SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended March 31, 1998
____ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ______ to______
Commission File Number: 333-19327
OLYMPUS COMMUNICATIONS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 25-1622615
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
OLYMPUS CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-2868925
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-------------------------------------------------------
Main at Water Street
Coudersport, PA 16915-1141
(Address of principal (Zip code)
executive offices)
814-274-9830
(Registrants' telephone number including area code)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
Yes X No __
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
INDEX
Page Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Condensed Consolidated Balance Sheets - December 31, 1997 and March 31, 1998....................3
Condensed Consolidated Statements of Operations - Three Months Ended
March 31, 1997 and 1998........................................................................4
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31,
1997 and 1998..................................................................................5
Notes to Condensed Consolidated Financial Statements............................................6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations..................................................................................8
Item 3..Quantitative and Qualitative Disclosures about Market Risk....................................14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................................15
Item 2. Changes in Securities........................................................................15
Item 3. Defaults Upon Senior Securities.............................................................15
Item 4. Submission of Matters to a Vote of Security Holders.........................................15
Item 5. Other Information...........................................................................15
Item 6. Exhibits and Reports on Form 8-K.............................................................15
SIGNATURES............................................................................................16
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2
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
December 31, March 31,
1997 1998
------------ ------------
ASSETS:
Cable systems, at cost, net of accumulated
depreciation and amortization:
Property, plant and equipment $ 265,783 $ 273,162
Intangible assets 417,559 415,104
----------- -----------
Total 683,342 688,266
Cash and cash equivalents 3,554 3,555
Subscriber receivables - net 12,577 11,935
Prepaid expenses and other assets - net 29,479 28,580
----------- -----------
Total $ 728,952 $ 732,336
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY):
Subsidiary debt $ 427,000 $ 470,000
Parent debt 200,000 200,000
Other debt 46,804 4,503
Accounts payable 15,947 17,739
Subscriber advance payments and deposits 7,907 7,980
Accrued interest and other liabilities 25,265 29,622
Accrued priority return on preferred limited
partner interests 22,241 24,208
Due to affiliates - net 55,169 54,694
Deferred income taxes 40,836 40,836
----------- -----------
Total liabilities 841,169 849,582
----------- -----------
Commitments and contingencies (Note 4)
Partners' equity (deficiency):
Limited partners' interests 488,398 508,873
General partners' equity (deficiency) (600,615) (626,119)
----------- -----------
Total partners' equity (deficiency) (112,217) (117,246)
----------- -----------
Total $ 728,952 $ 732,336
=========== ===========
See notes to condensed consolidated financial statements.
3
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands)
Three Months Ended
March 31,
---------------------------
1997 1998
------------- -------------
<S> <C> <C>
Revenues $ 41,411 $ 50,918
------------ ------------
Operating expenses:
Direct operating and programming 13,869 17,285
Selling, general and administrative 7,511 9,043
Depreciation and amortization 9,939 12,250
Management fees to managing affiliate 2,357 2,698
------------ ------------
Total 33,676 41,276
------------ ------------
Operating income 7,735 9,642
------------ ------------
Other income (expense):
Interest expense (11,434) (13,025)
Interest expense - affiliates (1,650) (1,650)
Other (44) 370
------------ ------------
Total (13,128) (14,305)
------------ ------------
Loss before income taxes (5,393) (4,663)
Income tax benefit 75 -
------------ ------------
Net loss (5,318) (4,663)
Priority return on preferred and senior limited partner interests (18,006) (20,792)
------------ ------------
Net loss of general and limited partners after priority return $ (23,324) $ (25,455)
============ ============
Net loss per general and limited partners' unit after priority return $ (2,332) $ (2,546)
============ ============
See notes to condensed consolidated financial statements.
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4
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Three Months
Ended March 31,
------------------------
1997 1998
------------ -----------
Cash flows from operating activities:
Net loss $ (5,318) $ (4,663)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 6,024 6,794
Amortization 3,915 5,456
Accretion of non-interest bearing note 1,813 -
Deferred income taxes (59) -
Changes in operating assets and liabilities, net of
effects of acquisitions:
Subscriber receivables 963 642
Prepaid expenses and other assets (1,637) (46)
Accounts payable 118 1,792
Subscriber advance payments and deposits 693 73
Accrued interest and other liabilities 1,606 4,285
---------- ----------
Net cash provided by operating activities 8,118 14,333
----------- -----------
Cash flows from investing activities:
Business acquisitions - (2,055)
Expenditures for property, plant and equipment (9,205) (13,249)
---------- ----------
Cash used for investing activities (9,205) (15,304)
---------- ----------
Cash flows from financing activities:
Proceeds from debt - 43,000
Repayments of debt (15,124) (43,153)
Payments of priority returns (18,006) (18,825)
Amounts advanced to (from) affiliates 1,657 (475)
Issuance of preferred limited partner interests 19,656 20,475
Capital distributions (50) (50)
----------- -----------
Net cash (used for) provided by financing activities (11,867) 972
----------- -----------
(Decrease) increase in cash and cash equivalents (12,954) 1
Cash and cash equivalents, beginning of period 26,466 3,554
----------- -----------
Cash and cash equivalents, end of period $ 13,512 $ 3,555
=========== ===========
See notes to condensed consolidated financial statements.
5
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)
The accompanying unaudited condensed consolidated financial statements
of Olympus Communications, L.P. and its substantially wholly-owned subsidiaries
("Olympus" or the "Company") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments, consisting of only
normal recurring accruals necessary for a fair presentation of the financial
position of Olympus at March 31, 1998, and the results of operations for the
three months ended March 31, 1997 and 1998, have been included. These condensed
consolidated financial statements should be read in conjunction with Olympus'
consolidated financial statements included in its Annual Report on Form 10-K for
the year ended December 31, 1997 ("Annual Report"). The results of operations
for the three months ended March 31, 1998 are not necessarily indicative of the
results to be expected for the year ending December 31, 1998.
1. The Registrants:
Olympus Communications, L.P. is a joint venture limited partnership
formed under the laws of Delaware with 50% of the outstanding voting interests
held by ACP Holdings, Inc., a wholly-owned subsidiary of Adelphia Communications
Corporation ("Adelphia") and the managing general partner of Olympus. The
remaining 50% of the voting interest is held by various wholly-owned
subsidiaries of FPL Group, Inc. Olympus' operations consist primarily of selling
video programming which is distributed to subscribers in Florida for a monthly
fee through a network of fiber optic and coaxial cables.
Olympus Capital Corporation, a wholly-owned subsidiary of the Company,
was formed solely for the purpose of serving as a co-issuer with Olympus
Communications, L.P. of the 10 5/8% Senior Notes due 2006 (the "Senior Notes").
Olympus Capital Corporation has no substantial assets or liabilities and no
operations of any kind and the Indenture, pursuant to which such Senior Notes
were issued, limits Olympus Capital Corporation's ability to acquire or hold any
significant assets or other properties or engage in any business activities
other than in connection with the issuance of the Senior Notes.
2. Significant Events Subsequent to the Annual Report:
Olympus has entered into a definitive agreement for the purchase of
cable television systems from Jones Intercable, Inc. These systems will be
acquired for $110,000 cash and serve approximately 46,000 subscribers in and
around the city of Ft. Myers, Florida. The acquisition, which will be accounted
for under the purchase method of accounting, is expected to close during
calendar year 1998.
3. Supplemental Financial Information:
Cash payments for interest were $7,147 and $9,384 for the three months
ended March 31, 1997 and 1998, respectively. Accumulated depreciation of
property, plant and equipment amounted to $142,797 and $163,958 at December 31,
1997 and March 31, 1998, respectively. Accumulated amortization of intangible
assets amounted to $125,178 and $137,534 at December 31, 1997 and March 31,
1998, respectively.
4. Commitments and Contingencies:
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Annual Report for a discussion of
material commitments and contingencies.
6
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)
5. Recent Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income," issued by the Financial
Accounting Standards Board in June 1997 is effective for the interim period
ended March 31, 1998, with reclassification of comparative financial statements.
SFAS No. 130 defines comprehensive income and outlines certain reporting and
disclosure requirements related to comprehensive income. Olympus has no items of
other comprehensive income for either the three months ended March 31, 1997 or
1998.
7
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
(Dollars in thousands)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Form 10-Q, including Management's Discussion and Analysis of Financial Condition
and Results of Operations, is forward-looking, such as information relating to
the effects of future regulation, future capital commitments and the effects of
competition. Such forward-looking information involves important risks and
uncertainties that could significantly affect expected results in the future
from those expressed in any forward-looking statements made by, or on behalf of,
the Company. These risks and uncertainties include, but are not limited to,
uncertainties relating to economic conditions, acquisitions and divestitures,
government and regulatory policies, the pricing and availability of equipment,
materials, inventories and programming, technological developments and changes
in the competitive environment in which the Company operates.
Olympus Communications, L.P. and subsidiaries ("Olympus" or the
"Company") is a joint venture limited partnership formed under the laws of
Delaware with 50% of the outstanding voting interests held by ACP Holdings,
Inc., a wholly-owned subsidiary of Adelphia Communications Corporation
("Adelphia") and managing general partner of Olympus. The remaining 50% of the
voting interest is held by various wholly-owned subsidiaries of FPL Group, Inc.
Olympus Capital Corporation, a wholly-owned subsidiary of the Company,
was formed solely for the purpose of serving as a co-issuer with Olympus
Communications, L.P. of the 10 5/8% Senior Notes due 2006 (the "Senior Notes").
Olympus Capital Corporation has no substantial assets or liabilities and no
operations of any kind and the Indenture, pursuant to which such Senior Notes
were issued, limits Olympus Capital Corporation's ability to acquire or hold any
significant assets or other properties or engage in any business activities
other than in connection with the issuance of the Senior Notes.
Olympus earned substantially all of its revenues in the three months
ended March 31, 1997 and 1998 from monthly subscriber fees for basic, satellite,
premium and ancillary services (such as installations and equipment rentals),
local and national advertising sales, pay-per-view programming, home shopping
networks and electronic security monitoring services.
The changes in Olympus' operating results for the quarter ended March
31, 1998, compared to the same period of the prior year, were primarily the
result of acquisitions, expanding existing cable television operations, the
impact of subscriber rate increases which became effective June 1, 1997, and
vendor price increases for the Company's programming.
The high level of depreciation and amortization associated with the
significant number of acquisitions in recent years, the continuing program of
upgrading and expansion of systems and interest costs associated with financing
activities will continue to have a negative impact on the reported results of
operations. Olympus expects to report net losses for the next several years.
8
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The following table sets forth certain cable television system data at
the dates indicated.
March 31,
-------------------- Percent
1997 1998 Increase
--------- --------- --------
Homes Passed by Cable 650,742 755,185 16.0%
Basic Subscribers 416,760 501,722 20.4%
Exclusive of acquisitions, basic subscribers grew 3.7% during the
twelve months ended March 31, 1998.
The following table is derived from Olympus' condensed consolidated
financial statements that are included in this interim report and sets forth the
historical percentage relationship to revenues of the components of operating
income contained in such financial statements for the periods indicated.
Three Months Ended
March 31,
------------------------
1997 1998
----------- ----------
Revenues 100.0% 100.0%
Operating expenses:
Direct operating and programming 33.5% 33.9%
Selling, general and administrative 18.1% 17.8%
Depreciation and amortization 24.0% 24.1%
Management fees to Managing Affiliate 5.7% 5.3%
--------- ---------
Operating income 18.7% 18.9%
========= =========
Revenues. The primary revenue sources, reflected as a percentage of total
revenues, for the periods indicated were as follows:
Three Months Ended
March 31,
-------------------------
1997 1998
------------ -----------
Regulated service and equipment fees 74% 73%
Premium programming services 13% 11%
Advertising sales and other services 13% 16%
9
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Total revenues increased approximately 23.0% for the three month period
ended March 31, 1998 compared with the same period of the prior year, primarily
due to acquisitions, basic subscriber growth and the impact of rate increases,
partially offset by price reductions on certain services and a decrease in
premium programming services.
The increase in revenues was attributable to the following:
Acquisitions 70%
Basic subscriber growth 16%
Rate increases 9%
Premium programming fees (6%)
Advertising sales and other services 11%
Direct Operating and Programming Expenses. Direct operating and
programming expenses, which are mainly basic and premium programming costs and
technical expenses, increased 24.6% for the three month period ended March 31,
1998 compared with the same period of the prior year. Such increases were
primarily due to increased operating expenses from acquired systems, increased
basic and premium programming costs and increased technical costs associated
with providing electronic security monitoring services.
Selling, General and Administrative Expenses. These expenses, which are
mainly comprised of costs related to system offices, customer service
representatives, and sales and administrative employees, increased 20.4% for the
three month period ended March 31, 1998 compared with the same periods of the
prior year. This increase was primarily due to incremental costs associated with
acquisitions and subscriber growth.
EBITDA. Earnings before interest expense, income taxes, depreciation
and amortization, management fees and other noncash charges ("EBITDA") for the
three month period ended March 31, 1998 increased 24.9% compared with the same
period of the prior year, primarily due to acquisitions, basic subscriber growth
and subscriber rate increases, partially offset by increases in programming,
general and administrative expenses. EBITDA and similar measurements of cash
flow are commonly used in the cable television industry to analyze and compare
cable television companies on the basis of operating performance, leverage and
liquidity. While EBITDA is not an alternative indicator of operating performance
to operating income or an alternative to cash flows from operating activities as
a measure of liquidity, as defined by generally accepted accounting principles,
and, while EBITDA may not be comparable to other similarly titled measures of
other companies, the Company's management believes EBITDA is a meaningful
measure of performance as substantially all of the Company's financing
agreements contain financial covenants based on EBITDA.
Depreciation and Amortization. Depreciation and amortization was higher
for the three month period ended March 31, 1998 compared with the same period of
the prior year, primarily due to increased depreciation and amortization related
to acquisitions and increased capital expenditures.
Management Fees to Managing Affiliate. Pursuant to the terms of the
Company's Partnership Agreement, the Company pays to Adelphia, on a quarterly
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basis, an amount representing an allocation of the corporate overhead of
Adelphia and its subsidiaries with respect to the Company for such period, which
allocation is based upon the ratio of the Company's cable subscribers to the
total cable subscribers owned or managed by Adelphia. Management fees decreased
as a percentage of revenues for the three month period ended March 31, 1998 as
compared with the same period of the prior year, primarily due to revenues
increasing proportionately at a higher rate than allocated corporate costs
included in management fees.
Interest Expense. Interest expense increased 13.9% for the three month
period ended March 31, 1998 compared with the same period of the prior year. The
increase in interest expense was primarily attributable to an increase in the
average amount of debt outstanding due to an acquisition during the three month
period ended December 31, 1997.
Net Loss. The Company reported net losses of $5,318 and $4,663 for the
quarters ended March 31, 1997 and 1998, respectively. The decrease in net loss
for the three months ended March 31, 1998 was due primarily to an increase in
operating income, partially offset by an increase in interest expense.
Liquidity and Capital Resources
The cable television business is capital intensive and typically
requires continual financing for the construction, modernization, maintenance,
expansion, and acquisition of cable systems. The Company historically has
committed significant capital resources for these purposes. These expenditures
were funded through long-term borrowings and, to a lesser extent, advances from
affiliates and internally generated funds. The Company's ability to generate
cash to meet its future needs will depend generally on its results of operations
and the continued availability of external financing.
The Company's network architecture is designed to increase channel
capacity and minimize future capital expenditures, while positioning the Company
to take advantage of future opportunities. Capital expenditures for the three
months ended March 31, 1997 and 1998 were $9,205 and $13,249, respectively. The
Company expects capital expenditures for the remaining nine months of the year
ending December 31, 1998 to range from $40,000 to $50,000.
The Company generally has funded its working capital requirements,
capital expenditures, and acquisitions through long-term borrowings, primarily
from banks, issuance of public debt, advances from affiliates and internally
generated funds. The Company generally has funded the principal and interest
obligations on its long-term borrowings from banks by refinancing the principal
with new loans and by paying the interest out of internally generated funds.
Olympus has funded the interest obligations on its public borrowings from
internally generated funds.
At March 31, 1998, the Company's total outstanding debt aggregated
approximately $675,000 which included $202,000 of parent debt, and $473,000 of
subsidiary debt. In addition, the Company had an aggregate of $3,555 in cash and
cash equivalents, and $86,500 in unused credit lines with banks, which includes
$1,500 also available to affiliates, part of which is subject to achieving
certain levels of operating performance.
At March 31, 1998, the Company's unused credit lines were provided by
reducing revolving credit facilities whose revolver periods expire through
December 31, 2003. The Company's weighted average interest rate on subsidiary
debt was approximately 7.19% at March 31, 1997 compared to 7.02% at March 31,
1998. At March 31, 1998, approximately 24.5% of such debt was subject to fixed
interest rates for at least one year under the terms of such debt or applicable
interest rate swap agreements.
11
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Mandatory reductions in principal under all agreements for indebtedness
for the four years and nine months after March 31, 1998 based on amounts
outstanding at March 31, 1998 are as follows:
Nine months ending December 31, 1998 $ 13,002
Year ending December 31, 1999 34,514
Year ending December 31, 2000 88,990
Year ending December 31, 2001 105,285
Year ending December 31, 2002 121,579
The Company plans to continue to explore and consider new commitments,
arrangements or transactions to refinance existing debt, increase the Company's
liquidity or decrease the Company's leverage. These could include, among other
things, the future issuance of debt and the negotiation of new or amended credit
facilities by the Company, or its subsidiaries. These could also include
entering into acquisitions, joint ventures or other investment or financing
activities, although no assurance can be given that any such transactions will
be consummated. The Company's ability to borrow under current credit facilities
and to enter into refinancings and new financings is limited by covenants
contained in its subsidiaries' credit agreements, including covenants under
which the ability to incur indebtedness is in part a function of applicable
ratios of total debt to cash flow.
The Company believes that cash and cash equivalents, internally
generated funds, borrowings under existing credit facilities, and future
financing sources will be sufficient to meet its short-term and long-term
liquidity and capital requirements. Although in the past the Company has been
able to refinance its indebtedness or obtain new financing, there can be no
assurance that the Company will be able to do so in the future or that the terms
of such financings would be favorable.
Management believes that the telecommunications industry, including the
cable television and telephone industries, continues to be in a period of
consolidation characterized by mergers, joint ventures, acquisitions, sales of
all or part of cable companies or their assets, and other partnering and
investment transactions of various structures and sizes involving cable or other
telecommunications companies. The Company continues to evaluate new
opportunities that allow for the expansion of its business through the
acquisition of additional cable television systems in geographic proximity to
its existing regional markets or in locations that can serve as a basis for new
market areas. The Company, like other cable television companies, has
participated from time to time and is participating in preliminary discussions
with third parties regarding a variety of potential transactions, and the
Company has considered and expects to continue to consider and explore potential
transactions of various types with other cable and telecommunications companies.
However, no assurances can be given as to whether any such transaction may be
consummated or, if so, when.
Regulatory and Competitive Matters
The cable television operations of the Company may be adversely
affected by changes and developments in governmental regulation, competitive
forces and technology. The cable television industry and the Company are subject
to extensive regulation at the federal, state and local levels. The 1992 Cable
Act significantly expanded the scope of regulation of certain subscriber rates
and a number of other matters in the cable industry, such as mandatory carriage
of local broadcast stations and retransmission consent, and increased the
12
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administrative costs of complying with such regulations. The FCC has adopted
rate regulations that establish, on a system-by-system basis, maximum allowable
rates for (i) basic and cable programming services (other than programming
offered on a per-channel or per-program basis), based upon a benchmark
methodology, and (ii) associated equipment and installation services based upon
cost plus a reasonable profit. Under the FCC rules, franchising authorities are
authorized to regulate rates for basic services and associated equipment and
installation services, and the FCC will regulate rates for regulated cable
programming services in response to complaints filed with the agency. The
Telecommunications Act of 1996 (the "1996 Act") ends FCC regulation of cable
programming service tier rates on March 31, 1999.
Rates for basic and cable programming services are set pursuant to a
benchmark formula. Alternatively, a cable operator may elect to use a
cost-of-service methodology to show that rates for basic and cable programming
services are reasonable. Refunds with interest will be required to be paid by
cable operators who are required to reduce regulated rates. The FCC has reserved
the right to reduce or increase the benchmarks it has established. The rate
regulations also limit increases in regulated rates to an inflation indexed
amount plus increases in certain costs such as taxes, franchise fees, costs
associated with specific franchise requirements and increased programming costs.
Cost-based adjustments to these capped rates can also be made in the event a
cable operator adds or deletes channels or completes a significant system
rebuild or upgrade. Because of the limitation on rate increases for regulated
services, future revenue growth from cable services will rely to a much greater
extent than has been true in the past on increased revenues from unregulated
services and new subscribers than from increases in previously unregulated
rates.
The FCC has adopted regulations implementing all of the requirements of
the 1992 Cable Act. The FCC is also likely to continue to modify, clarify or
refine the rate regulations. Olympus cannot predict the effect of the 1996 Act
on future rulemaking proceedings or changes to the rate regulations.
Cable television companies operate under franchises granted by local
authorities which are subject to renewal and renegotiation from time to time.
Because such franchises are generally non-exclusive, there is a potential for
competition with the systems from other operators of cable television systems,
including public systems operated by municipal franchising authorities
themselves, and from other distribution systems capable of delivering television
programming to homes. The 1992 Cable Act and the 1996 Act contain provisions
which encourage competition from such other sources. The Company cannot predict
the extent to which competition will materialize from other cable television
operators, local telephone companies, other distribution systems for delivering
television programming to the home, or other potential competitors, or, if such
competition materializes, the extent of its effect on the Company.
The 1996 Act repealed the prohibition on local exchange telephone
companies ("LECs") from providing video programming directly to customers within
their local exchange areas other than in rural areas or by specific waiver of
FCC rules. The 1996 Act also authorized LECs to operate "open video systems"
("OVS") without obtaining a local cable franchise, although LECs operating such
a system can be required to make payments to local governmental bodies in lieu
of cable franchise fees. Where demand exceeds capacity, up to two-thirds of the
channels on an OVS must be available to programmers unaffiliated with the LEC.
The statute states that the OVS scheme supplants the FCC's "video dialtone"
rules. The FCC has promulgated rules to implement the OVS concept.
The Company believes that the provision of video programming by
telephone companies in competition with the Company's existing operations could
have an adverse effect on the Company's financial condition and results of
operations. At this time, the impact of any such effect is not known or
estimable.
13
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The Company also competes with direct broadcast satellite ("DBS")
service providers. DBS has been available to consumers since 1994. A single DBS
satellite can provide more than 100 channels of programming. DBS service can be
received virtually anywhere in the United States through the installation of a
small outdoor antenna. DBS service is being heavily marketed on a nationwide
basis by several service providers. At this time, any impact of DBS competition
on the Company's future results is not known or estimable.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable
-------------------------------------------------
14
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
PART II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27.01 Financial Data Schedule (supplied for the
information of the Commission).
(b) Reports on Form 8-K:
A Form 8-K was filed on January 14, 1998, which reported
information under Item 2 thereof. No financial statements were
filed with such Form 8-K.
-------------------------------------------------
15
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OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
OLYMPUS COMMUNICATIONS, L.P.
BY: ACP HOLDINGS, INC.
Managing General Partner
Date: May 15, 1998 By: /s/ Timothy J. Rigas
--------------------
Timothy J. Rigas
Executive Vice President,
Treasurer, Principal
Accounting Officer and
Principal Financial Officer
of ACP Holdings, Inc.
Date: May 15, 1998 OLYMPUS CAPITAL CORPORATION
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President,
Treasurer, Principal
Accounting Officer and
Principal Financial Officer
16
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INDEX TO EXHIBITS
Exhibit List:
Please refer to Part II, Item 6 for an exhibit list.
17
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<ARTICLE> 5
<LEGEND>
Financial Data Schedule for Olympus Communications L.P. for the three
months ended March 31, 1998. Information is only included for Olympus
Communications(a registrant) and does not include information for Olympus
Capital Corp., which has no operations.
</LEGEND>
<CIK> 0000861255
<NAME> OLYMPUS COMMUNICATIONS L.P.
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0
0
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<FN>
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