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As filed with the Securities and Exchange Commission on May 11, 1999
Registration No. 333-75995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware 4841 23-2417713
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
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MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
COLIN H. HIGGIN, ESQUIRE
DEPUTY GENERAL COUNSEL
ADELPHIA COMMUNICATIONS CORPORATION
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
CARL E. ROTHENBERGER, JR., ESQUIRE
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
21ST FLOOR, 301 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8800
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [_]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Subject To Completion Dated
May 11, 1999
Offer to Exchange
7 1/2% Series B Senior Notes due 2004
for
any and all of the 7 1/2% Senior Notes due 2004
and
7 3/4% Series B Senior Notes due 2009
for
any and all of the 7 3/4% Senior Notes due 2009 of
ADELPHIA COMMUNICATIONS CORPORATION
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THE EXCHANGE OFFER NEW NOTES
. The exchange offer expires 5:00 . The 7 1/2% Series B Senior Notes
p.m., New York City time, June and the 7 3/4% Series B Senior
14, 1999, unless extended by us. Notes will evidence the same debt
as the 7 1/2% Senior Notes and
. You may withdraw tenders of the 7 3/4% Senior Notes and will
outstanding 7 1/2% Senior Notes be entitled to the benefits of
and 7 3/4% Senior Notes any time the same Indenture.
prior to 5:00 p.m., New York City
time on the last day of the . The terms of the 7 1/2% Series B
exchange offer. Senior Notes and the 7 3/4%
Series B Senior Notes will be
. The exchange offer is subject to substantially identical to the
customary conditions which are currently outstanding 7 1/2%
described more fully in this Senior Notes and 7 3/4% Senior
prospectus and the accompanying Notes, except for transfer
letter of transmittal. restrictions and registration
rights that relate to the 7 1/2%
. We will exchange all outstanding Senior Notes and the 7 3/4%
7 1/2% Senior Notes and 7 3/4% Senior Notes.
Senior Notes that are validly
tendered and not validly . We believe, based on
withdrawn. interpretations made by the SEC
staff with respect to similar
. We will not receive any proceeds transactions, that with some
from the exchange offer. exceptions, you may offer for
resale, resell, or otherwise
transfer the 7 1/2% Series B
Senior Notes and the 7 3/4%
Series B Senior Notes without
compliance with registration and
prospectus delivery requirements
of the Securities Act of 1933.
. We will not list the 7 1/2%
Series B Senior Notes and the 7
3/4% Series B Senior Notes on any
exchange or in any automated
quotation system. Therefore,
there may not be any active
trading market for them.
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You should carefully review the "Risk Factors" beginning on page 12 for a
discussion of things you should consider before participating in the exchange
offer.
----------------
Neither the SEC nor any state securities commission has approved or
disapproved of the 7 1/2% Senior Notes or the 7 3/4% Senior Notes to be
distributed in the exchange offer, nor have any of these organizations
determined that this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The information in the prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
SEC is effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is prohibited.
----------------
The date of this Prospectus is May 14, 1999.
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TABLE OF CONTENTS
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Page
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Summary.................................................................. 2
Risk Factors............................................................. 12
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends............................................................... 26
The Exchange Offer....................................................... 27
Use of Proceeds.......................................................... 39
Description of the Notes................................................. 40
Certain Federal Income Tax Considerations................................ 65
Plan of Distribution..................................................... 68
Where You Can Find More Information...................................... 68
Legal Matters............................................................ 70
Experts.................................................................. 70
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SUMMARY
This summary may not contain all the information that may be important to
you. You should read the entire prospectus and those documents incorporated by
reference into this document, including the risk factors, financial data and
related notes, before making an investment decision or participating in the
exchange offer. When we use the term Adelphia Parent Company in this
prospectus, we are referring only to the parent holding company entity,
Adelphia Communications Corporation, and not to its subsidiaries.
Adelphia
Adelphia is a leader in the telecommunications industry with cable
television and local telephone operations. Our operations consist of providing
telecommunications services primarily over our networks, which are commonly
referred to as broadband networks because they can transmit large quantities of
voice, video and data by way of digital or analog signals. As of December 31,
1998, we owned or managed cable television systems with broadband networks that
passed in front of 3,252,830 homes and served 2,304,325 basic subscribers. 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 New Jersey. These systems are located
primarily in suburban areas of large and medium-sized cities within the 50
largest television markets. As of December 31, 1998, the broadband networks for
these systems passed in front of 2,131,978 homes and served 1,528,307 basic
subscribers.
We also provide management and consulting services to other partnerships and
corporations engaged in the ownership and operation of cable television
systems. John J. Rigas and members of his immediate family, including entities
they own or control, have substantial ownership interests in these partnerships
and corporations. As of December 31, 1998, the broadband networks for cable
systems owned by these Rigas family partnerships and corporations passed in
front of 177,250 homes and served 134,443 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 that operates a large cable system in Florida. As
of December 31, 1998, the broadband networks for this system passed in front of
943,602 homes and served 641,575 basic subscribers.
Through our subsidiary, Hyperion Telecommunications, Inc., we own and
operate a large competitive local exchange carrier in the eastern United
States. This means that Hyperion provides its customers with alternatives to
the incumbent local telephone company for local telephone and
telecommunications services. Hyperion's telephone operations are referred to as
being facilities based, which means it generally owns the local
telecommunications networks and facilities it uses to deliver these services,
rather than leasing or renting the use of another party's networks to do so. As
of December 31, 1998,
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Hyperion managed and operated 22 telecommunications networks, including two
under construction, serving 46 markets. Hyperion's Class A common stock is
listed on the Nasdaq National Market under the symbol "HYPT."
Our executive offices are located at Main at Water Street, Coudersport,
Pennsylvania 16915, and our telephone number is (814) 274-9830.
Recent Developments
On April 30, 1999, Adelphia consummated its offering of 2.5 million shares
of 5 1/2% Series D convertible preferred stock, liquidation preference of $200
per share. Net proceeds from the convertible preferred stock offering, after
deducting expenses, were approximately $484.5 million. Adelphia invested a
portion of the net proceeds in cash equivalents and advanced or contributed the
remaining net proceeds to repay borrowings under subsidiary credit agreements,
all of which, subject to compliance with the terms of and maturities of the
revolving credit facilities, Adelphia plans to reborrow and use to fund one or
more of the recently announced acquisitions.
On April 28, 1999, Adelphia consummated its offering of 8.0 million shares
of Class A common stock. Net proceeds from this common stock offering, after
deducting offering expenses, were approximately $485.5 million. Adelphia used
the net proceeds to repay borrowings under subsidiary credit agreements, all of
which, subject to compliance with the terms of and maturities of the revolving
credit facilities, Adelphia plans to reborrow and use to fund one or more of
the recently announced acquisitions.
On April 28, 1999 Adelphia consummated its offering of $350 million of 7
7/8% Senior Notes due 2009. Net proceeds from this offering, after deducting
offering expenses, were approximately $345 million. The net proceeds were used
to repay borrowings under subsidiary credit agreements, all of which, subject
to compliance with the terms of and maturities of the revolving credit
facilities, may be reborrowed and used for general corporate purposes,
including acquisitions, capital expenditures and investments.
On April 12, 1999, Adelphia announced that it had entered into a definitive
agreement to purchase the cable television systems owned by Harron
Communications Corp. for $1.2 billion in cash. This transaction is subject to
customary closing conditions. As of December 31, 1998, Harron had approximately
294,000 basic subscribers after giving effect to recent and pending
acquisitions involving approximately 9,000 basic subscribers.
On April 9, 1999, Adelphia entered into a stock purchase agreement with
Highland Holdings, a general partnership controlled by members of the family of
John J. Rigas, in which Adelphia agreed to sell to Highland Holdings, and
Highland Holdings agreed to purchase, from $250 million to $375 million of
Adelphia's Class B common stock. The purchase price for the Class B common
stock will be equal to the public offering price in Adelphia's April 28, 1999
public offering of Class A common stock, less the underwriting
3
<PAGE>
discount, plus an interest factor. Closing under this stock purchase agreement
is to occur within 270 days following the April 28, 1999 closing of the public
offering of Class A common stock.
On March 5, 1999, Adelphia announced that it had entered into a definitive
merger agreement to acquire Century Communications Corp. Under the agreement,
Adelphia would acquire the outstanding common stock of Century for an aggregate
of approximately $826 million in cash, 48.7 million shares of Class A common
stock and the assumption of approximately $1.6 billion of debt. This
transaction is subject to shareholder approval by Century and Adelphia and
other customary closing conditions. As of December 31, 1998, Century had
approximately 1,593,000 basic subscribers after giving effect to Century's
pending joint venture with AT&T.
On March 2, 1999, Hyperion issued $300 million of 12% Senior Subordinated
Notes due 2007. An entity controlled by members of the Rigas family purchased
$100 million of the $300 million of Senior Subordinated Notes directly from
Hyperion at a price equal to the aggregate principal amount less the discount
to the initial purchasers. The net proceeds of approximately $292 million will
be used to fund Hyperion's acquisition of interests held by local partners in
certain of its networks, for capital expenditures and investments in its
networks, for working capital purposes and for general corporate purposes.
On February 23, 1999, Adelphia announced that it had entered into a
definitive agreement to acquire FrontierVision Partners, L.P. for approximately
$2.1 billion. Under the agreement, Adelphia would acquire FrontierVision in
exchange for approximately $550 million in cash, 7 million shares of Class A
common stock and the assumption of approximately $1.1 billion of debt. The
transaction is subject to customary closing conditions. As of December 31,
1998, FrontierVision had approximately 702,000 basic subscribers.
On January 29, 1999, Adelphia purchased from Telesat Cablevision, Inc., a
subsidiary of FPL Group, Inc., shares of Adelphia's stock owned by Telesat.
Adelphia purchased 1,091,524 shares of Class A common stock and 20,000 shares
of Series C cumulative convertible preferred stock which are convertible into
an additional 2,358,490 shares of Class A common stock. These shares represent
3,450,014 shares of common stock on a fully converted basis. Adelphia and
Telesat also agreed to a redemption of Telesat's interests in Olympus
Communications, L.P. by August 1999. The redemption is subject to applicable
third party approvals. The aggregate purchase price for these transactions will
be approximately $257.2 million.
On January 21, 1999, Adelphia acquired Verto Communications, Inc. In
connection with the Verto acquisition, Adelphia issued 2,561,024 shares of its
Class A common stock to the former owners of Verto. Verto provided cable
television services to approximately 56,000 basic subscribers in the greater
Scranton, Pennsylvania area at the date of acquisition.
4
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On January 14, 1999, Adelphia completed offerings totaling 8.6 million
shares of its Class A common stock. Adelphia used the net proceeds of
approximately $372 million from these offerings to repay subsidiary bank debt.
On January 13, 1999, Adelphia completed offerings of $100 million of 7 1/2%
Senior Notes due 2004 and $300 million of 7 3/4% Senior Notes due 2009. Net
proceeds from these offerings, after deducting offering expenses, were
approximately $393.7 million. Of this amount, Adelphia used approximately $160
million to redeem a portion of its 9 1/2% Senior Pay-In-Kind Notes due 2004.
Adelphia used the remainder to repay borrowings under revolving credit
facilities of its subsidiaries. The terms of the notes are similar to those of
Adelphia's existing publicly held senior debt. It is the 7 1/2% Series B Senior
Notes and the 7 3/4% Series B Senior Notes that are being registered under this
registration statement in exchange for the 7 1/2% Senior Notes and the 7 3/4%
Senior Notes.
For other recent developments regarding Adelphia, we refer you to our most
recent filings and future filings by us under the Exchange Act.
5
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The Exchange Offer
On January 13, 1999, we completed private offerings of $100,000,000 of 7
1/2% Senior Notes due 2004 and $300,000,000 of 7 3/4% Senior Notes due 2009. We
will refer to both the 7 1/2% Senior Notes and the 7 3/4% Senior Notes as old
notes in this prospectus. When we refer to the 7 1/2% Series B Senior Notes due
2004 and the 7 3/4% Series B Senior Notes due 2009 that we are offering in
exchange for the old notes, we will call them new notes. When we refer to the
old notes and the new notes together, we will call them the notes. When we
refer to the registration rights agreement we are referring to the registration
rights agreement dated January 13, 1999 between Adelphia and the initial
purchasers of the old notes.
You are entitled to exchange in the exchange offer your outstanding old
notes for registered new notes. We believe that the new notes issued in the
exchange offer may be resold by you without compliance with the registration
and prospectus delivery provisions of the Securities Act, subject to some
conditions. For more information you should read "Description of the Notes."
You should also read the discussion under the headings "Summary of the Terms of
the Exchange Offer" and "The Exchange Offer" for further information regarding
the exchange offer and resale of the notes.
6
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Summary of the Terms of the Exchange Offer
The exchange offer relate to the exchange of up to: $100,000,000 aggregate
principal amount of outstanding 7 1/2% Senior Notes for an equal aggregate
principal amount of 7 1/2% Series B Senior Notes and $300,000,000 aggregate
principal amount of outstanding 7 3/4% Senior Notes for an equal aggregate
principal amount of 7 3/4% Series B Senior Notes. All of the new notes will be
obligations of the Adelphia Parent Company entitled to the benefits of the
Indenture governing the outstanding old notes. When we refer to the Indenture
in this prospectus we are referring to the Indenture, dated January 13, 1999,
between Adelphia and the Bank of Montreal Trust Company, as Trustee. The form
and terms of the new notes are identical in all material respects to the form
and terms of the outstanding old notes, except that the new notes do not have
transfer restrictions and they have been "registered" under the Securities Act,
and therefore are not entitled to the benefits of the registration rights
granted under the registration rights agreement.
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Securities Offered
. Up to $100,000,000 aggregate principal amount of 7
1/2% Series B Senior Notes and $300,000,000
aggregate principal amount of 7 3/4% Series B
Senior Notes.
. Terms of the new notes and the old notes are
substantially identical in all material respects,
except for transfer restrictions, registration
rights and liquidated damage provisions which
apply to the old notes but not to the new notes.
The Exchange Offer
. We are offering to exchange $1,000 principal
amount of the new notes for each $1,000 principal
amount of old notes. You should read "The Exchange
Offer" for a detailed description of the
procedures for tendering old notes.
. The exchange offer satisfies the registration
obligations of Adelphia under the registration
rights agreement. When the exchange offer is
completed, holders of old notes that were not
prohibited from participating in the exchange
offer and that did not tender their old notes will
not have any registration rights under the
registration rights agreement with respect to
their non-tendered old notes. Accordingly, non-
tendered old notes will continue to be subject to
the restrictions on transfer contained in the
legend on them.
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Tenders; Expiration
Date; Withdrawal;
Exchange Date . The exchange offer will expire at 5:00 p.m., New
York City time, on June 14, 1999, or, if we elect
to extend the exchange offer, such later date and
time to which it is extended. However, we cannot
extend the exchange offer beyond 30 business days
from the date of this prospectus.
. You may withdraw your tender of old notes and
retender at any time prior to the expiration of
the exchange offer.
. Any old notes not accepted for exchange for any
reason will be returned without expense to you as
promptly as practicable after the expiration or
termination of the exchange offer. Your old notes
will be accepted for exchange, if properly
tendered and not withdrawn, for new notes on the
first business day following the last day of the
exchange offer or as soon as practicable
thereafter. We refer to this date of acceptance as
the exchange date.
Accrued Interest on the
New Notes . Each new note will bear interest from the most
recent date to which interest has been paid on the
old notes or, if no such payment has been made,
from January 13, 1999.
Federal Income Tax
Considerations . The exchange offer will not result in any income,
gain or loss to the holders of notes or to us for
federal income tax purposes. For more information
you should read "Certain Federal Income Tax
Considerations."
Use of Proceeds
. We will not receive any proceeds from the exchange
offer.
Exchange Agent
. Bank of Montreal Trust Company, the Trustee under
the Indenture is the exchange agent for the
exchange offer.
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Consequences of Exchanging or Failure to Exchange Old Notes
Pursuant to the Exchange Offer
Holders that are not Broker-Dealers
. Generally, if you are not an "affiliate" of Adelphia within the meaning of
Rule 405 under the Securities Act, upon the exchange of your old notes for
new notes pursuant to the exchange offer, you will be able to offer your new
notes for resale, resell your new notes and otherwise transfer your new
notes without compliance with the registration and prospectus delivery
provisions of the Securities Act.
. This is true so long as you have acquired the new notes in the ordinary
course of your business, you have no arrangement with any person to
participate in a distribution of the new notes and neither you nor any other
person is engaging in or intends to engage in a distribution of the new
notes.
Holders that are Broker-Dealers
. A broker-dealer who acquired old notes directly from us cannot exchange
those old notes in the exchange offer.
. Otherwise, each broker-dealer that receives new notes for its own account in
exchange for old notes must acknowledge that it will deliver a prospectus in
connection with any resale of the new notes. You should read "Plan of
Distribution" for a more detailed discussion of these requirements.
Failure to Exchange
. Upon consummation of the exchange offer, holders that were not prohibited
from participating in the exchange offer and did not tender their old notes
will not have any registration rights under the registration rights
agreement with respect to such nontendered old notes. Accordingly,
nontendered old notes will continue to be subject to the significant
restrictions on transfer contained in the legend on them.
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Summary Description of the Notes
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Maturity Dates
. The 7 1/2% Series B notes will mature on January
15, 2004 and the 7 3/4% Series B notes will mature
on January 15, 2009.
Interest Payment Dates
. January 15 and July 15 each year commencing July
15, 1999.
Redemption
. Neither the old notes nor the new notes will be:
. redeemable prior to maturity, or
. subject to any mandatory redemption or sinking
fund payments.
Ranking
. The old notes and the new notes are unsecured
indebtedness of the Adelphia Parent Company
ranking pari passu with other unsubordinated
indebtedness of the Adelphia Parent Company and
senior in right of payment to any future
subordinated indebtedness of the Adelphia Parent
Company.
. The operations of the Adelphia Parent Company are
conducted through the Adelphia Parent Company's
subsidiaries. Therefore, the Adelphia Parent
Company is dependent on the earnings, if any, and
cash flow of and distributions from its
subsidiaries to meet its debt obligations,
including its obligations with respect to the
notes. Because the assets of its subsidiaries and
other investments constitute substantially all of
the assets of Adelphia Parent Company, and because
those subsidiaries and other investments will not
guarantee the payment of principal of and interest
on the notes, the claims of holders of the notes
effectively will be subordinated to the claims of
creditors of such entities.
. As of December 31, 1998, on an as adjusted basis,
after giving effect to the offering of the old
notes, the sales of stock and debt described under
"Recent Developments," and the Century,
FrontierVision, Harron and Olympus acquisitions,
the notes would have been effectively subordinated
to $6.4 billion of indebtedness and redeemable
preferred stock of Adelphia's subsidiaries.
. As of December 31, 1998 our total indebtedness was
approximately $3.5 billion and total trade
payables as of such date were $97.0 million. The
Adelphia Parent
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Company's ability to access the cash flow of its
subsidiaries is subject to significant contractual
restrictions. You should read "Risk Factors--
Holding Company Structure and Potential Impact of
Restrictive Covenants in Subsidiary Debt
Agreements" and "Description of the Notes" for
more information.
Certain Covenants
. The Indenture pursuant to which the notes were or
will be issued contains certain restrictions on,
among other things:
. the incurrence of indebtedness,
. mergers and sales of assets,
. changes of control,
. the payment of dividends on, or the repurchase
of, capital stock of Adelphia, and
. certain other restricted payments by Adelphia
and its restricted subsidiaries and certain
transactions with and investments in
affiliates.
. The Indenture permits Adelphia's subsidiaries to
incur substantial additional indebtedness.
Registration Rights
. Adelphia entered into the registration rights
agreement with the initial purchasers of the old
notes. In that agreement, Adelphia agreed to file
a registration statement, of which this prospectus
is a part, with respect to the exchange offer. You
should read "Description of the Notes--
Registration Rights; Liquidated Damages" for a
more detailed discussion.
Change of Control
. Upon some change of control events, you will have
the right to require Adelphia to purchase your
notes at a price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid
interest and liquidated damages, if any, to the
date of purchase. You should read "Description of
the Notes--Covenants--Change of Control Offer."
. We cannot give you any assurances that we will
have adequate financial resources to effect a
required repurchase of the notes if a change of
control event occurs.
. Our failure to make a required repurchase of the
notes upon such a change in control would be an
Event of Default under the Indenture.
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RISK FACTORS
Prospective participants in the exchange offer should consider all of the
information contained in this prospectus in connection with the exchange offer.
In particular, prospective participants should consider the following things
before deciding to participate.
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What Happens If You Fail Upon the completion of the exchange offer, if you
To Exchange Your Old were not prohibited from participating in the
Notes For New Notes exchange offer and you did not tender your old
notes, you will no longer have any registration
rights with respect to the old notes you still
hold. These old notes are privately placed
securities and will remain subject to the
restrictions on transfer contained in the legend on
the notes. In general, you cannot sell or offer to
sell the old notes without these restrictions,
unless the old notes are registered under the
Securities Act and applicable state securities
laws. We do not intend to register the old notes
under the Securities Act.
We believe, based on SEC staff interpretations with
respect to other transactions like the one
described in this prospectus, the new notes issued
as part of the exchange offer may be offered for
resale, resold and otherwise transferred by any
holder, other than a holder that is an "affiliate"
of Adelphia within the meaning of Rule 405 under
the Securities Act, without compliance with the
prospectus delivery provisions of the Securities
Act. This is true so long as the new notes are
acquired in the ordinary course of the holder's
business, the holder does not have any arrangement
or understanding with anyone to participate in the
distribution of the new notes and neither the
holder nor anyone else is or intends to engage in a
distribution of the new notes.
A broker-dealer that acquires new notes for its own
account in the exchange offer for old notes must
acknowledge that it will deliver a prospectus in
connection with any resale of new notes. The letter
of transmittal states that by making this
acknowledgment and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. A broker-dealer may use this
prospectus, as it may be amended or supplemented
from time to time, in connection with resales of
the new notes received in exchange for the old
notes acquired by the broker-dealer as a result of
market-making activities or other trading
activities. We have agreed
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that we will make this prospectus available to any
broker-dealer for use in connection with any such
resale for a period of 365 days after the exchange
date or, if earlier, until all participating broker-
dealers have so resold. You should read "Plan of
Distribution" for more information.
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
As of December 31, extent, for investments and loans to our affiliates.
1998, we owed At December 31, 1998, our indebtedness totaled
approximately $3.5 approximately $3.5 billion. This included
billion and as of that approximately:
date we would have owed
approximately $5.6 . $1.8 billion of Adelphia Parent Company public
billion after the debt;
acquisition of Century,
$6.8 billion after the . $1.2 billion of debt owed by our subsidiaries to
acquisition of Century banks, other financial institutions and other
and FrontierVision persons; and
and $8.6 billion after
such transactions and . $471 million of public debt owed by Hyperion,
the Harron and Olympus Adelphia's competitive local exchange carrier
acquisitions. Our high subsidiary.
level of indebtedness
can have important Olympus, a non-consolidated joint venture, also has
adverse conse- approximately $727 million of debt. Olympus will be
quences to us and to consolidated with Adelphia upon completion of
you. Adelphia's proposed acquisition of interests in
Olympus. That acquisition is expected to close in
July 1999.
We may need to
refinance significant Century and its subsidiaries have substantial
Century indebtedness indebtedness. At February 28, 1999, Century and its
that we will be subsidiaries had long-term debt of approximately
assuming. $2.0 billion (exclusive of current maturities of
$20.1 million), including approximately $1.9 billion
principal amount of public indebtedness under nine
indentures, $97 million of indebtedness under four
credit agreements entered into by subsidiaries of
Century and various banks and $80 million of
indebtedness under a note agreement entered into by
a subsidiary of Century.
Without a consent from the lenders to Century's
subsidiaries, the Century merger will violate
certain covenants contained in the Century credit
agreements. As a result, we will either secure a
waiver from the lenders under these credit
agreements or will refinance such credit agreements
with new or existing credit facilities. Although we
currently have sufficient liquidity under our
existing credit facilities to refinance the
borrowings under Century's credit agreements,
Adelphia is seeking consents to keep some or all of
such
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credit agreements in place. In the event that these
consents
cannot be obtained upon reasonable terms, we could
seek to refinance some or all of them under one or
more new facilities in order to preserve our
existing liquidity. There can be no assurance,
however, that we will be able to obtain these
consents or refinance these credit agreements under
any terms or on terms acceptable to Adelphia. As a
result, the failure to obtain the required consents
or to refinance these credit agreements could
materially decrease Adelphia's liquidity.
Under the indentures for Century's public notes,
the merger will require Century to make an offer to
purchase the public notes if the merger results in
the public notes being downgraded to a specified
level by certain national rating agencies. Upon
announcement of the merger, certain rating agencies
announced that the Century notes were under review
with a view to a downgrade to a level which would
not require Century to make an offer to repurchase
public notes. In the event that the public notes
were to be downgraded to a level beyond that
announced by the rating agencies upon disclosure of
the merger, Century would be required to make an
offer to repurchase the public notes at 101% of the
amount of the notes. In the event that a
significant amount of notes were tendered to
Century for repurchase, this could materially
decrease Adelphia's liquidity.
We may need to
refinance significant On February 23, 1999, we announced our proposed
FrontierVision acquisition of FrontierVision. FrontierVision and
indebtedness that we its subsidiaries have substantial indebtedness. At
will be assuming. December 31, 1998, FrontierVision and its
subsidiaries had nonaffiliate long-term debt of
approximately $1.1 billion, including approximately
$672 million owed to banks under a credit agreement
and approximately $450 million owed under three
indentures for public notes. We are attempting to
secure consents and waivers from the lenders to
permit the credit agreement to remain outstanding.
As a result of the acquisition by Adelphia, the
indentures for the public debt will require
FrontierVision to make an offer to repurchase the
public notes at 101% of the amount of the public
notes. In the event that the lenders do not consent
to permitting the credit agreement to remain
outstanding or a significant amount of the public
notes are tendered to FrontierVision for
repurchase, this could materially decrease our
liquidity.
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We will need to raise We will need to raise significant funds to pay for
significant financing the $1.2 billion acquisition of Harron.
for the Harron
acquisition.
The Century, FrontierVision, Olympus and Harron
acquisitions are reflected in Adelphia's unaudited
condensed consolidated pro forma financial
statements incorporated by reference in this
prospectus.
Debt service consumes
a substantial portion of Our high level of indebtedness can have important
the cash we generate. adverse consequences to us and to you. It requires
This could affect our that we spend a substantial portion of the cash we
ability to invest in our get from our business to repay the principal and
business in the future interest on these debts. Otherwise, we could use
as well as to react to these funds for general corporate purposes or for
changes in our industry capital improvements. Our ability to obtain new
or economic downturns. loans for working capital, capital expenditures,
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. In addition to our debt, at
December 31, 1998, the Adelphia Parent Company had
approximately $148 million and Hyperion had
approximately $229 million of redeemable
exchangeable preferred stock which contain payment
obligations that are similar to Adelphia's debt
obligations.
Approximately 32% of
our debt outstanding at Our debt comes due at various times up to the year
December 31, 1998 must 2009, including an aggregate of approximately $1.1
be paid by April 1, 2003 billion as of December 31, 1998, which we must pay
and all of it must be by April 1, 2003.
paid by 2009.
As discussed above, Century, FrontierVision and
Olympus also have a substantial amount of debt.
Under its current terms, this debt comes due at
various times up to the year 2017, including an
aggregate of approximately $1.6 billion as of
December 31, 1998 (May 31, 1998 as to Century),
which must be paid over the next five years.
Our Business Requires
Substantial Additional Our business requires substantial additional
Financing And If We Do financing on a continuing basis for capital
Not Obtain That expenditures and other purposes including:
Financing We May Not Be
Able To Upgrade Our
Plant, Offer Services,
Make Payments When Due
Or Refinance Existing
Debt
. 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;
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. refinancing existing debt; and
. acquisitions and investments.
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.
We Have Had Large Losses
And Negative The Total Convertible Preferred Stock, Common Stock
Stockholders' Equity And and Other Stockholders' Equity (Deficiency) at
We Expect This To December 31, 1998 was a deficit of approximately
Continue $1.0 billion.
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:
. fiscal year ended March 31, 1996--$119.9 million;
. fiscal year ended March 31, 1997--$130.6 million;
. fiscal year ended March 31, 1998--$192.7 million;
and
. nine months ended December 31, 1998--$135.8
million.
We expect to continue to incur large net losses for
the next several years.
Our earnings have
been insufficient to pay Our earnings could not pay for our combined fixed
for our fixed charges charges and preferred stock dividends during these
and preferred stock periods by the amounts set forth in the table
dividends. below, 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>
<TABLE>
<CAPTION>
Earnings Non-Cash
Deficiency Charges
---------- --------
(in thousands)
<S> <C> <C>
. fiscal year ended March 31, 1996 $ 78,189 $127,319
. fiscal year ended March 31, 1997 $ 61,848 $165,426
. fiscal year ended March 31, 1998 $113,941 $195,153
. nine months ended
December 31, 1998 $116,899 $186,022
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Pro forma for the old notes, the sales of stock and
If we cannot debt described in "Recent Developments," and the
refinance our debt Century, FrontierVision, Harron and Olympus
including debt incurred acquisitions, our earnings were insufficient to
in connection with the cover our combined fixed charges and preferred
acquisitions of stock dividends by approximately $609.6 million and
FrontierVision and approximately $466.4 million for the year ended
Century or obtain new March 31, 1998 and the nine months ended December
loans, we would likely 31, 1998, respectively.
have to consider various
options such as the sale Historically, the cash we generate from our
of additional equity or operating activities and borrowings has been
some of our assets to sufficient to meet our requirements for debt
meet the principal and service, working capital, capital expenditures and
interest payments we investments in and advances to our affiliates, and
owe, negotiate with our we have depended on additional borrowings to meet
lenders to restructure our liquidity requirements. Although in the past we
existing loans or have been able both to refinance our debt and to
explore other options obtain new debt, there can be no guarantee that we
available under will be able to continue to do so in the future or
applicable laws that the cost to us or the other terms which would
including those under affect us would be as favorable to us as current
reorganization or loans and credit agreements. We believe that our
bankruptcy laws. We business will continue to generate cash and that we
cannot guarantee that will be able to obtain new loans to meet our cash
any options available to needs. However, the covenants in the indentures and
us would enable us to credit agreements for our current debt provide some
repay our debt in full. limitations on our ability to borrow more money.
Competition
The telecommunications services provided by
Adelphia are subject to strong competition and
potential competition from various sources.
Our cable television
business is subject to Our cable television systems compete with other
strong competition from means of distributing video to home televisions
several sources which such as Direct Broadcast Satellite systems,
could adversely affect commonly known as DBS systems, and Multichannel
revenue or revenue Multipoint Distribution systems. Some of the
growth. regional Bell telephone operating companies and
other local telephone companies are in the process
of entering the video-to-home business and several
have expressed their intention to enter the video-
to-home business. In addition, some regional Bell
operating companies and local telephone 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
Adelphia in distributing video to home televisions.
The regional Bell
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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 continue to
materialize or, if such competition materializes,
the extent of its effect on our cable television
business.
We also face competition from other communications
and entertainment media, including conventional
off-air television broadcasting services,
newspapers, movie theaters, live sporting events
and home video products. We cannot predict the
extent to which competition may affect us.
Hyperion's operations
are also subject to risk In each of the markets served by Hyperion's
because Hyperion networks, the competitive local exchange carrier
competes principally services offered by Hyperion compete principally
with established local with the services offered by the incumbent local
telephone carriers that telephone exchange carrier company serving that
have long-standing area. Local telephone companies have long-standing
utility relationships relationships with their customers, have the
with their customers and potential to subsidize competitive services from
pricing flexibility for monopoly service revenues, and benefit from
local telephone favorable state and federal regulations. The merger
services. of Bell Atlantic and NYNEX created a very large
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.
We believe 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 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.
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If 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. To date, the FCC has denied the requests
competition with for approval filed by regional Bell operating
Hyperion's significant companies in Hyperion's operating areas. However,
customers, some of approval of such a request could result in
Hyperion's major decreased market share for the major long distance
customers could lose carriers which are among Hyperion's significant
market share. customers. This could have a material adverse
effect on Hyperion.
The regional Bell
telephone companies Some of the regional Bell operating companies have
continue to seek other also recently filed petitions with the FCC
regulatory approvals requesting waivers of other obligations under the
that could significantly federal Telecommunications Act of 1996. These
enhance their involve services Hyperion also provides such as
competitive position high speed data, long distance, and services to
against Hyperion. Internet Service Providers. If the FCC grants the
regional Bell operating companies' petitions, this
could have a material adverse effect on Hyperion.
Potential competitors
to Hyperion's Potential competitors for Hyperion include other
telecommunications competitive local exchange carriers, incumbent
services include the local telephone companies which are not subject to
regional Bell telephone regional Bell operating companies' restrictions on
companies, AT&T, offering long distance service, AT&T, MCIWorldCom,
MCIWorldCom and Sprint, Sprint and other long distance carriers, cable
electric utilities and television companies, electric utilities, microwave
other companies that carriers, wireless telecommunications providers and
have advantages over private networks built by large end users. Both
Hyperion. AT&T and MCIWorldCom have announced that they have
begun 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. In addition, the long distance
carriers 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.
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We Are Subject To 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
service package 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 12-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.
Our cable television
and telecommunications
businesses are heavily
regulated as to rates we
can charge and other
matters. This regulation
could limit our ability
to increase rates, cause
us to decrease then
current rates or require
us to refund previously
collected fees.
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
Telecommunications Act The federal Telecommunications Act of 1996
of 1996 may have a substantially changed federal, state and local laws
significant impact on and regulations governing our cable television and
our cable television and telecommunications businesses. This law could
telephone businesses. materially affect the growth and operation of the
cable television industry and the cable services we
provide. Although this legislation may lessen
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 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.
Similarly, the federal Telecommunications Act of
1996 removes entry barriers for all companies and
could increase substantially the number of
competitors offering comparable services in
Hyperion's markets or potential markets.
Furthermore, we 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.
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Unequal Voting Rights Adelphia has two classes of common stock--Class A
Of Stockholders which carries one vote per share and Class B which
carries ten votes per share. Under Adelphia's
Certificate of Incorporation, the Class A shares
elect only one of our eight directors.
Control Of Voting Power
By The Rigas Family As of May 1, 1999, the Rigas family beneficially
owned shares representing about 42% of the total
number of outstanding shares of both classes of
Adelphia's common stock and about 77% of the total
voting power of Adelphia's shares. The public holds
a majority of the outstanding shares of Class A
common stock, although the Rigas family also owns
approximately 30% of those shares as of May 1,
1999. The Rigas family owns approximately 99% of
Adelphia's shares of Class B common stock. The
Rigas family also owns shares of Adelphia's 8 1/8%
Series C cumulative convertible preferred stock
which, if converted, would increase its voting
power and beneficial ownership. The Rigas family
also has agreed to acquire 4,114,549 shares of
Class B common stock, and has rights to acquire up
to an additional 2,057,275 shares of Class B Common
Stock. As a result of the Rigas family's stock
ownership and an agreement among the Class B
stockholders, members of the Rigas family as of May
1, 1999 have the power to elect seven of eight
Adelphia directors, and if they converted their
convertible preferred stock might be able to elect
all eight directors. In addition, the Rigas family
could control stockholder decisions on other
matters such as amendments to Adelphia's
Certificate of Incorporation and Bylaws, and
mergers or other fundamental corporate
transactions.
The Rigas family can
control stockholder
decisions on very
important matters.
There Are Potential
Conflicts Of Interest John J. Rigas and the other executive officers of
Between Adelphia And Adelphia, including other members of the Rigas
The Rigas Family family, own other 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 Adelphia, 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. Our public debt
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indentures contain covenants that place some
restrictions on transactions between us and our
affiliates.
Holding Company
Structure And Potential The Adelphia Parent Company directly owns no
Impact Of Restrictive significant assets other than stock, partnership
Covenants In Subsidiary interests and equity and other interests in our
Debt Agreements subsidiaries and in other companies. This creates
risks regarding our ability to provide cash to the
Adelphia Parent Company to repay the interest and
principal which it owes, our ability to pay cash
dividends to our common stockholders in the future,
and the ability of our subsidiaries and other
companies to respond to changing business and
economic conditions and to get new loans.
The Adelphia Parent
Company depends on its The public indentures and the credit agreements for
subsidiaries and other bank and other financial institution loans of our
companies in which it subsidiaries and other companies in which we have
has investments to fund invested, restrict their ability and the ability of
its cash needs. the companies they own to make payments to the
Adelphia Parent Company. These agreements also
place other restrictions on the borrower's ability
to borrow new funds and include requirements for
the borrowers to remain in compliance with the
credit agreements. The ability of a subsidiary or a
company in which we have invested to comply with
debt restrictions may be affected by events that
are beyond our control. The breach of any of these
covenants could result in a default which could
result in all loans and other amounts owed to its
lenders becoming due and payable. Our subsidiaries
and companies in which we have invested might not
be able to repay in full the accelerated loans.
We May Not Have The
Resources To Repurchase The Indenture and most of Adelphia's other public
The Notes Upon A Change debt indentures contain provisions requiring
of Control Adelphia, upon a change of control, to offer to
redeem the notes and certain of Adelphia's other
debt. In the event a change of control occurs,
there is no assurance that Adelphia will have the
ability to make an offer to redeem the notes, that
it will have sufficient funds to repurchase all of
the notes or that it would be able to obtain any
additional debt or equity financing in an amount
sufficient to repurchase the notes.
No Public Market Exists
For The Notes The notes are new securities for which there is
currently no market. Adelphia does not intend to
apply for listing of the notes on any securities
exchange or automated quotation system. Although
the initial purchasers have advised Adelphia that
they currently intend to make a market in the
notes, they are not obligated to do so. Therefore,
any market
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making activities may be discontinued at any time
without notice. We cannot assure you that any
market for the notes will develop, or that that
market will provide liquidity for holders of the
notes. If a market for the notes does develop, the
notes could trade at prices that may be higher or
lower than their initial offering price depending
upon many factors, including prevailing interest
rates, Adelphia's operating results and the markets
for similar securities. Historically, the market
for non-investment grade debt has been subject to
disruptions that have caused the prices of
securities similar to the notes to fluctuate
dramatically. There can be no assurance that, if a
market for the notes does develop, that market
would not be subject to similar disruption.
The Century Merger May
Not Be Completed If The The Century merger requires approvals from
Required Approval Of Century's stockholders and our stockholders.
Century's Class A Although the Class B stockholders of Century and
Stockholders Is Not the controlling stockholders of Adelphia have
Obtained agreed to vote in favor of the merger, the
companies cannot be certain of the ultimate outcome
of the required vote of the Class A stockholders of
Century. If that vote is not obtained, the
companies will not be able to complete the proposed
transaction as currently structured or in a timely
manner, if at all.
The failure to
satisfy conditions to Even if Century's stockholders approve the Century
completion of the merger, one or more of the pending acquisitions may
acquisitions could not close unless several other conditions are met.
jeopardize the These include:
acquisitions.
. receipt of all required consents of governmental
authorities, except where the failure to obtain
any such required consent would not have a
material adverse effect;
. clearance under antitrust laws;
. neither Adelphia nor the selling parties have
breached any of their respective
representations, warranties or covenants made in
the applicable agreement; and
. there is no law or court order prohibiting the
applicable acquisition.
Our ability to complete the pending acquisitions is
dependent on our ability to raise additional
capital.
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Our Acquisitions And Because we are experiencing a period of rapid
Expansion Could Involve expansion through acquisition, the operating
Operational And Other complexity of Adelphia, as well as the
Risks responsibilities of management personnel, have
increased. Our ability to manage such expansion
effectively will require us to continue to expand
and improve our operational and financial systems
and to expand, train and manage our employee base.
The Century, FrontierVision and Harron transactions
and some of our other recent acquisitions involve
the acquisition of companies that have previously
operated independently. We may not be able to
integrate the operations of these companies without
some level of difficulty, such as the loss of key
personnel. There is no guarantee that we will be
able to realize the benefits expected from the
integration of operations from these transactions.
Because the cable systems to be acquired in the
Century, FrontierVision and Harron acquisitions are
in the same industry as those of Adelphia, the
acquired systems will generally be subject to the
same risks as those of Adelphia, such as those
relating to competition, regulation, year 2000
issues and technological developments.
Year 2000 Issues Present
Risks To Our Business The year 2000 issue refers to the potential
Operations In Several inability of computerized systems and technologies
Ways to properly recognize and process dates beyond
December 31, 1999. This could present risks to the
operation of our business in several ways. 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
systems; 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. Although we are evaluating
the impact of the year 2000 issue on our business
and are seeking to implement necessary solutions,
this process has not been completed.
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There can be no assurance that the systems of other
companies on which our systems rely will be year
2000 ready or 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, including parties acquired by us, may
have a material adverse effect on Adelphia,
including significant service interruption or
outages; however, we cannot currently estimate the
extent of any such adverse effects.
Forward-Looking
Statements In This The statements contained or incorporated by
Prospectus Are Subject reference in this prospectus that are not
To Risks historical facts are "forward-looking statements"
And Uncertainties and can be identified by the use of forward-looking
terminology such as "believes," "expects," "may,"
"will," "should," "intends" or "anticipates" or the
negative thereof or other variations thereon or
comparable terminology, or by discussions of
strategy that involve risks and uncertainties.
Certain information set forth or incorporated by
reference in this prospectus, including
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Adelphia's
1998 Annual Report on Form 10-K and in Adelphia's
Form 10-Qs, is forward-looking, such as information
related 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 risks and
uncertainties include, but are not limited to,
uncertainties relating to economic conditions, the
availability and cost of capital, acquisitions and
divestitures, government and regulatory policies,
the pricing and availability of equipment,
materials, inventories and programming,
technological developments, year 2000 issues and
changes in the competitive environment in which we
operate. Persons reading this prospectus are
cautioned that such statements are only predictions
and that actual events or results may differ
materially. In evaluating such statements, readers
should specifically consider the various factors
which could cause actual events or results to
differ materially from those indicated by such
forward-looking statements.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends of Adelphia for the periods indicated.
For purposes of calculating the ratio of earnings available to cover combined
fixed charges and preferred stock dividends:
. earnings consist of loss before income taxes and extraordinary items
plus fixed charges, excluding capitalized interest, and
. fixed charges consist of interest, whether expensed or capitalized, plus
amortization of debt issuance costs plus the assumed interest component
of rent expense.
<TABLE>
<CAPTION>
Nine Months
Ended
Fiscal Year Ended March 31, December 31, 1998
- -------------------------------------------------------- ---------------------
1994 1995 1996 1997 1998
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
-- -- -- -- -- --
</TABLE>
For the years ended March 31, 1994, 1995, 1996, 1997 and 1998, and the nine
months ended December 31, 1998, Adelphia's earnings were insufficient to cover
its combined fixed charges and preferred stock dividends by approximately
$65,997,000, $69,146,000, $78,189,000, $61,848,000, $113,941,000 and
$116,899,000, respectively. Pro forma for the old notes, the sales of stock and
debt described in "Recent Developments," and the Century, FrontierVision,
Harron and Olympus acquisitions, our earnings were insufficient to cover our
combined fixed charges and preferred stock dividends by approximately $609.6
million and approximately $466.4 million for the year ended March 31, 1998 and
the nine months ended December 31, 1998, respectively.
26
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
On January 13, 1999, Adelphia issued $100,000,000 aggregate principal amount
of 7 1/2% Senior Notes and $300,000,000 aggregate principal amount of 7 3/4%
Senior Notes to the initial purchasers of the notes. We did not register that
issuance under the Securities Act. Rather, we relied upon the private placement
exemptions under Rule 144A, Regulation S, and Section 4(2) of the Securities
Act. In connection with the issuance and sale of the old notes, we entered into
the registration rights agreement. The registration rights agreement requires
us to:
. cause the old notes to be registered under the Securities Act or
. file with the SEC a registration statement under the Securities Act with
respect to the issuance of new notes; and
. use our best efforts to cause such registration statement to become
effective under the Securities Act, and
. upon the effectiveness of that registration statement, to offer to the
holders of the old notes the opportunity to exchange their old notes for
a like principal amount of new notes, which will be issued without a
restrictive legend and may be reoffered and resold by the holder without
restrictions or limitations under the Securities Act.
A copy of the registration rights agreement has been filed as an exhibit to
the registration statement of which this prospectus is a part. The exchange
offer is being made pursuant to the registration rights agreement to satisfy
our obligations under it.
Based on no-action letters issued by the staff of the SEC to third parties,
we believe that holders of the new notes issued in exchange for old notes may
offer for resale, resell and otherwise transfer the new notes, other than any
such holder which is an "affiliate" of Adelphia within the meaning of Rule 405
under the Securities Act, without compliance with the registration and
prospectus delivery provisions of the Securities Act. This is true so long as
the new notes are acquired in the ordinary course of the holder's business, the
holder has no arrangement or understanding with any person to participate in
the distribution of the new notes and neither the holder nor any other person
is engaging in or intends to engage in a distribution of the new notes. A
broker-dealer who acquired old notes directly from Adelphia cannot exchange
such old notes in the exchange offer. Any holder who tenders in the exchange
offer for the purpose of participating in a distribution of the new notes
cannot rely on such interpretation by the staff of the SEC and must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives new
notes for its own account in exchange for old notes, where the old notes were
acquired by the broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. You should read "Plan of
Distribution" for more information.
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<PAGE>
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal, which together constitute the
exchange offer, Adelphia will accept any and all old notes validly tendered and
not withdrawn prior to 5:00 p.m., New York City time, on the last day of the
exchange offer. Adelphia will issue a principal amount of new notes in exchange
for an equal principal amount of outstanding old notes tendered and accepted in
the exchange offer. You may tender some or all of your old notes pursuant to
the exchange offer. The date of acceptance for exchange of the old notes for
the new notes will be the first business day following the last day of the
exchange offer or as soon as practicable thereafter.
The terms of the new notes and the old notes are substantially identical in
all material respects, except for certain transfer restrictions, registration
rights and liquidated damages for registration defaults, as more fully
described under "Description of the Notes," relating to the old notes which
will not apply to the new notes. You should read "Description of the Notes" for
more information. The new notes will evidence the same debt as the old notes.
The new notes will be issued under and entitled to the benefits of the
Indenture pursuant to which the old notes were issued.
As of the date of this prospectus, $100,000,000 aggregate principal amount
of the 7 1/2% Senior Notes and $300,000,000 aggregate principal amount of the 7
3/4% Senior Notes are outstanding. This prospectus, together with the letter of
transmittal, is being sent to all registered holders of the old notes.
You do not have any appraisal or dissenters' rights under state law or the
Indenture in connection with the exchange offer. Adelphia intends to conduct
the exchange offer in accordance with the provisions of the registration rights
agreement and the applicable requirements of the Exchange Act and the rules and
regulations of the SEC. Old notes which are not tendered and were not
prohibited from being tendered for exchange in the exchange offer will remain
outstanding and continue to accrue interest and to be subject to transfer
restrictions, but will not be entitled to any rights or benefits under the
registration rights agreement.
Upon satisfaction or waiver of all the conditions to the exchange offer, on
the first business day following the last day of the exchange offer, Adelphia
will accept all old notes properly tendered and not withdrawn and will issue
new notes in exchange therefor. For purposes of the exchange offer, we will be
deemed to have accepted properly tendered old notes for exchange when, as and
if we had given oral or written notice to that effect the Exchange Agent. The
Exchange Agent will act as agent for the tendering holders for the purposes of
receiving the new notes from Adelphia.
In all cases, we will issue new notes for old notes that are accepted for
exchange only after timely receipt by the Exchange Agent of such old notes, a
properly completed and duly executed letter of transmittal and all other
required documents. We nevertheless reserve the
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absolute right to waive any defects or irregularities in the tender or
conditions of the exchange offer. If we do not accept any tendered old notes
for any reason set forth in the terms and conditions of the exchange offer or
if you submit old notes for a greater principal amount than you desire to
exchange, we will return the unaccepted or nonexchanged old notes or substitute
old notes evidencing the unaccepted portion, as appropriate, without expense to
the tendering holder as promptly as practicable after the expiration or
termination of the exchange offer.
If you tender old notes in the exchange offer, you will not pay brokerage
commissions or fees or, subject to the instructions in the letter of
transmittal, transfer taxes with respect to the exchange. We will pay all
charges and expenses, other than certain applicable taxes described below, in
connection with the exchange offer. For more information you should read "Fees
and Expenses."
Expiration Date; Extensions; Amendments
When we use the term expiration date, we mean 5:00 p.m., New York City time,
on June 14, 1999, unless we, in our sole discretion, extend the exchange offer,
in which case the term expiration date means the latest date and time to which
we extend the exchange offer. However, we cannot extend the exchange offer
beyond 30 business days after the date of this prospectus.
If we decide to extend the expiration date, we will notify the Exchange
Agent of the extension by oral or written notice and will mail to the
registered holders an announcement of the extension, prior to 9:00 a.m., New
York City time, on the next business day after the then expiration date.
We reserve the right, in our sole discretion:
. to delay accepting any old notes, to extend the exchange offer or to
terminate the exchange offer if any of the conditions set forth below
under "Conditions" have not been satisfied, by giving oral or written
notice of such delay, extension or termination to the Exchange Agent, or
. to amend the terms of the exchange offer.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice of the event. If
we amend the exchange offer in a manner that we believe constitutes a material
change, we will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of old notes of that amendment.
Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, amendment or termination of the exchange
offer, we will have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
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Interest on the New Notes
The 7 1/2% Series B Senior Notes will bear interest at the rate of 7 1/2%
per year and the 7 3/4% Series B Senior Notes will bear interest at the rate of
7 3/4% per year, payable semi-annually, in cash, on January 15 and July 15 of
each year, from the most recent date to which interest has been paid on the old
notes or, if no such payment has been made, from January 13, 1999.
Conditions
Notwithstanding any other term of the exchange offer, Adelphia will not be
required to exchange any new notes for any old notes, and may terminate or
amend the exchange offer before the acceptance of any old notes for exchange,
if:
. any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which seeks to restrain or prohibit the exchange offer or, in our
judgment, would materially impair the ability of us to proceed with the
exchange offer, or
. any law, statute, rule or regulation is proposed, adopted or enacted, or
any existing law, statute, rule, order or regulation is interpreted, by
any government or governmental authority which, in our judgment, would
materially impair the ability of us to proceed with the exchange offer,
or
. the exchange offer or its consummation would otherwise violate or be
prohibited by applicable law.
If we determine in our sole discretion that any of these conditions is not
satisfied, we may:
. refuse to accept any old notes and return all tendered old notes to the
tendering holders,
. extend the exchange offer and retain all old notes tendered prior to the
expiration of the exchange offer, subject, however, to the rights of
holders who tendered such old notes to withdraw their tendered old
notes, or
. waive such unsatisfied conditions with respect to the exchange offer and
accept all properly tendered old notes which have not been withdrawn. If
such waiver constitutes a material change to the exchange offer, we will
promptly disclose such waiver by means of a prospectus that will be
distributed to the registered holders, and we will extend the exchange
offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the
registered holders, if the exchange offer would otherwise expire during
such five to ten business day period.
These conditions are for our sole benefit and we may assert them regardless
of the circumstances giving rise to any such condition or we may waive them in
whole or in part at any time, and from time to time, in our sole discretion.
Our failure at any time to exercise
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<PAGE>
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by us concerning the events
described above shall be final and binding on all parties.
Procedures for Tendering
The tender of old notes by a holder as set forth below, including the tender
of old notes by book-entry delivery pursuant to the procedures of DTC (the
Depository Trust Company), and the acceptance thereof by us will constitute an
agreement between such holder and us in accordance with the terms and subject
to the conditions set forth in this prospectus and in the letter of
transmittal.
Only a holder of old notes may tender old notes in the exchange offer. To
tender in the exchange offer, you must:
. complete, sign and date the letter of transmittal, or a facsimile of the
letter of transmittal, have the signatures guaranteed if required by the
letter of transmittal, and mail or otherwise deliver the letter of
transmittal or such facsimile, together with the old notes (unless such
tender is being effected pursuant to the procedure for book-entry
transfer described below) and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the expiration
date, or
. comply with the guaranteed delivery procedures described below.
Delivery of all documents must be made to the Exchange Agent at its address
set forth in this prospectus.
Please Note:
. The method of delivery of old notes and the letter of transmittal and
all other required documents to the exchange agent is at your election
and your risk.
. Instead of delivery by mail, we recommend that you use an overnight or
hand delivery service.
. In all cases, you should allow sufficient time to assure delivery to the
Exchange Agent before the expiration date.
. You should not send the letter of transmittal or your old notes to
Adelphia. You may request your broker, dealer, commercial bank, trust
company or nominee to handle the above transactions for you.
Any beneficial owner whose old notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact
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the registered holder promptly and instruct such registered holder to tender on
such beneficial owner's behalf. If such beneficial owner wishes to tender on
its own behalf, that owner must, prior to completing and executing the letter
of transmittal and delivering the owner's old notes, either make appropriate
arrangements to register ownership of the old notes in the owner's name or
obtain a properly completed bond power from the registered holder. The transfer
of registered ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by any Eligible Institution (as defined below)
unless the old notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Payment Instructions" or
"Special Delivery Instructions" on the letter of transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a letter of
transmittal or a notice of withdrawal are required to be guaranteed, the
guarantee must be by an Eligible Institution, which means a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor institution"
within the meaning of Rule 17Ad-15 under the Exchange Act.
If the letter of transmittal is signed by a person other than the registered
holder of any old notes listed therein, the old notes must be endorsed or
accompanied by a properly completed bond power, which the registered holder has
signed as such its name appears on the old notes, with the signature on it
guaranteed by an Eligible Institution. If the letter of transmittal or any old
notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, these persons should indicate this when
signing, and unless waived by Adelphia, submit evidence satisfactory to
Adelphia of their authority to act with the letter of transmittal.
Any financial institution that is a participant in the book-entry transfer
facility, DTC, for the old notes, may make book-entry delivery of old notes by
causing DTC to transfer such old notes into the Exchange Agent's account with
respect to the old notes in accordance with DTC's procedures for such transfer,
including if applicable the procedures under the Automated Tender Offer
Program. Such delivery must be accompanied by either:
. the letter of transmittal or facsimile thereof, with any required
signature guarantees, or
. an Agent's Message, and any other required documents, must, in any case,
be transmitted to and received by the Exchange Agent at the address set
forth below under "Exchange Agent" on or prior to the expiration date or
the guaranteed delivery procedures described below must be complied
with.
The Exchange Agent will make a request to establish an account with respect
to the old notes at DTC for purposes of the exchange offer.
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The term "Agent's Message" means a message, transmitted by DTC, received by
the Exchange Agent and forming part of a book-entry transfer where a tender is
initiated, which states that DTC has received an express acknowledgement from a
participant tendering old notes that such participant has received and agrees
to be bound by the terms of the letter of transmital and that Adelphia may
enforce such agreement against the participant.
We will determine all questions as to the validity, form, eligibility
(including time of receipt), acceptance of tendered old notes and withdrawal of
tendered old notes in our discretion, which determination will be final and
binding. We reserve the absolute right to reject any and all old notes not
properly tendered or any old notes for which, in the opinion of our counsel,
our acceptance would be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to particular old notes. Our
interpretation of the terms and conditions of the exchange offer (including the
instructions in the letter of transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of old notes must be cured within such time as we shall determine.
Although we intend to notify holders of defects or irregularities with respect
to tenders of old notes, neither Adelphia, the Exchange Agent nor any other
person shall be liable for failure to give notification. We will not deem
tenders of old notes to have been made until such defects or irregularities
have been cured or waived. If the Exchange Agent receives any old notes that
are not properly tendered and as to which the defects or irregularities have
not been cured or waived will return these notes, the Exchange Agent will
return these notes to the tendering holders, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date.
In addition, we reserve the right in our sole discretion to purchase or make
offers for any old notes that remain outstanding subsequent to the expiration
date or, as set forth above under "Conditions," to terminate the exchange offer
and, to the extent permitted by applicable law, purchase old notes in the open
market, in privately negotiated transactions or otherwise, with terms of offer
or purchase that could differ from the terms of the exchange offer.
By tendering, you will be representing to us:
. that the new notes you will acquire are being obtained in the ordinary
course of business of the person receiving such new notes, whether or
not such person is the holder,
. that neither you nor any such person has an arrangement or understanding
with any person to participate in the distribution of such new notes,
and
. that neither you nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of Adelphia, or that if you are an
"affiliate," that you will comply with the registration and prospective
delivery requirements of the Securities Act to the extent applicable.
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Guaranteed Delivery Procedures
If you wish to tender your old notes and:
. your old notes are not immediately available,
. you cannot deliver your old notes, the letter of transmittal or any
other required documents to the Exchange Agent prior to the Expiration
Date, or
. you cannot complete the procedures for book-entry transfer of old notes
to the Exchange Agent's account with DTC prior to the Expiration Date.
You may still complete a tender if:
. the tender is made through an Eligible Institution,
. on or prior to the Expiration Date, the Exchange Agent receives from the
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth your name and address, the certificate number(s) of such
old notes (if possible) and the principal amount of old notes tendered,
stating that the tender is being made thereby and guaranteeing that,
within three business trading days after the Expiration Date,
. the letter of transmittal (or facsimile thereof) together with the
certificate(s) representing the old notes and any other documents
required by the letter of transmittal will be deposited by the
Eligible Institution with the Exchange Agent, or
. that book-entry transfer of such old notes into the Exchange Agent's
account at DTC will be effected and confirmation of such book-entry
transfer will be delivered to the Exchange Agent, and
. the properly completed and executed letter of transmittal (or facsimile
thereof), as well as the certificate(s) representing all tendered old
notes in proper form for transfer and all other documents required by
the letter of transmittal, or confirmation of book-entry transfer of the
old notes into the Exchange Agent's account at DTC, are received or
deemed to be received by the Exchange Agent within three business
trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their old notes according to the guaranteed
delivery procedures set forth above.
Terms and Conditions of the Letter of Transmittal
The letter of transmittal contains, among other things, the following terms
and conditions, which are part of the exchange offer:
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<PAGE>
By tendering your old notes, you exchange, assign and transfer the old notes
to us and irrevocably constitute and appoint the Exchange Agent as your agent
and attorney-in-fact to cause the old notes to be assigned, transferred and
exchanged. You represent and warrant to us and the Exchange Agent that:
. you have full power and authority to tender, exchange, assign and
transfer the old notes and to acquire the new notes in exchange for the
old notes,
. when the old notes are accepted for exchange, we will acquire good and
unencumbered title to the old notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse
claim,
. you will, upon request, execute and deliver any additional documents
deemed by us to be necessary or desirable to complete the exchange,
assignment and transfer of tendered old notes, and
. acceptance of any tendered old notes by us and the issuance of new notes
in exchange therefor will constitute performance in full by us of our
obligations under the registration rights agreement and we will have no
further obligations or liabilities thereunder to such holders (except
with respect to accrued and unpaid Liquidated Damages, if any). All
authority conferred by you as a holder will survive your death or
incapacity and all of your obligations will be binding upon your heirs,
legal representatives, successors, assigns, executors and administrators
of the holder.
By tendering, you will also certify that you:
. are not an "affiliate" of Adelphia within the meaning of Rule 405 under
the Securities Act or that, if you are an "affiliate," you will comply
with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable,
. are acquiring the new notes in the ordinary course of your business, and
. have no arrangement with any person or intent to participate in, and you
are not participating in, the distribution of the new notes.
Withdrawal of Tenders
Except as otherwise provided herein, tenders of old notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date.
To withdraw a tender of old notes in the exchange offer, you must send a
telegram, telex, facsimile transmission or letter indicating notice of
withdrawal which must be received
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by the Exchange Agent at its address set forth below prior to 5:00 p.m., New
York City time, on the expiration date. Any such notice of withdrawal must:
. specify the name of the person having tendered the old notes to be
withdrawn, the Depositor,
. identify the old notes to be withdrawn (including the certificate number
or numbers and principal amount of such old notes),
. be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered
(including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee for the old notes
register the transfer of such old notes into the name of the person
withdrawing the tender, and
. specify the name in which any such old notes are to be registered, if
different from that of the Depositor.
If old notes have been tendered pursuant to the procedure for book-entry
transfer, any notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn old notes or otherwise comply
with DTC's procedures. Adelphia will determine all questions as to the
validity, form and eligibility (including time of receipt) of such notices, and
its determination will be final and binding on all parties. We will deem any
old notes so withdrawn to have been not validly tendered for purposes of the
exchange offer and we will not issue any new notes with respect thereto unless
the old notes so withdrawn are validly retendered. Any old notes you have
tendered but which are not accepted for payment will be returned to you without
cost as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. You may retender properly withdrawn old
notes by following one of the procedures described above under "Procedures for
Tendering" at any time prior to the expiration date.
Untendered Old Notes
Holders of old notes whose old notes are not tendered or are tendered but
not accepted in the exchange offer will continue to hold such old notes and
will be entitled to all the rights and preferences and subject to the
limitations applicable thereto under the Indenture. Following consummation of
the exchange offer, the holders of old notes will continue to be subject to the
existing restrictions upon transfer thereof and we will have no further
obligations to such holders, other than the initial purchaser, to provide for
the registration under the Securities Act of the old notes held by them. To the
extent that old notes are tendered and accepted in the exchange offer, the
trading market for untendered and tendered but unaccepted old notes could be
adversely affected.
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Exchange Agent
Bank of Montreal Trust Company, the Trustee under the Indenture has been
appointed as Exchange Agent of the exchange offer. Questions and requests for
assistance, requests for additional copies of this prospectus or of the letter
of transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail, by By Facsimile:
hand or by Overnight Courier: Bank of Montreal Trust Company
Bank of Montreal Trust Company Attention Reorganization
Wall Street Plaza Department
88 Pine Street, 19th Floor (212) 701-7636
New York, NY 10005
Attention: Reorganization Department Confirm by Telephone:
</TABLE> (212) 701-7624
Delivery to an address other than as set forth above or transmission of
instructions via facsimile other than as set forth above will not constitute a
valid delivery.
Fees and Expenses
We will bear the expenses of soliciting tenders. We are making the
principal solicitation by mail; however, we may make additional solicitation
by telegraph, telephone or in person by officers, regular employees or agents
of Adelphia and its affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We, however, will pay the Exchange Agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith and will pay the
reasonable fees and expenses of holders in delivering their old notes to the
Exchange Agent.
We will pay the cash expenses we incur in connection with the performance
and completion of the exchange offer. These expenses include fees and expenses
of the Exchange Agent and Trustee, accounting and legal fees and printing
costs, among others.
We will pay all transfer taxes, if any, applicable to the exchange of old
notes pursuant to the exchange offer. If, however, certificates representing
new notes or old notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be issued in the name of, any
person other than the registered holder of the old notes tendered, or if
tendered old notes are registered in the name of any person other than the
person signing the letter of transmittal, or if a transfer tax is imposed for
any reason other than the exchange of old notes pursuant to the exchange
offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
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Consequences of Failure to Exchange
Upon consummation of the exchange offer, holders of old notes that were not
prohibited from participating in the exchange offer and did not tender their
old notes will not have any registration rights under the registration rights
agreement with respect to their nontendered old notes and, accordingly, their
old notes will continue to be subject to the restrictions on transfer contained
in the legend on them. In general, the old notes may not be offered or sold,
unless registered under the Securities Act and applicable state securities
laws, except pursuant to an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws. We do not intend to
register the old notes under the Securities Act. Based on interpretations by
the staff of the SEC with respect to similar transactions, we believe that a
holder may offer for resale, resell or otherwise transfer the new notes issued
pursuant to the exchange offer in exchange for old notes (other than any such
holder which is an "affiliate" of Adelphia within the meaning of Rule 405 under
the Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that the holder acquired
its new notes in the ordinary course of its business, the holder has no
arrangement or understanding with any person to participate in the distribution
of such new notes and neither the holder nor any other person is engaging in or
intends to engage in a distribution of the new notes. If any holder has any
arrangement or understanding with respect to the distribution of the new notes
to be acquired pursuant to the exchange offer, the holder:
. could not rely on the applicable interpretations of the staff of the
SEC, and
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives new notes for its own account in exchange
for old notes must acknowledge that it will deliver a prospectus in connection
with any resale of its new notes. For more information you should read "Plan of
Distribution." The new notes may not be offered or sold unless they have been
registered or qualified for sale under applicable state securities laws or an
exemption from registration or qualification is available and is complied with.
The registration rights agreement requires Adelphia to register the new notes
in any jurisdiction requested by the holders, subject to certain limitations.
Other
Participation in the exchange offer is voluntary and you should carefully
consider whether to accept. Holders of the old notes are urged to consult their
financial and tax advisors in making their own decisions on what action to
take.
Upon consummation of the exchange offer, holders of the old notes that were
not prohibited from participating in the exchange offer and did not tender
their old notes will not have any registration rights under the registration
rights agreement with respect to such
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<PAGE>
nontendered old notes and, accordingly, such old notes will continue to be
subject to the restrictions on transfer contained in the legend on them.
However, in the event Adelphia fails to consummate the exchange offer or a
holder of old notes notifies Adelphia in accordance with the registration
rights agreement that it will be unable to participate in the exchange offer
due to circumstances delineated in the registration rights agreement, then the
holder of the old notes will have certain rights to have its old notes
registered under the Securities Act pursuant to the registration rights
agreement, subject to applicable conditions.
We have not entered into any arrangement or understanding with any person to
distribute the new notes to be received in the exchange offer, and to the best
of our information and belief, each person participating in the exchange offer
is acquiring the new notes in its ordinary course of business and has no
arrangement or understanding with any person to participate in the distribution
of the new notes to be received in the exchange offer. In this regard, we will
make each person participating in the exchange offer aware (through this
prospectus or otherwise) that any holder using the exchange offer to
participate in a distribution of new notes to be acquired in the registered
exchange offer:
. may not rely on the staff position enunciated in Morgan Stanley and Co.
Inc. (avail. June 5, 1991) and Exxon Capital Holding Corp. (avail. May
13, 1988) or similar letters, and
. must comply with registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
Accounting Treatment
The new notes will be recorded at the same carrying value as the old notes
as reflected in Adelphia's accounting records on the exchange date.
Accordingly, no gain or loss for accounting purposes will be recognized by
Adelphia. The costs of the exchange offer will be expensed over the term of the
new notes.
USE OF PROCEEDS
There will be no cash proceeds payable to us from the issuance of the new
notes pursuant to the exchange offer. The net proceeds less offering costs
received by us from the January 13, 1999 sale of old notes were approximately
$393,700,000. Of this amount, approximately $160,000,000 was used by Adelphia
to redeem a portion of the 9 1/2% Senior Pay-In-Kind Notes due 2004. The
remainder of these net proceeds were contributed to Adelphia's subsidiaries and
used to repay borrowings under revolving credit facilities of those
subsidiaries. Our subsidiaries may reborrow these funds and use them for
general corporate purposes. As of December 31, 1998, the average effective
interest rate charged on these subsidiary credit facilities was approximately
6.48%.
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DESCRIPTION OF THE NOTES
General
The 7 1/2% Senior Notes and the 7 3/4% Senior Notes constitute separate
series of Senior Notes issued pursuant to the January 13, 1999 Indenture, (the
"Indenture"), between Adelphia and Bank of Montreal Trust Company, as trustee
(the "Trustee"). The New Notes, like the Old Notes, will be issued pursuant to
the Indenture. As used in this section, (i) the term Old Notes refers to both
series of Senior Notes, the 7 1/2% Senior Notes due 2004 and the 7 3/4% Senior
Notes due 2009, (ii) the term New Notes refers to both Series of Notes, the 7
1/2% Series B Senior Notes due 2004 and the 7 3/4% Series B Senior Notes due
2009, and (iii) the term Notes refers to both the Old Notes and the New Notes.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (the
"Trust Indenture Act"). The terms of the New Notes are substantially identical
to the Old Notes in all material respects, including interest rate and
maturity, except that (i) the New Notes will not be subject to the restrictions
on transfer (other than with respect to holders that are broker-dealers,
persons who participated in the distribution of the Old Notes or affiliates)
and (ii) the Registration Rights Agreement covenants regarding registration and
the related liquidated damages (other than those that have accrued and were not
paid) with respect to registration defaults will have been deemed satisfied.
The Notes are subject to all such terms, and holders of Notes are referred to
the Indenture and the Trust Indenture Act for a statement thereof. The
following summary of certain provisions of the Indenture does not purport to be
complete and is qualified by reference to the Indenture including the
definitions of certain terms used below. A copy of the Indenture and
Registration Rights Agreement is available as set forth under "Where You Can
Find More Information." As used in this section, the term Registration Rights
Agreement refers to the Registration Rights Agreement between Adelphia and the
initial purchasers of the Old Notes, dated January 13, 1999. The definitions of
certain terms used in the following summary are set forth below under "--
Certain Definitions." As used in this section, the term "Adelphia" refers only
to the Adelphia Parent Company and not to subsidiaries.
As of the date of this prospectus, $100,000,000 principal amount of 7 1/2%
Senior Notes and $300,000,000 principal amount of 7 3/4% Senior Notes were
outstanding.
The Indenture authorizes the issuance of up to $700,000,000 in aggregate
principal amount of the Notes. The Notes are general senior unsecured
obligations of Adelphia and are effectively subordinate in right of payment to
the liabilities of Adelphia's subsidiaries. For more information you should
read "Subordination to Subsidiary Debt" and "Certain Definitions" below.
The 7 1/2% Senior Notes will mature on January 15, 2004. The 7 3/4% Senior
Notes will mature on January 15, 2009. Adelphia will pay interest on the Notes
on January 15 and July 15 of each year, commencing July 15, 1999, to the
persons who are registered holders at the close of business on the January 1
and July 1 immediately preceding the interest payment date. The Notes will not
be redeemable prior to the maturity date.
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The Notes will be issued only in fully registered form without coupons and
will be issued in denominations of $1,000 and integral multiples thereof.
The Indenture and the existing indentures under which Adelphia's other
Public Debt was issued contain covenants which may afford holders of Adelphia's
Public Debt certain protections regarding leverage and the incurrence of
indebtedness. These include covenants which limit the amount of additional
indebtedness that may be incurred by Adelphia and its subsidiaries, which
restrict mergers and consolidations by Adelphia unless after giving effect to
the transaction the consolidated fixed charge ratio of the surviving entity
satisfies certain compliance tests, and which require such Notes and Adelphia's
Public Debt to be secured equally and ratably with other indebtedness in
certain circumstances where Adelphia creates or assumes liens on its property
or assets in connection therewith. For more information you should read
"Covenants" below.
The Unrestricted Subsidiaries of Adelphia include Hyperion, Global
Cablevision, Inc. and Orchard Park Cablevision, Inc., their respective
subsidiaries, and certain other subsidiaries.
The Notes are not redeemable and there is no mandatory redemption or sinking
fund prior to maturity.
Ranking
The New Notes will be senior unsecured indebtedness of Adelphia, will rank
pari passu in right of payment with other unsubordinated indebtedness of
Adelphia and senior in right of payment to all future subordinated indebtedness
of Adelphia. The operations of Adelphia are conducted through its subsidiaries
and, therefore, Adelphia is dependent on the earnings and cash flow of and
distributions from its subsidiaries to meet its debt obligations, including its
obligations with respect to the New Notes. Because the assets of its
subsidiaries constitute substantially all of the assets of Adelphia, and
because the subsidiaries will not guarantee the payment of principal of and
interest on the New Notes, the claims of holders of the New Notes effectively
will be subordinated to the claims of creditors of such entities. As of
December 31, 1998 on an as adjusted basis, after giving effect to the offering
of the Old Notes, the sales of stock and debt described under "Recent
Developments," and the Century, FrontierVision, Harron and Olympus
acquisitions, the Notes would have been effectively subordinated to $6.4
billion of indebtedness and redeemable preferred stock of Adelphia's
subsidiaries. As of December 31, 1998, the total indebtedness of Adelphia's
subsidiaries to banks and institutions, on a consolidated basis, aggregated
$1.7 billion. For more information you should read "Risk Factors--Holding
Company Structure and Potential Impact of Restrictive Covenants in Subsidiary
Debt Agreements." In addition, at December 31, 1998, Hyperion had $0.2 billion
in redeemable preferred stock.
Registration Rights; Liquidated Damages
Adelphia and the initial purchasers entered into the Registration Rights
Agreement on January 13, 1999 (the "Closing Date"). Pursuant to the
Registration Rights Agreement,
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Adelphia agreed to several matters regarding registration of the Old Notes, as
described in this and the following four paragraphs in this section.
Capitalized terms used in this section and not defined in this prospectus will
have the meanings given to them in the Registration Rights Agreement.
Adelphia agreed to use its reasonable efforts to file with the SEC on or
prior to 90 days after the Closing Date the Exchange Offer Registration
Statement on the appropriate form under the Securities Act with respect to the
Exchange Notes. Upon the effectiveness of the Exchange Offer Registration
Statement, Adelphia will offer to the holders of Transfer Restricted Securities
pursuant to the Exchange Offer who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for Exchange
Notes. If (i) Adelphia is not required to file the Exchange Offer Registration
Statement or permitted to consummate the Exchange Offer because the Exchange
Offer is not permitted by applicable law or SEC policy, or (ii) any Holder of
Transfer Restricted Securities notifies Adelphia on or prior to the 20th
Business Day following consummation of the Exchange Offer that it (a) is
prohibited by law or SEC policy from participating in the Exchange Offer or (b)
may not resell the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales or (iii) any holder of Transfer Restricted Securities is a broker-
dealer and holds Notes acquired directly from Adelphia or an affiliate of
Adelphia, and shall so notify Adelphia, Adelphia will file with the SEC a Shelf
Registration Statement to cover resales of the Notes by the Holders thereof who
satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement. Adelphia will use its best
efforts to cause the applicable registration statement to be declared effective
by the SEC within the applicable time period. For purposes of the foregoing,
"Transfer Restricted Securities" means each Note until (i) the date on which
such Note has been exchanged by a person other than a broker-dealer for an
Exchange Note in the Exchange Offer, (ii) following the exchange by a broker-
dealer in the Exchange Offer of a Note for an Exchange Note, the date on which
such Exchange Note is sold to a purchaser who receives from such broker-dealer
on or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (iii) the date on which such Note has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Securities
Act. Notwithstanding the foregoing, at any time after Consummation (as defined
in the Registration Rights Agreement) of the Exchange Offer, Adelphia may allow
the Shelf Registration Statement to cease to be effective and usable if (i) the
Board of Directors of Adelphia determines in good faith that such action is in
the best interests of Adelphia, and Adelphia notifies the Holders within a
certain period of time after the Board of Directors of Adelphia makes such
determination or (ii) the prospectus contained in the Shelf Registration
Statement contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that the
period referred to in the Registration Rights Agreement during which the Shelf
Registration Statement is required to be effective
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and usable will be extended by the number of days during which such
registration statement was not effective or usable pursuant to the foregoing
provisions.
The Registration Rights Agreement provides that (i) Adelphia will use its
reasonable efforts to file an Exchange Offer Registration Statement with the
SEC on or prior to 90 days after the Closing Date, (ii) Adelphia will use its
best efforts to have the Exchange Offer Registration Statement declared
effective by the SEC on or prior to 180 days after the Closing Date (which
180-day period shall be extended for a number of days equal to the number of
Business Days, if any, that the SEC is officially closed during such period),
(iii) unless the Exchange Offer would not be permitted by applicable law or SEC
policy, Adelphia will commence the Exchange Offer and use its best efforts to
issue on or prior to 30 days after the date on which the Exchange Offer
Registration Statement was declared effective by the SEC, Exchange Notes in
exchange for all Notes tendered prior thereto in the Exchange Offer and (iv) if
obligated to file the Shelf Registration Statement, Adelphia will use its best
efforts to file the Shelf Registration Statement with the SEC on or prior to 60
days after such filing obligation arises and to cause the Shelf Registration
Statement to be declared effective by the SEC on or prior to 90 days after such
filing obligation arises. If (a) Adelphia fails to file either of the
Registration Statements required by the January 13, 1999, Registration Rights
Agreement on or before the date specified for such filing, (b) either of such
Registration Statements is not declared effective by the SEC on or prior to the
date specified for such effectiveness (the "Effectiveness Target Date"), (c)
Adelphia fails to consummate the Exchange Offer within 30 days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement, or (d) subject to the last sentence of the preceding paragraph, the
Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective, but thereafter ceases to be effective or usable in
connection with resales of Transfer Restricted Securities during the periods
specified in the Registration Rights Agreement (each such event referred to in
clauses (a) through (d) above is a "Registration Default"), then, subject to
the last sentence of the preceding paragraph, Adelphia will pay Liquidated
Damages to each holder of Transfer Restricted Securities, with respect to the
first 90-day period immediately following the occurrence of such Registration
Default, in an amount equal to 0.25% per annum on the principal amount of Notes
constituting Transfer Restricted Securities held by such Holder. The amount of
the Liquidated Damages will increase by an additional 0.25% per annum with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of Liquidated Damages of 2.0% per annum on
the principal amount of Notes constituting Transfer Restricted Securities. All
accrued Liquidated Damages will be paid by Adelphia in cash on each Damages
Payment Date to the Global Note Holder (and any holder of Certificated
Securities who has given wire-transfer instructions to Adelphia at least 10
Business Days prior to the Damages Payment Date) by wire transfer of
immediately available funds and to all other Holders of Certificated Securities
by mailing checks to their registered addresses. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages will cease.
Holders of the Old Notes will be required to make certain representations to
Adelphia (as described in the Registration Rights Agreement) in order to
participate in the Exchange
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Offer and will be required to deliver information to be used in connection with
the Shelf Registration Statement and to provide comments on the Shelf
Registration Statement within the time periods set forth in the Registration
Rights Agreement in order to have their Old Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
by reference to, all the provisions of the Registration Rights Agreement, a
copy of which is available upon request to Adelphia.
Except as described below under "--Modification of Indenture," the Old Notes
and the New Notes will be considered collectively to be a single class for all
purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and repurchase offers, and for purposes of this
"Description of the Notes" (except under this caption, "--Registration Rights;
Liquidated Damages"), all reference herein to "Notes" shall be deemed to refer
collectively to the Old Notes and any New Notes, unless the context otherwise
requires.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Indenture. Reference is made to the Indenture for
the full definition of all such terms as well as any other capitalized terms
used herein for which no definition is provided.
"Affiliate" means a Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, Adelphia, (ii) which beneficially owns or holds 10% or more of any class
of the voting Capital Stock of Adelphia, or (iii) of which 10% or more of the
voting Capital Stock is beneficially owned or held by Adelphia, a Restricted
Subsidiary or an Unrestricted Subsidiary of Adelphia. Without limitation, an
Affiliate also includes any director or executive officer of Adelphia. As used
herein, "Affiliate" shall not include a Restricted Subsidiary.
"Aggregate Excess Restricted Investments" means for any fiscal quarter the
aggregate of Excess Restricted Investments with respect to the Restricted
Investments in all of the Unrestricted Subsidiaries and Affiliates of Adelphia.
"Allowable Securities" means (i) cash equivalents, (ii) common or preferred
Capital Stock in a Person which (x) has Investment Grade Senior Debt or (y)
whose ratio of Indebtedness plus Preferred Stock to Annualized Pro Forma EBITDA
is less than 7.75:1, or (iii) debt securities issued by a Person which (x) has
Investment Grade Senior Debt or (y) whose Leverage Ratio is less than 7.75:1,
provided that the securities in (ii)(y) and (iii)(y) above shall only be deemed
to be Allowable Securities if the principal business of the Person is owning
and operating cable television systems.
"Annualized Pro Forma EBITDA" means, with respect to any Person, (i) such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four,
minus (ii) in the case of Adelphia only, Adelphia's Aggregate Excess Restricted
Investments for such fiscal quarter.
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"Asset Sale" means the sale, transfer or other disposition (other than to
Adelphia or any of its Restricted Subsidiaries) in any single transaction or
series of related transactions of (a) any Capital Stock of or other equity
interest in any Restricted Subsidiary, (b) all or substantially all of the
assets of Adelphia or of any Restricted Subsidiary, or (c) all or substantially
all of the assets of a Company System or part thereof serving at least 5,000
basic subscribers, a division, line of business or comparable business segment
of Adelphia or any Restricted Subsidiary.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Capital Stock Sale Proceeds" means the aggregate net sale proceeds
(including the fair market value of property, other than cash, as determined by
an independent appraisal firm) received by Adelphia from the issue or sale
(other than to a Subsidiary) by Adelphia of any class of its Capital Stock on
or after January 1, 1993 (including Capital Stock of Adelphia issued after
January 1, 1993 upon conversion of or in exchange for other securities of
Adelphia).
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with generally accepted accounting principles
and the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with generally accepted accounting
principles.
"Change of Control" means such time as (i) (a) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than the
Rigas Family and its Affiliates, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of more than 35% of the total voting power
required to elect or designate for election a majority of Adelphia's Board of
Directors and attaching to the then outstanding voting Capital Stock of
Adelphia and (b) the Rigas Family, together with its Affiliates, is not at such
time the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 35% of the total voting power required to elect or designate for
election a majority of Adelphia's Board of Directors and attaching to the then
outstanding voting Capital Stock of Adelphia, or (ii) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted Adelphia's Board of Directors (together with any new directors
whose election by Adelphia's Board of Directors or whose nomination for
election by Adelphia's stockholders was approved by a vote of at least two-
thirds of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved or approved by the Rigas Family and its Affiliates at a
time when they had the right or ability by voting right, contract or otherwise
to elect or designate for election a majority of Adelphia's Board of Directors)
cease for any reason to constitute a majority of the directors then in office.
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"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Consolidated Fixed Charge Ratio" means, for any Person, for any period, the
ratio of (i) Annualized Pro Forma EBITDA to (ii) Consolidated Interest Expense
for such period multiplied by four.
"Consolidated Interest Expense" means, for any Person, for any period, the
amount of interest in respect of Indebtedness (including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness), the amount of Redeemable Dividends and the interest component of
rentals in respect of any Capitalized Lease Obligation paid, accrued or
scheduled to be paid or accrued by such Person during such period, determined
on a consolidated basis in accordance with generally accepted accounting
principles. For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by such Person to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with generally accepted accounting principles
consistently applied.
"Cumulative Credit" means the sum of (i) Capital Stock Sale Proceeds plus
(ii) cumulative EBITDA of Adelphia from and after January 1, 1993 to the end of
the fiscal quarter immediately preceding the date of a proposed Restricted
Payment, or, if such cumulative EBITDA for such period is negative, minus the
amount by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means the aggregate amount of Consolidated
Interest Expense paid, accrued or scheduled to be paid or accrued by Adelphia
from January 1, 1993 to the end of the fiscal quarter immediately preceding a
proposed Restricted Payment, determined on a consolidated basis in accordance
with generally accepted accounting principles.
"EBITDA" means, for any Person, for any period, an amount equal to (A) the
sum of (i) consolidated net income for such period (exclusive of any gain or
loss realized in such period upon an Asset Sale), plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing consolidated net income and any provision
for taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period, plus (iv) depreciation for such
period on a consolidated basis, plus (v) amortization of intangibles for such
period on a consolidated basis, plus (vi) any other non-cash items reducing
consolidated net income for such period, minus (B) all non-cash items
increasing consolidated net income for such period, all for such Person and its
Subsidiaries determined in accordance with generally accepted accounting
principles consistently applied, except that with respect to Adelphia each of
the foregoing items shall be determined on a consolidated basis with respect to
Adelphia and its Restricted Subsidiaries only.
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"Excess Restricted Investment" means, with respect to any particular
Unrestricted Subsidiary or Affiliate of Adelphia for a fiscal quarter, the
lesser of the amounts described in the following clauses (i) and (ii), or, if
such amounts are equal, such amount:
(i) the aggregate amount of any Restricted Investments (other than the
Initial Investment) made by Adelphia or any Restricted Subsidiary with
respect to such Unrestricted Subsidiary or Affiliate and during the twelve-
month period ending on the last day of such fiscal quarter;
(ii) cash income received during such quarter by Adelphia with respect
to its Restricted Investments in such Unrestricted Subsidiary or Affiliate
multiplied by four;
and provided that cash income from a particular Restricted Investment shall be
included only (x) if cash income has been received by Adelphia with respect to
such Restricted Investment during each of the previous two fiscal quarters, or
(y) if the cash income derived from such Restricted Investment is attributable
to Allowable Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Indebtedness" is defined to mean (without duplication), with respect to any
Person, any indebtedness, secured or unsecured, contingent or otherwise, which
is for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), or evidenced
by bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding, without
limitation, any balances that constitute subscriber advance payments and
deposits, accounts payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of such
Person prepared in accordance with generally accepted accounting principles,
and shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations, (ii) obligations secured by a lien to which the
property or assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed, (iii)
guaranties of items of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) in the case of Adelphia, Preferred
Stock of its Restricted Subsidiaries and (v) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing.
Notwithstanding the foregoing, Indebtedness shall not include any interest or
accrued interest until due and payable.
"Initial Investment" means the Restricted Investment in a Person made by
Adelphia or a Restricted Subsidiary that first results in such Person becoming
an Unrestricted Subsidiary or Affiliate of Adelphia, except that in the case of
Olympus, "Initial Investment" shall mean any Restricted Investment made in
Olympus since February 22, 1994, but only to the extent that such Restricted
Investment when aggregated with the other Restricted Investments made in
Olympus since such date does not exceed $25,000,000.
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"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investment Grade Senior Debt" means, with respect to any Person,
Indebtedness of such Person which has been rated with an investment grade
rating by Moody's or Standard & Poor's.
"Leverage Ratio" is defined as the ratio of (i) the outstanding Indebtedness
of a Person and its Subsidiaries (or in the case of Adelphia, its Restricted
Subsidiaries) divided by (ii) the Annualized Pro Forma EBITDA of such Person.
"Lien" means with respect to any property or assets of Adelphia (it being
understood that for purposes of this definition property or assets of Adelphia
do not include property or assets of any Subsidiary of Adelphia) any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sale, or
other title retention agreement having substantially the same economic effect
as any of the foregoing) except for (i) liens for taxes, assessments or
governmental charges or levies on property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings; (ii) liens imposed by law, such as
carriers', warehousemen's and mechanics' liens and other similar liens arising
in the ordinary course of business which secure payment of obligations not more
than sixty (60) days past due or are being contested in good faith and by
appropriate proceedings; (iii) other liens incidental to the conduct of its
business or the ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit
and which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of its
business; (iv) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character; or (v) liens
arising upon entry of a confession of judgment in Pennsylvania courts in
connection with borrowings not in excess of $1,000,000 in aggregate.
"Permitted Investments" means, for any Person, Restricted Investments made
on or after February 22, 1994 consisting of (i) advances for less than one year
issued in the ordinary course of business for working capital purposes or for
the purchase of property, plant and equipment in an amount not to exceed
$5,000,000 in the aggregate outstanding, (ii) with respect to a Restricted
Investment in Olympus, $25,000,000 plus the aggregate amount of cash income
received by Adelphia from Olympus, minus the aggregate amount of all Restricted
Investments made since February 22, 1994, with respect to Olympus, (iii)
$20,000,000 plus the cash proceeds from the sale or redemption of, or income
from, any Restricted Investments made on or after January 1, 1993, minus the
aggregate amount of all Restricted Investments (excluding Restricted
Investments made with respect to Olympus)
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since January 1, 1993, (iv) non-cash Restricted Investments made with the non-
cash proceeds from the sale or redemption of, or income from, any Restricted
Investments, or (v) an amount which, at the time of such Restricted Investment,
does not exceed the amount of Restricted Payments that could then be made by
Adelphia and its Restricted Subsidiaries under the covenant set forth under
"Limitations on Restricted Payments"; provided further that no Restricted
Investments may be made under (ii), (iii), (iv) or (v) unless pro forma for
such Restricted Investment Adelphia could incur $1 of debt under the first
paragraph of the covenant set forth under "Limitation on Indebtedness."
"Permitted Refinancing Indebtedness" means any renewals, extensions,
substitutions, refinancings or replacements of any Indebtedness, including any
successive extensions, renewals, substitutions, refinancings or replacements so
long as (i) the aggregate amount of Indebtedness represented thereby is not
increased by such renewal, extension, substitution, refinancing or replacement,
(ii) in the case of Indebtedness of Adelphia, the average life and the date
such Indebtedness is scheduled to mature is not shortened and (iii) in the case
of Indebtedness of Adelphia, the new Indebtedness shall not be senior in right
of payment to the Indebtedness that is being extended, renewed, substituted,
refinanced or replaced.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of such
Person as determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied after giving effect to the
following: (i) if, during or after such period, such Person or any of its
Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA of such Person
and its Subsidiaries for such period shall be reduced by an amount equal to the
Pro Forma EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Sale for the period or increased by an amount equal
to the Pro Forma EBITDA (if negative) directly attributable thereto for such
period and (ii) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the
acquisition of such Person or business; and provided further that, with respect
to Adelphia, all of the foregoing references to "Subsidiary" or "Subsidiaries"
shall be deemed to refer only to a "Restricted Subsidiary" or "Restricted
Subsidiaries" of Adelphia.
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention of Adelphia to effect a Change of Control.
"Rating Decline" means the occurrence of the following on, or within 90 days
after, the date of public notice of the occurrence of a Change of Control or of
the intention by Adelphia to effect a Change of Control (which period shall be
extended so long as the rating
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of the Notes is under publicly announced consideration for possible downgrade
by Moody's or Standard & Poor's): (a) in the event the Notes are rated by
either Moody's or Standard & Poor's on the Rating Date as Investment Grade
Senior Debt, the rating of the Notes by both Moody's and Standard & Poor's
Corporation shall be below Investment Grade Senior Debt; or (b) in the event
the Notes are rated below Investment Grade Senior Debt by both Moody's and
Standard & Poor's on the Rating Date, the rating of the Notes by either Moody's
or Standard and Poor's shall be decreased by one or more gradations (including
gradations within rating categories as well as between rating categories).
"Redeemable Dividend" means, for any dividend with regard to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any Capital Stock that
by its terms or otherwise is required to be redeemed or is redeemable at the
option of the holder at any time prior to the maturity of the Notes.
"Restricted Investment" means any advance, loan, account receivable (other
than an account receivable arising in the ordinary course of business), or
other extension of credit (excluding, however, accrued and unpaid interest in
respect of any advance, loan or other extension of credit) or any capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others, or otherwise), any
purchase or ownership of any stocks, bonds, notes, debentures or other
securities (including, without limitation, any interests in any partnership or
joint venture) of, or any bank accounts with or guarantee of any Indebtedness
or other obligations of, any Unrestricted Subsidiary or Affiliate of Adelphia.
"Restricted Payment" means (i) any dividend or distribution (whether made in
cash, property or securities), on or with respect to any shares of Capital
Stock of Adelphia or Capital Stock of any Subsidiary which is consolidated with
Adelphia in accordance with generally accepted accounting principles
consistently applied, except for any dividend or distribution which is made
solely to Adelphia or another Subsidiary or dividends or distributions payable
solely in shares of Common Stock of Adelphia, or (ii) any redemption,
repurchase, retirement or other direct or indirect acquisition of (a)
Indebtedness of Adelphia which is subordinate in right of payment to the Notes,
except by exchange for or out of the proceeds of the substantially concurrent
issuance of Permitted Refinancing Indebtedness or from the proceeds of a sale
of Capital Stock by Adelphia or (b) shares of Capital Stock of Adelphia or any
warrants, rights or options to directly or indirectly purchase or acquire any
such Capital Stock of Adelphia or any securities exchangeable for or
convertible into any such shares, other than options issued or shares purchased
or granted under Adelphia's Stock Option Plan of 1986 or Adelphia's Restricted
Stock Bonus Plan, from any employee of Adelphia or any of its Subsidiaries who,
together with any Person that, directly or indirectly, controls (other than by
virtue of being directly or indirectly the employer of such employee), is
controlled by or is under common control with such employee, owns less than 1%
of the outstanding Capital Stock of Adelphia, except for the purchase,
redemption, retirement or
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other acquisition of any shares of Adelphia's Capital Stock by exchange for, or
out of the proceeds of the substantially concurrent sale of, other shares of
its Capital Stock other than any capital stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to
January 15, 2004 for the 7 1/2% Notes or January 15, 2009 for the 7 3/4% Notes.
"Restricted Subsidiary" means (a) any Subsidiary of Adelphia, whether
existing on or after the date of the Indenture, unless such Subsidiary is an
Unrestricted Subsidiary or shall have been classified as an Unrestricted
Subsidiary by a resolution adopted by the Board of Directors of Adelphia and
(b) an Unrestricted Subsidiary which is reclassified as a Restricted Subsidiary
by a resolution adopted by the Board of Directors of Adelphia, provided that on
and after the date of such reclassification such Unrestricted Subsidiary shall
not incur Indebtedness other than that permitted to be incurred by a Restricted
Subsidiary under the provisions of the Indenture.
"Rigas Family" means collectively John J. Rigas and members of his immediate
family, any of their respective spouses, estates, lineal descendants, heirs,
executors, personal representatives, administrators, trusts for any of their
benefit and charitable foundations to which shares of Adelphia's Capital Stock
beneficially owned by any of the foregoing have been transferred.
"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which
more than 50% of the total voting power of the Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the
direction of the management and policies of such entity by contract or
otherwise if in accordance with generally accepted accounting principles such
entity is consolidated with the first-named Person for financial statement
purposes.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary, (b) any Subsidiary of Adelphia which is classified after the date
of the Indenture as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors of Adelphia and (c) any subsidiary which as of the date of
the Indenture has been declared an Unrestricted Subsidiary by a resolution
adopted by the Board of Directors of Adelphia; provided that a Subsidiary
organized or acquired after the date of the Indenture may be so classified as
an Unrestricted Subsidiary only if immediately after the date of such
classification, any investment by Adelphia and its Restricted Subsidiaries in
such Subsidiary made at the time of the organization or acquisition of such
Subsidiary would be a Restricted Investment permissible under the Indenture.
The Trustee shall be given prompt notice by Adelphia of each resolution adopted
by its Board of Directors under this provision, together with a copy of each
such resolution adopted.
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Subordination to Subsidiary Debt
All liabilities of Adelphia's subsidiaries will be effectively senior in
right of payment to the Notes. As of December 31, 1998, the total indebtedness
of such subsidiaries to banks and institutions, on a consolidated basis,
aggregated approximately $1.7 billion. For more information you should read
"Risk Factors--Holding Company Structure and Potential Impact of Restrictive
Covenants in Subsidiary Debt Agreements." In addition, at December 31, 1998,
Hyperion had $0.2 billion in redeemable preferred stock.
Covenants
The Indenture contains, among others, the following covenants. Except as
otherwise specified, all of the covenants described below appear in the
Indenture.
Limitation on Indebtedness. The Indenture provides that Adelphia will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, issue, assume or become liable for, contingently or otherwise
(collectively an "incurrence"), any Indebtedness unless, after giving effect to
such incurrence on a pro forma basis, Indebtedness of Adelphia and its
Restricted Subsidiaries, on a consolidated basis, shall not be more than the
product of the Annualized Pro Forma EBITDA for the latest fiscal quarter
preceding such incurrence for which financial statements are available,
multiplied by 8.75.
Notwithstanding the above, the Indenture does not limit the incurrence of
Indebtedness which is incurred by Adelphia or its Restricted Subsidiaries for
working capital purposes or capital expenditures with respect to plant,
property and equipment of Adelphia and its Restricted Subsidiaries in an
aggregate amount not to exceed $50,000,000. Further, the Indenture will not
limit Permitted Refinancing Indebtedness, subject to the provisions of the
covenant set forth under "Limitation on Restricted Payments."
Limitation on Restricted Payments. The Indenture provides that, so long as
any of the Notes remain outstanding, Adelphia shall not make, and shall not
permit any Restricted Subsidiary to make, any Restricted Payment (as defined
above) if (a) at the time of such proposed Restricted Payment, a Default or
Event of Default shall have occurred and be continuing or shall occur as a
consequence of such Restricted Payment, or (b) immediately after giving effect
to any such Restricted Payment, the aggregate of all Restricted Payments which
shall have been made on or after January 1, 1993 (the amount of any Restricted
Payment, if other than cash, to be based upon fair market value as determined
in good faith by Adelphia's Board of Directors whose determination shall be
conclusive) would exceed an amount equal to the greater of (i) the sum of
$5,000,000 or (ii) the difference between (a) the Cumulative Credit (as defined
above) and (b) the sum of the aggregate amount of all Restricted Payments, and
all Permitted Investments made pursuant to clause (v) of the definition of
"Permitted Investments," made on or after January 1, 1993 plus 1.2 times
Cumulative Interest Expense (as defined above).
Mergers and Consolidations. The Indenture provides that Adelphia may not
consolidate with, merge with or into, or transfer all or substantially all of
its assets (as an
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entirety or substantially as an entirety in one transaction or a series of
related transactions), to any Person unless: (i) Adelphia shall be the
continuing Person, or the Person (if other than Adelphia) formed by such
consolidation or into which Adelphia is merged or to which the properties and
assets of Adelphia are transferred shall be a corporation organized and
existing under the laws of the United States or any state thereof or the
District of Columbia and shall expressly assume, by a supplemental Indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
of the obligations of Adelphia under the Notes and the Indenture, and the
obligations under the Indenture shall remain in full force and effect; (ii)
immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction on a pro forma basis for
the most recent quarter, the pro forma Consolidated Fixed Charge Ratio of the
surviving entity shall be at least 1:1; provided that, if the Consolidated
Fixed Charge Ratio of Adelphia for the most recent quarter preceding such
transaction is within the range set forth in Column A below, then the pro forma
Consolidated Fixed Charge Ratio of the surviving entity after giving effect to
such transaction shall be at least equal to the greater of the percentage of
the Consolidated Fixed Charge Ratio of Adelphia for the most recent quarter
preceding such transaction set forth in column B or the ratio set forth in
column C below:
<TABLE>
<CAPTION>
A B C
-------------------- --- ------
<S> <C> <C>
1.1111:1 to 1.4999:1 90% 1.00:1
1.5 and higher 80% 1.35:1
</TABLE>
and provided, further, that if the pro forma Consolidated Fixed Charge Ratio of
the surviving entity is 2:1 or more, the calculation in the preceding proviso
shall be inapplicable and such transaction shall be deemed to have complied
with the requirements of such proviso.
In connection with any consolidation, merger or transfer contemplated by
this provision, Adelphia shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental Indenture in respect
thereto comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
Limitations on Investment in Affiliates and Unrestricted Subsidiaries.
After the date of the Indenture, Adelphia may not, nor will Adelphia allow any
Restricted Subsidiary to, make a Restricted Investment other than by way of
Permitted Investments unless pro forma for such Restricted Investment the
Leverage Ratio of Adelphia does not exceed 7.75:1.
Covenant to Secure Notes Equally. The Indenture provides that except for
Liens created or assumed by Adelphia in connection with the acquisition of real
property or equipment to be used by Adelphia in the operation of its business
which do not secure Indebtedness in excess of the purchase price of such real
property or equipment, Adelphia covenants that, if it shall create or assume
any Lien upon any of its property or assets, whether now owned or hereafter
acquired, it will make or cause to be made effective provisions whereby the
Notes will be secured by such Lien equally and ratably with all other
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Indebtedness of Adelphia secured by such Lien, as long as any such other
Indebtedness of Adelphia shall be so secured. The restriction imposed by this
covenant shall not apply with respect to a Lien, including a pledge of Capital
Stock of a Subsidiary or an Affiliate, to secure Indebtedness which is an
obligation of such Subsidiary or Affiliate and not an obligation of Adelphia.
Limitation on Transactions with Affiliates. The Indenture provides that
Adelphia will not, and will not permit any Restricted Subsidiary to, engage in
any transaction with any Affiliate upon terms which would be any less favorable
than those obtainable by Adelphia or a Restricted Subsidiary in a comparable
arm's-length transaction with a person which is not an Affiliate. The Indenture
will provide that Adelphia will not, and will not permit any Restricted
Subsidiary to, engage in any transaction (or series of related transactions)
involving in the aggregate $1,000,000 or more with any Affiliate except for (i)
the making of any Restricted Payment, (ii) any transaction or series of
transactions between Adelphia and one or more of its Restricted Subsidiaries or
between two or more of its Restricted Subsidiaries (provided that no more than
5% of the equity interest in any of its Restricted Subsidiaries is owned by an
Affiliate), and (iii) the payment of compensation (including, without
limitation, amounts paid pursuant to employee benefit plans) for the personal
services of officers, directors and employees of Adelphia or any of its
Restricted Subsidiaries, so long as the Board of Directors of Adelphia in good
faith shall have approved the terms thereof and deemed the services theretofore
or thereafter to be performed for such compensation or fees to be fair
consideration therefor; and provided further that for any Asset Sale, or a
sale, transfer or other disposition (other than to Adelphia or any of its
Restricted Subsidiaries) of an interest in a Restricted Investment, involving
an amount greater than $25,000,000, such Asset Sale or transfer of interest in
a Restricted Investment is for fair value as determined by an opinion of a
nationally recognized investment banking firm filed with the Trustee.
Notwithstanding the foregoing, the Indenture provides that such provision will
not prohibit any such transaction which is determined by the independent
members of the Board of Directors of Adelphia, in their reasonable, good faith
judgment (as evidenced by a Board Resolution filed with the Trustee) to be (a)
in the best interests of Adelphia or such Restricted Subsidiary, and (b) upon
terms which would be obtainable by Adelphia or a Restricted Subsidiary in a
comparable arm's-length transaction with a Person which is not an Affiliate.
Limitation on Sale of Assets. The Indenture provides that neither Adelphia
nor a Restricted Subsidiary shall sell an asset (including Capital Stock of
Restricted Subsidiaries) or reclassify a Restricted Subsidiary existing on the
date of the Indenture as an Unrestricted Subsidiary (a "Reclassification")
unless (a) in the case of an asset sale, (i) at least 75% of the net proceeds
received by Adelphia or such Restricted Subsidiary is in cash, cash equivalents
or common or preferred Capital Stock or debt securities issued by a Person
which has Investment Grade Senior Debt, and (ii) cash proceeds from the asset
sale are used to reduce debt and such debt reduction results in Adelphia's
Leverage Ratio being lower pro forma after such asset sale than prior to such
asset sale, or (b) in the case of an asset sale or Reclassification, pro forma
for such asset sale or Reclassification the Indebtedness of Adelphia and its
Restricted Subsidiaries, on a consolidated basis, shall not be more than 7.75
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multiplied by Annualized Pro Forma EBITDA, provided that in no case under
either clause (a) or (b) shall Adelphia undertake an asset sale or
Reclassification, if pro forma for such an asset sale or Reclassification
Adelphia and its Restricted Subsidiaries would be the owners of fewer than 75%
of the cable systems (measured on the basis of basic subscribers as of February
22, 1994) owned by Adelphia and its Restricted Subsidiaries as of February 22,
1994, provided however, that Adelphia and its Restricted Subsidiaries may sell
additional assets of up to 10% of assets held as of February 22, 1994 if the
consideration received from such sale is (i) cash which is used within 12
months to purchase additional systems of equivalent value or (ii) other cable
systems of equivalent value.
Change of Control Offer. Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of a Change of Control Triggering
Event, Adelphia shall notify the Trustee in writing of such proposed occurrence
or occurrence, as the case may be, and shall make an offer to purchase (the
"Change of Control Offer") the Notes at a purchase price equal to 100% of the
principal amount thereof plus any accrued and unpaid interest thereon to the
Change of Control Payment Date (as hereinafter defined) (the "Change of Control
Purchase Price") in accordance with the procedures set forth in this covenant.
Within 50 days of (i) the proposed occurrence of a Change of Control or (ii)
the occurrence of a Change of Control Triggering Event, Adelphia also shall (a)
cause a notice of the Change of Control Offer to be sent at least once to the
Dow Jones News Service or similar business news service in the United States
and (b) send by first-class mail, postage prepaid, to the Trustee and to each
holder of the Notes, at his address appearing in the register of the Notes
maintained by the Registrar, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this
covenant and that all Notes tendered will be accepted for payment, provided
that a Change of Control Triggering Event has occurred and otherwise
subject to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the purchase date (which
shall be a Business Day no earlier than 50 days from the date such notice
is mailed and no later than 15 days after the date of the corresponding
Change of Control Triggering Event) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless Adelphia defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day preceding the Change of Control
Payment Date;
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(6) that holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of the Notes delivered for purchase, and a
statement that such holder is withdrawing his election to have such Notes
purchased;
(7) that holders whose Notes are being purchased only in part will be
issued New Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, provided that each Note purchased and each such new
Note issued shall be in an original principal amount in denominations of
$1,000 and integral multiples thereof; and
(8) any other procedures that a holder must follow to accept a Change
of Control Offer or effect withdrawal of such acceptance.
Notwithstanding any other provision of this covenant, in the case of a
notice of a Change of Control Offer that is being furnished by Adelphia with
respect to a proposed Change of Control that has not yet actually occurred,
Adelphia may specify in such notice that holders of the Notes shall be required
to notify Adelphia, by a date not later than the date (the "Proposed Change of
Control Response Date") which is 30 days from the date of such notice, as to
whether such holders will tender their Notes for payment pursuant to the Change
of Control Offer and to notify Adelphia of the principal amount of such Notes
to be so tendered (with the failure of any holder to so notify Adelphia within
such 30-day period to be deemed an election of such holder not to accept such
Change of Control Offer). In such event, Adelphia shall have the option, to be
exercised by a subsequent written notice to be sent, no later than 15 days
after the Proposed Change of Control Response Date, to the same Persons to whom
the original notice of the Change of Control Offer was sent, to cancel or
otherwise effect the termination of the proposed Change of Control and to
rescind the related Change of Control Offer, in which case the then outstanding
Change of Control Offer shall be deemed to be null and void and of no further
effect.
On the Change of Control Payment Date, Adelphia shall (a) accept for payment
Notes or portions thereof tendered pursuant to the Change of Control Offer, (b)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so tendered and (c) deliver or cause to be delivered
to the Trustee Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof tendered to Adelphia. The Paying Agent shall
promptly mail to each holder of Notes so accepted payment in an amount equal to
the purchase price for such Notes, and the Trustee shall promptly authenticate
and mail to such holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof.
There shall be no purchase of any Notes pursuant to this covenant if there
has occurred (prior to, on or after, as the case may be, the tender of such
Notes pursuant to the Change of Control Offer, by the holders of such Notes)
and is continuing an Event of Default. The
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Paying Agent will promptly return to the respective holders thereof any Notes
(a) the tender of which has been withdrawn in compliance with the Indenture or
(b) held by it during the continuance of an Event of Default (other than a
default in the payment of the Change of Control Purchase Price with respect to
such Notes).
Because a "Change of Control" for purposes of this covenant is defined in
terms of "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act) of voting power, there may be circumstances in which the Rigas Family
could beneficially own (for purposes of Rule 13d-3) more than 35% of the
outstanding voting Capital Stock of Adelphia through options, warrants or other
purchase rights while directly holding 35% or less of the total voting power
required to elect or designate for election a majority of Adelphia's Board of
Directors, without a Change of Control Triggering Event occurring. Further, a
change in the composition of the Board of Directors of Adelphia could occur
without the occurrence of a Change of Control Triggering Event if either the
election or the nomination of the new directors was approved by two-thirds of
the continuing directors or by the Rigas Family and its Affiliates. For more
information you should read "Certain Definitions--Change of Control."
Adelphia's Other Public Debt
In addition to the Notes, Adelphia has outstanding 7 7/8% Notes , 8 1/8%
Notes, 8 3/8% Notes, 9 1/4% Notes, 9 7/8% Notes, 10 1/2% Notes, 10 1/4% Notes,
9 1/2% Notes, 11 7/8% Debentures and 9 7/8% Debentures. We refer to that debt
as Adelphia's other public debt in this prospectus. As of December 31, 1998, on
an as adjusted basis, after giving effect to the issuances of debt described
under "Recent Developments," Adelphia's other public debt represents
outstanding indebtedness in the aggregate principal amount of approximately
$2.4 billion. The indentures for Adelphia's other public debt provide that
Adelphia must make an offer to purchase such debt at a purchase price equal to
100% of the principal amount thereof, plus any accrued but unpaid interest
thereon, in the event of circumstances identical to those which trigger a
Change of Control Offer under this covenant. In addition, the credit agreements
of Adelphia's subsidiaries generally contain provisions under which
circumstances that would trigger a Change of Control Offer under this covenant
would constitute an event of default under such credit agreements. In the event
that Adelphia is required to purchase Adelphia's other public debt and the
Notes in accordance with such provisions, and the indebtedness under such
subsidiary credit agreements were to be accelerated, the source of funds for
such purchases or payments will be Adelphia's available cash, cash generated
from Adelphia's operating activities, and other sources including borrowings,
asset sales or equity sales. There can be no assurance that sufficient funds
would be available to make any required repurchases under the Indenture and
under the indentures for Adelphia's other public debt or any such required
payments under such credit agreements. Although in the past Adelphia has been
able to both refinance its indebtedness or obtain new financing, there can be
no assurance that Adelphia would be able to do so under such circumstances or
that, if Adelphia were able to do so, the terms would be favorable to Adelphia.
In the event that Adelphia is required to make a Change of
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Control Offer, Adelphia will comply with all applicable tender offer rules
including Rule 14e-1 under the Exchange Act, to the extent applicable.
Events of Default
The following events are defined in the Indenture as "Events of Default":
(i) default in payment of any principal of the Notes; (ii) default for 30 days
in payment of any interest on the Notes; (iii) default by Adelphia in the
observance or performance of any other covenant in the Notes or the Indenture
for 60 days after written notice from the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding; (iv)
failure to pay when due principal, interest or premium aggregating $10,000,000
or more with respect to any Indebtedness of Adelphia or any Restricted
Subsidiary or the acceleration of any such Indebtedness which default shall not
be cured or waived, or such acceleration shall not be rescinded or annulled,
within ten days after written notice as provided in the Indenture; (v) any
final judgment or judgments for the payment of money in excess of $10,000,000
shall be rendered against Adelphia or any Restricted Subsidiary and shall not
be discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect; or (vi) certain events involving
bankruptcy, insolvency or reorganization of Adelphia or any Restricted
Subsidiary with liabilities of greater than $10,000,000 under generally
accepted accounting principles as of the date of such bankruptcy, insolvency or
reorganization. The Indenture provides that the Trustee may withhold notice to
the holders of the Notes of any default (except in payment of principal or
interest on the Notes) if the Trustee considers it to be in the best interest
of the holders of the Notes to do so.
The Indenture provides that if an Event of Default (other than an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization) shall have occurred and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may declare to be immediately due and payable the principal amount
of all the Notes then outstanding plus accrued but unpaid interest to the date
of acceleration; provided, however, that after such acceleration but before a
judgment or decree based on acceleration is obtained by the Trustee, the
holders of a majority in aggregate principal amount of outstanding Notes may,
under certain circumstances, rescind and annul such acceleration if all Events
of Default, other than the nonpayment of accelerated principal or interest,
have been cured or waived as provided in the Indenture. In case an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization shall occur, such amount with respect to all of the Notes shall
be due and payable immediately without any declaration or other act on the part
of the Trustee or the holders of Notes.
The holders of a majority in principal amount of the Notes then outstanding
shall have the right to waive any existing default or compliance with any
provision of the Indenture or the Notes and to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
subject to certain limitations specified in the Indenture.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to
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the Trustee written notice of a continuing Event of Default and unless also the
holders of at least 25% in aggregate principal amount of the outstanding Notes
shall have made written request and offered reasonable indemnity to the Trustee
to institute such proceeding as a trustee, and unless the Trustee shall not
have received from the holders of a majority in aggregate principal amount of
the outstanding Notes a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days. However, such limitations
do not apply to a suit instituted by a holder of a Note for enforcement of
payment of the principal of or interest on such Note on or after the respective
due dates expressed in such Note.
Defeasance and Covenant Defeasance
The Indenture provides Adelphia may elect either (a) to defease and be
discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of such Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold monies for payment in trust)
("defeasance") or (b) to be released from its obligations with respect to the
Notes under certain covenants contained in the Indenture and described above
under "Covenants" ("covenant defeasance"), upon the deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, of money and/or U.S.
Government Obligations which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient to pay
the principal of and interest on the Notes, on the scheduled due dates therefor
in accordance with the terms of the Indenture. Such a trust may only be
established if, among other things, Adelphia has delivered to the Trustee an
Opinion of Counsel (as specified in the Indenture) to the effect that the
holders of the Notes or persons in their positions will not recognize income,
gain or loss for federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such defeasance or covenant defeasance had not occurred. Such opinion, in
the case of defeasance under clause (a) above, must refer to and be based upon
a private ruling of the Internal Revenue Service concerning the Notes or a
ruling of general effect published by the Internal Revenue Service.
Modification of Indenture
From time to time, Adelphia and the Trustee may, without the consent of
holders of the Notes, amend the Indenture or the Notes or supplement the
Indenture for certain specified purposes, including providing for
uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any holder. The Indenture
contains provisions permitting Adelphia and the Trustee, with the consent of
holders of at least one-half in principal amount of the outstanding Notes, to
modify or supplement the Indenture or the Notes, except that no such
modification shall, without the consent of each holder affected thereby, (i)
reduce the amount of Notes whose holders must consent to an amendment,
supplement, or waiver to the Indenture or the Notes, (ii) reduce the rate of or
change the
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time for payment of interest on any Note, (iii) reduce the principal of or
change the stated maturity of any Note, (iv) make any Note payable in money
other than that stated in the Note or change the place of payment from New
York, New York, (v) change the amount or time of any payment required by the
Notes or provide for the redemption of the Notes prior to maturity, (vi) waive
a default on the payment of the principal of, interest on, or redemption
payment with respect to any Note, or (vii) take any other action otherwise
prohibited by the Indenture to be taken without the consent of each holder
affected thereby.
Reports to Holders
So long as Adelphia is subject to the periodic reporting requirements of the
Exchange Act it will continue to furnish the information required thereby to
the SEC and to the holders of the Notes. The Indenture provides that even if
Adelphia is entitled under the Exchange Act not to furnish such information to
the SEC or to the holders of the Notes, it will nonetheless continue to furnish
such information to the SEC (at such time as it would be required to file such
reports under the Exchange Act) and to the Trustee and the holders of the Notes
(within 15 days thereafter as required by the Indenture) as if it were subject
to such periodic reporting requirements.
Compliance Certificate
Adelphia will deliver to the Trustee on or before 105 days after the end of
its fiscal year and on or before 50 days after the end of its second fiscal
quarter in each year an Officer's Certificate stating whether or not the
signers know of any Default or Event of Default that has occurred. If they do,
the certificate will describe the Default or Event of Default and its status.
The Trustee
Bank of Montreal Trust Company is the Trustee under the Indenture and has
been appointed by Adelphia as Registrar and Paying Agent with regard to the
Notes. Bank of Montreal Trust Company also serves as Registrar and Paying Agent
and Trustee under the indentures with respect to Adelphia's other public debt.
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. During the existence of an Event of Default, the
Trustee will exercise such rights and powers vested in it under the Indenture
and use the same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs.
Book-Entry, Delivery and Form
The Notes were initially offered and sold to qualified institutional buyers
in reliance on Rule 144A. Except as set forth below, the Notes will be issued
in registered, global form in minimum denominations of $1,000 and integral
multiples thereof.
The New Notes initially will be represented by one or more Notes, in
registered, global form without interest coupons (the "Global Note"). The
Global Note will be deposited with,
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or on behalf of, DTC in New York, New York, and registered in the name of DTC
or its nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, the Global Note may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Note may not be exchanged for Notes
in certificated form except in the limited circumstances described below. For
more information you should read "--Exchange of Book-Entry Notes for
Certificated Notes."
The Old Notes (including beneficial interests in the Global Note) are
subject to certain restrictions on transfer and will bear a restrictive legend.
In addition, transfer of beneficial interests in the Global Note will be
subject to the applicable rules and procedures of DTC and its direct or
indirect participants, which may change from time to time.
Initially, the Trustee will act as Paying Agent and Registrar for the Notes.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar.
Depository Procedures
DTC has advised Adelphia that DTC is a limited-purpose trust company created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers
and dealers (including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interests and transfer of ownership interests of each actual
purchaser of each security held by or on behalf of DTC are recorded on the
records of the Participants and Indirect Participants.
DTC has also advised Adelphia that, pursuant to procedures established by
it, (i) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchaser with portions of the principal
amount of the Global Notes and (ii) ownership of such interests in the Global
Notes will be shown on, and the transfer of ownership thereof will be effected
only through, records maintained by DTC (with respect to the Participants) or
by the Participants and the Indirect Participants (with respect to other owners
of beneficial interests in the Global Notes).
Investors in the Global Notes may hold their interests therein directly
through DTC, if they are participants in such system, or indirectly through
organizations which are participants in such system. All interests in a Global
Note may be subject to the procedures and requirements of DTC. The laws of some
states require that certain persons take physical
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delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Note to such persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a Global Note to pledge such
interests to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests. For certain other
restrictions on the transferability of the Notes, For more information you
should read "Exchange of Book-Entry Notes for Certificated Notes."
Except as described below, owners of interests in the Global Notes will not
have Notes registered in their names, will not receive physical delivery of
Notes in certificated form and will not be considered the registered owners or
Holders thereof under the Indenture for any purpose.
Payments in respect of the principal of and premium and Liquidated Damages,
if any, and interest on a Global Note registered in the name of DTC or its
nominee will be payable by the Trustee to DTC in its capacity as the registered
Holder under the Indenture. Under the terms of the Indenture, Adelphia and the
Trustee will treat the persons in whose names the Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. Consequently, neither
Adelphia, the Trustee nor any agent of Adelphia or the Trustee has or will have
any responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to or payments made on
account of beneficial ownership interests in the Global Notes, or for
maintaining, supervising or reviewing any of DTC's records or any Participant's
or Indirect Participant's records relating to the beneficial ownership
interests in the Global Notes or (ii) any other matter relating to the actions
and practices of DTC or any of its Participants or Indirect Participants. DTC
has advised Adelphia that its current practice, upon receipt of any payment in
respect of securities such as the Notes (including principal and interest), is
to credit the accounts of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective holdings in the
principal amount of beneficial interests in the relevant security as shown on
the records of DTC unless DTC has reason to believe it will not receive payment
on such payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Notes will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
DTC, the Trustee or Adelphia. Neither Adelphia nor the Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Notes, and Adelphia and the Trustee may conclusively rely on and
will be protected in relying on instructions from DTC or its nominee for all
purposes.
Interests in the Global Notes are expected to be eligible to trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and
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procedures of DTC and its participants. For more information you should read
"--Same-Day Settlement and Payment."
Subject to the transfer restrictions on the Old Notes, transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised Adelphia that it will take any action permitted to be taken
by a Holder of Notes only at the direction of one or more Participants to whose
account with DTC interests in the Global Notes are credited and only in respect
of such portion of the aggregate principal amount of the Notes as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC reserves the right to exchange the
Global Notes for legend Notes in certificated form, and to distribute such
Notes to its Participants.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that Adelphia believes to be reliable, but
Adelphia takes no responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Notes among participants in DTC, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither Adelphia nor the Trustee
will have any responsibility for the performance by DTC or its respective
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
Exchange of Book-Entry Notes for Certificated Notes
A Global Note is exchangeable for definitive Notes in registered
certificated form if (i) DTC (a) notifies Adelphia that it is unwilling or
unable to continue as depositary for the Global Note and Adelphia thereupon
fails to appoint a successor depositary or (b) has ceased to be a clearing
agency registered under the Exchange Act, (ii) Adelphia, at its option,
notifies the Trustee in writing that it elects to cause the issuance of the
Notes in certificated form or (iii) there shall have occurred and be continuing
an Event of Default or any event which after notice or lapse of time or both
would be an Event of Default with respect to the Notes. In addition, beneficial
interests in a Global Note may be exchanged for certificated Notes upon request
but only upon at least 20 days prior written notice given to the Trustee by or
on behalf of DTC in accordance with its customary procedures. In all cases,
certificated Notes delivered in exchange for any Global Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures) and will bear any applicable restrictive legend,
unless Adelphia determines otherwise in compliance with applicable law.
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Same-Day Settlement and Payment
The Indenture requires that payments in respect of the Notes represented by
the Global Notes (including principal, premium, if any, interest and Liquidated
Damages, if any) be made by wire transfer of immediately available funds to the
accounts specified by the Global Note custodian. With respect to Notes issued
in definitive form, Adelphia will make all payments of principal, premium,
interest and Liquidated Damages, if any, by mailing a check to each such
Holder's registered address, provided that all payments with respect to Notes
have an aggregate principal amount of $1,000 or more, the Holders of which have
given wire transfer instructions to Adelphia at least ten business days prior
to the applicable payment date, will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
For more information you should read "General." The Notes represented by the
Global Notes are expected to be eligible to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
notes will, therefore, be required by DTC to be settled in immediately
available funds. Adelphia expects that secondary trading in the Certificated
Notes also will be settled in immediately available funds.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain federal income tax
considerations relevant to the exchange of the old notes for the new notes, but
does not purport to be a complete analysis of all potential tax effects. The
discussion is based upon the Internal Revenue Code, Treasury Regulations, IRS
rulings and pronouncements and judicial decisions now in effect, all of which
are subject to change at any time by legislative, judicial or administrative
action. Any such changes may be applied retroactively in a manner that could
adversely affect a holder of the new notes. The following discussion assumes
that holders hold the old notes and the new notes as capital assets within the
meaning of Section 1221 of the Internal Revenue Code.
Adelphia has not sought and will not seek any rulings from the IRS with
respect to the positions of Adelphia discussed below. There can be no assurance
that the IRS will not take a different position concerning the tax consequences
of the exchange of the old notes for the new notes or that any such position
would not be sustained.
The tax treatment of a holder may vary depending on his or its particular
situation or status. This summary does not address the tax consequences to
taxpayers who are subject to special rules such as insurance companies, tax-
exempt organizations, financial institutions, broker-dealers, foreign entities
and individuals, persons holding old notes or new notes as a part of a hedging
or conversion transaction or a straddle and holders whose "functional currency"
is not the U.S. dollar, or aspects of federal income taxation that may be
relevant to a prospective investor based upon such investor's particular tax
situation. In addition, the description does not consider the effect of any
applicable foreign, state, local or other tax laws.
You should consult your own tax adviser as to the particular tax
consequences to you of exchanging old notes for new notes including the
applicability and effect of any state, local or foreign tax laws.
Exchange
The exchange of the new notes for old notes pursuant to the exchange offer
will not constitute a recognition event for federal income tax purposes.
Consequently, holders will not recognize gain or loss upon receipt of the new
notes. For purposes of determining gain or loss upon the subsequent exchange of
new notes, a holder's basis in the new notes will be the same as a holder's
basis in the old notes exchanged. Holders will be considered to have held the
new notes from the time of their original acquisition of the old notes.
Interest on the New Notes
A holder of a new note will be required to report as income for federal
income tax purposes interest earned on a new note in accordance with the
holder's method of tax accounting. A holder of a new note using the accrual
method of accounting for tax purposes is, as a general rule, required to
include interest in income as such interest accrues. A cash
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basis holder must include interest in income when cash payments are received by
(or made available to) such holder.
Market Discount
If a holder acquired an old note at a market discount, i.e., at a price less
than the stated redemption price at maturity of the old note, the old note is
subject to the market discount rules of the Internal Revenue Code unless the
market discount is de minimis. Market discount is de minimis if it is less than
one quarter of one percent of the principal amount of the old note multiplied
by the number of complete years to maturity after the holder acquired the old
note. If the holder exchanges an old note that has more than de minimis market
discount for a new note, the new note also will be subject to the market
discount rules of the Internal Revenue Code. New notes purchased by a
subsequent purchaser also will be subject to the market discount rules if the
new notes are purchased with more than a de minimis amount of market discount.
Notes that have more than de minimis market discount are herein referred to as
market discount notes.
Any gain recognized on the maturity, sale or other disposition of a market
discount note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on the market discount note. The
amount of market discount treated as having accrued will be determined either:
. on a ratable basis by multiplying the market discount times a fraction,
the numerator of which is the number of days the new note was held by
the holder and the denominator of which is the total number of days
after the date such holder acquired the new note up to and including the
date of its maturity, or
. if the holder so elects, on a constant interest rate method.
A holder may elect to include market discount in income currently over the
life of the market discount note. Such an election shall apply to all debt
instruments with market discount acquired by the holder on or after the first
day of the first taxable year to which the election applies and all subsequent
taxable years. This election may not be revoked without the consent of the IRS.
Market discount will accrue on a ratable inclusion basis unless the holder
elects to accrue market discount on a constant yield to maturity basis. Such an
election shall apply only to the market discount note with respect to which it
is made and may not be revoked without the consent of the IRS. If an election
is made to include market discount in income currently, the basis of the new
note in the hands of the holder will be increased by the market discount
thereon as it is included in income. A holder who does not elect to include
market discount in income currently generally will be required to defer
deductions for interest on borrowings allocable to a market discount note in an
amount not exceeding the accrued market discount on the market discount note
until the maturity or disposition of the market discount note.
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Amortizable Bond Premium
A holder that purchased an old note for an amount in excess of its principal
amount may elect to treat such excess as "amortizable bond premium," in which
case the amount required to be included in the holder's income each year with
respect to interest on the old note will be reduced by the amount of
amortizable bond premium allocable (based on the yield to maturity of the old
note) to such year. If a holder made an election to amortize bond premium with
respect to an old note and exchanges the old note for a New Note pursuant to
the exchange offer, the election will apply to the new note. A holder who
exchanges an old note for which an election has not been made for a new note,
and a subsequent purchaser of a new note, may also elect to amortize bond
premium if the holder acquired the notes for an amount in excess of its
principal amount. Any election to amortize bond premium shall apply to all
bonds, other than bonds the interest on which is excludable from gross income,
held by the holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the holder, and is irrevocable
without the consent of the IRS.
Disposition of the Notes
Subject to the market discount rules discussed above, a holder of notes will
recognize gain or loss upon the sale, redemption, retirement or other
disposition of such securities equal to the difference between:
. the amount of cash and the fair market value of the property received,
except to the extent attributable to the payment of accrued interest,
and
. the holder's adjusted tax basis in the securities. Gain or loss
recognized will be capital gain or loss provided the notes are held as
capital assets by the holder, and will be long-term capital gain or loss
if the holder has held such securities or is treated as having held such
securities for more than one year.
Backup Withholding and Information Reporting
Holders of notes may be subject to backup withholding at a rate of 31% with
respect to interest paid on the notes unless such holder:
. is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact, or
. provides a correct taxpayer identification number, certifies as to no
loss of exemption from backup withholding and otherwise complies with
the requirements of the backup withholding rules.
Adelphia will report to the holders of the notes and the IRS the amount of
any "reportable payment" for each calendar year and amount of tax withheld, if
any, with respect to payments on the notes.
You should consult your own tax advisor with respect to the tax consequences
to you of the acquisition, ownership, and disposition of the notes, including
the applicability and effect of state, local, foreign, and other tax laws.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes
acquired as a result of market-making activities or other trading activities.
We have agreed that we will make this prospectus available to any broker-dealer
for use in connection with any such resale for a period of 365 days after the
expiration date or until all participating broker-dealers have so resold.
We will not receive any proceeds from any sale of new notes by broker-
dealers. New notes received by broker-dealers for their own account pursuant to
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concession from any such broker-dealer and/or the
purchasers of any new notes. Any broker-dealer that resells new notes that were
received by it for its own account pursuant to the exchange offer and any
broker-dealer that participates in a distribution of new notes may be deemed to
be an "underwriter" within the meaning of the Securities Act, and any profit on
any resale of new notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
We have not entered into any arrangement or understanding with any person to
distribute the new notes to be received in the exchange offer, and to the best
of our information and belief, each person participating in the exchange offer
is acquiring the new notes in its ordinary course of business and has no
arrangement or understanding with any person to participate in the distribution
of the new notes to be received in the exchange offer.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, as well as proxy statements
and other information with the SEC. You may read and copy any document we file
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. Our 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 us that file electronically with the
SEC.
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This prospectus is part of a registration statement on Form S-4 filed by us
with the SEC under the Securities Act. As permitted by SEC rules, this
prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus. If we
subsequently file updating or superseding information in a document that is
incorporated by reference into this prospectus, the subsequent information will
also become part of this prospectus and will supersede the earlier information.
We are incorporating by reference the following documents that we have filed
with the SEC:
. our Annual Report on Form 10-K for the year ended March 31, 1998, which
incorporates, in Items 7 and 8 to that 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
Adelphia's Form 10-K/A dated July 27, 1998;
. our Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998,
September 30, 1998 and December 31, 1998. We refer to these Form 10-Qs
in this prospectus as the Form 10-Qs;
. our 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, November 12, 1998, December 23, 1998, January 11, 1999,
February 22, 1999, February 23, 1999, March 5, 1999, March 30, 1999,
March 31, 1999, April 9, 1999, April 19, 1999, April 21, 1999, April 23,
1999 and April 28, 1999;
. our definitive proxy statement dated September 11, 1998 with respect to
the Annual Meeting of Stockholders held October 6, 1998; and
. the description of our Class A Common Stock contained in our
registration statement filed with the SEC under Section 12 of the
Securities Exchange Act of 1934 and subsequent amendments and reports
filed to update such description and our registration statement on Form
S-3 (File No. 333-78027).
We are also incorporating by reference into this prospectus all of our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until this offering has been completed.
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You may obtain a copy of any of our filings that are incorporated by
reference, at no cost, by writing to or telephoning us at the following
address:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Investor Relations
Telephone: (814) 274-9830
You should rely only on the information provided in this prospectus or
incorporated by reference. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the cover of the
prospectus. This exchange offer is not being made to, nor will we accept
surrenders for exchange from, holders of currently outstanding old notes in any
jurisdiction in which this exchange offer or the acceptance thereof would not
be in compliance with the Securities or Blue Sky laws of such jurisdiction.
LEGAL MATTERS
The validity of the new notes will be passed upon on behalf of Adelphia by
Buchanan Ingersoll Professional Corporation, Pittsburgh, Pennsylvania.
Attorneys of that firm who are representing Adelphia in the exchange offer 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.
EXPERTS
The consolidated financial statements of Adelphia and its subsidiaries as of
March 31, 1997 and 1998, and for each of the three years in the period ended
March 31, 1998, and the consolidated financial statements of Olympus and its
subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997, all incorporated in this prospectus by
reference from Adelphia's Annual Report on Form 10-K for the year ended March
31, 1998 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of FrontierVision Partners, L.P. and
subsidiaries as of December 31, 1998 and 1997, and for each of the years in the
three year period ended December 31, 1998, have been incorporated by reference
herein and in the registration statement from Adelphia's Current Report on Form
8-K filed April 19, 1999, in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Harron Communications Corp. and
subsidiaries as of December 31, 1998 and 1997 and for each of the three years
in the period ended
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December 31, 1998 incorporated in this prospectus by reference from Adelphia's
Current Report on Form 8-K filed April 19, 1999 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of Century Communications Corp. and
subsidiaries as of May 31, 1998 and 1997 and for each of the three years in the
period ended May 31, 1998 incorporated in this prospectus by reference from
Adelphia's Current Report on Form 8-K filed on April 19, 1999 have been audited
by Deloitte & Touche LLP, independent auditors as stated in their report, which
is incorporated herein by reference, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
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Adelphia Communications Corporation
7 1/2% Series B Senior Notes Due 2004
7 3/4% Series B Senior Notes Due 2009
----------------
PROSPECTUS
----------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell
nor does it solicit to buy any Notes in any jurisdiction where it is unlawful.
The information in this prospectus is current as of May 14, 1999.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides in general that
a corporation may indemnify its directors, officers, employees or agents
against expenditures (including judgments, fines, amounts paid in settlement
and attorneys' fees) made by them in connection with certain lawsuits to which
they may be made parties by reason of their being directors, officers,
employees or agents and shall so indemnify such persons against expenses
(including attorneys' fees) if they have been successful on the merits or
otherwise. The bylaws of Adelphia provide for indemnification of the officers
and directors of Adelphia to the full extent permissible under Delaware law.
Adelphia's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Adelphia
shall not be personally liable to Adelphia, respectively, or its stockholders
for monetary damages for breach of fiduciary duty as a director for acts or
omissions, provided that directors shall nonetheless be liable for breaches of
the duty of loyalty, bad faith, intentional misconduct, knowing violations of
law, unlawful distributions to stockholders, or transactions from which a
director derived an improper personal benefit.
Item 21. Exhibits and Financial Statement Schedules
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
3.01 Certificate of Incorporation of Adelphia Communications Corporation
(Incorporated herein by reference is Exhibit 3.01 to the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
3.02 Bylaws of Adelphia Communications Corporation (Incorporated herein
by reference is Exhibit 3.02 to Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1994.) (File No. 0-16014)
3.03 Certificate of Designations for 5 1/2% Series D Convertible
Preferred Stock (Incorporated herein by reference is Exhibit 3.01 to
Registrant's Current Report on Form 8-K for the event dated April
28, 1999.) (File No. 0-16104)
4.01 Indenture, dated as of February 26, 1997, between the Registrant and
Bank of Montreal Trust Company with respect to the Registrant's 9
7/8% Senior Notes Due 2007 (Incorporated herein by reference is
Exhibit 4.01 to Registrant's Current Report on Form 8-K dated May 1,
1997.) (File No. 0-16014)
4.02 Form of Note with respect to the Registrant's 9 7/8% Senior Notes
Due 2007 (Contained in Indenture filed as Exhibit 4.01.)
4.03 Registration Rights Agreement, dated as of February 26, 1997,
between the Registrant and the Initial Purchaser with respect to the
Registrant's 9 7/8% Senior Notes Due 2007 (Incorporated herein by
reference is Exhibit 10.01 to Registrant's Current Report on Form
8-K dated May 1, 1997.) (File No. 0-16014)
4.04 First Supplemental Indenture, dated as of May 4, 1994, with respect
to Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Current Report on Form 8-K dated May 5, 1994.) (File No. 0-16014)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.05 Indenture, dated as of February 22, 1994, with respect to
Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004 (Incorporated
herein by reference is Exhibit 4.05 to Registration Statement No.
33-52513 on Form S-4.)
4.06 Indenture, dated as of July 28, 1993, with respect to Registrant's
10 1/4% Senior Notes Due 2000 (Incorporated herein by reference is
Exhibit 4.01 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993.) (File No. 0-16014)
4.07 Amended and Restated Indenture, dated as of May 11, 1993, with
respect to Registrant's 9 7/8% Senior Debentures Due 2005
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Annual Report on Form 10-K for the fiscal year ended March 31,
1993.) (File No. 0-16014)
4.08 Indenture, dated as of September 2, 1992, with respect to the
Registrant's 11 7/8% Senior Debentures Due 2004 (Incorporated herein
by reference is Exhibit 4.03 to Registration Statement No. 33-52630
on Form S-1.)
4.09 Indenture, dated as of May 7, 1992, with respect to the Registrant's
12 1/2% Senior Notes Due 2002 (Incorporated herein by reference is
Exhibit 4.03 to Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1992.) (File No. 0-16014)
4.10 Indenture, dated as of April 15, 1996, between Hyperion
Telecommunications, Inc. and Bank of Montreal Trust Company
(Incorporated by reference is Exhibit 4.1 to Registration Statement
No. 333-06957 on Form S-4 filed for Hyperion Telecommunications,
Inc.)
4.11 Form of 13% Hyperion Telecommunications, Inc. Senior Discount Notes
(Incorporated herein by reference is Exhibit 4.3 to Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-12619 on
Form S-1.)
4.12 First Supplemental Indenture, dated as of September 11, 1996,
between Hyperion Telecommunications, Inc. and Bank of Montreal Trust
Company (Incorporated herein by reference is Exhibit 4.2 of Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-12619 on
Form S-1.)
4.13 Indenture, dated as of November 12, 1996, between Olympus
Communications, L.P., Olympus Capital Corporation and Bank of
Montreal Trust Company (Incorporated herein by reference is Exhibit
10.02 to Registrant's Current Report on Form 8-K dated December 16,
1996.) (File No. 0-16014)
4.14 Certificate of Designations for 13% Series A and Series B Cumulative
Exchangeable Preferred Stock (Contained in Exhibit 3.01 to
Registrant's Current Report on Form 8-K dated July 24, 1997, which
is incorporated herein by reference.) (File No. 0-16014)
4.15 Certificate of Designations for Series C Convertible Preferred Stock
(Contained in Exhibit 3.01 to Registrant's Current Report on Form 8-
K dated July 24, 1997, which is incorporated herein by reference.)
(File No. 0-16014)
4.16 Indenture, dated as of July 7, 1997, with respect to the
Registrant's 10 1/2% Senior Notes due 2004, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.03 from the Registrant's Current Report on
Form 8-K dated July 24, 1997.) (File No. 0-16014)
4.17 Form of 10 1/2% Senior Note due 2004 (Contained in Exhibit 4.03 to
Registrant's Current Report on Form 8-K dated July 24, 1997 which is
incorporated herein by reference.) (File No. 0-16014)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.18 Form of Indenture, with respect to the Registrant's 13% Senior
Subordinated Exchange Debentures due 2009, between the Registrant
and the Bank of Montreal Trust Company (Contained in Exhibit 3.01 as
Annex A to Registrant's Current Report on Form 8-K dated July 24,
1997, which is incorporated herein by reference.) (File No. 0-16014)
4.19 Form of Certificate for 13% Cumulative Exchangeable Preferred Stock
(Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
4.20 Form of Certificate for Series C Convertible Preferred Stock
(Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
4.21 Indenture, dated as of August 27, 1997, with respect to Hyperion
Telecommunications, Inc. ("Hyperion") 12 1/4% Senior Secured Notes
due 2004, between Hyperion and the Bank of Montreal Trust Company
(Incorporated herein by reference to Exhibit 4.01 to Hyperion's
Current Report on Form 8-K dated August 27, 1997.) (File No. 0-
21605)
4.22 Form of 12 1/4% Senior Secured Note due 2004 (Contained in Exhibit
4.21.)
4.23 Second Supplemental Indenture, dated as of August 27, 1997, between
Hyperion and the Bank of Montreal Trust Company, regarding
Hyperion's 13% Senior Discount Notes due 2003 (Incorporated by
reference herein to Exhibit 4.06 to Hyperion's Current Report on
Form 8-K, dated August 27, 1997.) (File No. 0-21605)
4.25 Indenture, dated as of September 25, 1997, with respect to the
Registrant's 9 1/4% Senior Notes due 2002, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.01 from the Registrant's Current Report on
Form 8-K, dated September 25, 1997.) (File No. 0-16014)
4.26 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated September 25, 1997,
regarding the Registrant's 9 1/4% Senior Notes due 2002
(Incorporated herein by reference is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K, dated September 25, 1997.)
(File No. 0-16014)
4.27 Form of 9 1/4% Senior Note due 2002 (Contained in Exhibit 4.25.)
4.28 Indenture, dated as of January 21, 1998, with respect to the
Registrant's 8 3/8% Senior Notes due 2008, between the Registrant
and the Bank of Montreal Trust Company (the "January 1998
Indenture") (Incorporated by reference herein is Exhibit 4.01 from
the Registrant's Current Report on Form 8-K, dated January 21,
1998.) (File No. 0-16014)
4.29 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated January 21, 1998,
regarding the Registrant's 8 3/8% Senior Notes due 2008
(Incorporated by reference herein is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K, dated January 21, 1998.)
(File No. 0-16014)
4.30 Form of 8 3/8% Senior Note due 2008 (Contained in Exhibit 4.28.)
4.31 Indenture, dated as of July 2, 1998, with respect to the
Registrant's 8 1/8% Senior Notes due 2003, between the Registrant
and the Bank of Montreal Trust Company (Incorporated by reference
herein is Exhibit 4.01 from the Registrant's Current Report on Form
8-K, dated July 2, 1998.) (File No. 0-16014)
4.32 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated July 2, 1998, regarding
the Registrant's 8 1/8% Senior Notes due 2003 (Incorporated by
reference herein is Exhibit 4.02 from the Registrant's Current
Report on Form 8-K, dated July 2, 1998.) (File No. 0-16014)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.33 Form of 8 1/8% Senior Note due 2003 (Incorporated by reference
herein is Exhibit 4.03 from the Registrant's Current Report on Form
8-K, dated July 2, 1998.) (File No. 0-16014)
4.34 The First Supplemental Indenture, dated as of November 12, 1998, to
January 1998 Indenture with respect to the Registrant's 8 3/8%
Senior Notes due 2008, between the Registrant and the Bank of
Montreal Trust Company (Incorporated by reference herein is Exhibit
4.01 from the Registrant's Current Report on Form 8-K filed on
January 28, 1999.) (File No. 0-16014)
4.35 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated November 12, 1998,
regarding the Registrant's 8 3/8% Senior Notes due 2008
(Incorporated by reference herein is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K filed on January 28, 1999.)
(File No. 0-16014)
4.36 Indenture, dated as of January 13, 1999, with respect to the
Registrant's 7 1/2% Senior Notes due 2004 and 7 3/4% Senior Notes
due 2009, between the Registrant and the Bank of Montreal Trust
Company (Incorporated by reference herein is Exhibit 4.03 from the
Registrant's Current Report on Form 8-K filed on January 28, 1999.)
(File No. 0-16014)
4.37 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated January 13, 1999,
regarding the Registrant's 7 1/2% Senior Notes due 2004 and 7 3/4%
Senior Notes due 2009 (Incorporated by reference herein is Exhibit
4.04 from the Registrant's Current Report on Form 8-K filed on
January 28, 1999.) (File No. 0-16014)
4.38 Form of 7 1/2% Senior Note due 2004 (Incorporated by reference
herein is Exhibit 4.05 from the Registrant's Current Report on Form
8-K filed on January 28, 1999.) (File No. 0-16014)
4.39 Form of 7 3/4% Senior Note due 2009 (Incorporated by reference
herein is Exhibit 4.06 from the Registrant's Current Report on Form
8-K filed on January 28, 1999.) (File No. 0-16014)
4.40 Indenture, dated as of March 2, 1999, with respect to Hyperion
Telecommunications, Inc. ("Hyperion") 12% Senior Subordinated Notes
due 2007, between Hyperion and the Bank of Montreal Trust Company
(Incorporated by reference herein is Exhibit 4.01 from the
Registrant's Current Report on Form 8-K filed on March 10, 1999.)
(File No. 0-16014)
4.41 Form of 12% Senior Subordinated Note due 2007 (Incorporated by
reference herein is Exhibit 4.02 from the Registrant's Current
Report on Form 8-K filed on March 10, 1999.) (File No. 0-16014)
4.42 Registration Rights Agreement between Hyperion Telecommunications,
Inc. and the Initial Purchasers, dated March 2, 1999, regarding
Hyperion's 12% Senior Subordinated Notes due 2007 (Incorporated by
reference herein is Exhibit 10.04 from the Registrant's Current
Report on Form 8-K filed on March 10, 1999.) (File No. 0-16014)
4.43 Indenture, dated as of April 28, 1999, with respect to the
Registrant's 7 7/8% Senior Notes due 2009, between the Registrant
and The Bank of Montreal Trust Company (Incorporated by reference
herein is Exhibit 4.01 from the Registrant's Current Report on Form
8-K filed on April 28, 1999.) (File No. 0-16014)
4.44 The First Supplemental Indenture, dated as of April 28, 1999, to
April 1999 Indenture, with respect to the Registrant's 7 7/8% Senior
Notes due 2009, between the Registrant and The Bank of Montreal
Trust Company (Incorporated by reference herein is Exhibit 4.02 from
the Registrant's Current Report on Form 8-K filed on April 28,
1999.) (File No. 0-16014)
4.45 Form of 7 7/8% Senior Note due 2009 (Contained in Exhibit 4.44.)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
5.01* Opinion of Buchanan Ingersoll Professional Corporation
12.01** Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
23.01* Consent of Buchanan Ingersoll Professional Corporation (Contained in
its opinion filed as Exhibit 5.01 hereto.)
23.02** Consent of Deloitte & Touche LLP with respect to financial
statements of Adelphia and Olympus
23.03** Consent of Deloitte & Touche LLP with respect to financial
statements of Century
23.04** Consent of Deloitte & Touche LLP with respect to financial
statements of Harron
23.05** Consent of KPMG LLP with respect to financial statements of
FrontierVision
24.01* Power of Attorney (Appearing on signature page.)
25.01* Form T-1 Statement of Eligibility of Trustee
99.01* Form of Letter of Transmittal and Notice of Guaranteed Delivery for
Notes
</TABLE>
- --------
* Prevously Filed.
** Filed herewith.
The Registrant will furnish to the SEC upon request copies of instruments not
filed herewith which authorize the issuance of long-term obligations of
Registrant not in excess of 10% of the Registrant's total assets on a
consolidated basis.
(b) Financial Statement Schedules
The following schedules are included in the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1998 contained herein by
reference.
Schedule I--Condensed Financial Information of the Registrant
Schedule II--Valuation and Qualifying Accounts
Item 22. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The Registrant hereby undertakes to respond to requests for information that
is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11,
or 13 of the Form S-4, within one business day of receipt of such request, and
to send the incorporated documents by first-class mail or other equally prompt
means. This
II-5
<PAGE>
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
The Registrant hereby undertakes to supply by means of a post-effective
amendment all information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
Registrant undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a Registration Statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed part of the
Registration Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at such
time shall be deemed to be the initial bona fide offering thereof.
(3) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) (230.424(b) of this chapter), if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
II-6
<PAGE>
Provided, however, that paragraphs (3)(i) and (3)(ii) above do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
SEC by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(4) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(6) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Coudersport, Commonwealth of Pennsylvania, on the 11th day of May, 1999.
ADELPHIA COMMUNICATIONS CORPORATION
/s/ Timothy J. Rigas
By: _________________________________
Timothy J. Rigas
Executive Vice President, Chief
Accounting Officer, Chief
Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman, President and May 11, 1999
______________________________________ Chief Executive Officer
John J. Rigas
* Executive Vice President May 11, 1999
______________________________________ and Director
Michael J. Rigas
/s/ Timothy J. Rigas Executive Vice President, May 11, 1999
______________________________________ Chief Accounting Officer,
Timothy J. Rigas Treasurer, Chief
Financial Officer and
Director
* Executive Vice President May 11, 1999
______________________________________ and Director
James P. Rigas
* Senior Vice President, May 11, 1999
______________________________________ Secretary and Director
Daniel R. Milliard
Director May 11, 1999
______________________________________
Pete J. Metros
Director May 11, 1999
______________________________________
Perry S. Patterson
Director May 11, 1999
______________________________________
Dennis P. Coyle
* /s/ Timothy J. Rigas May 11, 1999
______________________________________
Timothy J. Rigas
attorney-in-fact
</TABLE>
II-8
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
3.01 Certificate of Incorporation of Adelphia Communications Corporation
(Incorporated herein by reference is Exhibit 3.01 to the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
3.02 Bylaws of Adelphia Communications Corporation (Incorporated herein
by reference is Exhibit 3.02 to Registrant's Annual Report on Form
10-K for the fiscal year ended
March 31, 1994.) (File No. 0-16014)
3.03 Certificate of Designations for 5 1/2% Series D Convertible
Preferred Stock (Incorporated herein by reference is Exhibit 3.01 to
Registrant's Current Report on Form 8-K for the event dated April
28, 1999.) (File No. 0-16104)
4.01 Indenture, dated as of February 26, 1997, between the Registrant and
Bank of Montreal Trust Company with respect to the Registrant's 9
7/8% Senior Notes Due 2007 (Incorporated herein by reference is
Exhibit 4.01 to Registrant's Current Report on Form 8-K dated May 1,
1997.) (File No. 0-16014)
4.02 Form of Note with respect to the Registrant's 9 7/8% Senior Notes
Due 2007 (Contained in Indenture filed as Exhibit 4.01.)
4.03 Registration Rights Agreement, dated as of February 26, 1997,
between the Registrant and the Initial Purchaser with respect to the
Registrant's 9 7/8% Senior Notes Due 2007 (Incorporated herein by
reference is Exhibit 10.01 to Registrant's Current Report on
Form 8-K dated May 1, 1997.) (File No. 0-16014)
4.04 First Supplemental Indenture, dated as of May 4, 1994, with respect
to Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Current Report on Form 8-K dated May 5, 1994.) (File No. 0-16014)
4.05 Indenture, dated as of February 22, 1994, with respect to
Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004 (Incorporated
herein by reference is Exhibit 4.05 to Registration Statement No.
33-52513 on Form S-4.)
4.06 Indenture, dated as of July 28, 1993, with respect to Registrant's
10 1/4% Senior Notes Due 2000 (Incorporated herein by reference is
Exhibit 4.01 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993.) (File No. 0-16014)
4.07 Amended and Restated Indenture, dated as of May 11, 1993, with
respect to Registrant's 9 7/8% Senior Debentures Due 2005
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Annual Report on Form 10-K for the fiscal year ended March 31,
1993.) (File No. 0-16014)
4.08 Indenture, dated as of September 2, 1992, with respect to the
Registrant's 11 7/8% Senior Debentures Due 2004 (Incorporated herein
by reference is Exhibit 4.03 to Registration Statement No. 33-52630
on Form S-1.)
4.09 Indenture, dated as of May 7, 1992, with respect to the Registrant's
12 1/2% Senior Notes Due 2002 (Incorporated herein by reference is
Exhibit 4.03 to Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1992.) (File No. 0-16014)
4.10 Indenture, dated as of April 15, 1996, between Hyperion
Telecommunications, Inc. and Bank of Montreal Trust Company
(Incorporated by reference is Exhibit 4.1 to Registration Statement
No. 333-06957 on Form S-4 filed for Hyperion Telecommunications,
Inc.)
4.11 Form of 13% Hyperion Telecommunications, Inc. Senior Discount Notes
(Incorporated herein by reference is Exhibit 4.3 to Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-12619 on
Form S-1.)
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.12 First Supplemental Indenture, dated as of September 11, 1996,
between Hyperion Telecommunications, Inc. and Bank of Montreal Trust
Company (Incorporated herein by reference is Exhibit 4.2 of Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-12619 on
Form S-1.)
4.13 Indenture, dated as of November 12, 1996, between Olympus
Communications, L.P., Olympus Capital Corporation and Bank of
Montreal Trust Company (Incorporated herein by reference is Exhibit
10.02 to Registrant's Current Report on Form 8-K dated December 16,
1996.) (File No. 0-16014)
4.14 Certificate of Designations for 13% Series A and Series B Cumulative
Exchangeable Preferred Stock (Contained in Exhibit 3.01 to
Registrant's Current Report on Form 8-K dated July 24, 1997, which
is incorporated herein by reference.) (File No. 0-16014)
4.15 Certificate of Designations for Series C Convertible Preferred Stock
(Contained in Exhibit 3.01 to Registrant's Current Report on Form
8-K dated July 24, 1997, which is incorporated herein by reference.)
(File No. 0-16014)
4.16 Indenture, dated as of July 7, 1997, with respect to the
Registrant's 10 1/2% Senior Notes due 2004, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.03 from the Registrant's Current Report on
Form 8-K dated July 24, 1997.) (File No. 0-16014)
4.17 Form of 10 1/2% Senior Note due 2004 (Contained in Exhibit 4.03 to
Registrant's Current Report on Form 8-K dated July 24, 1997 which is
incorporated herein by reference.) (File No. 0-16014)
4.18 Form of Indenture, with respect to the Registrant's 13% Senior
Subordinated Exchange Debentures due 2009, between the Registrant
and the Bank of Montreal Trust Company (Contained in Exhibit 3.01 as
Annex A to Registrant's Current Report on Form 8-K dated July 24,
1997, which is incorporated herein by reference.) (File No. 0-16014)
4.19 Form of Certificate for 13% Cumulative Exchangeable Preferred Stock
(Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
4.20 Form of Certificate for Series C Convertible Preferred Stock
(Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
No. 0-16014)
4.21 Indenture, dated as of August 27, 1997, with respect to Hyperion
Telecommunications, Inc. ("Hyperion") 12 1/4% Senior Secured Notes
due 2004, between Hyperion and the Bank of Montreal Trust Company
(Incorporated herein by reference to Exhibit 4.01 to Hyperion's
Current Report on Form 8-K dated August 27, 1997.) (File No.
0-21605)
4.22 Form of 12 1/4% Senior Secured Note due 2004 (Contained in Exhibit
4.21.)
4.23 Second Supplemental Indenture, dated as of August 27, 1997, between
Hyperion and the Bank of Montreal Trust Company, regarding
Hyperion's 13% Senior Discount Notes due 2003 (Incorporated by
reference herein to Exhibit 4.06 to Hyperion's Current Report on
Form 8-K dated August 27, 1997.) (File No. 0-21605)
4.25 Indenture, dated as of September 25, 1997, with respect to the
Registrant's 9 1/4% Senior Notes due 2002, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.01 from the Registrant's Current Report on
Form 8-K, dated September 25, 1997.) (File No. 0-16014)
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.26 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated September 25, 1997,
regarding the Registrant's 9 1/4% Senior Notes due 2002
(Incorporated herein by reference is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K, dated September 25, 1997.)
(File No. 0-16014)
4.27 Form of 9 1/4% Senior Note due 2002 (Contained in Exhibit 4.25.)
4.28 Indenture, dated as of January 21, 1998, with respect to the
Registrant's 8 3/8% Senior Notes due 2008, between the Registrant
and the Bank of Montreal Trust Company (Incorporated by reference
herein is Exhibit 4.01 from the Registrant's Current Report on Form
8-K dated January 21, 1998.) (File No. 0-16014)
4.29 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated January 21, 1998,
regarding the Registrant's 8 3/8% Senior Notes due 2008
(Incorporated by reference herein is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K dated January 21, 1998.)
(File No. 0-16014)
4.30 Form of 8 3/8% Senior Note due 2008 (Contained in Exhibit 4.28.)
4.31 Indenture, dated as of July 2, 1998, with respect to the
Registrant's 8 3/8% Senior Notes due 2003, between the Registrant
and the Bank of Montreal Trust Company (Incorporated by reference
herein is Exhibit 4.01 from the Registrant's Current Report on Form
8-K, dated July 2, 1998.) (File No. 0-16014)
4.32 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated July 2, 1998, regarding
the Registrant's 8 1/8% Senior Notes due 2003 (Incorporated by
reference herein is Exhibit 4.02 from the Registrant's Current
Report on Form 8-K, dated July 2, 1998.) (File No. 0-16014)
4.33 Form of 8 1/8% Senior Note due 2003 (Incorporated by reference
herein is Exhibit 4.03 from the Registrant's Current Report on Form
8-K, dated July 2, 1998.) (File No. 0-16014)
4.34 First Supplemental Indenture, dated as of November 12, 1998, to
January 1998 Indenture with respect to the Registrant's 8 3/8%
Senior Notes due 2008, between the Registrant and the Bank of
Montreal Trust Company (Incorporated by reference herein is Exhibit
4.01 from the Registrant's Current Report on Form 8-K filed on
January 28, 1999.) (File No. 0-16014)
4.35 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated November 12, 1998,
regarding the Registrant's 8 3/8% Senior Notes due 2008
(Incorporated by reference herein is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K filed on January 28, 1999.)
(File No. 0-16014)
4.36 Indenture, dated as of January 13, 1999, with respect to the
Registrant's 7 1/2% Senior Notes due 2004 and 7 3/4% Senior Notes
due 2009, between the Registrant and the Bank of Montreal Trust
Company (Incorporated by reference herein is Exhibit 4.03 from the
Registrant's Current Report on Form 8-K filed on January 28, 1999.)
(File No. 0-16014)
4.37 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated January 13, 1999,
regarding the Registrant's 7 1/2% Senior Notes due 2004 and 7 3/4%
Senior Notes due 2009 (Incorporated by reference herein is Exhibit
4.04 from the Registrant's Current Report on Form 8-K, filed on
January 28, 1999.) (File No. 0-16014)
4.38 Form of 7 1/2% Senior Note due 2004 (Incorporated by reference
herein is Exhibit 4.05 from the Registrant's Current Report on Form
8-K filed on January 28, 1999.) (File No. 0-16014)
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.39 Form of 7 3/4% Senior Note due 2009 (Incorporated by reference
herein is Exhibit 4.06 from the Registrant's Current Report on Form
8-K filed on January 28, 1999.) (File No. 0-16014)
4.40 Indenture dated as of March 2, 1999, with respect to Hyperion
Telecommunications, Inc. ("Hyperion") 12% Senior Subordinated Notes
due 2007, between Hyperion and the Bank of Montreal Trust Company
(Incorporated by reference herein is Exhibit 4.01 from the
Registrant's Current Report on Form 8-K filed on March 10, 1999.)
(File No. 0-16014)
4.41 Form of 12% Senior Subordinated Notes due 2007 (Incorporated by
reference herein is Exhibit 4.02 from the Registrant's Current
Report on Form 8-K filed on March 10, 1999.) (File No. 0-16014)
4.42 Registration Rights Agreement between Hyperion Telecommunications,
Inc. and the Initial Purchasers, dated March 2, 1999, regarding
Hyperion's 12% Senior Subordinated Notes due 2007 (Incorporated by
reference herein is Exhibit 10.04 from the Registrant's Current
Report on Form 8-K filed on March 10, 1999.) (File No. 0-16014)
4.43 Indenture, dated as of April 28, 1999, with respect to the
Registrant's 7 7/8% Senior Notes due 2009, between the Registrant
and The Bank of Montreal Trust Company (Incorporated by reference
herein is Exhibit 4.01 from the Registrant's Current Report on Form
8-K filed on April 28, 1999.) (File No. 0-16014)
4.44 The First Supplemental Indenture, dated as of April 28, 1999, to
April 1999 Indenture, with respect to the Registrant's 7 7/8% Senior
Notes due 2009, between the Registrant and The Bank of Montreal
Trust Company (Incorporated by reference herein is Exhibit 4.02 from
the Registrant's Current Report on Form 8-K filed on April 28,
1999.) (File No. 0-16014)
4.45 Form of 7 7/8% Senior Note due 2009 (Contained in Exhibit 4.44.)
5.01* Opinion of Buchanan Ingersoll Professional Corporation
12.01** Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
23.01* Consent of Buchanan Ingersoll Professional Corporation (Contained in
its opinion filed as Exhibit 5.01 hereto.)
23.02** Consent of Deloitte & Touche LLP with respect to financial
statements of Adelphia and Olympus
23.03** Consent of Deloitte & Touche LLP with respect to financial
statements of Century
23.04** Consent of Deloitte & Touche LLP with respect to financial
statements of Harron
23.05** Consent of KPMG LLP with respect to financial statements of
FrontierVision
24.01* Power of Attorney (Appearing on signature page.)
25.01* Form T-1 Statement of Eligibility of Trustee
99.01* Forms of Letters of Transmittal and Notices of Guaranteed Delivery
for Notes
</TABLE>
- --------
*Previously Filed.
**Filed herewith.
II-12
<PAGE>
EXHIBIT 12.01
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(Dollars in thousands)
<TABLE>
<CAPTION>
Pro Forma
Pro Forma Nine Months Nine Months
Year Ended March 31, Year Ended Ended Ended
---------------------------------------------------- March 31, December 31, December 31,
1994 1995 1996 1997 1998 1998 1998 1998
-------- --------- --------- --------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loss before Income Taxes,
Extraordinary Loss and
Cumulative Effect of
Change in Accounting
Principle.............. $(94,706) $(111,759) $(122,680) $(119,290) $(168,161) $(572,331) $(117,595) $(389,189)
Add: Fixed charges,
excluding
capitalized
interest............ 187,439 200,927 217,170 249,113 280,670 677,590 220,832 565,522
Equity in losses of
joint ventures......... 30,054 44,349 46,257 59,169 79,055 20,429 58,471 9,466
Minority interest in
income (losses) of
subsidiaries........... -- -- -- -- -- 11,899 (25,772) (16,438)
Preferred stock
dividends
of subsidiary.......... -- -- -- -- 12,682 27,121 21,536 21,536
-------- --------- --------- --------- --------- --------- --------- ---------
Net Earnings Available for
Combined Fixed Charges
and Preferred Stock
Dividends................ 122,787 133,517 140,747 188,992 204,246 164,708 157,472 190,897
-------- --------- --------- --------- --------- --------- --------- ---------
Combined Fixed Charges and
Preferred Stock
Dividends:
Interest................ 182,136 195,698 210,691 240,692 271,056 654,424 212,545 544,295
Capitalized interest.... 1,345 1,736 1,766 1,727 5,985 14,463 11,285 28,902
Amortization of debt
issuance costs......... 3,987 3,792 4,917 6,344 7,141 17,211 6,432 16,492
Interest portion of rent
expense................ 1,316 1,437 1,562 2,077 2,473 5,955 1,855 4,735
Preferred stock
dividends
of subsidiary.......... -- -- -- -- 12,682 27,121 21,536 21,536
Preferred stock
dividends.............. -- -- -- -- 18,850 55,125 20,718 41,343
-------- --------- --------- --------- --------- --------- --------- ---------
Total Combined Fixed
Charges and Preferred
Stock Dividends.......... 188,784 202,663 218,936 250,840 318,187 774,299 274,371 657,303
-------- --------- --------- --------- --------- --------- --------- ---------
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends................ -- -- -- -- -- -- -- --
Deficiency in Earnings
Required to Cover
Combined Fixed Charges
and Preferred Stock
Dividends................ $ 65,997 $ 69,146 $ 78,189 $ 61,848 $ 113,941 $ 609,591 $ 116,899 $ 466,406
======== ========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
EXHIBIT 23.02
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-75995 of Adelphia Communications Corporation on
Form S-4 of our report dated June 10, 1998 and our report dated March 6, 1998
on our audits of the financial statements of Adelphia Communications
Corporation and subsidiaries and of Olympus Communications, L.P. and
subsidiaries, respectively, appearing in and incorporated by reference in the
Annual Report on Form 10-K of Adelphia Communications Corporation for the year
ended March 31, 1998, and to the reference to us under the heading "Experts" in
the prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
May 11, 1999
<PAGE>
EXHIBIT 23.03
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-75995 of Adelphia Communications Corporation on
Form S-4 of our report dated August 4, 1998, with respect to the consolidated
balance sheets of Century Communications Corp. and subsidiaries as of May 31,
1998 and 1997, and the related consolidated statements of operations and cash
flows for each of the three years in the period ended May 31, 1998, included in
the Current Report on Form 8-K, filed April 19, 1999 by Adelphia Communications
Corporation, incorporated by reference in this Registration Statement and to
the reference to us under the heading "Experts" in the prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
May 11, 1999
<PAGE>
EXHIBIT 23.04
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Amendment No. 1 to Registration
Statement No. 333-75995 of Adelphia Communications Corporation on Form S-4 of
our report dated March 19, 1999 (April 12, 1999 as to Note 16), with respect to
the consolidated balance sheets of Harron Communications Corp. and subsidiaries
as of December 31, 1998 and 1997, and the related consolidated statements of
income, stockholders' equity and comprehensive income and cash flows for each
of the three years in the period ended December 31, 1998, which report appears
in Adelphia Communications Corporation's Current Report on Form 8-K dated April
19, 1999. We also consent to the reference to our firm under the heading
"Experts" in the prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
May 11, 1999
<PAGE>
EXHIBIT 23.05
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-75995 on Form S-4, of Adelphia Communications
Corporation, of our report, dated March 19, 1999, relating to the consolidated
balance sheets of FrontierVision Partners, L.P. and subsidiaries as of December
31, 1998 and 1997, and the related consolidated statements of operations,
partners' deficit and cash flows for each of the years in the three year period
ended December 31, 1998, which report appears in the April 19, 1999 Current
Report on Form 8-K of Adelphia Communications Corporation which is incorporated
by reference herein and to the reference to our firm under the heading
"Experts" in the registration statement.
/s/ KPMG LLP
Denver, Colorado
May 11, 1999
