EXHIBIT 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
Case No. 02-12834 and 02-41729 through 02-41957*
Chapter 11
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(NAME OF DEBTORS)
Monthly Operating Report for
the period ended February 29, 2004 **
Debtors' Address:
----------------
5619 DTC Parkway
Greenwood Village, CO 80111
WILLKIE FARR & GALLAGHER LLP
(Debtors' Attorneys)
Monthly Operating Income: $12,014
($ in thousands)
Report Preparer:
The undersigned, having reviewed the attached report and being familiar with the
Debtors' financial affairs, verifies under the penalty of perjury, that the
information contained therein is complete, accurate and truthful to the best of
my knowledge.**
Date: March 25, 2004
/s/ Scott Macdonald
-------------------------------
Scott Macdonald
Senior Vice President
and Chief Accounting Officer
Indicate if this is an amended statement by checking here
AMENDED STATEMENT
-----
* Refer to Schedule VI for a listing of Debtors by Case Number
** All amounts herein are preliminary and subject to revision. The Debtors
reserve all rights to revise this report.
ADELPHIA COMMUNICATIONS CORPORATION, et al.
(DEBTORS-IN-POSSESSION)
UNAUDITED CONSOLIDATED BALANCE SHEET
(Dollars in thousands, except per share amounts)
<Table>
<Caption>
February 29,
2004
-------------
ASSETS:
Cash and cash equivalents $ 236,020
Restricted cash 82,622
Subscriber receivables - net 215,139
Prepaid expenses 79,001
Investments 23,164
Intercompany receivables 27,625,774
Related party receivables 1,897,522
Property, plant and equipment - net 7,043,367
Intangible assets - net 15,412,376
Other assets - net 432,543
-------------
Total assets $ 53,047,528
=============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable $ 138,982
Subscriber advance payments and deposits 93,624
Accrued interest and other liabilities 477,551
Intercompany payables 586,965
Related party payables 162,471
Parent and subsidiary debt 365,745
Deferred income taxes 2,004,832
-------------
3,830,170
-------------
Liabilities subject to compromise:
Parent and subsidiary debt 13,421,601
Parent and subsidiary debt under co-borrowing credit facilities attributable to
Rigas family entities 2,846,156
-------------
16,267,757
Accounts payable 981,283
Accrued interest and other liabilities 534,072
Intercompany payables 27,012,249
Related party payables 1,358,965
Cumulative redeemable exchangeable preferred stock 148,794
-------------
Total liabilities subject to compromise 46,303,120
-------------
Total liabilities 50,133,290
-------------
Minority interests 547,468
-------------
Stockholders' equity:
Convertible preferred stock 397
Class A and Class B common stock, $.01 par value, 1,500,000,000 shared authorized,
254,842,461 shares issued and outstanding 2,548
Additional paid-in capital 9,460,346
Accumulated other comprehensive loss (6,592)
Accumulated deficit (4,094,372)
Treasury stock, at cost (149,401)
-------------
5,212,926
Amounts due from Rigas family entities under co-borrowing credit facilities (2,846,156)
-------------
Total stockholders' equity 2,366,770
-------------
Total liabilities and stockholders' equity $ 53,047,528
=============
</Table>
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
2
ADELPHIA COMMUNICATIONS CORPORATION, et al.
(DEBTORS-IN-POSSESSION)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
<Table>
<Caption>
Twenty
Month Ended Months Ended
February 29, 2004 February 29, 2004
----------------- -----------------
Revenue $ 323,007 $ 5,892,755
Cost and expenses:
Direct operating and programming 188,868 3,319,821
Selling, general and administrative 36,060 863,756
Depreciation and amortization 76,505 1,496,493
Impairment of long-lived and other assets -- 72,134
Non-recurring professional fees 4,751 92,398
----------------- -----------------
Operating income before reorganization expenses due to 16,823 48,153
bankruptcy
Reorganization expenses due to bankruptcy 4,809 148,861
----------------- -----------------
Operating income (loss) 12,014 (100,708)
----------------- -----------------
Other income (expense):
Interest expense (31,712) (681,610)
Equity in losses of affiliates -net (85) (107,359)
Minority interest in (earnings) losses of subsidiaries - net (1,129) 13,389
Other-than-temporary impairment of investments and other assets -- (72,909)
Other 263 12,262
----------------- -----------------
(32,663) (836,227)
----------------- -----------------
Net loss before income taxes (20,649) (936,935)
Income tax benefit -- 35
----------------- -----------------
Net loss applicable to common stockholders $ (20,649) $ (936,900)
================= =================
Net loss per weighted average share outstanding - basic and diluted $ (0.08) $ (3.69)
================= =================
Weighted average shares outstanding (in thousands) - basic and diluted 253,748 253,748
================= =================
</Table>
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
3
ADELPHIA COMMUNICATIONS CORPORATION, et al.
(DEBTORS-IN-POSSESSION)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<Table>
<Caption>
Twenty
Month Ended Months Ended
February 29, 2004 February 29, 2004
----------------- -----------------
Cash flows from operating activities:
Net loss $ (20,649) $ (936,900)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 76,505 1,496,493
Amortization of bank financing costs 2,112 34,471
Impairment of long-lived and other assets -- 72,134
Other-than-temporary impairment of investments
and other assets -- 72,909
Minority interest in (earnings) losses of subsidiaries - net 1,129 (13,389)
Equity in losses of affiliates, net 85 107,359
Gain on sale of assets - net -- (3,864)
Other non-cash items -- 3,856
Reorganization expenses due to bankruptcy 4,809 148,861
Non-recurring professional fees, net of amounts paid 772 24,280
Change in assets and liabilities:
Subscriber receivables - net 9,193 (14,325)
Prepaid expenses - net 2,653 (25,084)
Other assets - net 90 (59,567)
Accounts payable (2,205) 44,821
Subscriber advance payments and deposits (29,568) 15,792
Accrued interest and other liabilities (21,757) 280,531
Intercompany receivables and payables - net 835 (13,408)
----------------- -----------------
Net cash provided by operating activities before
payment of reorganization expenses 24,004 1,234,970
Reorganization expenses paid during the period (3,297) (119,317)
----------------- -----------------
Net cash provided by operating activities 20,707 1,115,653
----------------- -----------------
Cash flows from investing activities:
Expenditures for property, plant and equipment (71,007) (1,180,781)
Cash paid for acquisitions -- (2,890)
Changes in restricted cash 5,222 (81,240)
Investment distributions and contributions - net (1,743) (2,697)
Related party receivables and payables - net (4,700) 24,151
Other -- 118
----------------- -----------------
Net cash used in investing activities (72,228) (1,243,339)
----------------- -----------------
Cash flows from financing activities:
Proceeds from debt 30,000 318,000
Payments of debt (6,685) (47,882)
Payment of debtor in possession bank financing costs -- (48,797)
----------------- -----------------
Net cash provided by financing activities 23,315 221,321
----------------- -----------------
Change in cash and cash equivalents (28,206) 93,635
Cash and cash equivalents, beginning of period 264,226 142,385
----------------- -----------------
Cash and cash equivalents, end of period $ 236,020 $ 236,020
================= =================
</Table>
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
4
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. ORGANIZATION, BUSINESS AND PROCEEDINGS UNDER CHAPTER 11
Adelphia Communications Corporation and subsidiaries ("Adelphia" or the
"Company") owns, operates and manages cable television systems and other related
businesses. Adelphia's operations primarily consist of providing analog and
digital cable services, high-speed Internet access and other advanced services
over Adelphia's broadband networks. These services are generally provided to
residential customers. These services are offered in the respective franchise
areas under the name Adelphia. Cable systems owned by Adelphia are located in 30
states and Puerto Rico, with large clusters in Los Angeles, Western
Pennsylvania, Ohio, Western New York, New England, Florida, Virginia and
Colorado Springs.
Solely for the purposes of the accompanying unaudited consolidated
financial statements, the accounts of Adelphia, including its majority-owned
subsidiaries and subsidiaries that are at least 50% owned and controlled by
Adelphia, are included with the exception of those subsidiaries/entities (the
"Non-Filing Entities") who did not file voluntary petitions under Chapter 11 of
Title 11 of the United States Code (the "Bankruptcy Code") and Century-ML Cable
Venture ("CMLCV"), a joint venture of which Adelphia is the managing partner and
whose bankruptcy filing is administered separately. The Non-Filing Entities as
of February 29, 2004 include Palm Beach Group Cable, Inc., Palm Beach Group
Cable Joint Venture, Century-ML Cable Corporation, Praxis Capital Ventures,
L.P., St. Mary's Television, Inc., Adelphia Brasil, Ltda, STV Communications and
Main Security Surveillance, Inc. As of and for the month ended February 29,
2004, the Non-Filing Entities were not significant to the consolidated results
of operations, financial position, or cash flows of the filing entities. The
accompanying unaudited consolidated financial statements do not include any
entities owned and/or controlled by John J. Rigas or his family (the "Rigas
Family" or "Rigas Entities").
Bankruptcy Proceedings
On June 25, 2002, Adelphia and all of its wholly-owned subsidiaries
(excluding Century Communications Corporation ("Century") which filed on June
10, 2002) (all filing entities, including Century, herein known as the "Debtors"
or "Filing Entities"), except for the Non-Filing Entities and CMLCV which filed
on September 30, 2002 (see Note 19), filed voluntary petitions to reorganize
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors are
operating their business as debtors-in-possession under Chapter 11. On July 11,
2002, the Office of the United States Trustee for the Southern District of New
York (the "U.S. Trustee") appointed a statutory committee of unsecured creditors
(the "Creditors' Committee"). In addition, on July 31, 2002, the U.S. Trustee
appointed a statutory committee of equity holders (the "Equity Committee" and
collectively with the Creditors' Committee, the "Committees"). The Committees
have the right to, among other things, review and object to certain business
transactions and may participate in the formulation of the Company's long-term
business plan and plan of reorganization. The Company has received several
extensions from the Bankruptcy Court of the period within which to file a plan
of reorganization (the "Exclusive Period") and solicit acceptances thereof (the
"Solicitation Period"), with the latest extension of the Exclusive Period and
the Solicitation Period being through February 17, 2004 and April 20, 2004,
respectively. On February 9, 2004, the Debtors filed a motion requesting an
additional extension of the Exclusive and Solicitation Periods to April 17, 2004
and June 19, 2004, respectively. On February 5, 2004, the Equity Committee filed
a motion to terminate the Debtors' Exclusive and Solicitation Periods. On
February 17, 2004, the Rigas Family filed a motion to terminate the Debtors'
Exclusive and Solicitation Periods. Other objections have been filed to the
Debtors' extension motion by parties in interest in these cases, including by
the agents for the pre-petition lenders and certain creditors. Bridge orders
were entered by the Bankruptcy Court extending the Exclusive and Solicitation
Periods until the hearing is held and a determination by the Bankruptcy Court is
made. A hearing to consider these motions is presently scheduled for April 26
and 28, 2004.
5
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
On February 25, 2004, the Debtors filed their proposed joint plan of
reorganization (the "Plan") and related draft disclosure statement with the
Bankruptcy Court and announced that they had received commitments for $8.8
billion in exit financing. A hearing on the Debtors motion seeking approval of
the exit financing is scheduled for April 26, 2004. The Debtors are not
soliciting acceptances of the Plan at this time, and any such solicitation will
be made only after the disclosure statement relating to the Plan has been
approved by the Bankruptcy Court. In order to successfully emerge from
bankruptcy, the Debtors must, among other things: (1) obtain an order of the
Bankruptcy Court approving the disclosure statement as containing "adequate
information", (2) solicit the approval of the Plan from the holders of claims
against and equity interests in each class that are impaired and not deemed to
have rejected the Plan, (3) obtain an order from the Bankruptcy Court confirming
the Plan and (4) consummate the Plan. No date for a hearing on the disclosure
statement has been scheduled at this time. In order to obtain a confirmation
order, the Bankruptcy Court will have to find, among other things, that each
class of impaired claims or equity interests has either accepted the Plan or the
Plan meets the requirements of the Bankruptcy Code to "cram down" the
non-accepting class. In addition, the Bankruptcy Court must find that the Plan
meets certain other requirements specified in the Bankruptcy Code. Confirmation
of the Plan would resolve, among other things, the Debtors' pre-petition
obligations, determine the revised capital structure of the newly reorganized
Debtors and provide for their corporate governance following emergence from
bankruptcy. There can be no assurance that the Bankruptcy Court will find that
the Plan satisfies all requirements necessary for confirmation by the Bankruptcy
Court. There also can be no assurance that modifications to the Plan will not be
required for confirmation or that such modifications would not necessitate the
resolicitation of votes of holders of claims and equity interests. In addition,
if the Plan is rejected by certain classes of claims or equity interests, the
Bankruptcy Court may or may not confirm it. Adelphia believes that the Plan will
be declared effective soon after the Plan is confirmed. However, because the
resolution of several matters are conditions to the consummation of the Plan,
there can be no assurance as to whether or when the Plan will be confirmed by
the Bankruptcy Court, or if confirmed whether or when the Plan will be
consummated. While the Plan proposes, among other things, the reorganization of
the Debtors and claims against them, it does not address the reorganization of
CMLCV.
Bankruptcy Costs and Fees
In connection with the effectiveness of a plan or plans of reorganization,
the Company will incur certain costs and fees. Certain of these expenses will be
due once the plan of reorganization is approved by the Bankruptcy Court and
include cure costs, financing fees and success fees. The Company is currently
aware of certain success fees that potentially could be paid to representatives
of the Company and Committees upon the Company's emergence from bankruptcy.
Currently, these contingent fees are estimated to be between $27,000 to $31,500.
As no plan or plans of reorganization have been confirmed by the Bankruptcy
Court, no accrual for such amounts has been recorded in the accompanying
unaudited consolidated financial statements.
Basis of Presentation
Until a plan or plans of reorganization is confirmed by the Bankruptcy
Court, the unaudited consolidated financial statements of the Company have been
prepared using guidance prescribed by the American Institute of Certified Public
Accountants' ("AICPA") Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7") and generally
accepted accounting principles in the United States of America ("GAAP"). These
unaudited consolidated financial statements are not intended to present fairly
the financial position of the Company as of February 29, 2004, or the results of
its operations or its cash flows for the one and twenty month periods ended
February 29, 2004 in conformity with GAAP because the accompanying unaudited
consolidated financial statements exclude the financial position, results of
operations and cash flows of the Non-Filing entities and CMLCV. Furthermore, the
accompanying unaudited consolidated financial statements do not include all of
the information and footnote disclosures required by GAAP for complete financial
statements.
The accompanying unaudited consolidated financial statements of the
Company have been prepared on a going concern basis, which assumes the
realization of assets and the payment of liabilities in the ordinary course of
business, and do not reflect any adjustments that might result if the Company is
unable to continue as a going concern. As a result of the reorganization
proceedings under Chapter 11 of the Bankruptcy Code, the Company may take, or
may be required to take, actions which may cause assets to be
6
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
realized, or liabilities to be liquidated, for amounts other than those
reflected in the accompanying unaudited consolidated financial statements. SOP
90-7 requires that pre-petition liabilities that are subject to compromise be
segregated in the unaudited consolidated balance sheet as liabilities subject to
compromise and that revenue, expenses, realized gains and losses, and provisions
for losses resulting directly from the reorganization due to the bankruptcy be
reported separately as reorganization expenses in the unaudited consolidated
statements of operations. See Note 5 to these unaudited consolidated financial
statements for further discussion. As a result of the Company's recurring
losses, the Chapter 11 filing and circumstances relating to these events
(including the Company's debt structure), actions taken by Rigas management and
current economic conditions, realization of assets and liquidation of
liabilities are subject to significant uncertainty. In order to provide
liquidity through June 2004, the Company entered into an Amended and Restated
Credit and Guaranty Agreement dated as of August 26, 2002, as amended, with a
group of lenders led by JP Morgan Securities Inc. and CitiGroup Global Markets
Inc. (formerly known as Salomon Smith Barney, Inc.) as Co-Lead Arrangers (the
"DIP Lenders"), for a Debtor-in-Possession Credit Facility (the "DIP Facility").
See Note 2 to these unaudited consolidated financial statements for further
discussion. The Company believes that cash flows from operations, along with the
financing provided through the DIP Facility, should allow the Company to
continue as a going concern; however, there can be no assurance of this. The
Company's ability to continue as a going concern is also dependent upon its
ability to maintain compliance with covenants under the DIP Facility and the
ability to generate sufficient cash flow from operations and financing sources
to meet its obligations as they become due. In the event a Chapter 11 plan or
plans of reorganization is confirmed by the Bankruptcy Court and becomes
effective, continuation of the Company's business thereafter will be dependent
on the Company's ability to achieve positive operating results and maintain
satisfactory capital and liquidity. Until a plan or plans of reorganization is
confirmed by the Bankruptcy Court and becomes effective, there can be no
assurance that the Company will emerge from these bankruptcy proceedings.
Furthermore, the effect on the Company's business from the terms and conditions
of such a plan or plans of reorganization cannot be determined at this time and,
therefore, also raises substantial doubt regarding the Company's ability to
continue as a going concern.
The accompanying unaudited consolidated financial statements have been
derived from the books and records of the Company. However, certain financial
information has not been subject to procedures that would typically be applied
to financial information presented in accordance with GAAP. Upon the application
of such procedures (i.e., tests for asset impairment), the Company believes that
the financial information of the Debtors will be subject to changes, and these
changes could be material. The Company's intangible assets primarily consist of
purchased franchises and goodwill that resulted from the allocation of the
purchase price of previously acquired cable systems. In accordance with
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets", the Company discontinued amortizing its purchased
franchise and goodwill intangibles as of January 1, 2002. SFAS No. 142 requires
annual testing for impairment of goodwill and indefinite-lived intangible assets
(i.e., purchased franchise intangibles), or more frequently as warranted by
events or changes in circumstances. At this time, the Company has not completed
its impairment test of its purchased franchise and goodwill intangible assets.
Any adjustment, as a result of an analysis performed in accordance with SFAS No.
142, may have a material impact on the Company's financial statements.
Additionally, the Company has not completed its adoption of SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", which
addresses the financial accounting and reporting for the impairment of
long-lived assets and long-lived assets to be disposed of. Once the Company has
completed its adoption of SFAS No. 144, an adjustment to the financial
statements may be required and this adjustment may be material to the financial
statements. Furthermore, the Company disclosed in its Current Report on Form
8-K, dated June 10, 2002, that it believes that certain financial information
reported by Rigas management was unreliable. As such, the books and records of
the Company from which the accompanying unaudited consolidated financial
statements of the Debtors are derived may not accurately reflect the financial
condition, results of operations and cash flows of the Debtors.
The Company is reviewing its books and records and other information on an
on-going basis to determine whether the accompanying unaudited consolidated
financial statements of the Debtors should be supplemented or otherwise amended.
The Company reserves the right to file, at any time, such supplements or
amendments to these accompanying unaudited consolidated financial statements.
The
7
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
accompanying unaudited consolidated financial statements should not be
considered an admission regarding any of the Debtors' income, expenditures or
general financial condition, but rather, a current compilation of the Debtors'
books and records. The Company does not make, and specifically disclaims, any
representation or warranty as to the completeness or accuracy of the information
set forth herein.
All significant intercompany accounts have been presented gross for
purposes of these unaudited consolidated financial statements and accordingly,
have not been eliminated in consolidation. GAAP would require that these
intercompany balances be eliminated in consolidation. See Note 8 to these
unaudited consolidated financial statements for further discussion.
As previously stated, certain footnote disclosures normally included in
unaudited consolidated financial statements prepared in accordance with GAAP
have been condensed or omitted. In the opinion of management, all disclosures
considered necessary for an informative presentation have been included herein.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K as of and
for the year ended December 31, 2000. As further discussed in Dismissal of
Former Independent Public Accountants/New Management below,
PricewaterhouseCoopers, LLP ("PwC"), the Company's independent accountants, has
not completed its audit as of and for the years ended December 31, 2003, 2002
and 2001 or its re-audits as of and for the years ended December 31, 2000 and
1999.
Reclassification
Certain amounts for the twenty months ended February 29, 2004 have been
reclassified to conform with the February 29, 2004 monthly presentation.
In accordance with SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," the Company
has reclassified "Cumulative redeemable exchangeable preferred stock" as a
liability in the accompanying unaudited consolidated balance sheet.
Dismissal of Former Independent Public Accountants/New Management
As disclosed in its Current Report on Form 8-K filed on June 14, 2002 as
amended, the Company, on June 9, 2002, dismissed Deloitte & Touche LLP
("Deloitte"), its former independent public accountants.
As a result of actions taken by management of the Company during the time
that it was controlled by the Rigas family ("Rigas Management"), the Company has
not yet completed its financial statements as of and for the years ended
December 31, 2003, 2002 and 2001 or received its independent auditor's report
thereon. In addition, the Company has not filed with the Securities and Exchange
Commission ("SEC") its Annual Reports on Form 10-K as of and for the years ended
December 31, 2002 and 2001. Furthermore, the Company has not timely filed its
Quarterly Reports on Form 10-Q for the quarters ended September 30, 2003, June
30, 2003, March 31, 2003, September 30, 2002, June 30, 2002 and March 31, 2002.
As of the date Deloitte was dismissed as the Company's independent accountants,
Deloitte had not completed its audit or issued its independent auditors' report
with respect to the Company's financial statements as of and for the year ended
December 31, 2001. In addition, Deloitte withdrew the audit reports it had
issued with respect to the financial statements of the Company and its
subsidiaries. The Company is performing a review of its historical books and
records, accounting policies and practices and financial statements to determine
whether its books and records and financial statements need to be adjusted in
light of the actions taken by management of the Company during the time that the
Rigas Family held director and officer positions at the Company. Adelphia's
current management is actively engaged in preparing restated financial
statements for 1999 and 2000, preparing restated financial statements for 2001
(which, although never publicly disclosed, were substantially completed at the
time of the discovery of the Rigas mismanagement) and preparing financial
statements for 2002 and 2003. In addition, PwC is preparing the audits for the
years ended December 31, 2003, 2002 and 2001 and re-audits for the years ended
December 31, 2000 and 1999. See Note 3 to these unaudited consolidated financial
statements for further information.
8
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
On November 6, 2002, the Company filed a lawsuit against Deloitte charging
them with, among other charges, professional negligence, breach of contract,
fraud and wrongful conduct. The Company is seeking compensation for all injury
from Deloitte's conduct, as well as punitive damages. Deloitte filed preliminary
objections to the complaint. On June 11, 2003, the Bankruptcy Court denied
Deloitte's preliminary objections in their entirety. On September 15, 2003,
Deloitte filed an answer and counterclaims with respect to the Company's
complaint and also asserted claims against the Rigas Family. On January 9, 2004,
the Company filed an answer to Deloitte's counterclaims and also served
discovery requests on Deloitte, including (i) Adelphia's First Set of Document
Requests and (ii) a Notice of Deposition of Deloitte's Corporate Designee.
Deloitte moved to stay discovery in this action until completion of the U.S.
Department of Justice's investigation of certain members of the Rigas family and
certain alleged co-conspirators , which Adelphia opposed. The motion became moot
as the court effectively stayed discovery for 60 days in that action until the
beginning of April 2004.
Effective March 18, 2003, the Company appointed William Schleyer to serve
as its new Chief Executive Officer and Ronald Cooper to serve as its new
President and Chief Operating Officer. The new Chief Executive Officer replaced
the Interim Chief Executive Officer, who, along with other new members of
management, took control of the Company in May 2002. The Company's employment of
William Schleyer and Ronald Cooper was approved by the Bankruptcy Court by
Orders dated March 4, 2003 and March 7, 2003, respectively. Mr. Schleyer's
employment agreement provides that he will be permitted to use the Company's
aircraft in accordance with the corporate aircraft policy approved by the Board
of Directors, and prohibits personal use of the aircraft. In October 2003, the
Board of Directors approved an aircraft policy that provides, among other
things, that reimbursed commuting under a timeshare arrangement does not
constitute personal use of the aircraft if significant advantages to the Company
in terms of time, money, security or productivity may be realized.
2. DEBT AND OTHER OBLIGATIONS
Due to the commencement of the Chapter 11 filings and the Company's
failure to comply with certain financial covenants, the Company is in default on
substantially all of its pre-petition debt obligations. Except as otherwise may
be determined by the Bankruptcy Court, the stay protection afforded by the
Chapter 11 filings prevents any action from being taken with regard to any of
the defaults under the pre-petition debt obligations. All of the pre-petition
obligations are classified as liabilities subject to compromise in the
accompanying consolidated balance sheet as of February 29, 2004. See Note 4 to
these unaudited consolidated financial statements for further information.
DIP Facility
In connection with the Chapter 11 filings, the Company entered into a
$1,500,000 DIP Facility. The DIP Facility was approved by the Bankruptcy Court
on August 23, 2002. The DIP Facility expires on the earlier of June 25, 2004 or
upon the occurrence of certain other events, including the effective date of a
reorganization plan of the loan parties that is confirmed pursuant to an order
of the Bankruptcy Court. The debtor-in-possession commitment that Adelphia
received can be used for general corporate purposes and investments, as defined
in the DIP Facility. The DIP Facility is secured with a first priority lien on
all of Adelphia's unencumbered assets, a priming first priority lien on all its
assets securing its pre-petition bank debt, and a junior lien on all other
assets subject to valid pre-existing liens. The DIP Facility consists of a
$1,300,000 revolving credit facility (the "Tranche A Loan") and a $200,000 loan
(the "Tranche B Loan"). Loans under the DIP Facility bear interest at the
Alternate Base Rate (greatest of the Prime Rate, the Base CD Rate plus 1% or the
Federal Funds Effective Rate plus .5%) plus 2.5% or the Adjusted LIBOR Rate, as
defined in the DIP Facility, plus 3.5%. On September 3, 2002, the Company closed
on the DIP Facility and, as part of the closing, the proceeds from the Tranche B
Loan in the amount of $200,000 were funded by the DIP Lenders and transferred
into credit-linked investment accounts maintained at JPMorgan Chase Bank (the
"Tranche B Loan Proceeds"). The Company pays interest on the Tranche B Loan
Proceeds, net of interest income, as defined.
The terms of the DIP Facility contain certain restrictive covenants, which
include limitations on the ability of the loan parties to (i) incur additional
guarantees, liens and indebtedness, (ii) sell or otherwise dispose of certain
assets and (iii) pay dividends or make other distributions or payments to other
loan
9
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
parties, including without limitation, payment of dividends to Adelphia and the
making of certain inter-company advances and loans, subject to certain
exceptions set forth in the DIP Facility. The DIP Facility also requires that
each designated subsidiary borrowing group of Adelphia and all of the loan
parties on a consolidated basis comply with certain financial covenants,
regarding the funding of capital expenditures, EBITDA (in the case of the loan
parties on a consolidated basis) and EBITDAR (in the case of each designated
subsidiary borrowing group of Adelphia). The terms EBITDA and EBITDAR are
defined in the DIP Facility. These financial covenants became effective for
periods beginning May 1, 2003. The Company believes that it is in material
compliance with all of the requirements of the DIP Facility.
On July 10, 2003 and January 28, 2004, certain loan parties made mandatory
prepayments of principal on the DIP Facility in connection with the consummation
of certain asset sales. As a result, the total commitment for the entire DIP
Facility was reduced to $1,497,751, with the total commitment of the Tranche A
Loan being reduced to $1,298,866 and the total commitment of the Tranche B Loan
being reduced to $198,885. As of February 29, 2004, $116,866 under the Tranche A
Loan has been drawn and letters of credit totaling $18,283 have been issued
under the Tranche A Loan, leaving availability of $1,163,717 under the Tranche A
Loan. Furthermore, as of February 29, 2004, $198,885 under the Tranche B Loan
has been drawn and letters of credit totaling $44,399 have been issued secured
by the Tranche B Loan Proceeds. A portion of the restricted cash in the
accompanying consolidated balance sheet reflects the Tranche B Loan Proceeds
securing letters of credit issued under the Tranche B Loan.
On March 17, 2004, Amendment No. 13 and Waiver to the DIP Facility
("Amendment No. 13") became effective. Under the terms of Amendment No. 13, the
loan parties and the DIP Lenders agreed to, among other things, modify (i) the
EBITDA and EBITDAR definitions contained in the DIP Facility to take into
account certain reserves and impairment charges that may be recorded and certain
losses that may be incurred by the loan parties in connection with the proposed
settlement of substantially all existing disputes with TelCove, which settlement
remains subject to the approval of the Bankruptcy Court (the "Proposed TelCove
Settlement"), (ii) certain financial reporting requirements contained in the DIP
Facility and (iii) certain other terms of the DIP Facility required to permit
the Company to enter into a new surety program with a nationally recognized
surety company, which program remains subject to the approval of the Bankruptcy
Court. Certain terms of the Proposed TelCove Settlement are more fully described
in Note 19 below. Under the terms of Amendment No. 13, the DIP Lenders also
agreed to waive certain covenants, including the asset sale and debt incurrence
covenants that would have otherwise restricted the consummation of the Proposed
TelCove Settlement. In addition, under the terms of Amendment No. 13, the DIP
Lenders agreed to waive certain other provisions of the DIP Facility (and
certain related defaults and events of default) to permit the loan parties to
make pre-petition payments in connection with the settlement and cure of certain
pre-petition obligations. Certain pre-petition payments contemplated by
Amendment No. 13 remain subject to the approval of the Bankruptcy Court.
Co-Borrowing Credit Facilities
As disclosed in the Company's Current Report on Form 8-K filed on May 24,
2002, various subsidiaries of the Company have entered into co-borrowing credit
facilities with certain entities owned by the Rigas Family. Historically, the
Company's financial statements reported borrowings attributable only to the
Company under such co-borrowing credit facilities and provided footnote
disclosure as to the total amount of borrowings permitted under such facilities
without disclosing the amount of borrowings attributable to entities owned by
the Rigas Family. Therefore, the entire co-borrowing credit facilities were not
reflected as indebtedness on the Company's historical financial statements.
As discussed in Note 1, at this time, PwC has not completed its audits of
the Company's financial statements as of and for the years ended December 31,
2003, 2002 and 2001 and the Company is engaged in preparing restated financial
statements as of and for the years ended December 31, 2001, 2000 and 1999. As
disclosed in its Current Reports on Form 8-K filed on May 24 and June 10, 2002,
after initial discussions with the SEC in early May 2002, the Company announced
on May 24, 2002 that it had tentatively concluded that it would increase the
Company's indebtedness by $2,846,156 to reflect the full amount of borrowings by
entities owned by the Rigas Family for which subsidiaries of the Company are
10
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
jointly and severally liable. Accordingly, the accompanying unaudited
consolidated financial statements reflect an increase of $2,846,156 of such
indebtedness of parent and subsidiary debt in liabilities subject to compromise
with a corresponding receivable from such Rigas Entities reflected as a
reduction in stockholders' equity. Since consultations are continuing with the
SEC and PwC, and PwC has not yet completed its audit of the Company's financial
statements, the accounting treatment for the increase in parent and subsidiary
debt and the reduction in stockholders' equity for the corresponding receivable
reflected in the accompanying unaudited financial statements has yet to be
finalized. The final accounting treatment may result in a materially different
treatment from that presented herein.
On July 6, 2003, the Creditors' Committee filed an adversary proceeding
against the Debtors' Pre-Petition Agents and Pre-Petition Secured Lenders
(collectively, the "Defendants") on behalf of the Debtors and their estates
seeking, among other things, to: (i) recover as fraudulent transfers the
principal and interest paid by the Debtors to the Defendants; (ii) avoid as
fraudulent transfer obligations the Debtors' obligation, if any, to repay the
Defendants; (iii) recover damages for breaches of fiduciary duties to the
Debtors and for aiding and abetting fraud and breaches of fiduciary duties by
the Rigas Family; (iv) equitably disallow, subordinate or re-characterize each
of the Defendants' claims in the Debtors' bankruptcy proceedings; (v) avoid and
recover certain preferential transfers made to certain of the Defendants; and
(vi) recover damages for violations of the Bank Holding Company Act. On July 29,
2003, the Bankruptcy Court entered a Stipulation and Order Regarding (a) the
Creditors' Committee's Motion for Leave to Prosecute Claims and Causes of Action
Against the Defendants, (b) the Equity Committee's Motion to Intervene in the
Adversary Proceeding and (c) the Pre-Petition Agents' Responses in Opposition to
the Motion of the Creditors' Committee and the Equity Committee and Alternative
Motions to Dismiss the Creditors' Committee's Complaint. On July 31, 2003, the
Equity Committee filed a motion seeking authority to file additional claims
against the Pre-Petition Lenders. By decision and order of the Bankruptcy Court,
on August 5, 2003, the Bankruptcy Court determined that the Creditors' Committee
had met the applicable legal standards to assert claims on behalf of the
Debtors. On or about October 3, 2003, certain of the Defendants filed objections
to the Creditors' Committee's motion seeking standing to pursue the adversary
proceeding filed against the Defendants. On or about January 13, 2004, the
Creditors' Committee filed its memorandum of law in opposition to objections to
standing and motions to dismiss.
11
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
Parent and Subsidiary Debt
The following information is an update of certain disclosures relating to
the book value of the Company's debt, as reflected on its books and records,
included in Note 4 to Adelphia's consolidated financial statements contained in
the Annual Report on Form 10-K as of and for the year ended December 31, 2000.
The book value of such indebtedness does not necessarily reflect the amount of
the claim of the holders' of such indebtedness in the Company's bankruptcy
proceeding.
<Table>
<Caption>
Parent Debt: February 29,
2004
------------
9 1/4% Senior Notes due 2002 $ 325,000
8 1/8% Senior Notes due 2003 149,817
10 1/2% Senior Notes due 2004 150,000
7 1/2% Senior Notes due 2004 100,000
10 1/4% Senior Notes due 2006 487,698
9 7/8% Senior Notes due 2007 348,417
8 3/8% Senior Notes due 2008 299,438
7 3/4% Senior Notes due 2009 300,000
7 7/8% Senior Notes due 2009 350,000
9 3/8% Senior Notes due 2009 497,048
10 7/8% Senior Notes due 2010 745,316
10 1/4% Senior Notes due 2011 1,000,000
6 % Convertible Subordinated Notes due 2006 1,024,924
3 1/4% Convertible Subordinated Notes due 2021 978,253
9 7/8% Senior Debentures due 2005 129,286
9 1/2% Pay-In-Kind Notes due 2004 31,847
------------
Total parent debt $ 6,917,044
------------
Subsidiary Debt:
Notes to banks $ 3,970,532
DIP Facility 315,750
10 5/8% Senior Notes of Olympus due 2006 202,243
11% Senior Subordinated Notes of FrontierVision Due 2006 207,953
11 7/8% Senior Discount Notes Series A of FrontierVision due 2007 244,639
11 7/8% Senior Discount Notes Series B of FrontierVision due 2007 89,953
Zero Coupon Senior Discount Notes of Arahova due 2003 412,601
9 1/2% Senior Notes of Arahova due 2005 250,590
8 7/8% Senior Notes of Arahova due 2007 245,371
8 3/4% Senior Notes of Arahova due 2007 219,168
8 3/8% Senior Notes of Arahova due 2007 96,046
8 3/8% Senior Notes of Arahova due 2017 94,924
Senior Discount Notes of Arahova due 2008 348,086
Other subsidiary debt and capital leases 172,446
------------
Total subsidiary debt $ 6,870,302
------------
Total parent and subsidiary debt, exclusive of co-borrowing credit
facilities 13,787,346
Debt under co-borrowing credit facilities attributable to Rigas Entities 2,846,156
------------
$ 16,633,502
============
</Table>
12
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
In connection with the Company's ongoing review of its books and records
and other information, an adjustment was made for liabilities subject to
compromise regarding classification of leases. For purposes of this report only,
leases which are being paid on a current basis, have not been treated as
liabilities subject to compromise.
Total parent and subsidiary debt, exclusive of debt under co-borrowing
credit facilities attributable to Rigas Entities, of $13,787,346 consists of
liabilities subject to compromise of $13,421,601, bank financing under the DIP
Facility of $315,750 and capital leases of $49,995.
<Table>
Weighted average interest rate payable by subsidiaries
under credit agreements with banks 4.81%
</Table>
On December 29, 2003, certain holders of prepetition convertible
subordinated debt issued by Adelphia Communications Corporation ("ACC") and the
Bank of New York, as trustee with respect to such debt, filed a lawsuit against
ACC seeking, among other things, a declaratory judgment stating that under the
provisions of the applicable indentures, such holders are entitled to receive
and retain their pro rata portion of payment on their claims to the extent that
distributions are made to ACC's senior note holders in the form of Common Stock
under any plan proposed in the chapter 11 cases. On February 6, 2004, ACC filed
an answer denying the substantive allegations in the plaintiffs' complaint. On
February 9, 2004, the plaintiffs moved for summary judgment in connection with
their request for relief. The Creditors' Committee has intervened in the
adversary proceeding and moved to dismiss the complaint on the basis that it
presents no case or controversy and thus is not ripe for adjudication. In the
alternative, the Creditors' Committee has sought to stay the proceedings until
all necessary parties have been joined or until the confirmation date of the
Debtors' plan of reorganization. On March 17, 2004 Adelphia cross moved for
summary judgment and asserted that distributions of capital stock on account of
claims related to the subordinated notes are not exempt from subordination under
the applicable indenture provisions. The trustee of the senior debt issued by
ACC has also sought leave to intervene in the action. A hearing is scheduled for
March 31, 2004.
Interest Expense
Interest expense totaled $31,712 and $681,610 for the one and twenty month
periods ended February 29, 2004, respectively, of which $11,892 and $263,645 is
attributable to the Rigas Entities under co-borrowing credit facilities. In
accordance with SOP 90-7, interest expense is reported only to the extent that
it will be paid during Chapter 11 proceedings or will be allowed on a secured or
unsecured claim. Had the Company not filed voluntary petitions under Chapter 11
of the Bankruptcy Code, the amount of interest expense that would have been
reported in the unaudited consolidated statement of operations, for the one and
twenty month periods ended February 29, 2004 is $93,334 and $1,918,436,
respectively.
Other
By order dated August 7, 2003, the Bankruptcy Court ordered that the Rigas
family could cause the Rigas Entities to pay on their behalf certain defense
costs, not to exceed $15,000 in the aggregate. The order does not require any
Debtor to advance funds of any Debtor's estate for such defense costs. Adelphia
and the Creditors' Committee both appealed the order. The United States District
Court for the Southern District of New York temporarily stayed the order. On
September 2, 2003, the Bankruptcy Court approved a stipulation and order (the
"Rigas Stipulation") between the Debtors, the Rigas Family and certain other
parties that allowed the Rigas Entities to advance up to $15,000 in defense
costs to the Rigas Family, acknowledged that certain Rigas Entities were in
default under certain co-borrowing facilities and delegated certain management
rights to the Company with respect to the Rigas Entities. On February 18, 2004,
the Bankruptcy Court approved the request of the Rigas Family for an additional
$12,800 for criminal defense costs only (the "February 18 Rigas Order"). The
Debtors and Creditors' Committee appealed the February 18 Rigas Order. A hearing
on the appeal has not been set. As of February 29, 2004, the Rigas Entities had
advanced $11,046 to the Rigas Family for defense costs in accordance with the
Rigas Stipulation.
13
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
3. CORRECTION IN ACCOUNTING POLICIES AND PRACTICES / PROVISION FOR ACCOUNTING
CHANGES
Effective January 1, 2003, the Company, as part of its ongoing review of
its historical books and records and its financial statements, corrected certain
of its erroneous accounting policies and practices for Property, Plant and
Equipment ("PP&E") relating to the capitalization of labor, labor-related costs,
certain overhead costs, and certain materials (collectively, "Capitalized
Costs") used in the maintenance of its cable systems. The erroneous
capitalization of costs that were corrected included, among other things,
Capitalized Costs for service calls and normal, ongoing maintenance to cable
systems. Some of the items that had been capitalized included system electrical
power, converter repairs, equipment repairs and maintenance contracts. The
Company believes that the corrections were necessary in order to be in
compliance with GAAP. At the time the Company filed its current report on Form
8-K dated February 25, 2003, the Company was still evaluating Capitalized Costs
related to installation activities and internal construction (collectively,
"Capitalized Installation and Construction Activities"). In April 2003, the
Company corrected its erroneous accounting policies and practices related to
Capitalized Installation and Construction Activities and recorded an adjustment
of approximately $15,000 in the April 2003 accounting month to correct for these
errors for the months of January through March 2003. These errors included the
incorrect capitalization of reconnect and disconnect activities, which are
prohibited by GAAP, as well as the improper capitalization or overcapitalization
of certain overhead costs. This adjustment had the effect of increasing expenses
and reducing capital expenditures in April 2003.
The Company has not restated previously filed Adelphia Monthly Operating
Reports and has not completed its review and analysis of its new accounting
policies and practices for PP&E relating to Capitalized Costs, including
Capitalized Installation and Construction Activities, on the financial
statements for the years ended December 31, 2003, 2002, 2001, 2000 and 1999.
However, the Company has recorded total adjustments of $144,000 in 2002 for
estimated corrections in accounting polices and practices, comprised of (i) a
May 2002 adjustment expensing approximately $21,000 for certain costs
erroneously capitalized under Rigas Management accounting policies and
practices, (ii) a December 2002 adjustment expensing approximately $21,000 for
certain costs erroneously capitalized under Rigas Management accounting policies
and practices, and (iii) an estimated provision for accounting changes of
$51,000 in June 2002 and $8,500 per month from July 2002 through December 2002.
The Company estimates that the new accounting policies and practices
relating to Capitalized Costs, including Capitalized Installation and
Construction Activities, for PP&E will materially increase expenses and decrease
capital expenditures as compared to the accounting policies and practices of the
Company under Rigas Management. The impact of the new accounting policies and
practices relating to Capitalized Costs, including Capitalized Installation and
Construction Activities, for PP&E on the Company's results of operations will
vary based upon levels of activities. Furthermore, the Company is currently
unable to determine the impact on depreciation expense attributable to these
corrections for any period since the adjustments to the historical costs of PP&E
for 2003, 2002, 2001, 2000 and 1999 have not yet been finalized. The impact of
these changes and any other further changes will likely be material.
Additionally, management has not completed its overall review of the
Company's historical books and records, accounting policies and practices and
financial statements, and accordingly, the Company may record additional
adjustments for corrections in erroneous accounting policies and practices in
addition to those adjustments already recorded for PP&E, and such adjustments
may be material.
PwC has not completed its audit of the Company's books for any period and
their audit could result in further adjustments to the Company's results of
operations and those adjustments could be material.
4. LIABILITIES SUBJECT TO COMPROMISE
As discussed in Note 1 to the accompanying unaudited consolidated
financial statements, the Company has been operating as a debtor-in-possession
under Chapter 11 of the Bankruptcy Code since June 25, 2002. The Company is
authorized to operate its business in the ordinary course.
14
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
Due to the commencement of the Chapter 11 cases and the Company's failure
to comply with certain financial covenants, the Company is in default on
substantially all of its pre-petition debt obligations.As a result of the
Chapter 11 filing, all actions to collect the payment of pre-petition
indebtedness are subject to compromise or other treatment under a plan or plans
of reorganization. Generally, actions to enforce or otherwise effect payment of
pre-Chapter 11 liabilities are stayed. However, as part of the first day orders
and subsequent motions granted by the Bankruptcy Court, the Bankruptcy Court
approved Adelphia's motions to pay certain pre-petition obligations including,
but not limited to, employee wages, salaries, commissions, incentive
compensation and other related benefits. The Company has been paying and intends
to continue to pay undisputed post-petition claims in the ordinary course of
business. In addition, the Company may assume or reject pre-petition executory
contracts and unexpired leases with the approval of the Bankruptcy Court. Unless
otherwise agreed to by the parties, the cost of curing any pre-petition
executory contract or unexpired lease is borne by the Debtors. Any damages
resulting from the rejection of executory contracts and unexpired leases are
treated as general unsecured claims and will be classified as liabilities
subject to compromise. By order dated October 24, 2003 (the "Bar Date Order"),
the Bankruptcy Court established a bar date for filing proofs of claim against
the Debtors' estates of January 9, 2004 at 5:00 P.M. (Eastern Time). A bar date
is the date by which proofs of claims must be filed if a claimant disagrees with
how such claimant's claim appears on the Debtor's Schedules of Liabilities. The
Company provided notice to all known claimants of the bar date and their need to
file a proof of claim with the Bankruptcy Court. The aggregate amount of claims
filed with the Bankruptcy Court far exceeds the Debtors' estimate of ultimate
liability. The Debtors believe that many of these claims are duplicative, based
upon contingencies that have not occurred, or otherwise are overstated, and are
therefore invalid. Differences between amounts recorded by the Debtors and
claims filed by creditors are being investigated and resolved in connection with
the Debtors' claims resolution process. That process has commenced and, in light
of the number of claims asserted, will take significant time to complete.
Accordingly, the ultimate number and allowed amounts of such claims are not
presently determinable. On July 31, 2003, each Debtor filed with the Bankruptcy
Court its Schedules of Liabilities and Statement of Financial Affairs. On or
about October 8, 2003, each Debtor filed its First Amendment to its Schedules of
Liabilities and Statement of Financial Affairs. On or about October 24, 2003,
certain of the Debtors filed a Second Amendment to their respective Schedules of
Liabilities. Between February 27 and March 1, 2004, each Debtor filed its
Schedules of Assets and February 2004 Amendments to Schedules of Liabilities and
Executory Contracts and February 2004 Amendments to the Statement of Financial
Affairs. Pursuant to the Bar Date Order, any claimant whose claim was effected
by this amendment has thirty days from the date upon which they receive notice
thereof to file a proof of claim.
As of February 29, 2004, the Company had liabilities subject to compromise
of $46,303,120. Liabilities subject to compromise have been reported in
accordance with SOP 90-7. Such amounts may be subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to
disputed claims, determinations of the secured status of certain claims, the
values of any collateral securing such claims, or other events. Such adjustments
may be material to the amounts reported as liabilities subject to compromise.
Valuation methods used in Chapter 11 reorganization cases vary depending
on the purpose for which they are prepared and used and are rarely based on
GAAP, the basis of which the accompanying financial statements are prepared,
unless otherwise noted. Accordingly, the values set forth in the accompanying
unaudited consolidated financial statements are not likely to be indicative of
the values presented to or used by the Bankruptcy Court.
5. NON-RECURRING PROFESSIONAL FEES AND REORGANIZATION EXPENSES DUE TO BANKRUPTCY
The Company is incurring certain non-recurring professional fees that,
although not directly related to the Chapter 11 filing, relate to the Company's
reorganization and have been incurred in response to the actions taken by Rigas
Management. These expenses include the re-audit, legal, special investigation
and forensic consultant fees of the Company and the Special Committee of the
Board of Directors and have been included in non-recurring professional fees in
the accompanying unaudited consolidated statements of operations. Based on the
Company's interpretation of SOP 90-7, only those fees directly related to the
15
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
Chapter 11 filing should be expensed and included in reorganization expenses due
to bankruptcy in the unaudited consolidated statements of operations. These
expenses include legal, restructuring and financial consultant fees for the
Company and for Committee representatives.
6. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES
To the Company's knowledge, all undisputed post-petition trade payables
are current and all premiums for insurance policies, including all workers'
compensation and disability insurance policies, required to be paid are fully
paid as of February 29, 2004.
As stated in Note 1, the Company is reviewing its books and records and
other information on an ongoing basis to determine whether the accompanying
unaudited consolidated financial statements should be supplemented or otherwise
amended. Management is currently performing a review to substantiate the
completeness of all liabilities. Such review is ongoing and may result in
additional adjustments to the accompanying unaudited consolidated financial
statements.
7. PREFERRED STOCK
In accordance with the accounting direction provided in SOP 90-7, the
Company has discontinued accruing for its preferred stock dividends as of June
25, 2002, the filing date of the Chapter 11 cases. Had the Company not filed
voluntary petitions under Chapter 11 of the Bankruptcy Code, preferred stock
dividends would have been $5,750 and $115,000 for the respective one and twenty
month periods ended February 29, 2004.
On August 11, 2003, the Debtors initiated an adversary proceeding
against the holders of various series of preferred stock of Adelphia (the
"Preferred Stockholders"), seeking, among other things, to enjoin the Preferred
Stockholders from exercising certain purported rights to elect directors to the
Board of Directors due to Adelphia's failure to pay dividends and alleged
breaches of debt-like covenants contained in the Certificates of Designations
relating to the preferred stock. On August 13, 2003, certain of the Preferred
Stockholders filed an action in the Delaware Chancery Court seeking a
declaratory judgment of their purported right to appoint two directors to the
Board of Directors (the "Delaware Action"). On August 13, 2003, the Bankruptcy
Court granted the Debtors a temporary restraining order, which, among other
things, stayed the Delaware Action and temporarily enjoined the Preferred
Stockholders from exercising their purported rights to elect directors to the
Board of Directors. Thereafter, the Delaware Action was withdrawn.
8. INTERCOMPANY RECEIVABLES AND PAYABLES
The accompanying unaudited consolidated financial statements include
intercompany receivables and payables related to all of Adelphia's
majority-owned subsidiaries and subsidiaries that are at least 50% owned and
controlled by the Company. The intercompany receivables and payables are
presented at the gross amount with the total receivables balance included in
assets and the total intercompany payables balance included in liabilities in
the accompanying unaudited consolidated balance sheet. Intercompany payables
have been segregated between pre- and post- bankruptcy petition and none of the
intercompany balances have been collateralized. The intercompany balances do not
net to zero as the Non-Filing Entities and CMLCV have not been included in the
accompanying consolidated financial statements, as discussed in Note 1.
9. RELATED PARTY RECEIVABLES AND PAYABLES
Related party receivables and payables represent advances to and payables
from certain related parties, including TelCove and entities owned and/or
controlled by the Rigas Family. Related party receivables and payables are
presented at the gross amount with the total receivable balance included in
assets and the payables included in the liabilities in the accompanying
unaudited consolidated balance sheet. Related party payables have been
segregated between pre- and post-bankruptcy petition, and none of the related
party balances have been collateralized. Management is continuing to evaluate
the recoverability of related party receivables and may record reserves against
such receivables in the future.
16
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
10. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
The Company considers all highly liquid investments with a maturity date
of three months or less to be cash equivalents.
As of February 29, 2004, the Company has restricted cash of $44,399
relating to proceeds from the Tranche B Loan which are subject to issued letters
of credit. In addition, as required by an agreement with the Company's insurance
provider, the Company has restricted cash for the payment of franchise
obligations in the amount of $27,952. Also included in restricted cash is $7,873
related to revenue received from customers which was placed in trust as a result
of a dispute arising from the acquisition of certain cable systems from Verizon
Media Ventures, Inc.. The remainder of the restricted cash balance consists of
cash collateral supporting obligations under certain of the Company's franchise
agreements and surety bonding obligations.
11. SUBSCRIBER RECEIVABLES
Subscriber receivables consist of monthly amounts due from the Company's
customers and are reported net of allowance for doubtful accounts of $12,881.
12. PREPAID EXPENSES AND OTHER ASSETS - NET
Included in other assets - net are unamortized deferred financing fees of
$154,979 relating to pre-petition debt obligations. Such amounts are not
currently being amortized. See Note 4 to these unaudited consolidated financial
statements for further discussion. SOP 90-7 requires that in cases where the
underlying debt becomes an allowed claim and the allowed claim differs from the
net carrying amount of the debt, the amount of the debt will be adjusted for any
unamortized deferred loan fees to equal the value of the allowed claim. Any gain
or loss from such adjustments to the underlying debt as compared to the allowed
claim will be reflected in the statement of operations.
13. OTHER-THAN-TEMPORARY IMPAIRMENT OF INVESTMENTS, LONG-LIVED ASSETS AND
CERTAIN OTHER ASSETS
As discussed in Note 1, the Company is reviewing its books and records and
other information on an ongoing basis to determine whether the accompanying
unaudited consolidated financial statements should be supplemented or otherwise
amended. Additionally, as discussed in Note 1, PwC has not completed its audit
as of and for the years ended December 31, 2003, 2002 and 2001 or its re-audit
as of and for the years ended December 31, 2000 and 1999. The Company is
performing an evaluation of impairment related to several investments and
long-lived and certain other assets. This evaluation includes a review of the
accounting treatment when the transaction originated and a review of the
accounting subsequent to the date of origination, including periodic evaluations
for impairment. These evaluations may result in adjustments to the unaudited
consolidated financial results contained herein and financial statements as of
and for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999. The
adjustments may be material to these periods.
Listed below are certain investments and other assets for which (with the
exception of property, plant and equipment and intangible assets) the Company
has recorded an asset impairment charge during the twenty month period ended
February 29, 2004. All adjustments to be made to prior periods as a result of
the Company's restatement of prior year financial statements have not been
reflected in the unaudited consolidated financial statements contained herein
pending the completion of the audit as of and for the years ended December 31,
2003, 2002 and 2001 and the re-audits as of and for the years ended December 31,
2000 and 1999.
17
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
The tables below present the impairment of long-lived and other assets and
other than temporary impairment of investments and other assets that have been
recorded by the Company since July 1, 2002.
<Table>
<Caption>
Twenty Months
Ended
February 29,
2004
-------------
Impairment of Long-Lived and Other Assets:
Internal Operations, Call Center and Billing System $ 63,910
Competitive Local Exchange Carriers 8,224
-------------
$ 72,134
=============
Other-than-Temporary Impairment of Investments and Other Assets:
Buffalo Sabres 68,612
Interactive Digital TV Investments 1,697
Praxis Capital Ventures, L.P. 2,600
-------------
$ 72,909
=============
</Table>
Internal Operations, Call Center and Billing System
From 1998 through mid-2002, the Company was developing an internal
operations, call center and billing system known as "Convergence." After careful
evaluation of the functionality and usability of Convergence, the Company
decided not to pursue continued rollout and terminated additional funding for
the system. In October 2002, the Company recognized an impairment charge related
to the abandonment of the Convergence system in the amount of $63,910.
Additional adjustments totaling $7,610 were recorded in October to reclassify
payroll and other operating expenses improperly capitalized during 2002. The
Company's remaining investment in this system of approximately $30,000 will be
adjusted in connection with the restatement of its prior year financial
statements.
Closure of the Competitive Local Exchange Carriers ("CLECs")
In August 2002, the Company filed a motion with the Bankruptcy Court for
approval to close operations in 14 markets that were served by the Company's
CLECs. The CLECs provided local telephone service to certain geographic markets
and competed with local telephone exchange carriers. The Company's Board of
Directors approved the closure, and approval was granted by the Bankruptcy Court
by order dated September 25, 2002. The Company expects that, in connection with
the restatement of its financial statements for prior periods, the property,
plant and equipment associated with these CLECs will be written down by
approximately $100,000. The remaining net book value of the property, plant and
equipment of approximately $20,000 was depreciated over its estimated remaining
useful life beginning in November 2002 through April 2003. Furthermore, in
November 2002, the Company recognized an additional impairment of $6,873 on
certain of its CLEC assets that are expected to be sold and recorded a reserve
on its CLEC trade accounts receivables of $1,351.
Buffalo Sabres
As disclosed in the Company's Current Report on Form 8-K filed on May 24,
2002, the Company had entered into various arrangements with Niagara Frontier
Hockey, L.P. ("NFHLP"), a Delaware limited partnership owned by the Rigas
Family. Among other assets, NFHLP owned the Buffalo Sabres, a National Hockey
League team. The Company made approximately $165,000 of loans and advances,
including accrued interest, to NFHLP and its subsidiaries. In November 2002, the
Company recognized impairments of those loans and advances of $31,447. On
January 13, 2003, NFHLP and certain of its subsidiaries (the "Niagara Debtors")
filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code
in the United States Bankruptcy Court for the Western District of New York (the
"NFHLP Bankruptcy Court").
18
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
On or about March 13, 2003, certain of the Niagara Debtors entered into an
Asset Purchase Agreement with Hockey Western New York LLC for the sale of
certain assets and assumption of certain liabilities of NFHLP. In March 2003,
the Company recognized an additional impairment of $37,922 as a result of the
then pending sale of certain assets, including the Buffalo Sabres, and
assumption of certain liabilities of NFHLP. On April 23, 2003, the sale was
completed. The Company did not recover any of its loans and advances in NFHLP
from such sale. The March 2003 impairment charge, combined with the November
2002 charge, and with anticipated adjustments related to restatement of the
Company's prior year financial statements, completely wrote off the Company's
loans and advances in NFHLP and its subsidiaries. On or about August 14, 2003,
the NFHLP Bankruptcy Court approved the Niagara Debtors' Disclosure Statement.
On September 25, 2003, the NFHLP Bankruptcy Court approved the NFHLP joint plan
of liquidation. The Niagara Debtors filed a complaint, dated November 4, 2003,
against, among others, the Company and the Creditors' Committee seeking to
enforce certain purported rights against the Company and the Creditors'
Committee related to the waiver of the Company's claims. One of the Niagara
Debtors' prepetition lenders, which is also a defendant in the lawsuit, has
filed a cross-claim against the Company and the Creditors' Committee. A hearing
on the complaint or the cross-complaint has not been scheduled.
Interactive Digital TV Investments
The Company has investments in interactive digital TV product ventures. In
December 2002, the Company recognized a loss of $1,697 for declines in
investment value deemed other than temporary.
Praxis Capital Ventures, L.P.
As disclosed in the Company's Current Report on Form 8-K filed on May 24,
2002 the Company entered into certain transactions with Praxis Capital Partners,
LLC ("Praxis Capital"), a Delaware limited liability company and Praxis Capital
Management, LLC, a Delaware limited liability company, through Praxis Capital
Ventures, L.P. ("PCVLP"), a Delaware limited partnership in which ACC
Operations, Inc. (a wholly-owned Company subsidiary) is a 99.5% Limited Partner.
Formed in June 2001, PCVLP focused on private equity investments in the
telecommunications market. At June 30, 2002, the net book value of the Company's
portion of these investments was approximately $1,247. In addition, the Company
had recorded $1,053 of prepaid management service fees to PCVLP. The Company has
recorded reserves totaling $2,600 related to PCVLP. The Company is continuing to
evaluate the PCVLP investments, which consist primarily of investments in
private companies whose securities have no actively traded market. By order
dated October 20, 2003, the Debtors rejected the partnership agreement with
Praxis Capital.
Peter L. Venetis, the son-in-law of John J. Rigas and a former director of
the Company, is the managing director of Praxis Capital Management, LLC.
Devon Mobile Communications, L.P.
The Company is a 49.9% Limited Partner in Devon Mobile Communications,
L.P., ("Devon Mobile"), a Delaware limited partnership which, through its
subsidiaries, holds licenses to operate regional wireless telephone businesses
in several states. Devon Mobile had certain business and contractual
relationships with the Company and with former subsidiaries or divisions of the
Company which were spun-off as TelCove in January 2002. In late May 2002, the
Company notified Devon L.P., Inc., the General Partner of Devon Mobile, that it
would likely terminate certain discretionary operational funding to Devon
Mobile. In July 2002, the Company understood that its former subsidiary,
TelCove, elected to terminate certain services significant to Devon Mobile's
operations. Devon Mobile filed voluntary petitions to reorganize under Chapter
11 of the Bankruptcy Code with the Bankruptcy Court (the "Devon Bankruptcy
Court") on August 19, 2002. In July 2002, the Company recorded an asset
impairment reserve against the investment in and receivables from Devon Mobile
of $1,221 and $53,646, respectively. In November 2002, the Company refined its
evaluation of exposure to Devon Mobile and recorded additional impairments of
$51,087, which related primarily to the Company's guarantee of certain
obligations of Devon Mobile, other receivables from Devon Mobile, and an
incremental investment in Devon Mobile that is expected to result from the
Company's restatement of prior year financial information. All such impairments
are included in equity in losses of affiliates - net in the accompanying
unaudited consolidated statements of operations. As of November 2002, the
Company has fully reserved for its investment and
19
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
receivables in Devon Mobile. On January 17, 2003, the Company filed proofs of
claim against Devon Mobile and its subsidiaries for approximately $130,100 in
debt and equity claims, as well as an additional claim of approximately $34,000
relating to its guarantee of certain Devon Mobile obligations (collectively, the
"Company Claims"). On June 23, 2003, Devon filed a disclosure statement for the
joint plan of liquidation (the "Disclosure Statement"). On or about July 25,
2003, the Devon Bankruptcy Court approved the Disclosure Statement. By order
dated October 1, 2003, the Devon Bankruptcy Court confirmed Devon's first
amended joint plan of liquidation. According to the Disclosure Statement, Devon
Mobile and the Official Committee of Unsecured Creditors appointed in the Devon
Mobile chapter 11 cases disagree with the Company Claims and intend to file an
objection seeking an order eliminating such claims in their entirety. As of the
date hereof, Devon Mobile has not objected to the Company Claims.
Property, Plant and Equipment, and Intangible Assets
As stated previously, the Company's property, plant and equipment and
intangible assets are currently being evaluated by management for asset
impairment and other issues. These issues include the ownership of assets, prior
capitalization policies, estimated useful lives, amounts allocated to specific
assets in connection with acquisitions, and impairment. The complete results of
these evaluations are unknown at this time but could result in material
adjustments to the net book value of property, plant and equipment and
intangible assets at December 31, 2003, 2002, 2001, 2000 and 1999, as well as
results of operations for the periods then ended.
As more fully discussed in Note 3, the Company has corrected many of its
erroneous accounting policies and practices for PP&E with respect to the
accounting for Capitalized Costs and Capitalized Installation and Construction
Activities for the fourteen months ended February 29, 2004. The Company is
continuing its review of the historical books and records and other information;
accordingly, these issues should not be considered the only issues related to
these assets that are under evaluation by the Company, and the Company reserves
the right to amend, update or supplement this information.
14. NET LOSS PER WEIGHTED AVERAGE SHARE OF COMMON STOCK
Basic net loss per weighted average share of common stock is computed
based on the weighted average number of common shares outstanding after giving
effect to dividend requirements on the Company's preferred stock (see Note 7).
Diluted net loss per common share is equal to basic net loss per common share
because the Company's convertible preferred stock and outstanding stock options
do not have a dilutive effect for the periods presented. In the future, however,
the convertible preferred stock and outstanding stock options could have a
dilutive effect on earnings per share.
15. SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest were $31,055 and $627,031 for the one and
twenty month periods ended February 29, 2004, respectively. Included in these
amounts are cash payments made by the Company on behalf of the Rigas family
entities of $12,716 and $274,887 for the one and twenty month periods ended
February 29, 2004, respectively, for interest on the co-borrowing credit
facilities. Such payments are included in the related party receivables and
payables, net in the accompanying unaudited consolidated statements of cash
flows.
16. EBITDA
The following is a summary of Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA") from the accompanying unaudited
consolidated statements of operations for the one and twenty month periods ended
February 29, 2004. EBITDA is an alternative performance measure that is
customarily used by companies that own, operate and manage cable television
systems and other related telecommunications businesses. Management believes
that EBITDA provides an alternative measure that is useful in evaluating the
Company's liquidity. EBITDA is not a performance measure in accordance with GAAP
and the use of EBITDA is not meant to replace or supercede any information
presented in accordance with GAAP.
Presented below is a reconciliation of EBITDA to net loss and net cash
provided by operating activities as presented in the accompanying unaudited
consolidated financial statements.
20
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
Reconciliation of EBITDA to Net Loss Applicable to Common Stockholders
<Table>
<Caption>
Twenty
Month Ended Months Ended
February 29, 2004 February 29, 2004
----------------- -----------------
EBITDA $ 87,568 $ 1,241,168
Adjustments to reconcile EBITDA to net loss
applicable to common stockholders:
Depreciation and amortization (76,505) (1,496,493)
Interest expense (31,712) (681,610)
Income tax benefit -- 35
----------------- -----------------
Net loss applicable to common stockholders $ (20,649) $ (936,900)
================= =================
</Table>
Reconciliation of EBITDA to Net Cash Provided by Operating Activities
<Table>
<Caption>
Twenty
Month Ended Months Ended
February 29, February 29,
2004 2004
------------- -------------
EBITDA $ 87,568 $ 1,241,168
Adjustments to reconcile EBITDA to net cash
provided by operating activities:
Amortization of bank financing costs 2,112 34,471
Impairment of long-lived and other assets -- 72,134
Other-than-temporary impairment of investments
and other assets -- 72,909
Minority interest in earnings (losses) of subsidiaries -
net 1,129 (13,389)
Equity in losses of affiliates, net 85 107,359
Gain on sale of assets - net -- (3,864)
Other non-cash items -- 3,856
Reorganization expenses due to bankruptcy 4,809 148,861
Non-recurring professional fees, net of amounts paid 772 24,280
Change in Assets and Liabilities:
Subscriber receivables - net 9,193 (14,325)
Prepaid expenses - net 2,653 (25,084)
Other assets - net 90 (59,567)
Accounts payable (2,205) 44,821
Subscriber advance payments and deposits (29,568) 15,792
Accrued interest and other liabilities (21,757) 280,531
Intercompany receivables and payables - net 835 (13,408)
Reorganization expenses paid during the period (3,297) (119,317)
Interest expense (31,712) (681,610)
Income tax benefit -- 35
------------- -------------
Net cash provided by operating activities $ 20,707 $ 1,115,653
============= =============
</Table>
21
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
17. TELCOVE SPIN-OFF AND BANKRUPTCY PROCEEDINGS
Adelphia Business Solutions, Inc., which currently conducts business under
the name TelCove ("TelCove"), was a consolidated subsidiary of Adelphia as of
December 31, 2001. TelCove owns, operates and manages entities which provide
competitive local exchange carrier ("CLEC") telecommunications services. On
January 11, 2002, the Company distributed in the form of a dividend, all of the
shares of common stock of TelCove owned by Adelphia to holders of Adelphia's
Class A and Class B common stock (the "Spin-off"). As a result of the Spin-off,
the Rigas Family holds a majority of the total voting power of TelCove common
stock. The distribution of TelCove common stock was recorded on the date of the
Spin-off. Accordingly, the accompanying unaudited consolidated financial
statements do not include the accounts of TelCove. On March 27, 2002, TelCove
and certain of its direct subsidiaries filed voluntary petitions to reorganize
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of New York (the "Bankruptcy Court"). On December 19,
2003, the Bankruptcy Court entered an order confirming TelCove's Modified Third
Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
dated December 18, 2003.
Prior to the TelCove Spin-off (and in some circumstances following the
TelCove Spin-off), Adelphia and TelCove (i) shared certain collocation space,
real property interests, fiber-optic cable assets, strands and network
infrastructure and related equipment (collectively, the "Shared Assets"); (ii)
engaged in joint undertakings, including the construction and overlash of
fiber-optic cable networks and facilities, necessary for the construction and
operation of a telecommunications network and cable network; and (iii) provided
one another with certain services that are or were crucial to the operation of
each other's businesses (the "Shared Services").
In order to reduce Adelphia's dependence on TelCove for access to the
Shared Assets and Shared Services as well as to gain operational independence
from TelCove and validate and memorialize the ownership of the Shared Assets, on
December 3, 2003, the Debtors and TelCove entered into a Master Reciprocal
Settlement Agreement pursuant to which the parties, among other things,
memorialized their agreement relating to their ownership and use of the Shared
Assets. Such Master Reciprocal Settlement Agreement is subject to Bankruptcy
Court approval.
In the TelCove Plan and the related disclosure statement, TelCove alleges
that it has substantial claims against Adelphia (the "Alleged Claims"). The
Alleged Claims include, but are not limited to: (1) piercing the corporate veil
and/or substantive consolidation allegedly due to the manner in which Adelphia
and TelCove conducted their businesses; (2) preference and/or fraudulent
conveyance claims aggregating approximately $228,000 and associated with the
December 2000 and October 2001 purchase of certain TelCove CLEC assets by
Adelphia; (3) a $42,000 claim for the alleged misappropriation of proceeds from
a partnership controlled by an indirect non-Debtor subsidiary of TelCove and two
entities affiliated with a third-party electric utility ("PECO") through the
deposit of funds by PECO into Adelphia's cash management system; (4) the
disallowance of Adelphia's super-priority secured claims against TelCove in
connection with Adelphia's provision of $15,000 in debtor in possession
financing to TelCove (the "Adelphia DIP Facility Claims"), in addition to
TelCove's claims against Adelphia associated with the alleged losses and damages
TelCove purportedly suffered as a result of its need to obtain alternative DIP
financing; and (5) up to $500,000 associated with TelCove's borrowings under the
Century Credit Facility because either the amounts have allegedly been repaid or
because TelCove was allegedly forced to incur such liability by Adelphia and the
borrowings were purportedly used by Adelphia and not TelCove. In the aggregate,
TelCove asserts that the Alleged Claims against Adelphia total more than $1
billion. Adelphia has engaged BDO Seidman LLP, as special forensic accountants,
to assist Adelphia in connection with its investigation of the Alleged Claims.
On November 25, 2003, Adelphia filed a proof of claim for administrative
expenses against TelCove in the approximate amount of $71,000 (collectively,
"Adelphia's Administrative Claims"). Adelphia's Administrative Claims include,
but are not limited to: (i) a claim for TelCove's utilization of Adelphia's
fiber network, conduit, overlash rights, land usage, collocation space, power,
and network maintenance services; (ii) a claim relating to services rendered by
Adelphia to TelCove under a certain shared services agreement between the
parties; (iii) the Adelphia DIP Facility Claim; and (iv) a circuit refund claim
related
22
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
to Adelphia's overpayment to TelCove for its use of TelCove's telecommunications
network through certain circuits. In connection with seeking confirmation of the
TelCove Plan, TelCove filed a motion with the Bankruptcy Court seeking to
estimate Adelphia's Administrative Claims at no more than $1,000 for allowance
and distribution purposes. Although Adelphia contested this motion, following a
two-day hearing, the Bankruptcy Court estimated Adelphia's Administrative Claims
at no more than $2,700 for purposes of determining feasibility of and
establishing appropriated distribution reserves under the TelCove Plan. The
Bankruptcy Court also ordered TelCove and Adelphia to continue to engage in
settlement discussions regarding the claims and disputes between them, which the
parties have continued to do.
On February 21, 2004, the parties executed a global settlement agreement
(the "Global Settlement") which resolves, among other things, the Alleged
Claims, Adelphia's Administrative Claims, and TelCove's alleged counterclaims
and defenses thereto. The Global Settlement provides that on the closing date,
ACC will transfer to TelCove certain settlement consideration, including,
$60,000 in cash, plus an additional payment of up to $2,500 related to certain
outstanding payables, as well as certain vehicles, real property and
intellectual property licenses used in the operation of TelCove's businesses.
Additionally, the parties will execute various annexes to the Global Settlement
which provide, among other things, for (i) a five-year business commitment to
TelCove by ACC; (ii) future use by TelCove of certain fiber capacity in assets
owned by ACC and (iii) the mutual release by the parties from any and all
liabilities, claims and causes of action which either party has or may have
against the other party. Finally, the Global Settlement provides for the
transfer by ACC to TelCove of certain CLEC market assets together with the
various licenses, franchises and permits related to the operation and ownership
of such assets. The Global Settlement remains subject to approval of the lenders
under the DIP Facility as well as Bankruptcy Court approval. There can be no
assurance that both of these conditions will be satisfied or that the Global
Settlement will be consummated. The Company is in the process of evaluating the
impact of the Global Settlement on the accompanying unaudited consolidated
financial statements. The Company believes that such impact could be
significant. A hearing before the Bankruptcy Court to consider and authorize the
Debtors to enter into the Global Settlement is scheduled for March 23, 2004.
18. CENTURY-ML CABLE VENTURE BANKRUPTCY FILING
On September 30, 2002, CMLCV, a 50/50 joint venture between Century and ML
Media Partners, L.P. ("ML Media") filed a voluntary petition to reorganize under
Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. This bankruptcy
proceeding is administered separately from that of Adelphia. CMLCV is operating
its business as a debtor-in-possession and is continuing to serve its
subscribers in three communities in Puerto Rico. At this time, CMLCV is expected
to generate sufficient cash to fund foreseeable operations and capital
requirements. The CMLCV Chapter 11 filing is not expected to have a material
impact on the operations of CMLCV's subsidiary, Century-ML Cable Corporation,
which serves communities in Puerto Rico.
CMLCV, since October 2002, has been filing a separate monthly operating
report with the Bankruptcy Court. As more fully disclosed in CMLCV's separate
Monthly Operating Report, there is litigation pending in the Bankruptcy Court
between ML Media and CMLCV, Century, the Company and Highland Holdings, L.P.
("Highland"), a Rigas Family partnership. In connection with the parties'
December 13, 2001 Leveraged Recapitalization Agreement ("Recap Agreement"),
there is a pre-petition dispute relating primarily to an alleged secured
obligation in the amount of $279,800 to ML Media for its 50% ownership in CMLCV.
If there is an adverse outcome against the Company relating to this litigation,
the Company may be required to pay $279,800 to ML Media for its 50% ownership in
CMLCV, as well as interest and other amounts that may result from the outcome of
this litigation, or Century may be required to surrender its 50% ownership in
CMLCV to ML Media. A hearing was held on September 24, 2002, and a decision was
rendered on January 17, 2003, wherein the Bankruptcy Court; (i) denied all of
the parties' motions for summary judgment on the issue of whether there has been
an acceleration of the September 30, 2002 closing date under the Recap
Agreement, except that the Bankruptcy Court (ii) found "as a matter of law,
that, assuming that the Recap Agreement is enforceable, payment by the Company
was due on September 30, 2002 and payment by Adelphia, Century and Highland was
due on October 1, 2002, one day later, and that, having failed to make payment,
each of the Company, Century and Highland is now in default." The Bankruptcy
Court granted summary judgment only to such extent.
23
ADELPHIA COMMUNICATIONS CORPORATION, et. al.
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
In a decision and order dated March 31, 2003, the Bankruptcy Court denied
ML Media's request to become manager of CMLCV's cable systems. In a decision and
order dated April 21, 2003, the Bankruptcy Court denied ML Media's motion to
dismiss the CMLCV bankruptcy petition, rejecting ML Media's claim that Century
improperly filed the petition without ML Media's consent. On September 5, 2003,
the Bankruptcy Court heard oral argument on ML Media's motions for summary
judgment on, and dismissal of, the counterclaims brought by Adelphia and CMLCV
to avoid the Recap Agreement. No ruling has yet been issued in connection with
these motions. On September 17, 2003, the Bankruptcy Court entered an order
authorizing Adelphia's and Century's rejection of the Recap Agreement.
On May 12, 2003, the Bankruptcy Court directed ML Media, Century, Adelphia
and Highland to enter into mediation to resolve the dispute. Settlement
discussions between Adelphia and ML Media are continuing.
No accrual for the outcome of the above described litigation is included
in the accompanying unaudited financial statements.
By order dated December 2, 2003, the Bankruptcy Court established a bar
date for filing proofs of claim against CMLCV's estate of January 15, 2004 at
5:00 P.M. (Eastern Time).
19. CUSTOMERS
The table below provides information on the number of basic customers,
digital customers and high speed internet customers for the Debtors, the
Non-Filing Entities, which includes customers in Brazil and Puerto Rico, and the
Rigas Entities. As further described in its Current Report on Form 8-K filed May
25, 2003, the Company corrected the methodology for calculating customers
previously used; therefore, the customer data set forth below may not be
comparable to customer data reported prior to such correction.
<Table>
<Caption>
Non-Filing and
Filing Entities Rigas Entities Total
--------------- -------------- -----------
FEBRUARY 29, 2004:
Basic customers 4,999,926 425,891 5,425,817
Digital customers 1,796,109 148,530 1,944,639
High speed internet customers 1,031,339 68,392 1,099,731
--------------- -------------- -----------
Total revenue generating units 7,827,374 642,813 8,470,187
=============== ============== ===========
JANUARY 31, 2004:
Basic customers 5,012,639 427,509 5,440,148
Digital customers 1,797,942 148,587 1,946,529
High speed internet customers 984,876 66,355 1,051,231
--------------- -------------- -----------
Total revenue generating units 7,795,457 642,451 8,437,908
=============== ============== ===========
</Table>
20. BANKRUPTCY COURT REPORTING SCHEDULES
The Bankruptcy Court reporting schedules included in this report beginning
on page 25 are for the period from February 1 through February 29, 2004 and have
been prepared for the purpose of filing with the Bankruptcy Court and are not
required by GAAP. The accompanying Bankruptcy Court reporting schedules, as with
all other information contained herein, have been obtained from the books and
records of the Company and are unaudited.
24
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SUMMARY
<Table>
<Caption>
For the
Month Ended
February 29, 2004 Reference
----------------- -----------
Gross wages paid $ 54,626,282 Schedule I
Employee payroll taxes withheld 13,103,218 Schedule I
Employer payroll taxes due 5,695,428 Schedule I
Payroll taxes paid* 18,375,324 Schedule II*
Sales and other taxes due 6,979,684 Schedule III
Gross taxable sales 88,459,151 Schedule III
Real estate and personal property taxes paid 855,822 Schedule IV
Sales and other taxes paid 6,412,651 Schedule V
Cash disbursements 378,691,816 Schedule VI
Insurance coverage N/A Schedule VII
</Table>
* The amount reported above for payroll taxes paid is based upon the date paid
and not the date due.
25
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE I
COURT REPORTING SCHEDULES FOR PAYROLL AND PAYROLL TAXES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
- --------------------------------------------------------------------------
Gross Employee Payroll Employer Payroll
Week Ending Date Wages Paid Taxes Withheld Taxes Due
- --------------------------------------------------------------------------
January 9, 2004 $22,955,505 $ 5,082,599 $2,510,338
January 23, 2004 31,670,777 8,020,619 3,185,090
- --------------------------------------------------------------------------
Total $54,626,282 $13,103,218 $5,695,428
- --------------------------------------------------------------------------
</Table>
26
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE II PAGE 1 OF 3
COURT REPORTING SCHEDULES FOR PAYROLL TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYROLL TAXES
PAYEE PAID PAYMENT DATE
- ----- ------------- -------------
SCHOOL DISTRICT INCOME TAX 111 02/03/04
CITY OF CAMBRIDGE 80 02/06/04
NORTH CAROLINA DEPT OF REVENUE 11,681 02/06/04
OREGON DEPARTMENT OF REVENUE 170 02/06/04
TELE-MEDIA CORPORATION 3,386 02/06/04
WEST VIRGINIA DEPT OF TAX & REV 219 02/06/04
INTERNAL REVENUE SERVICE 5,965,236 02/09/04
STATE OF ARIZONA 1,971 02/09/04
STATE OF CALIFORNIA 178,143 02/09/04
STATE OF COLORADO 58,375 02/09/04
STATE OF CONNECTICUT 10,761 02/09/04
STATE OF GEORGIA 10,895 02/09/04
STATE OF IDAHO 4,572 02/09/04
STATE OF INDIANA 990 02/09/04
STATE OF KANSAS 655 02/09/04
STATE OF KENTUCKY 32,602 02/09/04
STATE OF MASSACHUSETTS 24,583 02/09/04
STATE OF MARYLAND 12,740 02/09/04
STATE OF MAINE 27,742 02/09/04
STATE OF NEW YORK 105,944 02/09/04
STATE OF OHIO 64,587 02/09/04
STATE OF OKLAHOMA 442 02/09/04
STATE OF PENNSYLVANIA 101,962 02/09/04
STATE OF SOUTH CAROLINA 5,072 02/09/04
STATE OF VIRGINIA 70,374 02/09/04
STATE OF VERMONT 13,696 02/09/04
STATE OF MARYLAND 787 02/09/04
DAVID SCHROEDER 210 02/10/04
KENTUCKY REVENUE CABINET 187 02/11/04
STRONG CAPITAL MANAGEMENT 541,651 02/11/04
OHIO DEPARTMENT OF TAXATION 358 02/13/04
MASS DEPT OF REVENUE 146 02/18/04
ASHTABULA INCOME TAX 592 02/20/04
CENTRAL COLLECTION AGENCY 32,537 02/20/04
CITY OF CHILLICOTHE 9,397 02/20/04
CITY OF CLEVELAND HEIGHTS 3,775 02/20/04
CITY OF DANVILLE 354 02/20/04
DIRECTOR OF FINANCE 83 02/20/04
</Table>
27
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE II PAGE 2 OF 3
COURT REPORTING SCHEDULES FOR PAYROLL TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYROLL TAXES
PAYEE PAID PAYMENT DATE
- ----- ------------- -------------
VILLAGE OF GREENWOOD 612 02/20/04
CITY OF HUNTINGTON 248 02/20/04
LORAIN CITY TAX 2,003 02/20/04
CITY OF MACEDONIA 2,211 02/20/04
CITY OF MARION 934 02/20/04
MICHIGAN DEPARTMENT OF REVENUE 125 02/20/04
MISSISSIPPI STATE TAX COMMISSN 2,731 02/20/04
MONTANA DEPARTMENT OF REVENUE 1,289 02/20/04
NEBRASKA DEPARTMENT OF REVENUE 247 02/20/04
CITY OF NEWARK 3,664 02/20/04
NORTH CAROLINA DEPT OF REVENUE 14,866 02/20/04
DIRECTOR OF FINANCE 227 02/20/04
OREGON DEPARTMENT OF REVENUE 174 02/20/04
TREASURER CITY OF OWENSBORO 449 02/20/04
CITY OF PITTSBURGH 1,676 02/20/04
SCHOOL DISTRICT INCOME TAX 2,837 02/20/04
UTAH STATE TAX COMMISSION 285 02/20/04
WEST VIRGINIA DEPT OF TAX & REV 19,444 02/20/04
JONATHAN COSCIA 4 02/23/04
INTERNAL REVENUE SERVICE 9,098,359 02/23/04
STATE OF ALABAMA 4,879 02/23/04
STATE OF ARIZONA 3,767 02/23/04
STATE OF CALIFORNIA 257,916 02/23/04
STATE OF COLORADO 198,703 02/23/04
STATE OF CONNECTICUT 12,120 02/23/04
STATE OF GEORGIA 13,465 02/23/04
STATE OF IDAHO 7,318 02/23/04
STATE OF INDIANA 1,283 02/23/04
STATE OF KANSAS 872 02/23/04
STATE OF KENTUCKY 30,949 02/23/04
STATE OF MASSACHUSETTS 46,556 02/23/04
STATE OF MARYLAND 15,490 02/23/04
STATE OF MAINE 39,504 02/23/04
STATE OF NEW YORK 147,652 02/23/04
STATE OF OHIO 81,519 02/23/04
STATE OF OKLAHOMA 849 02/23/04
STATE OF PENNSYLVANIA 136,240 02/23/04
STATE OF SOUTH CAROLINA 6,014 02/23/04
STATE OF VIRGINIA 81,767 02/23/04
</Table>
28
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE II PAGE 3 OF 3
COURT REPORTING SCHEDULES FOR PAYROLL TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYROLL TAXES
PAYEE PAID PAYMENT DATE
- ----- ------------- -------------
STATE OF VERMONT 18,541 02/23/04
STATE OF WISCONSIN 704 02/23/04
RITA 6,448 02/25/04
STRONG CAPITAL MANAGEMENT 813,317 02/25/04
TOTAL 18,375,324
</Table>
29
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 1 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
ALABAMA DEPT. OF REVENUE $ 262 $ 4,373
ALBEMARLE COUNTY 4,388 A
AMHERST COUNTY TREASURER 8 A
ARIZONA DEPARTMENT OF REVENUE 54 1,259
ARKANSAS DEPARTMENT OF REVENUE -- 7
ASHLAND INDEPENDENT BOARD OF EDUCATION 10,461 348,685
AUGUSTA COUNTY -- A
BANK OF AMERICA 428 30,504
BATH COUNTY SCHOOL DISTRICT 1,128 37,607
BEDFORD CITY -- A
BEDFORD COUNTY 57 1,939
BEREA COUNTY SCHOOL DISTRICT 2,272 75,749
BOARD OF EQUALIZATION 230 A
BOARD OF EQUALIZATION 338 4,397
BOURBON COUNTY SCHOOL DISTRICT 623 20,763
BOYD COUNTY SCHOOL DISTRICT 2,779 92,658
BOYLE COUNTY SCHOOL DISTRICT 1,538 51,259
BREATHITT COUNTY SCHOOL DISTRICT 912 30,388
BRECKINRIDGE COUNTY BOARD OF EDUCATION 779 25,981
BUREAU OF TAXATION 127 2,531
BURGIN INDEPENDENT BOARD OF EDUCATION 331 11,035
BUTLER COUNTY SCHOOL DISTRICT 18 611
CAMPBELL COUNTY TREASURER 134 A
CARTER COUNTY SCHOOL DISTRICT 1,675 55,836
CATTARAUGUS COUNTY 22 A
CCHCF-A 52 --
CHARLOTTESVILLE CITY TREASURER 2,138 A
CHAUTAUQUA COUNTY DIRECTOR OF FINANCE 26 A
CHCF-B 671 --
CHESTERFIELD COUNTY 166 A
CHESTERFIELD COUNTY 78 1,627
CITY OF ALAHAMBRA 1 28
CITY OF ALBION 2 36
CITY OF ALGOURA HILLS 6 121
CITY OF ARCADIA 11 222
CITY OF ARTESIA -- 4
CITY OF ASOTIN -- 1
CITY OF BALDWIN PARK 4,137 137,911
CITY OF BALDWIN PARK 3 102
</Table>
30
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 2 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
CITY OF BEAUMONT 2,751 91,708
CITY OF BEAUMONT 6 190
CITY OF BELLFLOWER 2 45
CITY OF BERKELEY 1 15
CITY OF BOTHELL 1 16
CITY OF BRAWLEY 6,640 166,008
CITY OF BRAWLEY 5 131
CITY OF BURBANK 4 51
CITY OF CALABASAS 6 124
CITY OF CHARLOTTESVILLE 53,553 535,532
CITY OF CHARLOTTESVILLE 13,975 150,090
CITY OF CLAREMONT -- 3
CITY OF CLOVERDALE 1 38
CITY OF COLFAX -- 5
CITY OF COLORADO SPRINGS 215 8,614
CITY OF COVINA 5 87
CITY OF CULVER CITY 3 31
CITY OF DESERT HOT SPRINGS 8 151
CITY OF DOWNEY 1 12
CITY OF EDMONDS 1 12
CITY OF EL MONTE 1 14
CITY OF ELK GROVE -- 16
CITY OF FONTANA 37,809 756,179
CITY OF FONTANA 7 146
CITY OF GARDENA -- 11
CITY OF GLENDALE 2 25
CITY OF HARRISONBURG TREASURER 12 A
CITY OF HAWTHORNE 2 47
CITY OF HERMOSA 23 379
CITY OF HERMOSA BEACH 18,692 311,541
CITY OF HOLTVILLE 1,751 35,018
CITY OF HOLTVILLE 1 18
CITY OF HUNTINGTON BEACH 2 44
CITY OF HUNTINGTON PARK -- --
CITY OF INDIO -- 7
CITY OF INGLEWOOD 2 21
CITY OF IRVINE 22 1,492
CITY OF ISSAQUAH -- 3
CITY OF KALAMA 4 67
</Table>
31
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 3 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
CITY OF KELSO 21 347
CITY OF KELSO 6,462 107,699
CITY OF KIRKLAND -- 3
CITY OF LA HABRA 25,400 423,338
CITY OF LA HABRA 26 432
CITY OF LA PALMA 1 30
CITY OF LA VERNE 15 385
CITY OF LAKEWOOD -- 15
CITY OF LAWNDALE -- 1
CITY OF LONG BEACH 9 157
CITY OF LONGVIEW 71 1,185
CITY OF LONGVIEW 21,879 364,657
CITY OF LOS ANGELES 989 9,881
CITY OF LYNWOOD 1 6
CITY OF MALIBU -- 9
CITY OF MAYWOOD 1 11
CITY OF MONTCLAIR 3 86
CITY OF MONTEREY PARK 1 20
CITY OF MORENO VALLEY 66,996 1,116,598
CITY OF MORENO VALLEY 48 799
CITY OF NORWALK 2 30
CITY OF OAKLAND 1 14
CITY OF OLYMPIA 2 36
CITY OF PALM SPRINGS -- 3
CITY OF PALOUSE 2 29
CITY OF PALOUSE 590 8,431
CITY OF PASADENA 4 43
CITY OF PETERSBURG 20,825 104,125
CITY OF PICO RIVERA 10,374 207,477
CITY OF PICO RIVERA 4 87
CITY OF PLACENTIA 16,861 481,753
CITY OF PLACENTIA 2 43
CITY OF POMONA -- 3
CITY OF PORT HUENEME 9,653 241,340
CITY OF PORT HUENEME 3 80
CITY OF PORTERVILLE -- 5
CITY OF PULLMAN 15 190
CITY OF REDONDO BEACH 43,283 911,224
CITY OF REDONDO BEACH 50 1,059
</Table>
32
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 4 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
CITY OF RIALTO 44,723 559,033
CITY OF RIALTO 26 325
CITY OF RICHMOND 1,881 A
CITY OF RICHMOND 14,772 94,689
CITY OF RICHMOND -- 1
CITY OF RIVERSIDE 10 153
CITY OF SALEM 1 A
CITY OF SALINAS 1 22
CITY OF SAN BERNARDINO 66,795 834,944
CITY OF SAN BERNARDINO 14 177
CITY OF SAN BUENAVENTURA 34,538 690,763
CITY OF SAN FRANCISCO 3 37
CITY OF SAN LUIS OBISPO -- 1
CITY OF SANTA ANA 30 496
CITY OF SANTA BARBARA 1 20
CITY OF SANTA MONICA 112,143 1,121,427
CITY OF SANTA MONICA 119 1,190
CITY OF SANTA ROSA -- 3
CITY OF SEA SIDE -- 3
CITY OF SEAL BEACH 14 128
CITY OF SEATTLE 1 12
CITY OF SIERRA MADRE 2 32
CITY OF SOUTH PASADENA 1 29
CITY OF SPOKANE 1 15
CITY OF STANTON -- 7
CITY OF TACOMA -- 1
CITY OF TORRANCE 4 55
CITY OF VALLEJO -- 4
CITY OF VANCOUVER 4 69
CITY OF VENTURA 27 539
CITY OF WAYNESBORO 30,232 302,319
CITY OF WESTMINISTER -- 1
CITY OF WHITTIER 12 243
CITY OF WINCHESTER 18,113 181,129
CITY OF WINLOCK -- 3
CITY OF WOODLAND 2 45
CITY OF ZILLAH -- 1
CLARKE COUNTY 2 A
CLOVERPORT INDEPENDENT SCHOOL DISTRICT 276 9,193
</Table>
33
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 5 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
COLORADO DEPT. OF REVENUE 484 23,098
COLORADO DEPT. OF REVENUE 2,932 84,944
COMMISSIONER OF REVENUE SERVICES 296,806 5,653,439
COMMISSIONER OF REVENUE SERVICES 356,474 5,941,228
COMMONWEALTH OF MASSACHUSETTS 5,766 115,306
COMPTROLLER OF MARYLAND 128 2,571
COMPTROLLER OF MARYLAND 14,485 289,712
COMPTROLLER OF PUBLIC ACCOUNTS 17 333
COMPTROLLER, CITY OF BUFFALO 13,894 463,123
COUNTY OF ALBEMARLE 8,867 95,527
COUNTY OF LOS ANGELES 300 6,002
COUNTY OF MONTGOMERY 9,313 93,126
COUNTY OF SACRAMENTO -- 3
DANVILLE INDEPENDENT SCHOOL DISTRICT 4,793 159,775
DANVILLE, CITY OF 3,947 A
DAVIESS COUNTY BOARD OF EDUCATION 15,692 523,055
DAVIESS COUNTY SCHOOL DISTRICT 108 3,584
DES MOINES 1 14
ELLIOT COUNTY SCHOOL DISTRICT 119 3,950
ERIE COUNTY COMPTROLLER 5,994 A
FAUQUIER COUNTY 24 A
FLORIDA DEPARTMENT OF REVENUE 3,406,328 24,292,432
FLORIDA DEPARTMENT OF REVENUE 147,444 2,479,693
FRANKLIN COUNTY PUBLIC SAFETY 2 A
FRANKLIN COUNTY SCHOOL DISTRICT 100 3,332
FREDERICK COUNTY 184 A
GARRAD COUNTY SCHOOL DISTRICT 987 32,885
GENESEE, COUNTY OF 9 A
GEORGIA DEPARTMENT OF REVENUE 14,255 214,047
GREENE COUNTY 14 A
HANCOCK COUNTY BOARD OF EDUCATION 867 28,915
HANOVER COUNTY 99 31,065
HANOVER COUNTY TREASURER 405 A
HARLAN COUNTY SCHOOL DISTRICT 229 7,628
HARRISON COUNTY SCHOOL DISTRICT 2,655 88,514
HARRODSBURG INDEPENDENT BOARD OF EDUCATION 2,666 88,862
HENDERSON COUNTY BOARD OF EDUCATION 2,159 71,963
HENRICO COUNTY 1,494 A
HENRICO COUNTY 2,700 36,677
</Table>
34
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 6 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
ID USF 24 --
IDAHO STATE TAX COMMISSION 3,989 66,475
ILLINOIS DEPARTMENT OF REVENUE 19 --
INDIANA DEPARTMENT OF REVENUE 30,327 505,467
INTERNAL REVENUE SERVICE 73,851 2,461,676
JACKSON INDEPENDENT SCHOOLS 425 14,179
JESSAMINE COUNTY BOARD OF EDUCATION 7,768 258,923
KANSAS DEPT. OF REVENUE 18,803 257,661
KENTUCKY REVENUE CABINET (673) (11,221)
LAUREL COUNTY SCHOOL DISTRICT 11,472 382,406
LEE COUNTY SCHOOL DISTRICT 1,024 34,118
LESLIE COUNTY SCHOOL DISTRICT 899 29,981
LETCHER COUNTY BOARD OF EDUCATION 777 25,906
LEWIS COUNTY BOARD OF EDUCATION 956 38,221
LEWIS COUNTY SCHOOL DISTRICT 106 4,259
LINCOLN COUNTY BOARD OF EDUCATION 1,372 45,731
LOGAN COUNTY SCHOOL DISTRICT 32 1,059
LYNCHBURG, CITY OF 455 A
MADISON COUNTY SCHOOL DISTRICT 18,657 621,891
MAINE REVENUE SERVICES 277,207 5,544,131
MARION COUNTY BOARD OF EDUCATION 2,570 85,674
MCLEAN COUNTY SCHOOL DISTRICT 841 28,050
MENIFEE COUNTY SCHOOL DISTRICT 245 8,175
MERCER COUNTY SCHOOL DISTRICT 1,732 57,740
MINNESOTA DEPARTMENT OF REVENUE 1 182
MISSISSIPPI STATE TAX COMMISSION 45,515 650,208
MISSISSIPPI STATE TAX COMMISSION 1,682 24,023
MORGAN COUNTY SCHOOL DISTRICT 454 15,125
NC DEPARTMENT OF REVENUE 14,237 194,357
NECA PAUSF 1,367 --
NECA VUSF 308 24,254
NELSON COUNTY BOARD OF EDUCATION 1,153 38,425
NICHOLAS COUNTY SCHOOL DISTRICT 659 21,967
NJ DIVISION OF TAXATION 659 10,980
NORTON CITY OF -- A
NYS ESTIMATED CORPORATION TAX 1,877 1,816,543
NYS ESTIMATED CORPORATION TAX 7,616 1,587,770
NYS SALES TAX PROCESSING 84,203 929,341
OHIO COUNTY SCHOOL DISTRICT 26 863
</Table>
35
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 7 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
OKLAHOMA TAX COMMISSION 905 16,792
ORLEANS COUNTY TREASURER 4 A
OWENSBORO BOARD OF EDUCATION 11,087 369,582
OWSLEY COUNTY BOARD OF EDUCATION 350 11,662
PA DEPARTMENT OF REVENUE 230,393 4,114,415
PA DEPT. OF REVENUE 4,792 95,801
PAGE COUNTY 15 A
PARIS INDEPENDENT SCHOOL DISTRICT 3,026 100,858
PERRY COUNTY SCHOOL DISTRICT 250 8,323
PITTSYLVANIA COUNTY 81 A
POWELL COUNTY SCHOOL DISTRICT 1,551 51,694
POWHATTAN COUNTY TREASURER 36 A
PSU 225 --
PUBLIC SERVICE TAXATION DIVISION 1,546 --
PULASKI COUNTY TREASURER 1 A
RHODE ISLAND DIVISION OF TAXATION 12 178
ROCKCASTLE COUNTY SCHOOL DISTRICT 895 29,849
RUSSELL INDEPENDENT SCHOOL DISTRICT 6,181 206,021
SCHOHARIE COUNTY TREASURER -- A
SCOTT COUNTY SCHOOL DISTRICT 7,331 244,362
SOUTH CAROLINA DEPT. OF REVENUE 67,479 1,060,513
SPOTSYLVANIA COUNTY 48 A
STATE OF MICHIGAN 106 1,762
STATE OF NEW HAMPSHIRE 1,875 26,786
STATE OF NEW HAMPSHIRE 72,749 1,039,254
STATE TAX DEPARTMENT 282,597 4,709,953
STAUNTON COUNTY 52 A
TN DEPARTMENT OF REVENUE 52,955 647,037
TOWN OF BLACKSBURG 15,715 157,152
TOWN OF MT CRESTED BUTTE 1,291 28,689
TOWN OF SOUTH BOSTON 4,861 48,605
TREASURER STATE OF OHIO 146,954 1,962,459
UNION COUNTY SCHOOL DISTRICT 2,896 96,547
USAC 52,648 --
VERMONT DEPARTMENT OF TAXES 331,658 5,527,632
VERMONT DEPARTMENT OF TAXES 1,462 24,367
VIRGINIA DEPARTMENT OF TAXATION 10,036 222,999
WARREN COUNTY TREASURER 12 A
WASHINGTON COUNTY BOARD OF EDUCATION 844 28,138
</Table>
36
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE III PAGE 8 OF 8
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES DUE AND GROSS TAXABLE SALES
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
SALES AND
OTHER GROSS
TAXING JURISDICTION TAXES DUE TAXABLE SALES
- ------------------- --------- -------------
WASHINGTON DEPT. OF REVENUE 3,649 47,904
WEBSTER COUNTY BOARD OF EDUCATION 839 27,972
WINCHESTER CITY TREASURER 1,085 A
WISCONSIN DEPARTMENT OF REVENUE 4 187
WOLFE COUNTY SCHOOL DISTRICT 239 7,983
WOODFORD COUNTY BOARD OF EDUCATION 4,860 161,986
WYOMING COUNTY TREASURER 8 A
WYOMING DEPARTMENT OF REVENUE -- 81
---------- -------------
Total $6,979,684 $ 88,459,151
========== =============
</Table>
Note (A): The 911 surcharge is based upon the number of phone lines and not as a
function of gross taxable sales.
37
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE IV PAGE 1 OF 4
COURT REPORTING SCHEDULES FOR REAL ESTATE AND PERSONAL PROPERTY TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYEE AMOUNT PAID CHECK DATE
- ----- ----------- ----------
ADAMS COUNTY TREASURER $ 17 02/09/04
APPLE TREE REALTY TRUST, INC 2,183 02/24/04
ARAPAHOE COUNTY 39,709 02/09/04
ARAPAHOE COUNTY 66,972 02/24/04
BEDFORD AREA SCHOOL 195 02/24/04
BLACKBURN CENTER, LLC 433 02/26/04
BLOUNT CO REVENUE COMMISSIONER 1,126 02/24/04
BOTETOURT COUNTY TREASURER 1,794 02/09/04
BOURBON COUNTY 7,079 02/24/04
BOYLE COUNTY FISCAL COURT 17,491 02/09/04
BREATHITT COUNTY TREASURER 3,929 02/03/04
BURGIN EDUCATION BO 4,581 02/03/04
BUTLER COUNTY 587 02/09/04
BUTLER COUNTY 1,565 02/03/04
CAL & JOANNE FAMILY LTD PRTNRSP 200 02/23/04
CANYON SPRINGS INVESTMENT 310 02/23/04
CATTARAUGUS COUNTY TREASURER 7,000 02/24/04
CAYUGA COUNTY TREASURER 9,385 02/09/04
CHAUTAUQUA COUNTY 19,313 02/03/04
CITY OF AUGUSTA 89 02/18/04
CITY OF AUGUSTA 19,881 02/03/04
CITY OF CARLISLE 96 02/18/04
CITY OF CHARLOTTESVILLE 152 02/18/04
CITY OF CLAY 1,077 02/24/04
CITY OF MILLERSBURG TREASURER 912 02/24/04
CITY OF MT STERLING 2,419 02/24/04
CITY OF NORTH ADAMS 425 02/24/04
CITY OF NORTH TONAWANDA 3,435 02/18/04
CITY OF RACELAND 474 02/03/04
CITY OF WEST LIBERTY 1,528 02/18/04
CITY OF WORTHINGTON 719 02/03/04
COHOES CITY TREASURER 14,048 02/18/04
COLUMBIANA COUNTY TREASURER 377 02/18/04
COTTAGE ROAD ASSOC 5,445 02/06/04
COUNTY OF HENRICO 413 02/16/04
DARKE COUNTY TREASURER 127 02/18/04
DILLON COUNTY TREASURER 3,477 02/09/04
DORIS LAWTON 145 02/03/04
DORIS LAWTON 145 02/27/04
</Table>
38
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE IV PAGE 2 OF 4
COURT REPORTING SCHEDULES FOR REAL ESTATE AND PERSONAL PROPERTY TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYEE AMOUNT PAID CHECK DATE
- ----- ----------- ----------
DORIS LAWTON 783 02/19/04
EASTLAKE COMMERCIAL 58 02/26/04
EDEN TOWN TAX COLLECTOR 1,576 02/24/04
ERIE COUNTY TAX DEPARTMENT 5,161 02/09/04
ERIE COUNTY TAX DEPARTMENT 6,604 02/24/04
ERIE COUNTY TAX DEPARTMENT 100,159 02/03/04
F & F REALTY CO 364 02/06/04
FINISTERRA CORPORATION 21,817 02/27/04
FREDRICK COUNTY TREASURER 935 02/18/04
FULTON COUNTY NY 1,736 02/18/04
GE CAPITAL 89 02/27/04
GE CAPITAL FLEET SERVICES 15,645 02/11/04
GECFS BY APEX AS AGENT 2,512 02/10/04
GLENN FALLS CITY TREASURER 5,309 02/09/04
GLOUCESTER CITY 6,991 02/09/04
GREENE COUNTY 1,994 02/27/04
GREENE COUNTY TRUSTEE 38 02/03/04
GUNNISON COUNTY TREASURER 23,220 02/09/04
HAMBURG TOWN COLLECTOR 716 02/03/04
HAMILTON COUNTY TREASURER 95 02/03/04
HAMPSHIRE COUNTY COLLECTOR 195 02/26/04
HANCOCK COUNTY 1,741 02/09/04
HAWESVILLE CITY SHERIFF 784 02/18/04
HAWKINS COUNTY TRUSTEE 1,298 02/03/04
IOS CAPITAL 62 02/20/04
IOS CAPITAL 551 02/26/04
IREDELL COUNTY TAX COLLECTOR 604 02/09/04
JAMES KIRTON 5,190 02/23/04
JEFFERSONVILLE TAX COLLECTOR 203 02/03/04
JOHN F PALMER 2,249 02/13/04
KIR TEMECULA L.P. 14 02/20/04
KIR TEMECULA L.P. 105 02/25/04
LACKAWANNA CITY TREASURER 6,467 02/09/04
LACKAWANNA COUNTY TAX COLLECTOR 339 02/03/04
LARRY SCHREDER 960 02/10/04
LAS ANIMAS COUNTY TREASURER 114 02/18/04
LAS ANIMAS COUNTY TREASURER 7,886 02/09/04
LEXINGTON CITY TREASURER 332 02/24/04
LICKING COUNTY TREASURER 627 02/03/04
LICKING COUNTY TREASURER 7,375 02/09/04
</Table>
39
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE IV PAGE 3 OF 4
COURT REPORTING SCHEDULES FOR REAL ESTATE AND PERSONAL PROPERTY TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYEE AMOUNT PAID CHECK DATE
- ----- ----------- ----------
LLB INVESTMENTS 4,966 02/06/04
LORAIN COUNTY TREASURER 4,333 02/09/04
LORAIN COUNTY TREASURER 6,710 02/18/04
LOS ANGELES COUNTY 255 02/13/04
LOS ANGELES COUNTY 4,791 02/04/04
LOUDON COUNTY TRUSTEE 4,073 02/03/04
MADAWASKA TOWN 12,551 02/24/04
MADISON COUNTY 64,570 02/09/04
MAHONING COUNTY TREASURER 5,177 02/18/04
MARION COUNTY TREASURER 78,750 02/18/04
MCKEAN COUNTY/WET 58 02/24/04
MEDINA COUNTY 289 02/09/04
MERCER COUNTY 4,712 02/09/04
MICHAEL J.& JEANNETTE Z.NEEDHAM 597 02/04/04
MINERAL COUNTY TAX COLLECTOR 5,396 02/26/04
MORGAN COUNTY 7,080 02/09/04
MORGAN COUNTY COLLECTOR 5,890 02/26/04
MUSKINGUM COUNTY TREASURER 731 02/18/04
NELSON COUNTY SHERIFF 3,243 02/24/04
NIAGARA FALLS CITY 11,061 02/24/04
NORTH COLLINS TOWN 3,118 02/24/04
OHIO COUNTY SHERIFF DEPT TREAS 48 02/03/04
OTTAWA COUNTY TREASURER 1,279 02/18/04
PACIFIC CORPORATE STRUCTURES 1,637 02/23/04
PARK COUNTY TREASURER 4 02/09/04
PITNEY BOWES CREDIT CORPORATION 23 02/26/04
PITNEY BOWES CREDIT CORPORATION 97 02/20/04
RICHLAND COUNTY 20,102 02/24/04
ROANOKE COUNTY TREASURER 30 02/09/04
ROSS COUNTY TREASURER 453 02/09/04
ROSS COUNTY TREASURER 16,219 02/18/04
SAN MIGUEL COUNTY TREASURER 5,873 02/09/04
SPOTSYLVANIA COUNTY 1,479 02/03/04
SPRINGFIELD CITY TREASURER 430 02/10/04
STEAMTOWN MALL PARTNERS LP 5 02/13/04
SUMMIT COUNTY 383 02/09/04
SUMMIT COUNTY 8,248 02/03/04
SUTHERLAND CORPORATION 393 02/17/04
TELLER COUNTY TREASURER 12 02/18/04
TOWN OF BOSTON 1,564 02/24/04
</Table>
40
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE IV PAGE 4 OF 4
COURT REPORTING SCHEDULES FOR REAL ESTATE AND PERSONAL PROPERTY TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
PAYEE AMOUNT PAID CHECK DATE
- ----- ----------- ----------
TOWN OF CANAJOHARIE 797 02/18/04
TOWN OF COLLINS 61 02/18/04
TOWN OF COLLINS 544 02/24/04
TOWN OF COLLINS 5,765 02/27/04
TOWN OF CONCORD 3,603 02/24/04
TOWN OF GREENEVILLE 25,936 02/03/04
TOWN OF LEE 258 02/24/04
TOWN OF MILTON 25,952 02/09/04
TOWN OF ROCKLAND 1,732 02/03/04
TOWN OF ROCKLAND 17,334 02/24/04
TOWN OF SARDINIA 866 02/24/04
TOWN OF SWANTON 1,160 02/18/04
TUSCARAWAS COUNTY 39 02/09/04
TUSCARAWAS COUNTY 7,096 02/18/04
WASHINGTON COUNTY 3,550 02/10/04
WILLIAMS COUNTY 195 02/18/04
WILMORE CITY 1,569 02/09/04
YATES COUNTY TREASURER 584 02/24/04
----------
Total $ 855,822
==========
</Table>
41
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE V PAGE 1 OF 5
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
TAXING JURISDICTION TAX TYPE AMOUNT PAID DATE PAID
- ------------------- ------------------ ----------- --------
ALABAMA DEPARTMENT OF REVENUE Gross Receipts Tax $ 295.00 02/18/04
ALBEMARLE COUNTY Utility Tax 523.00 02/18/04
ALBEMARLE COUNTY 911 Surcharge 4,226.00 02/18/04
AMHERST COUNTY 911 Surcharge 8.00 02/18/04
ARIZONA DEPARTMENT OF REVENUE Gross Receipts Tax 18.00 02/11/04
ARIZONA DEPARTMENT OF REVENUE Sales Tax 78.00 02/11/04
ASHLAND INDEPENDENT BOARD OF Utility Tax 10,481.00 02/13/04
BATH COUNTY SCHOOL D Utility Tax 1,223.00 02/13/04
BEDFORD COUNTY Utility Tax 10.00 02/18/04
BEREA INDEPENDENT SCHOOL DIST Utility Tax 1,931.00 02/13/04
BOARD OF EQUALIZATION 911 Surcharge 230.00 02/23/04
BOARD OF EQUALIZATION Sales Tax 357.00 02/24/04
BOURBON COUNTY SCHOOL Utility Tax 626.00 02/13/04
BOYD COUNTY SCHOOL D Gross Receipts Tax 18.00 02/11/04
BOYD COUNTY SCHOOL D Utility Tax 2,755.00 02/13/04
BOYLE COUNTY SCHOOL DISTRICT Utility Tax 1,553.00 02/13/04
BREATHITT COUNTY SCH Utility Tax 979.00 02/13/04
BRECKINRIDGE COUNTY BOARD OF Utility Tax 780.00 02/13/04
BURGIN EDUCATION BO Utility Tax 334.00 02/13/04
BUTLER COUNTY SCHOOL DISTRICT Utility Tax 52.00 02/13/04
CALIFORNIA HIGH COST FUND - A Gross Receipts Tax 52.00 02/10/04
CALIFORNIA HIGH COST FUND-B Sales Tax 678.00 02/10/04
CAMPBELL COUNTY 911 Surcharge 134.00 02/18/04
CARTER COUNTY SCHOOL Utility Tax 1,635.00 02/13/04
CATTARAUGUS COUNTY 911 Surcharge 22.00 02/18/04
CHESTERFIELD COUNTY Utility Tax 13.00 02/18/04
CHESTERFIELD COUNTY 911 Surcharge 214.00 02/18/04
CITY OF ARCADIA Gross Receipts Tax 12.00 02/18/04
CITY OF BALDWIN PARK Utility Tax 4,363.00 02/09/04
CITY OF BEAUMONT Gross Receipts Tax 7.00 02/18/04
CITY OF BEAUMONT Utility Tax 2,475.00 02/09/04
CITY OF BRAWLEY Gross Receipts Tax 5.00 02/18/04
CITY OF BRAWLEY Utility Tax 6,965.00 02/09/04
CITY OF CALABASAS Gross Receipts Tax 7.00 02/18/04
CITY OF CHARLOTTESVILLE 911 Surcharge 2,130.00 02/18/04
CITY OF CHARLOTTSVILLE Utility Tax 57,933.00 02/18/04
CITY OF COLORADO SPRINGS Sales Tax 207.00 02/11/04
CITY OF COVINA Gross Receipts Tax 8.00 02/18/04
CITY OF CULVER CITY Gross Receipts Tax 7.00 02/18/04
CITY OF DANVILLE 911 Surcharge 3,933.00 02/18/04
CITY OF EL MONTE Gross Receipts Tax 5.00 02/18/04
CITY OF FONTANA Gross Receipts Tax 10.00 02/18/04
</Table>
42
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE V PAGE 2 OF 5
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
TAXING JURISDICTION TAX TYPE AMOUNT PAID DATE PAID
- ------------------- ------------------ ----------- --------
CITY OF FONTANA Utility Tax 39,357.00 02/09/04
CITY OF HARRISONBURG TREASURER 911 Surcharge 12.00 02/18/04
CITY OF HERMOSA BEACH Gross Receipts Tax 18.00 02/18/04
CITY OF HERMOSA BEACH Utility Tax 18,820.00 02/09/04
CITY OF HOLTVILLE Utility Tax 1,929.00 02/09/04
CITY OF HUNTINGTON BEACH Gross Receipts Tax 5.00 02/18/04
CITY OF LA HABRA Gross Receipts Tax 25.00 02/18/04
CITY OF LA HABRA Utility Tax 26,064.00 02/09/04
CITY OF LA VERNE Gross Receipts Tax 20.00 02/18/04
CITY OF LONG BEACH Gross Receipts Tax 10.00 02/18/04
CITY OF LOS ANGELES Gross Receipts Tax 1,013.00 02/18/04
CITY OF LYNCHBURG 911 Surcharge 469.00 02/18/04
CITY OF MORENO VALLEY Gross Receipts Tax 44.00 02/18/04
CITY OF MORENO VALLEY Utility Tax 60,052.00 02/09/04
CITY OF OLYMPIA Gross Receipts Tax 33.00 02/13/04
CITY OF PASADENA Gross Receipts Tax 10.00 02/18/04
CITY OF PICO RIVERA Utility Tax 10,506.00 02/09/04
CITY OF PLACENTIA Utility Tax 13,687.00 02/09/04
CITY OF PORT HUENEME Gross Receipts Tax 6.00 02/18/04
CITY OF PORT HUENEME Utility Tax 9,413.00 02/09/04
CITY OF PULLMAN Gross Receipts Tax 20.00 02/13/04
CITY OF REDONDO BEACH Gross Receipts Tax 60.00 02/18/04
CITY OF REDONDO BEACH CA Utility Tax 43,509.00 02/09/04
CITY OF RIALTO Utility Tax 43,911.00 02/09/04
CITY OF RICHMOND 911 Surcharge 1,658.00 02/18/04
CITY OF RICHMOND Utility Tax 3,268.00 02/18/04
CITY OF RIVERSIDE Gross Receipts Tax 9.00 02/18/04
CITY OF SAN BERNARDINO Gross Receipts Tax 17.00 02/18/04
CITY OF SAN BERNARDINO Utility Tax 70,236.00 02/09/04
CITY OF SAN BUENAVENTURA Utility Tax 34,875.00 02/09/04
CITY OF SANTA ANA Gross Receipts Tax 37.00 02/18/04
CITY OF SANTA MONICA Gross Receipts Tax 149.00 02/18/04
CITY OF SANTA MONICA Utility Tax 146,760.00 02/09/04
CITY OF SEAL BEACH Gross Receipts Tax 16.00 02/18/04
CITY OF STAUNTON 911 Surcharge 52.00 02/18/04
CITY OF VENTURA Gross Receipts Tax 23.00 02/18/04
CITY OF WAYNESBORO Utility Tax 27,313.00 02/17/04
CITY OF WHITTIER Gross Receipts Tax 14.00 02/18/04
CITY OF WINCHESTER 911 Surcharge 1,362.00 02/18/04
CITY OF WINCHESTER Utility Tax 17,514.00 02/17/04
CLOVERPORT BOARD OF EDUCATION Utility Tax 277.00 02/13/04
COLORADO DEPARTMENT OF REVENUE Gross Receipts Tax 148.00 02/13/04
</Table>
43
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE V PAGE 3 OF 5
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
TAXING JURISDICTION TAX TYPE AMOUNT PAID DATE PAID
- ------------------- ------------------ ----------- --------
COLORADO DEPARTMENT OF REVENUE Sales Tax 390.00 02/13/04
COLORADO DEPARTMENT OF REVENUE Sales Tax 3,000.00 02/20/04
COMMONWEALTH OF MASS Sales Tax 1,192.00 02/11/04
COMMONWEALTH OF MASS Sales Tax 1,869.00 02/18/04
COMMONWEALTH OF MASS Sales Tax 2,192.00 02/13/04
COMPTROLLER OF MD Sales Tax 12,140.00 02/20/04
CONNECTICUT DEPT OF REVENUE Sales Tax 89,956.00 02/27/04
COUNTY OF AUGUSTA 911 Surcharge 10.00 02/18/04
COUNTY OF GENESEE 911 Surcharge 9.00 02/18/04
COUNTY OF MONTGOMERY Utility Tax 9,334.00 02/17/04
DANVILLE INDEPENDENT SCHOOL DIS Utility Tax 4,704.00 02/13/04
DAVIESS CO BOARD OF EDUCATION Gross Receipts Tax 17.00 02/11/04
DAVIESS CO BOARD OF EDUCATION Utility Tax 17,395.00 02/13/04
DEAF TRUST Sales Tax 14.00 02/10/04
DIRECTOR OF FINANCE 911 Surcharge 30.00 02/18/04
ELLIOTT COUNTY SCHOO Utility Tax 297.00 02/13/04
ERIE COUNTY COMPTROLLER 911 Surcharge 6,061.00 02/18/04
FAUQUIER COUNTY TREASURER 911 Surcharge 24.00 02/18/04
FLORIDA DEPT OF REVENUE Gross Receipts Tax 15,267.00 02/20/04
FLORIDA DEPT OF REVENUE Sales Tax 88,273.00 02/20/04
FLORIDA DEPT OF REVENUE Telecommunications Tax 3,372,045.00 02/20/04
FRANKLIN COUNTY PUBLIC SAFETY 911 Surcharge 5.00 02/18/04
FRANKLIN COUNTY SCHOOL DISTRICT Utility Tax 101.00 02/13/04
FREDRICK COUNTY TREASURER 911 Surcharge 185.00 02/18/04
GARRARD COUNTY SCHOOL DISTRICT Utility Tax 996.00 02/13/04
GEORGIA DEPARTMENT OF REVENUE Sales Tax 2.00 02/16/04
GEORGIA DEPARTMENT OF REVENUE Gross Receipts Tax 61.00 02/11/04
GEORGIA DEPARTMENT OF REVENUE Sales Tax 101.00 02/11/04
GEORGIA DEPARTMENT OF REVENUE Sales Tax 13,167.00 02/12/04
GREENE COUNTY 911 Surcharge 14.00 02/18/04
HANCOCK COUNTY BOARD OF Utility Tax 861.00 02/13/04
HARLAN COUNTY SCHOOL Utility Tax 251.00 02/13/04
HARRISON COUNTY SCHOOL DISTRICT Utility Tax 2,594.00 02/13/04
HARRODSBURG BOARD OF EDUCATION Utility Tax 2,676.00 02/13/04
HENDERSON CO BOARD OF EDUCATION Utility Tax 2,351.00 02/13/04
HENRICO COUNTY 911 Surcharge 1,784.00 02/18/04
HENRICO COUNTY Utility Tax 3,348.00 02/18/04
IDAHO STATE TAX COMMISSION Sales Tax 3,512.00 02/11/04
IDAHO UNIVERSAL SERVice Gross Receipts Tax 27.00 02/13/04
INDIANA DEPT OF REVENUE Sales Tax 1,262.00 02/11/04
INDIANA DEPT OF REVENUE Sales Tax 28,207.00 02/20/04
INTERNAL REVENUE SERVICE Federal Excise Tax 33,086.00 02/25/04
</Table>
44
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE V PAGE 4 OF 5
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
TAXING JURISDICTION TAX TYPE AMOUNT PAID DATE PAID
- ------------------- ------------------ ----------- --------
INTERNAL REVENUE SERVICE Federal Excise Tax 37,867.00 02/10/04
JACKSON INDEPENDENT SCHOOLS Utility Tax 497.00 02/13/04
JESSAMINE COUNTY BOARD OF EDUCA Utility Tax 7,580.00 02/13/04
KANSAS DEPT OF REVENUE Sales Tax 18,148.00 02/25/04
KENTUCKY REVENUE CABINET Sales Tax 3,300.00 02/20/04
LAUREL COUNTY SCHOOL Utility Tax 11,517.00 02/13/04
LEE COUNTY SCHOOL DI Utility Tax 1,123.00 02/13/04
LESLIE COUNTY SCHOOL Utility Tax 903.00 02/13/04
LETCHER COUNTY BOARD OF EDUCATI Utility Tax 772.00 02/13/04
LEWIS COUNTY BOARD OF Utility Tax 925.00 02/13/04
LEWIS COUNTY SCHOOL Utility Tax 285.00 02/13/04
LINCOLN COUNTY BOARD OF EDUCATI Utility Tax 1,348.00 02/13/04
LOGAN COUNTY SCHOOL DISTRICT Utility Tax 31.00 02/13/04
MADISON COUNTY SCHOOL DISTRICT Gross Receipts Tax 41.00 02/11/04
MADISON COUNTY SCHOOL DISTRICT Utility Tax 18,902.00 02/13/04
MAINE REVENUE SERVICES Sales Tax 272,944.00 02/17/04
MARION COUNTY SCHOOL Utility Tax 2,535.00 02/13/04
MCLEAN COUNTY SCHOOL DISTRICT Utility Tax 899.00 02/13/04
MENIFEE COUNTY SCHOO Utility Tax 469.00 02/13/04
MERCER COUNTY SCHOOL DISTRICT Utility Tax 1,708.00 02/13/04
MISSISSIPPI STATE TAX COMMISSIO Sales Tax 42,613.00 02/11/04
MORGAN COUNTY SCHOOL Utility Tax 1,160.00 02/13/04
NECA VUSF Gross Receipts Tax 395.00 02/13/04
NELSON COUNTY BOARD OF EDUCATIO Utility Tax 1,171.00 02/13/04
NEW JERSEY SALES TAX Sales Tax 747.00 02/11/04
NICHOLAS COUNTY SCHO Utility Tax 639.00 02/13/04
NORTH CAROLINA DEPT OF REVENUE Sales Tax 605.00 02/11/04
NORTH CAROLINA DEPT OF REVENUE Sales Tax 13,108.00 02/16/04
NYS SALES TAX PROCESSING Sales Tax 8,324.00 02/16/04
NYS SALES TAX PROCESSING Sales Tax 51,941.00 02/25/04
OHIO COUNTY SCHOOL DISTRICT Utility Tax 24.00 02/13/04
OKLAHOMA TAX COMMISSION Sales Tax 931.00 02/11/04
OWENSBORO BOARD OF EDUCATION Utility Tax 11,948.00 02/13/04
OWSLEY COUNTY BOARD OF EDUCATIO Utility Tax 378.00 02/13/04
PA DEPARTMENT OF REVENUE Gross Receipts Tax 180.00 02/20/04
PA DEPARTMENT OF REVENUE Sales Tax 196,101.00 02/20/04
PA DEPT. OF REVENUE Sales Tax 15,019.00 02/17/04
PAGE COUNTY 911 Surcharge 15.00 02/18/04
PARIS INDEPENDENT SCHOOLS Utility Tax 2,940.00 02/13/04
PERRY COUNTY SCHOOL Utility Tax 266.00 02/13/04
PETERSBURG CITY Utility Tax 20,902.00 02/17/04
</Table>
45
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE V PAGE 5 OF 5
COURT REPORTING SCHEDULES FOR SALES AND OTHER TAXES PAID
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
TAXING JURISDICTION TAX TYPE AMOUNT PAID DATE PAID
- ------------------- ------------------ ----------- --------
PITTSYLVANIA COUNTY 911 Surcharge 81.00 02/18/04
POWELL COUNTY SCHOOL Utility Tax 2,281.00 02/13/04
POWHATAN COUNTY TREASURER 911 Surcharge 36.00 02/18/04
PUBLIC SERVICE COMMISSION Gross Receipts Tax 225.00 02/18/04
RHODE ISLAND DIVISION OF TAX Gross Receipts Tax 128.00 02/26/04
ROCKCASTLE COUNTY SCHOOL Utility Tax 880.00 02/13/04
RUSSELL INDEPENDENT Utility Tax 6,111.00 02/13/04
SAN LUIS OBISPO Gross Receipts Tax 4.00 02/04/04
SCOTT COUNTY SCHOOL Utility Tax 7,245.00 02/13/04
SOUTH CAROLINA DEPARTMENT OF Sales Tax 43,836.00 02/20/04
SPOTSYLVANIA COUNTY 911 Surcharge 48.00 02/18/04
STATE OF CONNECTICUT Sales Tax 265,438.00 02/27/04
STATE OF NEW HAMPSHIRE Gross Receipts Tax 2,129.00 02/13/04
STATE OF NEW HAMPSHIRE Utility Tax 78,159.00 02/11/04
STATE TAX DEPARTMENT Sales Tax 121,522.00 02/13/04
STATE TAX DEPARTMENT Sales Tax 159,370.00 02/20/04
TENNESSEE DEPT OF REVENUE Sales Tax 58,633.00 02/20/04
TOWN OF BLACKSBURG Utility Tax 15,666.00 02/17/04
TOWN OF MT CRESTED BUTTE Utility Tax 1,220.00 02/11/04
TOWN OF SOUTH BOSTON Utility Tax 4,861.00 02/17/04
TREASURER OF HANOVER COUNTY Utility Tax 99.00 02/18/04
TREASURER OF HANOVER COUNTY 911 Surcharge 417.00 02/18/04
TREASURER OF STATE OF OHIO Sales Tax 80,222.00 02/23/04
TREASURER STATE OF OHIO Sales Tax 1,156.00 02/18/04
TREASURER STATE OF OHIO Gross Receipts Tax 1,275.00 02/23/04
TREASURER STATE OF OHIO Sales Tax 19,840.00 02/13/04
TREASURER STATE OF OHIO Sales Tax 38,111.00 02/23/04
UNION COUNTY SCHOOL DISTRICT Utility Tax 2,856.00 02/13/04
UNIVERSAL LIFETIME TELEPHONE SE Gross Receipts Tax 339.00 02/10/04
VERMONT DEPT OF TAXES Sales Tax 332,785.00 02/23/04
VIRGINIA DEPARTMENT OF TAXATION Sales Tax 2,712.00 02/18/04
VIRGINIA DEPARTMENT OF TAXATION Sales Tax 4,118.00 02/17/04
WASHINGTON COUNTY BOARD OF EDU Utility Tax 898.00 02/13/04
WASHINGTON DEPT OF REVENUE Gross Receipts Tax 55.00 02/20/04
WASHINGTON DEPT OF REVENUE Sales Tax 3,618.00 02/20/04
WEBSTER COUNTY BOARD OF Utility Tax 878.00 02/13/04
WOLFE COUNTY SCHOOL Utility Tax 593.00 02/13/04
WOODFORD COUNTY BOARD OF ED Utility Tax 4,774.00 02/13/04
WYOMING COUNTY NY 911 Surcharge 8.00 02/18/04
-------------
Total $6,412,651.00
=============
</Table>
46
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 1 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
ACC CABLE COMMUNICATIONS FL-VA, LLC 081-02-41904 02-41904 $ 2,631,207
ACC CABLE HOLDINGS VA, INC 081-02-41905 02-41905 --
ACC HOLDINGS II, LLC 081-02-41955 02-41955 --
ACC INVESTMENT HOLDINGS, INC 081-02-41957 02-41957 --
ACC OPERATIONS, INC 081-02-41956 02-41956 499,295
ACC TELECOMMUNICATIONS HOLDINGS LLC 081-02-41864 02-41864 --
ACC TELECOMMUNICATIONS LLC 081-02-41863 02-41863 1,643,055
ACC TELECOMMUNICATIONS OF VIRGINIA LLC 081-02-41862 02-41862 509,139
ACC-AMN HOLDINGS, LLC 081-02-41861 02-41861 --
ADELPHIA ACQUISITION SUBSIDIARY, INC 081-02-41860 02-41860 --
ADELPHIA ARIZONA, INC 081-02-41859 02-41859 --
ADELPHIA BLAIRSVILLE, LLC 081-02-41735 02-41735 --
ADELPHIA CABLE PARTNERS, LP 081-02-41902 02-41902 6,400,966
ADELPHIA CABLEVISION ASSOCIATES, LP 081-02-41913 02-41913 784,784
ADELPHIA CABLEVISION CORP 081-02-41752 02-41752 1,015,425
ADELPHIA CABLEVISION OF BOCA RATON, LLC 081-02-41751 02-41751 1,849,783
ADELPHIA CABLEVISION OF FONTANA, LLC 081-02-41755 02-41755 --
ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC 081-02-41754 02-41754 5,943,345
ADELPHIA CABLEVISION OF NEW YORK, INC 081-02-41892 02-41892 2,948,097
ADELPHIA CABLEVISION OF NEWPORT BEACH, LLC 081-02-41947 02-41947 699,832
ADELPHIA CABLEVISION OF ORANGE COUNTY II, LLC 081-02-41781 02-41781 658,919
ADELPHIA CABLEVISION OF ORANGE COUNTY, LLC 081-02-41946 02-41946 576,273
ADELPHIA CABLEVISION OF SAN BERNANDINO, LLC 081-02-41753 02-41753 --
ADELPHIA CABLEVISION OF SANTA ANA, LLC 081-02-41831 02-41831 2,522,674
ADELPHIA CABLEVISION OF SEAL BEACH, LLC 081-02-41757 02-41757 319,014
ADELPHIA CABLEVISION OF SIMI VALLEY, LLC 081-02-41830 02-41830 857,451
ADELPHIA CABLEVISION OF THE KENNEBUNKS, LLC 081-02-41943 02-41943 282,747
ADELPHIA CABLEVISION OF WEST PALM BEACH III, LLC 081-02-41783 02-41783 257,647
ADELPHIA CABLEVISION OF WEST PALM BEACH IV, LLC 081-02-41766 02-41766 2,463,908
ADELPHIA CABLEVISION OF WEST PALM BEACH V, LLC 081-02-41764 02-41764 96,842
ADELPHIA CABLEVISION, LLC 081-02-41858 02-41858 77,648,207
ADELPHIA CALIFORNIA CABLEVISION, LLC 081-02-41942 02-41942 3,763,053
ADELPHIA CENTRAL PENNSYLVANIA, LLC 081-02-41950 02-41950 5,285,991
ADELPHIA CLEVELAND, LLC 081-02-41793 02-41793 13,690,258
ADELPHIA COMMUNICATIONS CORPORATION 081-02-41729 02-41729 2,480
ADELPHIA COMMUNICATIONS INTERNATIONAL, INC 081-02-41857 02-41857 --
ADELPHIA COMMUNICATIONS OF CALIFORNIA II, LLC 081-02-41748 02-41748 4,003,789
ADELPHIA COMMUNICATIONS OF CALIFORNIA III, LLC 081-02-41817 02-41817 1,338,565
ADELPHIA COMMUNICATIONS OF CALIFORNIA, LLC 081-02-41749 02-41749 162,389
ADELPHIA COMPANY OF WESTERN CONNECTICUT 081-02-41801 02-41801 1,948,221
ADELPHIA GENERAL HOLDINGS III, LLC 081-02-41854 02-41854 --
</Table>
47
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 2 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
ADELPHIA GP HOLDINGS, LLC 081-02-41829 02-41829 --
ADELPHIA GS CABLE, LLC 081-02-41908 02-41908 3,116,904
ADELPHIA HARBOR CENTER HOLDINGS LLC 081-02-41853 02-41853 --
ADELPHIA HOLDINGS 2001, LLC 081-02-41926 02-41926 --
ADELPHIA INTERNATIONAL II, LLC 081-02-41856 02-41856 --
ADELPHIA INTERNATIONAL III, LLC 081-02-41855 02-41855 --
ADELPHIA MOBILE PHONES, INC 081-02-41852 02-41852 --
ADELPHIA OF THE MIDWEST, INC 081-02-41794 02-41794 412
ADELPHIA PINELLAS COUNTY, LLC 081-02-41944 02-41944 --
ADELPHIA PRESTIGE CABLEVISION, LLC 081-02-41795 02-41795 6,325,562
ADELPHIA TELECOMMUNICATIONS OF FLORIDA, INC 081-02-41939 02-41939 21,175
ADELPHIA TELECOMMUNICATIONS, INC 081-02-41851 02-41851 1,103,270
ADELPHIA WELLSVILLE, LLC 081-02-41850 02-41850 6,849
ADELPHIA WESTERN NEW YORK HOLDINGS, LLC 081-02-41849 02-41849 --
ARAHOVA COMMUNICATIONS, INC 081-02-41815 02-41815 34,575
ARAHOVA HOLDINGS, LLC 081-02-41893 02-41893 --
BADGER HOLDING CORP 081-02-41792 02-41792 1,111
BETTER TV INC. OF BENNINGTON 081-02-41914 02-41914 321,221
BLACKSBURG/SALEM CABLEVISION, INC 081-02-41759 02-41759 666,813
BRAZAS COMMUNICATIONS, INC 081-02-41804 02-41804 --
BUENAVISION TELECOMMUNICATIONS, INC 081-02-41938 02-41938 711,018
CABLE SENTRY CORPORATION 081-02-41894 02-41894 --
CALIFORNIA AD SALES, LLC 081-02-41945 02-41945 --
CCC-III, INC 081-02-41867 02-41867 --
CCC-INDIANA, INC 081-02-41937 02-41937 --
CCH INDIANA, LP 081-02-41935 02-41935 --
CDA CABLE, INC 081-02-41879 02-41879 205,845
CENTURY ADVERTISING, INC 081-02-41731 02-41731 --
CENTURY ALABAMA CORP 081-02-41889 02-41889 207,660
CENTURY ALABAMA HOLDING CORP 081-02-41891 02-41891 --
CENTURY AUSTRALIA COMMUNICATIONS CORP 081-02-41738 02-41738 --
CENTURY BERKSHIRE CABLE CORP 081-02-41762 02-41762 309,007
CENTURY CABLE HOLDING CORP 081-02-41814 02-41814 100
CENTURY CABLE HOLDINGS, LLC 081-02-41812 02-41812 15,129,793
CENTURY CABLE MANAGEMENT CORPORATION 081-02-41887 02-41887 316,799
CENTURY CABLE OF SOUTHERN CALIFORNIA 081-02-41745 02-41745 --
CENTURY CABLEVISION HOLDINGS, LLC 081-02-41936 02-41936 2,664,801
CENTURY CAROLINA CORP 081-02-41886 02-41886 680,173
CENTURY COLORADO SPRINGS CORP 081-02-41736 02-41736 133,663
CENTURY COLORADO SPRINGS PARTNERSHIP 081-02-41774 02-41774 5,910,931
CENTURY COMMUNICATIONS CORPORATION 081-02-12834 02-12834 1,793,881
</Table>
48
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 3 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
CENTURY CULLMAN CORP 081-02-41888 02-41888 482,860
CENTURY ENTERPRISE CABLE CORP 081-02-41890 02-41890 369,582
CENTURY EXCHANGE, LLC 081-02-41744 02-41744 --
CENTURY FEDERAL, INC 081-02-41747 02-41747 --
CENTURY GRANITE CABLE TELEVISION CORP 081-02-41779 02-41779 --
CENTURY HUNTINGTON COMPANY 081-02-41885 02-41885 1,918,773
CENTURY INDIANA CORP 081-02-41768 02-41768 --
CENTURY INVESTMENT HOLDING CORP 081-02-41740 02-41740 --
CENTURY INVESTORS, INC 081-02-41733 02-41733 --
CENTURY ISLAND ASSOCIATES, INC 081-02-41771 02-41771 35,715
CENTURY ISLAND CABLE TELEVISION CORP 081-02-41772 02-41772 --
CENTURY KANSAS CABLE TELEVISION CORP 081-02-41884 02-41884 207,779
CENTURY LYKENS CABLE CORP 081-02-41883 02-41883 229,248
CENTURY MENDOCINO CABLE TELEVISION, INC 081-02-41780 02-41780 650,484
CENTURY MISSISSIPPI CORP 081-02-41882 02-41882 453,032
CENTURY MOUNTAIN CORP 081-02-41797 02-41797 207,224
CENTURY NEW MEXICO CABLE TELEVISION CORP 081-02-41784 02-41784 --
CENTURY NORWICH CORP 081-02-41881 02-41881 874,842
CENTURY OHIO CABLE TELEVISION CORP 081-02-41811 02-41811 721,704
CENTURY OREGON CABLE CORP 081-02-41739 02-41739 --
CENTURY PACIFIC CABLE TV INC 081-02-41746 02-41746 --
CENTURY PROGRAMMING, INC 081-02-41732 02-41732 --
CENTURY REALTY CORP 081-02-41813 02-41813 --
CENTURY SHASTA CABLE TELEVISION CORP 081-02-41880 02-41880 --
CENTURY SOUTHWEST COLORADO CABLE TELEVISION CORP 081-02-41770 02-41770 --
CENTURY TRINIDAD CABLE TELEVISION CORP 081-02-41790 02-41790 153,414
CENTURY VIRGINIA CORP 081-02-41796 02-41796 675,059
CENTURY VOICE AND DATA COMMUNICATIONS, INC 081-02-41737 02-41737 --
CENTURY WARRICK CABLE CORP 081-02-41763 02-41763 --
CENTURY WASHINGTON CABLE TELEVISION, INC 081-02-41878 02-41878 --
CENTURY WYOMING CABLE TELEVISION CORP 081-02-41789 02-41789 72,302
CENTURY-TCI CALIFORNIA COMMUNICATIONS, LP 081-02-41743 02-41743 426,631
CENTURY-TCI CALIFORNIA, LP 081-02-41741 02-41741 55,213,595
CENTURY-TCI HOLDINGS, LLC 081-02-41742 02-41742 --
CHELSEA COMMUNICATIONS, INC 081-02-41923 02-41923 353
CHELSEA COMMUNICATIONS, LLC 081-02-41924 02-41924 8,088,039
CHESTNUT STREET SERVICES, LLC 081-02-41842 02-41842 --
CLEAR CABLEVISION, INC 081-02-41756 02-41756 --
CMA CABLEVISION ASSOCIATES VII, LP 081-02-41808 02-41808 180,853
CMA CABLEVISION ASSOCIATES XI, LP 081-02-41807 02-41807 44,716
CORAL SECURITY, INC 081-02-41895 02-41895 --
</Table>
49
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 4 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
COWLITZ CABLEVISION, INC 081-02-41877 02-41877 643,426
CP-MDU I LLC 081-02-41940 02-41940 --
CP-MDU II LLC 081-02-41941 02-41941 --
E & E CABLE SERVICE, INC 081-02-41785 02-41785 --
EASTERN VIRGINIA CABLEVISION HOLDINGS, LLC 081-02-41799 02-41799 --
EASTERN VIRGINIA CABLEVISION, LP 081-02-41800 02-41800 279,371
EMPIRE SPORTS NETWORK, LP 081-02-41844 02-41844 469,881
FAE CABLE MANAGEMENT CORP 081-02-41734 02-41734 --
FOP INDIANA, LP 081-02-41816 02-41816 178,110
FRONTIERVISION ACCESS PARTNERS, LLC 081-02-41819 02-41819 2,916,467
FRONTIERVISION CABLE NEW ENGLAND , INC 081-02-41822 02-41822 830,142
FRONTIERVISION CAPITAL CORPORATION 081-02-41820 02-41820 --
FRONTIERVISION HOLDINGS CAPITAL CORPORATION 081-02-41824 02-41824 --
FRONTIERVISION HOLDINGS CAPITAL II CORPORATION 081-02-41823 02-41823 --
FRONTIERVISION HOLDINGS, LLC 081-02-41827 02-41827 --
FRONTIERVISION HOLDINGS, LP 081-02-41826 02-41826 --
FRONTIERVISION OPERATING PARTNERS, LLC 081-02-41825 02-41825 --
FRONTIERVISION OPERATING PARTNERS, LP 081-02-41821 02-41821 29,196,372
FRONTIERVISION PARTNERS, LP 081-02-41828 02-41828 --
FT MYERS CABLEVISION, LLC 081-02-41948 02-41948 --
FT. MYERS ACQUISITION LIMITED PARTNERSHIP 081-02-41949 02-41949 --
GENESIS CABLE COMMUNICATIONS SUBSIDIARY, LLC 081-02-41903 02-41903 --
GLOBAL ACQUISITION PARTNERS, LP 081-02-41933 02-41933 1,407,671
GLOBAL CABLEVISION II, LLC 081-02-41934 02-41934 --
GRAFTON CABLE COMPANY 081-02-41788 02-41788 --
GS CABLE, LLC 081-02-41907 02-41907 3,922,606
GS TELECOMMUNICATIONS LLC 081-02-41906 02-41906 --
HARRON CABLEVISION OF NEW HAMPSHIRE, INC 081-02-41750 02-41750 2,065,121
HUNTINGTON CATV, INC 081-02-41765 02-41765 --
IMPERIAL VALLEY CABLEVISION, INC 081-02-41876 02-41876 832,360
KALAMAZOO COUNTY CABLEVISION, INC 081-02-41922 02-41922 --
KEY BISCAYNE CABLEVISION 081-02-41898 02-41898 146,988
KOOTENAI CABLE, INC 081-02-41875 02-41875 952,626
LAKE CHAMPLAIN CABLE TELEVISION CORPORATION 081-02-41911 02-41911 275,536
LEADERSHIP ACQUISITION LIMITED PARTNERSHIP 081-02-41931 02-41931 --
LOUISA CABLEVISION, INC 081-02-41760 02-41760 17,854
MANCHESTER CABLEVISION, INC 081-02-41758 02-41758 --
MARTHA'S VINEYARD CABLEVISION, LP 081-02-41805 02-41805 476,195
MERCURY COMMUNICATIONS, INC 081-02-41840 02-41840 57,210
MICKELSON MEDIA OF FLORIDA, INC 081-02-41874 02-41874 263,781
MICKELSON MEDIA, INC 081-02-41782 02-41782 193,283
</Table>
50
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 5 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
MONTGOMERY CABLEVISION, INC 081-02-41848 02-41848 --
MONUMENT COLORADO CABLEVISION, INC 081-02-41932 02-41932 181,523
MOUNTAIN CABLE COMMUNICATIONS CORPORATION 081-02-41916 02-41916 --
MOUNTAIN CABLE COMPANY, LP 081-02-41909 02-41909 4,363,886
MT. LEBANON CABLEVISION, INC 081-02-41920 02-41920 --
MULTI-CHANNEL TV CABLE COMPANY 081-02-41921 02-41921 617,155
NATIONAL CABLE ACQUISITION ASSOCIATES, LP 081-02-41952 02-41952 2,651,634
OLYMPUS CABLE HOLDINGS, LLC 081-02-41925 02-41925 5,951,895
OLYMPUS CAPITAL CORPORATION 081-02-41930 02-41930 --
OLYMPUS COMMUNICATIONS HOLDINGS, LLC 081-02-41953 02-41953 --
OLYMPUS COMMUNICATIONS, LP 081-02-41954 02-41954 --
OLYMPUS SUBSIDIARY, LLC 081-02-41928 02-41928 --
OWENSBORO INDIANA, LP 081-02-41773 02-41773 --
OWENSBORO ON THE AIR, INC 081-02-41777 02-41777 --
OWENSBORO-BRUNSWICK, INC 081-02-41730 02-41730 3,275,037
PAGE TIME, INC 081-02-41839 02-41839 2,365
PARAGON CABLE TELEVISION, INC 081-02-41778 02-41778 --
PARAGON CABLEVISION CONSTRUCTION CORPORATION 081-02-41775 02-41775 --
PARAGON CABLEVISION MANAGEMENT CORPORATION 081-02-41776 02-41776 --
PARNASSOS COMMUNICATIONS, LP 081-02-41846 02-41846 291,334
PARNASSOS HOLDINGS, LLC 081-02-41845 02-41845 --
PARNASSOS, LP 081-02-41843 02-41843 23,257,499
PERICLES COMMUNICATIONS CORPORATION 081-02-41919 02-41919 --
PULLMAN TV CABLE CO., INC 081-02-41873 02-41873 434,892
RENTAVISION OF BRUNSWICK, INC 081-02-41872 02-41872 300,718
RICHMOND CABLE TELEVISION CORPORATION 081-02-41912 02-41912 63,724
RIGPAL COMMUNICATIONS, INC 081-02-41917 02-41917 --
ROBINSON/PLUM CABLEVISION, LP 081-02-41927 02-41927 668,541
S/T CABLE CORPORATION 081-02-41791 02-41791 --
SABRES, INC 081-02-41838 02-41838
SCRANTON CABLEVISION, INC 081-02-41761 02-41761 1,640,305
SENTINEL COMMUNICATIONS OF MUNCIE, INDIANA, INC 081-02-41767 02-41767 --
SOUTHEAST FLORIDA CABLE, INC 081-02-41900 02-41900 15,633,758
SOUTHWEST COLORADO CABLE INC 081-02-41769 02-41769 181,486
SOUTHWEST VIRGINIA CABLE, INC 081-02-41833 02-41833 1,198,483
STAR CABLE INC 081-02-41787 02-41787 --
STARPOINT, LIMITED PARTNERSHIP 081-02-41897 02-41897 932,111
SVHH CABLE ACQUISITION, LP 081-02-41836 02-41836 1,037,651
SVHH HOLDINGS, LLC 081-02-41837 02-41837 --
TELE-MEDIA COMPANY OF HOPEWELL-PRINCE GEORGE 081-02-41798 02-41798 148,456
TELE-MEDIA COMPANY OF TRI-STATES, LP 081-02-41809 02-41809 84
</Table>
51
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VI PAGE 6 OF 6
COURT REPORTING SCHEDULES FOR CASH DISBURSEMENTS
FOR THE MONTH ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ACCOUNT CASE
LEGAL ENTITY NUMBER NUMBER DISBURSEMENTS
- ------------ ------------ -------- -------------
TELE-MEDIA INVESTMENT PARTNERSHIP, LP 081-02-41951 02-41951 1,017,755
TELESAT ACQUISITION LIMITED PARTNERSHIP 081-02-41929 02-41929 --
TELESAT ACQUISITION, LLC 081-02-41871 02-41871 2,153,023
THE GOLF CLUB AT WENDING CREEK FARMS, LLC 081-02-41841 02-41841 --
THE MAIN INTERNETWORKS, INC 081-02-41818 02-41818 --
THE WESTOVER TV CABLE CO., INC 081-02-41786 02-41786 --
THREE RIVERS CABLE ASSOCIATES, LP 081-02-41910 02-41910 1,170,604
TIMOTHEOS COMMUNICATIONS, LP 081-02-41901 02-41901 --
TMC HOLDINGS CORPORATION 081-02-41803 02-41803 --
TMC HOLDINGS, LLC 081-02-41802 02-41802 --
TRI-STATES, LLC 081-02-41810 02-41810 --
UCA LLC 081-02-41834 02-41834 11,240,152
UPPER ST. CLAIR CABLEVISION INC 081-02-41918 02-41918 --
US TELE-MEDIA INVESTMENT COMPANY 081-02-41835 02-41835 --
VALLEY VIDEO, INC 081-02-41870 02-41870 211,133
VAN BUREN COUNTY CABLEVISION, INC 081-02-41832 02-41832 237,462
WARRICK CABLEVISION, INC 081-02-41866 02-41866 --
WARRICK INDIANA, LP 081-02-41865 02-41865 248,955
WELLSVILLE CABLEVISION, LLC 081-02-41806 02-41806 380,579
WEST BOCA ACQUISITION LIMITED PARTNERSHIP 081-02-41899 02-41899 1,219,016
WESTERN NY CABLEVSION, LP 081-02-41847 02-41847 --
WESTVIEW SECURITY, INC 081-02-41896 02-41896 --
WILDERNESS CABLE COMPANY 081-02-41869 02-41869 154,378
YOUNG'S CABLE TV CORP 081-02-41915 02-41915 311,666
YUMA CABLEVISION, INC 081-02-41868 02-41868 918,432
-------------
Total $ 378,691,816
=============
</Table>
52
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VII PAGE 1 OF 2
COURT REPORTING SCHEDULES FOR INSURANCE COVERAGE
<Table>
<Caption>
COVERAGE ** COMPANY POLICY NO. TERM
----------- ------- ---------- ----
COMMERCIAL PROPERTY Royal Indemnity Company R2HD329266 05/16/03 - 05/16/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL GENERAL LIABILITY AIG (American Home Assurance Co) 4806103, 4806117, 4806148 12/15/03 - 12/15/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL AUTOMOBILE LIABILITY AIG (American Home Assurance Co) MA - 5188717 VA - 5188718 12/15/03 - 12/15/04
TX - 5188719
All other states - 5188716
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
WORKER'S COMPENSATION AIG (New Hampshire Ins. Co., AI All states except monopolistic & 12/15/03 - 12/15/04
South Insurance Co., and National CA; policy numbers 2981752,
Union Fire Insurance Co. of VT) 2981753, 2981754 and 2981755
California State Compensation Insurance 1703671-03 05/16/03 - 05/16/04
Fund
Ohio Ohio Bureau of Workers 1328524 Ongoing*
Compensation
Washington State WA Department of Labor & 083 004 452 10/1/99 - Ongoing*
Industry
West Virginia West Virginia Workers' 20104948 101 10/1/99 - Ongoing*
Compensation
Wyoming Wyoming Department of Employment 366575 10/1/99 - Ongoing*
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL PACKAGE POLICY ACE USA (ACE American PHF073190 10/15/03 - 10/15/04
(Liability & Foreign Voluntary Comp) Insurance Co.)
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
53
ADELPHIA COMMUNICATIONS CORPORATION, ET AL.
(DEBTORS-IN-POSSESSION)
BANKRUPTCY COURT REPORTING SCHEDULES
SCHEDULE VII PAGE 2 OF 2
COURT REPORTING SCHEDULES FOR INSURANCE COVERAGE
<Table>
<Caption>
COVERAGE ** COMPANY POLICY NO. TERM
----------- ------- ---------- ----
AIRCRAFT POLICY AIG (National Union Fire Insurance Co.) GM3380176-01 11/01/03 - 11/01/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
UMBRELLA LIABILITY Zurich (American Guarantee & Liability AUC937411600 05/16/03 - 05/16/04
Insurance Co.)
EXCESS UMBRELLA LIABILITY XL Insurance America US00006683L103A 05/16/03 - 05/16/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE PROTECTION Liberty Insurance Underwriters 180933013 12/19/03 - 12/19/04
(SPECIAL CRIME)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NEW YORK DISABILITY Cigna NYD 074487 07/01/03 - 07/01/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
POLLUTION LIABILITY Quanta Reinsurance U.S. Ltd. On-site coverage (2000110) 01/01/04 - 01/01/05
Off-site coverage(2000111)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIDUCIARY LIABILITY INSURANCE Houston Casualty Co. 14MG03A2983 12/08/03 - 12/08/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
DIRECTORS & OFFICERS LIABILITY AIG (National Union Insurance Co.) 7290984 12/31/03 - 12/31/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
DIRECTORS & OFFICERS LIABILITY TAIL Associated Electric & Gas Insurance D0999A1A00 12/31/03 - 12/31/05
Services Limited (AEGIS) (Extension of Limit of
Liability of 12/31/02-03
term)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
EXCESS DIRECTORS & OFFICERS LIABILITY U.S. Specialty Insurance Co. 14MGU03A3639 12/31/03 - 12/31/04
Hartford (Twin City Fire Ins. Co.) 00DA02209103
Hudson Insurance Co. HN03031687
Axis Reinsurance Co. RBN502748
Old Republic Insurance Co. CUG27319
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
ERISA BOND Hanover Insurance Co. BDR1680832 05-16/03 - 05/16/04
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
MEDIA PROFESSIONAL LIABILITY ACE (Illinois Union Insurance Company) EON G21640104 002 01/22/04 - 01/22/05
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
* Ongoing means until the policy is cancelled by Adelphia or carrier
** The named insured is Adelphia Communications Corporation et al for all of
the coverage except for Employee Dishonesty - ERISA whose named insured is
Adelphia Communications Corporation Health Benefit Plan and Adelphia
Communications Corporation Savings and Retirement Plan.
54