<PAGE>
Filed pursuant to Rule 424(b)(5)
Registration No. 333-58749
Prospectus Supplement to Prospectus dated July 9, 1998.
ADELPHIA LOGO
4,000,000 Shares
ADELPHIA COMMUNICATIONS CORPORATION
Class A Common Stock
---------------
The Class A common stock is listed on the Nasdaq National Market. The Class
A common stock's ticker symbol is "ADLAC." On January 8, 1999, the closing
sale price on the Nasdaq National Market of a single share of the Class A
common stock was $50.625.
Adelphia's common stock also includes Class B common stock. The rights of
holders of the Class A common stock and Class B 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.
Adelphia also has entered into an agreement with members of John J. Rigas'
family or one or more entities controlled by them under which they will
purchase directly from Adelphia 4,000,000 shares of Class A common stock for
an aggregate net purchase price of $173 million. The per share purchase price
is equal to the initial public offering price set forth below less the
underwriting discount.
---------------
See "Risk Factors" beginning on page S-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 NOR ANY OTHER REGULATORY BODY
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.
---------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ------------
<S> <C> <C>
Initial public offering price............................ $45.00 $180,000,000
Underwriting discount(1)................................. $ 1.75 $ 7,000,000
Proceeds, before expenses, to Adelphia................... $43.25 $173,000,000
</TABLE>
- -------
(1) In addition, the underwriter may receive from purchasers of the shares
normal brokerage commissions in amounts agreed with such purchasers.
The underwriter may, under certain circumstances, purchase up to an
additional 600,000 shares of Class A common stock from Adelphia at the initial
public offering price less the underwriting discount.
---------------
The underwriter expects to deliver the shares against payment in New York,
New York on January 14, 1999.
GOLDMAN, SACHS & CO.
---------------
Prospectus Supplement dated January 11, 1999.
<PAGE>
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 that passed
3,237,689 homes and served 2,298,516 basic subscribers. Through our subsidiary,
Hyperion Telecommunications, Inc., we own and operate one of the largest
facilities based competitive local exchange carriers 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 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. These 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,
these 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. John J. Rigas and certain members of his immediate
family, including entities they own or control, have substantial ownership
interests in these partnerships and corporations. As of September 30, 1998,
cable systems owned by these Rigas family partnerships and corporations 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 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 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.
S-1
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RECENT DEVELOPMENTS
On January 6, 1999, Adelphia entered into an agreement to sell, and on
January 13, 1999, Adelphia expects to consummate its offerings of, $100,000,000
of 7 1/2% Senior Notes due 2004 (the "7 1/2% Notes Offering") and $300,000,000
of 7 3/4% Senior Notes due 2009 (the "7 3/4% Notes Offering"). Net proceeds of
these offerings, after deducting offering expenses, are estimated to be
approximately $393,700,000. Of this amount, at least $160,000,000 will be used
by Adelphia to purchase, redeem or otherwise retire a portion of its 9 1/2%
Senior Pay-In-Kind Notes due 2004. The remainder will be contributed to
Adelphia subsidiaries and used to repay borrowings under revolving credit
facilities of such subsidiaries, all of which, subject to compliance with the
terms of and maturity of the revolving credit facilities, may be reborrowed and
used for general corporate purposes such as capital expenditures, investments,
acquisitions or other corporate purposes. The terms of these notes are similar
to those of Adelphia's existing publicly held senior debt.
On December 30, 1998, Adelphia's 66.7% owned joint venture limited
partnership with Tele-Communications, Inc., which has operations in the Western
New York region, closed on a $700,000,000, 8.5 year credit facility. The credit
facility consists of a $350,000,000 reducing revolving credit portion and a
$350,000,000 term loan portion (the "Western New York Partnership Financing").
Proceeds from initial borrowings were used to repay indebtedness owed to
Adelphia.
On December 21, 1998, Adelphia, a wholly owned subsidiary of Adelphia, Verto
Communications, Inc. and Verto's shareholders entered into a merger agreement
pursuant to which Verto will be merged into a wholly owned subsidiary of
Adelphia. 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 expects to issue
approximately 2.6 million shares of its Class A common stock, subject to
adjustment based on specified market prices, to the owners of Verto and to
assume approximately $32,000,000 of net liabilities of Verto. The Verto merger
agreement is expected to close in the first quarter of 1999.
For other recent developments regarding Adelphia, reference is made to the
Forms 10-Q and future filings by Adelphia under the Exchange Act.
S-2
<PAGE>
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 supplement before you decide to
purchase shares of Adelphia's Class A common stock.
HIGH LEVEL OF Adelphia has a substantial amount of debt. We
INDEBTEDNESS borrowed this money to purchase and to expand our
cable systems and other operations and, to a lesser
extent, for investments and loans to our
affiliates. At September 30, 1998, our indebtedness
totaled approximately $3,029,580,000. This included
approximately:
We owe approximately
$3.0 billion.
. $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.
Debt service consumes Our high level of indebtedness can have important
a substantial portion of adverse consequences to us and to you. It requires
the cash we generate and that we spend a substantial portion of the cash we
could affect our ability get from our business to repay the principal and
to invest in our interest on these debts. Otherwise, we could use
business in the future these funds for general corporate purposes or for
as well as to react to capital improvements. Our ability to obtain new
changes in our industry loans for working capital, capital expenditures,
or economic downturns. acquisitions or capital improvements may be limited
by our current level of debt. In addition, having
such a high level of debt could limit our ability
to react to changes in our industry and to economic
conditions generally. At September 30, 1998, the
Adelphia Parent Company had approximately
$148,148,000 and Hyperion had approximately
$221,251,000 of redeemable exchangeable preferred
stock. When we use the term "Adelphia Parent
Company" in this prospectus supplement, we are
referring only to the parent holding company
entity, Adelphia Communications Corporation, and
not to its subsidiaries. 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."
Approximately 35% of Our debt comes due at various times up to the year
this debt must be paid 2008, including an aggregate of approximately
by April 1, 2003 and all $1,046,711,000 which, as of September 30, 1998, we
of it must be paid by must pay by April 1, 2003. We have incurred long-
2008. term debt directly from the public. Different
groups of our subsidiaries borrow from banks,
insurance companies and other private lenders.
Adelphia Parent Company debt is not guaranteed by
our 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
S-3
<PAGE>
borrowings constitutes an event of default. Olympus
also has a substantial amount of debt.
NEED FOR ADDITIONAL Our business requires substantial additional
FINANCING financing on a continuing 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.
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
STRUCTURE AND POTENTIAL significant assets other than stock, partnership
IMPACT OF RESTRICTIVE interests, equity and other interests in our
COVENANTS IN SUBSIDIARY subsidiaries and our investments in other
DEBT AGREEMENTS companies. This creates risks regarding our ability
to provide cash to the parent holding company, and
to implement our business and financing plans. The
Adelphia Parent Company depends upon our
subsidiaries and other companies to provide cash
for it to repay the interest and principal which it
owes. However, the indentures for public debt and
the credit agreements for bank and other financial
The Adelphia Parent institution loans of our subsidiaries and other
Company depends on our companies restrict their ability and the ability of
subsidiaries and other the companies they own to make payments to the
companies in which we Adelphia Parent Company.
have 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
distributed to the
Adelphia Parent Company.
. maximum leverage ratios, i.e., debt to cash
flow,
. minimum interest coverage,
. current on principal and interest payments,
. 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
S-4
<PAGE>
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
could adversely affect other companies' debt and restrictive covenants,
the Adelphia Parent you can read the portions of Adelphia's most recent
Company and our Annual Report on Form 10-K and Adelphia's most
subsidiaries. recent Form 10-Q filed with the SEC which are
labeled "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
LARGE LOSSES AND The Total Convertible Preferred Stock, Common Stock
NEGATIVE STOCKHOLDERS' and Other Stockholders' Equity (Deficiency) at
EQUITY September 30, 1998 was a deficit 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:
We have had large net
losses for many years . fiscal year ended March 31, 1996--$119,894,000,
and expect this to
continue.
. fiscal year ended March 31, 1997--$130,642,000,
. fiscal year ended March 31, 1998--$192,729,000,
and
. 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."
S-5
<PAGE>
Our earnings have been
insufficient to pay for Our earnings could not pay for our combined fixed
our fixed charges and charges and preferred stock dividends during these
preferred stock years by the amounts set forth in the table below,
dividends. although combined fixed charges and preferred stock
dividends included substantial non-cash charges for
depreciation, amortization and non-cash interest
expense on some of our debts and the non-cash
expense of Hyperion's preferred stock dividends:
<TABLE>
<CAPTION>
EARNINGS NON-CASH
DEFICIENCY CHARGES
------------ ------------
<S> <C> <C>
. 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
</TABLE>
We have met our cash On an as adjusted basis, after giving effect to
needs in the past these offerings, the offering of an additional
through new borrowings $150,000,000 of 8 3/8% Senior Notes due 2008 (the
and will have to borrow "November 8 3/8% Notes Offering"), the 7 1/2% Notes
to meet our future cash Offering, the 7 3/4% Notes Offering and the Western
needs. However, we may New York Partnership Financing, but not otherwise
not be able to borrow giving effect to any other transactions after
needed funds in the September 30, 1998 that are described in "Recent
future for a variety of Developments," Adelphia's earnings were
reasons including the insufficient to cover its combined fixed charges
covenants in our current and preferred stock dividends by approximately
loan agreements and $122,318,000 and $70,931,000 for the year ended
indentures. If we could March 31, 1998 and six months ended September 30,
not borrow, we may have 1998, respectively. Historically, the cash we
to sell assets, generate from our operating activities and
renegotiate loans or borrowings have been sufficient to meet our
explore other requirements for debt service, working capital,
alternatives. capital expenditures, and investments in and
advances to our affiliates, and we have depended on
getting additional borrowings to meet our liquidity
requirements. Although in the past we have been
able both to refinance our debt and to obtain new
debt, there can be no guarantee that we will be
able to continue to do so in the future or that the
cost to us or the other terms which would affect us
would be as favorable to us as our current loans
and credit agreements. We believe that our business
will continue to generate cash and that we will be
able to obtain new loans to meet our cash needs.
However, the covenants in the indentures and credit
agreements for our current debt limit our ability
to borrow more money. If we could not refinance our
debt or obtain new loans, we would likely have to
consider various options such as the sale of equity
or some of our assets to meet the principal and
interest payments we owe, negotiate with our
lenders to restructure existing loans or explore
other options available under applicable laws
including those under reorganization or bankruptcy
laws. We can not guarantee that any options
available to us would enable us to repay our debt
in full. For more information about our losses,
negative stockholders equity, and borrowings, you
can read the portions of Adelphia's most recent
Annual Report on
S-6
<PAGE>
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
The cable television means of distributing video to home televisions
industry currently such as Direct Broadcast Satellite systems,
competes with direct commonly known as DBS systems, and Multichannel
broadcast satellite Multipoint Distribution systems. Some of the
systems and other regional Bell telephone operating companies and
distribution systems. other local telephone companies are in the process
Potential competitors to of entering the video-to-home business and several
our cable television have expressed their intention to enter the video-
business include the to-home business. In addition, some regional Bell
regional Bell telephone operating companies and local telephone companies
companies. have facilities which are capable of delivering
cable television service. The equipment which
telephone companies use in providing local exchange
service may give them competitive advantages over
us in distributing video to home televisions. The
regional Bell operating companies and other
potential competitors 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.
Hyperion competes with We also face competition from other communications
local telephone and entertainment media, including conventional
carriers, including Bell off-air television broadcasting services,
Atlantic and NYNEX, for newspapers, movie theaters, live sporting events
telephone services. and home video products. We cannot predict the
extent to which competition may affect us. In each
of the markets served by Hyperion's networks, the
competitive 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
could have substantial of 1996 will result in federal and state regulatory
impact on Hyperion's authorities adopting initiatives to provide
telecommunications increased business opportunities to competitive
services. local exchange carriers such as Hyperion. However,
we also think that local telephone companies will
gain increased pricing flexibility from regulators
as competition increases. Hyperion's operating
results and cash flow could be materially and
adversely affected
S-7
<PAGE>
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 aggressive 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 regional Bell operating companies can now
telephone companies obtain regulatory approval to offer long distance
could get regulatory services if they comply with the interconnection
approval to offer long requirements of the federal Telecommunications Act
distance service in of 1996. Regional Bell operating companies in
competition with Hyperion's operating territories have filed
Hyperion's significant applications with the FCC claiming that they have
customers. complied with the interconnection requirements and
are thus entitled to receive authority to provide
long distance services.
Each of these requests has been denied by the FCC.
However, an approval of such a regional Bell
operating company's 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 regional Bell
operating companies 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. Regional Bell operating companies
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. Regional Bell
operating companies 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. Regional Bell operating
companies 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,
regional Bell operating companies 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 regional Bell operating
companies' petitions, this could have a material
adverse effect on Hyperion.
Potential competitors Potential competitors for Hyperion include other
to Hyperion's competitive local exchange carriers, incumbent
telecommunications local telephone companies which are not subject to
services include the regional Bell operating companies' restrictions on
regional Bell telephone offering long distance service, AT&T, MCI WorldCom,
companies, AT&T, MCI Sprint and other long distance carriers, cable
WorldCom and Sprint, and television companies, electric utilities, microwave
electric utilities. carriers, wireless telecommunications providers and
private networks built by large end users. Both
AT&T and MCI WorldCom have announced that they have
begun
S-8
<PAGE>
to offer local telephone services in some areas of
the country, and 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
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.
The cable television industry and the provision of
EXTENSIVE REGULATION local telephone exchange services are subject to
extensive regulation at the federal, state and
local levels, and many aspects of such regulation
are currently the subject of judicial proceedings
and administrative or 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
and telecommunications
industries are heavily
regulated.
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
Telecommunications Act substantially changed federal, state and local laws
of 1996 may have a and regulations governing our cable television and
significant impact on telecommunications businesses. This law could
the cable television materially affect the growth and operation of the
business and cable television industry and the cable services we
telecommunications provide. Although this legislation may lessen
industries. regulatory burdens, the cable television industry
may be subject to new competition as a result.
There are numerous rulemakings that have been and
continue to be
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undertaken by the FCC which will interpret and
implement the provisions of this 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
may also have a large many legal barriers to entry (i.e., telephone
impact on Hyperion's companies entering the cable industry and cable
telecommunications companies entering the telephone industry), we
business. cannot guarantee that rules adopted by the FCC or
state regulators or other legislative 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
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
SHAREHOLDERS AND CONTROL which carries one vote per share and Class B which
BY THE RIGAS FAMILY carries ten votes per share. The public holds a
majority of the outstanding Class A shares,
although the 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. Upon consummation of
the offerings of Class A common stock described on
the cover page of this prospectus supplement, the
Rigas family will hold 15,029,119 shares, or about
38%, of the Class A common stock, about 51% of all
Adelphia common stock and about 83% of the combined
voting power of both classes of common stock. The
Rigas family also owns shares of Adelphia's 8%
Series C Cumulative Convertible preferred stock.
Prior to the offerings described on the cover page
of this prospectus supplement, 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
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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
INTEREST Adelphia, including other members of the Rigas
family own certain corporations and 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
PLANNED TO BE PAID IN any of its common stock and has no intention of
THE FORESEEABLE FUTURE paying cash dividends on such stock in 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
FUTURE SALE or arrangements, the 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
. the shares of Class A common stock that will be
issued to Verto's shareholders pursuant to the
Verto merger agreement.
Additionally, Adelphia will register with the SEC
for public resale the 4,000,000 shares of Class A
common stock to be purchased by the Rigas family as
described on the cover page of this prospectus
supplement (the "Direct Purchase").
S-11
<PAGE>
Approximately 14,904,000 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 or, upon completion of
these offerings, will be 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 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 PRICE stock may be 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. This
could present risks to the operation of our
business in several ways. 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.
S-12
<PAGE>
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 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.
S-13
<PAGE>
Costs incurred to date directly related to
addressing the year 2000 issue are approximately
$700,000. 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 $3,500,000. 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
STATEMENTS reference in this prospectus supplement 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 supplement, 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
Forms 10-Q, is forward-looking, such as information
relating to the effects of future regulation,
future capital commitments and the effects of
competition. Such forward-looking information
involves important risks and uncertainties that
could significantly affect expected results in the
future from those expressed in any forward-looking
statements made by, or on behalf of, us. These
S-14
<PAGE>
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 supplement
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.
S-15
<PAGE>
USE OF PROCEEDS
The net proceeds to Adelphia from the offerings described on the cover page
of this prospectus supplement (the "Offerings") will be approximately
$345,500,000, after deducting estimated underwriting discounts and commissions
and offering expenses. Such net proceeds will be advanced or contributed to its
subsidiaries which will apply such funds to repay revolving credit facilities
of such subsidiaries. Subject to compliance with the terms of and to the
maturity of the revolving credit facilities, the respective subsidiaries will
be able to reborrow and use such amounts for general corporate purposes such as
capital expenditures, investments, acquisitions or other corporate purposes. As
of December 31, 1998, the average effective interest rate on such credit
facilities was approximately 6.48%.
S-16
<PAGE>
CAPITALIZATION
(DOLLARS IN THOUSANDS EXCEPT PAR VALUE AMOUNTS)
The following table sets forth the cash and cash equivalents and
capitalization of Adelphia as of September 30, 1998, on an actual and as
adjusted basis to reflect the Offerings, the November 8 3/8% Notes Offering,
the 7 1/2% Notes Offering, the 7 3/4% Notes Offering and the Western New York
Partnership Financing and the application of the net proceeds therefrom. This
table should be read in conjunction with Adelphia's consolidated financial
statements and related notes thereto included in the Form 10-K and the Forms
10-Q.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------------
ACTUAL AS ADJUSTED (B)
----------- ---------------
<S> <C> <C>
Cash and cash equivalents......................... $ 171,030 $ 371,030
U.S. government securities--pledged............... 57,201 57,201
----------- -----------
Total cash, cash equivalents and U.S.
government securities--pledged................ $ 228,231 $ 428,231
=========== ===========
Long-term debt including current maturities (a):
Subsidiary debt................................. $ 1,369,567 $ 961,867
Parent debt..................................... 1,660,013 2,062,313
----------- -----------
Total long-term debt including current
maturities................................... 3,029,580 3,024,180
----------- -----------
Hyperion redeemable exchangeable preferred stock.. 221,251 221,251
----------- -----------
Redeemable exchangeable preferred stock........... 148,148 148,148
----------- -----------
Convertible preferred stock, common stock and
other stockholders' equity (deficiency):
8 1/8% Series C convertible preferred stock
($100,000 liquidation
preference).................................... 1 1
Class A common stock, $.01 par value,
200,000,000 shares authorized; 31,258,843
shares outstanding on an Actual basis and
39,258,843 shares outstanding on an As Adjusted
basis.......................................... 313 393
Class B common stock, $.01 par value, 25,000,000
shares authorized and 10,834,476 shares
outstanding.................................... 108 108
Additional paid-in capital...................... 744,975 1,090,395
Accumulated deficit............................. (1,723,391) (1,728,691)
----------- -----------
Total convertible preferred stock, common
stock and other stockholders' equity
(deficiency)................................. (977,994) (637,794)
----------- -----------
Total capitalization......................... $ 2,420,985 $ 2,755,785
=========== ===========
</TABLE>
- --------
(a) See Note 3 to Adelphia's consolidated financial statements in the Form 10-K
for a description of long-term debt of Adelphia and its subsidiaries. See
"The Company--Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources" in the Form 10-
K and the Forms 10-Q.
(b) Gives effect to the application of the net proceeds of approximately
$345,500 from the Offerings as described in "Use of Proceeds,"
approximately $393,700 from the 7 1/2% Notes Offering and the 7 3/4% Notes
Offering, as described in "Recent Developments," approximately $151,500
from the November 8 3/8% Notes Offering and approximately $668,000 from the
Western New York Partnership Financing. The above table does not otherwise
give effect to any other transactions after September 30, 1998 that are
described in "Recent Developments."
S-17
<PAGE>
PRICE RANGE OF ADELPHIA'S COMMON EQUITY AND DIVIDEND POLICY
Our Class A common stock is listed on the Nasdaq National Market under the
symbol "ADLAC."
The following table sets forth the range of high and low closing sale
prices of the Class A common stock for the fiscal periods indicated, as
reported by the Nasdaq Stock Market.
CLASS A COMMON STOCK
<TABLE>
<CAPTION>
HIGH LOW
------- ---------
FISCAL 1997
<S> <C> <C>
First Quarter Ended 6/30/96........................... $ 7 7/8 $ 6 9/16
Second Quarter Ended 9/30/96.......................... $11 $ 6 1/2
Third Quarter Ended 12/31/96.......................... $10 1/4 $ 5 3/4
Fourth Quarter Ended 3/31/97.......................... $ 7 1/8 $ 5 3/8
<CAPTION>
FISCAL 1998
<S> <C> <C>
First Quarter Ended 6/30/97........................... $ 7 3/4 $ 5
Second Quarter Ended 9/30/97.......................... $12 1/8 $ 6 3/4
Third Quarter Ended 12/31/97.......................... $18 3/4 $12
Fourth Quarter Ended 3/31/98.......................... $30 3/8 $16 3/8
<CAPTION>
FISCAL 1999
<S> <C> <C>
First Quarter Ended 6/30/98........................... $37 1/8 $21 1/2
Second Quarter Ended 9/30/98.......................... $44 $30 7/16
Third Quarter Ended 12/31/98.......................... $48 1/8 $29 1/8
Fourth Quarter (through 1/8/99)....................... $50 5/8 $45 11/16
</TABLE>
As of January 8, 1999, approximately 148 holders of record held our Class A
common stock. As of that date, two record holders were registered clearing
agencies holding Class A common stock on behalf of participants in such
clearing agencies.
No established public trading market exists for our Class B common stock.
As of the date hereof, the Class B common stock was held of record by seven
persons, principally members of the Rigas family, including a Pennsylvania
general partnership all of whose partners are members of the Rigas family. The
Class B common stock is convertible into shares of Class A common stock on a
one-to-one basis. As of the date of this prospectus supplement, the Rigas
family owned 99.1% of the outstanding Class B common stock.
DIVIDEND POLICY
We have never paid a cash dividend on our common stock and anticipate that
for the foreseeable future any earnings will be retained for use in our
business. Our ability to pay cash dividends on our common stock is limited by
the provisions of our indentures.
S-18
<PAGE>
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.
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
the Offerings and the pro forma net tangible book value per share of the common
stock immediately after completion of the Offerings, other than the Direct
Purchase (the "Public Offering"). After giving effect to the sale by Adelphia
of (i) 4,000,000 shares of Class A common stock in the Public Offerings at the
public offering price of $45.00 per share, after deduction of underwriting
discounts and commissions and estimated offering expenses and (ii) 4,000,000
shares of Class A common stock in the Direct Placement, the pro forma net
tangible book value of the Company as of September 30, 1998 would have been
$(1,679,782,000), or $(33.53) per share of Common Stock. This represents an
immediate increase in net tangible book value of $14.58 per share to existing
stockholders and an immediate dilution of net tangible book value of $(78.53)
per share to purchasers of Class A Common Stock in the Public Offerings, as
illustrated in the following table:
<TABLE>
<S> <C> <C>
Public offering price per share of Class A common stock...... $ 45.00
Net tangible book value per share of common stock before
the Offerings............................................. $(48.11)
Increase per share of common stock attributable to the
Direct Placement.......................................... 7.30
Increase per share of common stock attributable to the
Public Offering........................................... 7.28
-------
Pro forma net tangible book value per share of common stock
after the Offerings......................................... (33.53)
-------
Net tangible book value dilution per share................... $(78.53)
=======
</TABLE>
S-19
<PAGE>
UNDERWRITING
Adelphia and Goldman, Sachs & Co. (the "Underwriter") have entered into an
underwriting agreement with respect to the shares of Class A common stock being
offered. Subject to certain conditions, the Underwriter has agreed to purchase
all of the shares.
If the Underwriter sells more shares than the total number set forth on the
cover page of this prospectus supplement, it has an option to buy up to an
additional 600,000 shares from Adelphia to cover such sales. The Underwriter
may exercise that option for 30 days.
Total underwriting discounts and commissions to be paid to the Underwriter
by Adelphia are shown in the following table assuming both no exercise and full
exercise of the Underwriter's option to purchase additional shares.
<TABLE>
<CAPTION>
PAID BY ADELPHIA
----------------
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per Share....................................... $1.75 $1.75
Total........................................... $7,000,000 $8,050,000
</TABLE>
Shares sold by the Underwriter to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. In addition, the Underwriter may receive from purchasers of shares
normal brokerage commissions in amounts agreed with such purchasers. If all the
shares are not sold at the initial offering price, the Underwriter may change
the offering price and other selling terms.
In connection with the Public Offering, the Underwriter may purchase and
sell shares of Class A common stock in the open market. These transactions may
include short sales, stabilizing transactions and purchases to cover positions
created by short sales. Short sales involve the sale by the Underwriter of a
greater number of shares than it is required to purchase in the Public
Offering. Stabilizing transactions consist of certain bids or purchases made
for the purpose of preventing or retarding a decline in the market price of the
Class A common stock while the Public Offering is in progress.
The Underwriter also may impose a penalty bid. This occurs when a particular
dealer repays to the Underwriter a portion of the underwriting discount
received by the dealer because the Underwriter has repurchased shares sold by
or for the account of such dealer in stabilizing or short covering
transactions.
These activities by the Underwriter may stabilize, maintain or otherwise
affect the market price of the Class A common stock. As a result, the price of
the Class A common stock may be higher than the price that otherwise might
exist in the open market. If these activities are commenced, they may be
discontinued by the Underwriter at any time. These transactions may be effected
on the Nasdaq National Market, in the over-the-counter market or otherwise.
Adelphia estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$500,000.
Adelphia has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act.
MARGIN AND PLEDGE ARRANGEMENTS
Adelphia has entered into an agreement with the Rigas family, pursuant to
which 4,000,000 shares of Class A common stock will be offered and sold by
Adelphia in the Direct Purchase directly
S-20
<PAGE>
to Highland Holdings II. In connection with the Direct Purchase, Highland
Holdings II and Doris Holdings, L.P., each of which are controlled by
individual members of the Rigas family, have entered into agreements to pledge
a total of approximately 6.2 million shares of Class A common stock, including
all of the shares acquired in the Direct Purchase, to the Underwriter as
security for margin loans pursuant to margin loan and pledge agreements. In
addition, Doris Holdings, L.P., will guarantee the margin loans. Under the
margin loan and pledge agreements, under certain conditions, including the
failure to maintain any required collateral value, the pledgee will have, among
other options, the right to cause the pledged shares to be sold, with the
proceeds of the sale to be used to repay the amount outstanding under the
margin loans. Adelphia will file and maintain an effective shelf registration
statement covering the potential resale of any such pledged shares for the
account of the pledgors and the pledgee for so long as the margin loans are
outstanding. Proceeds from these margin loans may be used for, among other
purposes, the purchase of the shares in the Direct Purchase. The closing of the
Direct Purchase and the closing of the sale of the shares of Class A common
stock offered by this prospectus supplement are conditioned upon each other,
among other conditions.
S-21
<PAGE>
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 supplement 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 supplement 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
supplement 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 supplement. If Adelphia subsequently files updating or superseding
information in a document that is incorporated by reference into this
prospectus supplement, the subsequent information will also become part of
this prospectus supplement and will supersede the earlier information.
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 (collectively, the "Forms 10-Q"),
. 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, November
9, 1998 and January 11, 1999,
. 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:
Adelphia's registration statement filed with the SEC under
Section 12 of the Exchange Act and subsequent amendments and
reports filed to update such description, and
Adelphia's registration statement on Form S-3 (File No. 333-
58749).
Adelphia is also incorporating by reference into this prospectus supplement
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.
S-22
<PAGE>
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
supplement 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 supplement is accurate as of any date other than
the date on the first page of the prospectus supplement. Adelphia is not making
this offer of securities in any state or country in which the offer or sale is
not permitted.
LEGAL MATTERS
The validity of the Common Stock will be passed upon for Adelphia by
Buchanan Ingersoll Professional Corporation, Pittsburgh, Pennsylvania.
Attorneys of that firm who are representing Adelphia in the Offerings own an
aggregate of 2,300 shares of Adelphia's Class A common stock and 15,100 shares
of Hyperion's Class A common stock. The validity of the Class A common stock
offered hereby will be passed upon on behalf of Goldman, Sachs & Co. by Latham
& Watkins, New York, New York.
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
supplement 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.
S-23
<PAGE>
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- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESEN-
TATIONS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS ARE AN OFFER TO SELL
ONLY THE SHARES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN JURISDIC-
TIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPEC-
TUS SUPPLEMENT AND THE PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Adelphia................................................................... S-1
Recent Developments........................................................ S-2
Risk Factors............................................................... S-3
Use of Proceeds............................................................ S-16
Capitalization............................................................. S-17
Price Range of Adelphia's Common Equity and Dividend Policy................ S-18
Dilution................................................................... S-19
Underwriting............................................................... S-20
Where You Can Find More Information........................................ S-22
Legal Matters.............................................................. S-23
Experts.................................................................... S-23
Prospectus
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 4
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends........... 10
Dilution................................................................... 10
Use of Proceeds............................................................ 10
Description of Debt Securities............................................. 10
Description of Capital Stock............................................... 20
Book Entry Issuance........................................................ 23
Plan of Distribution....................................................... 24
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
- -------------------------------------------------------------------------------
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4,000,000 Shares
ADELPHIA COMMUNICATIONS CORPORATION
Class A Common Stock
------------------
ADELPHIA LOGO
------------------
GOLDMAN, SACHS & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
