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FILED PURSUANT TO
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 APRIL 20, 1999
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Cox Communications, Inc. ................................................ 3
Use of Proceeds ......................................................... 4
Ratio of Earnings to Fixed Charges ...................................... 4
Description of Capital Stock............................................. 5
Description of the Debt Securities ...................................... 8
Plan of Distribution .................................................... 21
Legal Matters ........................................................... 22
Experts ................................................................. 22
Where You Can Find More Information ..................................... 22
Information Incorporated by Reference ................................... 22
</TABLE>
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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:
. ownership of highly clustered cable television systems;
. being on the cutting edge in upgrading the technological capabilities
of our broadband networks; and
. 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:
. multichannel video;
. digital video;
. high-speed Internet access;
. local and long-distance telephone services; and
. 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.
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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 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)/
---- ---- ---- ---- ----
12.3x 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:
. interest cost including capitalized interest;
. estimated interest component of rent expense; and
. dividends on subsidiary preferred stock.
_______________________
(1) Earnings for the years 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.
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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.
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:
. 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
. 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.
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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:
. 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;
. 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;
. 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
. 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, 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:
. the distinctive designation of each series and the number of shares
that will constitute the series;
. the voting rights, if any, of shares of the series;
. 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;
. the prices at which, and the terms and conditions on which, the shares
of the series may be redeemed, if the shares are redeemable;
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. the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares in the series;
. 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
. 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 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 debt securities will be unsecured senior obligations of Cox, unless we
specify otherwise in a prospectus supplement. Our subsidiaries own most of our
assets. Therefore, our rights and the rights of our 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.
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.
Unless we specify otherwise in the accompanying prospectus supplement, 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.
We refer 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:
. the classification, specific designation, date, aggregate principal
amount, purchase price and denomination of the debt securities;
. 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;
. the formula, if any, upon which we may determine from time to time the
principal amount of debt securities outstanding;
. any date of maturity, which may be fixed or extendible;
. interest rate or rates or the method by which such rate or rates will
be determined, if any;
. the dates on which any such interest will be payable, our right, if
any, to extend or defer the interest period and the duration of such
extensions or deferrals;
. the place or places where the principal of, premium, if any, and
interest on the debt securities will be payable;
. any repayment, redemption, prepayment or sinking fund provisions and
any provisions related to the purchase of such debt securities at the
option of the holders;
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. whether the debt securities will be issuable in global form, and, if
so, the identity of the depositary with respect thereto, or registered
and/or bearer form and, if such bearer securities are issuable, any
restrictions applicable to the exchange of one form for another and to
the offer, sale and delivery of such bearer securities;
. the terms, if any, on which such 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 such debt
securities may be so converted or exchanged;
. 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 we will have the option to redeem such debt securities rather
than pay such additional amounts;
. the subordination provisions, if any, relating to the debt securities;
and
. any other specific terms of the debt securities, including any
additional events of default or covenants provided for with respect to
such 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. We 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 such 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
such 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 such dates,
depending upon the value of the applicable currency, commodity, equity index or
other factor on such dates. Information as to the methods we 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 such date is linked and certain additional tax considerations will be
set forth in the applicable prospectus supplement.
Unless we indicate 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 we
specify 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
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York. Holders may present the debt securities for transfer or exchange at such
office unless we specify otherwise in the prospectus supplement, subject to the
limitations provided in the indenture and without any service charge, but we may
require payment of a sum sufficient to cover any tax or other governmental
charges payable in connection therewith.
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 we specify otherwise in a prospectus supplement for a particular series
of debt securities, all series of debt securities will be Cox senior
indebtedness and will be direct, unsecured obligations, ranking on a parity with
all of our other unsecured and unsubordinated obligations.
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:
. $200 million; or
. 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:
. $200 million; or
. 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:
. 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
. 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 into
or consolidate with another corporation or sell or lease all or substantially
all its assets to another corporation unless either:
. Cox is the surviving corporation; or
. the resulting, surviving or transferee corporation is organized under
the laws of a state of the United States or the District of Columbia
and agrees to pay promptly when due the principal of and premium, if
any, and interest on the debt securities, and to assume, perform and
observe all the covenants and conditions of the indenture; and
. 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:
. 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;
. any guarantee by such entity of any indebtedness of others as
described in the preceding clause; and
. any amendment, extension, renewal or refunding of any such
indebtedness or guarantee.
The term Indebtedness excludes:
. any indebtedness of Cox or of any its restricted subsidiaries;
. any guarantee by Cox or any restricted subsidiary of indebtedness of
Cox or another restricted subsidiary;
. trade accounts payable; and
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. letters of credit, performance bonds and similar obligations issued
in favor of governmental or franchising authorities as a term of
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:
. the aggregate outstanding principal amount of all Indebtedness of the
Restricted Group as of such date;
to
. 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:
. Cox or such restricted subsidiary shall have secured a stay of
execution pending such appeal or proceeding for review; or
. 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:
. 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;
. 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
. 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:
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. that the principal of the Indebtedness thus secured does not exceed
the principal of the Indebtedness secured immediately prior to such
extension, renewal or replacement;
plus
. any accrued and unpaid interest or capitalized interest payable; and
. such extension, renewal or replacement shall be limited to all or a
part of the property or interest subject to the lien so extended,
renewed or replaced;
plus
. 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:
. any such property which, in the Cox board of directors' good faith
opinion, is not of material importance to the business conducted by
Cox and its restricted subsidiaries taken as a whole; and
. 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 restricted subsidiaries for such period, to the
extent taken into account as charges to Restricted Group net income for
such period:
. interest expense;
. income tax expense;
. depreciation and amortization expense and other noncash charges;
. extraordinary items; and
. 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;
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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:
. noncash credits;
. extraordinary items; and
. 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:
. 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
. 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 which
continues for 30 days;
2. A default in the payment of principal when due at its stated maturity, upon
optional redemption, upon required repurchase, or upon declaration, of any
such debt security, or otherwise;
3. Cox's failure to comply with its obligations under "-- Certain Covenants --
Mergers or Sales of Assets" above;
4. Cox's failure to comply, within 60 days after notice, with any of its other
agreements contained in the indenture, including its obligations under the
covenants described above under "-- Limitation on Liens," "-- Limitation on
Indebtedness of Restricted Subsidiaries" or "-- Designation of
Subsidiaries;"
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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; or
6. Certain events of bankruptcy, insolvency or reorganization of Cox or a
restricted subsidiary.
However, a default under paragraph (4) above with respect to a particular series
of debt securities will not constitute an event of default until the trustee or
the holders of 25% in principal amount of the outstanding debt securities of
such series notify Cox of the default and Cox does not cure that default within
the time specified after receipt of that notice.
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:
. that holder has previously given the trustee notice that an event of
default is continuing;
. holders of at least 25% in principal amount of the outstanding debt
securities of such series have requested the trustee to pursue the
remedy;
. those holders have offered the trustee reasonable security or
indemnity against any loss, liability or expense;
. the trustee has not complied with such request within 60 days of
receiving it with an offer of security or indemnity; and
. 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.
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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 not opposed to 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,
a 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.
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:
. reduce the amount of debt securities of that series whose holders
must consent to an amendment;
. reduce the rate of, or extend the time for, payment of interest on
any debt security of that series;
. reduce the principal of or extend the stated maturity of any debt
security of that series;
. 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;
. make any debt securities of that series payable in money other than
that stated in the debt securities of such series;
. impair the right of any holder of the debt securities of that series
to receive payment of principal of, and interest on, that holder's
debt securities on or after the due dates, or to institute suit for
the enforcement of any payment on or with respect to that holder's
debt securities; or
. make any change in the amendment provisions which requires each
holder's consent, or in the waiver provisions.
Without the consent of any of the debt securities holders, Cox and the
trustee may amend the indenture:
. to cure any ambiguity, omission, defect or inconsistency;
. to provide for the assumption by a successor corporation of Cox's
obligations under the indenture;
. to provide for uncertificated debt securities in addition to or in
place of certificated debt securities;
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. to add guarantees with respect to the debt securities;
. to secure the debt securities;
. to add to the covenants for the benefit of the debt securities
holders;
. to surrender any right or power conferred upon Cox;
. to make any change that does not adversely affect the rights of any
debt securities holder; or
. 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 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:
. those respecting the defeasance trust;
. obligations to register the transfer or exchange of the debt
securities;
. to replace mutilated, destroyed, lost or stolen debt securities; and
. 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.
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
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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:
. holders of the debt securities of that series will not recognize
income gain or loss for federal income tax purposes as a result of
such deposit and defeasance;
. holders of the debt securities of that series will be subject to
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;
. 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
. the creation of the defeasance trust will not violate the Investment
Company Act of 1940, as amended.
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 we indicate otherwise in the applicable prospectus supplement,
we 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
We 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 or
in part by the depositary:
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. to its nominee;
. by its nominee to such depositary or another such nominee; or
. 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 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 limits and such laws may impair the ability
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 or our Certificate of
Incorporation. We understand that under existing industry practices, if we
request 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 or our Certificate of
Incorporation, 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.
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We expect 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, or dividends or distribution, respectively, 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. We also
expect 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 Securities 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. We expect that such instructions, with respect to ownership of
beneficial interests in the registered global security, will be based upon
directions received by the depositary from participants.
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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:
. the name or names of any underwriters;
. the purchase price of the securities and the proceeds to Cox from the
sale;
. any underwriting discounts and other items constituting underwriters'
compensation;
. any public offering price;
. any discounts or concessions allowed or reallowed or paid to dealers;
and
. 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.
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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 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 report, which is incorporated by reference into
this prospectus, and have been so incorporated in reliance upon the report of
Deloitte & Touche LLP 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 part of this prospectus.
. Cox's annual report on Form 10-K for the year ended December 31,
1998;
. Cox's current report on Form 8-K dated January 8, 1999;
. Cox's definitive proxy statement for the 1999 annual meeting of
stockholders dated March 29, 1999;
. Cox's current report on Form 8-K, dated October 1, 1998; and
. 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 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
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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:
. the prospectus;
. the accompanying prospectus supplement; or
. any other subsequently filed document which also is incorporated in,
or is deemed to be incorporated by reference to, this prospectus,
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.
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