<PAGE>
UNITED STATES
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, 1996
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
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE 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.
--------------------- --------
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available
for Participant Benefits,
December 31, 1996 and 1995 2
Statements of Changes in Net Assets
Available for Participant Benefits,
Years ended December 31, 1996, 1995 and 1994 3
Notes to Financial Statements,
December 31, 1996, 1995 and 1994 4
Schedule 1 - Item 27a - Schedule of Assets
Held for Investment Purposes 9
Schedule 2 - Item 27d - Schedule of Reportable
Transactions 10
</TABLE>
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.
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Name of Plan)
By /s/ Gary K. Bracken
----------------------------------
Gary K. Bracken
Plan Administrator
and Member of Plan Committee
June 27, 1997
<PAGE>
Independent Auditors' Report
----------------------------
The Plan Committee
Tele-Communications, Inc.
Employee Stock Purchase Plan:
We have audited the accompanying statements of net assets available for
participant benefits of the Tele-Communications, Inc. Employee Stock Purchase
Plan as of December 31, 1996 and 1995, 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, 1996. 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
Tele-Communications, Inc. Employee Stock Purchase Plan as of December 31, 1996
and 1995, and the changes in net assets available for participant benefits for
each of the years in the three-year period ended December 31, 1996 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 assets
held for investment purposes 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 supplemental schedules
have been subjected to the auditing procedures applied in the audits 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
June 23, 1997
1
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Net Assets Available
for Participant Benefits
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Assets 1996 1995
- ------ ------------- -----------
<S> <C> <C>
Cash and cash equivalents $ 198,786 5,893
Investments in Tele-Communications,
Inc. ("TCI") common stock (note 2):
Series A TCI Group common stock
(12,808,355 and 10,697,224 shares,
with a cost of $184,500,192 and
$160,800,352 at December 31, 1996
and 1995, respectively) 167,315,541 212,607,327
Series A Liberty Media Group common
stock (4,291,652 and 3,642,569
shares, with a cost of $60,105,253
and $45,707,755 at December 31,
1996 and 1995, respectively) 81,721,628 65,287,501
------------ -----------
249,037,169 277,894,828
Investment in TCI Satellite
Entertainment, Inc. ("TSAT") Series A
common stock (1,273,108 shares, with a
cost of $17,485,317 at December 31,
1996 (note 2) 12,578,307 --
------------ -----------
261,814,262 277,900,721
Liabilities
- -----------
Due to broker for securities purchased -- 7,324
------------ -----------
Net assets available for participant
benefits, including $6,275,041 and
$4,771,528 of benefits payable to
participants at December 31, 1996 and
1995, respectively $261,814,262 277,893,397
============ ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Changes in Net Assets Available
for Participant Benefits
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
1996 1995 1994
-------------- ------------ ------------
Contributions:
<S> <C> <C> <C>
Employer $ 36,917,288 27,558,906 21,254,569
Employee 36,917,289 28,190,279 21,450,536
Transfers from other plans (note 5) 192,429 456,493 911,970
------------ ----------- -----------
74,027,006 56,205,678 43,617,075
------------ ----------- -----------
Net investment income (loss):
Net unrealized appreciation
(depreciation) of securities (61,562,981) 46,893,887 (63,660,489)
Realized gain on securities
transactions 16,111 49,231 381,450
Interest income 42,089 44,771 52,335
------------ ----------- -----------
(61,504,781) 46,987,889 (63,226,704)
------------ ----------- -----------
Total contributions and net investment
income (loss) 12,522,225 103,193,567 (19,609,629)
Distributions to participants (28,601,360) (11,761,367) (13,320,794)
------------ ----------- -----------
Increase (decrease) in net assets
available for participant benefits (16,079,135) 91,432,200 (32,930,423)
Net assets available for participant
benefits:
Beginning of year 277,893,397 186,461,197 219,391,620
------------ ----------- -----------
End of year $261,814,262 277,893,397 186,461,197
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1996, 1995 and 1994
(1) Summary of Significant Accounting Policies
------------------------------------------
Basis of Presentation
---------------------
The accompanying financial statements 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 The Colorado National Bank ("Trustee")
------------------------------------------------------------
Under the terms of a trust agreement between the Trustee and the Tele-
Communications, Inc. Employee Stock Purchase Plan (the "Plan"), the Trustee
manages a trust fund on behalf of the Plan. The Trustee has been granted
discretionary authority concerning purchases and sales of investments for
the trust fund. The Trustee may invest up to 100% of the assets of the
Plan in employer securities without regard to any fiduciary requirement to
diversify Plan assets. Additionally, the Plan is allowed to invest in non-
employer securities.
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 the TCI Series A TCI Group common stock, the TCI Series A
Liberty Media Group common stock, and the Series A TCI Satellite
Entertainment common stock were $13.06, $19.04, and $9.88 per share,
respectively, at December 31, 1996. The value used for the TCI Series A
TCI Group common stock and the TCI Series A Liberty Media Group was $19.88
and $17.92 per share at December 31, 1995, 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 priced at current market value and are accounted for when shares are
transferred by the Trustee to participants. The cost basis of such shares
distributed is determined using the "first-in, first-out" method.
Income Taxes
------------
The Internal Revenue Service has determined and informed the Plan by a
letter dated November 15, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
(continued)
4
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
Plan Expenses
-------------
Administrative expenses of the Plan are paid by TCI. Accordingly, such
expenses are not reflected in the accompanying financial statements.
Reclassifications
-----------------
Certain amounts have been reclassified for comparability with the 1996
presentation.
(2) Description of the Plan
-----------------------
As of January 27, 1994, TCI Communications, Inc. (formerly Tele-
Communications, Inc. or "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.
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, 2,341,764 shares of Series A Liberty Media
Group common stock were distributed to the Plan during 1995. Additionally,
the stockholders of TCI approved the redesignation of the previously
authorized TCI Class A and B common stock into Series A and B TCI Group
common stock ("TCI Group Stock").
On December 4, 1996, all of the capital stock of TSAT was distributed to
holders of record of TCI Group Stock as of the close of business on
November 12, 1996 (the "Record Date"). Stockholders of record of Series A
TCI Group Stock on the Record Date received one share of TSAT Series A
common stock for each ten shares of Series A TCI Group Stock owned of
record at the close of business on the Record Date and one share of TSAT
Series B common stock for each ten shares of Series B TCI Group Stock owned
of record as of the close of business on the Record Date. Fractional
shares were not issued. Fractions of one-half or greater of a share were
rounded up and fractions of less than one-half of a share were rounded down
to the nearest whole number of shares of TSAT Series A common stock and
TSAT Series B common stock. As a result of the TSAT Distribution,
1,273,108 shares of TSAT Series A common stock were distributed to the Plan
during 1996.
(continued)
5
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
Effective January 13, 1997, TCI issued a stock dividend to holders of
Liberty Group Stock consisting of one share of Series A Liberty Group Stock
for every two shares of Series A Liberty Group Stock owned and one share of
Series A Liberty Group Stock for every two shares of Series B Liberty Group
Stock owned (the "Liberty Group Stock Dividend"). The Liberty Group Stock
Dividend has been treated as a stock split, and accordingly, all share and
per share amounts have been retroactively restated to reflect the Liberty
Group Stock Dividend.
The Plan is a defined contribution plan sponsored by TCI. The Plan enables
participating employees to acquire a proprietary interest in TCI and to
receive benefits upon retirement. In addition, the Plan includes a salary
deferral feature with respect to employee contributions. At December 31,
1996, there were 16,063 participants in the Plan and 24,098 employees who
had one or more years of service and met all other eligibility requirements
were eligible to participate. Due to the TCI/Liberty Merger, Liberty
employees who had one or more years of service and met all other
eligibility requirements were allowed to participate in the Plan effective
October 1, 1994. Under the terms of the Plan, employees are eligible for
participation after one year of service (if at least 18 years old and work
a minimum of 1,000 hours per year) and the normal retirement age is 65
years. Participants may contribute up to 10% of their compensation, as
defined, to the Plan. TCI (by annual resolution of the Board) may
contribute up to 100% of the participant contributions. Forfeitures (due
to participants' withdrawal prior to full vesting) may be applied to reduce
TCI's otherwise determined contributions or offset the expenses of
maintaining the Plan. Such forfeitures amounted to $722,256, $631,373 and
$195,967 for the years ended December 31, 1996, 1995 and 1994,
respectively. Participant contributions are always fully vested.
Generally, participants acquire a vested right in TCI contributions as
follows:
Vesting
Years of service percentage
---------------- ----------
Less than 1 0%
1-2 20%
2-3 30%
3-4 45%
4-5 60%
5-6 80%
6 or more 100%
Although TCI has not expressed an intent to terminate the Plan, it may do
so at any time. The Plan provides for full and immediate vesting of all
participant rights upon termination of the Plan.
(continued)
6
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
(3) Other Marketable Securities
---------------------------
On January 30, 1985, TCI distributed all of the issued and outstanding
shares held by TCI of the capital stock of Republic Pictures Corporation, a
majority-owned subsidiary of TCI prior to the distribution, to TCI's
shareholders of record on January 14, 1985. During 1994, the Republic
Pictures Corporation shares were sold by the Plan and were discontinued as
an investment option.
In early 1987, WestMarc Communications, Inc. ("WestMarc"), an indirect
wholly-owned subsidiary of TCI, distributed all of the issued and
outstanding shares of the capital stock of General Communication, Inc.
("GCI"), a wholly-owned subsidiary of WestMarc prior to the distribution,
to WestMarc's shareholders of record on December 29, 1986. During 1994,
the GCI shares were sold by the Plan and were discontinued as an investment
option.
(4) Change in Unrealized Appreciation (Depreciation)
------------------------------------------------
Unrealized appreciation (depreciation) of investments held for the years
ended December 31, 1996, 1995 and 1994, is calculated as follows:
<TABLE>
<CAPTION>
1996 1995 1994
-------------- ---------- ------------
<S> <C> <C> <C> <C>
End of year $ (475,286) 71,386,721 28,094,639
Change in unrealized appreciation of distributions 10,299,026 3,601,805 7,312,909
Less beginning of year 71,386,721 28,094,639 99,068,037
------------ ---------- -----------
Net unrealized appreciation (depreciation) of investments $(61,562,981) 46,893,887 (63,660,489)
============ ========== ===========
</TABLE>
(5) Transfers from Other Plans
--------------------------
TCI has certain subsidiaries that maintain separate retirement savings
plans. Participants in a subsidiary plan may elect, on a quarterly basis,
to transfer their entire account balance to the Plan. During 1996, 1995
and 1994, transfers to the Plan from such subsidiary plans aggregated
$192,429, $456,493 and $911,970, respectively.
(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, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
-------------- ------------
<S> <C> <C> <C>
Net Assets Available for Participant
Benefits - financial statements $261,814,262 277,893,397
Benefits payable to participants (6,275,041) (4,771,528)
------------ -----------
Net Assets Available for Participant
Benefits - Form 5500 $255,539,221 273,121,869
============ ===========
</TABLE>
(continued)
7
<PAGE>
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
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, 1996:
Distributions to participants -
financial statements $28,601,360
Reversal of prior year benefits
payable to participants (4,771,528)
Current year benefits payable
to participants 6,275,041
-----------
Distributions to participants -
Form 5500 $30,104,873
===========
8
<PAGE>
Schedule 1
----------
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
(a)* (b) (c) (d) (e)
Identity of Description of investment Current
issuer including par value Cost value
- ------ --------------------------------- ----------------------------------------------------- -------------- ------------
<S> <C> <C> <C> <C>
Tele-Communications, Inc. Series A TCI Group common
stock, par value $1.00 per share $184,500,192 167,315,541
Tele-Communications, Inc. Series A Liberty Media Group
common stock, par value $1.00
per share $ 60,105,253 81,721,628
TCI Satellite Entertainment, Inc. Series A TSAT common stock, par value $1.00 per share $ 17,485,317 12,578,307
</TABLE>
* None of the issuers represent parties in interest to the Plan.
See accompanying independent auditors' report.
9
<PAGE>
Schedule 2
----------
TELE-COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1996
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Current
value of Net
Expense asset on gain
Identity of party Description Purchase Selling Lease incurred with Cost of transaction or
involved of asset price price rental transaction asset date (loss)
- --------------------------- ------------ -------------- ------------ -------- ------------ ----------- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aim Short-Term Prime Money
Investment Co. Market fund $55,347,016 -- -- -- 55,347,016 55,347,016 --
Aim Short-Term Prime Money
Investment Co. Market Fund $ -- 55,154,123 -- -- 55,154,123 55,154,123 --
Tele-Communications, Series A TCI
Inc. Group common
stock $38,135,418 -- -- -- 38,135,418 38,135,418 --
Tele-Communications, Inc. Series A
Liberty
Media Group
common stock $15,287,668 -- -- -- 15,287,668 15,287,668 --
</TABLE>
See accompanying independent auditors' report.
10
<PAGE>
EXHIBIT INDEX
-------------
Shown below is the exhibit which is filed as a part of this Report -
23-Consent of KPMG Peat Marwick LLP
<PAGE>
Exhibit 23
----------
Consent of Independent Auditors
-------------------------------
The Plan Committee
Tele-Communications, Inc.
Employee Stock Purchase Plan:
We consent to incorporation by reference in the registration statements (Nos.
33-57635 and 33-65483) on Form S-8 of Tele-Communications, Inc. Employee Stock
Purchase Plan of our report dated June 23, 1997, relating to the statements of
net assets available for participant benefits of Tele-Communications, Inc.
Employee Stock Purchase Plan as of December 31, 1996 and 1995, 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, 1996 and all related
schedules, which report appears in the December 31, 1996 Annual Report on Form
11-K of Tele-Communications, Inc. Employee Stock Purchase Plan.
KPMG Peat Marwick LLP
Denver, Colorado
June 23, 1997
