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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON May 3, 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 (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
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]
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
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<CAPTION>
Proposed Proposed
maximum maximum
Title of each class of Amount to offering price aggregate Amount of
securities to be registered be registered per share (1) offering price (1) registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 per share 1,000,000 shares $66.19 $66,190,000 $18,400.82
===============================================================================================================================
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(1) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended. The
maximum price per share information is based on the average of the high and the
low sale prices of Adelphia Communications Corporation Class A Common Stock,
$.01 par value per share, reported on the Nasdaq National Market System on
April 28, 1999.
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.
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1,000,000 shares Subject to Completion
ADELPHIA COMMUNICATIONS CORPORATION Dated May 3, 1999
Class A common stock
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The stockholders of Adelphia Communications respect to cash dividends and distributions
Corporation as described under the caption upon the liquidation of Adelphia. Holders of
"Selling Stockholders" on page 22 of this Class B common stock are entitled to greater
prospectus are offering and selling up to voting rights than the holders of Class A
1,000,000 shares of Adelphia's Class A common stock; however, the holders of Class A
common stock under this prospectus. common stock, voting as a separate class, are
entitled to elect one of Adelphia's directors.
The Class A common stock is listed on the You should carefully review "Risk Factors"
Nasdaq National Market. The Class A common beginning on page 5 for a discussion of things
stock's ticker symbol is "ADLAC." On April you should consider when investing in our
29, 1999, the closing sale price on the Class A common stock.
Nasdaq National Market of a single share of
the Class A common stock was $66 5/8.
Our common stock also includes Class B common Neither the SEC nor any state securities
stock. The rights of holders of the Class A commission has approved or disapproved of
common stock and Class B common stock differ these securities or passed upon the adequacy
with respect to certain aspects of or accuracy of this prospectus. Any
dividends, liquidations and voting. The representation to the contrary is a criminal
Class A common stock has preferential rights offense.
with
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The date of this prospectus is __________ ____, 1999.
The information in the prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell securities and is not soliciting an offer to buy these securities in any
state where the offer is prohibited.
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TABLE OF CONTENTS
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ADELPHIA........................................................... 1
RISK FACTORS....................................................... 5
DILUTION........................................................... 22
SELLING STOCKHOLDERS............................................... 22
USE OF PROCEEDS.................................................... 23
PLAN OF DISTRIBUTION............................................... 23
WHERE YOU CAN FIND MORE INFORMATION................................ 25
EXPERTS............................................................ 27
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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
two 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."
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Our executive offices are located at Main at Water Street, Coudersport,
Pennsylvania 16915, and our telephone number is (814) 274-9830.
Recent Developments
On April 30, 1999, Adelphia consummated its offering of 2.5 million shares of
5-1/2% Series D convertible preferred stock, liquidation preference $200 per
share. Net proceeds from the convertible preferred stock offering, after
deducting expenses, were approximately $484.5 million. Adelphia invested a
portion of the net proceeds in cash equivalents and advanced or contributed the
remaining net proceeds to subsidiaries to repay borrowings under subsidiary
credit agreements, all of which, subject to compliance with the terms of and
maturities of the revolving credit facilities, Adelphia plans to reborrow and
use to fund one or more of the recently announced acquisitions.
On April 28, 1999, Adelphia consummated its offering of 8.0 million shares of
Class A common stock. Net proceeds from this common stock offering, after
deducting offering expenses, were approximately $485.5 million. Adelphia used
the net proceeds to repay borrowings under subsidiary credit agreements, all of
which, subject to compliance with the terms of and maturities of the revolving
credit facilities, Adelphia plans to reborrow and use to fund one or more of the
recently announced acquisitions.
On April 28, 1999 Adelphia consummated its offering of $350 million of 7 7/8%
Senior Notes due 2009. Net proceeds from this offering, after deducting
offering expenses, were approximately $345.0 million. The net proceeds were
used to repay borrowings under subsidiary credit agreements, all of which,
subject to compliance with the terms of and maturities of the revolving credit
facilities, may be reborrowed and used for general corporate purposes, including
acquisitions, capital expenditures and investments.
On April 12, 1999, Adelphia announced that it had entered into a definitive
agreement to purchase the cable television systems owned by Harron
Communications Corp. for $1.2 billion in cash. This transaction is subject to
customary closing conditions. As of December 31, 1998, Harron had approximately
294,000 basic subscribers after giving effect to recent and pending acquisitions
involving approximately 9,000 basic subscribers.
On April 9, 1999, Adelphia entered into a stock purchase agreement with
Highland Holdings, a general partnership controlled by members of the family of
John J. Rigas, in which Adelphia agreed to sell to Highland Holdings, and
Highland Holdings agreed to purchase, from $250 million to $375 million of
Adelphia's Class B common stock. The purchase price for the Class B common stock
will be equal to the public offering price in Adelphia's April 28, 1999 public
offering of Class A common stock described above, less the underwriting
discount, plus an interest factor. Closing under this stock purchase agreement
is to occur within 270 days following the closing of the April 28, 1999 public
offering of Class A common stock.
On March 5, 1999, Adelphia announced that it had entered into a definitive
merger agreement to acquire Century Communications Corp. Under the agreement,
Adelphia would acquire the outstanding common stock of Century for an aggregate
of approximately $826
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million in cash, 48.7 million shares of Class A common stock and the assumption
of approximately $1.6 billion of debt. This transaction is subject to
shareholder approval by Century and Adelphia and other customary closing
conditions. As of December 31, 1998, Century had approximately 1,593,000 basic
subscribers after giving effect to Century's pending joint venture with AT&T.
On March 2, 1999, Hyperion issued $300 million of 12% Senior Subordinated
Notes due 2007. An entity controlled by members of the Rigas family purchased
$100 million of the $300 million of Senior Subordinated Notes directly from
Hyperion at a price equal to the aggregate principal amount less the discount to
the initial purchasers. The net proceeds of approximately $292 million will be
used to fund Hyperion's acquisition of interests held by local partners in
certain of its networks, for capital expenditures and investments in its
networks, for working capital purposes and for general corporate purposes.
On February 23, 1999, Adelphia announced that it had entered into a definitive
agreement to acquire FrontierVision Partners, L.P. for approximately $2.1
billion. Under the agreement, Adelphia would acquire FrontierVision in exchange
for approximately $550 million in cash, 7 million shares of Class A common stock
and the assumption of approximately $1.1 billion of debt. The transaction is
subject to customary closing conditions. As of December 31, 1998, FrontierVision
had approximately 702,000 basic subscribers.
On January 29, 1999, Adelphia purchased from Telesat Cablevision, Inc., a
subsidiary of FPL Group, Inc., shares of Adelphia's stock owned by Telesat.
Adelphia purchased 1,091,524 shares of Class A common stock and 20,000 shares of
Series C cumulative convertible preferred stock which are convertible into an
additional 2,358,490 shares of Class A common stock. These shares represent
3,450,014 shares of common stock on a fully converted basis. Adelphia and
Telesat also agreed to a redemption of Telesat's interests in Olympus
Communications, L.P. by July 11, 1999. The redemption is subject to applicable
third party approvals. The aggregate purchase price for these transactions will
be approximately $257.2 million.
On January 21, 1999, Adelphia acquired Verto Communications, Inc. In
connection with the Verto acquisition, Adelphia issued 2,561,024 shares of its
Class A common stock to the former owners of Verto. Verto provided cable
television services to approximately 56,000 basic subscribers in the greater
Scranton, Pennsylvania area at the date of acquisition.
On January 14, 1999, Adelphia completed offerings totaling 8.6 million shares
of its Class A common stock. Adelphia used the net proceeds of approximately
$372 million from these offerings to repay subsidiary bank debt.
On January 13, 1999, Adelphia completed offerings of $100 million of 7-1/2%
Senior Notes due 2004 and $300 million of 7-3/4% Senior Notes due 2009. Net
proceeds from these offerings, after deducting offering expenses, were
approximately $393.7 million. Of this amount, Adelphia used approximately $160
million to redeem a portion of its 9-1/2% Senior Pay-In-Kind Notes due 2004.
Adelphia used the remainder to repay borrowings under revolving credit
facilities of
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its subsidiaries. The terms of the notes are similar to those of Adelphia's
existing publicly held senior debt.
For other recent developments regarding Adelphia, we refer you to our most
recent and future filings under the Exchange Act.
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RISK FACTORS
Before you invest in our Class A common stock, you should be aware that there
are various risks associated with investing in Adelphia, including those
described below. You should carefully consider these risk factors together with
all of the other information included or incorporated by reference in this
prospectus before you decide to purchase shares of Adelphia's Class A common
stock.
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HIGH LEVEL OF INDEBTEDNESS
As of December 31, 1998, we owed approximately Adelphia has a substantial amount of debt. We borrowed this
$3.5 billion and as of that date we would have money to purchase and to expand our cable systems and other
owed approximately $5.6 billion after the operations and, to a lesser extent, for investments and loans
acquisition of Century, $6.8 billion after the to our affiliates. At December 31, 1998, our indebtedness totaled
acquisition of Century and FrontierVision and approximately $3.5 billion. This included approximately:
$8.6 billion after such transactions and the
Harron and Olympus acquisitions. Our high level . $1.8 billion of Adelphia Parent Company public debt;
of indebtedness can have important adverse
consequences to us and to you. . $1.2 billion of debt owed by our subsidiaries to banks, other
financial institutions and other persons; and
. $471 million of public debt owed by Hyperion, Adelphia's competitive
local exchange carrier subsidiary.
Olympus, a non-consolidated joint venture, also has approximately $727
million of debt. Olympus will be consolidated with Adelphia upon
completion of Adelphia's proposed acquisition of interests in Olympus.
That acquisition is expected to close in July 1999.
We may need to refinance significant Century Century and its subsidiaries have substantial indebtedness. At February
indebtedness that we will be assuming. 28, 1999, Century and its subsidiaries had long-term debt of
approximately $2.0 billion (exclusive of current maturities of $20.1
million), including approximately $1.9 billion principal amount of public
indebtedness under nine indentures, $97 million of indebtedness under
four credit agreements entered into by subsidiaries of Century and
various banks and $80 million of indebtedness under a note agreement
entered into by a subsidiary of Century.
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Without a consent from the lenders to Century's subsidiaries, the Century
merger will violate certain covenants contained in the Century credit
agreements. As a result, we will either secure a waiver from the lenders
under these credit agreements or will refinance such credit agreements
with new or existing credit facilities. Although we currently have
sufficient liquidity under our existing credit facilities to refinance
the borrowings under Century's credit agreements, Adelphia is seeking
consents to keep some or all of such credit agreements in place. In the
event that these consents cannot be obtained upon reasonable terms, we
could seek to refinance some or all of them under one or more new
facilities in order to preserve our existing liquidity. There can be no
assurance, however, that we will be able to obtain these consents or
refinance these credit agreements under any terms or on terms acceptable
to Adelphia. As a result, the failure to obtain the required consents or
to refinance these credit agreements could materially decrease Adelphia's
liquidity.
Under the indentures for Century's public notes, the merger will require
Century to make an offer to purchase the public notes if the merger
results in the public notes being downgraded to a specified level by
certain national rating agencies. Upon announcement of the merger,
certain rating agencies announced that the Century notes were under
review with a view to a downgrade to a level which would not require
Century to make an offer to repurchase public notes. In the event that
the public notes were to be downgraded to a level beyond that announced
by the rating agencies upon disclosure of the merger, Century would be
required to make an offer to repurchase the public notes at 101% of the
amount of the notes. In the event that a significant amount of notes were
tendered to Century for repurchase, this could materially decrease
Adelphia's liquidity.
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We may need to refinance significant On February 23, 1999, we announced our proposed acquisition of
FrontierVision indebtedness that we will be assuming. FrontierVision. FrontierVision and its subsidiaries have substantial
indebtedness. At December 31, 1998, FrontierVision and its subsidiaries
had nonaffiliate long-term debt of approximately $1.1 billion, including
approximately $672 million owed to banks under a credit agreement and
approximately $450 million owed under three indentures for public notes.
We are attempting to secure consents and waivers from the lenders to
permit the credit agreement to remain outstanding. As a result of the
acquisition by Adelphia, the indentures for the public debt will require
FrontierVision to make an offer to repurchase the public notes at 101% of
the amount of the public notes. In the event that the lenders do not
consent to permitting the credit agreement to remain outstanding or a
significant amount of the public notes are tendered to FrontierVision for
repurchase, this could materially decrease our liquidity.
We will need to raise significant financing We will need to raise significant funds to pay for the $1.2 billion
for the Harron acquisition. acquisition of Harron. The Century, FrontierVision, Olympus and Harron
acquisitions are reflected in Adelphia's unaudited condensed consolidated
pro forma financial statements incorporated by reference in this
prospectus.
Debt service consumes a substantial portion of Our high level of indebtedness can have important adverse consequences
the cash we generate. This could affect our ability to us and to you. It requires that we spend a substantial portion of the
to invest in our business in the future as well as cash we get from our business to repay the principal and interest on
to react to changes in our industry or economic these debts. Otherwise, we could use these funds for general corporate
downturns. purposes or for capital improvements. Our ability to obtain new loans
for working capital, capital expenditures, acquisitions or capital
improvements may be limited by our current level of debt. In addition,
having such a high level of debt could limit our ability to react to
changes in our industry and to economic conditions generally. In addition
to our debt, at December 31, 1998, the Adelphia Parent Company had
approximately $148 million and Hyperion had approximately $229 million of
redeemable exchangeable preferred stock which contain payment obligations
that are similar to Adelphia's debt obligations.
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Approximately 32% of our debt outstanding at Our debt comes due at various times up to the year 2009, including an
December 31, 1998 must be paid by April 1, 2003 aggregate of approximately $1.1 billion as of December 31, 1998, which
and all of it must be paid by 2009. we must pay by April 1, 2003.
As discussed above, Century, FrontierVision and Olympus also have a
substantial amount of debt. Under its current terms, this debt comes due
at various times up to the year 2017, including an aggregate of
approximately $1.6 billion as of December 31, 1998 (May 31, 1998 as to
Century), which must be paid over the next five years.
OUR BUSINESS REQUIRES SUBSTANTIAL ADDITIONAL Our business requires substantial additional financing on a continuing
FINANCING AND IF WE DO NOT OBTAIN THAT FINANCING basis for capital expenditures and other purposes including:
WE MAY NOT BE ABLE TO UPGRADE OUR PLANT, OFFER
SERVICES, MAKE PAYMENTS WHEN DUE OR REFINANCE . constructing and upgrading our plant and networks--some of these
EXISTING DEBT upgrades we must make to comply with the requirements of local
cable franchise authorities;
. scheduled principal and interest payments;
. refinancing existing debt; and
. acquisitions and investments.
There can be no guarantee that we will be able to issue additional debt
or sell stock or other additional equity on satisfactory terms, or at
all, to meet our future financing needs.
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WE HAVE HAD LARGE LOSSES AND NEGATIVE The Total Convertible Preferred Stock, Common Stock and Other
STOCKHOLDERS' EQUITY AND WE EXPECT THIS Stockholders' Equity (Deficiency) at December 31, 1998 was a deficit of
TO CONTINUE approximately $1.0 billion. Our continuing net losses, which are mainly
due to our high levels of depreciation and amortization and interest
expense, have created this deficiency. Our recent net losses applicable
to our common stockholders were approximately as follows for the periods
specified:
. fiscal year ended March 31, 1996--$119.9 million;
. fiscal year ended March 31, 1997--$130.6 million;
. fiscal year ended March 31, 1998--$192.7 million; and
. nine months ended December 31, 1998--$135.8 million.
We expect to continue to incur large net losses for the next several
years.
Our earnings have been insufficient to pay for Our earnings could not pay for our combined fixed charges and
our fixed charges and preferred stock dividends. preferred stock dividends during these periods by the amounts
set forth in the table below, although combined fixed charges
and preferred stock dividends included substantial non-cash
charges for depreciation, amortization and non-cash interest
expense on some of our debts and the non-cash expense of Hyperion's
preferred stock dividends:
Earnings Non-Cash
---------- ------------
Deficiency Charges
---------- ------------
(in thousands)
. fiscal year ended March 31, 1996 $ 78,189 $127,319
. fiscal year ended March 31, 1997 $ 61,848 $165,426
. fiscal year ended March 31, 1998 $113,941 $195,153
. nine months ended December 31, 1998 $116,899 $186,022
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If we cannot refinance our debt including debt Historically, the cash we generate from our operating activities
incurred in connection with the acquisitions of and borrowings has been sufficient to meet our requirements for debt
FrontierVision and Century or obtain new loans, we service, working capital, capital expenditures and investments in and
would likely have to consider various options such advances to our affiliates, and we have depended on additional borrowings
as the sale of additional equity or some of our to meet our liquidity requirements. Although in the past we have been
assets to meet the principal and interest payments able both to refinance our debt and to obtain new debt, there can be no
we owe, negotiate with our lenders to restructure guarantee that we will be able to continue to do so in the future or that
existing loans or explore other options available the cost to us or the other terms which would affect us would be as
under applicable laws including those under favorable to us as current loans and credit agreements. We believe that
reorganization or bankruptcy laws. We cannot our business will continue to generate cash and that we will be able to
guarantee that any options available to us would obtain new loans to meet our cash needs. However, the covenants in the
enable us to repay our debt in full. indentures and credit agreements for our current debt provide some
limitations on our ability to borrow more money.
COMPETITION The telecommunications services provided by Adelphia are subject to
strong competition and potential competition from various sources.
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Our cable television business is subject to Our cable television systems compete with other means of distributing
strong competition from several sources which video to home televisions such as Direct Broadcast Satellite systems,
could adversely affect revenue or revenue growth. commonly known as DBS systems, and Multichannel Multipoint Distribution
systems. Some of the regional Bell telephone operating companies and
other local telephone companies are in the process of entering the video-
to-home business and several have expressed their intention to enter the
video-to-home business. In addition, some regional Bell operating
companies and local telephone companies have facilities which are capable
of delivering cable television service. The equipment which telephone
companies use in providing local exchange service may give them
competitive advantages over Adelphia in distributing video to home
televisions. The regional Bell 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.
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Hyperion's operations are also subject to risk In each of the markets served by Hyperion's networks, the competitive
because Hyperion competes principally with local exchange carrier services offered by Hyperion compete principally
established local telephone carriers that have with the services offered by the incumbent local telephone exchange
long-standing utility relationships with their carrier company serving that area. Local telephone companies have long-
customers and pricing flexibility for local standing relationships with their customers, have the potential to
telephone services. subsidize competitive services from monopoly service revenues, and
benefit from favorable state and federal regulations. The merger of Bell
Atlantic and NYNEX created a very large company whose combined territory
covers a substantial portion of Hyperion's markets. Other combinations
are occurring in the industry, which may have a material adverse effect
on Hyperion and us.
We believe that local telephone companies will gain increased pricing
flexibility from regulators as competition increases. Hyperion's
operating results and cash flow could be materially and adversely
affected by actions by regulators, including permitting the incumbent
local telephone companies in Hyperion's markets to do the following:
. lower their rates substantially;
. engage in aggressive volume and term discount pricing practices for
their customers; or
. charge excessive fees to Hyperion for interconnection to the
incumbent local telephone company's networks.
If the regional Bell telephone companies could
get regulatory approval to offer long The regional Bell operating companies can now obtain regulatory
distance service in competition with Hyperion's approval to offer long distance services if they comply with the
significant customers, some of Hyperion's interconnection requirements of the federal Telecommunications Act of
major customers could lose market share. 1996. To date, the FCC has denied the requests for approval filed by
regional Bell operating companies in Hyperion's operating areas. However,
approval of such a request could result in decreased market share for
the major long distance carriers which are among Hyperion's significant
customers. This could have a material adverse effect on Hyperion.
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The regional Bell telephone companies continue Some of the regional Bell operating companies have also recently filed
to seek other regulatory approvals that could petitions with the FCC requesting waivers of other obligations under the
significantly enhance their competitive position federal Telecommunications Act of 1996. These involve services Hyperion
against Hyperion. also provides such as high speed data, long distance, and services to
Internet Service Providers. If the FCC grants the regional Bell operating
companies' petitions, this could have a material adverse effect on
Hyperion.
Potential competitors to Hyperion's Potential competitors for Hyperion include other competitive local
telecommunications services include the exchange carriers, incumbent local telephone companies which are not
regional Bell telephone companies, AT&T, subject to regional Bell operating companies' restrictions on offering
MCIWorldCom and Sprint, electric utilities long distance service, AT&T, MCIWorldCom, Sprint and other long distance
and other companies that have advantages over carriers, cable television companies, electric utilities, microwave
Hyperion. carriers, wireless telecommunications providers and private networks
built by large end users. Both AT&T and MCIWorldCom have announced that
they have begun to offer local telephone services in some areas of the
country, and AT&T recently announced a new wireless technology for
providing local telephone service. In addition, the long distance
carriers could build their own facilities, purchase other carriers or
their facilities, or resell the services of other carriers rather than
use Hyperion's services when entering the market for local exchange
services.
Many of Hyperion's current and potential competitors, particularly
incumbent local telephone companies, have financial, personnel and other
resources substantially greater than those of Hyperion, as well as other
competitive advantages over Hyperion.
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WE ARE SUBJECT TO EXTENSIVE REGULATION The cable television industry and the provision of local telephone
exchange services are subject to extensive regulation at the federal,
Our cable television and telecommunications state and local levels, and many aspects of such regulation are currently
businesses are heavily regulated the subject of judicial proceedings and administrative or legislative
as to rates we can charge and other matters. proposals. In particular, the FCC adopted regulations that limit our
This regulation could limit our ability to ability to set and increase rates for our basic service package and for
increase rates, cause us to decrease then current the provision of cable television-related equipment. The law permits
rates or require us to refund previously collected certified local franchising authorities to order refunds of rates paid in
fees. the previous 12-month period determined to be in excess of the permitted
reasonable rates. It is possible that rate reductions or refunds of
previously collected fees may be required in the future.
The cable television industry is subject to state and local regulations,
and we must comply with rules of the local franchising authorities to
retain and renew our cable franchises, among other matters. There can be
no assurances that the franchising authorities will not impose new and
more restrictive requirements as a condition to franchise renewal.
The federal Telecommunications Act of 1996 may The federal Telecommunications Act of 1996 substantially changed federal,
have a significant impact on our cable state and local laws and regulations governing our cable television and
television and telephone businesses. telecommunications businesses. This law could materially affect the
growth and operation of the cable television industry and the cable
services we provide. Although this legislation may lessen regulatory
burdens, the cable television industry may be subject to new competition
as a result. There are numerous rulemakings that have been and continue
to be undertaken by the FCC which will interpret and implement the
provisions of this law. Furthermore, portions of this law have been, and
likely other portions will be, challenged in the courts. We cannot
predict the outcome of such rulemakings or lawsuits or the short-and
long-term effect, financial or otherwise, of this law and FCC
rulemakings on us.
Similarly, the federal Telecommunications Act of 1996 removes entry
barriers for all companies and could increase substantially the number of
competitors offering comparable services in Hyperion's markets or
potential markets. Furthermore, we cannot guarantee that rules adopted by
the FCC or state regulators or other legislative or judicial initiatives
relating to the telecommunications industry will not have a material
adverse effect on Hyperion.
</TABLE>
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<TABLE>
<S> <C>
UNEQUAL VOTING RIGHTS OF STOCKHOLDERS Adelphia has two classes of common stock--Class A which carries one vote
per share and Class B which carries ten votes per share. Under Adelphia's
Certificate of Incorporation, the Class A shares elect only one of our
eight directors.
CONTROL OF VOTING POWER BY THE RIGAS FAMILY As of April 1, 1999, the Rigas family beneficially owned shares
representing about 48% of the total number of outstanding shares of both
The Rigas family can control stockholder classes of Adelphia's common stock and about 81% of the total voting
decisions on very important matters. power of Adelphia's shares. The public holds a majority of the
outstanding shares of Class A common stock, although the Rigas family
also owns approximately 36% of those shares as of April 1, 1999. The
Rigas family owns approximately 99% of Adelphia's shares of Class B
common stock. The Rigas family also owns shares of Adelphia's 81/8%
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 Adelphia's Certificate of Incorporation and Bylaws,
and mergers or other fundamental corporate transactions. Sales of Class B
common stock to the Rigas family under the Highland Holdings stock
purchase agreement dated April 9, 1999 will increase the voting power of
the Rigas family.
THERE ARE POTENTIAL CONFLICTS OF INTEREST BETWEEN John J. Rigas and the other executive officers of Adelphia, including
ADELPHIA AND THE RIGAS FAMILY other members of the Rigas family, own other corporations and
partnerships, which are managed by us for a fee. Subject to the
restrictions contained in a business opportunity agreement regarding
future acquisitions, Rigas family members and the executive officers are
free to continue to own these interests and acquire additional interests
in cable television systems. These activities could present a conflict of
interest with Adelphia, such as how much time our executive officers
devote to our business. In addition, there have been and will continue to
be transactions between us and the executive officers or the other
entities they own or have affiliations with. Our public debt indentures
contain covenants that place some restrictions on transactions between us
and our affiliates.
</TABLE>
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<TABLE>
<S> <C>
HOLDING COMPANY STRUCTURE AND POTENTIAL IMPACT The Adelphia Parent Company directly owns no significant assets other
OF RESTRICTIVE COVENANTS IN SUBSIDIARY than stock, partnership interests and equity and other interests in our
DEBT AGREEMENTS subsidiaries and in other companies. This creates risks regarding our
ability to provide cash to the Adelphia Parent Company to repay the
interest and principal which it owes, our ability to pay cash dividends
to our common stockholders in the future, and the ability of our
subsidiaries and other companies to respond to changing business and
economic conditions and to get new loans.
The Adelphia Parent Company depends on its The public indentures and the credit agreements for bank and other
subsidiaries and other companies financial institution loans of our subsidiaries and other companies in
in which it has investments to fund which we have invested, restrict their ability and the ability of the
its cash needs. companies they own to make payments to the Adelphia Parent Company. These
agreements also place other restrictions on the borrower's ability to
borrow new funds and include requirements for the borrowers to remain in
compliance with the credit agreements. The ability of a subsidiary or a
company in which we have invested to comply with debt restrictions may be
affected by events that are beyond our control. The breach of any of
these covenants could result in a default which could result in all loans
and other amounts owed to its lenders becoming due and payable. Our
subsidiaries and companies in which we have invested might not be able to
repay in full the accelerated loans.
IT IS UNLIKELY YOU WILL RECEIVE A RETURN ON YOUR Adelphia has never declared or paid cash dividends on any of its common
SHARES THROUGH THE PAYMENT OF CASH DIVIDENDS stock and has no intention of doing so in the foreseeable future. As a
result, it is unlikely that you will receive a return on your shares
through the payment of cash dividends.
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
FUTURE SALES OF ADELPHIA COMMON STOCK COULD Sales, or availability for sale, of a substantial number of shares of our
ADVERSELY AFFECT ITS MARKET PRICE common stock, including sales by any pledgees of such shares, could
adversely affect the market price of Class A common stock and could
impair our ability in the future to raise capital through stock
offerings. Under various registration rights agreements or arrangements,
as of April 1, 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 Class A common stock, consisting of 15,029,119
shares, Class B common stock, consisting of 10,736,544 shares and the
equivalent number of shares of Class A common stock into which they may
be converted, and Series C cumulative convertible preferred stock,
consisting of 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 Series C cumulative convertible preferred stock and
the Class A common stock issuable upon conversion of the Series C
cumulative 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;
. for a Rigas family partnership--4,000,000 shares of Class A common
stock purchased by it in connection with the January 14, 1999 equity
offerings;
. for the owners of FrontierVision--7,000,000 shares of Class A common
stock in connection with the pending FrontierVision acquisition, and
for the benefit of FrontierVision in certain circumstances if the
transaction does not close, 1,000,000 shares of Class A common stock;
and
. for the owners of Century--approximately 48,700,000 shares of Class A
common stock to be issued in connection with the pending Century
acquisition.
</TABLE>
17
<PAGE>
<TABLE>
<S> <C>
Approximately 14,904,000 shares of Class A common stock and up to 80,000
shares of Series C cumulative convertible preferred stock, including the
underlying Class A common stock, have been pledged by members of the
Rigas family in connection with margin loans made to members of the Rigas
family. These pledgees could freely sell any shares acquired upon a
foreclosure.
THE CENTURY MERGER MAY NOT BE COMPLETED IF THE The Century merger requires approvals from Century's stockholders and our
REQUIRED APPROVAL OF CENTURY'S stockholders. Although the Class B stockholders of Century and the
CLASS A STOCKHOLDERS IS NOT OBTAINED controlling stockholders of Adelphia have agreed to vote in favor of the
merger, the companies cannot be certain of the ultimate outcome of the
required vote of the Class A stockholders of Century. If that vote is not
obtained, the companies will not be able to complete the proposed
transaction as currently structured or in a timely manner, if at all.
The failure to satisfy conditions to completion Even if Century's stockholders approve the Century merger, one or more of
of the acquisitions could the pending acquisitions may not close unless several other conditions
jeopardize the acquisitions. are met. These include:
. receipt of all required consents of governmental authorities have been
received, except where the failure to obtain any such required consent
would not have a material adverse effect ;
. clearance under antitrust laws;
. neither Adelphia nor the selling parties have breached any of their
respective representations, warranties or covenants made in the
applicable agreement; and
. there is no law or court order prohibiting the applicable
acquisition.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
OUR ACQUISITIONS AND EXPANSION COULD INVOLVE Because we are experiencing a period of rapid expansion through
OPERATIONAL AND OTHER RISKS acquisition, the operating complexity of Adelphia, as well as the
responsibilities of management personnel, have increased. Our ability to
manage such expansion effectively will require us to continue to expand
and improve our operational and financial systems and to expand, train
and manage our employee base.
The Century, FrontierVision and Harron transactions and some of our other
recent acquisitions involve the acquisition of companies that have
previously operated independently. We may not be able to integrate the
operations of these companies without some level of difficulty, such as
the loss of key personnel. There is no guarantee that we will be able to
realize the benefits expected from the integration of operations from
these transactions.
Because the cable systems to be acquired in the Century, FrontierVision
and Harron acquisitions are in the same industry as those of Adelphia,
the acquired systems will generally be subject to the same risks as those
of Adelphia, such as those relating to competition, regulation, year 2000
issues and technological developments.
PURCHASERS OF OUR COMMON STOCK WILL INCUR Persons purchasing Class A common stock will incur immediate and
IMMEDIATE DILUTION substantial net tangible book value dilution.
</TABLE>
19
<PAGE>
<TABLE>
<S> <C>
YEAR 2000 ISSUES PRESENT RISKS TO OUR The year 2000 issue refers to the potential inability of computerized
BUSINESS OPERATIONS IN SEVERAL WAYS systems and technologies to properly recognize and process dates beyond
December 31, 1999. This could present risks to the operation of our
business in several ways. Our computerized business applications that
could be adversely affected by the year 2000 issue include:
. information processing and financial reporting systems;
. customer billing systems;
. customer service systems;
. telecommunication transmission and reception systems; and
. facility systems.
System failure or miscalculation could result in an inability to process
transactions, send invoices, accept customer orders or provide customers
with products and services. Although we are evaluating the impact of the
year 2000 issue on our business and are seeking to implement necessary
solutions, this process has not been completed.
There can be no assurance that the systems of other companies on which
our systems rely will be year 2000 ready or compatible with our systems.
Our failure or a third-party's failure to become year 2000 ready, or our
inability to become compatible with third parties with which we have a
material relationship, including parties acquired by us, may have a
material adverse effect on Adelphia, including significant service
interruption or outages; however, we cannot currently estimate the extent
of any such adverse effects.
</TABLE>
20
<PAGE>
<TABLE>
<S> <C>
FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS The statements contained or incorporated by reference in this prospectus
SUPPLEMENT ARE SUBJECT TO RISKS that are not historical facts are "forward-looking statements" and can be
AND UNCERTAINTIES identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," "intends" or "anticipates" or the
negative thereof or other variations thereon or comparable terminology,
or by discussions of strategy that involve risks and uncertainties.
Certain information set forth or incorporated by reference in this
prospectus, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Adelphia's 1998 Annual Report on
Form 10-K and in Adelphia's Form 10-Qs, is forward-looking, such as
information related to the effects of future regulation, future capital
commitments and the effects of competition. Such forward-looking
information involves important risks and uncertainties that could
significantly affect expected results in the future from those expressed
in any forward-looking statements made by, or on behalf of, us. These
risks and uncertainties include, but are not limited to, uncertainties
relating to economic conditions, the availability and cost of capital,
acquisitions and divestitures, government and regulatory policies, the
pricing and availability of equipment, materials, inventories and
programming, technological developments, year 2000 issues and changes in
the competitive environment in which we operate. Persons reading this
prospectus are cautioned that such statements are only predictions and
that actual events or results may differ materially. In evaluating such
statements, readers should specifically consider the various factors
which could cause actual events or results to differ materially from
those indicated by such forward-looking statements.
</TABLE>
21
<PAGE>
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 negative $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 based on net tangible book value as of December 31, 1998.
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.
SELLING STOCKHOLDERS
The 1,000,000 shares offered under this prospectus have been issued to
FrontierVision Partners, L.P. to be held in escrow by the Bank of Montreal Trust
Company. Adelphia, FrontierVision Partners, L.P. and others are parties to the
FrontierVision purchase agreement, a deposit escrow agreement and the related
registration rights agreement. Under the purchase agreement and registration
rights agreement, Adelphia has agreed prior to the closing of that transaction
to register 1,000,000 shares of Class A common stock for sale under this
prospectus.
If Adelphia breaches some provisions of the FrontierVision purchase
agreement, these 1,000,000 shares would be released from escrow to
FrontierVision Partners, L.P. If the FrontierVision acquisition closes, these
1,000,000 shares would be released from escrow and returned to us. If that
occurs, we would issue, as part of the closing of the FrontierVision
acquisition, these 1,000,000 shares to the owners of FrontierVision as part of
the purchase price paid to the owners of FrontierVision.
The selling stockholder is FrontierVision Partners, L.P., which is a limited
partnership with FVP GP, L.P. as its general partner. FVP GP, L.P. may also be
a selling stockholder under this prospectus. A number of limited partners of
FrontierVision Partners, L.P. and/or their affiliates may also become selling
stockholders under this prospectus if FrontierVision Partners, L.P. makes a
distribution to its owners. If required, we would file an amendment or a
prospectus supplement to add additional selling stockholders.
If the FrontierVision acquisition closes, the owners of FrontierVision will
acquire their shares of Class A common stock from us in exchange for their
interests in FrontierVision. Those owners include FVP GP, L.P., the owners of
FVP GP, L.P. and FrontierVision Partners, L.P.'s direct and indirect limited
partners. Registration of these shares does not necessarily mean that the
selling stockholders will sell all or any of the shares.
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<PAGE>
FrontierVision Partners, L.P. has not held any positions or office or had any
material relationship with us, our predecessors or affiliates during the past
three years. In addition, one or more of the selling stockholders may donate,
pledge or transfer as gifts some or all of their shares, or may pledge or
transfer its or their shares for no value to other beneficial owners. This
prospectus may also be used for resales by these pledgees, donees or transferees
of the selling stockholder listed below or its distributees and we will identify
any of those pledgees, donees or transferees in a supplement to this prospectus.
The shares listed below represent, as of April 30, 1999, all of the shares
that the selling stockholder beneficially owns, the number of shares it may
offer and the number of shares it will own after the offering assuming it sells
all of the shares.
The numbers presented under "Class A Common Shares Held After Offering" and
"Percent of Class A Common Shares Held After Offering" in the table below assume
that all of the shares held by the selling stockholder and being offered under
this prospectus are sold, and that the selling stockholder acquires no
additional shares of common stock before the completion of this offering.
<TABLE>
<CAPTION>
Held Percent of Percent of
Class A Common Class A Common Class A Class A Common Class A Common
Shares Held Shares Held Common Shares Shares Held Shares Held
Name Before Offering Before Offering Offered Hereby After Offering After Offering
- ----------------- ------------------ --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
FrontierVision
Partners, L.P. 1,000,000 1.99% 1,000,000 _ _
</TABLE>
USE OF PROCEEDS
All net proceeds from the sale of the shares will go to the stockholders who
offer and sell them. We will not receive any proceeds from the sale of shares
by the selling stockholders.
PLAN OF DISTRIBUTION
Adelphia is registering the shares on behalf of the selling stockholders.
References in this section to selling stockholders also include any permitted
pledgees, donees or transferees identified in a supplement to this prospectus as
described above. The selling stockholders may offer their shares at various
times in one or more of the following transactions:
. in transactions, which may involve crosses or block transactions, on any
national securities exchange or quotation service on which the shares may be
listed or quoted at the time of sale;
. in the over-the-counter market;
. in private transactions other than in the over-the-counter market or on an
exchange;
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<PAGE>
. in connection with short sales of shares;
. by pledge to secure debts and other obligations;
. in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options; or
. in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices at the time
of sale, at prices related to market prices, at negotiated prices or at fixed
prices.
The selling stockholders may use broker-dealers to sell their shares. If
this happens, broker-dealers will either receive discounts or commissions from
the selling stockholders, or they will receive commissions from purchasers of
shares for whom they acted as agents. The selling stockholders, any brokers,
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with these sales, and any profits realized or commissions received may be deemed
underwriting compensation.
The selling stockholders may also enter into hedging transactions with
broker-dealers or other financial institutions. In connection with these
transactions, broker-dealers or other financial institutions may engage in short
sales of Adelphia's Class A common stock in the course of hedging the positions
they assume with selling stockholders. The selling stockholders may also enter
into options or other transactions with broker-dealers or other financial
institutions which require the delivery, to that broker-dealer or other
financial institution, the shares offered under this prospectus. The shares
that broker-dealer or other financial institution receives in those types of
transactions may be resold under this prospectus.
Selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided they meet the criteria and conform to the requirements of that Rule.
When a particular offering of shares is made, if required, we will distribute
a prospectus supplement. This supplement will set forth the names of the
selling stockholders, the aggregate amount and type of shares being offered, the
number of such securities owned prior to and after the completion of any such
offering, and, to the extent required, the terms of the offering, including the
name or names of any underwriters, broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
To comply with the securities law in some jurisdictions, the shares will be
offered or sold in particular jurisdictions only through registered or licensed
brokers or dealers. In addition, in some jurisdictions the shares may not be
offered or sold unless they have been registered or qualified for sale in that
jurisdictions or an exemption from registration or qualification is available
and is complied with.
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<PAGE>
To comply with rules and regulations under the Securities Exchange Act of
1934, persons engaged in a distribution of the shares may be limited in their
ability to engage in market activities with respect to such shares. In addition
and without limiting the foregoing, each selling stockholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, which provisions may limit the timing of purchases and
sales of any of the shares by the selling stockholders. All of these things may
affect the marketability of the shares.
All expenses of the registration of the shares will be paid by Adelphia,
including, without limitation, Commission filing fees and expenses of compliance
with state securities or "blue sky" laws; provided, however, that the selling
stockholders will pay all underwriting discounts and selling commissions, if
any. Subject to some limitations, the selling stockholders will be indemnified
by Adelphia against civil liabilities, including liabilities under the
Securities Act of 1933, or will be entitled to contribution in connection
therewith. Subject to some limitations, Adelphia will be indemnified by the
selling stockholders against civil liabilities, including liabilities under the
Securities Act of 1933, or will be entitled to contribution in connection
therewith.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, as well as proxy statements
and other information with the SEC. You may read and copy any document we file
with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its Regional Offices in Chicago, Illinois or New
York, New York. You may obtain further information about the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are
also available to the public over the Internet at the SEC's web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants like us that file electronically with the SEC.
This prospectus is part of a registration statement on Form S-3 filed by us
with the SEC under the Securities Act of 1933. As permitted by SEC rules, this
prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus. If we
subsequently file updating or superseding information in a document that is
incorporated by reference into this prospectus, the subsequent information will
also become part of this prospectus and will supersede the earlier information.
We are incorporating by reference the following documents that we have filed
with the SEC:
. our Annual Report on Form 10-K for the year ended March 31, 1998, which
incorporates, in Items 7 and 8 to such Form 10-K, portions of the Form 10-K for
the fiscal year ended December 31, 1997 of Olympus Communications, L.P. and
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<PAGE>
Olympus Capital Corporation, as amended by Adelphia's Form 10-K/A dated July 27,
1998;
. our Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998
September 30, 1998 and December 31, 1998;
. our Current Reports on Form 8-K for the events dated June 29, 1998, July 2,
1998, August 3, 1998, August 18, 1998, September 10, 1998, November 9, 1998,
November 12, 1998, December 23, 1998, January 11, 1999, February 22, 1999,
February 23, 1999, March 5, 1999, March 30, 1999, March 31, 1999, April 9, 1999,
April 19, 1999, April 21, 1999, April 23, 1999 and April 28, 1999;
. our definitive proxy statement dated September 11, 1998 with respect to the
Annual Meeting of Stockholders held on October 6, 1998; and
. the description of its Class A common stock contained in:
. our registration statement filed with the SEC under Section 12 of the
Exchange Act and subsequent amendments and reports filed to update such
description; and
. our registration statement on Form S-3 (File No. 333-74219).
We are also incorporating by reference into this prospectus:
. all of our future filings with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act until this offering has been completed; and
. all of our filings made by us under the Exchange Act after the date the
registration statement to which this prospectus is a part was initially filed
and prior to the effective date of that registration statement.
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. No offer of securities is being made in any state or country in
which the offer or sale is not permitted.
26
<PAGE>
EXPERTS
The consolidated financial statements of Adelphia and its subsidiaries as of
March 31, 1997 and 1998, and for each of the three years in the period ended
March 31, 1998, and the consolidated financial statements of Olympus and its
subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997, all incorporated in this prospectus by
reference from Adelphia's Annual Report on Form 10-K for the year ended March
31, 1998, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of FrontierVision Partners, L.P. and
subsidiaries as of December 31, 1998 and 1997, and for each of the years in the
three year period ended December 31, 1998, have been incorporated by reference
herein and in the registration statement from Adelphia's Current Report on Form
8-K filed April 19, 1999, in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Harron Communications Corp. and
subsidiaries as of December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998 incorporated in this prospectus by reference
from Adelphia's Current Report on Form 8-K filed April 19, 1999 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The consolidated financial statements of Century Communications Corp. and
subsidiaries as of May 31, 1998 and 1997 and for each of the three years in the
period ended May 31, 1998 incorporated in this prospectus by reference from
Adelphia's Current Report on Form 8-K filed on April 19, 1999 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
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<PAGE>
Adelphia Communications Corporation
1,000,000 Shares of Class A Common Stock
PROSPECTUS
We have not authorized any dealer, salesperson or other person to give any
information or represent anything contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell
nor does it solicit to buy any shares of Class A common stock in any
jurisdiction where it is unlawful. The information in this prospectus is current
as of _____________, 1999.
<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....................................... $18,400
Legal fees and expenses.............................. 10,000
Accounting fees and expenses......................... 4,000
Miscellaneous expenses............................... 7,600
-------
Total................................................ $40,000
=======
</TABLE>
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
- ----------- ---------
<S> <C> <C>
4.01 Certificate of Incorporation of Adelphia Incorporated herein by
Communications Corporation reference is Exhibit 3.01
to Registrant's Current
Report on Form 8-K dated
July 24, 1997 (File No.
000-16104).
4.02 Certificate of Designations for 5 1/2% Series D Incorporated herein by
Convertible Preferred Stock reference is Exhibit 3.01
to Registrant's Current
Report on Form 8-K for the
event dated April 28, 1999
(File No. 000-16104).
23.01 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Adelphia and Olympus
23.02 Consent of KPMG LLP with respect to financial Filed herewith.
statements of FrontierVision
23.03 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Century
23.04 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Harron
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which,
II-2
<PAGE>
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, as amended, 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 Securities Act of 1933, as amended, 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 Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
II-3
<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 3rd day of May, 1999.
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ Timothy J. Rigas
----------------------
Timothy J. Rigas, Executive Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints Michael J. Rigas, Timothy J. Rigas and James P. Rigas,
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 May 3, 1999
- ----------------------------------
JOHN J. RIGAS
/s/ Michael J. Rigas Executive Vice President and Director May 3, 1999
- ----------------------------------
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Executive Vice President, Chief Financial May 3, 1999
- ---------------------------------- Officer, Chief Accounting Officer, Treasurer
TIMOTHY J. RIGAS and Director
/s/ James P. Rigas Executive Vice President and Director May 3, 1999
- ----------------------------------
JAMES P. RIGAS
/s/ Daniel R. Milliard Senior Vice President, Secretary and Director May 3, 1999
- ----------------------------------
DANIEL R. MILLIARD
- --------------------------------- Director May ___, 1999
PERRY S. PATTERSON
- --------------------------------- Director May ___, 1999
PETE J. METROS
- --------------------------------- Director May ___, 1999
DENNIS P. COYLE
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ---------
<C> <S> <C>
4.01 Certificate of Incorporation of Adelphia Incorporated herein by
Communications Corporation reference is Exhibit 3.01 to
Registrant's Current Report on
Form 8-K dated July 24, 1997
(File No. 000-16104).
4.02 Certificate of Designations for 5 1/2% Series D Incorporated herein by
Convertible Preferred Stock reference is Exhibit 3.01 to
Registrant's Current Report on
Form 8-K for the event dated
April 28, 1999 (File No.
000-16104).
23.01 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Adelphia and Olympus
23.02 Consent of KPMG LLP with respect to financial Filed herewith.
statements of FrontierVision
23.03 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Century
23.04 Consent of Deloitte & Touche LLP with respect to Filed herewith.
financial statements of Harron
24.01 Power of Attorney (included on the signature page Filed herewith.
to the registration statement)
</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
May 3, 1999
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-3, of Adelphia Communications Corporation, of our report, dated March 19,
1999, relating to the consolidated balance sheets of FrontierVision Partners,
L.P. and subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of operations, partners' deficit and cash flows for each
of the years in the three year period ended December 31, 1998, which report
appears in the April 19, 1999 Current Report on Form 8-K of Adelphia
Communications Corporation which is incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the registration statement.
/s/ KPMG LLP
Denver, Colorado
May 3, 1999
<PAGE>
Exhibit 23.03
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Adelphia Communications Corporation on Form S-3 of our report dated August 4,
1998, with respect to the consolidated balance sheets of Century Communications
Corp. and subsidiaries as of May 31, 1998 and 1997, and the related consolidated
statements of operations and cash flows for each of the three years in the
period ended May 31, 1998, included in the Current Report on Form 8-K, filed
April 19, 1999 by Adelphia Communications Corporation, incorporated by reference
in this Registration Statement and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Stamford, Connecticut
May 3, 1999
<PAGE>
Exhibit 23.04
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 March 19,
1999 (April 12, 1999 as to Note 16), with respect to the consolidated balance
sheets of Harron Communications Corp. and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of income, stockholders'
equity and comprehensive income and cash flows for each of the three years in
the period ended December 31, 1998, which report appears in Adelphia
Communications Corporation's Current Report on Form 8-K dated April 19, 1999.
We also consent to the reference to our firm under the heading "Experts" in the
prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
May 3, 1999
