Rule 424(b)(3)
File No. 333-76235
$2,000,000,000
COX COMMUNICATIONS, INC.
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
This prospectus is part of a shelf registration statement which Cox has
filed with the Securities and Exchange Commission. Under the shelf registration
statement, Cox may offer unsecured debentures, notes, bonds or other evidences
of indebtedness and forward contracts in respect of any such indebtedness,
shares of preferred stock, par value $1.00 per share, and shares of Class A
common stock, par value $1.00 per share, all of which securities combined have
an aggregate initial public offering price of $2 billion, including the U.S.
dollar equivalent if the initial public offering is denominated in one or more
foreign currencies, foreign currency units or composite currencies.
Under the shelf registration process, we may sell the securities from time
to time in one or more separate offerings, in amounts, at prices and on terms to
be determined at the time of sale. Our debt securities may be issuable in global
form, in registered form without coupons attached, or in bearer form with or
without coupons attached.
Our Class A common stock is listed on the New York Stock Exchange. The Class
A common stock's ticker symbol is "COX." On April 1, 1999, the closing sale
price on the New York Stock Exchange for a single share of Class A common stock
was $76.00.
In addition to Class A common stock, Cox also has shares of Class C common
stock issued and outstanding. The rights of holders of Class A common stock and
Class C common stock differ with respect to some aspects of transferability,
convertibility and voting.
We will not offer or sell any shares of Class C common stock using this
prospectus.
This prospectus provides a general description of the securities we may
offer. Each time we sell a particular series of debt securities or preferred
stock, or shares of Class A common stock, we will provide a prospectus
supplement which will contain the specific terms of the securities being offered
at that time. Unless we specify otherwise in the prospectus supplement, the debt
securities will be senior securities of Cox.
The prospectus supplement may add, update or change information contained in
the prospectus. You should read both the prospectus and the prospectus
supplement in conjunction with the additional information described under the
headings "Where You Can Find More Information" and "Information Incorporated by
Reference."
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
THE DATE OF THIS PROSPECTUS IS JULY 20, 1999
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TABLE OF CONTENTS
Page
Cox Communications, Inc....................................................1
Use of Proceeds............................................................1
Ratio of Earnings To Fixed Charges.........................................2
Description of Capital Stock...............................................2
Description of the Debt Securities.........................................6
Plan of Distribution......................................................20
Legal Matters.............................................................21
Experts .................................................................21
Where You Can Find More Information.......................................21
Information Incorporated By Reference.....................................21
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COX COMMUNICATIONS, INC.
Cox is one of the largest broadband communications companies in the
U.S. We have extensive broadband network operations in the U.S. as well as
investments in cable television programming, telecommunications, and technology
and broadband networks.
At present, we are focused primarily on developing new and advanced
communications services. We believe that we have a number of advantages that
will allow us to implement this strategy successfully, including:
o ownership of highly clustered cable television systems;
o being on the cutting edge in upgrading the technological
capabilities of our broadband networks; and
o a strong commitment to and reputation for superior customer
service.
In addition, we lead the communications industry in creating and
offering integrated packages of telecommunications services. We believe that
such integration will allow us to retain existing customers, acquire new
customers and increase the revenue stream from each customer. We are bundling
services like:
o multichannel video;
o digital video;
o high-speed Internet access;
o local and long-distance telephone services; and
o commercial local exchange carrier operations.
Cox also has invested in programming, telecommunications and technology
companies that complement our business strategy. We believe that our investments
have been vital to our growth into a communications industry leader.
Cox Enterprises, Inc. ("CEI"), a privately held corporation based in
Georgia and one of the largest media companies in the U.S., controls
approximately 73.3% of Cox. In addition to Cox, CEI publishes, owns or operates
newspapers, television and radio stations, Internet web sites, and Manheim
Auctions, the world's largest auto auction operator.
Our principal executive offices are located at 1400 Lake Hearn Drive,
Atlanta, Georgia 30319. Our telephone number is (404)843-5000.
USE OF PROCEEDS
Unless we state otherwise in the accompanying prospectus supplement, we
intend to use the net proceeds from the sale of the securities offered in such
prospectus supplement for general corporate purposes, which may include
additions to working capital, repayment or redemption of existing indebtedness
and financing of capital expenditures and acquisitions. We may borrow additional
funds from time to time from public and private sources on both a long-term and
short-term basis and may sell
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commercial paper to fund our future capital and working capital requirements in
excess of internally generated funds.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of Cox for the periods indicated:
Year Ended December 31,
1998(1) 1997(1) 1996(1)) 1995(1) 1994(1)
- ---- ---- ---- ---- ----
2.3x 2.0x 1.5x 2.7x 2.7x
For purposes of this computation, earnings are defined as income before
income taxes and excluding losses and undistributed earnings on equity method
investments, minority interests and fixed charges excluding capitalized
interest. Fixed charges are the sum of:
o interest cost including capitalized interest;
o estimated interest component of rent expense; and
o dividends on subsidiary preferred stock.
-----------------------
(1) Earnings for the year ended December 31, 1998, 1997, 1996, 1995 and 1994
include $2.5 billion, 116.6 million, 4.6 million, 188.8 million and zero,
respectively, of net investment gains.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock sets forth general terms
and provisions of the particular issuance of capital stock to which any
prospectus supplement may relate. The prospectus supplement will describe the
particular terms of any sale of capital stock and the extent, if any, to which
such general provisions will not apply to such sale. The following description
also sets forth selected provisions of our certificate of incorporation and
bylaws. This description is a summary only and is qualified in its entirety by
Cox's certificate of incorporation and bylaws, which are incorporated as
exhibits to our registration statement of which this prospectus is a part.
Our certificate of incorporation authorizes us to issue 316,000,000
shares of Class A common stock, 14,000,000 shares of Class C common stock and
5,000,000 shares of preferred stock; 2,418,186 shares of preferred stock have
been designated Series A convertible preferred stock. On March 18, 1999, we
announced that our board of directors has approved a two-for-one stock split
which could be effected promptly following Cox's May 13, 1999 annual meeting of
stockholders. The stock split requires a separate approval by stockholders to
amend our articles of incorporation to increase the authorized preferred stock
from 5,000,000 to 10,000,000 shares, the Class A common stock from 316,000,000
to 632,000,000 and the Class C common stock from 13,798,896 to 27,597,792
shares.
As of April 1, 1999, there were outstanding 263,735,317 shares of Class
A common stock, 13,798,896 shares of Class C common stock and 2,418,186 shares
of Series A convertible preferred stock. If each class approves the proposed
stock split at our 1999 annual meeting, at April 1, 1999 there would have been
outstanding approximately 527,470,634 shares of Class A common stock, 27,597,792
shares of Class C common stock and 4,836,372 shares of Series A convertible
preferred stock.
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Common Stock
Except with respect to voting, transfer and convertibility, shares of
Class A common stock and shares of Class C common stock are identical in all
respects. Class A common stock holders are entitled to one vote per share, while
Class C common stock holders are entitled to ten votes per share. The shares of
Class C common stock are subject to significant transfer restrictions.
Voting. The Class A common stock holders and the Class C common stock
holders vote together as a single class on all actions, except that the
affirmative vote of the holders of a majority of outstanding shares of Class A
common stock and/or Class C common stock voting separately as a class is
required:
o to approve any amendment to our certificate of incorporation
that would alter or change the powers, preferences or special
rights of such class in a way that adversely affects the
holders of such class; and
o to approve such other matters as may require a class vote
under the Delaware General Corporation Law.
Dividends and Other Distributions. Each share of common stock is equal
in respect of dividends and other distributions in cash, stock or property,
including distributions upon Cox's liquidation or a sale of all or substantially
all of Cox's assets. However, in the case of dividends or other distributions
payable on either class of common stock in shares of such stock, including
distributions pursuant to stock splits or dividends, only Class A common stock
will be distributed with respect to outstanding Class A common stock, and only
Class C common stock will be distributed with respect to outstanding Class C
common stock. Neither of the Class A common stock nor the Class C common stock
will be split, divided or combined unless each other class is proportionately
split, divided or combined.
Cox has never declared or paid cash dividends on its Class A common
stock and currently intends to retain any future earnings for use developing and
operating its businesses. Accordingly, we do not expect to pay cash dividends on
the Class A common stock in the foreseeable future.
Restrictions on Transfer of Class C Common Stock: Convertibility of
Class C Common Stock into Class A Common Stock. Cox Holdings, Inc. and Cox DNS,
Inc. hold all of the shares of Class C common stock currently outstanding.
Shares of the Class C common stock are convertible at any time, or from time to
time, at the Class C stockholder's option, into Class A common stock on a
share-for-share basis. Shares of Class C common stock will be converted
automatically into shares of Class A common stock on a share-for-share basis:
o at any time Cox's board of directors and the holders of a
majority of the shares of Class C common stock then
outstanding approve conversion of all shares of Class C common
stock into Class A common stock;
o if the Class A common stock is precluded from trading on any
national securities exchange or national quotation system as a
result of the Class C common stock's existence;
o upon election by Cox's board of directors in connection with
their approval of any sale or lease of all or substantially
all of Cox's assets or any merger, consolidation, liquidation
or dissolution of Cox; or
o upon election by Cox's board of directors, after the board has
determined there has been a material adverse change in the
outstanding Class A common stock's liquidity,
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marketability or market value due to its exclusion from a
national exchange or quotation system or due to federal or
state legal requirements, in either case because of the Class
C common stock's existence.
Liquidation, Dissolution or Winding Up. In the event of any
liquidation, dissolution or winding up of Cox, whether voluntary or not, the
Class A common stock holders and the Class C common stock holders shall be
entitled to share ratably, according to their respective interests, in Cox's
assets which remain after payment, or provision of payment, of Cox's debts and
other liabilities and the preferential amounts due to the holders of any stock
ranking prior to the common stock in the distribution of assets.
Preferred Stock
Cox may issue preferred stock with such designations, powers,
preferences and other rights and qualifications, limitations and restrictions as
our board of directors may authorize, without further action by our
shareholders, including but not limited to:
o the distinctive designation of each series and the number of
shares that will constitute the series;
o the voting rights, if any, of shares of the series;
o the dividend rate on the shares of the series, any
restriction, limitation or condition upon the payment of
dividends, whether dividends will be cumulative and the dates
on which dividends are payable;
o the prices at which, and the terms and conditions on which,
the shares of the series may be redeemed, if the shares are
redeemable;
o the purchase or sinking fund provisions, if any, for the
purchase or redemption of shares the series;
o any preferential amount payable upon shares of the series in
the event of the liquidation, dissolution or winding up of Cox
or the distribution of its assets; and
o the prices or rates of conversion at which, and the terms and
conditions on which, the shares of such series may be
converted into other securities, if such shares are
convertible.
Series A Convertible Preferred Stock.
In October 1998, Cox completed the acquisition of a cable television
system located in Las Vegas, Nevada, and certain related businesses previously
owned by Prime South Diversified, Inc. Cox issued shares of Series A preferred
stock as part of the consideration for the acquisition.
Dividends. Series A preferred stock holders are entitled to dividends
only when, and to the extent that, Cox's board of directors declares such
dividends.
Voting. Series A preferred stock holders are entitled to one vote per
share, and such holders vote together with the holders of Class A common stock
and Class C common stock on all matters upon which the Class A common stock and
Class C common stock holders are entitled to vote.
Conversion. Shares of the Series A preferred stock are convertible into
shares of Class A common stock at the preferred stockholders' option only after
October 1, 2003, a change in control of Cox or notification of liquidation,
whichever event occurs first. Shares of the Series A preferred stock are
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convertible into shares of Class A common stock according to a formula based
upon 20.0% of the fair value of our Las Vegas cable system and the average
closing price of the Class A common stock over a specified ten-day period.
Shares of the Series A preferred stock will convert automatically into shares of
Class A common stock, if the Las Vegas cable system makes a distribution on its
capital stock or upon the sale of all or substantially all of Cox's assets,
according to the formula described above. We anticipate that appreciation
realized upon conversion of the Series A preferred stock into Class A common
stock will be accounted for as contingent purchase price in accordance with APB
Opinion No. 16, "Business Combinations."
Transfer Agent
The transfer agent and registrar for the Class A common stock is First
Chicago Trust Company of New York.
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DESCRIPTION OF THE DEBT SECURITIES
General
The following description of the terms of the debt securities sets
forth selected general terms and provisions of the particular issuance of debt
securities to which any prospectus supplement may relate. The prospectus
supplement will describe the particular terms of any debt securities and the
extent, if any, to which such general provisions will not apply to those debt
securities.
The debt securities will be issued from time to time in series under an
indenture, dated as of June 27, 1995, between Cox and The Bank of New York, as
trustee. A copy of the indenture is incorporated by reference as an exhibit to
the registration statement of which this prospectus is a part.
The indenture does not limit the aggregate principal amount of debt
securities Cox may issue, and the indenture provides that Cox may issue debt
securities from time to time in one or more series. The following summary of
selected provisions of the indenture and the debt securities does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the indenture, including the definitions of selected terms
which it contains as well as those terms which the Trust Indenture Act of 1939,
as amended, requires be incorporated.
Cox refers you to the prospectus supplement for the following terms and
other possible terms of each series of debt securities in respect of which this
prospectus is being delivered, to the extent such terms are applicable to such
debt securities:
o the classification, specific designation, date, aggregate
principal amount, purchase price and denomination of the debt
securities;
o currency or units based on or relating to currencies in which
such debt securities are denominated and/or in which
principal, premium, if any, and/or interest will or may be
payable;
o the formula, if any, upon which Cox may determine from time to
time the principal amount of debt securities outstanding;
o any date of maturity, which may be fixed or extendible;
o the interest rate or rates or the method by which the interest
rate or rates will be determined, if any;
o the dates on which any interest will be payable, Cox's right,
if any, to extend or defer the interest period and the
duration of extensions or deferrals;
o the place or places where the principal of, premium, if any,
and interest on the debt securities will be payable;
o any repayment, redemption, prepayment or sinking fund
provisions and any provisions related to the purchase of debt
securities at the option of the holders;
o whether the debt securities will be issuable in global form,
and, if so, the identity of the depositary, or in registered
and/or bearer form and, if bearer securities are issuable, any
restrictions applicable to the exchange of one form for
another and to the offer, sale and delivery of bearer
securities;
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o the terms, if any, on which debt securities may be converted
into or exchanged for stock or other securities of Cox or
other entities or for cash, any specific terms relating to the
adjustment of the conversion or exchange terms, and the period
during which debt securities may be so converted or exchanged;
o any applicable United States federal income tax consequences,
including whether and under what circumstances Cox will pay
additional amounts on debt securities held by a person who is
not a U.S. person, as defined in the prospectus supplement, in
respect of any tax, assessment or governmental charge withheld
or deducted and, if so, whether Cox will have the option to
redeem debt securities rather than pay such additional
amounts;
o the subordination provisions, if any, relating to the debt
securities; and
o any other specific terms of the debt securities, including any
additional events of default or covenants provided for with
respect to debt securities, and any terms which may be
required by or advisable under applicable laws or regulations.
Holders may present debt securities for exchange, and holders of
registered debt securities may present them for transfer, in the manner, at the
places and subject to the restrictions set forth in the debt securities and the
prospectus supplement. Cox will provide these services without charge, other
than any tax or other governmental charge payable in that connection, but
subject to the limitations provided in the indenture. Debt securities in bearer
form and the coupons, if any, pertaining to such debt securities will be
transferable by delivery.
Debt securities will bear interest at a fixed rate or a floating rate.
Debt securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any discounted debt securities or to certain debt
securities issued at par, which are treated as having been issued at a discount
for United States federal income tax purposes, will be described in the
accompanying prospectus supplement.
Cox may issue debt securities from time to time, with the principal
amount payable on any principal payment date, or the amount of interest payable
on any interest payment date, to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other factors.
Holders of these debt securities may receive a payment of principal on any
principal payment date, or a payment of interest on any interest payment date,
that is greater or less than the amount of principal or interest otherwise
payable on those dates, depending upon the value of the applicable currency,
commodity, equity index or other factor on those dates. Information as to the
methods Cox will use to determine the amount of principal or interest payable on
any date, the currencies, commodities, equity indices or other factors to which
the amount payable on that date is linked and certain additional tax
considerations will be set forth in the applicable prospectus supplement.
Unless Cox indicates otherwise in the accompanying prospectus
supplement, the debt securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 and any integral multiples of
$1,000. Unless Cox specifies otherwise in the prospectus supplement, the
principal amount of the debt securities will be payable at the corporate trust
office of the trustee in New York, New York. Holders may present the debt
securities for transfer or exchange at that office unless Cox specifies
otherwise in the prospectus supplement, subject to the limitations provided in
the indenture and without any service charge, but Cox may require payment of a
sum sufficient to cover any tax or other governmental charges payable.
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Concerning the Trustee
The Bank of New York is the trustee under the indenture and has been
appointed by Cox as registrar and paying agent with regard to the debt
securities. The trustee is a depository for funds and performs other services
for, and transacts other banking business with, Cox in the normal course of
business.
Ranking
Unless Cox specifies otherwise in a prospectus supplement for a
particular series of debt securities, all series of debt securities will be
senior indebtedness of Cox and will be direct, unsecured obligations, ranking
equally with all of Cox's other unsecured and unsubordinated obligations.
Cox conducts most of its operations through its subsidiaries.
Therefore, Cox's rights and the rights of Cox's creditors, including debt
securities holders, to participate in the assets of any subsidiary upon such
subsidiary's liquidation or recapitalization will be subject to the prior claims
of the subsidiary's creditors, except to the extent Cox may be a creditor with
recognized claims against the subsidiary.
Certain Covenants
The indenture contains covenants, including, among others, the
following:
Limitation on liens. Cox will not, and will not permit any restricted
subsidiary to, create, incur or assume any lien, other than permitted liens on
restricted property incurred to secure the payment of Indebtedness of Cox or any
restricted subsidiary, if, immediately after the creation, incurrence or
assumption of such lien, the aggregate outstanding principal amount of all
Indebtedness of Cox and its restricted subsidiaries that is secured by liens
other than permitted liens on restricted property would exceed the greater of:
o $200 million; or
o 15% of the aggregate outstanding principal amount of all
Indebtedness of Cox and the restricted subsidiaries, whether
or not so secured,
unless effective provision is made such that, at Cox's determination, the debt
securities together with any other Indebtedness of equal ranking, whether then
existing or later created, are secured equally and ratably with, or prior to,
such Indebtedness, but only for as long as such Indebtedness is so secured.
Limitation on Indebtedness of restricted subsidiaries. Cox will not
permit any restricted subsidiary to incur any Indebtedness if, immediately after
the incurrence or assumption of such Indebtedness, the aggregate outstanding
principal amount of all indebtedness of the restricted subsidiaries would exceed
the greater of:
o $200 million; or
o 15% of the aggregate outstanding principal amount of all
Indebtedness of Cox and the restricted subsidiaries;
provided that, in any event, a restricted subsidiary may incur Indebtedness to
extend, renew or replace its own Indebtedness to the extent that the principal
amount of the Indebtedness so incurred does not exceed the level of the
principal amount of the Indebtedness immediately prior to such extension,
renewal or replacement plus any premium, accrued and unpaid interest or
capitalized interest payable on the previous amount.
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Designation of subsidiaries. Cox may designate a restricted subsidiary
as an unrestricted subsidiary or designate an unrestricted subsidiary as a
restricted subsidiary at any time, provided that:
o immediately after giving effect to such designation, the
restricted group's leverage ratio is not greater than 7:1 and
Cox and the restricted subsidiaries are in compliance with the
"Limitation on Liens" and "Limitation on Indebtedness of
Restricted Subsidiaries" covenants; and
o Cox delivers an officers' certificate with respect to such
designation, to the trustee, within 75 days after the end of
Cox's fiscal quarter in which it made such designation, or, in
the case of a designation made during the last fiscal quarter
of Cox's fiscal year, within 120 days after the end of such
fiscal year. The officers' certificate shall state the
effective date of such designation.
Mergers or sales of assets. The indenture provides that Cox may not
merge with or into or consolidate with another entity or lease, convey or
transfer all or substantially all of its assets to another entity unless either:
o Cox is the surviving corporation; or
o the resulting, surviving or transferee entity is a corporation
organized under the laws of a state of the United States or
the District of Columbia and expressly assumes all of Cox's
obligations under the debt securities and the indenture; and
o immediately after and giving effect to such transaction, no
event of default has occurred.
The indenture does not contain any provisions affording debt securities
holders any additional protection in the event that Cox enters into a
highly-leveraged transaction.
Definitions
Indebtedness means, without duplication, with respect to any entity:
o any indebtedness of such entity for borrowed money or
evidenced by a note, debenture or similar instrument,
including a purchase money obligation which was given in
connection with the acquisition of any property or assets,
including securities;
o any guarantee by such entity of any indebtedness of others as
described in the preceding clause; and
o any amendment, extension, renewal or refunding of any such
indebtedness or guarantee.
The term Indebtedness excludes:
o any indebtedness of Cox or of any its restricted subsidiaries
to Cox or another restricted subsidiary;
o any guarantee by Cox or any restricted subsidiary of
indebtedness of Cox or another restricted subsidiary;
o trade accounts payable; and
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o letters of credit, performance bonds and similar obligations
issued in favor of governmental or franchising authorities as
a term of a cable television franchise or other governmental
franchise, license, permit or authorization held by such
entity or any of its subsidiaries.
Leverage ratio with respect to the restricted group means, as of the
date of and after giving effect to any designation of an unrestricted subsidiary
as a restricted subsidiary, or any designation of a restricted subsidiary as an
unrestricted subsidiary, in each case in accordance with the "Designation of
Subsidiaries" covenant, the ratio of:
o the aggregate outstanding principal amount of all Indebtedness
of the restricted group as of such date;
to
o the product of four times the restricted group cash flow for
the most recent full fiscal quarter for which financial
information is available on such date.
Permitted liens means:
1. Any lien which arises out of a judgment or award against Cox or any
restricted subsidiary, with respect to which Cox or such restricted
subsidiary, at the time, shall be prosecuting an appeal or proceeding for
review, or with respect to which the period within which such appeal or
proceeding for review may be initiated shall not have expired, and with
respect to which:
o Cox or such restricted subsidiary shall have secured a
stay of execution pending such appeal or proceeding for
review; or
o Cox or such restricted subsidiary shall have posted a bond or
established adequate reserves, in accordance with generally
accepted accounting principles, for the payment of such
judgment or award;
2. Any lien upon any real or personal property or interest in such property
belonging to Cox or a restricted subsidiary and existing at the time the
property or interest was acquired, or securing payment of Indebtedness
which Cox or the restricted subsidiary incurred to finance some or all of
the purchase price of, or cost of construction of or improvements on, any
such property or interest therein; provided that:
o the outstanding principal amount of the Indebtedness secured
by such lien does not at any time exceed 100% of the greater
of the purchase price for or the fair value of such real or
personal property or interest;
o such lien does not encumber or constitute a charge against any
other restricted property owned by the restricted group,
except that in the case of construction or improvement, the
lien may extend to unimproved real property on which the
property so constructed or the improvement is located; and
o the indebtedness secured by such lien would be permitted to be
incurred under the covenant described under "Limitation on
Indebtedness of Restricted Subsidiaries;" and
3. Any lien representing the extension, renewal or replacement, or successive
extensions, renewals or replacements, of liens referred to in paragraph (2)
above; provided that the principal of the Indebtedness thus secured does
not exceed
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o the principal of the Indebtedness secured immediately prior to
such extension, renewal or replacement,
plus
o any accrued and unpaid interest or capitalized interest
payable;
and such extension, renewal or replacement shall be limited to:
o all or a part of the property or interest subject to the lien
so extended, renewed or replaced,
plus
o improvements and construction on such property.
The outstanding principal amount of Indebtedness secured by a lien
permitted by paragraph (2) or (3) above or, if less, the fair value of the
property or interest thus secured, shall be included in the calculation of the
aggregate outstanding principal amount of Indebtedness secured by liens on
restricted property, for purposes of determining whether a lien, other than a
permitted lien, may be incurred in compliance with the covenant described under
"Limitation on Liens."
Principal property means, as of any date of determination, any property
or assets which any restricted subsidiary owns other than:
o property which, in the good faith opinion of Cox's board of
directors, is not of material importance to the business
conducted by Cox and its restricted subsidiaries taken as a
whole; and
o any shares of any class of stock or any other security of any
unrestricted subsidiary.
Restricted group means, as of any date of determination, Cox and the
restricted subsidiaries as of such date and after giving effect to any
designation being made on such date in accordance with the "Designation of
Subsidiaries" covenant.
Restricted group cash flow for any period means the restricted group's
net income for such period,
plus
the sum, without duplication, of the aggregate of each of the following
items of Cox and the restricsubsidiaries for such period, to the extent taken
into account as charges to restricted group net income for such period:
o interest expense;
o income tax expense;
o depreciation and amortization expense and other noncash
charges;
o extraordinary items; and
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o after-tax losses on sales of assets outside of the ordinary
course of business, which otherwise are not included in
extraordinary items in accordance with generally accepted
accounting principles;
minus
the sum, without duplication, of the aggregate of each of the following
items of Cox and the restricted subsidiaries for such period, to the extent
taken into account as credits to restricted group net income for such period:
o noncash credits;
o extraordinary items; and
o after-tax gains on sales of assets outside of the ordinary
course of business, which otherwise are not included in
extraordinary items in accordance with generally accepted
accounting principles.
For purposes of this definition:
o Restricted group net income for any period means the aggregate
of the net income or loss of Cox and its restricted
subsidiaries for such period, determined on a consolidated
basis in accordance with generally accepted accounting
principles; provided that the net income or loss of any entity
accounted for by the equity method of accounting, and the net
income or loss of any unrestricted subsidiary, shall be
excluded. However, the net income of any such entity or
unrestricted subsidiary shall be included to the extent of the
amount of dividends or distributions such entity or
unrestricted subsidiary pays to Cox or a restricted subsidiary
during such period; and
o if Cox or any restricted subsidiary consummated any
acquisition or disposition of assets during the period for
which restricted group cash flow is being calculated, or
consummated any acquisition or disposition of assets
subsequent to such period and on or prior to the date as of
which the leverage ratio is to be determined, then, in each
such case, the restricted group cash flow for such period
shall be calculated on a pro forma basis, instead of as a
pooling of interests, if applicable, as if such acquisition or
disposition had occurred at the beginning of such period.
Restricted property means, as of any date of determination, any
principal property and any shares of stock of a restricted subsidiary which Cox
or a restricted subsidiary owns.
Defaults
An event of default with respect to debt securities of any series is
defined in the indenture as:
1. a default in the payment of interest when due on the debt
securities of that series which continues for 30 days;
2. a default in the payment of principal of any debt security of
that series when due, whether at its stated maturity, upon
redemption, upon required repurchase, by declaration or
otherwise;
3. Cox's failure to comply with its obligations under "--Certain
Covenants Mergers or Sales of Assets" above;
<PAGE>
4. Cox's failure to comply, within 60 days after notice provided
in accordance with the terms of the indenture, with any of
its other covenants or agreements contained in the indenture
with respect to that series of debt securities, including its
obligations under the covenants described above under
"--Certain Covenants --Limitation on Liens," "--Limitation on
Indebtedness of Restricted Subsidiaries" or "--Designation of
Subsidiaries," provided that this provision does not apply to
defaults in covenants for which the indenture spectifically
provides otherwise;
5. Indebtedness of Cox or any restricted subsidiary is not paid
within any applicable grace period after final maturity or is
accelerated by its holders because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds 5%
of the aggregate outstanding principal amount of all
Indebtedness of Cox and the restricted subsidiaries;
6. certain events of bankruptcy, insolvency or reorganization of
Cox or a restricted subsidiary;
7. failure to make a sinking fund payment when due on the debt
securities of that series; or
8. any other events of default specified for that series of debt
securities.
Except as described in the second to last sentence of this paragraph,
if an event of default occurs and is continuing with respect to a particular
series of debt securities, the trustee or the holders of at least 25% in
principal amount of the outstanding debt securities of such series may declare
the principal of and accrued but unpaid interest on all the debt securities of
such series to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an event of default relating
to specific events of bankruptcy, insolvency or reorganization of Cox occurs and
is continuing, the principal of and interest on all the debt securities will
become and be immediately due and payable without any declaration or other act
on the part of the trustee or any holders of the debt securities. Under some
circumstances, the holders of a majority in principal amount of the outstanding
debt securities of a series may rescind any acceleration and its consequences
with respect to the debt securities of that series.
Subject to the provisions of the indenture relating to the duties of
the trustee, if an event of default occurs and is continuing, the trustee will
be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of the debt
securities of any series, unless such holders have offered to the trustee
reasonable indemnity or security against any loss, liability or expense. Except
to enforce the right to receive payment of principal, premium, if any, or
interest when due, no debt security holder may pursue any remedy with respect to
the indenture or the debt securities of its series unless:
o that holder has previously given the trustee notice that an
event of default is continuing;
o holders of at least 25% in principal amount of the outstanding
debt securities of such series have requested the trustee to
pursue the remedy;
o those holders have offered the trustee reasonable security or
indemnity against any loss, liability or expense;
o the trustee has not complied with such request within 60 days
of receiving it with an offer of security or indemnity; and
<PAGE>
o the holders of a majority in principal amount of the
outstanding debt securities of such series have not given the
trustee a direction inconsistent with such request within such
60-day period.
Subject to some restrictions, the holders of a majority in principal
amount of the outstanding debt securities of any series are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or of exercising any trust or power conferred on the
trustee. The trustee, however, may refuse to follow any direction that conflicts
with law or the indenture or that the trustee determines is unduly prejudicial
to the rights of any other holder of a debt security of the same series, or that
would involve the trustee in personal liability.
The indenture provides that if a default occurs and is continuing with
respect to a particular series of debt securities and is known to the trustee,
the trustee must mail notice of the default within 90 days after it occurs to
each holder of the debt securities of such series. Except in the case of a
default in the payment of principal of, premium, if any, or interest on any debt
security, the trustee may withhold notice if and so long as a committee of its
trust officers determines that withholding notice is in the interests of the
holders of the debt securities of such series. In addition, Cox must deliver to
the trustee, within 120 days after the end of each fiscal year, an officers'
certificate indicating whether the signers thereof know of any default that
occurred during the previous year. Cox also is required to deliver to the
trustee, within 30 days after its occurrence, written notice of any events which
would constitute certain defaults, their status and what action Cox is taking or
proposes to take.
Prior to the acceleration of the maturity of the debt securities of any
series, the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series may on behalf of all the debt
securities and any related coupons of that series waive any past default or
event of default, except:
o a default in the payment of the principal of, and premium, if
any, or interest on, any of the debt securities or in the
payment of any related coupon; and
o a default that cannot be waived without the consent of each
holder affected.
A waiver will serve to end such default, to cure any event of default, and to
restore Cox, the trustee and holders of the affected debt securities to their
former positions and rights. No such waiver will extend to any subsequent or
other default.
Amendments and Waivers
Subject to specific exceptions, the indenture may be amended with
respect to a series of debt securities with the consent of the holders of a
majority in principal amount then outstanding of the debt securities of that
series, including consents obtained in connection with a tender offer or
exchange for the debt securities. Any past default or compliance with any
provisions also may be waived with such a consent of the holders of a majority
in principal amount then outstanding of the debt securities of such series.
However, without the consent of each holder of an outstanding debt security of
that series, no amendment may, among other things:
o reduce the amount of debt securities of that series whose
holders must consent to an amendment;
o reduce the rate of, or extend the time for, payment of
interest on any debt security of that series;
<PAGE>
o reduce the principal of or extend the stated maturity of any
debt security of that series;
o reduce the premium payable upon the redemption of any debt
security of that series, or change the time at which any debt
security of that series may or shall be redeemed;
o make any debt securities of that series payable in a currency
other than that stated in the debt securities of such series;
o release any security that may have been granted in respect of
the debt securities; or
o make any change (1) affecting the rights of holders of a
majority in principal amount of the outstanding debt
securities of that series to direct the time, method and place
of conducting proceedings for any remedy available to the
trustee, (2) in the amendment provisions which requires each
holder's consent, or (3) in the waiver provisions.
Without the consent of any of the debt securities holders, Cox and the
trustee may amend the indenture:
o to cure any ambiguity, omission, defect or inconsistency;
o to provide for the assumption by a successor entity of Cox's
obligations under the indenture;
o to provide for uncertificated debt securities in addition to
or in place of certificated debt securities;
o to add guarantees with respect to the debt securities;
o to secure the debt securities;
o to add to the covenants for the benefit of holders of all or
any series of the debt securities and to make a default of
that additional covenant an event of default under the
indenture for all or any series of debt securities;
o to surrender any right or power conferred upon Cox;
o to convey, transfer, assign, mortgage or pledge any property
to or with the trustee, or to make such other provisions in
regard to matters or questions arising under this indenture as
shall not adversely affect the interests of any holders of
debt securities;
o to make any change that does not adversely affect the rights
of any debt securities holder;
o to provide for a successor or separate trustee with respect to
the debt securities of one or more series; or
o to comply with any SEC requirement in connection with the
qualification of the indenture under the Trust Indenture Act.
The indenture does not require the debt securities holders to give
consent approving of the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the indenture becomes effective, Cox is
required to mail to holders of the debt securities of the affected series a
notice briefly describing such amendment. However, Cox's
<PAGE>
failure to give such notice to all holders of the debt securities of such
series, or any defect in such notice, will not impair or affect the validity of
the amendment.
Defeasance
Cox at any time may terminate all its obligations with respect to a
particular series of debt securities, and under the indenture, with respect to
the legal defeasance of such series, except for specific obligations including:
o those respecting the defeasance trust;
o to register the transfer or exchange of the debt securities;
o to replace mutilated, destroyed, lost or stolen debt
securities; and
o to maintain a registrar and paying agent in respect of the
debt securities.
Cox at any time may terminate its obligations with respect to a series
of debt securities under the covenants described under "-- Certain Covenants,"
other than the covenants described under "-- Mergers or Sales of Assets," and
any other restrictive covenants described in the accompanying prospectus
supplement relating to that series, as well as the operation of the
cross-acceleration provision and the bankruptcy provisions described under "--
Defaults" above.
Cox may exercise its legal defeasance option notwithstanding its prior
exercise of the covenant defeasance option. If Cox exercises its legal
defeasance option with respect to a particular series of debt securities,
payment of the debt securities of that series may not be accelerated because of
an event of default with respect thereto. If Cox exercises its covenant
defeasance option with respect to a particular series of debt securities,
payment of the debt securities of such series may not be accelerated because of
an event of default as specified in paragraphs (4), (5) or (6) under "--
Defaults" above, with respect to restricted subsidiaries only, or paragraph (8)
above, except to the extent that any of the agreements or covenants referenced
in such paragraphs remain applicable.
In order to exercise either defeasance option with respect to a
particular series of debt securities, Cox must deposit irrevocably in trust,
with the trustee, money or U.S. Government obligations, which trust will be
known as the defeasance trust. Through the payment of interest and principal on
the debt securities in accordance with their terms the defeasance trust will
provide money in an amount sufficient to pay all the principal, including any
mandatory sinking fund payments, of, premium, if any, on, and interest on the
debt securities of that series, to redemption or maturity, as the case may be.
Cox also must comply with other specified conditions, including delivery to the
trustee of an opinion of counsel to the effect that:
o holders of the debt securities of that series will not
recognize income gain or loss for United States federal income
tax purposes as a result of such deposit and defeasance;
o holders of the debt securities of that series will be subject
to United States federal income tax on the same amount, in the
same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred;
o in the case of legal defeasance only, that opinion of counsel
must be based on a ruling of the Internal Revenue Service or
other change in applicable federal income tax law; and
o the creation of the defeasance trust will not violate the
Investment Company Act of 1940, as amended.
<PAGE>
In addition, Cox must deliver to the trustee an officers' certificate
stating that Cox did not make such deposit with the intent of preferring the
debt securities holders over other of Cox's creditors, or with the intent of
defeating, hindering, delaying or defrauding its creditors or the creditors of
others.
Transfer
Holders may transfer or exchange the debt securities in accordance with
the indenture. Unless Cox indicates otherwise in the applicable prospectus
supplement, Cox will issue the debt securities in registered form and they will
be transferable only upon the surrender of such debt securities for registration
of transfer. Cox may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection with certain
transfers or exchanges. Cox is not required to transfer or exchange any debt
security selected for redemption. In addition, Cox is not required to transfer
or exchange any debt security for a period of 15 days before a selection of debt
securities to be redeemed or before any interest payment date.
Governing Law
The indenture provides that it and the debt securities will be governed
by, and construed in accordance with, the laws of the State of New York without
giving effect to applicable principles of conflicts of law to the extent that
the application of the law of another jurisdiction would be required thereby.
Global Securities
Cox may issue the registered debt securities of a series in the form of
one or more fully registered global securities which will be deposited with a
depositary, or with a nominee for the depositary, as identified in the
prospectus supplement relating to such series. A registered global security will
be registered in the name of the depositary or its nominee. If registered debt
securities are issued in global form, one or more registered global securities
will be issued in a denomination or aggregate denominations equal to the portion
of the aggregate principal amount of outstanding registered debt securities of
the series to be represented by those registered global securities. Unless and
until it is exchanged in whole for debt securities in definitive registered
form, a registered global security may not be transferred except as a whole by
the depositary:
o to its nominee;
o by its nominee to such depositary or another such nominee; or
o by the depositary or any of its nominees to a successor of
that depositary or the successor's nominee.
The specific terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a registered global
security will be described in the prospectus supplement relating to such series.
Cox anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a registered global security will
be limited to persons, who will be referred to as participants, who have
accounts with the depositary for such registered global security, or persons
that may hold interests through participants. Upon the issuance of a registered
global security, the depositary will credit the participants' accounts, on its
book-entry registration and transfer system, with the respective principal
amounts of the debt securities represented by such registered global security
and beneficially owned by those participants. The accounts to be credited shall
be designated by any dealers, underwriters or agents participating in the
distribution of those debt securities, or by Cox if it offers and sells such
debt securities directly. Ownership of beneficial interests in such registered
global
<PAGE>
security will be shown on, and the transfer of those ownership interests will be
effected only through, records maintained by the depositary with respect to
participants' interests, and on the records of participants with respect to
interests of persons holding through participants. The laws of some states may
require that some purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability of those
purchasers to own, transfer or pledge beneficial interests in registered global
securities.
So long as the depositary for a registered global security, or its
nominee, is the registered owner of that registered global security, that
depositary or that nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by such registered global
security for all purposes under the indenture. Except as set forth below, owners
of beneficial interests in a registered global security will not be entitled to
have the debt securities registered in their names, will not receive or be
entitled to receive physical delivery of such debt securities in definitive form
and will not be considered the owners or holders of the debt securities under
the indenture. Accordingly, each person owning a beneficial interest in a
registered global security must rely on the procedures of the depositary for
such registered global security and, if such person is not a participant, on the
procedures of the participant through which that person owns its interest, to
exercise any rights a holder possesses under the indenture. Cox understands that
under existing industry practices, if Cox requests any action of holders or if
an owner of a beneficial interest in a registered global security desires to
give or take any action which a holder is entitled to give or take under the
indenture, as the case may be, the depositary for such registered global
security would authorize the participants holding the relevant beneficial
interests to give or take that action, and such participants would authorize
beneficial owners owning through such participants to give or take that action
or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to such depositary or its nominee, as the
case may be, as the registered owner of such registered global security. None of
Cox, the trustee, the registrar or any other agent of Cox, of the trustee or of
the registrar will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in such registered global security, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Cox expects that the depositary for any debt securities represented by
a registered global security, or its nominee, upon receipt of any payment of
principal, premium or interest in respect of the registered global security,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests as shown on the records
of such depositary or its nominee. Cox also expects that payments by
participants to owners of beneficial interests in the registered global security
held through such participants will be governed by standing customer
instructions and customary practices, and will be the responsibility of those
participants, as is now the case with the securities held for the accounts of
customers in bearer form or registered in street name.
If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary, or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and Cox does not appoint a successor depositary registered as
a clearing agency under the Exchange Act within 90 days, Cox will issue such
debt securities in definitive form in exchange for such registered global
security. In addition, Cox may at any time and in its sole discretion determine
not to have any of the debt securities of a series represented by one or more
registered global securities and, in such event, will issue such debt securities
in definitive form in exchange for all of the registered global securities
representing such debt securities. Any debt securities issued in definitive form
in exchange for a registered global security will be registered in such name or
names as the depositary shall instruct the trustee or the registrar. Cox expects
that such instructions, with
<PAGE>
respect to ownership of beneficial interests in the registered global security,
will be based upon directions received by the depositary from participants.
<PAGE>
PLAN OF DISTRIBUTION
Cox may sell the securities to one or more underwriters or dealers for
public offering and sale by them, or it may sell the securities to investors
directly or through agents. The accompanying prospectus supplement will set
forth the terms of the offering and the method of distribution and will identify
any firms acting as underwriters, dealers or agents in connection with the
offering, including:
o the name or names of any underwriters;
o the purchase price of the securities and the proceeds to Cox
from the sale;
o any underwriting discounts and other items constituting
underwriters' compensation;
o any public offering price;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any securities exchange or market on which the securities
offered in the prospectus supplement may be listed.
Only those underwriters identified in such prospectus supplement are deemed to
be underwriters in connection with the securities offered in the prospectus
supplement.
We may distribute the securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at prices
determined as the prospectus supplement specifies. We may sell securities
through forward contracts or similar arrangements. In connection with the sale
of the securities, underwriters, dealers or agents may be deemed to have
received compensation from Cox in the form of underwriting discounts or
commissions and also may receive commissions from securities purchasers for whom
they may act as agent. Underwriters may sell the securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters or commissions from the
purchasers for whom they may act as agent. Some of the underwriters, dealers or
agents who participate in the securities distribution may engage in other
transactions with, and perform other services for, Cox and its subsidiaries in
the ordinary course of business.
Any underwriting compensation which we pay to underwriters or agents in
connection with the securities offering, and any discounts, concessions or
commissions which underwriters allow to dealers, are set forth in the prospectus
supplement. Underwriters, dealers and agents participating in the securities
distribution may be deemed to be underwriters, and any discounts and commissions
they receive and any profit they realize on the resale of the securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters and their controlling persons, dealers and agents may be entitled,
under agreements entered into with Cox, to indemnification against and
contribution toward specific civil liabilities, including liabilities under the
Securities Act.
<PAGE>
LEGAL MATTERS
Dow, Lohnes & Albertson, PLLC, of Washington, D.C., will pass upon the
validity of the securities offered in the prospectus supplement.
EXPERTS
The consolidated financial statements of Cox and Cox Communications
PCS, L.P. incorporated by reference in this prospectus from Cox's Annual Report
on Form 10-K for the year ended December 31, 1998 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports, which are
incorporated by reference into this prospectus, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Cox is subject to the informational requirements of the Securities
Exchange Act and files reports, proxy statements and other information with the
SEC. Our SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York and Chicago or obtain
copies of such materials by mail. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges, as well as the
Public Reference Section's charges for mailing copies of the documents we have
filed.
You can also inspect and copy any of our SEC filings at the offices of
the New York Stock Exchange, Inc., located at 20 Broad Street, New York, New
York, 10005.
INFORMATION INCORPORATED BY REFERENCE
We filed the following documents with the SEC. SEC rules permit us to
incorporate these filings by reference into this prospectus. By incorporating
our SEC filings by reference they are made a part of this prospectus:
o Cox's annual report on Form 10-K for the year ended December
31, 1998;
o Cox's current report on Form 8-K dated January 8, 1999;
o Cox's definitive proxy statement for the 1999 annual meeting
of stockholders dated March 29, 1999;
o Cox's current report on Form 8-K, dated October 1, 1998; and
o Cox's registration statement on Form 8-A.
All documents which Cox will file with the SEC, under the terms of
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act, after the
date of this prospectus and prior to the termination of the securities offering
shall be deemed to be incorporated by reference in, and to be a part of, this
prospectus from the date such documents are filed. Cox's SEC file number for
Securities Exchange Act documents is 1-6590. Cox will provide without charge, to
any person who receives a copy of this prospectus and the
<PAGE>
accompanying prospectus supplement, upon such recipient's written or oral
request, a copy of any document this prospectus incorporates by reference, other
than exhibits to such incorporated documents, unless such exhibits are
specifically incorporated by reference in such incorporated document. Requests
should be directed to:
Dallas S. Clement,
Vice President and Treasurer
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Telephone: (404) 843-5000.
Any statement contained in this prospectus or in a document
incorporated in, or deemed to be incorporated by reference to, this prospectus
shall be deemed to be modified or superseded, for purposes of this prospectus,
to the extent that a statement contained in:
o the prospectus;
o the accompanying prospectus supplement; or
o any other subsequently filed document which also is
incorporated in, or is deemed to be incorporated by reference
to, this prospectus,
o modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this
prospectus.
