SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) February 23, 1999
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-16014 23-2417713
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
Main at Water Street - Coudersport, PA 16915-1141
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 274-9830
<PAGE>
Item 5. Other Events.
On February 23, 1999, the Registrant announced its pending acquisition of
FrontierVision Partners, L.P. in a press release which is attached hereto as
Exhibit 99.01 and incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
99.01 Press Release dated February 23, 1999 regarding the Registrant's
acquisition of FrontierVision Partners, L.P. (Filed herewith)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADELPHIA COMMUNICATIONS CORPORATION
Date: February 23, 1999 By: /s/ Timothy J. Rigas
--------------------------
Timothy J. Rigas
Executive Vice President, Treasurer
and Chief Financial Officer
Exhibit 99.01
PRESS RELEASE
FOR RELEASE: IMMEDIATE
CONTACT: Timothy J. Rigas, Executive Vice President and Chief Financial Officer
(814) 274-9830
Adelphia Announces the Acquisition of FrontierVision Partners, L.P. and Related
Financing Plans
Coudersport, PA, February 23, 1999
John Rigas, Chairman and CEO of Adelphia Communications Corporation (Adelphia)
(NASDAQ: ADLAC), today announced that Adelphia has entered into a definitive
agreement to acquire FrontierVision Partners, L.P. (FrontierVision) for $2.1
billion. Adelphia will acquire 100% of FrontierVision in exchange for $550
million cash, the assumption of $1.11 billion of debt and 7,000,000 shares of
Adelphia Class A common stock. The transaction is expected to close during the
September 1999 quarter. The transaction is subject to customary closing
conditions.
The acquisition of FrontierVision will add 702,000 basic cable subscribers to
Adelphia's existing base of 2,360,000 owned and managed cable subscribers.
Approximately 310,000 of FrontierVision's customers are located adjacent to
Adelphia's existing operations in New England and Virginia. The remaining
392,000 customers will form a new cluster for Adelphia in the Ohio/Kentucky
region. Table 1 below details Adelphia's subscriber base by region.
John Rigas stated "The FrontierVision systems represent the largest group of
cable systems located within our Northeast region of operations that were likely
to come up for sale. The geographic overlap of these operations with our
existing operations is outstanding. In addition to this geographic fit,
increasing Adelphia's owned and managed subscriber base to over three million
helps further establish Adelphia as a significant consolidator and long term
player in the cable industry."
Prior to completing this acquisition, Adelphia intends to sell an aggregate of
approximately $750 million of convertible preferred stock and Class A common
stock to the public and the John Rigas family.
Approximately $550 million of these proceeds will be used to fund the cash
portion of the FrontierVision acquisition while the remaining $200 million will
be used to reduce debt. After giving pro forma effect to these transactions (and
excluding the impact of its Hyperion subsidiary), Adelphia's ratio of debt to
EBITDA will be 6.9:1.
Adelphia expects to acquire FrontierVision as an unrestricted subsidiary for
purposes of its outstanding bond indentures. There are no anticipated changes to
the amount of debt outstanding for FrontierVision as a result of these
transactions. Table 2 below summarizes the financial impact of these
transactions on Adelphia's existing cable operations as well as the impact on
FrontierVision.
Tim Rigas, Chief Financial Officer of Adelphia commented. "Not only does this
acquisition fit well strategically and operationally, we believe these
transactions also present the opportunity to continue expanding our shareholder
base and to further strengthen Adelphia's financial position."
Daniels & Associates of Denver, Colorado initiated the acquisition transaction
and represented Adelphia. J.P. Morgan & Company represented FrontierVision.
<PAGE>
<TABLE>
<CAPTION>
Table 1: Regional Subscriber Analysis
Total Owned &
Existing Cable(1) FrontierVision(2) Total Owned Managed Systems Managed
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Southeastern
Florida 641,575 0 641,575 25,604 667,179
New England 297,610 247,983 545,593 24,734 570,327
Western New York 498,765 0 498,765 0 498,765
Ohio/Kentucky 37,823 392,520 430,343 0 430,343
Virginia 309,284 61,699 370,983 21,772 392,755
Western PA 183,184 0 183,184 62,333 245,517
Eastern PA 151,359 0 151,359 0 151,359
Coastal New Jersey 106,281 0 106,281 0 106,281
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Total 2,225,881 702,202 2,928,083 134,443 3,062,526
<FN>
(1) The pro forma selected financial and other data is presented as if all
acquisitions completed subsequent to October 1, 1997 and the consolidation of
Olympus had occurred as of October 1, 1997. Additionally, the pro forma
results include the January 14, 1999 common stock offering and the January
29, 1999 repurchase of Adelphia common and preferred stock from Telesat
Cablevision, Inc., as if these transactions had occurred December 31, 1998.
The pro forma information is not necessarily indicative of what the results
would have been had the acquisitions occurred on October 1, 1997. Reference
is made to the Company's 1998 Annual Report on Form 10-K and Quarterly Report
on Form 10-Q for the quarter ended December 31, 1998 for further information
on the acquisitions and other pro forma transactions.
(2) Pro forma for the acquisition of State Cable Systems and certain other
acquisitions.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Table 2: Adelphia Communications Pro Forma Selected Financial and Other Data as of and for the
three months ended 12/31/98
(excludes results of Hyperion, Dollars in thousands)
- - -----------------------------------------------------------------------------------------------------------------
Proforma as of and for Adjustments Related to
the three months ended Acquisition and Related Proforma for Acquisition and
12/31/98 Financing Related Financing
----------------------- ----------------------------------------------------------------
Existing FrontierVision(2) Existing FrontierVision Existing FrontierVision Cable
Cable(1) Cable Cable Total
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Homes Passed 3,151,580 1,006,955 0 0 3,151,580 1,006,955 4,158,535
Basic Subscribers 2,225,881 702,202 0 0 2,225,881 702,202 2,928,083
Digital Subscribers 41,611 5,034 0 0 41,611 5,034 46,645
Data Subscribers 15,439 139 0 0 15,439 139 15,578
- - -----------------------------------------------------------------------------------------------------------------
Revenue 246,570 72,817 0 0 246,570 72,817 319,387
Expenses 123,183 38,017 0 (1,500) (3) 123,183 36,517 159,700
Operating Cash Flow 123,387 34,800 0 1,500 123,387 36,300 159,687
Operating Margin 50.0% 47.8% 0.0% 2.1% 50.0% 49.9% 50.0%
Total Debt 3,680,598 1,111,000 0 0 3,680,598 1,111,000 4,791,598
Cash (201,634) 0 0 0 (201,634) 0 (201,634)
Proceeds From Equity
Sales - - (750,000)(4)(5) 0 (750,000) 0 (750,000)
Purchase of LP Units - - 550,000 0 550,000 0 550,000
Net Debt 3,478,964 1,111,000 (200,000) 0 3,278,964 1,111,000 4,389,964
Total Debt:OCF 7.05 7.98 -0.41 -0.33 6.64 7.65 6.87
Pref Stock 150,000 - 375,000 (4) - - - 525,000
Fully Converted Shares 61,596 - 6,085 (5) 7,000 - - 74,681
- - -----------------------------------------------------------------------------------------------------------------
<FN>
- - --------
(1) The pro forma selected financial and other data is presented as if all
acquisitions completed subsequent to October 1, 1997 and the consolidation of
Olympus had occurred as of October 1, 1997. Additionally, the pro forma
results include the January 14, 1999 common stock offering and the January
29, 1999 repurchase of Adelphia common and preferred stock from Telesat
Cablevision, Inc., as if these transactions had occurred December 31, 1998.
The pro forma information is not necessarily indicative of what the results
would have been had the acquisitions occurred on October 1, 1997. Reference
is made to the Company's 1998 Annual Report on Form 10-K and Quarterly Report
on Form 10-Q for the quarter ended December 31, 1998 for further information
on the acquisitions and other pro forma transactions.
(2) Pro forma for the acquisition of State Cable Systems and certain other
acquisitions.
(3) Reflects $1.5 million of estimated programming cost savings.
(4) Reflects expected sale of $375 million in Convertible Preferred Stock.
(5) Reflects expected sale of $375 million in Class A Common Stock @$61 5/8 per
Share.
</FN>
</TABLE>
