Fitch Places Cox Enterprises & Cox Communications on Rating Watch Negative

Business Wire, August 2, 2004

CHICAGO -- Fitch Ratings has placed Cox Enterprises Inc. (CEI) and Cox Communications Inc. (Cox) on Rating Watch Negative following today's proposal by CEI to acquire the 38% publicly held minority stake in Cox for $7.9 billion or $32 per share. CEI currently has a 62% economic interest and a 73% voting interest in Cox. The Rating Watch Negative status reflects the uncertainty regarding the capital structure of CEI and Cox following the proposed transaction. Fitch presently rates both Cox Enterprises, Inc. and Cox Communications, Inc. 'BBB'.

CEI and Cox currently have $2.5 billion and $6.7 billion of debt, respectively. Bridge financing for the transaction totaling $10 billion has been arranged with Lehman Brothers and Citigroup, who are acting as lead managers for the transaction. Approximately $2.1 billion of the transaction-related financing will be used to refinance existing indebtedness of CEI and for other corporate purposes. The proposal involves several steps, with the resolution expected in the fourth quarter of 2004.

The resolution of the Rating Watch will depend on the final capital structure of the company and any cash flow restrictions between the parent, CEI, and its subsidiary, Cox. CEI has a broad assortment of wholly owned and partially owned assets that could be used to strengthen the balance sheet as part of the transaction. Fitch plans to review the proposed transaction and future capitalization objectives with the company in the near term.