SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) October 1, 1999
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-16014 23-2417713
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
One North Main Street - Coudersport, PA 16915-1141
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 274-9830
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) On October 1, 1999, Adelphia Communications Corporation
("Adelphia"), a Delaware corporation and Century Communications Corp.
("Century"), a New Jersey corporation, consummated a merger ("the Merger")
whereby Century was merged with and into Adelphia Acquisition Subsidiary, Inc.
("Merger Sub"), a Delaware corporation and a wholly owned subsidiary of
Adelphia, pursuant to an Agreement and Plan of Merger ("the Merger Agreement"),
dated as of March 5, 1999, as amended as of July 12, 1999 and July 29, 1999 by
and among Adelphia, Century and Merger Sub. Upon the effectiveness of the
Merger, Adelphia Acquisition Subsidiary, Inc. changed its name to Arahova
Communications, Inc. ("Arahova"). As a result of the Merger, Century was merged
into Arahova, a wholly owned subsidiary of Adelphia, which became the successor
registrant to Century.
In connection with the closing of the merger, Adelphia issued
approximately 47.8 million new shares of Adelphia Class A common stock and paid
approximately $812 million to the stockholders of Century, and assumed
approximately $2.0 billion of debt. The amount of assumed debt gives effect to
approximately $284 million of additional indebtedness expected to be incurred in
connection with the closing of Century's pending AT&T joint venture. The
stockholders of both Adelphia and Century approved the transaction at
stockholder meetings held on October 1, 1999. The Merger Agreement, which was
negotiated by the parties thereto in an arms-length transaction, was previously
announced by Adelphia on March 5, 1999.
Century is engaged primarily in the ownership and operation of cable
television systems with significant concentrations of basic subscribers in
California, Colorado and Puerto Rico. As of May 31, 1999, Century had
approximately 1,610,000 basic subscribers after giving effect to Century's
pending joint venture with AT&T in the Los Angeles, California area. Adelphia
will continue to operate the Century cable television systems after the merger.
The sources for the cash consideration paid by Adelphia included cash on hand
from financing transactions completed earlier in the current year and funds
reborrowed under four existing bank credit facilities between Adelphia
subsidiaries and four different lending bank groups for which Toronto Dominion
(Texas), Inc., The Bank of Nova Scotia, First Union National Bank and Toronto
Dominion (Texas), Inc., respectively, serve as Administrative Agent.
In the Merger, Century Class A common stockholders were entitled to
elect to receive $44.14 in cash or 0.77269147 of a share of Adelphia Class A
common stock on a share-by-share basis, subject to certain adjustments and
prorations. The aggregate number of shares of Century Class A common stock
converted into the right to receive cash in the Merger was limited to 20.76% of
the number of shares of Century Class A common stock outstanding immediately
prior to the effective time of the Merger. The aggregate number of shares of the
Century Class A common stock converted into shares of Adelphia Class A common
stock in the Merger was limited to 79.24% of the number of such shares of
<PAGE>
Century Class A common stock outstanding immediately prior to the effective time
of the Merger.
In the Merger, Century Class B common stockholders were entitled to
elect to receive $48.14 in cash or 0.84271335 of a share of Adelphia Class A
common stock on a share-by-share basis, subject to certain adjustments and
prorations. The aggregate number of shares of Century Class B common stock
converted into the right to receive cash in the Merger was limited to 24.54% of
the number of shares of Century Class B common stock outstanding immediately
prior to the effective time of the Merger. The aggregate number of shares of
Century Class B common stock converted into the right to receive shares of
Adelphia Class A common stock in the Merger was limited to 75.46% of the number
of shares of Century Class B common stock outstanding immediately prior to the
effective time of the Merger.
Century Class A common stockholders made stock elections for an amount
of Adelphia Class A common stock exceeding the amount available to such holders.
As a result, holders of Century Class A common stock who elected to receive
Adelphia Class A common stock will receive 86.42000% of their consideration in
Adelphia Class A common stock, or approximately 0.6678 of a share of Adelphia
Class A common stock, and 13.58000% of their consideration in cash, or
approximately $5.99, for each share of Century Class A common stock. Holders of
Century Class A common stock who elected to receive cash will receive $44.14 per
share, without interest.
Century Class B common stockholders made stock elections for amounts of
cash and Adelphia Class A common stock equal to the amounts available to such
holders. As a result, holders of Century Class B common stock who elected to
receive Adelphia Class A common stock will receive 0.84271335 of a share of
Adelphia Class A common stock for each share of Century Class B common stock,
and holders of Century Class B common stock who elected to receive cash will
receive $48.14 per share, without interest.
Also pursuant to the terms of the Merger Agreement, each outstanding
option to purchase shares of Century Class A common stock granted under
Century's 1993 Non-Employee Directors' Stock Option Plan, the 1994 Stock Option
Plan, and all other similar plans or arrangements (collectively "Option Plans"),
whether or not previously exercisable or vested, became fully exercisable and
vested. Option holders were given the option to exercise immediately prior to
the Merger or to rollover their options. The number of shares noted above that
were issued by Adelphia in connection with the Merger does not include any
shares with respect to Century options that were rolled over by option holders
(options with respect to approximately 440,000 Century Class A common shares
that were converted into options with respect to approximately 330,000 Adelphia
Class A common shares) or that were otherwise converted to cash pursuant to
their terms. Furthermore, all restricted shares of Century Class A common stock
issued pursuant to the 1992 Management Equity Incentive Plan became fully vested
and ceased to be restricted.
<PAGE>
In addition to the above information regarding the consideration paid in
the Merger, at the effective time of the Merger, Adelphia also purchased
Citizens Utilities Company's 50% interest in the Century/Citizens Joint Venture,
one of Century's 50% owned joint ventures, for a purchase price of approximately
$157.5 million, comprised of approximately $27.7 million in cash, approximately
1.85 million shares of Adelphia Class A common stock and the assumption of
indebtedness. This joint venture serves approximately 92,300 basic subscribers
in California and was jointly owned by the Company and Citizens Cable Company, a
subsidiary of Citizens.
Also pursuant to the Merger Agreement, the Board of Directors of
Adelphia will expand the size of the Board by three positions after the Adelphia
1999 annual meeting of stockholders to be held on October 25, 1999, and will
appoint Leonard Tow, Bernard Gallagher and Scott Schneider to the Board of
Directors of the Company after the 1999 annual meeting, and have the new
appointees serve until the next annual meeting of stockholders. Messrs. Tow,
Gallagher and Schneider previously served as directors and executive officers of
Century and were holders of Century common stock at the time of the merger. So
long as the former holders of Century Class B common stock (Leonard Tow and two
trusts established by Leonard Tow and Claire Tow, his wife) and their permitted
transferees and assignees continue to own at least 10% of the outstanding common
stock of Adelphia, they will be entitled to nominate up to three members to
Adelphia's Board of Directors. Also, pursuant to agreements among Adelphia, John
Rigas, Michael Rigas, Timothy Rigas, James Rigas, the holders of Century Class B
common stock and Claire Tow, Adelphia and the Rigas family have granted each of
the holders of Century Class B common stock certain rights with respect to the
Adelphia Class A common stock they will receive in the merger, including rights
to make demand registrations of their shares, to piggyback and include their
Adelphia shares in registrations of shares undertaken by Adelphia, and to tag
along or participate in sales of shares of Adelphia common stock by any such
member of the Rigas family. These rights are subject to various qualifications,
limitations and restrictions as set forth in the applicable agreements.
In connection with the Merger, Arahova entered into (i) a Ninth
Supplemental Indenture, dated as of October 1, 1999, between Arahova and U.S.
Bank Trust National Association (the "Trustee"), successor trustee to Bank of
America National Trust and Savings Association, to the Indenture, dated as of
February 12, 1992, between Century and the Trustee and (ii) a First Supplemental
Indenture, dated as of October 1, 1999, between Arahova and U.S. Bank Trust
National Association, to the Indenture, dated as of January 15, 1998, between
Century and the Trustee, each as required by such indentures and pursuant to
which Arahova assumed the obligations of Century under such indentures.
Additional information concerning the above transactions is contained in
the Proxy Statement regarding the Merger filed by Adelphia, which is an exhibit
hereto and is incorporated by reference herein.
<PAGE>
(b) On October 1, 1999, Adelphia completed the acquisition of
FrontierVision Partners, L.P. ("FrontierVision") through ACC Operations, Inc.
and Adelphia GP Holdings, LLC, direct or indirect wholly owned subsidiaries of
Adelphia that directly or indirectly acquired all of the partnership interests
of FrontierVision from its partners in exchange for approximately $543 million
in cash, 7.0 million shares of Adelphia Class A common stock and assumed debt of
approximately $1.15 billion. The purchase price and form of consideration were
the result of arms length negotiations between the parties.
FrontierVision owns, directly and indirectly, all of the partnership
interests of FrontierVision Holdings, L.P. and FrontierVision owns, indirectly,
all of the common stock of FrontierVision Holdings Capital Corporation and
FrontierVision Holdings Capital II Corporation. FrontierVision also owns,
directly and indirectly, all of the partnership interests of FrontierVision
Operating Partners, L.P. and FrontierVision owns, indirectly, all of the common
stock of FrontierVision Capital Corporation. As a result of the acquisition
transaction, all of the above FrontierVision entities have become indirect
wholly owned subsidiares of Adelphia. All of the above FrontierVision entities,
other than FrontierVision itself, file and will continue to file reports with
the Securities and Exchange Commission.
As of June 30, 1999, FrontierVision owned and operated cable television
systems serving approximately 710,000 basic subscribers primarily in Ohio,
Kentucky, New England and Virginia. Adelphia will continue to operate these
cable television systems after the acquisition. The sources for the cash
consideration paid by Adelphia included cash on hand from financing transactions
completed earlier in the current year and funds reborrowed under four existing
bank credit facilities between Adelphia subsidiaries and four different lending
bank groups for which Toronto Dominion (Texas), Inc., The Bank of Nova Scotia,
First Union National Bank and Toronto Dominion (Texas), Inc., respectively,
serve as Administrative Agent.
(c) On October 1, 1999, Adelphia completed the acquisition of Harron
Communications Corp. ("Harron") by acquiring all of the outstanding common stock
of Harron from the stockholders of Harron for approximately $852.7 million in
cash and $303.0 million in assumed debt. The purchase price for this transaction
was the result of arms length negotiations between the parties.
As of June 30, 1999, Harron operated cable television systems serving
approximately 299,000 basic subscribers. Adelphia will continue to operate these
cable television systems after the acquisition. The sources for the cash
consideration paid by Adelphia included cash on hand from financing transactions
completed earlier in the current year, funds reborrowed under four existing bank
credit facilities between Adelphia subsidiaries and four different lending bank
groups for which Toronto Dominion (Texas), Inc., The Bank of Nova Scotia, First
Union National Bank and Toronto Dominion (Texas), Inc., respectively, serve as
Administrative Agent.
<PAGE>
(d) On October 1, 1999, Olympus Communications, L.P. completed its
previously announced redemption of the interests in Olympus held by Telesat
Cablevision, Inc., a subsidiary of FPL Group, Inc. The redemption was made in
exchange for noncash assets of Olympus valued at approximately $108 million
pursuant to the previously announced redemption agreement between the parties.
As a result of the redemption, Olympus has become a wholly-owned subsidiary
partnership of Adelphia and the financial results of Olympus will be
consolidated with those of Adelphia and Adelphia's other consolidated
subsidiaries. Prior to the redemption, Olympus was a nonconsolidated joint
venture of Adelphia accounted for on the equity method.
The redemption transaction was the result of arms length negotiations
between the parties. Olympus owned and operated cable television systems which
as of June 30, 1999 served approximately 641,000 basic subscribers. Adelphia
will continue to operate the Olympus systems after the redemption. One of the
directors of Adelphia is Dennis Coyle, who is also the Vice President, Secretary
and General Counsel of FPL Group, Inc. and is an officer and director of Telesat
Cablevision, Inc.
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Exhibit No. Description
99.01 Independent Auditors' Report by Deloitte & Touche LLP
to the Board of Directors and Stockholders of Century
Communications Corp. dated July 29, 1999 (August 26,
1999 as to Note 17), and the consolidated financial
statements of Century Communications Corp. and
subsidiaries as of May 31, 1998 and 1999 and for each
of the three years in the period ended May 31, 1999,
all of which were also filed in the Century
Communications Corp. Form 10-K for the fiscal year
ended May 31, 1999. (Incorporated herein by reference
to Exhibit 99.01 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.02 Independent Auditors' Report by KPMG LLP to the
Partners of FrontierVision Partners, L.P., dated
March 19, 1999, and the consolidated financial
statements of FrontierVision Partners, L.P. and
subsidiaries as of December 31, 1997 and 1998 and for
each of the years in the three year period ended
December 31, 1998. Unaudited financial information
for FrontierVision Partners, L.P. for the six month
period ended June 30, 1999. (Incorporated herein by
reference to Exhibit 99.02 to the Current Report on
Form 8-K of Adelphia for event dated September 9,
1999) (SEC File No. 0-16014).
99.03 Independent Auditors' Report by Deloitte & Touche LLP
to the Board of Directors and Stockholders of Harron
Communications Corp. dated March 19, 1999 (April 12,
1999 as to Note 16), and the consolidated financial
statements of Harron Communications Corp. and
subsidiaries as of December 31, 1997 and 1998 and for
each of the three years in the period ended December
31, 1998. (Incorporated herein by reference to
Exhibit 99.03 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.04 Unaudited financial information for Harron
Communications Corp. for the six month period ended
June 30, 1999. (Incorporated herein by reference to
Exhibit 99.04 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.05 Independent Auditors' Report of Deloitte & Touche LLP
to Olympus Communications, L. P. dated March 19,
1999, and the consolidated financial statements of
Olympus Communications, L. P. and subsidiaries as
December 31, 1997 and 1998 and for each of the three
years in the period ended December 31, 1998
(Incorporated herein by reference to Exhibit 99.01 to
the Transition Report of Adelphia on Form 10-K for
the nine months ended December 31, 1998)(SEC File No.
0-16104).
99.06 Unaudited financial information for Olympus
Communications, L. P. for the six months ended June
30, 1999 (Filed Herewith).
<PAGE>
(b) Pro forma financial information.
Exhibit No. Description
99.07 Unaudited pro forma condensed consolidated financial
information for Adelphia Communications Corporation
as of June 30, 1999 and for the nine months ended
December 31, 1998 and the six months ended June 30,
1999. (Incorporated herein by reference to Exhibit
99.05 to the Current Report on Form 8-K of Adelphia
for event dated September 9, 1999) (SEC File No.
0-16014)
(c) Exhibits
Exhibit No. Description
99.08 Definitive Joint Proxy Statement/Prospectus dated
August 12, 1999 (Incorporated herein by reference to
Registration Statement No. 333-85101 of Adelpha on
Form S-4, filed on August 12, 1999).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 14, 1999 ADELPHIA COMMUNICATIONS CORPORATION
(Registrant)
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President, Treasurer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.01 Independent Auditors' Report by Deloitte & Touche LLP
to the Board of Directors and Stockholders of Century
Communications Corp. dated July 29, 1999 (August 26,
1999 as to Note 17), and the consolidated financial
statements of Century Communications Corp. and
subsidiaries as of May 31, 1998 and 1999 and for each
of the three years in the period ended May 31, 1999,
all of which were also filed in the Century
Communications Corp. Form 10-K for the fiscal year
ended May 31, 1999. (Incorporated herein by reference
to Exhibit 99.01 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.02 Independent Auditors' Report by KPMG LLP to the
Partners of FrontierVision Partners, L.P., dated
March 19, 1999, and the consolidated financial
statements of FrontierVision Partners, L.P. and
subsidiaries as of December 31, 1997 and 1998 and for
each of the years in the three year period ended
December 31, 1998. Unaudited financial information
for FrontierVision Partners, L.P. for the six month
period ended June 30, 1999. (Incorporated herein by
reference to Exhibit 99.02 to the Current Report on
Form 8-K of Adelphia for event dated September 9,
1999) (SEC File No. 0-16014).
99.03 Independent Auditors' Report by Deloitte & Touche LLP
to the Board of Directors and Stockholders of Harron
Communications Corp. dated March 19, 1999 (April 12,
1999 as to Note 16), and the consolidated financial
statements of Harron Communications Corp. and
subsidiaries as of December 31, 1997 and 1998 and for
each of the three years in the period ended December
31, 1998. (Incorporated herein by reference to
Exhibit 99.03 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.04 Unaudited financial information for Harron
Communications Corp. for the six month period ended
June 30, 1999. (Incorporated herein by reference to
Exhibit 99.04 to the Current Report on Form 8-K of
Adelphia for event dated September 9, 1999) (SEC File
No. 0-16014).
99.05 Independent Auditors' Report of Deloitte & Touche LLP
to Olympus Communications, L. P. dated March 19,
1999, and the consolidated financial statements of
Olympus Communications, L. P. and subsidiaries as
December 31, 1997 and 1998 and for each of the three
years in the period ended December 31, 1998
(Incorporated herein by reference to Exhibit 99.01 to
the Transition Report of Adelphia on Form 10-K for
the nine months ended December 31, 1998)(SEC File No.
0-16104).
99.06 Unaudited financial information for Olympus
Communications, L. P. for the six months ended June
30, 1999 (Filed Herewith).
99.07 Unaudited pro forma condensed consolidated financial
information for Adelphia Communications Corporation
as of June 30, 1999 and for the nine months ended
December 31, 1998 and the six months ended June 30,
1999. (Incorporated herein by reference to Exhibit
99.05 to the Current Report on Form 8-K of Adelphia
for event dated September 9, 1999) (SEC File No.
0-16014)
99.08 Definitive Joint Proxy Statement/Prospectus dated
August 12, 1999 (Incorporated herein by reference to
Registration Statement No. 333-85101 of Adelpha on
Form S-4, filed on August 12, 1999).
Exhibit 99.06
<TABLE>
<CAPTION>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, June 30,
1998 1999
------------- --------------
ASSETS:
Cable systems, at cost, net of accumulated
depreciation and amortization:
<S> <C> <C>
Property, plant and equipment $ 355,470 $ 379,346
Intangible assets 577,171 568,044
------------- -------------
Total 932,641 947,390
Cash and cash equivalents 44,617 5,197
Subscriber receivables - net 14,407 14,548
Prepaid expenses and other assets - net 20,334 14,986
============= =============
Total $ 1,011,999 $ 982,121
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY):
Subsidiary debt $ 519,443 $ --
Parent debt 200,000 200,000
Other debt 7,539 7,503
Accounts payable 23,311 22,190
Subscriber advance payments and deposits 6,965 6,973
Accrued interest and other liabilities 29,904 21,613
Accrued priority return on preferred limited
partner interests 36,397 56,138
Due to affiliates - net 283,436 802,942
Deferred income taxes 40,951 41,131
------------- -------------
Total liabilities 1,147,946 1,158,490
------------- -------------
Commitments and contingencies (Note 4)
Partners' equity (deficiency):
Limited partners' interests 570,298 604,423
General partners' equity (deficiency) (706,245) (780,792)
------------- -------------
Total partners' equity (deficiency) (135,947) (176,369)
============= =============
Total $ 1,011,999 $ 982,121
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------------
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 51,198 $ 63,351 $ 102,116 $ 128,217
----------- ----------- ----------- -----------
Operating expenses:
Direct operating and programming 17,663 21,912 34,948 44,864
Selling, general and administrative 8,827 11,254 17,870 22,997
Depreciation and amortization 11,998 18,141 24,248 36,400
Management fees to managing affiliate 2,888 5,913 5,586 9,456
----------- ----------- ----------- -----------
Total 41,376 57,220 82,652 113,717
----------- ----------- ----------- -----------
Operating income 9,822 6,131 19,464 14,500
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (13,002) (7,521) (26,027) (19,596)
Interest expense - affiliates (1,650) (13,266) (3,300) (18,535)
Other 613 (120) 983 (120)
----------- ----------- ----------- -----------
Total (14,039) (20,907) (28,344) (38,251)
----------- ----------- ----------- -----------
Loss before income taxes (4,217) (14,776) (8,880) (23,751)
Income tax benefit (expense) (28) (94) (28) (180)
----------- ----------- ----------- -----------
Net loss (4,245) (14,870) (8,908) (23,931)
Priority return on preferred and senior
limited partner interests (21,923) (25,940) (42,715) (50,566)
----------- ----------- ----------- -----------
Net loss of general and limited partners
after priority return $ (26,168) $ (40,810) $ (51,623) $ (74,497)
=========== =========== =========== ===========
Basic and diluted net loss per general and limited
partners' unit after priority return $ (2,617) $ (4,081) $ (5,162) $ (7,450)
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
June 30,
---------------------------
1998 1999
------------- -------------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (8,908) $ (23,931)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 13,675 19,494
Amortization 10,573 16,906
Deferred income taxes 28 180
Changes in operating assets and liabilities, net of
effects of acquisitions:
Subscriber receivables 15 (141)
Prepaid expenses and other assets (2,825) 354
Accounts payable 3,112 (1,121)
Subscriber advance payments and deposits 250 8
Accrued interest and other liabilities (1,248) (8,330)
------------ ------------
Net cash provided by operating activities 14,672 3,419
------------ ------------
Cash flows from investing activities:
Business acquisitions (2,055) (1,474)
Proceeds from sale of assets 10,469 --
Capital expenditures (28,417) (44,060)
------------ ------------
Net cash used for investing activities (20,003) (45,534)
------------ ------------
Cash flows from financing activities:
Proceeds from debt 43,000 --
Repayments of debt (43,388) (520,061)
Payments of priority returns (37,650) (30,825)
Amounts advanced from affiliates 6,129 519,506
Issuance of preferred limited partner interests 40,950 34,125
Capital distributions (50) (50)
------------ ------------
Net cash provided by financing activities 8,991 2,695
------------ ------------
Increase (decrease) in cash and cash equivalents 3,660 (39,420)
Cash and cash equivalents, beginning of period 3,554 44,617
------------ ------------
Cash and cash equivalents, end of period $ 7,214 $ 5,197
============ ============
See notes to condensed consolidated financial statements.
</TABLE>
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<PAGE>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Dollars in thousands)
The accompanying unaudited condensed consolidated financial statements
of Olympus Communications, L.P. and its substantially wholly owned subsidiaries
("Olympus" or the "Company") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments, consisting of only
normal recurring accruals necessary for a fair presentation of the financial
position of Olympus at June 30, 1999, and the results of operations for the
three and six months ended June 30, 1998 and 1999, have been included. These
condensed consolidated financial statements should be read in conjunction with
Olympus' consolidated financial statements included in its Annual Report on Form
10-K for the year ended December 31, 1998 ("Annual Report"). The results of
operations for the three and six months ended June 30, 1999 are not necessarily
indicative of the results to be expected for the year ending December 31, 1999.
1. The Registrants:
Olympus Communications, L.P. is a joint venture limited partnership
formed under the laws of Delaware with 50% of the outstanding voting interests
held by ACP Holdings, Inc., a wholly-owned subsidiary of Adelphia Communications
Corporation ("Adelphia") and the managing general partner of Olympus. The
remaining 50% of the voting interest is held by various wholly-owned
subsidiaries of FPL Group, Inc. On January 28, 1999, the partners entered into
an agreement pursuant to which Adelphia will acquire FPL Group's partnership
interests in Olympus. The transaction is expected to close in the third quarter
of 1999. Olympus' operations consist primarily of selling video programming
which is distributed to subscribers in Florida for a monthly fee through a
network of fiber optic and coaxial cables.
Olympus Capital Corporation, a wholly-owned subsidiary of the Company,
was formed solely for the purpose of serving as a co-issuer with Olympus
Communications, L.P. of the 10 5/8% Senior Notes due 2006 (the "Senior Notes").
Olympus Capital Corporation has no substantial assets or liabilities and no
operations of any kind and the Indenture, pursuant to which such Senior Notes
were issued, limits Olympus Capital Corporation's ability to acquire or hold any
significant assets or other properties or engage in any business activities
other than in connection with the issuance of the Senior Notes.
2. Significant Events Subsequent to the Annual Report:
On May 6, 1999, certain subsidiaries and affiliates of Adelphia and
Olympus closed on an $850,000 credit facility. The credit facility consists of a
$600,000, 8 1/2 year reducing revolving credit loan and a $250,000, 9 year term
loan. Proceeds from initial borrowings were held as cash by certain of Olympus'
affiliates and used to repay existing indebtedness of the co-borrower group.
3. Supplemental Financial Information:
Cash payments for interest were $28,505 and $42,454 for the six months
ended June 30, 1998 and 1999, respectively. Accumulated depreciation of
property, plant and equipment amounted to $172,867 and $192,318 at December 31,
1998 and June 30, 1999, respectively. Accumulated amortization of intangible
assets amounted to $144,548 and $160,240 at December 31, 1998 and June 30, 1999,
respectively.
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<PAGE>
4. Commitments and Contingencies:
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Annual Report for a discussion of
material commitments and contingencies.
5. Recent Accounting Pronouncements:
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. Management of the Company has not completed its
evaluation of the impact of SFAS No. 133 on the Company's financial statements.
In July 1999, SFAS No. 137 was issued to delay the effective date of SFAS No.
133 to fiscal quarters of fiscal years beginning after June 15, 2000.
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