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) June 22, 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
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 99.06 by Adelphia
Communications Corporation (the "Company") on June 22, 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
----------- -----------
99.06 Unaudited pro forma condensed consolidated financial information
for Adelphia Communications Corporation as of March 31, 1999 (as
restated) and for the nine months ended December 31, 1998 (as
restated) and the three months ended March 31, 1999 (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
----------- -----------
99.06 Unaudited pro forma condensed consolidated financial information
for Adelphia Communications Corporation as of March 31, 1999 (as
restated) and the nine months ended December 31, 1998 (as restated)
and the three months ended March 31, 1999 (as restated). (Filed
Herewith)
<PAGE>
EXHIBIT 99.06
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 March 31, 1999 (as restated) gives pro forma effect to: (i)
the securities offerings completed by Adelphia after March 31, 1999, (ii) the
pending acquisitions by Adelphia of FrontierVision, Century, Harron and the
interests in Olympus held by subsidiaries of FPL Group ("Telesat"), and (iii)
the intended sale by Adelphia of Class B common stock to Highland Holdings (an
entity controlled by members of the family of John J. Rigas, principal
shareholders of Adelphia) to be completed prior to closing all such
acquisitions, as if all such transactions had been consummated on March 31,
1999. The unaudited pro forma condensed consolidated statements of continuing
operations information for the nine months ended December 31, 1998 (as restated)
and the three months ended March 31, 1999 (as restated) have been presented as
if: (i) the financing and securities offerings of Adelphia and its majority
owned subsidiary, Hyperion Telecommunications, Inc. ("Hyperion") completed after
April 1, 1998, including the securities offerings completed by Adelphia after
March 31, 1999, (ii) the pending acquisitions by Adelphia of FrontierVision,
Century, Harron and Telesat's interests in Olympus, and (iii) the intended sale
by Adelphia of Class B common stock to Highland Holdings to be completed prior
to closing all such acquisitions, had all been consummated on April 1, 1998.
The unaudited pro forma financial information gives effect to the pending
acquisitions by Adelphia 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 information presented on
the following pages. The allocations of the purchase prices for the pending
acquisitions 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 or 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 or 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
pending acquisitions and the securities offerings been consummated on the dates
for which such transactions are being given effect. The pro forma adjustments
reflecting the consummation of the pending acquisitions and the 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 information 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 June 22, 1999.
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1999
(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.............. $ 1,407,700 $ 369,050 $ 344,548 $ 564,415 $136,530 $ -- $ 16,630 $ --
Intangible
assets--net...... 1,188,835 571,335 802,581 462,356 82,574 -- 72,845 959,557
Cash and cash
equivalents...... 169,652 2,801 13,715 628,162 4,677 1,417,900 (108,000) (550,000)
Investment in and
amounts due from
Olympus.......... 340,330 -- -- -- -- -- (340,330) --
Other assets--
net.............. 504,519 39,200 41,573 144,531 137,419 5,000 11,772 --
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Total assets.... $ 3,611,036 $ 982,386 $1,202,417 $1,799,464 $361,200 $1,422,900 $(347,083) $ 409,557
=========== ========= ========== ========== ======== ========== ========= =========
Liabilities,
Redeemable
Preferred Stock
and
Stockholders'/
Partners' Equity
(Deficiency):
Subsidiary debt.. $ 1,532,156 $ 550,097 $1,369,132 $2,037,582 293,804 $ (345,000) $ -- $(240,565)
Parent debt...... 2,055,917 -- -- -- -- 350,000 -- --
Deferred income
taxes............ 106,983 41,037 11,161 3,278 9,626 -- -- --
Other
liabilities...... 204,068 540,460 50,881 147,658 19,646 -- (473,846) 14,679
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Total
liabilities..... 3,899,124 1,131,594 1,431,174 2,188,518 323,076 5,000 (473,846) (225,886)
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Minority
interests........ 34,488 -- -- 73,888 1,000 -- -- --
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Hyperion
Redeemable
Exchangeable
Preferred Stock.. 236,293 -- -- -- -- -- -- --
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Series A
Cumulative
Redeemable
Exchangeable
Preferred Stock.. 148,234 -- -- -- -- -- -- --
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Stockholders'/Partners'
equity
(deficiency):
Convertible
preferred stock.. 1 -- -- -- -- 29 -- --
Common stock..... 542 -- -- 1,090 482 142 -- 70
Additional paid-
in capital....... 1,281,070 -- -- 181,103 13,017 1,417,729 (22,445) 406,616
Retained earnings
(accumulated
deficit)......... (1,781,404) -- -- (497,864) 23,625 -- -- --
Class A common
stock held in
escrow........... (58,099) -- -- -- -- -- -- --
Treasury stock,
at cost and
other............ (149,213) -- -- (147,271) -- -- -- --
Partners'
deficiency....... -- (149,208) (228,757) -- -- -- 149,208 228,757
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Stockholders'/Partners'
equity
(deficiency).... (707,103) (149,208) (228,757) (462,942) 37,124 1,417,900 126,763 635,443
----------- --------- ---------- ---------- -------- ---------- --------- ---------
Total........... $ 3,611,036 $ 982,386 $1,202,417 $1,799,464 $361,200 $1,422,900 $(347,083) $ 409,557
=========== ========= ========== ========== ======== ========== ========= =========
</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 $ 186,578 $ 3,831,392
Intangible
assets--net...... 4,323,765 1,119,526 9,583,374
Cash and cash
equivalents...... (826,000) (580,451) 172,456
Investment in and
amounts due from
Olympus.......... -- -- --
Other assets--
net.............. -- (129,348) 754,666
------------ ------------ -------------
Total assets.... $4,303,706 $ 596,305 $14,341,888
============ ============ =============
Liabilities,
Redeemable
Preferred Stock
and
Stockholders'/
Partners' Equity
(Deficiency):
Subsidiary debt.. $ -- $ 295,969 $ 5,493,175
Parent debt...... -- -- 2,405,917
Deferred income
taxes............ 1,100,000 340,838 1,612,923
Other
liabilities...... -- (2,378) 501,168
------------ ------------ -------------
Total
liabilities..... 1,100,000 634,429 10,013,183
------------ ------------ -------------
Minority
interests........ -- (1,000) 108,376
------------ ------------ -------------
Hyperion
Redeemable
Exchangeable
Preferred Stock.. -- -- 236,293
------------ ------------ -------------
Series A
Cumulative
Redeemable
Exchangeable
Preferred Stock.. -- -- 148,234
------------ ------------ -------------
Stockholders'/Partners'
equity
(deficiency):
Convertible
preferred stock.. -- -- 30
Common stock..... (603) (482) 1,241
Additional paid-
in capital....... 2,559,174 (13,017) 5,823,247
Retained earnings
(accumulated
deficit)......... 497,864 (23,625) (1,781,404)
Class A common
stock held in
escrow........... -- -- (58,099)
Treasury stock,
at cost and
other............ 147,271 -- (149,213)
Partners'
deficiency....... -- -- --
------------ ------------ -------------
Stockholders'/Partners'
equity
(deficiency).... 3,203,706 (37,124) 3,835,802
------------ ------------ -------------
Total........... $4,303,706 $ 596,305 $14,341,888
============ ============ =============
<FN>
-----
*As of February 28, 1999.
</FN>
</TABLE>
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1999
(Dollars in thousands, except per share amounts)
(a) Represents historical amounts.
(b) Represents the net effects of: (i) sale on April 28, 1999 of $350,000 of 7
7/8% Senior Notes due 2009 with net proceeds of approximately $345,000,
which were used to repay subsidiary debt, (ii) sale on April 28, 1999 of
8,000,000 shares of Adelphia Class A common stock with net proceeds of
approximately $485,500, which Adelphia intends to use to fund one or more of
the pending acquisitions, (iii) sale on April 30, 1999 and May 14, 1999 of
an aggregate 2,875,000 shares of Adelphia 5 1/2% Series D convertible
preferred stock with net proceeds of approximately $557,000, which Adelphia
intends to use to fund one or more of the pending acquisitions and (iv)
receipt of net proceeds from the intended offering of $375,000 of Adelphia
Class B common stock to Highland Holdings (which is the maximum commitment)
at an assumed price of $60.76 per share.
(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 $20,206 and $80,822
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
transactions.
(d) Represents the net effects of: (i) issuance of 7,000,000 shares of Adelphia
Class A common stock at $58.10 per share (the average of the closing prices
of Adelphia Class A common stock for the three trading days before and three
trading days after the date of the acquisition agreement), (ii) $550,000
cash portion of the acquisition, (iii) preliminary adjustments recorded in
conjunction with applying purchase accounting including an initial
allocation of $959,557 to Intangible assets--net, (iv) the elimination of
$240,565 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 (the average of
the closing prices of Adelphia Class A common stock for the three trading
days before and three trading days after the date of the merger agreement),
(ii) $826,000 cash portion of the acquisition, (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 to Property,
plant and equipment--net and Intangible assets-- net, respectively.
(f) Represents the net effects of: (i) approximately $1,170,000 acquisition
price funded with cash and 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 $194,764 and
$1,119,526 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.
(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
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 -- 3,031(i)
--------- -------- -------- --------- ------- ------- --------
Total.......... 416,186 135,422 191,731 298,844 76,854 10,456 (7,425)
--------- -------- -------- --------- ------- ------- --------
Operating income
(loss).......... 79,828 29,302 (416) 88,882 16,694 (10,456) 7,425
--------- -------- -------- --------- ------- ------- --------
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) (29,363)(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) (16,358) 7,932
--------- -------- -------- --------- ------- ------- --------
(Loss) income
before income
taxes
and extraordinary loss.. (96,291) (11,296) (89,481) (59,096) 12,969 (26,814) 15,357
Income tax
benefit
(expense)....... 6,802 (115) 2,927 19,104 7,345 63,441(f) --
--------- -------- -------- --------- ------- ------- --------
(Loss) income
from continuing
operations...... (89,489) (11,411) (86,554) (39,992) 20,314 36,627 15,357
Dividend
requirements
applicable
to preferred stock.. (20,718) -- -- -- -- (23,719)(g) --
--------- -------- -------- --------- ------- ------- --------
(Loss) income
applicable to
common
stockholders/partners
from continuing
operations...... $(110,207) $(11,411) $(86,554) $ (39,992) $20,314 $12,908 $ 15,357
========= ======== ======== ========= ======= ======= ========
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... (31,727)(l) 66,652(o) 34,843(q) 486,630
--------------- ------------- -------------- ---------------
Total.......... (31,727) 178,097 28,682 1,297,120
--------------- ------------- -------------- ---------------
Operating income
(loss).......... 31,727 (79,889) (35,370) 127,727
--------------- ------------- -------------- ---------------
Other income
(expense)
Priority
investment
income from
Olympus........ -- -- -- --
Interest
expense--net... 19,570(m) 13,237(n) (21,928)(p) (480,709)
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 (28,946) (462,050)
--------------- ------------- -------------- ---------------
(Loss) income
before income
taxes
and extraordinary loss.. 51,297 (66,652) (64,316) (334,323)
Income tax
benefit
(expense)....... -- -- (8,390)(p) 91,114
--------------- ------------- -------------- ---------------
(Loss) income
from continuing
operations...... 51,297 (66,652) (72,706) (243,209)
Dividend
requirements
applicable
to preferred stock.. -- -- -- (44,437)
--------------- ------------- -------------- ---------------
(Loss) income
applicable to
common
stockholders/partners
from continuing
operations...... $ 51,297 $(66,652) $(72,706) $ (287,646)
=============== ============= ============== ===============
Basic and
diluted loss
from continuing
operations per
weighted average
share of common stock
................ $ (2.45)(r)
===============
Weighted average
shares of common
stock outstanding (in thousands).. 117,619(r)
===============
<FN>
-----
*Nine months ended February 28, 1999.
</FN>
</TABLE>
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO 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
$295,000 from the March 2, 1999 12% Senior Subordinated Notes issued by
Hyperion, (ii) approximately $345,000 from the April 28, 1999 7 7/8% Senior
Notes issued by Adelphia, (iii) approximately $371,450 from the January 14,
1999 offering of 8,600,000 shares of Adelphia Class A common stock, (iv)
approximately $393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior
Notes issued by Adelphia, (v) $330,000 from the December 30, 1998 financing
of the Western New York Partnership and (vi) approximately $268,000 from the
1998 offering of 8,805,315 shares of Adelphia Class A common stock, as if
such transactions had occurred on April 1, 1998. 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 effect on the estimated income tax provision of the
pending acquisitions of FrontierVision, Century, Harron and Telesat's
interests in Olympus, and related pro forma adjustments.
(g) Gives effect to the April 30, 1999 and May 14, 1999 sales of an aggregate
$575,000 of Adelphia 5 1/2% Series D convertible preferred stock as if such
sales had occurred on April 1, 1998.
(h) Represents the elimination of overhead costs allocated from Adelphia.
(i) Represents the additional depreciation and amortization expense resulting
from the acquisition of Telesat's interests in Olympus. Pro forma
depreciation and amortization is calculated on a straight-line basis
consistent with Adelphia's accounting policy and 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 to 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 consistent with
Adelphia's accounting policy and with Adelphia's depreciation and
amortization periods. 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.
<PAGE>
(m) Represents the elimination of affiliate interest expense paid by
FrontierVision on affiliate debt not assumed in the acquisition.
(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 consistent with Adelphia's accounting
policy and 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 to 12 years) and intangible
assets (primarily purchased franchises and goodwill amortized over 40 years)
and is subject to final allocation adjustments.
(p) 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.
(q) Represents the net effect of depreciation and amortization expense of non-
cable television assets excluded from the acquisition of Harron 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 consistent with Adelphia's accounting policy and
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 to 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 Adelphia Class A common stock
in connection with: (i) repurchase of approximately 1,091,524 shares from
Telesat, (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) 8,000,000 shares issued April 28,
1999, and (vii) intended sale of 6,171,824 shares of Adelphia Class B common
stock to Highland Holdings to be completed prior to completion of closing
the acquisitions of Century, FrontierVision, Harron and Telesat's interests
in Olympus, as if such transactions had been consummated on April 1, 1998.
Diluted loss from continuing operations per common share is equal to basic
loss from continuing operations per common share because Adelphia's
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.
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
Three Months Ended March 31, 1999
(Dollars in thousands, except per share amounts)
Adelphia Olympus FrontierVision
Adelphia Olympus FrontierVision Century* Harron Pro Forma Pro Forma Pro Forma
(s) (a) (a) (a) (a) Adjustments Adjustments Adjustments
-------- -------- -------------- -------- ------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......... $201,604 $ 64,866 $ 72,417 $131,278 $34,764 $ -- $ -- $ --
-------- -------- -------- -------- ------- -------- ------- --------
Operating
expenses:
Direct operating
and
programming..... 67,295 22,952 38,272 29,820 13,687 -- -- (14,637)(k)
Selling, general
and
administrative.. 49,111 15,285 1,740 29,093 8,972 3,543(b) (3,543)(h) 14,637(k)
Depreciation and
amortization.... 56,863 18,259 30,329 43,290 7,793 -- 1,010(i) (10,702)(l)
-------- -------- -------- -------- ------- -------- ------- --------
Total........... 173,269 56,496 70,341 102,203 30,452 3,543 (2,533) (10,702)
-------- -------- -------- -------- ------- -------- ------- --------
Operating
income........... 28,335 8,370 2,076 29,075 4,312 (3,543) 2,533 10,702
-------- -------- -------- -------- ------- -------- ------- --------
Other income
(expense)
Priority
investment
income from
Olympus......... 12,000 -- -- -- -- (12,000)(c) -- --
Interest
expense--net.... (67,464) (17,344) (31,988) (47,816) (4,173) (12,114)(d) 5,269(j) 6,563(m)
Equity in loss
of Olympus and
other joint ventures.. (14,861) -- -- -- -- 13,873(e) -- --
Equity in loss
of Hyperion
joint ventures.. (3,803) -- -- -- -- -- -- --
Minority
interest in
losses (income)
of
subsidiaries.... 12,914 -- -- (2,870) -- -- -- --
Hyperion
preferred stock
dividends....... (7,619) -- -- -- -- -- -- --
Gain (loss) on
sale of assets.. 2,354 -- -- (39) -- -- -- --
Other........... -- -- 1,358 -- 180 -- -- --
-------- -------- -------- -------- ------- -------- ------- --------
Total........... (66,479) (17,344) (30,630) (50,725) (3,993) (10,241) 5,269 6,563
-------- -------- -------- -------- ------- -------- ------- --------
(Loss) income
before income
taxes and
extraordinary loss.. (38,144) (8,974) (28,554) (21,650) 319 (13,784) 7,802
17,265
Income tax
benefit
(expense)........ 2,897 (86) 695 27,621 (10) (3,024)(f) -- --
-------- -------- -------- -------- ------- -------- ------- --------
(Loss) income
from continuing
operations....... (35,247) (9,060) (27,859) 5,971 309 (16,808) 7,802 17,265
Dividend
requirements
applicable to
preferred stock.. (6,500) -- -- -- -- (7,906)(g) -- --
-------- -------- -------- -------- ------- -------- ------- --------
(Loss) income
applicable to
common
stockholders/partners
from continuing
operations....... $(41,747) $ (9,060) $(27,859) $ 5,971 $ 309 $(24,714) $ 7,802 $ 17,265
======== ======== ======== ======== ======= ======== ======= ========
Basic and diluted
loss from
continuing
operations per
weighted average
share
of common stock
................. $ (0.80)
========
Weighted average
shares of common
stock outstanding
(in thousands)... 52,019
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Century Harron Pro Forma
Pro Forma Pro Forma Adelphia
Adjustments Adjustments Consolidated
(s)
------------- -------------- --------------
<S> <C> <C> <C>
Revenues......... $ 33,498(n) $ (2,055)(p) $ 536,372
------------- -------------- --------------
Operating
expenses:
Direct operating
and
programming..... 39,310(n) (967)(p) 195,732
Selling, general
and
administrative.. -- (1,955)(p) 116,883
Depreciation and
amortization.... 20,882(o) 11,653(q) 179,377
------------- -------------- --------------
Total........... 60,192 8,731 491,992
------------- -------------- --------------
Operating
income........... (26,694) (10,786) 44,380
------------- -------------- --------------
Other income
(expense)
Priority
investment
income from
Olympus......... -- -- --
Interest
expense--net.... 5,812(n) (6,163)(p) (169,418)
Equity in loss
of Olympus and
other joint ventures.. -- -- (988)
Equity in loss
of Hyperion
joint ventures.. -- -- (3,803)
Minority
interest in
losses (income)
of
subsidiaries.... -- -- 10,044
Hyperion
preferred stock
dividends....... -- -- (7,619)
Gain (loss) on
sale of assets.. -- -- 2,315
Other........... -- (393)(p) 1,145
------------- -------------- --------------
Total........... 5,812 (6,556) (168,324)
------------- -------------- --------------
(Loss) income
before income
taxes and
extraordinary loss.. (20,882) (17,342) (123,944)
Income tax
benefit
(expense)........ -- 11(p) 28,104
------------- -------------- --------------
(Loss) income
from continuing
operations....... (20,882) (17,331) (95,840)
Dividend
requirements
applicable to
preferred stock.. -- -- (14,406)
------------- -------------- --------------
(Loss) income
applicable to
common
stockholders/partners
from continuing
operations....... $(20,882) $(17,331) $(110,246)
============= ============== ==============
Basic and diluted
loss from
continuing
operations per
weighted average
share
of common stock
................. $ (0.91)(r)
==============
Weighted average
shares of common
stock outstanding
(in thousands)... 120,755(r)
==============
<FN>
-----
*Three 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
Three Months Ended March 31, 1999
(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
$295,000 from the March 2, 1999 12% Senior Subordinated Notes issued by
Hyperion, (ii) approximately $345,000 from the April 28, 1999 7 7/8% Senior
Notes issued by Adelphia, (iii) approximately $371,450 from the January 14,
1999 offering of 8,600,000 shares of Adelphia Class A common stock and (iv)
approximately $393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior
Notes issued by Adelphia, as if such transactions had occurred on April 1,
1998. Also gives effect to the elimination of $5,269 of interest income
received from Olympus.
(e) Represents the elimination of equity in loss of Olympus.
(f) Represents the estimated effect on the estimated income tax provision of the
pending acquisitions of FrontierVision, Century, Harron and Telesat's
interests in Olympus, and related pro forma adjustments.
(g) Gives effect to the April 30, 1999 and May 14, 1999 sales of an aggregate
$575,000 of Adelphia 5 1/2% Series D convertible preferred stock as if such
sales had occurred on April 1, 1998.
(h) Represents the elimination of overhead costs allocated from Adelphia.
(i) Represents the additional depreciation and amortization expense resulting
from the acquisition of Telesat's interests in Olympus. Pro forma
depreciation and amortization is calculated on a straight-line basis
consistent with Adelphia's accounting policy and 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 to 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 consistent with
Adelphia's accounting policy and with Adelphia's depreciation and
amortization periods. 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.
<PAGE>
(m) Represents the elimination of affiliate interest expense paid by
FrontierVision on affiliate debt not assumed in the acquisition.
(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 consistent with Adelphia's accounting
policy and 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 to 12 years) and intangible
assets (primarily purchased franchises and goodwill amortized over 40 years)
and is subject to final allocation adjustments.
(p) 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.
(q) Represents the net effect of depreciation and amortization expense of non-
cable television assets excluded from the acquisition of Harron 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 consistent with Adelphia's accounting policy and
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 to 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 Adelphia Class A common stock
in connection with: (i) repurchase of approximately 1,091,524 shares from
Telesat, (ii) 8,600,000 shares issued January 14, 1999, (iii) 7,000,000
shares to be issued in the FrontierVision acquisition, (iv) approximately
48,700,000 shares to be issued in the Century acquisition, (v) 8,000,000
shares issued April 28, 1999, and (vi) the intended sale of 6,171,824 shares
of Adelphia Class B common stock to Highland Holdings to be completed prior
to completion of closing the acquisitions of Century, FrontierVision,
Harron, and Telesat's interests in Olympus as if such transactions had been
consummated on April 1, 1998. Diluted loss from continuing operations per
common share is equal to basic loss from continuing operations per common
share because Adelphia's 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.
