-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N39CdrzVX4UOS+Wq+sw0xKGFTBM+LUqhAgRJFvyiOGcZ1yhYQEHcj2zlG0gewxfN qTWIJ/dvO1zZLnOutQJW3A== 0001105705-06-000048.txt : 20060802 0001105705-06-000048.hdr.sgml : 20060802 20060802171104 ACCESSION NUMBER: 0001105705-06-000048 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060731 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060802 DATE AS OF CHANGE: 20060802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER INC CENTRAL INDEX KEY: 0001105705 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 134099534 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15062 FILM NUMBER: 06998909 BUSINESS ADDRESS: STREET 1: ONE TIME WARNER CENTER CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 MAIL ADDRESS: STREET 1: ONE TIME WARNER CENTER CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: AOL TIME WARNER INC DATE OF NAME CHANGE: 20000208 8-K 1 k8twi8206.txt TIME WARNER INC. 8-K AUGUST 2., 2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): July 31, 2006 TIME WARNER INC. (Exact Name of Registrant as Specified in its Charter) Delaware 1-15062 13-4099534 -------- ------- ---------- (State or Other Jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) One Time Warner Center, New York, New York 10019 ------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) 212-484-8000 ------------ (Registrant's Telephone Number, Including Area Code) Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.01 Completion of Acquisition or Disposition of Assets. On July 31, 2006, Time Warner Inc., a Delaware corporation ("Time Warner" or the "Company"), and Comcast Corporation, a Pennsylvania corporation ("Comcast"), issued a joint press release announcing that the Adelphia Acquisition (as defined below) had closed on July 31, 2006 and that the redemption of Comcast's interests in Time Warner Cable Inc., a Delaware corporation ("TWC"), and Time Warner Entertainment Company, L.P., a Delaware limited partnership ("TWE") and a subsidiary of TWC, and the Cable Swaps (as defined below) had been completed. A copy of the press release dated July 31, 2006 is attached as Exhibit 99.1. As previously reported, on April 21, 2005, Time Warner and Comcast announced that they and certain of their respective subsidiaries and affiliates had entered into separate definitive agreements (the "TW Purchase Agreement" and the "Comcast Purchase Agreement," respectively) with Adelphia Communications Corporation, a Delaware corporation ("Adelphia"), to, collectively, acquire substantially all of the cable systems managed by Adelphia (the "Adelphia Acquisition"). On June 21, 2006, Adelphia and Time Warner NY Cable LLC, a Delaware limited liability company ("TW NY") and a subsidiary of TWC, entered into Amendment No. 2 to the TW Purchase Agreement (the "TW Amendment"). Concurrently, Adelphia and Comcast entered into Amendment No. 2 to the Comcast Purchase Agreement, the terms of which are similar to those of the TW Amendment. Under the terms of the TW Amendment, the assets TW NY acquired from Adelphia and the consideration it paid remained unchanged. However, the TW Amendment provided that the Adelphia Acquisition would be effected pursuant to sections 105, 363 and 365 of Title 11 of the United States Bankruptcy Code (the "363 Sale") and the creditors of Adelphia would not be required to approve a plan of reorganization under Chapter 11 of the Bankruptcy Code prior to the consummation of the Adelphia Acquisition. In connection with the closing of the Adelphia Acquisition, TW NY paid approximately $8.9 billion in cash, after giving effect to certain purchase price adjustments, and shares representing 16% of TWC's common stock for the Adelphia assets it acquired. At the closing of the Adelphia Acquisition, Adelphia and TWC entered into a registration rights and sale agreement (the "RRA"). Under the RRA, Adelphia is required to sell, in a registered underwritten public offering (the "Offering"), at least one-third of the shares of TWC Class A common stock it received in the Adelphia Acquisition within three months following the effectiveness of a registration statement filed by TWC to effect such sale, subject to customary rights to delay for a limited period of time under certain circumstances. TWC is required to use its commercially reasonable efforts to file a registration statement covering these shares as promptly as practicable and to cause the registration statement to be declared effective as promptly as practicable after filing, but in any event not later than January 31, 2007. Any remaining shares received by Adelphia in the Adelphia Acquisition are expected to be distributed to Adelphia's creditors pursuant to a subsequent plan of reorganization under Chapter 11 of the Bankruptcy Code (the "Remainder Plan") to be filed by Adelphia with the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). If a Remainder Plan meeting specified requirements is consummated prior to the closing of the Offering, the shares of TWC Class A common stock received by Adelphia in the Adelphia Acquisition would be distributed to Adelphia's creditors under Section 1145 of the Bankruptcy Code in accordance with the terms of such plan and the Offering would not occur. The shares distributed to Adelphia's creditors under the Remainder Plan would be freely transferable, subject to certain exceptions. At the same time that TW NY and Comcast entered into the TW Purchase Agreement and the Comcast Purchase Agreement, respectively, TWC, Comcast, and/or their respective affiliates entered into separate agreements providing for the redemption of Comcast's interests in TWC and TWE (the "TWC Redemption Agreement" and the "TWE Redemption Agreement," respectively, and, collectively, the "TWC and TWE Redemption Agreements"). These redemptions also occurred on July 31, 2006, immediately before the closing of the Adelphia Acquisition, and were funded through the issuance of TWC commercial paper, borrowings under the Cable Revolving Facility (as defined below) and cash on hand. Specifically, Comcast's 17.9% interest in TWC was redeemed in exchange for 100% of the capital stock of a subsidiary of TWC holding both cable systems serving approximately 589,000 subscribers (based on June 30, 2006 information) and approximately $1.9 billion in cash. In addition, Comcast's 4.7% interest in TWE was redeemed in exchange for 100% of the equity interests in a subsidiary of TWE holding both cable systems serving approximately 162,000 subscribers (based on June 30, 2006 information) and approximately $147 million in cash. Following these redemptions and the Adelphia Acquisition, on July 31, 2006, TWC, Comcast and their respective subsidiaries also swapped certain cable systems to enhance their respective geographic clusters of subscribers (the "Cable Swaps") and TW NY paid Comcast approximately $67 million for certain adjustments related to the Cable Swaps. As a result of the closing of the Adelphia Acquisition, the TWC and TWE redemptions and the Cable Swaps, TWC gained systems with approximately 3.3 million basic subscribers. As of July 31, 2006, Time Warner owns 84% of TWC's common stock (including 83% of the outstanding TWC Class A common stock and all outstanding shares of TWC Class B common stock), as well as an indirect approximately 12% non-voting interest in TW NY, a subsidiary of TWC. As of July 31, 2006, the remaining 16% of TWC's common stock is held by Adelphia, and Comcast has no interest in TWC or TWE. This report does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. As a result of the Adelphia Acquisition, the TWC and TWE redemptions and the Cable Swaps, the net indebtedness of the Company increased by approximately $11.0 billion (including the Series A Preferred Equity Membership Units described below). In connection with the closing of the Adelphia Acquisition, TW NY paid approximately $8.9 billion in cash, after giving effect to certain purchase price adjustments, that was funded by an intercompany loan from TWC and the proceeds of the private placement issuance by TW NY of $300 million of non-voting Series A Preferred Equity Membership Units with a mandatory redemption date of August 1, 2013 and a cash dividend of 8.21% per annum. The intercompany loan was financed by borrowings under TWC's $6.0 billion senior unsecured five-year revolving credit facility with a maturity date of February 15, 2011 (the "Cable Revolving Facility") and TWC's two $4.0 billion term loan facilities (collectively with the Cable Revolving Facility, the "Cable Facilities"), with maturity dates of February 24, 2009 and February 21, 2011, respectively, and the issuance of TWC commercial paper. For more information on the Cable Facilities, see "Management's Discussion and Analysis of Results of Operations and Financial Condition--Financial Condition and Liquidity--Bank Credit Agreements and Commercial Paper Programs--TWC Inc. Credit Agreements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2005 (the "2005 Form 10-K"). The Cable Revolving Facility was filed as Exhibit 10.51 to the 2005 Form 10-K and TWC's five-year term loan credit agreement and TWC's three-year term loan credit agreement were filed as Exhibits 10.52 and 10.53, respectively, to the 2005 Form 10-K. Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after August 4, 2006, the date by which this Current Report must be filed. (b) Pro Forma Financial Information. The pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after August 4, 2006, the date by which this Current Report must be filed. (c) Shell Company Transactions. Not applicable. (d) Exhibits. Exhibit Description - ------- ----------- 99.1 Press Release, dated July 31, 2006, issued by Time Warner Inc. and Comcast Corporation. 99.2 Asset Purchase Agreement, dated as of April 20, 2005, between Adelphia Communications Corporation ("Adelphia") and Time Warner NY Cable LLC ("TW NY") (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated April 20, 2005). 99.3 Amendment No. 1, dated June 24, 2005, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005). 99.4 Amendment No. 2, dated June 21, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (the "June 2006 Form 10-Q")). 99.5 Amendment No. 3, dated June 26, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.3 to the June 2006 Form 10-Q). 99.6 Amendment No. 4, dated July 31, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.6 to the June 2006 Form 10-Q). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TIME WARNER INC. By: /s/ Wayne H. Pace ----------------------------------- Name: Wayne H. Pace Title: Executive Vice President and Chief Financial Officer Date: August 2, 2006 EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press Release, dated July 31, 2006, issued by Time Warner Inc. and Comcast Corporation. 99.2 Asset Purchase Agreement, dated as of April 20, 2005, between Adelphia Communications Corporation ("Adelphia") and Time Warner NY Cable LLC ("TW NY") (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated April 20, 2005). 99.3 Amendment No. 1, dated June 24, 2005, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005). 99.4 Amendment No. 2, dated June 21, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (the "June 2006 Form 10-Q")). 99.5 Amendment No. 3, dated June 26, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.3 to the June 2006 Form 10-Q). 99.6 Amendment No. 4, dated July 31, 2006, to the Asset Purchase Agreement dated as of April 20, 2005 between Adelphia and TW NY (incorporated herein by reference to Exhibit 10.6 to the June 2006 Form 10-Q). EX-99.1 2 ex991adelphiapressrelease.txt EXHIBIT 99.1 ADELPHIA PRESS RELEASE Exhibit 99.1 TIME WARNER AND COMCAST COMPLETE ADELPHIA COMMUNICATIONS TRANSACTIONS Comcast's Interests in Time Warner Cable Redeemed NEW YORK and PHILADELPHIA, July 31, 2006 - Time Warner Inc. (NYSE:TWX) and Comcast Corporation (Nasdaq:CMCSA, CMCSK) today announced that they completed the acquisition of substantially all of Adelphia Communications Corporation's assets. With this acquisition as well as the swaps of cable systems between them, Comcast and Time Warner Cable have expanded their cable footprints and improved the geographic clusters of their subscribers. In addition, Comcast's historical ownership interests in Time Warner Cable and Time Warner Entertainment Company L.P. (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. Time Warner Chairman and Chief Executive Officer Dick Parsons said: "With Time Warner Cable delivering stellar growth, we are very pleased to continue to build value by significantly enhancing our scale, subscriber clusters, and operating efficiencies, all at an attractive price. Glenn Britt and his team, with their technological leadership and operating expertise, are ready to integrate these new cable systems seamlessly, enabling the rollout of our highly popular `triple play' to a whole new universe of subscribers. We're confident that Time Warner Cable will continue to be an engine of growth for our Company, while delivering the best possible cable experience to all of our customers. Let me thank Brian Roberts and his impressive Comcast team, Bill Schleyer and his colleagues at Adelphia, as well as all of the Time Warner Cable and Time Warner people, for all of their great work in this long process." Brian L. Roberts, Chairman and Chief Executive Officer of Comcast, said: "The first half of 2006 has been terrific for Comcast with great consumer response to our new advanced products and triple play offer. Comcast is in the strongest position in our history and the acquisition of these contiguous and complementary systems could not come at a better time. Steve Burke, Dave Watson and the cable team have extensive experience integrating cable systems and we look forward to delivering to our new customers the products and services that are already so popular with Comcast's subscribers. Significantly, today's transactions also complete the redemption of our stakes in Time Warner Cable and Time Warner Entertainment, which is an important strategic milestone for our Company. We are grateful to Dick Parsons and his colleagues at Time Warner and the team at Adelphia who worked so hard to facilitate and close these transactions. We'd also like to welcome our new Adelphia and Time Warner employees and customers into the family. Now it's time to get to work delivering on the promise of these transactions." Glenn Britt, President and Chief Executive Officer 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. Under agreements entered into in connection with the acquisition, Adelphia is required to sell at least one-third of the Time Warner Cable common stock it received in the transaction in an underwritten public offering within three months of the registration statement for such offering becoming effective, unless, prior to that, the shares are distributed to creditors of Adelphia pursuant to a confirmed plan of reorganization. Time Warner Cable expects that any shares distributed to Adelphia creditors pursuant to a plan of reorganization 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 2 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. This release does not constitute an offer of any security for sale. Subscriber Information The subscriber information contained herein with regard to reporting basic video subscribers has been approximated because each company uses somewhat different methodologies with respect to reporting subscriber counts of multiple-dwelling units. About Time Warner Inc. Time Warner Inc. is a leading media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks and publishing. About Comcast Corporation Comcast Corporation (Nasdaq: CMCSA, CMCSK) (http://www.comcast.com) is the nation's leading provider of cable, entertainment and communications products and services. With 23.3 million cable customers, 10 million high-speed Internet customers, and 1.6 million voice customers, Comcast is principally involved in the development, management and operation of broadband cable systems and in the delivery of programming content. Comcast's content networks and investments include E! Entertainment Television, Style Network, The Golf Channel, OLN, G4, AZN Television, PBS KIDS Sprout, TV One and four regional Comcast SportsNets. Comcast also has a majority ownership in Comcast Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia. About Time Warner Cable Time Warner Cable owns and manages cable systems serving 14.4 million subscribers in 33 states. Passing approximately 28 million homes, Time Warner Cable includes some of the most technologically advanced and best-clustered cable systems in the country, with nearly 85 percent of the Company's customers located in five geographic regions: New York, Texas, Ohio, the Carolinas and southern California. Leveraging its leadership in innovation and quality customer care, Time Warner Cable delivers advanced products and services such as video on demand, high definition television, digital video recorders, 3 high-speed data and Digital Phone. Time Warner Cable is a subsidiary of Time Warner Inc. (NYSE: TWX). Caution Concerning Forward-Looking Statements This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of the management of Time Warner and Comcast, respectively, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to the bankruptcy court approval process, regulatory review and approval process and changes in economic, business, competitive, technological and/or other regulatory factors, as well as other factors affecting the operation of the businesses of Time Warner Inc. and Comcast Corporation. More detailed information about these factors may be found in the respective filings by Time Warner and Comcast with the Securities and Exchange Commission, including their most recent annual reports on Form 10-K and quarterly reports on Form 10-Q. Time Warner and Comcast are under no obligation to, and expressly disclaim any such obligation to, update or alter the forward-looking statements, whether as a result of new information, future events, or otherwise. Contacts: Time Warner Corporate Communications Comcast Public Relations - ------------------------------------ ------------------------ Edward Adler (212) 484-6630 D'Arcy Rudnay (215) 981-8582 Susan Duffy (212) 484-6686 Jennifer Khoury (215) 320-7408 Danielle Perissi (212) 484-6645 Adam Miller (212) 371-5999 Time Warner Investor Relations Comcast Investor Relations - ------------------------------ -------------------------- Jim Burtson (212) 484-8719 Marlene Dooner (215) 981-7392 Chris Clipper (212) 484-6297 Dan Goodwin (215) 981-7518 Mark Holmes (212) 484-8206 Time Warner Cable Public Affairs - -------------------------------- Mark Harrad (203) 328-0613 Keith Cocozza (203) 351-2039 Time Warner Cable Investor Relations - ------------------------------------ Tom Robey (203) 351-2015 # # # 4 -----END PRIVACY-ENHANCED MESSAGE-----