Time Warner and Comcast buy Adelphia

April 21, 2005 Greenwood Village, CO -- Time Warner and Comcast have reached definitive agreements to acquire substantially all the U.S. assets of Adelphia Communications, for $12.7 billion in cash and 16% of the common stock of Time Warner's cable subsidiary, Time Warner Cable. Adelphia is an operator of cable systems in the U.S. with approximately 5.2 million basic subscribers in 31 states.

April 21, 2005 Greenwood Village, CO -- Time Warner and Comcast have reached definitive agreements to acquire substantially all the U.S. assets of Adelphia Communications, for $12.7 billion in cash and 16% of the common stock of Time Warner's cable subsidiary, Time Warner Cable. Adelphia is an operator of cable systems in the U.S. with approximately 5.2 million basic subscribers in 31 states.

Under the terms of the transaction, approved by the boards of directors of all three companies, Adelphia's stakeholders will receive $9.2 billion in cash and 16% of Time Warner Cable's common equity from Time Warner. In addition, Comcast will pay Adelphia $3.5 billion in cash.

Also, according to a press release, under proposed transactions between Time Warner and Comcast, the two companies will swap cable systems to enhance their respective geographic clusters and unwind Comcast's investments in Time Warner Cable and Time Warner Entertainment Company, in an efficient and mutually beneficial way.

"After extensive review of all options for the company, Adelphia's board of directors has determined that this transaction delivers the maximum value to its bankruptcy constituents," remarks Bill Schleyer, chairman and CEO of Adelphia. "We believe that this option is superior to Adelphia emerging as a standalone company."

After a 20-month effort involving hundreds of accountants, Adelphia says it restored credibility to its financial reporting last December with the filing of its 2003 Annual Report on Form 10-K and audited financial statements for the fiscal years 2003, 2002, and 2001. According to the company, new financial reporting systems were put into place, along with a corporate-wide ethics policy signed by every employee.

The transaction is subject to approval by the U.S. bankruptcy court for the southern district of New York, and customary closing conditions. Going forward, Adelphia will file a revised plan of reorganization and draft disclosure statement with the bankruptcy court that reflects the terms of the transaction. Parallel to the bankruptcy process, for the deal to close it will require approvals of the FCC, the Justice Department, and, where required, local franchising authorities. Subject to all necessary approvals, the deal is expected to close in approximately nine to 12 months. The Official Committee of the Unsecured Creditors supported Adelphia in moving forward with the transaction.

The agreement does not include Adelphia's cable system partnership in Puerto Rico.

According to the release, since early 2003, Adelphia has made investments in equipment and systems to upgrade its cable network, serving 97% of its passed homes with a network capable of delivering services including digital video, high-speed Internet, high-definition television, video-on-demand, digital video recording, and telephony. The company also overhauled its customer service organization, repackaging service offerings and consolidating call centers.

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