<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, 1993
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, 1993 and 1992 2
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1993 3
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1992 4
Statement of Changes in Net Assets Available for
Participant Benefits - Year ended December 31, 1991 5
Notes to Financial Statements
December 31, 1993, 1992 and 1991 6
Schedule 1 - Plan Investments 11
Schedule 2 - Reportable Transactions 12
Exhibit-
-------
23 - Consent of KPMG Peat Marwick
</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 27, 1994 /s/ GARY K. BRACKEN
Gary K. Bracken
Plan Administrator 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, 1993 and 1992, 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, 1993. 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
Plan as of December 31, 1993 and 1992, and the changes in net assets available
for participant benefits for each of the years in the three-year period ended
December 31, 1993 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.
/s/ KPMG PEAT MARWICK
KPMG Peat Marwick
Denver, Colorado
June 22, 1994
1
<PAGE> 4
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available
for Participant Benefits
December 31, 1993 and 1992
<TABLE>
<CAPTION>
1993 1992
-------------------------------- ---------------------------------
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 3 26 18 117 135
Investments, at market value:
Tele-Communications, Inc. ("TCI"):
Class A common stock
(with a cost of $20,586,000
at December 31, 1993 and
$25,161,000 at December 31,
1992) 40,805 -- 40,805 35,045 -- 35,045
Other (note 3) -- 1,135 1,135 -- 1,196 1,196
-------- ----- ------ ------ ----- ------
Net assets available for
participant benefits,
including benefits
payable to participants
(note 6) $ 40,828 1,138 41,966 35,063 1,313 36,376
======== ===== ====== ====== ===== ======
</TABLE>
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, 1993
------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ------------- -------
amounts in thousands
<S> <C> <C> <C>
Investment income:
Net unrealized appreciation
of TCI common stock
(note 4) $ 13,422 -- 13,422
Realized gain on
securities transactions 421 -- 421
Interest income 24 84 108
-------- ------ ------
Total investment income 13,867 84 13,951
Distributions to participants (8,102) (105) (8,207)
Transfers to TCI Employee
Stock Purchase Plan (note 2) -- (154) (154)
-------- ------ ------
Increase (decrease) in net assets
available for participant benefits 5,765 (175) 5,590
Net assets available for
participant benefits:
Beginning of year 35,063 1,313 36,376
-------- ----- ------
End of year $ 40,828 1,138 41,966
======== ===== ======
</TABLE>
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, 1992
------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ----------------- -------
amounts in thousands
<S> <C> <C> <C>
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 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.
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, 1991
------------------------------
Income
Stock Accumulation
Fund Fund Total
----- ----------------- -------
amounts in thousands
<S> <C> <C> <C>
Contributions:
Employer $ 5,535 -- 5,535
Employee 4,467 952 5,419
Predecessor plans (note 5) 31 -- 31
-------- ----- ------
10,033 952 10,985
-------- ----- ------
Investment income:
Net unrealized appreciation of United
Artists Entertainment Company
("UAE") common stock (note 4) 11,409 -- 11,409
Interest income 33 108 141
-------- ----- ------
11,442 108 11,550
-------- ----- ------
Total contributions and investment
income 21,475 1,060 22,535
Distributions to participants (3,664) (253) (3,917)
-------- ----- ------
Increase in net assets available
for participant benefits 17,811 807 18,618
Net assets available for participant
benefits:
Beginning of year 27,472 996 28,468
-------- ----- ------
End of year $ 45,283 1,803 47,086
======== ===== ======
</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, 1993, 1992 and 1991
(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.
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 be 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 Class A common stock were $30.25
and $21.25 per share at December 31, 1993 and 1992, respectively (on
June 15, 1994, TCI Class A common stock had a market value of $21.25
per share). 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" ("FIFO")
method.
In conjunction with the TCI Merger (see note 2), the cost basis for
each share of stock held by the Plan was adjusted to reflect the
merger conversion basis 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
1993 and 1992 are calculated based on the adjusted cost basis.
(continued)
6
<PAGE> 9
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.
Plan Expenses
Administrative expenses of the Plan were paid by UAE through December
2, 1991 and by TCI thereafter. Accordingly, such expenses are not
reflected in the accompanying financial statements.
Reclassification
Certain amounts have been reclassified for comparability with the 1993
presentation.
(2) Description of Plan
On December 2, 1991, UAE and TCI consummated a merger (the "TCI
Merger") pursuant to which UAE became a wholly-owned subsidiary of
TCI. Under the TCI 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 TCI Class A common stock on the basis
of 1.02 TCI Class A shares for each share of either class of UAE's
common stock.
Employees of UAE became employees of TCI and, as such, are entitled to
participate in TCI's benefit plan, if eligible.
The Plan became "inactive" as of the date of the TCI Merger and all
participants automatically became fully vested in all employer
contributions. Participant contributions were always fully vested.
During 1993, participants in the Income Accumulation Fund were given
an option to transfer their fund balance into the TCI Employee Stock
Purchase Plan. Such transfers aggregated $154,000. All remaining
assets of the Plan will remain in the Plan until such time that
participants are eligible to receive benefits as discussed below.
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.
(continued)
7
<PAGE> 10
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
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, 1993, 275 participants had
balances remaining in the Stock Fund and 29 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. UAE elected to
contribute the maximum amount allowed by the Plan during 1991.
Forfeitures (due to a participant's termination prior to full vesting)
were utilized to reduce the Company's contributions. Forfeitures
aggregated $456,000 in 1991. There were no contributions or
forfeitures made during 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.
(3) Other Investments
Other investments (at market value) at December 31 are summarized as
follows:
<TABLE>
<CAPTION>
1993 1992
-------------------------- --------------------------
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 $ -- 1,135 -- --
Prudential Bank and Trust
Short-term U.S.
Government Fund -- -- -- 134
Prudential Bank and Trust
Discovery Annuity -- -- -- 1,062
---- ----- --- -----
$ -- 1,135 -- 1,196
==== ===== === =====
</TABLE>
The cost of the above investments approximates their market value at
December 31, 1993 and 1992, respectively.
(continued)
8
<PAGE> 11
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(4) Change in Unrealized Appreciation (Depreciation)
Unrealized appreciation (depreciation) of TCI's and UAE's Class A
common stock for the years ended December 31, 1993, 1992 and 1991, is
calculated as follows:
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
amounts in thousands
<S> <C> <C> <C>
End of year $ 20,219 9,884 4,495
Change in unrealized appreciation
(depreciation) of distributions 3,087 (64) (66)
Add (subtract) beginning of year (9,884) (4,495) 6,980
-------- ------ ------
$ 13,422 5,325 11,409
======== ====== ======
</TABLE>
(5) Contributions
In 1991, funds were deposited into the Plan from a predecessor plan as
rollover contributions.
(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, 1993 (amounts
in thousands):
<TABLE>
<S> <C>
Net Assets Available for Participant Benefits -
financial statements $41,966
Benefits payable to participants (727)
-------
Net Assets Available for Participant Benefits -
Form 5500 $41,239
=======
</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, 1993 (amounts in
thousands):
<TABLE>
<S> <C>
Distributions to participants -
financial statements $ 8,207
Benefits payable to participants 727
-------
Distributions to participants -
Form 5500 $ 8,934
=======
</TABLE>
9
<PAGE> 12
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(7) Subsequent Event
As of January 27, 1994, TCI and Liberty Media Corporation ("Liberty")
entered into a definitive agreement to combine the two companies (the
"Merger"). The Merger will be 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 ("TCI/Liberty"). TCI shareholders will receive one
share of TCI/Liberty for each of their shares. Liberty common
shareholders will receive 0.975 of a share of TCI/Liberty for each of
their common shares. The Merger is subject to the approval of both
sets of shareholders as well as various regulatory approvals and other
customary conditions. Subject to timely receipt of such approvals,
which cannot be assured, it is anticipated the closing of the Merger
will take place during 1994.
By virtue of the Merger, each share of TCI Class A common stock held
by the Plan at the effective date of the Merger will be converted into
the right to receive one share of TCI/Liberty Class A common stock.
10
<PAGE> 13
Schedule 1
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Plan Investments
December 31, 1993
<TABLE>
<CAPTION>
Shares
or principal
Investment securities amount Cost Market
- - --------------------- ------------ ---------- ----------
amounts in thousands
<S> <C> <C> <C>
Common Stock
------------
TCI Class A common stock 1,349 $ 20,586 $ 40,805
Other Investments
-----------------
Prudential Insurance Company of
America Retirement Annuity 1,135 1,135 1,135
-------- --------
Total investments $ 21,721 $ 41,940
======== ========
</TABLE>
See accompanying independent auditors' report.
11
<PAGE> 14
Schedule 2
UNITED ARTISTS ENTERTAINMENT
EMPLOYEE STOCK OWNERSHIP PLAN
Reportable Transactions
Years ended December 31, 1993, 1992 and 1991
<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, 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
December 31, 1991:
Prudential Bank and Trust
Short-term U.S. Government
Funds 13,180 $13,180 12,320 $12,320 --
UAE Class A common stock 368 $ 5,142 -- -- --
</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
<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 22, 1994, relating to the United Artists Entertainment
Employee Stock Ownership Plan statements of net assets available for
participant benefits as of December 31, 1993 and 1992, 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, 1993 and related
schedules which report appears in the December 31, 1993 Annual Report on Form
11-K of the United Artists Entertainment Employee Stock Ownership Plan.
/s/ KPMG PEAT MARWICK
KPMG Peat Marwick
Denver, Colorado
June 27, 1994
