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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON December 29, 1998
REGISTRATION NO. 333-
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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)
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DELAWARE 4841 23-2417713
(State or other jurisdiction of (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NO.)
incorporation or organization) CLASSIFICATION CODE NUMBER)
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MAIN AT WATER STREET
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
MAIN AT WATER STREET
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
21ST FLOOR, 301 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8826
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
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 being 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]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
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Class A Common Stock, par value $.01 per share 3,100,000 shares $40.21875 $124,678,125 $34,661
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(1) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended. The
maximum price per share information is based on the average of the high and the
low sale prices of Adelphia Communications Corporation Class A Common Stock,
$.01 par value per share, reported on the Nasdaq National Market System on
December 21, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION
DECEMBER 29, 1998
3,100,000 SHARES
ADELPHIA COMMUNICATIONS CORPORATION
CLASS A COMMON STOCK
($.01 par value)
Certain stockholders of Adelphia Communications Corporation ("Adelphia") listed
below are offering and selling up to 3,100,000 shares (the "Shares") of
Adelphia's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock") under this Prospectus.
The Selling Stockholders obtained their Shares of Class A Common Stock as
consideration for their equity interests in certain businesses that were
purchased by us. We will not receive any of the proceeds from the sale of the
Shares.
The Shares may be sold from time to time by the Selling Stockholders in open
market or over-the-counter transactions, in private or negotiated transactions
or in a combination of those methods of sale, at fixed prices, at the market
price at the time of sale, at prices related to market prices or at varying or
negotiated prices. Any of the Shares covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus. The Selling Shareholders will pay the brokerage commissions
charged to sellers in connection with such sales. These methods are more fully
described under the heading "Plan of Distribution" on page 12. If a Selling
Stockholder offers the Shares in an underwritten transaction, that Selling
Stockholder will provide the purchaser with a supplemental prospectus describing
the underwriting arrangements. This Prospectus may be updated from time to time.
The Class A Common Stock is listed on the Nasdaq National Market. The Class A
Common Stock's ticker symbol is "ADLAC." On December 28, 1998, the closing sale
price on the Nasdaq National Market of a single share of the Class A Common
Stock was $47.50.
The rights of holders of the Class A Common Stock and Class B Common Stock, par
value $.01 per share (the "Class B Common Stock" and together with the Class A
Common Stock, the "Common Stock") differ with respect to certain aspects of
dividends, liquidations and voting. 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.
YOU SHOULD CAREFULLY REVIEW "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION
OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN
THE CLASS A COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION ("SEC") NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS PROHIBITED.
The date of this Prospectus is ____________ ___, 1999.
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TABLE OF CONTENTS
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ADELPHIA............................................... 1
RISK FACTORS........................................... 3
DILUTION............................................... 11
SELLING STOCKHOLDERS................................... 11
USE OF PROCEEDS........................................ 12
PLAN OF DISTRIBUTION................................... 12
WHERE YOU CAN FIND MORE INFORMATION.................... 13
EXPERTS................................................ 14
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ADELPHIA
Adelphia is a leader in the telecommunications industry with cable television
operations and competitive local exchange telephone operations. We are the
seventh largest cable television operator in the United States. As of September
30, 1998, we owned or managed cable television systems (the "Systems") that
passed 3,237,689 homes and served 2,298,516 basic subscribers. Through our
subsidiary Hyperion Telecommunications, Inc. ("Hyperion"), we own and operate
one of the largest facilities based competitive local exchange carriers (CLEC)
in the United States based on route miles and buildings connected. John J.
Rigas, the Chairman, President, Chief Executive Officer and founder of Adelphia,
has owned and operated cable television systems since 1952.
We own cable systems (the "Company Systems") in twelve states which 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. As of September 30,
1998, the Company Systems passed 2,124,473 homes and served 1,530,699 basic
subscribers.
We also provide, for a fee, management and consulting services to certain
partnerships and certain corporations engaged in the ownership and operation of
cable television systems (the "Managed Partnerships"). John J. Rigas and
certain members of his immediate family, including entities they own or control
(collectively, the "Rigas Family"), have substantial ownership interests in the
Managed Partnerships. As of September 30, 1998, cable systems owned by the
Managed Partnerships passed 284,716 homes and served 216,229 basic subscribers.
We also own a 50% voting interest and nonvoting Preferred Limited Partnership
interests in Olympus Communications, L.P. ("Olympus"). Olympus is a joint
venture limited partnership between the Company and subsidiaries of FPL Group,
Inc. Olympus operates a large cable system in Florida that, as of September 30,
1998, passed 828,500 homes and served 551,588 basic subscribers. Our investment
in Olympus is accounted for under the equity method of accounting.
Hyperion designs, constructs, operates and manages state-of-the-art, fiber
optic networks and facilities. As of September 30, 1998, Hyperion managed and
operated 22 networks (including two under construction), serving 46 cities. As
of September 30, 1998, these networks had 5,711 route miles, connecting 2,143
buildings. Hyperion currently offers switched services, including local dial
tone, in 20 of its markets. Hyperion is consolidated in Adelphia's financial
results and is currently an unrestricted subsidiary of Adelphia for purposes of
Adelphia's indentures. Hyperion's Class A Common Stock, par value $.01 per
share, is listed on the Nasdaq National Market under the symbol "HYPT."
Our operations consist of providing telecommunications services primarily
over our broadband networks. We did not have any material foreign operations or
foreign sales in the year ended March 31, 1998. Our executive offices are
located at Main at Water Street, Coudersport, Pennsylvania 16915, and our
telephone number is (814) 274-9830.
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RECENT DEVELOPMENTS
Verto Acquisition
On January __,1999, Verto Communications, Inc. ("Verto") was merged with and
into a wholly owned subsidiary of Adelphia pursuant to the terms of a merger
agreement (the "Verto Merger Agreement") between Adelphia, a wholly owned
subsidiary of Adelphia and Verto, dated December 21, 1998. As of December 21,
1998, Verto provided cable television services to approximately 56,000
subscribers in the greater Scranton, Pennsylvania area. In connection with the
Verto Merger Agreement, Adelphia issued _________ shares of its Class A Common
Stock to the former owners of Verto and assumed approximately $32 million of net
liabilities of Verto. The Shares being offered and sold pursuant to this
Prospectus were acquired pursuant to the Verto Merger Agreement by the former
owners of Verto.
For other recent developments regarding Adelphia, we refer you to Adelphia's
most recent Form 10-Q and future filings by us under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
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RISK FACTORS
Before you invest in Adelphia's Class A Common Stock, you should be aware
that there are various risks, including those described below. You should
consider carefully these risk factors together with all of the other information
included in this Prospectus before you decide to purchase shares of Adelphia's
Class A Common Stock.
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High Level of Adelphia has a substantial amount of debt. We borrowed this money to
Indebtedness purchase and to expand our cable systems and other operations and, to a
lesser extent, for investments and loans to our affiliates. At
We owe approximately September 30, 1998, our indebtedness totaled approximately
$3.0 billion. $3,029,580,000. This included approximately:
. $1,660,013,000 of parent holding company public debt
. $906,443,000 of debt owed by our subsidiaries to banks, other
financial institutions and other persons; and
. $463,124,000 of public debt owed by Hyperion.
Approximately 35% of Our debt comes due at various times up to the year 2008, including an
this debt must be aggregate of approximately $1,046,711,000 which, as of September 30,
paid by April 1, 2003 1998, we must pay by April 1, 2003. We have incurred long-term debt
and all of it must be directly from the public. Different groups of our subsidiaries borrow
paid by 2008. from banks, insurance companies and other private lenders. Adelphia
Parent Company debt is not guaranteed by our subsidiaries. (When we
use the term "Adelphia Parent Company" in this Prospectus, we are
referring only to the parent holding company entity, Adelphia
Communications Corporation, and not to its subsidiaries.) The
agreements for the loans made to our various groups of subsidiaries
differ in many respects including when they are due to be paid and the
covenants or promises made by the group such as the ability of the
group to borrow more money and when a default by that group on other
borrowings constitutes an event of default. Olympus also has a
substantial amount of debt.
Debt service consumes Our high level of indebtedness can have important adverse consequences
a substantial portion to us and to you. It requires that we spend a substantial portion of
of the cash we the cash we get from our business to repay the principal and interest
generate and could on these debts. Otherwise, we could use these funds for general
affect our ability to corporate purposes or for capital improvements. Our ability to obtain
invest in our new loans for working capital, capital expenditures, acquisitions or
business in the capital improvements may be limited by our current level of debt. In
future as well as to addition, having such a high level of debt could limit our ability to
react to changes in react to changes in our industry and to economic conditions generally.
our industry or At September 30, 1998, the Adelphia Parent Company had approximately
economic downturns. $148,148,000 and Hyperion had approximately $221,251,000 of redeemable
exchangeable preferred stock. For more information about our debt and
redeemable exchangeable preferred stock, you can read the portions of
Adelphia's most recent Annual Report on Form 10-K and Adelphia's most
recent Form 10-Q filed with the SEC which are labeled ''Management's
Discussion and Analysis of Financial Condition and Results of
Operations."
NEED FOR ADDITIONAL Our business requires substantial additional financing on a continuing
FINANCING basis for capital expenditures and other purposes including:
. constructing and upgrading our plant and networks (some of these
upgrades we must make to comply with the requirements of local cable
franchise authorities),
. offering new services,
. scheduled principal and interest payments, and
. refinancing existing debt.
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There can be no guarantee that we will be able to issue additional debt
or sell stock or other additional equity on satisfactory terms, or at
all, to meet our future financing needs. For more information on our
financing needs, you can read the portions in Adelphia's most recent
Annual Report on Form 10-K and Adelphia's most recent Form 10-Q filed
with the SEC labeled ''Management's Discussion and Analysis of
Financial Condition and Results of Operations.''
HOLDING COMPANY The Adelphia Parent Company directly owns no significant assets other
STRUCTURE AND POTENTIAL than stock, partnership interests, equity and other interests in our
IMPACT OF RESTRICTIVE subsidiaries and our investments in other companies.
COVENANTS IN SUBSIDIARY
DEBT AGREEMENTS The Adelphia Parent Company depends upon our subsidiaries and other
companies to provide cash for it to repay the interest and principal
The Adelphia Parent which it owes. However, the indentures for public debt and the credit
Company depends on agreements for bank and other financial institution loans of our
our subsidiaries and subsidiaries and other companies restrict their ability and the ability
other companies in of the companies they own to make payments to the Adelphia Parent
which we have Company.
investments to
provide cash for it. Typical loan agreement requirements which must be met by a subsidiary
or by a company in which we have invested in order for them to
distribute cash to the Adelphia Parent Company include:
Various restrictions . financial performance tests;
exist on funds being . maximum leverage ratios (i.e., debt to cash flow);
distributed to the . minimum interest coverage;
Adelphia Parent . current on principal and interest payments;
Company. . absence of an event of default; and
. absence of a default by us under our credit agreements.
The ability of a subsidiary or a company in which we have invested to
comply with debt restrictions may be affected by events that are beyond
our control. The breach of any of these covenants could result in a
default which could result in all loans and other amounts owed to its
lenders, to be due and payable. Our subsidiaries and companies in
which we have invested might not be able to repay in full the
accelerated loans.
Our subsidiaries and other companies in which we have invested may
agree in the future to additional or new restrictions.
Reductions in the amounts of payment, or prohibitions on the payment,
of funds by our subsidiaries and other companies could impair our
ability to pay the debts and to implement the business plans of the
Adelphia Parent Company. In addition, these indenture and credit
agreement covenants could restrict the ability of our subsidiaries and
other companies to respond to changing business and economic conditions
and to get new loans.
Reductions in funding For more information about our subsidiaries' and other companies' debt
could adversely and restrictive covenants, you can read the portions of Adelphia's most
affect the Adelphia recent Annual Report on Form 10-K and Adelphia's most recent Form 10-Q
Parent Company and filed with the SEC which are labeled ''Management's Discussion and
our subsidiaries. Analysis of Financial Condition and Results of Operations.''
LARGE LOSSES AND The Total Convertible Preferred Stock, Common Stock and Other
NEGATIVE STOCKHOLDERS' Stockholders' Equity (Deficiency) at September 30, 1998 was a deficit
EQUITY of approximately $977,994,000. Our continuing net losses, which are
mainly due to our high levels of depreciation and amortization and
interest expense, have created this deficiency. Our recent net losses
applicable to our common stockholders were approximately as follows for
the periods specified:
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We have had large net . fiscal year ended March 31, 1996 - $119,894,000;
losses for many years . fiscal year ended March 31, 1997 - $130,642,000;
and expect this to . fiscal year ended March 31, 1998 - $192,729,000; and
continue. . six months ended September 30, 1998 - $91,354,000.
We expect to continue to incur large net losses for the next several
years. For more information about our losses, you can read the portions
of Adelphia's most recent Annual Report on Form 10-K and Adelphia's
most recent Form 10-Q filed with the SEC which are labeled
''Management's Discussion and Analysis of Financial Condition and
Results of Operations.''
Our earnings have been Our earnings could not pay for our combined fixed charges and preferred
insufficient to pay stock dividends during these years by the amounts set forth in the
for our fixed charges table below, although combined fixed changes and preferred stock
and preferred stock dividends included substantial non-cash charges for depreciation,
dividends. amortization and non-cash interest expense on some of our debts and the
non-cash expense of Hyperion's preferred stock dividends:
Earnings Non-Cash
Deficiency Charges
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. fiscal year ended March 31, 1997 $ 61,848,000 $165,426,000
. fiscal year ended March 31, 1998 $113,941,000 $195,153,000
. six months ended September 30, 1998 $ 74,222,000 $114,557,000
We have met our cash Historically, the cash we generate from our operating activities and
needs in the past borrowings have been sufficient to meet our requirements for debt
through new service, working capital, capital expenditures, and investments in and
borrowings and will advances to our affiliates, and we have depended on getting additional
have to borrow to borrowings to meet our liquidity requirements. We believe that our
meet our future cash business will continue to generate cash and that we will be able to
needs. However, we obtain new loans to meet our cash needs. However, the covenants in the
may not be able to indentures and credit agreements for our current debt limit our ability
borrow needed funds to borrow more money. Although in the past we have been able both to
in the future for a refinance our debt and to obtain new debt, there can be no guarantee
variety of reasons that we will be able to continue to do so in the future or that the
including the cost to us or the other terms which would affect us would be as
covenants in our favorable to us as our current loans and credit agreements. If we
current loan could not refinance our debt or obtain new loans, we would likely have
agreements and to consider various options such as the sale of equity or some of our
indentures. If we assets to meet the principal and interest payments we owe, negotiate
could not borrow, we with our lenders to restructure existing loans or explore other options
may have to sell available under applicable laws including those under reorganization or
assets, renegotiate bankruptcy laws. We can not guarantee that any options available to us
loans or explore would enable us to repay our debt in full. For more information about
other alternatives. our losses, negative stockholders equity, and borrowings, you can read
the portions of Adelphia's most recent Annual Report on Form 10-K and
Adelphia's most recent Form 10-Q filed with the SEC which are labeled
''Selected Consolidated Financial Data'' and ''Management's Discussion
and Analysis of Financial Condition and Results of Operations.''
COMPETITION Our cable television systems compete with other means of distributing
The cable television video to home televisions such as Direct Broadcast Satellite Systems
industry currently and Multichannel Multipoint Distribution Systems. Some of the regional
competes with direct Bell telephone operating companies (which in our business are commonly
broadcast satellite called ''RBOCs'') and other local telephone companies are in the
systems and other process of entering the video-to-home business and several have
distribution systems. expressed their intention to enter the video-to-home business. In
Potential competitors addition, some RBOCs and local telephone companies have facilities
to our cable which are capable of delivering cable television service. The
television business equipment which telephone companies use in providing local exchange
include the regional service may give them competitive advantages over us in distributing
Bell telephone video to home televisions. The RBOCs and other potential competitors
companies. have much greater resources than Adelphia and would constitute
formidable competition for our cable television business. We cannot
predict either the extent to which competition will materialize or, if
such competition materializes, the extent of its effect on our cable
television business.
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We also face competition from other communications and entertainment
Hyperion competes with media, including conventional off-air television broadcasting services,
local telephone newspapers, movie theaters, live sporting events and home video
carriers, including products. We cannot predict the extent to which competition may affect
Bell Atlantic and us.
NYNEX, for telephone In each of the markets served by Hyperion's networks, the competitive
services. local exchange carrier services offered by Hyperion compete principally
with the services offered by the incumbent local telephone exchange
carrier company serving that area. Local telephone companies have
long-standing relationships with their customers, have the potential to
subsidize competitive services from monopoly service revenues, and
benefit from favorable state and federal regulations. The merger of
Bell Atlantic and NYNEX created a company whose combined territory
covers a substantial portion of Hyperion's markets. Other combinations
are occurring in the industry, which may have a material adverse effect
on Hyperion and us.
Actions by regulators We expect that the federal Telecommunications Act of 1996 will result
could have in federal and state regulatory authorities adopting initiatives to
substantial impact on provide increased business opportunities to competitive local exchange
Hyperion's carriers such as Hyperion. However, we also think that local telephone
telecommunications companies will gain increased pricing flexibility from regulators as
services. competition increases. Hyperion's operating results and cash flow
could be materially and adversely affected by actions by regulators,
including permitting the incumbent local telephone companies in
Hyperion's markets to do the following:
. lower their rates substantially;
. engage in excessive volume and term discount pricing practices for
their customers; or
. charge excessive fees to Hyperion for interconnection to the
incumbent local telephone company's networks.
The regional Bell The RBOCs can now obtain regulatory approval to offer long distance
telephone companies services if they comply with the interconnection requirements of the
could get regulatory federal Telecommunications Act of 1996. RBOCs in Hyperion's operating
approval to offer territories have filed applications with the Federal Communications
long distance service Commission ("FCC") claiming that they have complied with the
in competition with interconnection requirements and are thus entitled to receive authority
Hyperion's to provide long distance services. Each of these requests has been
significant customers. denied by the FCC. However, an approval of such an RBOC request could
result in decreased market share for the major long distance carriers
which are among Hyperion's significant customers. Such a result could
have an adverse effect on Hyperion. In addition, if RBOCs are
permitted to provide long distance services, they will ultimately be in
a position to offer single source service for local and long distance
communications and subsidize the price of their long distance services
with charges on local service. RBOCs have also recently filed
petitions with the FCC requesting a waiver of certain obligations
imposed on incumbent local exchange carriers under the
Telecommunications Act of 1996. First RBOCs have sought, with some
degree of success, to provide high-speed data services free of the
obligations to unbundle and offer for resale such services. RBOCs are
also seeking to provide such services on a long distance basis without
complying with the interconnection requirements of the federal
Telecommunications Act of 1996. In addition, RBOCs have sought an FCC
determination that they need not compensate competitive local exchange
carriers for traffic terminated to Internet Service Providers who are
customers of competitive local exchange carriers. If the FCC grants
the RBOC petitions, this could have a material adverse effect on
Hyperion.
Potential competitors Potential competitors for Hyperion include other competitive local
to Hyperion's exchange carriers, incumbent local telephone companies which are not
telecommunications subject to RBOC restrictions on offering long distance service, AT&T,
services include the MCI WorldCom, Sprint and other long distance carriers, cable television
regional Bell companies, electric utilities, microwave carriers, wireless
telephone companies, telecommunications providers and private networks built by large end
AT&T, MCI WorldCom users. Both AT&T and MCI WorldCom have announced that they have begun
and Sprint, and to offer local telephone services in some areas of the country, and
electric utilities. AT&T recently announced a new wireless technology for providing local
telephone service. AT&T and Tele-Communications, Inc. also recently
announced that they will merge. Although Hyperion has good
relationships with the long
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distance carriers, they could build their own facilities, purchase other
carriers or their facilities, or resell the services of other carriers rather
than use Hyperion's services when entering the market for local exchange services.
Many of Hyperion's current and potential competitors, particularly
incumbent local telephone companies, have financial, personnel and
other resources substantially greater than those of Hyperion, as well
as other competitive advantages over Hyperion.
For more information about competition in our businesses, you can read
the portions of Adelphia's 1998 Annual Report on Form 10-K labeled
"Competition" under the heading ''Business" and labeled "Legislation
and Regulation.'' You should also read the subsection "Regulatory and
Competitive Matters'' under the heading ''Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
Adelphia's 1998 Annual Report on Form 10-K and Adelphia's most recent
Form 10-Q filed with the SEC.
EXTENSIVE REGULATION The cable television industry and the provision of local telephone
The cable television exchange services are subject to extensive regulation at the federal,
and telecommunications state and local levels, and many aspects of such regulation are
industries are heavily currently the subject of judicial proceedings and administrative or
regulated. legislative proposals. In particular, the FCC adopted regulations that
limit our ability to set and increase rates for our basic and cable
programming service packages and for the provision of cable
television-related equipment. The law permits certified local
franchising authorities to order refunds of rates paid in the previous
twelve-month period determined to be in excess of the permitted
reasonable rates. It is possible that rate reductions or refunds of
previously collected fees may be required in the future.
The cable television industry is subject to state and local regulations
and we must comply with rules of the local franchising authorities to
retain and renew our cable franchises, among other matters. There can
be no assurances that the franchising authorities will not impose new
and more restrictive requirements as a condition to franchise renewal.
The federal The federal Telecommunications Act of 1996, which became law on
Telecommunications February 8, 1996, substantially changed federal, state and local laws
Act of 1996 may have and regulations governing our cable television and telecommunications
a significant impact businesses. This law could materially affect the growth and operation
on the cable television of the cable television industry and the cable services we provide.
business and Although this legislation may lessen regulatory burdens, the cable
telecommunications television industry may be subject to new competition as a result.
industries. There are numerous rulemakings that have been and continue to be
undertaken by the FCC which will interpret and implement the provisions
of this new law. Furthermore, portions of this law have been, and
likely other portions will be, challenged in the courts. We cannot
predict the outcome of such rulemakings or lawsuits or the short- and
long-term effect (financial or otherwise) of this law and FCC
rulemakings on us.
The recent federal law Although the federal law discussed above eliminates many legal barriers
may also have a large to entry (i.e., telephone companies entering the cable industry and
impact on Hyperion's cable companies entering the telephone industry), we cannot guarantee
telecommunications that rules adopted by the FCC or state regulators or other legislative
business. or judicial initiatives relating to the telecommunications industry
will not have a material adverse effect on Hyperion. In addition, the
new law removes entry barriers for all companies and could increase
substantially the number of competitors offering comparable services in
our potential markets.
For more information about regulation in our businesses, you can read
the portions of Adelphia's 1998 Annual Report on Form 10-K labeled
"Competition" under the heading ''Business" and labeled "Legislation
and Regulation.'' You should also read the portion labeled "Regulatory
and Competitive Matters'' under the heading ''Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
Adelphia's
</TABLE>
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<TABLE>
<S> <C>
1998 Annual Report on Form 10-K and its most recent Form 10-Q filed with the SEC.
UNEQUAL VOTING RIGHTS OF Adelphia has two classes of Common Stock -- Class A which carries one
SHAREHOLDERS AND vote per share and Class B which carries ten votes per share. The
CONTROL BY THE RIGAS public holds a majority of the outstanding Class A shares, although the
FAMILY Rigas Family also owns about 35% of it. The Rigas Family owns
virtually all of Adelphia's Class B shares. As of October 1, 1998, the
Rigas Family beneficially owned shares representing about 52% of the
total number of outstanding shares of both classes of Adelphia's Common
Stock and about 85% of the total voting power of Adelphia's shares. The
Rigas Family also owns shares of Adelphia's 8% Series C Cumulative
Convertible Preferred Stock. If the Rigas Family had exercised its
right to convert these shares into Class A Common Stock, it would have
beneficially owned a majority of the Class A Common Stock, and would
have increased its total voting power to about 86%. As a result of
their stock ownership and an agreement among the Class B stockholders,
members of the Rigas Family have the power to elect seven of eight
Adelphia directors (and if they converted their Convertible Preferred
Stock might be able to elect all eight directors). In addition, the
Rigas Family could control stockholder decisions on other matters such
as amendments to our Certificate of Incorporation and Bylaws, and
mergers or other fundamental corporate transactions.
POTENTIAL CONFLICTS OF John J. Rigas and the other executive officers of Adelphia (including
INTEREST other members of the Rigas Family) own the Managed Partnerships, which
are managed by us for a fee. Subject to the restrictions contained in a
business opportunity agreement 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. These activities could present a conflict of interest with
us, such as how much time our executive officers devote to our
business. In addition, there have been and will continue to be
transactions between us and the executive officers or the other
entities they own or have affiliations with. We describe such
transactions in Adelphia's Proxy Statement under the heading ''Certain
Transactions.'' Our public debt indentures contain covenants that
place some restrictions on transactions between us and our affiliates.
NO DIVIDENDS PAID OR Adelphia has never declared or paid dividends on any of its Common
PLANNED TO BE PAID IN Stock and has no intention of paying cash dividends on such stock in
THE FORESEEABLE FUTURE the foreseeable future. In addition, our public debt indentures contain
covenants which limit our ability to pay such dividends.
SHARES ELIGIBLE FOR Pursuant to various registration rights agreements or arrangements, the
FUTURE SALE Rigas Family has the right, subject to some limitations, to require
Adelphia to register substantially all of the shares which it owns of
the Class A Common Stock (11,029,119 shares as of October 1, 1998),
Class B Common Stock (10,736,544 shares as of October 1, 1998 and the
equivalent number of shares of Class A Common Stock into which they may
be converted) and Convertible Preferred Stock (80,000 shares and the
approximately 9,433,962 shares of Class A Common Stock into which they
may be converted). Among others, Adelphia has registered for public
sale the following shares:
. for the Rigas Family - up to 11,000,000 shares of Class A Common
Stock, 80,000 shares of Convertible Preferred Stock and the Class A
Common Stock issuable upon conversion of the Convertible Preferred
Stock;
. for Booth American Company - 3,571,428 shares of Class A Common
Stock owned as of March 24, 1998; and
. for the Selling Stockholders -- 3,100,000 shares of Class A Common
for offer and sale pursuant to this Prospectus.
Approximately 8,506,000 shares of Class A Common Stock and up to 80,000
shares of Convertible Preferred Stock (including the underlying Class A
Common Stock) have been pledged in connection with margin loans made to
members of the Rigas Family. These pledgees could freely sell any
shares acquired upon a foreclosure. Sales of a
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
substantial number of shares of Class A Common Stock or Class B Common Stock,
including sales by any pledgees of such shares, could adversely affect the
market price of our Class A Common Stock and could impair our ability in the future
to raise capital through stock offerings.
POTENTIAL VOLATILITY OF The market price of the shares of Class A Common Stock may be
STOCK PRICE significantly affected by various factors including:
. actual or anticipated fluctuations in our operating results,
. new products or services or new contracts by us or our competitors,
. legislative and regulatory developments,
. conditions and trends in the telecommunications industry,
. general market conditions, and
. other factors beyond our control.
In addition, the stock market has, from time to time, experienced
significant price and volume fluctuations that have particularly
affected the market prices for the common stock of telecommunications
companies and that have often been unrelated to the operating
performance of particular companies. These broad market fluctuations
may also adversely affect the market price of our Class A Common Stock.
DILUTION Persons purchasing Class A Common Stock will incur immediate and
substantial net tangible book value dilution.
YEAR 2000 ISSUES The year 2000 issue refers to the inability of computerized systems and
technologies to recognize and process dates beyond December 31, 1999.
We are evaluating the impact of the year 2000 issue on our business
applications and our products and services. The evaluation includes a
review of our information technology systems, cable network equipment
and other embedded technologies. A significant portion of our
computerized systems and technologies has been developed, installed or
upgraded in recent years and is generally more likely to be year 2000
ready. We are also evaluating the potential impact as a result of our
reliance on third-party systems that may have the year 2000 issue.
Our computerized business applications that could be adversely affected
by the year 2000 issue include:
. information processing and financial reporting systems,
. customer billing systems,
. customer service systems,
. telecommunication transmission and reception system, and
. facility systems.
System failure or miscalculation could result in an inability to
process transactions, send invoices, accept customer orders or provide
customers with products and services.
We have developed a program to assess and address the year 2000 issue.
This program consists of the following phases:
. inventorying and assessing the impact on affected technology and
systems,
. developing solutions for affected technology and systems,
. modifying or replacing affected technology and systems,
. testing and verifying solutions,
. implementing solutions, and
. developing contingency plans.
We have substantially completed inventorying and assessing the affected
computerized systems and technologies. We are in various stages of our
year 2000 compliance program
</TABLE>
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<TABLE>
<S> <C>
with respect to the remaining phases as it relates to the affected systems
and technologies.
We have engaged a consulting firm familiar with our financial reporting
systems. This firm has developed and tested year 2000 solutions that we are
in the process of implementing. We expect our financial reporting systems to
be year 2000 compliant by June 1999.
A third-party billing vendor currently facilitates customer billing.
We are currently in the process of testing an in-house service ordering,
provisioning, maintenance and billing system that would replace the
third-party billing vendor. We expect to have this new system implemented
by June 1999. On a contingency basis, the third-party vendor has provided
a written statement that it will certify it is fully year 2000 compliant by
June 1999.
Telecommunication plant rebuilds and upgrades in recent years minimized
the potential impact of the year 2000 issue on our facilities, customer
service, telecommunication transmission and reception systems. We are
engaged in a comprehensive internal inventory and assessment of all
hardware components and component controlling software throughout our
telecommunication networks. We expect to implement any hardware and
software modifications, upgrades or replacements resulting from the
internal review by June 1999.
Costs incurred to date directly related to addressing the year 2000
issue have not been material. We have also redeployed internal
resources to meet the goals of our year 2000 program. We currently
estimate the total cost of our year 2000 remediation program to be
approximately $2,500,000. Although we will continue to incur
substantial capital expenditures in the ordinary course of meeting our
telecommunications system upgrade goals through the year 2000, we will
not specifically accelerate our expenditures to facilitate year 2000
readiness, and accordingly we have not included such expenditures in
the above estimate.
We have begun communicating with others with whom we do significant
business to determine their year 2000 readiness and to determine the
extent to which we are vulnerable to the year 2000 issue related to
those third parties. We purchase much of our technology from third
parties. There can be no assurance that the systems of other companies
on which our systems rely will be year 2000 ready or timely converted
into systems compatible with our systems. Our failure or a
third-party's failure to become year 2000 ready, or our inability to
become compatible with third parties with which we have a material
relationship, may have a material adverse effect on us, including
significant service interruption or outages; however, we cannot
currently estimate the extent of any such adverse effects.
We are in the process of identifying secondary sources to supply our
systems or services in the event it becomes probable that any of our
systems will not be year 2000 ready prior to the end of 1999. We are
also in the process of identifying secondary vendors and service
providers to replace those vendors and service providers whose failure
to be year 2000 ready could lead to a significant delay in our ability
to provide our services to our customers.
FORWARD-LOOKING The statements contained or incorporated by reference in this
STATEMENTS Prospectus that are not historical facts are "forward-looking
statements" and can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should,"
"intends" or "anticipates" or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties.
Certain information set forth or incorporated by reference in this
Prospectus, including "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Adelphia's 1998
Annual Report on Form 10-K and in Adelphia's Form 10-Qs, is
forward-looking, such as information relating to the effects of future
regulation, future capital commitments and the effects of competition.
Such forward-looking
</TABLE>
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<TABLE>
<S> <C>
information involves important risks and uncertainties that could
significantly affect expected results in the future from those
expressed in any forward-looking statements made by, or on behalf of, us.
These risks and uncertainties include, but are not limited to, uncertainties
relating to economic conditions, acquisitions and divestitures, government
and regulatory policies, the pricing and availability of equipment, materials,
inventories and programming, technological developments and changes in the
competitive environment in which we operate. Persons reading this Prospectus
are cautioned that such statements are only predictions and that actual events
or results may differ materially. In evaluating such statements, readers should
specifically consider the various factors which could cause actual events or
results to differ materially from those indicated by such forward-looking statements.
</TABLE>
DILUTION
The net tangible book value of Adelphia's Common Stock as of September 30,
1998 was a deficit of approximately ($2,025,282,000) or ($48.11) a share. Net
tangible book value per share represents the amount of Adelphia's convertible
preferred stock, Common Stock and other stockholders' equity (deficiency), less
intangible assets, divided by shares of Adelphia's Common Stock outstanding.
Purchasers of Class A Common Stock will have an immediate dilution of net
tangible book value which, due to our having a net tangible book value deficit,
will exceed the purchase price per share. For example, in Adelphia's public
offering which was completed in August 1998, the purchase price of a single
share sold to the public was $32.00 and the net tangible book value dilution per
share was $76.95. Net tangible book value dilution per share represents the
difference between the amount per share paid by purchasers of shares of Class A
Common Stock in an offering by Adelphia and the pro forma net tangible book
value per share of the Common Stock immediately after completion of such
offering.
SELLING STOCKHOLDERS
The Selling Stockholders acquired their Shares of Class A Common Stock from
us in exchange for equity interests in certain businesses that we acquired.
Each of the Selling Stockholders is a party to the Verto Merger Agreement and
the registration rights agreement entered into by Adelphia and Verto in
connection with the Verto Merger Agreement under which Adelphia has agreed to
register that number of shares delivered (as determined by the merger agreement)
as payment for equity interests purchased. The Verto Merger Agreement was
conditioned upon only (i) the effectiveness of the registration statement, of
which this Prospectus is a part, and (ii) certain regulatory approvals. See
"Recent Developments -- Verto Acquisition." Registration of these Shares does
not necessarily mean that the Selling Stockholders will sell all or any of the
Shares.
No Selling Stockholder has held any positions or office or had any material
relationship with us, our predecessors or affiliates during the past three
years. In addition, one or more of the Selling Stockholders may donate, pledge
or transfer as gifts some or all of their Shares, or may pledge or transfer its
or their Shares for no value to other beneficial owners. The Selling
Stockholders will include these donees or transferees as Selling Stockholders in
a prospectus supplement if the donees or transferees wish to use this Prospectus
to re-offer the Shares.
The shares listed below represent all of the shares that each of the Selling
Stockholders currently beneficially owns, the number of shares each of them may
offer and the number of shares each of them will own after the offering assuming
they sell all of the Shares.
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<PAGE>
<TABLE>
<CAPTION>
Percent of Class
Class A Common Percent of Class A Class A Common Class A Common A Common Shares
Shares Held Common Shares Held Shares Shares Held Held
Name Before Offering Before Offering Offered Hereby After Offering(1) After Offering(1)
- ---- ------------------ -------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Louis Pagnotti, Inc. ____ __ __ __
The Ithaka Company ____ __ __ __
Tedesco Corporation ____ __ __ __
Brynfan Associates ____ __ __ __
TOTAL 3,100,000 9.0% 3,100,000 __ 0.0%
========= ==== ========= == ====
</TABLE>
- ------------------------
(1) Assumes that all of the shares held by the Selling Stockholders and being
offered under this Prospectus are sold, and that the Selling Stockholders
acquire no additional shares of Common Stock before the completion of this
offering.
(*) Less than one percent.
USE OF PROCEEDS
All net proceeds from the sale of the Shares will go to the stockholders who
offer and sell them. We will not receive any proceeds from the sale of Shares.
PLAN OF DISTRIBUTION
Adelphia is registering the Shares on behalf of the Selling Stockholders.
"Selling Stockholders," as used in this Prospectus, includes donees and pledgees
selling shares received from a named Selling Stockholder after the date of this
Prospectus. The Selling Stockholders may offer their Shares at various times in
one or more of the following transactions:
. in transactions (which may involve crosses or block transactions) on
any national securities exchange or quotation service on which the
Shares may be listed or quoted at the time of sale;
. in the over-the-counter market;
. in private transactions other than in the over-the-counter market or
on an exchange;
. in connection with short sales of Shares;
. by pledge to secure debts and other obligations;
. in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options; or
. in a combination of any of the above transactions.
The Selling Stockholders may sell their Shares at market prices at the time
of sale, at prices related to market prices, at negotiated prices or at fixed
prices.
The Selling Stockholders may use broker-dealers to sell their Shares. If
this happens, broker-dealers will either receive discounts or commissions from
the Selling Stockholders, or they will receive commissions from purchasers of
Shares for whom they acted as agents. The Selling Stockholders, any brokers,
dealers and any other
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participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act") in
connection with these sales, and any profits realized or commissions received
may be deemed underwriting compensation.
Selling Stockholders also may resell all or a portion of the Shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
they meet the criteria and conform to the requirements of that Rule.
If required, a prospectus supplement will be distributed when a particular
offering of Shares is made. This supplement will set forth the names of the
Selling Stockholders, the aggregate amount and type of Shares being offered, the
number of such securities owned prior to and after the completion of any such
offering, and, to the extent required, the terms of the offering, including the
name or names of any underwriters, broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the Selling
Stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
To comply with the securities law of certain jurisdictions, if applicable,
the Shares will be offered or sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain jurisdictions the
Shares may not be offered or sold unless they have been registered or qualified
for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may be limited in its ability to engage
in market activities with respect to such Shares. In addition and without
limiting the foregoing, each Selling Stockholder will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the Shares by
the Selling Stockholders. All of the foregoing may affect the marketability of
the Shares.
All expenses of the registration of the Shares will be paid by Adelphia,
including, without limitation, Commission filing fees and expenses of compliance
with state securities or "blue sky" laws; provided, however, that the Selling
Stockholders will pay all underwriting discounts and selling commissions, if
any. The Selling Stockholders will be indemnified by Adelphia against certain
civil liabilities, including certain liabilities under the Securities Act, or
will be entitled to contribution in connection therewith. Adelphia will be
indemnified by the Selling Stockholders against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
WHERE YOU CAN FIND MORE INFORMATION
Adelphia files annual, quarterly and special reports, as well as proxy
statements and other information with the SEC. You may read and copy any
document Adelphia files with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549 or at its Regional Offices in
Chicago, Illinois or New York, New York. You may obtain further information
about the operation of the Public Reference Room by calling the SEC at 1-800-
SEC-0330. Adelphia's SEC filings are also available to the public over the
Internet at the SEC's web site at http://www.sec.gov, which contains reports,
proxy statements and other information regarding registrants like Adelphia that
file electronically with the SEC.
This Prospectus is part of a registration statement on Form S-3 filed by
Adelphia with the SEC under the Securities Act. As permitted by SEC rules, this
Prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows Adelphia to "incorporate by reference" into this Prospectus
the information it files with the SEC. This means that Adelphia can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
Prospectus. If Adelphia subsequently files updating or superseding information
in a document that is incorporated by reference into this Prospectus, the
subsequent information will also become part of this Prospectus and will
supersede the earlier information.
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Adelphia is incorporating by reference the following documents that it has
filed with the SEC:
. its Annual Report on Form 10-K for the year ended March 31, 1998,
which incorporates, in Items 7 and 8 to such Form 10-K, portions of
the Form 10-K for the fiscal year ended December 31, 1997 of Olympus
Communications, L.P. and Olympus Capital Corporation, as amended by
the Parent Company's Form 10-K/A dated July 27, 1998;
. its Quarterly Reports on Form 10-Q for the quarters ended June 30,
1998 and September 30, 1998;
. its Current Reports on Form 8-K for the events dated June 29, 1998,
July 2, 1998, August 3, 1998, August 18, 1998, September 10, 1998 and
November 9, 1998;
. its definitive proxy statement dated September 11, 1998 with respect
to the Annual Meeting of Stockholders held on October 6, 1998; and
. the description of its Class A Common Stock contained in (i)
Adelphia's registration statement filed with the SEC under Section 12
of the Securities Exchange Act of 1934 ("Exchange Act") and
subsequent amendments and reports filed to update such description
and (ii) Adelphia's registration statement on Form S-3 (File No. 333-
58749).
Adelphia is also incorporating by reference into this Prospectus all of its
future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until this offering has been completed.
You may obtain a copy of any of our filings which are incorporated by
reference, at no cost, by writing to or telephoning us at the following address:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Investor Relations
Telephone: (814) 274-9830
You should rely only on the information provided in this Prospectus or
incorporated by reference. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
Prospectus is accurate as of any date other than the date on the first page of
the Prospectus. Adelphia is not making this offer of securities in any state or
country in which the offer or sale is not permitted.
EXPERTS
The consolidated financial statements of Adelphia and its subsidiaries as of
March 31, 1997 and 1998, and for each of the three years in the period ended
March 31, 1998, and the consolidated financial statements of Olympus and its
subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997, all incorporated in this Prospectus by
reference from Adelphia's Annual Report on Form 10-K for the year ended March
31, 1998, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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ADELPHIA COMMUNICATIONS CORPORATION
3,100,000 SHARES OF CLASS A COMMON STOCK
---------
($.01 PAR VALUE PER SHARE)
---------------
PROSPECTUS
---------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING CONTAINED IN THIS PROSPECTUS. YOU MUST NOT
RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL
NOR DOES IT SOLICIT TO BUY ANY SHARES OF CLASS A COMMON STOCK IN ANY
JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT
AS OF ________________, 1998.
<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
Adelphia in connection with the issuance and distribution of the securities
being registered.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
SEC filing fee....................................... $34,661
Legal fees and expenses.............................. $12,000
Accounting fees and expenses......................... $ 5,000
Miscellaneous expenses............................... $ 3,339
-------
Total................................................ $55,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
</TABLE>
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:
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ---------
<C> <S> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by reference
Corporation is Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated
July 24, 1997 (File No. 000-16104).
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney (included on the signature page of the Filed herewith.
Registration Statement)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering.
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The undersigned Registrant hereby undertakes:
(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 of 1933, 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.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
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.
(c) Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, 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 of 1933, as amended, and will be governed by the
final adjudication of such issue.
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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 registration statement on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport, Commonwealth
of Pennsylvania, on the 29th day of December, 1998.
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ Timothy J. Rigas
-----------------------------------------
Timothy J. Rigas, Executive Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints Michael 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 Commission, 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>
/s/ John J. Rigas Chairman, President and Chief Executive Officer December 29, 1998
- ----------------------------------
JOHN J. RIGAS
/s/ Michael J. Rigas Executive Vice President and Director December 29, 1998
- ----------------------------------
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Executive Vice President, Chief Financial December 29, 1998
- ---------------------------------- Officer, Chief Accounting Officer, Treasurer
TIMOTHY J. RIGAS and Director
/s/ James P. Rigas Executive Vice President and Director December 29, 1998
- ----------------------------------
JAMES P. RIGAS
/s/ Daniel R. Milliard Senior Vice President, Secretary and Director December 29, 1998
- ----------------------------------
DANIEL R. MILLIARD
Director December , 1998
- ----------------------------------
PERRY S. PATTERSON
Director December , 1998
- ----------------------------------
PETE J. METROS
Director December , 1998
- ----------------------------------
DENNIS P. COYLE
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ---------
<C> <S> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by reference is
Corporation Exhibit 3.01 to Registrant's Current
Report on Form 8-K dated July 24,
1997 (File No. 000-16104).
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney (included on the signature page of the Filed herewith.
Registration Statement)
</TABLE>
<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 report dated June 10,
1998 and our report dated March 6, 1998 on our audits of the financial
statements of Adelphia Communications Corporation and subsidiaries and of
Olympus Communications, L.P. and subsidiaries, respectively, appearing in and
incorporated by reference in the Annual Report on Form 10-K of Adelphia
Communications Corporation for the year ended March 31, 1998 and to the
reference to us under the heading ''Experts'' in the Prospectus, which is part
of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
December 28, 1998
