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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee Required)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No fee Required)
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-20135
INTERMEDIA COMMUNICATIONS INC.
(Exact name of registrant as specified in its charter)
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Intermedia Communications Inc. 401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Intermedia Communications Inc.
One Intermedia Way
Tampa, Florida 33647-1752
(813) 829-0011
REQUIRED INFORMATION
Intermedia Communications Inc. 401(k) Plan is subject to the Employee
Retirement Income Security Act of 1974 (ERISA). Required information includes
financial statements and schedules for the Plan prepared in accordance with
ERISA reporting requirements.
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AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Intermedia Communications Inc.
401(k) Profit Sharing Plan
December 31, 1999 and 1998 and Year Ended December 31, 1999 with Report of
Independent Auditors
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Audited Financial Statements
and Supplemental Schedules
December 31, 1999 and 1998 and Year Ended December 31, 1999
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors..........................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits.........................................2
Statement of Changes in Net Assets Available for Benefits...............................3
Notes to Financial Statements...........................................................4
Supplemental Schedules
Schedule H, Line 4i--Schedule of Assets Held for Investment Purposes at End of Year.....9
Schedule G, Part III--Schedule of Nonexempt Transactions...............................10
</TABLE>
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Report of Independent Auditors
The Plan Administrator
Intermedia Communications Inc.
401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of Intermedia Communications Inc. 401(k) Profit Sharing Plan as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at December
31, 1999 and 1998 and the changes in its net assets available for benefits for
the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes at end of year as of December 31, 1999 and
nonexempt transactions for the year then ended are presented for purposes of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Tampa, Florida
June 26, 2000
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
----------------------------------
<S> <C> <C>
ASSETS
Investments, at fair value $65,937,412 $37,797,639
Contribution receivables 1,225,175 1,159,938
----------------------------------
Net assets available for benefits $67,162,587 $38,957,577
==================================
</TABLE>
See accompanying notes.
2
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
<TABLE>
<S> <C>
ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $14,398,239
Interest and dividends 2,099,335
-----------
16,497,574
Contributions:
Participants 14,179,815
Employer 4,661,394
-----------
18,841,209
-----------
Total additions 35,338,783
DEDUCTIONS FROM NET ASSETS AVAILABLE FOR BENEFITS ATTRIBUTED TO:
Benefits paid directly to participants 7,115,068
Excess contribution refund 14,882
Other 3,823
-----------
Total deductions 7,133,773
-----------
Increase in net assets available for benefits 28,205,010
Net assets available for benefits at beginning of year 38,957,577
-----------
Net assets available for benefits at end of year $67,162,587
===========
</TABLE>
See accompanying notes.
3
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF PLAN
The following description of the Intermedia Communications Inc. 401(k) Profit
Sharing Plan (the Plan) provides only general information. Participants should
refer to the plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering substantially all employees of
Intermedia Communications Inc. and affiliated companies (collectively, the
Company) who have at least three months of service and are age 21 or older,
except those employees whose employment is governed by a collective bargaining
agreement or leased employees. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Effective July 1, 1998, the Plan was amended and restated to allow for the
transfer of certain plan assets to the Putnam Group of Investment Funds.
Additional amendments were made to the Plan to allow employees who were employed
by the following companies acquired by the Company to participate in the Plan:
Shared Technologies Fairchild, Inc. (Shared), Long Distance Saver group of
companies (collectively, LDS) and National Telecommunications of Florida, Inc.
and NTC, Inc. (collectively, National). Employees previously making salary
reduction contributions under 401(k) plans sponsored by Shared, LDS, or National
(collectively, previous plans) began to make salary deferrals into the Plan at
the rates being made under the previous plans, unless such participants elected
to change or cease making such contributions.
Effective January 1, 1999, all participants of the Digex, Incorporated (Digex)
401(k) Profit Sharing Plan became eligible to participate in the Plan. Digex is
a majority-owned subsidiary of the Company. Employees previously making salary
reduction contributions under a 401(k) plan sponsored by Digex began to make
salary deferrals into the Plan unless such participants elected to change or
cease making such contributions.
CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax annual compensation
up to certain amounts, as defined in the plan document. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans. Company contributions are discretionary
at the option of the Company's Board of Directors. The Company contributed 50%
of the first 7% of compensation that a participant contributed to the Plan
during 1999.
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan earnings.
Allocations are based on participant compensation or account balances, as
defined. Forfeited balances of terminated participants' nonvested accounts are
used to reduce future Company contributions. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's account.
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of service. A participant is
incrementally vested over three years of credited service.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in percentage increments in any of eleven investment options.
Participants may change their investment options daily.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of the participant's vested
account balance. Loan terms range from 1 to 15 years. The loans are secured by
the balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined monthly by the plan
administrator. Principal and interest are paid ratably through monthly payroll
deductions.
PAYMENT OF BENEFITS
Upon termination of service, death, disability, or retirement, a participant may
elect to receive a lump-sum payment equal to the vested value of his or her
account, or choose from various forms of annuity payments. As of December 31,
1999 and 1998, participants elected distributions in the amount of $128,624 and
$14,112, respectively, that had not yet been paid.
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
All investments, other than loans to participants, are stated at fair value
which equals the quoted market price on the last business day of the plan year.
The participant loans are valued at their outstanding balances, which
approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The Plan's investments were held and administered by Union Central Life
Insurance Company through June 30, 1998 and by Putnam Fiduciary Trust Company
beginning July 1, 1998.
During 1999, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
<TABLE>
<CAPTION>
TOTAL NET
APPRECIATION IN
FAIR VALUE OF
INVESTMENTS
-----------
<S> <C>
Intermedia Communications Inc. Common Stock $ 2,950,486
Putnam Mutual Funds 11,447,753
-----------
$14,398,239
===========
</TABLE>
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
----------------------------------
<S> <C> <C>
Putnam Growth Opportunities Fund $22,059,886 $12,767,105
Intermedia Communications Inc. Common Stock 7,170,451 *
Putnam Capital Appreciation Fund 6,547,765 6,373,468
Putnam Money Market Fund 6,481,083 5,109,701
Putnam New Opportunities Fund 6,419,237 *
The Putnam Fund for Growth & Income 5,029,774 3,999,058
Putnam Equity Income Fund 3,398,506 3,145,553
</TABLE>
*Investment was not greater than 5%.
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
4. Income Tax Status
The Company has received a determination letter from the Internal Revenue
Service dated June 2, 1995, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan has been
amended since receiving the determination letter and has applied for a new
determination letter which it has not yet received. However, the plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
5. Administrative Expenses
The Company pays for all administrative costs on behalf of the Plan. These costs
may include third-party administration fees, legal fees, audit fees, and
investment fees, among others. Fees for administrative services are based upon
reasonable and customary rates.
6. Subsequent Events
Effective April 1, 2000, the Company added the investment option of Digex common
stock to the plan.
Effective July 1, 2000, the Company will transfer the investments and
participants of Digex to the newly formed Digex, Incorporated 401(k) Plan.
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
E.I.N: 69-2913586
Plan No.: 001
Schedule H, Line 4i
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
(c) Description of
Investment, Including Maturity
(b) Identity of Date, Rate
Issue, Borrower, of Interest, Collateral, Par or (e) Current Value
(a)Lessor or Similar Party Maturity Value (d) Cost
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mutual Funds
Putnam Growth Opportunities Fund Mutual Fund $22,059,886
* Putnam Capital Appreciation Fund Mutual Fund 6,547,765
* Putnam New Opportunities Fund Mutual Fund 6,419,237
* The Putnam Fund for Growth & Income Mutual Fund 5,029,774
* Putnam Equity Income Fund Mutual Fund 3,398,506
* Putnam International Growth Fund Mutual Fund 3,139,695
* Putnam International Voyager Fund Mutual Fund 2,896,636
* Putnam Diversified Income Trust Mutual Fund 1,132,049
-----------
50,623,548
Common Stock
* Intermedia Communications Inc. Common Stock 7,170,451
-----------
7,170,451
Money Market Fund
* Putnam Fiduciary Trust Company Money Market Fund 6,481,083
-----------
6,481,083
Loans to Participants
Participant Loans 5.6% - 10.75% 1,662,330
-----------
Total Investments $65,937,412
===========
</TABLE>
* Party-in-interest.
Note: Cost information has not been included in column (d) because all
investments are participant directed.
9
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Intermedia Communications Inc.
401(k) Profit Sharing Plan
E.I.N: 69-2913586
Plan No.: 001
Schedule G, Part III--Schedule of Nonexempt Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
(b) Relationship to (c) Description of Transactions Including Maturity Date,
Plan, Employer, or Rate
(a) Identity of Party Other of Interest, Collateral, Par
Involved Party-in-Interest or Maturity Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Intermedia Communications Plan Sponsor Late remittance of participant contributions for the
Inc. November 30, 1999 semimonthly pay period in the amount of
$761,350, deposited December 28, 1999
</TABLE>
Columns (d) through (j) are not applicable.
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Exhibit Index
Number Exhibit
23.1 Consent of Independent Auditors
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: June 27, 2000
INTERMEDIA COMMUNICATIONS INC.
401 (K) Plan
(Name of Plan)
By: /s/ Michael J. Randels
---------------------------------------
Michael J. Randels
Vice President-Human Resources
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