UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K


 Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934


 XTransition report pursuant to Section 13 or 15(d) of the Securities Exchange
  Act of 1934 for the transition period
                     from April 1, 1998 to December 31, 1998

                         Commission File Number: 0-16014

                       ADELPHIA COMMUNICATIONS CORPORATION
             (Exact name of registrant as specified in its charter)

              Delaware                                   23-2417713
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                   Identification No.)

                        Main at Water Street
                           Coudersport, PA              16915-1141
               (Address of principal executive offices) (Zip code)

                                  814-274-9830
               (Registrant's telephone number including area code)

        Securities registered pursuant to Section 12(b) of the Act: None.
           Securities registered pursuant to Section 12(g) of the Act:
                      Class A Common Stock, $.01 par value.
           5 1/2% Series D Convertible Preferred Stock, $.01 par value
                    (liquidation preference $200 per share).

Indicate by check mark whether the registrant (1) has 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes      X        No  ____

Aggregate market value of outstanding Class A Common Stock par value $0.01, held
by non-affiliates of the registrant at May 24, 1999 was $2.82 billion based on
the closing sale price as computed by the NASDAQ National Market system as of
that date. For purposes of this calculation only, affiliates are deemed to be
directors and executive officers of the registrant.

At May 24, 1999, 50,328,343 shares of Class A Common Stock, par value $0.01, and
10,834,476 shares of Class B Common Stock, par value $0.01, of the registrant
were outstanding.

Documents Incorporated by Reference: Portions of the Annual Report on Form 10-K
of Olympus Communications, L.P. and Olympus Capital Corporation for the year
ended December 31, 1998 are incorporated by reference into Part II hereof.
Portions of the Proxy Statement for the 1999 Annual Meeting of Stockholders are
incorporated by reference into Part III hereof.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to the
Form 10-K. __



<PAGE>



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                       ADELPHIA COMMUNICATIONS CORPORATION

                                TABLE OF CONTENTS



PART I

<S>                                                                                                                <C>
   ITEM 1.  BUSINESS                                                                                                  3

   ITEM 2.  PROPERTIES                                                                                               25

   ITEM 3.  LEGAL PROCEEDINGS                                                                                        26

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                      26


PART II

   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS                                                                                      28

   ITEM 6.  SELECTED FINANCIAL DATA                                                                                  29

   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS                                                                                    32

   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                                44

   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                              45

   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL  DISCLOSURE                                                                                    72


PART III

   ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                       72

   ITEM 11. EXECUTIVE COMPENSATION                                                                                   72

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                           72

   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                           72


PART IV

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                                          72

</TABLE>



<PAGE>



PART I
(Dollars in thousands, except subscriber rates and per share amounts)

ITEM 1.  BUSINESS

Introduction

      Adelphia Communications Corporation and subsidiaries ("Adelphia" or the
"Company") is a leader in the telecommunications industry with cable television
and local telephone operations. Adelphia's operations consist of providing
telecommunications services primarily over networks, which are commonly referred
to as broadband networks because they can transmit large quantities of voice,
video and data by way of digital or analog signals. As of December 31, 1998,
Adelphia owned or managed cable television systems ("Systems") with broadband
networks that passed in front of 3,252,830 homes and served 2,304,325 basic
subscribers. John J. Rigas, the Chairman, President, Chief Executive Officer and
founder of Adelphia, has owned and operated cable television systems since 1952.

      Cable systems owned by the Company (the "Company Systems") are located in
twelve states which are organized into seven regional clusters: Western New
York, Virginia, Western Pennsylvania, New England, Eastern Pennsylvania, Ohio
and New Jersey. The Company Systems are located primarily in suburban areas of
large and medium-sized cities within the 50 largest television markets. As of
December 31, 1998, the broadband networks for the Company Systems passed in
front of 2,131,978 homes and served 1,528,307 basic subscribers.

      Adelphia also provides management and consulting services to other
partnerships and corporations engaged in the ownership and operation of cable
television systems (the "Managed Partnerships"). John J. Rigas and members of
his immediate family (collectively, the "Rigas family"), including entities they
own or control, have substantial ownership interests in these partnerships and
corporations. As of December 31, 1998, the broadband networks for cable systems
owned by these Rigas family partnerships and corporations passed in front of
177,250 homes and served 134,443 basic subscribers.

      Adelphia also owns a 50% voting interest and nonvoting preferred limited
partnership interests in Olympus Communications, L.P. ("Olympus"). Olympus is a
joint venture limited partnership that operates a large cable system in Florida.
As of December 31, 1998, the broadband networks for this system passed in front
of 943,602 homes and served 641,575 basic subscribers. On January 28, 1999,
Adelphia entered into an agreement to acquire the Olympus partnership interests
owned by various Telesat Cablevision, Inc. ("Telesat") entities, which are
wholly owned subsidiaries of FPL Group, Inc. for a price of $108,000, subject to
definitive terms to be negotiated by both parties. Subsequent to the closing of
this transaction, Adelphia will own 100% of Olympus. Closing of this transaction
is expected to occur during the third quarter of 1999.

      Through Adelphia's majority-owned subsidiary, Hyperion Telecommunications,
Inc. ("Hyperion"), Adelphia owns and operates a super-regional provider of
communications services offering a full range of communications services to
customers that include businesses, governmental and educational end users and
other telecommunications service providers throughout the eastern United States.
This means that Hyperion provides its customers with alternatives to the
incumbent local telephone company for local telephone and telecommunications
services. Hyperion's telephone operations are referred to as being facilities
based, which means it generally owns the local telecommunications networks and
facilities it uses to deliver these services, rather than leasing or renting the
use of another party's networks to do so. As of December 31, 1998, Hyperion
managed and operated 22 telecommunications networks, including two under
construction, serving 46 markets.

      On May 8, 1998, Hyperion completed an initial public offering ("IPO") of
its Class A common stock ("Hyperion Stock"). As part of the offering, Adelphia
purchased an incremental 3,324,001 shares of Hyperion Stock for $49,900 and
converted indebtedness owed to the Company by Hyperion into 3,642,666 shares of
Hyperion Stock. In addition, Adelphia purchased warrants issued by Hyperion to
MCI Metro Access Transmission Services, Inc., and purchased shares of Hyperion
Class B common stock from certain executive officers of Hyperion for a total
purchase price of approximately $12,580 and $3,000, respectively. Adelphia owns
approximately 66% of the Hyperion common stock on a fully diluted basis and 86%
of the total voting power. Additional net proceeds of $191,411 to Hyperion were
received as a result of the sale of 12,500,000 shares of Hyperion Stock to the
public. In a related transaction on June 5, 1998, Hyperion issued and sold
350,000 shares of its Class A common stock at the $16.00 IPO price pursuant to
the underwriters' over allotment option in the IPO. As a result of the IPO,

<PAGE>

Adelphia's additional paid-in capital increased approximately $147,000 and
minority interests increased approximately $45,000.

      On March 30, 1999, the Board of Directors of Adelphia changed Adelphia's
fiscal year from March 31 to December 31. The decision was made to conform to
general industry practice and for administrative purposes. The change became
effective for the nine months ended December 31, 1998.

      John J. Rigas, the Chairman, President, Chief Executive Officer and
majority stockholder of Adelphia, is a pioneer in the cable television industry,
having built his first system in 1952 in Coudersport, Pennsylvania. Adelphia was
incorporated in Delaware on July 1, 1986 for the purpose of reorganizing five
cable television companies, then principally owned by the Rigas family, into a
holding company structure in connection with the initial public offering of its
Class A common stock. The Company's operations consist of providing
telecommunications services primarily over its broadband networks. The Company
did not have any material foreign operations or foreign sales in the nine months
ended December 31, 1998.

      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Transition Report on Form 10-K, including Management's Discussion and Analysis
of Financial Condition and Results of Operations, is forward-looking, such as
information relating to the effects of future regulation, future capital
commitments and the effects of competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect
expected results in the future from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These "forward looking
statements" can be identified by the use of forward-looking terminology such as
"believes", "expects," "may," "will," "should," "intends" or "anticipates" or
the negative thereof or other variations thereon or comparable terminology, or
by discussions of strategy that involve risks and uncertainties. These risks and
uncertainties include, but are not limited to, uncertainties relating to
economic conditions, acquisitions and divestitures, the availability and cost of
capital, government and regulatory policies, the pricing and availability of
equipment, materials, inventories and programming, product acceptance, Year 2000
issues, technological developments and changes in the competitive environment in
which the Company operates. Persons reading this Transition Report on Form 10-K
are cautioned that forward-looking statements herein are only predictions, that
no assurance can be given that the future results will be achieved, and that
actual events or results may differ materially as a result of the risks and
uncertainties facing the Company.

Cable Television Operations

    Products and Services

      Video Services

      Systems receive a variety of television, radio and data signals
transmitted to receiving sites ("headends") by way of off-air antennas,
microwave relay systems and satellite earth stations. Signals are then
modulated, amplified and distributed primarily through fiber optic and coaxial
cable to subscribers, who pay fees for the service. Cable television systems are
generally constructed and operated pursuant to non-exclusive franchises awarded
by state or local government authorities for specified periods of time.

      Systems typically offer subscribers a package of basic video services
consisting of local and distant television broadcast signals,
satellite-delivered non-broadcast channels (which offer programming such as
news, sports, family entertainment, music, weather, shopping, etc.) and public,
governmental and educational access channels.

      In addition, premium service channels, which provide movies, live and
taped concerts, sports events and other programming, are offered for an extra
monthly charge. Systems also offer pay-per-view programming, which allows the
subscriber to order special events or movies and to pay on a per event basis.
Local, regional and national advertising time is sold in the majority of the
Systems, with commercial advertisements inserted on certain satellite-delivered
non-broadcast channels.

      Digital video services are now available to Adelphia subscribers who lease
or purchase a digital converter. Digital TV is a computerized method of
defining, transmitting and storing information that makes up a television
signal. Since digital signals can be "compressed," Adelphia can transmit up to
12 channels in the space currently used to transmit just one analog channel.
Adelphia's digital TV subscribers may also receive "multichannel" premium
services, such as HBO 1, 2, 3 and 4 from east and west coast satellite feeds,

<PAGE>

enhanced Pay-Per-View options with 18 movie channels, up to 40 channels of
CD-quality music from Music Choice and an interactive on-screen program guide to
help them navigate the new digital choices.

      High-Speed Data Services

      Power Link, the Company's high-speed data service provided through cable
modems, which includes residential, institutional, and business service
offerings, constitutes an alternative to the traditional slower speed data
offerings available through Internet Service Providers ("ISPs"). Power Link
offers customers speeds comparable to those available through a T1 line, at
costs that compare to a typical ISP plus a second telephone line.

      The Company's deep fiber design allows the use of the expanded bandwidth
potential of digital compression technology for cable data and video services.
High speed cable data services are now available at speeds far in excess of that
which is currently available via a 28.8 kilobit per second telephone modem. In
addition, using a high speed cable modem and special ethernet card allows the
user to bypass telephone lines, does not require the user to log on, and allows
for multiple sessions or connections to multiple services simultaneously.

      The Company also offers high speed Internet access through the use of one
way cable modems, which provide the high speeds of broadband on the data
downstream and utilize a telephone line return path. One way cable modems enable
the Company to offer the high speed data service to the bulk of its customers,
while completing the system buildout of two way broadband plant.

      The Company also offers traditional dial up Internet access for those
customers who initially prefer this method of Internet access to the higher
speeds of our broadband network. This establishes the Company as a full service
Internet provider and creates a customer base which can be upgraded to the high
speed service in the future.

      Other Services

      Adelphia offers wireless messaging services through its wholly owned
subsidiary, Page Time, Inc. ("Page Time"). Page Time provides one-way messaging
services to the Company's Systems via resale arrangements with existing paging
network operators.

      Adelphia also offers long distance telephone service on a resale basis.
Services offered include state-to-state and in-state long distance, as well as
800 service, international calling, calling card services and debit card
services. The Company's sales effort is focused on the consumer market and
emphasizes the simplicity and savings of one low monthly rate plus a competitive
usage fee available 24 hours a day, 7 days a week.

    Operating Strategy

      The Company's cable television operations strategy is to construct and
operate a broadband network capable of offering a broad range of
telecommunications services and providing superior customer service while
maximizing operating efficiencies. The Company intends to build on its expertise
as a cable television service provider, as well as to become a provider of
bundled communications services. It intends to combine its cable television
service with high speed data and internet access, paging and telephony services.

      By acquiring and developing systems in geographic proximity, the Company
has been able to realize significant operating efficiencies through the
consolidation of many managerial, administrative and technical functions. The
Systems have consolidated virtually all of their administrative operations,
including customer service, service call dispatching, marketing, human
resources, advertising sales and government relations into regional offices.
Each regional office has a related technical center which contains the
facilities necessary for the Systems' technical functions, including
construction, installation and system maintenance and monitoring. Consolidating
customer service functions into regional offices allows the Company to provide
customer service through better training and staffing of customer service
representatives, and by providing more advanced telecommunications and computer
equipment and software to its customer service representatives than would
otherwise be economically feasible in smaller systems.

      The Company considers technological innovation to be an important
component of its service offerings and customer satisfaction. The Company
intends to continue the upgrade of its network infrastructure to add channel
capacity, increase digital transmission capabilities and further improve system

<PAGE>

reliability. These improvements will enable the Company to continue its
introduction of additional services, such as digital video, high speed data and
internet service and impulse-ordered pay-per-view programming, which expand
customer choices and are expected to increase Company revenues. Management
believes that the Company is among the leaders of the cable industry in the
deployment of fiber optic cable with one of the most advanced cable network
infrastructures.

Hyperion

    Products and Services

      Hyperion's products and services are designed to appeal to the
sophisticated telecommunications needs of its business, governmental and
educational customers. Adelphia and Hyperion are not in competition for the same
customer base. Adelphia's concentration is on residential customers, while
Hyperion concentrates on business, governmental and educational customers.

      Local Services

      Hyperion provides local dial-tone services to customers, which allows them
to complete calls in their calling area and to access a long distance calling
area. Local services and long distance services can be bundled together using
the same transport facility. Hyperion's networks are designed to allow a
customer to easily increase or decrease capacity and alter enhanced services as
the telecommunications requirements of the business change. In addition to its
core local services, Hyperion also provides access to third party directory
assistance and operator services.

      Long Distance Services

      Hyperion provides domestic and international long distance services for
completing intrastate, interstate and international calls. Long distance service
is offered as an additional service to Hyperion's local exchange customers. Long
distance calls which do not terminate on Hyperion's networks (which are
currently the bulk of such calls) are passed to long distance carriers which
route the remaining portion of the call.

      Enhanced Services

      In addition to providing typical enhanced services such as voicemail, call
transfer and conference calling, Hyperion offers additional value-added enhanced
services to complement its core local and long distance services. These enhanced
service offerings include:

               Access to Internet Services--Enables customers to use their
               available capacity for access to ISPs.

               Data Networking Services--Hyperion can provide high-speed,
               broadband services to use for data and Internet access such as
               Integrated Services Digital Network ("ISDN") and Primary Rate
               Interface ("PRI").

               Specialized Application Services--Hyperion can create products
               and services that are tailored for target industries with special
               telecommunications needs such as the hospitality industry. These
               services typically include non-measured rate local calling,
               expanded local calling area, discounted long distance rates and
               tailored trunking configurations.

    Growth Strategy

      Hyperion provides their services to telecommunications-intensive customers
that include businesses, governmental and educational end users, and other
telecommunications service providers. Hyperion believes that their target
customers are a large and under-served universe who generally have limited
choices in their communications services purchasing decisions. These customers
generally seek reliability, high quality, broad geographic coverage, end-to-end
service, solutions-oriented customer service and timely introduction of new and
innovative services. Hyperion offers dedicated access services on a wholesale
basis to interchange or long distance carriers ("IXCs") and has entered into
national service agreements with AT&T and MCI WorldCom to be their preferred
supplier.

      The broad deployment of fiber optic cable in Hyperion's markets typically
enables connectivity among Hyperion, the incumbent local exchange carrier

<PAGE>

("LEC") central offices and Hyperion's customers. Hyperion expects this strategy
to result in a high proportion of traffic that is both originated and terminated
on its network system, which would provide them with higher long-term operating
margins. As of December 31, 1998, Hyperion has collocated in 123 incumbent LEC
central offices, a figure which is expected to increase to over 300 during 1999.
In addition, as of December 31, 1998, in Hyperion's six most mature markets, 78%
of the access lines in service have been provisioned completely on its own
network system. Overall Hyperion had 110,005 installed access lines at December
31, 1998, approximately 63% of which are provisioned completely on Hyperion's
network system.

         In addition to the broad deployment of fiber optic cable in their
markets, Hyperion has been aggressively adding fiber over long distances to
create a fiber optic network system that connects their various markets. Once
fully deployed, this fiber optic backbone will enhance Hyperion's ability to
originate and terminate Hyperion's customers' communications traffic over their
networks. Hyperion believes long-term operating margins on Hyperion's long
distance and data transfer businesses will increase significantly as a result of
connecting these markets.

         As an alternative to fiber optic cable, Hyperion also plans to utilize
wireless technologies to deliver the "last mile" of communications services
where the use of fiber optic cable is not economical. Through the use of a fixed
wireless technology known as LMDS, Hyperion will be able to provide in most of
their markets an alternative means for establishing the connectivity that links
Hyperion's customers to their network system. These customers might otherwise
have limited access to a high speed fiber optic network. Therefore, Hyperion
expects LMDS to increase the amount of on-net traffic they carry in the future.

      In response to market demands and to maximize our selling efforts,
Hyperion offers a full suite of communications services to their customers.
Hyperion offers their services individually to suit specific customer needs or
bundled together to provide customers with a cost-effective and comprehensive
communications solution. In addition to the pricing benefits Hyperion's
customers receive from purchasing bundled communications services, Hyperion
believes that bundled services provide Hyperion with increased customer
retention, higher operating margins and a reduced cost of acquiring new
customers.

      Hyperion's service offerings currently include a wide range of local dial
tone and long-distance services in all of their operating markets. In addition,
Hyperion has launched internet access services, frame relay and ATM services in
certain markets and plan to extend these services to all of their markets during
1999. To accelerate their frame relay and ATM service offerings, Hyperion
recently entered into a wholesale provider agreement with Intermedia
Communications ("ICI"), whereby they will use ICI's frame relay network and data
switches to offer data services to their customers and then move their
customers' traffic onto their own network system as it becomes operational.
Hyperion believes this approach provides an efficient market-entry strategy and
allows them to build a market presence under the Hyperion trade name, while
providing better long-term operating margins through the use of their own
network system.

Recent Development of the Systems

      The Company has focused on acquiring and developing systems in markets
which have favorable historical growth trends. The Company believes that the
strong household growth trends in its Systems' market areas are a key factor in
positioning itself for future growth in basic subscribers. For a description of
acquisitions by the Company from April 1, 1996 through the date of this filing,
see Notes 1 and 13 to Adelphia's Consolidated Financial Statements included in
Item 8 of this Form 10-K.

      On January 21, 1999, Adelphia acquired Verto Communications, Inc.
("Verto"). In connection with the Verto acquisition, Adelphia issued 2,561,024
shares of its Class A common stock to the former owners of Verto. Verto provided
cable television services to approximately 56,000 basic subscribers in the
greater Scranton, Pennsylvania area at the date of acquisition.

      On January 28, 1999, Adelphia entered into an agreement to acquire the
Olympus partnership interests owned by various Telesat entities for a price of
$108,000, subject to definitive terms to be negotiated by both parties.
Subsequent to the closing of this transaction, Adelphia will own 100% of
Olympus. Closing of this transaction is expected to occur during the third
quarter of 1999.

      On February 23, 1999, Adelphia announced that it had entered into a
definitive agreement to acquire FrontierVision Partners, L.P. ("FrontierVision")

<PAGE>

for approximately $2,100,000. Under that agreement Adelphia would acquire 100%
of FrontierVision in exchange for approximately $550,000 in cash, 7,000,000
shares of Adelphia Class A common stock and the assumption of approximately
$1,110,000 of debt. The transaction is subject to customary closing conditions.
As of December 31, 1998, FrontierVision had approximately 702,000 basic
subscribers.

      On March 5, 1999, Adelphia announced that it had entered into a definitive
merger agreement to acquire Century Communications Corp. ("Century") for
approximately $5,200,000. Under the agreement, Adelphia would acquire 100% of
the outstanding common stock of Century for an aggregate of approximately
$826,000 in cash, 48,700,000 shares of Class A common stock and the assumption
of approximately $1,600,000 of debt. This transaction is subject to shareholder
approval by Century and Adelphia and other customary closing conditions. As of
December 31, 1998, Century had approximately 1,593,000 basic subscribers after
giving effect to Century's pending joint venture with AT&T.

      On April 12, 1999, Adelphia announced that it had entered into a
definitive agreement to acquire Harron Communications Corp. ("Harron") for
approximately $1,200,000. This transaction is subject to customary closing
conditions. As of December 31, 1998, Harron had approximately 294,000 basic
subscribers after giving effect to recent and pending acquisitions involving
approximately 9,000 basic subscribers.

      The Company will continue to evaluate new opportunities that allow for the
expansion of its business through the acquisition of additional cable television
systems in geographic proximity to its existing regional market areas or in
locations that can serve as the basis for new market areas, either directly or
indirectly through joint ventures, where appropriate.



<PAGE>



      The following table indicates the growth of the Company Systems and
Olympus systems by summarizing the number of homes passed by cable and the
number of basic subscribers for each of the four years in the period ended March
31, 1998 and the twelve month period ended December 31, 1998. The table also
indicates the numerical growth in subscribers attributable to acquisitions and
the numerical and percentage growth attributable to internal growth.

<TABLE>
<CAPTION>


                                                                                    Twelve Months
                                                                                        Ended
                                          Year Ended March 31,                       December 31,
                             --------------------------------------------------------------------
                                   1995         1996          1997         1998          1998
                             --------------------------------------------------------------------
COMPANY SYSTEMS:
Homes passed (a)
<S>                           <C>           <C>           <C>           <C>           <C>
Beginning of Year              1,207,425     1,340,808     1,422,077     1,569,953     1,663,505
Internal Growth (b)               39,012        30,665        35,049        25,433        26,528
% Internal Growth                    3.2%          2.3%          2.5%          1.6%          1.6%
Acquired Homes Passed             94,371        50,604       112,827        74,682       441,945
End of Year                    1,340,808     1,422,077     1,569,953     1,670,068     2,131,978

Basic subscribers (c)
Beginning of Year                888,167       975,066     1,039,704     1,138,414     1,213,400
Internal Growth (b)               31,651        29,215        20,396        12,740        13,111
% Internal Growth                    3.6%          3.0%          2.0%          1.1%          1.1%
Acquired Subscribers              55,248        35,423        78,314        63,886       301,796
End of Year                      975,066     1,039,704     1,138,414     1,215,040     1,528,307
Basic Penetration (d)               72.7%         73.1%         72.5%         72.8%         71.7%

OLYMPUS SYSTEMS:
Homes passed (a)
Beginning of Year                406,753       512,052       631,602       650,742       749,884
Internal Growth (b)               11,911        12,050        19,140        17,788        19,322
% Internal Growth                    2.9%          2.4%          3.0%          2.7%          2.6%
Acquired Homes Passed             93,388       107,500          --          86,655       174,396
End of Year                      512,052       631,602       650,742       755,185       943,602

Basic subscribers (c)
Beginning of Year                239,357       306,317       403,901       416,760       497,972
Internal Growth (b)               19,198         9,329        12,859        15,397        14,781
% Internal Growth                    8.0%          3.0%          3.2%          3.7%          3.0%
Acquired Subscribers              47,762        88,255          --          69,565       128,822
End of Year                      306,317       403,901       416,760       501,722       641,575
Basic Penetration (d)               59.8%         63.9%         64.0%         66.4%         68.0%
<FN>

(a)  A home which a broadband network passes in front of is deemed to be
     "passed" by cable if it can be connected to the distribution system without
     any further extension of the cable distribution plant.

(b)  The number of additional homes passed or additional basic subscribers not
     attributable to acquisitions of new cable systems.

(c)  A home with one or more television sets connected to a cable system is
     counted as one basic subscriber.

(d)  Basic subscribers as a percentage of homes passed by cable.
</FN>
</TABLE>


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<TABLE>
<CAPTION>

Market Areas

The Systems are "clustered" in eight market areas in the eastern portion of the United States as follows:



MARKET AREA                                  LOCATION OF SYSTEMS
<S>                        <C>
Southeastern Florida       Portions  of  southern  Dade,  Citrus,  Orange,  Hillsborough,  Palm  Beach,  Martin,
                           Broward, Lee and St. Lucie Counties and Hilton Head, South Carolina

Western                    New York City and suburbs of Buffalo and the adjacent Niagara Falls area, city of Erie, Pennsylvania,
                           communities near Cleveland, Ohio and several small communities in the southern tier of New York

Virginia                   Winchester,  Charlottesville,  Staunton, Richland,  Martinsville,  Blacksburg, Salem,
                           Hopewell,  Prince George,  Harrisonburg,  Petersburg and  surrounding  communities in
                           Virginia, and South Boston and Elizabeth City, North Carolina

Western Pennsylvania       Suburbs  of  Pittsburgh  and  several  small  communities  in  western  Pennsylvania,
                           Maryland and West Virginia

New England                Cape Cod communities, South Shore communities (the area between Boston and Cape Cod,
                           Massachusetts), Martha's Vineyard, Massachusetts; and Bennington, Burlington, Rutland and Montpelier,
                           Vermont and surrounding communities in Vermont, New Hampshire and New York and Seymour and Waterbury,
                           Connecticut

Eastern Pennsylvania       Suburbs of Philadelphia and suburbs of Scranton

Ohio                       Several small communities in Ohio and portions of Kalamazoo County, Michigan

New Jersey                 Ocean County, New Jersey

</TABLE>


<PAGE>



The following table summarizes by market area the homes passed by cable, basic
subscribers and premium service units for the systems as of December 31, 1998.

<TABLE>
<CAPTION>


                                               Homes          Basic         Basic      Premium       Premium
                                               Passed      Subscribers   Penetration    Units      Penetration

Company Systems:
<S>                                            <C>            <C>            <C>        <C>             <C>
Western New York                                740,458        498,765        67.36%     315,815         63.32%
New England                                     418,963        297,610        71.03%     128,283         43.10%
Virginia                                        408,847        309,284        75.65%     128,666         41.60%
Western Pennsylvania                            253,027        183,184        72.40%      64,094         34.99%
New Jersey                                      131,371        106,281        80.90%      52,507         49.40%
Eastern Pennsylvania                            131,853         95,360        72.32%      46,105         48.35%
Ohio                                             47,459         37,823        79.70%      19,170         50.68%
                                             ===========   ============               ===========
     Total                                    2,131,978      1,528,307        71.68%     754,640         49.38%
                                             ===========   ============               ===========

Olympus Systems:
Southeastern Florida                            943,602        641,575        67.99%     264,490         41.23%
                                             ===========   ============               ===========

Managed Systems:
Southeastern Florida                             29,173         25,604        87.77%       6,743         26.34%
Virginia                                         30,796         21,772        70.70%      11,392         52.32%
Western Pennsylvania                             81,183         62,333        76.78%      29,684         47.62%
Eastern Pennsylvania                             36,098         24,734        68.52%      16,410         66.35%
                                             ===========   ============               ===========
     Total                                      177,250        134,443        75.85%      64,229         47.77%
                                             ===========   ============               ===========

Total Systems:
Southeastern Florida                            972,775        667,179        68.59%     271,233         40.65%
Western New York                                740,458        498,765        67.36%     315,815         63.32%
Virginia                                        439,643        331,056        75.30%     140,058         42.31%
New England                                     418,963        297,610        71.03%     128,283         43.10%
Western Pennsylvania                            334,210        245,517        73.46%      93,778         38.20%
Eastern Pennsylvania                            167,951        120,094        71.51%      62,515         52.06%
New Jersey                                      131,371        106,281        80.90%      52,507         49.40%
Ohio                                             47,459         37,823        79.70%      19,170         50.68%
                                             ===========   ============               ===========
      Total                                   3,252,830      2,304,325        70.84%   1,083,359         47.01%
                                             ===========   ============               ===========
</TABLE>

Financial Information

      The financial data regarding the revenues, results of operations and
identifiable assets for the Company's two business segments as of and for each
of the Company's last two fiscal years ended March 31, 1997 and 1998 and the
nine months ended December 31, 1998 are set forth in, and incorporated herein,
by reference to Item 6 of this Form 10-K.

Cable Television Operations

    Technologies and Capital Improvements

      The Company has made a substantial commitment to the technological
development of the Systems and is aggressively investing in the upgrade of the
technical capabilities of its cable plant in a cost efficient manner. The
Company continues to deploy fiber optic cable and to upgrade the technical
capabilities of its broadband networks. The result is significant increases in
network capacity, digital capability, two-way communication and network
reliability.

      The design of the current System upgrade, when completed, will deploy on
average one fiber optic node for every two system plant miles or approximately
one fiber node for every 180 homes passed compared to the industry norm of 500
to 1000 homes passed per fiber optic node. Approximately 75% of the System will
be upgraded to 750 Mhz. Approximately 25% of the plant will remain at 550 Mhz.
The upgraded system will be completely addressable and provide two-way
communication capability. The additional bandwidth will enable the Company to
offer additional video programming services. A portion of the bandwidth will be
allocated to the new service offerings such as two-way data, telephony and
video-on-demand. The Company believes this combination of bandwidth and the
relatively low number of homes passed per fiber node will provide adequate

<PAGE>

capacity and flexibility to offer existing and anticipated services into the
foreseeable future with limited additional capital expenditures.

      The upgraded System, on average, will include only two active pieces of
equipment between the headend and the home. Limiting the number of active pieces
of equipment combined with the small number of homes per fiber node reduces the
potential for mechanical failure and the number of customers affected by such a
failure, all of which provides increased reliability to the customers.

    Subscriber Services and Rates

      The Company's revenues are derived principally from monthly subscription
fees for various services. Rates to subscribers vary in accordance with the type
of service selected. Although service offerings vary across franchise areas
because of differences in plant capabilities, each of the areas typically offer
services at monthly prices ranging as follows:

<TABLE>
<CAPTION>



               Service                                 Rate Range


<S>                                                <C>
       Basic Cable Television                      $    7.00 - 18.00
       Cable Value Cable Television                $   10.00 - 27.00
       Premium Cable Television                    $    9.00 - 14.00
       Digital Cable Television                    $    9.95
       High Speed Internet Access                  $   34.95 - 49.95
       Dial-up Internet Access                     $   15.95
       Paging                                      $    6.95 - 29.95
       Long Distance                               $     .09 per minute, plus $4.95 per month service fee

</TABLE>


      In addition, the Company derives other telephony revenue with rates
determined on a usage basis.

      An installation fee, which the Company may wholly or partially waive
during a promotional period, is usually charged to new subscribers. Subscribers
are free to terminate services at any time without charge, but often are charged
a fee for reconnection or change of service.

      The Cable Communications Policy Act of 1984 (the "1984 Cable Act," as
amended by the Cable Television Consumer Protection and Competition Act of 1992
( the "1992 Cable Act"), deregulated basic service rates for systems in
communities meeting the Federal Communication Commissions ("FCC") definition of
effective competition. Pursuant to the FCC's definition of effective competition
adopted following enactment of the 1984 Cable Act, substantially all of the
Company's franchises were rate deregulated. However, in June 1991, the FCC
amended its effective competition standard, which increased the number of cable
systems which could be subject to local rate regulation. The 1992 Cable Act
contains a definition of effective competition under which nearly all cable
systems in the United States are subject to regulation of basic service rates.
Additionally, the legislation (i) eliminated the 5% annual basic rate increase
allowed by the 1984 Cable Act without local approval; (ii) allows the FCC to
adjudicate the reasonableness of rates for non-basic service tiers, other than
premium services, for cable systems not subject to effective competition in
response to complaints filed by franchising authorities and/or cable
subscribers; (iii) prohibits cable systems from requiring subscribers to
purchase service tiers above basic service in order to purchase premium services
if the system is technically capable of doing so; (iv) allows the FCC to impose
restrictions on the retiering and rearrangement of cable services under certain
circumstances; and (v) permits the FCC and franchising authorities more latitude
in controlling rates and rejecting rate increase requests. The
Telecommunications Act of 1996 (the "1996 Act") ended FCC regulation on nonbasic
tier rates on March 31, 1999. See "Legislation and Regulation."

      For a discussion of recent FCC rate regulation and related developments,
see "Legislation and Regulation" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Regulatory and Competitive
Matters."



<PAGE>



      Franchises

      The 1984 Cable Act provides that cable operators may not offer cable
service to a particular community without a franchise unless such operator was
lawfully providing service to the community on July 1, 1984 and the franchising
authority does not require a franchise. The Systems operate pursuant to
franchises or other authorizations issued by governmental authorities,
substantially all of which are nonexclusive. Such franchises or authorizations
awarded by a governmental authority generally are not transferable without the
consent of the authority. As of December 31, 1998, the Company held 662
franchises, Olympus held 157 franchises and the Managed Systems held 102
franchises. Most of these franchises can be terminated prior to their stated
expiration by the relevant governmental authority, after due process, for breach
of material provisions of the franchise.

      Under the terms of most of the Company's franchises, a franchise fee
(generally ranging up to 5% of the gross revenues of the cable system) is
payable to the governmental authority. For the past three years, franchise fee
expense incurred by the Company has averaged approximately 2.6% of gross system
revenues.

      The franchises issued by the governmental authorities are subject to
periodic renewal. In renewal hearings, the authorities generally consider, among
other things, whether the franchise holder has provided adequate service and
complied with the franchise terms. In connection with a renewal, the authority
may impose different and more stringent terms, the impact of which cannot be
predicted. To date, all of the Company's material franchises have been renewed
or extended, at or effective upon their stated expiration, generally on modified
terms. Such modified terms have not been materially adverse to the Company.

      The Company believes that all of its material franchises are in good
standing. From time to time, the Company notifies the franchising authorities of
the Company's intent to seek renewal of the franchise in accordance with the
procedures set forth in the 1984 Cable Act. The 1984 Cable Act process requires
that the governmental authority consider the franchise holder's renewal proposal
on its own merits in light of the franchise holder's past performance and the
community's needs and interests, without regard to the presence of competing
applications. See "Legislation and Regulation." The 1992 Cable Act alters the
administrative process by which operators utilize their 1984 Cable Act franchise
renewal rights. Such changes could make it easier in some instances for a
franchising authority to deny renewal of a franchise.

Hyperion

    Networks

    Network Construction

      Hyperion's networks are constructed to cost-effectively access areas of
significant end user telecommunications traffic, as well as the majority of the
LEC-COs, POPs and most of the IXCs. Historically, Hyperion has established with
its local partner or Adelphia general requirements for network design including
engineering specifications, fiber type and amount, construction timelines and
quality control. Hyperion's engineering personnel provide project management,
including contract negotiation and overall supervision of the construction,
testing and certification of all facilities. The construction period for a new
network varies depending upon the number of route miles to be installed, the
initial number of buildings targeted for connection to the network, the general
deployment of the network and other factors. Networks that Hyperion has
installed to date have generally become operational within six to ten months
after the beginning of construction.

    Network Operating Control Center ("NOCC")

      Hyperion's NOCC is located in Coudersport, Pennsylvania. The NOCC is
equipped with state-of-the-art system monitoring and control technology. The
NOCC is a single point interface for monitoring all of Hyperion's networks and
provisioning all services and systems necessary to operate the networks. The
NOCC supports all of Hyperion's networks including the management of 1,748
building connections, 20 switches or remote switching modules and 15,005 network
route miles, all as of December 31, 1998. The NOCC is designed to accommodate
Hyperion's anticipated growth.





<PAGE>



      The NOCC is utilized for a variety of network management and control
functions including monitoring, managing and diagnosing Hyperion's SONET
networks, central office equipment, customer circuits and signals and Hyperion's
switches and associated equipment. The NOCC is also the location where Hyperion
provisions, coordinates, tests and accepts all orders for switched and dedicated
circuit orders. In addition, the NOCC maintains the database for Hyperion's
circuits and network availability. Network personnel at the NOCC also develop
and distribute a variety of software utilized to manage and maintain the
networks.

    Connections to Customer Locations

      Office buildings are connected by network backbone extensions to one of a
number of physical rings of fiber optic cable, which originate and terminate at
the operating company's central office. Signals are sent simultaneously on both
primary and alternate protection paths through a network backbone to the
operating company's central office. Within each building, operating
company-owned internal wiring connects the operating company's fiber optic
terminal equipment to the customer premises. Customer equipment is connected to
operating company-provided electronic equipment generally located where customer
transmissions are digitized, combined and converted to an optical signal. The
traffic is then transmitted through the network backbone to the operating
company's central office where it can be reconfigured for routing to its
ultimate destination on the network.

Cable Television Operations

    Competition

      Although the Company and the cable television industry have historically
faced modest competition, the competitive landscape is changing and competition
will increase. The Company believes that the increase in competition within its
communities will occur gradually over a period of time.

      At the present time, cable television systems compete with other
communications and entertainment media, including off-air television broadcast
signals which a viewer is able to receive directly using the viewer's own
television set and antenna. The extent to which a cable system competes with
over-the-air broadcasting depends upon the quality and quantity of the broadcast
signals available by direct antenna reception compared to the quality and
quantity of such signals and alternative services offered by a cable system. In
many areas, television signals which constitute a substantial part of basic
service can be received by viewers who use their own antennas. Local television
reception for residents of apartment buildings or other multi-unit dwelling
complexes may be aided by use of private master antenna services. Cable systems
also face competition from alternative methods of distributing and receiving
television signals and from other sources of entertainment such as live sporting
events, movie theaters and home video products, including videotape recorders
and compact disc players. In recent years, the FCC has adopted policies
providing for authorization of new technologies and a more favorable operating
environment for certain existing technologies that provide, or may provide,
substantial additional competition for cable television systems. The extent to
which cable television service is competitive depends in significant part upon
the cable television system's ability to provide an even greater variety of
programming and other services than that available off-air or through
competitive alternative delivery sources. In addition, certain provisions of the
1992 Cable Act and the 1996 Act are expected to increase competition
significantly in the cable industry. See "Legislation and Regulation."

      The 1992 Cable Act prohibits the award of exclusive franchises, prohibits
franchising authorities from unreasonably refusing to award additional
franchises and permits them to operate cable systems themselves without
franchises.

      Individuals presently have the option to purchase earth stations, which
allow the direct reception of satellite-delivered program services formerly
available only to cable television subscribers. Most satellite-distributed
program signals are being electronically scrambled to permit reception only with
authorized decoding equipment, generally at a cost to the viewer. From time to
time, legislation has been introduced in Congress which, if enacted into law,
would prohibit the scrambling of certain satellite-distributed programs or would
make satellite services available to private earth stations on terms comparable
to those offered to cable systems. Broadcast television signals are being made
available to owners of earth stations under the Satellite Home View Copyright
Act of 1988, which became effective January 1, 1989 for a six-year period. This
Act establishes a statutory compulsory license for certain transmissions made by
satellite owners to home satellite dishes for which carriers are required to pay
a royalty fee to the Copyright Office. This Act has been extended by Congress
until December 31, 1999. The 1992 Cable Act enhances the right of cable
competitors to purchase nonbroadcast satellite-delivered programming. See
"Legislation and Regulation--Federal Regulation."

<PAGE>

      Video programming is now being delivered to individuals by high-powered
direct broadcast satellites ("DBS") utilizing video compression technology. This
technology has the capability of providing more than 100 channels of programming
over a single high-powered DBS satellite with significantly higher capacity
available if multiple satellites are placed in the same orbital position. Video
compression technology is being used by cable operators to similarly increase
their channel capacity. DBS service can be received virtually anywhere in the
United States through the installation of a small rooftop or side-mounted
antenna, and it is more accessible than cable television service where a cable
plant has not been constructed or where it is not cost effective to construct
cable television facilities. DBS service is being heavily marketed on a
nationwide basis by several service providers. One DBS service provider is
proposing to deliver at least some local television stations via satellite, thus
lessening the distinction between cable television and DBS service.

      Cable communications systems also compete with wireless program
distribution services such as multichannel, multipoint distribution service
("MMDS"), commonly called wireless cable systems, which use low-power microwave
frequencies to transmit video programming over-the-air to subscribers. There are
MMDS operators who are authorized to provide or are providing broadcast and
satellite programming to subscribers in areas served by the Company's Systems.
MMDS systems are less capital intensive, are not required to obtain local
franchises or to pay franchise fees and are subject to fewer regulatory
requirements than cable television systems. MMDS systems' ability to compete
with cable television systems has previously been limited by channel capacity,
the inability to obtain programming and regulatory delays. Recently, however,
MMDS systems have developed digital compression technology which provides for
more channel capacity and better signal delivery. Although relatively few MMDS
systems in the United States are currently in operation or under construction,
virtually all markets have been licensed or tentatively licensed. A series of
actions taken by the FCC, including reallocating certain frequencies to wireless
services, are intended to facilitate the development of wireless cable
television spectrum that will be used by wireless operators to provide
additional channels of programming over longer distances. Several Regional Bell
Operating Companies acquired interests in major MMDS companies. The Company is
unable to predict whether wireless video services will have a material impact on
its operations.

      Additional competition may come from private cable television systems
servicing condominiums, apartment complexes and certain other multiple unit
residential developments. The operators of these private systems, known as
satellite master antenna television ("SMATV") systems, often enter into
exclusive agreements with apartment building owners or homeowners' associations
which preclude franchised cable television operators from serving residents of
such private complexes. However, the 1984 Cable Act gives franchised cable
operators the right to use existing compatible easements within their franchise
areas upon nondiscriminatory terms and conditions. Accordingly, where there are
preexisting compatible easements, cable operators may not be unfairly denied
access or discriminated against with respect to the terms and conditions of
access to those easements. There have been conflicting judicial decisions
interpreting the scope of the access right granted by the 1984 Cable Act,
particularly with respect to easements located entirely on private property.
Further, while a franchised cable television system typically is obligated to
extend service to all areas of a community regardless of population density or
economic risk, a SMATV system may confine its operation to small areas that are
easy to serve and more likely to be profitable. Under the 1996 Act, SMATV
systems can interconnect non-commonly owned buildings without having to comply
with local, state and federal regulatory requirements that are imposed upon
cable systems providing similar services, as long as they do not use public
rights-of-way. The U.S. Copyright Office has concluded that SMATV systems are
"cable systems" for purposes of qualifying for the compulsory copyright license
established for cable systems by federal law.

      The FCC has authorized a new interactive television service which will
permit non-video transmission of information between an individual's home and
entertainment and information service providers. This service will provide an
alternative means for DBS systems and other video programming distributors,
including television stations, to initiate the new interactive television
services. This service may also be used by the cable television industry.

      The FCC also has initiated a new rulemaking proceeding looking toward the
allocation of frequencies in the 28 Ghz range for a new multi-channel wireless
video service which could make 98 video channels available in a single market.
It cannot be predicted at this time whether competitors will emerge utilizing
such frequencies or whether such competition would have a material impact on the
operations of cable television systems.

      The FCC has recently auctioned a sizable amount of spectrum in the 31 Ghz
band for use by a new wireless service, Local Multipoint Distribution Service
("LMDS"), which among other uses, can deliver over 100 channels of digital
programming directly to consumers' homes. The FCC auctioned this spectrum to the
public during 1998, with cable operators and local telephone companies
restricted in their participation in this auction. The extent to which the

<PAGE>

winning licenses in this service will use this spectrum in particular regions of
the country to deliver multichannel video programming to subscribers, and
therefore provide competition for franchised cable systems, is at this time
uncertain. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations".

      The 1996 Act eliminates the restriction against ownership and operation of
cable systems by local telephone companies within their local exchange service
areas. Telephone companies are now free to enter the retail video distribution
business through any means, such as DBS, MMDS, SMATV or as traditional
franchised cable system operators. Alternatively, the 1996 Act authorizes local
telephone companies to operate "open video systems" without obtaining a local
cable franchise, although telephone companies operating such systems can be
required to make payments to local governmental bodies in lieu of cable
franchise fees. Up to two-thirds of the channel capacity of an "open video
system" must be available to programmers unaffiliated with the local telephone
company. The open video system concept replaces the FCC's video dialtone rules.
The 1996 Act also includes numerous provisions designed to make it easier for
cable operators and others to compete directly with local exchange telephone
carriers. With certain limited exceptions, neither a local exchange carrier nor
a cable operator can acquire more than 10% of the other entity operating within
its own service area.

      Advances in communications technology, as well as changes in the
marketplace and the regulatory and legislative environment, are constantly
occurring. Thus, it is not possible to predict the effect that ongoing or future
developments might have on the cable industry. The ability of cable systems to
compete with present, emerging and future distribution media will depend to a
great extent on obtaining attractive programming. The availability and exclusive
use of a sufficient amount of quality programming may in turn be affected by
developments in regulation or copyright law. See "Legislation and Regulation."

      The cable television industry competes with radio, television and print
media for advertising revenues. As the cable television industry continues to
develop programming designed specifically for distribution by cable, advertising
revenues may increase. Premium programming provided by cable systems is subject
to the same competitive factors which exist for other programming discussed
above. The continued profitability of premium services may depend largely upon
the continued availability of attractive programming at competitive prices.

Hyperion

    Competition

      In each of the markets served by Hyperion's networks, the services offered
by Hyperion compete principally with the services offered by the incumbent LEC
serving that area. Incumbent LECs have long-standing relationships with their
customers, have the potential to subsidize competitive services from monopoly
service revenues, and benefit from favorable state and federal regulations. In
light of the passage of the 1996 Act, federal and state regulatory initiatives
will provide increased business opportunities to competitive local exchange
carriers ("CLECs") such as Hyperion, but regulators are likely to provide
incumbent LECs with increased pricing flexibility for their services as
competition increases. Further, if a Regional Bell Operating Company ("RBOC") is
authorized to provide in region long distance service in one or more states by
fulfilling the market operating provisions of the 1996 Act, the RBOC may be able
to offer "one stop shopping" that would be competitive with Hyperion's
offerings. To date, each request for such authority has been denied by the FCC.
An approval could result in decreased market share for the major IXCs, which are
among the operating companies' significant customers. Any of these results could
have an adverse effect on Hyperion.

      There has been significant merger activity among the RBOCs in anticipation
of entry into the long distance market, including the merger of Bell Atlantic
and NYNEX, whose combined territory covers a substantial portion of Hyperion's
markets. Other combinations have occurred in the industry, which may have an
effect on Hyperion, such as the combination of AT&T Corp. and Teleport
Communications Group Inc. ("TCG") and the pending combination of Bell Atlantic
and GTE. The effects of these combinations are unknown at this time. Hyperion
believes that such combinations will also affect Hyperion's strategy of
originating and terminating a significant proportion of its customers'
communications traffic over its own networks, rather than relying on the network
of the incumbent LEC.

      Hyperion also faces, and will continue to face, competition from other
current and potential market entrants, including other CLECs, incumbent LECs
which are not subject to RBOC restrictions on long distance, AT&T, MCI WorldCom,
Sprint and other IXCs, cable television companies, electric utilities, microwave
carriers, wireless telecommunications providers and private networks built by
large end users. The 1996 Act facilitates such entry by requiring incumbent LECs

<PAGE>

to allow new entrants to acquire local services at wholesale prices for resale,
and to purchase unbundled networks at cost-based rates. Substantially all of
Hyperion's markets are served by one or more CLECs other than Hyperion. In
addition, all of the major IXCs are expected to enter the market for local
telecommunications services. Both AT&T and MCI WorldCom have announced that they
have begun to offer local telephone services in some areas of the country, and
AT&T recently announced a new wireless technology for providing local telephone
service. Although Hyperion has good relationships with the IXCs, there are no
assurances that any of these IXCs will not build their own facilities, purchase
other carriers or their facilities, or resell the services of other carriers
rather than use Hyperion's services when entering the market for local exchange
services.

      Hyperion also competes with equipment vendors and installers, and
telecommunications management companies with respect to certain portions of its
business.

      Many of Hyperion's current and potential competitors, particularly
incumbent LECs, have financial, personnel and other resources substantially
greater than those of Hyperion, as well as other competitive advantages over
Hyperion.

Employees

      At April 24, 1999, there were 5,512 full-time employees of the Company,
Olympus, and the Managed Partnerships, of which 131 employees were covered by
collective bargaining agreements at five locations. The Company considers its
relations with its employees to be good.

Legislation and Regulation

      The Company's existing and anticipated businesses are regulated by the
FCC, some state governments and most local governments. In addition, various
legislative and regulatory proposals under consideration from time to time by
Congress and various federal agencies may materially affect the Company's
existing and anticipated businesses. The following is a summary of federal laws
and regulations affecting the growth and operation of the Company's existing and
anticipated businesses and a description of certain state and local laws.

Cable Television/Federal  Laws and Regulations

    Cable Communications Policy Act of 1984

      The 1984 Cable Act became effective on December 29, 1984. This federal
statute, which amended the Communications Act of 1934 (the "Communications
Act"), created uniform national standards and guidelines for the regulation of
cable television systems. Violations by a cable television system operator of
provisions of the Communications Act, as well as of FCC regulations, can subject
the operator to substantial monetary penalties and other sanctions. Among other
things, the 1984 Cable Act affirmed the right of franchising authorities (state
or local, depending on the practice in individual states) to award one or more
franchises within their jurisdictions. It also prohibited non-grandfathered
cable television systems from operating without a franchise in such
jurisdictions. In connection with new franchises, the 1984 Cable Act provides
that in granting or renewing franchises, franchising authorities may establish
requirements for cable-related facilities and equipment, but may not establish
or enforce requirements for video programming or information services other than
in broad categories.

    Cable Television Consumer Protection and Competition Act of 1992

      On October 5, 1992, Congress enacted the 1992 Cable Act. This legislation
effected significant changes to the legislative and regulatory environment in
which the cable industry operates. It amended the 1984 Cable Act in many
respects. The 1992 Cable Act became effective on December 4, 1992, although
certain provisions, most notably those dealing with rate regulation and
retransmission consent, became effective at later dates. The legislation also
required the FCC to initiate a number of rulemaking proceedings to implement
various provisions of the statute. The 1992 Cable Act allows for a greater
degree of regulation on the cable industry with respect to, among other things:
(i) cable system rates for both basic and certain nonbasic services, (ii)
programming access and exclusivity arrangements, (iii) access to cable channels
by unaffiliated programming services, (iv) leased access terms and conditions,
(v) horizontal and vertical ownership of cable systems, (vi) customer service
requirements, (vii) franchise renewals, (viii) television broadcast signal
carriage and retransmission consent, (ix) technical standards, (x) subscriber

<PAGE>

privacy, (xi) consumer protection issues, (xii) cable equipment compatibility,
(xiii) obscene or indecent programming and (xiv) requiring subscribers to
subscribe to tiers of service other than basic service as a condition of
purchasing premium services. Additionally, the legislation encourages
competition with existing cable systems by allowing municipalities to own and
operate their own cable systems without having to obtain a franchise, preventing
franchising authorities from granting exclusive franchises or unreasonably
refusing to award additional franchises covering an existing cable system's
service area and prohibiting the common ownership of cable systems and
co-located MMDS or SMATV systems. The 1992 Cable Act also precludes video
programmers affiliated with cable television companies from favoring cable
operators over competitors and requires such programmers to sell their
programming to other multichannel video distributors. This provision may limit
the ability of cable programming suppliers to offer exclusive programming
arrangements to cable television companies. A number of provisions in the 1992
Cable Act relating to, among other things, rate regulation, have had a negative
impact on the cable industry and the Company's business.

    Telecommunications Act of 1996

      The 1996 Act significantly revised the federal regulatory structure. As it
pertains to cable television, the 1996 Act, among other things, (i) eliminates
the regulation of certain nonbasic programming services in 1999, (ii) expands
the definition of effective competition, the existence of which displaces rate
regulation, (iii) eliminates the restriction against the ownership and operation
of cable systems by telephone companies within their local exchange service
areas and (iv) liberalizes certain of the FCC's cross-ownership restrictions.
The FCC has been conducting a number of rulemaking proceedings in order to
implement many of the provisions of the 1996 Act.

FCC Regulation

      The FCC, the principal federal regulatory agency with jurisdiction over
cable television, has promulgated regulations covering such areas as the
registration of cable systems, cross-ownership between cable systems and other
communications businesses, carriage of television broadcast programming,
consumer education and lockbox enforcement, origination cablecasting and
sponsorship identification, children's programming, the regulation of basic
cable service rates in areas where cable systems are not subject to effective
competition, signal leakage and frequency use, technical performance,
maintenance of various records, equal employment opportunity, and antenna
structure notification, marking and lighting. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of other
administrative sanctions, such as the revocation of FCC licenses needed to
operate certain transmission facilities often used in connection with cable
operations. Furthermore, the 1992 Cable Act required the FCC to adopt
regulations covering, among other things, cable rates, signal carriage, consumer
protection and customer service, leased access, indecent programming, programmer
access to cable television systems, programming agreements, technical standards,
consumer electronics equipment compatibility, ownership of home wiring, program
exclusivity, equal employment opportunity, and various aspects of direct
broadcast satellite system ownership and operation. The 1996 Act requires
certain changes to various provisions of these regulations. A brief summary of
the most material federal regulations as adopted to date follows.

    Rate Regulation

      The 1984 Cable Act codified existing FCC preemption of rate regulation for
premium channels and optional nonbasic program tiers. The 1984 Cable Act also
deregulated basic cable rates for cable television systems determined by the FCC
to be subject to effective competition. The 1992 Cable Act substantially changed
the statutory and FCC rate regulation standards. The 1992 Cable Act replaced the
FCC's old standard for determining effective competition, under which most cable
systems were not subject to local rate regulation, with a statutory provision
that has resulted in nearly all cable television systems becoming subject to
local rate regulation of basic service. Additionally, the 1992 Cable Act
eliminated the 5% annual rate increase for basic service previously allowed by
the 1984 Cable Act without local approval; required the FCC to adopt a formula,
for franchising authorities to enforce, to assure that basic cable rates are
reasonable; allows the FCC to review rates for nonbasic service tiers (other
than per-channel or per-program services) in response to complaints filed by
franchising authorities; prohibits cable television systems from requiring
customers to purchase service tiers above basic service in order to purchase
premium services if the system is technically capable of doing so; required the
FCC to adopt regulations to establish, on the basis of actual costs, the price
for installation of cable service, remote controls, converter boxes and
additional outlets; and allows the FCC to impose restrictions on the retiering
and rearrangement of cable services under certain limited circumstances. The
1996 Act expands the definition of effective competition to cover situations

<PAGE>

where a local telephone company or its affiliate, or any multichannel video
provider using telephone company facilities, offers comparable video service by
any means except DBS. Satisfaction of this test deregulates both basic and
nonbasic tiers. The 1996 Act ended FCC regulation of nonbasic tier rates on
March 31, 1999.

      The FCC's regulations set standards for the regulation of basic and
nonbasic cable service rates (other than per-channel or per-program services).
The FCC's original rules became effective on September 1, 1993. The rules have
been amended several times. The rate regulations adopt a benchmark price cap
system for measuring the reasonableness of existing basic and nonbasic service
rates, and a formula for future rate increases based on inflation and increases
in certain costs. Alternatively, cable operators have the opportunity to make
cost-of-service showings which, in some cases, may justify rates above the
applicable benchmarks. The rules also require that charges for cable-related
equipment (e.g., converter boxes and remote control devices) and installation
services be unbundled from the provision of cable service and based upon actual
costs plus a reasonable profit. Local franchising authorities and/or the FCC are
empowered to order a reduction of existing rates which exceed the benchmark
level for either basic and/or nonbasic cable services and associated equipment,
and refunds could be required. The retroactive refund period for basic cable
service rates is limited to one year. A significant number of franchising
authorities have become certified by the FCC to regulate the rates charged by
the Company for basic cable service and for associated equipment. The Company's
ability to implement rate increases consistent with its past practices will
likely be limited by the regulations that the FCC has adopted.

    Carriage of Broadcast Television Signals

      The 1992 Cable Act contains new mandatory carriage requirements. These new
rules allow commercial television broadcast stations which are "local" to a
cable system (i.e., the system is located in the station's area of dominant
influence), to elect every three years whether to require the cable system to
carry the station, subject to certain exceptions, or whether the cable system
will have to negotiate for "retransmission consent" to carry the station. Local,
noncommercial television stations are also given mandatory carriage rights,
subject to certain exceptions, within the larger of (i) a 50 mile radius from
the station's city of license or (ii) the station's Grade B contour (a measure
of signal strength). Unlike commercial stations, noncommercial stations are not
given the option to negotiate retransmission consent for the carriage of their
signal. In addition, cable systems will have to obtain retransmission consent
for the carriage of all "distant" commercial broadcast stations, except for
certain "superstations," (i.e., commercial satellite-delivered independent
stations such as WTBS). The 1992 Cable Act also eliminated, effective December
4, 1992, the FCC's regulations requiring the provision of input selector
switches. The statutory must-carry provisions for noncommercial stations became
effective on December 4, 1992. Must-carry rules for both commercial and
noncommercial stations and retransmission consent rules for commercial stations
were adopted by the FCC on March 11, 1993. The must-carry requirement for
commercial stations went into effect on June 2, 1993, and any stations for which
retransmission consent had not been obtained (other than must-carry stations,
non-commercial stations and superstations) had to be dropped as of October 6,
1993. The most recent election between must-carry and retransmission consent for
local commercial television broadcast stations was on October 1, 1996. A number
of stations previously carried by the Company's cable television systems elected
retransmission consent. The Company was able to reach agreements with
broadcasters who elected retransmission consent and has therefore not been
required to pay cash compensation to broadcasters for retransmission consent or
been required by broadcasters to remove broadcast stations from the cable
television channel line-ups. The Company has, however, agreed to carry some
services (e.g., ESPN2 and a new service by FOX) in specified markets pursuant to
retransmission consent arrangements which it believes are comparable to those
entered into by most other large cable operators.

    Channel Set-Asides

      The 1984 Cable Act permits local franchising authorities to require cable
operators to set aside certain channels for public, educational and governmental
access programming. The Company believes that none of the Systems' franchises
contain unusually onerous access requirements. The 1984 Cable Act further
requires cable systems with 36 or more activated channels to designate a portion
of their channel capacity for commercial leased access by unaffiliated third
parties. While the 1984 Cable Act presently allows cable operators substantial
latitude in setting leased access rates, the 1992 Cable Act requires leased
access rates to be set according to a formula determined by the FCC. The FCC has
revised the existing rate formula in a way which will significantly lower the
rates cable operators have been able to charge. It is possible that such leased
access will result in competition to services offered by the Company on the
other channels of its cable systems.

<PAGE>

    Competing Franchises

      Questions concerning the ability of municipalities to award a single cable
television franchise and to impose certain franchise restrictions upon cable
television companies have been considered in several recent federal appellate
and district court decisions. These decisions have been somewhat inconsistent
and, until the U.S. Supreme Court rules definitively on the scope of cable
television's First Amendment protections, the legality of the franchising
process and of various specific franchise requirements is likely to be in a
state of flux. It is not possible at the present time to predict the
constitutionally permissible bounds of cable franchising and particular
franchise requirements. However, the 1992 Cable Act, among other things,
prohibits franchising authorities from unreasonably refusing to grant franchises
to competing cable systems and permits franchising authorities to operate their
own cable systems without franchises.

    Cross-Ownership

      The 1996 Act repealed the 1984 Cable Act's prohibition on LECs providing
video programming directly to customers within their local exchange telephone
service areas, except in rural areas or by specific waiver of FCC rules. The
1996 Act also authorized LECs to operate "open video systems" without obtaining
a local cable franchise, although LECs operating such systems can be required to
make payments to local governmental bodies in lieu of cable franchise fees.
Where demand exceeds channel capacity, up to two-thirds of the channels on an
"open video system" must be available to programmers unaffiliated with the LEC.

      The 1996 Act eliminated the FCC rule prohibiting common ownership between
a cable system and a national broadcast television network. The 1996 Act also
eliminated the statutory ban covering certain common ownership interests,
operation or control between a television station and cable system within the
station's Grade B signal coverage area. However, the parallel FCC rules against
cable/television station cross-ownership remains in place, subject to review by
the FCC within two years. Finally, the 1992 Cable Act prohibits common
ownership, control or interest in cable television systems and MMDS facilities
or SMATV systems having overlapping service areas, except in limited
circumstances. The 1996 Act exempts cable systems facing "effective competition"
from the MMDS and SMATV cross-ownership restrictions.

      Pursuant to the 1992 Cable Act, the FCC has imposed limits on the number
of cable systems which a single cable operator can own. In general, no cable
operator can have an attributable interest in cable systems which pass more than
30% of all homes nationwide. Attributable interests for these purposes include
voting interests of 5% or more (unless there is another single holder of more
than 50% of the voting stock), officerships, directorships and general
partnership interests. The FCC has stayed the effectiveness of these rules
pending the outcome of the appeal from the U.S. District Court decision holding
the multiple ownership limit provision of the 1992 Cable Act unconstitutional.

      The FCC has also adopted rules which limit the number of channels on a
cable system which can be occupied by programming in which the cable system's
owner has an attributable interest. The limit is 40% of all activated channels.

    Franchise Transfers

      The 1992 Cable Act requires franchising authorities to act on any
franchise transfer request submitted after December 4, 1992 within 120 days
after receipt of all information required by FCC regulations and by the
franchising authority. Approval is deemed to be granted if the franchising
authority fails to act within such period.

    Technical Requirements

      Historically, the FCC has imposed technical standards applicable to the
cable channels on which broadcast stations are carried, and has prohibited
franchising authorities from adopting standards which were in conflict with or
more restrictive than those established by the FCC. The FCC has recently revised
such standards and made them applicable to all classes of channels which carry
downstream NTSC video programming. Local franchising authorities are permitted
to enforce the FCC's new technical standards. The FCC also has adopted
additional standards applicable to cable television systems using frequencies in
the 108-137 MHz and 225-400 MHz bands in order to prevent harmful interference
with aeronautical navigation and safety radio services, and has also established
limits on cable system signal leakage. Periodic testing by cable operators for
compliance with these technical standards and signal leakage limits is required.
The Company believes that the Systems are in compliance with these standards in
all material respects. The 1992 Cable Act requires the FCC to update
periodically its technical standards to take into account changes in technology.
The FCC has adopted regulations to implement the requirements of the 1992 Cable

<PAGE>

Act designed to improve the compatibility of cable systems and consumer
electronics equipment.

    Pole Attachments

      The FCC currently regulates the rates and conditions imposed by certain
public utilities for use of their poles, unless under the Federal Pole
Attachments Act, state public service commissions are able to demonstrate that
they regulate rates, terms and conditions of the cable television pole
attachments. A number of states (including Massachusetts, Michigan, New Jersey,
New York, Ohio and Vermont) and the District of Columbia have certified to the
FCC that they regulate the rates, terms and conditions for pole attachments. In
the absence of state regulation, the FCC administers such pole attachment rates
through use of a formula which it has devised and from time to time revises. The
1996 Act directs the FCC to adopt a new rate formula for any attaching party,
including cable systems, which offers telecommunications services. This new
formula will result in significantly higher attachment rates for cable systems
which choose to offer such services.

    Other Matters

      FCC regulation also includes matters regarding a cable system's carriage
of local sports programming; restrictions on origination and cablecasting by
cable system operators; application of the rules governing political broadcasts;
customer service; home wiring; and limitations on advertising contained in
nonbroadcast children's programming.

    Copyright

      Cable television systems are subject to federal copyright licensing
covering carriage of broadcast signals. In exchange for making semi-annual
payments to a federal copyright royalty pool and meeting certain other
obligations, cable operators obtain a statutory license to retransmit broadcast
signals. The amount of this royalty payment varies, depending on the amount of
system revenues from certain sources, the number of distant signals carried, and
the location of the cable system with respect to over-the-air television
stations.

      Various bills have been introduced into Congress over the past several
years that would eliminate or modify the cable television compulsory license. At
the request of Congress, the Copyright Office has commenced an inquiry into
possible revisions of the compulsory license. Without the compulsory license,
cable operators might need to negotiate rights from the copyright owners for
each program carried on each broadcast station in the channel lineup. Such
negotiated agreements could increase the cost to cable operators of carrying
broadcast signals. The 1992 Cable Act's retransmission consent provisions
expressly provide that retransmission consent agreements between television
broadcast stations and cable operators do not obviate the need for cable
operators to obtain a copyright license for the programming carried on each
broadcaster's signal.

      Copyrighted music performed in programming supplied to cable television
systems by pay cable networks (such as HBO) and basic cable networks (such as
USA Network) has generally been licensed by the networks through private
agreements with the American Society of Composers and Publishers ("ASCAP") and
BMI, Inc. ("BMI"), the two major performing rights organizations in the United
States. As a result of extensive litigation, ASCAP and BMI are both now required
to offer "through to the viewer" licenses to the cable networks which would
cover the retransmission of the cable networks' programming by cable systems to
their subscribers.

      Copyrighted music performed by cable systems themselves on local
origination channels, Public Education Grant ("PEG") channels, and in locally
inserted advertising and cross promotional announcements must also be licensed.
A blanket license is available from BMI. Cable industry negotiations with ASCAP
are still in progress.

Cable Television/State and Local Regulation

      Because a cable television system uses local streets and rights-of-way,
cable television systems are subject to state and local regulation, typically
imposed through the franchising process. State and/or local officials are
usually involved in franchise selection, system design and construction, safety,
service rates, consumer relations, billing practices and community related
programming and services.

      Cable television systems generally are operated pursuant to nonexclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. Franchises generally are granted for fixed terms and in

<PAGE>

many cases are terminable if the franchise operator fails to comply with
material provisions. The 1984 Cable Act established renewal procedures and
criteria designed to protect incumbent franchises against arbitrary denials of
renewal. While these formal procedures are not mandatory unless timely invoked
by either the cable operator or the franchising authority, they can provide
substantial protection to incumbent franchisees. Even after the formal renewal
procedures are invoked, franchising authorities and cable operators remain free
to negotiate a renewal outside the formal process. Nevertheless, renewal is by
no means assured, as the franchisee must meet certain statutory standards. Even
if a franchise is renewed, a franchising authority may impose new and more
onerous requirements such as upgrading facilities and equipment, although the
municipality must take into account the cost of meeting such requirements. The
1992 Cable Act makes several changes to the process under which a cable operator
seeks to enforce its renewal rights which could make it easier in some cases for
a franchising authority to deny renewal.

      Franchises usually call for the payment of fees, often based on a
percentage of the system's gross subscriber revenues, to the granting authority.
Although franchising authorities may impose franchise fees under the 1984 Cable
Act, such payments cannot exceed 5% of a cable system's annual gross revenues.
In those communities in which franchise fees are required, the Company currently
pays franchise fees ranging up to 5% of gross revenues. Franchising authorities
are also empowered in awarding new franchises or renewing existing franchises to
require cable operators to provide cable-related facilities and equipment and to
enforce compliance with voluntary commitments. In the case of franchises in
effect prior to the effective date of the 1984 Cable Act, franchising
authorities may enforce requirements contained in the franchise relating to
facilities, equipment and services, whether or not cable-related. The 1984 Cable
Act, under certain limited circumstances, permits a cable operator to obtain
modifications of franchise obligations.

      Upon receipt of a franchise, the cable system owner usually is subject to
a broad range of obligations to the issuing authority directly affecting the
business of the system. The terms and conditions of franchises vary materially
from jurisdiction to jurisdiction, and even from city to city within the same
state, historically ranging from reasonable to highly restrictive or burdensome.
The 1984 Cable Act places certain limitations on a franchising authority's
ability to control the operation of a cable system operator and the courts have
from time to time reviewed the constitutionality of several general franchise
requirements, including franchise fees and access channel requirements, often
with inconsistent results. On the other hand, the 1992 Cable Act prohibits
exclusive franchises, and allows franchising authorities to exercise greater
control over the operation of franchised cable systems, especially in the area
of customer service and rate regulation. The 1992 Cable Act also allows
franchising authorities to operate their own multichannel video distribution
system without having to obtain a franchise and permits states or local
franchising authorities to adopt certain restrictions on the ownership of cable
systems. Moreover, franchising authorities are immunized from monetary damage
awards arising from regulation of cable systems or decisions made on franchise
grants, renewals, transfers and amendments.

      The specific terms and conditions of a franchise and the laws and
regulations under which it was granted directly affect the profitability of the
cable television system. Cable franchises generally contain provisions governing
charges for basic cable television services, fees to be paid to the franchising
authority, length of the franchise term, renewal, sale or transfer of the
franchise, territory of the franchise, design and technical performance of the
system, use and occupancy of public streets and number and types of cable
services provided. The 1996 Act prohibits a franchising authority from either
requiring or limiting a cable operator's provision of telecommunications
services.

      Various proposals have been introduced at the state and local levels with
regard to the regulation of cable television systems, and a number of states
have adopted legislation subjecting cable television systems to the jurisdiction
of centralized state governmental agencies, even to the exclusion of local
community regulation. Some of these states regulate jointly and impose
regulation of a character similar to that of a public utility. Attempts in other
states to regulate cable television systems are continuing and can be expected
to increase. Such proposals and legislation may be preempted by federal statute
and/or FCC regulation. To date, the states in which the Company operates that
have enacted such state level regulation are New York, New Jersey, Massachusetts
and Vermont. The Company cannot predict whether other states in which it
currently operates, or in which it may acquire systems, will engage in such
regulation in the future.

      The foregoing does not purport to describe all present and proposed
federal, state and local regulations and legislation relating to the cable
television industry. Other existing federal regulations, copyright licensing
and, in many jurisdictions, state and local franchise requirements currently are
the subject of a variety of judicial proceedings, legislative hearings and
administrative and legislative proposals which could change, in varying degrees,
the manner in which cable television systems operate. Neither the outcome of
these proceedings nor their impact upon the cable television industry or the
Company can be predicted at this time.

<PAGE>

Telephony and Telecommunications/Federal  Laws and Regulations

      The 1996 Act also alters federal, state and local laws and regulations
regarding telecommunications providers and services, including the Company, and
creates a favorable environment in which the Company may provide telephone and
other telecommunications services and facilities. The following is a summary of
the key provisions of the 1996 Act that could materially affect the
telecommunications business of the Company.

      The 1996 Act was intended to promote the provision of competitive
telephone services and facilities by cable television companies and others. The
1996 Act declares that no state or local laws or regulations may prohibit or
have the effect of prohibiting the ability of any entity to provide any
interstate or intrastate telecommunications service. States are authorized to
impose "competitively neutral" requirements regarding universal service, public
safety and welfare, service quality, and consumer protection. The 1996 Act
further provides that cable operators and affiliates providing
telecommunications services are not required to obtain a separate franchise from
local franchising authorities ("LFAs") for such services. An LFA may not order a
cable operator or affiliate to discontinue providing telecommunications services
or discontinue operating its cable system on the basis that it has failed to
obtain a separate franchise or renewal for the provision of telecommunications
services. The 1996 Act prohibits LFAs from requiring cable operators to provide
telecommunications service or facilities as a condition of the grant of a
franchise, franchise renewal, or franchise transfer, except that LFAs may seek
"institutional networks" as part of such franchise negotiations.

      The 1996 Act provides that, when cable operators provide
telecommunications services, LFAs may require reasonable, competitively neutral
compensation for management of the public rights-of-way. The LFA must publicly
disclose such compensation requirements.

      The Company believes that it qualifies as a connecting carrier under
federal law and therefore does not need FCC certification to provide intrastate
service. In the event that it is determined that the Company must seek FCC
certification, the Company believes that such certification will be granted by
the FCC in a timely manner. The Company may be required to file certain tariffs
and reports with the FCC.

      Interconnection  and Other Telecommunications  Carrier Obligations

      To facilitate the entry of new telecommunications providers (including
cable operators), the 1996 Act imposes interconnection obligations on all
telecommunications carriers. All carriers must interconnect their networks with
other carriers and must not deploy network features and functions that interfere
with interoperability. LECs also have a set of separate identified obligations
beyond those that apply to new entrants: (i) good faith negotiation with those
seeking interconnection, (ii) unbundling, equal access and non-discrimination
requirements, (iii) resale of services, including "resale at wholesale rates,"
(iv) notice of changes in the network that would affect interconnection and
interoperability and (v) physical collocation unless shown that practical
technical reasons, or space limitations, make physical collocation impractical.

      Under the 1996 Act, individual interconnection rates must be just and
reasonable, based on cost, and may include a reasonable profit. Traffic
termination charges shall be "mutual and reciprocal." The 1996 Act permits
carriers to agree on a "bill and keep" system, but does not require such a
system.

      The 1996 Act contemplates that interconnection agreements will be
negotiated by the parties and submitted to a state public service commission
("SPSC") for approval. A SPSC may become involved, at the request of either
party, if negotiations fail. If the state regulator refuses to act, the FCC may
determine the matter. If the SPSC acts, an aggrieved party's remedy is to file a
case in federal district court. The 1996 Act provides for a rural exemption to
interconnection requests, but also provides that the exception does not apply
where a cable operator makes an interconnection request of a rural LEC within
the operator's franchise area.

      The 1996 Act requires that all telecommunications providers (including
cable operators that provide telecommunications services) contribute equitably
to a Universal Service Fund ("USF"), and the FCC may exempt an interstate
carrier or class of carriers if its contribution would be minimal under the USF
formula. The 1996 Act allows states to determine which intrastate
telecommunications providers contribute to the USF. The 1996 Act prohibits
geographic end user rate de-averaging to protect rural subscribers' rates.

<PAGE>

    FCC Interconnection  Order

      On August 8, 1996 the FCC released its First Report and Order, Second
Report and Order and memorandum Opinion and Order promulgating rules and
regulations to implement Congress' statutory directive concerning the
interconnection obligations of all telecommuications carriers, including
obligations of CLECs and LECs, and incumbent LEC pricing of interconnection and
unbundled elements (the "Local Competition Orders"). The Local Competition
Orders adopted a national framework for interconnection but left to the
individual states the task of implementing the FCC's rules. The Local
Competition Orders also established rules implementing the 1996 Act requirements
that LECs negotiate interconnection agreements, and provide guidelines for
review of such agreements by State PUCs.

      In July 1997, the United States Court of Appeals for the Eighth Circuit
vacated in part the FCC's local competition rules. That court concluded that the
FCC did not have the authority to establish rules to govern the pricing of
interconnection, network elements, and resale services provided by incumbent
local exchange carriers. In addition, it found certain other FCC rules to be
unlawful. On January 25, 1999, the Supreme Court issued an opinion in which it
reversed portions of the court of appeals decision. The Supreme Court held that
the FCC has authority under the Communications Act to establish rules, including
pricing rules, to implement the local competition provisions of the 1996 Act,
even with respect to intrastate services. The Supreme Court did not address the
merits of the FCC's 1996 pricing rules. In addition, the Supreme Court affirmed
several of the other rules which had been promulgated by the FCC, but which had
been found unlawful by the court of appeals. These included a rule allowing
requesting carriers to select provisions from among different interconnection
agreements approved by state commissions (the so-called "pick-and-choose" rule)
and a rule allowing requesting carriers to obtain from incumbent local exchange
carriers assembled combinations of unbundled network elements (sometimes called
unbundled network element platforms). The Supreme Court vacated a FCC rule
identifying specific network elements which incumbent local exchange carriers
must make available to requesting carriers on the basis that the FCC had failed
to consider (i) whether such network elements were necessary, and (ii) whether
the failure to make network elements available would impair the ability of
requesting carriers to provide the services they seek to offer. The FCC has
indicated that it will conduct further proceedings to comply with the Supreme
Court's opinion regarding the availability of network elements. Whether
incumbent local exchange carriers will be required to make available combined
platforms of network elements will depend on how the FCC implements the
"necessary" and "impair" standards governing network element availability in
light of the Supreme Court opinion.

Internet Services/Federal Laws and Regulations

      Transmitting indecent material via the Internet was made criminal by the
1996 Act. However, on-line access providers are exempted from criminal liability
for simply providing interconnection service; they are also granted an
affirmative defense from criminal or other action where in "good faith" they
restrict access to indecent materials. These provisions have been challenged in
federal court. The 1996 Act further exempts on-line access providers from civil
liability for actions taken in good faith to restrict access to obscene,
excessively violent or otherwise objectionable material.

Telephony and Telecommunications/State  Law and Regulation

      Adelphia's nonconsolidated joint venture, Olympus Communications, L.P.,
has systems in Florida. In 1995, the Florida Legislature amended Chapter 362 of
Florida Statutes by enacting "An Act Relating to Local Exchange
Telecommunications Companies" ("Florida Act") (Chapter 362, Fl. Stat. (1995)).
This new law substantially altered Florida law regarding telecommunications
providers and services, such as Olympus. The following is a summary of the key
provisions of the Florida Act and associated Florida Public Service Commission
("PSC") actions that could materially affect Olympus' telecommunications
business.

    The Florida Act

      The Florida Act vests in the PSC virtually exclusive jurisdiction over
intrastate telecommunications matters. The Florida Act limits municipalities to
taxation of certain telecommunications services or management of long distance
carriers' occupation of local rights-of-way. The Florida Act further directs the
PSC to employ flexible regulatory treatment to ensure the widest possible range
of telecommunications services, and provides that new entrants such as the
Company are subject to a lesser level of regulatory oversight than LECs.


<PAGE>

    PSC Actions

      Pursuant to the Florida Act (and the 1996 Act and the FCC's First Report
and Order), the PSC is conducting several proceedings to address competitive
issues. To summarize, pursuant to the Florida Act, the PSC has adopted rules
requiring certification of CLEC Interexchange Telecommunications Service
Providers; Operator Service Providers; Alternative Access Vendor Services; and
Shared Tenant Services Providers. The Florida Act provides that the PSC shall
grant certification to applicants upon a showing of sufficient technical,
financial, and managerial capability to provide service in the geographic area
proposed to be served. The Company believes that Olympus meets the statutory
requirements for PSC certification for any type of intrastate telecommunications
service provider, and that any such application process should be completed
expeditiously. In addition, like the 1996 Act, the Florida Act requires LECs to
interconnect with certified CLECs. Approximately fourteen interconnection
agreements have been reached between LECs and CLECs to date, while approximately
five CLECs have requested PSC arbitration of stalled agreements. The PSC is
obligated under the Florida Act to arbitrate any disputes in no more than 120
days from date of request. As well, the PSC has ordered BellSouth, the state's
largest LEC, to unbundle eight network elements for resale by CLECs, and the PSC
has ordered favorable interim rates for these elements. The PSC has not yet
adopted an order resolving wholesale discounts associated with local service
resale.

      Based on the foregoing, the Company believes that the Florida Act and
actions of the PSC to date reflect a generally favorable legal and regulatory
environment for new entrants, such as Olympus, to intrastate telecommunications
in Florida.

ITEM 2.   PROPERTIES

      The Company's principal physical assets consist of cable television
operating plant and equipment, including signal receiving, encoding and decoding
devices, headends and distribution systems and subscriber house drop equipment
for each of its cable television systems. The signal receiving apparatus
typically includes a tower, antenna, ancillary electronic equipment and earth
stations for reception of satellite signals. Headends, consisting of associated
electronic equipment necessary for the reception, amplification and modulation
of signals, are located near the receiving devices. The Company's distribution
system consists primarily of coaxial and fiber optic cables and related
electronic equipment. Subscriber devices consist of decoding converters. The
physical components of cable television systems require maintenance and periodic
upgrading to keep pace with technological advances.

      The  Company's  cables and related  equipment are generally  attached to
utility poles under pole rental agreements with local public utilities, although
in some areas the distribution cable is buried in underground ducts or trenches.
See "Legislation and Regulation-Federal Regulation."

      The Company owns or leases parcels of real property for signal reception
sites (antenna towers and headends), microwave facilities and business offices
in each of its market areas, and owns most of its service vehicles. The Company
also leases certain cable, operating and support equipment from a corporation
owned by members of the Rigas Family. All leasing transactions between the
Company and its officers, directors or principal stockholders, or any of their
affiliates, are, in the opinion of management, on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.

      Substantially all of the assets of Adelphia's subsidiaries are subject to
encumbrances as collateral in connection with the Company's credit arrangements,
either directly with a security interest or indirectly through a pledge of the
stock in the respective subsidiaries. See Note 3 to the Adelphia Consolidated
Financial Statements. The Company believes that its properties, both owned and
leased, are in good operating condition and are suitable and adequate for the
Company's business operations.

      Hyperion's fiber optic cable, fiber optic telecommunications equipment and
other properties and equipment used in its networks, are owned or leased. Fiber
optic cable plant used in providing service is primarily on or under public
roads, highways or streets, with the remainder being on or under private
property. As of December 31, 1998, Hyperion's total telecommunications equipment
in service consists of fiber optic telecommunications equipment, switching
equipment, fiber optic cable, furniture and fixtures, leasehold improvements and
construction in progress.



<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

      On February 24, 1999, Hyperion was served with a summons and complaint
filed in the United States District Court for the Northern District of New York,
Case Number 99-CV-268, by Hyperion Solutions Corporation ("Solutions"), which is
described in the complaint as a company in the business of developing, marketing
and supporting comprehensive computer software tools, executive information
systems and applications that companies use to improve their business
performance. The complaint alleges, among other matters, that Hyperion's use of
the name "Hyperion" in its business infringes upon various trademarks and
service marks of Solutions in violation of federal trademark laws and violates
various New York business practices, advertising and business reputation laws.
The complaint seeks, among other matters, to enjoin Hyperion from using the name
or mark "Hyperion" in Hyperion's business as well as to recover unspecified
damages, treble damages and attorney's fees. Management of Hyperion believes
that Hyperion has meritorious defenses to the complaint and intends to
vigorously defend this lawsuit. Although management believes that this lawsuit
will not in any event have a material adverse effect upon the Company, no
assurance can be given regarding the effect upon the Company if Solutions were
to prevail in this lawsuit.

      On or about March 10, 1999, Robert Lowinger (the "Plaintiff"), on behalf
of himself and all other shareholders of Class A common stock of Century,
commenced an action by filing a putative Class Action Complaint (the
"Complaint") in the Superior Court of Connecticut, Judicial District of
Stamford/Norwalk, Case Number CV-99-0171092, against Century, all of its
directors, and Adelphia. The Plaintiff claims that he owns shares of Class A
common stock of Century, and alleges that in connection with the proposed merger
of Adelphia with Century, holders of Class B common stock of Century - which
have superior voting rights to the holders of Class A common stock - will
receive $4.00 per share more than the consideration to be paid to the holders of
Class A common stock. This would allegedly result in the Class B shareholders
receiving approximately $170,000 more than if they held the equivalent number of
Century Class A shares. The Plaintiff claims that the individual defendants,
comprising the directors of Century and the majority shareholders of Century's
Class B shares, breached their fiduciary duties of loyalty, good faith, and due
care to Century's Class A shareholders by agreeing to these two levels of
consideration. The sole claim against Adelphia is that it, together with
Century, aided and abetted these alleged breaches of fiduciary duty. The
Plaintiff seeks certification of a class of Century's Class A shareholders and
seeks recovery on behalf of himself and the class of unspecified damages,
profits, and special benefits. He also seeks all costs, expenses and attorney's
fees. Adelphia has entered an appearance in the case and is required to respond
to the Complaint by June 21, 1999. Adelphia believes the allegation of liability
against it to be without merit and intends to vigorously defend the action.

      There are no other material pending legal proceedings, other than routine
litigation incidental to the business, to which the Company is a part of or
which any of its property is subject.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of security holders during the quarter
ended December 31, 1998.

Executive Officers of the Registrant

      The executive officers of the Company, first elected to hold their
respective positions on July 1, 1986, serve at the discretion of the Board of
Directors.

      The executive officers of the Company are:

<TABLE>
<CAPTION>

        NAME                        AGE                           POSITION

<S>                                  <C>         <C>
        John J. Rigas............    74          Chairman, Chief Executive Officer, President and Director

        Michael J. Rigas.........    45          Executive Vice President, Operations and Director

        Timothy J. Rigas.........    42          Executive Vice President, Chief Financial Officer, Chief
                                                     Accounting Officer, Treasurer and Director

        James P. Rigas...........    41          Executive Vice President, Strategic Planning and Director

        Daniel R. Milliard.......    51          Senior Vice President, Secretary and Director
</TABLE>

<PAGE>

      John J. Rigas is the founder, Chairman, President and Chief Executive
Officer of Adelphia and is President of its subsidiaries. He is also Chairman of
Hyperion. Mr. Rigas has served as President or general partner of most of the
constituent entities which became wholly-owned subsidiaries of Adelphia upon its
formation in 1986, as well as the cable television operating companies acquired
by the Company which were wholly or partially owned by members of the Rigas
family. Mr. Rigas has owned and operated cable television systems since 1952.
Among his business and community service activities, Mr. Rigas is Chairman of
the Board of Directors of Citizens Bancorp., Inc., Coudersport, Pennsylvania,
and a member of the Board of Directors of Charles Cole Memorial Hospital. He is
a director of the National Cable Television Association and a past President of
the Pennsylvania Cable Television Association. He is also a member of the Board
of Directors of C-SPAN and the Cable Advertising Bureau, and is a Trustee of St.
Bonaventure University. He graduated from Rensselaer Polytechnic Institute with
a B.S. in Management Engineering in 1950.

      John J. Rigas is the father of  Michael J.  Rigas,  Timothy  J.  Rigas and
James P.  Rigas,  each of whom  currently  serves as a director and executive
officer of the Company.

      Michael J. Rigas is Executive Vice President, Operations of Adelphia and
is a Vice President of its subsidiaries. He is also Vice Chairman of Hyperion.
Since 1981, Mr. Rigas has served as a Senior Vice President, Vice President,
general partner or other officer of the constituent entities which became
wholly-owned subsidiaries of Adelphia upon its formation in 1986, as well as the
cable television operating companies acquired by the Company which were wholly
or partially owned by members of the Rigas family. From 1979 to 1981, he worked
for Webster, Chamberlain & Bean, a Washington, D.C. law firm. Mr. Rigas
graduated from Harvard University (magna cum laude) in 1976 and received his
Juris Doctor degree from Harvard Law School in 1979.

      Timothy J. Rigas is Executive Vice President, Chief Financial Officer,
Chief Accounting Officer and Treasurer of Adelphia and its subsidiaries. He is
also Vice Chairman, Chief Financial Officer and Treasurer of Hyperion. Since
1979, Mr. Rigas has served as Senior Vice President, Vice President, general
partner or other officer of the constituent entities which became wholly-owned
subsidiaries of Adelphia upon its formation in 1986, as well as the cable
television operating companies acquired by the Company which were wholly or
partially owned by members of the Rigas family. Mr. Rigas graduated from the
University of Pennsylvania, Wharton School, with a B.S. degree in Economics (cum
laude) in 1978.

      James P. Rigas is Executive Vice President, Strategic Planning of Adelphia
and is a Vice President of its subsidiaries, and also serves as Vice Chairman
and Chief Executive Officer of Hyperion. Since February 1986, Mr. Rigas has
served as a Senior Vice President, Vice President or other officer of the
constituent entities which became wholly-owned subsidiaries of Adelphia upon its
formation in 1986, as well as the cable television operating companies acquired
by the Company which were wholly or partially owned by members of the Rigas
family. Among his business activities, Mr. Rigas is a member of the Board of
Directors of Cable Labs. Mr. Rigas graduated from Harvard University (magna cum
laude) in 1980 and received a Juris Doctor degree and an M.A. degree in
Economics from Stanford University in 1984. From June 1984 to February 1986, he
was a consultant with Bain & Co., a management consulting firm.

      Daniel R. Milliard is Senior Vice President and Secretary of Adelphia and
its subsidiaries, and also serves as Vice Chairman, President and Secretary of
Hyperion. Since 1982, Mr. Milliard served as Vice President, Secretary and/or
General Counsel of Adelphia and the constituent entities which became
wholly-owned subsidiaries of Adelphia, as well as the cable television operating
companies acquired by the Company which were wholly or partially owned by
members of the Rigas family. He served as outside general counsel to the
Company's predecessors from 1979 to 1982. Mr. Milliard graduated from American
University in 1970 with a Bachelor of Science degree in Business Administration.
He received an M.A. degree in Business from Central Missouri State University in
1971 and received a Juris Doctor degree from the University of Tulsa School of
Law in 1976. He is a Director of Citizens Bancorp., Inc. in Coudersport,
Pennsylvania and a member of the Board of Directors of Charles Cole Memorial
Hospital.



<PAGE>





ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's Class A common stock is quoted on the National Association
of Securities Dealers Automated Quotations System National Market System
(NASDAQ-NMS). Adelphia's NASDAQ-NMS symbol is "ADLAC."

      The following table sets forth the range of high and low prices of the
Class A common stock on NASDAQ/NMS for the periods presented. Such prices
represent inter-dealer quotations, without retail mark-up, mark-down or
commission, and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>

                          CLASS A COMMON STOCK

   QUARTER ENDED:                                 HIGH         LOW

<S>                                            <C>         <C>
   June 30, 1997                                $  7 3/4    $  5
   September 30, 1997                           $ 12 1/8    $  6 3/4
   December 31, 1997                            $ 18 3/4    $ 12
   March 31, 1998                               $ 30 3/8    $ 16 3/8

   June 30, 1998                                $ 37 1/8    $ 21 1/2
   September 30, 1998                           $ 44        $ 30 7/16
   December 31, 1998                            $ 48 1/8    $ 29 1/8

</TABLE>



      As of May 24, 1999, there were approximately 163 holders of record of
Adelphia's Class A common stock. As of May 24, 1999, five record holders were
registered clearing agencies holding Class A common stock on behalf of
participants in such clearing agencies.

      No established public trading market exists for Adelphia's Class B common
stock. As of the date hereof, the Class B common stock was held of record by
seven persons, principally members of the Rigas family, including a Pennsylvania
general partnership all of whose partners are members of the Rigas family. The
Class B common stock is convertible into shares of Class A common stock on a
one-to-one basis. As of May 24, 1999 the Rigas family owned 99.1% of the
outstanding Class B common stock.

      Adelphia has never paid a cash dividend on its common stock and
anticipates that for the foreseeable future any earnings will be retained for
use in its business. The ability of Adelphia to pay cash dividends on its common
stock is limited by the provisions of its indentures. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources."

      On September 30, 1998, the Company issued 2,250,000 shares of Class A
common stock to AT&T, as consideration for its interest in Syracuse Hilton Head
Holdings, L.P. This issuance was made in reliance upon the exemption from
registration contained in Section 4(2) of the Securities Act of 1933.

      On February 15, 1999, the Company issued 1,000,000 shares of Class A
common stock to FrontierVision, as a deposit to be held in escrow for the
acquisition of FrontierVision. This issuance was made in reliance upon the
exemption from registration contained in Section 4(2) of the Securities Act of
1933.


<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA
 (Dollars in thousands except per share amounts)

      The selected consolidated financial data as of and for each of the four
years in the period ended March 31, 1998 and the nine months ended December 31,
1998 have been derived from the audited consolidated financial statements of the
Company. The selected consolidated financial data for the nine months ended
December 31, 1997 have been derived from unaudited condensed consolidated
financial statements of the Company not included herein; however, in the opinion
of management, such data reflect all adjustments (consisting only of normal and
recurring adjustments) necessary to fairly present the data for such interim
period. These data should be read in conjunction with the consolidated financial
statements and related notes thereto as of March 31, 1998 and December 31, 1998
and for each of the two years in the period ended March 31, 1998 and the nine
months ended December 31, 1998 and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Transition Report on Form 10-K. The statement of operations data with respect to
fiscal years ended March 31, 1995 and 1996, and the balance sheet data at March
31, 1995, 1996 and 1997, have been derived from audited consolidated financial
statements of the Company not included herein.

<TABLE>
<CAPTION>

                                                                                                   Nine Months Ended
                                                           Year Ended March 31,                       December 31,
                                            --------------------------------------------------- -------------------------
Statements of Operations Data:                   1995         1996         1997        1998         1997         1998
                                            --------------------------------------------------- ------------ ------------
                                                                                                 (Unaudited)
<S>                                           <C>          <C>          <C>          <C>          <C>          <C>
Revenues                                      $ 361,505    $ 403,597    $ 472,778    $ 528,442    $ 389,905    $ 507,155
Direct operating and programming expense        106,993      124,116      148,982      167,288      121,924      167,963
Selling, general and administrative expense      63,487       68,357       81,763       95,731       70,085      107,249
Depreciation and amortization expenses           97,602      111,031      124,066      145,041      104,570      140,823
Rate regulation charge                             --          5,300         --           --           --           --
                                              ---------    ---------     --------    ---------    ---------    ---------
Operating income                                 93,423       94,793      117,967      120,382       93,326       91,120
Priority investment income from Olympus          22,300       28,852       42,086       47,765       35,765       36,000
Cash interest expense - net                    (169,830)    (183,780)    (190,965)    (209,677)    (157,360)    (167,930)
Noncash interest expense                        (14,756)     (16,288)     (41,360)     (37,430)     (29,981)     (23,663)
Equity in loss of joint ventures                (44,349)     (46,257)     (59,169)     (79,056)     (59,334)     (58,471)
Hyperion preferred stock dividends                 --           --           --        (12,682)      (5,988)     (21,536)
Minority interest in net losses of
subsidiaries                                       --           --           --           --           --         25,772
Gain on sale of investments                        --           --         12,151        2,538        1,018         --
Other income                                      1,453         --           --           --           --          1,113
                                              ---------    ---------     --------    ---------    ---------    ---------
Loss before income taxes and extraordinary
loss                                           (111,759)    (122,680)    (119,290)    (168,160)    (122,554)    (117,595)
Income tax benefit (expense)                      5,475        2,786          358        5,606         (559)       6,802
                                              ---------    ---------     --------    ---------    ---------    ---------
Loss before extraordinary loss                 (106,284)    (119,894)    (118,932)    (162,554)    (123,113)    (110,793)
Extraordinary loss on early retirement of
debt                                               --           --        (11,710)     (11,325)     (11,325)      (4,337)
                                              ---------    ---------     --------    ---------    ---------    ---------
Net loss                                       (106,284)    (119,894)    (130,642)    (173,879)    (134,438)    (115,130)
Dividend requirements applicable to
preferred stock                                    --           --           --        (18,850)     (11,998)     (20,718)
                                              ---------    ---------     --------    ---------    ---------    ---------
Net loss applicable to common stockholders    $(106,284)   $(119,894)   $(130,642)   $(192,729)   $(146,436)   $(135,848)
                                              =========    =========    =========    =========    =========    =========
Basic and diluted loss per weighted average
share of Common stock before
extraordinary loss                            $   (4.32)   $   (4.56)   $   (4.50)   $   (6.07)   $   (4.57)   $   (3.63)
Basic and diluted net loss per weighted
average share of common stock                     (4.32)       (4.56)       (4.94)       (6.45)       (4.95)       (3.75)
Cash dividends declared per common share           --           --           --           --           --           --

</TABLE>



<PAGE>



Business Segment Information:

      As more fully described in this Form 10-K, Adelphia operates primarily in
two lines of business within the telecommunications industry: cable television
and related investments ("Adelphia, excluding Hyperion") and competitive local
exchange carrier telephony ("Hyperion"). The balance sheet data and other data
as of and for each of the four years ended March 31, 1998 and the nine months
ended December 31, 1998 of Hyperion have been derived from audited consolidated
financial statements of Hyperion not included herein. The selected consolidated
financial data for the nine months ended December 31, 1997 have been derived
from unaudited condensed consolidated financial statements of Hyperion not
included herein; however, in the opinion of management, such data reflect all
adjustments (consisting only of normal and recurring adjustments) necessary to
fairly present the data for such interim period.

<TABLE>
<CAPTION>

                                                                     March 31,                          December 31,
                                            ---------------------------------------------------------   ------------
                                                   1995          1996           1997          1998           1998
                                            --------------   -----------   -----------   ------------   ------------
Balance Sheet Data:

Adelphia Consolidated
<S>                                           <C>            <C>           <C>           <C>            <C>
  Total assets                                $  1,267,291   $ 1,367,579   $ 1,643,826   $  2,304,671   $  3,294,457
  Total debt                                     2,021,610     2,175,473     2,544,039      2,909,745      3,527,452
  Cash and cash equivalents                          5,045        10,809        61,539        276,895        398,644
  Investments (a)                                   50,426        74,961       130,005        150,787        229,494
  Redeemable preferred stock                            --            --            --        355,266        376,865
  Convertible preferred stock
    (liquidation preference)                            --            --            --        100,000        100,000

Hyperion
  Total assets                                $     23,212   $    35,269   $   174,601   $    639,992   $    836,342
  Total debt                                        35,541        50,855       215,675        528,776        494,109
  Cash and cash equivalents                             --            --        59,814        230,750        242,570
  Investments (a)                                   15,085        27,900        56,695         69,596        138,614
  Redeemable preferred stock                            --            --            --        207,204        228,674

Adelphia, excluding Hyperion
  Total assets                                $  1,244,079   $ 1,332,310   $ 1,469,225   $  1,664,679   $  2,458,115
  Total debt                                     1,986,069     2,124,618     2,328,364      2,380,969      3,033,343
  Cash and cash equivalents                          5,045        10,809         1,725         46,145        156,074
  Investments (a)                                   35,341        47,061        73,310         81,191         90,880
  Redeemable preferred stock                            --            --            --        148,062        148,191
  Convertible preferred stock
    (liquidation preference)                            --            --            --        100,000        100,000











                                                 See "Other Data" on next page.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                                                                                         Nine Months Ended
                                                 Year Ended March 31,                       December 31,
                                 --------------------------------------------------  ------------------------
Other Data:                            1995         1996        1997         1998         1997         1998
                                 --------------------------------------------------  ------------------------
                                                                                      (Unaudited)
Adelphia Consolidated
<S>                              <C>          <C>          <C>          <C>          <C>          <C>
  Revenues                       $   361,505  $   403,597  $   472,778  $   528,442  $   389,905  $   507,155
  Priority income                     22,300       28,852       42,086       47,765       35,765       36,000
  Operating expenses (b)             170,480      192,473      230,745      263,019      192,009      275,212
  Depreciation and
    amortization expenses             97,602      111,031      124,066      145,041      104,570      140,823
  Operating income                    93,423       94,793      117,967      120,382       93,326       91,120
  Interest expense - net            (184,586)    (200,068)    (232,325)    (247,107)    (187,341)    (191,593)
  Preferred stock dividends             --           --           --        (31,532)     (17,986)     (42,254)
  Capital expenditures                92,082      100,089      129,609      183,586      117,560      255,797
  Cash paid for acquisitions          70,256       60,804      143,412      146,546       88,217      403,851
  Cash used for investments           38,891       24,333       51,415       86,851       62,190       81,558

Hyperion
  Revenues                       $     1,729  $     3,322  $     5,088  $    13,510  $     8,690  $    34,776
  Operating expenses (b)               3,906        5,774       10,212       22,118       14,362       54,050
  Depreciation and
    amortization expenses                463        1,184        3,945       11,477        7,027       26,671
  Operating loss                      (2,640)      (3,636)      (9,069)     (20,085)     (12,699)     (45,945)
  Interest expense - net              (3,282)      (5,889)     (22,401)     (36,030)     (27,983)     (20,010)
  Preferred stock dividends             --           --           --        (12,682)      (5,988)     (21,536)
  Capital expenditures                 2,850        6,084       36,127       68,629       34,834      146,752
  Cash paid for acquisitions            --           --          5,040       65,968        7,638         --
  Cash used for investments            7,526       12,815       34,769       64,260       48,574       69,018

Adelphia,excluding Hyperion
  Revenues                       $   359,776  $   400,275  $   467,690  $   514,932  $   381,215  $   472,379
  Priority income                     22,300       28,852       42,086       47,765       35,765       36,000
  Operating expenses (b)             166,574      186,699      220,533      240,901      177,647      221,162
  Depreciation and
    amortization expenses             97,139      109,847      120,121      133,564       97,543      114,152
  Operating income                    96,063       98,429      127,036      140,467      106,025      137,065
  Interest expense - net            (181,304)    (194,179)    (209,924)    (211,077)    (159,358)    (171,583)
  Preferred stock dividends             --           --           --        (18,850)     (11,998)     (20,718)
  Capital expenditures                89,232       94,005       93,482      114,957       82,726      109,045
  Cash paid for acquisitions          70,256       60,804      138,372       80,578       80,579      403,851
  Cash used for investments           31,365       11,518       16,646       22,591       13,616       12,540

<FN>

(a) Represents total investments before cumulative equity in net losses.
(b) Amount excludes depreciation and amortization expenses.
</FN>
</TABLE>







<PAGE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS
         (Dollars in thousands)

    Introduction

      During the period January 29, 1999 through April 12, 1999, the Company
announced the pending acquisition of the Olympus partnership interests held by
FPL Group, Inc., and the pending acquisitions of FrontierVision Partners, L.P.,
Century Communications Corp. and Harron Communications Corp. (collectively, the
"Pending Acquisitions"). As of the time of filing of this Transition Report on
Form 10-K, all of these transactions were pending and therefore, are not
reflected in the results of operations of the Company for the nine months ended
December 31, 1998. After the completion of the nine months ended December 31,
1998, the Company filed unaudited financial information, audited financial
statements and unaudited pro forma financial information related to the Pending
Acquisitions on a Form 8-K for the event dated April 19, 1999. In addition,
during the period January 13, 1999 through April 30, 1999, the Company entered
into several financing transactions, the proceeds of which will or may be used
to fund one or more of the Pending Acquisitions or for other general corporate
purposes. See Note 13 to Adelphia's Consolidated Financial Statements for
additional information regarding the Pending Acquisitions and financing
transactions referred to above.

    Results of Operations

General

      On March 30, 1999, the Board of Directors of Adelphia changed its fiscal
year from March 31 to December 31. The decision was made to conform to general
industry practice and for administrative purposes. The change became effective
for the nine months ended December 31, 1998. Management's discussion and
analysis of financial condition and results of operations compares the nine
months ended December 31, 1997 and 1998 and the years ended March 31, 1997 and
1998.

      Adelphia earned substantially all of its revenues in each of the years
ended March 31, 1997 and 1998 and the nine months ended December 31, 1998 from
monthly subscriber fees for basic, satellite, premium and ancillary services
(such as installations and equipment rentals), local and national advertising
sales, pay-per-view programming, high speed data services and CLEC
telecommunications services.

      The changes in Adelphia's results of operations for the year ended March
31, 1998 and the nine months ended December 31, 1998, compared to the respective
prior periods, were primarily the result of acquisitions, expanding existing
cable television operations and the impact of increased advertising sales and
other service offerings as well as increases in cable rates, effective October
1, 1997 and August 1, 1998.

      The high level of depreciation and amortization associated with the
significant number of acquisitions in recent years, the continued upgrade and
expansion of systems, interest costs associated with financing activities and
Hyperion's continued investment in the CLEC business will continue to have a
negative impact on the reported results of operations. Also, significant charges
for depreciation, amortization and interest are expected to be incurred in the
future by Olympus, which will also adversely impact Adelphia's future results of
operations. Adelphia expects to report net losses for the next several years.

      Hyperion, together with its subsidiaries, owns certain investments in CLEC
joint ventures and manages those ventures. Hyperion is an unrestricted
subsidiary for purposes of the Company's indentures.

      The information below for the years ended March 31, 1997 and 1998 and the
nine months ended December 31, 1998 is derived from Adelphia's consolidated
financial statements that are included in this Transition Report on Form 10-K.
Information for the nine months ended December 31, 1997 is derived from
unaudited condensed consolidated financial statements of the Company not
included herein; however, in the opinion of management, such data reflect all
adjustments (consisting only of normal and recurring adjustments) necessary to
fairly present the data for such interim periods. This table sets forth the
percentage relationship to revenues of the components of operating income
contained in such financial statements for the periods indicated.

<PAGE>

<TABLE>
<CAPTION>

                                                     Percentage of Revenues
                                                 Year Ended      Nine Months Ended
                                                  March 31           December 31,
                                           -------------------  ------------------
                                               1997      1998      1997      1998
                                           ---------  --------  --------  --------

<S>                                          <C>       <C>       <C>       <C>
Revenues                                      100.0%    100.0%    100.0%    100.0%

Operating Expenses:
     Direct operating and programming          31.5%     31.7%     31.3%     33.1%
     Selling, general and administrative       17.3%     18.1%     18.0%     21.1%
     Depreciation and amortization             26.2%     27.4%     26.8%     27.8%
                                           --------  --------  --------  --------
Operating Income                               25.0%     22.8%     23.9%     18.0%
                                           ========  ========  ========  ========
</TABLE>



      Comparison of the Nine Months Ended December 31, 1997 and 1998

      Revenues. The primary revenue sources reflected as a percentage of total
revenues were as follows:

<TABLE>
<CAPTION>

                                                          Nine Months Ended
                                                             December 31,
                                                      -------------------------
                                                          1997          1998
                                                      -----------   -----------
<S>                                                       <C>            <C>
      Regulated service and equipment                      76%            73%
      Premium programming                                  12%            10%
      Advertising sales and other services                 10%            10%
      Competitive local exchange carrier services           2%             7%

</TABLE>


      Revenues increased approximately 30.1% for the nine month period ended
December 31, 1998 compared with the same period of the prior year. The increase
is attributable to the following:

<TABLE>
<CAPTION>

                                                        Nine Months
                                                          Ended
                                                       December 31,
                                                           1998
                                                      --------------
<S>                                                        <C>
      Acquisitions                                          58%
      Basic subscriber growth                                4%
      Rate increases                                        21%
      Premium programming                                   (5%)
      Competitive local exchange carrier services           14%
      Advertising sales and other services                   8%

</TABLE>


      Effective August 1, 1998, certain rate increases related to regulated
cable services were implemented in substantially all of the Company's systems.
Advertising revenues and revenues derived from other strategic service offerings
such as paging, high-speed data services, long distance and CLEC services also
had a positive impact on revenues for the nine months ended December 31, 1998.
The Company expects to implement rate increases related to certain regulated
cable services in substantially all of the Company's systems during 1999.

      Direct Operating and Programming Expenses. Direct operating and
programming expenses, which are mainly basic and premium programming costs and
technical expenses, increased 37.8% for the nine month period ended December 31,
1998 compared with the same period of the prior year. Hyperion expenses
increased due to expansion of operations at its network control center, as well
as an increase in the number and size of its networks, which resulted in

<PAGE>

increased employee related costs and equipment maintenance costs. The
consolidation of the Buffalo, Syracuse, New Jersey, Louisville, Lexington and
Harrisburg networks also increased Hyperion's costs related to operations. The
increases in Adelphia excluding Hyperion were primarily due to increased
operating expenses from acquired systems, increased programming costs,
incremental costs associated with increased subscribers and new services.

      Selling, General and Administrative Expenses. These expenses, which are
mainly comprised of costs related to system offices, customer service
representatives and sales and administrative employees, increased 53.0% for the
nine month period ended December 31, 1998 compared with the same period of the
prior year. Hyperion expenses increased due to increased expenses associated
with the network expansion plan, an increase in the sales force in the existing
networks and an increase in corporate overhead costs to accommodate the growth
in the number, size and operations of operating companies managed and monitored
by Hyperion, as well as the consolidation of the networks mentioned in direct
operating and programming expenses. The increases in Adelphia excluding Hyperion
were primarily due to incremental costs associated with acquisitions, subscriber
growth and new services.

      Depreciation and Amortization. Depreciation and amortization, excluding
Hyperion, increased 17.0% for the nine month period ended December 31, 1998,
compared with the same period of the prior year primarily due to increased
depreciation and amortization related to acquisitions, as well as increased
capital expenditures made during the past several years. Depreciation and
amortization for Hyperion increased 279.6% for the nine month period ended
December 31, 1998, compared with the same period of the prior year. These
increases were primarily a result of increased depreciation resulting from the
higher depreciable asset bases of the Hyperion network operations control
center, its wholly owned networks and the consolidation of several of its
networks and increased amortization of deferred financing costs.

      Priority Investment Income. Priority investment income is comprised of
payments received from Olympus of accrued priority return on the Company's
investment in 16.5% preferred limited partner ("PLP") interests in Olympus.

      Interest Expense - net. Interest expense - net, excluding Hyperion,
increased 7.7% for the nine month period ended December 31, 1998, compared with
the same period of the prior year. Interest expense - net, including Hyperion,
increased 2.3% for the nine month period ended December 31, 1998, as compared
with the same period of the prior year. Interest expense increased primarily due
to incremental debt related to acquisitions and other new debt issuances. These
increases were partially offset by Hyperion's interest income on cash balances.
Interest expense includes noncash accretion of original issue discount on the
Hyperion 13% Senior Discount Notes and other noncash interest expense totaling
$23,663 for the nine month period ended December 31, 1998 compared with $29,981
the same period of the prior year.

      Equity in Loss of Joint Ventures. The equity in loss of joint ventures
represents primarily (i) the Company's pro-rata share of Olympus' losses and the
accretion requirements of Olympus' PLP interests, and (ii) Hyperion's pro-rata
share of its less than majority owned partnerships' operating losses.

      Hyperion Preferred Stock Dividend. During the nine months ended December
31, 1998, Hyperion incurred $21,536 of expense relating to its 12 7/8% Senior
Exchangeable Redeemable Preferred Stock, which was issued in October 1997.

      Minority Interest in Net Losses of Subsidiaries. As a result of Hyperion's
IPO, which occurred on May 8, 1998, a portion of Hyperion's net loss applicable
to common stockholders is attributable to minority interests.

      Extraordinary Loss on Early Retirement of Debt. During the nine months
ended December 31, 1998, $69,838 of 12 1/2% Senior Notes due 2002 were redeemed
at 103% of principal and subsidiary debt in the amount of $52,000 was repaid
prior to its maturity, at a premium. Additionally, Hyperion retired $25,160 face
value of its 13% Senior Discount Notes, resulting in a gain. As a result of
these transactions, Adelphia recognized a net extraordinary loss on early
retirement of debt of $4,337.

      Income Tax Benefit. Income tax benefit for the nine months ended December
31, 1998 is primarily due to the impact of a change in tax law which extends the
number of years the Company can utilize its net operating loss carryforward
generated in the current fiscal year.

<PAGE>

Comparison of the Years Ended March 31, 1997 and 1998

    Revenues.  The primary revenue sources reflected as a percentage of total
revenues were as follows:

<TABLE>
<CAPTION>

                                                      Year Ended March 31,
                                                     -----------------------
                                                         1997       1998
                                                     ----------- -----------
<S>                                                     <C>        <C>
      Regulated service and equipment fees                76%        76%
      Premium programming fees                            13%        11%
      Advertising sales and other services                10%        10%
      Competitive local exchange carrier services          1%         3%
</TABLE>


      Revenues increased approximately 11.8% for the year ended March 31, 1998
compared with the prior fiscal year.

      The increase is attributable to the following:

<TABLE>
<CAPTION>

                                                      Year Ended
                                                       March 31,
                                                         1998
                                                     -------------
<S>                                                     <C>
      Acquisitions                                        37%
      Basic subscriber growth                              9%
      Rate increases                                      48%
      Premium programming                                 (7%)
      Competitive local exchange carrier services          6%
      Advertising sales and other services                 7%

</TABLE>

      Effective October 1, 1997, certain rate increases related to regulated
cable services were implemented in substantially all of the Company's Systems.
Advertising revenues and revenues derived from other strategic service offerings
such as paging, high speed data services, long distance and CLEC services also
had a positive impact on revenues for the year ended March 31, 1998.

      Direct Operating and Programming Expenses. Direct operating and
programming expenses, which are mainly basic and premium programming costs and
technical expenses, increased 12.3% for the year ended March 31, 1998, compared
with the prior year. The increase was primarily due to increased operating
expenses from acquired systems, increased programming costs and incremental
costs associated with increased subscribers. Additionally, Hyperion expenses
increased due to expansion of operations at its network control center, as well
as an increase in the number and size of its networks, which resulted in
increased employee related costs and equipment maintenance costs.

      Selling, General and Administrative Expenses. These expenses, which are
mainly comprised of costs related to system offices, customer service
representatives, and sales and administrative employees, increased 17.1% for the
year ended March 31, 1998, compared with the prior year. The increase was
primarily due to incremental costs associated with acquisitions, subscriber
growth and Hyperion overhead and network operating and control center cost
increases to accommodate the growth in the number of operating companies managed
and monitored.

      Depreciation and Amortization. Depreciation and amortization was higher
for the year ended March 31, 1998, compared with the prior year. The increase
was primarily due to increased depreciation and amortization related to
acquisitions consummated during the years ended March 31, 1997 and 1998, as well
as increased capital expenditures made during the past several years.

      Priority Investment Income from Olympus. Priority investment income is
comprised of payments received from Olympus of accrued priority return on the
Company's investment in 16.5% PLP interests in Olympus.

      Interest Expense - net. Interest expense - net increased approximately
6.4% for the year ended March 31, 1998. For the year ended March 31, 1998,
interest expense -net increased primarily due to incremental debt related to
acquisitions and the issuance of the Hyperion 12 1/4% Senior Secured Notes.
These increases were partially offset by (i) the utilization of the proceeds

<PAGE>

from the convertible preferred stock and the redeemable preferred stock
offerings to repay outstanding debt, (ii) the refinancing of outstanding
borrowings and (iii) interest income on cash balances. Interest expense includes
non-cash accretion of original issue discount and non-cash interest expense
totaling $37,430 for the year ended March 31, 1998. The decrease in non-cash
interest for the year ended March 31, 1998 as compared to the prior year was
primarily due to Adelphia's cash payment of interest on its 9 1/2% Senior
Pay-In-Kind notes for the six month period ended February 15, 1998. This
decrease was partially offset by the accretion of original issue discount
related to the Hyperion 13% Senior Discount Notes.

      Equity in Loss of Joint Ventures. The equity in loss of joint ventures
represents primarily (i) the Company's pro rata share of Olympus' losses and the
accretion requirements of Olympus' preferred limited partner interests and (ii)
Hyperion's pro rata share of its less than majority owned partnerships'
operating losses.

      Hyperion Preferred Stock Dividends.  During the year ended March 31, 1998,
Hyperion incurred $12,682 of expense relating to its 12 7/8% Senior Exchangeable
Redeemable Preferred Stock issued in October 1997.

      Gain on Sale of Investments. On May 16, 1996, Hyperion completed the sale
of its 15.7% partnership interest in TCG South Florida to Teleport
Communications Group Inc. for an aggregate sales price of $11,618 resulting in a
gain of $8,405. On January 23, 1997, the Company received 284,425 shares of
Republic Industries, Inc. common stock ("Republic stock") in exchange for its
interest in Commonwealth Security, Inc. for an aggregate sales price of $9,315
resulting in a gain of $3,746. During the year ended March 31, 1998, the Company
sold its Republic stock, its investment in the Golf Channel and certain other
assets, resulting in a gain of $2,538.

      Extraordinary Loss on Early Retirement of Debt. During the year ended
March 31, 1997, certain bank indebtedness was repaid and a portion of the 12
1/2% Senior Notes due 2002 was reacquired resulting in an extraordinary loss on
retirement of debt. The amount pertaining to the repayment of bank debt was
$2,079, which primarily represents the write-off of the remaining deferred debt
financing costs associated with the debt retired. The amount pertaining to the
12 1/2% Senior Notes was $9,631, which represents the excess of reacquisition
cost over the net carrying value of the related debt. During the year ended
March 31, 1998, Adelphia reacquired through open market purchases $20,000 of 9
1/2% Senior Pay-in-Kind Notes due 2004 and redeemed $202,000 of 12 1/2% Senior
Notes due 2002 at 106% of principal. As a result of these two transactions,
Adelphia recognized an extraordinary loss of $11,325 for the year ended March
31, 1998.

Liquidity and Capital Resources

      The cable television and other telecommunications businesses are capital
intensive and typically require continual financing for the construction,
modernization, maintenance, expansion and acquisition of cable and other
telecommunications systems. During the years ended March 31, 1997 and 1998 and
the nine months ended December 31, 1998, the Company committed substantial
capital resources for these purposes and for investments in Olympus and other
affiliates and entities. These expenditures were funded through long-term
borrowings and internally generated funds. The Company's ability to generate
cash to meet its future needs will depend generally on its results of operations
and the continued availability of external financing.

      For information regarding significant events and financings subsequent to
December 31, 1998, including the Pending Acquisitions and the related use of
capital resources to consummate them, see "Introduction" above and Note 13 to
Adelphia's Consolidated Financial Statements.

      Comparison of the Nine Months Ended December 31, 1997 and 1998

      For the nine months ended December 31, 1997 and 1998, cash provided by
operating activities totaled $62,038 and $138,360, respectively; cash used for
investing activities totaled $423,965 and $1,015,690, respectively and cash
provided by financing activities totaled $681,791 and $999,079, respectively.
The Company's aggregate outstanding borrowings as of December 31, 1998 were
$3,527,452. The Company also had total redeemable preferred stock of $376,865
outstanding as of December 31, 1998.

      Capital Expenditures. Capital expenditures for Adelphia, excluding
Hyperion for the nine months ended December 31, 1997 and 1998 were $82,726 and
$109,045, respectively. Capital expenditures including Hyperion for the nine
months ended December 31, 1997 and 1998 were $117,560 and $255,797,
respectively. The increase in capital expenditures for the nine month period

<PAGE>

ended December 31, 1998, compared to the nine month period ended December 31,
1997, was primarily due to the upgrade of plant in markets in which Hyperion
purchased its local partners' interests, payments for indefeasible right of use
agreements for fiber optic networks and the commencement of switching services.
The Company expects that capital expenditures for the year ending December 31,
1999 will be in a range of approximately $172,000 to $192,500 for Adelphia,
excluding Hyperion and Pending Acquisitions. The Company expects Hyperion to
continue to have significant capital expenditure and investment requirements,
and estimates it will require approximately $400,000 to fund capital
expenditures, working capital requirements, operating losses and investments in
its existing and its planned new networks through September 2000.

      Comparison of the Years Ended March 31, 1997 and 1998

      For the years ended March 31, 1997 and 1998, cash provided by operating
activities totaled $43,001 and $66,270, respectively; cash used for investing
activities totaled $322,047 and $563,520, respectively and cash provided by
financing activities totaled $329,776 and $712,606, respectively. The Company's
aggregate outstanding borrowings as of March 31, 1998 were $2,909,745. The
Company also had total redeemable preferred stock of $355,266 outstanding as of
March 31, 1998.

      Capital Expenditures. Capital expenditures for Adelphia, excluding
Hyperion for the years ended March 31, 1997 and 1998 were $93,482 and $114,957,
respectively. Capital expenditures including Hyperion for the years ended March
31, 1997 and 1998 were $129,609 and $183,586, respectively. The increase in
capital expenditures for the year ended March 31, 1998, compared to the year
ended March 31, 1997, was primarily due to the acceleration of the rebuilding of
plant using fiber-to-feeder technology and Hyperion's introduction of switching
services.

Financing Activities

      The Company's financing strategy has been to maintain its public long-term
debt at the parent holding company level while the Company's consolidated
subsidiaries have their own senior and subordinated credit arrangements with
banks and insurance companies, or for Hyperion, its own public debt and equity.
The Company's ability to generate cash adequate to meet its future needs will
depend generally on its results of operations and the continued availability of
external financing. During the years ended March 31, 1997 and 1998 and the nine
months ended December 31, 1998, the Company generally funded its working capital
requirements, capital expenditures, and investments in Olympus, CLEC joint
ventures and other affiliates and entities through long-term borrowings
primarily from banks, short-term borrowings, internally generated funds and the
issuance of public debt or equity. The Company generally has funded the
principal and interest obligations on its long-term borrowings from banks and
insurance companies by refinancing the principal with new loans or through the
issuance of parent and subsidiary company debt securities, and by paying the
interest out of internally generated funds. Adelphia has generally funded the
interest obligations on its public borrowings from internally generated funds.

      Most of Adelphia's directly-owned subsidiaries have their own senior
credit agreements with banks and/or insurance companies. Typically, borrowings
under these agreements are collateralized by the stock and, in some cases, by
the assets of the borrowing subsidiary and its subsidiaries and, in some cases,
are guaranteed by such subsidiary's subsidiaries. At December 31, 1998, an
aggregate of $1,200,970 in borrowings was outstanding under these agreements.
These agreements contain certain provisions which, among other things, provide
for limitations on borrowings of and investments by the borrowing subsidiaries,
transactions between the borrowing subsidiaries and Adelphia and its other
subsidiaries and affiliates, and the payment of dividends and fees by the
borrowing subsidiaries. Several of these agreements also contain certain
cross-default provisions relating to Adelphia or other subsidiaries. These
agreements also require the maintenance of certain financial ratios by the
borrowing subsidiaries. See Note 3 to the Adelphia Communications Corporation
consolidated financial statements. Management believes the Company is in
compliance with the financial covenants and related financial ratio requirements
contained in its various credit agreements.

      At December 31, 1998, Adelphia's subsidiaries had an aggregate of $360,000
in unused credit lines with banks, part of which is subject to achieving certain
levels of operating performance. In addition, the Company had an aggregate
$398,644 in cash and cash equivalents at December 31, 1998 which combined with
the Company's unused credit lines with banks aggregated to $758,644. Based upon
the results of operations of subsidiaries for the quarter ended December 31,
1998, approximately $731,500 of available assets could have been transferred to
Adelphia at December 31, 1998, under the most restrictive covenants of the
subsidiaries' credit agreements. The subsidiaries also have the ability to sell,
dividend or distribute certain assets to other subsidiaries or Adelphia, which
would have the net effect of increasing availability. At December 31, 1998, the

<PAGE>

Company's unused credit lines were provided by reducing revolving credit
facilities whose revolver periods expire through December 31, 2007. The
Company's scheduled maturities of debt are currently $101,402 for the year
ending December 31, 1999.

      At December 31, 1998, the Company's total outstanding debt aggregated
$3,527,452, which included $1,810,212 of parent debt and $1,717,240 of
subsidiary debt. Bank debt interest rates are based upon one or more of the
following rates at the option of Adelphia: prime rate plus 0% to 1.5%;
certificate of deposit rate plus 1.25% to 2.75%; or LIBOR plus 1% to 2.5%. The
Company's weighted average interest rate on notes payable to banks and
institutions was approximately 8.11% at March 31, 1998, compared to 7.89% at
December 31, 1998. At December 31, 1998, approximately 36% of subsidiary debt
was subject to fixed interest rates for at least one year under the terms of
such debt or applicable interest rate swap agreements. Approximately 65% of the
Company's total indebtedness was at fixed interest rates as of December 31,
1998.

      Adelphia has entered into interest rate swap agreements and interest rate
cap agreements with banks and affiliates to reduce the impact of changes in
interest rates on its debt. Adelphia enters into pay-fixed agreements to
effectively convert a portion of its variable-rate debt to fixed-rate debt.
Adelphia enters into receive-fixed agreements to effectively convert a portion
of its fixed-rate debt to variable-rate debt which is indexed to LIBOR. Interest
rate cap agreements are used to reduce the impact of increases in interest rates
on variable rate debt. Adelphia is exposed to credit loss in the event of
nonperformance by the banks and the affiliates. The Company does not expect any
such nonperformance. At December 31, 1998, Adelphia would have had to pay
approximately $27,227 to settle its interest rate swap and cap agreements,
representing the excess of carrying cost over fair market value of these
agreements.

Financing Transactions

    Adelphia, Excluding Hyperion

      During the year ended March 31, 1998, Adelphia issued $625,000 of Senior
Notes and $150,000 aggregate liquidation preference, 13% Cumulative Exchangeable
Preferred Stock (the "Exchangeable Preferred Stock"), which is mandatorily
redeemable in 2009.

      During the year ended March 31, 1998, Adelphia also issued 100,000 shares
of perpetual Series C Convertible Preferred Stock (the "Convertible Preferred
Stock") with a par value of $.01 per share and an aggregate liquidation
preference of $100,000 in a private placement of which $80,000 was sold to a
Rigas family affiliate and the remainder was sold to Telesat Cablevision, Inc.,
a wholly owned subsidiary of FPL Group, Inc., a New York Stock Exchange company
and a 50% partner in Olympus. The Convertible Preferred Stock accrues dividends
at the rate of 8 1/8% of the liquidation preference per annum, and is
convertible at $8.48 per share into an aggregate of 11,792,450 shares of Class A
Common Stock of Adelphia. The Convertible Preferred Stock is redeemable at the
option of Adelphia after three years from the date of issuance at a premium
declining to the liquidation preference in 2002.

      Proceeds from the sale of the Exchangeable Preferred Stock, the Senior
Notes and the Convertible Preferred Stock were used to repay subsidiaries'
senior notes and revolving credit facility borrowings.

      On October 31, 1997, Adelphia redeemed $202,000 aggregate principal amount
of 12 1/2% Senior Notes due 2002 at 106% of principal.

      During the nine months ended December 31, 1998, Adelphia issued $300,000
of Senior Notes.

      Also, during the nine months ended December 31, 1998, Adelphia issued
8,190,315 shares of Class A common stock to the public and to the Rigas family
(principal shareholders and officers of Adelphia). Of this total, 4,100,000
shares were sold to the public at a price of $32.00 per share, with an
underwriting discount of $1.44 per share. The remaining 4,090,315 shares were
sold to entities controlled by the Rigas family at the public offering price
less the underwriting discount. In a related transaction on September 14, 1998,
the Company issued and sold 615,000 shares of Class A common stock at the
offering price of $32.00, with an underwriting discount of $1.44 per share,
pursuant to the underwriters' over-allotment option.

      Proceeds from the sale of the Senior Notes and the Class A common stock
were used to repay subsidiaries' senior notes and revolving credit facility
borrowings.

<PAGE>

      On May 15, 1998, Adelphia redeemed the remaining $69,838 of the 12 1/2%
Senior Notes due 2002 at 103% of principal.

      During the nine months ended December 31, 1998, Adelphia redeemed $137,200
aggregate principal amount of subsidiary notes to banks and institutions. As a
result of these transactions, Adelphia recognized an extraordinary loss on early
retirement of debt of $1,970.

      During the nine months ended December 31, 1998, the Western New York
Partnership closed on a $700,000, 8 1/2 year credit facility. The credit
facility consists of a $350,000 reducing revolving credit portion and a $350,000
term loan portion. Proceeds from initial borrowings were used to repay existing
indebtedness.

    Hyperion

      During the year ended March 31, 1998, Hyperion issued $250,000 aggregate
principal amount of 12 1/4% Senior Secured Notes due 2004 and $200,000 aggregate
liquidation preference 12 7/8% Senior Exchangeable Redeemable Preferred Stock
due 2007. Net proceeds from these transactions have been used primarily used to
fund capital expenditures, working capital, potential increases in ownership
interests in existing networks and for general corporate purposes.

      During the nine months ended December 31, 1998, Hyperion successfully
completed an IPO of Hyperion Stock. As part of the offering, Adelphia purchased
an incremental 3,324,001 shares of Hyperion Stock for $49,900 and converted
indebtedness owed to the Company by Hyperion into 3,642,666 shares of Hyperion
Stock. In addition, Adelphia purchased warrants issued by Hyperion to MCI Metro
Access Transmission Services, Inc., and purchased shares of Hyperion Class B
common stock from certain executive officers of Hyperion for a total purchase
price of approximately $12,580 and $3,000, respectively. Adelphia owns
approximately 66% of the Hyperion common stock on a fully diluted basis and 86%
of the total voting power. Additional net proceeds of $191,411 to Hyperion were
received as a result of the sale of 12,500,000 shares of Hyperion Stock to the
public. In a related transaction on June 5, 1998, Hyperion issued and sold
350,000 shares of its Class A common stock at the $16.00 IPO price pursuant to
the underwriters' over allotment option in the IPO. As a result of the IPO,
Adelphia's additional paid-in capital increased approximately $147,000 and
minority interests increased approximately $45,000. Net proceeds from this
transaction have been used primarily to fund capital expenditures, working
capital, increases in ownership interests in existing networks and for general
corporate purposes.

      For additional  information  regarding Adelphia's and Hyperion's financing
transactions,  see Notes 3, 4, 6 and 13 to Adelphia's Consolidated  Financial
Statements.

Acquisitions

    Adelphia, excluding Hyperion

      For the nine months ended December 31, 1998, Adelphia acquired (i) cable
systems serving approximately 11,250 subscribers in southern New York for an
aggregate price of $11,500, (ii) cable systems serving approximately 2,000
subscribers in western Pennsylvania for an aggregate price of $1,900, and (iii)
cable systems serving approximately 62,000 subscribers in Connecticut and
Vermont for an aggregate price of $150,126. These acquisitions further
contributed to Adelphia's existing clusters. See Note 1 to Adelphia's
Consolidated Financial Statements for a further discussion of acquisitions.

      On April 1, 1998, Adelphia and its affiliates and Time Warner
Entertainment and an affiliate ("Time Warner") traded certain cable systems.
Adelphia exchanged its systems serving 64,400 subscribers primarily in the
Mansfield, Ohio area for systems owned by Time Warner cable companies serving
70,200 subscribers adjacent to systems owned or managed by Adelphia in Virginia,
New England and New York.

      On July 31, 1998, Adelphia consummated its transaction with AT&T to form a
joint venture limited partnership in the Western New York region (the "Western
New York Partnership"). Pursuant to this agreement, Adelphia contributed its
Western New York and Lorain, Ohio systems totaling approximately 298,000
subscribers and certain programming assets and $440,000 in debt. Subsidiaries of
AT&T contributed their cable systems in Buffalo, New York; Erie, Pennsylvania;
and Ashtabula and Lake County, Ohio, totaling approximately 171,000 subscribers
and $228,000 in debt. Adelphia and AT&T hold a 66.7% and 33.3% interest,

<PAGE>

respectively, in the partnership. Adelphia manages the partnership and
consolidates the partnership's results of operations for financial reporting
purposes beginning on the acquisition date.

      On September 30, 1998, Adelphia merged a subsidiary of the Company with
the subsidiary of AT&T that held an interest in Syracuse Hilton Head Holdings,
L.P. ("SHHH, L.P."), an Adelphia managed partnership controlled by the Rigas
Family. Pursuant to the merger agreement, AT&T received 2,250,000 newly issued
shares of the Company's Class A Common Stock, $.01 par value. Simultaneously,
SHHH, L.P. distributed certain SHHH, L.P. cable systems, which serve
approximately 34,100 subscribers, in Virginia and North Carolina (the "Virginia
and North Carolina Systems") to Adelphia, in exchange for the interest acquired
by Adelphia from AT&T as described above, Adelphia's Preferred equity investment
in Managed Partnership and certain affiliate receivables owed to Adelphia. The
Virginia and North Carolina Systems were distributed to Adelphia without
indebtedness.

      For information regarding acquisitions subsequent to December 31, 1998,
including the Pending Acquisitions and the related use of capital resources to
consummate them, see "Introduction" above and Note 13 to Adelphia's Consolidated
Financial Statements.

Resources

      The Company plans to continue to explore and consider new commitments,
arrangements or transactions to refinance existing debt, increase the Company's
liquidity or decrease the Company's leverage. These could include, among other
things, the future issuance by Adelphia, or its subsidiaries, of public or
private equity or debt and the negotiation of new or amended credit facilities.
These could also include entering into acquisitions, joint ventures or other
investment or financing activities, although no assurance can be given that any
such transactions will be consummated. The Company's ability to borrow under
current credit facilities and to enter into refinancings and new financings is
limited by covenants contained in Adelphia's indentures and its subsidiaries'
credit agreements, including covenants under which the ability to incur
indebtedness is in part a function of applicable ratios of total debt to cash
flow.

      The Company believes that cash and cash equivalents, internally generated
funds, borrowings under existing credit facilities, and future financing sources
will be sufficient to meet its short-term and long-term liquidity and capital
requirements. Although in the past the Company has been able to refinance its
indebtedness or obtain new financing, there can be no assurance that the Company
will be able to do so in the future or that the terms of such financings would
be favorable.

      For information regarding significant events and financings subsequent to
December 31, 1998, including the Pending Acquisitions and related use of capital
resources to consummate them, see "Introduction" above and Note 13 to Adelphia's
Consolidated Financial Statements.

      Management believes that the telecommunications industry, including the
cable television and telephone industries, continues to be in a period of
consolidation characterized by mergers, joint ventures, acquisitions, sales of
all or part of cable companies or their assets, and other partnering and
investment transactions of various structures and sizes involving cable or other
telecommunications companies. The Company continues to evaluate new
opportunities that allow for the expansion of its business through the
acquisition of additional cable television systems in geographic proximity to
its existing regional markets or in locations that can serve as a basis for new
market areas. The Company, like other telecommunications companies, has
participated from time to time and is participating in preliminary discussions
with third parties regarding a variety of potential transactions, and the
Company has considered and expects to continue to consider and explore potential
transactions of various types with other cable and telecommunications companies.
However, no assurances can be given as to whether any such transaction may be
consummated or, if so, when.

Affiliates

      Olympus. The Company serves as the managing general partner of Olympus
and, as of December 31, 1998, held $5 of voting general partnership interests
representing, in the aggregate, 50% of the voting interests of Olympus. The
Company also held, as of December 31, 1998, approximately $366,861 aggregate
principal amount of nonvoting PLP interests in Olympus, which entitle the
Company to a 16.5% per annum priority return. The remaining equity in Olympus
consists of voting and non-voting partnership interests held by FPL Group.

      On January 29, 1999, Adelphia purchased from Telesat shares of Adelphia's
stock owned by Telesat for a price of $149,213. In the transaction, Adelphia
purchased 1,091,524 shares of Class A common stock and 20,000 shares of Series C

<PAGE>

Cumulative convertible preferred stock which are convertible into an additional
2,358,490 shares of Class A common stock. These shares represent 3,450,014
shares of common stock on a fully converted basis. Adelphia and Telesat also
agreed to a redemption of Telesat's interests in Olympus by July 11, 1999 for
approximately $108,000. The redemption is subject to applicable third party
approvals.

      During the year ended March 31, 1997, the Company received net
distributions and advances from Olympus totaling $9,012. During the year ended
March 31, 1998 and the nine months ended December 31, 1998, the Company made net
investments in and advances to Olympus totaling $11,466 and $222,610,
respectively. The increase in the investments and advances to Olympus for the
nine months ended December 31, 1998 is due primarily to acquisitions. During the
years ended March 31, 1997 and 1998 and the nine months ended December 31, 1998,
the Company received priority investment income from Olympus of $42,086 ,
$47,765 and $36,000, respectively.

      The Olympus limited partnership agreement requires approval by the holders
of 85% of the voting interests for, among other things, significant acquisitions
and dispositions of assets, and the issuance of certain partnership interests,
and also requires approval by the holders of 75% of the voting interests for,
among other things, material amendments to the Olympus partnership agreement,
certain financings and refinancings, certain issuances of PLP interests, certain
transactions with related parties and the adoption of annual budgets.

      During the years ended March 31, 1997 and 1998 and the nine months ended
December 31, 1998, Olympus acquired several cable and security systems, adding
approximately 128,000 subscribers for approximately $269,900. Olympus also
completed a financing arrangement for $200,000 in November 1996. For additional
information regarding Olympus acquisitions and financings, see Notes 1 and 3 to
Olympus' Consolidated Financial Statements.

      The Selected Financial Data and Management's Discussion and Analysis of
Financial Condition and Results of Operations for Olympus for each of the three
years in the period ended December 31, 1998, which appear in Items 6 and 7 of
the Annual Report on Form 10-K of Olympus Communications, L.P. and Olympus
Capital Corporation for the year ended December 31, 1998, are incorporated
herein by reference.

      Managed Partnerships. On September 29, 1993, the Board of Directors of the
Company authorized the Company to make loans in the future to the Managed
Partnerships up to an amount of $50,000. During the year ended March 31, 1998,
the Company made advances in the net amount of $21,458 to these and other
related parties, primarily for capital expenditures and working capital
purposes. During the year ended March 31, 1997 and the nine months ended
December 31, 1998, the Managed Partnerships and other related parties repaid
advances in the net amounts of $34,250 and $8,150, respectively.

Recent Accounting Pronouncements

      Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," has been issued and is
effective for fiscal quarters of fiscal years beginning after June 15, 1999.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Management of Adelphia has
not completed its evaluation of the impact of SFAS No. 133 on Adelphia's
consolidated financial statements. Statement of Position ("SOP") 98-5,
"Reporting on the Costs of Start-Up Activites", has been issued and is effective
for fiscal years beginning after December 15, 1998. SOP 98-5 provides guidance
on the financial reporting of start up costs and organization costs. It requires
such costs to be expensed as incurred. Management of Adelphia believes that SOP
98-5 will not have a material impact on Adelphia's consolidated financial
statements.

Inflation

      In the two fiscal years in the period ended March 31, 1998 and the nine
months ended December 31, 1998, inflation did not have a significant effect on
the Company. Periods of high inflation could have an adverse effect to the
extent that increased borrowing costs for floating-rate debt may not be offset
by increases in subscriber rates. At December 31, 1998, after giving effect to
interest rate hedging agreements, approximately $772,350 of the Company's total
debt was subject to floating interest rates.

<PAGE>

Regulatory and Competitive Matters

      The cable television operations of the Company may be adversely affected
by changes and developments in governmental regulation, competitive forces and
technology. The cable television industry and the Company are subject to
extensive regulation at the federal, state and local levels. The 1992 Cable Act
significantly expanded the scope of regulation of certain subscriber rates and a
number of other matters in the cable industry, such as mandatory carriage of
local broadcast stations and retransmission consent, and increased the
administrative costs of complying with such regulations. The FCC has adopted
rate regulations that establish, on a system-by-system basis, maximum allowable
rates for (i) basic and cable programming services (other than programming
offered on a per-channel or per-program basis), based upon a benchmark
methodology, and (ii) associated equipment and installation services based upon
cost plus a reasonable profit. Under the FCC rules, franchising authorities are
authorized to regulate rates for basic services and associated equipment and
installation services, and the FCC will regulate rates for regulated cable
programming services in response to complaints filed with the agency. The 1996
Act ended FCC regulation of cable programming service tier rates on March 31,
1999.

      Rates for basic services are set pursuant to a benchmark formula.
Alternatively, a cable operator may elect to use a cost-of-service methodology
to show that rates for basic services are reasonable. Refunds with interest will
be required to be paid by cable operators who are required to reduce regulated
rates. The FCC has reserved the right to reduce or increase the benchmarks it
has established. The rate regulations also limit increases in regulated rates to
an inflation indexed amount plus increases in certain costs such as taxes,
franchise fees, costs associated with specific franchise requirements and
increased programming costs. Cost-based adjustments to these capped rates can
also be made in the event a cable operator adds or deletes channels or completes
a significant system rebuild or upgrade. Because of the limitation on rate
increases for regulated services, future revenue growth from cable services will
rely to a much greater extent than has been true in the past on increased
revenues from unregulated services and new subscribers than from increases in
previously unregulated rates.

      The FCC has adopted regulations implementing all of the requirements of
the 1992 Cable Act. The FCC is also likely to continue to modify, clarify or
refine the rate regulations. Adelphia cannot predict the effect of the 1996 Act
or future rulemaking proceedings or changes to the rate regulations.

      Cable television companies operate under franchises granted by local
authorities which are subject to renewal and renegotiation from time to time.
Because such franchises are generally non-exclusive, there is a potential for
competition with the systems from other operators of cable television systems,
including public systems operated by municipal franchising authorities
themselves, and from other distribution systems capable of delivering television
programming to homes. The 1992 Cable Act and the 1996 Act contain provisions
which encourage competition from such other sources. The Company cannot predict
the extent to which competition will materialize from other cable television
operators, local telephone companies, other distribution systems for delivering
television programming to the home, or other potential competitors, or, if such
competition materializes, the extent of its effect on the Company.

      The 1996 Act repealed the prohibition on CLECs from providing video
programming directly to customers within their local exchange areas other than
in rural areas or by specific waiver of FCC rules. The 1996 Act also authorized
CLECs to operate "open video systems" ("OVS") without obtaining a local cable
franchise, although CLECs operating such a system can be required to make
payments to local governmental bodies in lieu of cable franchise fees. Where
demand exceeds capacity, up to two-thirds of the channels on an OVS must be
available to programmers unaffiliated with the CLEC. The statute states that the
OVS scheme supplants the FCC's "video dialtone" rules. The FCC has promulgated
rules to implement the OVS concept, and New Jersey Bell Telephone Company has
been granted permission to convert its video dialtone authorization in Dover
Township, New Jersey to an OVS authorization.

      The Company believes that the provision of video programming by telephone
companies in competition with the Company's existing operations could have an
adverse effect on the Company's financial condition and results of operations.
At this time, the impact of any such effect is not known or estimable.

      The Company also competes with DBS service providers. DBS has been
available to consumers since 1994. A single DBS satellite can provide more than
100 channels of programming. DBS service can be received virtually anywhere in
the United States through the installation of a small outdoor antenna. DBS
service is being heavily marketed on a nationwide basis by several service
providers. At this time, any impact of DBS competition on the Company's future
results is not known or estimable.

<PAGE>

Year 2000 Issues

      The year 2000 issue refers to the inability of computerized systems and
technologies to recognize and process dates beyond December 31, 1999. The
Company is evaluating the impact of the year 2000 issue on its business
applications and its products and services. The evaluation includes a review of
the Company's information technology systems, cable network equipment and other
embedded technologies. A significant portion of the Company's computerized
systems and technologies have been developed, installed or upgraded in recent
years and are generally more likely to be year 2000 ready. The Company is also
evaluating the potential impact as a result of its reliance on third-party
systems that may have year 2000 issue.

      Computerized business applications that could be adversely affected by the
year 2000 issue include:

  -    information processing and financial reporting systems;
  -    customer billing systems;
  -    customer service systems;
  -    telecommunication transmission and reception systems; and
  -    facility systems.

      System failure or miscalculation could result in an inability to process
transactions, send invoices, accept customer orders or provide customers with
products and services. Customers could also experience a temporary inability to
receive or use the Company's products and services.

      The Company has developed a program to assess and address the year 2000
issue. This program consists of the following phases:

  -    inventorying and assessing the impact on affected technology and systems;
  -    developing solutions for affected technology and systems;
  -    modifying or replacing affected technology and systems;
  -    testing and verifying solutions;
  -    implementing solutions; and - developing contingency plans.

      The Company has substantially completed inventorying and assessing the
affected computerized systems and technologies. The Company is in various stages
of its year 2000 compliance program with respect to the remaining phases as it
relates to the affected systems and technologies.

      The Company has engaged a consulting firm familiar with its financial
reporting systems. This firm has developed and tested year 2000 solutions that
the Company is in the process of implementing. The Company expects its financial
reporting systems to be year 2000 compliant by July 1999.

      A third-party billing vendor currently facilitates customer billing. The
Company is currently in the process of testing an in-house service ordering,
provisioning, maintenance and billing system that would replace the third-party
billing vendor. The Company expects to have this new system implemented by
August 1999. On a contingency basis, the third-party vendor implemented its own
year 2000 solution in April 1999.

      Telecommunication plant rebuilds and upgrades in recent years have
minimized the potential impact of the year 2000 issue on the Company's
facilities, customer service, telecommunication transmission and reception
systems. The Company is engaged in a comprehensive internal inventory and
assessment of all hardware components and component controlling software
throughout its telecommunication networks. The Company expects to implement any
hardware and software modifications, upgrades or replacements resulting from the
internal review by August 1999.

      Costs incurred to date directly related to addressing the year 2000 issue
have been approximately $750. The Company has also redeployed internal resources
to meet the goals of its year 2000 program. The Company currently estimates the
total cost of its year 2000 remediation program to be approximately $3,500.
Although the Company will continue to incur substantial capital expenditures in
the ordinary course of meeting its telecommunications system upgrade goals
through the year 2000, it will not specifically accelerate its expenditures to
facilitate year 2000 readiness, and accordingly such expenditures are not
included in the above estimate.

<PAGE>

      The Company has begun communicating with others with whom it does
significant business to determine their year 2000 readiness and to determine the
extent to which the Company is vulnerable to the year 2000 issue related to
those third parties. The Company purchases much of its technology from third
parties. There can be no assurance that the systems of other companies on which
the Company's systems rely will be year 2000 ready or timely converted into
systems compatible with the Company systems. The Company's failure or a
third-party's failure to become year 2000 ready or the Company's inability to
become compatible with third parties with which the Company has a material
relationship, may have a material adverse effect on the Company, including
significant service interruption or outages; however, the Company cannot
currently estimate the extent of any such adverse effects.

      The Company is in the process of identifying secondary sources to supply
its systems or services in the event it becomes probable that any of its systems
will not be year 2000 ready prior to the end of 1999. The Company is also in the
process of identifying secondary vendors and service providers to replace those
vendors and service providers whose failure to be year 2000 ready could lead to
a significant delay in the Company's ability to provide its service to its
customers.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
(Dollars in Thousands)

      The Company uses fixed and variable rate debt to fund its working capital
requirements, capital expenditures and acquisitions. These debt arrangements
expose the Company to market risk related to changes in interest rates. The
Company enters into pay-fixed agreements to effectively convert a portion of its
variable-rate debt to fixed-rate debt to reduce the risk of incurring higher
interest costs due to rising interest rates. As of December 31, 1998, the
Company had interest rate swap agreements covering notional principal of
$650,000 that expire through 2008 and that fix the interest rate at an average
of 6.55%. The Company also enters into receive-fixed agreements to effectively
convert a portion of its fixed-rate debt to a variable-rate debt which is
indexed to LIBOR to reduce the risk of incurring higher interest costs in
periods of falling interest rates. As of December 31, 1998, the Company had
interest rate swap agreements covering notional principal of $45,000 that expire
through 2003 and that have a variable rate at an average of 5.32%. The Company
enters into interest rate caps to reduce the risk of incurring higher interest
costs due to rising interest rates. As of December 31, 1998, the Company had
interest rate cap agreements covering a notional amount of $140,000, which
expire in 1999 and cap rates at an average rate of 7.82%. The Company does not
enter into any interest rate swap or cap agreements for trading purposes. The
Company is exposed to credit loss in the event of non-performance by the banks.
No such non-performance is expected. The table below summarizes the fair values
and contract terms of the Company's financial instruments subject to interest
rate risk as of December 31, 1998.



<PAGE>


<TABLE>
<CAPTION>


                                               Expected Maturity
                            --------------------------------------------------------                            Fair
                                 1999       2000       2001        2002       2003     Thereafter    Total      Value
                            ---------------------------------------------------------------------------------------------
Debt and Redeemable
   Preferred Stock:

<S>                          <C>        <C>        <C>         <C>        <C>        <C>          <C>         <C>
Fixed Rate                   $  12,375  $ 112,375  $   3,000   $ 325,000  $ 453,000  $ 1,870,021  $2,775,771  $ 2,807,970
   Average Interest Rate        10.63%     10.64%     10.65%      10.69%     10.71%       10.74%         --           --


Variable Rate                   88,262    122,002    184,834     212,412    235,577      375,619   1,218,706    1,218,706
   Average Interest Rate         6.43%      6.46%      6.74%       6.94%      7.27%        7.11%         --           --

Interest Rate Swaps
   and Caps:

Variable to Fixed            $ 175,000  $     --   $     --    $     --   $     --   $   475,000  $  650,000  $  (28,316)
Average Pay Rate                 6.55%        --         --          --         --         6.55%         --          --
Average Receive Rate             5.33%        --         --          --         --         5.61%         --          --

Fixed to Variable                   --        --         --          --      45,000           --      45,000       1,112
Average Pay Rate                    --        --         --          --       5.32%           --         --          --
Average Receive Rate                --        --         --          --       5.46%           --         --          --

Interest Rate Caps             140,000        --         --          --         --            --     140,000         (23)
Average Cap Rate                 7.82%        --         --          --         --            --         --          --


</TABLE>




      Interest rates on variable debt are estimated by us using the average
implied forward London Interbank Offer Rate ("LIBOR") rates for the year of
maturity based on the yield curve in effect at December 31, 1998, plus the
borrowing margin in effect at December 31, 1998. Average receive rates on the
variable to fixed swaps are estimated by us using the average implied forward
LIBOR rates for the year of maturity based on the yield curve in effect at
December 31, 1998.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements of Adelphia and related notes
thereto and independent auditors' report follow.

      The consolidated financial statements of Olympus and related notes thereto
and independent auditors' report dated March 19, 1999, appearing in Item 8 of
the Annual Report on Form 10-K of Olympus Communications, L.P. and Olympus
Capital Corporation for the year ended December 31, 1998, are incorporated by
reference in this Transition Report on Form 10-K.

<PAGE>



<TABLE>
<CAPTION>


                            INDEX TO FINANCIAL STATEMENTS OF ADELPHIA COMMUNICATIONS CORPORATION
                                                      AND SUBSIDIARIES



<S>                                                                                                       <C>
Independent Auditors' Report.............................................................................. 47
Consolidated Balance Sheets, March 31, 1998 and December 31, 1998......................................... 48
Consolidated Statements of Operations, Years Ended March 31, 1997 and 1998 and Nine
   Months Ended December 31, 1998......................................................................... 49
Consolidated Statements of Convertible Preferred Stock, Common Stock and Other Stockholders' Equity
   (Deficiency), Years Ended March 31, 1997 and 1998 and Nine Months Ended December 31, 1998.............. 50
Consolidated Statements of Cash Flows, Years Ended March 31, 1997 and 1998
   and Nine Months Ended December 31, 1998................................................................ 51
Notes to Consolidated Financial Statements................................................................ 52

</TABLE>



<PAGE>



                          INDEPENDENT AUDITORS' REPORT

Adelphia Communications Corporation:

     We have audited the accompanying consolidated balance sheets of Adelphia
Communications Corporation and subsidiaries as of March 31, 1998 and December
31, 1998, and the related consolidated statements of operations, of convertible
preferred stock, common stock and other stockholders' equity (deficiency), and
of cash flows for the years ended March 31, 1997 and 1998 and the nine months
ended December 31, 1998. Our audits also included the financial statement
schedules listed in the Index at Item 14. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Adelphia Communications
Corporation and subsidiaries at March 31, 1998 and December 31, 1998, and the
results of their operations and their cash flows for the years ended March 31,
1997 and 1998 and the nine months ended December 31, 1998 in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.



DELOITTE & TOUCHE LLP



Pittsburgh, Pennsylvania
May 17, 1999


<PAGE>


<TABLE>
<CAPTION>

                             ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                          CONSOLIDATED BALANCE SHEETS
                               (Dollars in thousands, except per share amounts)

                                                                                     March 31,    December 31,
                                                                                       1998           1998
                                                                                   -------------- --------------

ASSETS:
<S>                                                                                <C>            <C>
Property, plant and equipment--net                                                  $     918,637  $   1,207,655
Intangible assets--net                                                                    695,104      1,029,159
Cash and cash equivalents                                                                 276,895        398,644
U.S. government securities--pledged                                                        70,535         58,054
Investments                                                                               127,827        196,893
Preferred equity investment in Managed Partnership                                         18,338             --
Subscriber receivables--net                                                                30,551         53,911
Prepaid expenses and other assets--net                                                    114,526        114,625
Investment in and amounts due from Olympus                                                     --        191,408
Related party receivables--net                                                             52,258         44,108
                                                                                   -------------- --------------

          Total                                                                     $   2,304,671   $  3,294,457
                                                                                    ============== ==============

LIABILITIES, PREFERRED STOCK, COMMON STOCK AND
OTHER STOCKHOLDERS' EQUITY (DEFICIENCY):
Subsidiary debt                                                                     $   1,329,471   $  1,717,240
Parent debt                                                                             1,580,274      1,810,212
Accounts payable                                                                           65,019         96,985
Subscriber advance payments and deposits                                                   17,129         19,377
Accrued interest and other liabilities                                                     98,087        137,131
Deferred income taxes                                                                     116,351        109,609
                                                                                    --------------   ------------

          Total liabilities                                                             3,206,331      3,890,554
                                                                                   -------------- --------------

Minority interests                                                                         27,737         48,784
                                                                                   -------------- --------------

Cumulative equity in loss in excess of investment in and amounts
   due from Olympus                                                                        31,202             --
                                                                                   -------------- --------------

Hyperion redeemable exchangeable preferred stock                                          207,204        228,674
                                                                                   -------------- --------------

Series A cumulative redeemable exchangeable preferred stock                               148,062        148,191
                                                                                   -------------- --------------

Commitments and contingencies (Note 5)

Convertible preferred stock, common stock and
other stockholders' equity (deficiency):
8 1/8%  Series C convertible preferred stock ($100,000 liquidation preference)                  1              1
Class A common stock, $.01 par value, 200,000,000 shares
   authorized, 20,043,528 and 31,258,843 shares outstanding, respectively                     200            313
Class B common stock, $.01 par value, 25,000,000 shares
   authorized, 10,944,476 and 10,834,476 shares outstanding, respectively                     109            108
Additional paid-in capital                                                                331,263        738,102
Accumulated deficit                                                                    (1,647,438)    (1,760,270)
                                                                                   -------------- --------------
     Convertible preferred stock, common stock and other
        stockholders' equity (deficiency)                                              (1,315,865)    (1,021,746)
                                                                                   -------------- --------------

          Total                                                                     $   2,304,671   $  3,294,457
                                                                                    ==============  ============

                                See notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                               ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Dollars in thousands, except per share amounts)

                                                                                                  Nine Months
                                                                                                     Ended
                                                                          Year Ended March 31,    December 31,
                                                                             1997         1998        1998
                                                                        ------------ -----------  -----------
<S>                                                                     <C>          <C>          <C>
Revenues                                                                $   472,778  $   528,442  $   507,155
                                                                        -----------  -----------  -----------

Operating expenses:
Direct operating and programming                                            148,982      167,288      167,963
Selling, general and administrative                                          81,763       95,731      107,249
Depreciation and amortization                                               124,066      145,041      140,823
                                                                        -----------  -----------  -----------

Total                                                                       354,811      408,060      416,035
                                                                        -----------  -----------  -----------
Operating income                                                            117,967      120,382       91,120
                                                                        -----------  -----------  -----------
Other income (expense):
Priority investment income from Olympus                                      42,086       47,765       36,000
Interest expense - net (see Note 1)                                        (232,325)    (247,107)    (191,593)
Equity in loss of Olympus and other joint ventures                          (51,946)     (66,089)     (48,891)
Equity in loss of Hyperion joint ventures                                    (7,223)     (12,967)      (9,580)
Minority interest in net losses of subsidiaries                                --           --         25,772
Hyperion preferred stock dividends                                             --        (12,682)     (21,536)
Gain on sale of investments                                                  12,151        2,538         --
Other income                                                                   --           --          1,113
                                                                        -----------  -----------  -----------
Total                                                                      (237,257)    (288,542)    (208,715)
                                                                        -----------  -----------  -----------

Loss before income taxes and extraordinary loss                            (119,290)    (168,160)    (117,595)
Income tax benefit                                                              358        5,606        6,802
                                                                        -----------  -----------  -----------
Loss before extraordinary loss                                             (118,932)    (162,554)    (110,793)
Extraordinary loss on early retirement of debt                              (11,710)     (11,325)      (4,337)
                                                                        -----------  -----------  -----------

Net loss                                                                   (130,642)    (173,879)    (115,130)
Dividend requirements applicable to preferred stock                            --        (18,850)     (20,718)
                                                                        -----------  -----------  -----------

Net loss applicable to common stockholders                              $  (130,642) $  (192,729) $  (135,848)
                                                                        ===========  ===========  ===========

Basic and diluted net loss per weighted average share of common
stock before extraordinary loss                                         $     (4.50) $     (6.07) $     (3.63)

Basic and diluted extraordinary loss on early retirement of debt per
weighted average share of common stock                                        (0.44)       (0.38)       (0.12)
                                                                        ===========  ===========  ===========
Basic and diluted net loss per weighted average share of common stock   $     (4.94) $     (6.45) $     (3.75)
                                                                        ===========  ===========  ===========

Weighted average shares of common stock outstanding (in thousands)           26,411       29,875       36,226
                                                                        ===========  ===========  ===========

                                     See notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                  ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, COMMON STOCK
                                       AND OTHER STOCKHOLDERS' EQUITY (DEFICIENCY)
                                                 (Dollars in thousands)

                                          Series C
                                        Convertible     Class A       Class B       Additional
                                         Preferred      Common        Common         Paid-In      Accumulated
                                           Stock         Stock         Stock         Capital        Deficit         Total
                                        -----------   -----------   -----------    -----------    ------------  -------------

<S>                                     <C>           <C>           <C>            <C>            <C>            <C>
Balance, March 31, 1996                 $      --     $       154   $       109    $   214,415    $(1,342,917)   $(1,128,239)
Issuance of Class A common
stock for cable television assets              --               7          --            4,993           --            5,000
Net loss                                       --            --            --             --         (130,642)      (130,642)
                                        -----------   -----------   -----------    -----------    -----------    -----------

Balance, March 31, 1997                        --             161           109        219,408     (1,473,559)    (1,253,881)
Issuance of Class A common
stock for cable television assets              --              39          --           33,792           --           33,831
Issuance of Series C convertible
preferred stock                                   1          --            --           96,999           --           97,000
Dividend requirements applicable to
exchangeable preferred stock                   --            --            --          (14,246)          --          (14,246)
Dividend requirements applicable
to convertible preferred stock                 --            --            --           (4,604)          --           (4,604)
Other                                          --            --            --              (86)          --              (86)
Net loss                                       --            --            --             --         (173,879)      (173,879)
                                        -----------   -----------   -----------    -----------    -----------    -----------

Balance, March 31, 1998                           1           200           109        331,263     (1,647,438)    (1,315,865)
                                        -----------   -----------   -----------    -----------    -----------    -----------
Hyperion issuance of Class A
common stock                                   --            --            --          146,440           --          146,440
Issuance of Class A common stock
to the public                                  --              88          --          267,838           --          267,926
Dividend requirements applicable to
exchangeable preferred stock                   --            --            --          (14,625)          --          (14,625)
Dividend requirements applicable to
convertible preferred stock                    --            --            --           (6,093)          --           (6,093)
Issuance of Class A common stock
for affiliate cable television assets          --              23          --           77,085           --           77,108
Excess of purchase price over
carrying value of cable television
assets purchased from affiliate                --            --            --          (63,676)          --          (63,676)
Conversion of Class B common
stock into Class A common stock                --               1            (1)          --             --             --
Other                                          --               1          --             (130)         2,298          2,169
Net loss                                       --            --            --             --         (115,130)      (115,130)
                                        -----------   -----------   -----------    -----------    -----------    -----------

Balance, December 31, 1998              $         1   $       313   $       108    $   738,102    $(1,760,270)   $(1,021,746)
                                        ===========   ===========   ===========    ===========    ===========    ===========

                                            See notes to consolidated financial statements.

</TABLE>


<PAGE>

<TABLE>


                                 ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Dollars in thousands)
                                                                                             Nine Months
                                                                                                Ended
                                                                  Year Ended March 31,       December 31,
                                                                    1997          1998           1998
                                                               ------------   ------------   ------------
Cash flows from operating activities:
<S>                                                            <C>            <C>            <C>
Net loss                                                       $  (130,642)   $  (173,879)   $  (115,130)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization                                      124,066        145,041        140,823
Noncash interest expense                                            41,360         37,430         23,663
Noncash dividends                                                     --           12,682         21,536
Equity in loss of Olympus and other joint ventures                  51,946         66,089         48,891
Equity in loss of Hyperion joint ventures                            7,223         12,967          9,580
Gain on sale of investments                                        (12,151)        (2,538)          --
Minority interest in losses of subsidiaries                           --             --          (25,772)
Extraordinary loss on early retirement of debt                      11,710         11,325          4,337
Decrease in deferred taxes, net of effects of acquisitions            (500)        (6,305)        (6,510)
Changes in operating assets and liabilities,
net of effects of acquisitions:
Subscriber receivables                                                (813)        (4,351)       (19,874)
Prepaid expenses and other assets                                  (27,858)       (23,437)        (6,942)
Accounts payable                                                    (9,784)         4,282         31,029
Subscriber advance payments and deposits                             1,298            658          1,678
Accrued interest and other liabilities                             (12,854)       (13,694)        31,051
                                                               -----------    -----------    -----------

Net cash provided by operating activities                           43,001         66,270        138,360
                                                               -----------    -----------    -----------

Cash flows used for investing activities:
Acquisitions                                                      (143,412)      (146,546)      (403,851)
Expenditures for property, plant and equipment                    (129,609)      (183,586)      (255,797)
Investments in Hyperion joint ventures                             (34,769)       (64,260)       (69,018)
Investments in other joint ventures                                (16,646)       (22,591)       (12,540)
Purchase of minority interest in Hyperion                             --             --          (15,580)
Investment in U.S. government securities--pledged                     --          (83,400)          --
Sale of U.S. government securities - pledged                          --           15,653         15,312
Amounts invested in and advanced to Olympus
and related parties                                                 (9,229)       (91,468)      (274,216)
Proceeds from sale of investments                                   11,618         12,678           --
                                                               -----------    -----------    -----------

Net cash used for investing activities                            (322,047)      (563,520)    (1,015,690)
                                                               -----------    -----------    -----------

Cash flows from financing activities:
Proceeds from debt                                               1,280,649      1,298,137        836,176
Repayments of debt                                                (933,517)      (977,591)      (269,778)
Costs associated with debt financings                              (20,236)       (20,498)        (7,125)
Premium paid on early retirement of debt                            (8,207)       (12,153)        (3,634)
Issuance of Hyperion Class A common stock                             --             --          205,599
Issuance of Class A common stock                                      --             --          275,880
Costs associated with issuances of common stock                       --             --          (22,196)
Proceeds from Hyperion's issuance of warrants                       11,087           --             --
Issuance of redeemable exchangeable preferred stock                   --          147,976           --
Issuance of convertible preferred stock                               --           97,000           --
Issuance of Hyperion redeemable exchangeable preferred stock          --          194,522           --
Preferred stock dividends paid                                        --          (14,787)       (15,843)
                                                               -----------    -----------    -----------

Net cash provided by financing activities                          329,776        712,606        999,079
                                                               -----------    -----------    -----------

Increase in cash and cash equivalents                               50,730        215,356        121,749
Cash and cash equivalents, beginning of period                      10,809         61,539        276,895
                                                               -----------    -----------    -----------

Cash and cash equivalents, end of period                       $    61,539    $   276,895    $   398,644
                                                               ===========    ===========    ===========

Supplemental disclosure of cash flow activity--
Cash payments for interest                                     $   203,939    $   220,888    $   162,113
                                                               ===========    ===========    ===========

                                     See notes to consolidated financial statements.
</TABLE>


<PAGE>


              ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (Dollars in thousands, except per share amounts)


1.  The Company and Summary of Significant Accounting Policies:

    The Company and Basis for Consolidation

      Adelphia Communications Corporation and subsidiaries ("Adelphia") owns,
operates and manages cable television systems and other related
telecommunications businesses. Adelphia's operations consist primarily of
selling video programming which is distributed to subscribers for a monthly fee
through a network of fiber optic and coaxial cables. These services are offered
in the respective franchise areas under the name Adelphia. Hyperion
Telecommunications, Inc. and subsidiaries ("Hyperion") is a consolidated
subsidiary of Adelphia which owns, operates and manages entities which provide
competitive local exchange carrier ("CLEC") telecommunications services under
the name Hyperion Communications.

      On March 30, 1999, the Board of Directors of Adelphia changed Adelphia's
fiscal year from March 31 to December 31. The decision was made to conform to
general industry practice and for administrative purposes. The change became
effective for the nine months ended December 31, 1998.

      The consolidated financial statements include the accounts of Adelphia and
its more than 50% owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

      During the years ended March 31, 1997 and 1998 and the nine months ended
December 31, 1998, Adelphia consummated several acquisitions, each of which was
accounted for using the purchase method. Accordingly, the financial results of
each acquisition have been included in the consolidated results of Adelphia
effective from the date acquired.

      On April 1, 1996, Adelphia acquired cable systems from Cable TV Fund 11-B,
Ltd. These systems served approximately 39,700 subscribers at the acquisition
date located in the New York counties of Erie and Niagara and were purchased for
an aggregate price of $84,267.

      On July 12, 1996, Adelphia acquired cable systems from First Carolina
Cable TV, L.P. These systems served approximately 32,500 subscribers at the
acquisition date primarily located in Vermont and were purchased for an
aggregate price of $48,500.

      On February 10, 1997, Adelphia acquired cable systems from Small Cities
Cable Television, L.P. and Small Cities Cable Television, Inc.. These systems
served approximately 6,000 subscribers at the acquisition date, primarily
located in Vermont and were purchased for an aggregate price of $12,000 in cash
and Adelphia Class A common stock.

      On June 20, 1997, Adelphia acquired cable systems from Booth
Communications Company. These systems served approximately 25,800 subscribers at
the acquisition date in the Virginia cities of Blacksburg and Salem and were
purchased for an aggregate price of $54,500 in cash and Adelphia Class A common
stock.

      On September 12, 1997, Hyperion consummated an agreement with Time Warner
Entertainment-Advance/Newhouse ("TWEAN") to exchange interests in four New York
CLEC networks. As a result of the transaction, Hyperion paid TWEAN $7,638 and
increased its ownership in the networks serving Buffalo and Syracuse, New York
to 60% and 100%, respectively, and eliminated its interest in the Albany and
Binghamton networks, which became wholly owned by TWEAN.

      On November 7, 1997, Adelphia acquired approximately 61% of the
partnership interests in two cable systems from U.S. Cable Corporation. These
systems served approximately 20,300 subscribers at the acquisition date in the
western New York area and were purchased for an aggregate price of $20,737.

      On November 22, 1997, Adelphia acquired a cable system from Memphrecom,
Inc. This system served approximately 3,400 subscribers at the acquisition date
in Vermont and was purchased for an aggregate price of $8,096.

      On December 3, 1997, Adelphia exchanged its interest in Oxford, North
Carolina, a system which served approximately 4,400 subscribers, for TWEAN's
interest in its DuBois, Pennsylvania system, which served approximately 3,800
subscribers.

      On December 31, 1997, Adelphia acquired 82% of the partnership interests
in Tele-Media Company of Tri States, L.P. The systems acquired in this
transaction served approximately 16,000 subscribers at the acquisition date in
Pennsylvania, Maryland and West Virginia and were purchased for an aggregate
price of $23,615.

<PAGE>

      On February 12, 1998, Hyperion issued a warrant for 731,624 shares of
Hyperion Class A Common Stock to its 50% partner in Hyperion of Harrisburg in
exchange for such partnership interest.

      On February 12, 1998, Hyperion acquired the remaining partnership
interests in its Buffalo, NY, Louisville, KY and Lexington, KY networks for
approximately $18,300.

      On February 12, 1998, Hyperion acquired the remaining partnership
interests in its Morristown and New Brunswick, NJ networks for approximately
$26,328.

      On March 6, 1998, Adelphia exercised its option to purchase the remaining
15% of its Northeast Cable, Inc. system. Adelphia issued 341,220 shares of Class
A common stock to the sellers in connection with this purchase.

      On April 1, 1998, Adelphia exchanged its interest in Mansfield, Ohio area
systems, which served approximately 64,400 subscribers and approximately $11,000
cash for Time Warner Entertainment's interests in systems adjacent to systems
owned or managed by Adelphia in Virginia, New England and New York, which served
approximately 70,200 subscribers.

      On June 5, 1998, Adelphia acquired cable systems from Cablevision Systems.
These systems served approximately 11,250 subscribers at the acquisition date in
southern New York and were purchased for an aggregate price of $11,500.

      On July 31, 1998, Adelphia consummated its transaction with AT&T to form a
joint venture limited partnership in the Western New York region (the "Western
New York Partnership"). Pursuant to this agreement, Adelphia contributed its
Western New York and Lorain, Ohio systems totaling approximately 298,000
subscribers and certain programming assets and $440,000 in debt. Subsidiaries of
AT&T contributed their cable systems in Buffalo, New York; Erie, Pennsylvania;
and Ashtabula and Lake County, Ohio, totaling approximately 171,000 subscribers
and $228,000 in debt. Adelphia and AT&T hold a 66.7% and 33.3% interest,
respectively, in the partnership. Adelphia manages the partnership.

      On September 1, 1998, a majority owned subsidiary of Adelphia acquired
cable systems from Marcus Cable. These systems served approximately 62,000
subscribers at the acquisition date in Connecticut and Virginia and were
purchased for an aggregate price of $150,126.

      On September 30, 1998, Adelphia merged one of its subsidiaries with the
subsidiary of AT&T that held an interest in Syracuse Hilton Head Holdings, L.P.
("SHHH, L.P."), an Adelphia managed partnership controlled by the Rigas family,
principal stockholders of Adelphia. Pursuant to the merger agreement, AT&T
received 2,250,000 newly issued shares of Adelphia's Class A common stock.
Simultaneously, SHHH, L.P. distributed certain cable systems, which served
approximately 34,100 subscribers, in Virginia and North Carolina to Adelphia, in
exchange for the interest acquired by Adelphia from AT&T as described above,
Adelphia's preferred equity investment in Managed Partnership and certain
affiliate receivables owed to Adelphia.

      The following unaudited financial information assumes that the
acquisitions that were consummated during the nine months ended December 31,
1998 had occurred on April 1, 1996.

<TABLE>
<CAPTION>

                                                                                  Nine Months
                                                                                     Ended
                                                           Year Ended March 31,   December 31,
                                                              1997        1998        1998
                                                         ------------ ----------  ------------
<S>                                                      <C>          <C>          <C>
       Revenue                                           $  597,418   $  652,367   $  554,352
       Loss before extraordinary loss                       132,990      174,216      115,280
       Net loss                                             144,700      185,541      119,617
       Basic and diluted net loss per weighted
          average share of common stock                        5.05         6.36         3.72

    Investment in Olympus Joint Venture Partnership

</TABLE>

      The investment in the Olympus Communications, L.P. ("Olympus") joint
venture partnership comprises both limited and general partner interests. The
general partner interest represents a 50% voting interest in Olympus and is
being accounted for using the equity method. Under this method, Adelphia's
investment, initially recorded at the historical cost of contributed property,
is adjusted for subsequent capital contributions and its share of the losses of
the partnership as well as its share of the accretion requirements of the

<PAGE>

partnership's interests. The limited partner interest represents a preferred
interest ("PLP interests") entitled to a 16.5% annual return. At March 31, 1997
and 1998 and December 31, 1998, Adelphia owned $271,546, $325,911 and $366,861
in Olympus PLP Interests, respectively.

      The PLP interests are nonvoting, are senior to claims of certain other
partner interests, and provide for an annual priority return of 16.5%. Olympus
is not required to pay the entire 16.5% return currently and priority return on
PLP interests is recognized as income by Adelphia when received.
Correspondingly, equity in net loss of Olympus excludes accumulated unpaid
priority return (see Note 2).

    Subscriber Revenues

      Subscriber revenues are recorded in the month the service is provided.

    Property, Plant and Equipment

      Property, plant and equipment, at cost, are comprised of the following:

<TABLE>
<CAPTION>

                                                                     March 31,   December 31,
                                                                        1998        1998
                                                                    -----------  ------------
<S>                                                                 <C>          <C>
                   Operating plant and equipment                    $ 1,290,915  $ 1,531,405
                   Real estate and improvements                          78,435       93,457
                   Support equipment                                     26,961       30,533
                   Construction in progress                             171,853      283,133
                                                                   ------------  ------------
                                                                      1,568,164    1,938,528
                   Accumulated depreciation                            (649,527)    (730,873)
                                                                   ============  ============
                                                                   $    918,637  $ 1,207,655
                                                                   ============  ============

</TABLE>


      Depreciation is computed on the straight-line method using estimated
useful lives of 5 to 12 years for operating plant and equipment and 3 to 20
years for support equipment and real estate. Additions to property, plant and
equipment are recorded at cost which includes amounts for material, applicable
labor and overhead, and interest. Depreciation expense amounted to $78,328,
$93,688 and $98,699 for the years ended March 31, 1997 and 1998 and the nine
months ended December 31, 1998, respectively. Capitalized interest amounted to
$1,727, $5,985 and $11,285 for the years ended March 31, 1997 and 1998 and the
nine months ended December 31, 1998, respectively.

    Intangible Assets

      Intangible assets, at cost, net of accumulated amortization, are comprised
of the following:

<TABLE>
<CAPTION>


                                                                     March 31,   December 31,
                                                                        1998         1998
                                                                    ----------- -------------
<S>                                                                 <C>          <C>
                   Purchased franchises                             $   526,333  $    828,410
                   Goodwill                                              89,029       119,012
                   Non-compete agreements                                 8,705         8,922
                   Purchased subscribers lists                           71,037        72,815
                                                                    ===========  ============
                                                                    $   695,104  $  1,029,159
                                                                    ===========  ============
</TABLE>


      A portion of the aggregate purchase price of systems acquired has been
allocated to purchased franchises, purchased subscriber lists, goodwill and
non-compete agreements. Purchased franchises and goodwill are amortized on the
straight-line method over 40 years. Purchased subscriber lists are amortized on
the straight-line method over periods which range from 5 to 10 years.
Non-compete agreements are amortized on the straight-line method over their
contractual lives which range from 4 to 12 years. Accumulated amortization of
intangible assets amounted to $211,967 and $249,618 at March 31, 1998 and
December 31, 1998, respectively.

<PAGE>


    Cash and Cash Equivalents

      Adelphia considers all highly liquid investments with original maturities
of three months or less to be cash equivalents. Interest income on liquid
investments was $5,789, $13,383 and $10,752 for the years ended March 31, 1997
and 1998 and the nine months ended December 31, 1998, respectively. Book
overdrafts of $20,528 and $7,855 existed at March 31, 1998 and December 31,
1998, respectively. These book overdrafts were reclassified as accrued interest
and other liabilities and accounts payable.

    U.S. Government Securities - Pledged

      U.S. Government Securities - Pledged consist of highly liquid investments
which will be used to pay the first six semi-annual interest payments of the
Hyperion 12 1/4% Senior Secured Notes. Such investments are classified as
held-to-maturity and the carrying value approximates market value.

    Investments

      The equity method of accounting is generally used to account for
investments in affiliates which are greater than 20% but not more than 50%
owned. Under this method, Adelphia's initial investment is recorded at cost and
subsequently adjusted for the amount of its equity in the net income or losses
of its affiliates. Dividends or other distributions are recorded as a reduction
of Adelphia's investment. Investments in affiliates accounted for using the
equity method generally reflect Adelphia's equity in their underlying assets.

      Investments in entities in which Adelphia's ownership is 20% or less are
generally accounted for using the cost method. Under the cost method, Adelphia's
initial investment is recorded at cost and subsequently adjusted for the excess,
if any, of dividends or other distributions received over its share of
cumulative earnings. Dividends received in excess of earnings subsequent to the
date the investment was made are recorded as reductions of the cost of the
investment.

      Adelphia's nonconsolidated investments are as follows:
<TABLE>
<CAPTION>


          Investments accounted for using the equity method:               March 31,   December 31,
          Gross investment:                                                   1998         1998
                                                                       -------------- -------------
<S>                                                                    <C>            <C>
             Hyperion investments in joint ventures                    $      69,596  $    138,614
             Benbow PCS Ventures, Inc.                                        15,539        17,170
             Mobile communications                                            15,387        18,249
             Other                                                             1,757         2,308
                                                                       -------------- -------------

                    Total                                                    102,279       176,341
                                                                       -------------- -------------

          Investments accounted for using the cost method:
             Niagara Frontier Hockey, L.P.                                    40,497        44,897
             SuperCable ALK International                                      3,190         3,190
             Programming ventures                                              1,427         1,469
             Mobile communications                                             2,582         2,925
             Other                                                               812           672
                                                                       -------------- ------------

                    Total                                                     48,508        53,153
                                                                       -------------- -------------

          Total investments before cumulative equity in net losses           150,787       229,494
          Cumulative equity in net losses                                    (22,960)      (32,601)
                                                                       -------------- -------------

          Total investments                                            $     127,827  $    196,893
                                                                       ============== =============
</TABLE>


      On May 16, 1996, Hyperion sold its interest in one of its joint ventures
for $11,618, resulting in a gain of $8,405. On January 23, 1997, Adelphia
received 284,425 shares of Republic Industries, Inc. Common Stock ("Republic
Stock") in exchange for its interest in Commonwealth Security, Inc., resulting
in a gain of $3,746. On October 7, 1997, Adelphia sold its Republic Stock, on
which a gain of $408 was recognized. On March 16, 1998, Adelphia sold its
investment in the Golf Channel, resulting in a gain of $1,520.

<PAGE>

      Certain members of the Rigas family have entered into an agreement to
acquire all the voting interests of Niagara Frontier Hockey, L.P. ("NFHLP").
Closing of the agreement is subject to third party approvals. Adelphia has
capital funding notes of NFHLP of $40,497 and $44,897 as of March 31, 1998 and
December 31, 1998, respectively. The capital funding notes are convertible into
non-voting preferred equity of NFHLP at the option of Adelphia. These amounts
represent advances to NFHLP plus accrued return of 11.5% to 14.0%. The return on
these capital funding notes amounted to approximately $3,500, $5,100 and $4,400
for the years ended March 31, 1997 and 1998 and the nine months ended December
31, 1998, respectively. Adelphia advanced approximately $8,150 and $7,500,
respectively, during the year ended March 31, 1998 and the nine months ended
December 31, 1998 to fund working capital requirements of NFHLP. These amounts
could be repaid by NFHLP in the future or converted into programming rights to
air future Buffalo Sabres hockey games. NFHLP continues to generate net losses
and working capital deficiencies and is attempting to re-negotiate the terms of
certain of its operating and financial agreements. The ability of NFHLP to
re-negotiate the terms of certain operating and financial agreements will impact
the ability of NFHLP to generate positive operating cash flow in the future.
Adelphia is unable to predict the ability of NFHLP to successfully re-negotiate
these agreements on terms that are favorable to NFHLP. Management believes that
all amounts advanced to NFHLP and the related accrued return are recoverable.

    Subscriber Receivables

      An allowance for doubtful  accounts of $1,166 and $2,853 is recorded as a
reduction of subscriber  receivables  at March 31, 1998 and December 31, 1998,
respectively.

    Amortization of Other Assets and Debt Discounts

      Deferred debt financing costs, included in prepaid expenses and other
assets, and debt discounts, a reduction of the carrying amount of the debt, are
amortized over the term of the related debt. The unamortized amounts of deferred
debt financing costs included in prepaid expenses and other assets were $47,653
and $47,542 at March 31, 1998 and December 31, 1998, respectively.

    Franchise Expense

      The typical term of  Adelphia's  franchise  agreements  upon renewal is
10 years.  Franchise  fees range from 3% to 5% of certain subscriber revenues
and are expensed currently.

    Basic and Diluted 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 Adelphia's preferred stock. Diluted net loss
per weighted average common share is equal to basic net loss per weighted
average common share because Adelphia's convertible preferred stock had an
antidilutive effect for the periods presented; however, the convertible
preferred stock could have a dilutive effect on earnings per share in future
periods.

    Asset Impairments

      Adelphia periodically reviews the carrying value of its long-lived assets
for impairment whenever events or changes in circumstances indicate that the
carrying value of assets may not be recoverable. Measurement of any impairment
would include a comparison of estimated future operating cash flows anticipated
to be generated during the remaining life of the assets with their net carrying
value. An impairment loss would be recognized as the amount by which the
carrying value of the assets exceeds their fair value.

    Noncash Financing and Investing Activities

      Capital leases entered into during the years ended March 31, 1997 and 1998
and the nine months ended December 31, 1998 totaled $1,624, $2,842 and $15,522,
respectively, for Adelphia, excluding Hyperion. Hyperion entered into capital
leases totaling $1,683, $24,489 and $1,155, respectively, during the years ended
March 31, 1997 and 1998 and the nine months ended December 31, 1998. Reference
is made to Notes 1 and 6 for descriptions of additional noncash financing and
investing activities.

<PAGE>

    Interest Expense - Net

      Interest expense - net includes interest income of $8,367, $23,949 and
$20,952 for the years ended March 31, 1997 and 1998 and the nine months ended
December 31, 1998, respectively. Interest income includes interest income from
affiliates on long-term loans and for reimbursement of interest expense on
revolving credit agreements, related to short term borrowings by such affiliates
(see Note 11).

    Interest Rate Swaps

      Net settlement amounts under interest rate swap agreements are recorded as
adjustments to interest expense during the period incurred.

    Use of Estimates in the Preparation of Financial Statements

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

    Recent Accounting Pronouncements

      Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," has been issued and is
effective for fiscal quarters of fiscal years beginning after June 15, 1999.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Management of Adelphia has
not completed its evaluation of the impact of SFAS No. 133 on Adelphia's
consolidated financial statements. Statement of Position ("SOP") 98-5,
"Reporting on the Costs of Start-Up Activities", has been issued and is
effective for fiscal years beginning after December 15, 1998. SOP 98-5 provides
guidance on the financial reporting of start up costs and organization costs. It
requires such costs to be expensed as incurred. Management of Adelphia believes
that SOP 98-5 will not have a material impact on Adelphia's consolidated
financial statements.

    Reclassifications

      Certain March 31, 1997 and 1998 amounts have been reclassified to conform
with the December 31, 1998 presentation.

2.   Related Party Investments and Receivables:

      Related party receivables--net represent advances to managed partnerships
(see Note 11), John J. Rigas and certain members of his immediate family
(collectively, the "Rigas family"), including entities they own or control. No
related party advances are collateralized.

      Investment in and amounts due from Olympus is comprised of the following:

<TABLE>
<CAPTION>

                                                                       March 31,    December 31,
                                                                            1998          1998
                                                                       ------------- -------------
<S>                                                                   <C>            <C>
           Cumulative equity in loss over investment in Olympus        $   (94,833)   $ (102,888)
           Amounts due from Olympus                                          63,631       294,296
                                                                       ------------   -----------
                                                                       $   (31,202)   $   191,408
                                                                       ============   ===========


</TABLE>



<PAGE>



      The major components of the financial position of Olympus as of December
31, 1997 and 1998 and the results of operations for the years ended December 31,
1997 and 1998 were as follows:

<TABLE>
<CAPTION>

                                                                                       December 31,
                                                                                     1997         1998
                                                                                 --------------------------
                Balance Sheet Data:
<S>                                                                              <C>          <C>
                     Property, plant and equipment--net                          $    265,783 $    355,470
                     Total assets                                                     728,952    1,011,999
                     Subsidiary debt                                                  427,000      519,443
                     Parent debt                                                      200,000      200,000
                     Total liabilities                                                841,169    1,147,946
                     Limited partners' interests                                      488,398      570,298
                     General partners' equity (deficiency)                           (600,615)    (706,245)

                Statement of Operations Data:
                     Revenues                                                    $    176,363 $    215,642
                     Operating income                                                  34,392       38,944
                     Net loss                                                         (19,802)     (16,074)
                     Net loss of general and limited partners
                            after priority return                                     (95,695)    (105,530)
</TABLE>


      On January 28, 1999, Adelphia announced an agreement to acquire the
Olympus partnership interests owned by various Telesat Cablevision, Inc.
("Telesat") entities which are wholly owned subsidiaries of FPL Group, Inc. for
a price of $108,000, subject to definitive terms to be negotiated by both
parties. Subsequent to the closing of this transaction, Adelphia will own 100%
of Olympus. Closing of this transaction is expected to occur during the third
quarter of 1999.

      On October 6, 1993, Adelphia purchased the preferred Class B Limited
Partnership Interest in SHHH, L.P., a managed partnership, for a price of
$18,338 from Robin Media Group. The Class B Limited Partnership Interest had a
preferred return annually which was payable on a current basis at the option of
SHHH, L.P., and was senior in priority to the partnership interests of the Rigas
family and TCI. Preferred return on the Class B Limited Partner Interest in
SHHH, L.P. totaled $3,066, $3,750 and $2,017 and is included in revenues for the
years ended March 31, 1997 and 1998, and the nine months ended December 31,
1998, respectively. On September 30, 1998, the Class B limited partner interest
was redeemed (see Note 1).

3. Debt:
    Subsidiary Debt
<TABLE>
<CAPTION>


                                                                             March 31,    December 31,
                                                                               1998           1998
                                                                          -------------- --------------
<S>                                                                       <C>            <C>
                   Notes to banks and institutions                        $     827,725  $   1,200,970
                   13% Senior Discount Notes of Hyperion due 2003               215,213        220,784
                   12 1/4% Senior Secured Notes of Hyperion due 2004            250,000        250,000
                   Other subsidiary debt                                         36,533         45,486
                                                                          -------------- --------------

                         Total subsidiary debt                            $   1,329,471  $   1,717,240
                                                                          ============== ==============
</TABLE>


    Notes to Banks and Institutions

      The amount of borrowings available to Adelphia under its revolving credit
agreements is generally based upon the subsidiaries achieving certain levels of
operating performance. Adelphia had commitments from banks for additional
borrowings of up to $360,000 at December 31, 1998 which expire through December
31, 2007. Adelphia pays commitment fees of up to 0.5% of unused principal.

<PAGE>


      Borrowings under most of these credit arrangements of subsidiaries are
collateralized by a pledge of the stock in their respective subsidiaries, and,
in some cases, by other assets. These agreements limit, among other things,
additional borrowings, investments, transactions with affiliates and other
subsidiaries, and the payment of dividends and fees by the subsidiaries. The
agreements also require maintenance of certain financial ratios by the
subsidiaries. Several of the subsidiaries' agreements, along with the notes of
the parent company, contain cross default provisions. At December 31, 1998,
approximately $731,500 of the net assets of subsidiaries would be permitted to
be transferred to the parent company in the form of dividends, priority return
and loans without the prior approval of the lenders based upon the results of
operations of such subsidiaries for the quarter ended December 31, 1998. The
subsidiaries are permitted to pay management fees to the parent company or other
subsidiaries. Such fees are limited to a percentage of the subsidiaries'
revenues.

      A subsidiary of Adelphia is a co-borrower with a managed partnership under
a $200,000 credit agreement. Each of the co-borrowers is liable for all
borrowings under this credit agreement, although the lenders have no recourse
against Adelphia other than against Adelphia's interest in such subsidiary.

      Notes to banks and institutions mature at various dates through 2007. Bank
debt interest rates are based upon one or more of the following rates at the
option of Adelphia: prime rate plus 0% to 1.5%; certificate of deposit rate plus
1.25% to 2.75%; or LIBOR plus 1% to 2.5%. Total bank debt with interest rates
under these options was approximately $644,000 and $1,173,220 at March 31, 1998
and December 31, 1998, respectively. At March 31, 1998 and December 31, 1998,
the weighted average interest rate on notes payable to banks and institutions
was 8.11% and 7.89%, respectively. At March 31, 1998 and December 31, 1998, the
rates on 28.8% and 35.9%, respectively, of Adelphia's notes payable to banks and
institutions were fixed for at least one year through the terms of the notes or
interest rate swap agreements.

      During the nine months ended December 31, 1998, Adelphia redeemed $137,200
aggregate principal amount of subsidiary notes to banks and institutions. As a
result of these transactions, Adelphia recognized an extraordinary loss on early
retirement of debt of $1,970.

    13% Senior Discount Notes of Hyperion due 2003

      On April 15, 1996, Hyperion realized proceeds, net of discount,
commissions and other transaction costs, of $168,600 upon issuance of $329,000
aggregate principal amount of unsecured 13% Senior Discount Notes due April 15,
2003 and 329,000 warrants expiring April 1, 2001 to purchase an aggregate of
1,993,638 shares of Hyperion Class A Common Stock at $0.00308 per share.
Proceeds of $11,087 were allocated to the value of the warrants. Prior to April
15, 2001, interest on the notes is not payable in cash, but is added to
principal. Thereafter, interest is payable semi-annually commencing October 15,
2001. The notes contain restrictions on Hyperion regarding, among other things,
limitations on additional borrowings, issuance of equity instruments, payment of
dividends and other distributions, repurchase of equity instruments or
subordinated debt, liens, transactions with affiliates, sales of assets, mergers
and consolidations. On or before April 15, 1999 and subject to certain
restrictions, Hyperion may redeem, at its option, up to 25% of the aggregate
principal amount of the notes at a price of 113% of the outstanding amount. On
or after April 15, 2001, Hyperion may redeem, at its option, all or a portion of
the notes at 106.5% of the outstanding amount, declining to par in 2002. During
the quarter ended September 30, 1998, Hyperion paid $17,313 to repurchase a
portion of the 13% Senior Discount Notes due 2003 which had a face value of
$25,160 and a carrying value of $17,550. The notes were retired upon repurchase
which resulted in a $237 gain.

    12 1/4% Senior Secured Notes of Hyperion due 2004

      On August 27, 1997, Hyperion issued $250,000 aggregate principal amount of
12 1/4% Senior Secured Notes due September 1, 2004. The notes are collateralized
through the pledge of the common stock of certain of Hyperion's wholly-owned
subsidiaries. Of the proceeds to Hyperion of approximately $244,000, net of
commissions and other transaction costs, $83,400 was invested in U.S. government
securities and placed in an escrow account for payment in full when due of the
first six scheduled semi-annual interest payments on the notes as required by
the Indenture. Interest is payable semi-annually. The notes contain restrictions
and covenants similar to those pertaining to Hyperion's 13% Senior Discount
Notes. On or before September 1, 2000 and subject to certain restrictions,
Hyperion may redeem, at its option, up to 25% of the aggregate principal amount
of the notes at a price of 112.25% of principal with the net proceeds of one or
more Qualified Equity Offerings (as defined in the Indenture). On or after
September 1, 2001, Hyperion may redeem, at its option, all or a portion of the
notes at 106.125% of principal which declines to par in 2003.


<PAGE>

    Other Subsidiary Debt

      As of March 31, 1998 and December 31, 1998, other debt consists, in part,
of purchase money indebtedness and capital leases incurred in connection with
the acquisition of, and are collateralized by, certain equipment. The interest
rate on such debt is based on the Federal Funds rate plus 1.4% or the U.S.
Treasury rate plus 2.8%.

    Parent Debt

      Interest on the Parent Debt is due semi-annually. The Parent Debt is
effectively subordinated to all liabilities of the subsidiaries and the
agreements contain restrictions on, among other things, the incurrence of
indebtedness, mergers and sale of assets, certain restricted payments by
Adelphia, investments in affiliates and certain other affiliate transactions.
The agreements further require that Adelphia maintain a ratio of debt to
annualized operating cash flow not greater than 8.75 to 1.00, based on the
latest fiscal quarter. Net proceeds from the issuance of notes during the year
ended March 31, 1998 and the nine months ended December 31, 1998 were used to
reduce amounts outstanding on Adelphia's subsidiaries' notes payable to banks
and to purchase, redeem or otherwise retire the 12 1/2% Notes due 2002.

<TABLE>
<CAPTION>

                                                        Outstanding as of
           Interest          Issue       Amount      March 31    December 31,   Maturity   First Call  First Call
             Rate            Date        Issued        1998         1998          Date        Date       Rate

<S>       <C>             <C>        <C>         <C>            <C>             <C>        <C>        <C>
           10  1/4%         7/28/93  $  110,000   $   99,504    $    99,653      7/15/00    Non-call      N/A
           12  1/2% (a)     5/14/92     400,000       69,838           -         5/15/02    5/15/97    106.00%
            9  1/4%         9/25/97     325,000      325,000        325,000      10/1/02    Non-call      N/A
            9  1/2% (b)     2/15/94     150,000      186,347        186,347      2/15/04    2/15/99    103.56%
           10  1/2%         7/07/97     150,000      150,000        150,000      7/15/04    Non-call      N/A
           11  7/8%         9/10/92     125,000      124,579        124,613      9/15/04    9/15/99    104.50%
            9  7/8%         3/11/93     130,000      128,407        128,531      3/01/05    Non-call      N/A
            9  7/8%         2/26/97     350,000      347,446        347,586      3/01/07    Non-call      N/A
            8  3/8%         1/21/98     150,000      149,153        149,197      2/01/08    Non-call      N/A
            8  3/8%        11/12/98     150,000         --          150,000      2/01/08    Non-call      N/A
            8  1/8%         7/02/98     150,000         --          149,285      7/15/03    Non-call      N/A
                                                  ----------     ----------
                                                  $1,580,274     $1,810,212
                                                  ==========     ==========

<FN>


(a)   On May 15, 1998, Adelphia redeemed the remaining $69,838 aggregate
      principal amount of notes at 103% of principal. As a result, Adelphia
      recognized an extraordinary loss on early retirement of debt of $2,604.

(b)   These Senior Notes are Pay-in-Kind with respect to interest payments at
      the option of Adelphia. During the year ended March 31, 1998, $20,000 of
      notes were reacquired through open market purchases. As a result, Adelphia
      recognized an extraordinary gain on early retirement of debt of $2,136. On
      February 15, 1999, Adelphia redeemed $154,500 aggregate principal amount
      of notes at 103.56% of principal. As a result, Adelphia recognized an
      extraordinary loss on early retirement of debt of $6,676.
</FN>
</TABLE>

    Maturities of Debt

      The following table sets forth the mandatory reductions in principal under
all debt agreements for each of the next five years based on amounts outstanding
at December 31, 1998:

<TABLE>
<CAPTION>

<S>                                                    <C>
              Year ending December 31, 1999            $  101,402
              Year ending December 31, 2000               236,795
              Year ending December 31, 2001               190,403
              Year ending December 31, 2002               540,318
              Year ending December 31, 2003               693,663

</TABLE>

      Adelphia intends to fund its requirements for maturities of debt through
borrowings under new and existing credit arrangements and internally generated
funds. Changing conditions in the financial markets may have an impact on how
Adelphia will refinance its debt in the future.

<PAGE>

Interest Rate Swaps and Caps

      Adelphia has entered into interest rate swap agreements and interest rate
cap agreements with banks, Olympus and Managed Partnerships (see Note 11) to
reduce the impact of changes in interest rates on its debt. Several of
Adelphia's credit arrangements include provisions which require interest rate
protection for a portion of its debt. Adelphia enters into pay-fixed agreements
to effectively convert a portion of its variable-rate debt to fixed-rate debt to
reduce the risk of incurring higher interest costs due to rising interest rates.
Adelphia enters into receive-fixed agreements to effectively convert a portion
of its fixed-rate debt to a variable-rate debt which is indexed to LIBOR to
reduce the risk of incurring higher interest costs in periods of falling
interest rates. Interest rate cap agreements are used to reduce the impact of
increases in interest rates on variable rate debt. Adelphia is exposed to credit
loss in the event of nonperformance by the banks, by Olympus or by the managed
entities. Adelphia does not expect any such nonperformance. The following table
summarizes the notional amounts outstanding and weighted average interest rate
data, based on variable rates in effect at March 31, 1998 and December 31, 1998,
for these swaps and caps, which expire through 2008.

<TABLE>
<CAPTION>

                                                      March 31,   December 31,
                                                         1998         1998
                                                     -----------  -----------
                    Pay Fixed Swaps:
<S>                                                  <C>          <C>
                    Notional amount                  $   315,000  $   650,000
                    Average receive rate                   5.87%        5.33%
                    Average pay rate                       7.42%        6.55%

                    Receive Fixed Swaps:
                    Notional amount                  $    35,000  $    45,000
                    Average receive rate                   5.68%        5.98%
                    Average pay rate                       5.91%        5.32%

                    Interest Rate Caps:
                    Notional amount                  $   190,000  $   140,000
                    Average cap rate                       8.13%        7.82%

</TABLE>


4.       Redeemable Preferred Stock:

    12 7/8% Hyperion Redeemable Exchangeable Preferred Stock

      On October 9, 1997, Hyperion issued $200,000 aggregate liquidation
preference of 12 7/8% Senior Exchangeable Redeemable Preferred Stock due October
15, 2007. Dividends are payable quarterly commencing January 15, 1998 at 12 7/8%
of the liquidation preference of outstanding preferred stock. Through October
15, 2002, dividends are payable in cash or additional shares of preferred stock
at Hyperion's option. Subsequent to October 15, 2002, dividends are payable in
cash. The preferred stock ranks junior in right of payment to all indebtedness
of Hyperion, its Subsidiaries and Joint Ventures. On or before October 15, 2000,
and subject to certain restrictions, Hyperion may redeem, at it option, up to
35% of the initial aggregate liquidation preference of the preferred stock
originally issued with the net cash proceeds of one or more Qualified Equity
Offerings (as defined in the Certificate of Designation) at a redemption price
equal to 112.875% of the liquidation preference per share of the preferred
stock, plus, without duplication, accumulated and unpaid dividends to the date
of redemption; provided that, after any such redemption, there are remaining
outstanding shares of preferred stock having an aggregate liquidation preference
of at least 65% of the initial aggregate liquidation preference of the preferred
stock originally issued. On or after October 15, 2002, Hyperion may redeem, at
its option, all or a portion of the preferred stock at 106.438% of the
liquidation preference thereof declining to 100% of the liquidation preference
in 2005. Hyperion is required to redeem all of the shares of preferred stock
outstanding on October 15, 2007 at a redemption price equal to 100% of the
liquidation preference thereof, plus, without duplication, accumulated and
unpaid dividends to the date of redemption. The preferred stock contain
restrictions and covenants similar to Hyperion's 13% Senior Discount Notes.

      Hyperion may, at its option, on any dividend payment date, exchange in
whole, but not in part, the then outstanding shares of preferred stock for 12
7/8% Senior Subordinated Debentures due October 15, 2007 which have provisions
consistent with the provisions of the preferred stock. Hyperion may satisfy, and
has to date satisfied, the dividend requirements on this preferred stock by
issuing additional shares.

<PAGE>

    13% Exchangeable Redeemable Preferred Stock

      On July 7, 1997, Adelphia issued $150,000 aggregate liquidation preference
of 13% Cumulative Exchangeable Preferred Stock due July 15, 2009. Dividends are
payable semi-annually commencing January 15, 1998 at 13% of the liquidation
preference of outstanding preferred stock. Dividends are payable in cash with
any accumulated unpaid dividends bearing interest at 13% per annum. The
preferred stock ranks junior in right of payment to all indebtedness of
Adelphia. On or before July 15, 2000, Adelphia may redeem, at its option, up to
33% of the initial aggregate liquidation preference of the preferred stock
originally issued with the net cash proceeds of one or more common equity
offerings at a redemption price equal to 113% of the liquidation preference per
share of the preferred stock, plus, without duplication, accumulated and unpaid
dividends to the date of redemption; provided that, after any such redemption,
there are remaining outstanding shares of preferred stock having an aggregate
liquidation preference of at least 67% of the initial aggregate liquidation
preference of the preferred stock originally issued. On or after July 15, 2002,
Adelphia may redeem, at its option, all or a portion of the preferred stock at
106.500% of the liquidation preference thereof declining to 100% of the
liquidation preference in 2008. Adelphia is required to redeem all of the shares
of preferred stock outstanding on July 15, 2009 at a redemption price equal to
100% of the liquidation preference thereof, plus, without duplication,
accumulated and unpaid dividends to the date of redemption. The preferred stock
contains restrictions and covenants similar to Adelphia's parent debt.

      Adelphia may, at its option, on any dividend payment date, exchange in
whole or in part (subject to certain restrictions), the then outstanding shares
of preferred stock for 13% Senior Subordinated Exchange Debentures due July 15,
2009 which have provisions consistent with the provisions of the preferred
stock. Adelphia paid cash dividends on this preferred stock of $10,183 and
$9,750 during the year ended March 31, 1998 and the nine months ended December
31, 1998, respectively.

5.   Commitments and Contingencies:

      Adelphia rents office and studio space, tower sites, and space on utility
poles under leases with terms which are generally less than one year or under
agreements that are generally cancelable on short notice. Total rental expense
under all operating leases aggregated $6,232, $7,420 and $8,054 for the years
ended March 31, 1997 and 1998 and the nine months ended December 31, 1998,
respectively.

      In connection with certain obligations under franchise agreements,
Adelphia obtains surety bonds guaranteeing performance to municipalities and
public utilities. Payment is required only in the event of nonperformance.
Management believes Adelphia has fulfilled all of its obligations such that no
payments under surety bonds have been required.

      During the nine months ended December 31, 1998, Adelphia has entered into
purchase commitments for certain telecommunication services and digital
convertor purchases. In the aggregate, purchase commitments under these
agreements total $12,350 in 1999, $4,000 in 2000 and $5,000 in 2001.

      Since April 1, 1998, Hyperion entered into a series of agreements,
totaling $126,000 with several local and long-haul fiber optic network
providers. These agreements will provide Hyperion with ownership or an
indefeasible right of use ("IRU") to over 9,000 route miles of local and
long-haul fiber optic cable, which will significantly increase its presence in
the eastern half of the United States. Through December 31, 1998, Hyperion has
paid $42,604 of the total due under these agreements, which is included in
property, plant and equipment.

      Adelphia and Hyperion have entered into several commitments to acquire
certain cable and telecommunications companies (see Note 13).

      The cable television industry and Adelphia are subject to extensive
regulation at the federal, state and local levels. Pursuant to the 1992 Cable
Act, which significantly expanded the scope of regulation of certain subscriber
rates and a number of other matters in the cable industry the FCC has adopted
rate regulations that establish, on a system-by-system basis, maximum allowable
rates for (i) basic and cable programming services (other than programming
offered on a per-channel or per-program basis), based upon a benchmark
methodology, or, in the alternative, a cost of service showing, and (ii)
associated equipment and installation services based upon cost plus a reasonable
profit. Under the FCC rules, franchising authorities are authorized to regulate
rates for basic services and associated equipment and installation services, and
the FCC will regulate rates for regulated cable programming services in response
to complaints filed with the agency. The original rate regulations became
effective on September 1, 1993. Several amendments to the rate regulations have
subsequently been added.

<PAGE>

      The FCC has adopted regulations implementing all of the requirements of
the 1992 Cable Act. The FCC is also likely to continue to modify, clarify or
refine the rate regulations. The Telecommunications Act of 1996 (the "1996 Act")
deregulated the rates for cable programming services on March 31, 1999. Adelphia
cannot predict the effect or outcome of the future rulemaking proceedings,
changes to the rate regulations, or litigation.

      On February 24, 1999, Hyperion was served with a summons and complaint
filed in the United States District Court for the Northern District of New York,
Case Number 99-CV-268, by Hyperion Solutions Corporation ("Solutions"), which is
described in the complaint as a company in the business of developing, marketing
and supporting comprehensive computer software tools, executive information
systems and applications that companies use to improve their business
performance. The complaint alleges, among other matters, that Hyperion's use of
the name "Hyperion" in its business infringes upon various trademarks and
service marks of Solutions in violation of federal trademark laws and violates
various New York business practices, advertising and business reputation laws.
The complaint seeks, among other matters, to enjoin Hyperion from using the name
or mark "Hyperion" in Hyperion's business as well as to recover unspecified
damages, treble damages and attorney's fees. Management of Hyperion believes
that Hyperion has meritorious defenses to the complaint and intends to
vigorously defend this lawsuit. Although management believes that this lawsuit
will not in any event have a material adverse effect upon the Company, no
assurance can be given regarding the effect upon the Company if Solutions were
to prevail in this lawsuit.

      On or about March 10, 1999, Robert Lowinger (the "Plaintiff"), on behalf
of himself and all other shareholders of Class A common stock of Century,
commenced an action by filing a putative Class Action Complaint (the
"Complaint") in the Superior Court of Connecticut, Judicial District of
Stamford/Norwalk, Case Number CV-99-0171092, against Century, all of its
directors, and Adelphia. The Plaintiff claims that he owns shares of Class A
common stock of Century, and alleges that in connection with the proposed merger
of Adelphia with Century, holders of Class B common stock of Century - which
have superior voting rights to the holders of Class A common stock - will
receive $4.00 per share more than the consideration to be paid to the holders of
Class A common stock. This would allegedly result in the Class B shareholders
receiving approximately $170,000 more than if they held the equivalent number of
Century Class A shares. The Plaintiff claims that the individual defendants,
comprising the directors of Century and the majority shareholders of Century's
Class B shares, breached their fiduciary duties of loyalty, good faith, and due
care to Century's Class A shareholders by agreeing to these two levels of
consideration. The sole claim against Adelphia is that it, together with
Century, aided and abetted these alleged breaches of fiduciary duty. The
Plaintiff seeks certification of a class of Century's Class A shareholders and
seeks recovery on behalf of himself and the class of unspecified damages,
profits, and special benefits. He also seeks all costs, expenses and attorney's
fees. Adelphia has entered an appearance in the case and is required to respond
to the Complaint by June 21, 1999. Adelphia believes the allegation of liability
against it to be without merit and intends to vigorously defend the action.

      There are no other material pending legal proceedings, other than routine
litigation incidental to the business, to which Adelphia is a part of or which
any of its property is subject.

6. Convertible Preferred Stock, Common Stock and Other Stockholders' Equity
(Deficiency):

    Convertible Preferred Stock

      On July 7, 1997, Adelphia issued 100,000 shares of 8 1/8% Series C
Cumulative Convertible Preferred Stock with a par value of $.01 per share and an
aggregate liquidation preference of $100,000 of which $80,000 was sold to a
Rigas family affiliate and the remainder was sold to Telesat. The preferred
stock accrues dividends at the rate of 8 1/8% of the liquidation preference per
annum, and is convertible at $8.48 per share into an aggregate of 11,792,450
shares of Class A common stock of Adelphia. The preferred stock is redeemable at
the option of Adelphia on or after August 1, 2000 at 104% of the liquidation
preference declining to 100% of the liquidation preference in 2002. Adelphia
paid cash dividends on this preferred stock of $4,605 and $6,093 during the year
ended March 31, 1998 and the nine months ended December 31, 1998, respectively.

    Adelphia Common Stock Issued

      On February 10, 1997,  Adelphia  issued 766,871 shares of Class A common
stock in connection with the acquisition of Small Cities (see Note 1).

<PAGE>

      On June 20, 1997,  Adelphia issued 3,571,428 shares of Class A common
stock in connection with the acquisition of Booth (see Note 1).

      On March 6, 1998, Adelphia issued 341,220 shares of Class A common stock
in connection with exercising its option to purchase the remaining 15% of its
Northeast Cable, Inc. system (see Note 1).

      On August 18, 1998, Adelphia issued 8,190,315 shares of Class A common
stock to the public and to the Rigas family. Of this total, 4,100,000 shares
were sold to the public at a price of $32.00 per share, with an underwriter
discount of $1.44 per share. The remaining 4,090,315 shares were sold to
entities controlled by the Rigas family at the public offering price less the
underwriters discount. In a related transaction on September 14, 1998, the
Company issued and sold 615,000 shares of Class A common stock at the offering
price of $32.00, with an underwriter discount of $1.44 per share pursuant to the
underwriters' over-allotment option. Adelphia realized aggregate net proceeds of
$267,926 after deducting underwriter and other fees.

      On September 30, 1998,  Adelphia  issued  2,250,000  shares of Class A
common stock in connection  with the  acquisition  of AT&T interests in
SHHH, L.P.  (see Note 1).

      The Certificate of Incorporation of Adelphia authorizes two classes of
common stock, Class A and Class B. Holders of Class A common stock and Class B
common stock vote as a single class on all matters submitted to a vote of the
stockholders, with each share of Class A common stock entitled to one vote and
each share of Class B common stock entitled to ten votes, except (i) for the
election of directors and (ii) as otherwise provided by law. In the annual
election of directors, the holders of Class A common stock voting as a separate
class, are entitled to elect one of Adelphia's directors. In addition, each
share of Class B common stock is automatically convertible into a share of Class
A common stock upon transfer, subject to certain limited exceptions. In the
event a cash dividend is paid, the holders of Class A common stock will be paid
105% of the amount payable per share for each share of Class B common stock.

      Upon liquidation, dissolution or winding up of Adelphia, the holders of
Class A common stock are entitled to a preference of $1.00 per share. After such
amount is paid, holders of Class B common stock are entitled to receive $1.00
per share. Any remaining amount would then be shared ratably by both classes.

    Hyperion Common Stock Issued

      On May 8, 1998, Hyperion completed an IPO of its Class A common stock
("Hyperion Stock"). As part of the offering, Adelphia purchased an incremental
3,324,001 shares of Hyperion Stock for $49,000 and converted indebtedness owed
to the Company by Hyperion into 3,642,666 shares of Hyperion Stock. In addition,
Adelphia purchased warrants issued by Hyperion to MCI Metro Access Transmission
Services, Inc., and purchased shares of Hyperion Class B common stock from
certain executive officers of Hyperion for a total purchase price of
approximately $12,580 and $3,000, respectively. Adelphia owns approximately 66%
of the Hyperion common stock on a fully diluted basis and 86% of the total
voting power. Additional net proceeds of $191,411 to Hyperion were received as a
result of the sale of 12,500,000 shares of Hyperion Stock to the public. In a
related transaction on June 5, 1998, Hyperion issued and sold 350,000 shares of
its Class A common stock at the $16.00 IPO price pursuant to the underwriters'
over allotment option in the IPO. As a result of the IPO, Adelphia's additional
paid-in capital increased approximately $147,000 and minority interests
increased approximately $45,000.

    Restricted Stock Bonus Plan

      Adelphia had reserved 500,000 shares of Class A common stock for issuance
to officers and other key employees at the discretion of the Compensation
Committee of the Board of Directors. The bonus shares were to be awarded without
any cash payment by the recipient unless otherwise determined by the
Compensation Committee. Shares awarded under the plan would vest over a five
year period. No awards have been made under the plan. The plan was terminated as
of the stockholder approval of the 1998 Long-Term Incentive Compensation Plan
(see Note 7).

    Stock Option Plan

      Adelphia had a stock option plan, which provides for the granting of
options to purchase up to 200,000 shares of Adelphia's Class A common stock to
officers and other key employees of Adelphia. Options could be granted at an
exercise price equal to the fair market value of the shares on the date of
grant. The plan permitted the granting of tax-qualified incentive stock options,

<PAGE>

in addition to non-qualified stock options. Options outstanding under the plan
could be exercised by paying the exercise price per share through various
alternative settlement methods. No stock options have been granted under the
plan. The plan was terminated as of the stockholder approval of the 1998
Long-Term Incentive Compensation Plan (see Note 7).

7. Employee Benefit Plans:

    Savings Plan

      Adelphia has a savings plan (401(k)) which provides that eligible
full-time employees may contribute from 2% to 16% of their pre-tax compensation
subject to certain limitations. Adelphia makes matching contributions not
exceeding 1.5% of each participant's pre-tax compensation. Adelphia's matching
contributions amounted to $638, $687 and $605 for the years ended March 31, 1997
and 1998 and the nine months ended December 31, 1998, respectively.

    Adelphia Long-Term Incentive Compensation Plan

      On October 6, 1998, Adelphia adopted its 1998 Long-Term Incentive
Compensation Plan (the "1998 Plan"). The 1998 Plan provides for the granting of
(i) options which qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, (ii) options which
do not so qualify, (iii) share awards (with or without restrictions on vesting),
(iv) stock appreciation rights and (v) stock equivalent or phantom units. The
number of shares of Adelphia Class A common stock available for issuance under
the 1998 Plan is 3,500,000. Options, awards and units may be granted under the
1998 Plan to directors, officers, employees and consultants of Adelphia. The
1998 Plan provides that incentive stock options must be granted with an exercise
price of not less than the fair market value of the underlying Adelphia common
stock on the date of the grant. Options outstanding under the Plan may be
exercised by paying the exercise price per share through various alternative
settlement methods. No grants had been made under the 1998 Plan as of December
31, 1998.

    Hyperion Long-Term Incentive Compensation Plan

      On October 3, 1996, Hyperion adopted its 1996 Long-Term Incentive
Compensation Plan (the "1996 Plan"). The 1996 Plan provides for the granting of
(i) options which qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, (ii) options which
do not so qualify, (iii) share awards (with or without restrictions on vesting),
(iv) stock appreciation rights and (v) stock equivalent or phantom units. The
number of shares of Hyperion Class A common stock available for issuance
initially was 5,687,500. Such number is to increase each year by 1% of
outstanding shares of all classes of Hyperion common stock, up to a maximum of
8,125,000 shares. Options, awards and units may be granted under the 1996 Plan
to directors, officers, employees and consultants. The 1996 Plan provides that
incentive stock options must be granted with an exercise price of not less than
the fair market value of the underlying Hyperion common stock on the date of
grant. Options outstanding under the Plan may be exercised by paying the
exercise price per share through various alternative settlement methods. On
March 4, 1997 and April 1, 1997 and 1998, Hyperion issued 338,000 shares, 58,500
shares and 58,500 shares, respectively, of its Class A common stock to Daniel R.
Milliard pursuant to his employment agreement with Hyperion. In April 1998 and
in recognition for valuable past service to Hyperion and as an incentive for
future services, Hyperion authorized the issuance under the 1996 Plan to each of
John J. Rigas, Michael J. Rigas, Timothy J. Rigas and James P. Rigas of (i)
stock options (the "Rigas Options") covering 100,000 shares of Hyperion Class A
common stock, which options will vest in equal one-third amounts on the third,
fourth and fifth year anniversaries of grant (vesting conditioned on continued
service as an employee or director) and which shall be exercisable at $15.00 per
share and (ii) phantom stock awards (the "Rigas Grants") covering 100,000 shares
of Hyperion Class A common stock, which phantom awards will vest in equal
one-third amounts on the third, fourth and fifth year anniversaries of grant
(vesting conditioned on continued service as an employee or director). At
December 31, 1998, no Rigas Options or Rigas Grants have been granted. Also in
April 1998, pursuant to the then existing stockholders agreement, Hyperion
authorized the issuance under the 1996 Plan to certain Officers' stock options
(the "Management Stockholder Options") currently covering 13,047 shares of
Hyperion Class A common stock with exercise price and vesting terms identical to
the Rigas Options. In addition to the Rigas Options, the Rigas Grants and the
employment agreement, Hyperion currently expects to issue under the 1996 Plan
stock options, restrictive stock grants, phantom stock awards or other awards to
other 1996 Plan participants covering up to a total of 325,000 shares of
Hyperion Class A common stock during 1999.

<PAGE>

8.  Taxes on Income:

      Adelphia and its corporate subsidiaries file a consolidated federal income
tax return, which includes its share of the subsidiary partnerships and joint
venture partnership results of operations. At December 31, 1998, Adelphia had
net operating loss carryforwards for federal income tax purposes of
approximately $1,300,000 expiring through 2018. Depreciation and amortization
expense differs for tax and financial statement purposes due to the use of
prescribed periods rather than useful lives for tax purposes and also as a
result of differences between tax basis and book basis of certain acquisitions.

      The tax effects of significant items comprising Adelphia's net deferred
tax liability are as follows:

<TABLE>
<CAPTION>


                                                                           March 31,  December 31,
                                                                            1998         1998
                                                                         -----------  ----------
                    Deferred tax liabilities:
<S>                                                                     <C>          <C>
                      Differences between book and tax basis of
                        property, plant and equipment and
                        intangible assets                                $   250,298  $  251,289
                                                                         -----------  ----------

                    Deferred tax assets:
                      Investment in partnerships                              82,461     102,472
                      Operating loss carryforwards                           459,546     478,488
                                                                        ------------  ----------
                                                                             542,007     580,960
                      Valuation allowance                                   (408,060)   (439,280)
                                                                         -----------  ----------

                          Subtotal                                           133,947     141,680
                                                                         -----------  ----------

                      Net deferred tax liability                         $   116,351  $  109,609
                                                                         ===========  ==========
</TABLE>


      The net change in the valuation  allowance for the years ended
March 31, 1998 and the nine months ended  December 31, 1998 was an increase of
$48,775 and $31,220, respectively.

      Income tax benefit is as follows:

<TABLE>
<CAPTION>

                                                                             Nine Months
                                                                                Ended
                                                       Year Ended March 31,  December 31,
                                                         1997         1998       1998
                                                      ----------  ---------- ----------
<S>                                                   <C>         <C>        <C>
                    Current                           $    (142)  $    (699) $       60
                    Deferred                                500       6,305       6,742
                                                      ---------   ---------  ----------
                         Total                        $     358   $   5,606  $    6,802
                                                      =========   =========  ==========

</TABLE>


      A reconciliation of the statutory federal income tax rate and Adelphia's
effective income tax rate is as follows:

<TABLE>
<CAPTION>

                                                                                     Nine Months
                                                                                        Ended
                                                             Year Ended March 31,    December 31,
                                                               1997         1998         1998
                                                            ------------ ----------- -------------
<S>                                                          <C>          <C>           <C>
                  Statutory federal income tax rate                35%          35%           35%
                  Change in federal valuation allowance           (41%)        (30%)         (26%)
                  State taxes, net of federal benefit               6%          (2%)           1%
                  Other                                             -%           -%           (4%)
                                                            ============ =========== =============
                  Effective income tax benefit rate                 -%           3%            6%
                                                            ============ =========== =============
</TABLE>


9. Disclosures about Fair Value of Financial Instruments:

      Included in Adelphia's financial instrument portfolio are cash, U.S.
government securities, notes payable to banks and institutions, debentures,
redeemable preferred stock and interest rate swaps and caps. The carrying values
of notes payable to banks and institutions approximate their fair values at
March 31, 1998 and December 31, 1998. The carrying cost of the publicly traded
notes, debentures and redeemable preferred stock at March 31, 1998 and December
31, 1998 were $2,400,753 and $2,657,861, respectively. At March 31, 1998 and
December 31, 1998, the fair value exceeded the carrying cost by $199,296 and
$139,970, respectively. At March 31, 1998 and December 31, 1998, Adelphia would

<PAGE>

have been required to pay approximately $5,822 and $27,227, respectively, to
settle its interest rate swap and cap agreements, representing the excess of
carrying cost over fair value of these agreements. The fair values of the debt,
redeemable preferred stock and interest rate swaps and caps were based upon
quoted market prices of similar instruments or on rates available to Adelphia
for instruments of the same remaining maturities.

10.      Business Segment Information:

      Refer to Item 6 of this Transition Report on Form 10-K for information
regarding business segments as of and for the years ended March 31, 1997 and
1998 and as of and for the nine months ended December 31, 1998.

11.   Related Party Transactions:

      Adelphia currently manages cable television systems which are principally
owned by Olympus and limited partnerships in which certain of Adelphia's
principal shareholders who are executive officers have equity interests.

      Adelphia has agreements with Olympus and the Managed Partnerships which
provide for the payment of fees to Adelphia. The aggregate fee revenues from
Olympus and the Managed Partnerships amounted to $2,939, $3,960 and $2,022 for
the years ended March 31, 1997 and 1998 and the nine months ended December 31,
1998, respectively. In addition, Adelphia was reimbursed by Olympus and the
Managed Partnerships for allocated corporate costs of $6,335, $6,436 and $7,548
for the years ended March 31, 1997 and 1998 and the nine months ended December
31, 1998, respectively, which have been recorded as a reduction of selling,
general and administrative expenses.

      Interest expense - net includes interest income from affiliates for long
term borrowings of $8,367, $7,129 and $5,221 for the years ended March 31, 1997
and 1998 and the nine months ended December 31, 1998, respectively, and for
short term borrowings of $9,340 and 9,339 for the year ended March 31, 1998 and
the nine months ended December 31, 1998, respectively.

      At March 31, 1998, Adelphia had interest rate swaps with affiliates for a
notional amount of $175,000, which expired during the nine months ended December
31, 1998. The net effect of these interest rate swaps was to increase interest
expense by $50, $128 and $2,049 for the years ended March 31, 1997 and 1998 and
the nine months ended December 31, 1998, respectively.

      During the years ended March 31, 1997 and 1998 and the nine months ended
December 31, 1998, Adelphia paid $2,563, $2,485 and $3,422, respectively, to
entities owned by certain shareholders of Adelphia primarily for property, plant
and equipment and services.



<PAGE>



12.   Quarterly Financial Data (Unaudited):

      The following tables summarize the financial results of Adelphia for each
of the quarters in the year ended March 31, 1998 and the nine months ended
December 31, 1998:

<TABLE>

<CAPTION>

                                                                               Three Months Ended
                                                                June 30    September 30  December 31   March 31
                                                              ----------------------------------------------------
Year Ended March 31, 1998:
<S>                                                           <C>          <C>          <C>          <C>
Revenues                                                      $   122,644  $   128,990  $   138,271  $   138,537
                                                              -----------  -----------  -----------  -----------

Operating expenses:
Direct operating and programming                                   39,673       38,540       43,711       45,364
Selling, general and administrative                                22,259       23,472       24,354       25,646
Depreciation and amortization                                      33,733       33,586       37,251       40,471
                                                              -----------  -----------  -----------  -----------
Total                                                              95,665       95,598      105,316      111,481
                                                              -----------  -----------  -----------  -----------

Operating income                                                   26,979       33,392       32,955       27,056
                                                              -----------  -----------  -----------  -----------

Other income (expense):
Priority investment income from Olympus                            11,765       12,000       12,000       12,000
Interest expense - net                                            (61,737)     (62,432)     (63,172)     (59,766)
Equity in loss of Olympus and other joint ventures                (19,198)     (14,840)     (16,012)     (16,039)
Equity in loss of Hyperion joint ventures                          (2,540)      (3,886)      (2,858)      (3,683)
Hyperion preferred stock dividends                                   --           --         (5,988)      (6,694)
Gain on sale of investments                                          --            610          408        1,520
                                                              -----------  -----------  -----------  -----------
Total                                                             (71,710)     (68,548)     (75,622)     (72,662)
                                                              -----------  -----------  -----------  -----------

Loss before income taxes and extraordinary gain (loss)            (44,731)     (35,156)     (42,667)     (45,606)
Income tax benefit (expense)                                           70         (365)        (264)       6,165
                                                              -----------  -----------  -----------  -----------

Loss before extraordinary gain (loss)                             (44,661)     (35,521)     (42,931)     (39,441)
Extraordinary gain (loss) on early retirement of debt               2,300         --        (13,625)        --
                                                              -----------  -----------  -----------  -----------

Net loss                                                          (42,361)     (35,521)     (56,556)     (39,441)
Dividend requirements applicable to preferred stock                  --         (4,550)      (7,448)      (6,852)
                                                              -----------  -----------  -----------  -----------

Net loss applicable to common stockholders                    $   (42,361) $   (40,071) $   (64,004) $   (46,293)
                                                              ===========  ===========  ===========  ===========

Basic and diluted loss per weighted average share of common
stock before extraordinary gain (loss)                        $     (1.62) $     (1.31) $     (1.64) $     (1.51)
Basic and diluted extraordinary gain (loss) per weighted
average share on early retirement of debt                            0.08         --          (0.45)        --
                                                              ===========  ===========  ===========  ===========
Basic and diluted net loss per weighted average share of
common stock                                                  $     (1.54) $     (1.31) $     (2.09) $     (1.51)
                                                              ===========  ===========  ===========  ===========

Weighted average shares of common stock outstanding
(in thousands)                                                     27,468       30,647       30,647       30,730
                                                              ===========  ===========  ===========  ===========

</TABLE>


<PAGE>



<TABLE>
<CAPTION>

                                                                                  Three Months Ended
                                                                           June 30   September 30  December 31
                                                                        ------------ ------------ ------------
Nine Months Ended December 31, 1998:
<S>                                                                     <C>          <C>          <C>
Revenues                                                                $   144,756  $   169,387  $   193,012
                                                                        -----------  -----------  -----------

Operating expenses:
Direct operating and programming                                             48,738       56,595       62,630
Selling, general and administrative                                          29,111       33,043       45,095
Depreciation and amortization                                                38,559       46,083       56,181
                                                                        -----------  -----------  -----------
Total                                                                       116,408      135,721      163,906
                                                                        -----------  -----------  -----------

Operating income                                                             28,348       33,666       29,106
                                                                        -----------  -----------  -----------

Other income (expense):
Priority investment income from Olympus                                      12,000       12,000       12,000
Interest expense- net                                                       (62,745)     (63,317)     (65,531)
Equity in loss of Olympus and other joint ventures                          (18,316)     (14,803)     (15,772)
Equity in loss of Hyperion joint ventures                                    (3,190)      (2,614)      (3,776)
Minority interest in losses of subsidiaries                                   5,460        8,543       11,769
Hyperion preferred stock dividends                                           (6,946)      (7,166)      (7,424)
Other income                                                                  1,000          113         --
                                                                        -----------  -----------  -----------

Total                                                                       (72,737)     (67,244)     (68,734)
                                                                        -----------  -----------  -----------

Loss before income taxes and extraordinary loss                             (44,389)     (33,578)     (39,628)
Income tax benefit (expense)                                                  5,614         (852)       2,040
                                                                        -----------  -----------  -----------

Loss before extraordinary loss                                              (38,775)     (34,430)     (37,588)
Extraordinary loss on early retirement of debt                               (2,604)      (1,733)        --
                                                                        -----------  -----------  -----------

Net loss                                                                    (41,379)     (36,163)     (37,588)
Dividend requirements applicable to preferred stock                          (6,906)      (6,906)      (6,906)
                                                                        -----------  -----------  -----------

Net loss applicable to common stockholders                              $   (48,285) $   (43,069) $   (44,494)
                                                                        ===========  ===========  ===========

Basic and diluted loss per weighted average share of common stock
before extraordinary loss                                               $     (1.48) $     (1.16) $     (1.06)
Basic and diluted extraordinary loss per weighted average share on
early retirement of debt                                                      (0.08)       (0.05)        --
                                                                        -----------  -----------  -----------
Basic and diluted net loss per weighted average share of common stock   $     (1.56) $     (1.21) $     (1.06)
                                                                        ===========  ===========  ===========

Weighted average shares of common stock outstanding (in thousands)           30,988       35,533       42,093
                                                                        ===========  ===========  ===========
</TABLE>

13.   Subsequent Events:

      On January 13, 1999, Adelphia completed offerings of $100,000 of 7 1/2%
Senior Notes due 2004 and $300,000 of 7 3/4% Senior Notes due 2009. Net proceeds
from these offerings, after deducting offering expenses, were approximately
$393,700. Of this amount, Adelphia used approximately $160,000 to pay accrued
interest and retire a portion of its 9 1/2% Senior Pay-In-Kind Notes due 2004.
Adelphia used the remainder to repay borrowings under revolving credit
facilities of its subsidiaries which may be reborrowed and used for general
corporate purposes. The terms of these notes are similar to those of Adelphia's
other publicly held senior debt.

      On January 14, 1999, Adelphia completed offerings totaling 8,600,000
shares of its Class A common stock. In those offerings, Adelphia sold 4,600,000
newly issued shares of Class A common stock to Goldman, Sachs & Co. at $43.25
per share and it also sold 4,000,000 shares of its Class A common stock at
$43.25 per share to entities controlled by the Rigas family. Adelphia used the
proceeds of approximately $372,000 from these offerings to repay subsidiary bank
debt, which may be reborrowed and used for general corporate purposes.

      On January 21, 1999, Adelphia acquired Verto Communications, Inc.
("Verto") pursuant to a merger agreement between Adelphia, Verto and Verto's
shareholders. These systems served approximately 56,000 subscribers in the
greater Scranton, PA area at the date of acquisition. In connection with the
Verto acquisition, Adelphia issued 2,561,024 shares of its Class A common stock
to the former owners of Verto and assumed approximately $35,000 of net
liabilities of Verto. The acquisition is being accounted for under the purchase
method of accounting. Accordingly, the financial results of the acquired systems
will be included in the consolidated results of Adelphia effective from the date
acquired.

<PAGE>

      On January 29, 1999, Adelphia purchased from Telesat shares of Adelphia's
stock owned by Telesat for a price of $149,213. In the transaction, Adelphia
purchased 1,091,524 shares of Class A common stock and 20,000 shares of Series C
Cumulative convertible preferred stock which are convertible into an additional
2,358,490 shares of Class A common stock. These shares represent 3,450,014
shares of common stock on a fully converted basis. Adelphia and Telesat also
agreed to a redemption of Telesat's interests in Olympus Communications, L.P. by
July 11, 1999 for approximately $108,000. The redemption is subject to
applicable third party approvals.

      On February 23, 1999, Adelphia announced that it had entered into a
definitive agreement to acquire FrontierVision Partners, L.P. ("FrontierVision")
for approximately $2,100,000. Under that agreement Adelphia would acquire 100%
of FrontierVision in exchange for approximately $550,000 in cash, 7,000,000
shares of Adelphia Class A common stock and the assumption of approximately
$1,110,000 of debt. The transaction is subject to customary closing conditions.
As of December 31, 1998, FrontierVision had approximately 702,000 basic
subscribers.

      On March 2, 1999, Hyperion issued $300,000 of 12% Senior Subordinated
Notes due 2007 (the "Subordinated Notes"). An entity controlled by members of
the Rigas family purchased $100,000 of the Subordinated Notes directly from
Hyperion at a price equal to the aggregate principal amount less the discount to
the initial purchasers. The net proceeds of approximately $295,000 were or will
be used to fund Hyperion's acquisition of interests held by local partners in
certain of its markets, and will be used to fund capital expenditures and
investments in its networks and for general corporate and working capital
purposes.

      On March 5, 1999, Adelphia announced that it had entered into a definitive
merger agreement to acquire Century Communications Corp. ("Century") for
approximately $5,200,000. Under the agreement, Adelphia would acquire 100% of
the outstanding common stock of Century for approximately $826,000 in cash,
48,700,000 shares of Class A common stock and the assumption of approximately
$1,600,000 of debt. This transaction is subject to shareholder approval by
Century and Adelphia and other customary closing conditions. As of December 31,
1998, Century had approximately 1,593,000 basic subscribers after giving effect
to Century's pending joint venture with AT&T.

      On March 31, 1999, Hyperion consummated its transaction with subsidiaries
of MediaOne of Colorado, Inc. ("MediaOne"), its local partners in the
Jacksonville, FL and Richmond, VA networks, whereby MediaOne received
approximately $81,520 in cash for MediaOne's ownership interests in these
networks. In addition, Hyperion will be responsible for the payment of fiber
lease liabilities due to MediaOne in the amount of approximately $14,500 over
the next ten years. As a result of the transactions, Hyperion's ownership
interest in each of these networks will increase to 100%.

      On April 9, 1999, Adelphia entered into a stock purchase agreement with
Highland Holdings, a general partnership controlled by the Rigas family, in
which Adelphia agreed to sell to Highland Holdings, and Highland Holdings agreed
to purchase, from $250,000 to $375,000 of Adelphia's Class B common stock. The
purchase price for the Class B common stock will be equal to the public offering
price in the April 28, 1999 public offering of Class A common stock, described
below, less the underwriting discount, plus an interest factor. Closing under
this stock purchase agreement is to occur by January 23, 2000.

      On April 12, 1999, Adelphia announced that it had entered into a
definitive agreement to acquire cable television systems from Harron
Communications Corp. ("Harron") for approximately $1,200,000. The transaction is
subject to customary closing conditions. As of December 31, 1998, Harron had
approximately 294,000 basic subscribers after giving effect to recent and
pending acquisitions involving approximately 9,000 basic subscribers.

      On April 28, 1999, Adelphia completed an offering of $350,000 of 7 7/8%
Senior Notes due 2009. Net proceeds from this offering, after deducting offering
expenses, were approximately $345,500. Adelphia used the proceeds to repay
borrowings under revolving credit facilities of its subsidiaries, which may be
reborrowed and used for general corporate purposes, including acquisitions,
capital expenditures and investments. The terms of these notes are similar to
those of Adelphia's other publicly held senior debt.

      On April 28, 1999, Adelphia consummated its offering of 8,000,000 shares
of Class A common stock. Net proceeds of the offering, after deducting offering
expenses, were approximately $485,500. Adelphia initially used the net proceeds
to repay borrowings under subsidiary credit agreements, which Adelphia plans to
reborrow and use to fund one or more of the recently announced acquisitions.

<PAGE>


      On April 30, 1999, and, in a related transaction on May 14, 1999, Adelphia
sold an aggregate 2,875,000 shares of 5 1/2% Series D convertible preferred
stock with a liquidation preference of $200 per share. The preferred stock
accrues dividends at $11 per share annually and is convertible at $81.45 per
share into an aggregate of 7,059,546 shares of Class A common stock of Adelphia.
The preferred stock is redeemable at the option of Adelphia on or after May 1,
2002 at 103% of the liquidation preference. Net proceeds from the convertible
preferred stock offering were approximately $557,400 after deducting
underwriting discounts and commissions and offering expenses. Adelphia initially
used the net proceeds to repay borrowings under subsidiary credit agreements
which Adelphia plans to reborrow and use to fund one or more of the recently
announced acquisitions.

      On May 6, 1999, certain subsidiaries and affiliates of Adelphia and
Olympus closed on an $850,000 credit facility. The credit facility consists of a
$600,000, 8 1/2 year reducing revolving credit loan and a $250,000, 9 year term
loan. Proceeds from initial borrowings were held as cash and used to repay
existing indebtedness, which may be reborrowed and used for capital
expenditures, investments and other general corporate purposes.



<PAGE>




ITEM  9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND
           FINANCIAL  DISCLOSURE

      Not applicable.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information set forth above in Part I under the caption "Executive
Officers of the Registrant" is incorporated herein by reference. The other
information required by this item is incorporated herein by reference to the
information set forth under the caption "Election of Directors - Description of
Board of Directors"; the information set forth under the caption "Election of
Directors - Nominee for Election by Holders of Class A Common Stock"; the
information set forth under the caption "Election of Directors - Nominees for
Election by Holders of Class A Common Stock and Class B Common Stock"; and the
information, if any, under the caption "Section 16(a) Beneficial Ownership
Reporting Compliance," in the Company's definitive proxy statement for the 1998
Annual Meeting of Stockholders filed pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, or by reference to a filing
amending this Transition Report on Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

      The information required by this item is incorporated herein by reference
to the information set forth under the caption "Executive Compensation" in the
Company's definitive proxy statement for the 1999 Annual Meeting of Stockholders
filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, or by reference to a filing amending this Transition Report on Form
10-K.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The information required by this item is incorporated herein by reference
to the information set forth under the caption "Principal Stockholders" in the
Company's definitive proxy statement for the 1999 Annual Meeting of Stockholders
filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, or by reference to a filing amending this Transition Report on Form
10-K.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by this item is incorporated herein by reference
to the information set forth under the caption "Certain Transactions" in the
Company's definitive proxy statement for the 1999 Annual Meeting of Stockholders
filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, or by reference to a filing amending this Transition Report on Form
10-K.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      Financial statements, schedules and exhibits not listed have been omitted
where the required information is included in the consolidated financial
statements or notes thereto, or is not applicable or required.
         (a)(1)           A listing of the consolidated financial statements,
                          notes and independent auditors' reports required in
                          Item 8 are listed in the index in Item 8 of this
                          Transition Report on Form 10-K.

(c)      Financial statement schedules:
                The following are included in this Report:
                Schedule I  -- Condensed Financial Information of the Registrant
                Schedule II -- Valuation and Qualifying Accounts

           (3) Exhibits

<PAGE>


<TABLE>
<CAPTION>


Exhibit
   No.                                Description
<S>     <C>
  2.01   Agreement and Plan of Merger by and among Adelphia Communications
         Corporation, Adelphia Acquisition Subsidiary, Inc., and Century
         Communications Corp., dated as of March 5, 1999 (Incorporated herein by
         reference is Exhibit 2.01 to the Registrant's Current Report on Form
         8-K for the event dated February 22, 1999.) (File No. 0-16104).

  2.02   Purchase Agreement, dated as of February 22, 1999, among FrontierVision
         Partners, L. P., FVP GP, L. P., and certain direct and indirect Limited
         Partners of FrontierVision Partners, L. P., as sellers, and Adelphia
         Communications Corporation, as buyer (Incorporated herein by reference
         is Exhibit 2.02 to the Registrant's Current Report on Form 8-K for the
         event dated February 22, 1999.) (File No. 0-16104).

  2.03   Stock Purchase Agreement dated April 9, 1999 between Adelphia
         Communications Corporation and the shareholders of Harron
         Communications Corp. (Incorporated herein by reference is Exhibit 2.01
         to the Registrant's Current Report on Form 8-K for the event dated
         April 9, 1999.) (File No. 0-16104).

  3.01   Certificate of Incorporation of Adelphia Communications Corporation
         (Incorporated herein by reference is Exhibit 3.01 to the Registrant's
         Current Report on Form 8-K dated July 24, 1997.) (File Number 0-16014).

  3.02   Bylaws of Adelphia Communications Corporation (Incorporated herein by
         reference is Exhibit 3.02 to the Registrant's Current Report on Form
         8-K for the event dated April 9, 1999.) (File Number 0-16014).

  3.03   Certificate of Designations with respect to the Registrant's 5-1/2%
         Series D Convertible Preferred Stock (Incorporated by reference herein
         is Exhibit 3.01 to the Current Report on Form 8-K of the Registrant for
         the event dated April 28, 1999.) (File No. 0-16104).

  4.01   Indenture, dated as of February 26, 1997, between the Registrant and
         Bank of Montreal Trust Company with respect to the Registrant's 9-7/8%
         Senior Notes Due 2007 (Incorporated herein by reference is Exhibit 4.01
         to the Registrant's Current Report on Form 8-K dated May 1, 1997.)
         (File Number 0-16014).

  4.02   Form of Note with respect to the Registrant's 9-7/8% Senior Notes Due
         2007 (Contained in Indenture filed as Exhibit 4.01).

  4.03   Indenture, dated as of April 15, 1996, between Hyperion
         Telecommunications, Inc. and Bank of Montreal Trust Company
         (Incorporated by reference is Exhibit 4.1 to Registration Statement No.
         333-06957 on Form S-4 filed for Hyperion Telecommunications, Inc.).

  4.04   Form of 13% Hyperion Telecommunications, Inc. Senior Discount Notes
         (Incorporated herein by reference is Exhibit 4.3 to Hyperion
         Telecommunications, Inc.'s Registration Statement No. 333-12619 on Form
         S-3, formerly on Form S-1).

  4.05   First Supplemental Indenture, dated as of September 11, 1996, between
         Hyperion Telecommunications, Inc. and Bank of Montreal Trust Company
         (Incorporated herein be reference is Exhibit 4.2 to Hyperion
         Telecommunications, Inc.'s Registration Statement No. 333-12619 on Form
         S-3, formerly on Form S-1).

  4.06   Indenture, dated as of November 12, 1996, between Olympus
         Communications, L.P., Olympus Capital Corporation and Bank of Montreal
         Trust Company (Incorporated herein by reference is Exhibit 10.02 to the
         Registrant's Current Report on Form 8-K dated December 16, 1996.) (File
         Number 0-16014).
<PAGE>

 4.07    Certificate of Designations for 13% Series A and Series B Cumulative
         Exchangeable Preferred Stock (Contained in Exhibit 3.01 to the
         Registrant's Current Report on Form 8-K dated July 24, 1997, which is
         incorporated herein by reference.) (File Number 0-16014).

 4.08    Certificate of Designations for Series C Convertible Preferred Stock
         (Contained in Exhibit 3.01 to the Registrant's Current Report on Form
         8-K dated July 24, 1997, which is incorporated herein by reference.)
         (File Number 0-16014).

 4.09    Form of Indenture, with respect to the Registrant's 13% Senior
         Subordinated Exchange Debentures due 2009, between the Registrant and
         the Bank of Montreal Trust Company (Contained in Exhibit 3.01 as Annex
         A to Registrant's Current Report on Form 8-K dated July 24, 1997, which
         is incorporated herein by reference.) (File Number 0-16014).

 4.10    Form of Certificate for 13% Cumulative Exchangeable Preferred Stock
         (Incorporated herein by reference is Exhibit 4.06 to the Registrant's
         Current Report on Form 8-K dated July 24, 1997.)
         (File Number 0-16014).

 4.11    Form of Certificate for Series C Convertible Preferred Stock
         (Incorporated herein by reference is Exhibit 4.07 to the Registrant's
         Current Report on Form 8-K dated July 24, 1997.) (File Number 0-16014).

 4.12    Indenture, dated as of August 27, 1997, with respect to Hyperion
         Telecommunications, Inc. ("Hyperion") 12-1/4% Senior Secured Notes due
         2004, between Hyperion and the Bank of Montreal Trust Company
         (Incorporated herein by reference to Exhibit 4.01 to Hyperion's Current
         Report on Form 8-K dated August 27, 1997.) (File No. 0-21605).

 4.13    Form of 12-1/4% Senior Secured Note due 2004 (contained in Exhibit 4.12).

 4.14    Second Supplemental Indenture, dated as of August 27, 1997, between
         Hyperion and the Bank of Montreal Trust Company, regarding Hyperion's
         13% Senior Discount Notes due 2003 (Incorporated by reference herein to
         Exhibit 4.06 to Hyperion's Current Report on Form 8-K dated August 27,
         1997.)(File No. 0-21605).

 4.15    Indenture, dated as of September 25, 1997, with respect to the
         Registrant's 9-1/4% Senior Notes due 2002, between the Registrant and
         the Bank of Montreal Trust Company (Incorporated herein by reference is
         Exhibit 4.01 to the Registrant's Current Report on Form 8-K dated
         September 25, 1997.)(File Number 0-16014).

 4.16    Form of 9-1/4% Senior Note due 2002 (contained in Exhibit 4.15).

 4.17    Indenture, dated as of January 21, 1998, with respect to the
         Registrant's 8-3/8% Senior Notes due 2008, between the Registrant and
         the Bank of Montreal Trust Company (Incorporated by reference herein is
         Exhibit 4.01 to the Registrant's Current Report on Form 8-K dated
         January 21, 1998.) (File No. 0-10614).

 4.18    Form of 8-3/8% Senior Note due 2008 (Contained in Exhibit 4.17).

 4.19    First Supplemental Indenture, dated as of November 12, 1998, to January
         1998 Indenture with respect to the Registrant's 8-3/8% Senior Notes due
         2008, between the Registrant and the Bank of Montreal Trust Company
         (Incorporated by reference herein is Exhibit 4.01 to the Registrant's
         Current Report on Form 8-K filed on January 28, 1999.) (File No.
         0-16014).

 4.20    Registration Rights Agreement between Adelphia Communications
         Corporation and the Initial Purchaser, dated November 12, 1998,
         regarding the Registrant's 8-3/8% Senior Notes due 2008 (Incorporated
         by reference herein is Exhibit 4.02 to the Registrant's Current Report
         on Form 8-K filed on January 28, 1999.) (File No. 0-16014).


<PAGE>

 4.21    Indenture, dated as of January 13, 1999, with respect to the
         Registrant's 7-1/2% Senior Notes due 2004 and 7-3/4% Senior Notes due
         2009, between the Registrant and the Bank of Montreal Trust Company
         (Incorporated by reference herein is Exhibit 4.03 to the Registrant's
         Current Report on Form 8-K filed on January 28, 1999.) (File No.
         0-16014).

 4.22    Registration Rights Agreement between Adelphia Communications
         Corporation and the Initial Purchaser, dated January 13, 1999,
         regarding the Registrant's 7-1/2% Senior Notes due 2004 and 7-3/4%
         Senior Notes due 2009 (Incorporated by reference herein is Exhibit 4.04
         to the Registrant's Current Report on Form 8-K, filed on January 28,
         1999.) (File No. 0-16014).

 4.23    Form of 7-1/2% Senior Note due 2004 (Contained in Exhibit 4.21).

 4.24    Form of 7-3/4% Senior Note due 2009 (Contained in Exhibit 4.21).

 4.25    Indenture dated as of March 2, 1999, with respect to Hyperion
         Telecommunications, Inc. 12% Senior Subordinated Notes due 2007,
         between Hyperion and the Bank of Montreal Trust Company (Incorporated
         by reference herein is Exhibit 4.01 to the Registrant's Current Report
         on Form 8-K filed on March 10, 1999.) (File No. 0-16014).

 4.26    Form of 12% Senior Subordinated Notes due 2007 (Contained in Exhibit
         4.25).

 4.27    Registration Rights Agreement between Hyperion Telecommunications, Inc.
         and the Initial Purchasers, dated March 2, 1999, regarding Hyperion's
         12% Senior Subordinated Notes due 2007 (Incorporated by reference
         herein is Exhibit 10.04 to the Registrant's Current Report on Form 8-K
         filed on March 10, 1999.) (File No. 0-16014).

 4.28    Base Indenture, dated as of April 28, 1999, with respect to the
         Registrant's Senior Indebtedness, between the Registrant and The Bank
         of Montreal Trust Company (Incorporated by reference herein is Exhibit
         4.01 to the Registrant's Current Report on Form 8-K filed on April 28,
         1999.) (File No. 0-16014).

 4.29    The First Supplemental Indenture, dated as of April 28, 1999, to April
         28, 1999 Base Indenture, with respect to the Registrant's 7-7/8% Senior
         Notes due 2009, between the Registrant and The Bank of Montreal Trust
         Company (Incorporated by reference herein is Exhibit 4.02 to the
         Registrant's Current Report on Form 8-K filed on April 28, 1999.) (File
         No. 0-16014).

 4.30    Form of 7-7/8% Senior Note due 2009 (Contained in Exhibit 4.29).

 10.01   Class B Common Stockholders Agreement (Incorporated herein by reference
         is Exhibit 10.01 to Registration Statement No. 33-6974 on Form S-1).

 10.02   Joinder to Class B Common Stockholders Agreement (Incorporated herein
         by reference is Exhibit 10.02 to Registrant's Annual Report on Form
         10-K for the fiscal year ended March 31, 1994.)(File Number 0-16014).

 10.03   Registration Rights Agreement and Amendment to Registration Rights
         Agreement (Incorporated herein by reference are Exhibit 10.02 to
         Registration Statement No. 33-6974 on Form S-1 and Exhibit 10.35 to
         Registration Statement No. 33-25121 on Form S-1).

 10.04   Form of Management Agreement for Managed Companies (Incorporated herein
         by reference is Exhibit 10.04 to the Registrant's Annual Report on Form
         10-K for fiscal year ended March 31, 1996.)(File Number 0-16014).

 10.05   Management Agreement--Montgomery Cablevision Associates, L.P.
         (Incorporated herein by reference is Exhibit 10.08 to Registration
         Statement No. 33-6974 on Form S-1).


<PAGE>

 10.06   Management Agreement--Adelphia Cablevision Associates of Radnor, L.P.
         (Incorporated herein by reference is Exhibit 10.09 to Registration
         Statement No. 33-6974 on Form S-1).

 10.07   Business Opportunity Agreement (Incorporated herein by reference is
         Exhibit 10.13 to Registration Statement No. 33-3674 on Form S-1).

 10.08*  Employment Agreement between the Company and John J. Rigas
         (Incorporated herein by reference is Exhibit 10.14 to Registration
         Statement No. 33-6974 on Form S-1).

 10.09*  Employment Agreement between the Company and Timothy J. Rigas
         (Incorporated herein by reference is Exhibit 10.16 to Registration
         Statement No. 33-6974 on Form S-1).

 10.10*  Employment Agreement between the Company and Michael J. Rigas
         (Incorporated herein by reference is Exhibit 10.17 to Registration
         Statement No. 33-6974 on Form S-1).

 10.11*  Employment Agreement between the Company and James P. Rigas
         (Incorporated herein by reference is Exhibit 10.18 to Registration
         Statement No. 33-6974 on Form S-1).

 10.12*  $50,000 Term Note and Pledge Agreement between Adelphia Communications
         Corporation as lender and Daniel R. Milliard, dated October 1, 1988
         (Incorporated herein by reference is Exhibit 10.03 to the Registrant's
         Quarterly Report on Form 10-Q for the quarter ended September 30,
         1991.) (File Number 0-16014).

 10.13*  $205,000 Revolving Term Note and Pledge Agreement among Adelphia
         Communications Corporation as lender, Daniel R. Milliard and David
         Acker (Incorporated herein by reference is Exhibit 10.04 to the
         Registrant's Quarterly Report on Form 10-Q for the quarter ended
         September 30, 1991.)(File Number 0-16014).

  10.14  Olympus Communications, L.P. Second Amended and Restated Limited
         Partnership Agreement, dated as of February 28, 1995 (Incorporated
         herein by reference is Exhibit 10.32 to the Registrant's Annual Report
         on Form 10-K for the fiscal year ended March 31, 1995.) (File Number
         0-16014).

  10.15  Revolving Credit Facility among Adelphia Cable partners, L.P.,
         Southwest Florida Cable, Inc., West Boca Acquisition Limited
         Partnership and Toronto-Dominion (Texas), Inc., as Administrative
         Agent, dated May 12, 1995 (Incorporated herein by reference is Exhibit
         10.03 to the Registrant's Current Report on Form 8-K dated June 30,
         1995.) (File Number 0-16014).

  10.16  Credit Agreement, dated as of April 12, 1996, among Chelsea
         Communications, Inc., Kittanning Cablevision Inc., Robinson/Plum
         Cablevision L.P., the several banks and financial institutions parties
         thereto, and Toronto Dominion (Texas), Inc. as Administrative Agent
         (Incorporated herein by reference is Exhibit 10.36 to Registrant's
         Current Report on Form 8-K dated June 3, 1996.)(File Number 0-16014).

  10.17  Purchase Agreement dated as of February 21, 1997, between the
         Registrant and Smith Barney Inc. (Incorporated herein by reference is
         Exhibit 10.02 to the Registrant's Current Report on Form 8-K dated May
         1, 1997.) (File Number 0-16014).

  10.18  Warrant Agreement dated as of April 15, 1996, by and among Hyperion
         Telecommunications, Inc. and Bank of Montreal Trust Company
         (Incorporated by reference is Exhibit 10.13 to Registration Statement
         No. 333-06957 on Form S-4 for Hyperion Telecommunications, Inc.).

  10.19  Warrant Registration Rights Agreement dated as of April 15, 1996, by
         and among Hyperion Telecommunications, Inc. and the Initial Purchasers
         (Incorporated by reference is Exhibit 10.14 to Registration Statement
         No. 333-06957 on Form S-4 for Hyperion Telecommunications, Inc.).


<PAGE>

 10.20*  Hyperion Telecommunications, Inc. Long-Term Incentive Compensation Plan
         (Incorporated herein by reference is Exhibit 10.17 to Hyperion
         Telecommunications, Inc.'s Registration Statement No. 333-13663 on Form
         S-1).

  10.21  Registration Rights Agreement among Charles R. Drenning, Paul D.
         Fajerski, Randolph S. Fowler, Adelphia Communications Corporation and
         Hyperion Telecommunications, Inc. (Incorporated herein by reference is
         Exhibit 10.18 to Hyperion Telecommunications, Inc.'s Registration
         Statement No. 333-13663 on Form S-1).

  10.22  Registration Rights Agreement between Adelphia Communications
         Corporation and Hyperion Telecommunications, Inc. (Incorporated herein
         by reference is Exhibit 10.19 to Hyperion Telecommunications, Inc.'s
         Registration Statement No. 333-13663 on Form S-1).

  10.23  First Amendment to the Olympus Communications, L.P. Second Amended and
         Restated Limited Partnership Agreement, dated September 1, 1995
         (Incorporated herein by reference is Exhibit 10.33 to the Registrant's
         Annual Report on Form 10-K/A for the fiscal year ended March 31, 1996.)
         (File Number 0-16014).

  10.24  First Amendment to the Olympus Communications, L.P. Second Amended and
         Restated Limited Partnership Agreement, dated March 29, 1996
         (Incorporated herein by reference is Exhibit 10.34 to the Registrant's
         Annual Report on Form 10-K/A for the fiscal year ended March 31, 1996.)
         (File Number 0-16014).

  10.25  Second Amendment to the Olympus Communications, L.P. Second Amended and
         Restated Limited Partnership Agreement, dated June 27, 1996
         (Incorporated herein by reference is Exhibit 10.35 to the Registrant's
         Annual Report on Form 10-K/A for the fiscal year ended March 31, 1996.)
         (File Number 0-16014).

 10.26*  Employment Agreement between Hyperion Telecommunications, Inc. and
         Daniel R. Milliard dated as of March 4, 1997 (Incorporated herein by
         reference is Exhibit 10.03 to Adelphia Communications Corporation's
         Current Report on Form 8-K dated May 1, 1997) (File Number 0-16014).

 10.27   Extension Agreement dated as of January 8, 1997, among Hyperion
         Telecommunications, Inc., Adelphia Communications Corporation, Charles
         R. Drenning, Paul D. Fajerski, Randolph S. Fowler, and six Trusts named
         therein (Incorporated herein by reference is Exhibit 10.04 to Adelphia
         Communications Corporation's Current Report on Form 8-K dated May 1,
         1997) (File Number 0-16014).

10.28    Purchase Agreement among Adelphia Communications Corporation, Smith
         Barney Inc., Bear Stearns & Co. Inc., NationsBanc Capital Markets, Inc.
         and TD Securities (USA) Inc. dated July 1, 1997 (Incorporated herein by
         reference is Exhibit 10.01 to the Registrant's Current Report on Form
         8-K dated July 24, 1997.) (File Number 0-16014).

10.29    Registration Rights Agreement among Adelphia Communications
         Corporation, the Initial Purchasers and Highland Holdings, dated July
         7, 1997, regarding the 13% Cumulative Exchangeable Preferred Stock
         (Incorporated herein by reference is Exhibit 10.02 to the Registrant's
         Current Report on Form 8-K dated July 24, 1997.) (File Number 0-16014).

10.30    Registration Rights Agreement among Adelphia Communications Corporation
         and the Initial Purchasers, dated July 7, 1997, regarding the 10-1/2%
         Senior Notes due 2004 (Incorporated herein by reference is Exhibit
         10.03 to the Registrant's Current Report on Form 8-K dated July 24,
         1997.) (File Number 0-16014).


<PAGE>

10.31    Registration Rights Agreement among Adelphia Communications
         Corporation, Highland Holdings and Telesat Cablevision, Inc., dated
         July 7, 1997 (Incorporated herein by reference is Exhibit 10.04 to the
         Registrant's Current Report on Form 8-K dated July 24, 1997.) (File
         Number 0-16014).

10.32    Purchase Agreement between Adelphia Communications Corporation and
         Highland Holdings, dated July 1, 1997 (Incorporated herein by reference
         is Exhibit 10.05 to the Registrant's Current Report on Form 8-K dated
         July 24, 1997.) (File Number 0-16014).

10.33    Series C Preferred Stock Purchase Agreement among Adelphia
         Communications Corporation, Highland Holdings and Telesat Cablevision,
         Inc., dated June 22, 1997 (Incorporated herein by reference is Exhibit
         10.06 to the Registrant's Current Report on Form 8-K dated July 24,
         1997.) (File Number 0-16014).

10.34    Pledge Agreement between Hyperion and the Bank of Montreal Trust
         Company as Collateral Agent, dated as of August 27, 1997 (Incorporated
         by reference herein is Exhibit 4.03 to Hyperion's Current Report on
         Form 8-K dated August 27, 1997) (File No. 0-21605).

10.35    Registration Rights Agreement between Hyperion and the Initial
         Purchasers, dated August 27, 1997, regarding the 12-1/4% Senior Secured
         Notes due 2004 (Incorporated herein by reference to Exhibit 4.04 to
         Hyperion's Current Report on Form 8-K dated August 27, 1997.) (File No.
         0-21605).

10.36    Pledge, Escrow and Disbursement Agreement, between Hyperion and the
         Bank of Montreal Trust Company dated as of August 27, 1997
         (Incorporated by reference herein to Exhibit 4.05 to Hyperion's Current
         Report on Form 8-K dated August 27, 1997.) (File No. 0-21605).

10.37    Purchase Agreement among Hyperion, Bear Stearns & Co. Inc., Chase
         Securities Inc., TD Securities (USA) Inc., CIBC Wood Gundy Securities
         Corp., and Scotia Capital Markets dated August 21, 1997 (Incorporated
         herein by reference to Exhibit 10.01 to Hyperion's Current Report on
         Form 8-K dated August 27, 1997.)
         (File No. 0-21605).

10.38    Purchase Agreement among Adelphia Communications Corporation and Smith
         Barney Inc. dated September 22, 1997 (Incorporated herein by reference
         is Exhibit 10.01 to the Registrant's Current Report on Form 8-K, dated
         September 25, 1997.) (File Number 0-16014).

10.39    Purchase Agreement among Adelphia Communications Corporation and
         Salomon Brothers Inc. dated January 15, 1998 (Incorporated by reference
         herein is Exhibit 10.01 to the Registrant's Current Report on Form 8-K
         dated January 21, 1998.) (File No. 0-16014).

10.40*   Management Services Agreement dated as of April 10, 1998, between the
         Registrant and Hyperion Telecommunications, Inc. (Incorporated herein
         by reference is Exhibit 10.23 to Registration Statement No. 333-48209
         on Form S-1 filed by Hyperion Telecommunications, Inc.).

10.41    Letter Agreement dated April 10, 1998, among Hyperion
         Telecommunications, Inc., the Registrant and MCImetro Access
         Transmission Services, Inc. (Incorporated herein by reference is
         Exhibit 10.24 to Registration Statement No. 333-48209 on Form S-1 filed
         by Hyperion Telecommunications, Inc.).

10.42    Amendment to Registration Rights Agreement dated as of April 15, 1998,
         between Hyperion Telecommunications, Inc. and the Registrant
         (Incorporated herein by reference is Exhibit 10.25 to Registration
         Statement No. 333-48209 on Form S-1 filed by Hyperion
         Telecommunications, Inc.).

10.43    Letter Agreement dated as of April 9, 1998, between Hyperion
         Telecommunications, Inc. and the Registrant regarding the purchase of
         Hyperion's Class A Common Stock (Incorporated herein by reference is
         Exhibit 10.26 to Registration Statement No. 333-48209 on Form S-1 filed
         by Hyperion Telecommunications, Inc.).


<PAGE>

10.44    U.S. Underwriting Agreement dated May 4, 1998 among Hyperion
         Telecommunications, Inc. and the Representatives named therein
         (Incorporated herein by reference is Exhibit 10.01 to Hyperion
         Telecommunications, Inc.'s Current Report on Form 8-K dated June 24,
         1998.) (File Number 0-21605).

10.45    International Underwriting Agreement dated May 4, 1998 among Hyperion
         Telecommunications, Inc. and the Representatives named therein
         (Incorporated herein by reference is Exhibit 10.02 to Hyperion
         Telecommunications, Inc.'s Current Report on Form 8-K dated June 24,
         1998.) (File Number 0-21605).

10.46    Warrant issued by Hyperion Telecommunications, Inc. to MCI dated May 8,
         1998 (Incorporated herein by reference is Exhibit 10.03 to Hyperion
         Telecommunications, Inc.'s Current Report on Form 8-K dated June 24,
         1998.) (File Number 0-21605).

10.47    Warrant issued by Hyperion Telecommunications, Inc. to the Registrant
         dated June 5, 1998 (Incorporated herein by reference is Exhibit 10.04
         to Hyperion Telecommunications, Inc.'s Current Report on Form 8-K dated
         June 24, 1998.) (File Number 0-21605).

10.48    Purchase Agreement among Adelphia Communications Corporation and
         Barclays Capital, Inc. dated June 29, 1998 (Incorporated herein by
         reference is Exhibit 10.01 to the Registrant's Current Report on Form
         8-K dated July 23, 1998).

10.49    U.S. Underwriting Agreement between the Registrant and the
         Representatives of the U.S. Underwriters named therein, dated August
         12, 1998 (Incorporated herein by reference is Exhibit 10.01 to the Form
         8-K of the Registrant for the event dated August 18, 1998.) (File No.
         000-16104).

10.50    International Underwriting Agreement between the Registrant and the
         Lead Managers of the Managers named therein, dated August 12, 1998
         (Incorporated herein by reference is Exhibit 10.02 to the Form 8-K of
         the Registrant for the event dated August 18, 1998.) (File No.
         000-16104).

10.51    Direct Purchase Agreement between the Registrant and Highland
         Communications, L.L.C., dated August 12, 1998 (Incorporated herein by
         reference is Exhibit 10.03 to the Form 8-K of the Registrant for the
         event dated August 18, 1998.) (File No. 000-16104).

10.52*   Adelphia Communications Corporation 1998 Long-Term Incentive
         Compensation Plan (Incorporated herein by reference is Exhibit A to the
         Registrant's Proxy Statement for the Annual Meeting of Stockholders on
         October 6, 1998.) (File No. 000-16104).

10.53    Distribution Agreement dated as of August 31, 1998 among Syracuse
         Hilton Head Holdings, L.P., Adelphia Communications Corporation and
         SHHH Acquisition Corp. (Incorporated herein by reference is Exhibit
         10.05 to the Form 10-Q of the Registrant for the quarter ended
         September 30, 1998.) (File No. 0-16104).

10.54    Second Amendment to Credit Agreement, dated as of April 12, 1996, among
         Chelsea Communications, Inc., Kittanning Cablevision Inc.,
         Robinson/Plum Cablevision L. P., the several banks and financial
         institutions parties thereto, and Toronto Dominion (Texas), Inc. as
         Administrative Agent (Incorporated herein by reference is Exhibit 10.06
         to the Form 10-Q of the Registrant for the quarter ended September 30,
         1998.) (File No. 0-16104).

10.55    Purchase Agreement among Adelphia Communications Corporation and
         Barclays Capital, Inc. (the "Initial Purchaser") dated November 6, 1998
         (Incorporated by reference herein is Exhibit 10.01 to the Registrant's
         Current Report on Form 8-K, filed January 28, 1999.) (File No.
         0-16104).

10.56    Purchase Agreement among Adelphia Communications Corporation and
         Salomon Smith Barney, Inc., Credit Suisse First Boston Corporation,
         Goldman Sachs & Co., Lehman Brothers, Inc. and NationsBank Montgomery
         Securities LLC (the "Initial Purchasers") dated January 6, 1999
         (Incorporated by reference herein is Exhibit 10.02 to the Registrant's
         Current Report on Form 8-K, filed January 28, 1999.)
         (File No. 0-16104).


<PAGE>

10.57    Credit Agreement, dated as of December 30, 1998, among Parnassos, L.P.
         as the Borrower, various financial institutions as the Lenders, the
         Bank of Nova Scotia as the Administrative Agent, Nationsbank, N.A. as
         the Documentation Agent, and TD Securities (USA) Inc. as the
         Syndication Agent (Incorporated by reference herein is Exhibit 10.03 to
         the Registrant's Current Report on Form 8-K, filed January 28, 1999.)
         (File No. 0-16104).

10.58    Registration Rights Agreement among Adelphia Communications
         Corporation, Doris Holdings, L.P. and Highland Holdings II dated
         January 14, 1999 (Incorporated by reference herein is Exhibit 10.04 to
         the Registrant's Current Report on Form 8-K, filed January 28, 1999.)
         (File No. 0-16104).

10.59    Underwriting Agreement dated January 11, 1999 between the Registrant
         and Goldman, Sachs & Co. (Incorporated by reference herein is Exhibit
         1.01 to the Registrant's Current Report on Form 8-K, filed January 13,
         1999.) (File No. 0-16104).

10.60    Purchase Agreement between the Registrant and Highland Holdings II
         dated January 11, 1999 (Incorporated by reference herein is Exhibit
         10.01 to the Registrant's Current Report on Form 8-K, filed January 13,
         1999.) (File No. 0-16104).

10.61    Stock Purchase Agreement dated January 28, 1999 (Incorporated herein by
         reference is Exhibit 13 to Amendment No. 3 to Schedule 13D filed
         February 8, 1999 on behalf of FPL Group, Inc.).

10.62    Class B Voting Agreement, dated as of March 5, 1999, among Adelphia
         Communications Corporation, Leonard Tow, The Claire Tow Trust, and the
         Trust Created by Claire Tow under date of December 10, 1979
         (Incorporated herein by reference is Exhibit 10.01 to the Registrant's
         Current Report on Form 8-K for the event dated February 22, 1999.)
         (File No. 0-16104).

10.63    Rigas Class B Voting Agreement , dated as of March 5, 1999, among
         Century Communications Corp., John Rigas, Michael Rigas, Timothy Rigas
         and James Rigas (Incorporated herein by reference is Exhibit 10.02 to
         the Registrant's Current Report on Form 8-K for the event dated
         February 22, 1999.) (File No. 0-16104).

10.64    Purchase Agreement between Hyperion Telecommunications, Inc. and the
         Initial Purchasers named therein, dated as of February 25, 1999,
         regarding Hyperion's 12% Senior Subordinated Notes due 2007
         (Incorporated herein by reference is Exhibit 10.03 to the Registrant's
         Current Report on Form 8-K for the event dated February 22, 1999.)
         (File No. 0-16104).

10.65    Purchase Agreement between Hyperion Telecommunications, Inc. and
         Highland Holdings, dated as of February 25, 1999, regarding Hyperion's
         12% Senior Subordinated Notes due 2007 (Incorporated herein by
         reference is Exhibit 10.05 to the Registrant's Current Report on Form
         8-K for the event dated February 22, 1999.) (File No. 0-16104).

10.66    Class B Common Stock Purchase Letter Agreement dated April 9, 1999
         between Adelphia Communications Corporation and Highland Holdings
         (Incorporated herein by reference is Exhibit 10.01 to the Registrant's
         Current Report on Form 8-K for the event dated April 9, 1999.) (File
         No. 0-16104).

10.67    Class A Common Stock Underwriting Agreement among Adelphia
         Communications Corporation, Salomon Smith Barney Inc. and the other
         underwriters named therein, as representatives of the Underwriters,
         dated April 23, 1999 (Incorporated by reference herein is Exhibit 1.01
         to the Current Report on Form 8-K of the Registrant for the event dated
         April 28, 1999.) (File No. 0-16104).

10.68    7-7/8% Senior Notes Underwriting Agreement among Adelphia
         Communications Corporation and Chase Securities Inc., as representative
         of the Underwriters, dated April 23, 1999 (Incorporated by reference
         herein is Exhibit 10.02 to the Current Report on Form 8-K of the
         Registrant for the event dated April 28, 1999.) (File No. 0-16104).
<PAGE>

10.69    5-1/2% Series D Convertible Preferred Stock Underwriting Agreement
         among Adelphia Communications Corporation and Salomon Smith Barney
         Inc., as representative of the Underwriters, dated April 26, 1999
         (Incorporated by reference herein is Exhibit 1.03 to the Current Report
         on Form 8-K of the Registrant for the event dated April 28, 1999.)
         (File No. 0-16104).

21.01    Subsidiaries of the Registrant (Filed herewith).

23.01    Consent of Deloitte & Touche LLP (Filed herewith).

27.01    Financial Data Schedule (Filed herewith).

99.01    Materials incorporated by reference in this Transition Report on Form
         10-K of the Olympus Communications, L.P. and Olympus Capital
         Corporation Form 10-K for the year ended December 31, 1998.
<FN>


*    Denotes management contracts and compensatory plans and arrangements
     required to be identified by Item 14(a)(3).
</FN>
</TABLE>

     The Registrant will furnish to the Commission upon request copies of
instruments not filed herewith which authorize the issuance of long-term
obligations of Registrant not in excess of 10% of the Registrant's total assets
on a consolidated basis.

(b)  The Registrant filed Form 8-Ks dated November 9, 1998, November 13, 1998
     and December 23, 1998, which reported information under Items 5 and 7
     thereof. No financial statements were filed with such Form 8-K report.

(c)  The Company hereby files as exhibits to this Transition Report on Form 10-K
     the exhibits set forth in Item 14(a)(3) hereof which are not incorporated
     by reference.

(d)  The Company hereby files as financial statement schedules to this
     Transition Report on Form 10-K the financial statement schedules set forth
     in Item 14(a)(2) hereof.

<PAGE>



<TABLE>
<CAPTION>

                                             SCHEDULE I (Page 1 of 4)
                               ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                       Condensed Information as to the Financial Position of the Registrant
                                              (Dollars in thousands)
                                                                           March 31,    December 31,
                                                                             1998           1998
                                                                        -------------  -------------
ASSETS:
<S>                                                                    <C>             <C>
Investment in and net advances to cable television
subsidiaries and related parties                                        $     873,398  $   1,123,615
Property and equipment - net                                                   30,776         28,889
Cash and cash equivalents                                                         103            105
Other assets - net                                                             81,823         67,346
                                                                        -------------  -------------
Total                                                                   $     986,100  $   1,219,955
                                                                        =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY):

Losses and distributions in excess of investments in and net advances
to cable television subsidiaries                                        $     515,957  $     201,636
Parent debt                                                                 1,580,274      1,810,212
Other debt                                                                      2,745          2,096
Accrued interest and other liabilities                                         54,927         79,566
                                                                        -------------  -------------
Total liabilities                                                           2,153,903      2,093,510

Redeemable exchangeable preferred stock                                       148,062        148,191

Stockholders' equity (deficiency) - see consolidated financial
statements included herein for details                                     (1,315,865)    (1,021,746)
                                                                        -------------  -------------
Total                                                                   $     986,100  $   1,219,955
                                                                        =============  =============




                    See notes to condensed financial information of the Registrant.
</TABLE>



<PAGE>



<TABLE>
<CAPTION>

                                            SCHEDULE I (Page 2 of 4)
                              ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                          Condensed Information as to the Operations of the Registrant
                                             (Dollars in thousands)

                                                                                Nine Months
                                                                                  Ended
                                                         Year Ended March 31,  December 31,
                                                           1997         1998        1998
                                                      -----------  -----------  -----------
INCOME:

<S>                                                   <C>          <C>          <C>
Income from subsidiaries and affiliates               $    57,479  $    65,369  $    68,011
                                                      -----------  -----------  -----------

EXPENSES:

Operating expenses and fees to subsidiaries                 2,044        2,144          316
Depreciation and amortization                               5,882        7,408        4,106
Interest expense to subsidiaries and affiliates            18,591       16,831       12,902
Interest expense to others                                103,735      134,984      108,809
                                                      -----------  -----------  -----------
Total                                                     130,252      161,367      126,133
                                                      -----------  -----------  -----------

Loss before gain on sale of investments, equity in
net loss of subsidiaries and extraordinary items          (72,773)     (95,998)     (58,122)

Gain on sale of investments                                 3,746        1,927         --
Equity in net loss of subsidiaries                        (49,905)     (68,483)     (52,671)
                                                      -----------  -----------  -----------
Loss before extraordinary loss                           (118,932)    (162,554)    (110,793)
Extraordinary loss on early retirement of debt            (11,710)     (11,325)      (4,337)
                                                      -----------  -----------  -----------
Net loss                                                 (130,642)    (173,879)    (115,130)
Dividend requirements applicable to preferred stock          --        (18,850)     (20,718)
                                                      ===========  ===========  ===========
Net loss applicable to common stockholders            $  (130,642) $  (192,729) $  (135,848)
                                                      ===========  ===========  ===========

</TABLE>



<PAGE>


<TABLE>
<CAPTION>

                                            SCHEDULE I (Page 3 of 4)
                              ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                          Condensed Information as to the Cash Flows of the Registrant
                                             (Dollars in thousands)

                                                                                       Nine Months
                                                                                          Ended
                                                             Year Ended March 31,      December 31,
                                                              1997           1998          1998
                                                         -------------  -------------  ------------
Cash flows from operating activities:
<S>                                                      <C>            <C>            <C>
Net loss                                                 $   (130,642)  $   (173,879)  $   (115,130)
Adjustments to reconcile net loss to net cash used
for operating activities:
Equity in net loss of subsidiaries                             49,905         68,483         52,671
Gain on sale of investments                                    (3,746)        (1,927)          --
Extraordinary loss on debt retirement                          11,710         11,325          4,337
Depreciation and amortization                                   5,882          7,408          4,106
Noncash interest expense                                       17,893          9,389            545
Change in operating assets and liabilities:
Other assets                                                     (711)         1,661         15,554
Accrued interest and other liabilities                         (2,165)         2,814         22,062
                                                         ------------   ------------   ------------
Net cash used for operating activities                        (51,874)       (74,726)       (15,855)
                                                         ------------   ------------   ------------

Cash flows from investing activities:
Investments in and advances to subsidiaries
and related parties - net                                    (162,812)      (539,459)      (664,629)
Expenditures for property, plant and equipment                   (669)          (722)          (835)
Proceeds from sale of investments                                --           12,678           --
                                                         ------------   ------------   ------------
Net cash used for investing activities                       (163,481)      (527,503)      (665,464)
                                                         ------------   ------------   ------------

Cash flows from financing activities:
Proceeds from debt                                            348,312        624,142        299,232
Repayments of debt                                           (122,615)      (232,421)       (70,488)
Issuance of redeemable exchangeable preferred stock              --          147,976           --
Issuance of convertible preferred stock                          --           97,000           --
Issuance of Hyperion Class A common stock                        --             --          205,559
Issuance of Class A common stock                                 --             --          275,880
Costs associated with issuance of Class A common stock           --             --           (7,954)
Preferred stock dividends paid                                   --          (14,787)       (15,843)
Premium paid on early retirement of debt                       (8,207)       (12,153)        (2,095)
Debt financing costs                                           (5,135)        (7,522)        (2,970)
                                                         ------------   ------------   ------------
Net cash provided by financing activities                     212,355        602,235        681,321
                                                         ------------   ------------   ------------

(Decrease) increase in cash and cash equivalents               (3,000)             6              2

Cash and cash equivalents, beginning of period                  3,097             97            103
                                                         ------------   ------------   ------------

Cash and cash equivalents, end of period                 $         97   $        103   $        105
                                                         ============   ============   ============

Supplemental disclosure of cash flow activity -
Cash payments for interest                               $    106,746   $    134,805   $     97,972
                                                         ============   ============   ============
</TABLE>



<PAGE>


                            SCHEDULE I (Page 4 of 4)
              ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           Notes to Condensed Financial Information of the Registrant
                             (Dollars in thousands)

    1. Amounts advanced between Adelphia and related parties:

      Adelphia Communications Corporation ("Adelphia") has periodically advanced
to and borrowed funds from subsidiaries and affiliates. Adelphia and its
subsidiaries and affiliates charge interest on such amounts at rates ranging
from 2% to 11% with principal due upon demand five years after December 31,
1998.

     2.  Reclassifications:

      Certain prior period amounts have been reclassified to conform with the
current period presentation.


<PAGE>


<TABLE>
<CAPTION>

                                             SCHEDULE II
                         ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                 VALUATION AND QUALIFYING ACCOUNTS
                                      (Dollars in thousands)

                                                      Balance           Charged
                                                        at             to Costs                              Balance
                                                     Beginning            and            Deductions-          at End
                                                     of Period         Expenses          Write-Offs         of Period
                                                   --------------    --------------     --------------     -------------
Year Ended March 31, 1997

<S>                                              <C>               <C>                <C>               <C>
Allowance for doubtful accounts                  $         1,216   $         8,398    $         8,269   $         1,345
                                                 ================  ================   ================  ================

Valuation allowance for deferred tax assets      $       301,485   $        57,800    $            --   $       359,285
                                                 ================  ================   ================  ================

Year Ended March 31, 1998

Allowance for doubtful accounts                  $         1,345   $         8,685    $         8,864   $         1,166
                                                 ================  ================   ================  ================

Valuation allowance for deferred tax assets      $       359,285   $        48,775    $            --   $       408,060
                                                 ================  ================   ================  ================

Nine Months Ended December 31, 1998

Allowance for doubtful accounts                  $         1,166   $         8,765    $         7,078   $         2,853
                                                 ================  ================   ================  ================

Valuation allowance for deferred tax assets      $       408,060   $        31,220    $            --   $       439,280
                                                 ================  ================   ================  ================

</TABLE>



<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         ADELPHIA COMMUNICATIONS CORPORATION

May 25, 1999                                 By:  /s/ John J. Rigas
                                                      John J. Rigas,
                                                      Chairman, President and
                                                      Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

May 25, 1999                                      /s/ John J. Rigas
                                                      John J. Rigas,
                                                      Director

May 25, 1999                                      /s/ Timothy J. Rigas
                                                      Timothy J. Rigas,
                                                      Executive Vice President,
                                                      Chief Financial Officer,
                                                      Chief Accounting Officer,
                                                      Treasurer and Director

May 25, 1999                                      /s/ Michael J. Rigas
                                                      Michael J. Rigas,
                                                      Executive Vice President,
                                                      Operations and Director

May 25, 1999                                      /s/ James P. Rigas
                                                      James P. Rigas,
                                                      Executive Vice President,
                                                      Strategic Planning and
                                                      Director

May 25, 1999                                      /s/ Daniel R. Milliard
                                                      Daniel R. Milliard,
                                                      Senior Vice President,
                                                      Secretary and Director

May 25, 1999                                      /s/ Dennis P. Coyle
                                                      Dennis P. Coyle,
                                                      Director

May 25, 1999                                      /s/ Pete J. Metros
                                                      Pete J. Metros,
                                                      Director

May 25, 1999                                      /s/ Perry S. Patterson
                                                      Perry S. Patterson,
                                                      Director


<PAGE>