-----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, QyNa+61UgVnc+MVX9KCz45buZH1Nmk32+2KN+NfzjZ6oRrT7BmmLm7vF8gME5CcX 1ZGQxo7NZm6idvVMXVy6sQ== 0000950103-02-000534.txt : 20020607 0000950103-02-000534.hdr.sgml : 20020607 20020606172417 ACCESSION NUMBER: 0000950103-02-000534 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020606 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AT&T COMCAST CORP CENTRAL INDEX KEY: 0001166691 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] STATE OF INCORPORATION: PA FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 333-82460 FILM NUMBER: 02672666 MAIL ADDRESS: STREET 1: 1500 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COMCAST CORP CENTRAL INDEX KEY: 0000022301 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 231709202 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 1500 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102-2148 BUSINESS PHONE: 2156651700 MAIL ADDRESS: STREET 1: 1500 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102-2148 425 1 jun0602_425deutsche.txt Filed by Comcast Corporation Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: AT&T Comcast Corporation Commission File No. 333-82460 Date: June 6, 2002 The following presentation was shown at the 10th Annual Deutsche Bank Media Conference: 10th Annual Deutsche Bank Media Conference [GRAPHIC OMITTED] June 4, 2002 COMCAST LOGO Safe Harbor Caution Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify those so-called "forward-looking statements" by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of those words and other comparable words. Comcast Corporation ("Comcast") wishes to take advantage of the "safe harbor" provided for by the Private Securities Litigation Reform Act of 1995 and you are cautioned that actual events or results may differ materially from the expectations expressed in such forward-looking statements as a result of various factors, including risks and uncertainties, many of which are beyond the control of Comcast. Factors that could cause actual results to differ materially include, but are not limited to (1) the effects of legislative and regulatory changes; (2) the potential for increased competition; (3) technological changes; (4) the need to generate substantial growth in the subscriber base by successfully launching, marketing and providing services in identified markets; (5) pricing pressures which could affect demand for Comcast's services; (6) Comcast's ability to expand its distribution; (7) changes in labor, programming, equipment and capital costs; (8) Comcast's continued ability to create or acquire programming and products that customers will find attractive; (9) future acquisitions, strategic partnerships and divestitures; (10) general business and economic conditions; (11) other risks described from time to time in Comcast's periodic reports filed with the Securities and Exchange Commission; and (12) with respect to statements relating to the proposed combination of Comcast and AT&T Broadband, factors that could cause actual results of the combined businesses of Comcast and AT&T Broadband to differ materially from expected results for such businesses, including failure to integrate the businesses successfully or to achieve the expected combination benefits. Deutsche Bank June 4, 2002 COMCAST LOGO COMCAST LOGO Brian L. Roberts President 1Q02: Strong Operating Performance Cable QVC Content $ in Millions 13.5% 11.4% 33.6% $600 X $200 $60 X X X $55 X $550 X X X X X $175 X $50 X X X X X X $500 X X X X X X X X X $45 X X X X X X $450 X X $150 X X $40 X X 1Q01 1Q02 1Q01 1Q02 1Q01 1Q02 Consolidated Revenue Growth: 12% Consolidated OCF Growth: 18% Deutsche Bank Note: Pro Forma Results June 4, 2002 COMCAST LOGO Leveraging an Upgraded Network - --> Strong Demand for New Services comcast High-Speed Internet comcast digital cable - --> Double-Digit OCF Growth o 10% in 2000 o 12% in 2001 o 12-14% in 2002E - --> Significant Free Cash Flow o Consolidated: $800 million - $1.0 billion in 2002E Upgraded Network + New Services + Double-Digit OCF Growth = Significant Free Cash Flow Generation Deutsche Bank June 4, 2002 COMCAST LOGO COMCAST LOGO digital cable Subscriptions Penetration (000s) 3,500 40% 1Q02 Net Adds: 200,000 3,000 3MM*+ 35% 2.54MM 30% 2,500 2.33MM 25% 2,000 1.35MM 20% 1,500 15% 1,000 10% 515K 500 5% 78K 0 0% YE98 YE99 YE00 YE01 1Q02 YE02E * 2002 Guidance: 600-700,000 net additions. Deutsche Bank June 4, 2002 COMCAST LOGO COMCAST LOGO digital cable Strong and Profitable Growth o Positive Contribution Since Day One o Incremental Revenue: $10.61 per Box o Incremental OCF: >80% Margin Deutsche Bank June 4, 2002 COMCAST LOGO Building on the Digital Platform Subscription Penetration 100% + | | Interactive TV | | Extended VOD / PVR | | High Definition TV | | Video-On-Demand | | Digital Plus | $14.95 | | Digital Classic | $9.95 | -------------------------------------------------------------------------- Deutsche Bank COMCAST LOGO June 4, 2002 Building on the Digital Platform Video-On-Demand o Drives Digital Penetration o Leverages Existing Box o Competitive Advantage Digital --> Parity VOD --> Superiority o Scalable Architecture for Future Services Deutsche Bank COMCAST LOGO June 4, 2002 VOD . . . More Than Movies Movies + Time Shifted Programming | | ---------------- ----------------------------------------- | | | | | Impulse Subscription "Best of" Cable and HBO Showtime STARZ! Broadcasting [GRAPHIC OMITTED] News Sports Kids Shopping Prime Time Cable Deutsche Bank COMCAST LOGO June 4, 2002 Building on the Digital High-Definition Television o Today: Available to 1.3MM Customers in Philadelphia and New Jersey o YE 2002: Expand Offering in Mid- [GRAPHIC OMITTED] Atlantic Super Cluster and to Other Key Markets o Programming: ABC, NBC, HBO, and Showtime o 2003: Comcast SportsNet Deutsche Bank COMCAST LOGO June 4, 2002 COMCAST LOGO High-Speed Internet Subscribers (000s) Penetration 1,600 14% 1Q02 Net Adds: 92,000 1.4MM*+ 1,400 12% 1,200 948K 1.04MM 10% 1,000 8% 800 6% 600 4% 400 400K 200 142K 2% 51K 0 0% YE98 YE99 YE00 YE01 1Q02 YE02E * 2002 Guidance: 400-500,000 net additions. Deutsche Bank COMCAST LOGO June 4, 2002 COMCAST LOGO High-Speed Internet o 1Q02 ARPU: $40, up from $35 in 4Q01 o Significant Cash Flow Improvement [GRAPHIC OMITTED] o Designed to Support Multiple ISPs o First ISP Deal: Juno and NetZero o Juno Broadband Launched in Nashville and Indianapolis on May 30, 2002 [GRAPHIC OMITTED] Deutsche Bank COMCAST LOGO June 4, 2002 Building on the Cable Modem Platform Over the Next 12 - 24 Months: o Music o Photo Sharing o Gaming o Short-Form Video o Video Chat Deutsche Bank COMCAST LOGO June 4, 2002 [GRAPHIC OMITTED] COMMERCE LOGO Revenue Growth [Chart depicting revenue growth of Base+iQVC, UK, German and Other, resulting in an increase in CAGR by 15% from 1990-2001.] Deutsche Bank QVC LOGO June 4, 2002 Operating Cash Flow Growth [Chart depicting Operating Cash Flow Growth of Base+iQVC, UK, German and Other, resulting in an increase in CAGR by 38% from 1990-2001.] Deutsche Bank QVC LOGO June 4, 2002 QVC Delivers...In One Day! 1/19/02: $18MM in Computers [GRAPHIC OMITTED] [GRAPHIC OMITTED] 4/30/02: $18MM on Cooking Day 5/11/02: $23MM on Fashion Day [GRAPHIC OMITTED] Deutsche Bank QVC LOGO June 4, 2002 [GRAPHIC OMITTED] CONTENT o In Four Years: o Subscribers Up 50% [GRAPHICS OMITTED] o 71 Million Subscribers o E!'s 2002 Academy Awards Show o Most Watched Day in Networks History style. o Scheduled to Reach 40 Million Subscribers by YE04 [GRAPHICS OMITTED] Deutsche Bank June 4, 2002 COMCAST LOGO [GRAPHIC OMITTED] THE GOLF CHANNEL (R) o 46 Million Subscribers o Subscribers Up 25% In One Year o More Tournament Coverage Than All Other Networks Combined o Upscale, Highly Targeted Demographic [GRAPHICS OMITTED] Deutsche Bank June 4, 2002 [GRAPHIC OMITTED] o Launched in April 2002 o 24x7 Network Targeted to Video Game Enthusiasts o 145MM Americans Play Video Games o $9Bn in Domestic Revenue in 2001 [GRAPHICS OMITTED] Deutsche Bank June 4, 2002 COMCAST LOGO AT&T COMCAST (R) CORPORATION A Powerful Platform for Growth o Margin Improvement / Operating Efficiencies o Other Value Creation Opportunities o Content o National Advertising o Technology Unlimited Opportunity Deutsche Bank June 4, 2002 COMCAST LOGO COMCAST (R) John R. Alchin Executive Vice President and Treasurer AT&T COMCAST (R) CORPORATION Merger Funding In Place o $17 Billion of Bank Facilities o Funding Requirement at Closing: $11-$14 Billion o Includes Repayment of AT&T Intercompany Debt, Free Cash Flow Deficit and Other Near-Term Liquidity Needs for AT&T Comcast Deutsche Bank June 4, 2002 COMCAST LOGO Commitment to Deleveraging AT&T Comcast debt(1) ($ in Billions) QUIPS $5.0 $5.0---- $1.1 -------- ------- New $0.5 AT&T Comcast $6.5 Borrowings $12.5 $10.7 ------ $4.2 Existing AT&T Bonds $8.4 $8.4 $8.4 Existing Comcast Debt $9.9 $9.4 $9.4 - -------------------------------------------------------------------------------- Total Debt $30.8 $28.5 $22.0 - -------------------------------------------------------------------------------- Rural Cable Estimated System TWE value Sales/ (after-tax) Liquid Share Monetization o QUIPS conversion to equity represents a $5.0BN (face value) reduction in total debt and preferred o On April 5th, AT&T Broadband reached an agreement with Bresnan Communications to sell 320,000 subscribers in Montana, Wyoming and Colorado for $735MM in cash o On May 21st, Comcast sold 42MM shares of AT&T stock for $540MM in cash - Reducing opening debt balance o An additional after-tax value of $1.1BN in highly liquid assets will also be monetized in the next year o Within two years, AT&T Comcast expects to monetize TWE ($6.5BN+, after-tax(2)) 1 Net of AT&T Broadband Exchangeables and Comcast ZONES 2 Preliminary valuation for illustrative purposes based on Wall Street estimates Deutsche Bank June 4, 2002 COMCAST LOGO AT&T COMCAST (R) CORPORATION 2003 2004 2005 AT&T Broadband OCF Margin Improvement(1) 26% -----------> 36% Operating Synergies(1) (Millions) $300 $400 $500 Comcast Cable OCF Growth(1) 11% -----------> 11% OCF Growth Exceeding 20% Deutsche Bank June 4, 2002 COMCAST LOGO Free Cash Flow Generation Decrease in cable capital expenditures (Billions) $2.5 ==== $2.0 ==== //// ==== $1.5 ==== //// //// ==== //// //// $1.0 ==== //// //// ==== ==== //// //// //// $0.5 //// //// //// //// //// //// //// //// //// //// $0.0 //// //// //// //// //// 1998 1999 2000 2001 2002E /// Cable ...leads to significant FCF generation (Millions) + $800 [] / $700 / / $600 / / $500 / [] / $400 / \ / / \ / $300 / [] / / \ / $200 / \ / / \ / $100 / \ / / [] $0 [] 1998 1999 2000 2001 2002E Free Cash Flow = EBITDA - Cap Ex - Interest Expense - Cash Taxes. Excludes One-Time Tax Payments, OCF losses from Business Telephony Initiatives and High-Speed Internet Transition Costs Deutsche Bank June 4, 2002 COMCAST LOGO AT&T COMCAST (R) CORPORATION Financially Strong and Positioned for Growth o Free Cash Flow Generation o Investment Grade Rating o Building Long Term Shareholder Value Unlimited Opportunity Deutsche Bank June 4, 2002 COMCAST LOGO Comcast (R) Note: The following notice is included to meet certain legal requirements: FORWARD-LOOKING STATEMENTS The enclosed information contains forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the businesses of AT&T Corp. ("AT&T"), Comcast Corporation ("Comcast") and, after the completion of the proposed transaction between AT&T and Comcast, AT&T Comcast Corporation ("AT&T Comcast") are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties set forth in AT&T's, Comcast's and AT&T Comcast's filings with the Securities and Exchange Commission ("SEC"), including risks and uncertainties relating to: failure to obtain and retain expected synergies from the proposed transaction, delays in obtaining, or adverse conditions contained in, any required regulatory approvals, changes in laws or regulations, availability and cost of capital and other similar factors. Readers are referred to AT&T's and Comcast's most recent reports filed with the SEC. AT&T, Comcast and AT&T Comcast are under no obligation to (and expressly disclaim any such obligation to) update or alter their forward-looking statements whether as a result of new information, future events or otherwise. ADDITIONAL INFORMATION In connection with the proposed transaction, AT&T, Comcast and AT&T Comcast have filed a joint proxy statement/prospectus with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION BECAUSE IT CONTAINS IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and other documents containing information about AT&T, Comcast and AT&T Comcast, without charge, at the SEC's web site at http://www.sec.gov. Free copies of AT&T's filings may be obtained by directing a request to AT&T Corp., 295 North Maple Avenue, Basking Ridge, N.J. 07920, Attention: Investor Relations. Free copies of Comcast's and AT&T Comcast's filings may be obtained by directing a request to Comcast Corporation, 1500 Market Street, Philadelphia, Pennsylvania 19102-2148, Attention: General Counsel. AT&T, Comcast and their respective directors, executive officers and other members of their management and employees may be soliciting proxies from their respective stockholders in connection with the proposed transaction. Information concerning Comcast's participants in the solicitation is contained in a filing made by Comcast with the Commission pursuant to Rule 14a-12 on July 9, 2001. -----END PRIVACY-ENHANCED MESSAGE-----