Time Warner, Comcast close Adelphia deal

Time Warner Inc. (NYSE:TWX) and Comcast Corporation (Nasdaq:CMCSA,
CMCSK) today announced that they completed the acquisition of
substantially all of Adelphia Communications Corporation’s assets.

With this acquisition as well as the swaps of cable systems between
them, Comcast and Time Warner Cable have expanded their cable
footprints and improved the geographic clusters of their subscribers.
In addition, Comcast’s historical ownership interests in Time Warner
Cable and Time Warner Entertainment Company L.P. (TWE) have been
redeemed, with the result that Time Warner Cable is now owned
approximately 84% by Time Warner and 16% by Adelphia. Both companies
are now focused on integrating their new cable properties and laying
the groundwork to accelerate the deployment in the coming months of
enhanced video, high-speed data, digital voice and other advanced
services to consumers formerly served by Adelphia. Time Warner
Chairman and Chief Executive Officer Dick Parsons said: “With Time
Warner Cable delivering stellar growth, we are very pleased to continue
to build value by significantly enhancing our scale, subscriber
clusters, and operating efficiencies, all at an attractive price. Glenn
Britt and his team, with their technological leadership and operating
expertise, are ready to integrate these new cable systems seamlessly,
enabling the rollout of our highly popular ‘triple play’ to a whole new
universe of subscribers. We’re confident that Time Warner Cable will
continue to be an engine of growth for our Company, while delivering
the best possible cable experience to all of our customers. Let me
thank Brian Roberts and his impressive Comcast team, Bill Schleyer and
his colleagues at Adelphia, as well as all of the Time Warner Cable and
Time Warner people, for all of their great work in this long process.”
Brian L. Roberts, Chairman and Chief Executive Officer of Comcast,
said: “The first half of 2006 has been terrific for Comcast with great
consumer response to our new advanced products and triple play offer.
Comcast is in the strongest position in our history and the acquisition
of these contiguous and complementary systems could not come at a
better time. Steve Burke, Dave Watson and the cable team have extensive
experience integrating cable systems and we look forward to delivering
to our new customers the products and services that are already so
popular with Comcast’s subscribers. Significantly, today’s transactions
also complete the redemption of our stakes in Time Warner Cable and
Time Warner Entertainment, which is an important strategic milestone
for our Company. We are grateful to Dick Parsons and his colleagues at
Time Warner and the team at Adelphia who worked so hard to facilitate
and close these transactions. We’d also like to welcome our new
Adelphia and Time Warner employees and customers into the family. Now
it’s time to get to work delivering on the promise of these
transactions.” Glenn Britt, President and Chief Executive
Officer of Time Warner Cable, said: “After spending more than a year
preparing for the closing of these transactions, we now can
enthusiastically begin our full-scale integration and upgrade efforts.
In the coming months, we’ll stay focused on laying the critical
groundwork to allow us to offer our very successful triple-play package
of enhanced video, high-speed online and Digital Phone services
aggressively to the nearly 7.6 million new homes passed in our expanded
service area. We hope to strengthen customer relationships by ensuring
the best possible offerings and quality customer care. We will strive
to make this changeover as seamless as possible for our customers and
for the 12,000 new employees we’ll be welcoming to our Company.”
Time Warner Cable has gained cable systems passing approximately 7.6
million homes, with approximately 3.3 million basic subscribers. Time
Warner Cable now manages a total of approximately 14.4 million
well-clustered basic subscribers with 27.6 million homes passed.
Comcast has added about 1.7 million additional basic subscribers for a
total of approximately 23.3 million owned and operated customers, with
about 3.5 million additional subscribers held in various partnerships
attributed to it. As previously announced, the combined
purchase price for the assets acquired by Time Warner Cable and Comcast
consisted of $12.5 billion in cash and Time Warner Cable common stock
representing approximately 16% of Time Warner Cable’s total common
equity. The remaining 84% of Time Warner Cable common stock will be
held by Time Warner Inc. In addition, Time Warner Inc. will own a
direct non-voting common equity interest of approximately 12% in a
subsidiary of the cable company. Under agreements entered into in
connection with the acquisition, Adelphia is required to sell at least
one-third of the Time Warner Cable common stock it received in the
transaction in an underwritten public offering within three months of
the registration statement for such offering becoming effective,
unless, prior to that, the shares are distributed to creditors of
Adelphia pursuant to a confirmed plan of reorganization. Time Warner
Cable expects that any shares distributed to Adelphia creditors
pursuant to a plan of reorganization would be freely transferable.
In addition, Time Warner Cable has redeemed Comcast’s 17.9% interest in
Time Warner Cable Inc. and Time Warner Entertainment has redeemed
Comcast’s 4.7% in TWE, which together represented an effective 21%
economic interest in Time Warner Cable.

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