<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON March 10, 1999
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 4841 23-2417713
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
COLIN HIGGIN, ESQUIRE
DEPUTY GENERAL COUNSEL
ADELPHIA COMMUNICATIONS CORPORATION
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
CARL E. ROTHENBERGER, JR., ESQUIRE
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
21ST FLOOR, 301 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8826
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
<PAGE>
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of securities to be Proposed maximum Amount of
registered aggregate offering price(1) registration fee(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities --- ---
- -------------------------------------------------------------------------------------------------------------
Preferred Stock (par value $.01 per share) --- ---
- -------------------------------------------------------------------------------------------------------------
Debt Securities, Preferred Stock and Class A --- ---
Common Stock (par value $.01 per share)
issuable upon conversion of any convertible
Debt Securities or Preferred Stock(2)
- -------------------------------------------------------------------------------------------------------------
Class A Common Stock (par value $.01 per --- ---
share)
- -------------------------------------------------------------------------------------------------------------
TOTAL $1,350,000,000(3) $375,300
=============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933,
as amended (the "Securities Act"). There are being registered an
indeterminate number of Debt Securities, Preferred Stock and Class A Common
Stock of Adelphia Communications Corporation. The aggregate public
offering price of the Debt Securities, Preferred Stock and Class A Common
Stock of Adelphia Communications Corporation registered hereby will not
exceed $1,350,000,000.
(2) Consists of such indeterminate amount of Debt Securities and number of
shares of such Class A Common Stock or Preferred Stock of Adelphia
Communications Corporation issuable pursuant to any conversion rights which
are part of the Debt Securities or Preferred Stock of Adelphia
Communications Corporation sold pursuant to this Registration Statement.
(3) The aggregate initial offering price of all securities registered pursuant
to this Registration Statement and offered from time to time will not
exceed $1,350,000,000. An additional $750,000,000 of securities was
previously registered on a Registration Statement on Form S-3 (No.
333-58749) for which a registration fee in the amount of $221,250 was
previously paid. Of that $750,000,000, approximately $411,000,000 of
securities remains unissued as of March 9, 1999. The previously registered
securities may also be sold pursuant to the prospectus contained herein.
Any securities registered hereunder or under Registration Statement No.
333-58749 may be sold separately or with other securities registered
hereunder or thereunder. Pursuant to Rule 429 of the rules and regulations
of the Securities and Exchange Commission under the Securities Act of 1933
the combined prospectus contained herein also relates to the Registration
Statement on Form S-3 (No. 333-58749).
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
This Registration Statement has been filed pursuant to Rule 429 and relates to a
previously filed registration statement on Form S-3 (No. 333-58749).
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED March 10, 1999
Prospectus
ADELPHIA COMMUNICATIONS CORPORATION
Debt Securities
Preferred Stock
Class A Common Stock
This prospectus relates to:
. Adelphia Communications Corporation's debentures, notes and other debt
securities in one or more series which may be senior debt securities or
subordinated debt securities,
. shares of preferred stock of Adelphia issuable in series designated by the
Board of Directors of Adelphia and
. shares of Class A common stock, which may be offered in combination or
separately from time to time by Adelphia.
The aggregate initial offering price of all of the securities which may be sold
pursuant to this prospectus will not exceed U.S. $1,761,000,000, or its
equivalent based on the applicable exchange rate at the time of issue in one or
more foreign currencies or currency units as shall be designated by Adelphia.
The Class A common stock is listed on the Nasdaq National Market. The Class A
common stock's ticker symbol is "ADLAC." On March 9, 1999, the closing sale
price on the Nasdaq National Market of a single share of Class A common stock
was $54.875.
Our common stock also includes Class B common stock. The rights of holders of
the Class A common stock and Class B common stock differ with respect to certain
aspects of dividends, liquidations and voting. The Class A common stock has
preferential rights with respect to cash dividends and distributions upon the
liquidation of Adelphia. Holders of Class B common stock are entitled to
greater voting rights than the holders of Class A common stock; however, the
holders of Class A common stock, voting as a separate class, are entitled to
elect one of Adelphia's directors.
You should carefully review "Risk Factors" beginning on page 5 for a discussion
of things you should consider when investing in securities of Adelphia.
Neither the SEC nor any state securities commission has approved or disapproved
of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
This Prospectus May Not Be Used To Consummate Sales Of Securities Unless
Accompanied By A Prospectus Supplement.
The date of this Prospectus is _____________, 1999.
<PAGE>
TABLE OF CONTENTS
ADELPHIA................................................................. 3
RISK FACTORS............................................................. 5
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS..............................................14
DILUTION.................................................................14
USE OF PROCEEDS..........................................................15
DESCRIPTION OF DEBT SECURITIES...........................................15
DESCRIPTION OF CAPITAL STOCK.............................................26
BOOK ENTRY ISSUANCE......................................................28
PLAN OF DISTRIBUTION.....................................................30
WHERE YOU CAN FIND MORE INFORMATION......................................32
LEGAL MATTERS............................................................33
EXPERTS..................................................................33
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<PAGE>
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, 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 March 5, 1999, Adelphia announced that it had entered into a definitive
agreement to acquire Century Communications Corp. by merger. Under the
agreement, Adelphia would acquire 100% of the outstanding common stock of
Century for an aggregate of approximately $826,000,000 in cash, 48,700,000
shares of Class A common stock and the assumption of approximately
$1,600,000,000 of debt. This transaction is subject to shareholder approval by
Century and Adelphia and other customary closing conditions. As of March 5,
1999, Century had approximately 1,600,000 basic subscribers after giving effect
to Century's pending joint venture with Tele-Communications, Inc.
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<PAGE>
On March 2, 1999, Hyperion issued $300,000,000 of 12% Senior Subordinated
Notes due 2007. An entity controlled by members of the Rigas Family purchased
$100,000,000 of the $300,000,000 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 $292,000,000 will be
used to fund its acquisition of interests held by local partners in certain of
Hyperion's 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
$2,100,000,000. Under that agreement Adelphia would acquire 100% of
FrontierVision in exchange for approximately $550,000,000 in cash, 7,000,000
shares of Adelphia Class A common stock and the assumption of approximately
$1,110,000,000 of debt. The transaction is subject to customary closing
conditions. As of February 23, 1999, 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 the 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 by
July 11, 1999. The redemption transaction is subject to applicable approvals of
third parties or governmental authorities. The aggregate purchase price for
these transactions will be approximately $257,200,000.
On January 21, 1999, Adelphia acquired Verto Communications, Inc. Verto
provided cable television services to approximately 56,000 subscribers in the
greater Scranton, Pennsylvania area at the date of acquisition. In connection
with the Verto acquisition, Adelphia issued 2,561,024 shares of its Class A
common stock to the former owners of Verto.
On January 14, 1999, Adelphia completed offerings totaling 8,600,000 shares
of its Class A common stock. In those offerings, Adelphia sold 4,600,000 newly
issued shares of Class A common stock to Goldman, Sachs & Co. at $43.25 per
share and it also sold 4,000,000 shares of its Class A common stock at $43.25
per share to a Rigas family partnership. Adelphia used the proceeds of about
$372,000,000 from these offerings to repay subsidiary bank debt, which may be
reborrowed and used for general corporate purposes.
On January 13, 1999, Adelphia completed 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. Net
proceeds from these offerings, after deducting offering expenses, were
approximately $393,700,000. Of this amount, Adelphia used approximately
$160,000,000 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 which may be reborrowed and used for general
corporate purposes. The terms of these notes are similar to those of Adelphia's
existing publicly held senior debt.
On December 30, 1998, Adelphia's 66.7% owned joint venture limited
partnership with Tele-Communications, Inc., which has operations in the Western
New York region, completed a $700,000,000, eight and one-half year credit
facility. The credit facility consists of a $350,000,000 reducing revolving
credit portion and a $350,000,000 term loan portion. The partnership used
proceeds from initial borrowings to repay indebtedness owed to Adelphia.
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<PAGE>
RISK FACTORS
Before you invest in Adelphia's securities, you should be aware that there
are various risks, including those described below. You should consider
carefully these risk factors together with all of the other information included
in this prospectus before you decide to purchase any securities of Adelphia.
<TABLE>
<S> <C>
High Level Of Adelphia has a substantial amount of debt. We borrowed this money to
Indebtedness purchase and to expand our cable systems and other operations and, to a
- ------------------------ lesser extent, for investments and loans to our affiliates. At December
We owe approximately 31, 1998, our indebtedness totaled approximately $3,527,452,000. This
$3.5 billion. Our included approximately:
high level of . $1,810,212,000 of Adelphia Parent Company public debt. When we use
indebtedness can the term "Adelphia Parent Company" in this prospectus, we are referring
have important only to Adelphia Communications Corporation as a parent holding company
adverse consequences entity, and not to its subsidiaries;
to us and to you. . $1,246,456,000 of debt owed by our subsidiaries to banks, other
financial institutions and other persons; and
. $470,784,000 of public debt owed by Hyperion.
Debt service consumes a Our high level of indebtedness can have important adverse consequences to
substantial portion of us and to you. It requires that we spend a substantial portion of the
the cash we generate. cash we get from our business to repay the principal and interest on
This could affect our these debts. Otherwise, we could use these funds for general corporate
ability to invest in purposes or for capital improvements. Our ability to obtain new loans
our business in the for working capital, capital expenditures, acquisitions or capital
future as well as to improvements may be limited by our current level of debt. In addition,
react to changes in having such a high level of debt could limit our ability to react to
our industry or changes in our industry and to economic conditions generally. In
economic downturns. addition to our debt, at December 31, 1998, the Adelphia Parent Company
also had approximately $148,191,000 and Hyperion had approximately
$228,674,000 of redeemable exchangeable preferred stock which contain
payment obligations that are similar to our debt obligations in these
respects. Olympus also has a substantial amount of debt.
Approximately 32% of Our debt comes due at various times up to the year 2009, including an
this debt must be paid aggregate of approximately $1,126,169,000 which, as of December 31, 1998,
by April 1, 2003 and we must pay by April 1, 2003.
all of it must be paid
by 2009.
Our Business Requires Our business requires substantial additional financing on a continuing
Substantial Additional basis for capital expenditures and other purposes including:
Financing And If We Do . constructing and upgrading our plant and networks--some of these
Not Obtain That upgrades we must make to comply with the requirements of local cable
Financing We May Not franchise authorities,
Be Able To Upgrade Our . offering new services,
Plant, Offer Services, . scheduled principal and interest payments,
Make Payments When Due . refinancing existing debt, and
Or Refinance Existing . acquisitions and investments.
Debt.
</TABLE>
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<S> <C>
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 The Total Convertible Preferred Stock, Common Stock and Other
Losses And Negative Stockholders' Equity (Deficiency) at December 31, 1998 was a deficit of
Stockholders' Equity approximately ($1,021,746,000). Our continuing net losses, which are
And We Expect This To mainly due to our high levels of depreciation and amortization and
Continue 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 - $119,894,000;
. fiscal year ended March 31, 1997 - $130,642,000;
. fiscal year ended March 31, 1998 - $192,729,000; and
. nine months ended December 31, 1998 - $135,848,000.
We expect to continue to incur large net losses for the next several
years.
Our earnings have been Our earnings could not pay for our combined fixed charges and preferred
insufficient to pay stock dividends during these periods by the amounts set forth in the
for our fixed charges table below, although combined fixed charges and preferred stock
and preferred stock dividends included substantial non-cash charges for depreciation,
dividends. amortization and non-cash interest expense on some of our debts and the
non-cash expense of Hyperion's preferred stock dividends:
Earnings Non-Cash
Deficiency Charges
--------------- -----------------
. fiscal year ended March 31, 1996 $ 78,189,000 $127,319,000
. fiscal year ended March 31, 1997 $ 61,848,000 $165,426,000
. fiscal year ended March 31, 1998 $113,941,000 $195,153,000
. nine months ended December 31, 1998 $116,899,000 $186,022,000
If we could not Historically, the cash we generate from our operating activities and
refinance our debt or borrowings has been sufficient to meet our requirements for debt service,
obtain new loans, we working capital, capital expenditures, and investments in and advances to
would likely have to our affiliates, and we have depended on getting additional borrowings to
consider various meet our liquidity requirements. Although in the past we have been able
options such as the both to refinance our debt and to obtain new debt, there can be no
sale of additional guarantee that we will be able to continue to do so in the future or that
equity or some of our the cost to us or the other terms which would affect us would be as
assets to meet the favorable to us as our current loans and credit agreements. We believe
principal and interest that our business will continue to generate cash and that we will be able
payments we owe, to obtain new loans to meet our cash needs. However, the covenants in
negotiate with our the indentures and credit agreements for our current debt limit our
lenders to restructure ability to borrow more money.
existing loans or
explore other options
available under
applicable laws
including those under
reorganization or
bankruptcy laws. We
can
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not guarantee that
any options available
to us would enable us
to repay our debt in
full.
Competition The telecommunications services provided by Adelphia are subject to
- ------------------------ strong competition and potential competition from various sources. Our
Our cable television cable television systems compete with other means of distributing video
business is subject to to home televisions such as Direct Broadcast Satellite systems, commonly
strong competition known as DBS systems, and Multichannel Multipoint Distribution systems.
from several sources Some of the regional Bell telephone operating companies and other local
which could adversely telephone companies are in the process of entering the video-to-home
affect revenue or business and several have expressed their intention to enter the
revenue growth. 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 us in distributing video to home televisions.
The regional Bell operating companies and other potential competitors
have much greater resources than Adelphia and would constitute formidable
competition for our cable television business. We cannot predict either
the extent to which competition will 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 In each of the markets served by Hyperion's networks, the competitive
are also subject to local exchange carrier services offered by Hyperion compete principally
risk because Hyperion with the services offered by the incumbent local telephone exchange
competes principally carrier company serving that area. Local telephone companies have
with established local long-standing relationships with their customers, have the potential to
telephone carriers subsidize competitive services from monopoly service revenues, and
that have benefit from favorable state and federal regulations. The merger of Bell
long-standing utility Atlantic and NYNEX created a very large company whose combined territory
relationships with covers a substantial portion of Hyperion's markets. Other combinations
their customers and are occurring in the industry, which may have a material adverse effect
pricing flexibility on Hyperion and us.
for local telephone
services.
We think that local telephone companies will gain increased pricing
flexibility from regulators as competition increases. Hyperion's
operating results and cash flow could be materially and adversely
affected by actions by regulators, including permitting the incumbent
local telephone companies in Hyperion's markets to do the following:
. lower their rates substantially;
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<S> <C>
. 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.
If the regional Bell The regional Bell operating companies can now obtain regulatory approval
telephone companies to offer long distance services if they comply with the interconnection
could get regulatory requirements of the federal Telecommunications Act of 1996. To date, the
approval to offer long FCC has denied the requests for approval filed by regional Bell operating
distance service in companies in Hyperion's operating areas. However, an approval of such a
competition with request could result in decreased market share for the major long
Hyperion's significant distance carriers which are among Hyperion's significant customers. This
customers, some of could have a material adverse effect on Hyperion.
Hyperion's major
customers could lose
market share.
The regional Bell Regional Bell operating companies have also recently filed petitions with
telephone companies the FCC requesting waivers of other obligations under the
continue to seek other Telecommunications Act of 1996. These involve services the Company also
regulatory approvals provides such as high speed data, long distance, and services to Internet
that could Service Providers. If the FCC grants the regional Bell operating
significantly enhance companies' petitions, this could have a material adverse effect on
their competitive Hyperion.
position against
Hyperion.
Potential competitors Potential competitors for Hyperion include other competitive local
to Hyperion's exchange carriers, incumbent local telephone companies which are not
telecommunications subject to regional Bell operating companies' restrictions on offering
services include the long distance service, AT&T, MCIWorldCom, Sprint and other long distance
regional Bell carriers, cable television companies, electric utilities, microwave
telephone companies, carriers, wireless telecommunications providers and private networks
AT&T, MCIWorldCom and built by large end users. Both AT&T and MCIWorldCom have announced that
Sprint, electric they have begun to offer local telephone services in some areas of the
utilities and other country, and AT&T recently announced a new wireless technology for
companies that have providing local telephone service. AT&T and Tele-Communications, Inc.
advantages over have merged. Although Hyperion has good relationships with the long
Hyperion. distance carriers, they could build their own facilities, purchase other
carriers or their facilities, or resell the services of other carriers
rather than use Hyperion's services when entering the market for local
exchange services.
Many of Hyperion's current and potential competitors, particularly
incumbent local telephone companies, have financial, personnel and other
resources substantially greater than those of Hyperion, as well as other
competitive advantages over Hyperion.
</TABLE>
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<S> <C>
We Are Subject To The cable television industry and the provision of local telephone
Extensive Regulation exchange services are subject to extensive regulation at the federal,
- ------------------------ state and local levels, and many aspects of such regulation are currently
Our cable television the subject of judicial proceedings and administrative or legislative
and telecommunications proposals. In particular, the FCC adopted regulations that limit our
businesses are heavily ability to set and increase rates for our basic and cable programming
regulated as to rates service packages and for the provision of cable television-related
we can charge and equipment. The law permits certified local franchising authorities to
other matters. This order refunds of rates paid in the previous twelve-month period
regulation could limit determined to be in excess of the permitted reasonable rates. It is
our ability to possible that rate reductions or refunds of previously collected fees may
increase rates, cause be required in the future.
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 The federal Telecommunications Act of 1996 substantially changed federal,
Telecommunications state and local laws and regulations governing our cable television and
Act of 1996 may have a telecommunications businesses. This law could materially affect the
significant impact on growth and operation of the cable television industry and the cable
our cable television services we provide. Although this legislation may lessen regulatory
and telephone burdens, the cable television industry may be subject to new competition
businesses. 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 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.
Unequal Voting Rights Adelphia has two classes of common stock -- Class A which carries one
Of Stockholders vote per share and Class B which carries ten votes per share. Under our
- ------------------------ Certificate of Incorporation, the Class A shares elect only one of our
eight directors.
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Control Of Voting Power As of March 1, 1999, the Rigas family beneficially owned shares
By The Rigas Family representing about 48% of the total number of outstanding shares of both
- ------------------------ classes of Adelphia's common stock and about 81% of the total voting
The Rigas family can power of Adelphia's shares. The public holds a majority of the
control stockholder outstanding Class A shares, although the Rigas family also owns about 36%
decisions on very of those shares as of March 1, 1999. The Rigas family owns about 99% of
important matters. Adelphia's Class B shares. The Rigas family also owns shares of
Adelphia's 8% Series C Cumulative Convertible preferred stock which, if
converted, would increase its voting power and beneficial ownership. As
a result of the Rigas family's stock ownership and an agreement among the
Class B stockholders, members of the Rigas family have the power to elect
seven of eight Adelphia directors, and if they converted their
Convertible preferred stock might be able to elect all eight directors.
In addition, the Rigas family could control stockholder decisions on
other matters such as amendments to our Certificate of Incorporation and
Bylaws, and mergers or other fundamental corporate transactions.
There Are Potential John J. Rigas and the other executive officers of Adelphia, including
Conflicts Of Interest other members of the Rigas family, own other corporations and
Between Adelphia And partnerships, which are managed by us for a fee. Subject to the
The Rigas Family restrictions contained in a business opportunity agreement regarding
- ------------------------ future acquisitions, Rigas family members and the executive officers are
free to continue to own these interests and acquire additional interests
in cable television systems. These activities could present a conflict
of interest with us, such as how much time our executive officers devote
to our business. In addition, there have been and will continue to be
transactions between us and the executive officers or the other entities
they own or have affiliations with. Our public debt indentures contain
covenants that place some restrictions on transactions between us and our
affiliates.
Holding Company The Adelphia Parent Company directly owns no significant assets other
Structure And than stock, partnership interests, equity and other interests in our
Potential Impact Of subsidiaries and in other companies. This creates risks regarding our
Restrictive Covenants ability to provide cash to the Adelphia Parent Company to repay the
In Subsidiary Debt interest and principal which it owes, our ability to pay cash dividends
Agreements 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 The public indentures, and the credit agreements for bank and other
Company depends on its financial institution loans, of our subsidiaries and other companies restrict
</TABLE>
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<TABLE>
<S> <C>
subsidiaries and other their ability and the ability of the companies they own to make
companies in which it payments to the Adelphia Parent Company. These agreements also place
has investments, to other restrictions on the borrower's ability to borrow new funds and
fund its cash needs. include requirements for the borrowers to remain in compliance with the
loans. The ability of a subsidiary or a company in which we have
invested to comply with debt restrictions may be affected by events that
are beyond our control. The breach of any of these covenants could
result in a default which could result in all loans and other amounts
owed to its lenders, to be due and payable. Our subsidiaries and
companies in which we have invested might not be able to repay in full
the accelerated loans.
It Is Unlikely You Will Adelphia has never declared or paid cash dividends on any of its common
Receive A Return On stock and has no intention of doing so in the foreseeable future. As a
Your Shares Through result, it is unlikely that you will receive a return on your shares
The Payment Of Cash through the payment of cash dividends.
Dividends
- ------------------------
Future Sales Of Sales of a substantial number of shares of Class A common stock or Class
Outstanding Common B common stock, including sales by any pledgees of such shares, could
Stock Could Adversely adversely affect the market price of our Class A common stock and could
Affect The Market impair our ability in the future to raise capital through stock offerings.
Price Of Our Common Under various registration rights agreements or arrangements, as of
Stock January 26, 1999, the Rigas family has the right, subject to some
- ------------------------ limitations, to require Adelphia to register substantially all of the
shares which it owns of the Class A common stock--15,029,119 shares,
Class B common stock--10,736,544 shares and the equivalent number of
shares of Class A common stock into which they may be converted, and
Convertible preferred stock--80,000 shares and the 9,433,962 shares of
Class A common stock into which they may be converted. Among others,
Adelphia has registered or agreed to register for public sale the
following shares:
. for the Rigas family -- up to 11,000,000 shares of Class A common
stock, 80,000 shares of Convertible preferred stock and the Class A
common stock issuable upon conversion of the Convertible preferred stock;
. for Booth American Company -- 3,571,428 shares of Class A common stock
owned as of March 24, 1998;
. for the selling stockholders receiving shares in the Verto acquisition
-- 2,561,024 shares of Class A common stock;
. in connection with the January 14, 1999 equity offerings, 4,000,000
shares of Class A common stock purchased by a Rigas family partnership;
. in connection with the pending FrontierVision acquisition described in
Recent Developments, Adelphia has agreed to register 7,000,000 shares of
Class A common stock; and
</TABLE>
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<TABLE>
<S> <C>
. in connection with the pending Century acquisition described in Recent
Developments, Adelphia expects to register approximately 48,700,000
shares of Class A common stock.
Approximately 14,904,000 shares of Class A common stock and up to 80,000
shares of Convertible preferred stock, including the underlying Class A
common stock, have been pledged in connection with margin loans made to
members of the Rigas family. These pledgees could freely sell any shares
acquired upon a foreclosure.
Purchasers Of Our Persons purchasing Class A common stock will incur immediate and
Common Stock Will substantial net tangible book value dilution.
Incur Immediate
Dilution
- ------------------------
Adelphia's Acquisitions Because Adelphia is experiencing a period of rapid expansion through
And Expansion Could acquisition, the operating complexity of Adelphia, as well as the
Involve Operational responsibilities of management personnel, have increased. Adelphia's
Risks ability to manage such expansion effectively will require it to continue
- ------------------------ to expand and improve its operational and financial systems and to
expand, train and manage its employee base.
Both the Century and FrontierVision transactions involve the acquisition
of companies that have previously operated independently. Adelphia 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
Adelphia will be able to realize the benefits expected from the integration
of operations from these transactions.
The Century Acquisition The Century merger requires approvals from Century's shareholders and
May Not Be Completed Adelphia's stockholders. Although under the merger and related agreements
If The Required the Class B shareholders of Century and the controlling stockholders of
Approval of Century's Adelphia have agreed to vote in favor of the merger, the companies cannot
Class A Shareholders predict the ultimate outcome of the required vote of the Class A
Is Not Obtained shareholders of Century. If that vote was not obtained, the companies
- ------------------------ might not be able to complete the proposed transaction as currently
structured or in a timely manner, if at all.
</TABLE>
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<S> <C>
Year 2000 Issues The year 2000 issue refers to the inability of computerized systems and
Present Risks To Our technologies to recognize and process dates beyond December 31, 1999.
Business Operations In This could present risks to the operation of our business in several
Several Ways 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.
There can be no assurance that the systems of other companies on which
our systems rely will be year 2000 ready or timely converted into systems
compatible with our systems. Our failure or a third-party's failure to
become year 2000 ready, or our inability to become compatible with third
parties with which we have a material relationship, may have a material
adverse effect on us, including significant service interruption or
outages; however, we cannot currently estimate the extent of any such
adverse effects.
Forward-Looking The statements contained or incorporated by reference in this prospectus
Statements In This that are not historical facts are "forward-looking statements" and can be
Prospectus Are Subject identified by the use of forward-looking terminology such as "believes,"
To Risks And "expects," "may," "will," "should," "intends" or "anticipates" or the
Uncertainties negative thereof or other variations thereon or comparable terminology,
- ------------------------ or by discussions of strategy that involve risks and uncertainties.
Certain information set forth or incorporated by reference in this
prospectus, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Adelphia's 1998 Annual Report on
Form 10-K and in Adelphia's Form 10-Qs, is forward-looking, such as
information relating to the effects of future regulation, future capital
commitments and the effects of competition. Such forward-looking
information involves important risks and uncertainties that could
significantly affect expected results in the future from those expressed
in any forward-looking statements made by, or on behalf of, us. These
risks and uncertainties include, but are not limited to, uncertainties
relating to economic conditions, acquisitions and divestitures,
government and regulatory policies, the pricing and availability of
equipment, materials, inventories and programming, technological
developments, the year 2000 issues and changes in the competitive
environment in which we operate. Persons reading this
</TABLE>
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<TABLE>
<S> <C>
prospectus are cautioned that such statements are only
predictions and that actual events or results may
differ materially. In evaluating such statements,
readers should specifically consider the various
factors which could cause actual events or results to
differ materially from those indicated by such forward-
looking statements.
</TABLE>
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>
Fiscal Year Ended March 31,
- ------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- ------------------ ------------------- ------------------- ------------------- -------------------
<S> <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.
DILUTION
The net tangible book value of Adelphia's common stock as of December 31,
1998 was a deficit of approximately ($2,050,905,000) or ($48.72) a share. Net
tangible book value per share represents the amount of Adelphia's convertible
preferred stock, common stock and other stockholders' equity (deficiency), less
intangible assets, divided by shares of Adelphia's common stock outstanding.
Purchasers of Class A common stock will have an immediate dilution of net
tangible book value which, due to our having a net tangible book value deficit,
will exceed the purchase price per share. For example, in the January 14, 1999
equity offerings, the purchase price of a single share initially sold to the
public was $45.00 and the net tangible book value dilution per share was $78.53.
Net tangible book value dilution per share represents the difference between the
amount per share paid by purchasers of shares of Class A common stock in an
offering by Adelphia and the pro forma net tangible book value per share of the
common stock immediately after completion of such offering.
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USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, Adelphia
intends to apply the net proceeds from the sale of the securities to which this
prospectus relates to its general funds to be used for general corporate
purposes including capital expenditures, acquisitions, the reduction of
indebtedness, investments and other purposes. Adelphia may invest funds not
required immediately for such purposes in short-term obligations or may use them
to reduce the future level of Adelphia's indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth general terms and provisions of the debt
securities to which any prospectus supplement may relate. We will describe the
particular terms and provisions of the series of debt securities offered by a
prospectus supplement, and the extent to which such general terms and provisions
described below may apply thereto, in the prospectus supplement relating to such
series of debt securities.
The senior debt securities are to be issued in one or more series under an
indenture, as supplemented or amended from time to time between Adelphia and an
institution that we will name in the related prospectus supplement, as trustee.
For ease of reference, we will refer to the indenture relating to senior debt
securities as the senior indenture and we will refer to the trustee under that
indenture as the senior trustee. The subordinated debt securities are to be
issued in one or more series under an indenture, as supplemented or amended from
time to time, between Adelphia and an institution that we will name in the
related prospectus supplement, as trustee. For ease of reference, we will refer
to the indenture relating to subordinate debt securities as the subordinate
indenture and we will refer to the trustee under that indenture as the
subordinate trustee. This summary of certain terms and provisions of the debt
securities and the indentures is not necessarily complete, and we refer you to
the copy of the form of the indentures which are filed as an exhibit to the
registration statement of which this prospectus forms a part, and to the Trust
Indenture Act. Whenever we refer to particular defined terms of the indentures
in this Section or in a prospectus supplement, we are incorporating these
definitions into this prospectus or the prospectus supplement.
General
The debt securities will be issuable in one or more series pursuant to an
indenture supplemental to the applicable indenture or a resolution of Adelphia's
Board of Directors or a committee of the Board. Unless otherwise specified in a
prospectus supplement, each series of senior debt securities will rank pari
passu in right of payment with all of Adelphia Parent Company's other senior
unsecured obligations. Each series of subordinated debt securities will be
subordinated and junior in right of payment to the extent and in the manner set
forth in the subordinated indenture and the supplemental indenture relating to
that debt. Except as otherwise provided in a prospectus supplement, the
indentures do not limit the incurrence or issuance of other secured or unsecured
debt of Adelphia, whether under the indentures, any other indenture that
Adelphia may enter into in the future or otherwise. For more information, you
should read the prospectus supplement relating to a particular offering of
securities.
The applicable prospectus supplement or prospectus supplements will describe
the following terms of each series of debt securities:
. the title of the debt securities and whether such series constitutes senior
debt securities or subordinated debt securities;
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. any limit upon the aggregate principal amount of the debt securities;
. the date or dates on which the principal of the debt securities is payable or
the method of that determination or the right, if any, of Adelphia to defer
payment of principal;
. the rate or rates, if any, at which the debt securities will bear interest
(including reset rates, if any, and the method by which any such rate will be
determined), the interest payment dates on which interest will be payable and
the right, if any, of Adelphia to defer any interest payment;
. the place or places where, subject to the terms of the indenture as described
below under the caption "--Payment and Paying Agents," the principal of and
premium, if any, and interest, if any, on the debt securities will be payable
and where, subject to the terms of the indenture as described below under the
caption "--Denominations, Registration and Transfer," Adelphia will maintain
an office or agency where debt securities may be presented for registration
of transfer or exchange and the place or places where notices and demands to
or upon Adelphia in respect of the debt securities and the indenture may be
made;
. any period or periods within, or date or dates on which, the price or prices
at which and the terms and conditions upon which debt securities may be
redeemed, in whole or in part, at the option of Adelphia pursuant to any
sinking fund or otherwise;
. the obligation, if any, of Adelphia to redeem or purchase the debt securities
pursuant to any sinking fund or analogous provisions or at the option of a
holder and the period or periods within which, the price or prices at which,
the currency or currencies including currency unit or units, in which and the
other terms and conditions upon which the debt securities will be redeemed or
purchased, in whole or in part, pursuant to such obligation;
. the denominations in which any debt securities will be issuable if other than
denominations of $1,000 and any integral multiple thereof;
. if other than in U.S. Dollars, the currency or currencies, including currency
unit or units, in which the principal of, and premium, if any, and interest,
if any, on the debt securities will be payable, or in which the debt
securities shall be denominated;
. any additions, modifications or deletions in the events of default or
covenants of Adelphia specified in the indenture with respect to the debt
securities;
. if other than the principal amount, the portion of the principal amount of
debt securities that will be payable upon declaration of acceleration of the
maturity thereof;
. any additions or changes to the indenture with respect to a series of debt
securities that will be necessary to permit or facilitate the issuance of the
series in bearer form, registrable or not registrable as to principal, and
with or without interest coupons;
. any index or indices used to determine the amount of payments of principal of
and premium, if any, on the debt securities and the manner in which such
amounts will be determined;
. subject to the terms described under "--Global Debt Securities," whether the
debt securities of the series will be issued in whole or in part in the form
of one or more global securities and, in such case, the depositary for the
global securities;
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<PAGE>
. the appointment of any trustee, registrar, paying agent or agents;
. the terms and conditions of any obligation or right of Adelphia or a holder
to convert or exchange debt securities into preferred securities or other
securities;
. whether the defeasance and covenant defeasance provisions described under the
caption "--Satisfaction and Discharge; Defeasance" will be inapplicable or
modified;
. any applicable subordination provisions in addition to those set forth herein
with respect to subordinated debt securities; and
. any other terms of the debt securities not inconsistent with the provisions
of the applicable indenture.
We may sell debt securities at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. We will describe material U.S. federal income
tax consequences and special considerations applicable to the debt securities in
the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one or more
foreign currencies or currency units or if any debt securities are denominated
in one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any debt securities is payable in one
or more foreign currencies or currency units, we will set forth the
restrictions, elections, material U.S. federal income tax considerations,
specific terms and other information with respect to such issue of debt
securities and such foreign currency or currency units in the applicable
prospectus supplement.
If any index is used to determine the amount of payments of principal,
premium, if any, or interest on any series of debt securities, we will describe
the material U.S. federal income tax, accounting and other considerations
applicable thereto in the applicable prospectus supplement.
Denominations, Registration and Transfer
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will be issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. Debt securities of
any series will be exchangeable for other debt securities of the same issue and
series, of any authorized denominations of a like aggregate principal amount,
the same original issue date, stated maturity and bearing the same interest
rate.
Holders may present each series of debt securities for exchange as provided
above, and for registration of transfer, with the form of transfer endorsed
thereon, or with a satisfactory written instrument of transfer, duly executed,
at the office of the appropriate securities registrar or at the office of any
transfer agent designated by Adelphia for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. Adelphia
will appoint the trustee of each series of debt securities as securities
registrar for such series under the indenture. If the applicable prospectus
supplement refers to any transfer agents, in addition to the securities
registrar initially designated by Adelphia with respect to any series, Adelphia
may at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, provided that
Adelphia maintains a transfer agent in each place of payment for the series.
Adelphia may at any time designate additional transfer agents with respect to
any series of debt securities.
In the event of any redemption, neither Adelphia nor the trustee will be
required to:
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. issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days before the day
of mailing of a notice for redemption of debt securities of that series, and
ending at the close of business on the day of mailing of the relevant notice
of redemption, or
. transfer or exchange any debt securities so selected for redemption, except,
in the case of any debt securities being redeemed in part, any portion not
being redeemed.
Global Debt Securities
Unless otherwise specified in the applicable prospectus supplement, the debt
securities of a series may be issued in whole or in part in the form of one or
more global securities that we will deposit with, or on behalf of, a depositary
identified in the prospectus supplement relating to such series. Global debt
securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual debt securities represented by it, a global debt security may not be
transferred except as a whole by the depositary for the global debt security to
a nominee of the depositary or by a nominee of the depositary to the depositary
or another nominee of the depositary or by the depositary or any nominee to a
successor depositary or any nominee of the successor.
The specific terms of the depositary arrangement with respect to a series of
debt securities will be described in the prospectus supplement relating to the
series. Adelphia anticipates that the following provisions will generally apply
to depositary arrangements.
Upon the issuance of a global debt security, and the deposit of the global
debt security with or on behalf of the applicable depositary, the depositary for
the global debt security or its nominee will credit on its book-entry
registration and transfer system, the respective principal amounts of the
individual debt securities represented by the global debt security to the
accounts of persons, more commonly known as participants, that have accounts
with the depositary. These accounts will be designated by the dealers,
underwriters or agents with respect to the debt securities or by Adelphia if the
debt securities are offered and sold directly by Adelphia. Ownership of
beneficial interests in a global debt security will be limited to participants
or persons that may hold interests through participants. Ownership of
beneficial interests in the global debt security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the applicable depositary or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons who hold through participants. The laws of some states require that
certain purchasers of securities take physical delivery of the securities in
definitive form. These limits and laws may impair the ability to transfer
beneficial interests in a global debt security.
So long as the depositary for a global debt security, or its nominee, is the
registered owner of the global debt security, the depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by the global debt security for all purposes under the
indenture. Except as provided below, owners of beneficial interests in a global
debt security will not be entitled to have any of the individual debt securities
of the series represented by the global debt security registered in their names,
will not receive or be entitled to receive physical delivery of any debt
securities of the series in definitive form and will not be considered the
owners or holders of them under the indenture.
Payments of principal of, and premium, if any, and interest on individual
debt securities represented by a global debt security registered in the name of
a depositary or its nominee will be made to the depositary or its nominee, as
the case may be, as the registered owner of the global debt security
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representing the debt securities. None of Adelphia, or the trustee, any paying
agent, or the securities registrar for the debt securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the global debt
security for the debt securities or for maintaining, supervising or reviewing
any records relating to those beneficial ownership interests.
Adelphia expects that the depositary for a series of debt securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent global debt security representing any of the debt
securities, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of the global debt security for the debt securities as shown on the
records of the depositary or its nominee. Adelphia also expects that payments
by participants to owners of beneficial interests in the global debt security
held through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." These payments will be
the responsibility of these participants.
Unless otherwise specified in the applicable prospectus supplement, if the
depositary for a series of debt securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not appointed
by Adelphia within 90 days, Adelphia will issue individual debt securities of
the series in exchange for the global debt security representing the series of
debt securities. In addition, unless otherwise specified in the applicable
prospectus supplement, Adelphia may at any time and in its sole discretion,
subject to any limitations described in the prospectus supplement relating to
the debt securities, determine not to have any debt securities of the series
represented by one or more global debt securities and, in such event, will issue
individual debt securities of the series in exchange for such global debt
securities. Further, if Adelphia so specifies with respect to the debt
securities of a series, an owner of a beneficial interest in a global debt
security representing debt securities of the series may, on terms acceptable to
Adelphia, the trustee and the depositary for the global debt security, receive
individual debt securities of the series in exchange for such beneficial
interests, subject to any limitations described in the prospectus supplement
relating to the debt securities. In any such instance, an owner of a beneficial
interest in a global debt security will be entitled to physical delivery of
individual debt securities of the series represented by the global debt security
equal in principal amount to its beneficial interest and to have the debt
securities registered in its name. Individual debt securities of the series so
issued will be issued in denominations, unless otherwise specified by Adelphia,
of $1,000 and integral multiples thereof. The applicable prospectus supplement
may specify other circumstances under which individual debt securities may be
issued in exchange for the global debt security representing any debt
securities.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal of, and premium, if any, and any interest on debt securities will
be made at the office of the trustee in New York or at the office of such paying
agent or paying agents as Adelphia may designate from time to time in the
applicable prospectus supplement, except that at the option of Adelphia payment
of any interest may be made:
. except in the case of global debt securities, by check mailed to the address
of the person or entity entitled thereto as such address shall appear in the
securities register; or
. by transfer to an account maintained by the person or entity entitled thereto
as specified in the securities register, provided that proper transfer
instructions have been received by the regular record date. Unless otherwise
indicated in the applicable prospectus supplement, we
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will make payment of any interest on debt securities to the person or entity
in whose name the debt security is registered at the close of business on the
regular record date for the interest payment, except in the case of defaulted
interest. Adelphia may at any time designate additional paying agents or
rescind the designation of any paying agent; however, Adelphia will at all
times be required to maintain a paying agent in each place of payment for
each series of debt securities.
Any moneys deposited with the trustee or any paying agent, or held by
Adelphia in trust, for the payment of the principal of, and premium, if any, or
interest on any debt security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable will, at
the request of Adelphia, be repaid to Adelphia or released from such trust, as
applicable, and the holder of the debt security will thereafter look, as a
general unsecured creditor, only to Adelphia for payment.
Option to Defer Interest Payments or to Pay-in-Kind
If provided in the applicable prospectus supplement, Adelphia will have the
right, at any time and from time to time during the term of any series of debt
securities, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that an extension period may not extend
beyond the stated maturity of the final installment of principal of the series
of debt securities. If provided in the applicable prospectus supplement,
Adelphia will have the right, at any time and from time to time during the term
of any series of debt securities, to make payments of interest by delivering
additional debt securities of the same series. Certain material U.S. federal
income tax consequences and special considerations applicable to the debt
securities will be described in the applicable prospectus supplement.
Subordination
Except as set forth in the applicable prospectus supplement, the subordinated
indenture provides that the subordinated debt securities are subordinated and
junior in right of payment to all senior indebtedness of Adelphia. If:
. Adelphia defaults in the payment of any principal, or premium, if any, or
interest on any senior indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or declaration or
otherwise; or
. an event of default occurs with respect to any senior indebtedness permitting
the holders thereof to accelerate the maturity thereof and written notice of
such event of default, requesting that payments on subordinated debt
securities cease, is given to Adelphia by the holders of senior indebtedness,
then unless and until the default in payment or event of default shall have been
cured or waived or shall have ceased to exist, no direct or indirect payment, in
cash, property or securities, by set-off or otherwise, will be made or agreed to
be made on account of the subordinated debt securities or interest thereon or in
respect of any repayment, redemption, retirement, purchase or other acquisition
of subordinated debt securities.
Except as set forth in the applicable prospectus supplement, the subordinated
indenture provides that in the event of:
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. any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to Adelphia,
its creditors or its property;
. any proceeding for the liquidation, dissolution or other winding-up of
Adelphia, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings;
. any assignment by Adelphia for the benefit of creditors; or
. any other marshaling of the assets of Adelphia,
all present and future senior indebtedness, including, without limitation,
interest accruing after the commencement of the proceeding, assignment or
marshaling of assets, will first be paid in full before any payment or
distribution, whether in cash, securities or other property, will be made by
Adelphia on account of subordinated debt securities. In that event, any payment
or distribution, whether in cash, securities or other property, other than
securities of Adelphia or any other corporation provided for by a plan of
reorganization or a readjustment, the payment of which is subordinate, at least
to the extent provided in the subordination provisions of the indenture, to the
payment of all senior indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or readjustment
and other than payments made from any trust described in the "Satisfaction and
Discharge; Defeasance" below, which would otherwise but for the subordination
provisions be payable or deliverable in respect of subordinated debt securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of Adelphia being
subordinated to the payment of subordinated debt securities will be paid or
delivered directly to the holders of senior indebtedness, or to their
representative or trustee, in accordance with the priorities then existing among
such holders until all senior indebtedness shall have been paid in full. No
present or future holder of any senior indebtedness will be prejudiced in the
right to enforce subordination of the indebtedness evidenced by subordinated
debt securities by any act or failure to act on the part of Adelphia.
The term "senior indebtedness" is defined as the principal, premium, if any,
and interest on:
. all indebtedness of Adelphia, whether outstanding on the date of the issuance
of subordinated debt securities or thereafter created, incurred or assumed,
which is for money borrowed, or which is evidenced by a note or similar
instrument given in connection with the acquisition of any business,
properties or assets, including securities,
. any indebtedness of others of the kinds described in the first bullet point
above for the payment of which Adelphia is responsible or liable as guarantor
or otherwise, and
. amendments, renewals, extensions and refundings of any such indebtedness,
unless in any instrument or instruments evidencing or securing such indebtedness
or pursuant to which the same is outstanding, or in any such amendment, renewal,
extension or refunding, it is expressly provided that such indebtedness is not
superior in right of payment to subordinated debt securities. The senior
indebtedness will continue to be senior indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of the senior indebtedness or extension or
renewal of the senior indebtedness.
Except as provided in the applicable prospectus supplement, the subordinated
indenture for a series of subordinated debt does not limit the aggregate amount
of senior indebtedness that may be issued by Adelphia. As of December 31, 1998,
senior indebtedness of the Adelphia Parent Company aggregated
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approximately $1,810,212,000. In addition, because Adelphia is a holding
company, the subordinated debt securities are effectively subordinated to all
existing and future liabilities of Adelphia's subsidiaries.
Modification of Indentures
From time to time, Adelphia and the trustees may modify the indentures
without the consent of any holders of any series of debt securities with respect
to some matters, including:
. to cure any ambiguity, defect or inconsistency or to correct or supplement
any provision which may be inconsistent with any other provision of the
indenture,
. to qualify, or maintain the qualification of, the indentures under the Trust
Indenture Act, and
. to make any change that does not materially adversely affect the interests of
any holder of such series of debt securities.
In addition, under the indentures, Adelphia and the trustee may modify some
rights, covenants and obligations of Adelphia and the rights of holders of any
series of debt securities with the written consent of the holders of at least a
majority in aggregate principal amount of the series of outstanding debt
securities; but no extension of the maturity of any series of debt securities,
reduction in the interest rate or extension of the time for payment of interest,
change in the optional redemption or repurchase provisions in a manner adverse
to any holder of the series of debt securities, other modification in the terms
of payment of the principal of, or interest on, the series of debt securities,
or reduction of the percentage required for modification, will be effective
against any holder of the series of outstanding debt securities without the
holder's consent.
In addition, Adelphia and the trustees may execute, without the consent of
any holder of the debt securities, any supplemental indenture for the purpose of
creating any new series of debt securities.
Events of Default
The indentures provide that any one or more of the following described events
with respect to a series of debt securities that has occurred and is continuing
constitutes an "event of default" with respect to that series of debt
securities:
. failure for 60 days to pay any interest or any sinking fund payment on the
series of debt securities when due, (subject to the deferral of any due date
in the case of an extension period);
. failure to pay any principal or premium, if any, on the series of the debt
securities when due whether at maturity, upon redemption, by declaration or
otherwise;
. failure to observe or perform in any material respect certain other covenants
contained in the indenture for 90 days after written notice has been given to
Adelphia from the trustee or the holders of at least 25% in principal amount
of the series of outstanding debt securities;
. default resulting in acceleration of other indebtedness of Adelphia for
borrowed money where the aggregate principal amount so accelerated exceeds
$25 million and the acceleration is not rescinded or annulled within 30 days
after the written notice thereof to Adelphia by the trustee or to Adelphia
and the trustee by the holders of 25% in aggregate principal amount of the
debt securities of the series then outstanding, provided that the
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event of default will be remedied, cured or waived if the default that
resulted in the acceleration of such other indebtedness is remedied, cured or
waived; or
. certain events in bankruptcy, insolvency or reorganization of Adelphia.
The holders of a majority in outstanding principal amount of the series of
debt securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee of the series.
The trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the series may declare the principal due and payable
immediately upon an event of default. The holders of a majority in aggregate
outstanding principal amount of the series may annul the declaration and waive
the default if the default (other than the non-payment of the principal of the
series which has become due solely by the acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the trustee of the
series.
The holders of a majority in outstanding principal amount of a series of debt
securities affected thereby may, on behalf of the holders of all the holders of
the series of debt securities, waive any past default, except a default in the
payment of principal or interest, unless the default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the trustee of the
series, or a default in respect of a covenant or provision which under the
related indenture cannot be modified or amended without the consent of the
holder of each outstanding debt security of the series. Adelphia is required to
file annually with the trustees a certificate as to whether or not Adelphia is
in compliance with all the conditions and covenants applicable to it under the
indentures.
In case an event of default shall occur and be continuing as to a series of
debt securities, the trustee of the series will have the right to declare the
principal of and the interest on the debt securities, and any other amounts
payable under the indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the debt securities.
No holder of any debt securities will have any right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
the holder shall have previously given to 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 debt securities of the series
shall have made written request and offered reasonably indemnity to the trustee
of the series to institute the 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 debt securities of the class a direction inconsistent
with the request and shall have failed to institute the proceeding within 60
days. However, these limitations do not apply to a suit instituted by a holder
of a debt security for enforcement of payment of the principal or interest on
the debt security on or after the respective due dates expressed in the debt
security.
Consolidation, Merger, Sale of Assets and Other Transactions
Unless otherwise indicated in the applicable prospectus supplement, the
indentures provide that Adelphia will not consolidate with or merge into any
other person or entity or sell, assign, convey, transfer or lease its properties
and assets substantially as an entirety to any person or entity unless:
. either Adelphia is the continuing corporation, or any successor or purchaser
is a corporation, partnership, or trust or other entity organized under the
laws of the United States of America, any State thereof or the District of
Columbia, and the successor or purchaser
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expressly assumes Adelphia's obligations on the debt securities under a
supplemental indenture; and
. immediately before and after giving effect thereto, no event of default, and
no event which, after notice or lapse of time or both, would become an event
of default, shall have happened and be continuing.
Unless otherwise indicated in the applicable prospectus supplement, the
general provisions of the indentures do not afford holders of the debt
securities protection in the event of a highly leveraged or other transaction
involving Adelphia that may adversely affect holders of the debt securities.
Satisfaction and Discharge; Defeasance
The indentures provide that when, among other things, all debt securities not
previously delivered to the trustee for cancellation:
. have become due and payable, or
. will become due and payable at their stated maturity within one year,
and Adelphia deposits or causes to be deposited with the trustee, as trust funds
in trust for the purpose, an amount in the currency or currencies in which the
debt securities are payable sufficient to pay and discharge the entire
indebtedness on the debt securities not previously delivered to the trustee for
cancellation, for the principal, and premium, if any, and interest to the date
of the deposit or to the stated maturity, as the case may be, then the indenture
will cease to be of further effect (except as to Adelphia's obligations to pay
all other sums due pursuant to the indenture and to provide the officers'
certificates and opinions of counsel described therein), and Adelphia will be
deemed to have satisfied and discharged the indenture.
The indentures provide that Adelphia may elect either:
. to terminate, and be deemed to have satisfied, all its obligations with
respect to any series of debt securities, except for the obligations to
register the transfer or exchange of such debt securities, to replace
mutilated, destroyed, lost or stolen debt securities, to maintain an office
or agency in respect of the debt securities and to compensate and indemnify
the trustee ("defeasance"); or
. to be released from its obligations with respect to certain covenants,
("covenant defeasance") upon the deposit with the trustee, in trust for such
purpose, of money and/or U.S. Government Obligations, as defined in the
indenture, which through the payment of principal and interest in accordance
with the term used will provide money, in an amount sufficient (in the
opinion of a nationally recognized firm of independent public accountants) to
pay the principal of, interest on and any other amounts payable in respect of
the outstanding debt securities of the series.
Such a trust may be established only if, among other things, Adelphia has
delivered to the trustee an opinion of counsel (as specified in the indenture)
with regard to certain matters, including an opinion to the effect that the
holders of the debt securities will not recognize income, gain or loss for
Federal income tax purposes as a result of the deposit and discharge and will be
subject to Federal income tax on the same amounts and in the same manner and at
the same times as would have been the case if the deposit and defeasance or
covenant defeasance, as the case may be, had not occurred.
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Redemption
Unless otherwise indicated in the applicable prospectus supplement, debt
securities will not be subject to any sinking fund requirements.
Unless otherwise indicated in the applicable prospectus supplement, Adelphia
may, at its option, redeem the debt securities of any series in whole at any
time or in part from time to time, at the redemption price set forth in the
applicable prospectus supplement plus accrued and unpaid interest to the date
fixed for redemption, and debt securities in denominations larger than $1,000
may be redeemed in part but only in integral multiples of $1,000. If the debt
securities of any series are so redeemable only on or after a specified date or
upon the satisfaction of additional conditions, the applicable prospectus
supplement will specify the date or describe the conditions.
Adelphia will mail notice of any redemption at least 30 days but not more
than 60 days before the redemption date to each holder of debt securities to be
redeemed at the holder's registered address. Unless Adelphia defaults in the
payment of the redemption price, on and after the redemption date interest shall
cease to accrue on the debt securities or portions thereof called for
redemption.
Conversion or Exchange
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities. The specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at the option of Adelphia, in
which case the number of shares of other securities to be received by the
holders of debt securities would be calculated as of a time and in the manner
stated in the applicable prospectus supplement.
Certain Covenants
The indentures contain certain covenants regarding, among other matters,
corporate existence, payment of taxes and reports to holders of debt securities.
If and to the extent indicated in the applicable prospectus supplement, these
covenants may be removed or additional covenants added with respect to any
series of debt securities.
Governing Law
The indentures and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
Information Concerning the Trustees
Each trustee shall have and be subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to these provisions, each trustee is under no obligation to exercise any
of the powers vested in it by the indenture at the request of any holder of the
debt securities, unless offered reasonable indemnity by the holder against the
costs, expenses and liabilities which might be incurred thereby. Each trustee
is not required to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
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DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock of Adelphia and certain
provisions of Adelphia's Certificate of Incorporation and Bylaws is a summary
and is qualified in its entirety by Adelphia's Certificate of Incorporation and
Bylaws, which documents are exhibits to the prospectus.
Adelphia's authorized capital stock consists of 200,000,000 shares of Class A
common stock, 25,000,000 shares of Class B common stock, and 5,000,000 shares of
Preferred Stock.
Common Stock
Dividends. Holders of Class A common stock and Class B common stock are
entitled to receive such dividends as may be declared by Adelphia's Board of
Directors out of funds legally available for this purpose, but only after
payment of dividends required to be paid on outstanding shares of any other
class or series of stock having preference over common stock as to dividends.
No dividend may be declared or paid in cash or property on either class of
common stock, however, unless simultaneously a dividend is paid on the other
class of common stock as follows. In the event a cash dividend is paid, the
holders of Class A common stock will be paid a cash dividend per share equal to
105% of the amount payable per share of Class B common stock. In the event of a
property dividend, holders of each class of common stock are entitled to receive
the same value per share of common stock outstanding. In the case of any stock
dividend, holders of Class A common stock are entitled to receive the same
percentage dividend (payable in Class A common stock) as the holders of Class B
common stock receive (payable in Class B common stock).
Voting Rights. Holders of Class A common stock and Class B common stock vote
as a single class on all matters submitted to a vote of the stockholders, with
each share of Class A common stock entitled to one vote and each share of Class
B common stock entitled to ten votes, except:
. for the election of directors, and
. as otherwise provided by law.
In the annual election of directors, the holders of Class A common stock, voting
as a separate class, are entitled to elect one of Adelphia's directors. The
holders of Class A common stock and Class B common stock, voting as a single
class with each share of Class A common stock entitled to one vote and each
share of Class B common stock entitled to ten votes, are entitled to elect the
remaining directors. Consequently, holders of Class B common stock have
sufficient voting power to elect the remaining seven members of the current
eight-member Board of Directors. Holders of Class A common stock and Class B
common stock are not entitled to cumulate votes in the election of directors.
Under Delaware law and Adelphia's Certificate of Incorporation, the affirmative
vote of a majority of the outstanding shares of Class A common stock is required
to approve, among other matters, a change in the powers, preferences or special
rights of the shares of Class A common stock so as to affect them adversely, but
is not required to approve an increase or decrease in the number of authorized
shares of Class A common stock.
Liquidation Rights. Upon liquidation, dissolution or winding up of Adelphia,
any distributions to holders of any class of common stock would only be made
after payment in full of creditors and provision for the preference of any other
class or series of stock having a preference over the common stock upon
liquidation, dissolution or winding up that may then be outstanding.
Thereafter, the holders of Class A common stock are entitled to a preference of
$1.00 per share. After this amount is paid,
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holders of the Class B common stock are entitled to receive $1.00 per share. Any
remaining amount would then be shared ratably by both classes.
Other Provisions. Each share of Class B common stock is convertible at the
option of its holder into one share of Class A common stock at any time. The
holders of Class A common stock and Class B common stock are not entitled to
preemptive or subscription rights. Neither the Class A common stock nor the
Class B common stock may be subdivided, consolidated, reclassified or otherwise
changed unless concurrently the other class of common stock is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
Preferred Stock
The 5,000,000 shares of authorized preferred stock may be issued with such
designations, powers, preferences and other rights and qualifications,
limitations and restrictions thereof as Adelphia's Board of Directors may
authorize without further action by Adelphia's stockholders, including but not
limited to:
. the distinctive designation of each series and the number of shares that will
constitute the series;
. the voting rights, if any, of shares of the series;
. the dividend rate on the shares of the series, any restriction, limitation or
condition upon the payment of dividends, whether dividends will be cumulative
and the dates on which dividends are payable;
. the prices at which, and the terms and conditions on which, the shares of the
series may be redeemed, if the shares are redeemable;
. the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares of the series;
. any preferential amount payable upon shares of the series in the event of the
liquidation, dissolution or winding up of Adelphia or the distribution of its
assets;
. the prices or rates of conversion at which, and the terms and conditions on
which, the shares of such series may be converted into other securities, if
such shares are convertible. Adelphia has designated and has outstanding two
classes of preferred stock - 8 1/8% Series C Convertible preferred stock and
13% Cumulative Exchangeable preferred stock. For ease of reference, we refer
to the 8 1/8% Series C convertible preferred stock as the Convertible
preferred stock and 13% Cumulative Exchangeable preferred stock as the
Exchangeable preferred stock; and
. In connection with the foregoing designations, the maximum number of shares
authorized of Convertible preferred stock and Exchangeable preferred stock is
100,000 shares and 1,500,000 shares, respectively.
Convertible Preferred Stock. The Convertible preferred stock accrues
cumulative dividends at the rate of 8 1/8% per annum, or $81.25 per share of the
Convertible preferred stock per annum. The Convertible preferred stock has a
liquidation preference of $1,000 per share. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of Adelphia, the holders
of the Convertible preferred stock are entitled to receive the liquidation
preference for the Convertible preferred stock, plus any accrued but unpaid
dividends thereon, and no more. Neither the voluntary sale,
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conveyance, exchange or transfer, for cash, shares of stock, securities or other
consideration, of all or substantially all of the property or assets of Adelphia
nor the consolidation or merger of Adelphia with or into one or more
corporations will be deemed to be a voluntary or involuntary liquidation,
dissolution or winding-up of Adelphia, unless the sale, conveyance, exchange or
transfer shall be in connection with a liquidation, dissolution or winding-up of
the business of Adelphia. The Convertible preferred stock ranks pari passu with
the Exchangeable preferred stock and ranks senior to the common stock of
Adelphia with respect to dividends and liquidation.
Each share of Convertible preferred stock is convertible based upon its
stated liquidation preference into shares of Class A common stock of Adelphia at
any time at the election of the holder of it at a conversion price of $8.48 per
share of Adelphia Class A common stock, or approximately 117.9245 shares of
Class A common stock per share of Convertible preferred stock. The conversion
price is subject to adjustment if Adelphia pays a dividend in shares of Class A
common stock or subdivides, combines or reclassifies the shares of Class A
common stock or distributes rights to purchase common stock or makes certain
other distributions to holders of common stock. The Convertible preferred stock
is not entitled to vote in the election of directors of Adelphia or upon any
other matter, except as provided by law, unless a Voting Rights Triggering
Event, as defined in the related Certificate of Designation, occurs with respect
to the Convertible preferred stock. If this occurs, the Board of Directors will
be expanded by two seats, the directors for which shall then be elected by the
holders of the Convertible preferred stock. The Convertible preferred stock is
not subject to mandatory redemption.
The Convertible preferred stock may be redeemed at the option of Adelphia, in
whole or in part, at any time on or after August 1, 2000 at 104%, 102% and 100%
of the liquidation preference of the Convertible preferred stock plus accrued
dividends in the years beginning August 1, 2000, 2001 and 2002 and thereafter,
respectively.
Exchangeable Preferred Stock. The shares of Exchangeable preferred stock are
redeemable at the option of Adelphia, on or after July 15, 2002. Adelphia is
required, subject to certain conditions, to redeem all of the Exchangeable
preferred stock outstanding on July 15, 2009, at a redemption price equal to
100% of the liquidation preference thereof, plus accumulated and unpaid
dividends to the date of redemption. Dividends on the Exchangeable preferred
stock accrue at a rate of 13% of the liquidation preference per annum and are
payable semiannually. The Exchangeable preferred stock is not entitled to vote
in the election of directors of Adelphia or upon any other matter, except as
provided by law, unless a Voting Rights Triggering Event, as defined in the
related Certificate of Designation, occurs with respect to the Exchangeable
preferred stock. If this occurs, the Board of Directors will be expanded by two
seats, the directors for which shall then be elected by the holders of the
Exchangeable preferred stock.
The rights of holders of shares of common stock as described above will be
subject to, and may be adversely affected by, the rights of holders of any
additional classes of preferred stock that may be designated and issued in the
future.
Transfer Agent
The Transfer Agent and Registrar for the Class A common stock and the
Exchangeable preferred stock is American Stock Transfer & Trust Company.
BOOK ENTRY ISSUANCE
Unless otherwise specified in the applicable prospectus supplement, DTC will
act as depositary for securities issued in the form of global securities. Such
securities will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
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securities will be issued for such securities representing in the aggregate the
total number of such securities, and will be deposited with or on behalf of DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among its participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, the American Stock Exchange and
the National Association of Securities Dealers, Inc. Access to the DTC system
is also available to others, known as indirect participants, such as securities
brokers and dealers, banks and trust companies that clear through or maintain
custodial relationships with direct participants, either directly or indirectly.
The rules applicable to DTC and its participants are on file with the
Commission.
Purchases of securities within the DTC system must be made by or through
direct participants, which will receive a credit for such Securities on DTC's
records. The ownership interest of each actual purchaser of each Security,
commonly referred to as the beneficial owner is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from DTC of their purchases, but beneficial owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the direct or indirect
participants through which the beneficial owners purchased securities.
Transfers of ownership interests in securities issued in the form of global
securities are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in such securities, except
in the event that use of the book-entry system for such securities is
discontinued.
DTC has no knowledge of the actual beneficial owners of the securities issued
in the form of global securities. DTC's records reflect only the identity of
the direct participants to whose accounts such securities are credited, which
may or may not be the beneficial owners. The participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct participants,
by direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Although voting with respect to securities issued in the form of global
securities is limited to the holders of record of such securities, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to such securities. Under its usual procedures,
DTC would mail an omnibus proxy to the issuer of such securities as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts such
securities are credited on the record date, identified in a listing attached to
the omnibus proxy.
Payments in respect of securities issued in the form of global securities
will be made by the issuer of such securities to DTC. DTC's practice is to
credit direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
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believe that it will not receive payments on such payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices and will be the responsibility of such participant and not
of DTC or Adelphia, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payments to DTC are the responsibility of the
issuer of the applicable securities, disbursement of such payments to direct
participants is the responsibility of DTC, and disbursements of such payments to
the beneficial owners is the responsibility of direct and indirect participants.
DTC may discontinue providing its services as depositary with respect to any
securities at any time by giving reasonable notice to the issuer of such
securities. In the event that a successor depositary is not obtained,
individual security certificates representing such securities are required to be
printed and delivered. Adelphia, at its option, may decide to discontinue use
of the system of book-entry transfers through DTC or a successor depositary.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Adelphia believe to be accurate, but
Adelphia assumes no responsibility for the accuracy thereof. Adelphia has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
PLAN OF DISTRIBUTION
Any of the securities being offered under this prospectus may be sold in any
one or more of the following ways from time to time:
. through agents;
. to or through underwriters;
. through dealers; and
. directly by Adelphia to purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
Offers to purchase securities may be solicited by agents designated by
Adelphia from time to time. Any agent involved in the offer or sale of the
securities under this prospectus will be named, and any commissions payable by
Adelphia to these agents will be set forth, in a related prospectus supplement.
Unless otherwise indicated in a prospectus supplement, any agent will be acting
on a reasonable best efforts basis for the period of its appointment. Any agent
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the securities so offered and sold.
If securities are sold by means of an underwritten offering, Adelphia will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in a related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be acquired
by the underwriters for their own account and may be resold
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from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined by
the underwriters and Adelphia at the time of sale. Securities may be offered to
the public either through underwriting syndicates represented by managing
underwriters or directly by one or more underwriters. If any underwriter or
underwriters are used in the sale of securities, unless otherwise indicated in a
related prospectus supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to some conditions precedent and
that the underwriters with respect to a sale of these securities will be
obligated to purchase all such Securities if any are purchased.
Adelphia may grant to the underwriters options to purchase additional
securities, to cover over-allotments, if any, at the initial public offering
price, with additional underwriting commissions or discounts, as may be set
forth in a related prospectus supplement. If Adelphia grants any over-allotment
option, the terms of that over-allotment option will be set forth in the
prospectus supplement for these securities.
If a dealer is utilized in the sale of the securities in respect of which
this prospectus is delivered, Adelphia will sell these securities to the dealer
as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an underwriter, as such term is defined in the
Securities Act, of the securities so offered and sold. The name of the dealer
and the terms of the transaction will be set forth in the prospectus supplement
relating to those offers and sales.
Offers to purchase securities may be solicited directly by Adelphia and those
sales may be made by Adelphia directly to institutional investors or others, who
may be deemed to be underwriters within the meaning of the Securities Act with
respect to any resale of those securities. The terms of any sales of this type
will be described in the prospectus supplement.
Securities may also be offered and sold, if so indicated in the related
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment in connection with their terms, or
otherwise, by one or more firms "remarketing firms," acting as principals for
their own accounts or as agents for Adelphia. Any remarketing firm will be
identified and the terms of its agreement, if any, with Adelphia and its
compensation will be described in a related prospectus supplement. Remarketing
firms may be deemed to be underwriters, as that term is defined in the
Securities Act, in connection with the securities remarketed by them.
If so indicated in a related prospectus supplement, Adelphia may authorize
agents and underwriters to solicit offers by certain institutions to purchase
securities from Adelphia at the public offering price set forth in a related
prospectus supplement as part of delayed delivery contracts providing for
payment and delivery on the date or dates stated in a related prospectus
supplement. Such delayed delivery contracts will be subject to only those
conditions set forth in a related prospectus supplement. A commission indicated
in a related prospectus supplement will be paid to underwriters and agents
soliciting purchases of securities pursuant to delayed delivery contracts
accepted by Adelphia.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with Adelphia to indemnification by Adelphia against some
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, underwriters, dealers and
remarketing firms may be required to make in respect thereof.
Each series of securities will be a new issue and, other than the Class A
common stock, which is listed on the Nasdaq National Market, will have no
established trading market. Unless otherwise specified in a related prospectus
supplement, Adelphia will not be obligated to list any series of securities
-31-
<PAGE>
on an exchange or otherwise. We cannot assure you that there will be any
liquidity in the trading market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, Adelphia and its
subsidiaries in the ordinary course of business.
WHERE YOU CAN FIND MORE INFORMATION
Adelphia files annual, quarterly and special reports, as well as proxy
statements and other information with the SEC. You may read and copy any
document Adelphia files with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549 or at its Regional Offices in
Chicago, Illinois or New York, New York. You may obtain further information
about the operation of the Public Reference Room by calling the SEC at 1-800-
SEC-0330. Adelphia's SEC filings are also available to the public over the
Internet at the SEC's web site at http://www.sec.gov, which contains reports,
proxy statements and other information regarding registrants like Adelphia that
file electronically with the SEC.
This prospectus is part of a registration statement on Form S-3 filed by
Adelphia with the SEC under the Securities Act. As permitted by SEC rules, this
prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows Adelphia to "incorporate by reference" into this prospectus
the information it files with the SEC. This means that Adelphia can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. If Adelphia subsequently files updating or superseding information
in a document that is incorporated by reference into this prospectus, the
subsequent information will also become part of this prospectus and will
supersede the earlier information.
Adelphia is incorporating by reference the following documents that it has
filed with the SEC:
. its Annual Report on Form 10-K for the year ended March 31, 1998, which
incorporates, in Items 7 and 8 to such Form 10-K, portions of the Form 10-K
for the fiscal year ended December 31, 1997 of Olympus Communications, L.P.
and Olympus Capital Corporation, as amended by Adelphia's Form 10-K/A dated
July 27, 1998;
. its Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998
September 30, 1998 and December 31, 1998;
. its Current Reports on Form 8-K for the events dated June 29, 1998, July 2,
1998, August 3, 1998, August 18, 1998, September 10, 1998, November 9, 1998,
November 12, 1998, December 23, 1998, January 11, 1999, February 22, 1999,
February 23, 1999 and March 5, 1999;
. its definitive proxy statement dated September 11, 1998 with respect to the
Annual Meeting of Stockholders held on October 6, 1998; and
. the description of its Class A common stock contained in
. Adelphia's registration statement filed with the SEC under Section 12 of
the Exchange Act and subsequent amendments and reports filed to update
such description and
-32-
<PAGE>
. Adelphia's registration statement on Form S-3 (File No. 333-58749).
Adelphia is also incorporating by reference into this prospectus all of its
future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until this offering has been completed.
You may obtain a copy of any of our filings which are incorporated by
reference, at no cost, by writing to or telephoning us at the following address:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Investor Relations Telephone: (814) 274-9830
You should rely only on the information provided in this prospectus or
incorporated by reference. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the first page of
the prospectus. Adelphia is not making this offer of securities in any state or
country in which the offer or sale is not permitted.
LEGAL MATTERS
Buchanan Ingersoll Professional Corporation, Pittsburgh, Pennsylvania will
pass upon the validity of the securities. Any required information regarding
ownership of Adelphia's securities by lawyers of such firm will be contained in
the applicable prospectus supplement. If the securities are underwritten, the
applicable prospectus supplement will also set forth whether and to what extent,
if any, a law firm for the underwriters will pass upon the validity of the
securities.
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.
-33-
<PAGE>
Prospectus
Debt Securities
Preferred Stock
Class A Common Stock
--------------------------
ADELPHIA COMMUNICATIONS CORPORATION
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 securities in any jurisdiction where it is
unlawful. The information in this prospectus is current as of ________________,
1999.
Dated ____________, 1999
-34-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate of the expenses which will be incurred by
Adelphia in connection with the issuance and distribution of the securities
being registered.*
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
SEC filing fee................... $375,300
Trustee fees..................... 10,000
Blue Sky fees and expenses....... 20,000
Legal fees and expenses.......... 200,000
Accounting fees and expenses..... 150,000
Printing and engraving expenses.. 150,000
Miscellaneous expenses........... 50,000
--------
Total............................ $955,300
========
</TABLE>
- ------------
*All amounts are estimated except for the SEC filing fee.
ITEM 15. 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 or its stockholders for monetary
damages for breach of fiduciary duty as a director for acts or omissions after
July 1, 1986, provided that directors shall nonetheless be liable for breaches
of the duty of loyalty, bad faith, intentional misconduct, knowing violations of
law, unlawful distributions to stockholders, or transactions from which a
director derived an improper personal benefit.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
<TABLE>
<CAPTION>
Exhibit No. Reference
----------- ---------
<C> <S> <C>
4.01 The Certificate of Incorporation of Adelphia Incorporated herein by reference
Communications Corporation is Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated
July 24, 1997. (File No. 0-16014)
4.02 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)
4.03 Form of Senior Debt Indenture between Adelphia Incorporated herein by reference
Communications Corporation and is Exhibit 4.03 to Registration
Statement No. 333-57849.
4.04 Form of Subordinated Debt Indenture between Adelphia Incorporated herein by reference
Communications Corporation and is Exhibit 4.03 to Registration
Statement No. 333-57849.
5.01 Opinion of Buchanan Ingersoll Professional Corporation Filed herewith.
12.01 Computation of Ratio of Earnings to Combined Fixed Filed herewith.
Charges and Preferred Stock Dividends
23.01 Consent of Deloitte & Touche LLP Filed herewith.
23.02 Consent of Buchanan Ingersoll Professional Filed herewith.
Corporation (included in Exhibit 5.01)
24.01 Power of Attorney (included on the signature page of Filed herewith.
the Registration Statement)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
(d) Rule 430A.
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 this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose 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 that time shall be deemed to be
the initial bona fide offering thereof.
(e) Trust Indenture Application.
The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Registration Statement on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport, Commonwealth
of Pennsylvania, on the 10th day of March, 1999.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Timothy J. Rigas
--------------------
Timothy J. Rigas, Executive Vice President
Known All Men By These Presents that each person whose signature appears
below constitutes and appoints John J. Rigas, Timothy J. Rigas and Daniel R.
Milliard, and each of them, such person's true and lawful attorneys-in-fact and
agents, with full power of substitution and revocation, for such person and in
such person's name, place and stead, in any and all amendments (including post-
effective amendments to this Registration Statement) and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ John J. Rigas Chairman, President and Chief Executive Officer March 10, 1999
- -------------------------------
JOHN J. RIGAS
/s/ Michael J. Rigas Executive Vice President and Director March 10, 1999
- -------------------------------
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Executive Vice President, Chief Financial Officer, March 10, 1999
- ------------------------------- Chief Accounting Officer, Treasurer and Director
TIMOTHY J. RIGAS
/s/ James P. Rigas Executive Vice President and Director March 10, 1999
- -------------------------------
JAMES P. RIGAS
/s/ Daniel R. Milliard Senior Vice President, Secretary and Director March 10, 1999
- -------------------------------
DANIEL R. MILLIARD
Director March ___, 1999
- -------------------------------
PERRY S. PATTERSON
Director March ___, 1999
- -------------------------------
PETE J. METROS
Director March ___, 1999
- -------------------------------
DENNIS P. COYLE
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference
----------- ---------
<C> <S> <C>
4.01 The Certificate of Incorporation of Adelphia Incorporated herein by reference
Communications Corporation is Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated
July 24, 1997. (File No. 0-16014)
4.02 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)
4.03 Form of Senior Debt Indenture between Adelphia Incorporated herein by reference
Communications Corporation and is Exhibit 4.03 to Registration
Statement No. 333-57849.
4.04 Form of Subordinated Debt Indenture between Adelphia Incorporated herein by reference
Communications Corporation and is Exhibit 4.03 to Registration
Statement No. 333-57849.
5.01 Opinion of Buchanan Ingersoll Professional Corporation Filed herewith.
12.01 Computation of Ratio of Earnings to Combined Fixed Filed herewith.
Charges and Preferred Stock Dividends
23.01 Consent of Deloitte & Touche LLP Filed herewith.
23.02 Consent of Buchanan Ingersoll Professional Filed herewith.
Corporation (included in Exhibit 5.01)
24.01 Power of Attorney (included on the signature page of Filed herewith.
the Registration Statement)
</TABLE>
* - to be filed by amendment
<PAGE>
EXHIBIT 5.01
Buchanan Ingersoll Professional Corporation
One Oxford Centre
301 Grant Street, 20th Floor
Pittsburgh, PA 15219-1410
March 10, 1999
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Re: Adelphia Communications Corporation
Ladies and Gentlemen:
We have acted as counsel to Adelphia Communications Corporation, a Delaware
corporation ("Adelphia" or the "Company"), in connection with the preparation of
a Registration Statement on Form S-3, registering up to $1,350,000,000 in
securities and to which this opinion is an exhibit (as amended and supplemented,
the "Registration Statement"), including the form of prospectus included therein
(as supplemented, the "Prospectus"), filed by the Company with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the public offering of: (i) debentures, notes
and other debt securities in one or more series (the "Debt Securities") of
Adelphia which may be senior debt securities or subordinated debt securities of
Adelphia, (ii) shares of Preferred Stock, $.01 par value per share (the
"Preferred Stock") of Adelphia issuable in series designated by the Board of
Directors of Adelphia, and (iii) shares of Class A Common Stock, $.01 par value
per share (the "Class A Common Stock") of Adelphia. The Debt Securities, the
Preferred Stock and the Class A Common Stock are collectively referred to herein
as the "Securities." The Securities may be offered in combination or separately
from time to time by the Company in amounts, at prices and on terms to be
determined at the time or times of offering. The aggregate initial offering
price of all of the Securities which may be sold pursuant to the Prospectus will
not exceed $1,750,000,000 (including Securities being carried forward from
registration statement (No. 333-58749) included therein pursuant to Commission
Rule 429).
This opinion is being delivered in accordance with the requirements of Item
601(b)(5)(i) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
certificates or records as we have deemed necessary or appropriate as bases for
the opinions set forth herein. In our examination, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies.
<PAGE>
Based on the foregoing, and subject to the other qualifications and
limitations set forth herein, we are of the following opinion:
1. When (a) the issuance, execution and delivery by the Company of
any of the Debt Securities shall have been duly authorized by all necessary
corporate actions of the Company, and (b) Debt Securities shall have been duly
executed and delivered by the Company, authenticated by the Trustee (the
"Trustee") under the indenture (the "Indenture") pursuant to which the Debt
Securities shall be issued and sold as contemplated by each of the Registration
Statement, the Prospectus, and any prospectus supplement relating to such Debt
Securities and the Indenture, assuming that the terms of such Debt Securities
are in compliance with then applicable law, such Debt Securities will be validly
issued and will constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally and by general
principles of equity and judicial discretion, including principles of commercial
reasonableness, good faith and fair dealing (whether considered in a proceeding
at law or in equity).
2. When (a) the terms of the issuance and sale of the Preferred Stock
shall have been duly authorized by all necessary corporate actions of the
Company, and (b) the shares of the Preferred Stock shall have been duly issued
and delivered as contemplated by each of the Registration Statement, the
Prospectus, and any prospectus supplement relating thereto and paid for with the
consideration fixed therefor by the Board of Directors or a duly authorized
committee therefor, assuming that the Company has reserved for issuance the
requisite number of shares of Preferred Stock, the Preferred Stock will be duly
authorized, validly issued, fully paid and nonassessable.
3. When (a) the terms of the issuance and sale of the Class A Common
Stock shall have been duly authorized by all necessary corporate actions of the
Company, and (b) the shares of Class A Common Stock shall have been duly issued
and delivered as contemplated by each of the Registration Statement, the
Prospectus, and any prospectus supplement relating thereto and paid for with the
consideration fixed therefor by the Board of Directors or a duly authorized
committee therefor, assuming that the Company has reserved for issuance the
requisite number of shares of Class A Common Stock, the Class A Common Stock
will be duly authorized, validly issued, fully paid and nonassessable.
In rendering the above opinions, we have assumed in all cases that the
Registration Statement has been declared effective by order of the Commission
and remains in effect. We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and the reference to this firm under the
caption "Legal Matters" in the Prospectus contained therein.
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
By: /s/ Carl E. Rothenberger, Jr.
-------------------------------
<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>
Nine Months
Year Ended March 31, Ended
---------------------------------------------------- December 31,
1994 1995 1996 1997 1998 1998
-------- --------- --------- --------- --------- -------------
<S> <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) $(117,595)
Add: Fixed Charges, Excluding
Capitalized interest........ 187,439 200,927 217,170 249,113 280,670 220,832
Equity in loss of joint
ventures.................... 30,054 44,349 46,257 59,169 79,055 58,471
Minority interest in losses
of subsidiaries............. -- -- -- -- -- (25,772)
Preferred stock dividends of
subsidiary.................. -- -- -- -- 12,682 21,536
-------- --------- --------- --------- --------- --------
Net Earnings Available for
Combined Fixed Charges
and Preferred Stock Dividends.. 122,787 133,517 140,747 188,992 204,246 157,472
-------- --------- --------- --------- --------- --------
Combined Fixed Charges and
Preferred Stock Dividends:
Interest..................... 182,136 195,698 210,691 240,692 271,056 212,545
Capitalized interest......... 1,345 1,736 1,766 1,727 5,985 11,285
Amortization of debt issuance
costs....................... 3,987 3,792 4,917 6,344 7,141 6,432
Interest portion of rent
expense..................... 1,316 1,437 1,562 2,077 2,473 1,855
Preferred stock dividends of
subsidiary.................. -- -- -- -- 12,682 21,536
Preferred stock dividends.... -- -- -- -- 18,850 20,718
-------- --------- --------- --------- --------- --------
Total Combined Fixed Charges
and Preferred Stock
Dividends..................... 188,784 202,663 218,936 250,840 318,187 274,371
-------- --------- --------- --------- --------- --------
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 $116,899
======== ========= ========= ========= ========= ========
</TABLE>
<PAGE>
Exhibit 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Adelphia Communications Corporation on Form S-3 of our report dated June 10,
1998 and our report dated March 6, 1998 on our audits of the financial
statements of Adelphia Communications Corporation and subsidiaries and of
Olympus Communications, L.P. and subsidiaries, respectively, appearing in and
incorporated by reference in the Annual Report on Form 10-K of Adelphia
Communications Corporation for the year ended March 31, 1998, and to the
reference to us under the heading "Experts" in the prospectus, which is part
of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
March 10, 1999
