-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KnyGOgEOeboxI+SmZDgy/qsUmiEiBfS8daJD4KwlaayxOi82aXcT1pUnbGDeasUQ qDlXQQsgqxtXKbGOChfnLA== 0001047469-98-043803.txt : 19981215 0001047469-98-043803.hdr.sgml : 19981215 ACCESSION NUMBER: 0001047469-98-043803 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FALCON COMMUNICATIONS LP CENTRAL INDEX KEY: 0000900346 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 954654565 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 033-60776 FILM NUMBER: 98768605 BUSINESS ADDRESS: STREET 1: 10900 WILSHIRE BLVD STREET 2: 15TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 3108249990 FORMER COMPANY: FORMER CONFORMED NAME: FALCON HOLDING GROUP LP DATE OF NAME CHANGE: 19940601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FALCON FUNDING CORP CENTRAL INDEX KEY: 0001060530 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 954681480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-55755-01 FILM NUMBER: 98768606 BUSINESS ADDRESS: STREET 1: 10900 WILSHIRE BLVD STREET 2: 15TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 3108249990 MAIL ADDRESS: STREET 1: 10900 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90024 10-Q/A 1 FORM 10-Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------------------- FORM 10-Q/A (Amendment No. 1) (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 ----------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- ------------------------ Commission File Numbers: 33-60776 and 333-55755 ---------------------------- FALCON COMMUNICATIONS, L.P. (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) FALCON FUNDING CORPORATION* ---------------------------------------------------------------------------- (Exact Names of Registrants as Specified in Their Charters) California 95-4654565 California 95-4681480 - ------------------------------- ---------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification Numbers) Incorporation or Organization) 10900 Wilshire Boulevard - 15th Floor Los Angeles, California 90024 - ---------------------------------------- ----------------------------- (Address of Principal Executive Offices) (Zip Code) (310) 824-9990 ---------------------------------------------------- (Registrants' Telephone Number, Including Area Code) - ---------------------------------------------------------------------------- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report. Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes No X ------- --------- Number of shares of common stock of Falcon Funding Corporation outstanding as of November 10, 1998: 1,000. * Falcon Funding Corporation meets the conditions set forth in General Instruction H(1)(a) and (b) to the Form 10-Q and is therefore filing with the reduced disclosure format. EXPLANATORY NOTE This amended Form 10-Q for the period ended September 30, 1998 is being filed to amend "Item 1. Financial Statements," solely to provide certain pro forma financial information for the three-month and nine-month periods ended September 30, 1997 and 1998 (which was not available at the time of the original filing), relating to the acquisitions of the TCI and Falcon Video systems, which occurred on September 30, 1998. This pro forma financial information is located at the end of "Note 3 Acquisitions" in the Notes to the Condensed Consolidated Financial Statements. Other than the pro forma financial data added to Note 3, the financial statements and accompanying notes are identical to those filed in the original September 30, 1998 Form 10-Q. -2- ITEM 1. FINANCIAL STATEMENTS PART I - FINANCIAL INFORMATION FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------------------- -------------------------------------------------
December 31, September 30, 1997* 1998 ------------- ------------- (Unaudited) (Dollars in Thousands) ASSETS: Cash and cash equivalents $ 13,917 $ 9,269 Receivables: Trade, less allowance of $825,000 and $524,000 for possible losses 13,174 15,675 Affiliates 11,254 959 Other assets 14,576 15,847 Other investments 1,776 119 Property, plant and equipment, less accumulated depreciation and amortization of $272,551,000 and $306,183,000 324,559 483,536 Franchise cost, less accumulated amortization of $203,700,000 and $229,788,000 222,281 410,929 Goodwill, less accumulated amortization of $18,531,000 and $24,663,000 66,879 140,006 Customer lists and other intangible costs, less accumulated amortization of $25,517,000 and $39,996,000 59,808 353,795 Deferred loan costs, less accumulated amortization of $7,144,000 and $1,735,000 12,134 24,847 ----------- ----------- $ 740,358 $1,454,982 ----------- ----------- ----------- ----------- LIABILITIES AND PARTNERS' DEFICIT LIABILITIES: Notes payable $ 911,221 $1,578,140 Accounts payable 9,169 7,833 Accrued expenses 52,789 91,242 Customer deposits and prepayments 1,452 1,916 Deferred income taxes 7,553 9,916 Minority interest 354 412 Equity in losses of affiliated partnerships in excess of investment 3,202 - --------- ---------- TOTAL LIABILITIES 985,740 1,689,459 --------- ---------- COMMITMENTS AND CONTINGENCIES REDEEMABLE PARTNERS' EQUITY 171,373 135,385 --------- ---------- PARTNERS' EQUITY (DEFICIT): General partner (13,200) (374,910) Limited partners (403,555) 5,048 --------- ---------- TOTAL PARTNERS' DEFICIT (416,755) (369,862) --------- ---------- $ 740,358 $1,454,982 --------- ---------- --------- ----------
*As presented in the audited financial statements. See accompanying notes to condensed consolidated financial statements. -3- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- -----------------------------------------------
Unaudited ---------------------------- Three months ended September 30, ---------------------------- 1997 1998 ------------ ------------- (Dollars in Thousands) REVENUES $ 64,515 $ 68,457 -------- -------- EXPENSES: Service costs 19,320 21,080 General and administrative expenses 11,165 20,226 Depreciation and amortization 28,637 34,278 -------- -------- Total expenses 59,122 75,584 -------- -------- Operating income (loss) 5,393 (7,127) OTHER INCOME (EXPENSE): Interest expense, net (19,658) (25,045) Equity in net income of investee partnerships 212 67 Other expense, net (1,416) (338) Income tax benefit (expense) 200 (4,679) -------- -------- Net loss before extraordinary items (15,269) (37,122) Extraordinary item, retirement of debt - (2,230) -------- -------- NET LOSS $(15,269) $(39,352) -------- -------- -------- --------
See accompanying notes to condensed consolidated financial statements. -4- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- -----------------------------------------------
Unaudited ------------------------ Nine months ended September 30, ------------------------- 1997 1998 ------------ ----------- (Dollars in Thousands) REVENUES $192,482 $ 201,789 -------- --------- EXPENSES: Service costs 56,302 61,137 General and administrative expenses 34,072 44,742 Depreciation and amortization 87,270 98,284 -------- --------- Total expenses 177,644 204,163 -------- --------- Operating income (loss) 14,838 (2,374) OTHER INCOME (EXPENSE): Interest expense, net (58,979) (69,744) Equity in net income (loss) of investee partnerships 183 (199) Other expense, net (1,616) (1,162) Income tax benefit (expense) 1,322 (2,848) -------- --------- Net loss before extraordinary items (44,252) (76,327) Extraordinary item, retirement of debt - (30,642) -------- --------- NET LOSS $(44,252) $(106,969) -------- --------- -------- ---------
See accompanying notes to condensed consolidated financial statements. -5- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- -----------------------------------------------
Unaudited --------------------------- Nine months ended September 30, --------------------------- 1997 1998 ------------ ------------ (Dollars in Thousands) Net cash provided by operating activities $ 56,371 $ 44,361 -------- ----------- Cash flows from investing activities: Acquisition of cable television systems - (83,391) Capital expenditures (46,764) (63,357) Increase in intangible assets (1,207) (7,692) Cash retained by FHGLP - (1,546) Other 90 37 -------- ----------- Net cash used in investing activities (47,881) (155,949) -------- ----------- Cash flows from financing activities: Borrowings from notes payable 24,500 2,357,607 Repayment of debt (33,038) (2,225,120) Deferred loan costs (1) (25,630) Other 192 83 -------- ----------- Net cash provided by (used in) financing activities (8,347) 106,940 -------- ----------- Net increase (decrease) in cash and cash equivalents 143 (4,648) Cash and cash equivalents at beginning of period 13,633 13,917 -------- ----------- Cash and cash equivalents at end of period $ 13,776 $ 9,269 -------- ----------- -------- -----------
See accompanying notes to condensed consolidated financial statements. -6- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 1 - BASIS OF PRESENTATION Falcon Communications, L.P., a California limited partnership (the "Partnership") and successor to Falcon Holding Group, L.P. ("FHGLP"), owns and operates cable television systems serving small to medium-sized communities and the suburbs of certain cities in 26 states. On September 30, 1998, pursuant to a Contribution and Purchase Agreement dated as of December 30, 1997, as amended (the "Contribution Agreement"), FHGLP acquired the assets and liabilities of Falcon Video Communications, L.P. ("Falcon Video" or the "Falcon Video Systems"), in exchange for ownership interests in FHGLP. Simultaneously with the closing of that transaction, in accordance with the Contribution Agreement, FHGLP contributed substantially all of the existing cable television system operations owned by FHGLP and its subsidiaries (including the Falcon Video Systems) to the Partnership and TCI Falcon Holdings, LLC ("TCI") contributed certain cable television systems owned and operated by affiliates of TCI (the "TCI Systems") to the Partnership (the "TCI Transaction"). As a result, TCI holds approximately 46% of the equity interests of the Partnership and FHGLP holds the remaining 54% and serves as the managing general partner of the Partnership. The TCI Transaction is being accounted for as a recapitalization of FHGLP into the Partnership and the concurrent acquisition by the Partnership of the TCI Systems. The condensed consolidated financial statements include the consolidated accounts of the Partnership and its subsidiary cable television operating partnerships and corporations (the "Owned Subsidiaries"). The condensed consolidated balance sheet for the Partnership as of September 30, 1998 also includes the assets acquired and liabilities assumed with respect to the TCI Systems and the Falcon Video Systems. The assets contributed by FHGLP to the Partnership excluded certain immaterial investments, principally FHGLP's ownership of 100% of the outstanding stock of Enstar Communications Corporation ("ECC"), which is the general partner and manager of fifteen limited partnerships operating under the name "Enstar" (the "Enstar Partnerships", whose cable television systems are referred to as the "Enstar Systems"). Upon the consummation of the TCI Transaction, the management of the Enstar Partnerships was assigned to the Partnership by FHGLP. The condensed consolidated statements of operations and statements of cash flows for the three months and the nine months ended September 30, 1998 do not include results from the TCI Systems or the Falcon Video Systems; however, such statements include FHGLP's interest in ECC. The effects of ECC's operations on all previous periods presented are immaterial and therefore the Partnership has not restated prior periods to give effect to the recapitalization of the Partnership. Prior to closing the TCI Transaction, FHGLP owned and operated cable television systems in 23 states (the "Owned Systems"). FHGLP also controlled, held varying equity interests in and managed certain other cable television systems for a fee (the "Affiliated Systems" and, together with the Owned Systems, the "Systems"). The Affiliated Systems operated cable television systems in 14 states. FHGLP is a limited partnership, the sole general partner of which is Falcon Holding Group, Inc., a California corporation ("FHGI"). FHGI also holds a 1% interest in certain of the subsidiaries of the Partnership. At the beginning of 1998, the Affiliated Systems were comprised of systems owned by Falcon Classic Cable Income Properties, L.P. ("Falcon Classic") whose cable television systems are referred to as the "Falcon Classic Systems", Falcon Video and the Enstar Partnerships. As discussed in Note 3, the Falcon Classic Systems -7- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 1 - BASIS OF PRESENTATION (CONTINUED) were acquired by FHGLP during 1998. The Falcon Video Systems were acquired on September 30, 1998 in connection with the TCI Transaction. NOTE 2 - INTERIM FINANCIAL STATEMENTS The interim financial statements for the three and nine months ended September 30, 1998 and 1997 are unaudited. These condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in FHGLP's latest Annual Report on Form 10-K. In the opinion of management, such statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of such periods. The results of operations for the three and nine months ended September 30, 1998 are not indicative of results for the entire year, particularly due to the TCI Transaction. NOTE 3 - ACQUISITIONS As discussed in Note 1, on September 30, 1998 the Partnership acquired the TCI Systems and the Falcon Video Systems in accordance with the Contribution Agreement. In March and July 1998, FHGLP paid to Falcon Classic $83.4 million in order to purchase the Falcon Classic Systems. Falcon Classic had revenue of approximately $20.3 million for the year ended December 31, 1997. -8- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 3 - ACQUISITIONS (CONTINUED) The acquisitions of the TCI Systems, the Falcon Video Systems and the Falcon Classic Systems were accounted for by the purchase method of accounting, whereby the purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, as follows:
Falcon Video Falcon Classic TCI Systems Systems Systems ---------- ---------- ----------- (Dollars in Thousands) PURCHASE PRICE: General partnership interests issued $231,937 $ 43,168 $ - Debt assumed 275,000 112,196 - Debt incurred - - 83,391 Other liabilities assumed 999 6,158 2,804 Transaction costs 2,879 - - -------- -------- -------- 510,815 161,522 86,195 -------- -------- -------- FAIR MARKET VALUE OF ASSETS AND LIABILITIES ACQUIRED: Property, plant and equipment 74,533 36,659 33,539 Franchise costs 166,486 41,604 7,847 Customer lists and other intangible assets 217,443 53,602 34,992 Other assets 7,118 2,285 3,164 -------- -------- -------- 465,580 134,150 79,542 -------- -------- -------- Excess of purchase price over fair value of assets and liabilities acquired $ 45,235 $ 27,372 $ 6,653 -------- -------- -------- -------- -------- --------
The excess of purchase price over the fair value of net assets acquired has been recorded as goodwill and is being amortized using the straight-line method over 20 years. The allocation of the purchase price and the pro forma information presented below are based on preliminary information and are subject to possible adjustment once complete information on the fair value of the assets is developed. The allocation may also be subject to possible adjustment pursuant to the Contribution Agreement. The general partnership interests issued in the TCI Transaction were valued in proportion to the estimated fair value of the TCI Systems and the Falcon Video Systems as compared to the estimated fair value of the Partnership's assets, which was agreed upon in the Contribution Agreement by all holders of Partnership interests. -9- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 3 - ACQUISITIONS (CONTINUED) Sources and uses of funds for each of the transactions were as follows:
Falcon Video Falcon Classic TCI Systems Systems Systems ------------------ ----------------- ------------------ (Dollars in Thousands) SOURCES OF FUNDS: Cash in Owned Systems $ 11,429 $ 59,038 $ 6,591 Advance under bank credit facilities 429,739 56,467 76,800 -------- -------- ------- Total sources of funds $441,168 $115,505 $83,391 -------- -------- ------- -------- -------- ------- USES OF FUNDS: Repay debt assumed from TCI and existing debt of Falcon Video, including accrued interest $429,739 $115,505 $ - Purchase price of assets - - 83,391 Payment of assumed obligations at closing 6,495 - - Transaction fees and expenses 2,879 - - Available funds 2,055 - - -------- -------- ------- Total uses of funds $441,168 $115,505 $83,391 -------- -------- ------- -------- -------- -------
The following unaudited condensed consolidated pro forma statements of operations present the consolidated results of operations of the Partnership as if the acquisitions had occurred at January 1, 1997 and are not necessarily indicative of what would have occurred had the acquisitions been made as of that date or of results which may occur in the future.
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------------------ ------------------------------------------ 1997 1998 1997 1998 -------------------- ------------------- ------------------- -------------------- (Dollars in Thousands) Revenues $ 107,325 $ 107,418 $ 320,804 $ 321,058 Expenses (108,238) (113,008) (323,696) (334,577) --------- --------- --------- --------- Operating loss (913) (5,590) (2,892) (13,519) Interest and other expenses (30,812) (35,306) (92,560) (98,127) --------- --------- --------- --------- Loss before extraordinary items $ (31,725) $ (40,896) $ (95,452) $(111,646) --------- --------- --------- --------- --------- --------- --------- ---------
-10- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 4 - NOTES PAYABLE On April 3, 1998, FHGLP and its wholly-owned subsidiary, Falcon Funding Corporation ("FFC" and, collectively with FHGLP, the "Issuers"), sold $375,000,000 aggregate principal amount of 8.375% Senior Debentures due 2010 (the "Senior Debentures") and $435,250,000 aggregate principal amount at maturity of 9.285% Senior Discount Debentures due 2010 (the "Senior Discount Debentures" and, collectively with the Senior Debentures, the "Debentures") in a private placement exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). The Issuers filed a registration statement with the Securities and Exchange Commission (the "SEC") on June 2, 1998 to register debentures (the "Exchange Debentures") to be exchanged for the Debentures (the "Exchange Offer"). The form and terms of the Exchange Debentures are the same as the corresponding Debentures except that the Exchange Debentures are registered under the Securities Act and, therefore, do not bear legends restricting their transfer and that the holders of Exchange Debentures are not entitled to certain registration rights. All of the outstanding Debentures were tendered for exchange in the Exchange Offer. In connection with consummation of the TCI Transaction, pursuant to Section 5.01 of the Indenture governing the Exchange Debentures (the "Debentures Indenture"), the Partnership was substituted for FHGLP as an obligor under the Exchange Debentures and the Debentures Indenture and thereupon FHGLP was released and discharged from any further obligation with respect to the Exchange Debentures and the Debentures Indenture. FFC remains as an obligor under the Exchange Debentures and the Debentures Indenture and is now a wholly owned subsidiary of the Partnership. FFC was incorporated solely for the purpose of serving as a co-issuer of the Debentures and does not have any material operations or assets and will not have any revenues. The Senior Debentures were issued at a price of 99.732% of their principal amount, for total gross proceeds of approximately $374 million. The Senior Discount Debentures were issued at a price of 63.329% per $1,000 aggregate principal amount at maturity, for total gross proceeds of approximately $275.6 million, and will accrete to stated value at an annual rate of 9.285% until April 15, 2003. After giving effect to offering discounts, commissions and estimated expenses of the offering, the sale of the Debentures (representing aggregate indebtedness of approximately $650.6 million as of the date of issuance) generated net proceeds of approximately $631 million. The Partnership used substantially all the net proceeds from the sale of the Debentures to repay outstanding bank indebtedness. On May 19, 1998, FHGLP repurchased approximately $247.8 million aggregate principal amount of its 11% Senior Subordinated Notes due 2003 (the "Notes") for an aggregate purchase price of $270.3 million pursuant to a fixed spread tender offer for all outstanding Notes. The Notes tendered represented approximately 88% of the Notes previously outstanding. The approximate $34.4 million of Notes not repurchased in the tender offer were redeemed on September 15, 1998 in accordance with the terms of the indenture governing the Notes at 105.5% of the outstanding principal amount, plus accrued interest to the redemption date (the "Redemption Price"). -11- FALCON COMMUNICATIONS, L.P. AND SUBSIDIARIES (SUCCESSOR TO FALCON HOLDING GROUP, L.P.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------- ----------------------------------------------- NOTE 4 - NOTES PAYABLE (CONTINUED) On June 30, 1998, the Partnership entered into a new $1.5 billion senior credit facility (the "New Credit Facility"). The borrowers under the New Credit Facility were the Owned Subsidiaries prior to consummation of the TCI Transaction and, following the TCI Transaction, the borrower is Falcon Cable Communications LLC, a Delaware limited liability company and a wholly owned subsidiary of the Partnership ("Falcon LLC"). The restricted companies, as defined under the New Credit Facility, are Falcon LLC and each of its subsidiaries (excluding certain subsidiaries designated as excluded companies from time to time) and each restricted company (other than Falcon LLC) is also a guarantor of the New Credit Facility. The New Credit Facility consists of three committed facilities (one revolver and two term loans) and one uncommitted $350 million supplemental credit facility (the terms of which will be negotiated at the time the Partnership makes a request to draw on such facility). Facility A is a $650 million revolving credit facility maturing December 29, 2006; Facility B is a $200 million term loan maturing June 29, 2007; and Facility C is a $300 million term loan maturing December 31, 2007. All of Facility C and approximately $126 million of Facility B were funded on June 30, 1998, and the approximately $329 million debt outstanding under the then existing bank credit agreement was repaid. As a result, from June 30, 1998 until September 29, 1998, FHGLP had an excess cash balance of approximately $90 million. Immediately prior to closing the TCI Transaction, approximately $39 million was borrowed under Facility A to discharge certain indebtedness of Falcon Video. In connection with consummation of the TCI Transaction, Falcon LLC assumed the approximately $433 million of indebtedness outstanding under the New Credit Facility. In addition to utilizing cash on hand of approximately $63 million, Falcon LLC borrowed the approximately $74 million remaining under Facility B and approximately $366 million under Facility A to discharge approximately $73 million of Falcon Video indebtedness and to retire approximately $430 million of TCI indebtedness assumed as part of the contribution of the TCI Systems. As a result of these borrowings, the amount outstanding under the New Credit Facility at September 30, 1998 was $912 million. NOTE 5 - EXTRAORDINARY ITEMS Fees and expenses incurred in connection with the repurchase of the Notes on May 19, 1998 and the retirement of the remaining Notes on September 15, 1998 were $19.7 million in the aggregate. In addition, the unamortized portion of deferred loan costs related to the Notes and to extinguishment of debt outstanding under the then existing bank credit agreement, which amounted to $10.9 million in the aggregate, were written off as an extraordinary charge. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this amended report to be signed on their behalf by the undersigned thereunto duly authorized. FALCON COMMUNICATIONS, L.P. By: Falcon Holding Group, L.P. General Partner By: Falcon Holding Group, Inc., its General Partner Date: December 11, 1998 By: /s/ MICHAEL K. MENEREY ----------------------------------- Michael K. Menerey, Executive Vice President, Secretary and Chief Financial Officer FALCON FUNDING CORPORATION Date: December 11, 1998 By: /s/ MICHAEL K. MENEREY ----------------------------------- Michael K. Menerey, Chief Financial Officer and Secretary -----END PRIVACY-ENHANCED MESSAGE-----