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

--The purchase of the Adelphia assets is not dependent on the occurrence of the system swaps and redemption transactions between Time Warner and Comcast.

Steve Burke, Chief Operating Officer of Comcast, said, "The Adelphia transaction, the various system swaps, and the redemption of our Time Warner Cable interests will allow us to enhance our key clusters. It is truly a perfect fit. We look forward to quickly integrating the 1.8 million additional subscribers just as we did when we acquired AT&T Broadband and its 13 million subscribers in 2002. Most importantly, we look forward to providing all our subscribers, both old and new, with a complete suite of integrated communications and entertainment products."

Don Logan, Chairman of Time Warner's Media & Communications Group, said: "We like the cable business. It's the only platform today that can deliver enhanced digital video, high-speed data and voice services to consumers, and we have great confidence in its future. Our newly acquired systems will give us a bigger and better-clustered cable footprint, built around five large clusters, including New York City and Los Angeles. Together with Glenn Britt and the Time Warner Cable team, we'll bring our experience in innovation and proven operating track record to improving and growing the performance of these new systems."

Outcome for Time Warner

When these transactions close, Time Warner will own 84% of Time Warner Cable's common stock, which will continue to consist of Class A shares and Class B super-voting shares. The remaining 16% of Time Warner Cable's common equity initially will be owned by Adelphia stakeholders and is expected to be publicly traded in the form of Class A shares. In addition to its 84% stake in the publicly traded Time Warner Cable, Time Warner also will own a direct non-voting common equity interest of approximately $2.9 billion in a subsidiary of Time Warner Cable. The acquisition will be accounted for as an asset purchase. Time Warner said that it expects to retain significant financial flexibility, while maintaining its strong investment-grade debt rating.

Taking into account the proposed acquisition, swaps and redemptions, on a net basis, Time Warner Cable will gain approximately 3.5 million basic video subscribers. Specifically, Time Warner Cable will add around 3 million Adelphia subscribers and more than 1 million Comcast subscribers, and will give Comcast approximately 750,000 current Time Warner Cable subscribers. It will then manage a total of approximately 14.4 million basic subscribers - 12.9 million consolidated and 1.5 million in 50%-owned continuing joint ventures with Comcast. That will make Time Warner Cable the second-largest multi-channel video provider in the U.S. - ahead of all other cable operators, except for Comcast, and ahead of both major satellite companies.

Once these transactions are complete, 85% of Time Warner Cable's managed subscribers will be located in five large clusters, including (in round numbers): 3.1 million in New York, 2.6 million in Texas, 2.4 million in California, 2.3 million in Ohio and 1.9 million in the Carolinas. Time Warner Cable will be the largest cable provider in both New York City and Los Angeles, cities which anchor the country's two largest designated market areas (DMAs).