownership Plan
available for participant benefits for each of the years in the three-year
period ended December 31, 1994 and related schedules which report appears in the
December 31, 1994 Annual Report on Form 11-K of the United Artists Entertainment
Employee Stock Ownership Plan.
KPMG Peat Marwick LLP
Denver, Colorado
June 23, 1995
