<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
--------------------------
Date of Report (Date of
earliest event reported): May 19, 1998
INTERMEDIA COMMUNICATIONS INC.
(Exact name of registrant as specified in its charter)
Delaware 59-2913586
(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
0-20135
(Commission File Number)
3625 Queen Palm Drive, Tampa, Florida 33619-1309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 829-0011
<PAGE> 2
Item 7. Financial Statements and Exhibits
Exhibit 99.4 of the Current Report on Form 8-K, dated May 20, 1998, of
Intermedia Communications Inc., a Delaware corporation, is hereby replaced in
its entirety with Exhibit 99 attached hereto.
Exhibit 99 Unaudited Pro Forma Condensed Consolidated Financial
Statements
2 of 5
<PAGE> 3
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: June, 1998
INTERMEDIA COMMUNICATIONS INC.
(Registrant)
By: /s/ Robert M. Manning
Name: Robert M. Manning
Title: Senior Vice President and Chief
Financial Officer
3 of 5
<PAGE> 4
EXHIBIT INDEX
Exhibit Page
No. Description No.
Exhibit 99 Unaudited Pro Forma Condensed
Consolidated Financial
Statements. 5
4 of 5
<PAGE> 1
EXHIBIT 99
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Unaudited Pro Forma Condensed Consolidated Financial
Statements -- Summary..................................... F-2
Unaudited Pro Forma Condensed Consolidated Balance
Sheet -- March 31, 1998................................... F-3
Notes to Unaudited Pro Forma Condensed Consolidated Balance
Sheet..................................................... F-4
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1997........... F-5
Notes to Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the year ended December 31,
1997...................................................... F-6
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the three months ended March 31, 1998...... F-8
Notes to Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the three months ended March
31, 1998.................................................. F-9
</TABLE>
F-1
<PAGE> 2
INTERMEDIA COMMUNICATIONS INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY
The accompanying unaudited pro forma condensed consolidated balance sheet
of Intermedia Communications Inc. (Intermedia) at March 31, 1998, includes the
historical and pro forma effects of the acquisition of National
Telecommunications, Inc. Companies (collectively, National), which was
consummated on April 30, 1998. The unaudited pro forma condensed consolidated
statements of operations for the three months ended March 31, 1998 and the year
ended December 31, 1997, have been prepared to reflect the aforementioned
purchase transactions, as well as the historical and pro forma effects of the
acquisitions of Shared Technologies Fairchild, Inc. (STFI), which was
consummated on March 10, 1998, the Long Distance Savers Group of Companies
(collectively, LDS), which was consummated on March 31, 1998, and DIGEX,
Incorporated (DIGEX), which was consummated in July 1997 and the March, July,
October and December 1997 Offerings, as if they were consummated on January 1,
1997.
The pro forma effects are based on the historical financial statements of
the acquired businesses giving effect to these transactions under the purchase
method of accounting. As such, the total cost of all acquisitions have or will
be allocated to the net tangible and intangible assets acquired and liabilities
assumed based upon their respective fair values at the effective date of each
acquisition. Such allocations and the related amortization periods for purchase
transactions recently consummated will be based on valuations or other data
which have not yet been completed or obtained. Accordingly, the allocations
reflected in the pro forma financial statements are preliminary and subject to
revision.
The unaudited pro forma condensed consolidated financial statements are not
intended to purport to be indicative of the actual results of operations or
financial position that would have been achieved had the acquisitions or
offerings in fact been consummated at the beginning of the periods presented or
on March 31, 1998. Such pro forma financial information should be read in
conjunction with the Consolidated Financial Statements and Notes of Intermedia.
F-2
<PAGE> 3
INTERMEDIA COMMUNICATIONS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
-----------------------
(A) (B) PRO FORMA PRO FORMA
CONSOLIDATED NATIONAL ADJUSTMENTS TOTALS
------------ -------- ----------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................... $ 335,260 $ 3,425 $(63,083)(c) $ 275,602
Restricted investments....................... 7,534 7,534
Accounts receivable, net..................... 114,200 10,060 124,260
Prepaid expenses and other current assets.... 18,281 18,281
---------- ------- -------- ----------
Total current assets................. 475,275 13,485 (63,083) 425,677
Telecommunications and other equipment......... 1,120,706 6,164 (2,551)(d) 1,124,319
Less accumulated depreciation.................. (107,918) (2,551) 2,551(d) (107,918)
---------- ------- -------- ----------
Telecommunications and other equipment, net.... 1,012,788 3,613 0 1,016,401
Intangible assets, net......................... 894,552 0 141,742(e) 1,041,394
5,100(f)
Other assets................................... 43,140 602 43,742
---------- ------- -------- ----------
Total assets......................... $2,425,755 $17,700 $ 83,759 $2,527,214
========== ======= ======== ==========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable............................. $ 87,337 $ 6,573 $ 93,910
Other accrued expenses....................... 80,422 1,037 81,459
Current portion of long-term debt and capital
lease obligations......................... 8,442 509 $ (509)(g) 8,442
---------- ------- -------- ----------
Total current liabilities............ 176,201 8,119 (509) 183,811
Long-term debt and capital lease obligations... 1,733,110 2,269 (2,269)(g) 1,733,110
Series B redeemable exchangeable preferred
stock........................................ 334,742 334,742
Series D redeemable exchangeable preferred
stock........................................ 169,936 169,936
Series E junior convertible preferred stock.... 196,759 196,759
Stockholders' equity (deficiency):
Common stock................................. 205 5 (5)(h) 220
15(i)
Additional paid-in capital................... 390,565 1,811 (1,811)(h) 484,399
88,734(i)
5,100(f)
Retained earnings (accumulated deficit)...... (567,863) 5,496 (5,496)(h) (567,863)
Deferred compensation........................ (7,900) (7,900)
---------- ------- -------- ----------
Total stockholders' equity
(deficiency)....................... (184,993) 7,312 86,537 (91,144)
---------- ------- -------- ----------
Total liabilities, redeemable
preferred stock and stockholders'
equity (deficiency)................ $2,425,755 $17,700 $ 83,759 $2,527,214
========== ======= ======== ==========
</TABLE>
See Accompanying Notes
F-3
<PAGE> 4
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(MARCH 31, 1998)
(DOLLARS AND SHARES IN THOUSANDS)
(a) This column represents the historical consolidated balance sheet of
Intermedia at March 31, 1998.
(b) This column represents the historical combined balance sheet of
National at March 31, 1998.
(c) This adjustment represents the cash portion of the $151,832 purchase
price for National, consisting of 1,455 shares of the Company's common stock
valued at $88,749 and $63,083 in cash.
(d) This adjustment represents the elimination of the National accumulated
depreciation as fixed assets will be recorded at fair values, which the Company
believes approximate net book values on the date of acquisition.
(e) This adjustment represents the excess of the total purchase price for
National over the fair values of the net tangible and identifiable intangible
assets acquired. The allocation reflected in this proforma financial statement
is preliminary and subject to change based upon the completion of asset
valuations.
(f) These adjustments represent the elimination of imputed interest related
to the STFI purchase resulting from the recognition of the purchase on the
January 1, 1998 effective date which preceded the consummation date.
(g) These adjustments represent payments made by Intermedia to retire the
debt of National. Such Payments are included in the purchase price noted at (c)
above.
(h) These adjustments represent the elimination of stockholders' equity of
National for pro forma combining purposes.
(i) These adjustments represent the portion of the National purchase price
paid in stock.
F-4
<PAGE> 5
INTERMEDIA COMMUNICATIONS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A)
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL
----------------------- -------------------------------
(B) (C) PRO FORMA PRO FORMA (D) (E) (F)
CONSOLIDATED DIGEX ADJUSTMENTS SUB TOTALS STFI LDS NATIONAL
------------ -------- ----------- ---------- --------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues....................... $ 247,899 $ 19,646 $ 267,545 $ 181,827 $122,267 $ 65,243
Costs and expenses:
Network expenses, facilities
administration and
maintenance costs.......... 199,139 19,588 (5,400)(g) 213,327 100,356 80,203 47,969
Selling, general and
administrative............. 98,598 18,506 (374)(h) 116,730 68,482 31,486 10,428
Depreciation and
amortization............... 53,613 3,390 4,741(i) 61,744 19,916 2,895 995
Charge off of purchased in-
process R&D................ 60,000 60,000
--------- -------- --------- --------- --------- -------- --------
411,350 41,484 (1,033) 451,801 188,754 114,584 59,392
--------- -------- --------- --------- --------- -------- --------
Income (loss) from
operations................. (163,451) (21,838) 1,033 (184,256) (6,927) 7,683 5,851
Other income (expense):
Interest expense........... (60,662) (784) (76,491)(j) (137,937) (29,775) (896) (145)
Interest and other income
(expense)................ 26,824 486 (5,120)(k) 22,190 (62,428) 4,908 212
--------- -------- --------- --------- --------- -------- --------
Income (loss) before income
taxes and extraordinary
item......................... (197,289) (22,136) (80,578) (300,003) (99,130) 11,695 5,918
Income tax (provision)
benefit...................... -- -- -- (380)
--------- -------- --------- --------- --------- -------- --------
Income (loss) before
extraordinary item........... (197,289) (22,136) (80,578) (300,003) (99,510) 11,695 5,918
Extraordinary income (loss).... (43,834) (43,834)
--------- -------- --------- --------- --------- -------- --------
Net income (loss).............. (241,123) (22,136) (80,578) (343,837) (99,510) 11,695 5,918
Preferred stock dividends and
accretions................... (43,742) -- (28,108)(l) (71,850) (4,628)
--------- -------- --------- --------- --------- -------- --------
Net loss attributable to common
stockholders................. $(284,865) $(22,136) $(108,686) $(415,687) $(104,138) $ 11,695 $ 5,918
========= ======== ========= ========= ========= ======== ========
Net loss per share............. $ (17.09) $ (24.94)
========= =========
Weighted average number of
shares ...................... 16,670 16,670
========= =========
EBITDA(t)...................... $ (49,838) $ (62,512)
========= =========
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENTS TOTALS(A)
----------- ---------
<S> <C> <C>
Revenues....................... $ 636,882
Costs and expenses:
Network expenses, facilities
administration and
maintenance costs.......... 441,855
Selling, general and
administrative............. 227,126
Depreciation and
amortization............... 43,037(m) 128,587
Charge off of purchased in-
process R&D................ 60,000
-------- ---------
43,037 857,568
-------- ---------
Income (loss) from
operations................. (43,037) (220,686)
Other income (expense):
Interest expense........... 15,974(n) (141,513)
11,121(o)
145(p)
Interest and other income
(expense)................ (20,677)(k) 6,505
62,300(q)
-------- ---------
Income (loss) before income
taxes and extraordinary
item......................... 25,826 (355,694)
Income tax (provision)
benefit...................... (380)
-------- ---------
Income (loss) before
extraordinary item........... 25,826 (356,074)
Extraordinary income (loss).... (43,834)
-------- ---------
Net income (loss).............. 25,826 (399,908)
Preferred stock dividends and
accretions................... 4,628(r) (71,850)
-------- ---------
Net loss attributable to common
stockholders................. $ 30,454 $(471,758)
======== =========
Net loss per share............. $ (22.68)
=========
Weighted average number of
shares ...................... 20,805(s)
=========
EBITDA(t)...................... $ (32,099)
=========
</TABLE>
See Accompanying Notes
F-5
<PAGE> 6
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(DOLLARS AND SHARES IN THOUSANDS)
(a) The unaudited pro forma condensed consolidated statement of operations
for the year ended December 31, 1997 does not give effect to any potential cost
savings and synergies that could result from the DIGEX, STFI, LDS or National
acquisitions. The effect of the write-off of intangible assets associated with
the STFI acquisition, consisting of in-process research and development of $85.0
million, has not been reflected in the statement as it is a non-recurring
charge. The allocations of purchase price to the fair values of assets and
liabilities of STFI, LDS and National is preliminary for purposes of these pro
forma financial statements.
(b) This column represents the historical consolidated results of
operations for Intermedia for the year ended December 31, 1997.
(c) This column represents the operating results for DIGEX for the six
months ended June 30, 1997.
(d) This column represents the historical results of operations of STFI for
the year ended December 31, 1997.
(e) This column represents the historical results of operations of LDS for
the year ended December 31, 1997.
(f) This column represents the historical results of operations of National
for the year ended December 31, 1997.
(g) This adjustment represents the reduction of network lease expense due
to unfavorable lease terms accrued for in purchase accounting.
(h) This adjustment represents the reversal of DIGEX's amortization of
deferred compensation associated with stock compensation preceding the purchase.
(i) This adjustment represents the amortization expense of intangible
assets related to DIGEX.
(j) This adjustment represents interest expense, including amortization of
debt discount and finance costs, of $24,400 on the 11 1/4% Senior Discount Notes
Due 2007 that were issued in July 1997 (net of $10,800 reduction of interest due
to the retirement of the 13 1/2% Senior Notes), $19,800 on 8 7/8% Senior Notes
due 2007 that were issued in October 1997 and $43,100 on 8 1/2% Senior Notes due
2008 that were issued in December 1997 as if the Notes had been issued January
1, 1997.
(k) Where acquisitions were paid all or partially in cash, interest income
was reduced to reflect the absence of the cash or investments for the full year.
(l) This adjustment increases the preferred stock dividends and accretions
to amounts that would have been recorded if Intermedia's Series B, D and E
preferred stock had been outstanding for the entire period.
(m) This adjustment represents the additional amortization expense that
would have been incurred in connection with the STFI, LDS and National
acquisitions. For purposes of the pro forma presentation, it is assumed that the
excess of the purchase price over the net tangible assets acquired will
ultimately be allocated to either identifiable intangibles such as developed
technology and customer lists or goodwill with the weighted average amortization
period of 20 years.
(n) This adjustment represents the elimination of interest expense in
STFI's historical financial statements related to the 12 1/4% Senior
subordinated Discount Notes purchased by the Company.
(o) This adjustment represents the elimination of interest expense in
STFI's historical financial statements related to the Credit Facility Term Loans
and Revolving Credit Facility paid by the Company upon closing of the
acquisition.
F-6
<PAGE> 7
(p) This adjustment represents the elimination of interest expense in
National's historical financial statements related to the outstanding debt paid
by the Company at closing.
(q) This adjustment represents the elimination of the following
non-recurring charges related to the STFI's terminated merger agreement with
Tel-Save, Inc. Termination of merger agreement -- $15,000; Termination of long
distance service contract -- $36,000; and Retirement of outstanding options held
by Tel-Save, Inc. -- $11,300
(r) This adjustment represents the elimination of preferred stock dividends
and accretions of STFI.
(s) Includes the effect of 2,680 shares issued for LDS and 1,455 shares
issued for National.
(t) EBITDA consists of earnings (loss) before interest expense, interest
and other income, income tax (provision) benefit, depreciation, amortization and
one-time and certain non-recurring charges, such as the charge for in-process R
& D.
F-7
<PAGE> 8
INTERMEDIA COMMUNICATIONS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A)
THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------
(B) (C) (D) PRO FORMA PRO FORMA
CONSOLIDATED LDS NATIONAL ADJUSTMENTS TOTALS(A)
------------ ------- -------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues................................................. $ 136,786 $30,012 $17,897 $ 184,695
Costs and expenses:
Network expenses, facilities administration and
maintenance costs.................................... 100,266 19,345 12,924 132,535
Selling, general and administrative.................... 46,347 5,816 3,385 55,548
Depreciation and amortization.......................... 39,864 655 276 $ 3,528(e) 44,323
Charge off of purchased in-process R&D................. 85,000 85,000
--------- ------- ------- ------- ---------
271,477 25,816 16,585 3,528 317,406
--------- ------- ------- ------- ---------
Income (loss) from operations............................ (134,691) 4,196 1,312 (3,528) (132,711)
Other income (expense):
Interest expense......................................... (49,301) (54) 1,972(f) (42,229)
54(g)
5,100(h)
Interest and other income (expense)...................... 10,729 65 22 (1,181)(i) 9,635
--------- ------- ------- ------- ---------
Income (loss) before income taxes and extraordinary
items.................................................. (173,263) 4,261 1,280 2,417 (165,305)
Income tax (provision) benefit........................... 0
--------- ------- ------- ------- ---------
Income (loss) before extraordinary item.................. (173,263) 4,261 1,280 2,417 (165,305)
Extraordinary income (loss).............................. 0
--------- ------- ------- ------- ---------
Net income (loss)........................................ (173,263) 4,261 1,280 2,417 (165,305)
Preferred stock dividends and accretions................. (18,594) (18,594)
--------- ------- ------- ------- ---------
Net loss attributable to common stockholders............. $(191,857) $ 4,261 $ 1,280 $ 2,417 $(183,899)
========= ======= ======= ======= =========
Net loss per share....................................... $ (10.87) $ (8.44)
========= =========
Weighted average number of shares........................ 17,653 21,788(j)
========= =========
EBITDA(k)................................................ $ (9,827) $ (3,388)
========= =========
</TABLE>
See Accompanying Notes
F-8
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(DOLLARS AND SHARES IN THOUSANDS)
(a) The unaudited pro forma condensed consolidated statement of operations
for the three months ended March 31, 1998 does not give effect to any potential
cost savings and synergies that could result from the LDS or National
acquisitions. The allocations of purchase price to fair values of assets and
liabilities of STFI, LDS and National are preliminary for purposes of proforma
financial statements.
(b) This column represents the historical consolidated results of
operations for Intermedia for the three months ended March 31, 1998.
(c) This column represents the historical results of operations of LDS for
the three months ended March 31, 1998.
(d) This column represents the historical results of operations of National
for the three months ended March 31, 1998.
(e) This adjustment represents the additional amortization expense that
would have been incurred in connection with the LDS and National acquisitions.
For purposes of the pro forma presentation, it is assumed that the excess of the
purchase price over the net tangible assets acquired will ultimately be
allocated to either identifiable intangibles such as developed technology and
customer lists or goodwill with the weighted average amortization period of
approximately 20 years.
(f) This adjustment represents the elimination of interest expense in
STFI's historical financial statements related to the 12 1/4% Senior
Subordinated Discount Notes purchased by the Company and to the Credit Facility
Term Loans and Revolving Credit Facility paid by the Company upon closing of the
acquisition.
(g) This adjustment represents the elimination of interest expense in
National's historical financial statements related to the outstanding debt paid
by the Company at closing.
(h) This adjustment represents the elimination of imputed interest related
to the STFI purchase resulting from the recognition of the purchase on the
January 1, 1998 effective date which precedes the consummation date.
(i) Where acquisitions were paid all or partially in cash, interest income
was reduced to reflect the absence of the cash or investments for the full year.
(j) Includes the effect of 2,680 shares issued for LDS and 1,455 shares
issued for National.
(k) EBITDA consists of earnings (loss) before interest expense, interest
and other income, income tax (provision) benefit, depreciation, amortization and
one-time and certain non-recurring charges, such as the charge for in-process R
& D.
F-9
