UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date
of Report (date of earliest event reported) April 19, 1999
------------
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-16014 23-2417713
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
One North Main Street
Coudersport, PA 16915-1141
(Address of principal executive offices) (Zip Code)
------------
Registrant's telephone number, including area code (814) 274-9830
<PAGE>
Item 5. Other Events
Purpose of Amendment:
This amendment to the current report on Form 8-K/A is being filed for
the purpose of amending the pro forma financial information contained in the
current report on Form 8-K previously filed as Exhibit 99.05 by Adelphia
Communications Corporation (the "Company") on April 20, 1999 with the Securities
Exchange Commission ("SEC").
The pro forma financial information is being amended to reflect the
restatement of previously reported financial results as more fully described in
the Company's Annual Report on Form 10-K/A-2 filed on December 19, 2000.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Statements included in this Form 8-K/A,
which are not historical facts are forward-looking statements, such as
information relating to the effect 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, the Company. These "forward looking
statements" can be identified by the use of forward looking terminology such as
"believes," "expects," "may," "will," "should," "intends," or "anticipates" or
the negative thereof and the variations thereon or comparable terminology, or by
discussions of strategy that involves risks or uncertainties. These risks and
uncertainties include, but are not limited to, uncertainties relating to
economic conditions, acquisitions and divestitures, the availability and cost of
capital, government and regulatory policies, the pricing and availability of
equipment, materials, inventories and programming, product acceptance, the
Company's ability to construct, expand and upgrade its networks, reliance on
vendors, technological developments, and changes in the competitive environment
in which the Company operates. Readers are cautioned that such forward-looking
statements are only predictions, that no assurance can be given that any
particular future results will be achieved, and that actual events or results
may differ materially. For further information regarding these risks and
uncertainties and their potential impact on the Company, see the prospectus and
most recent prospectus supplement filed under Registration Statement No.
333-78027, under the caption "Risk Factors." 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.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
----------- -----------
99.05 Unaudited pro forma condensed consolidated financial information
for Adelphia Communications Corporation as of December 31, 1998 (as
restated) and for the year ended March 31, 1998 and the nine months
ended December 31, 1998(as restated). (Filed Herewith)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date December 28, 2000
ADELPHIA COMMUNICATIONS CORPORATION
(Registrant)
/s/ Timothy J. Rigas
By: ______________________________________
Timothy J. Rigas
Executive Vice President, Treasurer
and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.05 Unaudited pro forma condensed consolidated financial information
for Adelphia Communications Corporation as of December 31, 1998(as
restated) and for the year ended March 31, 1998 and the nine months
ended December 31, 1998(as restated). (Filed Herewith)
<PAGE>
EXHIBIT 99.05
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma financial information presented on the following pages
is derived from the historical financial statements of Adelphia Communications
Corporation and subsidiaries ("Adelphia"), FrontierVision Partners, L.P. and
subsidiaries ("FrontierVision"), Century Communications Corp. and subsidiaries
("Century"), Harron Communications Corp. and subsidiaries ("Harron") and Olympus
Communications, L.P. and subsidiaries ("Olympus"). The unaudited pro forma
condensed consolidated balance sheet information as of December 31, 1998 (as
restated) gives pro forma effect to (i) the securities offerings completed by
Adelphia and its 67% owned subsidiary, Hyperion Telecommunications, Inc.
("Hyperion") after December 31, 1998, (ii) the repurchase of Adelphia Class A
common stock and Series C Cumulative Convertible preferred stock from
subsidiaries of Florida Power and Light ("FPL") after December 31, 1998, (iii)
the pending acquisitions of FrontierVision, Century, Harron and the interests in
Olympus held by Telesat Cablevision, Inc. ("Telesat"), a subsidiary of FPL, and
(iv) the intended securities offering to be completed prior to closing such
acquisitions, as if all such transactions had been consummated on December 31,
1998. The unaudited pro forma condensed consolidated statements of continuing
operations information for the year ended March 31, 1998 and the nine months
ended December 31, 1998 (as restated) have been presented as if (i) the
financing and securities offerings of Adelphia and Hyperion completed after
April 1, 1997, including the securities offerings completed by Adelphia and
Hyperion after December 31, 1998 as discussed above, (ii) the repurchase of
Adelphia Class A common stock from FPL, (iii) the pending acquisitions of
FrontierVision, Century, Harron and Telesat's interests in Olympus, and (iv) the
intended securities offering to be completed prior to closing such acquisitions
had all been consummated on April 1, 1997.
The unaudited pro forma financial information gives effect to the pending
acquisitions of FrontierVision, Century, Harron and Telesat's interests in
Olympus under the purchase method of accounting and is based upon the
assumptions and adjustments described in the accompanying notes to the unaudited
pro forma condensed consolidated financial statements presented on the following
pages. The allocations of the total purchase price for the acquisition of
FrontierVision, Century, Harron and Telesat's interests in Olympus are based on
preliminary estimates and are subject to final allocation adjustments.
The pro forma adjustments do not reflect any operating efficiencies and cost
savings that may be achievable with respect to the combined companies. The pro
forma adjustments do not include any adjustments to historical revenues for any
future price changes nor any adjustments to selling and marketing expenses for
any future operating changes.
The unaudited pro forma financial information is not necessarily indicative of
the financial position or operating results that would have occurred had the
stock repurchase, acquisitions and securities offerings been consummated on the
dates for which such transactions are being given effect. The pro forma
adjustments reflecting the consummation of the stock repurchase, acquisitions
and securities offerings are based upon the assumptions set forth in the notes
to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements presented
on the following pages should be read in conjunction with the audited and
unaudited historical financial statements (including the notes thereto) of
Adelphia and Olympus, which are contained in their respective annual reports on
Form 10-K, as amended, and quarterly reports on Form 10-Q as amended, not
included in this current report on Form 8-K/A, and of FrontierVision, Century
and Harron, which are included in the current report on Form 8-K filed on April
20, 1999.
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1998
(Dollars in thousands)
Adelphia Olympus FrontierVision
Pro Forma Pro Forma Pro Forma
Adelphia Olympus FrontierVision Century* Harron Adjustments Adjustments Adjustments
(g) (a) (a) (a) (a) (b) (c) (d)
----------- ---------- -------------- ---------- -------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Property, plant
and equipment--
net.............. $ 1,196,388 $ 355,470 $ 342,754 $ 564,415 $133,222 $ -- $ 24,568 $ --
Intangible
assets--net...... 1,061,730 577,171 820,524 462,356 81,139 -- 104,913 943,408
Cash and cash
equivalents...... 398,644 44,617 7,354 628,162 3,645 872,787 (108,000) (550,000)
Investment in and
amounts due from
Olympus.......... 191,408 -- -- -- -- -- (191,408) --
Other assets--
net.............. 467,591 34,741 43,731 144,531 132,963 14,300 10,782 --
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Total assets.... $ 3,315,761 $1,011,999 $1,214,363 $1,799,464 $350,969 $ 887,087 $ (159,145) $ 393,408
=========== ========== ========== ========== ======== ========= ========== =========
Liabilities,
Preferred Stock,
Common Stock and
Other
Stockholders'
Equity
(Deficiency):
Subsidiary debt.. $ 1,717,240 $ 726,982 $1,355,144 $2,037,582 284,179 $(312,150) $ -- $(234,002)
Parent debt...... 1,810,212 -- -- -- -- 252,300 -- --
Deferred income
taxes............ 109,609 40,951 11,856 3,278 9,626 -- -- --
Other
liabilities...... 253,493 380,013 48,261 147,658 23,858 -- (319,833) 19,826
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Total
liabilities..... 3,890,554 1,147,946 1,415,261 2,188,518 317,663 (59,850) (319,833) (214,176)
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Minority
interests........ 48,784 -- -- 73,888 1,000 -- -- --
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Hyperion
Redeemable
Exchangeable
Preferred Stock.. 228,674 -- -- -- -- -- -- --
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Series A
Cumulative
Redeemable
Exchangeable
Preferred Stock.. 148,191 -- -- -- -- -- -- --
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Convertible
preferred stock,
common stock and
other
stockholders'
equity
(deficiency):
Convertible
preferred stock.. 1 -- -- -- -- 20 -- --
Common stock..... 421 -- -- 1,090 482 174 -- 70
Additional paid-
in capital....... 738,102 -- -- 181,103 8,508 1,101,256 -- 406,616
Accumulated
deficit.......... (1,738,966) -- -- (497,864) 23,316 (5,300) 24,741 --
Treasury stock at
cost and other... -- -- -- (147,271) -- (149,213) -- --
Partners'
deficiency....... -- (135,947) (200,898) -- -- -- 135,947 200,898
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Convertible
preferred stock,
common stock and
other
stockholders'
equity
(deficiency).... (1,000,442) (135,947) (200,898) (462,942) 32,306 946,937 160,688 607,584
----------- ---------- ---------- ---------- -------- --------- ---------- ---------
Total........... $ 3,315,761 $1,011,999 $1,214,363 $1,799,464 $350,969 $ 887,087 $ (159,145) $ 393,408
=========== ========== ========== ========== ======== ========= ========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Century Harron Pro Forma
Pro Forma Pro Forma Adelphia
Adjustments Adjustments Consolidated
(e) (f) (g)
------------ ------------ -------------
<S> <C> <C> <C>
Assets:
Property, plant
and equipment--
net.............. $ 805,941 $ 188,473 $ 3,611,231
Intangible
assets--net...... 4,323,765 1,131,579 9,506,585
Cash and cash
equivalents...... (726,000) (336) 570,873
Investment in and
amounts due from
Olympus.......... -- -- --
Other assets--
net.............. -- (125,559) 723,080
------------ ------------ -------------
Total assets.... $4,403,706 $1,194,157 $14,411,769
============ ============ =============
Liabilities,
Preferred Stock,
Common Stock and
Other
Stockholders'
Equity
(Deficiency):
Subsidiary debt.. $ 100,000 885,591 $ 6,560,566
Parent debt...... -- -- 2,062,512
Deferred income
taxes............ 1,100,000 344,502 1,619,822
Other
liabilities...... -- (2,630) 550,646
------------ ------------ -------------
Total
liabilities..... 1,200,000 1,227,463 10,793,546
------------ ------------ -------------
Minority
interests........ -- (1,000) 122,672
------------ ------------ -------------
Hyperion
Redeemable
Exchangeable
Preferred Stock.. -- -- 228,674
------------ ------------ -------------
Series A
Cumulative
Redeemable
Exchangeable
Preferred Stock.. -- -- 148,191
------------ ------------ -------------
Convertible
preferred stock,
common stock and
other
stockholders'
equity
(deficiency):
Convertible
preferred stock.. -- -- 21
Common stock..... (603) (482) 1,152
Additional paid-
in capital....... 2,559,174 (8,508) 4,986,251
Accumulated
deficit.......... 497,864 (23,316) (1,719,525)
Treasury stock at
cost and other... 147,271 -- (149,213)
Partners'
deficiency....... -- -- --
------------ ------------ -------------
Convertible
preferred stock,
common stock and
other
stockholders'
equity
(deficiency).... 3,203,706 (32,306) 3,118,686
------------ ------------ -------------
Total........... $4,403,706 $1,194,157 $14,411,769
============ ============ =============
<FN>
-----
*As of February 28, 1999.
</FN>
</TABLE>
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1998
(Dollars in thousands, except per share amounts)
(a) Represents historical amounts.
(b) Represents the net effects of: (i) sale on January 14, 1999 of 8,600,000
shares of Adelphia Class A common stock with net proceeds of approximately
$371,450, which was used to repay subsidiary debt, (ii) the offering
completed on January 13, 1999 of $100,000 of 7 1/2% Senior Notes due 2004
and $300,000 of 7 3/4% Senior Notes due 2009, with net proceeds of
approximately $393,700 which was used to repay approximately $147,700 of
parent debt and approximately $246,000 of subsidiary debt, (iii) the
repurchase of Adelphia Class A common stock and Series C Cumulative
Convertible preferred stock for a total of approximately $149,213 from FPL,
(iv) the receipt of net proceeds from the intended securities offerings of
approximately $200,000 of Adelphia 5 1/2% Convertible preferred stock,
$300,000 of Adelphia Class A common stock at an assumed price of $64 per
share and $250,000 of Adelphia Class B common stock at an assumed price of
$64 per share less the underwriting discount and (v) the offering completed
on March 2, 1999 by Hyperion of $300,000 of 12% Senior Subordinated Notes
due 2007, with net proceeds of approximately $292,000 which will be used for
acquisition of its local partners' interests, capital expenditures,
investments in networks, and working capital and general corporate purposes.
(c) Represents the net effects of Adelphia's purchase of Telesat's interests in
Olympus for $108,000 and the associated preliminary adjustments to the
historical balance sheet of Olympus recorded in conjunction with applying
purchase accounting including an initial allocation of $28,237 and $112,946
of the purchase price to Property, plant and equipment--net and Intangible
assets--net, respectively. The purchase by Adelphia of Telesat's interests
in Olympus will result in the consolidation of Olympus with Adelphia;
accordingly, this also includes elimination of all significant intercompany
accounts and balances, reclassification of $10,782 of other affiliate
receivables and the elimination of approximately $24,741 of accrued priority
return expensed by Olympus but not recorded by Adelphia until received.
(d) Represents the net effects of: (i) issuance of 7,000,000 shares of Adelphia
Class A common stock at $58.10 per share, (ii) $550,000 cash portion of the
acquisition, (iii) preliminary adjustments recorded in conjunction with
applying purchase accounting including an initial allocation of $943,408 of
the purchase price to Intangible assets--net, (iv) the elimination of
$234,002 of affiliate debt not assumed in the acquisition and (v) certain
other working capital adjustments.
(e) Represents the net effects of (i) issuance of approximately 48,700,000
shares of Adelphia Class A common stock at $56.30 per share, (ii) $826,000
cash portion of the acquisition, a portion of which is assumed to be funded
under Adelphia's subsidiaries' credit facilities, (iii) preliminary estimate
of deferred tax liability impact due to acquisition and (iv) preliminary
adjustments recorded in conjunction with applying purchase accounting
including an initial allocation of $805,941 and $4,323,765 of the purchase
price to Property, plant and equipment--net and Intangible assets--net,
respectively.
(f) Represents the net effects of: (i) $1,169,770 cash acquisition funded
through additional borrowings under Adelphia's subsidiaries' credit
facilities, net of repayment of existing Harron subsidiary debt, (ii) non-
cable television assets excluded from the acquisition, (iii) preliminary
adjustments recorded in conjunction with applying purchase accounting
including an initial allocation of $196,858 and $1,131,936 of the purchase
price to Property, plant and equipment--net and Intangible assets--net,
respectively and (iv) preliminary estimate of deferred tax liability impact
due to acquisition.
<PAGE>
(g) The historical and pro forma financial information has been amended to
reflect the restatement of previously reported financial results as more
fully described in the Company's Annual Report on Form 10-K/A-2 filed on
December 19, 2000.
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
Year Ended March 31, 1998
(Dollars in thousands, except per share amounts)
Adelphia Olympus FrontierVision
Adelphia Olympus* FrontierVision* Century** Harron* Pro Forma Pro Forma Pro Forma
(a) (a) (a) (a) (a) Adjustments Adjustments Adjustments
--------- --------- --------------- --------- -------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......... $ 524,889 $ 176,363 $145,126 $ 484,736 $112,127 $ -- $ -- $ --
--------- --------- -------- --------- -------- ------- ------- -------
Operating
expenses:
Direct operating
and
programming..... 167,288 56,905 74,314 103,932 42,982 -- -- (21,873)(l)
Selling, general
and
administrative.. 95,731 41,729 4,418 122,307 26,044 9,715(b) (9,566)(i) 21,873 (l)
Depreciation and
amortization.... 145,041 43,337 65,627 154,029 19,852 -- 5,647 (j) 12,746 (m)
--------- --------- -------- --------- -------- ------- ------- -------
Total........... 408,060 141,971 144,359 380,268 88,878 9,715 (3,919) 12,746
--------- --------- -------- --------- -------- ------- ------- -------
Operating income
(loss)........... 116,829 34,392 767 104,468 23,249 (9,715) 3,919 (12,746)
--------- --------- -------- --------- -------- ------- ------- -------
Other income
(expense)
Priority
investment
income from
Olympus......... 47,765 -- -- -- -- (47,765)(c) -- --
Interest
expense--net.... (243,554) (56,750) (70,430) (172,608) (5,658) (36,041)(d) 6,600(k) 22,264(n)
Equity in loss
of Olympus and
other joint ventures.. (66,089) -- -- -- -- 58,627(e) -- --
Equity in loss
of Hyperion
joint ventures.. (12,967) -- -- -- -- -- -- --
Minority
interest in
income of
subsidiaries.... -- -- -- (11,899) -- -- -- --
Hyperion
preferred stock
dividends....... (12,682) -- -- -- -- (14,439)(f) -- --
Gain on sale of
assets.......... 2,538 1,522 -- -- 11,973 -- -- --
Other........... -- 1,085 (57) 1,533 478 -- -- --
--------- --------- -------- --------- -------- ------- ------- -------
Total........... (284,989) (54,143) (70,487) (182,974) 6,793 (39,618) 6,600 22,264
--------- --------- -------- --------- -------- ------- ------- -------
(Loss) income
before income
taxes and
extraordinary loss.. (168,160) (19,751) (69,720) (78,506) 30,042 (49,333) 10,519 9,518
Income tax
benefit
(expense)........ 5,606 (51) -- 624 (12,215) 169,097(g) -- --
--------- --------- -------- --------- -------- ------- ------- -------
(Loss) income
from continuing
operations....... (162,554) (19,802) (69,720) (77,882) 17,827 119,764 10,519 9,518
Dividend
requirements
applicable to
preferred stock.. (18,850) -- -- -- -- (19,775)(h) -- --
--------- --------- -------- --------- -------- ------- ------- -------
(Loss) income
applicable to
common
stockholders from
continuing
operations....... $(181,404) $ (19,802) $(69,720) $ (77,882) $ 17,827 $99,989 $10,519 $ 9,518
========= ========= ======== ========= ======== ======= ======= =======
Basic and diluted
loss from
continuing
operations per
weighted average
share
of common stock
................. $ (6.07)
=========
Weighted average
shares of common
stock outstanding
(in thousands)... 29,875
=========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Century Harron Pro Forma
Pro Forma Pro Forma Adelphia
Adjustments Adjustments Consolidated
------------- -------------- --------------
<S> <C> <C> <C>
Revenues......... $ 123,605(o) $ (8,801)(q) $1,558,045
------------- -------------- --------------
Operating
expenses:
Direct operating
and
programming..... 131,792(o) (4,035)(q) 551,305
Selling, general
and
administrative.. -- (4,445)(q) 307,806
Depreciation and
amortization.... 102,659(p) 46,437(r) 595,375
------------- -------------- --------------
Total........... 234,451 37,957 1,454,486
------------- -------------- --------------
Operating income
(loss)........... (110,846) (46,758) 103,559
------------- -------------- --------------
Other income
(expense)
Priority
investment
income from
Olympus......... -- -- --
Interest
expense--net.... 8,187(o) (70,158)(q) (618,148)
Equity in loss
of Olympus and
other joint ventures.. -- -- (7,462)
Equity in loss
of Hyperion
joint ventures.. -- -- (12,967)
Minority
interest in
income of
subsidiaries.... -- -- (11,899)
Hyperion
preferred stock
dividends....... -- -- (27,121)
Gain on sale of
assets.......... -- -- 16,033
Other........... -- (5,696)(q) (2,657)
------------- -------------- --------------
Total........... 8,187 (75,854) (664,221)
------------- -------------- --------------
(Loss) income
before income
taxes and
extraordinary loss.. (102,659) (122,612) (560,662)
Income tax
benefit
(expense)........ -- 4,649(q) 167,710
------------- -------------- --------------
(Loss) income
from continuing
operations....... (102,659) (117,963) (392,952)
Dividend
requirements
applicable to
preferred stock.. -- -- (38,625)
------------- -------------- --------------
(Loss) income
applicable to
common
stockholders from
continuing
operations....... $(102,659) $(117,963) $ (431,577)
============= ============== ==============
Basic and diluted
loss from
continuing
operations per
weighted average
share
of common stock
................. $ (3.91)(s)
==============
Weighted average
shares of common
stock outstanding
(in thousands)... 110,423(s)
==============
<FN>
-----
*Year ended December 31, 1997.
**Year ended May 31, 1998.
</FN>
</TABLE>
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
Year Ended March 31, 1998
(Dollars in thousands)
(a) Represents historical amounts.
(b) Represents the elimination of allocated overhead costs to Olympus.
(c) Represents the elimination of priority investment income from Olympus.
(d) Gives effect to the application of the net proceeds of (i) approximately
$292,000 from the March 2, 1999 12% Senior Subordinated Notes issued by
Hyperion, (ii) approximately $371,450 from the January 14, 1999 offering of
8,600,000 shares of Adelphia Class A common stock, (iii) approximately
$393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior Notes issued by
Adelphia, (iv) $330,000 from the financing of the Western New York
Partnership, (v) approximately $268,000 from the 1998 offering of 8,805,315
shares of Adelphia Class A common stock, and (vi) approximately $244,000
from the August 27, 1997 offering of 12 1/4% Senior Secured Notes issued by
Hyperion, as if such transactions had occurred April 1, 1997. Also gives
effect to the elimination of $6,600 of interest income received from
Olympus.
(e) Represents the elimination of equity in loss of Olympus.
(f) Gives effect to an increase in Hyperion preferred stock dividends as if the
October 1997 issuance of $200,000 12 7/8% Senior Exchangeable Preferred
Stock had occurred on April 1, 1997.
(g) Represents the estimated income tax provision after giving effect to the
pending acquisitions of FrontierVision, Century, Harron, and Olympus and
related pro forma adjustments.
(h) Gives effect to an increase in Adelphia preferred stock dividends as if the
July 7, 1997 issuance of $150,000 of 13% Cumulative Exchangeable Preferred
Stock and $100,000 of 8 1/8% Series C Cumulative Convertible preferred stock
and the intended sale of $200,000 of Adelphia 5 1/2% Convertible preferred
stock as if they had occurred on April 1, 1997.
(i) Represents the elimination of allocated overhead costs from Adelphia.
(j) Represents the additional depreciation and amortization expense resulting
from the acquisition of Olympus. Pro forma depreciation and amortization is
calculated on a straight-line basis over periods that are consistent with
Adelphia's depreciation and amortization periods. The cost basis of the
purchased assets utilized in these calculations is based on preliminary
asset allocations among property, plant and equipment (primarily operating
plant and equipment depreciated over 5-12 years) and intangible assets
(primarily purchased franchises and goodwill amortized over 40 years) and is
subject to final allocation adjustments.
(k) Represents the elimination of interest expense paid to Adelphia.
(l) Represents reclassification between direct operating and programming and
selling, general and administrative expenses to conform with Adelphia's
presentation.
(m) Represents the additional depreciation and amortization expense resulting
from the acquisition of FrontierVision. Pro forma depreciation and
amortization is calculated on a straight-line basis over periods that are
consistent with Adelphia's accounting policy. The cost basis of the
purchased assets utilized in these calculations is based on a preliminary
asset allocation to intangible assets (primarily purchased franchises and
goodwill amortized over 40 years) and is subject to final allocation
adjustments. Additionally, amount represents pro forma reduction of
depreciation and amortization expense to adjust historical expense amounts
to Adelphia's depreciation and amortization periods.
<PAGE>
(n) Represents the elimination of affiliate interest expense paid by
FrontierVision on affiliate debt not assumed in the acquisition.
(o) Represents reclassification of programming expense from a reduction of
revenues to direct operating and programming expense and reclassification of
interest income from revenues to a decrease in interest expense--net to
conform to Adelphia's presentation.
(p) Represents the additional depreciation and amortization expense resulting
from the acquisition of Century. Pro forma depreciation and amortization is
calculated on a straight-line basis over periods that are consistent with
Adelphia's accounting policy. The cost basis of the purchased assets
utilized in these calculations is based on preliminary asset allocations
among property, plant and equipment (primarily operating plant and equipment
depreciated over 5-12 years) and intangible assets (primarily purchased
franchises and goodwill amortized over 40 years) and is subject to final
allocation adjustments. Additionally, amount represents pro forma reduction
of depreciation and amortization expense to adjust historical expense
amounts to Adelphia's depreciation and amortization periods.
(q) Represents amounts resulting from the non-cable television operations
excluded from the acquisition and the incremental interest expense incurred
from additional borrowings under Adelphia's subsidiaries' credit facilities
to fund the acquisition.
(r) Represents the net effect of depreciation and amortization expense of non-
cable television assets excluded from the acquisition and the additional
depreciation and amortization expense resulting from the acquisition of
Harron. Pro forma depreciation and amortization is calculated on a
straight-line basis over periods that are consistent with Adelphia's
accounting policy. The cost basis of the purchased assets utilized in these
calculations is based on preliminary asset allocations among property, plant
and equipment (primarily operating plant and equipment depreciated over 5-12
years) and intangible assets (primarily purchased franchises and goodwill
amortized over 40 years) and is subject to final allocation adjustments.
(s) Gives effect to the repurchase and issuance of Class A common stock in
connection with: (i) the repurchase of approximately 1,091,524 shares from
FPL, (ii) 8,600,000 shares issued January 14, 1999, (iii) 8,805,315 shares
issued in the 1998 offering, (iv) 7,000,000 shares to be issued in the
FrontierVision acquisition, (v) approximately 48,700,000 shares to be issued
in the Century acquisition, (vi) approximately 8,777,814 shares estimated to
be issued in the intended offering to be completed prior to closing the
acquisitions of FrontierVision, Century, Harron and Telesat's interest in
Olympus, as if such transactions had been consummated on April 1, 1997.
Diluted loss from continuing operations per common share is equal to basic
loss from continuing operations per common share because Adelphia's existing
and expected convertible preferred stock had or would have an antidilutive
effect; however, the convertible preferred stock could have a dilutive
effect on earnings per share in future periods.
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
Nine Months Ended December 31, 1998
(Dollars in thousands, except per share amounts)
Adelphia Olympus
Adelphia Olympus FrontierVision Century* Harron Pro Forma Pro Forma
(s) (a) (a) (a) (a) Adjustments Adjustments
--------- -------- -------------- --------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........ $ 496,014 $164,724 $191,315 $ 387,726 $93,548 $ -- $ --
--------- -------- -------- --------- ------- ------- --------
Operating
expenses:
Direct
operating and
programming.... 167,963 56,586 95,907 85,284 36,728 -- --
Selling,
general and
administrative.. 107,249 39,153 5,216 87,696 23,424 10,456(b) (10,456)(h)
Depreciation
and
amortization... 140,974 39,683 90,608 125,864 16,702 -- 4,235(i)
--------- -------- -------- --------- ------- ------- --------
Total.......... 416,186 135,422 191,731 298,844 76,854 10,456 (6,221)
--------- -------- -------- --------- ------- ------- --------
Operating income
(loss).......... 79,828 29,302 (416) 88,882 16,694 (10,456) 6,221
--------- -------- -------- --------- ------- ------- --------
Other income
(expense)
Priority
investment
income from
Olympus........ 36,000 -- -- -- -- (36,000)(c) --
Interest
expense--net... (180,452) (48,129) (88,667) (143,830) (9,079) (26,829)(d) 7,932(j)
Equity in
(loss) income
of Olympus
and other joint
ventures....... (48,891) -- -- -- -- 49,005(e) --
Equity in loss
of Hyperion
joint
ventures....... (9,580) -- -- -- -- -- --
Minority
interest in
losses (income)
of
subsidiaries... 25,772 -- -- (9,334) -- -- --
Hyperion
preferred stock
dividends...... (21,536) -- -- -- -- -- --
Gain on cable
systems swap..... 21,455 -- -- -- -- -- --
Gain on sale of
assets......... -- 7,215 -- 5,186 -- -- --
Other.......... 1,113 316 (398) -- 5,354 -- --
--------- -------- -------- --------- ------- ------- --------
Total.......... (176,119) (40,598) (89,065) (147,978) (3,725) (13,824) 7,932
--------- -------- -------- --------- ------- ------- --------
(Loss) income
before income
taxes
and extraordinary loss.. (96,291) (11,296) (89,481) (59,096) 12,969 (24,280) 14,153
Income tax
benefit
(expense)....... 6,802 (115) 2,927 19,104 7,345 72,124(f) --
--------- -------- -------- --------- ------- ------- --------
(Loss) income
from continuing
operations...... (89,489) (11,411) (86,554) (39,992) 20,314 47,844 14,153
Dividend
requirements
applicable
to preferred stock.. (20,718) -- -- -- -- (8,250)(g) --
--------- -------- -------- --------- ------- ------- --------
(Loss) income
applicable to
common
stockholders
from continuing
operations...... $(110,207) $(11,411) $(86,554) $ (39,992) $20,314 $39,594 $ 14,153
========= ======== ======== ========= ======= ======= ========
Basic and
diluted loss
from continuing
operations per
weighted average
share of common stock
................ $ (3.04)
=========
Weighted average
shares of common
stock outstanding (in thousands).. 36,226
=========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FrontierVision Century Harron Pro Forma
Pro Forma Pro Forma Pro Forma Adelphia
Adjustments Adjustments Adjustments Consolidated
(s)
--------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Revenues........ $ -- $ 98,208(n) $ (6,688)(p) $1,424,847
--------------- ------------- -------------- ---------------
Operating
expenses:
Direct
operating and
programming.... (35,242)(k) 111,445(n) (3,211)(p) 515,460
Selling,
general and
administrative.. 35,242(k) -- (2,950)(p) 295,030
Depreciation
and
amortization... (31,828)(l) 66,652(o) 35,228(q) 488,118
--------------- ------------- -------------- ---------------
Total.......... (31,828) 178,097 29,067 1,298,608
--------------- ------------- -------------- ---------------
Operating income
(loss).......... 31,828 (79,889) (35,755) 126,239
--------------- ------------- -------------- ---------------
Other income
(expense)
Priority
investment
income from
Olympus........ -- -- -- --
Interest
expense--net... 19,570(m) 13,237(n) (47,783)(p) (504,030)
Equity in
(loss) income
of Olympus
and other joint
ventures....... -- -- -- 114
Equity in loss
of Hyperion
joint
ventures....... -- -- -- (9,580)
Minority
interest in
losses (income)
of
subsidiaries... -- -- -- 16,438
Hyperion
preferred stock
dividends...... -- -- -- (21,536)
Gain on cable
systems swap..... -- -- -- 21,455
Gain on sale of
assets......... -- -- -- 12,401
Other.......... -- -- (7,018)(p) (633)
--------------- ------------- -------------- ---------------
Total.......... 19,570 13,237 (54,801) (485,371)
--------------- ------------- -------------- ---------------
(Loss) income
before income
taxes
and extraordinary loss.. 51,398 (66,652) (90,556) (359,132)
Income tax
benefit
(expense)....... -- -- (8,390)(p) 99,797
--------------- ------------- -------------- ---------------
(Loss) income
from continuing
operations...... 51,398 (66,652) (98,946) (259,335)
Dividend
requirements
applicable
to preferred stock.. -- -- -- (28,968)
--------------- ------------- -------------- ---------------
(Loss) income
applicable to
common
stockholders
from continuing
operations...... $51,398 $(66,652) $(98,946) $ (288,303)
=============== ============= ============== ===============
Basic and
diluted loss
from continuing
operations per
weighted average
share of common stock
................ $ (2.57)(r)
===============
Weighted average
shares of common
stock outstanding (in thousands).. 112,242(r)
===============
<FN>
-----
*Nine months ended February 28, 1999.
</FN>
</TABLE>
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
Nine Months Ended December 31, 1998
(Dollars in thousands)
(a) Represents historical amounts.
(b) Represents the elimination of allocated overhead costs to Olympus.
(c) Represents the elimination of priority investment income from Olympus.
(d) Gives effect to the application of the net proceeds of (i) approximately
$292,000 from the March 2, 1999 12% Senior Subordinated Notes issued by
Hyperion, (ii) approximately $371,450 from the January 14, 1999 offering of
8,600,000 shares of Adelphia Class A common stock, (iii) approximately
$393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior Notes issued by
Adelphia, (iv) $330,000 from the financing of the Western New York
Partnership and (v) approximately $268,000 from the 1998 offering of
8,805,315 shares of Adelphia Class A common stock as if such transactions
had occurred April 1, 1997. Also gives effect to the elimination of $7,932
of interest income received from Olympus.
(e) Represents the elimination of equity in loss of Olympus.
(f) Represents the estimated income tax provision after giving effect to the
pending acquisitions of FrontierVision, Century, Harron, and Olympus and
related pro forma adjustments.
(g) Gives effect to the intended issuance of $200,000 of Adelphia 5 1/2%
convertible preferred stock as if such issuance had occurred on April 1,
1997.
(h) Represents the elimination of allocated overhead costs from Adelphia.
(i) Represents the additional depreciation and amortization expense resulting
from the acquisition of Olympus. Pro forma depreciation and amortization is
calculated on a straight-line basis over periods that are consistent with
Adelphia's accounting policy. The cost basis of the purchased assets
utilized in these calculations is based on preliminary asset allocations
among property, plant and equipment (primarily operating plant and equipment
depreciated over 5-12 years) and intangible assets (primarily purchased
franchises and goodwill amortized over 40 years) and is subject to final
allocation adjustments.
(j) Represents the elimination of interest expense paid to Adelphia.
(k) Represents reclassification between direct operating and programming and
selling, general and administrative expenses to conform with Adelphia's
presentation.
(l) Represents pro forma reduction of FrontierVision historical depreciation and
amortization expense to conform to Adelphia's depreciation and amortization
periods net of additional depreciation and amortization expense resulting
from the acquisition of FrontierVision. Pro forma depreciation and
amortization is calculated on a straight-line basis over periods that are
consistent with Adelphia's accounting policy. The cost basis of the
purchased assets utilized in these calculations is based on a preliminary
asset allocation to intangible assets (primarily purchased franchises and
goodwill amortized over 40 years) and is subject to final allocation
adjustments.
(m) Represents the elimination of affiliate interest expense paid by
FrontierVision on affiliate debt not assumed in the acquisition.
<PAGE>
(n) Represents reclassification of programming expense from a reduction of
revenues to direct operating and programming expense and reclassification of
interest income from revenues to a decrease in interest expense--net to
conform to Adelphia's presentation.
(o) Represents the additional depreciation and amortization expense resulting
from the acquisition of Century. Pro forma depreciation and amortization is
calculated on a straight-line basis over periods that are consistent with
Adelphia's depreciation and amortization periods. The cost basis of the
purchased assets utilized in these calculations is based on preliminary
asset allocations among property, plant and equipment (primarily operating
plant and equipment depreciated over 5-12 years) and intangible assets
(primarily purchased franchises and goodwill amortized over 40 years) and is
subject to final allocation adjustments. Additionally, amount represents pro
forma reduction of depreciation and amortization to adjust historical
expense amounts to Adelphia's depreciation and amortization periods.
(p) Represents the non-cable television operations excluded from the acquisition
and the incremental interest expense incurred from additional borrowings
under Adelphia's subsidiaries' credit facilities to fund the acquisition.
(q) Represents the net effect of depreciation and amortization expense of non-
cable television assets excluded from the acquisition and the additional
depreciation and amortization expense resulting from the acquisition of
Harron. Pro forma depreciation and amortization is calculated on a
straight-line basis over periods that are consistent with Adelphia's
accounting policy. The cost basis of the purchased assets utilized in these
calculations is based on preliminary asset allocations among property, plant
and equipment (primarily operating plant and equipment depreciated over 5-12
years) and intangible assets (primarily purchased franchises and goodwill
amortized over 40 years) and is subject to final allocation adjustments.
(r) Gives effect to the repurchase and issuance of Class A common stock in
connection with: (i) the repurchase of approximately 1,091,524 shares from
FPL, (ii) 8,600,000 shares issued January 14, 1999, (iii) 8,805,315 shares
issued in the 1998 offering, (iv) 7,000,000 shares to be issued in the
FrontierVision acquisition, (v) approximately 48,700,000 shares to be issued
in the Century acquisition and (vi) approximately 8,777,814 shares estimated
to be issued in the intended offering to be completed prior to closing the
acquisitions of FrontierVision, Century, Harron and Telesat's interest in
Olympus, as if such transactions had been consummated on April 1, 1997.
Diluted loss from continuing operations per common share is equal to basic
loss from continuing operations per common share because Adelphia's existing
and expected convertible preferred stock had or would have an antidilutive
effect; however, the convertible preferred stock could have a dilutive
effect on earnings per share in future periods.
(s) The historical and pro forma financial information has been amended to
reflect the restatement of previously reported financial results as more
fully described in the Company's Annual Report on Form 10-K/A-2 filed on
December 19, 2000.
