Time Warner and Comcast complete Adelphia acquisition

August 1, 2006 New York, NY and Philadelphia, PA -- Time Warner Inc. and Comcast Corp. have completed the acquisition of substantially all of Adelphia Communications Corp.'s assets. Time Warner and Comcast announced an agreement to acquire the bankrupt multiple systems operator (MSO) in April 2005.

August 1, 2006 New York, NY and Philadelphia, PA -- Time Warner Inc. and Comcast Corp. have completed the acquisition of substantially all of Adelphia Communications Corp.'s assets. Time Warner and Comcast announced an agreement to acquire the bankrupt multiple systems operator (MSO) in April 2005.

In addition to acquiring the Adelphia assets, Time Warner and Comcast also swapped certain cable systems. In addition, Comcast's ownership interests in Time Warner Cable and Time Warner Entertainment Co. LP (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, according to a press release.

Glenn Britt, President and CEO 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.

Meanwhile, Adelphia is required to sell at least one-third of the Time Warner Cable common stock it received in an underwritten public offering within three months of the registration statement for such offering becoming effective, unless the shares are distributed to creditors of Adelphia pursuant to a confirmed plan of reorganization prior to that. Time Warner Cable expects that any shares distributed to Adelphia creditors as part of a reorganization plan 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.

Bear Stearns and Lehman Brothers acted as financial advisors to Time Warner. The Blackstone Group acted as financial advisor to Comcast on the Adelphia transaction and assisted on the Time Warner Cable and Time Warner Entertainment redemptions. Morgan Stanley acted as financial advisor to Comcast on the Time Warner redemptions and assisted on Adelphia. Paul, Weiss, Rifkind, Wharton & Garrison LLP is legal advisor to Time Warner. Davis Polk & Wardwell is legal advisor to Comcast. Ballard Spahr Andrews & Ingersoll, LLP advised Comcast on bankruptcy-related issues.

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