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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 1995
REGISTRATION NO. 33-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=========================================
FORM S-3
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 (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
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
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
58TH FLOOR, 600 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8826
____________________
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.
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Subject to Completion
July 19, 1995
[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.]
PROSPECTUS
1,856,405 Shares
ADELPHIA COMMUNICATIONS CORPORATION
Class A Common Stock
($.01 par value)
This Prospectus relates to 1,856,405 shares of Class A Common Stock ("Shares")
of Adelphia Communications Corporation ("Adelphia"), which may be sold by or for
the account of the Selling Stockholders named herein. See "Selling
Stockholders." The Shares were acquired by the respective Selling Stockholders
from Adelphia in privately negotiated acquisition or investment transactions.
The Shares may be sold from time to time by the Selling Stockholders 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 July 18, 1995, the closing sale price of the Class A Common Stock
was $10.00 per share.
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.
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 ______________, 1995.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
Adelphia is subject to the information 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
Commission. Such reports, proxy statements and other information may be
inspected and copied at the Public Reference Section of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at 500 West Madison Street, Chicago, Illinois 60661-2511, and
Seven World Trade Center, Suite 1300, 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 of 1933 as amended (the "Securities Act") with respect to the
securities offered by this Prospectus. As permitted by the rules and
regulations of the Commission, the Prospectus does not contain all of the
information set forth in the Registration Statement and in 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, 1995 (the "Form
10-K"); (b) Adelphia's Proxy Statement dated August 22, 1994 (the "1994 Proxy
Statement"); and (c) 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
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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.
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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 March 31, 1995, cable television systems
owned or managed by the Company (the "Systems") served 1,579,437 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 owned cable systems (the "Company Systems") are located
in ten 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 March 31, 1995, the Company Systems passed
1,340,808 homes and served 975,066 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 Communication, L.P. ("Olympus"). Olympus is a joint venture which owns
cable systems (the "Olympus Systems") primarily located in southern 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. As of March 31, 1995, the Olympus Systems passed 512,052 homes and
served 306,317 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 March 31, 1995, cable
systems owned by the Managed Partnerships (the "Managed Systems") passed 415,641
homes and served 298,054 basic subscribers.
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 13% 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.
The Offering
Shares Offered by the Selling Stockholders . . . . . . . . . 1,856,405 shares,
Class A Common
Shares outstanding before and after the offering . . . . . . 15,364,009 shares,
Class A Common
10,944,476 shares,
Class B Common
NASDAQ National Market System Symbol . . . . . . . . . . . . ADLAC
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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 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. The FCC has adopted rate regulations that
establish, on a system-by-system basis, maximum allowable rates for (i) basic
and cable programming services (other than programming offered on a per-channel
or per-program basis), based upon a benchmark methodology, and (ii) associated
equipment and installation services based upon cost plus a reasonable profit.
Under the FCC rules, franchising authorities are authorized to regulate rates
for basic services and associated equipment and installation services, and the
FCC will regulate rates for regulated cable programming services in response to
complaints filed with the agency. The original rate regulations became
effective on September 1, 1993. Amendments to the rate regulations became
effective May 15, 1994. Further amendments were adopted on November 10, 1994.
The FCC ordered an interim rate freeze effective April 5, 1993 which was
extended through May 15, 1994.
The original rate regulations required 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. The amended
regulations generally require a reduction of up to 17 percent from the rates for
regulated services in force as of September 30, 1992, adjusted forward for
inflation and certain other factors. 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. The FCC has adopted interim rules 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 retroactively from the date of a local franchising
authority's decision 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 in certain costs
such as taxes, franchise fees, costs associated with specific franchise
requirements and increased programming costs. Cost-based adjustments to these
capped rates can also be made in the event a cable operator adds or deletes
channels. On November 10, 1994, the FCC adopted an alternative method for
adjusting the rates charged for a cable programming services tier when new
services are added. This will allow cable operators to increase rates by as
much as $1.50 over a two year period to reflect the addition of up to six new
channels of service on cable programming service tiers. In addition, a new
programming tier can be created, the rate for which would not be regulated as
long as certain conditions are met, such as not moving services from existing
tiers to the new one. 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.
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The FCC has adopted regulations implementing virtually all of the
requirements of the 1992 Cable Act. The U.S. Court of Appeals for the District
of Columbia Circuit recently upheld all aspects of the FCC's rate regulations
except for certain minor matters. As noted above, amendments to the rate
regulations were recently announced and the FCC is also likely to continue to
modify, clarify or refine the rate regulations. The Company cannot predict the
effect or outcome of future rulemaking proceedings or changes to the rate
regulations. Further, because the FCC has only issued its interim rules and has
not adopted final cost-of-service rules, the Company has not determined to what
extent it will be able to utilize cost-of-service showings to justify rates.
Effective as of September 1, 1993, in accordance with the 1992 Cable Act,
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 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 have also been 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.
On November 10, 1994 the FCC ruled that, prospectively, any a la carte
package will be treated as a regulated tier, except for packages involving
premium services. The Company is currently unable to predict the effect that
the amended regulations, future FCC treatment of "a la carte" packages or other
future FCC rulemaking proceedings 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 negative financial impact 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.
A letter of inquiry, one of at least 63 sent by the FCC to numerous cable
operators, was received by an Olympus System regarding the implementation of
this new method of offering services. Olympus responded in writing to the FCC's
inquiry. On November 18, 1994, the Cable Services Bureau of the FCC issued a
decision holding that the "CableSelect" program was an evasion of the rate
regulations and ordered this package to be treated as a regulated tier. This
decision, and all other letter of inquiry decisions, were principally decided on
the number of programming services moved from regulated tiers to a la carte
packages. Adelphia has appealed this decision to the full Commission. The
Company cannot predict the outcome or effect of this proceeding.
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
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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 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 FCC approved the
application on July 18, 1994. The Company has appealed this decision to the
U.S. Court of Appeals for the District of Columbia. This case is presently
pending.
A number of telephone companies have filed suit seeking to void as
unconstitutional the provisions in the 1984 Cable Act that prohibit telephone
companies from owning cable television systems in their telephone service areas.
The U.S. Courts of Appeal for the Fourth and Ninth Circuits have struck down the
cross-ownership ban on first amendment grounds. Several federal district courts
have also struck down the cross-ownership ban on the same grounds. In addition,
legislation which would alter or eliminate the cross-ownership ban is under
active consideration in Congress.
Direct broadcast satellite ("DBS") service became available to consumers
during 1994. A single DBS satellite can provide more than 100 channels of
programming. DBS service can be received virtually anywhere in the United
States through the installation of a small outdoor antenna. DBS service is
being heavily marketed on a nation-wide basis. The extent to which DBS will be
competitive with cable systems will depend on the continued availability of
reception equipment and programming at reasonable prices to the consumer.
The Company cannot predict the ultimate outcome of the video dialtone
proceeding or the cross-ownership ban litigation. However, the Company believes
that the provision of video programming by telephone companies in competition
with the Company's existing operations could have an adverse effect on the
Company's financial condition and results of operations. At this time, the
impact of any such effect is not known or estimable.
See generally "Business-Competition," "Legislation and Regulation" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations ("Management's Discussion and Analysis")" in the Form 10-K.
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 March 31,
1995, the Company's total debt aggregated approximately $2,021,610,000 which
included approximately $1,086,350,000 of subsidiary debt and approximately
$935,260,000 of parent debt. The Company's total debt has varying maturities to
2005, including as of March 31, 1995, an aggregate of approximately $983,162,000
maturing on or prior to March 31, 2000, of which $114,921,000 and $216,099,000
mature in the years ended March 31, 1996 and 1997, respectively. 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 in the Form 10-K.
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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 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" in the Form 10-K.
Net Losses and Stockholders' Deficiency
The total stockholders' deficiency at March 31, 1995 was $1,011,575,000.
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 $176,795,000, $187,860,000 and $106,284,000 respectively, for the
years ended March 31, 1993, 1994 and 1995. The increases in net loss for the
years ended March 31, 1993 and 1994, respectively, 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 years ended March 31, 1993
and 1994, respectively. The Company expects to incur significant losses for the
next several years. See "Management's Discussion and Analysis" in the Form 10-
K.
Voting Control and Disparate Voting Rights
As of July 1, 1995, the Rigas Family beneficially owned 10,846,544 shares,
or 99.1%, of Adelphia's Class B Common Stock and 6,822,804 shares, or 44.4%, of
Adelphia's Class A Common Stock. On a combined basis, these shares represented
67.1% of the total number of shares of both classes of Common Stock and 92.4% 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, 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 "Principal
Stockholders" in the 1994 Proxy Statement.
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
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fee. Subject to the restrictions contained in the Business Opportunity
Agreement (as described in "Certain Transactions" in the 1994 Proxy Statement)
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 Adelphia's 9 1/2% Senior PIK Notes, 10
1/4% Senior Notes, 9 7/8% Senior Debentures, 11 7/8% Senior Debentures and 12
1/2% Senior Notes were issued contain covenants that place certain restrictions
on transactions between the Company and its affiliates. See "Management" and
"Certain Transactions" in the 1994 Proxy Statement.
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 March 31,
1995, the total amount of such long-term debt of subsidiaries was
$1,086,350,000. See Note 3 to the Adelphia Communications Corporation
Consolidated Financial Statements and "Management's Discussion and Analysis" in
the Form 10-K.
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 9 1/2% Senior PIK Notes, 10 1/4%
Senior Notes, 9 7/8% Senior Debentures, 11 7/8% Senior Debentures and 12 1/2%
Senior Notes contain covenants which limit Adelphia's ability to pay such
dividends. See "Market for Registrant's Common Equity and Related Stockholder
Matters" and Note 3 to the Adelphia Communications Corporation Consolidated
Financial Statements in the Form 10-K.
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. Shares of Class A
Common Stock owned by the Rigas Family or entities controlled by members of the
Rigas Family may from time to time, be pledged as security for margin loans.
Pursuant to such pledge and loan arrangements, the applicable pledgee, under
certain conditions, will have 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 or make
acquisitions through the sale of its equity securities.
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SELLING STOCKHOLDERS
The Selling Stockholders and the number of Shares to be offered by them
hereby, or for their account or by Selling Affiliates as described herein, and
the total number of shares of Class A Common Stock beneficially owned by the
Selling Stockholders, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Benjamin J. Terry Revocable Trust 299,316
Cornelia M. Terry Revocable Trust 99,771
Telesat Cablevision, Inc. 1,000,000
WB Cable Associates, Ltd. 457,318
---------
TOTAL 1,856,405
</TABLE>
The Selling Stockholders will not own any shares of Class A Common Stock
after the sale of the Shares.
Cornelia M. Terry Revocable Trust and Benjamin J. Terry Revocable Trust
(the "Terry Trusts") acquired the Shares referenced above pursuant to an
Agreement and Plan of Merger by and among Oxford Cable Television, Inc.
("Oxford"), Adelphia, Adelphia Acquisition Corporation and the Terry Trusts
dated as of July 8, 1994, and such shares were issued in a private placement as
partial consideration for the outstanding stock of Oxford, which owns and
operates cable television systems in North Carolina. Telesat Cablevision, Inc.
("Telesat") acquired the Shares referenced above in a private placement pursuant
to a Subscription Agreement with Adelphia dated as of February 28, 1995. As a
part of this transaction, members of the Rigas family agreed to vote their
shares of Adelphia stock to elect one nominee of Telesat to Adelphia's Board of
Directors, subject to certain conditions. Telesat indirectly holds a 50% voting
interest and general and limited partnership interests in Olympus. WB Cable
Associates, Ltd. ("WB Cable") acquired the Shares referenced above pursuant to
an Asset Purchase Agreement by and between Adelphia and WB Cable dated as of
October 28, 1994, and such Shares were issued in a private placement as partial
consideration for the acquisition by Olympus of the assets of WB Cable, which
consisted primarily of cable television systems in Florida.
The registration rights agreement by and among the Terry Trusts and
Adelphia, dated January 10, 1995, the registration rights agreement by and
between Telesat and Adelphia, dated February 28, 1995 and the registration
rights agreement by and between WB Cable and Adelphia, dated April 3, 1995 each
provide that the right to sell pursuant to this Prospectus may be transferred to
certain affiliates of the Terry Trusts, WB Cable and Telesat, respectively
(together, the "Selling Affiliates"), as described below. The Terry Trusts may
transfer such right only to each other or to a member of the immediate family of
Benjamin J. Terry or Cornelia M. Terry. Telesat may transfer such right only to
a directly or indirectly wholly-owned subsidiary of Telesat or to an entity that
owns, directly or indirectly, 100% of the outstanding capital stock of Telesat.
WB Cable may transfer such right only in a partnership distribution to a limited
or general partner of WB Cable that was such a partner on April 3, 1995 (or such
a party's successor, assignor or legal representative). Such Selling Affiliates
may be Selling Stockholders under this Prospectus with respect to the Shares
being offered hereby.
Adelphia will not receive any proceeds from the sale of the Shares.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholders in reliance on this Prospectus. This Prospectus only constitutes
an offer by the Selling Stockholder who has delivered 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. In effecting
such sales, underwriters, brokers or dealers engaged by the Selling
10
<PAGE>
Stockholders may arrange for other underwriters, brokers or dealers to
participate. Underwriters, brokers or dealers may purchase Shares as principals
for their own accounts and resell such Shares pursuant to this Prospectus.
Underwriters, brokers and dealers may receive commissions or discounts from such
Selling Stockholders in amounts to be negotiated immediately prior to the sale.
The Selling Stockholders, any such underwriters, brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales, and any profits
realized or commissions received may be deemed underwriting compensation.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities which may be incurred in connection with this offering,
including certain liabilities under the Securities Act.
A supplement to this Prospectus ("Prospectus Supplement") will set forth,
with respect to the Selling Stockholders, any necessary further information
regarding them or the distribution of the shares offered hereby. Such
Prospectus Supplement may be appropriately modified or supplemented.
EXPERTS
The consolidated financial statements and related financial statement
schedules of the Company and its subsidiaries as of March 31, 1994 and 1995, and
for each of the three years in the period ended March 31, 1995, and the
consolidated financial statements of Olympus Communications, L.P. and its
subsidiaries as of December 31, 1993 and 1994, and for each of the three years
in the period ended December 31, 1994 that are incorporated by reference in this
Prospectus from the Company's Annual Report on Form 10-K for the year ended
March 31, 1995 have been audited by Deloitte & Touche LLP, independent auditors,
and have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesman or any other person has 1,856,405 Shares
been authorized to give any information or to
make any representations other than those
contained in this Prospectus in connection 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 delivery of this
Prospectus nor any sale made hereunder shall
under any circumstances 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
solicitation by anyone in any jurisdiction in
which such offer or solicitation 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 solicitation.
------------------------
ADELPHIA
COMMUNICATIONS
CORPORATION
Class A Common Stock
($.01 par value)
Prospectus
Dated _______________, 1995
</TABLE>
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate of the expenses which will be incurred by
the Company in connection with the issuance and distribution of the securities
being registered.
<TABLE>
<CAPTION>
PAYABLE BY
THE COMPANY
<S> <C>
SEC filing fee................ $ 6,162
Legal fees and expenses....... 20,000
Accounting fees and expenses.. 3,000
Miscellaneous expenses........ 5,838
-------
Total......................... $35,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides in general that
a corporation may indemnify its directors, officers, employees or agents against
expenditures (including judgments, fines, amounts paid in settlement and
attorneys' fees) made by them in connection with certain lawsuits to which they
may be made parties by reason of their being directors, officers, employees or
agents and shall so indemnify such persons against expenses (including
attorneys' fees) if they have been successful on the merits or otherwise. The
bylaws of Adelphia provide for indemnification of the officers and directors of
Adelphia to the full extent permissible under Delaware law.
Adelphia's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Adelphia
shall not be personally liable to Adelphia or its stockholders for monetary
damages for breach of fiduciary duty as a director for acts or omissions after
July 1, 1986, provided that directors shall nonetheless be liable for breaches
of the duty of loyalty, bad faith, intentional misconduct, knowing violations of
law, unlawful distributions to stockholders, or transactions from which a
director derived an improper personal benefit.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
13
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Reference
-------------------------------- ------------------------------
<C> <S> <C>
4.01 Indenture, dated as of May 7, Incorporated herein by
1992, with respect to the reference is Exhibit 4.03 to
Registrant's 12-1/2% Senior Registrant's Annual Report on
Notes Due 2002 form 10-K for the fiscal year
ended March 31, 1992.
4.02 Indenture, dated as of Incorporated herein by
September 2, 1992, with reference is Exhibit 4.03 to
respect to the Registrant's Registration Statement No.
11-7/8% Senior Debentures Due 33-52630 on form S-1.
2004
4.03 Amended and Restated Incorporated herein by
Indenture, dated as of May reference is Exhibit 4.01 to
11, 1993, with respect to Registrant's Annual Report on
Registrant's 9-7/8% Senior Form 10-K for the fiscal year
Debentures Due 2005 ended March 31, 1993.
4.04 Indenture, dated as of July Incorporated herein by
28, 1993, with respect to the reference is Exhibit 4.01 to
Registrant's 10-1/4% Senior Registrant's quarterly Report
Notes Due 2000, Series A and on Form 10-Q for the quarter
B ended June 30, 1993.
4.05 Indenture, dated as of Incorporated herein by
February 22, 1994, with reference is Exhibit 4.05 to
respect to the Registrant's 9 Registration Statement No.
1/2% Senior Pay-In-King Notes 33-52513 on Form S-4.
Due 2004, Series A and B.
4.06 First Supplemental Indenture, Incorporated herein by
dated as of May 4, 1994, with reference is Exhibit 4.01 to
respect to the Registrant's 9 Registrant's Current Report
1/2% Senior Pay-In-Kind Notes on Form 8-K, dated May 5,
Due 2004 1994
23.01 Consent of Deloitte & Touche Filed herewith.
LLP
24.01 Power of Attorney (appearing Filed herewith.
on the 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
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.
The undersigned Registrant hereby undertakes that:
14
<PAGE>
(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 Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities 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 Securities
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.
15
<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 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 July, 1995.
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ Timothy J. Rigas
---------------------------------------
Timothy J. Rigas, Senior Vice President
Known All Men By These Presents that each person whose signature appears
below constitutes and appoints John J. Rigas, Timothy J. Rigas and Daniel R.
Milliard, and each of them, such person's true and lawful attorneys-in-fact and
agents, with full power of substitution and revocation, for such person and in
such person's name, place and stead, in any and all amendments (including post-
effective amendments to this Registration Statement) and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Committee, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
- ------------------------ Chairman, President and
JOHN J. RIGAS Chief Executive Officer
/s/ Michael J. Rigas Senior Vice President July 18, 1995
- ------------------------ and Director
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Senior Vice President, July 18, 1995
- ------------------------ Chief Financial Officer,
TIMOTHY J. RIGAS Chief Accounting
Officer, Treasurer and
Director
/s/ James P. Rigas Vice President and July 18, 1995
- ------------------------ Director
JAMES P. RIGAS
/s/ Daniel R. Milliard Vice President, July 18, 1995
- ------------------------ Secretary and Director
DANIEL R. MILLIARD
/s/ Perry S. Patterson Director July 18, 1995
- ------------------------
PERRY S. PATTERSON
/s/ Pete J. Metros Director July 18, 1995
- ------------------------
PETE J. METROS
</TABLE>
16
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ------------------------------
<S> <C> <C>
4.01 Indenture, dated as of May 7, Incorporated herein by
1992, with respect to the reference is Exhibit 4.03 to
Registrant's 12-1/2% Senior Registrant's Annual Report on
Notes Due 2002 Form 10-K for the fiscal year
ended March 31, 1992.
4.02 Indenture, dated as of Incorporated herein by
September 2, 1992, with respect reference is Exhibit 4.03 to
to the Registrant's 11-7/8% Registration Statement No.
Senior Debentures Due 2004 33-52630 on Form S-1.
4.03 Amended and Restated Indenture, Incorporated herein by
dated as of May 11, 1993, with reference is Exhibit 4.01 to
respect to Registrant's 9-7/8% Registrant's Annual Report on
Senior Debentures Due 2005 Form 10-K for the fiscal year
ended March 31, 1993.
4.04 Indenture, dated as of July 28, Incorporated herein by
1993, with respect to the reference is Exhibit 4.01 to
Registrant's 10-1/4% Senior Registrant's Quarterly Report
Notes due 2000, Series A and B on Form 10-Q for the Quarter
ended June 30, 1993.
4.05 Indenture, dated as of February Incorporated herein by
22,1994, with respect to the reference in Exhibit 4.05 to
Registrant's 9 1/2% Senior Pay- Registration Statement No.
in-King Notes Due 2004, Series 33-52513 on Form S-4.
A and B
4.06 First Supplemental Indenture, Incorporated herein by
dated as of May 4, 1994, with reference is Exhibit 4.01 to
respect to the Registrant's 9- Registrant's Current Report
1/2% Senior Pay-In-Kind Notes on Form 8-K, dated May 5,
Due 2004. 1994
23.01 Consent of Deloitte & Touche Filed herewith.
LLP
24.01 Power of Attorney (appearing on Filed herewith.
the Signature
Page)
</TABLE>
17
<PAGE>
Exhibit 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Adelphia Communications Corporation on Form S-3 of our reports dated June 28,
1995 and April 13, 1995 (June 8, 1995 as to Notes 4 and 12) for Adelphia
Communications Corporation and subsidiaries and Olympus Communications, L.P. and
subsidiaries, respectively, (each of which expresses an unqualified opinion and
includes an explanatory paragraph relating to change in method of accounting for
income taxes) appearing in the Annual Report on Form 10-K of Adelphia
Communications Corporation for the year ended March 31, 1995, and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
July 19, 1995
