Restructuring & Reorganization
Selected Transactions

July 31, 2006

Company Description
Founded in 1952, Adelphia Communications Corporation (or the “Company”) was the country’s sixth largest cable television operator and, through various subsidiaries, provided cable television and local telephone service to customers in twenty-nine states and Puerto Rico.

Situation Overview
After years of successful growth, the Company’s fate dramatically reversed in the first half of 2002. In April of that year, Adelphia announced the SEC’s informal inquiry relating to certain co-borrowing arrangements. One month later, Adelphia’s founder, John Rigas, resigned as Chairman and CEO, and the Company failed to make interest payments of approximately $40 million. In early June of 2002, while facing uncertainty created by mounting evidence of accounting fraud and the continuing need for significant capital investment in its cable systems, the Company was delisted from the NASDAQ. The confluence of these events led to Adelphia’s Chapter 11 filing on June 25, 2002.

Transaction Summary
Following Adelphia’s Chapter 11 filing, Blackstone was retained by Comcast Corporation to assist Comcast in formulating a joint proposal with Time Warner to acquire Adelphia’s cable assets. Negotiating the basic deal involved significant market-by-market due diligence and shuffling of markets between each of the cable operators. The transaction was made even more complex by the need to negotiate the unwinding of a joint venture that Comcast had entered into with Adelphia for a major market as well as the need to implement a simultaneous repurchase of a significant cross ownership of shares between Comcast and Time Warner.

Blackstone assisted Comcast in valuing Adelphia’s different cable assets and developing a strategy to negotiate with Adelphia and its creditors. Given the accounting issues facing Adelphia and the complexity of its corporate structure, with seven different clusters of entities and significant intercompany activity, a major focus of Blackstone’s efforts was developing reliable financial models in order to value the different parts of Adelphia’s business. Blackstone worked closely with Adelphia and Comcast finance staff to complete this. Although the transaction was initially announced as a purchase pursuant to a Plan of Reorganization, the transaction was modified to a §363 sale in order to facilitate a more timely closing. On July 31, 2006, Comcast and Time Warner completed the purchase of substantially all of the assets of Adelphia at a value of approximately $17 billion.

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