Time Warner Cable and Comcast to Acquire Assets of Adelphia Communications; Companies Also to Swap Certain Cable Systems and Unwind Comcast's Interests in Time Warner Cable and Time Warner Entertainment Company

Business Wire, April 21, 2005

NEW YORK & PHILADELPHIA -- Transactions to Expand Both Companies' Cable Footprints and Enhance Their Geographic Subscriber Clusters, Speeding the Delivery of New Products in Areas Currently Served by Adelphia

Time Warner Inc. (NYSE:TWX) and Comcast Corporation (Nasdaq:CMCSA, CMCSK) today announced that they have reached definitive agreements to acquire substantially all the assets of Adelphia Communications Corporation (OTC: ADELQ) for a total of $12.7 billion in cash and 16% of the common stock of Time Warner's cable subsidiary, Time Warner Cable Inc. Time Warner Cable and Comcast also will swap certain cable systems. In addition, Time Warner Cable will redeem Comcast's interests of 17.9% in Time Warner Cable and 4.7% in Time Warner Entertainment Company, L.P. (TWE) (together an effective 21% economic ownership of Time Warner Cable) in an efficient and mutually beneficial way.

These transactions will serve to expand both companies' cable footprints and improve the geographic clusters of their subscribers. Importantly, consumers in areas now served by Adelphia will benefit significantly from the accelerated deployment of video, high-speed data, voice and other advanced services.

As a result of these transactions, Time Warner Cable will gain systems passing approximately 7.5 million homes, with approximately 3.5 million basic subscribers. Time Warner Cable will then manage a total of approximately 14.4 million well-clustered basic subscribers. Time Warner will own 84% of Time Warner Cable's common stock, and the cable company will become a publicly traded company at the time of closing.

Comcast will emerge from these transactions with approximately 1.8 million additional basic subscribers for a net cash investment of approximately $1.5 billion. Following these transactions, Comcast will serve a total of approximately 23.3 million customers. Comcast's clusters in Washington, D.C., Florida, Massachusetts and Pennsylvania will be enhanced, and Comcast will divest its interests in Time Warner Cable and TWE in transactions designed to be tax-free to all parties. Comcast's attributable subscribers, as calculated under the Federal Communications Commission (FCC) rules, will remain under 30% of the multi-channel video subscribers in the United States.

Time Warner Chairman and Chief Executive Officer Dick Parsons said: "I'm very pleased that we're able to take full advantage of this unique opportunity to grow our company at a fair price and move it forward - strategically, operationally and financially. Consistent with our strategy, these transactions will better position us to compete, improve returns and create shareholder value. At Time Warner Cable, we'll gain important scale, enhance our subscriber clusters and accelerate growth. As we plan the smooth integration of these new cable systems, we'll stay focused on meeting all of Time Warner's financial and operational objectives, while evaluating how to best employ our significant remaining capacity to improve shareholder returns. My thanks to Brian Roberts and his Comcast team for being such fine partners in this process that produced beneficial results for both companies."

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast, said: "These transactions underscore our belief that there has never been a better time to be in the cable business. Adding these subscribers, many of whom are in high-growth, geographically desirable areas, will allow us to roll out our new products and services rapidly. Our vision remains to provide customers with more choice and control of their entertainment and communication services, and to generate superior shareholder returns. I would like to thank Dick Parsons and everyone at Time Warner for helping to achieve such a positive outcome for all parties."

Terms of Proposed Transactions

In the proposed transactions:

--Time Warner Cable and Comcast will each acquire a portion of Adelphia's assets, representing approximately 5.0 million basic cable subscribers in the aggregate. Time Warner Cable will pay $9.2 billion in cash and will issue common shares representing 16% of Time Warner Cable's outstanding common equity (taking into account the redemption transaction with Comcast) to Adelphia stakeholders in connection with its acquisition agreement. Comcast will pay $3.5 billion in cash.

--Time Warner Cable and Comcast have agreed to swap certain cable systems to enhance their respective geographic clusters of subscribers.

--Time Warner Cable will redeem Comcast's 17.9% interest in Time Warner Cable, now held in an FCC-mandated trust, in exchange for a subsidiary holding Time Warner Cable systems serving nearly 600,000 subscribers, as well as approximately $1.856 billion in cash.

--TWE will redeem Comcast's 4.7% interest in TWE, now held in an FCC-mandated trust, in exchange for cable systems serving more than 150,000 subscribers, as well as approximately $133 million in cash.

--Comcast's net cash investment in these transactions will be $1.5 billion.