<PAGE>
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, 1995
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 0-20421
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>
REQUIRED INFORMATION
- --------------------
Financial Statements: Page No.
-------------------- --------
Independent Auditors' Report 1
Statements of Net Assets Available for Participant
Benefits - December 31, 1995 and 1994 2
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1995 3
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1994 4
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1993 5
Notes to Financial Statements -
December 31, 1995, 1994 and 1993 6
Schedule 1 - Item 27a - Schedule of Assets Held for
Investment Purposes - December 31, 1995 11
Exhibit -
-------
23-Consent of KPMG Peat Marwick LLP
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: April 18, 1996 By /s/Gary K. Bracken
----------------------------------------------
Gary K. Bracken
Plan Administrator
and Member of Plan Committee
<PAGE>
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, 1995 and 1994, 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, 1995. 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,
1995 and 1994, and the changes in net assets available for participant benefits
for each of the years in the three-year period ended December 31, 1995 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 schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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
schedule 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.
KPMG Peat Marwick LLP
Denver, Colorado
April 5, 1996
1
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available
for Participant Benefits
December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------------------------- ----------------------------
Income Income
Stock Accumulation Stock Accumulation
Fund Fund Total Fund Fund Total
------- ------------ ------ ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C>
(amounts in thousands)
Cash and cash equivalents $ 24 -- 24 23 -- 23
Investments, at market value:
Tele-Communications, Inc. ("TCI")
(note 2):
Class A common stock
(1,404,000 shares, with a
cost of $21,431,000 at
December 31, 1994) -- -- 30,542 -- 30,542
Series A TCI Group common
stock (1,266,000 shares,
with a cost of $14,637,000
at December 31, 1995) 25,163 -- 25,163 -- -- --
Series A Liberty Media Group
common stock (315,000
shares, with a cost of
$4,811,000 at
December 31, 1995) 8,474 -- 8,474 -- -- --
Other (note 3) -- 973 973 -- 953 953
------- ------------ ------ ------ ------------ ------
Net assets available for
participant benefits,
including $512,000 and
$677,000 of benefits
payable to participants
in 1995 and 1994,
respectively (note 6) $33,661 973 34,634 30,565 953 31,518
======= ============ ====== ====== ============ ======
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
<TABLE>
<CAPTION>
Year ended December 31, 1995
---------------------------------
Income
Stock Accumulation
Fund Fund Total
--------- ------------- -------
<S> <C> <C> <C>
amounts in thousands
Net investment income:
Net unrealized appreciation
of TCI common stock (note 4) $ 6,196 -- 6,196
Realized gain on securities
transactions 111 -- 111
Interest income 2 95 97
------- ------------ ------
Total net investment income 6,309 95 6,404
------- ------------ ------
Proceeds received upon settlement
of claim (note 5) 14 -- 14
Distributions to participants (note 6) (3,227) (75) (3,302)
------- ------------ ------
Increase in net assets available
for participant benefits 3,096 20 3,116
Net assets available for
participant
benefits:
Beginning of year 30,565 953 31,518
------- ------------ ------
End of year $33,661 973 34,634
======= ============ ======
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
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
---------- ------------- --------
<S> <C> <C> <C>
amounts in thousands
Net investment income (loss):
Net unrealized depreciation of TCI
common stock (note 4) $(13,065) -- (13,065)
Realized gain on security 118 -- 118
transactions
Interest income 2 1 3
-------- ------------ -------
Total net investment income (12,945) 1 (12,944)
(loss)
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>
See accompanying notes to financial statements.
4
<PAGE>
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
--------- ------------- -------
<S> <C> <C> <C>
amounts in thousands
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 10,999 (175) 10,824
benefits
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>
See accompanying notes to financial statements.
5
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1995, 1994 and 1993
(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.
Trust Fund Managed by Colorado National Bank ("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.
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 Series A TCI Group common stock and TCI Series A
Liberty Media Group common stock were $19.88 and $26.88 per share,
respectively, at December 31, 1995. The value used for TCI Class A common
stock was $21.75 per share at December 31, 1994. 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
priced at current market value as of the last day of the calendar month
in which the event requiring distribution occurs.
Any appreciation (depreciation) and realized gains associated with the
stock held by the Plan during 1995, 1994 and 1993 are calculated based on
the cost basis of the shares on the applicable date. (See note 2)
(continued)
6
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
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. During 1994, the Plan was amended and restated to comply with the Tax
Reform Act of 1986. The Plan has applied for a new determination letter and
expects to maintain its qualified status.
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.
In conjunction with the TCI/UAE Merger, 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 for the
TCI Class A common stock of $15.26 per share.
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.
(continued)
7
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
On August 3, 1995, the stockholders of TCI authorized the Board of
Directors of TCI (the "Board") to issue a new class of stock ("Liberty
Group Stock") which is intended to reflect the separate performance of
TCI's business which produces and distributes cable television programming
services ("Liberty Media Group"). On August 10, 1995, TCI distributed one
hundred percent of the equity value attributable to the Liberty Media Group
(the "Distribution") to its security holders of record on August 4, 1995.
As a result of the Distribution, 329,597 shares of Series A Liberty Group
Stock were distributed to the Plan during 1995. Additionally, the
stockholders of TCI approved the redesignation of the previously authorized
TCI Class A common stock into Series A TCI Group common stock ("TCI Group
Stock").
In conjunction with the Distribution, the cost basis for each share of
stock then held by the Plan was reallocated between the TCI Group Stock and
the Series A Liberty Group Stock. Such reallocation effectively created a
revised cost basis for the TCI Group Stock of $11.56 and a cost basis for
the Series A Liberty Group Stock of $15.26.
Annually participants are given an option to transfer their fund balance
into the TCI Employee Stock Purchase Plan. There were no such transfers in
1995. Such transfers aggregated $7,000 from the Stock Fund during 1994, and
$123,000 and $154,000 from the Income Accumulation Fund during 1994 and
1993, respectively.
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.
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, 1995,
2,085 participants had balances remaining in the Stock Fund and 401 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 during 1995, 1994
and 1993 as the Plan was inactive.
(continued)
8
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
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 common stock at the
participant's or beneficiary's (as applicable) election.
The Plan provides for "hardship withdrawals" by participants under certain
circumstances, subject to approval by the Plan Committee.
(3) Other Investment
----------------
Other investment (at contract value) at December 31 is shown below:
<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
Income Income
Stock Accumulation Stock Accumulation
Description Fund Fund Fund Fund
----------- ----- ------------ ----- ------------
<S> <C> <C> <C> <C>
amounts in thousands
Prudential Insurance
Company of America
Retirement Annuity $-- 973 -- 953
==== ============ ===== ============
</TABLE>
The contract value of the above investment approximates its fair value at
December 31, 1995 and 1994.
(4) Change in Unrealized Appreciation (Depreciation)
------------------------------------------------
Unrealized appreciation (depreciation) of TCI securities for the years
ended December 31, 1995, 1994 and 1993, is calculated as follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- -------
<S> <C> <C> <C>
amounts in thousands
End of year $14,189 9,111 22,812
Change in unrealized
appreciation of 1,118 636 731
distributions
Less beginning of year (9,111) (22,812) (9,884)
------- ------- ------
Net unrealized appreciation
(depreciation) of TCI
common stock
$ 6,196 (13,065) 13,659
======= ======= ======
</TABLE>
(continued)
9
<PAGE>
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(5) Proceeds Received Upon Settlement of Claim
------------------------------------------
During 1995 and 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 $14,000 and $398,000 to the Plan
during the years ended December 31, 1995 and 1994, for the benefit of the
former employees. Such contributions were distributed to the former
employees in the year in which they were contributed to the Plan.
(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, 1995 and 1994
(amounts in thousands):
Net Assets Available for
Participant Benefits -
financial statements -
December 31, 1995 $34,634
Benefits payable to
participants (512)
-------
Net Assets Available for
Participant Benefits -
Form 5500 - December 31,
1995 $34,122
=======
Net Assets Available for
Participant Benefits -
Financial Statements -
December 31, 1994 $31,518
Benefits payable to
participants (677)
-------
Net Assets Available for
Participant Benefits -
Form 5500 - December 31,
1994 $30,841
=======
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, 1995 (amounts in thousands):
Distributions to participants -
financial statements $3,302
Reversal of prior year benefits
payable to participants (677)
Benefits payable to
participants 512
------
Distributions to participants -
Form 5500 $3,137
======
10
<PAGE>
Schedule 1
----------
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1995
(amounts in thousands)
(a) (b) (c) (d) (e)
Description of investment Current
Identity of issuer including par value Cost value
--------------------- -------------------------- -------- --------
* Tele-Communications, Series A TCI Group
Inc. common stock, par value
$1.00 per share $14,637 25,163
* Tele-Communications, Series A Liberty Media
Inc. Group common stock,
par value $1.00 per share $ 4,811 8,474
Prudential Insurance Retirement annuity
Company of America contract $ 973 973
*Indicates party in interest to the Plan.
See accompanying independent auditors' report.
11
<PAGE>
EXHIBIT INDEX
-------------
Shown below is the exhibit which is filed as part of this Report-
23-Consent of KPMG Peat Marwick LLP
<PAGE>
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 April 5, 1996, relating to the statements of net assets
available for participant benefits of the United Artist Entertainment Employee
Stock Ownership Plan as of December 31, 1995 and 1994, 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, 1995, and related
schedule, which report appears in the December 31, 1995 Annual Report on Form
11-K of the United Artists Entertainment Employee Stock Ownership Plan.
KPMG Peat Marwick LLP
Denver, Colorado
April 15, 1996
