<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
(Amendment No. 1)
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
-----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Numbers: 33-60776 and 333-55755
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FALCON COMMUNICATIONS, L.P.
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
FALCON FUNDING CORPORATION*
----------------------------------------------------------------------------
(Exact Names of Registrants as Specified in Their Charters)
California 95-4654565
California 95-4681480
- ------------------------------- ----------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Numbers)
Incorporation or Organization)
10900 Wilshire Boulevard - 15th Floor
Los Angeles, California 90024
- ---------------------------------------- -----------------------------
(Address of Principal Executive Offices) (Zip Code)
(310) 824-9990
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(Registrants' Telephone Number, Including Area Code)
- ----------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes No X
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Number of shares of common stock of Falcon Funding Corporation outstanding as of
November 10, 1998: 1,000.
* Falcon Funding Corporation meets the conditions set forth in General
Instruction H(1)(a) and (b) to the Form 10-Q and is therefore filing with
the reduced disclosure format.
<PAGE>
EXPLANATORY NOTE
This amended Form 10-Q for the period ended September 30, 1998 is being
filed to amend "Item 1. Financial Statements," solely to provide certain pro
forma financial information for the three-month and nine-month periods ended
September 30, 1997 and 1998 (which was not available at the time of the original
filing), relating to the acquisitions of the TCI and Falcon Video systems, which
occurred on September 30, 1998. This pro forma financial information is located
at the end of "Note 3 Acquisitions" in the Notes to the Condensed Consolidated
Financial Statements. Other than the pro forma financial data added to Note 3,
the financial statements and accompanying notes are identical to those filed in
the original September 30, 1998 Form 10-Q.
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<PAGE>
ITEM 1. FINANCIAL STATEMENTS PART I - FINANCIAL INFORMATION
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
CONDENSED CONSOLIDATED BALANCE SHEETS
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-------------------------------------------------
<TABLE>
<CAPTION>
December 31, September 30,
1997* 1998
------------- -------------
(Unaudited)
(Dollars in Thousands)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 13,917 $ 9,269
Receivables:
Trade, less allowance of $825,000 and
$524,000 for possible losses 13,174 15,675
Affiliates 11,254 959
Other assets 14,576 15,847
Other investments 1,776 119
Property, plant and equipment, less accumulated depreciation
and amortization of $272,551,000 and $306,183,000 324,559 483,536
Franchise cost, less accumulated
amortization of $203,700,000 and $229,788,000 222,281 410,929
Goodwill, less accumulated amortization
of $18,531,000 and $24,663,000 66,879 140,006
Customer lists and other intangible costs, less
accumulated amortization of $25,517,000 and $39,996,000 59,808 353,795
Deferred loan costs, less accumulated amortization
of $7,144,000 and $1,735,000 12,134 24,847
----------- -----------
$ 740,358 $1,454,982
----------- -----------
----------- -----------
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Notes payable $ 911,221 $1,578,140
Accounts payable 9,169 7,833
Accrued expenses 52,789 91,242
Customer deposits and prepayments 1,452 1,916
Deferred income taxes 7,553 9,916
Minority interest 354 412
Equity in losses of affiliated partnerships in excess of investment 3,202 -
--------- ----------
TOTAL LIABILITIES 985,740 1,689,459
--------- ----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PARTNERS' EQUITY 171,373 135,385
--------- ----------
PARTNERS' EQUITY (DEFICIT):
General partner (13,200) (374,910)
Limited partners (403,555) 5,048
--------- ----------
TOTAL PARTNERS' DEFICIT (416,755) (369,862)
--------- ----------
$ 740,358 $1,454,982
--------- ----------
--------- ----------
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
-----------------------------------------------
<TABLE>
<CAPTION>
Unaudited
----------------------------
Three months ended
September 30,
----------------------------
1997 1998
------------ -------------
(Dollars in Thousands)
<S> <C> <C>
REVENUES $ 64,515 $ 68,457
-------- --------
EXPENSES:
Service costs 19,320 21,080
General and administrative expenses 11,165 20,226
Depreciation and amortization 28,637 34,278
-------- --------
Total expenses 59,122 75,584
-------- --------
Operating income (loss) 5,393 (7,127)
OTHER INCOME (EXPENSE):
Interest expense, net (19,658) (25,045)
Equity in net income of investee partnerships 212 67
Other expense, net (1,416) (338)
Income tax benefit (expense) 200 (4,679)
-------- --------
Net loss before extraordinary items (15,269) (37,122)
Extraordinary item, retirement of debt - (2,230)
-------- --------
NET LOSS $(15,269) $(39,352)
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
-----------------------------------------------
<TABLE>
<CAPTION>
Unaudited
------------------------
Nine months ended
September 30,
-------------------------
1997 1998
------------ -----------
(Dollars in Thousands)
<S> <C> <C>
REVENUES $192,482 $ 201,789
-------- ---------
EXPENSES:
Service costs 56,302 61,137
General and administrative expenses 34,072 44,742
Depreciation and amortization 87,270 98,284
-------- ---------
Total expenses 177,644 204,163
-------- ---------
Operating income (loss) 14,838 (2,374)
OTHER INCOME (EXPENSE):
Interest expense, net (58,979) (69,744)
Equity in net income (loss) of investee partnerships 183 (199)
Other expense, net (1,616) (1,162)
Income tax benefit (expense) 1,322 (2,848)
-------- ---------
Net loss before extraordinary items (44,252) (76,327)
Extraordinary item, retirement of debt - (30,642)
-------- ---------
NET LOSS $(44,252) $(106,969)
-------- ---------
-------- ---------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
-----------------------------------------------
<TABLE>
<CAPTION>
Unaudited
---------------------------
Nine months ended
September 30,
---------------------------
1997 1998
------------ ------------
(Dollars in Thousands)
<S> <C> <C>
Net cash provided by operating activities $ 56,371 $ 44,361
-------- -----------
Cash flows from investing activities:
Acquisition of cable television systems - (83,391)
Capital expenditures (46,764) (63,357)
Increase in intangible assets (1,207) (7,692)
Cash retained by FHGLP - (1,546)
Other 90 37
-------- -----------
Net cash used in investing activities (47,881) (155,949)
-------- -----------
Cash flows from financing activities:
Borrowings from notes payable 24,500 2,357,607
Repayment of debt (33,038) (2,225,120)
Deferred loan costs (1) (25,630)
Other 192 83
-------- -----------
Net cash provided by (used in) financing activities (8,347) 106,940
-------- -----------
Net increase (decrease) in cash
and cash equivalents 143 (4,648)
Cash and cash equivalents
at beginning of period 13,633 13,917
-------- -----------
Cash and cash equivalents
at end of period $ 13,776 $ 9,269
-------- -----------
-------- -----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-6-
<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
Falcon Communications, L.P., a California limited partnership (the
"Partnership") and successor to Falcon Holding Group, L.P. ("FHGLP"), owns and
operates cable television systems serving small to medium-sized communities and
the suburbs of certain cities in 26 states. On September 30, 1998, pursuant to a
Contribution and Purchase Agreement dated as of December 30, 1997, as amended
(the "Contribution Agreement"), FHGLP acquired the assets and liabilities of
Falcon Video Communications, L.P. ("Falcon Video" or the "Falcon Video
Systems"), in exchange for ownership interests in FHGLP. Simultaneously with the
closing of that transaction, in accordance with the Contribution Agreement,
FHGLP contributed substantially all of the existing cable television system
operations owned by FHGLP and its subsidiaries (including the Falcon Video
Systems) to the Partnership and TCI Falcon Holdings, LLC ("TCI") contributed
certain cable television systems owned and operated by affiliates of TCI (the
"TCI Systems") to the Partnership (the "TCI Transaction"). As a result, TCI
holds approximately 46% of the equity interests of the Partnership and FHGLP
holds the remaining 54% and serves as the managing general partner of the
Partnership. The TCI Transaction is being accounted for as a recapitalization of
FHGLP into the Partnership and the concurrent acquisition by the Partnership of
the TCI Systems.
The condensed consolidated financial statements include the consolidated
accounts of the Partnership and its subsidiary cable television operating
partnerships and corporations (the "Owned Subsidiaries"). The condensed
consolidated balance sheet for the Partnership as of September 30, 1998 also
includes the assets acquired and liabilities assumed with respect to the TCI
Systems and the Falcon Video Systems. The assets contributed by FHGLP to the
Partnership excluded certain immaterial investments, principally FHGLP's
ownership of 100% of the outstanding stock of Enstar Communications Corporation
("ECC"), which is the general partner and manager of fifteen limited
partnerships operating under the name "Enstar" (the "Enstar Partnerships", whose
cable television systems are referred to as the "Enstar Systems"). Upon the
consummation of the TCI Transaction, the management of the Enstar Partnerships
was assigned to the Partnership by FHGLP. The condensed consolidated statements
of operations and statements of cash flows for the three months and the nine
months ended September 30, 1998 do not include results from the TCI Systems or
the Falcon Video Systems; however, such statements include FHGLP's interest in
ECC. The effects of ECC's operations on all previous periods presented are
immaterial and therefore the Partnership has not restated prior periods to give
effect to the recapitalization of the Partnership.
Prior to closing the TCI Transaction, FHGLP owned and operated cable
television systems in 23 states (the "Owned Systems"). FHGLP also controlled,
held varying equity interests in and managed certain other cable television
systems for a fee (the "Affiliated Systems" and, together with the Owned
Systems, the "Systems"). The Affiliated Systems operated cable television
systems in 14 states. FHGLP is a limited partnership, the sole general partner
of which is Falcon Holding Group, Inc., a California corporation ("FHGI"). FHGI
also holds a 1% interest in certain of the subsidiaries of the Partnership. At
the beginning of 1998, the Affiliated Systems were comprised of systems owned by
Falcon Classic Cable Income Properties, L.P. ("Falcon Classic") whose cable
television systems are referred to as the "Falcon Classic Systems", Falcon Video
and the Enstar Partnerships. As discussed in Note 3, the Falcon Classic Systems
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<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 1 - BASIS OF PRESENTATION (CONTINUED)
were acquired by FHGLP during 1998. The Falcon Video Systems were acquired on
September 30, 1998 in connection with the TCI Transaction.
NOTE 2 - INTERIM FINANCIAL STATEMENTS
The interim financial statements for the three and nine months ended
September 30, 1998 and 1997 are unaudited. These condensed interim financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in FHGLP's latest Annual Report on Form 10-K. In the
opinion of management, such statements reflect all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
results of such periods. The results of operations for the three and nine months
ended September 30, 1998 are not indicative of results for the entire year,
particularly due to the TCI Transaction.
NOTE 3 - ACQUISITIONS
As discussed in Note 1, on September 30, 1998 the Partnership acquired the
TCI Systems and the Falcon Video Systems in accordance with the Contribution
Agreement.
In March and July 1998, FHGLP paid to Falcon Classic $83.4 million in order
to purchase the Falcon Classic Systems. Falcon Classic had revenue of
approximately $20.3 million for the year ended December 31, 1997.
-8-
<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 3 - ACQUISITIONS (CONTINUED)
The acquisitions of the TCI Systems, the Falcon Video Systems and the
Falcon Classic Systems were accounted for by the purchase method of accounting,
whereby the purchase prices were allocated to the assets acquired and
liabilities assumed based on their estimated fair values at the dates of
acquisition, as follows:
<TABLE>
<CAPTION>
Falcon Video Falcon Classic
TCI Systems Systems Systems
---------- ---------- -----------
(Dollars in Thousands)
<S> <C> <C> <C>
PURCHASE PRICE:
General partnership interests issued $231,937 $ 43,168 $ -
Debt assumed 275,000 112,196 -
Debt incurred - - 83,391
Other liabilities assumed 999 6,158 2,804
Transaction costs 2,879 - -
-------- -------- --------
510,815 161,522 86,195
-------- -------- --------
FAIR MARKET VALUE OF ASSETS AND LIABILITIES ACQUIRED:
Property, plant and equipment 74,533 36,659 33,539
Franchise costs 166,486 41,604 7,847
Customer lists and other intangible assets 217,443 53,602 34,992
Other assets 7,118 2,285 3,164
-------- -------- --------
465,580 134,150 79,542
-------- -------- --------
Excess of purchase price over fair value of
assets and liabilities acquired $ 45,235 $ 27,372 $ 6,653
-------- -------- --------
-------- -------- --------
</TABLE>
The excess of purchase price over the fair value of net assets acquired has
been recorded as goodwill and is being amortized using the straight-line method
over 20 years. The allocation of the purchase price and the pro forma
information presented below are based on preliminary information and are subject
to possible adjustment once complete information on the fair value of the assets
is developed. The allocation may also be subject to possible adjustment pursuant
to the Contribution Agreement.
The general partnership interests issued in the TCI Transaction were valued
in proportion to the estimated fair value of the TCI Systems and the Falcon
Video Systems as compared to the estimated fair value of the Partnership's
assets, which was agreed upon in the Contribution Agreement by all holders of
Partnership interests.
-9-
<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 3 - ACQUISITIONS (CONTINUED)
Sources and uses of funds for each of the transactions were as follows:
<TABLE>
<CAPTION>
Falcon Video Falcon Classic
TCI Systems Systems Systems
------------------ ----------------- ------------------
(Dollars in Thousands)
<S> <C> <C> <C>
SOURCES OF FUNDS:
Cash in Owned Systems $ 11,429 $ 59,038 $ 6,591
Advance under bank credit facilities 429,739 56,467 76,800
-------- -------- -------
Total sources of funds $441,168 $115,505 $83,391
-------- -------- -------
-------- -------- -------
USES OF FUNDS:
Repay debt assumed from TCI and existing debt of Falcon Video,
including accrued interest $429,739 $115,505 $ -
Purchase price of assets - - 83,391
Payment of assumed obligations at closing 6,495 - -
Transaction fees and expenses 2,879 - -
Available funds 2,055 - -
-------- -------- -------
Total uses of funds $441,168 $115,505 $83,391
-------- -------- -------
-------- -------- -------
</TABLE>
The following unaudited condensed consolidated pro forma statements of
operations present the consolidated results of operations of the Partnership as
if the acquisitions had occurred at January 1, 1997 and are not necessarily
indicative of what would have occurred had the acquisitions been made as of that
date or of results which may occur in the future.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------------ ------------------------------------------
1997 1998 1997 1998
-------------------- ------------------- ------------------- --------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Revenues $ 107,325 $ 107,418 $ 320,804 $ 321,058
Expenses (108,238) (113,008) (323,696) (334,577)
--------- --------- --------- ---------
Operating loss (913) (5,590) (2,892) (13,519)
Interest and other expenses (30,812) (35,306) (92,560) (98,127)
--------- --------- --------- ---------
Loss before extraordinary items $ (31,725) $ (40,896) $ (95,452) $(111,646)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
-10-
<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 4 - NOTES PAYABLE
On April 3, 1998, FHGLP and its wholly-owned subsidiary, Falcon Funding
Corporation ("FFC" and, collectively with FHGLP, the "Issuers"), sold
$375,000,000 aggregate principal amount of 8.375% Senior Debentures due 2010
(the "Senior Debentures") and $435,250,000 aggregate principal amount at
maturity of 9.285% Senior Discount Debentures due 2010 (the "Senior Discount
Debentures" and, collectively with the Senior Debentures, the "Debentures") in a
private placement exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"). The Issuers filed a registration statement with
the Securities and Exchange Commission (the "SEC") on June 2, 1998 to register
debentures (the "Exchange Debentures") to be exchanged for the Debentures (the
"Exchange Offer"). The form and terms of the Exchange Debentures are the same as
the corresponding Debentures except that the Exchange Debentures are registered
under the Securities Act and, therefore, do not bear legends restricting their
transfer and that the holders of Exchange Debentures are not entitled to certain
registration rights.
All of the outstanding Debentures were tendered for exchange in the
Exchange Offer. In connection with consummation of the TCI Transaction, pursuant
to Section 5.01 of the Indenture governing the Exchange Debentures (the
"Debentures Indenture"), the Partnership was substituted for FHGLP as an obligor
under the Exchange Debentures and the Debentures Indenture and thereupon FHGLP
was released and discharged from any further obligation with respect to the
Exchange Debentures and the Debentures Indenture. FFC remains as an obligor
under the Exchange Debentures and the Debentures Indenture and is now a wholly
owned subsidiary of the Partnership. FFC was incorporated solely for the purpose
of serving as a co-issuer of the Debentures and does not have any material
operations or assets and will not have any revenues.
The Senior Debentures were issued at a price of 99.732% of their principal
amount, for total gross proceeds of approximately $374 million. The Senior
Discount Debentures were issued at a price of 63.329% per $1,000 aggregate
principal amount at maturity, for total gross proceeds of approximately $275.6
million, and will accrete to stated value at an annual rate of 9.285% until
April 15, 2003. After giving effect to offering discounts, commissions and
estimated expenses of the offering, the sale of the Debentures (representing
aggregate indebtedness of approximately $650.6 million as of the date of
issuance) generated net proceeds of approximately $631 million. The Partnership
used substantially all the net proceeds from the sale of the Debentures to repay
outstanding bank indebtedness.
On May 19, 1998, FHGLP repurchased approximately $247.8 million aggregate
principal amount of its 11% Senior Subordinated Notes due 2003 (the "Notes") for
an aggregate purchase price of $270.3 million pursuant to a fixed spread tender
offer for all outstanding Notes. The Notes tendered represented approximately
88% of the Notes previously outstanding. The approximate $34.4 million of Notes
not repurchased in the tender offer were redeemed on September 15, 1998 in
accordance with the terms of the indenture governing the Notes at 105.5% of the
outstanding principal amount, plus accrued interest to the redemption date (the
"Redemption Price").
-11-
<PAGE>
FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES
(SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------
-----------------------------------------------
NOTE 4 - NOTES PAYABLE (CONTINUED)
On June 30, 1998, the Partnership entered into a new $1.5 billion senior
credit facility (the "New Credit Facility"). The borrowers under the New Credit
Facility were the Owned Subsidiaries prior to consummation of the TCI
Transaction and, following the TCI Transaction, the borrower is Falcon Cable
Communications LLC, a Delaware limited liability company and a wholly owned
subsidiary of the Partnership ("Falcon LLC"). The restricted companies, as
defined under the New Credit Facility, are Falcon LLC and each of its
subsidiaries (excluding certain subsidiaries designated as excluded companies
from time to time) and each restricted company (other than Falcon LLC) is also a
guarantor of the New Credit Facility.
The New Credit Facility consists of three committed facilities (one
revolver and two term loans) and one uncommitted $350 million supplemental
credit facility (the terms of which will be negotiated at the time the
Partnership makes a request to draw on such facility). Facility A is a $650
million revolving credit facility maturing December 29, 2006; Facility B is a
$200 million term loan maturing June 29, 2007; and Facility C is a $300 million
term loan maturing December 31, 2007. All of Facility C and approximately $126
million of Facility B were funded on June 30, 1998, and the approximately $329
million debt outstanding under the then existing bank credit agreement was
repaid. As a result, from June 30, 1998 until September 29, 1998, FHGLP had an
excess cash balance of approximately $90 million. Immediately prior to closing
the TCI Transaction, approximately $39 million was borrowed under Facility A to
discharge certain indebtedness of Falcon Video. In connection with consummation
of the TCI Transaction, Falcon LLC assumed the approximately $433 million of
indebtedness outstanding under the New Credit Facility. In addition to utilizing
cash on hand of approximately $63 million, Falcon LLC borrowed the approximately
$74 million remaining under Facility B and approximately $366 million under
Facility A to discharge approximately $73 million of Falcon Video indebtedness
and to retire approximately $430 million of TCI indebtedness assumed as part of
the contribution of the TCI Systems. As a result of these borrowings, the amount
outstanding under the New Credit Facility at September 30, 1998 was $912
million.
NOTE 5 - EXTRAORDINARY ITEMS
Fees and expenses incurred in connection with the repurchase of the Notes
on May 19, 1998 and the retirement of the remaining Notes on September 15, 1998
were $19.7 million in the aggregate. In addition, the unamortized portion of
deferred loan costs related to the Notes and to extinguishment of debt
outstanding under the then existing bank credit agreement, which amounted to
$10.9 million in the aggregate, were written off as an extraordinary charge.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this amended report to be signed on their behalf by
the undersigned thereunto duly authorized.
FALCON COMMUNICATIONS, L.P.
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc., its
General Partner
Date: December 11, 1998 By: /s/ MICHAEL K. MENEREY
-----------------------------------
Michael K. Menerey, Executive
Vice President, Secretary and
Chief Financial Officer
FALCON FUNDING CORPORATION
Date: December 11, 1998 By: /s/ MICHAEL K. MENEREY
-----------------------------------
Michael K. Menerey, Chief
Financial Officer and Secretary
