<PAGE>
Filed pursuant to
Rule 424(b)(5)
Registration No. 33-64329
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 7, 1996)
$1,000,000,000
TCI COMMUNICATIONS, INC.
$400,000,000
6 7/8% SENIOR NOTES DUE 2006
$600,000,000
7 7/8% SENIOR DEBENTURES DUE 2026
The Notes will mature on February 15, 2006 and the Debentures will mature on
February 15, 2026. Interest on the Notes and the Debentures is payable semi-
annually on February 15 and August 15 of each year, beginning August 15, 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.
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>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Note................................ 99.786% .650% 99.136%
Total................................... $399,144,000 $2,600,000 $396,544,000
Per Debenture........................... 99.920% .875% 99.045%
Total................................... $599,520,000 $5,250,000 $594,270,000
</TABLE>
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from February 14, 1996.
(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
February 14, 1996.
SALOMON BROTHERS INC
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus Supplement is February 7, 1996.
<PAGE>
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 LEGISLATIVE DEVELOPMENT
THE TELECOMMUNICATIONS ACT OF 1996
On February 1, 1996 the Congress passed S. 652, "The Telecommunications Act
of 1996" ("Act"), and it is expected that the President will soon sign the Act
into law. This new law will alter federal, state and local laws and
regulations regarding telecommunications providers and services, including the
Company and the cable television and other telecommunications services
provided by the Company. The following is a summary of certain provisions of
the Act which could materially affect the growth and operation of the cable
television industry and the cable and telecommunications services provided by
the Company. As noted below, there are numerous rulemakings to be undertaken
by the Federal Communications Commission ("FCC") which will interpret and
implement the provisions discussed below. It is not possible at this time to
predict the outcome of such rulemakings.
Cable Rate Regulation
Rate regulation of the Company's cable television services is divided
between the FCC and local units of government such as states, counties or
municipalities. The FCC's jurisdiction extends to the cable programming
service tier ("CPST"), which consists largely of satellite-delivered
programming (excluding basic tier programming and programming offered on a per
channel or per program basis). Local units of governments (commonly referred
to as local franchising authorities or "LFAs") are primarily responsible for
regulating rates for the basic tier of cable service ("BST"), which will
typically contain at least the local broadcast stations and Public Access,
Educational and Government ("PEG") channels. Equipment rates are also
regulated by LFAs. The FCC retains appeal jurisdiction from LFA decisions.
Cable services offered on a per channel or per program only basis remain
unregulated.
The Act eliminates CPST rate regulation for the Company as of March 31,
1999. In the interim, CPST rate regulation can be triggered only by an LFA
complaint to the FCC. An LFA complaint must be based upon more than one
subscriber complaint. Prior to the Act, an FCC review of CPST rates could be
occasioned by a single subscriber complaint to the FCC. The Act does not
disturb existing or pending CPST rate settlements between the Company and the
FCC. The Company's BST rates remain subject to LFA regulation under the Act.
Existing law precludes rate regulation wherever a cable operator faces
"effective competition." The Act expands the definition of effective
competition to include any franchise area where a local exchange carrier (or
affiliate) provides video programming services to subscribers by any means
other than through direct broadcast satellite (DBS). There is no penetration
minimum for the local exchange carrier to qualify as an effective competitor,
but it must provide "comparable" programming services (12 channels including
one broadcast) in the franchise area.
Under the Act, the Company will be allowed to aggregate, on a franchise,
system, regional or company level, its equipment costs into broad categories,
such as converter boxes, regardless of the varying levels of functionality of
the equipment within each such broad category. The Act will allow the Company
to average together costs of different types of converters (including non-
addressable, addressable, and digital). The statutory changes will also
facilitate the rationalizing of equipment rates across jurisdictional
boundaries. These favorable cost-aggregation rules do not apply to the limited
equipment used by "BST-only" subscribers.
S-2
<PAGE>
Cable Uniform Rate Requirements. The Act immediately relaxes the "uniform
rate" requirements by specifying such requirements do not apply where the
operator faces "effective competition," and by exempting bulk discounts to
multiple dwelling units, although complaints about "predatory" pricing may be
made to the FCC. Upon a prima facie showing that there are reasonable grounds
to believe that the discounted price is predatory, the cable system operator
will have the burden of proving otherwise.
System Sales. The Act eliminates the existing three-year holding requirement
with respect to the sale of cable television systems.
Cable System Definition. The Act changes the definition of a "cable system"
so that competitive providers of video services will only be regulated and
franchised as a cable system if they use public rights-of-way.
Cable Pole Attachments
Under the Act, investor-owned utilities must make poles and conduits
available to cable systems under delineated terms. Electric utilities are
given the right to deny access to particular poles on a nondiscriminatory
basis for lack of capacity, safety, reliability, and generally accepted
engineering purposes. The current method for determining rates charged by
telephone and utility companies for cable delivery of cable and non-cable
services will continue for five years. However, the FCC will establish a new
formula for poles used by cable operators for telecommunications services
which will result in higher pole rental rates for cable operators. Any
increases pursuant to this formula may not begin for 5 years and will be
phased in equal increments over years 5 through 10. This new FCC formula does
not apply in states which certify they regulate pole rents. Pole owners must
impute pole rentals to themselves if they offer telecommunications or cable
services. Cable operators need not pay future "makeready" on poles currently
contacted if the makeready is required to accommodate the attachments of
another user, including the pole owner.
Cable Entry Into Telecommunications
The Act declares that no state or local laws or regulations may prohibit or
have the effect of prohibiting the ability of any entity to provide any
interstate or intrastate telecommunications service. States are authorized to
impose "competitively neutral" requirements regarding universal service,
public safety and welfare, service quality, and consumer protection. The Act
further provides that cable operators and affiliates providing
telecommunications services are not required to obtain a separate franchise
from LFAs for such services. The Act prohibits LFAs from requiring cable
operators to provide telecommunications service or facilities as a condition
of a grant of a franchise, franchise renewal, or franchise transfer, except
that LFAs can seek "institutional networks" as part of such franchise
negotiations.
The Act clarifies that traditional cable franchise fees may only be based on
revenues related to the provision of cable television services. However, when
cable operators provide telecommunications services, LFAs may require
reasonable, competitively neutral compensation for management of the public
rights-of-way.
Interconnection and Other Telecommunications Carrier Obligations. To
facilitate the entry of new telecommunications providers (including cable
operators), the Act imposes interconnection obligations on all
telecommunications carriers. All carriers must interconnect their networks
with other carriers and may not deploy network features and functions that
interfere with interoperability. Existing local exchange carriers ("LECs")
also have the following obligations: (1) good faith negotiation with those
seeking interconnection; (2) unbundling, equal access and non-discrimination
requirements; (3) resale of services, including "resale at wholesale rates"
(with an exception for certain low-priced residence
S-3
<PAGE>
services to business customers); (4) notice of changes in the network that
would affect interconnection and interoperability; and (5) physical
collocation unless shown that practical technical reasons, or space
limitations, make physical collocation impractical. The FCC has six months to
"complete all actions necessary to establish regulations" needed to effectuate
this section. The Act also directs the FCC, within one year of enactment, to
adopt regulations for existing LECs to share infrastructure with "qualifying"
carriers.
Under the Act, individual interconnection rates must be just and reasonable,
based on cost, and may include a reasonable profit. Cost of interconnection
will not be determined in a rate of return proceeding. Traffic termination
charges shall be "mutual and reciprocal." The Act contemplates that
interconnection agreements will be negotiated by the parties and submitted to
a state public service commission ("PSC") for approval. A PSC may become
involved, at the request of either party, if negotiations fail. If the state
regulator refuses to act, the FCC may determine the matter. If the PSC acts,
an aggrieved party's remedy is to file a case in federal district court.
The Act requires that all telecommunications providers (including cable
operators that provide telecommunications services) must contribute equitably
to a Universal Service Fund ("USF"), although the FCC may exempt an interstate
carrier or class of carriers if their contribution would be minimal under the
USF formula. The Act allows states to determine which intrastate
telecommunications providers contribute to the USF.
Telephone Company Entry Into Cable Television
The Act allows telephone companies to compete directly with cable operators
by repealing the telephone company-cable cross-ownership ban and the FCC's
video dialtone regulations. This will allow LECs, including the Bell Operating
Companies, to compete with cable both inside and outside their telephone
service areas. If a LEC provides video via radio waves, it is subject to Title
III broadcast jurisdiction. If a LEC provides common carrier channel service
it is subject to Title II common carrier jurisdiction. A LEC providing video
programming to subscribers is otherwise regulated as a cable operator
(including franchising, leased access, and customer service requirements),
unless the LEC elects to provide its programming via an "open video system."
LEC owned programming services will also be fully subject to program access
requirements.
The Act replaces the FCC's video dialtone rules with an "open video system"
("OVS") plan by which LECs can provide cable service in their telephone
service area. LECs complying with FCC OVS regulations will receive relaxed
oversight. The Act requires the FCC to act on any such OVS certification
within ten days of its filing. Only the program access, negative option
billing prohibition, subscriber privacy, EEO, PEG, must-carry and
retransmission consent provisions of the Communications Act of 1934 will apply
to LEC provided OVS. Franchising, rate regulation, consumer service
provisions, leased access and equipment compatibility will not apply. Cable
copyright provisions will apply to programmers using OVS. LFAs may require OVS
operators to pay "franchise fees" only to the extent that the OVS provider or
its affiliates provide cable services over the OVS. OVS operators will be
subject to LFA general right-of-way management regulations. Such fees may not
exceed the franchise fees charged to cable operators in the area, and the OVS
provider may pass through the fees as a separate subscriber bill item.
The Act requires the FCC to adopt, within six months, regulations
prohibiting an OVS operator from discriminating among programmers, and
ensuring that OVS rates, terms, and conditions for service are reasonable and
nondiscriminatory. Further, the FCC is to adopt regulations prohibiting a LEC-
OVS operator, or its affiliates, from occupying more than one-third of the
system's activated channels when demand for channels exceeds supply, although
there are no numeric limits. The Act also mandates OVS regulations governing
channel sharing; extending the FCC's sports exclusivity, network
nonduplication, and syndex regulations; and controlling the positioning of
programmers on menus and program guides. The Act does not require LECs to use
separate subsidiaries to provide incidental interLATA video or audio
programming services to subscribers or for their own programming ventures.
S-4
<PAGE>
Buyouts. While there remains a general prohibition on LEC buyouts of cable
systems (any ownership interest exceeding 10 percent), cable operator buyouts
of LEC systems, and joint ventures between cable operators and LECs in the
same market, the Act provides exceptions. A rural exemption permits buyouts
where the purchased system serves an area with fewer than 35,000 inhabitants
outside an urban area. Where a LEC purchases a cable system, that system plus
any other system in which the LEC has an interest may not serve 10% or more of
the LEC's telephone service area. Additional exceptions are also provided for
such buyouts. The Act also provides the FCC with the power to grant waivers of
the buyout provisions in cases where (1) the cable operator or LEC would be
subject to undue economic distress; (2) the system or facilities would not be
economically viable; or (3) the anticompetitive effects of the proposed
transaction are clearly outweighed by the effect of the transaction in meeting
community needs. The LFA must approve any such waiver.
Electric Utility Entry Into Telecommunications
The Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services (including cable) notwithstanding the
Public Utilities Holding Company Act. Electric utilities must establish
separate subsidiaries, known as "exempt telecommunications companies" and must
apply to the FCC for operating authority. It is anticipated that large utility
holding companies will become significant competitors to both cable television
and other telecommunications providers.
Miscellaneous Reforms
Cross-Ownership; Must Carry. The Act eliminates broadcast/cable cross-
ownership restrictions, but leaves in place FCC regulations prohibiting local
cross-ownership between television stations and cable systems. The FCC is
empowered by the Act to adopt rules to ensure carriage, channel positioning
and non-discriminatory treatment of non-affiliated broadcast stations by cable
systems affiliated with a broadcast network. The satellite master antenna
television and mutichannel multipoint distribution system cable cross-
ownership restrictions have been eliminated for cable operators subject to
effective competition.
The Act preserves must carry rights for local television broadcasters, and
establishes new audience standards based on commercial publications which
delineate television markets based on viewing patterns. The FCC is directed to
grant or deny must carry requests within 120 days of a complaint being filed
with the FCC.
Cable Equipment Compatibility; Scrambling Requirements. The Act directs an
FCC equipment compatability rulemaking emphasizing that (1) narrow technical
standards, mandating a minimum degree of common design among televisions,
VCRs, and cable systems, and relying heavily on the open marketplace, should
be pursued; (2) competition for all converter features unrelated to security
descrambling should be maximized; and (3) adopted standards should not affect
unrelated telephone and computer features. The Act directs the FCC to adopt
regulations which assure the competitive availability of converters
("navigation devices") from vendors other than cable operators. The Act
provides that the FCC's rules may not impinge upon signal security concerns or
theft of service protections. Waivers will be possible where the cable
operator shows the waiver is necessary for the introduction of new services.
Once the equipment market becomes competitive, FCC regulations in this area
will be terminated.
The Act requires cable operators, upon subscriber request, to fully scramble
or block at no charge the audio and video portion of any channel not
specifically subscribed to by a household. Further, the Act provides that
sexually explicit programming must be fully scrambled or blocked. If the cable
operator cannot fully scramble or block its signal, it must restrict
transmission to those hours of the day when children are unlikely to view the
programming.
Cable Provision of Internet Services. Transmitting indecent material via the
Internet is made criminal by the Act. However, on-line access providers are
exempted from criminal liability for simply providing interconnection service;
they are also granted an affirmative defense from criminal or other action
where in good "good faith" they restrict access to indecent materials. The Act
further exempts on-line access providers from civil liability for actions
taken in good faith to restrict access to obscene, excessively violent or
otherwise objectionable material.
S-5
<PAGE>
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 June 8, 1997 and has a current interest rate of 6.33%, (ii) a
commercial paper program which has a current interest rate of 5.67% and (iii)
two short-term lines of credit which have a current interest rate of 5.97% and
5.81%, respectively. 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.
DESCRIPTION OF SECURITIES
GENERAL
The Securities will be issued under an Indenture, dated as of December 20,
1995 (the "Indenture"), between the Company and The Bank of New York, 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 $400,000,000 aggregate principal amount and
will mature February 15, 2006. Each Note will bear interest at the rate per
annum shown on the front cover of this Prospectus Supplement from February 14,
1996 or from the most recent interest payment date to which interest has been
paid or provided for, payable semi-annually on February 15 and August 15 of
each year, commencing August 15, 1996, to the person in whose name the Note is
registered at the close of business on the first day of the month in which
such interest payment date occurs.
The Debentures will be limited to $600,000,000 aggregate principal amount
and will mature February 15, 2026. Each Debenture will bear interest at the
rate per annum shown on the front cover of this Prospectus Supplement from
February 14, 1996 or from the most recent interest payment date to which
interest has been paid or provided for, payable semi-annually on February 15
and August 15 of each year, commencing August 15, 1996, to the person in whose
name the Debenture is registered at the close of business on the first day of
the month in which such interest payment date occurs.
The Securities will be issued only in fully registered form in denominations
of $1,000 and integral multiples thereof.
The Company has appointed The Bank of New York, 101 Barclay Street, New
York, New York 10286, as the Paying Agent and 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.
S-6
<PAGE>
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 Salomon
Brothers Inc, Bear, Stearns & Co. Inc., CS First Boston Corporation, Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated 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>
Salomon Brothers Inc ......................... $ 62,000,000 $ 92,500,000
Bear, Stearns & Co. Inc. ..................... 61,600,000 92,500,000
CS First Boston Corporation................... 61,600,000 92,500,000
Lehman Brothers Inc. ......................... 61,600,000 92,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................... 61,600,000 92,500,000
Morgan Stanley & Co. Incorporated............. 61,600,000 92,500,000
Chemical Securities Inc. ..................... 6,000,000 9,000,000
Citicorp Securities, Inc. .................... 6,000,000 9,000,000
Credit Lyonnais Securities (USA) Inc. ........ 6,000,000 9,000,000
Deutsche Morgan Grenfell/C.J. Lawrence Inc. .. 6,000,000 9,000,000
Societe Generale Securities Corporation....... 6,000,000 9,000,000
------------ ------------
Total..................................... $400,000,000 $600,000,000
============ ============
</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 .40% of the principal
amount of the Notes and .50% 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 prices, 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.
Certain of the Underwriters and certain of their affiliates engage in
transactions with and perform services for the Company and certain of its
subsidiaries in the ordinary course of business.
S-7
<PAGE>
VALIDITY OF THE SECURITIES
The legality of 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. Series A TCI Group Common Stock and Series A Liberty Media
Group 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-8
<PAGE>
Filed pursuant to
Rule 424(b)(5)
Registration No. 33-64329
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 $1.16 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."
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, 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, the designation and qualification (to the extent not already
designated and qualified and described herein) of any trustee with respect to
the Debt Securities, 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 February 7, 1996.
<PAGE>
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. 33-64329) (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 Company and the Debt Securities offered hereby, 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 information 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,
and at the following Regional Offices of the Commission: 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the Company
(File No. 0-5550) and are incorporated into this Prospectus by reference and
made a part hereof: (i) the Annual Report on Form 10-K of the Company for the
year ended December 31, 1994 (as amended by Form 10K/A (Amendment No. 1));
(ii) the Quarterly Reports on Form 10-Q of the Company for the quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995 (as amended by Form 10-
Q/A (Amendment No.1)); (iii) the Current Reports on Form 8-K of the Company
dated January 23, 1995, February 3, 1995 (as amended by Form 8-K/A (Amendment
No. 1)), April 6, 1995, April 20, 1995 (as amended by Form 8-K/A (Amendment
No. 1)), July 26, 1995, August 1, 1995, September 13, 1995, December 18, 1995
and December 21, 1995; and (iv) the financial statements and notes thereto of
TeleCable Corporation as of December 31, 1993 and 1992 and for each of the
years in the two-year period ended December 31, 1993, included in the Current
Report on Form 8-K of the Company dated August 26, 1994.
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 previous 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 this
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.
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THE COMPANY
The Company is principally engaged in the construction, acquisition,
ownership and operation of cable television systems. The Company believes that
it is the largest provider of cable television services in the United States,
based on the number of basic subscribers served by the Company and its
subsidiaries and affiliates at September 30, 1995. At that date, the Company,
through its subsidiaries and affiliates, owned cable television systems
throughout the continental United States.
The Company is a subsidiary of Tele-Communications, Inc. (the "Parent")
which, in addition to the operations of the Company, is engaged in the
provision of satellite delivered programming services to various distribution
media, principally cable television systems. In addition, the Parent has
interests in cable and telecommunications operations and television
programming in certain international markets and has investments in companies
and joint ventures involved in developing and providing programming for new
television and telecommunications technologies. The Parent will have no
obligation or liability, contingent or otherwise, with respect to the Debt
Securities.
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 of the Company; for general operations of the
Company, including acquisitions, capital expenditures and working capital
requirements; or for such other purposes as may be specified in the Prospectus
Supplement. All or a portion of such proceeds may be advanced to the Parent 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 the Company's 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."
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges of the Company was 1.02, 1.22, and
1.21 for the years ended December 31, 1992, 1993 and 1994, respectively, and
1.23 for the nine months ended September 30, 1994. The ratio of earnings to
fixed charges of the Company was less than 1.00 for the years ended December
31, 1990 and 1991, and for the nine months ended September 30, 1995; 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,
and $63 million for the nine
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months ended September 30, 1995. 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. Fixed charges consist of (i) interest (including capitalized
interest) on debt, including interest of less than 50%-owned affiliates with
debt guaranteed by the Company and 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 represent 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 $5,346,000 relating to such guarantees
for the years ended December 31, 1990, 1991, 1992, 1993 and 1994,
respectively, and fixed charges of $7,403,000 and $3,053,000 relating to such
guarantees for the nine months ended September 30, 1994 and 1995,
respectively, have not been included in fixed charges.
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 $1.16 billion (or the equivalent thereof denominated in one or
more foreign currencies, foreign currency units or composite currencies).
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 September 30, 1995, the Company had an aggregate of approximately
$12.1 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 and its subsidiaries also had an aggregate of approximately $2.4
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 September 30, 1995, the Company's subsidiaries had total Debt
of approximately $4.4 billion (including guarantees of indebtedness of others
and the unaccreted portion of indebtedness issued at a discount, but excluding
indebtedness owed to the Company).
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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.
The Senior Debt Securities will be issued under an Indenture, dated as of
December 20, 1995, between the Company and The Bank of New York, as Trustee
(the "Senior Indenture"); the Senior Subordinated Debt Securities will be
issued under an Indenture to be executed by the Company and a trustee
designated in accordance with the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") (the "Senior Subordinated Indenture"); and the
Subordinated Debt Securities will be issued under an Indenture to be executed
by the Company and a trustee designated in accordance with the Trust Indenture
Act (the "Subordinated Indenture"). In this Prospectus, the Senior 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 Senior 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 in any supplemental indenture, and those made part
of the Indentures by reference to the Trust Indenture Act, as in effect on the
date of the Indentures. The Indentures (or form thereof, as the case may be)
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: (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)
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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; and (xii) any other specific
terms. Reference is made to the Prospectus Supplement with respect to the
designation and qualification of the Trustee under the applicable Senior
Subordinated Indenture and the Subordinated Indenture.
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.
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 Indenture contains, 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 the maturity thereof (or during such other period as may be specified for
such series in the related Prospectus Supplement) and (ii) on any date which
occurs during the period commencing 90 days before and ending 90 days after
the date that 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, two or more National Rating Agencies shall downgrade their
respective ratings of the Senior Debt Securities from the ratings in effect at
the beginning of such 180-day period (each a "Downgrading Agency") (except
that if a National Rating Agency shall have downgraded its rating of the
Senior Debt Securities during the 90-day period prior to such public
disclosure, such National Rating Agency shall not be deemed a Downgrading
Agency if it upgrades its rating of the Senior Debt Securities, by the close
of business on the date of such public disclosure, to at least the rating it
had given to the Senior Debt Securities as of the beginning of such 180-day
period) (the occurrence of the conditions specified in both (i) and (ii) 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 Senior
Indenture), all as provided in, and subject to the terms of, the Senior
Indenture, as the Senior Indenture may be supplemented in connection with
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the issuance of Senior Debt Securities 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 Indenture) 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.
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
Indenture)
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 Indenture)
The Senior Indenture 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
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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 Indenture)
Definitions. The following are certain of the terms defined in the Senior
Indenture (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 or Parent Subsidiary, any employee stock
ownership or other employee benefit plan of the Parent or the Company or of
any Subsidiary or Parent Subsidiary, or any Controlling Person) during any
period of twelve (12) consecutive months of beneficial ownership of shares of
the Class A Stock or Class B Stock or both representing in the aggregate
thirty percent (30%) or more of the combined voting power of all shares of the
Class A 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 Class A Stock and Class B Stock beneficially owned by the
Parent, the Parent Subsidiaries (other than the Company) and the Controlling
Persons represent in the aggregate 30% or more of the combined voting power of
all shares of the Class A Stock and Class B Stock calculated on a fully
diluted basis, or (B) for so long as the Company is a Parent Subsidiary, the
acquisition by any person (other than the Parent, any Parent Subsidiary, any
employee stock ownership plan or other employee benefit plan of the Parent or
any Parent Subsidiary, or any Controlling Person) during any period of twelve
(12) consecutive months of beneficial ownership of shares of common stock of
the Parent representing in the aggregate thirty percent (30%) or more of the
combined voting power of all shares of the Parent's 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 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 common
stock calculated on a fully diluted basis.
"Class A Stock" means the Class A Common Stock, $1.00 par value, of the
Company as it exists on the date of the Senior Indenture and stock of any
other class into which such Class A Common Stock may thereafter have been
changed.
"Class B Stock" means the Class B Common Stock, $1.00 par value, of the
Company as it exists on the date of the Senior Indenture and stock of any
other class into which such Class B Common Stock may thereafter have been
changed.
"Company" means TCI Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of the Indenture
and thereafter means the successor.
"Controlling Person" means each of (1) the Chairman of the Board of the
Parent as of the date of the Indenture, (2) the President of the Parent as of
the date of the Indenture, (3) each of the directors of the Parent as of the
date of the Indenture, (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 or Parent Subsidiary.
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 or Parent Subsidiary shall be
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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
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.
"National Rating Agency" means any of the following nationally recognized
statistical rating organizations (and, in each case, any successor thereto):
Duff & Phelps Credit Rating Co.; Moody's Investors Service, Inc.; Standard &
Poor's Securities, Inc.; and Fitch Investors Service, L.P.
"Parent" means Tele-Communications, Inc., a Delaware corporation, and any
successor thereof.
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"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 deposition 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 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.
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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.
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
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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 Senior Subordinated 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 or in the event of a change of control of the Company or
the Parent.
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 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
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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 Subordinated 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 or in the event of a change of control of the Company or the Parent.
DENOMINATION 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 Senior Subordinated and Subordinated Indentures
and Sections 2.01 and 2.03 of the Senior Indenture) Under the Senior
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 Senior 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 Senior
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
Senior 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 Senior Indenture and Section 2.15
of the Senior Subordinated and the Subordinated Indentures) The Prospectus
Supplement relating to a series of Debt Securities denominated other than in
U.S. Dollars will specify the authorized denominations thereof.
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."
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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
Senior Indenture. The Company will promptly notify the Trustee of the name and
address of any such Agent. (Section 2.05 of the Indentures)
The Senior 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 Senior 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 Indenture) In addition, if Debt Securities of any
series issued under the Senior 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 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 Senior 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 Senior Indenture)
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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 Senior
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 Senior
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 Senior
Subordinated and the Subordinated Indentures) The Senior 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 Senior Indenture)
Prior to due presentment of a Registered Debt Security for registration to
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 Senior Indenture)
GLOBAL SECURITIES
The Indentures provide 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 registered form (or, in the case of
Senior Debt Securities, bearer form) and in either temporary or permanent
form. (Sections 2.10 and 2.11 of the Senior Indenture and Sections 2.11 and
2.15 of the Senior Subordinated and Subordinated Indentures) 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
Senior Indenture and Section 2.15 of the Senior Subordinated and Subordinated
Indentures) 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
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Indentures) 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 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 Indentures)
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 applicable 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 Indentures) 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 applicable 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 interest 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 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
Indentures)
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
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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.
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 Regulations 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 the 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)(1)(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
Senior Indenture in connection with the establishment of such series and will
be described in the applicable
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<PAGE>
Prospectus Supplement. (Sections 2.02 and 2.04 of the Senior Indenture) The
Senior 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 Senior 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 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 Senior 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 Senior 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 Senior 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 Senior 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
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<PAGE>
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
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 Indenture 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 Senior Indenture; 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 Indenture provides 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 Senior Indenture 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
19
<PAGE>
such acceleration) with respect to Senior Debt Securities of that series have
been cured or waived. (Section 6.02 of the Senior Indenture) 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 Indenture and Section 4.03 of
the Senior Subordinated and Subordinated Indentures)
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 Indenture 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 Senior
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 2.01 of the Indentures)
THE TRUSTEES
The Bank of New York serves as paying, exchange and redemption agent and
registrar for the Company's Cumulative Exchangeable Preferred Stock, Series A,
and acts as depositary 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 each series of the Parent's common stock and for the Parent's
Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock. John C.
Malone, a director of the Company, is a director of The Bank of New York.
Information with respect to the Trustees under the Senior Subordinated
Indenture and the Subordinated Indenture shall be provided in the applicable
Prospectus Supplement.
Any Trustee 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)
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<PAGE>
ADDITIONAL INFORMATION
The Indentures (or form thereof, as the case may be) are exhibits to the
Registration Statement. Anyone who receives this Prospectus may obtain copies
of the Indentures (or form thereof, as the case may be) 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.
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. 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.
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.
21
<PAGE>
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 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
The legality of 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 the Parent. Mr. Kern holds options to purchase shares of the Parent's
Series A TCI Group Common Stock and Series A Liberty Media Group 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 accounting and auditing. The reports of
KPMG Peat Marwick LLP covering the December 31, 1994 consolidated financial
statements refer to the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," in 1994.
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 TCI Communications Inc.'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.
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<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION 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
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Recent Legislative Development............................................. S-2
Use of Proceeds............................................................ S-6
Description of Securities.................................................. S-6
Underwriting............................................................... S-7
Validity of the Securities................................................. S-8
PROSPECTUS
Available Information...................................................... 2
Incorporation of Documents by Reference.................................... 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 21
Legal Matters.............................................................. 22
Experts.................................................................... 22
</TABLE>
$1,000,000,000
TCI COMMUNICATIONS, INC.
$400,000,000
6 7/8% SENIOR NOTES DUE 2006
$600,000,000
7 7/8% SENIOR DEBENTURES DUE 2026
SALOMON BROTHERS INC
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED FEBRUARY 7, 1996
