ADELPHIA COMMUNICATIONS CORP, POS AM, 1994-01-18

ADELPHIA COMMUNICATIONS CORP
POS AM, 1994-01-18
CABLE & OTHER PAY TELEVISION SERVICES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY , 1994

REGISTRATION NO. 33-46550
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------

POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
(FORMERLY FORM S-1)

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------

ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 4841 23-2417713
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of incorporation Classification Code Number) Identification No.)
or organization)

5 WEST THIRD STREET--P.O. BOX 472
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830

(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

COLIN HIGGIN, ESQUIRE
DEPUTY GENERAL COUNSEL
ADELPHIA COMMUNICATIONS CORPORATION
5 WEST THIRD STREET--P.O. BOX 472
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830

(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------

PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:

CARL E. ROTHENBERGER, JR., ESQUIRE ALLAN G. SPERLING, ESQUIRE
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION CLEARY, GOTTLIEB, STEEN & HAMILTON
58TH FLOOR, 600 GRANT STREET ONE LIBERTY PLAZA
PITTSBURGH, PENNSYLVANIA 15219 NEW YORK, NEW YORK 10006
(412) 562-8826 (212) 225-2000
------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION JANUARY 18, 1994
PROSPECTUS

155,100 SHARES

ADELPHIA COMMUNICATIONS CORPORATION

CLASS A COMMON STOCK

($.01 PAR VALUE)

This Prospectus relates to 155,100 shares of Class A Common Stock ("Shares") of
Adelphia Communications Corporation ("Adelphia"), which may be sold by or for
the account of the Selling Stockholder named herein. See "Selling Stockholder."
The Shares were acquired by the Selling Stockholder directly from Adelphia in
May 1992 in connection with a public offering of Class A Common Stock in which
the Selling Stockholder acted as an underwriter.

The Shares may be sold from time to time by the Selling Stockholder in open
market transactions, in private or negotiated transactions or in a combination
of such methods of sale, at fixed prices, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. See "Plan of Distribution." Adelphia will not receive any of
the proceeds from the sale of the Shares.

The Class A Common Stock is listed for trading on the NASDAQ National Market
System. On January 14, 1994, the closing sale price of the Class A Common Stock
on NASDAQ-NMS was $22.25 per share. See "Price Range of the Company's Common
Equity and Dividend Policy."

The rights of holders of Class A Common Stock and Class B Common Stock differ
with respect to certain aspects of dividend, liquidation and voting rights. The
Class A Common Stock has certain preferential rights with respect to cash
dividends and distributions upon the liquidation of Adelphia. Holders of Class
B Common Stock are entitled to greater voting rights than the holders of Class
A Common Stock; however, the holders of Class A Common Stock, voting as a
separate class, are entitled to elect one of Adelphia's directors. See
"Description of Capital Stock."

PROSPECTIVE PURCHASERS OF CLASS A COMMON STOCK SHOULD CAREFULLY CONSIDER THE
MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS JANUARY , 1994.
<PAGE>

AVAILABLE INFORMATION

Adelphia is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at Room 319D, Northwest Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661-2511, and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such reports, proxy statements and other information can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.

Adelphia has filed with the Commission a Registration Statement under the
Securities Act with respect to the securities offered by this Prospectus. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement. For
further information about Adelphia and the securities offered hereby, reference
is made to the Registration Statement and to the financial statements, exhibits
and schedules filed therewith. The statements contained in this Prospectus
about the contents of any contract or other document are not necessarily
complete, and in each instance reference is made to the copy of each such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies
of the Registration Statement and the exhibits and schedules thereto may be
inspected without charge and copied at prescribed rates at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C., 20549.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Adelphia hereby incorporates by reference into this Prospectus the following
documents or information filed with the Commission: (a) Adelphia's Annual
Report on Form 10-K for the fiscal year ended March 31, 1993 (the "Form 10-K");
(b) Adelphia's Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1993 (the "June Form 10-Q"); (c) Adelphia's Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1993 (the "September Form 10-Q");
(d) Adelphia's Current Reports on Form 8-K filed September 3, 1993 and January
18, 1994; (e) Adelphia's Proxy Statement dated August 23, 1993; and (f) the
descriptions of common stock contained in Adelphia's Registration Statement
filed under Section 12(g) of the Exchange Act, including any amendments or
reports filed for the purpose of updating such description.

All documents filed by Adelphia pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act on or after the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in any documents incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for the purpose of this Prospectus to the extent that a
subsequent statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN EXHIBITS UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) ARE
AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST FROM MICHAEL C. MULCAHEY,
DIRECTOR OF INVESTOR RELATIONS OF ADELPHIA AT ADELPHIA'S PRINCIPAL EXECUTIVE
OFFICE LOCATED AT 5 WEST THIRD STREET, COUDERSPORT, PENNSYLVANIA 16915,
TELEPHONE NUMBER (814) 274-9830.

2
<PAGE>

PROSPECTUS SUMMARY

The following information is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus or
incorporated by reference herein. Prospective investors should carefully
consider the factors set forth herein under the caption "Risk Factors."

THE COMPANY

Adelphia Communications Corporation ("Adelphia" and, collectively with its
subsidiaries, the "Company") is one of the largest cable television operators
in the United States. As of September 30, 1993, cable television systems owned
or managed by the Company (the "Systems") served 1,284,209 basic subscribers.
John J. Rigas, the Chairman, President, Chief Executive Officer and founder of
Adelphia, has owned and operated cable television systems since 1952.

The Company's wholly-owned cable systems (the "Company Systems") are located
in eight states and are organized into seven regional clusters: Western New
York, Virginia, Western Pennsylvania, New England, Eastern Pennsylvania, Ohio
and Coastal New Jersey. The Company Systems are located primarily within the 50
largest television markets. As of September 30, 1993, the Company Systems
passed 1,128,891 homes and served 828,453 basic subscribers.

The Company owns a 50% voting interest and nonvoting preferred limited
partnership interests entitling the Company to a 16.5% priority return in
Olympus Communications, L.P. ("Olympus"). Olympus is a joint venture which owns
cable systems (the "Olympus Systems") primarily located in some of the fastest
growing areas of Florida. The Olympus Systems in Florida form a substantial
part of an eighth regional cluster, Southeastern Florida. The Company is the
managing general partner of Olympus and receives a fee for providing management
services. As of September 30, 1993, the Olympus Systems passed 451,878 homes
and served 264,762 basic subscribers.

The Company also provides, for a fee, management and consulting services to
certain partnerships (the "Managed Partnerships"). John J. Rigas and certain
members of his immediate family, including entities they own or control
(collectively, the "Rigas Family"), control or have substantial ownership
interests in the Managed Partnerships. As of September 30, 1993, cable systems
owned by the Managed Partnerships (the "Managed Systems") passed 265,364 homes
and served 190,994 basic subscribers.

The Company's strategy has been to provide superior customer service while
maximizing operating cash flow. By clustering its systems in geographic
proximity, the Company has been able to realize significant operating
efficiencies through the consolidation of many managerial, administrative and
technical functions while maintaining a strong community presence in its
service areas. At September 30, 1993, approximately 642,000, or 50%, of the
Systems' basic subscribers were served from only ten headends and approximately
1,027,000, or 80%, of such subscribers were served from only 27 headends. In
addition, approximately 65% of the Systems' basic subscribers were served by
systems serving more than 50,000 subscribers while, nationwide, only 39% were
served by systems as large. Over 99% of the subscribers to the Company Systems
are served by systems with "addressable capable" technology.

Since April 1, 1988, the Company has invested more than $358,000,000 to
modernize and expand the Company Systems. In particular, the Company has
replaced approximately 18% of the total installed trunk cable for the Systems
with fiber optic cable. In addition, the Company has installed over 400 miles
of fiber optic plant for point-to-point applications such as connecting or
eliminating headends or microwave link sites. Through the use of fiber optic
cable and other technological improvements, the Company has increased system
reliability, channel capacity and its ability to deliver advanced cable
television services. These improvements have enhanced customer service, reduced
operating expenses and allowed the Company to introduce additional services,
such as impulse-ordered pay-per-view programming, which expand customer choices
and increase Company revenues. The Company believes that the installation of
fiber optic cable plant will better position the Company to deliver new or
enhanced services in the future.

Management believes that the telecommunications industry, including the cable
television and telephone industries, is 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. Management also believes that the Company is well
positioned to participate in this consolidation trend due to its well-clustered
cable systems, the quality of its cable plant, its management strengths and its
relationships within the cable industry. 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, the Company has not reached any
agreements, in principal or otherwise, with respect to any material transaction
and no assurances can be given as to whether any such transaction may be
consummated or, if so, when.

3
<PAGE>

RECENT EVENTS--THE STOCK OFFERING

On January 7, 1994, the Company announced in a press release that its
registration statement with respect to the offer and sale of 8,832,604 shares
of Class A Common Stock (the "Stock Offering") had been declared effective by
the Securities and Exchange Commission. The 8,832,604 shares do not include an
additional 300,000 shares of Class A Common Stock that the Company sold to the
Underwriter in the Stock Offering pursuant to an over-allotment option. Upon
completion of the Stock Offering and the sale of the additional 300,000 shares
pursuant to the over-allotment option on January 14, 1994, there were
13,507,604 shares of Class A Common Stock outstanding and a total of 24,452,080
shares of Class A Common Stock and Class B Common Stock outstanding. Certain
provisions of this Prospectus present information that gives effect to the
completion of the Stock Offering with estimated net proceeds, before offering
expenses, of $151,435,000 or $17.145 per share to the Company. The exercise of
the over-allotment option for the 300,000 additional shares provided an
additional $5,143,500 in net proceeds to the Company which is not reflected or
presented elsewhere herein. The net proceeds from the Stock Offering and the
over-allotment option are to be used to redeem all the Company's outstanding
13% Senior Subordinated Notes Due 1996 ("Senior Subordinated Notes") and to
reduce bank debt of Adelphia's subsidiaries. Of the 8,832,604 shares of Class A
Common Stock sold in the Stock Offering, 3,000,000 shares were sold to the
public at $18.00 per share and 5,832,604 shares were sold directly by Adelphia
to partnerships controlled by members of the Rigas Family, at the public
offering price less the underwriting discount. Highland Holdings and Syracuse
Hilton Head Holdings, L.P., which purchased 4,374,453 and 1,458,151 of such
5,832,604 shares, respectively, hold and control the Managed Systems.

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA (DOLLARS IN THOUSANDS EXCEPT PER SHARE AND
PER SUBSCRIBER DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30,
------------------------------------------------------- ------------------
1989 1990 1991 1992 1993 1992 1993
--------- --------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................ $ 186,379 $ 228,643 $ 248,586 $ 273,630 $ 305,222 $148,578 $159,620
Operating Income before
Depreciation and
Amortization........... 100,177 129,936 141,158 154,416 173,377 85,142 89,531
Depreciation and
Amortization........... 114,009 122,107(a) 79,427 84,817 90,406 44,809 45,316
Operating Income (Loss). (13,832) 7,829 61,731 69,599 82,971 40,333 44,215
Interest Income from Af-
filiates............... 1,257 933 1,596 3,085 5,216 2,628 2,490
Other Income (Expense).. 261 122 1,750 968 1,447 632 283
Priority Investment In-
come (b)............... -- 9,797 19,175 22,300 22,300 11,150 11,150
EBITDA (c).............. 101,695 140,788 163,679 180,769 202,340 99,552 103,454
Interest Expense........ (111,331) (150,263) (163,637) (164,839) (164,859) (77,485) (90,131)
Loss before Income
Taxes, Extraordinary
Loss and Cumulative
Effect of Change in
Accounting Principle
(d).................... (123,645) (156,939) (141,360) (121,605) (99,766) (57,232) (47,314)
Net Loss................ (123,645) (156,939) (141,360) (121,605) (176,795) (71,618) (138,764)
Loss per Share of Common
Stock before Income
Taxes, Extraordinary
Loss and Cumulative
Effect of Change in
Accounting Principle
(d).................... (8.94) (11.36) (10.23) (8.80) (6.80) (3.82) (3.21)
Net Loss per Share of
Common Stock........... (8.94) (11.36) (10.23) (8.80) (11.68) (4.79) (9.06)
Cash Dividends Declared
per Common Share....... -- -- -- -- -- -- --
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30, 1993
--------------------------------------------------------- --------------------------
1989 1990 1991 1992 1993 ACTUAL AS ADJUSTED(E)
---------- ---------- ---------- ---------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Cash
Equivalents............ $ 43,662 $ 15,287 $ 18,592 $ 11,173 $ 38,671 $22,564 $ 22,564
Investment in and
Amounts Due from
Olympus (f)............ -- 87,337 79,030 64,972 7,692 745 745
Total Assets............ 897,555 971,792 981,960 925,791 949,593 949,385 949,118
Total Debt.............. 1,121,796 1,355,330 1,495,025 1,554,270 1,731,099 1,776,550 1,626,050
Debt Net of Cash (g).... 1,078,134 1,340,043 1,476,433 1,543,097 1,692,428 1,753,986 1,603,486
Stockholders' Equity
(Deficiency)........... (293,640) (450,579) (591,939) (713,544) (868,614) (1,007,378) (857,145)
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30,
------------------------------------------- --------------------------------
AS ADJUSTED(E)
1989 1990 1991 1992 1993 1992 1993 1993
------- ------- ------- ------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND OTHER DATA:
Total Debt to EBITDA
(h).................... 9.87x 8.69x 8.85x 8.09x 8.41x 8.37x 8.55x 7.83x
Debt Net of Cash to
EBITDA................. 9.48x 8.59x 8.74x 8.03x 8.22x 8.23x 8.44x 7.72x
EBITDA to Total Interest
Expense................ 0.91 0.94 1.00 1.10 1.23 1.28 1.15 1.25x
Operating Margin (i).... 53.7% 56.8% 56.8% 56.4% 56.8% 57.3% 56.1% 56.1%
Capital Expenditures.... $58,501 $75,619 $77,851 $52,808 $70,975 $31,448 $31,153 $31,153
Average Monthly Revenue
per Basic Subscriber
(j).................... $25.07 $26.61 $28.63 $29.82 $32.40 $30.97 $32.13 $32.13
</TABLE>

SUMMARY SUBSCRIBER DATA (K)

<TABLE>
<CAPTION>
AS OF
AS OF MARCH 31, SEPTEMBER 30,
----------------------------------------------- -------------------
1989 1990 1991 1992 1993 1992 1993
------- --------- --------- --------- --------- --------- ---------
COMPANY SYSTEMS:
<S> <C> <C> <C> <C> <C> <C> <C>
Homes Passed............ 920,703 1,032,081 1,072,950 1,099,462 1,124,238 1,117,287 1,128,891
Basic Subscribers....... 639,311 732,538 767,817 792,198 816,983 810,556 828,453
Premium Service Units... 455,530 478,967 465,995 453,401 442,460 441,916 418,387
<CAPTION>
OLYMPUS SYSTEMS:
<S> <C> <C> <C> <C> <C> <C> <C>
Homes Passed............ 139,374 399,837 435,793 454,462 461,768 437,067 451,878
Basic Subscribers....... 53,018 234,195 257,222 271,121 276,571 212,894 264,762
Premium Service Units... 51,060 149,724 150,373 137,735 137,044 104,329 115,773
</TABLE>

5
<PAGE>

- --------
(a) Reflects an increase in estimated useful lives of certain intangible assets
effective January 1990. See Note 1 to the Adelphia Communications
Corporation Consolidated Financial Statements.

(b) The Company's return on its priority investment in Olympus is based on a
16.5% return on its nonvoting preferred limited partnership interests ("PLP
Interests"), although the Company recognizes priority investment income
only to the extent received. At March 31, 1993 and September 30, 1993,
$68,702,000 and $85,667,000, respectively, of accumulated priority return
remained unpaid.

(c) Earnings before interest, income taxes, depreciation and amortization,
equity in net loss of Olympus, extraordinary loss and cumulative effect of
change in accounting principle. The use of the term "EBITDA" is consistent
with the use of the same term in the indentures for the 10 1/4% Senior
Notes due 2000 (the "10 1/4% Notes"), the 9 7/8% Senior Debentures due 2005
(the "9 7/8% Debentures"), the 11 7/8% Senior Debentures due 2004 (the "11
7/8% Debentures") and the 12 1/2% Senior Notes due 2002 (the "12 1/2%
Notes"). 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.

(d) "Extraordinary loss" relates to loss on the early retirement of the
Company's 16 1/2% Senior Discount Notes due 1999 ("Senior Discount Notes").
"Cumulative Effect of Change in Accounting Principle" refers to a change in
accounting principle for Olympus and the Company. Effective January 1, 1993
and April 1, 1993, respectively, Olympus and the Company adopted the
provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS 109), which requires an asset and
liability approach for financial accounting and reporting for income taxes.
SFAS 109 resulted in the cumulative recognition of an additional liability
by Olympus and the Company of approximately $59,500,000 and $89,660,000,
respectively.

(e) As adjusted data for the six months ended September 30, 1993 give effect to
the issuance of 8,832,604 shares of Class A Common Stock in the Stock
Offering and to the application of $151,090,000 in net proceeds therefrom
after estimated expenses, as if all such events had occurred on April 1,
1993.

(f) Investment in and amounts due from Olympus at September 30, 1993 is
comprised of the following:
<TABLE>
<S> <C>
Gross Investment in Preferred Limited Partnership Interests
and General Partner's Equity.............................. $ 283,002,000
Excess of Ascribed Value of Contributed Property over
Historical Cost........................................... (98,303,000)
Cumulative Equity in Net Loss of Olympus................... (261,712,000)
-------------
Investments in Olympus.................................... (77,013,000)
Amounts due from Olympus................................... 77,758,000
-------------
Total.................................................... $ 745,000
=============
</TABLE>
(g) Total debt less cash and cash equivalents.

(h) Based on annualized EBITDA for the quarter ending the period presented. The
Company believes that this presentation is consistent with the covenant
test which limits the incurrence of indebtedness in the indentures for the
10 1/4% Notes, the 9 7/8% Debentures, the 11 7/8% Debentures and the 12
1/2% Notes and that this ratio is commonly used in the cable television
industry as a measure of leverage.

(i) Percentage representing operating income before depreciation and
amortization divided by revenues.

(j) Average for the last quarter of each period presented, including revenues
and subscribers for the South Dade System (as defined herein) up to
December 1989, the date of transfer to Olympus. The Company believes that
this presentation provides meaningful trend information over the periods
presented and is commonly used in the cable television industry to present
such data on a comparative basis.

(k) See "Business--Development of the Systems" for certain definitions used in
this table. The South Dade System was transferred to Olympus in December
1989. Subscriber data for the South Dade System is included under the
Olympus Systems and excluded from the Company Systems for all periods
presented. Information contained in this table and elsewhere in this
Prospectus regarding homes passed and basic subscribers for Olympus at
March 31, 1993 includes information for the South Dade System presented as
of July 31, 1992 prior to Hurricane Andrew. Information as of September 30,
1992 and 1993 reflects actual homes passed and basic subscribers for
Olympus' South Dade System. At July 31, 1992, prior to Hurricane Andrew,
the South Dade System passed 157,922 homes and served 71,193 basic
subscribers. At September 30, 1992 and 1993, the South Dade System served
approximately 12,000 basic subscribers and 58,309 basic subscribers,
respectively, and at December 6, 1993, it served 60,117 basic subscribers.

6
<PAGE>

THE COMPANY

The Company is one of the largest cable television operators in the United
States. As of September 30, 1993, cable television systems owned or managed by
the Company served 1,284,209 basic subscribers. John J. Rigas, the Chairman,
President, Chief Executive Officer and founder of Adelphia, has owned and
operated cable television systems since 1952.

The Company Systems are located in eight states and are organized in seven
regional clusters: Western New York, Virginia, Western Pennsylvania, New
England, Eastern Pennsylvania, Ohio and Coastal New Jersey. The Company Systems
are located primarily in suburban areas of large and medium-sized cities within
the 50 largest television markets. As of September 30, 1993, the Company
Systems passed 1,128,891 homes and served 828,453 basic subscribers.

The Company owns a 50% voting interest in Olympus and nonvoting PLP Interests
entitling the Company to a 16.5% priority return. The Olympus Systems are
primarily located in some of the fastest growing areas of Florida. The Olympus
Systems in Florida form a substantial part of an eighth regional cluster,
Southeastern Florida. The Company is the managing general partner of Olympus
and receives a fee for providing management services. As of September 30, 1993,
the Olympus Systems passed 451,878 homes and served 264,762 basic subscribers.

The Company also provides, for a fee, management and consulting services to
the Managed Partnerships. The Rigas Family controls or has substantial
ownership interests in the Managed Partnerships. As of September 30, 1993, the
Managed Systems passed 265,364 homes in Pennsylvania, New York, South Carolina,
North Carolina and Virginia, and served 190,994 basic subscribers.

The Company's strategy has been to provide superior customer service while
maximizing operating cash flow. By clustering its systems in geographic
proximity, the Company has been able to realize significant operating
efficiencies through the consolidation of many managerial, administrative and
technical functions while maintaining a strong community presence in its
service areas. At September 30, 1993, approximately 642,000, or 50%, of the
Systems' basic subscribers were served from only ten headends and approximately
1,027,000, or 80%, of such subscribers were served from only 27 headends. In
addition, approximately 65% of the Systems' basic subscribers were served by
systems serving more than 50,000 subscribers while, nationwide, only 39% of
basic subscribers were served by systems as large. Over 99% of the subscribers
to the Company Systems are served by systems with "addressable capable"
technology.

The Company has made a substantial commitment to the technological
development of the Company Systems and has actively sought to modernize its
cable plant in order to increase channel capacity for the delivery of
additional programming and new services. Since April 1, 1988, the Company has
invested more than $358,000,000 to modernize and expand the Company Systems. In
particular, the Company has replaced approximately 18% of the total installed
trunk cable for the Systems with fiber optic cable. In addition, the Company
has installed over 400 miles of fiber optic plant for point-to-point
applications such as connecting or eliminating headends or microwave link
sites. Through the use of fiber optic cable and other technological
improvements, the Company has increased system reliability, channel capacity
and its ability to deliver advanced cable television services. These
improvements have enhanced customer service, reduced operating expenses and
allowed the Company to introduce additional services, such as impulse-ordered
pay-per-view programming, which expand customer choices and increase Company
revenues. The Company believes that the installation of fiber optic cable plant
will better position the Company to deliver new or enhanced services in the
future.

Adelphia was incorporated in Delaware on July 1, 1986 for the purpose of
reorganizing five cable television companies, then principally owned by the
Rigas Family, into a holding company structure in connection with the initial
public offering of Adelphia's Class A Common Stock and its Senior Subordinated
Notes. The Company's executive offices are located at 5 West Third Street,
Coudersport, Pennsylvania 16915, and its telephone number is (814) 274-9830.

7
<PAGE>

RISK FACTORS

Prior to making an investment decision, prospective investors should
carefully consider, along with other matters referred to herein or incorporated
by reference herein, the following:

REGULATION AND COMPETITION IN THE CABLE TELEVISION INDUSTRY

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. Many aspects of
such regulation are currently the subject of judicial proceedings and
administrative or legislative proceedings or proposals. On October 5, 1992,
Congress passed the Cable Television Consumer Protection and Competition Act of
1992 (the "1992 Cable Act") which significantly expands 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 which will increase the administrative costs of
complying with such regulations. On May 3, 1993, the Federal Communications
Commission (the "FCC") released 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 rate regulations became effective on
September 1, 1993. The FCC has also ordered an interim rate freeze effective
April 5, 1993 through February 15, 1994.

The rate regulations require a reduction of existing rates charged for basic
services and regulated cable programming services to the greater of (i) the
applicable benchmark level or (ii) the rates in force as of September 30, 1992
reduced by 10%, adjusted forward for inflation. Rate reductions are not
required to the extent that a cable operator at its option elects to use an
alternative cost-of-service methodology and shows that rates for basic and
cable programming services are reasonable. On July 15, 1993, the FCC announced
a proposal to adopt rules providing for traditional cost-of-service
requirements to govern cost-of-service showings by cable operators. Refunds
with interest will be required to be paid by cable operators who are required
to reduce regulated rates after September 1, 1993, calculated from the
effective date of the FCC's rate regulations with regard to basic rates, and
from the date a complaint is filed with the FCC with regard to the rates
charged for regulated programming services. The FCC has reserved the right to
reduce or increase the benchmarks it has established. The rate regulations will
also limit future increases in regulated rates to an inflation indexed amount
plus increases above the inflation index in certain costs such as taxes,
franchise fees, costs associated with specific franchise requirements and
increased programming costs. 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 most of the requirements of the
1992 Cable Act and is in the process of completing certain additional
rulemaking proceedings before the 1992 Cable Act can be fully implemented. The
FCC is also likely to continue to modify, clarify or refine the rate
regulations and benchmark methodology. In addition, litigation has been
instituted challenging various portions of the 1992 Cable Act and the
rulemaking proceedings. The Company cannot predict the effect or outcome of the
future rulemaking proceedings, changes to the rate regulations, or litigation.
Further, because the FCC has not yet adopted final cost-of-service rules, the
Company cannot predict whether it would be able to utilize cost-of-service
showings to justify rates.

Effective as of August 31, 1993, in accordance with the 1992 Cable Act, the
Company repackaged certain existing cable services by adjusting rates for basic
service and introducing a new method of offering certain cable services. The
Company adjusted the basic service rates and related equipment and installation
rates in

8
<PAGE>

all of its systems in order for such rates to be in compliance with the
applicable benchmark or equipment and installation cost levels. The Company
also implemented a program in all of its systems called "CableSelect" under
which most of the Company's satellite-delivered programming services are now
offered individually on a per channel basis, or as a group at a price of
approximately 15% to 20% below the sum of the per channel prices of all such
services. For subscribers who elect to customize their channel lineup, the
Company will provide, for a monthly rental fee, an electronic device located on
the cable line outside the home, enabling a subscriber's television to receive
only those channels selected by the subscriber. These basic service rate
adjustments and the CableSelect program are also being implemented in all
systems managed by the Company. The Company believes CableSelect provides
increased programming choices to the Company's subscribers while providing
flexibility to the Company to respond to future changes in areas such as
customer demand and programming. Certain programmers have taken the position
that the Company's new method of offering services is inconsistent with their
programming agreements. The Company disagrees and is in discussions with these
programmers. Because the Company's new method of offering services will depend
upon several factors, including decisions of subscribers and the cost and
availability of programming, the Company is currently unable to determine the
effect that this new method will have on its business and results of operations
for future periods. As part of its survey of post-September 1, 1993 cable rates
of the 25 largest multiple systems operators in the United States, the FCC is
reviewing the cable rates of eleven of such operators, including the Company,
that offer certain of their cable services on a per channel basis. A letter of
inquiry, one of at least 52 sent by the FCC to numerous cable operators, was
recently received by an Olympus System regarding the implementation of this new
method of offering services.

The Company is currently unable to predict the effect that implementation of
the rate regulations and other provisions of the 1992 Cable Act, future FCC
rulemaking proceedings including cost-of-service standards, and its new method
of offering services will have on its business and results of operations in
future periods. No assurance can be given at this time that such matters will
not have a material adverse effect on the Company's business and results of
operations in the future. Also, no assurance can be given as to what other
future actions Congress, the FCC or other regulatory authorities may take or
the effects thereof on the Company.

On July 16, 1993, Moody's Investors Service Inc. ("Moody's") announced that
it had placed long-term debt of five cable television companies, including
Adelphia, under review for possible downgrade due to concerns about potential
effects on such respective companies resulting from the negative impact of the
FCC rate regulations on revenues and cash flow and from such respective
companies' relative lack of diversity. Standard & Poor's Corp. ("S&P")
announced, on October 20, 1993, that it had placed Adelphia's senior unsecured
and subordinated debt on Credit Watch for possible downgrade. Prospective
investors are referred to official information published from time to time by
Moody's, S&P and other credit rating agencies for further information.

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 contains provisions which
encourage competition from such other sources. Additionally, recent court and
administrative decisions have removed certain of the restrictions that have
limited entry into the cable television business by potential competitors such
as telephone companies, and proposals now under consideration by the FCC, and
which are being and from time to time have been considered by Congress, could
result in the elimination of other such restrictions. The Company cannot
predict the extent to which competition will materialize from other cable
television operators, 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.

FCC rules permit local telephone companies to offer "video dialtone" service
for video programmers, including channel capacity for the carriage of video
programming and certain non-common carrier activities

9
<PAGE>

such as video processing, billing and collection and joint marketing
agreements. On December 15, 1992, New Jersey Bell Telephone Company filed an
application with the FCC to operate a "video dialtone" service in portions of
Dover County, New Jersey, in which the Company serves approximately 20,000
subscribers. The Company opposed the application. On July 28, 1993, the FCC
sent a letter to New Jersey Bell stating that the application appeared to be
inconsistent with the FCC's video dialtone requirements in that insufficient
capacity to serve multiple programmers was to be made available. New Jersey
Bell was given the opportunity to amend its application which, it subsequently
did. The Company then filed a further opposition to the application. The matter
has not yet been decided by the FCC.

On December 17, 1992, the Chesapeake and Potomac Telephone Company of
Virginia and Bell Atlantic Video Service Company ("Bell Atlantic Video") filed
suit in U.S. District Court in Alexandria, Virginia seeking to declare
unconstitutional the provisions in the Cable Communications Policy Act of 1984
(the "1984 Cable Act") that prohibit telephone companies from owning a cable
television system in their telephone service areas. On August 24, 1993, the
court held that the 1984 Cable Act cross-ownership provision is
unconstitutional, and it issued an order enjoining the FCC from enforcing the
cross-ownership ban. The U.S. Justice Department has announced that it will
appeal this decision to the U.S. Court of Appeals for the Fourth Circuit.
Similar suits have been filed in other federal district courts.

The Company cannot predict the outcome of the New Jersey Bell video dialtone
proceeding or the Bell Atlantic Video litigation. However, the Company believes
that the provision of video programming by telephone companies with
considerable financial resources 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 magnitude of any such effect is
not known or estimable.

For further discussion relating to regulatory and competitive matters, see
"Management's Discussion and Analysis," "Business--Competition" and
"Legislation and Regulation."

SUBSTANTIAL LEVERAGE

The Company is highly leveraged and has incurred substantial indebtedness,
primarily to finance acquisitions and expansion of its operations and, to a
lesser extent, for investments in and advances to affiliates. At September 30,
1993, the Company's total debt aggregated approximately $1,776,550,000 which
included approximately $916,183,000 of subsidiary debt and approximately
$860,367,000 of parent debt. The Company's total debt has varying maturities to
2005, including as of September 30, 1993 an aggregate of approximately
$682,841,000 maturing on or prior to March 31, 1998. The Company's financing
strategy has been to maintain its public long-term debt at the holding company
level while borrowing in the private debt markets (e.g., bank and insurance
company debt) through the Company's wholly-owned subsidiaries. The Company's
subsidiary financings are effected through separate borrowing groups, and
substantially all of the indebtedness in these borrowing groups is non-recourse
to Adelphia. The subsidiary credit arrangements have varied revolving credit
and term periods and contain separately-negotiated covenants relating to cross-
defaults and the incurrence of additional debt for each borrowing group. See
"Management's Discussion and Analysis" and Note 3 to the Adelphia
Communications Corporation Consolidated Financial Statements.

Historically, the Company's cash generated from operating activities and
borrowings has been sufficient to meet its requirements for debt service,
working capital, capital expenditures, and investments in and advances to
affiliates. The Company believes that it will continue to generate cash and
obtain financing sufficient to meet such requirements. However, the Company's
ability to incur additional indebtedness is limited by covenants in its parent
company indentures and subsidiary credit agreements. If the Company were unable
to meet its debt service obligations, the Company would have to consider
refinancing its indebtedness or obtaining new financing. Although in the past
the Company has been able to refinance its indebtedness and to obtain new
financing, there can be no assurance that the Company would be able to do so in
the future or that, if the Company were able to do so, the terms available
would be favorable to the Company. In the event that the Company were unable to
refinance its indebtedness or obtain new financing

10
<PAGE>

under these circumstances, the Company would likely have to consider various
options such as the sale of certain assets to meet its required debt service,
negotiation with its lenders to restructure applicable indebtedness or other
options available to it under applicable law. See "Selected Consolidated
Financial Data" and "Management's Discussion and Analysis."

NET LOSSES AND STOCKHOLDERS' DEFICIENCY

The total stockholders' deficiency at March 31, 1993 and at September 30,
1993 was $868,614,000 and $1,007,378,000, respectively. The stockholders'
deficiency generally has resulted from the Company's reported net losses which
have been caused primarily by high levels of depreciation and amortization and
interest expense. The Company reported net losses of approximately
$141,400,000, $121,600,000 and $176,800,000, respectively, for the years ended
March 31, 1991, 1992 and 1993, and $71,618,000 and $138,764,000, respectively,
for the six months ended September 30, 1992 and 1993. The increases in net loss
for the year ended March 31, 1993 and the six months ended September 30, 1993,
compared to the respective prior year periods, were primarily due to the
cumulative effect of change in accounting principle for Olympus and the
Company. Effective January 1, 1993 and April 1, 1993, Olympus and the Company,
respectively, adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes." The cumulative effect
of adopting SFAS No. 109 was to increase the net loss by $59,500,000 and
$89,660,000 for the year ended March 31, 1993 and the six months ended
September 30, 1993, respectively. The Company expects to incur significant
losses for the next several years. See "Management's Discussion and Analysis"
and "Business--Development of the Systems."

VOTING CONTROL AND DISPARATE VOTING RIGHTS

As of December 14, 1993, the Rigas Family beneficially owned 10,846,544
shares, or 99.1%, of Adelphia's Class B Common Stock and 952,300 shares, or
21.8%, of Adelphia's Class A Common Stock. On a combined basis, these shares
represented 77.0% of the total number of shares of both classes of Common Stock
and 96.1% of the total voting power of both classes. As a result of the Stock
Offering, the Rigas Family currently holds 6,784,904 shares, or 50.2%, of
Adelphia's Class A Common Stock and, on a combined basis, 72.1% of the total
number of shares of both classes of Common Stock and 93.7% of the total voting
power of both classes. As a result of the stock ownership by the Rigas Family
and the Class B Stockholders' Agreement (described in "Principal
Stockholders"), John J. Rigas and members of his family have the power to elect
all six directors subject to election by both classes on a combined basis,
which directors constitute six of the seven members of the Board of Directors
of Adelphia. (The holders of the Class A Common Stock are entitled, as a
separate class, to elect one of Adelphia's directors.) Moreover, because
holders of Class B Common Stock are entitled to ten votes per share while
holders of Class A Common Stock are entitled to one vote per share, the Rigas
Family may control stockholder decisions on matters in which holders of Class A
Common Stock and Class B Common Stock vote together as a class. These matters
include the amendment of certain provisions of Adelphia's Certificate of
Incorporation and the approval of certain fundamental corporate transactions,
including mergers. See "Description of Capital Stock" and "Principal
Stockholders."

POTENTIAL CONFLICTS OF INTEREST

John J. Rigas and the other executive officers of Adelphia (including other
members of the Rigas Family) hold direct and indirect ownership interests in
the Managed Partnerships, which are managed by the Company for a fee. Subject
to the restrictions contained in the Business Opportunity Agreement (as defined
herein) regarding future acquisitions, Rigas Family members and the executive
officers are free to continue to own these interests and acquire additional
interests in cable television systems. Such activities could present a conflict
of interest with the Company in the allocation of management time and resources
of the executive officers. In addition, there have been and will continue to be
transactions between the Company and the executive officers or other entities
in which the executive officers have ownership interests or with which they are
affiliated. The indentures under which the 10 1/4% Notes, 9 7/8% Debentures, 11
7/8% Debentures and

11
<PAGE>

12 1/2% Notes were issued contain covenants that place certain restrictions on
transactions between the Company and its affiliates. See "Management" and
"Certain Transactions."

HOLDING COMPANY STRUCTURE

As a holding company, Adelphia holds no significant assets other than its
investments in and advances to its subsidiaries. Adelphia's ability to make
interest and principal payments when due to holders of debt of Adelphia is
dependent upon the receipt of sufficient funds from its subsidiaries. Under the
terms of various debt agreements between the Adelphia subsidiaries and their
respective lending institutions, upon the occurrence of an event of default
(including certain cross-defaults resulting from defaults under Adelphia's debt
agreements) or unless certain financial performance tests are met, the Adelphia
subsidiaries are restricted from distributing funds to Adelphia. At September
30, 1993, the total amount of such long-term debt of subsidiaries was
$896,475,000. See "Capitalization," "Management's Discussion and Analysis" and
Note 3 to the Adelphia Communications Corporation Consolidated Financial
Statements.

NO DIVIDENDS PAID OR TO BE PAID

Adelphia has never declared or paid dividends on any of its Common Stock and
has no intention to pay cash dividends on such stock in the foreseeable future.
In addition, the indentures for the 10 1/4% Notes, 9 7/8% Debentures, 11 7/8%
Debentures and 12 1/2% Notes contain covenants which limit Adelphia's ability
to pay such dividends. See "Price Range of the Company's Common Equity and
Dividend Policy" and Note 3 to the Adelphia Communications Corporation
Consolidated Financial Statements.

SHARES ELIGIBLE FOR FUTURE SALE

Pursuant to a Registration Rights Agreement among Adelphia and virtually all
of the Class B common stockholders, John J. Rigas has the right, subject to
certain limitations, to require Adelphia to register shares of his Common Stock
for sale to the public on five occasions through the year 2000. The other Class
B stockholder parties have the right to participate, at the option of John J.
Rigas, as selling stockholders in any such registration and all Class B
stockholder parties have the right to participate as selling stockholders in
any registered public offering initiated by Adelphia. Each share of Class B
Common Stock is convertible into one share of Class A Common Stock. The shares
of Class A Common Stock offered and sold by Adelphia directly to partnerships
controlled by individual members of the Rigas Family in the Stock Offering were
pledged as security for margin loans made to such partnerships at the closing
of the Stock Offering. Pursuant to such pledge and loan arrangements, the
applicable pledgee, under certain conditions, has the right to cause the
pledged shares of the Class A Common Stock to be sold pursuant to an effective
shelf registration statement. Sales of a substantial number of shares of Class
A Common Stock or Class B Common Stock could adversely affect the market price
of the Class A Common Stock and could impair Adelphia's ability in the future
to raise capital through an offering of its equity securities.

12
<PAGE>

PRICE RANGE OF THE COMPANY'S COMMON EQUITY AND DIVIDEND POLICY

Adelphia's Class A Common Stock is listed on NASDAQ/NMS pursuant to an
exception from the net tangible asset requirement of the National Association
of Securities Dealers, Inc. ("NASD"). Adelphia's NASDAQ/NMS symbol is "ADLAC."
Prior to October 2, 1992, Adelphia's Class A Common Stock was quoted over-the-
counter in the NASDAQ Small Cap Market under the same symbol.

The following table sets forth the range of high and low closing bid prices
of the Class A Common Stock from July 1, 1991 to October 1, 1992, as regularly
quoted in the NASDAQ Small Cap Market, and the range of high and low closing
sale prices of the Class A Common Stock from October 2, 1992 to September 30,
1993, on NASDAQ/NMS, as applicable. Such bid prices represent inter-dealer
quotations, without retail mark-up, mark-down or commission, and may not
necessarily represent actual transactions.

CLASS A COMMON STOCK

<TABLE>
<CAPTION>
HIGH LOW
---- ----
QUARTER ENDED:
<S> <C> <C>
September 30, 1991...................................... $16 1/4 $ 9 1/2
December 31, 1991....................................... $20 3/4 $14 3/4
March 31, 1992.......................................... $20 1/2 $16 1/2
June 30, 1992........................................... $19 $14 3/4
September 30, 1992...................................... $20 $15 3/4
December 31, 1992....................................... $17 $13 1/2
March 31, 1993.......................................... $20 $ 17
June 30, 1993........................................... $18 $11 1/8
September 30, 1993...................................... $20 5/8 $ 14
</TABLE>

As of December 7, 1993, there were approximately 103 holders of record of
Adelphia's Class A Common Stock. As of December 7, 1993, three record holders
were registered clearing agencies holding Class A Common Stock on behalf of
participants in such clearing agencies.

No established public trading market exists for Adelphia's Class B Common
Stock. As of the date hereof, the Class B Common Stock was held of record by
seven persons, principally members of the Rigas Family, including a
Pennsylvania general partnership all of whose partners are members of the Rigas
Family. The Class B Common Stock is convertible into shares of Class A Common
Stock on a one-to-one basis. As of December 14, 1993, the Rigas Family owned
99.1% of the outstanding Class B Common Stock.

Adelphia has never paid a cash dividend on its common stock and anticipates
that for the foreseeable future any earnings will be retained for use in its
business. The ability of Adelphia to pay cash dividends on its common stock is
limited by the provisions of its indentures. See "Management's Discussion and
Analysis--Liquidity and Capital Resources" and Note 3 to the Adelphia
Communications Corporation Consolidated Financial Statements.

13
<PAGE>

CAPITALIZATION

The following table sets forth the actual capitalization of the Company at
September 30, 1993 and as adjusted to give effect to the Stock Offering and to
the application of the net proceeds therefrom.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1993
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Total Debt (a):
Notes of subsidiaries to banks.................... $ 376,775 $ 325,685(b)
Notes of subsidiaries to institutions ............ 519,700 519,700
---------- ----------
Total subsidiaries' debt........................ 896,475 845,385
10 1/4% Senior Notes Due 2000..................... 108,698 108,698
12 1/2% Senior Notes Due 2002..................... 400,000 400,000
11 7/8% Senior Debentures Due 2004................ 124,429 124,429
9 7/8% Senior Debentures Due 2005................ 127,830 127,830
13% Senior Subordinated Notes Due 1996............ 99,410 -- (b)
Other debt........................................ 19,708 19,708
---------- ----------
Total Debt...................................... 1,776,550 1,626,050
Stockholders' Equity (Deficiency):
Preferred Stock, $.01 par value, 5,000,000 shares
authorized,
none issued...................................... -- --
Class A Common Stock, $.01 par value, 50,000,000
shares
authorized, 4,375,000 and 13,207,604 shares
issued and
outstanding, liquidation preference, $1.00 per
share (c)........................................ 44 132(d)
Class B Common Stock, $.01 par value, 25,000,000
shares
authorized, 10,944,476 shares issued and
outstanding...................................... 109 109
Paid-in capital................................... 60,112 211,114(d)
Accumulated deficit............................... (1,067,643) (1,068,500)(e)
---------- ----------
Stockholders' Equity (Deficiency)............... (1,007,378) (857,145)
---------- ----------
Total Capitalization............................ $ 769,172 $ 768,905
========== ==========
</TABLE>
- --------
(a) Reference is made to Note 3 to the Adelphia Communications Corporation
Consolidated Financial Statements for a description of Notes of
subsidiaries to banks and institutions. See "Management's Discussion and
Analysis--Liquidity and Capital Resources."

(b) Gives effect to the application of $100,000,000 of the estimated net
proceeds from the Stock Offering for the redemption of the Senior
Subordinated Notes, and to the application of the remainder ($51,090,000)
to reduce bank debt.

(c) Does not include an aggregate of 700,000 shares of Class A Common Stock
reserved for issuance to officers and other key employees pursuant to
Adelphia's Stock Option Plan of 1986 and Restricted Stock Bonus Plan.

(d) Gives effect to the issuance of 8,832,604 shares of Class A Common Stock
pursuant to the Stock Offering.

(e) Gives effect to the redemption at par of the Senior Subordinated Notes,
with accretion requirements of $590,000, and the treatment as an expense of
deferred debt cost of $267,000.

14
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA (DOLLARS IN THOUSANDS EXCEPT PER SHARE
AND PER SUBSCRIBER DATA)

The selected consolidated financial data as of and for each of the five
years in the period ended March 31, 1993 have been derived from the audited
consolidated financial statements of the Company. The selected consolidated
financial data with respect to the six months ended September 30, 1992 and
1993 are unaudited; however, in the opinion of management, such data reflect
all adjustments (consisting only of normal recurring adjustments) necessary to
fairly present the data for such interim periods. These data should be read in
conjunction with the Consolidated Financial Statements and related notes for
each of the three years in the period ended March 31, 1993, the Financial
Statements and related notes for the six month period ended September 30, 1993
and "Management's Discussion and Analysis." The statement of operations data
with respect to the fiscal years ended March 31, 1989 and 1990, and the
balance sheet data at March 31, 1989, 1990 and 1991, have been derived from
audited consolidated financial statements of the Company not included herein.
Results of operations for the South Dade System are reflected on a
consolidated basis up to the date of transfer (December 19, 1989) of such
systems to Olympus. Operating results for interim periods are not necessarily
indicative of the results that may be expected for a full year.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30,
-------------------------------------------------------- -------------------
1989 1990 1991 1992 1993 1992 1993
--------- --------- --------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues................ $ 186,379 $ 228,643 $ 248,586 $ 273,630 $ 305,222 $148,578 $ 159,620
Direct Operating and
Programming............ 52,966 63,381 66,007 74,787 82,377 39,791 44,695
Selling, General and
Administrative......... 33,236 35,326 41,421 44,427 49,468 23,645 25,394
--------- --------- --------- ---------- --------- -------- ---------
Operating Income before
Depreciation
and Amortization....... 100,177 129,936 141,158 154,416 173,377 85,142 89,531
Depreciation and
Amortization........... 114,009 122,107(a) 79,427 84,817 90,406 44,809 45,316
--------- --------- --------- ---------- --------- -------- ---------
Operating Income (Loss). (13,832) 7,829 61,731 69,599 82,971 40,333 44,215
Interest Income from
Affiliates............. 1,257 933 1,596 3,085 5,216 2,628 2,490
Other Income (Expense).. 261 122 1,750 968 1,447 632 283
Priority Investment In-
come (b)............... -- 9,797 19,175 22,300 22,300 11,150 11,150
Interest Expense........ (111,331) (150,263) (163,637) (164,839) (164,859) (77,485) (90,131)
Equity in Net Loss of
Olympus................ -- (25,357) (61,975) (52,718) (46,841) (34,490) (15,321)
--------- --------- --------- ---------- --------- -------- ---------
Loss before Income
Taxes, Extraordinary
Loss and Cumulative
Effect of Change in
Accounting Principle
(c).................... (123,645) (156,939) (141,360) (121,605) (99,766) (57,232) (47,314)
Income Tax Expense...... -- -- -- -- (3,143) -- (1,790)
Extraordinary Loss (c).. -- -- -- -- (14,386) (14,386) --
Cumulative Effect of
Change in
Accounting Principle
(c).................... -- -- -- -- (59,500) -- (89,660)
--------- --------- --------- ---------- --------- -------- ---------
Net Loss................ $(123,645) $(156,939) $(141,360) $(121,605) $(176,795) $(71,618) $(138,764)
========= ========= ========= ========== ========= ======== =========
Loss per Share of Common
Stock before Income
Taxes, Extraordinary
Loss and Cumulative
Effect of Change in
Accounting Principle... $ (8.94) $ (11.36) $ (10.23) $ (8.80) $ (6.80) $ (3.82) $ (3.21)
Net Loss per Share of
Common Stock........... $ (8.94) $ (11.36) $ (10.23) $ (8.80) $ (11.68) $ (4.79) $ (9.06)
Cash Dividends Declared
per Common Share....... -- -- -- -- -- -- --
EBITDA (d).............. $ 101,695 $ 140,788 $ 163,679 $ 180,769 $ 202,340 $ 99,552 $ 103,454
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
--------------------------------------------------------- ---------------------
1989 1990 1991 1992 1993 1992 1993
---------- ---------- ---------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Cash
Equivalents............ $ 43,662 $ 15,287 $ 18,592 $ 11,173 $ 38,671 $ 28,546 $ 22,564
Investment in and
Amounts Due from
Olympus (e)............ -- 87,337 79,030 64,972 7,692 68,947 745
Total Assets............ 897,555 971,792 981,960 925,791 949,593 1,012,039 949,385
Total Debt.............. 1,121,796 1,355,330 1,495,025 1,554,270 1,731,099 1,675,010 1,776,550
Debt Net of Cash (f).... 1,078,134 1,340,043 1,476,433 1,543,097 1,692,428 1,646,464 1,753,986
Stockholders' Equity
(Deficiency)........... (293,640) (450,579) (591,939) (713,544) (868,614) (763,437) (1,007,378)
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
------------------------------------------- ----------------
1989 1990 1991 1992 1993 1992 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND
OTHER DATA:
Total Debt to EBITDA
(g).................... 9.87x 8.69x 8.85x 8.09x 8.41x 8.37x 8.55x
Debt Net of Cash to
EBITDA................. 9.48x 8.59x 8.74x 8.03x 8.22x 8.23x 8.44x
EBITDA to Total Interest
Expense................ 0.91 0.94 1.00 1.10 1.23 1.28 1.15
Operating Margin (h).... 53.7% 56.8% 56.8% 56.4% 56.8% 57.3% 56.1%
Capital Expenditures.... $58,501 $75,619 $77,851 $52,808 $70,975 $31,448 $31,153
Average Monthly Revenue
per Basic Subscriber
(i).................... $ 25.07 $ 26.61 $ 28.63 $ 29.82 $ 32.40 $ 30.97 $ 32.13
</TABLE>
- --------
(a) Reflects an increase in the estimated useful lives of certain intangible
assets effective January 1990. See Note 1 to the Adelphia Communications
Corporation Consolidated Financial Statements.

(b) The Company's return on its priority investment in Olympus is based on a
16.5% return on its nonvoting PLP Interests, although the Company
recognizes priority investment income only to the extent received. At
March 31, 1993 and September 30, 1993, $68,702,000 and $85,667,000,
respectively, of accumulated priority return remained unpaid.

(c) "Extraordinary loss" relates to loss on the early retirement of the Senior
Discount Notes. "Cumulative Effect of Change in Accounting Principle"
refers to a change in accounting principle for Olympus and the Company.
Effective January 1, 1993 and April 1, 1993, respectively, Olympus and the
Company adopted the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which
requires an asset and liability approach for financial accounting and
reporting for income taxes. SFAS 109 resulted in the cumulative
recognition of an additional liability by Olympus and the Company of
$59,500,000 and $89,660,000, respectively.

(d) Earnings before interest, income taxes, depreciation and amortization,
equity in net loss of Olympus, extraordinary loss and cumulative effect of
change in accounting principle. The use of the term "EBITDA" is consistent
with the use of the same term in the indentures for the 10 1/4% Notes, the
9 7/8% Debentures, the 11 7/8% Debentures and the 12 1/2% Notes. 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.

(e) Investment in and amounts due from Olympus at September 30, 1993 is
comprised of the following:

<TABLE>
<S> <C>
Gross Investment in PLP Interests and General Partner's
Equity.................................................... $283,002,000
Excess of Ascribed Value of Contributed Property over His-
torical Cost............................................. (98,303,000)
Cumulative Equity in Net Loss of Olympus.................. (261,712,000)
------------
Investments in Olympus................................... (77,013,000)
Amounts due from Olympus.................................. 77,758,000
------------
Total................................................... $ 745,000
============
</TABLE>

(f) Total debt less cash and cash equivalents.

(g) Based on annualized EBITDA for the quarter ending the period presented.
The Company believes that this presentation is consistent with the
covenant test which limits the incurrence of indebtedness in the
indentures for the 10 1/4% Notes, the 9 7/8% Debentures, the 11 7/8%
Debentures and the 12 1/2% Notes and that this ratio is commonly used in
the cable television industry as a measure of leverage.

(h) Percentage representing operating income before depreciation and
amortization divided by revenues.

(i) Average for the last quarter of each period presented, including revenues
and subscribers for the South Dade System up to the date of transfer to
Olympus. The Company believes that this presentation provides meaningful
trend information over the periods presented and is commonly used in the
cable television industry to present such data on a comparative basis.

16
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS

General

The Company earned substantially all of its revenues in each of the past
three fiscal years and in the six months ended September 30, 1993 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 and home shopping networks.

The cable television operations of the Company may be adversely affected by
changes and developments in governmental regulation, competitive forces and
technology. On October 5, 1992, Congress passed the 1992 Cable Act, which
significantly expands the scope of regulation of certain subscriber rates and a
number of other matters in the cable industry, and which will increase the
administrative costs of complying with such regulations. Accordingly, certain
changes in the way the Company offers and charges for subscriber services were
implemented as of September 1, 1993. See "Business-Subscriber Services and
Rates." For a discussion of the 1992 Cable Act and other regulatory and
competitive matters that affect the Company and its operations, see "Risk
Factors--Regulation and Competition in the Cable Television Industry,"
"Business--Competition" and "Legislation and Regulation."

The Company has achieved average annual growth in revenues of 11.4% during
the past two fiscal years and average annual growth in operating income before
depreciation and amortization of 11.4% during the same period. Revenues
increased 11.5% in fiscal 1993 and 10.1% in fiscal 1992. These increases
resulted primarily from internal subscriber growth and rate increases. The
Company has not completed any material acquisitions since August 1989.
Operating expenses increased significantly during the past two years; however,
operating margins (the percentage representing operating income before
depreciation and amortization divided by revenues) remained relatively
unchanged at 56.8% for the year ended March 31, 1993, 56.4% for the year ended
March 31, 1992 and 56.8% for the year ended March 31, 1991.

The changes in the Company's results of operations for the six months ended
September 30, 1993, compared to the same period in the prior year, were
generally the result of the expansion of existing cable television operations
since September 30, 1992 and the cumulative effect of a change in accounting
principle of the Company.

The high level of (i) depreciation and amortization associated with prior
acquisitions and the upgrading and expansion of systems and (ii) interest costs
associated with financing activities will continue to have a negative impact on
the reported results of operations. Significant charges for depreciation,
amortization and interest are expected to be incurred in the future by the
Olympus joint venture, which will also impact the Company's future results of
operations. The Company expects to report net losses for the next several
years.

The Company currently offers competitive access telecommunications services
through a subsidiary, Hyperion Telecommunications, Inc. ("Hyperion"). Since
Hyperion's formation in October 1992, it has formed operating companies or
entered into joint venture partnerships to develop and operate competitive
access networks in eight select metropolitan areas. Hyperion's revenues since
inception are insignificant and correspondingly the investment in Hyperion
resulted in a reduction in the Company's operating income before depreciation
and amortization for fiscal year 1993 and the six months ended September 30,
1993 of approximately $900,000 and $534,000, respectively. The equity in net
loss of Hyperion's joint venture partnerships amounted to $168,335 for the six
months ended September 30, 1993.

17
<PAGE>

The following table is derived from the Adelphia Communications Corporation
Consolidated Financial Statements for the periods presented that are included
in this Prospectus and sets forth the historical percentage relationship of the
components of operating income contained in such financial statements for the
periods indicated.

<TABLE>
<CAPTION>
PERCENTAGE
OF REVENUES
PERCENTAGE OF REVENUES FOR THE SIX MONTHS
FOR YEAR ENDED MARCH 31, ENDED SEPTEMBER 30,
---------------------------- --------------------
1993 1992 1991 1993 1992
-------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Direct operating and pro-
gramming.................. 27.0 27.3 26.6 28.0 26.8
Selling, general and ad-
ministrative.............. 16.2 16.2 16.7 15.9 15.9
-------- -------- -------- --------- ---------
Operating income before de-
preciation and amortiza-
tion...................... 56.8 56.4 56.8 56.1 57.3
Depreciation and amortiza-
tion...................... 29.6 31.0 32.0 28.4 30.2
-------- -------- -------- --------- ---------
Operating income........... 27.2% 25.4% 24.8% 27.7% 27.1%
======== ======== ======== ========= =========
</TABLE>

Interim Operating Results

Revenues increased approximately 7.4% for the six months ended September 30,
1993, compared to the same period in the prior year. Approximately 93% of such
increases were attributable to basic subscriber growth and rate increases,
partially offset by adjustments to equipment and installation charges
(discussed below), with the remainder primarily attributable to the expansion
of advertising sales and other services. Revenues for the six months ended
September 30, 1993 reflected the repackaging and adjustment of equipment and
installation charges, effective in July 1993, and rates for basic services and
certain other satellite programming services under "CableSelect," the Company's
new method of offering services that was implemented effective September 1,
1993. In addition, the Company's revenues during the most recent six-month
period were subject in part to the FCC rate freeze, which has been in effect
since April 5, 1993 and was recently extended to February 15, 1994. See "Risk
Factors--Regulation and Competition in the Cable Television Industry."

Operating expenses (exclusive of depreciation and amortization) increased
10.5% for the six-month period ended September 30, 1993, compared to the same
1992 period, primarily due to increased costs of providing programming to
subscribers, incremental costs (such as increased administrative and personnel
costs) associated with increased subscribers and revenues and increased costs
related to the implementation of the 1992 Cable Act and regulations thereunder.

Operating income before depreciation and amortization increased 5.2% for the
six-month period compared to last year. This increase was primarily due to
increased revenues partially offset by increased operating expenses. Interest
income from affiliates, other income and priority investment income remained
relatively unchanged for the six-month period. EBITDA (earnings before
interest, income taxes, depreciation and amortization, equity in net loss of
Olympus, extraordinary loss and cumulative effect of change in accounting
principle) increased 3.9% for the six month period primarily due to increased
revenues partially offset by increased operating expenses.

Interest expense increased 16.3% for the six months ended September 30, 1993,
compared to the same prior year period, primarily due to higher levels of debt
outstanding and the refinancing of short-term floating rate debt with long-term
fixed rate debt during fiscal 1993 and the six months ended September 30, 1993.
Equity in net loss of Olympus decreased 55.6% for the six months ended
September 30, 1993 due to decreases in the net loss of Olympus during such
period.

Effective April 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
109), which requires an asset and liability

18
<PAGE>

approach for financial accounting and reporting for income taxes. SFAS 109
generally provides that deferred tax assets and liabilities be recognized for
temporary differences between the financial reporting basis and the tax basis
of the Company's assets and liabilities and expected benefits of utilizing net
operating loss carry forwards. The adoption of SFAS 109 resulted in the
cumulative recognition of an additional liability by the Company of
$89,660,000. The cumulative effect of adopting SFAS 109 at April 1, 1993 on the
Company's financial statements was to increase the net loss by $89,660,000. In
August 1993, the Congress passed and the President signed new tax legislation
which, among other things, increases the corporate Federal income tax from 34%
to 35%. The Company anticipates that the enactment of this legislation will not
have a significant effect on the Company's deferred income tax liability.

Net loss for the six-month period increased 93.8% primarily due to the
cumulative effect of the change in accounting principle for the Company noted
above. Loss before income taxes, extraordinary loss and cumulative effect of
change in accounting principle decreased by 17.3% for the most recent six-month
period.

Comparison of Years Ended March 31, 1993, 1992 and 1991

Revenues. Revenues increased 11.5% and 10.1% for the years ended March 31,
1993 and 1992, respectively. Approximately 90% of such increases were
attributable to basic subscriber growth and rate increases, with the remainder
primarily attributable to the expansion of advertising sales and other
services. Increases in total revenues were partially offset by a lower premium
penetration rate, which caused premium service revenues to remain relatively
constant compared to the respective prior year.

Direct Operating and Programming Expenses. Direct operating and programming
expenses, which are mainly basic and premium programming costs and technical
expenses, increased in each of the years ended March 31, 1993 and 1992,
primarily as a result of the incremental costs associated with internal
subscriber growth and programming rate increases. As a percentage of revenues,
such expenses remained relatively constant for the years ended March 31, 1993
and 1992, compared to the prior years.

Selling, General and Adminisrative Expenses. These expenses, which are mainly
comprised of costs related to system offices, customer service representatives
and sales and administrative employees, increased in each of the years ended
March 31, 1993 and 1992, primarily as a result of the incremental costs
associated with internal subscriber growth. As a percentage of revenues, such
expenses remained relatively constant for the years ended March 31, 1993 and
1992, compared to the prior years.

Operating Income Before Depreciation and Amortization. Operating income
before depreciation and amortization was $173,377,000, $154,416,000 and
$141,158,000 for the years ended March 31, 1993, 1992 and 1991, respectively,
representlng operating margins of 56.8%, 56.4% and 56.8%, respectively. The
increases in operating income before depreciation and amortization for the two
years ended March 31, 1993 and 1992 were primarily attributable to increased
revenues and relatively constant operating margins. This increase was offset in
1993 by the Company's investment, through Hyperion, in the competitive access
business, which resulted in an approximately $900,000 reduction in operating
income before depreciation and amortization.

Depreciation and Amortization. Depreciation and amortization expense
increased for the years ended March 31, 1993 and 1992, compared to the prior
years, primarily due to capital expenditures made during fiscal 1993 and 1992.
As a percentage of revenues, such expenses decreased for the years ended March
31, 1993 and 1992, compared to each respective prior year, primarily due to
increased revenues.

Priority Investment Income. Priority investment income is comprised of
payments received from Olympus of accrued priority return on the Company's
investment in PLP Interests in Olympus. The Company recognizes priority
investment income only to the extent received. Priority investment income
remained constant for the year ended March 31, 1993 compared to the prior year,
and increased during fiscal 1992 as a result of higher priority return
payments.

19
<PAGE>

EBITDA. EBITDA amounted to $202,340,000, $180,769,000 and $163,679,000 for
the years ended March 31, 1993, 1992 and 1991, respectively. The increases in
EBITDA for the two years ended March 31, 1993 and 1992 were primarily
attributable to increased revenues and relatively constant operating margins.
EBITDA and similar measures 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.

Interest Expense. Interest expense remained relatively constant for the years
ended March 31, 1993 and 1992 primarily as a result of a reduction in the
weighted average interest rate paid to banks since March 31, 1991, offset by
increased interest expense on incremental borrowings and, for 1992, increased
non-cash accretion on the Senior Discount Notes. Interest expense includes
$164,000, $35,602,000 and $31,612,000 for the years ended March 31, 1993, 1992
and 1991, respectively, of non-cash accretion of original issue discount.

Equity in Net Loss of Olympus. The equity in net loss of Olympus represents
the Company's pro rata share of Olympus' net losses and the accretion
requirements of Olympus' redeemable limited partner interests. The decrease in
net loss of Olympus prior to the cumulative effect of its change in accounting
principle for the years ended March 31, 1993 and 1992, compared to the prior
years, is primarily attributable to a decrease in the net loss of Olympus
during such period.

Net Loss. The Company reported net losses of $176,795,000, $121,605,000 and
$141,360,000 for the years ended March 31, 1993, 1992 and 1991, respectively.
The Company reported net loss before extraordinary loss and cumulative effect
of change in accounting principle of $102,909,000, $121,605,000 and
$141,360,000 for the years ended March 31, 1993, 1992 and 1991, respectively.
This reduction for the years ended March 31, 1993 and 1992 was primarily due to
an increase in revenues and, for 1992, an increase in priority investment
income, which was only partially offset by increased operating expenses, and to
the decrease in equity in net loss of Olympus. In 1993 the increase in net loss
was primarily due to the cumulative effect of change in accounting principle by
Olympus and to the extraordinary loss recorded in 1993 for the early
extinguishment of debt. Effective January 1, 1993, Olympus adopted the
provisions of SFAS 109 which requires an asset and liability approach for
financial accounting and reporting for income taxes. SFAS 109 resulted in the
cumulative recognition of an additional liability of $59,500,000 by Olympus.

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. During the three fiscal years in the period
ended March 31, 1993 and the six months ended September 30, 1993, the Company
committed substantial capital resources for these purposes and for investments
in Olympus and other affiliates and entities. These expenditures were funded
through long-term borrowings and, to a lesser extent, internally generated
funds.

Capital Expenditures. The Company has developed an innovative fiber-to-feeder
network architecture which is designed to increase channel capacity and
minimize future capital expenditures, while positioning the Company to take
advantage of future opportunities. Management believes its capital expenditures
program has resulted in higher levels of channel capacity and addressability in
comparison to other cable television operators.

Capital expenditures for the years ended March 31, 1993, 1992 and 1991, were
$70,975,000, $52,808,000 and $77,851,000, respectively. Capital expenditures
for the six months ended September 30, 1992 and 1993 were $31,448,000 and
$31,153,000 respectively. An additional $8,742,000 and $6,386,000 in support
equipment was acquired and financed through capitalized lease obligations
during the year ended March 31, 1993 and the six months ended September 30,
1993, respectively. The decrease in capital expenditures during fiscal 1992 was
primarily due to the Company's reduced need to modernize its cable plant as a
result of expenditures undertaken to improve, rebuild and expand the Company
Systems, including the purchase of a significant quantity of addressable
converters. The increase in capital expenditures for fiscal 1993 compared

20
<PAGE>

to the prior year is primarily due to the acceleration of the rebuilding of
plant using fiber-to-feeder technology, the upgrading of the corporate computer
system for better management information services, the purchase of support
equipment, renovation costs related to the corporate office building, and
expenditures related to faster than expected growth of the Company's
competitive access telecommunications subsidiary, Hyperion Telecommunications,
Inc. Management expects capital expenditures for fiscal 1994 to approximate
those in fiscal 1993.

Olympus. During the fiscal years ended March 31, 1992 and 1991, the Company
made equity investments of $32,100,000 and $38,000,000, respectively, in
Olympus, and during the fiscal year ended March 31, 1993, the Company made
advances of $49,061,000 to Olympus, of which $37,415,000 was advanced during
the quarter ended June 30, 1992. During the six months ended September 30,
1993, the Company made advances of $8,374,000 to Olympus. Such investments
provided funds for capital expenditures, the repayment of debt and working
capital. During the six months ended September 30, 1993 and fiscal years ended
March 31, 1993, 1992 and 1991, the Company received priority investment income
from Olympus of $11,150,000, $22,300,000, $22,300,000 and $19,175,000,
respectively. Future investments by the Company in Olympus are subject to
certain limitations under the indentures for the 10 1/4% Notes, the 11 7/8%
Debentures, the 9 7/8% Debentures, and the 12 1/2% Notes.

Financing Activities. The Company's financing strategy has been to maintain
its public long-term debt at the parent holding company level while the
Company's consolidated subsidiaries have their own senior and subordinated
credit arrangements with banks and insurance companies. The Company's ability
to generate cash adequate to meet its future needs will depend generally on its
results of operations and the continued availability of external financing.
During the three-year and six-month period ended September 30, 1993, the
Company funded its working capital requirements, capital expenditures,
investments in Olympus and other affiliates and entities and the redemption of
the Senior Discount Notes through long-term borrowings primarily from banks and
insurance companies, short-term borrowings, internally generated funds and the
issuance of parent company public debt. The Company generally has funded the
principal and interest obligations on its long-term borrowings from banks and
insurance companies by refinancing the principal with new loans or through the
issuance of parent company debt securities, and by paying the interest out of
internally generated funds. Adelphia has funded the interest obligations on its
public borrowings from internally generated funds.

Most of Adelphia's directly-owned subsidiaries have their own senior credit
agreements with banks and/or insurance companies. Typically, borrowings under
these agreements are collateralized by the stock in and, in some cases, by the
assets of the borrowing subsidiary and its subsidiaries and, in some cases, are
guaranteed by such subsidiary's subsidiaries. At September 30, 1993, an
aggregate of $744,475,000 in borrowings was outstanding under these agreements.
These agreements contain certain provisions which, among other things, provide
for limitations on borrowings of and investments by the borrowing subsidiaries,
transactions between the borrowing subsidiaries and Adelphia and its other
subsidiaries and affiliates, and the payment of dividends and fees by the
borrowing subsidiaries. Several of these agreements also contain certain cross-
default provisions relating to Adelphia or other subsidiaries. These agreements
also require the maintenance of certain financial ratios by the borrowing
subsidiaries. In addition, at September 30, 1993, an aggregate of $152,000,000
in subordinated and unsecured borrowings by Adelphia's subsidiaries was
outstanding under credit agreements containing limitations and restrictions
similar to those mentioned above. See Note 3 to the Adelphia Communications
Corporation Consolidated Financial Statements. The Company is in compliance
with the financial covenants and related financial ratio requirements contained
in its various credit agreements, based on operating results for the quarter
and period ended September 30, 1993.

At September 30, 1993, Adelphia's subsidiaries had an aggregate of
$153,000,000 in unused credit lines with banks, part of which is subject to
achieving certain levels of operating performance. In addition, the Company had
an aggregate $22,564,000 in cash and cash equivalents at September 30, 1993,
which combined with the Company's unused credit lines with banks aggregated to
$175,564,000. Based upon the results of operations of subsidiaries for the
quarter ended September 30, 1993, approximately $203,000,000 of available

21
<PAGE>

assets could have been transferred to Adelphia at September 30, 1993, under the
most restrictive covenants of the subsidiaries' credit agreements. The
subsidiaries also have the ability to sell, dividend or distribute certain
assets to other subsidiaries or Adelphia, which would have the net effect of
increasing availability. At September 30, 1993, the Company's unused credit
lines were provided by reducing revolving credit facilities whose revolver
periods expire on April 1, 1994 through March 31, 1999. The Company's scheduled
maturities for notes payable of subsidiaries to banks and institutions are
currently expected to total $3,462,000 for the remainder of fiscal 1994.

At September 30, 1993, the interest rates on floating rate notes issued by
the Company's subsidiaries to banks ranged from LIBOR plus 1.0% to LIBOR plus
1.5%. The Company's subsidiaries' weighted average interest rate on notes to
banks and institutions was 8.80% at September 30, 1993, with approximately 69%
of such debt subject to fixed rates for over one year under the terms of such
notes or interest swap agreements at September 30, 1993.

During fiscal 1991, subsidiaries of Adelphia entered into new credit
facilities, as follows: On August 6, 1990, a subsidiary privately placed with
several insurance companies $250,000,000 in eight-year 10.66% senior notes, the
proceeds of which were used, in part, to refinance the outstanding principal of
existing term notes to banks in the amount of $162,750,000. On December 10,
1990, a subsidiary privately placed with an insurance company a $30,000,000
six-year unsecured note, the terms of which provided for an interest rate of
8.92% through December 15, 1991, after which date interest was payable at the
greater of 12.25% or the prime rate plus 2.25%. On January 7, 1992, the
subsidiary exercised its right to call this note, which call was funded by
borrowings under existing lines of credit that provided for a current interest
rate of 5.44%. In addition, on July 12, 1990, a subsidiary entered into a six-
year $10,000,000 unsecured, revolving credit agreement with a bank.

On August 6, 1991, a subsidiary entered into a $105,000,000 credit agreement
with several banks. The agreement provides for senior secured revolving and
term notes payable through 1997. The initial proceeds from this facility,
$65,000,000, were used to repay $55,000,000 in other revolving bank debt and
for working capital.

On May 14, 1992, Adelphia completed offerings of $400,000,000 aggregate
principal amount of unsecured 12 1/2% Senior Notes due 2002 and of 1,500,000
shares of its Class A Common Stock. The 12 1/2% Notes, which are effectively
subordinated to all liabilities of Adelphia's subsidiaries, were issued
pursuant to an indenture containing certain restrictions on, among other
things, the incurrence of indebtedness, mergers and sales of assets, the
payment of dividends on or the repurchase of capital stock and subordinated
debt of Adelphia, certain other restricted payments by Adelphia and certain
transactions with and investments in affiliates and unrestricted subsidiaries.
The shares of Class A Common Stock were sold at a public offering price of
$15.00 per share, including 750,000 of such shares which were purchased at the
public offering price by certain members of the Rigas Family. The net proceeds
from these offerings were approximately $389,000,000 for the offering of the 12
1/2% Notes and $21,700,000 for the offering of the Class A Common Stock. On
July 1, 1992, $260,000,000 of such net proceeds was used for the redemption of
all outstanding 16 1/2% Senior Discount Notes, at 104% of par.

On September 10, 1992, Adelphia completed an offering of $125,000,000
aggregate principal amount of 11 7/8% Senior Debentures Due 2004. The 11 7/8%
Debentures, which are effectively subordinated to all liabilities of Adelphia's
subsidiaries, were issued pursuant to an indenture containing certain
restrictions on, among other things, the incurrence of indebtedness, mergers
and sales of assets, the payment of dividends on or the repurchase of capital
stock and subordinated debt of Adelphia, certain other restricted payments by
Adelphia and certain transactions with and investments in affiliates and
unrestricted subsidiaries. The net proceeds from this offering were
approximately $120,600,000.

On March 11, 1993, Adelphia completed the placement of $130,000,000 aggregate
principal amount of 9 7/8% Senior Debentures Due 2005. The 9 7/8% Debentures,
which are effectively subordinated to all liabilities of Adelphia's
subsidiaries, were issued pursuant to an indenture containing certain
restrictions substantially the same as the indenture for 11 7/8% Debentures.
Pursuant to a related registration rights agreement,

22
<PAGE>

Adelphia granted to holders of the 9 7/8% Debentures certain registration
rights regarding a registered exchange offer for, or the registration of, the 9
7/8% Debentures. The net proceeds from this placement were approximately
$125,307,000. The 9 7/8% Debentures were the subject of an exchange offer,
which expired July 16, 1993, of substantially identical 9 7/8% Senior
Debentures Due 2005 that were registered under the Securities Act of 1933.

On July 28, 1993, Adelphia completed the placement of $110,000,000 aggregate
principal amount of 10 1/4% Senior Notes Due 2000, Series A. The 10 1/4% Notes,
which are effectively subordinated to all liabilities of Adelphia's
subsidiaries, were issued pursuant to an indenture containing certain
restrictions substantially the same as the 9 7/8% Debentures. Pursuant to a
related registration rights agreement, Adelphia granted to holders of the 10
1/4% Notes certain registration rights regarding a registered exchanged offer
for, or the registration of, the 10 1/4% Notes. The net proceeds from this
placement were approximately $106,961,000. The 10 1/4% Notes are the subject of
an exchange offer of substantially identical 10 1/4% Notes, Series B, that are
registered under the Securities Act of 1933.

During the six months ended September 30, 1993, the Company made loans in the
net amount of $20,000,000 to Managed Partnerships, to facilitate the
acquisition of cable television systems serving Palm Beach County, Florida from
unrelated parties. As of September 30, 1993, $15,000,000 was outstanding, and
the balance is expected to be repaid during fiscal 1994. In addition, during
the six months ended September 30, 1993, the Company made repayments and
advances in the net amount of $398,000 to other related parties primarily for
capital expenditures and working capital purposes. On September 29, 1993, the
Board of Directors of the Company authorized the Company to make loans in the
future to Highland Video Associates, L.P. ("Highland") and Syracuse Hilton Head
Holdings, L.P. ("SHHH") up to an amount of $25,000,000 for each. SHHH and
Highland own the cable systems managed by the Company for fees. See "Certain
Transactions."

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 by Adelphia of public or private equity or debt and
the negotiation of new or amended credit facilities. 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 Adelphia's indentures and 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.

Recent Accounting Pronouncements. SFAS 109, "Accounting for Income Taxes,"
requires an asset and liability approach for financial accounting and reporting
for income taxes. Effective January 1, 1993 and April 1, 1993, respectively,
Olympus and the Company adopted the provisions of SFAS 109. The adoption of
SFAS 109 resulted in the cumulative recognition of an additional liability by
Olympus and the Company of $59,500,000 and $89,660,000, respectively. See
"Interim Operating Results."

Financial Accounting Standards Board Statement No. 106, "Employer's
Accounting for Postemployment Benefits Other Than Pensions," requires the
accrual of future payments under these benefit plans (such as health care)
during the periods the employee provides the services to earn them and is
effective

23
<PAGE>

for years beginning after December 15, 1992. The Company currently provides no
such postemployment benefits; therefore, the new standard will not have an
effect on its financial position and results of operations.

INFLATION

In the three fiscal years ended March 31, 1993 and the six months ended
September 30, 1993, inflation did not have a significant effect on the Company.
Periods of high inflation could have an adverse effect to the extent that
increased borrowing costs for floating-rate debt may not be offset by increases
in subscriber rates. At September 30, 1993, approximately $276,775,000 of the
Company's total long-term debt was subject to floating interest rates.

OLYMPUS

The Company serves as the managing general partner of Olympus and, as of
December 31, 1992, held $16,500,000 of voting general partnership interests
representing, in the aggregate, 50% of the voting equity of Olympus. The
Company also held, as of December 31, 1992, $269,601,000 aggregate principal
amount of nonvoting PLP Interests in Olympus, which entitle the Company to a
16.5% per annum priority return, and nonvoting special limited partnership
interests. Unpaid priority return on the PLP Interests accrues additional
return at the rate of 18.5% per annum. At September 30, 1993, $85,667,000 of
priority return remained unpaid and the Company had outstanding advances to
Olympus of $77,758,000.

The remaining equity in Olympus consists of voting limited partnership
interests held by unaffiliated third parties who sold cable television system
assets to Olympus in partial consideration for such limited partnership
interests. At December 31, 1992, these interests included (i) $10,000,000 of
redeemable limited partnership interests held by certain members of the Joseph
Gans family ("Gans") and (ii) $6,500,000 of redeemable limited partnership
interests held by an affiliate of Telesat Cablevision, Inc. ("Telesat"). The
Olympus limited partnership agreement requires approval by the holders of 85%
of the voting interests for, among other things, significant acquisitions and
dispositions of assets, certain transactions with related parties and the
issuance of voting interests beyond a stated maximum, and also requires
approval by the holders of 75% of the voting interests for, among other things,
material amendments to the Olympus partnership agreement, certain financings
and refinancings, and certain issuances of PLP Interests.

On January 3, 1993, Olympus redeemed Telesat's interests for $9,794,706 and
the Company converted $6,500,000 of its voting general partnership interests to
nonvoting PLP Interests, thereby maintaining 50% of the outstanding general
partner and limited partner voting units of Olympus. At various dates from
January 1993 through January 1996, Gans can require Olympus to redeem its
limited partnership interest at its fair market value on the exercise date. If
Olympus does not effect such redemption, or if such redemption would cause
Olympus, Adelphia or any of Adelphia's affiliates to be in default under their
respective loan agreements, then Olympus is to sell its assets and be
liquidated. At various dates beginning in January 1994 through January 1996,
Adelphia may purchase the Gans interests at its fair market value at the
exercise date.

In the event that any such redemption or purchase of limited partnership
interests in Olympus results in the Company owning more than 50% of the voting
equity in Olympus, the Company may at its option convert its voting partnership
interests in Olympus into PLP Interests or senior debt in order to maintain its
voting interest at 50%.

On August 24, 1992 service in Olympus' South Dade system in the southern
portion of Florida's Dade County was interrupted by Hurricane Andrew. Other
Olympus subscribers were unaffected by the storm. Prior to the hurricane, as of
July 31, 1992, the South Dade system passed 157,922 homes and served 71,193
basic subscribers. The rebuilding of the cable plant has been completed with
state-of-the-art fiber to feeder technology which has an 80 channel capacity.
At September 30, 1993 the South Dade System served 58,309 basic subscribers,
and at December 6, 1993 served 60,117 basic subscribers.

The following table is derived from the Olympus Communications, L.P.
Consolidated Financial Statements included in this Prospectus.

24
<PAGE>

SUPPLEMENTAL FINANCIAL DATA FOR OLYMPUS (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------------------- ------------------
1992 1991 1990 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues..................... $ 86,255 $ 90,597 $ 77,910 $ 65,931 $ 69,460
Business Interruption Reve-
nue......................... 7,146 -- -- 7,547 --
-------- -------- -------- -------- --------
Total........................ 93,401 90,597 77,910 73,478 69,460
Operating Income Before De-
preciation and
Amortization................ 47,280 44,906 39,963 41,154 34,027
Depreciation and Amortiza-
tion........................ 39,407 38,427 37,613 27,247 28,970
Operating Income............. 7,873 6,479 2,350 13,907 5,057
Interest Expense............. (30,272) (39,413) (43,711) (22,731) (25,114)
Net Loss..................... (16,617) (36,577) (45,277) (68,324) (21,530)
BALANCE SHEET DATA:
Total Assets................. 467,279 482,316 513,545 465,209 465,623
Total Long-Term Debt......... 362,428 392,786 396,746 368,768 344,240
PLP Interests................ 269,601 269,601 237,501 276,101 269,601
OTHER FINANCIAL DATA:
Capital Expenditures......... 26,827 21,859 30,133 18,655 14,010
Operating Margin (a)......... 50.6% 49.6% 51.3% 56.0% 49.0%
</TABLE>
- --------
(a) Percentage representing operating income before depreciation and
amortization divided by total revenues.

Interim Results. For the nine months ended September 30, 1993, total revenues
for Olympus increased 5.8% over the comparable period in the prior year. The
increase was primarily the result of basic subscriber growth and rate
increases, which were partially offset by the effects of Hurricane Andrew on
the South Dade System, net of business interruption insurance proceeds.
Operating expenses (excluding depreciation and amortization) decreased 9.6% as
compared to the 1992 nine-month period, primarily due to reduced direct,
operating and programming expenses. As a result, operating income before
depreciation and amortization increased 21.0%, and operating income increased
175.0%, as compared to the 1992 nine-month period.

Interest expense decreased 9.5% for the nine-month period, primarily due to
lower average amounts of outstanding debt and lower effective average interest
rates. Net loss increased from $21,530,000 to $68,324,000 for the nine months
ended September 30, 1993, primarily due to the cumulative effect of a change in
accounting principle of $59,500,000 resulting from the adoption of SFAS 109 by
Olympus. The Company believes Olympus will continue to incur net losses for at
least the remainder of 1993.

Comparison of Years Ended December 31, 1992, 1991 and 1990

Revenues. Total revenues for the year ended December 31, 1992 increased 3.1%
over the prior year. The increase was primarily attributable to basic
subscriber growth, in areas other than South Dade, and rate increases, which
were partially offset by the effects of Hurricane Andrew on the South Dade
System, net of business interruption insurance proceeds. See Note 3 to the
Olympus Communications, L.P. Consolidated Financial Statements.

Total revenues for the year ended December 31, 1991 increased 16.3% over the
prior year. Of the increase, 76.3% of such increase was attributable to basic
subscriber growth and rate increases and 12.3% was attributable to the
expansion of advertising sales, pay-per-view programming and other services,
with the remainder of the increase primarily attributable to the inclusion of a
full period of operations for systems acquired in January and March 1990.

25
<PAGE>

Operating Income Before Depreciation and Amortization. For the year ended
December 31, 1992, operating income before depreciation and amortization
increased 5.3%, which was primarily attributable to higher levels of total
revenues, including business interruption revenue related to the effects of
Hurricane Andrew. The increase in operating margin from 49.6% to 50.6% was
primarily due to the increase in total revenues that was not offset by
corresponding increases in operating expenses.

For the year ended December 31, 1991, operating income before depreciation
and amortization increased 12.4%, which was primarily attributable to higher
levels of revenue. The decrease in operating margin for 1991 from 51.3% to
49.6% was primarily caused by an increase in programming expenses due to the
launching of certain national and regional sports networks. The Company
believes that operating income
before depreciation and amortization and its related percentage relationship to
revenues are financial benchmarks commonly used by analysts, investors and
lenders to evaluate operating performance, liquidity and leverage of cable
television and other media companies.

Operating Income. Operating income for the year ended December 31, 1992,
increased from $6,479,000 to $7,873,000, primarily due to the increase in total
revenues, including business interruption revenue. For the year ended December
31, 1991, operating income increased to $6,479,000 from $2,350,000 primarily
due to the increase in revenues partially offset by increases in programming
expenses and other operating expenses.

Interest Expense. For the year ended December 31, 1992, interest expense
decreased 23.2%. The decrease was primarily due to reduced interest rates and
lower average amounts of outstanding debt. For the year ended December 31,
1991, interest expense decreased 9.8%. This decrease was primarily due to
reduced interest rates attributable to both decreased spreads on interest rates
charged by banks resulting from the achievement of certain levels of operating
performance and the general market decline in interest rates, and to a lesser
extent to the repayment of debt in 1991.

Net Loss. Olympus reported net losses of $16,617,000, $36,577,000 and
$45,277,000 for the years ended December 31, 1992, 1991 and 1990, respectively.
The decrease in net loss was attributable to increased revenues and reduced
interest expense, partially offset by increased operating expenses. In
addition, the decrease for the year ended December 31, 1992 was also
attributable to the effects of the termination of an affiliate guarantee
arrangement. See Note 4 to the Olympus Communications, L.P. Consolidated
Financial Statements.

BUSINESS

INTRODUCTION

The Company is one of the largest cable television operators in the United
States. As of September 30, 1993, the Systems in the aggregate passed 1,846,133
homes and served 1,284,209 basic subscribers who subscribed for 620,638 premium
service units.

The Company Systems are located in eight states and are organized into seven
regional clusters: Western New York, Virginia, Western Pennsylvania, New
England, Eastern Pennsylvania, Ohio and Coastal New Jersey. The Company Systems
are located primarily in suburban areas of large and medium-sized cities within
the 50 largest television markets ("areas of dominant influence" or "ADIs," as
measured by The Arbitron Company). At September 30, 1993, the Company Systems
passed 1,128,891 homes and served 828,453 basic subscribers.

The Company owns a 50% voting interest in Olympus, a joint venture which owns
the Olympus Systems. The Olympus Systems are primarily located in some of the
fastest growing areas of Florida. The Olympus Systems in Florida form a
substantial part of an eighth regional cluster, Southeastern Florida. The
Company

26
<PAGE>

is the managing general partner of Olympus and receives a fee for providing
management services. As of September 30, 1993, the Olympus Systems passed
451,878 homes and served 264,762 basic subscribers.

The Company also provides management and consulting services to the Managed
Partnerships for fees generally based on revenues. The Rigas Family controls or
has substantial ownership interests in the Managed Partnerships. As of
September 30, 1993, cable systems owned by the Managed Partnerships passed
265,364 homes and served 190,994 basic subscribers. The Company does not have
any ownership interests in any of the Managed Partnerships.

Cable television systems receive a variety of television, radio and data
signals transmitted to receiving sites ("headends") by way of off-air antennas,
microwave relay systems and satellite earth stations. Signals are then
modulated, amplified and distributed primarily through coaxial and, in some
cases, fiber optic cable to subscribers, who pay fees for the service. Cable
television systems are generally constructed and operated pursuant to non-
exclusive franchises awarded by state or local government authorities for
specified periods of time.

Cable television systems typically offer subscribers a package of basic video
services consisting of local and distant television broadcast signals,
satellite-delivered non-broadcast channels (which offer programming such as
news, sports, family entertainment, music, weather, shopping, etc.) and public,
governmental and educational access channels. Cable television systems also
offer non-video services, such as digital radio, data transmission and
telephony.

In addition, premium service channels, which provide movies, live and taped
concerts, sports events and other programming, are offered for an extra monthly
charge. At September 30, 1993, over 95% of the Company Systems also offered
pay-per-view programming, which allows the subscriber to order special events
or movies and to pay on a per event basis. At September 30, 1993, approximately
51% of the subscribers to the Company Systems and 63% of the subscribers to the
Olympus Systems had addressable converters in their homes, which permit such
subscribers to access pay-per-view programming. Local, regional and national
advertising time is sold in the majority of the Systems, with commercial
advertisements inserted on certain satellite-delivered non-broadcast channels.

John J. Rigas, the Chairman, President, Chief Executive Officer and majority
stockholder of Adelphia, is a pioneer in the cable television industry, having
built his first system in 1952 in Coudersport, Pennsylvania. Adelphia was
incorporated in Delaware on July 1, 1986 for the purpose of reorganizing five
cable television companies, then principally owned by the Rigas Family, into a
holding company structure in connection with the initial public offering of its
Class A Common Stock, $.01 par value, and Senior Subordinated Notes. Prior
to 1982, the Company grew principally by obtaining municipal cable television
franchises to construct new cable television systems. Since 1982, the Company
has grown principally by acquiring and developing existing cable systems. The
Company's business comprises one segment, the ownership, operation and
management of cable television systems. The Company does not have any foreign
operations or foreign sales.

OPERATING STRATEGY

The Company's strategy has been to provide superior customer service while
maximizing operating cash flow. By acquiring and developing systems in
geographic proximity, the Company has been able to realize significant
operating efficiencies through the consolidation of many managerial,
administrative and technical functions. The Systems have consolidated, into
regional offices, virtually all of their administrative operations, including
customer service, service call dispatching, marketing, human resources,
advertising sales and government relations. Each regional office has a related
technical center which contains the facilities necessary for the Systems'
technical functions, including construction, installations and system
maintenance and monitoring. Consolidating customer service functions into
regional offices allows the Company to provide customer service through better
training and staffing of customer service representatives and by providing more
advanced telecommunications and computer equipment and software to its customer
service representatives than would otherwise be economically feasible in
smaller systems.

27
<PAGE>

In addition to the consolidation of its administrative and technical
operations, the Company has substantially consolidated the Systems' headends.
At September 30, 1993, approximately 642,000, or 50%, of the Systems' basic
subscribers were served from only ten headends, and 1,027,000, or 80%, of such
subscribers were served from only 27 headends. Approximately 65% of the
Systems' basic subscribers were served by systems serving more than 50,000
subscribers while, nationwide, only 39% of basic subscribers were served by
systems as large. Furthermore, 36% of nationwide basic cable subscribers were
served by systems with fewer than 20,000 subscribers, while less than 14% of
the Systems' basic subscribers were served by such systems at September 30,
1993.*

The Company has used telecommunications advances to develop centralized
customer service facilities. During 1991, the Company consolidated 22 separate
customer service and administrative offices serving approximately 330,000 basic
subscribers in Pennsylvania and Virginia into one central facility. This
facility allows the Company to provide superior customer service. The Company
staffs the facility to respond promptly to customer inquiries on a 24-hour
basis. The Company also uses the facility to provide continuous training to its
customer service representatives. By investing in state-of-the-art computer
hardware and software, the Company also has centralized certain financial,
telemarketing and technical functions, thereby eliminating duplicate field
personnel and permitting the Company to maintain a more efficient "middle"
management layer at the corporate office.

The Company considers technological innovation to be an important component
of cost-effective improvement of its product and customer satisfaction. Since
April 1, 1988, the Company has invested more than $358,000,000 to modernize and
expand its cable systems. Through the use of fiber optic cable and other
technological improvements, the Company has increased system reliability,
channel capacity and its ability to deliver advanced cable television services.
These improvements have enhanced customer service, reduced operating expenses
and allowed the Company to introduce additional services, such as impulse-
ordered pay-per-view programming, which expand customer choices and increase
Company revenues. The Company has developed new cable construction architecture
which allows it to readily deploy fiber optic cable in its systems. The Company
has replaced approximately 18% of the total installed trunk cable for the
Systems with fiber optic cable and has used fiber optic cable in all of its
rebuilding projects and principally all of the Systems' line extensions. In
addition, the Company has installed over 400 miles of fiber optic plant for
point-to-point applications such as connecting or eliminating headends or
microwave link sites. Management believes that the Company is among the leaders
of the cable industry in the deployment of fiber optic cable.

DEVELOPMENT OF THE SYSTEMS

The Company has focused on acquiring and developing systems in markets which
have favorable historical growth trends. The Company believes that the strong
household growth trends in its Systems' market areas are a key factor in
positioning itself for future growth in basic subscribers.

The Company has grown since 1982 principally by acquiring and developing
existing cable systems. During the fiscal year ended March 31, 1990, the
Company acquired cable television systems which, on the respective dates of
acquisition, in the aggregate passed 77,343 homes and served 59,792 basic
subscribers. During the fiscal year ended March 31, 1989, in addition to the
acquisition of the Private Companies and the South Dade Interest (as defined
below, respectively) discussed below, the Company acquired other cable
television systems which, on the respective dates of acquisition, in the
aggregate passed 90,300 homes and served 63,741 basic subscribers. During the
fiscal year ended March 31, 1988, the Company acquired cable television systems
which, on the respective dates of acquisition, in the aggregate passed 220,600
homes and served 152,150 basic subscribers. The Company, for a fee, provides
consulting and management services to

- --------
*National average data is as of December 31, 1992, as published in NCTA Cable
Television Developments, March 1993.

28
<PAGE>

cable television systems in Florida, Pennsylvania, New York, South Carolina,
Virginia and North Carolina owned by the Managed Partnerships and Olympus.

The Company has made no material acquisitions since August 1989. The Company
will continue 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 market areas or in locations
that can serve as the basis for new market areas, either directly or
indirectly through joint ventures, where appropriate.

On May 11, 1988, the Company issued 3,944,476 shares of Class B Common Stock
and $50,000,000 in notes to acquire the capital stock and general partnership
interests in certain cable television companies principally owned by the Rigas
Family (the "Private Companies") as well as their 19.9% interest in a
partnership with the Company which at that time owned cable television systems
in the southeastern Florida area (the "South Dade Interest"). Prior to the
acquisition, the cable television systems owned by the Private Companies were
managed by the Company. See Note 1 to the Adelphia Communications Corporation
Consolidated Financial Statements. The Company's subscriber data included in
this Prospectus have been restated to include retroactively the operations of
the Private Companies, and the discussion herein of the Company Systems
includes the Private Companies unless otherwise indicated. Prior to the
Company's approving and consummating the acquisition on May 11, 1988, the full
Board of Directors and a special committee consisting of the Company's outside
board members received an opinion from an independent investment banking firm
that the terms of the transaction were fair to the Company's public
stockholders from a financial point of view.

On December 19, 1989, the Company, through a wholly-owned subsidiary,
acquired equity interests in Olympus, a joint venture partnership which is not
consolidated with the Company. In connection with this investment, the Company
transferred to Olympus property valued at $171,000,000, comprising its
interests in the South Dade System (which at the time of the transfer
represented 54,955 basic subscribers), and contributed cash and other assets
in return for general partner, preferred limited partner and special limited
partner interests in Olympus. Results of operations for the South Dade System
are reflected in the Adelphia Communications Corporation Consolidated
Financial Statements included in this Prospectus up to the date of transfer.
The investment by the Company and transfer of the South Dade System
facilitated the simultaneous acquisition (and related financing) by Olympus of
Centel Corporation's Southeastern Florida cable group, representing 134,050
basic subscribers, for a purchase price of approximately $307,700,000, and the
subsequent acquisition from non-affiliates by March 31, 1990 of systems
serving approximately 40,000 basic subscribers. The Company holds a 50% voting
interest in Olympus and serves as its managing general partner. See Note 2 to
the Adelphia Communications Corporation Consolidated Financial Statements.
During the fiscal year ended March 31, 1990, Olympus acquired from non-
affiliates cable television systems which, on the respective dates of
acquisition, in the aggregate passed 254,475 homes and served 174,161 basic
subscribers, including Centel Corporation's Southeastern Florida cable group's
systems.

Pursuant to an agreement executed in July 1989, two of the Managed
Partnerships, which are partly owned by unaffiliated third parties, acquired
during fiscal 1992 cable television systems previously owned by Jack Kent
Cooke Incorporated. At March 31, 1992, these systems (the "Cooke Systems") had
88,372 basic subscribers in Syracuse, New York, Hilton Head, South Carolina
and communities in Virginia and North Carolina. In June 1993, a Managed
Partnership acquired from unrelated parties cable television systems serving
approximately 52,000 basic subscribers in Palm Beach County, Florida. The
Company elected not to exercise its rights under the Business Opportunity
Agreement to participate in these purchases. See "Certain Transactions."

The following table indicates the growth of the Company Systems and Olympus
Systems by summarizing the number of homes passed by cable and the number of
basic subscribers for each of the five years ending March 31, 1993 and for the
six-month period ending September 30, 1993. The table also indicates the
numerical growth in subscribers attributable to acquisitions and the numerical
and percentage growth attributable to internal growth. For the period April 1,
1988 through March 31, 1993, 78% of

29
<PAGE>

aggregate internal basic subscriber growth for both the Company Systems and
the Olympus Systems was derived from internal growth in homes passed, while
the remaining 22% of such aggregate growth was derived from penetration
increases.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------
TWELVE MONTHS
ENDED
1989 1990 1991 1992 1993 SEPTEMBER 30, 1993
------- --------- --------- --------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY SYSTEMS (a):
- ----------------------
HOMES PASSED (b)
Beginning of Period.... 799,414 920,703 1,032,081 1,072,950 1,099,462 1,117,287
Internal Growth (c).... 33,667 36,461 40,869 26,512 17,836 11,604
% Internal Growth...... 4.2% 4.0% 4.0% 2.5% 1.6% 1.0%
Acquired Homes Passed.. 87,622 74,917 -- -- 6,940 --
End of Period.......... 920,703 1,032,081 1,072,950 1,099,462 1,124,238 1,128,891
BASIC SUBSCRIBERS (d)
Beginning of Period.... 548,164 639,311 732,538 767,817 792,198 810,556
Internal Growth (c).... 28,102 35,398 35,279 24,381 19,219 17,897
% Internal Growth...... 5.1% 5.5% 4.8% 3.2% 2.4% 2.2%
Acquired Subscribers... 63,045 57,829 -- -- 5,566 --
End of Period.......... 639,311 732,538 767,817 792,198 816,983 828,453
Basic Penetration (e).. 69.4% 71.0% 71.6% 72.1% 72.7% 73.4%
OLYMPUS SYSTEMS (a):
- ---------------------
HOMES PASSED (b)
Beginning of Period.... 131,670 139,374 399,837 435,793 454,462 437,067
Internal Growth (c).... 7,704 4,831 35,956 18,669 7,306 14,811
% Internal Growth...... 5.9% 3.5% 9.0% 4.3% 1.6% 3.4%
Acquired Homes Passed.. -- 255,632 -- -- -- --
End of Period.......... 139,374 399,837 435,793 454,462 461,768 451,878
BASIC SUBSCRIBERS (d)
Beginning of Period.... 48,570 53,018 234,195 257,222 271,121 212,894
Internal Growth (c).... 4,448 4,025 23,027 13,899 5,450 51,868
% Internal Growth...... 9.2% 7.6% 9.8% 5.4% 2.0% 24.4%
Acquired Subscribers... -- 177,152 -- -- -- --
End of Period.......... 53,018 234,195 257,222 271,121 276,571 264,762
Basic Penetration (e).. 38.0% 58.6% 59.0% 59.7% 59.9% 58.6%
</TABLE>
- --------
(a) Data for the South Dade System is included under the Olympus Systems and
excluded from the Company Systems for all periods presented. Data included
for the South Dade System at March 31, 1993 is as of July 31, 1992, prior
to Hurricane Andrew. Data for the twelve months ended September 30, 1993
reflect changes in actual homes passed and basic subscribers for the South
Dade System. See Note (k) to "Summary Consolidated Financial Data."
(b) A home is deemed to be "passed" by cable if it can be connected to the
distribution system without any further extension of the cable
distribution plant.
(c) The number of additional homes passed or additional basic subscribers not
attributable to acquisitions of new cable systems.
(d) A home with one or more television sets connected to a cable system is
counted as one basic subscriber. Bulk accounts (such as motels or
apartments) are included on a "subscriber equivalent" basis in which the
total monthly bill for the account is divided by the basic monthly charge
for a single outlet in the area.
(e)Basic subscribers as a percentage of homes passed by cable.

30
<PAGE>

MARKET AREAS

The Systems are "clustered" in eight market areas in the eastern portion of
the United States as follows:

<TABLE>
<CAPTION>
MARKET AREA LOCATION OF SYSTEMS
----------- -------------------
<C> <S>
Southeastern Florida Portions of southern Dade, Palm Beach, Martin and St.
Lucie Counties and Hilton Head, South Carolina
Western New York Suburbs of Buffalo and the adjacent Niagara Falls area,
and Syracuse and adjacent communities
Virginia Winchester, Charlottesville, Staunton, Richland,
Martinsville and surrounding communities in Virginia, and
South Boston and Elizabeth City, North Carolina
Western Pennsylvania Suburbs of Pittsburgh and several small communities in
western Pennsylvania
New England Cape Cod communities, South Shore communities (the area
between Boston and Cape Cod, Massachusetts) and
Bennington, Burlington, Rutland and Montpelier, Vermont
and surrounding communities in Vermont and New York
Eastern Pennsylvania Suburbs of Philadelphia and suburbs of Scranton
Ohio Suburbs of Cleveland and the city of Mansfield and
surrounding communities, and portions of Kalamazoo
County, Michigan
Coastal New Jersey Ocean County, New Jersey
</TABLE>

The following table summarizes by market area the homes passed by cable,
basic subscribers and premium service units for the Systems as of September 30,
1993.

<TABLE>
<CAPTION>
HOMES BASIC BASIC PREMIUM PREMIUM
PASSED SUBSCRIBERS PENETRATION SUBSCRIBERS PENETRATION
--------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
COMPANY SYSTEMS:
Western New York........ 286,003 207,302 72.48% 111,667 53.87%
Virginia................ 201,631 151,973 75.37% 56,075 36.90%
Western Pennsylvania.... 149,277 109,942 73.65% 43,061 39.17%
New England............. 160,891 120,499 74.90% 65,176 54.09%
Eastern Pennsylvania.... 69,974 47,200 67.45% 42,890 90.87%
Ohio.................... 139,962 96,264 68.78% 49,400 51.32%
Coastal New Jersey...... 121,153 95,273 78.64% 50,118 52.60%
--------- ------- -------
TOTAL................. 1,128,891 828,453 73.39% 418,387 50.50%
========= ======= ===== ======= =====
OLYMPUS SYSTEMS:
Southeastern Florida.... 403,073 228,542 56.70% 101,883 44.58%
Eastern Pennsylvania.... 48,805 36,220 74.21% 13,890 38.35%
--------- ------- -------
TOTAL................. 451,878 264,762 58.59% 115,773 43.73%
========= ======= ===== ======= =====
MANAGED SYSTEMS:
Southeastern Florida.... 89,659 73,560 82.04% 21,358 29.03%
Western New York........ 67,150 41,165 61.30% 24,688 59.97%
Virginia................ 43,198 30,540 70.70% 13,401 43.88%
Western Pennsylvania.... 31,905 23,658 74.15% 7,017 29.66%
Eastern Pennsylvania.... 33,452 22,071 65.98% 20,014 90.68%
--------- ------- -------
TOTAL................. 265,364 190,994 71.97% 86,478 45.28%
========= ======= ===== ======= =====
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
HOMES BASIC BASIC PREMIUM PREMIUM
PASSED SUBSCRIBERS PENETRATION SUBSCRIBERS PENETRATION
--------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
TOTAL SYSTEMS:
Southeastern Florida.... 492,732 302,102 61.31% 123,241 40.79%
Western New York........ 353,153 248,467 70.36% 136,355 54.88%
Virginia................ 244,830 182,513 74.55% 69,476 38.07%
Western Pennsylvania.... 181,182 133,599 73.74% 50,078 37.48%
New England............. 160,891 120,499 74.90% 65,176 54.09%
Eastern Pennsylvania.... 152,230 105,491 69.30% 76,794 72.80%
Ohio.................... 139,962 96,264 68.78% 49,400 51.32%
Coastal New Jersey...... 121,153 95,273 78.64% 50,118 52.60%
--------- --------- -------
TOTAL................. 1,846,133 1,284,209 69.57% 620,638 48.33%
========= ========= ===== ======= =====
</TABLE>

The following table identifies the ADIs predominantly served by each of the
Systems' market areas at September 30, 1993.

<TABLE>
<CAPTION>
MARKET AREA PREDOMINANT ADI LOCATIONS
----------- -------------------------
<C> <S>
Southeastern Florida West Palm Beach, Miami; Savannah, GA
Western New York Buffalo, Syracuse
Washington, DC; Charlottesville, Richmond, Norfolk,
Virginia Roanoke
Western Pennsylvania Pittsburgh
New England Burlington, VT; Boston, MA; Albany, NY
Eastern Pennsylvania Philadelphia, Scranton-Wilkes Barre
Ohio Cleveland; Grand Rapids, MI
Coastal New Jersey New York, NY; Philadelphia, PA
</TABLE>

The Systems are located primarily in suburban areas of large and medium-size
cities. As of September 30, 1993, approximately 77% of the Systems' basic
subscribers were located in the 50 largest ADIs, compared with 39% for the
nation's total households. The Company believes that being located primarily in
larger television markets has contributed positively to increased advertising
sales revenues because advertisers typically concentrate placement of
advertising in media outlets located in the larger ADIs.

TECHNOLOGICAL DEVELOPMENTS

The Company has made a substantial commitment to the technological
development of the Company Systems and has actively sought to upgrade the
technical capabilities of its cable plant in order to increase channel capacity
for the delivery of additional programming and new services. All of the Company
Systems have a minimum of 35-channel capacity, and 63.6% of the subscribers to
the Company Systems are served by systems having capacity of 54 or more
channels, which exceeds the national average for cable systems. By expanding
channel capacity, the Company expects that it will be able to provide
subscribers with a wider range of programming choices and improved picture
quality.

Over 99% of the subscribers to the Company Systems are served by systems with
"addressable capable" technology, which permits the cable operator to remotely
activate the cable television services to be delivered to subscribers who are
equipped with addressable converters. In recent years, the Company has deployed
addressable converters throughout most of the Company Systems and, as of
September 30, 1993, approximately 51% of the subscribers to the Company Systems
had addressable converters. With addressable converters, the Company can
immediately add to or reduce the services provided to a subscriber from the
Company's headend site, without the need to dispatch a service technician to
the subscriber's home. Addressable technology has allowed the Company to offer
pay-per-view programming. Addressable technology also has assisted the Company
in reducing pay service theft and, by allowing the Company to automatically cut
off a subscriber's service, has been effective in collecting delinquent
subscriber payments.

32
<PAGE>

The following table indicates channel capacities and addressable converter
deployment for the Systems as of September 30, 1993.

<TABLE>
<CAPTION>
SYSTEMS CHANNEL CAPACITY % OF BASIC
AS A % OF BASIC SUBSCRIBERS SUBSCRIBERS ADDRESSABLE
--------------------------- IN CONVERTERS AS
BASIC ADDRESSABLE A % OF BASIC
SUBSCRIBERS 35-53 54-79 80 SYSTEMS SUBSCRIBERS
------------ ---------- ---------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY SYSTEMS:
Western New York........ 207,302 38.3% 33.6% 28.1% 100.0% 32.1%
Virginia................ 151,973 24.2% 51.8% 24.1% 98.9% 49.2%
Western Pennsylvania.... 109,942 20.1% 48.3% 31.6% 100.0% 54.2%
New England............. 120,499 41.7% 40.9% 17.4% 97.4% 88.9%
Eastern Pennsylvania.... 47,200 47.4% 17.0% 35.6% 100.0% 20.8%
Ohio.................... 96,264 59.1% 29.2% 11.7% 99.6% 72.9%
Coastal New Jersey...... 95,273 35.2% 15.5% 49.3% 100.0% 37.4%
---------
TOTAL................. 828,453 36.4% 36.4% 27.2% 99.4% 51.1%
========= ========= ======== ======== ===== ====
OLYMPUS SYSTEMS:
Southeastern Florida.... 228,542 6.2% 82.0% 11.9% 99.5% 71.4%
Eastern Pennsylvania.... 36,220 60.6% -- 39.4% 100.0% 10.4%
---------
TOTAL................. 264,762 13.6% 70.8% 15.6% 99.6% 63.1%
========= ========= ======== ======== ===== ====
MANAGED SYSTEMS:
Southeastern Florida.... 73,560 37.9% 52.7% 9.5% 99.6% --
Western New York........ 41,165 100.0% -- -- 100.0% 61.0%
Virginia................ 30,540 58.8% 11.7% 29.5% 66.3% 33.8%
Western Pennsylvania.... 23,658 17.1% 81.2% 1.7% 100.0% 42.4%
Eastern Pennsylvania.... 22,071 64.1% 33.6% 2.4% 100.0% 69.1%
---------
TOTAL................. 190,994 55.1% 36.1% 8.8% 94.4% 43.8%
========= ========= ======== ======== ===== ====
TOTAL SYSTEMS:
Southeastern Florida.... 302,102 13.3% 73.9% 12.8% 99.5% 65.3%
Western New York........ 248,467 48.5% 28.1% 23.4% 100.0% 36.9%
Virginia................ 182,513 30.0% 45.1% 25.0% 93.4% 46.6%
Western Pennsylvania.... 133,600 19.6% 54.1% 26.3% 100.0% 52.2%
New England............. 120,499 41.7% 40.9% 17.4% 97.4% 88.9%
Eastern Pennsylvania.... 105,491 55.4% 14.6% 30.0% 100.0% 27.3%
Ohio.................... 96,264 59.1% 29.2% 11.7% 99.6% 72.9%
Coastal New Jersey...... 95,273 35.2% 15.5% 49.3% 100.0% 37.4%
---------
TOTAL................. 1,284,209 34.1% 43.5% 22.4% 98.7% 52.9%
========= ========= ======== ======== ===== ====
</TABLE>

33
<PAGE>

The following table compares levels of channel capacity in the Company
Systems and Olympus Systems at September 30, 1993 against national averages as
of December 1992.

<TABLE>
<CAPTION>
CHANNEL CAPACITY NATIONAL AVERAGE COMPANY SYSTEMS OLYMPUS SYSTEMS
---------------- ---------------- --------------- ---------------
<S> <C> <C> <C>
At least 80 channels................ 3.6%* 27.2% 15.6%
At least 54 channels................ 34.6%* 63.6% 86.4%
At least 30 channels................ 94.5%* 100.0% 100.0%
Less than 30 channels............... 5.5%* -- --
Addressable Converters as a
% of Basic Subscribers............. 35.4%** 51.1% 63.1%
</TABLE>
- --------
* Based on data for channel capacity as published in NCTA Cable Television
Developments, November 1993.
** Company estimate based on industry data.

In a number of its recent system upgrades, the Company has utilized fiber
optic cable as an alternative to the coaxial cable that historically has been
used to distribute cable signals to the subscriber's home. Fiber optic cable is
capable of carrying hundreds of video, data and voice channels. The Company has
developed an innovative "fiber-to-feeder" network design, consisting of a
combination of fiber optic trunk and certain other distribution plant, which
has proven to be economical for the construction, rebuilding, extension and
upgrading of the Systems.

The Company expects that the continued use of the fiber-to-feeder network
design strategy will give the Company the flexibility to exploit the expanded
delivery capacity of fiber optic cable in a cost-effective manner. The
construction of fiber-to-feeder networks will also position the Company to take
advantage of alternative communications delivery systems made possible by fiber
optic technology (such as mobile personal communications service ("PCS") and
"alternate access" voice and data communications that bypass local
exchange telephone carriers), to utilize the expanded bandwidth potential of
digital compression technology and to meet the anticipated transmission
requirements for high-definition television and digital television. The Company
has one PCS system in operation on an experimental basis.

The Company is currently offering alternate access telecommunications
services through a subsidiary, Hyperion Telecommunications, Inc. ("Hyperion").
Competitive access carriers can provide businesses and other large
telecommunications consumers with local telecommunications services and access
to long-distance service carriers via competitive networks that bypass the
local telephone company. Hyperion's networks will be constructed exclusively
with fiber optics plant designed to provide increased quality service and data
integrity compared to the existing local telephone company's network. These
competitive access networks also can complement existing networks by providing
redundant telecommunications service backup and route diversity for their
customers.

In addition to the activities described above, the Company has made a
substantial commitment to technological development as a member of Cable
Television Laboratories, Inc., a not-for-profit research and development
company serving the cable industry. The Company has also joined other industry
members in a partnership venture in Digital Cable Radio, a satellite-delivered,
multichannel music service featuring "compact disc" quality sound, which will
be marketed like a premium service.

SUBSCRIBER SERVICES AND RATES

The Company's revenues are derived principally from monthly subscription fees
for basic, satellite and premium services. Rates to subscribers vary from
market to market and in accordance with the type of service selected. Although
services vary from system to system because of differences in channel capacity
and viewer interests, each of the Systems typically offers a basic service
package ranging from $8.00 to $12.00 per month. As described below, the Systems
currently offer certain satellite services through CableSelect, at monthly

34
<PAGE>

per channel rates ranging from $.10 to $1.25 per channel, and in discounted
packages. The Systems' monthly rates for premium services range from $7.00 to
$13.00 per service. An installation fee, which the Company may wholly or
partially waive during a promotional period, is usually charged to new
subscribers. Subscribers are free to terminate cable service at any time
without charge, but often are charged a fee for reconnection or change of
service.

The Cable Communications Policy Act of 1984 (the "1984 Cable Act," as amended
by the 1992 Cable Act), deregulated basic service rates for systems in
communities meeting the FCC's definition of effective competition. Pursuant to
the FCC's definition of effective competition adopted following enactment of
the 1984 Cable Act, substantially all of the Company's franchises were rate
deregulated. However, in June 1991, the FCC amended its effective competition
standard, which increased the number of cable systems which could be subject to
local rate regulation. The 1992 Cable Act contains a new definition of
effective competition under which nearly all cable systems in the United States
will be subject to regulation of basic service rates. Additionally, the
legislation (i) eliminated the 5% annual basic rate increase allowed by the
1984 Cable Act without local approval; (ii) allows the FCC to adjudicate the
reasonableness of rates for non-basic service tiers other than premium services
for cable systems not subject to effective competition in response to
complaints filed by franchising authorities and/or cable subscribers; (iii)
prohibits cable systems from requiring subscribers to purchase service tiers
above basic service in order to purchase premium services if the system is
technically capable of doing so; (iv) allows the FCC to impose restrictions on
the retiering and rearrangement of cable services under certain circumstances;
and (v) permits the FCC and franchising authorities more latitude in
controlling rates and rejecting rate increase requests. See "Legislation and
Regulation."

Effective as of September 1, 1993, in accordance with the 1992 Cable Act, the
Company repackaged certain existing cable services by adjusting rates for basic
service and introducing a new method of offering certain cable services. The
Company adjusted the basic service rates and related equipment and installation
rates in all of its systems in order for such rates to be in compliance with
the 1992 Cable Act's applicable benchmark or equipment and installation cost
levels. The Company also implemented a program in all of its systems called
"CableSelect" under which most of the Company's satellite-delivered programming
services are now offered individually on a per channel basis, or as a group at
a price of approximately 15% to 20% below the sum of the per channel prices of
all such services. For subscribers who elect to customize their channel lineup,
the Company will provide, for a monthly rental fee, an electronic device
located on the cable line outside the home, enabling a subscriber's television
to receive only those channels selected by the subscriber. These basic service
rate adjustments and the CableSelect program are also being implemented in all
systems managed by the Company. The Company believes CableSelect provides
increased programming choices to the Company's subscribers while providing
flexibility to the Company to respond to future changes in areas such as
customer demand and programming. Certain programmers have taken the position
that the Company's new method of offering services is inconsistent with their
programming agreements. The Company disagrees and is in discussions with these
programmers. Because the Company's new method of offering services will depend
upon several factors, including decisions of subscribers and the cost and
availability of programming, the Company is currently unable to determine the
effect that this new method will have on its business and results of operations
for future periods. As part of its survey of post-September 1, 1993 cable rates
of the 25 largest multiple systems operators in the United States, the FCC is
reviewing the cable rates of 11 of such operators, including the Company, that
offer certain of their cable services on a per-channel basis. A letter of
inquiry, one of at least 52 sent by the FCC to numerous cable operators, was
recently received by an Olympus System regarding the implementation of this new
method of offering services.

35
<PAGE>

the Company's business and results of operations in the future. Also, no
assurances can be given as to what other future actions Congress, the FCC or
other regulatory authorities may take or the effects thereof on the Company.

FRANCHISES

The 1984 Cable Act provides that cable operators may not offer cable service
to a particular community without a franchise unless such operator was lawfully
providing service to the community on July 1, 1984 and the franchising
authority does not require a franchise. The Company Systems and the Olympus
Systems operate pursuant to franchises or other authorizations issued by
governmental authorities, substantially all of which are nonexclusive. Such
franchises or authorizations awarded by a governmental authority generally are
not transferable without the consent of the authority. Additionally, the 1992
Cable Act prohibits cable operators from selling or otherwise transferring the
ownership of any cable system within 36 months after acquisition or initial
construction, subject to certain limited exceptions. As of September 30, 1993,
the Company held 359 franchises and Olympus held 115 franchises. Most of these
franchises can be terminated prior to their stated expiration by the relevant
governmental authority, after due process, for breach of material provisions of
the franchise.

Under the terms of most of the Company's franchises, a franchise fee (ranging
up to 5% of the gross revenues of the cable system) is payable to the
governmental authority. For the past three years, franchise fee payments made
by the Company have averaged approximately 2.4% of gross system revenues.

The franchises issued by the governmental authorities are subject to periodic
renewal. In renewal hearings, the authorities generally consider, among other
things, whether the franchise holder has provided adequate service and complied
with the franchise terms. In connection with a renewal, the authority may
impose different and more stringent terms, the impact of which cannot be
predicted. To date, all of the Company's material franchises have been renewed
or extended, at or effective upon their stated expiration, generally on
modified terms. Such modified terms have not been materially adverse to the
Company.

The Company believes that all of its material franchises are in good
standing. From time to time, the Company notifies the franchising authorities
of the Company's intent to seek renewal of the franchise in accordance with the
procedures set forth in the 1984 Cable Act. The 1984 Cable Act process requires
that the governmental authority consider the franchise holder's renewal
proposal on its own merits in light of the franchise holder's past performance
and the community's needs and interests, without regard to the presence of
competing applications. See "Legislation and Regulation." The 1992 Cable Act
alters the administrative process by which operators utilize their 1984 Cable
Act franchise renewal rights. Such changes could make it easier in some
instances for a franchising authority to deny renewal of a franchise.

PROPERTIES

The Company's principal physical assets consist of cable television operating
plant and equipment, including signal receiving, encoding and decoding devices,
headends and distribution systems and subscriber house drop equipment for each
of its cable television systems. The signal receiving apparatus typically
includes a tower, antenna, ancillary electronic equipment and earth stations
for reception of satellite signals. Headends, consisting of associated
electronic equipment necessary for the reception, amplification and modulation
of signals, are located near the receiving devices. The Company's distribution
system consists primarily of coaxial and fiber optic cables and related
electronic equipment. Subscriber devices consist of decoding converters. The
physical components of cable television systems require maintenance and
periodic upgrading to keep pace with technological advances.

The Company's cables and related equipment are generally attached to utility
poles under pole rental agreements with local public utilities, although in
some areas the distribution cable is buried in underground ducts or trenches.
See "Legislation and Regulation--Federal Regulation."

36
<PAGE>

The Company owns or leases parcels of real property for signal reception
sites (antenna towers and headends), microwave facilities and business offices
in each of its market areas and owns most of its service vehicles. The Company
leases its corporate headquarters located in Coudersport, Pennsylvania, real
estate used in connection with its suburban Buffalo systems and several other
parcels of real estate used in its cable systems from Dorellenic, a general
partnership comprised of members of the Rigas Family. The Company also leases
certain cable, operating and support equipment from Dorellenic and a
corporation owned by members of the Rigas Family. All leasing transactions
between the Company and its officers, directors or principal stockholders, or
any of their affiliates, are, in the opinion of management, on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties. See "Certain Transactions."

Substantially all of the assets of Adelphia's subsidiaries are subject to
encumbrances as collateral in connection with the Company's credit
arrangements, either directly with a security interest or indirectly through a
pledge of the stock in the respective subsidiaries. See Note 4 to the Adelphia
Communications Corporation Consolidated Financial Statements. The Company
believes that its properties, both owned and leased, are in good operating
condition and are suitable and adequate for the Company's business operations.

COMPETITION

Cable television systems compete with other communications and entertainment
media, including off-air television broadcast signals which a viewer is able to
receive directly using the viewer's own television set and antenna. The extent
to which a cable system competes with over-the-air broadcasting depends upon
the quality and quantity of the broadcast signals available by direct antenna
reception compared to the quality and quantity of such signals and alternative
services offered by a cable system. In many areas, television signals which
constitute a substantial part of basic service can be received by viewers who
use their own antennas. Local television reception for residents of apartment
buildings or other multi-unit dwelling complexes may be aided by use of private
master antenna services. Cable systems also face competition from alternative
methods of distributing and receiving television signals and from other sources
of entertainment such as live sporting events, movie theaters and home video
products, including videotape recorders and cassette players. In recent years,
the FCC has adopted policies providing for authorization of new technologies
and a more favorable operating environment for certain existing technologies
that provide, or may provide, substantial additional competition for cable
television systems. The extent to which cable television service is competitive
depends in significant part upon the cable television system's ability to
provide an even greater variety of programming than that available off-air or
through competitive alternative delivery sources. In addition, certain
provisions of the 1992 Cable Act are expected to increase competition
significantly in the cable industry. See "Legislation and Regulation."

Because the Systems are operated under non-exclusive franchises, other
applicants may obtain franchises in areas where the Company presently has
franchises. The 1992 Cable Act prohibits franchising authorities from
unreasonably refusing to award additional franchises and permits them to
operate cable systems themselves without franchises. The Company believes that,
except for insignificant situations, no other operators currently operate cable
television systems that pass any of the homes passed by the Systems. The
Company is unable to predict whether any of the Systems will be subject to an
overbuild by franchising authorities or other cable operators. However, several
federal court decisions have found unconstitutional various aspects of
franchising schemes that seek to limit the number of cable operators allowed to
serve a particular area. Additionally, the 1992 Cable Act removes some of the
legal and regulatory impediments that currently discourage overbuilding. See
"Legislation and Regulation--Competing Franchises".

Homeowners have the option to purchase earth stations, which allow the direct
reception of satellite-delivered program services formerly available only to
cable television subscribers. The Company is unable to estimate the extent to
which earth stations represent competition in its franchised service areas. The
attractiveness of cable service compared to private earth stations may be
enhanced now that most satellite-distributed program signals are being
electronically scrambled to permit reception only with authorized decoding
equipment, generally at a cost to the viewer, making the unauthorized reception
of such scrambled

37
<PAGE>

signals by earth station viewers more difficult. From time to time, legislation
has been introduced in Congress which, if enacted into law, would prohibit the
scrambling of certain satellite-distributed programs or would make satellite
services available to private earth stations on terms comparable to those
offered to cable systems. Broadcast television signals are being made available
to owners of earth stations under the Satellite Home Viewer Copyright Act of
1988, which became effective January 1, 1989 for a six-year period. This Act
establishes a statutory compulsory license for certain transmission made by
satellite owners to home satellite dishes, for which carriers are required to
pay a royalty fee to the Copyright Office. This Act will expire automatically
at the end of 1994, unless extended by Congress. The Company cannot predict at
the present time whether the Act will be modified or extended beyond 1994. The
1992 Cable Act enhances the right of cable competitors to purchase nonbroadcast
satellite-delivered programming. See "Legislation and Regulation--Federal
Regulation." The Company cannot predict at this time the impact such
legislation will have upon its cable television operations.

In the future, it is expected that such programming will be delivered by
high-powered direct broadcast satellites ("DBS") on a wide-scale basis and
several companies have announced plans to provide DBS programming services by
as early as 1994. Those companies propose to use recently developed video
compression technology to increase the channel capacity of their systems. Video
compression technology reportedly has the capability of providing more than 100
channels of programming over a single high-powered DBS, and this capacity could
increase in the future. Video compression technology may also be used by cable
operators to similarly increase their current channel capacity. DBS service
will be able to be received virtually anywhere in the United States through the
installation of a rooftop or side-mounted antenna, and it will be more
accessible than cable television service where cable plant has not been
constructed or where it is not cost effective to construct cable television
facilities. The extent to which DBS systems will be competitive with cable
television systems will also depend upon, among other things, the ability of
DBS operators to obtain access to programming, the availability of reception
equipment, and whether such equipment can be made available to consumers at
reasonable prices.

Although multi-point distribution systems ("MDS") traditionally have been a
single channel service, the FCC has changed its allocation policies to make
more frequencies available and multichannel MDS ("MMDS") service possible. MMDS
systems deliver programming services over microwave channels licensed by the
FCC received by subscribers with special antennas. MMDS systems are less
capital intensive, are not required to obtain local franchises or to pay
franchise fees, and are subject to lower regulatory requirements than cable
television systems. To date, the ability of these so-called "wireless" cable
services to compete with cable television systems has been limited by channel
capacity and the need for unobstructed line-of-sight over-the-air transmission.
Although relatively few MMDS systems in the United States are currently in
operation or under construction, virtually all markets have been licensed or
tentatively licensed. The FCC has taken a series of actions intended to
facilitate the development of MMDS and other wireless cable systems as
alternative means of distributing video programming, including reallocating
certain frequencies to these services and expanding the permissible use and
eligibility requirements for certain channels reserved for educational
purposes. The FCC's actions enable a single entity to develop an MMDS system
with a potential of up to 35 channels that could compete effectively with cable
television. FCC rules and the 1992 Cable Act prohibit the common ownership of
cable systems and MMDS facilities serving the same area.

The U.S. Copyright Office has recently adopted regulations, which become
effective January 1, 1994, declaring that wireless distribution systems, such
as direct satellite transmission to home satellite antennae, MDS and MMDS, do
not qualify for purposes of the statutory compulsory copyright license for the
retransmission of off-air television and radio broadcast stations by cable
systems. These Copyright Office regulations may make it more difficult for
wireless cable systems to offer television and radio retransmissions as part of
their service offerings. The Company is unable to predict to what extent
additional competition from these services will materialize in the future or
what impact such competition would have on the operation of the Systems.

38
<PAGE>

Additional competition may come from private cable television systems known
as satellite master antenna television ("SMATV") systems, servicing
condominiums, apartment complexes and certain other multiple unit residential
developments. The Cable Act gives franchised cable operators the right to use
existing compatible easements within their franchise areas upon
nondiscriminatory terms and conditions. There have been conflicting judicial
decisions interpreting the scope of the access right granted by the Cable Act,
particularly with respect to easements located entirely on private property. A
SMATV system is subject to the 1984 Cable Act's franchise requirement only if
it uses physically closed transmission paths, such as wires or cables to
interconnect separately owned and managed buildings or if its lines use or
cross any public right-of-way. In some cases, SMATV operators may be able to
charge a lower price than could a cable system providing comparable services
and the FCC's new regulations implementing the 1992 Cable Act limit a cable
operator's ability to reduce its rates to meet this competition. Furthermore,
the U.S. Copyright Office has tentatively concluded that SMATV systems are
"cable systems" for purposes of qualifying for the compulsory copyright license
established for cable systems by federal law. The 1992 Cable Act prohibits the
common ownership of cable systems and SMATV facilities serving the same area.
As a result of all of the foregoing, the ability of the Company to compete for
subscribers in communities with extensive SMATV or private cable television
operations is uncertain.

The FCC has initiated a new rulemaking proceeding looking toward the
allocation of frequencies in the 28 GHz range for a new multichannel wireless
video service which could make 98 compressed video channels available in a
single market. The Company is unable to predict whether competitors will emerge
utilizing such frequencies or whether such competition would have a material
impact on the operations of the Company.

In the past, federal cross-ownership restrictions have limited entry into the
cable television business by potentially strong competitors such as telephone
companies. Proposals recently adopted by the FCC, pending litigation and
legislation could make it possible for companies with considerable resources
and consequently a potentially greater willingness or ability to overbuild, to
enter the business. The FCC recently amended its rules to permit local
telephone companies to offer "video dialtone" service for video programmers,
including channel capacity for the carriage of video programming and certain
non-common carrier activities such as video processing, billing and collection
and joint marketing agreements. Furthermore, on August 24, 1993 a federal
district court struck down as unconstitutional a provision in the 1984 Cable
Act which prevents local telephone companies from offering video programming on
a non-common carrier basis directly to subscribers in their local telephone
service areas. This decision is being appealed. Several similar suits have been
instituted in other district courts. Even in the absence of further changes in
the cross-ownership restrictions, the expansion of telephone companies' fiber
optic systems may facilitate entry by other video service providers in
competition with cable systems. See "Legislation and Regulation--Federal
Regulation."

The Company holds a franchise to provide cable service in Dover Township, New
Jersey. On December 15, 1992, New Jersey Bell Telephone Company ("New Jersey
Bell") filed an application with the FCC requesting authority to construct new
fiber optic facilities for the purpose of operating a "video dialtone" system
in a portion of that community in which the Company serves approximately 20,000
subscribers. Initial programming service over those facilities would be
provided by FutureVision of America Corporation. On January 22, 1993, the
Company formally opposed New Jersey Bell's application on various grounds by
filing a Petition to Deny the application at the FCC. Several other parties
also opposed the New Jersey Bell application. On February 4, 1993, New Jersey
Bell filed an opposition to the Company's Petition to Deny and the other
filings. On February 17, 1993, the Company filed its reply in that matter,
concluding the formal pleading cycle. On July 28, 1993, the FCC sent a letter
to New Jersey Bell stating that the application appeared to be inconsistent
with the FCC's video dialtone requirements in that insufficient capacity to
serve multiple programmers was to be made available. New Jersey Bell was given
an opportunity to amend its application, which it subsequently did. The Company
filed a further opposition to the application. The matter has not yet been
decided by the FCC.

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Advances in communications technology, as well as changes in the marketplace
and the regulatory and legislative environment, are constantly occurring. Thus,
it is not possible to predict the effect that ongoing or future developments
might have on the cable industry. The ability of cable systems to compete with
present, emerging and future distribution media will depend to a great extent
on obtaining attractive programming. The availability and exclusive use of a
sufficient amount of quality programming may in turn be effected by
developments in regulation or copyright law. See "Legislation and Regulation."

The cable television industry competes with radio, television and print media
for advertising revenues. As the cable television industry continues to develop
programming designed specifically for distribution by cable, advertising
revenues may increase. Premium programming provided by the Company's cable
communications systems is subject to the same competitive factors which exist
for other programming discussed above. The continued profitability of the
Company's premium services may depend largely upon the continued availability
of attractive programming at competitive prices.

EMPLOYEES

At November 13, 1993, there were 2,456 full-time employees of the Company, of
which 98 employees were covered by collective bargaining agreements at two
locations. The Company considers its relations with its employees to be good.

LEGISLATION AND REGULATION

The cable television industry is regulated by the FCC, some state governments
and most local governments. In addition, various legislative and regulatory
proposals under consideration from time to time by Congress and various federal
agencies may materially affect the cable television industry. The following is
a summary of federal laws and regulations affecting the growth and operation of
the cable television industry and a description of certain state and local
laws.

CABLE COMMUNICATIONS POLICY ACT OF 1984

The 1984 Cable Act became effective on December 29, 1984. This federal
statute, which amended the Communications Act of 1934 (the "Communications
Act"), created uniform national standards and guidelines for the regulation of
cable television systems. Violations by a cable television system operator of
provisions of the Communications Act, as well as of FCC regulations, can
subject the operator to substantial monetary penalties and other sanctions.
Among other things, the 1984 Cable Act affirmed the right of franchising
authorities (state or local, depending on the practice in individual states) to
award one or more franchises within their jurisdictions. It also prohibited
non-grandfathered cable television systems from operating without a franchise
in such jurisdictions. In connection with new franchises, the 1984 Cable Act
provides that in granting or renewing franchises, franchising authorities may
establish requirements for cable-related facilities and equipment, but may not
establish or enforce requirements for video programming or information services
other than in broad categories. The 1984 Cable Act grandfathered, for the
remaining term of existing franchises, many but not all of the provisions in
existing franchises which would not be permitted in franchises entered into or
renewed after the effective date of the 1984 Cable Act.

CABLE TELEVISION CONSUMER PROTECTION AND COMPETITION ACT OF 1992

On October 5, 1992, Congress enacted the 1992 Cable Act. This legislation
will effect significant changes to the legislative and regulatory environment
in which the cable industry operates. It amends the 1984 Cable Act in many
respects. The 1992 Cable Act became effective on December 4, 1992, although
certain provisions, most notably those dealing with rate regulation and
retransmission consent, become effective at later dates. The legislation also
requires the FCC to initiate a number of rulemaking proceedings to implement
various

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provisions of the statute. The 1992 Cable Act allows for a greater degree of
regulation on the cable industry with respect to, among other things: (i) cable
system rates for both basic and certain nonbasic services; (ii) programming
access and exclusivity arrangements; (iii) access to cable channels by
unaffiliated programming services; (iv) leased access terms and conditions; (v)
horizontal and vertical ownership of cable systems; (vi) customer service
requirements; (vii) franchise renewals; (viii) television broadcast signal
carriage and retransmission consent; (ix) technical standards; (x) subscriber
privacy; (xi) consumer protection issues; (xii) cable equipment compatibility;
(xiii) obscene or indecent programming; and (xiv) requiring subscribers to
subscribe to tiers of service other than basic service as a condition of
purchasing premium services. Additionally, the legislation encourages
competition with existing cable systems by: allowing municipalities to own and
operate their own cable systems without having to obtain a franchise;
preventing franchising authorities from granting exclusive franchises or
unreasonably refusing to award additional franchises covering an existing cable
system's service area; and prohibiting the common ownership of cable systems
and co-located MMDS or SMATV systems. The 1992 Cable Act also precludes video
programmers affiliated with cable television companies from favoring cable
operators over competitors and requires such programmers to sell their
programming to other multichannel video distributors. This provision may limit
the ability of cable program suppliers to offer exclusive programming
arrangements to cable television companies. While the Company is currently
unable to predict the ultimate outcome of the pending FCC rulemaking
proceedings or the ultimate effect of the 1992 Cable Act, the Company believes
that a number of provisions in this legislation relating to, among other
things, rate regulation, are likely to have an adverse effect, potentially
material, on the cable industry and the Company's business.

Various cable operators have filed actions in the United States District
Court in the District of Columbia challenging the constitutionality of several
sections of the 1992 Cable Act. Pursuant to special jurisdictional provisions
in the 1992 Cable Act, a challenge to the must-carry provisions of the Act was
heard by a three-judge panel of the District Court. On April 8, 1993, the
three-judge court granted a summary judgment for the government upholding the
constitutional validity of the must-carry provisions of the 1992 Cable Act.
That decision has been appealed directly to the U.S. Supreme Court. The
plaintiffs in that case have unsuccessfully sought an injunction pending appeal
of the District Court's decision.

The cable operators' constitutional challenge to the balance of the 1992
Cable Act provisions was heard by a single judge of the District Court. On
September 16, 1993, the court rendered its decision upholding the
constitutionality of all but three provisions of the statute (multiple
ownership limits for cable operators, advance notice of free previews for
certain programming services, and channel set-asides for DBS operators). It is
expected that this decision will be appealed to the U.S. Court of Appeals for
the District of Columbia Circuit.

Appeals have also been filed in the U.S. Court of Appeals for the District of
Columbia Circuit from the FCC's must-carry and rate regulation rulemaking
decisions.

FEDERAL REGULATION

The FCC, the principal federal regulatory agency with jurisdiction over cable
television, has promulgated regulations covering such areas as the registration
of cable systems, cross-ownership between cable systems and other
communications businesses, carriage of television broadcast programming,
consumer education and lockbox enforcement, origination cablecasting and
sponsorship identification, children's programming, the regulation of basic
cable service rates in areas where cable systems are not subject to effective
competition, signal leakage and frequency use, technical performance,
maintenance of various records, equal employment opportunity, and antenna
structure notification, marking and lighting. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of other
administrative sanctions, such as the revocation of FCC licenses needed to
operate certain transmission facilities often used in connection with cable
operations. Furthermore, the 1992 Cable Act requires the FCC to adopt
implementing regulations covering, among other things, cable rates, signal

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carriage, consumer protection and customer service, leased access, indecent
programming, programmer access to cable television systems, programming
agreements, technical standards, consumer electronics equipment compatibility,
ownership of home wiring, program exclusivity, equal employment opportunity,
and various aspects of direct broadcast satellite system ownership and
operation. A brief summary of the most material federal regulations as adopted
to date follows.

Rate Regulation. The 1984 Cable Act codified existing FCC preemption of rate
regulation for premium channels and optional nonbasic program tiers. The 1984
Cable Act also deregulated basic cable rates for cable television systems
determined by the FCC to be subject to effective competition. The 1992 Cable
Act substantially changes the current statutory and FCC rate regulation
standards. The 1992 Cable Act replaces the FCC's current standard for
determining effective competition, under which most cable systems are not
subject to local rate regulation, with a statutory provision that will result
in nearly all cable television systems becoming subject to local rate
regulation of basic service. Additionally, the legislation eliminates the 5%
annual rate increase for basic service currently allowed by the 1984 Cable Act
without local approval; requires the FCC to adopt a formula, for franchising
authorities to enforce, to assure that basic cable rates are reasonable; allows
the FCC to review rates for nonbasic service tiers (other than per-channel or
per-program services) in response to complaints filed by franchising
authorities and/or cable customers; prohibits cable television systems from
requiring customers to purchase service tiers above basic service in order to
purchase premium services if the system is technically capable of doing so;
requires the FCC to adopt regulations to establish, on the basis of actual
costs, the price for installation of cable service, remote controls, converter
boxes and additional outlets; and allows the FCC to impose restrictions on the
retiering and rearrangement of cable services under certain limited
circumstances. The FCC completed rulemaking proceedings designed to implement
these rate regulation provisions on April 1, 1993.

The FCC's regulations set standards for the regulation of basic and nonbasic
cable service rates (other than per-channel or per-program services). The FCC
ordered an interim 120-day freeze on these rates effective April 5, 1993. The
FCC's rules were originally scheduled to become effective on June 21, 1993.
After two interim changes in this date, the rules became effective for cable
systems serving more than 1,000 subscribers on September 1, 1993, and the
freeze was extended until February 15, 1994, or the date on which a particular
cable system becomes subject to rate regulation, whichever comes sooner. The
FCC has granted a temporary stay of its rate regulation rules for small systems
serving 1,000 or fewer subscribers, pending its consideration of issues
concerning reducing regulatory burdens on such small systems and whether any
such relief should also be extended to small systems affiliated with large
multiple system operators, such as the Company. The new rate regulations adopt
a benchmark price cap system for measuring the reasonableness of existing basic
and nonbasic service rates, and a formula for evaluating future rate increases.
Alternatively, cable operators will have the opportunity to make cost-of-
service showings which, in some cases, may justify rates above the applicable
benchmarks. The FCC has not yet completed the rulemaking proceeding in which it
will set forth the substantive rules to be utilized in such cost-of-service
showings. The new rules also require that charges for cable-related equipment
(e.g., converter boxes and remote control devices) and installation services be
unbundled from the provision of cable service and based upon actual costs plus
a reasonable profit. Local franchising authorities and/or the FCC are empowered
to order a reduction of existing rates which exceed the benchmark level for
either basic and/or nonbasic cable services and associated equipment, and
refunds could be required, measured from the date of a complaint to the FCC
challenging an existing nonbasic cable service rate or from September 1, 1993,
for existing basic cable service rates. In general, the reduction for existing
basic and nonbasic cable service rates would be to the greater of the
applicable benchmark level or the rates in force as of September 30, 1992,
minus 10 percent, adjusted forward for inflation. The FCC has, however,
reserved the right to adjust the benchmarks that it has established. The
regulations also provide that future rate increases may not exceed an
inflation-indexed amount, plus increases in certain costs beyond the cable
operator's control, such as taxes, franchise fees and increased programming
costs that exceed the inflation index. The Company's ability to implement rate
increases consistent with its past practices could be limited by the
regulations that the FCC has adopted. See "Risk Factors--Regulation and
Competition in the Cable Television Industry."

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On March 11, 1993, the FCC adopted regulations pursuant to the 1992 Cable Act
which require cable systems to permit customers to purchase video programming
on a per channel or a per program basis without the necessity of subscribing to
any tier of service, other than the basic service tier, unless the cable system
is technically incapable of doing so. Generally, this exemption from compliance
with the statute for cable systems that do not have such technical capability
is available until a cable system obtains the capability, but not later than
December, 2002.

Carriage of Broadcast Television Signals. The 1992 Cable Act contains new
mandatory carriage requirements. These new rules allow commercial television
broadcast stations which are "local" to a cable system, i.e., the system is
located in the station's Area of Dominant Influence, to elect every three
years, whether to require the cable system to carry the station, subject to
certain exceptions, or whether the cable system will have to negotiate for
"retransmission consent" to carry the station. The first such election was made
on June 17, 1993. Local, non-commercial television stations are also given
mandatory carriage rights, subject to certain exceptions, within the larger of
(i) a 50 mile radius from the station's city of license or (ii) the station's
Grade B contour (a measure of signal strength). Unlike commercial stations,
noncommercial stations are not given the option to negotiate retransmission
consent for the carriage of their signal. In addition, cable systems will have
to obtain retransmission consent for the carriage of all "distant" commercial
broadcast stations, except for certain "superstations," i.e., commercial
satellite-delivered independent stations such as WTBS. The 1992 Cable Act also
eliminated, effective December 4, 1992, the FCC's regulations requiring the
provision of input selector switches. The statutory must-carry provisions for
non-commercial stations became effective on December 4, 1992. Must-carry rules
for both commercial and non-commercial stations and retransmission consent
rules for commercial stations were adopted by the FCC on March 11, 1993. The
must-carry requirement for commercial stations went into effect on June 2,
1993, and any stations for which retransmission consent had not been obtained
(other than must-carry stations, non-commercial stations and superstations) had
to be dropped as of October 6, 1993. A number of stations previously carried by
the Company's cable television systems elected retransmission consent. The
Company has thus far been able to reach agreements with broadcasters who
elected retransmission consent or to negotiate extensions to the October 6,
1993 deadline and has therefore not been required to pay cash compensation to
broadcasters for retransmission consent or been required by broadcasters to
remove broadcast stations from the cable television channel line-ups. The
Company has, however, agreed to carry some services (e.g., ESPN2 and a new
service by FOX) in specified markets pursuant to retransmission consent
arrangements which it believes are comparable to those entered into by most
other large cable operators.

Nonduplication of Network Programming. Cable systems that have 1,000 or more
subscribers must, upon the appropriate request of a local television station,
delete the simultaneous or nonsimultaneous network programming of a distant
station when such programming has also been contracted for by the local station
on an exclusive basis.

Deletion of Syndicated Programming. FCC regulations enable television
broadcast stations that have obtained exclusive distribution rights for
syndicated programming in their market to require a cable system to delete or
"black out" such programming from other television stations which are carried
by the cable system. The extent of such deletions will vary from market to
market and cannot be predicted with certainty. However, it is possible that
such deletions could be substantial and could lead the cable operator to drop a
distant signal in its entirety. The FCC also has commenced a proceeding to
determine whether to relax or abolish the geographic limitations on program
exclusivity contained in its rules, which would allow parties to set the
geographic scope of exclusive distribution rights entirely by contract, and to
determine whether such exclusivity rights should be extended to noncommercial
educational stations. It is possible that the outcome of these proceedings will
increase the amount of programming that cable operators are requested to black
out. Finally, the FCC has declined to impose equivalent syndicated exclusivity
rules on satellite carriers who provide services to the owners of home
satellite dishes similar to those provided by cable systems.

Franchise Fees. Although franchising authorities may impose franchise fees
under the 1984 Cable Act, such payments cannot exceed 5% of a cable system's
annual gross revenues. In those communities in which

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franchise fees are required, the Company currently pays franchise fees ranging
up to 5% of gross revenues. Franchising authorities are also empowered in
awarding new franchises or renewing existing franchises to require cable
operators to provide cable-related facilities and equipment and to enforce
compliance with voluntary commitments. In the case of franchises in effect
prior to the effective date of the 1984 Cable Act, franchising authorities may
enforce requirements contained in the franchise relating to facilities,
equipment and services, whether or not cable-related. The 1984 Cable Act, under
certain limited circumstances, permits a cable operator to obtain modifications
of franchise obligations.

Renewal of Franchises. The 1984 Cable Act established renewal procedures and
criteria designed to protect incumbent franchises against arbitrary denials of
renewal. While these formal procedures are not mandatory unless timely invoked
by either the cable operator or the franchising authority, they can provide
substantial protection to incumbent franchisees. Even after the formal renewal
procedures are invoked, franchising authorities and cable operators remain free
to negotiate a renewal outside the formal process. Nevertheless, renewal is by
no means assured, as the franchisee must meet certain statutory standards. Even
if a franchise is renewed, a franchising authority may impose new and more
onerous requirements such as upgrading facilities and equipment, although the
municipality must take into account the cost of meeting such requirements.

The 1992 Cable Act makes several changes to the process under which a cable
operator seeks to enforce its renewal rights which could make it easier in some
cases for a franchising authority to deny renewal. While a cable operator must
still submit its request to commence renewal proceedings within thirty to
thirty-six months prior to franchise expiration to invoke the formal renewal
process, the request must be in writing and the franchising authority must
commence renewal proceedings not later than six months after receipt of such
notice. The four-month period for the franchising authority to grant or deny
the renewal now runs from the submission of the renewal proposal, not the
completion of the public proceeding. Franchising authorities may consider the
"level" of programming service provided by a cable operator in deciding whether
to renew. For alleged franchise violations occurring after December 29, 1984,
franchising authorities are no longer precluded from denying renewal based on
failure to comply substantially with the material terms of the franchise where
the franchising authority has "effectively acquiesced" to such past violations.
Rather, the franchising authority is estopped if, after giving the cable
operator notice and opportunity to cure, it fails to respond to a written
notice from the cable operator of its failure or inability to cure. Courts may
not reverse a renewal denial based on procedural regulations found to be
"harmless error."

Channel Set-Asides. The 1984 Cable Act permits local franchising authorities
to require cable operators to set aside certain channels for public,
educational and governmental access programming. The Company believes that none
of the Systems' franchises contain unusually onerous access requirements. The
1984 Cable Act further requires cable systems with thirty-six or more activated
channels to designate a portion of their channel capacity for commercial leased
access by unaffiliated third parties. While the 1984 Cable Act presently allows
cable operators substantial latitude in setting leased access rates, the 1992
Cable Act requires leased access rates to be set according to a formula to be
determined by the FCC. It is possible that such leased access will result in
competition to services offered by the cable operator on the other channels of
its cable systems.

Competing Franchises. Questions concerning the ability of municipalities to
award a single cable television franchise and to impose certain franchise
restrictions upon cable television companies have been considered in several
recent federal appellate and district court decisions. These decisions have
been somewhat inconsistent and, until the U.S. Supreme Court rules definitively
on the scope of cable television's First Amendment protections, the legality of
the franchising process and of various specific franchise requirements is
likely to be in a state of flux. It is not possible at the present time to
predict the constitutionally permissible bounds of cable franchising and
particular franchise requirements. However, the 1992 Cable Act, among

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other things, prohibits franchising authorities from unreasonably refusing to
grant franchises to competing cable systems and permits franchising authorities
to operate their own cable systems without franchises.

Ownership. The 1984 Cable Act codified existing FCC crossownership
regulations, which, in part, prohibit local exchange telephone companies
("LECs"), including the Bell Operating Companies ("BOCs"), from providing video
programming directly to subscribers within their local exchange telephone
service areas, except in rural areas or by specific waiver of FCC rules. This
federal cross-ownership rule is particularly important to the cable industry
since these telephone companies already own certain facilities needed for cable
television operation, such as poles, ducts and associated rights-of-way. On
August 24, 1993 the United States District Court for the Eastern District of
Virginia struck down the 1984 Cable Act's cable/telco cross ownership
prohibition as facially invalid and inconsistent with the First Amendment. This
decision will be appealed to the U.S. Court of Appeals for the Fourth Circuit.
Similar litigation has commenced in several other district courts. The Company
cannot predict the outcome of this litigation, but believes that the provision
of video programming by telephone companies with considerable financial
resources in competition with the Company's existing operations could have an
adverse effect on the Company's financial condition and results of operation;
the magnitude of any such effect is not known or estimable. Separately, as part
of a comprehensive proceeding examining whether and under what circumstances
telephone companies should be allowed to provide cable television services,
including video programming to their customers, the FCC has concluded that
neither the 1984 Cable Act nor its rules apply to prohibit the interexchange
carriers (i.e., long distance telephone companies such as AT&T) from providing
such services to their customers. Additionally, the FCC has also concluded that
where an LEC makes its facilities available on a common carrier basis for the
provision of video programming to the public, the 1984 Cable Act does not
require either the LEC or its programmer customers to obtain a franchise to
provide such service. Because cable operators are required to bear the costs of
complying with local franchise requirements, the FCC's decision could place
cable operators at a competitive disadvantage vis-a-vis local telephone
companies seeking to offer competing services on a common carrier basis.
Certain parties asked the FCC to clarify and reconsider certain aspects of its
so-called "video dialtone" decision and, after granting such petitions, the FCC
affirmed its initial decision. Other parties have sought judicial review of the
FCC's conclusion that neither a LEC or its programmer customers would be
required to obtain a local franchise. This appeal is currently pending.

As part of the same proceeding, the FCC recommended that Congress amend the
1984 Cable Act to allow LECs to provide their own video programming services
over their facilities in competition with their customers' services. The FCC
also decided to loosen ownership and affiliation restrictions currently
applicable to telephone companies, and has proposed to increase the numerical
limit on the population of areas qualifying as "rural" and in which LECs can
provide cable service without FCC waiver.

The BOCs have recently been released by the United States District Court for
the District of Columbia from restrictions on their ability to provide
information services, including broadband video programming, which had been
imposed as part of the 1984 AT&T divestiture decree. They are, of course, still
subject to the 1984 Cable Act cross ownership restriction discussed above.

The telephone industry has continued to lobby Congress for legislation that
will permit LECs to provide video programming directly to consumers within
their service areas. There is currently a bill pending in Congress that would
permit the LECs to provide cable television service over their own facilities
conditioned on establishing a video programming affiliate that will maintain
separate records to prevent cross-subsidization. The bill, among other
provisions, would also prohibit telephone companies from purchasing existing
cable television systems within their telephone service areas. On the other
hand, different legislation has been introduced in Congress that would reimpose
the ban on the provision of information services, including broadband video
programming, by LECs similar to that formerly contained in the 1984 AT&T
divestiture decree. The outcome of these FCC, legislative or court proceedings
and proposals or the effect of such outcome on cable system operations cannot
be predicted; however, adoption of such proposals could intensify the
competition which the Systems might face from LECs in the areas in which the
Systems operate.

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The 1984 Cable Act and the FCC's rules also prohibit the common ownership,
operation, control or interest in a cable system and a local television
broadcast station whose predicted grade B contour (a measure of significant
signal strength as defined by the FCC's rules) covers any portion of the
community served by the cable system. As part of a wide ranging inquiry on
competition in the video marketplace, the FCC has solicited comments to
determine whether the policy prohibiting the common ownership or control of co-
located broadcast and cable facilities continues to service the public
interest. Common ownership or control has historically also been prohibited by
the FCC (but not by the 1984 Cable Act) between a cable system and a national
television network, although the FCC has recently adopted an order which
substantially relaxes the network/cable cross-ownership prohibitions subject to
certain national and local ownership caps. As a part of the same action, the
FCC also voted to recommend to Congress that the broadcast/cable cross-
ownership restrictions contained in the 1984 Cable Act be repealed. In
addition, the FCC's rules prohibit common ownership, affiliation, control or
interest in cable systems and MDS facilities having overlapping service areas,
except in very limited circumstances. The 1992 Cable Act codified this
restriction and also extended it to co-located SMATV systems. Permitted
arrangements in effect as of October 5, 1992, are grandfathered. Thus, the
FCC's cross-ownership rules could preclude the Company, its general partners,
the officers, directors of its general partners or holders of a cognizable
equity interest in the Company (as defined by the FCC) from serving
simultaneously as general partners, the officers or directors of, or from
holding a substantial ownership interest in, these other businesses. The 1992
Cable Act permits states or local franchising authorities to adopt certain
additional restrictions on the ownership of cable systems.

Pursuant to the 1992 Cable Act, the FCC has imposed limits on the number of
cable systems which a single cable operator can own. In general, no cable
operator can have an attributable interest in cable systems which pass more
than 30 percent of all homes nationwide. Attributable interests for these
purposes include voting interests of 5% or more (unless there is another single
holder of more than 50% of the voting stock), officerships, directorships and
general partnership interests. The FCC has stayed the effectiveness of these
rules pending the outcome of the appeal from the U.S. District Court decision
holding the multiple ownership limit provision of the 1992 Cable Act
unconstitutional. The FCC has also adopted rules which limit the number of
channels on a cable system which can be occupied by programming in which the
cable system's owner has an attributable interest. The limit is 40% of all
activated channels.

EEO. The 1984 Cable Act includes provisions to ensure that minorities and
women are provided equal employment opportunities within the cable television
industry. The statute requires the FCC to adopt reporting and certification
rules that apply to all cable system operators with more than five full-time
employees. Pursuant to the requirements of the 1992 Cable Act, the FCC has
imposed more detailed annual EEO reporting requirements on cable operators and
has expanded those requirements to all multichannel video service distributors.
Failure to comply with the EEO requirements can result in the imposition of
fines and/or other administrative sanctions, or may, in certain circumstances,
be cited by a franchising authority as a reason for denying a franchisee's
renewal request. As a result of an EEO audit of one of the Company's employment
units, the Company has received notification from the FCC regarding certain
insufficiencies in the implementation and enforcement of its EEO policy.
Although the FCC has not yet taken any formal action on this matter, the
Company has taken a number of steps to strengthen its EEO program in response
to the concerns raised by the FCC. The Company does not believe that the
outcome of any FCC action will have a material adverse effect on the Company as
a whole.

Privacy. The 1984 Cable Act imposes a number of restrictions on the manner in
which cable system operators can collect and disclose data about individual
system subscribers. The statute also requires that the system operator
periodically provide all subscribers with written information about its
policies regarding the collection and handling of data about subscribers, their
privacy rights under federal law and their enforcement rights. In the event
that a cable operator is found to have violated the subscriber privacy
provisions of the 1984 Cable Act, it could be required to pay damages,
attorney's fees and other costs. Under the 1992 Cable Act, the privacy
requirements are strengthened to require that cable operators take such actions
as are necessary to prevent unauthorized access to personally identifiable
information.

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Anti-Trafficking. The 1992 Cable Act precludes cable operators from selling
or otherwise transferring ownership of a cable system within 36 months after
acquisition or initial construction, except for: resales required by the terms
of a contract covering the acquisition of multiple systems; tax free sales;
governmentally required divestitures; or internal transfers to a commonly
controlled entity. The anti-trafficking restriction applies to systems acquired
prior to the effective date of the new law (i.e., December 4, 1992) as well as
subsequent acquisitions. The FCC may waive the foregoing restrictions where
generally consistent with the public interest, unless the franchising authority
has refused to grant any required approval. The 1992 Cable Act also requires
franchising authorities to act on any franchise transfer request submitted
after December 4, 1992 within 120 days after receipt of all information
required by FCC regulations and by the franchising authority. Approval is
deemed to be granted if the franchising authority fails to act within such
period.

Registration Procedure and Reporting Requirements. Prior to commencing
operation in a particular community, all cable television systems must file a
registration statement with the FCC listing the broadcast signals they will
carry and certain other information. Additionally, cable operators periodically
are required to file various informational reports with the FCC. Cable
operators who operate in certain frequency bands are required on an annual
basis to file the results of their periodic cumulative leakage testing
measurements. Operators who fail to make this filing or who exceed the FCC's
allowable cumulative leakage index risk being prohibited from operating in
those frequency bands in addition to other sanctions.

Technical Requirements. Historically, the FCC has imposed technical standards
applicable to the cable channels on which broadcast stations are carried, and
has prohibited franchising authorities from adopting standards which were in
conflict with or more restrictive than those established by the FCC. The FCC
has recently revised such standards and made them applicable to all classes of
channels which carry downstream NTSC video programming. Local franchising
authorities are permitted to enforce the FCC's new technical standards. The FCC
also has adopted additional standards applicable to cable television systems
using frequencies in the 108-137 MHz and 225-400 MHz bands in order to prevent
harmful interference with aeronautical navigation and safety radio services and
has also established limits on cable system signal leakage; the FCC's power in
this respect has not been questioned. Although these requirements could force
some cable operators to make significant capital and additional operating
expenditures to meet these new technical standards and more stringent leakage
criteria, the Company believes that the Systems are in compliance with these
standards in all material respects. The 1992 Cable Act requires the FCC to
update periodically its technical standards to take into account changes in
technology and to entertain waiver requests from franchising authorities who
would seek to impose more stringent technical standards upon their franchised
cable systems. Although the 1992 Cable Act requires the FCC to establish
"minimum technical standards relating to cable systems' technical operation and
signal quality," the FCC has announced that its recently completed cable
television technical standards rulemaking satisfies the new statutory mandate.

Pole Attachments. The FCC currently regulates the rates and conditions
imposed by certain public utilities for use of their poles, unless under the
Federal Pole Attachments Act state public service commissions are able to
demonstrate that they regulate rates, terms and conditions of the cable
television pole attachments. A number of states (including Massachusetts,
Michigan, New Jersey, New York, Ohio and Vermont) and the District of Columbia
have certified to the FCC that they regulate the rates, terms and conditions
for pole attachments. In the absence of state regulation, the FCC administers
such pole attachment rates through use of a formula which it has devised and
from time to time revises. The authority of the FCC to regulate such rates was
affirmed by the U.S. Supreme Court in 1987.

Other Matters. FCC regulation also includes matters regarding a cable
system's carriage of local sports programming; restrictions on origination and
cablecasting by cable system operators; application of the fairness doctrine
and rules governing political broadcasts; customer service; home wiring; and
limitations on advertising contained in nonbroadcast children's programming.

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<PAGE>

Copyright. Cable television systems are subject to federal copyright
licensing covering carriage of broadcast signals. In exchange for making semi-
annual payments to a federal copyright royalty pool and meeting certain other
obligations, cable operators obtain a statutory license to retransmit broadcast
signals. The amount of this royalty payment varies, depending on the amount of
system revenues from certain sources, the number of distant signals carried,
and the location of the cable system with respect to over-the-air television
stations. A federal copyright royalty tribunal ("CRT") is empowered to make and
has made several adjustments in copyright royalty rates to account for the
impact of national monetary inflation and regulatory changes affecting the
amount of cable television signal carriage. Most recently, pursuant to this
authority, the CRT in 1990 reduced the copyright fees owed by many cable
systems in response to the adoption of new syndicated exclusivity rules by the
FCC. Although the CRT was scheduled to engage in a further reexamination of its
rate structure for distant signal carriage during 1991, the copyright owners
and the cable industry entered into a settlement agreement which essentially
leaves intact, until 1995, the rate in existence as of December 31, 1990,
barring any further changes in the FCC's syndicated exclusivity or sports
blackout rules.

The Copyright Office has commenced a proceeding aimed at examining its
policies governing the consolidated reporting of commonly owned and contiguous
cable systems. The present policies governing the consolidated reporting of
certain cable systems have often led to substantial increases in the amount of
copyright fees owed by the systems affected. These situations have most
frequently arisen in the context of cable system mergers and acquisitions.
While it is not possible to predict the outcome of this proceeding, any changes
adopted by the Copyright Office in its current policies may have the effect of
reducing the copyright impact of certain transactions involving cable company
mergers and cable system acquisitions.

Various bills have been introduced into Congress over the past several years
that would eliminate or modify the cable television compulsory license. The FCC
has recommended to Congress that it repeal the cable industry's compulsory
copyright license. The FCC determined that the statutory compulsory copyright
license for local and distant broadcast signals no longer serves the public
interest and that private negotiations between the applicable parties would
better serve the public. Without the compulsory license, cable operators might
need to negotiate rights from the copyright owners for each program carried on
each broadcast station in the channel lineup. Such negotiated agreements could
increase the cost to cable operators of carrying broadcast signals. The 1992
Cable Act's retransmission consent provisions expressly provide that
retransmission consent agreements between television broadcast stations and
cable operators do not obviate the need for cable operators to obtain a
copyright license for the programming carried on each broadcaster's signal.

Copyrighted music performed in programming supplied to cable television
systems by pay cable networks (such as HBO) and basic cable networks (such as
USA Network) has generally been licensed by the networks through private
agreements with the American Society of Composers and Publishers ("ASCAP") and
BMI, Inc. ("BMI"), the two major performing rights organizations in the United
States. These two organizations have asserted that cable television systems
must separately obtain licenses and pay fees to them for the performance of
such music. Litigation was initiated in two federal courts which, among other
things, raised the question of whether cable television systems can be required
to obtain separate music performance licenses for cable network programming.
Both federal district courts ruled against ASCAP and BMI and held that they are
required to offer "through to the viewer" licenses to the cable networks which
would cover the retransmission of the cable networks' programming by cable
systems to their subscribers. Both decisions were appealed, although the BMI
litigation was subsequently settled. The decision of the federal district court
in the ASCAP case was recently upheld by an appellate court and the U.S.
Supreme Court has declined to review this decision.

STATE AND LOCAL REGULATION

Because a cable television system uses local streets and rights-of-way, cable
television systems are subject to state and local regulation, typically imposed
through the franchising process. State and/or local officials

48
<PAGE>

are usually involved in franchise selection, system design and construction,
safety, service rates, consumer relations, billing practices and community
related programming and services.

Cable television systems generally are operated pursuant to nonexclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. Franchises generally are granted for fixed terms and
in many cases are terminable if the franchise operator fails to comply with
material provisions. Although the 1984 Cable Act provides for certain
procedural protections, there can be no assurance that renewals will be granted
or that renewals will be made on similar terms and conditions. Franchises
usually call for the payment of fees, often based on a percentage of the
system's gross subscriber revenues, to the granting authority. Upon receipt of
a franchise, the cable system owner usually is subject to a broad range of
obligations to the issuing authority directly affecting the business of the
system. The terms and conditions of franchises vary materially from
jurisdiction to jurisdiction, and even from city to city within the same state,
historically ranging from reasonable to highly restrictive or burdensome. The
1984 Cable Act places certain limitations on a franchising authority's ability
to control the operation of a cable system operator and the courts have from
time to time reviewed the constitutionality of several general franchise
requirements, including franchise fees and access channel requirements, often
with inconsistent results. On the other hand, the 1992 Cable Act prohibits
exclusive franchises, and allows franchising authorities to exercise greater
control over the operation of franchised cable systems, especially in the area
of customer service and rate regulation. The 1992 Cable Act also allows
franchising authorities to operate their own multichannel video distribution
system without having to obtain a franchise and permits states or local
franchising authorities to adopt certain restrictions on the ownership of cable
systems. Moreover, franchising authorities are immunized from monetary damage
awards arising from regulation of cable systems or decisions made on franchise
grants, renewals, transfers and amendments.

The specific terms and conditions of a franchise and the laws and regulations
under which it was granted directly affect the profitability of the cable
television system. Cable franchises generally contain provisions governing
charges for basic cable television services, fees to be paid to the franchising
authority, length of the franchise term, renewal, sale or transfer of the
franchise, territory of the franchise, design and technical performance of the
system, use and occupancy of public streets and number and types of cable
services provided.

Various proposals have been introduced at the state and local levels with
regard to the regulation of cable television systems, and a number of states
have adopted legislation subjecting cable television systems to the
jurisdiction of centralized state governmental agencies, some of which impose
regulation of a character similar to that of a public utility. Attempts in
other states to regulate cable television systems are continuing and can be
expected to increase. Such proposals and legislation may be preempted by
federal statute and/or FCC regulation. To date, the states in which the Company
operates that have enacted such state level regulation are New York, New
Jersey, Massachusetts and Vermont. The Company cannot predict whether other
states in which it currently operates, or in which it may acquire systems, will
engage in such regulation in the future.

The foregoing does not purport to describe all present and proposed federal,
state and local regulations and legislation relating to the cable television
industry. Other existing federal regulations, copyright licensing and, in many
jurisdictions, state and local franchise requirements currently are the subject
of a variety of judicial proceedings, legislative hearings and administrative
and legislative proposals which could change, in varying degrees, the manner in
which cable television systems operate. Neither the outcome of these
proceedings nor their impact upon the cable television industry or the Systems
can be predicted at this time.

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<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John J. Rigas 69 Chairman, Chief Executive Officer,
President and Director
Michael J.
Rigas 40 Senior Vice President, Operations and Director
Timothy J. 37 Senior Vice President, Chief Financial Officer, Chief
Rigas Accounting Officer, Treasurer and Director
James P. Rigas 36 Vice President, Strategic Planning and Director
Daniel R. Mil- 46 Vice President, Secretary and Director
liard
Perry S.
Patterson 76 Director
Pete J. Metros 53 Director
</TABLE>

John J. Rigas is the founder, Chairman, President and Chief Executive Officer
of Adelphia and is President of its subsidiaries. Mr. Rigas has served as
President or general partner of most of the constituent entities which became
wholly-owned subsidiaries of Adelphia upon its formation in 1986, as well as
the cable television operating companies acquired by the Company which were
wholly or partially owned by members of the Rigas Family. See "Certain
Transactions." Mr. Rigas has owned and operated cable television systems since
1952. Among his business and community service activities, Mr. Rigas is
Chairman of the Board of Directors of Citizens Bancorp., Inc., Coudersport,
Pennsylvania, and a member of the Board of Directors of Charles Cole Memorial
Hospital. He is a director of the National Cable Television Association and a
past President of the Pennsylvania Cable Television Association. He is also a
member of the board of directors of C-SPAN and the Cable Advertising Bureau,
and is a Trustee of St. Bonaventure University. He graduated from Rensselaer
Polytechnic Institute with a B.S. in Management Engineering in 1950.

John J. Rigas is the father of Michael J. Rigas, Timothy J. Rigas and James
P. Rigas, each of whom currently serves as a director and executive officer of
the Company.

Michael J. Rigas is Senior Vice President, Operations of Adelphia and is a
Vice President of its subsidiaries. Since 1981, Mr. Rigas has served as a Vice
President, general partner or other officer of the constituent entities which
became wholly-owned subsidiaries of Adelphia upon its formation in 1986, as
well as the cable television operating companies acquired by the Company which
were wholly or partially owned by members of the Rigas Family. See "Certain
Transactions." From 1979 to 1981, he worked for Webster, Chamberlain & Bean, a
Washington, D.C. law firm. Mr. Rigas graduated from Harvard University (magna
cum laude) in 1976 and received his Juris Doctor degree from Harvard Law School
in 1979.

Timothy J. Rigas is Senior Vice President, Chief Financial Officer, Chief
Accounting Officer and Treasurer of Adelphia and its subsidiaries. Since 1979,
Mr. Rigas has served as Vice President, general partner or other officer of the
constituent entities which became wholly-owned subsidiaries of Adelphia upon
its formation in 1986, as well as the cable television operating companies
acquired by the Company which were wholly or partially owned by members of the
Rigas Family. See "Certain Transactions." Mr. Rigas graduated from the
University of Pennsylvania, Wharton School, with a B.S. degree in Economics
(cum laude) in 1978.

James P. Rigas is Vice President, Strategic Planning of Adelphia and is a
Vice President of its subsidiaries. Since February 1986, Mr. Rigas has served
as a Vice President or other officer of the constituent entities which became
wholly-owned subsidiaries of Adelphia upon its formation in 1986, as well as
the cable television operating companies acquired by the Company which were
wholly or partially owned by members of the Rigas Family. See "Certain
Transactions." Mr. Rigas graduated from Harvard University (magna cum

50
<PAGE>

laude) in 1980 and received a Juris Doctor degree and an M.A. degree in
Economics from Stanford University in 1984. From June 1984 to February 1986, he
was a consultant with Bain & Co., a management consulting firm.

Daniel R. Milliard is Vice President and Secretary of Adelphia and its
subsidiaries, and also serves as President of a subsidiary, Hyperion
Telecommunications, Inc. From 1986 to 1992, Mr. Milliard served as Vice
President, Secretary and/or General Counsel of Adelphia and the constituent
entities which became wholly-owned subsidiaries of Adelphia as well as the
cable television operating companies acquired by the Company which were wholly
or partially owned by members of the Rigas Family. See "Certain Transactions."
He served as outside general counsel to the Company's predecessors from 1979 to
1982. Mr. Milliard graduated from American University in 1970 with a Bachelor
of Science degree in Business Administration. He received an M.A. degree in
Business from Central Missouri State University in 1971, where he was an
Instructor in the Department of Finance, School of Business and Economics, from
1971-1973, and received a Juris Doctor degree from the University of Tulsa
School of Law in 1976. He is a director of Citizens Bancorp., Inc. in
Coudersport, Pennsylvania and President of the Board of Directors of Charles
Cole Memorial Hospital.

Perry S. Patterson became a director of Adelphia in 1986. Since 1977, Mr.
Patterson has practiced law in Coudersport, Pennsylvania. From 1975 to 1977,
Mr. Patterson served as President Judge of the Court of Common Pleas of the
55th Judicial District in Potter County, Pennsylvania. He was a member of the
law firm of Kirkland & Ellis in Chicago, Illinois, and Washington, D.C., from
1946 to 1973. Mr. Patterson attended Georgetown University and graduated from
Northwestern University Law School in 1941.

Pete J. Metros became a director of Adelphia in 1986. Mr. Metros has been
President and a member of the Board of Directors of Rapistan Demag Corporation,
a subsidiary of Mannesmann AG, since December 1991. From August 1987 to
December 1991, Mr. Metros was President of Rapistan Corp., the predecessor of
Rapistan Demag Corporation, and of Truck Products Corp., both of which were
major subsidiaries of Lear Siegler Holdings Corp. From 1980 to August 1987, Mr.
Metros was President of the Steam Turbine, Motor & Generator Division of
Dresser-Rand Company, which manufactures and markets turbines, generators and
motors. From 1964 to 1980, he held various positions at the General Electric
Company, the last of which was Manager--Manufacturing for the Large Gas Turbine
Division. Mr. Metros also is a member of the Board of Directors of Borroughs
Corporation of Kalamazoo, Michigan. Mr. Metros received a B.S. degree from The
Georgia Institute of Technology in 1962.

OTHER PRINCIPAL EMPLOYEES

Orby G. Kelley, 62, joined the Company in 1986 as Vice President of Human
Resources. Since 1981, Mr. Kelley served as Vice President Human Resources--
Columbus Operations for Warner Amex Cable Communications, Inc. Prior to that
time he served in a similar capacity for Colony Communications, Inc. and
Landmark Communications, Inc. Mr. Kelley received his B.A. degree from Old
Dominion University in 1958 and his M.B.A. from California Western University
in 1980.

Daniel Liberatore, 43, has been Vice President of Engineering since 1986. He
is responsible for technical operations, engineering and related supervisory
and management functions for the Company Systems. Mr. Liberatore received a
B.S. degree in Electrical Engineering from West Virginia University and served
as director of engineering for Warner Amex Cable Communications, Inc. from June
1982 until joining the Company. From December 1980 to June 1982, Mr. Liberatore
served as a Project Administrator for Warner Amex Cable Communications, Inc.

James R. Brown, 31, joined the Company in 1984 and currently holds the
position of Vice President of Finance. Mr. Brown graduated with a B.S. degree
in Industrial and Management Engineering from Rensselaer Polytechnic Institute
in 1984.

51
<PAGE>

Randall D. Fisher, 41, joined the Company in 1991 and is General Counsel and
Assistant Corporate Secretary to the Company. Previously Mr. Fisher was in
private practice with the Washington, D.C. law firm of Baraff, Koerner, Olender
& Hochberg, P.C. Mr. Fisher earned his J.D. from Texas Tech University. He
received a Masters Degree in Public Administration from Midwestern University
in Wichita Falls, Texas, and a B.A. degree in Journalism from the University of
Texas at Austin.

Colin H. Higgin, 32, joined the Company in November 1992 as Deputy General
Counsel. Mr. Higgin was an associate at Proskauer Rose Goetz & Mendelsohn from
1991 to 1992 and Latham & Watkins from 1987 to 1991. Mr. Higgin graduated from
the University of Pennsylvania, Wharton School, with a B.S. degree in Economics
(cum laude) in 1983 and received his J.D. from Indiana University in 1987.

Kathleen S. Mitchell, 46, joined the Company in 1989 and currently holds the
position of Corporate Controller. From 1979 to 1988, Ms. Mitchell served in
several senior accounting and financial management capacities for American
Television and Communications, Inc. Ms. Mitchell received her B.A. degree from
Mount Holyoke College in 1969 and her M.B.A. degree from the University of
Colorado in 1976.

Michael C. Mulcahey, CPA, 36, has been the Director of Investor Relations
since joining the Company in 1991. From 1987 to 1991, Mr. Mulcahey held
accounting and tax positions with the Syracuse office of Coopers & Lybrand. Mr.
Mulcahey received his B.A. in Political Science from State University of New
York at Buffalo in 1980 and his M.B.A. from Eastern Washington University in
1985.

James M. Kane, CPA, 31, joined the Company in April 1992 and currently holds
the position of Director of Finance. From 1989 to 1992, Mr. Kane served in
accounting and consulting positions with Price Waterhouse in Pittsburgh. From
1984 to 1987, Mr. Kane served in accounting positions with Coopers & Lybrand in
Pittsburgh. Mr. Kane received his B.S. degree in Accounting from Pennsylvania
State University in 1984 and his M.B.A. from Carnegie Mellon's Graduate School
of Industrial Administration in 1989.

LeMoyne T. Zacherl, 40, joined the Company in November 1993 as Vice President
of Financial Operations and Administration. Since 1987 Mr. Zacherl was a
Corporate Controller and member of senior management for Irvin Feld and Kenneth
Feld Productions, Inc., a worldwide entertainment concern. From 1975 to 1987,
Mr. Zacherl was with Coopers Lybrand and served in both the Pittsburgh, PA and
Washington, D.C. offices.

James H. Boso, 46, joined the Company in February 1993 as Vice President of
Operations. Formerly, Mr. Boso was Chief Executive Officer and President of
Spectradyne, Inc., a provider of entertainment services to the lodging
industry. From 1981 to 1989, Mr. Boso was Senior Vice President of Storer
Communications in South Florida.

52
<PAGE>

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation
paid by the Company for services rendered during the Company's last three
fiscal years ended March 31, 1993 to the Company's Chief Executive Officer and
the four most highly compensated executive officers whose compensation exceeded
$100,000 in salary and bonus during fiscal 1993:

ANNUAL COMPENSATION

<TABLE>
<CAPTION>
FISCAL SALARY ALL OTHER
YEAR ($) COMPENSATION (A) ($)
------ ------ --------------------
<S> <C> <C> <C>
John J. Rigas 1993 552,358 200,750
Chairman, President and 1992 553,525 200,750
Chief Executive Officer 1991 530,544 200,750
Michael J. Rigas 1993 124,658 10,750
Vice-President--Operations 1992 124,921 10,750
1991 94,077 10,750
Timothy J. Rigas 1993 124,658 10,750
Senior Vice President, Chief 1992 124,921 10,750
Financial Officer, Treasurer 1991 94,077 10,750
and Chief Accounting Officer
James P. Rigas 1993 124,658 10,750
Vice President--Operations 1992 124,921 10,750
1991 94,077 10,750
Daniel R. Milliard 1993 172,527 5,250
Vice President and Secretary 1992 168,310 5,250
1991 159,536 5,250
</TABLE>
- --------
(a) Fiscal 1993 amounts include (i) life insurance premiums paid during each
respective fiscal year by the Company under employment agreements with John
J. Rigas, Michael J. Rigas, Timothy J. Rigas, James P. Rigas and Daniel R.
Milliard in premium payment amounts of $200,000, $10,000, $10,000, $10,000
and $4,500, respectively, on policies owned by the respective named
executive officers and (ii) $750 in Company matching contributions for each
executive officer under the Company's 401(k) savings plan. The amounts
shown above do not include transactions between the Company and certain
executive officers or certain entities which are privately owned in whole
or in part by the executive officers named in the table. See "Certain
Transactions".

All of the executive officers are eligible to receive bonuses of Class A
Common Stock under the Company's Restricted Stock Bonus Plan, as amended, and
options to purchase Class A Common Stock under the Stock Option Plan of 1986,
as amended, to be awarded or granted at the discretion of the Bonus Committee
(as defined therein) and Option Committee (as defined therein), respectively,
subject to certain limitations on the number of shares that may be awarded to
each executive officer under each of the Plans. No awards were made under
either the Restricted Stock Bonus Plan or the Stock Option Plan of 1986 during
fiscal 1993.

BOARD OF DIRECTORS COMPENSATION

Directors who are not also employees of the Company each receive compensation
from the Company for services as a director at a rate of $750 plus
reimbursement of expenses for each Board and committee

53
<PAGE>

meeting attended. Directors who are employees of the Company do not receive any
compensation for services as a director or as a member of Board committees.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT

Each of the named executive officers has an employment agreement with the
Company which is automatically renewable each year unless one party gives the
other prior notice and which provides among other things for compensation
review by the Compensation Committee, the insurance premium payments noted
above, and benefits. In addition, under such employment agreements, upon
termination of such employment for any reason other than "for cause," each of
the executive officers will be entitled to receive severance pay equal to three
months of the salary plus the amount of insurance premiums payable under such
officer's employment agreement which, as of April 1, 1993, in the aggregate in
the case of John J. Rigas would be approximately $189,000.

CERTAIN TRANSACTIONS

OLYMPUS MATTERS

Simultaneously with the Company's initial acquisitions of interests in
Olympus on December 19, 1989, a partnership subsidiary of Olympus, Adelphia
Cable Partners, L.P. ("ACP") and a corporate subsidiary of ACP, Southeast
Florida, Inc. ("SFC"), entered into a $350,000,000 revolving credit agreement
with certain banks (the "ACP Credit Facility"). Borrowings under the ACP Credit
Facility are non-recource as to the Company and are secured by guarantees of,
and a pledge of the equity interests in, ACP and SFC, and also were secured by
a guarantee of Highland Video Associates, L.P. ("Highland Video"), a limited
partnership whose general partners then were Timothy J. Rigas, Michael J.
Rigas, and Dorellenic Cable Partners ("DCP"), a general partnership which is
controlled by certain members of the Rigas Family (which general partnership
then was also the sole limited partner of Highland Video). In addition, the ACP
Credit Facility was secured by a pledge of the partnership interests in
Highland Video, whose cash flow was available to Olympus to pay interest on the
ACP Credit Facility during the period of the Highland Video guarantee. In
connection with the guarantee by Highland Video and the pledge of the
partnership interests in Highland Video to support and consummate the ACP
Credit Facility, approximately $10,157,000 of senior debt of Highland Video was
refinanced through a 15-year term loan from ACP. The guarantee and pledge of
Highland Video were to be released under the ACP Credit Facility if certain
conditions were met, including the achievement of certain levels of operating
performance by ACP and the repayment of the term note to ACP.

On March 27, 1992, Highland Video entered into a $30,000,000 revolving credit
facility with a bank and was released from its guaranty obligations pursuant to
the ACP Credit Facility. In consideration for the guarantee, Highland Video was
entitled to compensation from Olympus in accordance with an amendment to the
limited partnership agreement of Olympus. Pursuant to the amendment, Olympus
reimbursed Highland Video in an amount equal to the Highland Video free cash
flow (as defined) made available to Olympus for the period December 19, 1989,
through the guarantee release date.

DCP held a .05% voting general partner interest in Olympus until April 29,
1992, on which date such interest was redeemed by Olympus. DCP also holds a
limited partner interest (approximately .01%) in ACP. See "Business" and
"Management's Discussion and Analysis" for further discussion of the Company's
investment in Olympus.

MANAGEMENT SERVICES

During the three fiscal years in the period ended March 31, 1993 and the six
months ended September 30, 1993, the Company provided management services for
certain cable television systems not owned by the Company, including Managed
Partnerships in which John J. Rigas, Michael J. Rigas,

54
<PAGE>

Timothy J. Rigas, James P. Rigas and Daniel R. Milliard have varied ownership
interests. These services included supervision of technical and business
operations, accounting, marketing, programming, purchasing, field engineering
and other technical and administrative nonfield services. During these periods,
the Managed Partnerships paid the Company five to six percent of system
revenues for such services. Other fees were charged by the Company to the
Managed Partnerships during these periods for goods and services including
mark-ups on the Company's volume purchases of equipment, pay programming and
other goods and services. In addition, the Managed Partnerships charged the
Company for system and corporate costs during these periods. The net fees and
expenses charged by the Company to Managed Partnerships amounted to $1,498,000,
$1,938,000 and $1,550,000 for fiscal 1991, 1992 and 1993 and $606,000 for the
six-month period ended September 30, 1993. The Company believes that these fees
were reasonable and comparable to fees charged by other cable system operators
for providing similar services.

REAL ESTATE

The Company leases from Dorellenic the Company's corporate headquarters
located in Coudersport, Pennsylvania and other real estate used in connection
with the operation of the Company Systems including, among others, the offices
of the systems serving suburban Buffalo, New York. The partners of Dorellenic
are John J. Rigas, Michael J. Rigas, Timothy J. Rigas, James P. Rigas and Ellen
K. Rigas. The leases are for varying terms and, at present, generally provide
for monthly rental payments equal to the fair market value rentals, and are no
less favorable than the terms of leases which the Company believes it could
obtain from unrelated third parties. The Company pays all operating expenses in
connection with the leased property. Real estate rental payments to Dorellenic
totalled $604,000, $655,000 and $715,000 for fiscal 1991, 1992 and 1993 and
$340,264 for the six months ended September 30, 1993.

During fiscal 1987, Dorellenic purchased the real estate used in connection
with the Company Systems serving suburban Buffalo, New York directly from the
persons who sold such systems to the Company for such sellers' respective net
book value for such properties of $639,000. The financing for Dorellenic's
purchase of this property was obtained from the Company pursuant to demand
notes bearing interest at the Company's
cost of funds under a loan agreement, plus 0.25% (10.91% at March 31, September
30, 1993). The loan balance for the suburban Buffalo facility amounted to
$639,000 at March 31, 1991, 1992 and 1993 and September 30, 1993, respectively.

During fiscal 1991, Island Partners, a Pennsylvania general partnership
composed of members of the Rigas Family, purchased real estate from third
parties used in connection with the Company Systems serving suburban
Philadelphia, Pennsylvania. The financing for Island Partners' purchase of this
property was obtained from the Company pursuant to demand notes bearing
interest at the Company's cost of funds under a loan agreement, plus 0.25%
(5.00% at March 31, 1993 and 5.00% at September 30, 1993). The Company leases
this property from Island Partners at amounts equal to the interest on the note
(plus operating expenses). The loan balance for the suburban Philadelphia
facility amounted to $2,584,000, $2,651,000, $2,867,000 and $2,879,000 at March
31, 1991, 1992 and 1993 and September 30, 1993, respectively, of which $67,000,
and $216,000 consisted of advances made for improvements and working capital
during fiscal 1992 and 1993, respectively.

EQUIPMENT LEASES

The Company leases certain vehicles, cable and operating and support
equipment from a corporation which is wholly owned by members of the Rigas
Family, for which it made aggregate lease payments, respectively, of
$1,860,000, $954,000 and $644,000 in fiscal 1991, 1992 and 1993 and $307,408
during the six-month period ended September 30, 1993. Of these leases,
$2,975,000, $2,380,000, $1,897,000 and $1,717,766 in principal amount is
capitalized by the Company for financial reporting purposes at March 31, 1991,
1992 and 1993 at September 30, 1993, respectively. Such lease payments equal
the lessor's borrowing costs or lease payments to unrelated third parties for
such equipment. The Company also pays all operating costs incurred with respect
to such equipment. These lease arrangements are expected to continue; however,

55
<PAGE>

the terms of such leases may be revised in the future to reflect fair market
value rates, but will be no less favorable than the terms of the leases which
the Company believes it could obtain from unrelated third parties.

LOANS TO AND FROM AFFILIATES

Certain loans to and from the Company by or to affiliates (which do not
include Olympus) as of March 31, 1991, 1992 and 1993 and September 30, 1993 are
discussed above (see "Certain Transactions--Real Estate"). Other such loans are
summarized below. Interest is charged on such other loans to affiliates at
rates which ranged from 6.5% to 16.5% for the three years ended March 31, 1993
and the six months ended September 30, 1993. Total interest income on such
loans aggregated $531,000, $45,000, $589,000 and $574,000 for fiscal 1991, 1992
and 1993 and the six-month period ended September 30, 1993, respectively.

Net receivables due from (to) the Managed Partnerships for advances made by
the Company for the construction of cable television systems and for working
capital purposes, including accrued interest thereon, were $274,000, $411,000,
($4,845,000) and ($4,072,000) at March 31, 1991, 1992 and 1993 and September
30, 1993, respectively. The Company made loans to Managed Partnerships during
fiscal 1993 in the amount of $9,305,000 for the purpose of making nonscheduled
prepayments of such partnerships' outstanding bank debt, which loans were
repaid to the Company in January 1993, and during the six months ended
September 30, 1993 in the net amount of $20,000,000 for the purpose of a
Managed Partnership acquiring from unrelated parties cable television systems
serving Palm Beach County, Florida, of which $15,000,000 was outstanding as of
September 30, 1993.

During the six-month period ended September 30, 1993, the Company made net
advances of $14,613,000 to Dorellenic. During fiscal 1993, the Company made net
advances of $4,919,000 and repayments of $14,020,000 to Dorellenic. At March
31, 1993 and September 30, 1993, net receivables from Dorellenic (including
accrued interest) were $4,919,000 and $19,532,000, respectively. During fiscal
1992 the Company received net advances and repayments from Dorellenic of
$15,011,000 which were used by the Company for debt repayment, working capital
and general corporate purposes. During fiscal 1991, the Company made net
advances to Dorellenic of $73,000. At March 31, 1991 and 1992, net receivables
due from (net payables to) Dorellenic were $991,000 and ($14,020,000),
respectively. Amounts advanced to Dorellenic during fiscal 1991, 1992 and 1993
and the six-month period ended September 30, 1993, were used primarily for
working capital purposes.

During fiscal 1990 and 1991, the Company loaned an aggregate $255,000 to
Daniel R. Milliard and an unaffiliated third party, pursuant to several
revolving term and term notes, for capital expenditures and working capital
purposes. As of March 31, 1993 and September 30, 1993, the outstanding amount
of these loans, which mature in fiscal 1994 and 1995, was $255,000.

On an end-of-quarter basis, the largest aggregate amount of net outstanding
loans and advances receivable from affiliates (directors, officers and five-
percent shareholders) or entities they control, including John J. Rigas,
Michael J. Rigas, Timothy J. Rigas, James P. Rigas, Ellen K. Rigas, Daniel R.
Milliard, Dorellenic and/or the Managed Partnerships during fiscal 1993 was
$15,015,000 at December 31, 1992. Such aggregate net amount was $3,835,000 at
March 31, 1993 and $19,233,000 at September 30, 1993.

BUSINESS OPPORTUNITIES

The Company's executive officers have entered into a Business Opportunity
Agreement, dated July 1, 1986 (the "Business Opportunity Agreement"), under
which they have agreed not to acquire an interest (except that such persons
may, individually for their own account, engage in regular portfolio trading of

56
<PAGE>

publicly traded securities of companies in the cable television industry) in
any cable television system except: cable television systems which they or
their affiliates (excluding the Company) owned, in whole or in part, operated
or had agreed to acquire as of July 1, 1986; any expansions of such systems
within the same county or an adjacent county (except for systems which are also
contiguous to Company-owned systems); and systems which the Company elects not
to acquire under its right of first refusal described below and any expansions
of such systems within the same county or an adjacent county (except for
systems which are also contiguous to Company-owned systems). Otherwise, the
executive officers will first offer to the Company the opportunity to acquire
or invest in any cable television system or franchise therefor or interest
therein that is offered or available to them. If a majority of the Company's
Board of Directors, including a majority of the independent directors, rejects
such offer, the executive officers may acquire or invest in all of such cable
television systems or franchises therefor or interest therein or with others on
terms no more favorable to them than those offered to the Company.

A partnership composed of the executive officers of the Company acquired
during May 1992 substantially all of the limited and special limited
partnership interests of a Managed Partnership which has systems in Radnor,
Pennsylvania. This acquiring partnership also acquired in October 1992
substantially all of the limited partnership interests in another Managed
Partnership. These acquisitions were not subject to the Company's right of
first refusal because, on July 1, 1986, these systems were owned in part by two
of the executive officers as general partners of this Managed Partnership. In
addition, the Company elected not to exercise its right of first refusal with
respect to the acquisition of the Cooke Systems in fiscal 1992 and cable
systems in Palm Beach County, Florida in June 1993, all of which were acquired
by Managed Partnerships. The Company provides management services to these
systems pursuant to a consulting agreement. The Company's executive officers
may from time to time evaluate and, subject to the Company's rights under the
Business Opportunity Agreement and covenants in the Company's loan agreements
and indentures, may acquire cable television systems or interests therein for
their own accounts separately or along with the Company and/or other joint
venture parties.

Except for the limitations on the ownership of cable television systems as
described herein, the executive officers of Adelphia and their affiliates are
not subject to limitations with respect to their other business activities and
may engage in other businesses related to cable television or other
telecommunications media. The executive officers will devote as much of their
time to the business of the Company as is reasonably required to fulfill the
duties of their offices.

In the event that any executive officer (or his affiliate) decides to offer
for sale (other than to another executive officer or his or another executive
officer's family member, trust or family controlled entity) for his account,
his ownership interest in any cable television system or franchise, he or it
will (subject to the rights of third parties existing at such time) first offer
such interests to the Company. Such selling person or entity has a unilateral
option to elect to require that, if the Company accepts such offer, up to one
half of the consideration for his or its interest would consist of shares of
Class B Common Stock, which shares will be valued at the prevailing market
price of the Class A Common Stock, and the remainder would consist of shares of
Class A Common Stock and/or cash. If a majority of the Company's independent
directors rejects such offer, the executive officer (or his affiliate) may sell
such interest to third parties on terms no more favorable to such third parties
than those offered to the Company.

REGISTRATION RIGHTS

Pursuant to a Registration Rights Agreement, as amended, between the Company
and virtually all holders of Class B Common Stock, John J. Rigas has the right,
subject to certain limitations, to require the Company to register shares of
the Company's Common Stock owned by him for sale to the public and pay the
expenses (except for Mr. Rigas' counsel fees) of such registration on five
occasions selected by him (subject to certain limitations intended to prevent
undue interference with the Company's ability to distribute its securities)
during a fourteen-year period which began in December 1986. The other holders
of Class B Common Stock have the right to participate, at the option of John J.
Rigas, as selling stockholders in any

57
<PAGE>

such registration initiated by John J. Rigas. The holders of Class B Common
Stock also have unlimited rights to participate as selling stockholders in any
registered public offering initiated by the Company and require the Company to
pay their expenses (except counsel fees). Such rights of participation are
subject to limitation at the discretion of the managing underwriter of such
offering.

Adelphia entered into an agreement with the Rigas Family pursuant to which
certain members of the Rigas Family purchased from Adelphia 750,000 shares of
Class A Common Stock, at the same price offered to the public ($15.00 per
share), in Adelphia's public offering of Class A Common Stock completed on May
14, 1992. No underwriting discount or commission was paid by the Company on the
sale of these shares.

58
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth, based on information available to the Company
as of October 15, 1993, certain information with respect to the beneficial
ownership of Class A Common Stock and Class B Common Stock by each director,
all officers and directors of Adelphia as a group, and each person known to
Adelphia to own beneficially more than 5% of such Common Stock. Unless
otherwise noted, the individuals have sole voting and investment power. The
business address of each such person named below, unless otherwise noted, is 5
West Third Street, Coudersport, Pennsylvania 16915. For information regarding
the recent acquisition of Class A Common Stock in the Stock Offering by
Highland Holdings and Syracuse Hilton Head Holdings, L.P., see "Prospectus
Summary--Recent Events--The Stock Offering" and "Risk Factors--Voting Control
and Disparate Voting Rights."

<TABLE>
<CAPTION>
PERCENT PERCENT
SHARES OF OF SHARES OF OF
CLASS A CLASS A CLASS B CLASS B
COMMON COMMON COMMON COMMON
NAME AND ADDRESSES STOCK STOCK STOCK STOCK
- ------------------ ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
John J. Rigas................... (a) (b) 5,883,004(c) 53.8%
Michael J. Rigas................ (a) (b) 1,915,970(c) 17.5%
Timothy J. Rigas................ (a) (b) 1,915,970(c) 17.5%
James P. Rigas.................. (a) (b) 1,151,634(c) 10.5%
Daniel R. Milliard.............. 1,000(d) (e) 0 --
Perry S. Patterson.............. 1,250 (e) 0 --
Pete J. Metros.................. 100 (e) 0 --
All officers and directors as a
group
(eleven persons)............... 11,521,931(a)(c) (b) 10,572,731(c) 96.6%
Ionian Communications, L.P...... 940,000(f) 21.5% -- --
5 West Third Street
Coudersport, Pennsylvania 16915
Sandler Associates.............. 390,600(g) 8.9% -- --
1114 Avenue of the Americas
New York, New York 10036
Sandler Capital Management...... 134,212(g) 3.1% -- --
1114 Avenue of the Americas
New York, New York 10036
GeoCapital Corporation.......... 579,500(h) 13.3% -- --
655 Madison Avenue
New York, New York 10021
The Capital Group, Inc.......... 350,000(i) 5.8% -- --
333 South Hope Street
Los Angeles, California 90071
</TABLE>
- --------
(a) The holders of Class B Common Stock are deemed to be beneficial owners of
an equal number of shares of Class A Common Stock because Class B Common
Stock is convertible into Class A Common Stock on a one-to-one basis. In
addition, the following persons own or have the power to direct the voting
of shares of Class A Common Stock in the following amounts: John J. Rigas,
369,400 shares--9,300 shares directly and 360,100 shares through Ionian
Communications, L.P. ("Ionian"); Michael J. Rigas, 193,500 shares--200
shares directly and 193,300 shares through Ionian; Timothy J. Rigas,
193,500 shares--200 shares directly and 193,300 shares through Ionian;
James P. Rigas, 193,300 shares indirectly through Ionian. See also note (f)
below. John J. Rigas shares voting power with his spouse with respect to
106,300 of such shares held through Ionian.

59
<PAGE>

(b) After giving effect to the conversion solely by each individual holder of
all of his Class B Common Stock into Class A Common Stock and including all
shares of Class A Common Stock currently held by such individual holder or
over which such individual holder has voting power as disclosed in note (a)
above, the percent of Class A Common Stock owned by John J. Rigas, Michael
J. Rigas, Timothy J. Rigas and James P. Rigas, and by all officers and
directors as a group (eleven persons), would be 61.0%, 33.5%, 33.5%, 24.3%
and 77.1%, respectively.

(c) The amounts shown include 97,949 of the same shares which are owned of
record by Dorellenic, and such shares are only included once for "All
officers and directors as a group." The named Rigas individuals and another
family member have shared voting and investment power with respect to these
shares.

(d) Daniel R. Milliard shares voting and investment power with his spouse with
respect to these shares.

(e) Less than 1%.

(f) Ionian and Iliad Holdings, Inc., Ionian's general partner, are affiliates
of John J. Rigas, Michael J. Rigas, Timothy J. Rigas and James P. Rigas.
Through irrevocable proxies, each of the above-named individuals shares
with Ionian the power to vote or direct the vote of such number of shares
of Class A Common Stock held by Ionian as is specified in note (a) above.
In addition, through agreements with Ionian, John J. Rigas (individually
and jointly with his spouse), Michael J. Rigas, Timothy J. Rigas and James
P. Rigas collectively share with Ionian the power to dispose of all 940,000
shares of Class A Common Stock held by Ionian.

(g) According to a Schedule 13D, as amended, Mr. Harvey Sandler, Mr. Barry
Lewis and Mr. John Kornreich as general partners of both Sandler Associates
and Sandler Capital Management, respectively, share voting and dispositive
power with respect to these shares. J. K. Media, of which Mr. Kornreich is
sole general partner, additionally reports ownership of 31,500 shares not
included in these shares, over which Mr. Kornreich has voting and
dispositive power. Sandler Associates, Sandler Capital Management and J.K.
Media each disclaim membership in a group with respect to these shares.

(h) According to a Schedule 13G, the named entity has sole investment power
with respect to such shares while its clients, none of whom has an interest
in excess of 5% of the outstanding shares of Class A Common Stock, retain
voting power with respect to such shares. Irwin Lieber, a principal
stockholder of the named entity, reports voting and dispositive power over
an additional 3,500 shares not included in these shares. Jonathan and Seth
Lieber, employees of the named entity, report ownership of 800 and 900
shares, respectively, over which they have sole respective voting and
dispositive power. Each of such individuals disclaims beneficial ownership
of the shares held by GeoCapital Corporation.

(i) According to a Schedule 13G, the named entity has sole dispositive power
with respect to such shares as of December 31, 1992 through its operating
subsidiary, Capital Research and Management Company, a registered
investment advisor. Neither entity has any voting power over such shares
and each entity disclaims beneficial ownership of the shares.

John J. Rigas, Michael J. Rigas, Timothy J. Rigas, James P. Rigas, Ellen K.
Rigas, Daniel R. Milliard, Dorellenic and the Company have entered into a Class
B Stockholders Agreement providing that such stockholders shall vote their
shares of Common Stock for the election of directors designated by a majority
of voting power (as defined in the Agreement) of the shares of Common Stock
held by them. The Class B Stockholders Agreement also provides that, in the
absence of the consent of the holders of a majority of the voting power of the
shares of Common Stock owned by the parties to the Agreement, (i) none of the
stockholder parties may sell, assign or transfer all or any part of their
shares of Common Stock in a public

60
<PAGE>

sale (as defined in the Agreement) without first offering the shares to the
other parties to the Agreement and (ii) no stockholder party may accept a bona
fide offer from a third party to purchase shares of such stockholder without
first offering the shares to the Company and then to the other parties to the
Class B Stockholders Agreement. In addition, each party has certain rights to
acquire the shares of Common Stock of the others under certain conditions. John
J. Rigas has also entered into a Stock Purchase Agreement with the other holder
of Class B Common Stock who is not a party to the Class B Stockholders
Agreement which gives John J. Rigas certain rights to acquire the shares of
Common Stock of such stockholder under certain conditions.

DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of Adelphia and certain
provisions of Adelphia's Certificate of Incorporation and Bylaws is a summary
and is qualified in its entirety by Adelphia's Certificate of Incorporation and
Bylaws, which documents are incorporated herein by reference.

Adelphia's authorized capital stock consists of 50,000,000 shares of Class A
Common Stock, par value $.01 per share, 25,000,000 shares of Class B Common
Stock, par value $.01 per share, and 5,000,000 shares of Preferred Stock, par
value $.01 per share.

COMMON STOCK

Dividends. Holders of Class A Common Stock and Class B Common Stock are
entitled to receive such dividends as may be declared by Adelphia's Board of
Directors out of funds legally available for such purpose, but only after
payment of dividends required to be paid on outstanding shares of any other
class or series of stock having preference over Common Stock as to dividends.
No dividend may be declared or paid in cash or property on either class of
Common Stock, however, unless simultaneously a dividend is paid on the other
class of Common Stock as follows. In the event a cash dividend is paid, the
holders of Class A Common Stock will be paid a cash dividend per share equal to
105% of the amount payable per share of Class B Common Stock. In the event of a
property dividend, holders of each class of Common Stock are entitled to
receive the same value per share of Common Stock outstanding. In the case of
any stock dividend, holders of Class A Common Stock are entitled to receive the
same percentage dividend (payable in Class A Common Stock) as the holders of
Class B Common Stock receive (payable in Class B Common Stock). Adelphia is
limited in its ability to pay cash dividends on Common Stock under its
outstanding long-term loan agreements. See Note 4 to the Adelphia
Communications Corporation Consolidated Financial Statements.

Voting Rights. Holders of Class A Common Stock and Class B Common Stock vote
as a single class on all matters submitted to a vote of the stockholders, with
each share of Class A Common Stock entitled to one vote and each share of Class
B Common Stock entitled to ten votes, except (i) for the election of directors
and (ii) as otherwise provided by law. In the annual election of directors, the
holders of Class A Common Stock, voting as a separate class, are entitled to
elect one of Adelphia's directors. The holders of Class A Common Stock and
Class B Common Stock, voting as a single class with each share of Class A
Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes, are entitled to elect the remaining directors.
Consequently, holders of Class B Stock have sufficient voting power to elect
the remaining six members of the seven-member Board of Directors. Holders of
Class A Common Stock and Class B Common Stock are not entitled to cumulate
votes in the election of directors. Under Delaware law and Adelphia's
Certificate of Incorporation, the affirmative vote of a majority of the
outstanding shares of Class A Common Stock is required to approve, among other
matters, a change in the powers, preferences or special rights of the shares of
Class A Common Stock so as to affect them adversely, but is not required to
approve an increase or decrease in the number of authorized shares of Class A
Common Stock.

61
<PAGE>

Liquidation Rights. Upon liquidation, dissolution or winding up of Adelphia,
any distributions to holders of any class of Common Stock would only be made
after payment in full of creditors and provision for the preference of any
other class or series of stock having a preference over the Common Stock upon
liquidation, dissolution or winding up that may then be outstanding.
Thereafter, the holders of Class A Common Stock are entitled to a preference of
$1.00 per share. After such amount is paid, holders of the Class B are entitled
to receive $1.00 per share. Any remaining amount would then be shared ratably
by both classes.

Other Provisions. Each share of Class B Common Stock is convertible at the
option of its holder into one share of Class A Common Stock at any time. The
holders of Class A Common Stock and Class B Common Stock are not entitled to
preemptive or subscription rights. Neither the Class A Common Stock nor the
Class B Common Stock may be subdivided, consolidated, reclassified or otherwise
changed unless concurrently the other class of Common Stock is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.

PREFERRED STOCK

The 5,000,000 shares of authorized and unissued preferred stock may be issued
with such designations, powers, preferences and other rights and
qualifications, limitations and restrictions thereof as Adelphia's Board of
Directors may authorize without further action by Adelphia's stockholders,
including but not limited to: (i) the distinctive designation of each series
and the number of shares that will constitute such series; (ii) the voting
rights, if any, of shares of such series; (iii) the dividend rate on the shares
of such series, any restriction, limitation or condition upon the payment of
such dividends, whether dividends shall be cumulative and the dates on which
dividends are payable; (iv) the prices at which, and the terms and conditions
on which, the shares of such series may be redeemed, if such shares are
redeemable; (v) the purchase or sinking fund provisions, if any, for the
purchase or redemption of shares of such series; (vi) any preferential amount
payable upon shares of such series in the event of the liquidation, dissolution
or winding up of Adelphia or the distribution of its assets; and (vii) 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. The rights of holders of shares of Common Stock as
described above will be subject to, and may be adversely affected by, the
rights of holders of any Preferred Stock that may be issued in the future. The
Board of Directors currently does not contemplate the issuance of any Preferred
Stock, however, and is not aware of any pending or proposed transactions that
would be affected by such issuance.

TRANSFER AGENT

The Transfer Agent and Registrar for the Class A Common Stock is American
Stock Transfer & Trust Company.

SELLING STOCKHOLDER

The Selling Stockholder, Salomon Brothers Inc, acquired the 155,100 Shares to
be offered hereby directly from Adelphia in May 1992 in connection with a
public offering of Class A Common Stock in which the Selling Stockholder acted
as an underwriter. In addition to the 155,100 Shares to be offered hereby, the
Selling Stockholder may from time to time hold shares of Class A Common Stock
it acquires as a market-maker in such shares on NASDAQ-NMS. Accordingly, the
number of shares of Class A Common Stock that the Selling Stockholder may hold
when it sells the Shares to be offered hereby, and the number of such shares
that it may hold thereafter, is uncertain. The Selling Stockholder has, from
time to time, provided investment banking services to the Company.

Adelphia will not receive any proceeds from the sale of the Shares.

62
<PAGE>

PLAN OF DISTRIBUTION

The Shares offered hereby were acquired by the Selling Stockholder directly
from Adelphia in May 1992 in connection with a public offering of Class A
Common Stock in which the Selling Stockholder acted as an underwriter and may
be sold from time to time by the Selling Stockholder in reliance on this
Prospectus. Sales may be made in one or more transactions that may take place
in the open market, private or negotiated transactions or in a combination of
such methods of sale, at fixed prices, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices.

The Selling Stockholder may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended, with respect to the Shares
offered hereby, and any profits realized or commissions received may be deemed
underwriter compensation.

PROSPECTUS SUPPLEMENT

A supplement to this Prospectus ("Prospectus Supplement") will set forth,
with respect to the Selling Stockholder, any necessary further information
regarding the distribution of the Shares offered hereby. Such Prospectus
Supplement may be appropriately modified or supplemented subsequent to the date
of this Prospectus, and included as a part of this Prospectus.

STOCK OFFERING--MARGIN AND PLEDGE ARRANGEMENTS

Adelphia entered into an agreement with the Rigas Family pursuant to which
5,832,604 shares of Class A Common Stock (the "Rigas Shares") of the 8,832,604
shares offered in the Stock Offering were sold by Adelphia directly to SHHH and
Highland Holdings, partnerships controlled by individual members of the Rigas
Family which in turn control the Managed Systems. The Rigas Shares were pledged
by the Rigas Family (the "Pledged Shares") to Salomon Brothers Inc (the
"Pledgee") as security for margin loans made at the closing of the Stock
Offering. The pledge and loan agreements relating to such margin loans impose
certain requirements as to the value of the Class A Common Stock pledged as
collateral for such loans.

It is expected that, pursuant to such pledge and margin loan arrangements,
under certain conditions, including the failure to maintain any required
collateral value, the Pledgee will have, among other options, the right to
cause applicable Pledged Shares to be sold, with the proceeds of such sale to
be used to repay the amounts outstanding under any such loans. Adelphia will
maintain an effective shelf registration statement covering the potential
resale of any such Pledged Shares for the account of the applicable Rigas
Family members for so long as such loans are outstanding. In the event of such
resale, such Pledged Shares would be offered pursuant to a form of prospectus
covering secondary offers and sales of Pledged Shares.

EXPERTS

The consolidated financial statements of the Company and its subsidiaries as
of March 31, 1992 and 1993, and for each of the three years in the period ended
March 31, 1993, and the consolidated financial statements of Olympus
Communications, L.P. and its subsidiaries as of December 31, 1991 and 1992, and
for each of the three years in the period ended December 31, 1992 included in
and incorporated by reference in this Prospectus have been audited by Deloitte
& Touche, independent auditors, as stated in their reports which are included
and incorporated by reference herein, and have been so included and
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

63
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets, March 31, 1992 and 1993, and September 30,
1993 (unaudited)......................................................... F-3
Consolidated Statements of Operations, Years Ended March 31, 1991, 1992
and 1993,
and Six Months Ended September 30, 1992 and 1993 (unaudited)............. F-4
Consolidated Statements of Stockholders' Equity (Deficiency), Years Ended
March 31,
1991, 1992 and 1993, and Six Months Ended September 30, 1993 (unaudited). F-5
Consolidated Statements of Cash Flows, Years Ended March 31, 1991, 1992
and 1993,
and Six Months Ended September 30, 1992 and 1993 (unaudited)............. F-6
Notes to Consolidated Financial Statements................................ F-7
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
Independent Auditors' Report.............................................. F-19
Consolidated Balance Sheets, December 31, 1991 and 1992 and September 30,
1993 (unaudited)......................................................... F-20
Consolidated Statements of Operations, Years Ended December 31, 1990,
1991, and 1992, and Nine Months Ended September 30, 1992 and 1993 (unau-
dited) .................................................................. F-21
Consolidated Statements of General Partners' Equity (Deficiency), Years
Ended
December 31, 1990, 1991 and 1992, and Nine Months Ended September 30,
1993 (unaudited)......................................................... F-22
Consolidated Statements of Cash Flows, Years Ended December 31, 1990, 1991
and 1992, and Nine Months Ended September 30, 1992 and 1993 (unaudited).. F-23
Notes to Consolidated Financial Statements................................ F-24
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

Adelphia Communications Corporation:

We have audited the accompanying consolidated balance sheets of Adelphia
Communications Corporation and its subsidiaries as of March 31, 1992 and 1993,
and the related consolidated statements of operations, stockholders' equity
(deficiency), and cash flows for each of the three years in the period ended
March 31, 1993. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Adelphia Communications
Corporation and its subsidiaries at March 31, 1992 and 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended March 31, 1993 in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE

Pittsburgh, Pennsylvania June 25, 1993

F-2
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 31,
----------------------------- SEPTEMBER 30,
1992 1993 1993
----------------------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Cable television systems, at cost,
net of accumulated depreciation
and amortization:
Property, plant and equipment--net. $ 371,357 $ 398,859 $ 408,330
Intangible assets--net............. 449,993 439,599 426,694
----------- ---------- -----------
Total............................ 821,350 838,458 835,024
Cash and cash equivalents............ 11,173 38,671 22,564
Investments.......................... 478 15,467 20,370
Note receivable from Managed System.. -- -- 15,000
Subscriber receivables............... 14,945 17,541 22,431
Prepaid expenses and other assets--
net................................. 22,937 27,929 29,018
Related party investments and receiv-
ables--net.......................... 54,908 11,527 4,978
----------- ---------- -----------
Total............................ $ 925,791 $ 949,593 $ 949,385
=========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIEN-
CY):
Notes payable of subsidiaries to
banks and institutions.............. $ 1,192,967 $ 962,900 $ 896,475
16 1/2% Senior Discount Notes due
1999................................ 250,000 -- --
12 1/2% Senior Notes due 2002........ -- 400,000 400,000
11 7/8% Senior Debentures due 2004
(face value $125,000)............... -- 124,416 124,429
9 7/8% Senior Debentures due 2005
(face value $130,000)............... -- 127,781 127,830
13% Senior Subordinated Notes due
1996 (face value $100,000).......... 99,181 99,329 99,410
10 1/4% Senior Notes due 2000 (face
value $110,000)..................... -- -- 108,698
Other debt........................... 12,122 16,673 19,708
Accounts payable..................... 31,005 21,105 20,102
Subscriber advance payments and de-
posits.............................. 13,917 14,140 12,108
Accrued interest and other liabili-
ties................................ 40,143 51,863 56,866
Deferred income taxes................ -- -- 91,137
----------- ---------- -----------
Total............................ 1,639,335 1,818,207 1,956,763
----------- ---------- -----------
Commitments and Contingencies (Note
4)
Stockholders' equity (deficiency):
Class A Common Stock, $.01 par
value 50,000,000 shares
authorized, 2,875,000 and
4,375,000 shares issued
and outstanding, respectively..... 29 44 44
Class B Common Stock, $.01 par
value 25,000,000 shares
authorized, 10,944,476 shares is-
sued and outstanding.............. 109 109 109
Paid-in capital.................... 38,402 60,112 60,112
Accumulated deficit................ (752,084) (928,879) (1,067,643)
----------- ---------- -----------
Stockholders' equity (deficiency).... (713,544) (868,614) (1,007,378)
----------- ---------- -----------
Total............................ $ 925,791 $ 949,593 $ 949,385
=========== ========== ===========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30,
------------------------------------- ------------------------
1991 1992 1993 1992 1993
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................ $ 248,586 $ 273,630 $ 305,222 $ 148,578 $ 159,620
----------- ----------- ----------- ----------- -----------
Operating expenses:
Direct operating and
programming........... 66,007 74,787 82,377 39,791 44,695
Selling, general and
administrative........ 41,421 44,427 49,468 23,645 25,394
Depreciation and amor-
tization.............. 79,427 84,817 90,406 44,809 45,316
----------- ----------- ----------- ----------- -----------
Total................. 186,855 204,031 222,251 108,245 115,405
----------- ----------- ----------- ----------- -----------
Operating income........ 61,731 69,599 82,971 40,333 44,215
----------- ----------- ----------- ----------- -----------
Other income (expense):
Interest income from
affiliates............ 1,596 3,085 5,216 2,628 2,490
Other income........... 1,750 968 1,447 632 283
Priority investment in-
come.................. 19,175 22,300 22,300 11,150 11,150
Interest expense....... (163,637) (164,839) (164,859) (77,485) (90,131)
Equity in net loss of
Olympus joint
venture before cumula-
tive effect of change
in accounting princi-
ple................... (61,975) (52,718) (46,841) (34,490) (15,321)
----------- ----------- ----------- ----------- -----------
Total................. (203,091) (191,204) (182,737) (97,565) (91,529)
----------- ----------- ----------- ----------- -----------
Loss before income tax-
es, extraordinary
loss and cumulative ef-
fect of change in
accounting principle... (141,360) (121,605) (99,766) (57,232) (47,314)
Income tax expense...... -- -- (3,143) -- (1,790)
----------- ----------- ----------- ----------- -----------
Loss before extraordi-
nary loss and
cumulative effect of
change in
accounting principle... (141,360) (121,605) (102,909) (57,232) (49,104)
Extraordinary loss on
early retirement
of debt................ -- -- (14,386) (14,386) --
Cumulative effect of
change in
accounting for income
taxes.................. -- -- -- -- (89,660)
Cumulative effect of
change in accounting
for income taxes--Olym-
pus.................... -- -- (59,500) -- --
----------- ----------- ----------- ----------- -----------
Net loss................ $ (141,360) $ (121,605) $ (176,795) $ (71,618) $ (138,764)
=========== =========== =========== =========== ===========
Loss per weighted aver-
age share of
common stock before ex-
traordinary
loss and cumulative
effect of change
in accounting princi-
ple.................... $ (10.23) $ (8.80) $ (6.80) $ (3.82) $ (3.21)
Extraordinary loss...... -- -- (.95) (.97) --
Cumulative effect of
change in accounting
for income taxes....... -- -- -- -- (5.85)
Cumulative effect of
change in accounting
for income taxes--Olym-
pus.................... -- -- (3.93) -- --
----------- ----------- ----------- ----------- -----------
Net loss per weighted
average share of
common stock........... $ (10.23) $ (8.80) $ (11.68) $ (4.79) $ (9.06)
=========== =========== =========== =========== ===========
Weighted average share
of common stock
outstanding............ 13,819,476 13,819,476 15,138,654 14,967,017 15,319,476
=========== =========== =========== =========== ===========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) (DOLLARS IN
THOUSANDS)

<TABLE>
<CAPTION>
CLASS A CLASS B STOCKHOLDERS'
COMMON COMMON PAID-IN ACCUMULATED EQUITY
STOCK STOCK CAPITAL DEFICIT (DEFICIENCY)
------- ------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1990..... $29 $109 $38,402 $ (489,119) $ (450,579)
Net loss.................... (141,360) (141,360)
--- ---- ------- ----------- -----------
Balance, March 31, 1991..... 29 109 38,402 (630,479) (591,939)
Net loss.................... (121,605) (121,605)
--- ---- ------- ----------- -----------
Balance, March 31, 1992..... 29 109 38,402 (752,084) (713,544)
Issuance of Class A Common
Stock...................... 15 -- 21,710 -- 21,725
Net loss.................... (176,795) (176,795)
--- ---- ------- ----------- -----------
Balance, March 31, 1993..... 44 109 60,112 (928,879) (868,614)
Net loss (unaudited)........ (138,764) (138,764)
--- ---- ------- ----------- -----------
Balance, September 30, 1993
(unaudited)................ $44 $109 $60,112 $(1,067,643) $(1,007,378)
=== ==== ======= =========== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31, SEPTEMBER 30,
-------------------------------- --------------------
1991 1992 1993 1992 1993
--------- --------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operat-
ing activities:
Net loss.............. $(141,360) $(121,605) $ (176,795) $ (71,618) $(138,764)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation.......... 48,739 51,224 54,129 26,856 28,068
Amortization.......... 30,688 33,593 36,277 17,953 17,248
Accretion of original
issue discount......... 31,612 35,602 164 72 166
Equity in net loss of
Olympus................ 61,975 52,718 46,841 34,490 15,321
Extraordinary loss on
early retirement of
debt................... -- -- 14,386 14,386 --
Cumulative effect of
Olympus change in
accounting
principle.......... -- -- 59,500 -- --
Cumulative effect of
change in account-
ing
principle.......... -- -- -- -- 89,660
Increase in deferred
taxes.................. -- -- -- -- 1,477
Changes in operating
assets and liabilities:
Subscriber receiv-
ables.................. (1,576) (2,557) (2,596) (1,824) (4,890)
Prepaid expenses and
other assets........... (8,207) (5,693) (4,883) (8,643) (3,665)
Accounts payable..... 8,439 1,845 (9,900) (1,099) (1,003)
Subscriber advance
payments and deposits.. (4,709) 308 223 (28) (2,032)
Accrued interest and
other liabilities...... 6,198 4,038 11,720 16,075 5,003
--------- --------- ---------- --------- ---------
Net cash provided by op-
erating activities..... 31,799 49,473 29,066 26,620 6,589
--------- --------- ---------- --------- ---------
Cash flows used for in-
vestment activities:
Cable television sys-
tems acquired.......... -- -- (14,501) (14,501) --
Expenditures for prop-
erty, plant and
equipment.......... (76,461) (51,458) (62,069) (31,448) (31,134)
Expenditures for sup-
port equipment......... (1,390) (1,350) (8,906) -- (19)
Amounts advanced to
Managed Systems for
notes receivable... -- -- -- (9,305) (15,000)
Amounts invested in
and advanced to
Olympus and related
parties--net....... (54,765) (23,853) (62,960) (53,879) (8,772)
Investments in other
joint ventures......... -- -- (14,989) (13,000) (4,903)
--------- --------- ---------- --------- ---------
Net cash used for in-
vestment activities.... (132,616) (76,661) (163,425) (122,133) (59,828)
--------- --------- ---------- --------- ---------
Cash flows from financ-
ing activities:
Proceeds from debt.... 364,608 178,391 1,277,847 908,404 206,238
Repayments of debt.... (256,525) (155,750) (1,109,924) (792,364) (167,339)
Costs associated with
debt financing......... (3,961) (2,872) (17,791) (14,879) (1,767)
Redemption premium on
early retirement of
debt............... -- -- (10,000) (10,000) --
Issuance of Class A
Common Stock........... -- -- 21,725 21,725 --
--------- --------- ---------- --------- ---------
Net cash provided by fi-
nancing activities..... 104,122 19,769 161,857 112,886 37,132
--------- --------- ---------- --------- ---------
Increase (decrease) in
cash and cash equiva-
lents.................. 3,305 (7,419) 27,498 17,373 (16,107)
Cash and cash equiva-
lents, beginning of pe-
riod................... 15,287 18,592 11,173 11,173 38,671
--------- --------- ---------- --------- ---------
Cash and cash equiva-
lents, end of period... $ 18,592 $ 11,173 $ 38,671 $ 28,546 $ 22,564
========= ========= ========== ========= =========
Supplemental disclosure
of cash flow activity--
Cash payments for in-
terest................. $ 125,401 $ 133,746 $ 151,653 $ 64,272 $ 86,187
========= ========= ========== ========= =========
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The Company and Basis for Consolidation

Adelphia Communications Corporation and subsidiaries ("ACC") primarily owns,
operates and manages cable television systems. ACC's operations consist
primarily of selling video programming which is distributed to subscribers for
a monthly fee through a network of fiber optic and coaxial cables. These
services are offered in their respective franchise areas under the name
Adelphia Cable Communications.

The consolidated financial statements include the accounts of ACC and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Investment in Olympus Joint Venture Partnership

The investment in the Olympus joint venture partnership, comprising both
limited and general partner interests, represents a 50% voting interest in
Olympus Communications, L.P. ("Olympus") and is being accounted for using the
equity method. Under this method, ACC's investment, initially recorded at the
historical cost of contributed property, is adjusted for subsequent capital
contributions and its share of the losses of the partnership as well as its
share of the accretion requirements of the partnership's redeemable partnership
interests. The Limited Partner interest represents a redeemable preferred
interest ("PLP Interests") entitled to a 16.5% return. The PLP interests are
nonvoting, senior to claims of other partner interests, and are to be repaid by
2004. Olympus is not required to pay the entire 16.5% return currently and PLP
Interests are recognized as income when received. Correspondingly, equity in
net loss of Olympus excludes unpaid priority return.

Subscriber Revenues

Subscriber revenues are recorded in the month the service is provided.

Subscriber Receivables

An allowance for doubtful accounts of $1,964,000, $2,016,000, and $2,488,000
has been recorded as a reduction of subscriber receivables at March 31, 1992
and 1993, and September 30, 1993, respectively.

Property, Plant and Equipment

Property, plant and equipment are comprised of the following (dollars in
thousands):

<TABLE>
<CAPTION>
MARCH 31,
-------------------- SEPTEMBER 30,
1992 1993 1993
--------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Operating plant and equipment............ $ 564,351 $ 633,110 $ 670,252
Real estate and improvements............. 24,544 28,493 28,867
Support equipment........................ 15,138 24,044 24,062
--------- --------- ---------
604,033 685,647 723,181
Accumulated depreciation................. (232,676) (286,788) (314,851)
--------- --------- ---------
$ 371,357 $ 398,859 $ 408,330
========= ========= =========
</TABLE>

Depreciation is computed on the straight-line method using estimated useful
lives of 5 to 12 years for operating plant and equipment and 3 to 20 years for
support equipment and buildings. Additions to property,

F-7
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

plant and equipment are recorded at cost which includes amounts for material,
applicable labor and overhead, and interest. Capitalized interest amounted to
$2,992,000, $1,498,000 and $1,009,000 for the years ended March 31, 1991, 1992
and 1993, respectively.

Intangible Assets

Intangible assets, net of accumulated amortization, are comprised of the
following (dollars in thousands):

<TABLE>
<CAPTION>
MARCH 31,
----------------- SEPTEMBER 30,
1992 1993 1993
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Purchased franchises......................... $380,469 $379,337 $368,797
Purchased subscriber lists................... 16,670 10,512 7,438
Goodwill..................................... 42,224 42,184 45,354
Non-compete agreements....................... 10,630 7,566 5,105
-------- -------- --------
$449,993 $439,599 $426,694
======== ======== ========
</TABLE>

A portion of the aggregate purchase price of cable television systems
acquired has been allocated to purchased franchises, purchased subscriber
lists, non-compete agreements and goodwill. Purchased franchises and goodwill
are amortized on the straight-line method over 40 years. Purchased subscriber
lists are amortized on the straight-line method over periods which range from 5
to 10 years. Non-compete agreements are amortized on the straight line method
over their contractual lives which range from 4 to 12 years. Accumulated
amortization of intangible assets amounted to $237,762,000, $262,799,000 and
$269,045,000 at March 31, 1992 and 1993 and September 30, 1993, respectively.

Amortization of Other Assets and Debt Discounts

Deferred debt financing costs, included in other assets, and debt discounts,
a reduction of the carrying amount of the debt, are amortized using the
interest method over the term of the related debt. The unamortized amounts
included in other assets were $13,087,000 and $22,484,000 at March 31, 1992 and
1993, respectively.

Cash and Cash Equivalents

ACC considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

Noncash Financing and Investment Activities (dollars in thousands):

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------- SEPTEMBER 30,
1991 1992 1993 1993
------ ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Forgiveness of a capital lease
receivable from a joint
venture partnership in exchange
for equity interests............ $1,905 -- -- --
Capital leases................... -- $1,002 $8,742 $6,386
</TABLE>

Reclassification

Certain amounts in 1992 and 1991 have been reclassified for comparability
with the 1993 presentation.

Unaudited Interim Information

In the opinion of management, the accompanying unaudited financial statements
contain all adjustments which are of a normal recurring nature, necessary to
present fairly the financial positions of ACC as of September 30, 1993 and the
results of operations and cash flows for the six months ended September 30,
1992 and 1993.

F-8
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

2. INVESTMENTS AND RELATED PARTY RECEIVABLES:

The following table summarizes the investments in and receivables from
Olympus and related parties (dollars in thousands):

<TABLE>
<CAPTION>
MARCH 31,
------------------ SEPTEMBER 30,
1992 1993 1993
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Investment in Olympus..................... $ 44,649 $(61,692) $(77,013)
Amounts due from Olympus.................. 20,323 69,384 77,758
Amounts due from (to) other related par-
ties--net................................ (10,064) 3,835 4,233
-------- -------- --------
$ 54,908 $ 11,527 $ 4,978
======== ======== ========
</TABLE>

During the year ended March 31, 1993, concurrent with Olympus's redemption of
$6,500,000 in limited partner interests, ACC converted 6.5 general partner
units to PLP interests, thereby maintaining 50% of the outstanding general
partner and limited partner voting units of Olympus. At March 31, 1991, 1992
and 1993, ACC owned $237,501,000, $269,601,000 and $276,101,000 in Olympus PLP
Interests, respectively.

The major components of the financial position of Olympus as of December 31,
1991 and 1992, and September 30, 1992 and 1993, and the results of operations
for the years ended December 31, 1991 and 1992, and the nine months ended
September 30, 1992 and 1993 were as follows (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
BALANCE SHEET DATA: 1991 1992 1993
- ------------------- --------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Property, plant and equipment--net.......... $ 154,097 $ 157,752 $ 164,021
Total assets................................ 482,316 467,279 465,209
Notes payable to banks...................... 391,750 361,900 368,450
Deferred income taxes....................... -- -- 59,500
Due to ACC.................................. 11,746 59,232 77,758
Total liabilities........................... 456,660 500,218 617,865
PLP Interests............................... 269,601 269,601 276,101
Redeemable limited partners interests....... 14,900 19,515 10,000
General partners' equity (deficiency)....... (258,845) (322,055) (438,757)
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
---------------- -----------------
INCOME STATEMENT DATA: 1991 1992 1992 1993
- ---------------------- ------- ------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues.................................. 90,597 93,401 69,460 73,478
Operating income.......................... 6,479 7,873 5,057 13,907
Net loss before cumulative effect of
change in
accounting principle..................... (36,577) (16,617) (21,530) (8,824)
Cumulative effect of change in accounting
principle
for income taxes......................... -- -- -- (59,500)
Net loss.................................. (36,577) (16,617) (21,530) (68,324)
Net loss of general partners after prior-
ity return
and accretion requirements............... (85,254) (73,367) (63,612) (110,202)
</TABLE>

F-9
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

2. INVESTMENTS AND RELATED PARTY RECEIVABLES, CONTINUED:

The following reconciles ACC's investment in Olympus to the related equity
accounts of Olympus (dollars in thousands):

<TABLE>
<CAPTION>
MARCH 31,
------------------- SEPTEMBER 30,
1992 1993 1993
-------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Investment in Olympus joint venture partner-
ship....................................... $ 44,649 $ (61,692) $ (77,013)
Accumulated unpaid priority return require-
ments...................................... (37,947) (68,702) (85,667)
-------- --------- ---------
Olympus' combined PLP Interests and general
partners' equity
(deficiency)............................... $ 6,702 $(130,394) $(162,680)
======== ========= =========
</TABLE>

Through March 27, 1992, an affiliated partnership guaranteed certain
indebtedness of a subsidiary of Olympus. As provided for in the Olympus
partnership agreement, Olympus had accrued prior to that date approximately
$7,727,000 in net consideration for this guaranty. Prior to March 31, 1992,
ACC, Olympus and the affiliate consummated a series of transactions which
resulted in the repayment of amounts owed to Olympus by the affiliate, the
release of the affiliate from the guarantee and the cancellation of the rights
of the affiliate and ACC to contribute assets to Olympus in return for PLP
Interests and the related return thereon, through an amendment to the Olympus
partnership agreement. In connection with the amendment, during the three month
period ended March 31, 1992, Olympus reversed $5,674,000 of the expense
previously accrued under the guarantee arrangement. The reversal of such amount
previously accrued by Olympus is reflected in ACC's March 31, 1992 consolidated
financial statements as a reduction in its equity in net loss of Olympus.

Effective January 1, 1993, Olympus adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
109), which requires an asset and liability approach for financial accounting
and reporting for income taxes. SFAS 109 resulted in the cumulative recognition
of an additional liability of approximately $59,500,000. Olympus has not
restated prior years' financial statements to reflect the provisions of SFAS
109.

3. DEBT:

Notes Payable of Subsidiaries to Banks and Institutions

Notes payable of subsidiaries to banks and institutions are comprised of the
following (dollars in thousands):

<TABLE>
<CAPTION>
MARCH 31,
------------------- SEPTEMBER 30,
1992 1993 1993
---------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Credit agreements with banks payable through
2000 (weighted average interest
rate 6.26% and 5.32% at March 31, 1993 and
1992, respectively)......................... $ 662,667 $440,000 $376,775
10.66% Senior Secured Notes due 1996 through
1999........................................ 250,000 250,000 250,000
11.00% Senior Secured Notes due through 1993. 1,000 -- --
9.95% Senior Secured Notes due 1993 through
1997........................................ 28,800 22,400 19,200
10.80% Senior Secured Notes due 1996 through
2000........................................ 45,000 45,000 45,000
10.50% Senior Secured Notes due 1997 through
2001........................................ 16,000 16,000 16,000
9.73% Senior Secured Notes due 1998 through
2001........................................ 37,500 37,500 37,500
10.25% Senior Subordinated Notes due 1995
through 1998................................ 80,000 80,000 80,000
11.85% Senior Subordinated Notes due 1998
through 2000................................ 60,000 60,000 60,000
11.13% Senior Subordinated Notes due 1999
through 2002................................ 12,000 12,000 12,000
---------- -------- --------
$1,192,967 $962,900 $896,475
========== ======== ========
</TABLE>

F-10
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

3. DEBT, CONTINUED:

The amount of actual borrowings available to ACC under its revolving credit
agreements is generally based upon achieving certain levels of operating
performance. ACC had commitments from banks for additional borrowings of up to
$170,563,000 at March 31, 1993, which expire through 1994. At the expiration of
the commitments, all borrowings are convertible into term loans. ACC pays
commitment fees of up to .5% of unused principal.

Borrowings under most of these credit arrangements of subsidiaries are
collateralized by a pledge of the stock in their respective subsidiaries and in
some cases assets. These agreements stipulate, among other things, limitations
on additional borrowings, investments, transactions with affiliates and other
subsidiaries, and the payment of dividends and fees by the subsidiaries, and
they require maintenance of certain financial ratios by the subsidiaries. In
addition, several of the subsidiaries' agreements, along with the notes of the
parent company, contain certain cross default provisions. At March 31, 1993,
approximately $194,000,000 of the net assets of subsidiaries would be permitted
to be transferred to the parent company in the form of dividends and loans
without the prior approval of the banks and institutions based upon the results
of operations of such subsidiaries for the quarter ended March 31, 1993. The
subsidiaries are permitted to pay fees to the parent company or other
subsidiaries. Such fees are limited to a percentage of the subsidiaries'
revenues.

Fixed interest rates to institutions range from 9.73% to 11.85%. Bank debt
interest rates are based, upon one or more of the following rates at the option
of ACC: prime rate plus from 0% to 1.5%; certificate of deposit rate plus 1.25%
to 2.75%; or Eurodollar (or London Interbank Offered) rate plus 1% to 2.5%. At
March 31, 1993, the weighted average interest rate on notes payable to banks
and institutions, including the effect of interest rate hedging arrangements,
was 8.65%. The rates on 67% of ACC's principal balance to banks and
institutions were fixed for at least one year through the terms of the notes or
interest rate swap agreements.

ACC has entered into fixed and floating interest rate swap agreements with
banks, Olympus and the Managed Partnerships. At March 31, 1993, ACC had a total
notional principal amount of $217,500,000 outstanding under such agreements,
which expire from 1995 through 2000. These agreements provide for a weighted
average rate of 6.06%, at March 31, 1993. ACC is exposed to credit loss in the
event of nonperformance by the banks. ACC does not expect any such
nonperformance. Net settlement amounts under these swap agreements are recorded
as adjustments to interest expense during the period incurred.

Other Debt

Other debt is comprised of the following (dollars in thousands):

<TABLE>
<CAPTION>
MARCH 31,
---------------
1992 1993
------- -------
<S> <C> <C>
Seller notes due through 1994, interest at 10% to 18.5%..... $ 946 $ 81
Capital lease obligations due through 2004, interest at 8.2%
to 15.1%................................................... 6,738 13,201
Installment notes due through 2006, interest at 6.0% to 15%. 1,962 1,086
Mortgages due through 2004, interest at prime rate plus
1.5%....................................................... 2,476 2,305
------- -------
$12,122 $16,673
======= =======
</TABLE>

The Seller notes arose from investments in and acquisition of cable
television systems. The remaining balance of Other Debt consists primarily of
purchase money indebtedness and capital lease obligations incurred in
connection with the acquisition of, and are collateralized by, certain
equipment.

F-11
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

3. DEBT, CONTINUED:

12.5% Senior Notes due 2002

On May 14, 1992, ACC issued at face value to the public $400,000,000
aggregate principal amount of unsecured 12.5% Senior Notes due May 15, 2002.
Interest is due on the notes semi-annually. The notes, which are effectively
subordinated to all liabilities of the subsidiaries, contain certain
restrictions on, among other things, the incurrence of indebtedness, mergers
and sale of assets, certain restricted payments by ACC, investments in
affiliates and certain other affiliate transactions. The notes further require
that ACC maintain a debt to annualized operating cash flow ratio of not greater
than 8.75 to 1.00, based on the latest fiscal quarter, exclusive of the
incurrence of $50,000,000 in additional indebtedness which is not subject to
the required ratio. ACC may redeem the notes in whole or in part on or after
May 15, 1997, at a premium of 106% declining to 100% of the $400,000,000
aggregate principal amount on or after May 15, 1999. Net proceeds from the
offering of the notes, after offering costs, aggregated approximately
$389,000,000 and was initially used for the repayment of subsidiary revolving
bank debt, $260,000,000 of which was reborrowed on July 1, 1992 to redeem in
full, at a premium of 104%, the Senior Discount Notes, with the remainder being
used for working capital purposes.

16.5% Senior Discount Notes due 1999

On July 1, 1992, ACC redeemed all of the 16.5% Senior Discount Notes at a
premium of 104%. The $10,000,000 redemption premium together with $4,386,000 in
unamortized deferred financing costs comprise the extraordinary loss on early
retirement of debt recognized on ACC's consolidated financial statements for
the year ended March 31, 1993. The unsecured 16.5% Senior Discount Notes were
originally sold at a substantial discount from their principal amount to yield
the purchaser a 16.5% return and provided $150,125,000 in gross proceeds.
Included in interest expense is noncash accretion of the original issue
discount on these notes which amounted to $31,499,000 and $35,472,000 for the
years ended March 31, 1991 and 1992, respectively.

11 7/8% Senior Debentures due 2004

On September 10, 1992, ACC issued to the public $125,000,000 aggregate
principal amount of unsecured 11 7/8% Senior Debentures due September 2004.
Interest is due on the debentures semi-annually. The debentures, which are
effectively subordinated to all liabilities of the subsidiaries, contain
restrictions and covenants similar to the restrictions on the 12 1/2% Senior
Notes. ACC may redeem the debentures in whole or in part on or after September
15, 1999, at a premium of 104.5% declining to 100% on or after September 15,
2002. Net proceeds of the debentures, after offering costs, aggregated
$120,600,000.

9 7/8% Senior Debentures due 2005

On March 11, 1993, ACC issued 9 7/8% Senior Debentures due March 2005 in the
aggregate principal amount of $130,000,000. Interest on the debentures is
payable semi-annually. The debentures, which are effectively subordinated to
all liabilities of the subsidiaries, contain restrictions and covenants similar
to the restrictions on the 12 1/2% Senior Notes. The debentures are not
redeemable prior to the maturity date of March 1, 2005. Net proceeds from the
debenture offer, after offering costs, aggregated $125,307,000.

13% Senior Subordinated Notes due 1996

On August 12, 1986, ACC issued to the public $100,000,000 of unsecured 13%
Senior Subordinated Notes due in 1996. The notes contain certain restrictions
on payment of dividends by ACC and on the redemptions or repurchases of ACC's
common stock. ACC may redeem the notes at a premium of 101.86% declining to
100% after August 15, 1993.

F-12
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

3. DEBT, CONTINUED:

10 1/4% Senior Notes due 2000

On July 28, 1993, ACC issued $110,000,000 aggregate principal amount of
unsecured 10 1/4% Senior Notes due July 2000. Interest is due on the notes
semi-annually. The notes, which are effectively subordinated to all liabilities
of the subsidiaries, contain restrictions and covenants similar to the
restrictions on the 12 1/2% Senior Notes. The notes are not redeemable prior to
the maturity date of July 15, 2000. Net proceeds of the notes, after offering
costs, aggregated $106,961,000.

Maturities of Debt

Maturities of debt for the five years after March 31, 1993, are as follows
(dollars in thousands):

Maturities of debt for the four years and six months after September 30,
1993, taking into account repayments and prepayments of debt through September
30, 1993, are as follows (dollars in thousands):

<TABLE>
<S> <C>
Six months ended March 31, 1994.................................. $ 4,660
Year ended March 31, 1995........................................ 40,730
Year ended March 31, 1996........................................ 101,547
Year ended March 31, 1997........................................ 295,470
Year ended March 31, 1998........................................ 240,433
</TABLE>

Management intends to fund its requirements for maturities of debt through
borrowings under new and existing credit arrangements and internally generated
funds. Changing conditions in the financial markets may have some impact on how
ACC will refinance its debt in the future. Management does not expect these
matters to adversely affect ACC's operations.

4. COMMITMENTS AND CONTINGENCIES:

ACC rents office and studio space, tower sites, and space on utility poles
under leases with terms which are generally less than one year or under
agreements that are generally cancelable on short notice. Total rental expense
under all operating leases aggregated $3,925,000, $3,868,000, and $4,090,000
for the years ended March 31, 1991, 1992 and 1993, respectively.

In connection with certain obligations under existing franchise agreements,
ACC obtains surety bonds guaranteeing performance to municipalities and public
utilities. Payment is required only in the event of nonperformance. ACC has
fulfilled all of its obligations such that no payments under surety bonds have
been required.

F-13
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

4. COMMITMENTS AND CONTINGENCIES, CONTINUED:

On October 5, 1992 Congress passed the 1992 Cable Act which will
significantly expand the scope of regulation of certain subscriber rates and a
number of other matters in the cable industry. To the extent applicable, the
regulations could result in a rollback of existing Company rates. The FCC is
likely to clarify and refine the rate regulations. In addition, litigation has
been instituted challenging various portions of the 1992 Cable Act and the
rulemaking proceedings. Other radical challenges to the rate regulations are
expected to be filed.

The Company is currently unable to predict the ultimate outcome or effect of
rulemaking proceedings and the rate regulations, the ultimate effect of the
legislation or the ultimate outcome of relevant litigation. While the overall
impact of such matters on the Company cannot be determined at this time, the
rate regulation and other provisions of the 1992 Cable Act could have a
material adverse impact on the cable industry generally and on the Company's
business and revenues. The Company intends to continue to assess the impact of
the FCC rate regulations and to consider the implementation of strategies
designed to mitigate the potentially adverse effects of such regulation on the
Company's business.

5. STOCKHOLDERS' EQUITY (DEFICIENCY):

ACC has no convertible securities or other common stock equivalent securities
outstanding.

Public Offering of Class A Common Stock on May 14, 1992

On May 14, 1992, Adelphia sold to the public 1,500,000 shares of Class A
Common Stock for $15.00 per share. The net proceeds of the sale, after offering
costs, aggregated approximately $21,700,000 and were initially used for both
the repayment of subsidiary revolving bank debt, which may be reborrowed, and
working capital.

Preferred Stock

The Certificate of Incorporation of Adelphia authorizes 5,000,000 shares of
Preferred Stock, $.01 par value. None have been issued.

Common Stock

The Certificate of Incorporation of Adelphia authorizes two classes of common
stock, Class A and Class B. Holders of Class A Common Stock and Class B Common
Stock vote as a single class on all matters submitted to a vote of the
stockholders, with each share of Class A Common Stock entitled to one vote and
each share of Class B Common Stock entitled to ten votes, except (i) for the
election of directors and (ii) as otherwise provided by law. In the annual
election of directors, the holders of Class A Common Stock voting as a separate
class, are entitled to elect one of ACC's directors. In addition, any Class B
Common Stock is automatically convertible into Class A Common Stock upon
transfer, subject to certain limited exceptions. In the event a cash dividend
is paid, the holders of Class A Common Stock will be paid 105% of the amount
payable per share for each share of Class B Common Stock. Upon liquidation,
dissolution or winding up of ACC, the holders of Class A Common Stock are
entitled to a preference of $1.00 per share. After such amount is paid, holders
of Class B Common Stock are entitled to receive $1.00 per share. Any remaining
amount would then be shared ratably by both classes.

F-14
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

5. STOCKHOLDERS' EQUITY (DEFICIENCY), CONTINUED:

Restricted Stock Bonus Plan

Adelphia has reserved 500,000 shares of Class A Common Stock for issuance to
officers and other key employees at the discretion of the Compensation
Committee of the Board of Directors. The bonus shares will be awarded without
any cash payment by the recipient unless otherwise determined by the
Compensation Committee. Shares awarded under the plan vest over a five year
period. No awards have been made under the Restricted Stock Bonus Plan.

Stock Option Plan

Adelphia has a stock option plan, which provides for the granting of options
to purchase up to 200,000 shares of Adelphia's Class A Common Stock to officers
and other key employees of the Company and its subsidiaries. Options may be
granted at an exercise price equal to the fair market value of the shares on
the date of grant. The plan permits the granting of tax-qualified incentive
stock options, in addition to nonqualified stock options. Options outstanding
under the plan may be exercised by paying the exercise price per share through
various alternative settlement methods. No stock options have been granted
under the plan.

6. EMPLOYEE BENEFIT PLANS:

ACC has a savings plan (401(k)) which provides that eligible full-time
employees may contribute from 2% to 20% of their pre-tax compensation. ACC
makes matching contributions not exceeding 1.5% of each participants pre-tax
compensation, up to a maximum of $750 per year. ACC's matching contributions
amounted to $185,000, $303,000 and $241,115 for the years ended March 31, 1991,
1992 and 1993, respectively.

Financial Accounting Standards Board Statement No. 106 (SFAS 106),
"Employer's Accounting for Postemployment Benefits Other Than Pensions",
requires the accrual of future payments under these benefit plans (such as
health care) during the periods the employee provides the services to earn
them, and is effective for years beginning after December 15, 1992. ACC
currently provides no such postemployment benefits, therefore, the new standard
will not have an effect on its financial position and results of operations.

7. TAXES ON INCOME:

ACC and its corporate subsidiaries file a consolidated federal income tax
return, which includes its share of the subsidiary partnerships and joint
venture partnership results. At March 31, 1993, ACC had net operating loss
carryforwards for federal income tax purposes of approximately $720,000,000
expiring through 2008. Depreciation and amortization expense differs for tax
and financial statement purposes due to the use of prescribed periods rather
than useful lives for tax purposes and also as a result of differences between
tax basis and book basis of certain acquisitions.

ACC adopted Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," effective April 1, 1993. This statement
supersedes Accounting Principles Board Opinion No. 11, "Accounting for Income
Taxes," which ACC had followed previously and under which ACC recorded no
deferred tax liability. The cumulative effect of adopting SFAS No. 109 at April
1, 1993 was to increase the net loss by $89,660,000 for the six months ended
September 30, 1993.

F-15
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

7. TAXES ON INCOME, CONTINUED:

Deferred income taxes reflect the net tax effects of: (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and
(b) operating loss and tax credit carryforwards. The tax effects of significant
items comprising ACC's net deferred tax liability as of April 1, 1993 are as
follows (dollars in thousands):

<TABLE>
<S> <C>
Deferred tax liabilities:
Differences between book and tax basis of property.................. $192,444
Other............................................................... 8,401
---------
200,845
Deferred tax assets:
Reserves not currently deductible................................... 687
Operating loss carryforwards........................................ 326,544
---------
327,231
Valuation allowance................................................. (216,046)
---------
Subtotal........................................................ 111,185
---------
Net deferred tax liability.......................................... $ 89,660
=========
</TABLE>

As a result of applying SFAS No. 109, $110,498,000 of previously unrecorded
deferred tax benefits from operating loss carryforwards incurred by ACC were
recognized at April 1, 1993 as part of the cumulative effect of adopting the
Statement. Under prior accounting, a part of these benefits would have been
recognized as a reduction of income tax expense from continuing operations in
the six months ended September 30, 1993.

The provision for income tax expense for the six months ended September 30,
1993 was $1,790,000 of which $313,000 and $1,477,000 are current and deferred
tax expense, respectively.

8. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

Included in ACC's financial instrument portfolio are cash, notes payable,
debentures and interest rate swaps. The carrying values of the cash and notes
payable approximate their fair values at March 31, 1993. The fair value of the
debentures exceeded their carrying cost by approximately $49,500,000 at March
31, 1993. The fair value of the interest rate swaps exceeded their carrying
cost by approximately $12,500,000 at March 31, 1993. The fair values of the
debt and interest rate swaps were based upon quoted market prices of similar
instruments or on rates available to ACC for instruments of the same remaining
maturities.

9. RELATED PARTY TRANSACTIONS:

ACC currently manages cable television systems which are principally owned by
Olympus and limited partnerships of which certain of ACC's executive officers
have equity interests (the "Managed Partnerships").

ACC has agreements with Olympus and the Managed Partnerships which provide
for management fees not to exceed 5% to 6% of their respective gross revenues.
In addition, ACC charged the Managed Partnerships fees for services which
include the purchase of programming and equipment, loan placement, construction
and other services. The aggregate fee revenues from Olympus and the Managed
Partnerships amounted to $4,382,000, $3,643,000 and $4,659,000, for the years
ended March 31, 1991, 1992 and 1993,

F-16
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

9. RELATED PARTY TRANSACTIONS, CONTINUED:

respectively. In addition, ACC was reimbursed for corporate costs of
$2,974,000, $3,696,000 and $4,521,000 for the years ended March 31, 1991, 1992
and 1993, respectively, which have been recorded as a reduction of selling,
general and administrative expense.

ACC leases from a partnership and a corporation owned by certain executive
officers support equipment under agreements which have been accounted for as
capital leases. These obligations, which are included in Other Debt, amounted
to $2,380,000 and $1,897,000 at March 31, 1992 and 1993, respectively. ACC
leases from this partnership certain buildings which have been accounted for as
operating leases. Rent expense under these operating leases aggregated
$604,000, $655,000 and $715,000 for the years ended March 31, 1991, 1992 and
1993, respectively.

Net settlement amounts under interest rate swap agreements with Olympus and
the Managed Partnerships are recorded as adjustments to interest expense during
the period incurred. The effect of the interest rate swaps was to decrease
ACC's interest expense by $1,698,000 for the year ended March 31, 1993.

10. QUARTERLY FINANCIAL DATA--(UNAUDITED):

The following table summarizes the financial results of ACC for each of the
quarters in the years ended March 31, 1992 and 1993 (dollars in thousands
except per share amounts):

<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------
JUNE 30 SEPT. 30 DEC. 31 MARCH 31
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1992:
Revenues............................... $ 65,684 $ 67,531 $ 69,767 $ 70,648
-------- -------- -------- --------
Operating expenses:
Direct operating and programming..... 18,417 18,587 18,902 18,881
Selling, general and administrative.. 10,911 10,940 11,532 11,044
Depreciation and amortization........ 19,731 21,424 21,028 22,634
-------- -------- -------- --------
Total.................................. 49,059 50,951 51,462 52,559
-------- -------- -------- --------
Operating income....................... 16,625 16,580 18,305 18,089
-------- -------- -------- --------
Other income (expense):
Interest income from affiliates...... 802 776 748 759
Other income......................... -- -- -- 968
Priority investment income........... 5,575 5,575 5,575 5,575
Interest expense..................... (42,014) (41,383) (42,110) (39,332)
Equity in net loss of Olympus joint
venture partnership................... (17,784) (15,991) (13,287) (5,656)
-------- -------- -------- --------
Total.................................. (53,421) (51,023) (49,074) (37,686)
-------- -------- -------- --------
Net loss............................... $(36,796) $(34,443) $(30,769) $(19,597)
======== ======== ======== ========
Net loss per share..................... $ (2.66) $ (2.49) $ (2.23) $ (1.42)
======== ======== ======== ========
</TABLE>

F-17
<PAGE>

ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

10. QUARTERLY FINANCIAL DATA--(UNAUDITED):

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------
JUNE 30 SEPT. 30 DEC. 31 MARCH 31
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED MARCH 31,
1993:
Revenues....................... $ 73,877 $ 74,701 $ 77,342 $ 79,302
---------- ---------- ---------- ----------
Operating expenses:
Direct operating and program-
ming.......................... 19,802 19,989 21,319 21,267
Selling, general and adminis-
trative....................... 11,785 11,860 11,983 13,840
Depreciation and amortiza-
tion.......................... 21,845 22,964 21,336 24,261
---------- ---------- ---------- ----------
Total.......................... 53,432 54,813 54,638 59,368
---------- ---------- ---------- ----------
Operating income............... 20,445 19,888 22,704 19,934
---------- ---------- ---------- ----------
Other income (expense):
Interest income from affili-
ates.......................... 1,314 1,314 1,333 1,255
Other income................. 367 265 370 445
Priority investment income... 5,575 5,575 5,575 5,575
Interest expense............. (39,547) (37,938) (42,833) (44,541)
Equity in net loss of Olympus
joint venture before
cumulative effect of
change in accounting
principle................. (13,357) (21,133) (1,819) (10,532)
---------- ---------- ---------- ----------
Total.......................... (45,648) (51,917) (37,374) (47,798)
---------- ---------- ---------- ----------
Loss before income taxes,
extraordinary loss and
cumulative effect of change in
accounting principle.......... (25,203) (32,029) (14,670) (27,864)
Income tax expense............. -- -- -- (3,143)
---------- ---------- ---------- ----------
Loss before extraordinary loss
and cumulative effect of
change in accounting
principle..................... (25,203) (32,029) (14,670) (31,007)
Extraordinary loss on early re-
tirement of debt.............. (14,386) -- -- --
Cumulative effect of Olympus
change in accounting
principle..................... -- -- -- (59,500)
---------- ---------- ---------- ----------
Net loss....................... $ (39,589) $ (32,029) $ (14,670) $ (90,507)
========== ========== ========== ==========
Loss per weighted average share
of common stock before
extraordinary loss and
cumulative effect of change in
accounting principle.......... (1.72) $ (2.09) $ (.96) $ (2.02)
Extraordinary loss............. (.99) -- -- --
Cumulative effect of Olympus
change in accounting estimate. -- -- -- (3.88)
---------- ---------- ---------- ----------
Net loss per weighted average
share of common stock......... $ (2.71) $ (2.09) $ (.96) $ (5.90)
========== ========== ========== ==========
Weighted average shares of
common stock outstanding...... 14,610,685 15,319,476 15,319,476 15,319,476
========== ========== ========== ==========
</TABLE>

F-18
<PAGE>

INDEPENDENT AUDITORS' REPORT

Olympus Communications, L.P.:

We have audited the accompanying consolidated balance sheets of Olympus
Communications, L.P. and its subsidiaries as of December 31, 1991 and 1992, and
the related consolidated statements of operations, general partners' equity
(deficiency), and cash flows for each of the three years in the period ended
December 31, 1992. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Olympus Communications, L.P. and
its subsidiaries at December 31, 1991 and 1992 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1992, in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE
Pittsburgh, Pennsylvania March 17, 1993

F-19
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1991 1992 1993
--------- --------- -------------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS:
Cable television systems, at cost, net of
accumulated
depreciation and amortization:
Property, plant and equipment--net........ $ 154,097 $ 157,752 $ 164,021
Intangible assets--net.................... 314,236 293,895 278,526
--------- --------- -----------
Total...................................... 468,333 451,647 442,547
Cash and cash equivalents.................. 3,771 7,050 11,426
Subscriber receivables..................... 5,902 5,404 7,838
Prepaid expenses and other assets--net..... 4,310 3,178 3,398
--------- --------- -----------
Total.................................... $ 482,316 $ 467,279 $ 465,209
========= ========= ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIEN-
CY):
Notes payable to banks..................... $ 391,750 $ 361,900 $ 368,450
Other debt................................. 1,036 528 318
Accounts payable........................... 7,834 7,821 10,418
Subscriber advance payments and deposits... 4,194 4,135 3,995
Accrued interest and other liabilities..... 18,645 8,401 8,518
Accrued priority return on redeemable pre-
ferred limited
partner interests......................... 30,960 60,794 85,667
Deferred business interruption proceeds.... -- 6,279 3,038
Deferred income taxes...................... -- -- 59,500
Amounts payable to related parties--net.... 2,241 50,360 77,961
--------- --------- -----------
Total.................................... 456,660 500,218 617,865
Commitments and Contingencies (Note 7).....
16.5% redeemable preferred limited partner
interests................................. 269,601 269,601 276,101
Redeemable limited partner interests....... 14,900 19,515 10,000
General partners' equity (deficiency)...... (258,845) (322,055) (438,757)
--------- --------- -----------
Total.................................... $ 482,316 $ 467,279 $ 465,209
========= ========= ===========
</TABLE>

See notes to consolidated financial statements.

F-20
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------- -------------------
1990 1991 1992 1992 1993
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Revenues.................... $ 77,910 $ 90,597 $ 86,255 $ 69,460 $ 65,931
Business interruption reve-
nue........................ -- -- 7,146 -- 7,547
-------- -------- -------- -------- ---------
Total................... 77,910 90,597 93,401 69,460 73,478
-------- -------- -------- -------- ---------
Operating expenses:
Direct operating and pro-
gramming................. 19,613 24,433 22,473 18,164 16,204
Selling, general and ad-
ministrative............. 14,424 16,761 18,817 13,683 12,582
Depreciation and amortiza-
tion..................... 37,613 38,427 39,407 28,970 27,247
Management fees to Manag-
ing Affiliate............ 3,910 4,497 4,831 3,586 3,538
-------- -------- -------- -------- ---------
Total................... 75,560 84,118 85,528 64,403 59,571
-------- -------- -------- -------- ---------
Operating income............ 2,350 6,479 7,873 5,057 13,907
Interest expense............ (43,711) (39,413) (30,272) (25,114) (22,731)
Priority return to an affil-
iate....................... (4,083) (3,643) 5,247 5,247
Other income................ 167 -- 535 -- --
-------- -------- -------- -------- ---------
Loss before cumulative ef-
fect of
change in accounting prin-
ciple...................... (45,277) (36,577) (16,617) (21,530) (8,824)
Cumulative effect of change
in accounting for income
taxes...................... -- -- -- -- (59,500)
-------- -------- -------- -------- ---------
Net loss................ (45,277) (36,577) (16,617) (21,530) (68,324)
Priority return on redeem-
able preferred limited
partner interests.......... (36,011) (44,271) (52,135) (38,625) (41,598)
Net loss allocated to re-
deemable limited partners.. 16,500 10,494 8,309 10,765 9,720
Accretion requirements of
redeemable limited
partners................... (10,494) (14,900) (12,924) (14,222) (10,000)
-------- -------- -------- -------- ---------
Net loss of general
partners after priority
return and accretion
requirements........... $(75,282) $(85,254) $(73,367) $(63,612) $(110,202)
======== ======== ======== ======== =========
Net loss per general
partner unit after
priority return and ac-
cretion
requirements........... $ (4,700) $ (5,162) $ (4,446) $ (3,855) $ (11,020)
======== ======== ======== ======== =========
</TABLE>

See notes to consolidated financial statements.

F-21
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF GENERAL PARTNERS' EQUITY (DEFICIENCY)
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
GENERAL NOTE
PARTNERS RECEIVABLE TOTAL
--------- ---------- ---------
<S> <C> <C> <C>
Balance, December 31, 1989.................... $ (91,052) $(10,157) $(101,209)
Partner's contributions....................... 6,000 -- 6,000
Return of capital............................. (3,100) -- (3,100)
Net loss of general partners after priority
return and accretion requirements............ (75,282) (75,282)
--------- -------- ---------
Balance, December 31, 1990.................... (163,434) (10,157) (173,591)
Net loss of general partners after priority
return and accretion requirements............ (85,254) -- (85,254)
--------- -------- ---------
Balance, December 31, 1991.................... (248,688) (10,157) (258,845)
Repayment of note receivable from affiliated
partnership.................................. -- 10,157 10,157
Net loss of general partners after priority
return and accretion requirements............ (73,367) (73,367)
--------- -------- ---------
Balance, December 31, 1992.................... (322,055) -- (322,055)
Conversion of general partnership interests to
preferred limited partnership interests
(unaudited).................................. (6,500) (6,500)
Net loss of general partners after priority
return and accretion requirements
(unaudited).................................. (110,202) (110,202)
--------- -------- ---------
Balance, September 30, 1993 (unaudited)....... $(438,757) $ -- $(438,757)
========= ======== =========
</TABLE>

See notes to consolidated financial statements.

F-22
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------------------- ------------------
1990 1991 1992 1992 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating
activities:
Net loss................... $(45,277) $(36,577) $(16,617) $(21,530) $(68,324)
Adjustments to reconcile
net loss to net cash
provided by (used for)
operating activities:
Depreciation and amortiza-
tion....................... 37,613 38,427 39,407 28,970 27,247
Loss (gain) on property
damage related to
hurricane.............. -- -- (535) 6,720 --
Changes in operating
assets and liabilities,
net of effects of
acquisitions and
transfer of property:
Subscriber receivables.. (1,827) (1,835) 498 399 (2,434)
Prepaid expenses and
other assets............... (6,823) (1,444) (58) (2,508) 287
Accounts payable........ 3,366 (347) (13) (402) 2,598
Subscriber advance
payments and
deposits............ 334 (446) (59) 488 (140)
Accrued interest and
other liabilities.......... 12,301 2,402 (10,245) (10,283) 117
Deferred business inter-
ruption proceeds........... -- -- 6,279 11,017 (3,241)
Deferred income taxes..... -- -- -- -- 59,500
Other..................... (267) -- -- -- --
-------- -------- -------- -------- --------
Net cash provided by (used (580) 180 18,657 12,871 15,610
for) operating activities.. -------- -------- -------- -------- --------
Cash flows used for invest-
ment activities:
Expenditures for property,
plant and equipment.... (30,133) (21,859) (26,827) (14,010) (18,655)
Insurance proceeds for
property damage related
to hurricane........... -- -- 6,800 -- --
Cable television systems
acquired................... (66,027) -- -- -- --
Purchase of limited part-
ner equity interests....... -- -- -- -- (9,795)
Proceeds from repayment of
note receivable from -- -- 10,157 10,157 --
affiliated partnership. -------- -------- -------- -------- --------
Net cash used for investment (96,160) (21,859) (9,870) (3,853) (28,450)
activities................. -------- -------- -------- -------- --------
Cash flows from financing
activities:
Proceeds from debt........ 63,634 276 59,956 16,771 13,000
Repayments of debt........ (2,554) (4,510) (90,314) (64,923) (6,660)
Costs associated with debt
financing.................. (792) -- (969) (959) --
Limited partners' contri-
butions.................... 56,138 32,100 -- -- --
General partners' contri-
butions.................... 6,000 -- -- -- --
Payments of priority re-
turn....................... (24,990) (20,950) (22,300) (16,725) (16,725)
Return of capital to gen-
eral partners.............. (3,100) -- -- -- --
Amounts advanced from (to) 5,692 (3,451) 48,119 53,743 27,601
related parties--net... -------- -------- -------- -------- --------
Net cash provided by (used 100,028 3,465 (5,508) (12,093) 17,216
for) financing activities.. -------- -------- -------- -------- --------
Increase (decrease) in cash
and cash equivalents....... 3,288 (18,214) 3,279 (3,075) 4,376
Cash and cash equivalents, 18,697 21,985 3,771 3,771 7,050
beginning of period........ -------- -------- -------- -------- --------
Cash and cash equivalents, $ 21,985 $ 3,771 $ 7,050 $ 696 $ 11,426
end of period.............. ======== ======== ======== ======== ========
Supplemental disclosure of
cash flow activity--cash $ 37,170 $ 40,846 $ 32,387 $ 26,714 $ 22,071
payments for interest...... ======== ======== ======== ======== ========
</TABLE>

See notes to consolidated financial statements.

F-23
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

1. THE PARTNERSHIP AND ACQUISITION OF CABLE TELEVISION SYSTEMS:

Olympus Communications, L.P. and Subsidiaries ("Olympus") is a joint venture
limited partnership formed under the laws of Delaware with 50% of the
outstanding voting interests controlled by Adelphia Communications Corporation
("ACC"). Olympus' operations consist primarily of selling video programming
which is distributed to subscribers for a monthly fee through a network of
fiber optic and coax cables.

During 1990, Olympus, through subsidiaries, acquired the following
properties: on January 30, 1990, from Telesat Cablevision Inc. and Telesat
Cablevision of South Florida, Inc., cable television systems in southeast
Florida (the "Telesat Systems"), for $13,000,000, consisting of $6,500,000 in
cash and $6,500,000 in redeemable limited partner interests; on January 31,
1990, all of the outstanding common stock of Joseph S. Gans, Inc. which owns
cable television systems in northeast Pennsylvania, (the "Northeast Systems")
for $68,000,000, consisting of $52,527,000 in cash, $5,850,000 in non-interest
bearing notes, valued at $5,446,000, and $10,000,000 in redeemable limited
partner interests; and on March 9, 1990 from US Cable of Florida, Inc., cable
television systems adjacent to existing Olympus systems (the "US Cable
Systems"), for $11,000,000, consisting of $7,000,000 in cash and a $4,000,000
note of ACC which was issued by ACC in exchange for an equivalent amount of
nonvoting 16.5% redeemable preferred limited partner interests ("PLP
Interests").

The acquisition of the Telesat, Northeast and US Cable systems were accounted
for using the purchase method of accounting. The consolidated statements of
operations and cash flows include the operations of the acquired systems from
their respective dates of acquisition. Olympus assumed seller liabilities of
approximately $1,326,000 in connection with the 1990 acquisitions.

The consolidated financial statements include the accounts of Olympus and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Subscriber Revenues

Subscriber revenues are recorded in the month the service is provided.

Subscriber Receivables

An allowance for doubtful accounts of $1,208,000, $1,638,000 and $2,505,000
is recorded as a reduction of subscriber receivables at December 31, 1991 and
1992 and September 30, 1993, respectively.

Property, Plant and Equipment

Property, plant and equipment are comprised of the following (dollars in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPTEMBER 30,
1991 1992 1993
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Operating plant and equipment.............. $172,256 $188,475 $209,454
Real estate and improvements............... 5,607 5,717 3,299
Support equipment.......................... 2,226 3,113 3,192
-------- -------- --------
180,089 197,305 215,945
Accumulated depreciation................... (25,992) (39,553) (51,924)
-------- -------- --------
$154,097 $157,752 $164,021
======== ======== ========
</TABLE>

F-24
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Depreciation is computed on the straight-line method using estimated useful
lives of 5 to 18 years for operating plant and equipment and 3 to 20 years for
support equipment and buildings. Additions to property, plant and equipment are
recorded at cost which includes amounts for material, applicable labor and
interest. Olympus capitalized interest amounting to $422,000 and $436,000 for
1991 and 1992, respectively.

Intangible Assets

Intangible assets, net of accumulated amortization, are comprised of the
following (dollar in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- SEPTEMBER 30,
1991 1992 1993
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Purchased franchises......................... $262,753 $255,926 $250,402
Purchased subscriber lists................... 4,259 2,024 553
Goodwill..................................... 4,946 4,707 4,603
Non-compete agreements....................... 42,278 31,238 22,968
-------- -------- --------
$314,236 $293,895 $278,526
======== ======== ========
</TABLE>

A portion of the aggregate purchase price of cable television systems
acquired has been allocated to purchased franchises, purchased subscriber
lists, non-compete agreements and goodwill. Purchased franchises and goodwill
are amortized on the straight-line method over periods which range from 34 to
40 years. Purchased subscriber lists are amortized on the straight-line method
over 7 years. Non-compete agreements are amortized over their contractual
lives, which range from 2 to 10 years. Accumulated amortization of intangible
assets amounted to $41,652,000, $62,101,000 and $76,630,000 at December 31,
1991 and 1992 and September 30, 1993, respectively.

Amortization of Other Assets

Deferred debt financing costs, included in other assets, are amortized using
the interest method over the term of the related debt. The unamortized amount
included in other assets was $1,156,000 and $1,360,000 at December 31, 1991 and
1992, respectively.

Net Loss Per General Partner Unit After Priority Return and Accretion
Requirements

Net loss per general partner unit after priority return and accretion
requirements is based upon the weighted average number of general partner units
outstanding of 16.0 for 1990 and 16.5 for the periods ended December 30, 1991
and 1992 and September 30, 1992 and 10.0 for the period ended September 30,
1993.

Cash and Cash Equivalents

Olympus considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

F-25
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Unaudited Interim Information

In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, all of which are of a normal recurring nature,
necessary to present fairly the financial position of Olympus as of September
30, 1993 and the results of operations and cash flows for the nine months ended
September 30, 1993 and 1992.

Noncash Financing and Investment Activities (dollars in thousands)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1990 1991 1992
------- ------ ------
<S> <C> <C> <C>
Issuance of redeemable limited partner interests to
unrelated sellers in connection with acquisitions... $16,500 -- --
Issuance of PLP Interests to ACC in exchange for the
issuance by ACC of a seller note in connection with
an acquisition...................................... 4,000 -- --
Issuance of PLP Interests to ACC representing
forgiveness of a capital lease obligation........... 1,904 -- --
Issuance of PLP Interests to ACC in payment of accrued
priority return through January 30, 1990............ 4,403 -- --
Notes issued to sellers in connection with an
acquisition......................................... 5,446 $ 274 --
</TABLE>

3. BUSINESS INTERRUPTION AND PROPERTY DAMAGE RELATED TO HURRICANE:

On August 24, 1992, service in Olympus' South Dade system was interrupted by
Hurricane Andrew. As of July 31, 1992, the South Dade system served
approximately 71,000 of Olympus' 271,000 basic subscribers. The hurricane
damaged property with a net book value of approximately $6,265,000. Olympus
maintains insurance for property loss and for business interruption and
transmission lines. As of December 31, 1992, Olympus received net proceeds of
approximately $20,225,000 from the insurance carriers. Olympus received
additional proceeds of $3,000,000 subsequent to December 31, 1992.

Based upon information currently available, Olympus has made a preliminary
allocation of insurance proceeds. Of the $20,225,000 received at December 31,
1992, $6,800,000 has been allocated to property damage resulting in a $535,000
gain (included in other income), and $7,146,000 has been allocated to business
interruption. Remaining insurance proceeds received as of December 31, 1992 of
$6,279,000 have been deferred to provide for business interruption in 1993.
Olympus expects to finalize its allocation of the insurance proceeds in 1993.

4. DEBT:

Notes Payable to Banks

Notes payable to banks of Olympus' subsidiaries are comprised of the
following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1991 1992
-------- --------
<S> <C> <C>
Revolving credit agreements with banks, converted into term
notes with quarterly principal installments increasing
from 1% to 5.25% due March 31, 1993 through 1999--Adelphia
Cable Partners, L.P. ("ACP").............................. $348,000 $323,900
$45,000 revolving credit agreement with banks convertible
into term notes with the first quarterly installment of 2%
due September 30, 1993 and due through 1999--Northeast
Cable, Inc. ("Northeast")................................. 43,750 38,000
-------- --------
$391,750 $361,900
======== ========
</TABLE>

F-26
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

4. DEBT, CONTINUED:

Notes Payable to Banks, continued:

The ACP revolving credit agreement converted to a term note on December 30,
1992. Simultaneous with the conversion, ACP prepaid $25,000,000 of principal
through March 31, 1994. The amount of actual borrowings available to Northeast
under revolving credit agreements is generally based upon achieving certain
levels of operating performance. Northeast pays commitment fees of .375% of
unused principal. Borrowings under the ACP and Northeast credit arrangements
are collateralized substantially by a pledge of the stock or partnership
interests of the subsidiaries. These agreements stipulate, among other things,
limitations on additional borrowings, investments, transactions with
affiliates, payment of dividends, distributions and fees, and requires the
maintenance of certain financial ratios. The indebtedness under these
agreements is non-recourse to Olympus and ACC.

Interest rates charged for the ACP and Northeast bank debt are based upon one
or more of the following options: prime rate plus 0% to 1.50%, certificate of
deposit rate plus .88% to 2.63%, or Eurodollar rate plus .75% to 2.50%. The
weighted average interest rate on notes payable of ACP and Northeast to the
banks was 7.66% and 6.85% at December 31, 1991 and 1992, respectively. Interest
on outstanding borrowings is generally payable on a quarterly basis.

Olympus has entered into interest rate swap agreements with banks and ACC to
reduce the impact of changes in interest rates on its floating rate bank debt.
At December 31, 1992, Olympus had a net total notional principal amount of
$180,00,000 outstanding under such agreements, which expire through 2000. These
agreements provide for a weighted average rate of 9.54% at December 31, 1992.
Olympus is exposed to credit loss in the event of nonperformance by the bank.
Olympus does not expect any such nonperformance. Net settlement amounts under
these swap agreements are recorded as adjustments to interest expense during
the period incurred.

Through March 27, 1992, an affiliated partnership of certain executive
officers of ACC, which owns several cable television systems, guaranteed
indebtedness under ACP's credit agreement with banks. During the period of this
guarantee, the cash flow of this affiliated partnership was available to
Olympus for the purpose of paying interest on this indebtedness. This guarantee
was subject to release by the banks if certain conditions were met including
the achieving of certain levels of operating performance, the repayment of a
$10,157,000 term note of the affiliated partnership to Olympus, plus accrued
interest, (Note 11) and the repayment of a certain amount of ACP bank debt.

In consideration for this guarantee, the affiliated partnership had the right
to transfer all of its assets to Olympus, on or before March 31, 1992, as
amended, in exchange for $29,000,000 in PLP Interests subject to a 16.5% return
on such interests as if they had been issued on January 30, 1990.
Alternatively, before or at the time the banks released the guarantee, but not
later than March 31, 1992, ACC was entitled to contribute to Olympus an amount
equal to the fair market value of $29,000,000 in PLP Interest assuming such
interests had been issued on January 30, 1990 in exchange for $29,000,000 in
PLP Interests subject to a 16.5% return on such interests as if they had been
issued on January 30, 1990. If such a transaction had occurred, Olympus would
have been required to pay to the affiliated partnership the excess, if any, of
the contribution over $29,000,000. Through December 31, 1991, Olympus has
accrued $9,251,000 for this potential obligation. This accrual, net of the
available cash flow provided by the affiliated partnership of $1,524,000
through December 31, 1991, has been included on the Statement of Operations
under the caption "Priority Return to an Affiliate".

F-27
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

4. DEBT, CONTINUED:

Notes Payable to Banks, continued:

Prior to March 31, 1992, Olympus, ACC and the affiliated partnership
consummated a series of transactions which resulted in the repayment of amounts
owed to Olympus by the affiliate, the release of the affiliate from the
guarantee and the cancellation of the rights of the affiliate and ACC to
contribute assets to Olympus in return for PLP Interest and the related return
thereon, through an amendment to the Olympus partnership agreement. As a
condition of the release of the affiliate's guarantee, ACP repaid $24,000,000
of its bank debt through funds provided by Olympus. Olympus obtained these
funds through the repayment of the term note plus interest from the affiliate
and advances from affiliates of ACC. In connection with the amendment, as of
March 31, 1992, Olympus reversed $5,674,000 of the net priority return amounts
previously accrued under the guarantee arrangement.

Other Debt

Other debt, with interest at 6.0% to 11.3%, consists of purchase money
indebtedness and capital leases incurred in connection with the acquisition of,
and are collateralized by, certain equipment.

Maturities of Debt

Maturities of debt, for the five years after December 31, 1992, are as
follows (dollars in thousands):

Management intends to fund its requirements for maturities of debt under new
credit arrangements and internally generated funds. Changing conditions in the
financial markets may have some impact on how Olympus will refinance its debt
in the near future. Management does not expect these matters to adversely
affect Olympus' operations during the next several years.

5. 16.5% REDEEMABLE PREFERRED LIMITED PARTNER INTERESTS ("PLP INTERESTS") AND
SPECIAL LIMITED PARTNER INTERESTS:

The PLP Interests issued to ACC are nonvoting, senior to claims represented
by other partner interests, provide for a priority return of 16.5% per annum,
(payable quarterly) and are to be repaid by 2004. In the event that any
priority return is not paid when due, such unpaid amounts will accrue
additional return at a rate of 18.5% per annum. The unpaid priority return
amounted to $30,960,000, $60,794,000 and $85,667,000 at December 31, 1991 and
1992 and September 30, 1993, respectively.

F-28
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

5. 16.5% REDEEMABLE PREFERRED LIMITED PARTNER INTERESTS ("PLP INTERESTS") AND
SPECIAL LIMITED PARTNER INTERESTS, CONTINUED:

The following summarizes the issuance of PLP Interests to ACC for the three
years ended December 31, 1992 (dollars in thousands):

<TABLE>
<S> <C>
Balance, December 31, 1989............................................ $171,056
Issuances during 1990 (of which $10,307 represents noncash considera-
tion, Note 2)........................................................ 66,445
--------
Balance, December 31, 1990............................................ 237,501
Issuances during 1991................................................. 32,100
--------
Balance, December 31, 1991 and 1992................................... $269,601
========
</TABLE>

Special limited partner interests were issued to ACC in connection with the
issuance of PLP Interests and general partner interests, without any
contribution of assets by ACC. These interests provide for special allocations
of Olympus' income (Note 6).

6. REDEEMABLE LIMITED PARTNER INTERESTS AND GENERAL PARTNERS' EQUITY
(DEFICIENCY):

The general partners and limited partners of Olympus will generally share in
future net income and losses of Olympus based upon their respective percentage
ownership of partnership voting units except for certain special allocation
provisions set forth in the Olympus partnership agreement. As specified in the
partnership agreement, after the holders of the PLP Interests have received a
return of their capital plus 16.5% per annum priority return, distributions by
Olympus will be made in the following order: (i) to partners holding voting
units (other than ACC) until each partner receives an 18% compounded return on
their investment; (ii) to ACC until it receives an 18% compounded return on its
investment in the voting units; (iii) to ACC as managing general partner, to
the special limited partners and to the partners holding voting units until
each partner holding voting units receives as 24% compounded return on their
investment; and (iv) to ACC as managing general partner, to the special limited
partners and to the partners holding voting units.

The $16,500,000 in redeemable limited partner units issued to unrelated
parties in connection with the 1990 cable television system acquisitions
represent voting partnership interests which are subject to certain put and
call rights. In the event that any such redemption or purchase of limited
partner units results in ACC owning more than 50% of the Partnership's voting
interests, ACC will be required under the Partnership Agreement to reduce its
voting interests so as to maintain its voting interests at or below 50%. ACC
may at its option convert voting partner units to PLP Interests or senior debt
in order to maintain its voting interest at or below 50%.

After giving notice to Olympus in July 1992, the holder of the $6,500,000 in
limited partner interests exercised its right to require Olympus to redeem its
units on or before January 30, 1993. On January 3, 1993, Olympus redeemed the
holder's interest for $9,794,706. Concurrently, ACC converted 6.5 general
partner units to PLP Interests, thereby maintaining its 50% partnership voting
interests.

The holders of $10,000,000 of redeemable limited partner units can, at
various dates from January 1993 through January 1996, require Olympus to redeem
all of its units at the fair market value of the units on the exercise date. In
the event that Olympus does not make the required purchase or if such purchase
would cause Olympus, ACC or any affiliate of ACC to be in default of the
provisions of their respective loan agreements, then Olympus may sell the
assets and liquidate the partnership. At various dates beginning January 1994
through January 1996, ACC may purchase the $10,000,000 in limited partner units
at their fair market value at the exercise date.

F-29
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

6. REDEEMABLE LIMITED PARTNER INTERESTS AND GENERAL PARTNERS' EQUITY
(DEFICIENCY), CONTINUED:

For financial reporting purposes, the $9,900,000 redemption price on the
$6,500,000 in limited partner units is being accreted using the interest
method. Such accretion is charged proportionately to the remaining limited and
general partners' capital accounts. The carrying value of the $10,000,000
limited partner units are being adjusted as the fair market value of the units
change. The difference between the carrying value and the fair market value is
being accreted ratably through January 1993 as a charge to the general
partners' capital account.

The following summarizes activity related to the redeemable limited partners
through September 30, 1993 (dollars in thousands):

<TABLE>
<S> <C>
Issued in January 1990 in connection with acquisitions, Note 1........ $ 16,500
Net loss allocated to redeemable limited partners..................... (16,500)
Accretion requirements to redeemable limited partners................. 10,494
--------
Balance, December 31, 1990............................................ 10,494
Net loss allocated to redeemable limited partners..................... (10,494)
Accretion requirements to redeemable limited partners................. 14,900
--------
Balance, December 31, 1991............................................ 14,900
Net loss allocated to redeemable limited partners..................... (8,309)
Accretion requirements to redeemable limited partners................. 12,924
--------
Balance, December 31, 1992............................................ 19,515
Redemption of limited partnership interests on January 3, 1993........ (9,795)
Net loss allocated to redeemable limited partners (unaudited)......... (9,720)
Accretion requirements to redeemable limited partners (unaudited)..... 10,000
--------
Balance, September 30, 1993 (unaudited)............................... $ 10,000
========
</TABLE>

7. COMMITMENTS AND CONTINGENCIES:

Olympus rents office space, tower sites, and space on utility poles under
leases with terms which are generally less than one year or under agreements
that are generally cancelable on short notice. Total rental expense under all
operating leases aggregated $1,280,000, $1,104,000, and $1,008,000 for 1990,
1991 and 1992, respectively.

In connection with certain obligations under existing franchise agreements,
Olympus obtains surety bonds guaranteeing performance to municipalities and
public utilities. Payment is required only in the event of nonperformance.
Olympus has fulfilled all of its obligations such that no payments under surety
bonds have been required.

8. EMPLOYEE BENEFIT PLANS:

Olympus participates in an ACC savings plan (401(k)) which provides that
eligible full-time employees may contribute from 2% to 20% of their pre-tax
compensation. Olympus matches contributions not exceeding 1.5% of each
participant's pre-tax compensation. During 1990, 1991 and 1992, no significant
matching contributions were made by Olympus.

F-30
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

8. EMPLOYEE BENEFIT PLANS, CONTINUED:

Financial Accounting Standards Board Statement No. 106 (SFAS 106),
"Employer's Accounting for Postretirement Benefits Other Than Pensions,"
requires the accrual of future payments under these benefit plans (such as
health care) during the periods the employee provides the service to earn them,
and is effective for years beginning after December 15, 1992. Olympus currently
provides no such postretirement benefits, therefore, the new standard will not
have an effect on its financial position and results of operations.

9. TAXES ON INCOME:

Several subsidiaries of Olympus are corporations that file separate federal
and state income tax returns. At December 31, 1992, these subsidiaries had net
operating loss carryforwards for financial reporting and federal income tax
purposes of approximately $70,400,000 and $124,700,000, respectively, expiring
through 2007.

Olympus adopted Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," effective January 1, 1993. This Statement
supercedes Accounting Principles Board Opinion No. 11, "Accounting for Income
Taxes," which Olympus had followed previously and under which Olympus recorded
no deferred tax liability. The cumulative effect of adopting SFAS No. 109 at
January 1, 1993 was to increase the net loss by $59,500,000 for the nine months
ended September 30, 1993.

Deferred income taxes reflect the net tax effects of: (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and
(b) operating loss and tax credit carryforwards. The tax effects of significant
items comprising ACC's net deferred tax liability as of January 1, 1993 are as
follows (dollars in thousands):

<TABLE>
<S> <C>
Deferred tax liabilities:
Differences between book and tax basis of property.................... $106,630
--------
Deferred tax assets:
Operating loss carryforwards.......................................... 49,312
Valuation allowance................................................... (2,182)
--------
Subtotal.......................................................... 47,130
--------
Net deferred tax liability............................................ $ 59,500
--------
</TABLE>

As a result of applying SFAS No. 109, $47,130,000 of previously unrecorded
deferred tax benefits from operating loss carryforwards incurred by Olympus
were recognized at January 1, 1993 as part of the cumulative effect of adopting
the Statement. Under prior accounting, a part of these benefits would have been
recognized as a reduction of income tax expense from continuing operations in
the nine months ended September 30, 1993.

10. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

Included in Olympus' financial instrument portfolio are cash, notes payable,
interest rate swaps, and redeemable limited partner interests (including
redeemable preferred limited partner interests and the accrued priority return
thereon). The carrying values of the cash and notes payable approximate their
fair values at December 31, 1992. The fair value of the interest rate swaps
exceeded their carrying cost by approximately $10,500,000 at December 31, 1992.
The fair values of the debt and interest rate swaps were based upon quoted
market prices of similar instruments or on rates available to Olympus for
instruments of the same remaining maturities.

F-31
<PAGE>

OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS TO THE NINE-MONTH PERIODS ENDING SEPTEMBER 30, 1992 AND 1993 IS
UNAUDITED)

10. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED:

The aggregate of the redeemable limited partner and the redeemable preferred
limited partner interests (collectively "The Aggregate Redeemable Partner
Interests") had carrying values totalling $351,000,000 at December 31, 1992.
The Aggregate Redeemable Partner Interests had an estimated fair value ranging
from $209,000,000 to $264,000,000 at December 31, 1992. The fair value of the
Aggregate Redeemable Partner Interests was based upon an investment bank market
research report, computed using multiples of estimated cash flows. Considerable
judgment is necessary to develop the estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of the amounts that a
holder could realize in a current market exchange nor are they representative.
The use of different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value amounts.

11. TRANSACTIONS WITH RELATED PARTIES:

Olympus has an agreement with a subsidiary of ACC (Managing Affiliate) which
provides for payment of management fees by Olympus equal to 5% of Olympus'
gross revenues. The amount and payment of these fees is subject to the
restrictions contained in the credit agreements. During 1990, Olympus
reimbursed ACC $5,600,000 for costs incurred in organizing, financing, and
negotiating acquisitions for Olympus. Olympus also reimburses ACC for direct
operating costs, net of allocated programming credits, which amounted to

$750,000, $525,000 and $431,000 for 1990, 1991 and 1992, respectively.
Additionally, during 1990 ACC charged Olympus an acquisition fee of $3,100,000
which was contributed back to Olympus in exchange for an equivalent amount of
PLP Interests. This $3,100,000 acquisition fee was recorded by Olympus as a
return of capital. In 1992, Olympus assigned to Adelphia $750,000 of insurance
proceeds for assistance provided with respect to the hurricane and the
resulting insurance claims (Note 3).

At December 31, 1991, Olympus held a 16.5% term note from an affiliated
partnership of certain executive officers of ACC in the amount of $10,157,000.
This note was repaid on March 27, 1992. Interest income from this affiliated
partnership on the term note and other receivables amounted to $1,736,000,
$2,271,000 and $597,000 for 1990, 1991, and 1992 respectively.

Olympus has periodically received funds from and advanced funds to ACC and
other affiliates. Olympus was charged $441,000, $2,798,200 and $4,497,000 of
interest on such net payables for 1990, 1991 and 1992, respectively.

Net settlement amounts under interest rate swap agreements with ACC are
recorded as adjustments to interest expense during the period incurred. The
effect of the interest rate swaps was to increase interest expense by
$1,434,000 in 1992.

F-32
<PAGE>

NO DEALER, SALESMAN OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REP-
RESENTATIONS OTHER THAN THOSE CON-
TAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. NEITHER THE DELIV-
ERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY CIR-
CUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF ADELPHIA SINCE THE
DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR SOLICI-
TATION BY ANYONE IN ANY JURISDIC-
TION IN WHICH SUCH OFFER OR SOLICI-
TATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SO-
LICITATION.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 3
The Company................................................................ 7
Risk Factors............................................................... 8
Price Range of the Company's Common Equity and Dividend Policy............. 13
Capitalization............................................................. 14
Selected Consolidated Financial Data....................................... 15
Management's Discussion and Analysis....................................... 17
Business................................................................... 26
Legislation and Regulation................................................. 40
Management................................................................. 50
Executive Compensation..................................................... 53
Certain Transactions....................................................... 54
Principal Stockholders..................................................... 59
Description of Capital Stock............................................... 61
Selling Stockholder........................................................ 62
Plan of Distribution....................................................... 63
Experts.................................................................... 63
Index to Financial Statements.............................................. F-1
</TABLE>
155,100 SHARES

ADELPHIA
COMMUNICATIONS
CORPORATION

CLASS A COMMON STOCK
($.01 PAR VALUE)

LOGO
ADELPHIA
CABLE COMMUNICATIONS

PROSPECTUS

DATED JANUARY , 1994
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Previously provided.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Previously provided.

ITEM 16. EXHIBITS

(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:

<TABLE>
<CAPTION>
EXHIBIT NO. REFERENCE
----------- ---------
<C> <S> <C>
1.01 Form of Underwriting Agreement relating Incorporated herein by reference is
to the Class A Common Stock between the Exhibit 10.35 to Registrant's Annual
Company and the Underwriters named Report on Form 10-K for the fiscal year
therein ended March 31, 1992.
4.01 Indenture, dated as of August 15, 1986, Incorporated herein by reference is
with respect to the Registrant's Exhibit 4.01 to Registration Statement
$100,000,000 13% Senior Subordinated No. 33-46551 on Form S-1.
Notes Due 1996
4.02 Indenture, dated as of May 7, 1992, Incorporated herein by reference is
with respect to the Registrant's 12 Exhibit 4.03 to Registrant's Annual
1/2% Senior Notes Due 2002 Report on Form 10-K for the fiscal year
ended March 31, 1992.
4.03 Indenture, dated as of September 2, Incorporated herein by reference is
1992, Exhibit 4.03 to Registration Statement
with respect to the Registrant's 11 No. 33-52630 on Form S-1.
7/8% Senior Debentures Due 2004
4.04 Amended and Restated Indenture, dated Incorporated herein by reference is
as of May 11, 1993, with respect to Exhibit 4.01 to Registrant's Annual
Registrant's 9 7/8% Senior Debentures Report on Form 10-K for the fiscal year
Due 2005 ended March 31, 1993.
4.05 Indenture, dated as of July 28, 1993, Incorporated herein by reference is
with respect to the Registrant's 10 Exhibit 4.01 to Registrant's Quarterly
1/4% Senior Notes Due 2000, Series A Report on Form 10-Q for the Quarter
and B ended June 30, 1993.
23.01 Consent of Deloitte & Touche Filed herewith.
24.01 Power of Attorney (appearing on the Previously filed.
Signature Page)
</TABLE>

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-1
<PAGE>

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
Registration Statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed part of the Registration
Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at such time shall be deemed to be
the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to the extent applicable
hereunder:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registrant statement:

(i) To include any prospectus required by section 10(a)(3) of the Act;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.

(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

II-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Amendment on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport,
Commonwealth of Pennsylvania, on the 18th day of January, 1994.

ADELPHIA COMMUNICATIONS CORPORATION

/s/ Timothy J. Rigas
By:
----------------------------------
Timothy J. Rigas Senior Vice
President

Pursuant to the requirements of the Securities Act, this Amendment to the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURES TITLE DATE

* Chairman, President and
- ------------------------------- Chief Executive Officer
JOHN J. RIGAS

* Senior Vice President
- ------------------------------- and Director
MICHAEL J. RIGAS

/s/ Timothy J. Rigas Senior Vice President, January 18,
- ------------------------------- Chief Financial 1994
TIMOTHY J. RIGAS Officer, Chief
Accounting Officer,
Treasurer and Director

* Vice President and
- ------------------------------- Director
JAMES P. RIGAS

* Vice President,
- ------------------------------- Secretary and Director

DANIEL R. MILLIARD
* Director
- -------------------------------

PERRY S. PATTERSON
* Director
- -------------------------------

PETE J. METROS
*By: /s/ Timothy J. Rigas January 18,
------------------------------- 1994
TIMOTHY J. RIGAS
ATTORNEY-IN-FACT

II-3
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. REFERENCE
----------- ---------
<C> <S> <C>
1.01 Form of Underwriting Agreement relating Incorporated herein by reference is
to the Class A Common Stock between the Exhibit 10.35 to Registrant's Form 10-K
Company and the Underwriters named for the fiscal year ended March 31,
therein. 1992.
4.01 Indenture, dated as of August 15, 1986, Incorporated herein by reference is
with respect to the Registrant's Exhibit 4.01 to Registration Statement
$100,000,000 13% Senior Subordinated No. 33-46551 on Form S-1.
Notes Due 1996
4.02 Indenture, dated as of May 7, 1992, Incorporated herein by reference is
with respect to the Registrant's 12 Exhibit 4.03 to Registrant's Annual
1/2% Senior Notes Due 2002 Report on Form 10-K for the fiscal year
ended March 31, 1992.
4.03 Indenture, dated as of September 2, Incorporated herein by reference is
1992, Exhibit 4.03 to Registration Statement
with respect to the Registrant's 11 No. 33-52630 on Form S-1.
7/8% Senior Debentures Due 2004
4.04 Amended and Restated Indenture, dated Incorporated herein by reference is
as of May 11, 1993, with respect to Exhibit 4.01 to Registrant's Annual
Registrant's 9 7/8% Senior Debentures Report on Form 10-K for the fiscal year
Due 2005 ended March 31, 1993.
4.05 Indenture, dated as of July 28, 1993, Incorporated herein by reference is
with respect to the Registrant's 10 Exhibit 4.01 to Registrant's Quarterly
1/4% Senior Notes Due 2000, Series A Report on Form 10-Q for the Quarter
and B ended June 30, 1993.
23.01 Consent of Deloitte & Touche Filed herewith.
24.01 Power of Attorney (appearing on the Previously filed.
Signature Page)
</TABLE>

<PAGE>

EXHIBIT 23.01

LETTERHEAD OF DELOITTE & TOUCHE

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Post Effective Amendment
No. 1 to Registration Statement No. 33-46550 of Adelphia Communications
Corporation on Form S-3 of our reports dated June 25, 1993 and March 17, 1993
for Adelphia Communications Corporation and subsidiaries and Olympus
Communications, L.P. and subsidiaries, respectively, included in the Annual
Report on Form 10-K of Adelphia Communications Corporation for the year ended
March 31, 1993, and to the use of our reports dated June 25, 1993 and March 17,
1993, appearing in the Prospectus, which is part of this Registration
Statement. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

/s/ Deloitte & Touche

January 14, 1994