<PAGE> 1
Rule 424(b)(5)
File No. 33-60982
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY 27, 1995)
$1,100,000,000
TCI COMMUNICATIONS, INC.
$350,000,000 8% SENIOR NOTES DUE AUGUST 1, 2005
$750,000,000 8 3/4% SENIOR DEBENTURES DUE AUGUST 1, 2015
------------------------
Interest on the Notes and the Debentures is payable semi-annually on
February 1 and August 1 of each year, beginning February 1, 1996. Neither the
Notes nor the Debentures will be subject to redemption by the Company prior to
maturity. The Notes and the Debentures are collectively referred to herein as
the "Securities."
The Securities will be issuable and transferable only in fully registered
form, in denominations of $1,000 and any integral multiple thereof.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THE ATTACHED PROSPECTUS FOR A
DISCUSSION OF CERTAIN RISKS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE SECURITIES OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
==================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------------------------
Per Note.......................... 99.5% .65% 98.85%
- --------------------------------------------------------------------------------------------------
Total............................. $348,250,000 $2,275,000 $345,975,000
- --------------------------------------------------------------------------------------------------
Per Debenture..................... 99.44% .875% 98.565%
- --------------------------------------------------------------------------------------------------
Total............................. $745,800,000 $6,562,500 $739,237,500
==================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from August 1, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $100,000.
------------------------
The Securities are offered by the several Underwriters, subject to prior
sale, when, as and as if issued to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel, or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Securities will be made in New York, New York on or about
August 1, 1995.
------------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
------------------------
The date of this Prospectus Supplement is July 27, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES AT
LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
RECENT DEVELOPMENTS
AGREEMENT SIGNED TO ACQUIRE CONTROL OF VIACOM INC. CABLE SYSTEM SUBSIDIARY
The Company and its sole shareholder Tele-Communications, Inc. ("Parent")
have entered into certain agreements with Viacom Inc. ("Viacom") and certain
subsidiaries of Viacom regarding the purchase by the Company of all of the
common stock of a subsidiary of Viacom ("Cable Sub") which, at the time of
purchase, will own Viacom's cable systems and related assets. Viacom's cable
systems, at June 30, 1995, served an aggregate of approximately 1.2 million
basic subscribers in the following areas: the Bay area of San Francisco,
California; Seattle/Tacoma, Washington; Salem, Oregon; Nashville, Tennessee; and
Dayton, Ohio.
The transaction has been structured as a tax-free reorganization in which
Cable Sub will initially transfer all of its non-cable assets, as well as all of
its liabilities other than current liabilities, to a new subsidiary of Viacom
("New Viacom Sub"). Cable Sub will also transfer to New Viacom Sub the proceeds
(the "Loan Proceeds") of a $1.7 billion loan facility (the "Loan Facility") to
be arranged by the Company, Parent and Cable Sub. Following these transfers,
Cable Sub will retain cable assets with an estimated value at closing of $2.25
billion and the obligation to repay the Loan Proceeds borrowed under the Loan
Facility.
Viacom will offer to the holders of shares of Viacom Class A Common Stock
and Viacom Class B Common Stock (collectively, "Viacom Common Stock") the
opportunity to exchange (the "Exchange Offer") a portion of their shares of
Viacom Common Stock for shares of Class A Common Stock, par value $100 per
share, of Cable Sub ("Cable Sub Class A Stock"). The total number of shares of
Cable Sub Class A Stock issuable in the Exchange Offer (the "Total Number") will
be a number equal to (x) the estimated gross value of Cable Sub (which is
estimated to be approximately $2.25 billion) minus the Loan Proceeds, divided by
(y) $100 (the par value of the Cable Sub Class A Stock). The Exchange Offer will
be conducted as a "dutch auction" in which stockholders of Viacom will be able
to specify a minimum fraction of a share of Cable Sub Class A Stock that they
are willing to receive in exchange for a share of Viacom Common Stock. The
maximum exchange ratio that a Viacom stockholder will be permitted to specify
will be equal to the equivalent of 112.5% of the average intraday sales prices
for a share of Viacom Class B Common Stock, as reported on the American Stock
Exchange, during the 20 trading-day period ending the date prior to the
commencement of the Exchange Offer. The Exchange Offer will be subject to a
number of conditions, including a condition (the "Minimum Condition") that
sufficient tenders are made of Viacom Common Stock to permit the number of
shares of Cable Sub Class A Stock issued pursuant to the Exchange Offer to equal
the Total Number.
Immediately following the completion of the Exchange Offer, the Company
will acquire from Cable Sub shares of Cable Sub Class B Common Stock in exchange
for a capital contribution of $350 million (which will be used to reduce Cable
Sub's obligations under the Loan Facility). At the time of such contribution,
the Cable Sub Class A Stock received by Viacom stockholders pursuant to the
Exchange Offer will automatically convert into a series of senior cumulative
redeemable exchangeable preferred stock (the "Exchangeable Preferred Stock") of
Cable Sub with a stated value of $100 per share (the "Stated Value"). The terms
of the Exchangeable Preferred Stock, including its dividend, redemption and
exchange features, will be designed to cause the Exchangeable Preferred Stock to
initially trade at the Stated Value. The Exchangeable Preferred Stock will be
exchangeable, at the option of the holder commencing after the fifth anniversary
of the date of issuance, for shares of Parent Class A Common Stock (or, in the
event of a recapitalization or reclassification, the shares of common stock of
Parent into which shares of such Class A Common Stock are converted) ("Parent
Common Stock"). The Exchangeable Preferred Stock will also be redeemable, at the
option of Cable Sub, after the fifth anniversary of the date of issuance, and
will be subject to mandatory redemption on
S-2
<PAGE> 3
the tenth anniversary of the date of issuance at a price equal to the Stated
Value per share plus accrued and unpaid dividends, payable in cash or, at the
election of Cable Sub, in shares of Parent Common Stock. If insufficient tenders
are made by Viacom stockholders in the Exchange Offer to permit the Minimum
Condition to be satisfied, Viacom will extend the Exchange Offer for up to 15
business days and, during such extension, TCI and Viacom are to negotiate in
good faith to determine mutually acceptable terms and conditions for the
Exchangeable Preferred Stock and the Exchange Offer that each believes in good
faith will cause the Minimum Condition to be fulfilled and that would cause the
Exchangeable Preferred Stock to trade at a price equal to the Stated Value
immediately following the expiration of the Exchange Offer. In the event the
Minimum Condition is not thereafter met, TCI and Viacom will each have the right
to terminate the transaction.
Upon the closing of the transaction, Cable Sub will have a capitalization
consisting of approximately $1.35 billion of borrowings under the Loan Facility,
Exchangeable Preferred Stock with a Stated Value of approximately $550 million
and $350 million of paid-in capital for the Cable Sub Class B Common Stock.
Consummation of the transaction is subject to a number of conditions, including
receipt of a favorable letter ruling from the Internal Revenue Service that the
transaction qualifies as a tax-free reorganization, the expiration or early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, receipt of necessary consents of the Federal
Communications Commission and local cable franchise authorities, and the
satisfaction or waiver of all of the conditions of the Exchange Offer.
Accordingly, no assurance can be given that the transaction will be consummated.
USE OF PROCEEDS
The Company intends to use the net proceeds of the sale of the Securities
to reduce outstanding indebtedness incurred under (i) a reducing revolving loan
that matures on December 31, 1999 and has a current interest rate of 6.76%, (ii)
a reducing revolving loan that matures on December 31, 2003 and has a current
interest rate of 6.81%, (iii) a reducing revolving loan that matures on May 10,
1998 and has a current interest rate of 6.80% (iv) a commercial paper program
which has a current interest rate of 6.27% and (v) various short-term lines of
credit which have a current interest rate of 6.38%. The proceeds from such
borrowings were used to reduce then outstanding indebtedness under various
credit facilities of the Company and certain subsidiaries of the Company, for
certain acquisitions, for working capital and for general corporate purposes.
Amounts may be subsequently reborrowed under the foregoing credit
facilities and used for any of the purposes specified under "Use of Proceeds" in
the accompanying Prospectus.
DESCRIPTION OF SECURITIES
GENERAL
The Securities will be issued under an Indenture, dated as of July 26,
1993, as amended and supplemented by a First Supplemental Indenture, dated as of
September 13, 1994 (the "Indenture"), between the Company and Shawmut Bank
Connecticut, National Association, as trustee (the "Trustee"), and are a series
of Senior Debt Securities described in the accompanying Prospectus. Reference
should be made to the accompanying Prospectus for a detailed summary of
additional terms and provisions of the Securities and the Indenture. Capitalized
terms not defined herein have the meanings ascribed to them in the accompanying
Prospectus and the Indenture.
The Notes will be limited to $350,000,000 aggregate principal amount and
will mature August 1, 2005. Each Note will bear interest at the rate per annum
shown on the front cover of this Prospectus Supplement from August 1, 1995 or
from the most recent interest payment date to which interest has been paid or
provided for, payable semi-annually on February 1 and August 1 of each year
commencing on February 1, 1996 to the person in whose name the Note is
registered at the close of business on the fifteenth day of the month preceding
such interest payment date.
The Debentures will be limited to $750,000,000 aggregate principal amount
and will mature August 1, 2015. Each Debenture will bear interest at the rate
per annum shown on the front cover of this Prospectus
S-3
<PAGE> 4
Supplement from August 1, 1995 or from the most recent interest payment date to
which interest has been paid or provided for, payable semi-annually on February
1 and August 1 of each year commencing on February 1, 1996 to the person in
whose name the Debenture is registered at the close of business on the fifteenth
day of the month preceding such interest payment date.
The Securities will be issued only in fully registered form in
denominations of $1,000 and integral multiples thereof.
The Company has appointed the Trustee under the Indenture as the Paying
Agent and Registrar and has appointed Shawmut Trust Company, at 14 Wall Street,
8th Floor, New York, New York, as an additional paying agent and co-Registrar
where the Securities may be presented or surrendered for payment, where the
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities and the
Indenture may be served.
REDEMPTION
The Securities may not be redeemed by the Company prior to maturity.
There is no provision for a sinking fund for the Securities.
CHANGE OF CONTROL
As more fully described in the accompanying Prospectus under the caption
"Description of Debt Securities -- Senior Debt Securities -- Change of Control,"
Section 4.02 of the Indenture provides that, if a Put Event occurs, each holder
of Securities will have the right, as provided in, and subject to the terms of,
the Indenture, to require the Company to repurchase all or any portion of such
holder's Securities at a purchase price equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase. A Put
Event will occur if, among other things, there is a Change of Control of the
Company or, for so long as the Company is a subsidiary of Parent, a Change of
Control of the Parent, at any time after the date on which the Securities are
first issued and on or prior to maturity. The applicability of this covenant is
limited. See "Description of Debt Securities -- Senior Debt Securities -- Change
of Control" and "-- Definitions" in the accompanying Prospectus. Among other
things, it would not apply to the acquisition of shares of the Company's or the
Parent's common stock by a Controlling Person or by any other person if and for
so long as the shares of such company's common stock beneficially owned by the
Controlling Persons (and, in the case of the Company, by the Parent and
subsidiaries of the Parent) represent in the aggregate thirty percent (30%) or
more of the combined voting power of all shares of such company's common stock
calculated on a fully diluted basis. The term "Controlling Person" includes each
of the Company's Chairman of the Board, its President and each director of the
Company as of the date the Indenture was first executed, their respective family
members, estates and heirs, Kearns-Tribune Corporation and the trustee under the
Parent's Employee Stock Purchase Plan or any successor plan or any other
employee stock ownership or other employee benefit plan of the Parent or the
Company or any subsidiary of the Parent or the Company. See "Description of Debt
Securities -- Senior Debt Securities -- Definitions" in the accompanying
Prospectus.
The Company's payment obligations with respect to the Securities, including
its obligation to pay the purchase price of a Note or Debenture that the holder
has elected to require the Company to repurchase following the occurrence of a
Put Event, are unsecured, unsubordinated obligations of the Company and are pari
passu (equally and ratably) with other unsecured, unsubordinated indebtedness of
the Company. There are other issues of senior indebtedness of the Company
outstanding in addition to the Securities that would permit the holders to
require the Company to repurchase or repay such indebtedness upon the occurrence
of a Put Event or events similar thereto and the Company anticipates that it
will continue to issue indebtedness with similar covenants in the future.
Approximately $6.45 billion of the Company's outstanding indebtedness at March
31, 1995 includes provisions that would permit the holders to require the
Company to repurchase or repay such indebtedness upon the occurrence of a Put
Event, a Change of Control or events similar thereto, which obligation of the
Company would rank on a parity with its repurchase obligation with respect to
the Securities. In addition, approximately $2.63 billion of the outstanding
indebtedness of the Company's subsidiaries at March 31, 1995 includes provisions
that require the applicable subsidiary to repurchase or repay such indebtedness
upon a Change of Control or events similar thereto. If a Put Event were to
occur, there can
S-4
<PAGE> 5
be no assurance that the Company would have sufficient funds to satisfy its
repurchase obligations with respect to the Securities and such other
indebtedness. The failure of the Company to repurchase a Note or Debenture that
the holder has elected to require it to repurchase following the occurrence of a
Put Event would constitute an Event of Default with respect to the Securities
and could cause the acceleration of the maturity of other indebtedness of the
Company after notice and/or passage of time.
No amendment, supplement or waiver may be made to the Indenture or to the
Securities that would materially adversely affect the rights of any holder of
Securities to require the Company to purchase such Securities upon the
occurrence of a Put Event without the consent of the holder of each outstanding
Note or Debenture.
S-5
<PAGE> 6
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Lehman Brothers
Inc., Morgan Stanley & Co. Incorporated and Salomon Brothers Inc are acting as
representatives (the "Representatives"), has severally agreed to purchase, the
principal amount of Securities set forth opposite its respective name below. In
the Underwriting Agreement, the several Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Securities offered
hereby if any of the Securities are purchased. In the event of default by one or
more of the Underwriters, the Underwriting Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or additional underwriters may be added, or the Underwriting Agreement
may be terminated.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER NOTES DEBENTURES
----------- --------- ----------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................... $61,600,000 $132,000,000
Bear, Stearns & Co. Inc. ......................... 61,600,000 132,000,000
Lehman Brothers Inc. ............................. 61,600,000 132,000,000
Morgan Stanley & Co. Incorporated................. 61,600,000 132,000,000
Salomon Brothers Inc.............................. 61,600,000 132,000,000
BA Securities, Inc. .............................. 7,000,000 15,000,000
Chemical Securities Inc. ......................... 7,000,000 15,000,000
Credit Lyonnais Securities (USA) Inc. ............ 7,000,000 15,000,000
C.J. Lawrence/Deutsche Bank Securities
Corporation..................................... 7,000,000 15,000,000
SBC Capital Markets Inc. ......................... 7,000,000 15,000,000
Societe Generale.................................. 7,000,000 15,000,000
------------ ------------
Total................................ $350,000,000 $750,000,000
============ ============
</TABLE>
The Representatives have advised the Company that the Underwriters propose
initially to offer the Securities to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less concessions not in excess of .4% of the principal amount of the
Notes and .5% of the principal amount of the Debentures. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .25% of the
principal amount of the Securities to certain other dealers. After the initial
public offering, the public offering price, concessions and discounts may be
changed.
The Securities are new issues of securities with no established trading
market. The Representatives have advised the Company that the Underwriters
intend to act as market makers for the Securities. However, the Underwriters are
not obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Securities.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, or contribute to payments which the Underwriters may be required to
make in respect thereof.
Each of the Underwriters engages in transactions with and performs services
for the Company and certain of its subsidiaries in the ordinary course of
business.
VALIDITY OF THE SECURITIES
Certain legal matters with respect to the Securities offered hereby will be
passed upon for the Company by Baker & Botts, L.L.P., 885 Third Avenue, New
York, New York 10022-4834. Jerome H. Kern, a partner of Baker & Botts, L.L.P.,
is a director of Tele-Communications, Inc. and holds options to purchase shares
of Tele-Communications, Inc.'s Class A Common Stock. Certain legal matters in
connection with the offering will be passed upon for the Underwriters by Brown &
Wood, One World Trade Center, New York, New York 10048-0557.
S-6
<PAGE> 7
Rule 424(b)(5)
File No. 33-60982
PROSPECTUS
TCI COMMUNICATIONS, INC.
DEBT SECURITIES
------------------------
TCI Communications, Inc. (the "Company") from time to time may offer its
debentures, notes, bonds or other evidences of indebtedness (the "Debt
Securities") for a maximum aggregate initial offering price of $3 billion (or
the equivalent thereof denominated in one or more foreign currencies, foreign
currency units or composite currencies). The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be determined at the time
of sale and to be set forth in supplements to this Prospectus. The Debt
Securities may be issued in registered form without coupons attached
("Registered Debt Securities"), in bearer form with or without coupons attached
("Bearer Debt Securities") and in the form of one or more global securities
("Global Securities"). See "Description of Debt Securities." Bearer Debt
Securities will be offered only to non-United States persons (subject to certain
exceptions) and to branches, located outside the United States, of certain
United States financial institutions. See "Description of Debt
Securities -- Limitations on Issuance of Bearer Debt Securities." The Company
may sell Debt Securities on a negotiated or competitive bid basis to or through
underwriters or dealers designated from time to time, and also may sell Debt
Securities directly to other purchasers or through agents designated from time
to time. See "Plan of Distribution." Prior to the date of this Prospectus, the
Company sold Debt Securities pursuant to the Registration Statement of which
this Prospectus is a part for an aggregate initial offering price of
$1,435,825,000.
Certain terms of the Debt Securities in respect of which this Prospectus is
being delivered, including, where applicable, the specific designation
(including whether senior, senior subordinated or subordinated), aggregate
principal amount, maturity (which may be fixed or extendible), interest rate or
rates (which may be fixed or variable), if any, and time of payment of interest,
if any, authorized denominations, currency or currencies in which principal,
premium, if any, and interest are payable and any specific terms relating to the
adjustment thereof that are in addition to or different from those described
herein, any terms for a sinking fund or for redemption, purchase or exchange at
the option of the Company or the holder (including the form or method of
payment, which may include cash, Debt Securities of another series or other
forms of consideration), any covenants or events of default that are in addition
to or different from those described herein, and any other specific terms of the
Debt Securities, will be set forth in a Prospectus Supplement accompanying this
Prospectus (the "Prospectus Supplement"). Debt Securities may be issued as
Original Issue Discount Securities to be sold at a substantial discount below
their principal amount and, if issued, certain terms thereof will be set forth
in the Prospectus Supplement related thereto. See "Description of Debt
Securities." The Debt Securities in respect of which this Prospectus is being
delivered are hereinafter referred to collectively as the "Offered Securities."
The terms of the offering and sale of the Offered Securities, including, where
applicable, the name or names of any agents, dealers or underwriters to be
utilized in connection with the offer and sale of the Offered Securities, the
principal amount of Debt Securities to be purchased by underwriters, the
purchase price of the Offered Securities and the proceeds to the Company from
such sale, any applicable commissions, discounts or other items constituting
compensation of such agents or underwriters, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers, will
also be set forth in the accompanying Prospectus Supplement. The Company
reserves the sole right to accept and, together with its agents, from time to
time, to reject in whole or in part any proposed purchase of the Offered
Securities to be made directly or through agents. See "Plan of Distribution" for
possible indemnification arrangements for agents, dealers and underwriters.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by the Prospectus Supplement applicable to the Offered
Securities being sold.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is July 27, 1995.
<PAGE> 8
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a registration statement on Form S-3
(Registration No. 33-60982) (together with all amendments and exhibits, referred
to as the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Debt Securities. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information pertaining to the Debt Securities and
the Company, reference is made to the Registration Statement. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Reports and
other information filed under the Exchange Act by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and at 7 World
Trade Center, New York, New York 10048; and copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents filed by the Company with the Commission (Commission File
No. 0-5550): (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as amended by Form 10-K/A (Amendment 1), (ii) the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and (iii)
the Company's Current Reports on Form 8-K dated August 26, 1994, January 23,
1995, February 3, 1995, as amended by Form 8-K/A, April 6, 1995, April 20, 1995,
as amended by Form 8-K/A, and July 26, 1995. All documents filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date hereof and prior to the termination of the offering
of the securities offered hereby shall be deemed to be incorporated herein by
reference and to be a part hereof from the respective dates of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated by reference herein, other than certain
exhibits to such documents. Such requests should be addressed to Stephen M.
Brett, Esq., Senior Vice President, TCI Communications, Inc., Terrace Tower II,
5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500.
2
<PAGE> 9
RISK FACTORS
The following factors, among others, should be considered carefully before
making an investment decision with respect to any Offered Securities.
Losses. Although the Company had net earnings of $92 million for the year
ended December 31, 1994, the Company incurred a net loss of $7 million for the
year ended December 31, 1993 and a net loss of $8 million for the year ended
December 31, 1992. The Company also had net earnings of $4 million and $32
million for the three months ended March 31, 1995 and 1994, respectively.
Notwithstanding the losses it has incurred, the Company has been able to, and
expects to continue to be able to, satisfy its debt service and other
obligations as and when they become due. The Company's operating cash flow
(operating income before depreciation, amortization and other non-cash credits
or charges) ($1,801 million, $1,858 million and $1,637 million for the years
ended December 31, 1994, 1993 and 1992, respectively, and $497 million and $450
million for the three months ended March 31, 1995 and 1994, respectively) has
historically been sufficient to cover its interest expense ($777 million, $731
million and $718 million for the years ended December 31, 1994, 1993 and 1992,
respectively, and $232 million and $178 million for the three months ended March
31, 1995 and 1994, respectively). The Company's interest coverage ratio for the
years ended December 31, 1994, 1993, and 1992 was 232%, 254% and 228%,
respectively, and for the three months ended March 31, 1995 and 1994 was 214%
and 253%, respectively. Operating cash flow is a measure of value and borrowing
capacity within the cable television industry and is not intended to be a
substitute for cash flows provided by operating activities, a measure of
performance prepared in accordance with generally accepted accounting
principles, and should not be relied upon as such. Operating cash flow, as
defined, does not take into consideration substantial costs of doing business,
such as interest expense, and should not be considered in isolation to other
measures of performance.
Another measure of liquidity is net cash provided by operating activities
as reflected in the Company's consolidated statements of cash flows. Net cash
provided by operating activities ($1,142 million, $1,251 million and $957
million for the years ended December 31, 1994, 1993 and 1992, respectively, and
$248 million and $326 million for the three months ended March 31, 1995 and
1994, respectively) reflects net cash from the operations of the Company
available for the Company's liquidity needs after taking into consideration the
aforementioned substantial costs of doing business not reflected in operating
cash flow. Amounts expended by the Company for its investing activities exceed
net cash provided by operating activities.
Ratios of Earnings to Fixed Charges. The ratio of earnings to fixed charges
of the Company was 1.02, 1.22, and 1.22 for the years ended December 31, 1992,
1993 and 1994, respectively, and 1.25 and 1.04 for the three months ended March
31, 1994 and 1995, respectively. The ratio of earnings to fixed charges was less
than 1.00 for the years ended December 31, 1990 and 1991; thus, earnings
available for fixed charges were inadequate to cover fixed charges for such
periods. The amounts of the coverage deficiencies were $399 million and $177
million for the years ended December 31, 1990 and 1991, respectively. For the
ratio calculations, earnings available for fixed charges consists of earnings
(losses) before income taxes plus fixed charges (minus capitalized interest),
distributions from and (earnings) losses of less than 50%-owned affiliates with
debt not guaranteed by the Company (net of earnings not distributed of less than
50%-owned affiliates), and minority interest in earnings (losses) of
consolidated subsidiaries (including an amount representing the pretax earnings
which would be required to cover preferred stock dividend requirements of
consolidated subsidiaries). Fixed charges consist of (i) interest (including
capitalized interest) on debt, excluding interest to 50%-owned affiliates, (ii)
the Company's proportionate share of interest of 50%-owned affiliates, (iii)
that portion of rental expense the Company believes to be representative of
interest (one-third of rental expense), (iv) amortization of debt expense, (v)
that portion of minority interests in earnings of consolidated subsidiaries that
represents the amount of pretax earnings that would be required to cover
preferred stock dividend requirements excluding similarly adjusted preferred
stock dividend requirements of consolidated subsidiaries to 50%-owned
affiliates, and (vi) the amount representing the pretax earnings which would be
required to cover preferred stock dividend requirements of 50%-owned affiliates,
other than amounts payable to the Company. The Company has guaranteed the debt
of certain less than 50%-owned affiliates and certain other entities in which it
has an interest. Fixed charges of $710,000, $506,000, $2,517,000, $13,833,000,
and $12,471,000 relating to such guarantees for the years ended December 31,
1990, 1991, 1992, 1993, and 1994, respectively, and fixed charges of $3,458,000
and $3,336,000 relating to such guarantees for the three months ended March 31,
1994 and 1995, respectively, have not been included in fixed charges.
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<PAGE> 10
THE COMPANY
The Company is a Delaware corporation incorporated in 1968 with executive
offices at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000;
telephone (303) 267-5500. Unless the context indicates otherwise and except as
used in the discussion under the caption "Description of Debt Securities," the
"Company" means TCI Communications, Inc. and its consolidated subsidiaries.
The Company or its predecessor companies have been principally engaged in
the acquisition, development and operation of cable television systems since the
early 1950's. The Company believes that, measured by the number of basic
subscribers, it is the largest provider of basic cable television services in
the United States. At March 31, 1995, the Company, through its subsidiaries and
affiliates, operated cable television systems throughout the continental United
States and Hawaii.
On August 4, 1994, the Company and Liberty Media Corporation ("Liberty")
each merged (the "Mergers") with separate wholly owned subsidiaries of
TCI/Liberty Holding Company, a new holding company formed by the Company and
Liberty. Under the terms of the respective Mergers, the Company and Liberty were
the surviving corporations. In connection with the Mergers, TCI/Liberty Holding
Company changed its name to Tele-Communications, Inc. and the Company changed
its name to TCI Communications, Inc. As a result of the foregoing, each of the
Company and Liberty is now a wholly owned subsidiary of Tele-Communications,
Inc. The Company remains the sole obligor with respect to all indebtedness
(including Debt Securities) and other obligations of the Company outstanding at
the time the Mergers were consummated and will be the sole obligor with respect
to Debt Securities issued subsequent to the Mergers, and Tele-Communications,
Inc. has not assumed any of such indebtedness or other obligations.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities, together with
internally generated funds, may be used to repay, redeem or repurchase
outstanding indebtedness; for general operations, including acquisitions,
capital expenditures and working capital requirements; to repurchase shares of
Tele-Communications, Inc.'s common and preferred stock; or for such other
purposes as may be specified in the Prospectus Supplement. All or a portion of
such proceeds may be advanced to Tele-Communications, Inc. in the form of
dividends or loans and to other affiliates of the Company in the form of loans
or as a contribution to capital. See "Description of Debt Securities."
A description of any indebtedness to be repaid with the proceeds of the
Offered Securities will be set forth in the Prospectus Supplement. The amount of
the Company's future capital expenditures for cable television operations will
be determined by acquisitions of additional cable television systems,
contractual obligations under existing franchises, expansions of existing
systems through rebuilds and upgrades, technological developments and various
other economic factors and market conditions. Specific plans, arrangements or
agreements, written or oral, with respect to any material acquisitions by the
Company by merger or otherwise, or with respect to any material disposition of
assets by the Company, if any, will, to the extent not disclosed in a document
incorporated by reference herein, be disclosed in the Prospectus Supplement.
Pending application of the net proceeds to the foregoing uses, the net
proceeds will be added to working capital and invested in short-term
interest-bearing obligations. Such investments will be subject to fluctuating
interest rates which may be lower than the rates applicable to the Debt
Securities.
The Company may borrow additional funds from time to time from public and
private sources on both a long-term and short-term basis and may sell commercial
paper to fund its future capital and working capital requirements in excess of
internally generated funds. Certain of such borrowings may rank senior in right
of payment to the indebtedness represented by the Debt Securities. See
"Description of Debt Securities."
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<PAGE> 11
DESCRIPTION OF DEBT SECURITIES
The Company may offer Debt Securities consisting of Senior Debt Securities,
Senior Subordinated Debt Securities or Subordinated Debt Securities, or any
combination of the foregoing, provided that the aggregate initial offering price
of the Debt Securities offered pursuant to the Registration Statement will not
exceed $3 billion (or the equivalent thereof denominated in one or more foreign
currencies, foreign currency units or composite currencies). Prior to the date
of this Prospectus, the Company sold Debt Securities under the Registration
Statement for an aggregate initial offering price of $1,435,825,000.
The Debt Securities will represent unsecured general obligations of the
Company. The Senior Debt Securities will be senior to all subordinated
indebtedness of the Company, and pari passu (equally and ratably) with other
unsecured, unsubordinated indebtedness of the Company. The Senior Subordinated
Debt Securities will be subordinate in right of payment to certain other debt
obligations of the Company, pari passu with certain other senior subordinated
indebtedness of the Company and senior to certain other subordinated
indebtedness of the Company. The Subordinated Debt Securities will be
subordinate in right of payment to certain other debt obligations of the Company
and pari passu with certain other subordinated indebtedness of the Company. At
March 31, 1995, the Company had an aggregate of approximately $7.01 billion of
total Debt (as defined under "Senior Debt Securities -- Definitions") (including
guarantees of indebtedness of others and the unaccreted portion of indebtedness
issued at a discount, but excluding indebtedness to subsidiaries), substantially
all of which would rank on a parity in right of payment with the Senior Debt
Securities. At that date, the Company also had an aggregate of approximately $95
million in undrawn lines of credit (excluding amounts related to lines of credit
which provide availability to support commercial paper).
The Company is a holding company and its assets consist primarily of
investments in its subsidiaries. A substantial portion of the consolidated
liabilities of the Company have been incurred by its subsidiaries. Therefore,
the Company's rights and the rights of its creditors, including holders of Debt
Securities, to participate in the distribution of assets of any subsidiary upon
the latter's liquidation or reorganization will be subject to prior claims of
the subsidiary's creditors, including trade creditors, except to the extent that
the Company may itself be a creditor with recognized claims against the
subsidiary (in which case the claims of the Company would still be subject to
the prior claims of any secured creditor of such subsidiary and of any holder of
indebtedness of such subsidiary that is senior to that held by the Company). At
March 31, 1995, the Company's subsidiaries had total Debt of approximately $4.06
billion (including guarantees of indebtedness of others and the unaccreted
portion of indebtedness issued at a discount, but excluding indebtedness owed to
the Company). At that date the Company's subsidiaries had an aggregate of
approximately $2.14 billion in undrawn lines of credit.
The Debt Securities will be obligations exclusively of the Company. The
Company's ability to service its indebtedness, including the Debt Securities, is
dependent primarily upon the earnings of its subsidiaries and the distribution
or other payment of such earnings to the Company in the form of dividends, loans
or advances, payment or reimbursement for management fees and expenses, and
repayment of loans and advances from the Company. The subsidiaries are separate
and distinct legal entities and have no obligation, contingent or otherwise, to
pay any amounts due pursuant to the Debt Securities or to make any funds
available therefor, whether by dividends, loans or other payments. The payment
of dividends or the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or regulatory restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business considerations. Further, certain of the Company's subsidiaries are
subject to loan agreements that prohibit or limit the transfer of funds by such
subsidiaries to the Company in the form of loans, advances or dividends and
require that such subsidiaries' indebtedness to the Company be subordinate to
the indebtedness under such loan agreements. The amount of net assets of
subsidiaries subject to such restrictions exceeds the Company's consolidated net
assets. Tele-Communications, Inc. is also a separate and distinct legal entity
and it has no obligation, contingent or otherwise, to pay any amounts due
pursuant to the Debt Securities or to make any funds available therefor, whether
by loans or other payments.
The Senior Debt Securities will be issued under an Indenture executed by
the Company and Shawmut Bank Connecticut, National Association, as Trustee,
dated as of July 26, 1993, as amended and supplemented by a First Supplemental
Indenture, dated as of September 13, 1994 (the "SBC Indenture") or under an
Indenture executed by the Company and The Bank of New York, as Trustee, dated as
of August 4, 1993, as
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<PAGE> 12
amended and supplemented by a First Supplemental Indenture, dated as of
September 13, 1994 (the "BNY Indenture," and together with the SBC Indenture,
the "Senior Indentures"); the Senior Subordinated Debt Securities will be issued
under an Indenture to be executed by the Company and Shawmut Bank, N.A., as
Trustee (the "Senior Subordinated Indenture"); and the Subordinated Debt
Securities will be issued under an Indenture executed by the Company and
Chemical Bank, as Trustee, dated as of April 1, 1991 (the "Subordinated
Indenture"). In this Prospectus, the SBC Indenture, the BNY Indenture, the
Senior Subordinated Indenture and the Subordinated Indenture are sometimes
collectively referred to as the Indentures and individually as an Indenture and
the Trustee under the SBC Indenture, the Trustee under the BNY Indenture, the
Trustee under the Senior Subordinated Indenture and the Trustee under the
Subordinated Indenture are sometimes collectively referred to as the Trustees
and individually as a Trustee. The terms of the Senior Debt Securities, the
Senior Subordinated Debt Securities and the Subordinated Debt Securities include
those stated in the respective Indentures and those made part of the Indentures
by reference to the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), as in effect on the date of the Indentures. The Indentures are
filed as exhibits to the Registration Statement. The Debt Securities are subject
to all such terms and holders of Debt Securities are referred to the respective
Indentures and the Trust Indenture Act for a statement of such terms. See
"Additional Information."
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all provisions of the Indentures. As used in this section
"Description of Debt Securities," unless the context indicates otherwise, the
term "Company" means TCI Communications, Inc. and does not include any of its
subsidiaries. All other capitalized terms used in this section and not otherwise
defined have the meanings assigned to them in the Indentures.
GENERAL
The Indentures do not limit the amount of Debt Securities which can be
issued thereunder and provide that Debt Securities may be issued in one or more
series, in such form, with such terms and up to the aggregate principal amount
authorized from time to time by the Company. (Sections 2.01 and 2.02 of the
Indentures)
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities consisting of Debt Securities: (i) the designation
(including whether they are Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities), aggregate principal amount,
authorized denominations and currency or currencies in which principal, premium,
if any, and interest on the Offered Securities are payable; (ii) whether the
Offered Securities are to be issuable initially in temporary global form and
whether any of the Offered Securities are issuable in permanent global form as
Global Securities; (iii) whether the Offered Securities are to be issuable as
Registered Debt Securities or Bearer Debt Securities or both; (iv) the index or
indices used to determine the amount of payments of principal, premium, if any,
and interest on the Offered Securities; (v) the percentage of their principal
amount at which such Offered Securities will be issued; (vi) the date on which
the Offered Securities will mature (which may be fixed or extendible); (vii) the
rate or rates (which may be fixed or variable) per annum, if any, at which the
Offered Securities will bear interest and the date from which such interest will
accrue; (viii) the times at which any such interest will be payable and with
respect to Registered Debt Securities the record date for the interest payable
on any interest payment date; (ix) any mandatory or optional sinking fund or
analogous provisions; (x) the date or dates, if any, on or after which, or the
circumstances under which, and the price or prices (and form or method of
payment thereof) at which the Offered Securities may be redeemed, purchased or
exchanged at the option of the Company or any holder; (xi) any covenants or
Events of Default that are in addition to or different from those described
herein; and (xii) any other specific terms.
If the purchase price of any Offered Securities is denominated in one or
more foreign currencies, foreign currency units or composite currencies, or if
the principal, premium, if any, and interest on any Offered Securities are
payable in one or more foreign currencies, foreign currency units or composite
currencies, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such Offered Securities and such
foreign currency or currencies or foreign currency unit or units or composite
currencies will be set forth in the applicable Prospectus Supplement.
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<PAGE> 13
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their principal
amount ("original issue discount"). The issue price of Offered Securities that
are Original Issue Discount Securities, the amount of the original issue
discount with respect thereto, the manner and rate or rates per annum (which may
be fixed or variable) at which such original issue discount shall accrue, the
yield to maturity represented thereby, the date or dates from or to which or
period or periods during which such original issue discount shall accrue, the
portion of the principal amount of such Offered Securities that will be payable
upon acceleration of the maturity thereof or upon the optional or mandatory
redemption, purchase or exchange thereof, and any other specific terms thereof
will be described in the Prospectus Supplement relating thereto, together with
special federal income tax and other considerations applicable to such Offered
Securities.
SENIOR DEBT SECURITIES
The Senior Indentures contain, among others, the following covenants which
will apply to Offered Securities that are Senior Debt Securities unless
otherwise provided in the Prospectus Supplement for such Offered Securities:
Change of Control. With respect to the Senior Debt Securities of any
series, if both (i) a Change of Control shall occur at any time after the date
on which Senior Debt Securities of such series are first issued and on or prior
to a date to be specified for such series in the related Prospectus Supplement
and (ii) on any date during the period commencing 90 days before and ending 90
days after a public filing has been made with the Commission or other general
public disclosure has been made indicating the occurrence of such Change of
Control, the then current rating of the Senior Debt Securities of such series by
Duff & Phelps Credit Rating Co. or its successor ("D&P") or by Moody's Investors
Service, Inc. or its successor ("Moody's") is downgraded to lower than BBB-, in
the case of D&P (or an equivalent successor rating), or lower than Baa3, in the
case of Moody's (or an equivalent successor rating) and, in the event that such
downgrading shall have occurred during the 90-day period prior to such public
disclosure, the rating assigned to such series of Senior Debt Securities by D&P
or Moody's as of the close of business on the date of such public disclosure
remains lower than BBB- or lower than Baa3, respectively (the occurrence of the
conditions specified in both (i) and (ii) above being a "Put Event"), then each
holder of Senior Debt Securities of such series shall have the right to require
the Company to repurchase all or any portion of such holder's Senior Debt
Securities of such series at a purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of purchase
(or if the Senior Debt Securities of such series are Original Issue Discount
Securities, 100% of that portion of the principal amount specified in the terms
of that series that would be payable if the maturity thereof were accelerated
pursuant to the Indenture), all as provided in, and subject to the terms of, the
Senior Indentures, as either of such Senior Indentures may be supplemented in
connection with the issuance of Senior Debt Securities of such series
thereunder. Subsequent to the occurrence of a Put Event, the Company will give a
notice to each holder of Senior Debt Securities of such series setting forth,
among other things, details regarding the right of such holder to require the
Company to repurchase such holder's Senior Debt Securities of such series, the
purchase date, and the name and address of the Paying Agent (which for this
purpose will, in the case of Registered Securities, be the Trustee and, in the
case of Bearer Securities, will be a Paying Agent in a place of payment located
outside the United States) to which such Senior Debt Securities are to be
presented and surrendered. The Company will not be obligated, with respect to
the Senior Debt Securities of any series, to purchase such Senior Debt
Securities or give notice to the holders thereof with respect to more than one
Put Event. (Section 4.02 of the Senior Indentures) The obligation of the Company
to purchase Senior Debt Securities put to it pursuant to this covenant will rank
senior to its obligations in respect of the Senior Subordinated Debt Securities
and the Subordinated Debt Securities. The applicability of this covenant is
limited to the circumstances described above and this covenant is not designed
to, and may not, provide rights to the holders of Senior Debt Securities in all
circumstances in which the market value of the Senior Debt Securities held by
them may be adversely affected, whether as the result of the Company's engaging
in a highly leveraged transaction or otherwise.
The Company will comply with any applicable requirements of Rule 14e-1
promulgated under the Exchange Act and any applicable securities laws and
regulations in connection with the performance of its obligations under this
covenant.
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<PAGE> 14
Limitation on Liens. Subject to certain specified exceptions, as long as
any Senior Debt Securities of a series entitled to the benefit of this covenant
are outstanding, the Company will not, and will not permit any Restricted
Subsidiary to, create, incur or assume any Lien on Restricted Property to secure
the payment of Funded Debt of the Company or any Restricted Subsidiary if
immediately after the creation, incurrence or assumption of such Lien, the
aggregate outstanding principal amount of all Funded Debt of the Company and the
Restricted Subsidiaries that is secured by Liens on Restricted Property would
exceed fifteen percent (15%) of the Maximum Funded Debt Amount, unless effective
provision is made whereby the Senior Debt Securities (together with, if the
Company shall so determine, any other Funded Debt ranking equally with the
Senior Debt Securities, whether then existing or thereafter created) are secured
equally and ratably with (or prior to) such Funded Debt (but only for so long as
such Funded Debt is so secured). (Section 4.04 of the Senior Indentures)
Limitation on Restricted Subsidiary Funded Debt. As long as any Senior Debt
Securities of a series entitled to the benefit of this covenant are outstanding,
the Company will not permit any Restricted Subsidiary to incur or assume any
Funded Debt if immediately after the incurrence or assumption of such Funded
Debt, the aggregate outstanding principal amount of all Funded Debt of the
Restricted Subsidiaries would exceed fifteen percent (15%) of the Maximum Funded
Debt Amount. Notwithstanding the foregoing, any Restricted Subsidiary may incur
Funded Debt to extend, renew or replace Funded Debt of such Restricted
Subsidiary, provided that the principal amount of the Funded Debt so incurred
does not exceed the principal amount of the Funded Debt extended, renewed or
replaced thereby immediately prior to such extension, renewal or replacement
plus any premium, accrued and unpaid interest or capitalized interest payable
thereon. (Section 4.05 of the Senior Indentures) The Senior Indentures do not
limit the incurrence of Funded Debt, or any other debt, secured or unsecured, by
the Company, except as described under "Limitation on Liens," or by any
Unrestricted Subsidiary.
Designation of Restricted Subsidiaries. With respect to the Senior Debt
Securities of any series, the Company may designate an Unrestricted Subsidiary
as a Restricted Subsidiary or designate a Restricted Subsidiary as an
Unrestricted Subsidiary at any time, provided that (1) immediately after giving
effect to such designation, the Leverage Ratio of the Restricted Group is not
greater than 8.0:1 and the Company and the Restricted Subsidiaries are in
compliance with the "Limitation on Liens" and "Limitation on Restricted
Subsidiary Funded Debt" covenants, and (2) an Officers' Certificate with respect
to such designation is delivered to the Trustee within 75 days after the end of
the fiscal quarter of the Company in which such designation is made (or, in the
case of a designation made during the last fiscal quarter of the Company's
fiscal year, within 120 days after the end of such fiscal year), which Officers'
Certificate shall state the effective date of such designation. The Company
shall make the initial designation of Restricted Subsidiaries with respect to
the Senior Debt Securities of any series, and deliver the required Officers'
Certificate with respect thereto to the Trustee, on or prior to the date of
initial issuance of Senior Debt Securities of such series. (Section 4.03 of the
Senior Indentures)
Definitions. The following are certain of the terms defined in each of the
Senior Indentures (Section 1.01):
"Change of Control" means the occurrence of either of the following events
(to the extent applicable): (A) the acquisition by any person (other than the
Parent, the Company, any subsidiary of the Parent or the Company, any employee
stock ownership or other employee benefit plan of the Parent or the Company or
of any subsidiary of the Parent or the Company, or any Controlling Person)
during any period of twelve (12) consecutive months of beneficial ownership of
shares of the Common Stock or Class B Stock or both of the Company representing
in the aggregate thirty percent (30%) or more of the combined voting power of
all shares of the Company's Common Stock and Class B Stock, calculated on a
fully diluted basis as of the date immediately prior to the date of such
acquisition (or, if there be more than one acquisition during such twelve-month
period, the date of the last such acquisition); provided, however, that
notwithstanding the foregoing, no Change of Control shall be deemed to have
occurred if and for so long as the shares of the Common Stock and Class B Stock
of the Company beneficially owned by the Parent, the subsidiaries of the Parent
and the Controlling Persons represent in the aggregate 30% or more of the
combined voting power of all shares of the Company's Common Stock and Class B
Stock calculated on a fully diluted basis, or (B) for so long as the Company is
a subsidiary of the Parent, the acquisition by any person (other than the
Parent, any subsidiary of
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<PAGE> 15
the Parent, any employee stock ownership plan or other employee benefit plan of
the Parent or any subsidiary of the Parent, or any Controlling Person) during
any period of twelve (12) consecutive months of beneficial ownership of shares
of the Class A or Class B Common Stock or both of the Parent representing in the
aggregate thirty percent (30%) or more of the combined voting power of all
shares of the Parent's Class A and Class B Common Stock, calculated on a fully
diluted basis as of the date immediately prior to the date of such acquisition
(or, if there be more than one acquisition during such twelve-month period, the
date of the last such acquisition); provided, however, that notwithstanding the
foregoing no Change of Control shall be deemed to have occurred if and for so
long as the shares of the Parent's Class A and Class B Common Stock beneficially
owned by the Controlling Persons represent in the aggregate 30% or more of the
combined voting power of all shares of the Parent's Class A and Class B Common
Stock calculated on a fully diluted basis.
"Company" means TCI Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of the applicable
Indenture and thereafter means the successor.
"Controlling Person" means each of (1) the Chairman of the Board of the
Company as of the date the applicable Indenture was first executed, (2) the
President of the Company as of the date the applicable Indenture was first
executed, (3) each of the directors of the Company as of the date the applicable
Indenture was first executed, (4) the respective family members, estates and
heirs of each of the persons referred to in clauses (1) through (3) above and
any trust or other investment vehicle for the primary benefit of any of such
persons or their respective family members or heirs, (5) Kearns-Tribune
Corporation, a Delaware corporation or any successor thereto by merger or
consolidation and (6) the trustee under the Parent's Employee Stock Purchase
Plan or any successor plan or any other employee stock ownership or other
employee benefit plan of the Parent or the Company or of any subsidiary of the
Parent or the Company. As used with respect to any person, the term "family
member" means the spouse, siblings and lineal descendants of such person. The
trustee under the Parent's Employee Stock Purchase Plan or any successor plan or
any other employee stock ownership or other employee benefit plan of the Parent
or the Company or of any subsidiary of the Parent or the Company shall be deemed
to have beneficial ownership of all shares of common stock of the Parent or the
Company held under the plan, whether or not allocated to or vested in
participants' accounts.
"Debt" of any person means:
(1) any indebtedness of such person (i) for borrowed money or (ii)
evidenced by a note, debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any property or assets,
including securities;
(2) any guarantee by such person of any indebtedness of others described in
the preceding clause (1); and
(3) any amendment, extension, renewal or refunding of any such indebtedness
or guarantee.
"Funded Debt" of any person means, as of the date as of which the amount
thereof is to be determined, without duplication, all indebtedness of such
person for borrowed money and all guaranties by such person of any indebtedness
of others for borrowed money, which by its terms has a final maturity, duration
or payment date more than one year from the date of determination thereof
(including, without limitation, any balance of such indebtedness which was
Funded Debt at the time of its creation maturing within one year from such date
of determination) or which has a final maturity, duration or payment date within
one year from such date of determination but which by its terms may be renewed
or extended at the option of such person for more than one year from such date
of determination, whether or not theretofore renewed or extended. When used with
respect to the Company or any Restricted Subsidiary, the term "Funded Debt"
excludes (1) any indebtedness of the Company or any Restricted Subsidiary to the
Company or another Restricted Subsidiary, (2) any guarantee by the Company or
any Restricted Subsidiary of indebtedness of the Company or another Restricted
Subsidiary, provided that such guarantee is not secured by a Lien on Restricted
Property, and (3) with respect to any series of Senior Debt Securities, any
indebtedness of the Company or any Restricted Subsidiary to any Unrestricted
Subsidiary which indebtedness is subordinated in right of payment to the prior
payment in full of the outstanding Senior Debt Securities of such series on
terms no less favorable to the holders of such Senior Debt Securities than those
contained in Article Ten of the Subordinated Indenture pursuant to which
Subordinated Debt Securities issued by the Company are subordinated to all
Senior Debt of
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<PAGE> 16
the Company (as defined therein), without giving effect to any amendment,
modification or supplement to, or discharge of, the Subordinated Indenture after
the date of the Senior Indenture, and which indebtedness is not secured by a
Lien on Restricted Property. For purposes of determining the outstanding
principal amount of Funded Debt at any date, the amount of indebtedness issued
at a price less than the principal amount thereof shall be equal to the amount
of the liability in respect thereof at such date determined in accordance with
generally accepted accounting principles.
"Leverage Ratio" with respect to the Restricted Group means, as of the date
of and after giving effect to any designation of an Unrestricted Subsidiary as a
Restricted Subsidiary and/or any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, in each case in accordance with the "Designation of
Restricted Subsidiaries" covenant, the ratio of (1) the aggregate outstanding
principal amount of all Funded Debt of the Restricted Group as of such date to
(2) the product of four times the Restricted Group Cash Flow for the most recent
full fiscal quarter for which financial information is available on such date.
"Lien" means any mortgage, pledge, lien, security interest, or other
similar encumbrance.
"Maximum Funded Debt Amount" means, as of any date of determination
thereof, that amount which is equal to the product of (i) eight and (ii) the
product of (x) the Restricted Group Cash Flow for the most recent full fiscal
quarter for which financial information is available on such date and (y) four.
"Parent" means Tele-Communications, Inc., a Delaware corporation, and any
successor thereof.
"Principal Property" means, as of any date of determination, any property
or assets owned by any Restricted Subsidiary other than (1) any such property
which, in the good faith opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole and (2) any shares of any class of stock or any
other security of any Unrestricted Subsidiary.
"Restricted Group" means, as of any date of determination, the Company and
the Restricted Subsidiaries as of such date after giving effect to any
designation being made on such date in accordance with the "Designation of
Restricted Subsidiaries" covenant.
"Restricted Group Cash Flow" for any period means the Restricted Group Net
Income (as defined below) for such period, plus (A) the sum (without
duplication) of the aggregate of each of the following items of the Company and
the Restricted Subsidiaries for such period to the extent taken into account as
charges to Restricted Group Net Income for such period: (i) interest expense,
(ii) income tax expense, (iii) depreciation and amortization expense and other
noncash charges, (iv) extraordinary items and (v) after-tax losses on sales of
assets outside of the ordinary course of business not otherwise included in
extraordinary items in accordance with generally accepted accounting principles,
minus (B) the sum (without duplication) of the aggregate of each of the
following items of the Company and the Restricted Subsidiaries for such period
to the extent taken into account as credits to Restricted Group Net Income for
such period: (i) noncash credits, (ii) extraordinary items, and (iii) after-tax
gains on sales of assets outside of the ordinary course of business not
otherwise included in extraordinary items in accordance with generally accepted
accounting principles.
For purposes of this definition, (1) "Restricted Group Net Income" for any
period means the aggregate of the net income (loss) for such period of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that (i) the net income (loss) of any person accounted for by the equity method
of accounting and the net income (loss) of any Unrestricted Subsidiary shall be
excluded, except that the net income of any such person or Unrestricted
Subsidiary shall be included to the extent of the amount of dividends or
distributions paid by such person or Unrestricted Subsidiary to the Company or a
Restricted Subsidiary during such period, and (ii) except as otherwise provided
in clause (2) below, the net income (loss) of any other person acquired by the
Company or any Restricted Subsidiary in a transaction accounted for as a pooling
of interests for any period prior to the date of such acquisition shall be
excluded; and (2) if the Company or any Restricted Subsidiary consummated any
acquisition or disposition of assets during the period for which Restricted
Group Cash Flow is being calculated, or consummated any acquisition or
disposition of assets subsequent to such period and on or prior to the date as
of which the Leverage Ratio or Maximum Funded Debt Amount, as
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applicable, is to be determined, then, in each such case, the Restricted Group
Cash Flow for such period shall be calculated on a pro forma basis as if such
acquisition or disposition had occurred at the beginning of such period.
"Restricted Property" means, as of any date of determination, any Principal
Property and any shares of stock of a Restricted Subsidiary owned by the Company
or a Restricted Subsidiary.
"Restricted Subsidiary" means, as of any date of determination, a
corporation a majority of whose voting stock is owned by the Company and/or one
or more Restricted Subsidiaries, which corporation has been, or is then being,
designated a Restricted Subsidiary in accordance with the "Designation of
Restricted Subsidiaries" covenant, unless and until designated an Unrestricted
Subsidiary in accordance with such covenant.
"Subsidiary" means a corporation a majority of whose voting stock is owned
by the Company and/or one or more Subsidiaries. Voting stock is capital stock
having voting power under ordinary circumstances to elect directors.
"Unrestricted Subsidiary" means, as of any date of determination, any
Subsidiary of the Company that is not a Restricted Subsidiary.
SENIOR SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are Senior
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities:
Subordination. The indebtedness evidenced by the Senior Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or any other debt,
secured or unsecured, of the Company or any subsidiary, except as described
under "Limitation on Subordinated Debt Superior to the Senior Subordinated Debt
Securities" below. Upon maturity (by acceleration or otherwise) of any Senior
Debt, payment in full must be made on such Senior Debt (or duly provided for)
before any payment is made on or in respect of the Senior Subordinated Debt
Securities (except payments made in capital stock of the Company or in warrants,
rights or options to purchase or acquire capital stock of the Company, sinking
fund payments made in Senior Subordinated Debt Securities acquired by the
Company before the maturity of such Senior Debt, and payments made through the
exchange of other debt obligations of the Company for such Senior Subordinated
Debt Securities in accordance with the terms of such Senior Subordinated Debt
Securities provided that such debt obligations are subordinated to Senior Debt
at least to the extent that the Senior Subordinated Debt Securities for which
they are exchanged are so subordinated in accordance with the Indenture). During
the continuance of any default in payment of the principal of, premium, if any,
interest on, or other amounts due in respect of, any Senior Debt, no payment may
be made by the Company on, or in respect of, the Senior Subordinated Debt
Securities (except payments made in capital stock of the Company or in warrants,
rights or options to purchase or acquire capital stock of the Company, sinking
fund payments made in Senior Subordinated Debt Securities acquired by the
Company before such default and notice thereof, and payments made through the
exchange of other debt obligations of the Company for such Senior Subordinated
Debt Securities in accordance with the terms of such Senior Subordinated Debt
Securities provided that such debt obligations are subordinated to Senior Debt
at least to the extent that the Senior Subordinated Debt Securities for which
they are exchanged are so subordinated in accordance with the Indenture). Upon
any distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, payment of all amounts due in
respect of the Senior Subordinated Debt Securities will be subordinated, to the
extent and in the manner set forth in the Indenture, to the prior payment in
full of all Senior Debt. Such subordination will not prevent the occurrence of
any Event of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Indenture)
The Indenture for the Senior Debt Securities contains a cross-acceleration
provision that would, among other things, permit the acceleration of the
maturity of any outstanding Senior Debt Securities in the event that the
maturity of any outstanding Senior Subordinated Debt Securities or Subordinated
Debt Securities were accelerated. See "Defaults and Remedies" below. The
instruments and agreements pursuant to which all or substantially all of the
Company's Senior Debt has been incurred also contain cross-default or cross-
acceleration provisions.
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Securities Senior to Junior Subordinated Debt. The indebtedness evidenced
by the Senior Subordinated Debt Securities will be superior in right of payment
to all Junior Subordinated Debt as described below. Upon maturity (by
acceleration or otherwise) of the Senior Subordinated Debt Securities of any
series, payment in full must be made thereon, or duly provided for, before any
payment is made on or in respect of any Junior Subordinated Debt (except
payments made in capital stock of the Company or in warrants, rights or options
to purchase or acquire capital stock of the Company, sinking fund payments made
in instruments evidencing Junior Subordinated Debt of the same issue acquired
before the maturity of the Senior Subordinated Debt Securities of such series,
and payments made through the exchange of other debt obligations of the Company
for such Junior Subordinated Debt in accordance with the terms of such Junior
Subordinated Debt provided that such debt obligations are subordinated to the
Senior Subordinated Debt Securities at least to the extent that the Junior
Subordinated Debt for which they are exchanged is so subordinated in accordance
with the Indenture). During the continuance of any default in payment of the
principal of, premium, if any, interest on, or other amounts due in respect of,
the Senior Subordinated Debt Securities of any series, no payment may be made by
the Company on, or in respect of, any Junior Subordinated Debt (except payments
made in capital stock of the Company or in warrants, rights or options to
purchase or acquire capital stock of the Company, sinking fund payments made in
instruments evidencing Junior Subordinated Debt of the same issue acquired
before such default and notice thereof, and payments made through the exchange
of other debt obligations of the Company for such Junior Subordinated Debt in
accordance with the terms of such Junior Subordinated Debt provided that such
debt obligations are subordinated to the Senior Subordinated Debt Securities at
least to the extent that the Junior Subordinated Debt for which they are
exchanged is so subordinated in accordance with the Indenture). Upon any
distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, holders of the Senior Subordinated
Debt Securities will be entitled to receive payment in full of all amounts due
in respect thereof before the holders of any Junior Subordinated Debt are
entitled to receive any payment on account of such Junior Subordinated Debt.
(Section 4.05 of the Indenture)
Limitation on Subordinated Debt Superior to the Senior Subordinated Debt
Securities. As long as any Senior Subordinated Debt Securities remain
outstanding, the Company may not create or incur any Debt which is subordinate
or junior in right of payment to any Senior Debt if such Debt is superior in
right of payment to the Senior Subordinated Debt Securities. (Section 4.06 of
the Indenture)
Definitions. The following are certain of the terms defined in the
Indenture (Sections 4.06 and 10.01):
"Junior Subordinated Debt" means the principal of (premium, if any) and
interest on Debt of the Company created or incurred after the date of the
Indenture which by its terms is subordinate in right of payment to the Senior
Subordinated Debt Securities, including any Subordinated Debt Securities issued
under the Subordinated Indenture.
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Senior Subordinated
Debt Securities, (ii) the Company's outstanding 11 1/8% senior subordinated
debentures due October 1, 2003, which shall rank pari passu with the Senior
Subordinated Debt Securities, (iii) any Subordinated Debt Securities issued
under the Subordinated Indenture, and (iv) Debt which by its terms is not
superior in right of payment to the Senior Subordinated Debt Securities.
The definition of "Debt" in the Senior Subordinated Indenture is the same
as that in the Senior Indenture.
Nothing in the Indenture affords holders of Senior Subordinated Debt
Securities protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company.
SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities:
Subordination. The indebtedness evidenced by the Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or
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<PAGE> 19
any other debt, secured or unsecured, of the Company or any subsidiary. Upon
maturity (by acceleration or otherwise) of any Senior Debt, payment in full must
be made on such Senior Debt (or duly provided for) before any payment is made on
or in respect of the Subordinated Debt Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in Subordinated
Debt Securities acquired by the Company before the maturity of such Senior Debt,
and payments made through the exchange of other debt obligations of the Company
for such Subordinated Debt Securities in accordance with the terms of such
Subordinated Debt Securities provided that such debt obligations are
subordinated to Senior Debt at least to the extent that the Subordinated Debt
Securities for which they are exchanged are so subordinated in accordance with
the Indenture). During the continuance of any default in payment of the
principal of, premium, if any, interest on, or other amounts due in respect of,
any Senior Debt, no payment may be made by the Company on, or in respect of, the
Subordinated Debt Securities (except payments made in capital stock of the
Company or in warrants, rights or options to purchase or acquire capital stock
of the Company, sinking fund payments made in Subordinated Debt Securities
acquired by the Company before such default and notice thereof, and payments
made through the exchange of other debt obligations of the Company for such
Subordinated Debt Securities in accordance with the terms of such Subordinated
Debt Securities provided that such debt obligations are subordinated to Senior
Debt at least to the extent that the Subordinated Debt Securities for which they
are exchanged are so subordinated in accordance with the Indenture). Upon any
distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, payment of all amounts due in
respect of the Subordinated Debt Securities will be subordinated, to the extent
and in the manner set forth in the Indenture, to the prior payment in full of
all Senior Debt. Such subordination will not prevent the occurrence of any Event
of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Indenture) The
Indenture for the Senior Debt Securities contains a cross-acceleration provision
that would, among other things, permit the acceleration of the maturity of any
outstanding Senior Debt Securities in the event that the maturity of any
outstanding Senior Subordinated Debt Securities or Subordinated Debt Securities
were accelerated. See "Defaults and Remedies" below. The instruments and
agreements pursuant to which all or substantially all of the Company's Senior
Debt has been incurred also contain cross-default or cross-acceleration
provisions.
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Subordinated Debt
Securities, and (ii) Debt which by its terms is not superior in right of payment
to the Subordinated Debt Securities. The definition of "Debt" in the
Subordinated Indenture is the same as that in the Senior Indenture.
Nothing in the Indenture affords holders of Subordinated Debt Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company.
DENOMINATIONS AND FORM
Unless otherwise indicated in the Prospectus Supplement, the Offered
Securities will be Registered Debt Securities denominated in U.S. Dollars and
will be issued only in denominations of $1,000 and integral multiples of $1,000.
(Section 2.03 of the SBC, Senior Subordinated and Subordinated Indentures and
Sections 2.01 and 2.03 of the BNY Indenture) Under the BNY Indenture, Debt
Securities of any series may be issuable as Registered Debt Securities, Bearer
Debt Securities (with or without coupons attached) or both, and may be issuable
in whole or in part in the form of one or more Global Securities. In addition,
the BNY Indenture provides that Debt Securities may be denominated or payable in
one or more foreign currencies, foreign currency units or composite currencies.
(Sections 2.01 and 2.02 of the BNY Indenture) Unless otherwise indicated in the
applicable Prospectus Supplement, Bearer Debt Securities denominated in U.S.
Dollars will be issued only in the denomination of $5,000 with coupons attached.
(Sections 2.01 and 2.03 of the BNY Indenture) A Global Security will be issued
in a denomination equal to the aggregate principal amount of outstanding Debt
Securities represented by such Global Security. (Section 2.10 of the BNY
Indenture) The Prospectus Supplement relating to a series of Debt Securities
denominated other than in U.S. Dollars will specify the authorized denominations
thereof.
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<PAGE> 20
During the "restricted period," as defined in Treasury Regulation Section
1.163-5(c)(2)(i)(D)(7), no Bearer Debt Security may be offered or sold (or
resold in connection with its original issuance) in the United States or its
possessions or to a United States person (subject to certain exceptions).
Further, no Bearer Debt Security may be mailed or otherwise delivered to any
location in the United States or its possessions in connection with a sale that
occurred during the restricted period. Offered Securities that are Bearer Debt
Securities will be subject to certification requirements as to the ownership of
such Bearer Debt Security (including beneficial interests in a Global Security
representing such Bearer Debt Security) which will be described in the
applicable Prospectus Supplement. See "Limitations on Issuance of Bearer Debt
Securities."
REGISTRAR, PAYING AGENT
The Company will maintain an office or agency where Registered Debt
Securities of each series may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Debt Securities of each
series may be presented for payment ("Paying Agent"). The Company may have one
or more co-Registrars and one or more additional Paying Agents with respect to
any series of Debt Securities and the Company or any of its subsidiaries may act
as Paying Agent, Registrar or co-Registrar. Unless otherwise indicated in an
applicable Prospectus Supplement, each Trustee will initially act as Paying
Agent and Registrar for each series of Debt Securities issued under its
respective Indenture. The Company may change any Paying Agent, Registrar or
co-Registrar at any time without notice to the holders of Debt Securities,
except as described below with respect to Debt Securities issued under the BNY
Indenture. The Company will promptly notify the Trustee of the name and address
of any such Agent. (Section 2.05 of the Indentures)
The BNY Indenture also provides that if Debt Securities of a series are
issuable as Bearer Debt Securities, the Company will maintain (i) in the Borough
of Manhattan, The City of New York, an office or agency where any Registered
Debt Securities of that series may be presented or surrendered for payment and
for registration of transfer, where Debt Securities of that series may be
surrendered for exchange and where Bearer Debt Securities of that series and
related coupons may be presented or surrendered for payment in the circumstances
described under "Payment" below, and (ii) subject to any laws or regulations
applicable thereto, in a place of payment for Debt Securities of that series
located outside the United States, an office or agency where any Registered Debt
Securities of that series may be surrendered for registration of transfer, where
Debt Securities of that series may be surrendered for exchange and where Debt
Securities of that series and any related coupons may be presented and
surrendered for payment, provided that if the Debt Securities of that series are
listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Debt Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Debt Securities of that series are listed on
such exchange. Any Paying Agents outside the United States initially designated
by the Company for the Offered Securities will be named in the applicable
Prospectus Supplement. The Company will promptly notify the Trustee and the
holders of Debt Securities of a series of the location and any change in the
location of any office or agency which it is required to maintain for the Debt
Securities of such series. (Section 4.01 of the BNY Indenture)
TRANSFER AND EXCHANGE
Registered Debt Securities of any series (other than a Global Security,
except as provided under "Global Securities") will be exchangeable at the option
of the holder for other Registered Debt Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
(Section 2.08 of the Indentures) In addition, if Debt Securities of any series
issued under the BNY Indenture are issuable as both Registered Debt Securities
and Bearer Debt Securities, then, if so provided with respect to the Debt
Securities of such series, at the option of the holder and subject to the terms
of such Indenture, Bearer Debt Securities (with, except as provided below, all
related unmatured coupons and all related matured coupons in default) of such
series will be exchangeable for Registered Debt Securities of the same series of
any authorized denominations and of a like aggregate principal amount and tenor.
Bearer Debt Securities surrendered in exchange for Registered Debt Securities
between a regular record date or, in certain circumstances, a special record
date, for an interest payment and the relevant interest payment date shall be
surrendered without the coupon relating to such interest payment date attached
and interest will not be payable on such interest payment date in respect of
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<PAGE> 21
the Registered Debt Security issued in exchange for such Bearer Debt Security,
but will be payable only to the holder of such coupon in accordance with the
terms of the BNY Indenture. Unless otherwise specified in the applicable
Prospectus Supplement, Bearer Debt Securities will not be issued in exchange for
Registered Debt Securities. (Section 2.08 of the BNY Indenture)
Debt Securities of any series may be surrendered for exchange as provided
above, and Registered Debt Securities of any series (other than a Global
Security, except as provided under "Global Securities") may be surrendered for
registration of transfer, at the office or agency designated by the Company for
such purpose with respect to such series of Debt Securities. Bearer Debt
Securities will be transferable by delivery. (Section 2.14 of the BNY Indenture)
Every Registered Debt Security presented or surrendered for registration of
transfer or for exchange shall be duly endorsed or accompanied by appropriate
transfer documents duly executed. No service charge will be made for any
registration of transfer or exchange of Debt Securities, but the Company may
require payment of a sum sufficient to cover any taxes and other governmental
charges that may be imposed in relation thereto. (Section 2.08 of the
Indentures)
The Company and the Registrar need not transfer or exchange any Debt
Securities selected for redemption or purchase (except, in the case of Debt
Securities to be redeemed or purchased in part, the portion thereof not to be
redeemed or purchased) or any Debt Securities in respect of which a notice
requiring the purchase or redemption thereof by the Company at the option of the
holder thereof has been given and not withdrawn by such holder in accordance
with the terms of such Debt Securities (as described, if applicable, in the
Prospectus Supplement) (except, in the case of Debt Securities to be so
purchased or redeemed in part, the portion thereof not to be so purchased or
redeemed). (Section 2.08 of the Indentures) A Bearer Debt Security so selected
for redemption or purchase or in respect of which a notice requiring the
redemption or purchase thereof by the Company at the option of the holder
thereof has been given and not so withdrawn may however, if so provided with
respect to the Debt Securities of such series, be exchanged for a Registered
Debt Security of that series and like tenor, provided that such Registered Debt
Security is simultaneously surrendered for redemption or purchase, as the case
may be. (Section 2.08 of the BNY Indenture)
The SBC Indenture, the Senior Subordinated Indenture and the Subordinated
Indenture also provide that the Registrar need not transfer or exchange any Debt
Securities of a particular series during a period of 15 days before a selection
of Debt Securities of such series to be redeemed. (Section 2.08 of the SBC, the
Senior Subordinated and the Subordinated Indentures) The BNY Indenture provides
that the Company shall not be required to issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (i) if Debt Securities of that
series are issuable only as Registered Debt Securities, the date of the mailing
of the relevant notice of redemption, and (ii) if Debt Securities of that series
are issuable as Bearer Debt Securities, the date of the first publication of the
relevant notice of redemption or, if Debt Securities of that series are also
issuable as Registered Debt Securities and there is no publication, the mailing
of the relevant notice of redemption. (Section 2.08 of the BNY Indenture)
Prior to due presentment of a Registered Debt Security for registration of
transfer, the person in whose name such Registered Debt Security is registered
may be treated as the owner of it for all purposes. (Section 2.14 of the
Indentures) The bearer of any Bearer Debt Security and the bearer of any coupon
appertaining thereto may be treated as the owner of such Bearer Debt Security or
coupon for all purposes. (Section 2.14 of the BNY Indenture)
GLOBAL SECURITIES
The BNY Indenture provides that the Debt Securities of any series
thereunder may be issued in whole or in part in the form of one or more Global
Securities, which Global Securities may be issued in either registered or bearer
form and in either temporary or permanent form. (Sections 2.10 and 2.11 of the
BNY Indenture) Each Global Security will be deposited with and, if it is issued
in registered form, will be registered in the name of the depositary (or a
nominee of the depositary) identified in the applicable Prospectus Supplement.
(Section 2.10 of the BNY Indenture) So long as the depositary for a Global
Security in registered form, or its nominee, is the registered owner of the
Global Security, the depositary or its nominee, as the case may be, will be
considered the sole owner of the Debt Securities represented by such Global
Security for all purposes under the Indenture. (Section 2.14 of the BNY
Indenture) Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form, a Global Security may not be transferred except
as a whole by the depositary for such Global
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Security to a nominee of such depositary or by a nominee of such depositary to
such depositary or another nominee of such depositary or by the depositary or
any nominee to a successor depositary or any nominee of such successor. (Section
2.08 of the BNY Indenture) Unless otherwise specified in the applicable
Prospectus Supplement, if the depositary with respect to any Global Security is
at any time unwilling, unable or ineligible to continue as depositary and a
successor depositary is not appointed by the Company within 90 days of such
time, or if the Company, in its sole discretion, at any time determines that any
series of Debt Securities issued or issuable in the form of a Global Security
shall no longer be represented by such Global Security, then in either such
event the Global Security shall be exchanged for Debt Securities in definitive
form pursuant to the BNY Indenture. Further, if so specified by the Company with
respect to the Debt Securities of a series and described in the applicable
Prospectus Supplement, an owner of a beneficial interest in a Global Security
representing Debt Securities of such series may, on terms acceptable to the
Company and the depositary for such Global Security, receive Debt Securities of
such series in definitive form. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of Debt Securities in authorized denominations and of like tenor
of the series represented by such Global Security, equal in principal amount to
such beneficial interest, and to have such Debt Securities registered in its
name (if the Debt Securities of such series are issuable as Registered Debt
Securities). (Section 2.08 of the BNY Indenture) See, however, "Limitations on
Issuance of Bearer Debt Securities" below for a discussion of certain
restrictions on the delivery of a Bearer Debt Security in definitive form in
exchange for an interest in a Global Security. Except as described above, unless
otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the BNY Indenture.
Any specific terms of the depositary arrangement with respect to a series
of Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. The Company anticipates that the following provisions
will apply to all depositary arrangements.
Upon the issuance of a Global Security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
participants. Ownership of beneficial interests in a Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the depositary (with respect to beneficial interests of
participants in the depositary), or by participants in the depositary or persons
that may hold interests through such participants (with respect to beneficial
interests of persons other than participants in the depositary). Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that hold interests through participants.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Debt Securities" below, payments of the principal of and any premium and
interest on Debt Securities registered in the name of or held by a depositary or
its nominee will be made to the depositary or its nominee, as the case may be,
as the registered owner or the holder of the Global Security representing such
Debt Securities. None of the Company, the Trustee, any Paying Agent or the
Registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. (Section 2.14 of the BNY Indenture)
The Company expects that the depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
Global Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants. With
respect to a Global Security that represents in whole or in part Debt Securities
of a series that are issuable as Bearer Debt Securities, receipt by owners of
beneficial interests in such Global Security of payments in respect of such
Global Security will be subject to the restrictions discussed under "Limitations
on Issuance of Bearer Debt Securities" below.
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LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Debt Securities (including beneficial interests in a Global Security that
represents Bearer Debt Securities) may not be offered or sold (or resold in
connection with their original issuance) during the "restricted period," as
defined in Treasury Regulation Section 1.163-5(c)(2)(i)(D)(7), in the United
States or its possessions or to United States persons (each as defined below)
other than to (i) a Qualifying Foreign Branch of a United States Financial
Institution (as defined below), (ii) a United States person who acquires and
holds the obligation through the Qualifying Foreign Branch of a United States
Financial Institution, (iii) a United States office of an "exempt distributor,"
as defined in Treasury Regulation Section 1.163-5(c) (2)(i)(D)(5), (iv) the
United States office of an international organization, as defined in Section
7701(a)(18) of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations thereunder, or (v) the United States office of a foreign central
bank, as defined in Section 895 of the Code and the regulations thereunder. In
addition, Bearer Debt Securities may not be delivered within the United States
or its possessions in connection with a sale that occurred during the restricted
period. Any underwriters, agents and dealers participating in the offering of
Offered Securities must agree that they will not offer any Bearer Debt
Securities for sale or resale in the United States or its possessions or to
United States persons (other than a person specified in clause (i), (ii), (iii),
(iv) or (v) above) or deliver Bearer Debt Securities within the United States or
its possessions. The term "Qualifying Foreign Branch of a United States
Financial Institution" means a branch located outside the United States of a
United States financial institution (as defined in Treasury Regulation Section
1.165-12(c)(1)(v)) that provides a certificate within a reasonable time (or a
blanket certificate in the year the Debt Security is issued or either of the
preceding two calendar years) stating that it agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Code and the regulations
thereunder. The term "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof
and an estate or trust the income of which is subject to United States federal
income taxation regardless of its source; the term "United States" means the
United States of America (including the States and the District of Columbia),
and the term "possessions" includes, but is not limited to, Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
United States federal tax laws and regulations also require that the owner
of an obligation issuable in bearer form or the financial institution (as
defined in the preceding paragraph) or clearing organization through which the
owner directly or indirectly holds such obligation must provide the issuer of
the obligation with a certificate on the earlier of the date of the first actual
payment of interest on the obligation or the date of delivery by the issuer of
the obligation in definitive form stating that on such date the obligation is
owned by
(a) a person that is not a United States person, (b) a person described in
clause (i) or (ii) of the preceding paragraph, or (c) a financial institution
for purposes of resale during the restricted period, but not for resale directly
or indirectly to a United States person or to a person within the United States
or its possessions. A certificate described in clause (a) or (b) above may not
be given with respect to an obligation that is owned by a financial institution
for purposes of resale during the restricted period. When the required
certificate is provided by a clearing organization, the certificate must be
based upon statements provided to it by its member organizations. For purposes
of the foregoing, a "temporary global security," as defined in Treasury
Regulation Section 1.163-5(c)(l)(ii)(B), is not considered to be an obligation
in definitive form. In compliance with the foregoing, if the Offered Securities
are of a series of Debt Securities issuable as Bearer Debt Securities, the
delivery thereof (including delivery in exchange for an interest in a Global
Security) and the payment of interest thereon, as applicable, will be subject to
the satisfaction of certification requirements that will be specified by the
Company in accordance with the BNY Indenture in connection with the
establishment of such series and will be described in the applicable Prospectus
Supplement. (Sections 2.02 and 2.04 of the BNY Indenture) The BNY Indenture also
provides that no Bearer Debt Security (including a Global Security that
represents Bearer Debt Securities) will be mailed or otherwise delivered to any
location in the United States or its possessions. (Section 2.04 of the BNY
Indenture)
Bearer Debt Securities and any coupons appertaining thereto will bear a
legend substantially to the following effect: "Any United States person who
holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code." Under Sections 165(j) and 1287(a) of the
Code, holders that are United States
17
<PAGE> 24
persons, with certain exceptions, will not be entitled to deduct any loss on
Bearer Debt Securities and must treat as ordinary income any gain realized on
the sale or other disposition (including the receipt of principal) of Bearer
Debt Securities.
PAYMENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Debt Securities (other
than a Global Security) will be made, subject to any applicable laws and
regulations, at the offices of such Paying Agent or Paying Agents outside the
United States as the Company may designate from time to time, except that, at
the option of the Company (or, if so specified in the applicable Prospectus
Supplement, at the option of the holder), payment of interest may be made by
check (provided the same is not mailed to an address inside the United States)
or by wire transfer to an account located outside the United States maintained
by the payee. (Sections 2.13 and 4.01 of the BNY Indenture) Unless otherwise
indicated in an applicable Prospectus Supplement, payment of interest on Bearer
Debt Securities on any interest payment date will be made only against surrender
of the coupon relating to such interest payment date. (Section 2.13 of the BNY
Indenture) No payment with respect to any Bearer Debt Security will be made at
any office or agency of the Company in the United States or by check mailed to
any address in the United States or by transfer to an account maintained in the
United States. Notwithstanding the foregoing, payments of principal of and any
premium and interest on Bearer Debt Securities denominated and payable in U.S.
Dollars will be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. Dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 4.01 of the BNY Indenture)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities
(other than a Global Security) will be made at the office of such Paying Agent
or Paying Agents as the Company may designate from time to time, except that at
the option of the Company payment of any interest may be made by check mailed to
the address of the person entitled thereto as such address shall appear in the
security register or, if so specified with respect to the Registered Debt
Securities of any series issued under the BNY Indenture, by wire transfer to an
account designated by such person. Payment of any installment of interest on
Registered Debt Securities will be made to the person in whose name such
Registered Debt Security is registered at the close of business on the regular
record date (or, in the case of defaulted interest, special record date) for
such interest payment. (Section 2.13 of the Indentures)
All moneys paid by the Company to a Paying Agent for the payment of
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the holder
of such Debt Security or any coupon appertaining thereto will thereafter look
only to the Company for payment thereof unless an applicable abandoned property
law designates another person. (Section 8.03 of the Indentures)
AMENDMENT, SUPPLEMENT, WAIVER
Subject to certain exceptions, the Indentures or the Debt Securities may be
amended or supplemented, and any past default or compliance with any provision
may be waived, insofar as the Debt Securities of any series are concerned, with
the consent of the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series. (Sections 6.04 and 9.02 of the
Indentures) Without the consent of any holder of Debt Securities, the Company
and the Trustee may amend or supplement the Indentures or the Debt Securities to
cure any ambiguity, defect or inconsistency, to permit or facilitate the
issuance of Debt Securities in bearer form or to provide for uncertificated Debt
Securities in global form in addition to certificated Debt Securities (so long
as any "registration-required obligation," within the meaning of Section
163(f)(2) of the Code, is in registered form for purposes of the Code) or to
make certain other specified changes or any change that does not materially
adversely affect the rights of any holder of Debt Securities. (Section 9.01 of
the Indentures)
SUCCESSOR CORPORATION
The Company may not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another corporation
unless (i) the successor corporation, which shall be a corporation organized
18
<PAGE> 25
under the laws of the United States or a State thereof, assumes by supplemental
indenture all the obligations of the Company under the Debt Securities and the
Indentures, and (ii) after giving effect to such transaction, no Event of
Default shall have occurred and be continuing. Thereafter, unless otherwise
specified in the Prospectus Supplement, all such obligations of the Company
terminate. (Section 5.01 of the Indentures)
DEFAULTS AND REMEDIES
An Event of Default with respect to Debt Securities of any series is: (i)
default for 30 days in payment of any interest on the Debt Securities of that
series; (ii) default in payment of principal, premium or any other amount (other
than interest) due in respect of the Debt Securities of that series at maturity,
upon redemption (including default in the making of any mandatory sinking fund
payment), upon purchase by the Company at the option of the holder or otherwise;
(iii) failure by the Company for 30 days after receipt of written notice as
provided in the Indentures to comply with any of its other agreements in the
Indentures (other than agreements expressly included in the Indentures solely
for the benefit of a series of Debt Securities other than that series or
expressly made inapplicable to the Debt Securities of such series) or the Debt
Securities of that series; (iv) (for purposes of the Senior Indentures only)
acceleration of the maturity of any Debt of the Company (including Senior Debt
Securities of any other series) if the aggregate principal amount (or, if
applicable, issue price plus accrued original issue discount) of the Debt the
maturity of which has been accelerated exceeds five percent (5%) of the
aggregate principal amount of the Company's Funded Debt then outstanding and
such Debt is not paid, or such acceleration is not rescinded or annulled or such
acceleration is not contested by appropriate proceedings and all consequences
thereof that would have a material adverse effect on the Company stayed, within
30 days after receipt of written notice as provided in the SBC Indenture or the
BNY Indenture, as applicable; provided, however, that if, after the expiration
of such 30-day period, the event of default that resulted in the acceleration of
the maturity of such Debt of the Company is remedied or cured by the Company or
waived by the holders of such Debt in any authorized manner or otherwise ceases
to exist, then the Event of Default described in this clause (iv) resulting from
such acceleration will be deemed cured and not continuing; and (v) certain
events of bankruptcy or insolvency. (Section 6.01 of the Indentures) If an Event
of Default occurs with respect to the Debt Securities of any series and is
continuing, the Trustee or the holders of at least 25% in aggregate principal
amount of the Debt Securities of that series may declare to be due and payable
immediately (i) the principal amount of that series (or, if the Debt Securities
of that series are Original Issue Discount Securities, that portion of the
principal amount specified in the terms of that series) and (ii) accrued
interest, if any, thereon. The Indentures provide for automatic acceleration of
the maturity of such amounts upon the occurrence of certain events of bankruptcy
or insolvency. (Section 6.02 of the Indentures) The Senior Indentures provide
that a declaration of acceleration of the maturity of the Senior Debt Securities
of any series as a result of an Event of Default described in clause (iv) above
will be automatically annulled if (x) the acceleration of the Debt that is the
subject of such Event of Default is declared void ab initio as a result of the
Company's contest thereof or (y) the declaration of acceleration of such Debt is
rescinded or annulled in any manner authorized by the instrument evidencing or
creating such Debt within 90 days of the declaration of acceleration of the
Senior Debt Securities of such series and, in the case of clause (y), the
annulment of the declaration of acceleration under the SBC Indenture or the BNY
Indenture, as applicable, would not conflict with any judgment or decree, and,
in the case of either clause (x) or (y), all other existing Events of Default
(other than the non-payment of amounts that have become due with respect to such
Senior Debt Securities solely by such acceleration) with respect to Senior Debt
Securities of that series have been cured or waived. (Section 6.02 of the Senior
Indentures) Holders of Debt Securities may not enforce the Indentures or the
Debt Securities except as provided in the Indentures. (Section 6.06 of the
Indentures) The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Debt Securities. (Section 7.01 of the Indentures)
Subject to certain limitations, holders of a majority in aggregate principal
amount of the Debt Securities of any series may direct the Trustee in its
exercise of any trust or power with respect to the Debt Securities of that
series. (Section 6.05 of the Indentures) The Trustee may withhold from holders
of Debt Securities notice of any continuing default (except a default in payment
of principal, premium, if any, interest or other amounts due) if it determines
that withholding notice is in their interest. (Section 7.05 of the Indentures)
The Company is required to file periodic reports with the Trustee as to the
absence of default. (Section 4.07 of the Senior Indentures and Section 4.03 of
the Senior Subordinated and Subordinated Indentures)
19
<PAGE> 26
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or stockholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Debt Securities or the Indentures or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of Debt Securities by accepting a Debt Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Debt Securities. (Section 11.11 of the Senior
Indentures and Section 12.11 of the Senior Subordinated and Subordinated
Indentures)
SATISFACTION AND DISCHARGE
The Company's obligations under the Debt Securities of any series and the
applicable Indenture with respect to such series (except for the obligation to
pay the principal of and premium and interest, if any, on the Debt Securities of
such series and certain other specified obligations) will be satisfied and
discharged in accordance with the provisions of the Indenture if either (i) all
Debt Securities of such series and coupons, if any, appertaining thereto
previously authenticated and delivered (other than destroyed, lost or
wrongfully-taken Debt Securities or coupons which have been replaced or paid,
Debt Securities or coupons for whose payment money has theretofore been held in
trust and, after remaining unclaimed for two years, has been repaid to the
Company, and certain coupons appertaining to Bearer Securities surrendered for
exchange, redemption or purchase) have been delivered to the Trustee for
cancellation or (ii) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations (or, in the case of the BNY Indenture,
Government Obligations) sufficient to pay the principal of and premium and
interest, if any, on all Debt Securities of such series and coupons, if any,
appertaining thereto not theretofore cancelled or delivered to the Trustee for
cancellation (other than Debt Securities and coupons referred to in the
parenthetical in clause (i) above) to maturity or redemption, as the case may
be. (Section 8.01 of the Indentures)
THE TRUSTEES
The Bank of New York acts as depository for funds of, makes loans to, and
performs other services for the Company and certain of its affiliates in the
normal course of business and acts as trustee with respect to certain
outstanding senior indebtedness of the Company. The Bank of New York serves as
transfer agent and registrar for Tele-Communications, Inc.'s Class A and Class B
Common Stock and Class B 6% Cumulative Redeemable Exchangeable Junior Preferred
Stock. John C. Malone, President and a director of the Company, is a director of
The Bank of New York.
Shawmut Bank Connecticut, National Association (formerly known as The
Connecticut National Bank) has loaned funds to a subsidiary of the Company, acts
as trustee with respect to certain outstanding indebtedness of a subsidiary of
the Company and acts as trustee with respect to certain outstanding senior
indebtedness of the Company. Shawmut Bank, N.A. is an affiliate of Shawmut Bank
Connecticut, National Association and acts as trustee with respect to the
Company's outstanding 11 1/8% senior subordinated debentures due October 1,
2003. Shawmut Bank Connecticut, National Association or Shawmut Bank, N.A. may
loan money or perform other services for the Company or its subsidiaries in the
future.
Chemical Bank has loaned funds to certain subsidiaries of the Company and
performs other services for the Company and certain of its subsidiaries in the
normal course of business.
Each of the Trustees in its individual or any other capacity may become the
owner or pledgee of Debt Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not the Trustee
provided it complies with the terms of the Indenture. (Section 7.03 of the
Indentures)
ADDITIONAL INFORMATION
The Indentures are exhibits to the Registration Statement. Anyone who
receives this Prospectus may obtain copies of the Indentures without charge by
writing to Stephen M. Brett, Esq., Senior Vice President of the Company, at the
address set forth under "The Company." The foregoing summaries of certain
provisions of the Indentures do not purport to be complete and are subject to,
and qualified in their entirety by reference to, all provisions of the
Indentures, including the definitions of certain terms. Wherever particular
provisions or defined terms of the Indentures are referred to, such provisions
or defined terms are incorporated herein by reference.
20
<PAGE> 27
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities on a negotiated or competitive
bid basis to or through underwriters or dealers, and also may sell the Offered
Securities directly to other purchasers or through agents.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
If Offered Securities are offered on a competitive bid basis, the Company
will receive bids by telephone or otherwise prior to a designated time. Each bid
will be required to be made for all Offered Securities and the Company will
reserve the right to reject all bids. In the case of Debt Securities offered
alone or with Warrants, if any bid is accepted, the Company will accept the
qualified bid which in its sole and final determination will result in the
lowest annual cost of money to it for the Offered Securities. No underwriter
will be entitled to submit or participate as a bidder in more than one bid.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters and the names of
the underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
the Offered Securities. Unless otherwise indicated in the Prospectus Supplement,
the obligations of any underwriters to purchase the Offered Securities will be
subject to certain conditions precedent and the underwriters will be obligated
to purchase all of the Offered Securities if any are purchased. Such
underwriters may include Bear, Stearns & Co. Inc., Citicorp Securities Markets,
Inc., CS First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Furman & Selz, Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
Oppenheimer & Co., Inc., PaineWebber Incorporated, Salomon Brothers Inc or Smith
Barney Inc., or may be a group of underwriters represented by firms including
one or more of such firms.
If a dealer is utilized in the sale, the Company will sell the Offered
Securities to the dealer as principal. The dealer may then resell the Offered
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
Offers to purchase Offered Securities may be solicited by the Company or
agents designated by the Company from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities which are issuable in bearer form will agree that it will
not, directly or indirectly, offer any Offered Securities in bearer form for
sale or resale in the United States or its possessions or to United States
persons (subject to certain exceptions) or deliver any Offered Securities in
bearer form within the United States or its possessions. See "Description of
Debt Securities -- Limitations on Issuance of Bearer Debt Securities."
In connection with the sale of the Offered Securities, underwriters,
dealers and agents may receive compensation in the form of discounts,
concessions or commissions from the Company or from purchasers of the Offered
Securities for whom they may act as agents. Underwriters, dealers and agents
that participate in the distribution of the Offered Securities may be deemed to
be underwriters as that term is defined in the Securities Act, and any discounts
or commissions received by them from the Company and any profits on the resale
of the Offered Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such person who may be deemed to be an
underwriter will be identified and any such compensation received from the
Company will be described in the Prospectus Supplement.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain specified institutions to
purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future.
Institutions with whom such contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions but
shall in all cases be subject to the approval of the Company. Such contracts
will be subject only to those conditions set forth in the
21
<PAGE> 28
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents, underwriters or dealers may be
required to make in respect thereof. Agents, underwriters and dealers may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The anticipated place and time of delivery for the Offered Securities will
be set forth in the Prospectus Supplement.
LEGAL MATTERS
Certain legal matters with respect to the Debt Securities offered hereby
will be passed upon for the Company by Baker & Botts, L.L.P., 885 Third Avenue,
New York, New York 10022-4834. Jerome H. Kern, a partner of Baker & Botts,
L.L.P. is a director of Tele-Communications, Inc. Mr. Kern holds options to
purchase shares of Tele-Communications, Inc. Class A Common Stock.
EXPERTS
The consolidated balance sheets of TCI Communications, Inc. (formerly
Tele-Communications, Inc.) and subsidiaries as of December 31, 1994 and 1993,
and the related consolidated statements of operations, stockholder's(s') equity,
and cash flows for each of the years in the three year period ended December 31,
1994, and the related financial statement schedules, which appear in TCI
Communications, Inc.'s annual report on Form 10-K for the year ended December
31, 1994, as amended, have been incorporated by reference herein in reliance
upon the reports, dated March 27, 1995, of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in auditing and accounting.
The financial statements of TeleCable Corporation as of December 31, 1993
and 1992 and for each of the two years in the period ended December 31, 1993
incorporated in this Prospectus by reference to the Company's Current Report on
Form 8-K dated August 26, 1994, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
22
<PAGE> 29
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
----------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments................... S-2
Use of Proceeds....................... S-3
Description of Securities............. S-3
Underwriting.......................... S-6
Validity of the Securities............ S-6
PROSPECTUS
Available Information................. 2
Incorporation of Documents by
Reference........................... 2
Risk Factors.......................... 3
The Company........................... 4
Use of Proceeds....................... 4
Description of Debt Securities........ 5
Plan of Distribution.................. 21
Legal Matters......................... 22
Experts............................... 22
</TABLE>
======================================================
======================================================
$1,100,000,000
TCI COMMUNICATIONS, INC.
$350,000,000
8% SENIOR NOTES
DUE AUGUST 1, 2005
$750,000,000
8 3/4% SENIOR DEBENTURES
DUE AUGUST 1, 2015
----------------------
PROSPECTUS SUPPLEMENT
----------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
JULY 27, 1995
======================================================
