As filed with the Securities and Exchange Commission on December 16, 2002
Registration No. 333-_______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
COMCAST CORPORATION
(formerly AT&T Comcast Corporation)
(Exact name of Registrant as specified in its charter)
Pennsylvania See Table of Additional Registrants 27-0000798
------------ ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Address, including zip code, and telephone number including area code,
of Registrant's principal executive offices)
Arthur R. Block, Esq.
Senior Vice President
Comcast Corporation
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------------
Copies to:
Bruce K. Dallas
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, California 94025
(650) 752-2000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ].
---------------
==================================================================================================================================
Amount to Proposed Maximum Proposed Maximum Amount of
Title of Each Class of be Offering Price Aggregate Offering Registration
Securities to be Registered Registered(1) Per Unit(2) Price(2) Fee(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Senior Debt Securities and Subordinated Debt
Securities (collectively, "Debt Securities")(4).....
Preferred Stock, without par value.....................
Depositary Shares representing Preferred Stock.........
Class A Common Stock, $0.01............................
Class A Special Common Stock, $0.01 par value..........
Warrants (5)...........................................
Purchase Contracts (5).................................
Units (5)..............................................
Guarantees of the Debt Securities, Warrants, Purchase
Contracts and Units (6).............................
- ----------------------------------------------------------------------------------------------------------------------------------
Total............................................... $10,000,000,000 100% $10,000,000,000 $920,000
==================================================================================================================================
(1) Such amount in U.S. dollars as shall result in an aggregate initial
offering price for all securities of $10,000,000,000. In addition, this
Registration Statement includes such presently indeterminate number of
Securities (as defined herein) as may be issuable from time to time upon
conversion or exchange of the Securities being registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering
price rather than the principal amount of any Debt Securities issued at a
discount or the liquidation value of any Preferred Stock.
(4) Comcast Cable Communications, Inc., Comcast Cable Communications Holdings,
Inc., Comcast Cable Holdings, LLC and Comcast MO Group, Inc.
(collectively, the "Cable Guarantors") will fully and unconditionally
guarantee the Debt Securities.
(5) If indicated in the relevant prospectus supplement, the Warrants, Purchase
Contracts and/or Units may be fully and unconditionally guaranteed by
specified Cable Guarantors.
(6) Pursuant to Rule 457(n), no separate registration fee is payable in
connection with the Guarantees.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
ADDITIONAL REGISTRANTS
COMCAST CABLE COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2175755
-------- ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Address, including zip code, and telephone number including area code,
of Registrant's principal executive offices)
Arthur R. Block, Esq.
Senior Vice President
Comcast Corporation
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
- --------------------------------------------------------------------------------
COMCAST CABLE COMMUNICATIONS HOLDINGS, INC.
(formerly AT&T Broadband Corp.)
(Exact name of registrant as specified in its charter)
Delaware 04-3592397
-------- ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Address, including zip code, and telephone number including area code,
of Registrant's principal executive offices)
Arthur R. Block, Esq.
Senior Vice President
Comcast Corporation
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
- --------------------------------------------------------------------------------
COMCAST CABLE HOLDINGS, LLC
(formerly AT&T Broadband, LLC)
(Exact name of Registrant as specified in its charter)
Delaware 84-1260157
-------- ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Address, including zip code, and telephone number including area code,
of registrant's principal executive offices)
Arthur R. Block, Esq.
Senior Vice President
Comcast Corporation
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
- --------------------------------------------------------------------------------
COMCAST MO GROUP, INC.
(formerly MediaOne Group, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 84-0926774
-------- ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Address, including zip code, and telephone number including area code,
of Registrant's principal executive offices)
Arthur R. Block, Esq.
Senior Vice President
Comcast Corporation
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and we are not soliciting offers to buy
these securities in any state where the offer or sale is not permitted.
PROSPECTUS Subject to Completion
Issued December 16, 2002
$10,000,000,000 Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
(215) 665-1700
- -------------------------------------------------------------------------------
The following are types of securities that we may offer and sell under this
prospectus:
o Unsecured senior debt securities o Preferred Stock
o Unsecured subordinated debt securities o Depositary shares
o Warrants o Class A Common Stock
o Purchase contracts o Class A Special Common Stock
o Units
If indicated in the relevant prospectus supplement, the securities may be
fully and unconditionally guaranteed by a number of our wholly-owned cable
subsidiaries named in this prospectus.
Our Class A Special Common Stock and Class A Common Stock are quoted on The
Nasdaq National Market System under the ticker symbols "CMCSK" and "CMCSA". On
December 13, 2002, the reported last sale prices on The Nasdaq National Market
System for our Class A Special Common Stock and our Class A Common Stock were
$22.04 and $22.84.
We will describe in a prospectus supplement, which must accompany this
prospectus, the securities we are offering and selling, as well as the specific
terms of the securities. Those terms may include:
o Maturity o Listing on a securities exchange
o Interest rate o Amount payable at maturity
o Sinking fund terms o Conversion or exchange rights
o Currency of payments o Liquidation amount
o Dividends o Subsidiary guarantees
o Redemption terms
- -------------------------------------------------------------------------------
Investing in the securities involves risks that are described under the
caption "Risk Factors" beginning on page 3.
- -------------------------------------------------------------------------------
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- -------------------------------------------------------------------------------
We may offer the securities in amounts, at prices and on terms determined
at the time of offering. We may sell the securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
December , 2002
Table of Contents
---------------
PAGE
----
Summary...................................................................1
Risk Factors..............................................................3
Special Note Regarding Forward-Looking Statements........................10
Use of Proceeds..........................................................11
Dividend Policy..........................................................11
Ratios of Earnings to Fixed Charges......................................11
Pro Forma Ratio of Earnings to Fixed Charges.............................13
Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends.................................................13
Description of the Senior Debt Securities, Subordinated
Debt Securities and Cable Guarantees................................13
Description of Warrants..................................................27
Description of Purchase Contracts........................................28
Description of Units.....................................................28
Global Securities........................................................29
Description of Preferred Stock...........................................30
Description of Depositary Shares.........................................31
Description of Common Stock..............................................33
Description of Shareholder Rights Plan...................................36
Description of AT&T Comcast Transaction..................................38
Plan of Distribution.....................................................48
Legal Matters............................................................48
Experts..................................................................49
Available Information....................................................49
Incorporation of Certain Documents by Reference..........................50
We refer to Comcast Corporation (formerly known as AT&T Comcast
Corporation) in this prospectus as "Comcast" or "we," "us," "our" or comparable
terms and to Comcast Holdings Corporation (formerly known as Comcast
Corporation) as "Comcast Holdings." We refer to Comcast Cable Communications,
Inc., Comcast Cable Communications Holdings, Inc. (formerly known as AT&T
Broadband Corp.), Comcast Cable Holdings, LLC (formerly known as AT&T Broadband,
LLC, which was formerly known as Tele-Communications, Inc.) and Comcast MO
Group, Inc. (formerly known as MediaOne Group, Inc.) collectively as the "Cable
Guarantors."
i
SUMMARY
THE COMPANIES
Comcast Corporation
We were formed through the merger of Comcast Holdings Corporation (formerly
known as Comcast Corporation) and the broadband business of AT&T Corp. in the
belief that combining the strengths of these businesses would create the world's
premier broadband company.
We are principally involved in three lines of business through our
wholly-owned subsidiaries Comcast Holdings and Comcast Cable Communications
Holdings:
o Cable--through the development, management and operation of broadband
communications networks and regional sports programming networks,
o Commerce--through QVC, our electronic retailing subsidiary, and
o Content--through our consolidated subsidiaries, Comcast-Spectacor, E!
Entertainment Television, The Golf Channel, Outdoor Life Network and
G4 Media, and through our other programming investments.
The transactions which created Comcast were consummated on November 18,
2002 in several steps. First, AT&T transferred to Comcast Cable Communications
Holdings substantially all the assets, liabilities and businesses represented by
AT&T Broadband Group, which was the integrated broadband business of AT&T.
Second, AT&T spun off Comcast Cable Communications Holdings to its shareholders.
Third, Comcast Holdings and Comcast Cable Communications Holdings each merged
with a different, wholly-owned subsidiary of ours, and Comcast Holdings and AT&T
shareholders received our shares.
For a description of our business, financial condition, results of
operations and other important information regarding us, see our and Comcast
Holdings' filings with the SEC incorporated by reference in this prospectus. For
a description of certain continuing obligations and risks related to the AT&T
Comcast transaction, see "Description of AT&T Comcast Transaction," and "Risk
Factors--Risks Relating to the AT&T Comcast Transaction," as well as our and
Comcast Holdings' filings with the SEC incorporated by reference in this
prospectus. For instructions on how to find copies of these and our other
filings incorporated by reference in this prospectus, see "Available
Information."
We are a Pennsylvania corporation incorporated in 2001. Our principal
executive office is located at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148. Our telephone number is (215) 665-1700. The address of our web site
is www.comcast.com. The information on our web site is not part of this
prospectus.
Cable Guarantors
Our obligations, including the payment of principal, premium, if any, and
interest, on the debt securities will be fully and unconditionally guaranteed by
each of Comcast Cable, Comcast Cable Communications Holdings, Comcast Cable
Holdings and Comcast MO Group. In this prospectus, we refer to these guarantors
as the cable guarantors and to these guarantees as the cable guarantees. If
indicated in the relevant prospectus supplement, our obligations under the other
securities we are offering and selling may be fully and unconditionally
guaranteed by specified cable guarantors.
The cable guarantees will not contain any restrictions on the ability of
any cable guarantor to:
o pay dividends or distributions on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of that cable
guarantor's capital stock; or
1
o make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of that cable
guarantor.
Comcast Cable Communications, Inc.
Comcast Cable is a Delaware corporation incorporated in 1981 and our
indirect wholly-owned subsidiary. Comcast Cable currently serves approximately
8.5 million subscribers and has deployed digital cable applications and
high-speed Internet access service to the vast majority of its cable
communications systems to expand the products available on its broadband
communications networks.
Comcast Cable Communications Holdings, Inc.
Comcast Cable Communications Holdings is a Delaware corporation (formerly
known as AT&T Broadband Corp.) incorporated in 2001 and our wholly-owned
subsidiary. As part of the AT&T Comcast transaction, AT&T transferred to Comcast
Cable Communications Holdings substantially all of the assets, liabilities and
businesses represented by AT&T Broadband Group, the integrated broadband
business of AT&T.
Comcast Cable Holdings, LLC
Comcast Cable Holdings is a Delaware limited liability company (formerly
known as AT&T Broadband, LLC) formed in 1994. Comcast Cable Holdings is a
wholly-owned subsidiary of Comcast Cable Communications Holdings.
Comcast MO Group, Inc.
Comcast MO Group is a Delaware corporation (formerly known as MediaOne
Group, Inc.) incorporated in 1999. Comcast MO Group is a wholly-owned subsidiary
of Comcast Cable Communications Holdings.
Each cable guarantor's principal place of business is 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
2
RISK FACTORS
Risks Relating to the AT&T Comcast Transaction
We may fail to realize the anticipated benefits of the AT&T Comcast
transaction.
The AT&T Comcast transaction combined two companies that have previously
operated separately. We expect to realize cost savings and other financial and
operating benefits as a result of the AT&T Comcast transaction. However, we
cannot predict with certainty when these cost savings and benefits will occur,
or the extent to which they actually will be achieved. There are a large number
of systems that must be integrated, including management information,
purchasing, accounting and finance, sales, billing, payroll and benefits, and
regulatory compliance. The integration of Comcast Cable and Comcast Cable
Communications Holdings will also require substantial attention from management.
The diversion of management attention and any difficulties associated with
integrating Comcast Cable and Comcast Cable Communications Holdings could have a
material adverse effect on our operating results.
We will have to abide by restrictions to preserve the tax treatment of the
AT&T Comcast transaction.
Because of the limitations imposed by Section 355(e) of the Internal
Revenue Code of 1986, as amended, referred to as the "Code" in this prospectus,
and by contractual agreements with AT&T, our ability and the ability of Comcast
Cable Communications Holdings to engage in specified acquisitions, redeem stock
or issue equity securities will be limited until December 18, 2004. See
"Description of AT&T Comcast Transaction--Separation and Distribution
Agreement--Post-Spin-Off Transactions." These restrictions may limit our ability
to issue equity securities to satisfy our financing needs or to acquire
businesses or assets.
We and our subsidiaries have significant debt and debt-like obligations and
may not maintain investment-grade credit ratings.
We and our subsidiaries have a significant amount of debt and debt-like
obligations. Our credit rating and the credit ratings of our subsidiaries may in
the future be lower than the current or historical credit ratings of Comcast
Holdings, Comcast Cable Communications Holdings and their respective
subsidiaries. In addition, it is possible that we or any of our subsidiaries
that issue debt may not obtain or maintain an investment-grade credit rating.
Differences in credit ratings would affect the interest rates charged on
financings, as well as the amounts of indebtedness, types of financing
structures and debt markets that may be available to us and our subsidiaries.
The closing of the AT&T Comcast transaction triggered put rights on the part of
holders of approximately $1.0 billion of debt issued by Comcast Cable Holdings.
In addition, the failure of certain of our subsidiaries to maintain certain
credit ratings until at least February 16, 2003 could trigger put rights on the
part of holders of up to approximately $3.8 billion of debt as of the date of
this prospectus, which would require us to obtain additional financing.
Accordingly, a downgrade in our or any of our subsidiaries' existing credit
ratings or failure by us and our subsidiaries to maintain investment-grade
credit ratings could have a material adverse effect on our operating results and
on the value of our common stock.
Atypical governance arrangements may make it more difficult for our
shareholders to act.
In connection with the AT&T Comcast transaction, we implemented a number of
governance arrangements that are atypical for a large, publicly held
corporation. A number of these arrangements relate to the election of our Board.
The term of our Board will not expire until our 2004 annual meeting of
shareholders. Since our shareholders will not have the right to call special
meetings of shareholders or act by written consent and our directors may be
removed only for cause, our shareholders will not be able to replace our initial
Board members prior to that meeting. After our 2004 annual meeting of
shareholders, our directors will be elected annually. Even then, however, it
will be difficult for one of our shareholders, other than BRCC Holdings LLC, to
elect a slate of directors of its own choosing to our Board. Brian L. Roberts,
our President and Chief Executive Officer, through his control of BRCC Holdings
LLC, holds a 33 1/3% nondilutable voting interest in our stock. In addition, we
adopted a shareholder rights plan upon completion of the AT&T Comcast
transaction that prevents any holder of our stock, other than any
3
holder of our Class B common stock or any of such holder's affiliates, from
acquiring our stock representing more than 10% of the voting power with respect
to us without the approval of our Board.
In addition to the governance arrangements relating to our Board, a number
of governance arrangements will make it difficult to replace our senior
management. Upon completion of the AT&T Comcast transaction, C. Michael
Armstrong, Chairman of the Board and CEO of AT&T, became our Chairman of the
Board and Brian L. Roberts, President of Comcast Holdings, became our CEO and
President. After the 2005 annual meeting of our shareholders, Brian L. Roberts
will also be our Chairman of the Board. Prior to the sixth anniversary of our
2004 annual meeting of shareholders, unless Brian L. Roberts ceases to be our
Chairman of the Board or CEO prior to such time, our Chairman of the Board and
CEO will be able to be removed only with the approval of at least 75% of our
entire Board. This supermajority removal requirement makes it unlikely that C.
Michael Armstrong or Brian L. Roberts will be removed from their management
positions.
Our principal shareholder has considerable influence over our operations.
Brian L. Roberts has significant control over our operations through his
control of BRCC Holdings LLC, which as a result of its ownership of outstanding
shares of our Class B common stock holds a nondilutable 33 1/3% of the combined
voting power of our stock and also has separate approval rights over certain
material transactions involving us. In addition, Brian L. Roberts is our CEO and
President and will, together with our Chairman of the Board, comprise the Office
of the Chairman, our principal executive deliberative body.
The performance of AT&T Broadband Group prior to the AT&T Broadband spin-off
may not be representative of the results of Comcast Cable Communications
Holdings without the other AT&T businesses and therefore is not a reliable
indicator of its future results.
AT&T Broadband Group was a fully integrated business unit of AT&T, and as a
result the financial information of AT&T Broadband Group incorporated by
reference in this prospectus was derived from the consolidated financial
statements and accounting records of AT&T and reflects certain assumptions and
allocations. The financial position, results of operations and cash flows of
Comcast Cable Communications Holdings without the other AT&T businesses could
differ from those that would have resulted had its business operated with the
other AT&T businesses.
Risks Relating to Our Business
Our actual financial position and results of operations may differ
significantly and adversely from the pro forma amounts incorporated by reference
in this prospectus.
Our actual financial position and results of operations may differ, perhaps
significantly and adversely, from the pro forma information incorporated by
reference in this prospectus due to a variety of factors, including access to
additional information, changes in value not currently identified and changes in
operating results between the date of the pro forma financial data and the date
on which the AT&T Comcast transaction was completed.
In addition, in many cases each of Comcast Holdings and AT&T Broadband
Group had long-term agreements, in some cases with the same counterparties, for
the same services and products, such as programming, billing services and
interactive programming guides. Comcast Holdings and AT&T Broadband Group could
not disclose the terms of many of these contracts to each other because of
confidentiality provisions included in these contracts or other legal
restrictions. For this and other reasons, it is not clear, in the case of
certain services and products, whether after completion of the AT&T Comcast
transaction each of the existing agreements continues to apply only to the
operations to which they have historically applied or whether instead one of the
two contracts will apply to the operations of both companies and the other
contract will be terminated. Since these contracts often differ significantly in
their terms, resolution of these contractual issues could cause our actual
financial position and results of operations to differ significantly and
adversely from those reflected in the pro forma financial information
incorporated by reference in this prospectus.
4
Programming costs are increasing and we may not have the ability to pass
these increases on to our customers, which would materially adversely affect our
cash flow and operating margins.
Programming costs are expected to be our largest single expense item in the
foreseeable future. In recent years, the cable and satellite video industries
have experienced a rapid increase in the cost of programming, particularly
sports programming. This increase is expected to continue, and we may not be
able to pass programming cost increases on to our customers. The inability to
pass these programming cost increases on to our customers would have a material
adverse impact on our cash flow and operating margins. In addition, as we
upgrade the channel capacity of our systems and add programming to our basic,
expanded basic and digital programming tiers, we may face increased programming
costs, which, in conjunction with the additional market constraints on our
ability to pass programming costs on to our customers, may reduce operating
margins.
We also expect to be subject to increasing financial and other demands by
broadcasters to obtain the required consent for the transmission of broadcast
programming to our subscribers. We cannot predict the financial impact of these
negotiations or the effect on our subscribers should we be required to stop
offering this programming.
We face a wide range of competition in areas served by our cable systems,
which could adversely affect our future results of operations.
Our cable communications systems compete with a number of different sources
which provide news, information and entertainment programming to consumers. We
compete directly with program distributors and other companies that use
satellites, build competing cable systems in the same communities we serve or
otherwise provide programming and other communications services to our
subscribers and potential subscribers. In addition, federal law now allows local
telephone companies to provide directly to subscribers a wide variety of
services that are competitive with cable communications services. Some local
telephone companies provide, or have announced plans to provide, video services
within and outside their telephone service areas through a variety of methods,
including broadband cable networks. Additionally, we will be subject to
competition from telecommunications providers and Internet service providers,
known as ISPs, in connection with offerings of new and advanced services,
including telecommunications and Internet services. This competition may
materially adversely affect our business and operations in the future. In
addition, any increase in vacancy rates in multi-dwelling units has historically
adversely impacted subscriber levels and is expected to do so in the future.
Subscriber levels also have historically demonstrated seasonal fluctuations,
particularly in markets that include major universities. The failure of seasonal
fourth quarter increases to offset decreases would adversely affect subscriber
levels.
We have substantial capital requirements which may require us to obtain
additional financing that may be difficult to obtain.
We expect that for some period of time our capital expenditures will
exceed, perhaps significantly, our net cash provided by operating activities.
This may require us to obtain additional financing. We may not be able to obtain
or to obtain on favorable terms the capital necessary to fund the substantial
capital expenditures described below that are required by our strategy and
business plan. A failure to obtain necessary capital or to obtain necessary
capital on favorable terms could have a material adverse effect on us and result
in the delay, change or abandonment of our development or expansion plans.
Historically, AT&T Broadband Group's capital expenditures significantly
exceeded its net cash provided by operations. For the year ended December 31,
2001 and the nine months ended September 30, 2002, AT&T Broadband Group's
capital expenditures exceeded its net cash provided by operations by $3.5
billion and $1.5 billion, respectively. In addition, for the year ended December
31, 2001, Comcast Holdings' capital expenditures exceeded its net cash provided
by operating activities by $952 million.
We anticipate that we will upgrade a significant portion of our broadband
systems over the coming years and make other capital investments, including with
respect to our advanced services. In 2003, we anticipate that the combined
Comcast Cable Communications Holdings and Comcast Cable cable systems will incur
capital expenditures of approximately $4.2 billion to $4.5 billion. We are
expected to incur substantial capital expenditures
5
in the years subsequent to 2003. However, the actual amount of the funds
required for capital expenditures cannot be determined with precision at this
time. Capital is expected to be used to upgrade and rebuild network systems to
expand bandwidth capacity and add two-way capability so that it may offer
advanced services. In addition, capital expenditures are expected to be used to
acquire equipment, such as set-top boxes, cable modems and telephone equipment,
and to pay for installation costs for additional video and advanced services
customers. There can be no assurance that these amounts will be sufficient to
accomplish the planned system upgrades, equipment acquisitions and expansion.
Comcast Cable Communications Holdings also have commitments under certain
of their franchise agreements with local franchising authorities to upgrade and
rebuild certain network systems. These commitments may require capital
expenditures in order to avoid default and/or penalties.
Some of our subsidiaries are subject to long-term exclusive agreements that
may limit their future operating flexibility and materially adversely affect our
financial results.
Some of the entities formerly attributed to AT&T Broadband Group which are
now our subsidiaries are subject to long-term agreements relating to significant
aspects of their operations, including long-term agreements for video
programming, audio programming, electronic program guides, billing and other
services. For example, Comcast Cable Holdings (formerly known as AT&T Broadband,
LLC), and AT&T Broadband Group's subsidiary, Satellite Services, Inc., are
parties to an affiliation term sheet with Starz Encore Group LLC, an affiliate
of Liberty Media, which extends to 2022 and provides for fixed price payments,
subject to adjustment for various factors including inflation, and may require
Comcast Cable Communications Holdings to pay two-thirds of Starz Encore Group's
programming costs above levels designated in the term sheet. Satellite Services,
Inc. also entered into a ten-year agreement with TV Guide in January 1999 for
interactive program guide services, which designates TV Guide Interactive as the
interactive programming guide for Comcast Cable Communications Holdings'
systems. Furthermore, a subsidiary of Comcast Cable Communications Holdings is
party to an agreement that does not expire until December 31, 2013 under which
it purchases certain billing services from CSG Systems, Inc. The price, terms
and conditions of the Starz Encore term sheet, the TV Guide agreement and the
CSG agreement may not reflect the current market and if one or more of these
arrangements continue to apply to Comcast Cable Communications Holdings after
completion of the AT&T Comcast transaction, they may materially adversely impact
our financial performance.
By letter dated May 29, 2001, AT&T Broadband Group disputed the
enforceability of the excess programming pass-through provisions of the Starz
Encore term sheet and questioned the validity of the term sheet as a whole. AT&T
Broadband Group also has raised certain issues concerning the uncertainty of the
provisions of the term sheet and the contractual interpretation and application
of certain of its provisions to, among other things, the acquisition and
disposition of cable systems. In July 2001, Starz Encore Group filed a lawsuit
seeking payment of the 2001 excess programming costs and a declaration that the
term sheet is a binding and enforceable contract. In October 2001, AT&T
Broadband Group and Starz Encore Group agreed to stay the litigation until
August 31, 2002 to allow the parties time to continue negotiations toward a
potential business resolution of this dispute. The court granted the stay on
October 30, 2001. The terms of the stay order allow either party to petition the
court to lift the stay after April 30, 2002 and to proceed with the litigation.
AT&T Broadband Group and Starz Encore Group agreed to extend the stay of the
litigation and the court extended the stay to and including January 31, 2003,
with a requirement that the parties attempt to mediate the dispute. The parties
have now selected a mediator, with mediation scheduled to proceed in mid-January
2003.
On November 18, 2002, Comcast and Comcast Holdings filed suit against Starz
Encore Group in the United States District Court for the Eastern District of
Pennsylvania. Comcast and Comcast Holdings seek a declaratory judgment that,
pursuant to their rights under a March 17, 1999 contract with a predecessor of
Starz Encore Group, upon the completion of the AT&T Comcast transaction that
contract now provides the terms under which Starz Encore Group programming is
acquired and transmitted by the Comcast Cable Communications Holdings' systems.
Starz Encore Group has until January 8, 2003 to file a response to this
complaint.
6
On March 13, 2002, AT&T Broadband Group informed CSG Systems, Inc. that
AT&T Broadband Group was considering the initiation of an arbitration against
CSG relating to a Master Subscriber Management System Agreement that the two
companies entered into in 1997. Pursuant to the Master Agreement, CSG provides
billing support to AT&T Broadband Group. On May 10, 2002, AT&T Broadband Group
filed a demand for arbitration against CSG before the American Arbitration
Association. On May 31, 2002, CSG answered AT&T Broadband Group's arbitration
demand and asserted various counterclaims. On June 21, 2002, CSG filed a lawsuit
against Comcast Holdings in federal court located in Denver, Colorado asserting
claims related to the Master Agreement and the pending arbitration. On November
4, 2002, CSG withdrew its complaint against Comcast Holdings without prejudice.
On November 15, 2002, Comcast, Comcast Holdings, and Comcast Cable initiated a
lawsuit against CSG in federal court located in Philadelphia, Pennsylvania.
Comcast, Comcast Holdings and Comcast Cable assert that systems owned by Comcast
Holdings are not required to use CSG as a billing service or customer care
provider pursuant to the Master Agreement, and that systems owned by Comcast
Cable Communications Holdings may be added to a billing service agreement
between Comcast Cable and CSG. CSG's response to the Complaint is due on
December 16, 2002. In the event that either the arbitration or this litigation
or the settlement thereof results in the termination of the Master Agreement,
Comcast Cable Communications Holdings may incur significant costs in connection
with its replacement of these customer care and billing services and may
experience temporary disruptions to its operations.
We are subject to regulation by federal, state and local governments which
may impose costs and restrictions.
The federal, state and local governments extensively regulate the cable
communications industry. We expect that court actions and regulatory proceedings
will refine the rights and obligations of various parties, including the
government, under the Communications Act of 1934, as amended. The results of
these judicial and administrative proceedings may materially affect our business
operations. Local authorities grant us franchises that permit us to operate our
cable systems. We will have to renew or renegotiate these franchises from time
to time. Local franchising authorities often demand concessions or other
commitments as a condition to renewal or transfer, which concessions or other
commitments could be costly to obtain.
We will be subject to additional regulatory burdens in connection with the
provision of telecommunications services, which could cause us to incur
additional costs.
We will be subject to risks associated with the regulation of our
telecommunications services by the Federal Communications Commission, or FCC,
and state public utilities commissions, or PUCs. Telecommunications companies,
including companies that have the ability to offer telephone services over the
Internet, generally are subject to significant regulation. This regulation could
materially adversely affect our business operations.
We may face increased competition because of technological advances and new
regulatory requirements, which could adversely affect our future results of
operations.
Numerous companies, including telephone companies, have introduced Digital
Subscriber Line technology, known as DSL, which provides Internet access to
subscribers at data transmission speeds greater than that of modems over
conventional telephone lines. We expect other advances in communications
technology, as well as changes in the marketplace, to occur in the future. Other
new technologies and services may develop and may compete with services that
cable communications systems offer. The success of these ongoing and future
developments could have a negative impact on our business operations.
In addition, over the past several years, a number of companies, including
telephone companies and ISPs, have asked local, state, and federal governmental
authorities to mandate that cable communications operators provide capacity on
their broadband infrastructure so that these and others may deliver Internet and
other interactive television services directly to customers over these cable
facilities. Some cable operators have initiated litigation challenging municipal
efforts to unilaterally impose so-called "open access" requirements. The few
court decisions dealing with this issue have been inconsistent. Moreover, in
connection with their review of the AOL-Time Warner merger, the FCC and the
Federal Trade Commission imposed "open access," technical performance and other
requirements related to the merged company's Internet and Instant Messaging
platforms. The FCC recently
7
concluded in a regulatory proceeding initiated by it to consider "open access"
and related regulatory issues that cable modem service, as it is currently
offered, is properly classified as an interstate information service that is not
subject to common carrier regulation but remains subject to the FCC's
jurisdiction. The FCC is seeking public comment regarding the regulatory
implications of this conclusion, including, among other things, whether it is
appropriate to impose "open access" requirements on these services or whether
consumers will be able to obtain a choice of ISPs without government
intervention.
A number of cable operators have reached agreements to provide unaffiliated
ISPs access to their cable systems in the absence of regulatory requirements.
Comcast Holdings reached an "access" agreement with United Online and Comcast
Cable Communications Holdings reached an "access" agreement with each of
Earthlink, Internet Central, Connected Data Systems, Galaxy Internet Services
and Connect Plus International. In connection with Comcast Holdings' and AT&T's
agreement with AOL Time Warner providing for the restructuring of Time Warner
Entertainment Company L.P., or TWE, Comcast Holdings and Comcast Cable
Communications will enter into a three-year non-exclusive access agreement with
AOL Time Warner. Under the terms of the exchange agreement that Comcast Holdings
and AT&T have executed with Microsoft, now that the AT&T Comcast transaction has
been consummated, we will be required, with respect to each such agreement with
another ISP, to offer Microsoft an access agreement on terms no less favorable
than those provided to the other ISP with respect to the specific cable systems
covered under the agreement with the other ISP. Notwithstanding the foregoing,
there can be no assurance that regulatory authorities will not impose "open
access" or similar requirements on us as part of an industry-wide requirement.
Such requirements could have a negative impact on our business operations.
We, through Comcast Cable Communications Holdings, have substantial economic
interests in joint ventures in which we have limited management rights.
Comcast Cable Communications Holdings is a partner in several large joint
ventures, such as TWE, Texas Cable Partners and Kansas City Cable Partners, in
which it has a substantial economic interest but does not have substantial
control with regard to management policies or the selection of management.
These joint ventures may be managed in a manner contrary to our best interests,
and the value of our investment in these joint ventures, through Comcast Cable
Communications Holdings, may be affected by management policies that are
determined without our input or over our objections. Comcast Cable
Communications Holdings has cable partnerships with each of AOL Time Warner,
Insight Communications, Adelphia Communications, Midcontinent and US Cable.
Materially adverse financial or other developments with respect to a partner
could adversely impact the applicable partnership.
On June 25, 2002, three cable partnerships between subsidiaries of AT&T and
subsidiaries of Adelphia Communications Corporation commenced bankruptcy
proceedings by the filing of Chapter 11 petitions in the Bankruptcy Court for
the Southern District of New York at about the same time that other Adelphia
entities filed for bankruptcy. These partnerships are: Century-TCI California
Communications, L.P. (in which Comcast Cable Communications Holdings holds a 25%
interest through a wholly-owned subsidiary and which as of December 31, 2001 had
an aggregate of approximately 775,000 subscribers in the greater Los Angeles,
California area), Parnassos Communications, L.P. (in which Comcast Cable
Communications Holdings holds a 33.33% interest through a wholly-owned
subsidiary) and Western NY Cablevision, L.P. (in which Comcast Cable
Communications Holdings holds a 33.33% interest through a wholly-owned
subsidiary and which as of December 31, 2001 had, together with Parnassos
Communications, L.P., an aggregate of approximately 470,000 subscribers in
Buffalo, New York and the surrounding areas). We cannot predict what the outcome
of these proceedings will be on any of the partnerships and the proceedings may
have a material adverse impact on the partnerships. AT&T Broadband Group
recorded an impairment charge through net losses related to equity investments
of $143 million, net of taxes of $90 million, in connection with the bankruptcy
proceedings of the Adelphia partnerships.
We, through Comcast Holdings and Comcast Cable Communications Holdings, face
risks arising from their and AT&T's relationship with At Home Corporation and
UAL Corp.
Through a subsidiary, AT&T owns approximately 23% of the outstanding common
stock and 74% of the voting power of the outstanding common stock of At Home
Corporation, which filed for bankruptcy protection on
8
September 28, 2001. Until October 1, 2001, AT&T appointed a majority of At
Home's directors and it now appoints none.
Since September 28, 2001, some creditors of At Home have threatened to
commence litigation against AT&T relating to the conduct of AT&T or its
designees on the At Home Board in connection with At Home's declaration of
bankruptcy and At Home's subsequent aborted efforts to dispose of some of its
businesses or assets in a bankruptcy court-supervised auction, as well as in
connection with other aspects of AT&T's relationship with At Home. On May 1,
2002, At Home filed a proposed plan of liquidation pursuant to Chapter 11 of the
U.S. Bankruptcy Code, which, as modified on June 18, 2002, among other things,
provides that all claims and causes of action of the bankrupt estate of At Home
against AT&T and other shareholders will be transferred to a liquidating trust
owned ratably by the bondholders of At Home and funded with at least $12
million, and as much as $17 million, to finance the litigation of those claims.
The plan was approved by the bankruptcy court on August 15, 2002 and became
effective on or about October 1, 2002. On November 7, 2002, a complaint was
filed by the bondholders' liquidating trust against AT&T and certain of its
senior officers alleging various breaches of fiduciary duties, misappropriation
of trade secrets and other causes of action in connection with the transactions
in March 2000 described below, and prior and subsequent alleged conduct on the
part of the defendants. Any liabilities resulting from this lawsuit would be
shared equally between AT&T and Comcast Cable Communications Holdings.
In addition, purported class action lawsuits have been filed in California
state court on behalf of At Home shareholders against AT&T, At Home, Comcast
Holdings and former directors of At Home. The lawsuits claim that the defendants
breached fiduciary obligations of care, candor and loyalty in connection with a
transaction announced in March 2000 in which, among other things, AT&T, Cox
Communications Inc. and Comcast Holdings agreed to extend existing distribution
agreements, the At Home Board was reorganized, and AT&T agreed to give Cox and
Comcast Holdings rights to sell their At Home shares to AT&T. These actions have
been consolidated by the court. At the request of At Home's bondholders, on
September 10, 2002, the bankruptcy court ruled that the claims asserted in these
actions belong to At Home's bankruptcy estate, not its shareholders, that the
actions must be dismissed, and that the claims in the actions are to be
prosecuted by the At Home bondholders' liquidating trust under the confirmed
Chapter 11 plan. The order remains subject to appeal. The liability for these
lawsuits would be shared equally between AT&T and Comcast Cable Communications
Holdings.
On September 23, 2002, the Official Committee of Unsecured Bondholders of
At Home filed suit in the United States District Court for the District of
Delaware against Comcast Holdings, Cox, Brian L. Roberts in his capacity as a
director of At Home, and other corporate and individual defendants. The
complaint seeks alleged "short-swing" profits under Section 16(b) of the
Securities Exchange Act of 1934 in connection with At Home put options Comcast
Holdings and Cox entered into with AT&T. The complaint alleges a total of at
least $600 million in damages in the aggregate from Comcast Holdings and Cox in
connection with this claim. The complaint also seeks damages in an unspecified
amount for alleged breaches of fiduciary duty by the defendants in connection
with transactions entered into among AT&T, At Home, Comcast Holdings and Cox. We
believe this suit is without merit and intend to vigorously defend ourselves in
the action.
In March 2002, three purported class actions were filed in the United
States District Court for the Southern District of New York against, among
others, AT&T and certain of its senior officers alleging violations of the
federal securities laws in connection with disclosures made by At Home in the
period from March 28, 2000 through August 28, 2001. These actions have been
consolidated. On November 8, 2002, a consolidated class action complaint was
filed in this action. Any liabilities resulting from this lawsuit would be
shared equally between AT&T and Comcast Cable Communications Holdings.
As part of a portfolio of lease and project financing assets Comcast Cable
Communications Holdings assumed in connection with the acquisition of Comcast MO
Group, Comcast Cable Communications Holdings is the lessor of some airplanes
under leveraged leases to UAL Corp. and US Airways Group. Under a leveraged
lease, the assets are secured with debt, which is non-recourse to Comcast Cable
Communications Holdings. US Airways filed for Chapter 11 bankruptcy protection
on August 11, 2002 and UAL Corp. filed for Chapter 11 bankruptcy protection on
December 9, 2002. In connection with their respective bankruptcy filings, each
of US Airways and UAL Corp. can
9
reject or reaffirm its leases. In connection with its bankruptcy filing, US
Airways rejected its leases with AT&T Broadband Group. AT&T Broadband Group
recorded an after-tax loss of approximately $39 million on such leases during
the third quarter of 2002. We do not know if the leases with UAL Corp. will be
rejected or reaffirmed. If the leases are rejected and the non-recourse debt
holder forecloses on the assets, Comcast Cable Communications Holdings could
incur an after-tax loss of approximately $33 million (based on September 30,
2002 balances).
Our indentures do not restrict our ability to incur additional indebtedness,
which could make our debt securities more risky in the future.
As of September 30, 2002, our pro forma consolidated indebtedness was
approximately $32.5 billion, of which $25.3 billion was issued by our
subsidiaries and was senior to debt obligations at Comcast Corporation. As of
September 30, 2002, our pro forma consolidated stockholders' equity was
approximately $38.5 billion. The indentures that govern the terms of our debt do
not restrict our ability or our subsidiaries' ability to incur additional
indebtedness. The degree to which we incur additional debt could have important
consequences to holders of the securities, including:
o limiting our ability to obtain any necessary financing in the future
for working capital, capital expenditures, debt service requirements
or other purposes;
o requiring us to dedicate a substantial portion of our cash flows from
operations to the payment of indebtedness and not for other purposes,
such as working capital and capital expenditures;
o limiting our flexibility to plan for, or react to, changes in our
businesses;
o making us more indebted than some of our competitors, which may place
us at a competitive disadvantage; and
o making us more vulnerable to a downturn in our businesses.
The securities we are offering may not develop an active public market, which
could depress the resale price of the securities.
The securities we are offering, other than our Class A Common Stock and
Class A Special Common Stock, will be new issues of securities for which there
is currently no trading market. We cannot predict whether an active trading
market for the securities will develop or be sustained. If an active trading
market were to develop, the securities could trade at prices that may be lower
than the initial offering price of the securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Our businesses may be affected by, among other things:
o changes in laws and regulations;
o changes in the competitive environment;
o changes in technology;
o industry consolidation and mergers;
o franchise-related matters;
o market conditions that may adversely affect the availability of debt
and equity financing for working capital, capital expenditures or
other purposes;
10
o demand for the programming content we distribute or the willingness of
other video program providers to carry our content; and
o general economic conditions.
In this prospectus and in the documents we incorporate by reference, we
state our expectations of future events and our future financial performance. 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. You should be aware that those
statements are only our predictions. Actual events or results may differ
materially. In evaluating those statements, you should specifically consider
various factors, including the risks outlined under "Risk Factors" above. Those
factors may cause our actual results to differ materially from any of our
forward-looking statements.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities for
working capital and general corporate purposes. We may also invest the proceeds
in certificates of deposit, United States government securities or certain other
interest-bearing securities. If we decide to use the net proceeds from a
particular offering of securities for a specific purpose, we will describe that
in the related prospectus supplement.
DIVIDEND POLICY
We do not intend to pay dividends on our common stock for the foreseeable
future.
RATIOS OF EARNINGS TO FIXED CHARGES
For the
Nine
Months
Ended
September
30, For the Years Ended December 31,
--------- ----------------------------------------------
2002 2001 2000 1999 1998 1997
--------- ------ ------ ------ ------ ------
Comcast(a)....................................... 1.03x 2.20x 5.93x 3.30x 5.37x 1.21x
Comcast Cable(b)................................. 2.35x (c) 1.76x (c) (c) (c)
Comcast Cable Communications Holdings(d)......... (e) (e) (e) (e) - -
Comcast Cable Holdings(f)........................ (g) (g) (g) (g) - -
Comcast MO Group(f).............................. 2.53x 4.96x (h) - - -
- ------------------
(a) We became the parent of Comcast Holdings and Comcast Cable Communications
Holdings on November 18, 2002 in connection with the consummation of the
merger of Comcast Holdings and Comcast Cable Communications Holdings with
our subsidiaries. Because Comcast Holdings is our predecessor, our
historical ratios are the same as Comcast Holdings' historical ratios. For
purposes of our ratio of earnings to fixed charges, earnings consist of
income (loss) from continuing operations before income taxes, cumulative
effect of accounting changes, minority interest, equity in net (income)
losses of affiliates and fixed charges. Fixed charges consist of interest
expense and capitalized interest.
(b) For purposes of Comcast Cable's ratio of earnings to fixed charges,
earnings consist of income (loss) from continuing operations before income
taxes, cumulative effect of accounting changes, minority interest, equity
in net (income) losses of affiliates and fixed charges. Fixed charges
consist of interest expense and interest expense on notes payable to
affiliates. As described in Note 2 to Comcast Cable's unaudited condensed
consolidated financial statements for the quarter ended September 30, 2002,
which are incorporated herein by reference, Comcast Cable adopted the
provisions of SFAS No. 145 on April 1, 2002. In connection with the
11
adoption of SFAS No. 145, amounts previously reported net of taxes as
extraordinary items have been reclassified to interest expense and income
taxes. The table above includes reclassifications of interest expense of
$10.9 million, $9.5 million, $0.2 million and $25.7 million for the years
ended December 31, 2000, 1999, 1998 and 1997, respectively.
In addition, as described in Note 2 to Comcast Cable's unaudited condensed
consolidated financial statements for the quarter ended September 30, 2002,
which are incorporated herein by reference, Comcast Cable adopted EITF
01-14 effective January 1, 2002. Upon adoption, Comcast Cable reclassified
franchise fees collected from cable subscribers from a reduction of
selling, general and administrative expenses to a component of service
revenues in its consolidated statement of operations. The impact of
adopting EITF 01-14 was to increase service revenues and selling, general
and administrative expenses by $189.4 million, $149.9 million, $103.4
million, $94.7 million and $72.8 million for the years ended December 31,
2001, 2000, 1999, 1998 and 1997, respectively. This reclassification had no
impact on Comcast Cable's reported operating income (loss) or financial
condition.
(c) For the years ended December 31, 2001, 1999, 1998 and 1997, Comcast Cable's
earnings, as defined above, were inadequate to cover fixed charges by
$390.0 million, $408.7 million, $149.8 million and $202.4 million,
respectively.
(d) From its date of inception on December 14, 2001 through September 30, 2002,
Comcast Cable Communications Holdings had no operations. On November 18,
2002, AT&T contributed its broadband communications business, referred to
as the AT&T Broadband Group in this prospectus, to Comcast Cable
Communications Holdings. Because AT&T Broadband Group is the predecessor of
Comcast Cable Communications Holdings, Comcast Cable Communications
Holdings' historical ratios are the same as AT&T Broadband Group's
historical ratios. For the purpose of calculating the ratio of earnings to
fixed charges, earnings is calculated by adding fixed charges excluding
capitalized interest to income from continuing operations before income
taxes, and by adding distributions of less-than-fifty-percent-owned
affiliates. By fixed charges we mean total interest, including capitalized
interest, dividend requirements on preferred stock and interest on trust
preferred securities and a portion of rentals, which we believe is
representative of the interest factor of our rental expense, as applicable.
(e) Comcast Cable Communications Holdings' loss for the nine months ended
September 30, 2002, the years ended December 31, 2001 and 2000, and the ten
month period ended December 31, 1999 was inadequate to cover fixed charges,
dividend requirements on subsidiary preferred stock and interest on trust
preferred securities in the amount of $19.2 billion, $9.2 billion, $10.4
billion and $2.0 billion, respectively.
(f) For the purpose of Comcast Cable Holdings' and Comcast MO Group's ratio of
earnings to fixed charges, earnings is calculated by adding fixed charges
excluding capitalized interest to income from continuing operations before
income taxes, and by adding distributions of less-than-fifty-percent-owned
affiliates. Fixed charges consist of total interest, including capitalized
interest, dividend requirements on preferred stock and interest on trust
preferred securities and a portion of rentals, which Comcast Cable Holdings
and Comcast MO Group believe is representative of the interest factor of
their rental expense, as applicable.
(g) Comcast Cable Holdings' loss for the nine months ended September 30, 2002,
the years ended December 31, 2001 and 2000, and the ten month period ended
December 31, 1999 was inadequate to cover fixed charges in the amount of
$1.1 billion, $1.5 billion, $1.9 billion and $1.3 billion, respectively.
(h) Comcast MO Group's loss for the period ended December 31, 2000 was
inadequate to cover fixed charges in the amount of $0.4 billion.
12
PRO FORMA RATIO OF EARNINGS TO
FIXED CHARGES
For the Nine For the
Months Ended Year Ended
September 30, 2002 December 31, 2001
------------------ -----------------
Comcast.................... (j) (j)
- ------------------
(j) For purposes of calculating our pro forma ratio of earnings to fixed
charges, earnings consist of income (loss) before income taxes,
extraordinary items, cumulative effect of accounting change, minority
interest, equity in net (income) losses of affiliates and fixed charges.
Fixed charges consist of interest expense. For the nine months ended
September 30, 2002 and for the year ended December 31, 2001, earning as
defined above, were inadequate to cover fixed charges by $19.1 billion and
$6.0 billion, respectively.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS
Pro Forma Historical
------------------------------- -----------------------------------------------------------
For the Nine For the Year For the Nine
Months Ended Ended Months Ended
September 30, December 31, September 30, For the Years Ended December 31,
2002 2001 2002 2001 2000 1999 1998 1997
------------- ------------ ------------- ------ ------ ------ ------ ------
Comcast................. (k) (k) 1.03x 2.20x 5.77x 3.20x 5.11x 1.20x
- ------------------
(k) For purposes of calculating our pro forma and historical ratios of earnings
to combined fixed charges and preferred dividends, earnings consist of
income (loss) before income taxes, extraordinary items, cumulative effect
of accounting change, minority interest, equity in net (income) losses of
affiliate and combined fixed charges and preferred dividends. Combined
fixed charges and preferred dividends consist of interest expense,
capitalized interest and preferred dividends. For the nine months ended
September 30, 2002 and for the year ended December 31, 2001, earnings, as
defined above, were inadequate to cover fixed charges by $19.1 billion and
$6.0 billion, respectively.
DESCRIPTION OF THE SENIOR DEBT SECURITIES, SUBORDINATED DEBT SECURITIES
AND CABLE GUARANTEES
Our debt securities, consisting of notes, debentures or other evidences of
indebtedness, may be issued from time to time in one or more series:
o in the case of senior debt securities, under a senior indenture to be
entered into among us, the cable guarantors and The Bank of New York,
as trustee; and
o in the case of subordinated debt securities, under a subordinated
indenture to be entered into among us, the cable guarantors and The
Bank of New York, as trustee.
The senior indenture and the subordinated indenture will be substantially
in the form included as exhibits to the registration statement of which this
prospectus is a part.
Because the following is only a summary of the indentures and the debt
securities, it does not contain all information that you may find useful. For
further information about the indentures and the debt securities, you should
read the indentures. As used in this Section of the prospectus and under the
captions "Description of
13
Warrants," "Description of Common Stock," "Description of Purchase Contracts"
and "Description of Units," the terms "we," "us" and "our" mean Comcast
Corporation only, and not subsidiaries of Comcast Corporation.
General
The senior debt securities will constitute our unsecured and unsubordinated
obligations and the subordinated debt securities will constitute our unsecured
and subordinated obligations. A detailed description of the subordination
provisions is provided below under the caption "Certain Terms of the
Subordinated Debt Securities -- Subordination." In general, however, if we
declare bankruptcy, holders of the senior debt securities will be paid in full
before the holders of subordinated debt securities will receive anything. The
debt securities will be fully and unconditionally guaranteed by the cable
guarantors, as described below.
We are a holding company and conduct all of our operations through
subsidiaries. Consequently, our ability to pay our obligations, including our
obligation to pay interest on the debt securities, to repay the principal amount
of the debt securities at maturity or upon redemption or to buy back the debt
securities will depend upon our subsidiaries' earnings and their distributing
those earnings to us and upon our subsidiaries repaying investments and advances
we have made to them. Our subsidiaries are separate and distinct legal entities
and, except for the cable guarantors with respect to the cable guarantees, have
no obligation, contingent or otherwise, to pay any amounts due on the debt
securities or to make funds available to us to do so. Our subsidiaries' ability
to pay dividends or make other payments or advances to us will depend upon their
operating results and will be subject to applicable laws and contractual
restrictions. In addition, some of our subsidiaries' existing indentures require
them to maintain financial ratios and cash flow levels and contain restrictions
on their ability to make dividend payments, pay management fees and make
advances to affiliated entities, including us. Our indentures will not limit our
subsidiaries' ability to enter into other agreements that prohibit or restrict
dividends or other payments or advances to us.
You should look in the applicable prospectus supplement for the following
terms of the debt securities being offered:
o the designation of the debt securities;
o the aggregate principal amount of the debt securities;
o the percentage of their principal amount (i.e. price) at which the
debt securities will be issued;
o the date or dates on which the debt securities will mature and the
right, if any, to extend such date or dates;
o the rate or rates, if any, per year, at which the debt securities will
bear interest, or the method of determining such rate or rates;
o the date or dates from which such interest will accrue, the interest
payment dates on which such interest will be payable or the manner of
determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any
interest payment dates;
o the right, if any, to extend the interest payment periods and the
duration of that extension;
o provisions for a sinking fund purchase or other analogous fund, if any;
o the period or periods, if any, within which, the price or prices of
which, and the terms and conditions upon which the debt securities may
be redeemed, in whole or in part, at our option or at your option;
o the form of the debt securities;
o any provisions for payment of additional amounts for taxes and any
provision for redemption, if we must pay such additional amounts in
respect of any debt security;
14
o the terms and conditions, if any, upon which we may have to repay the
debt securities early at your option and the price or prices in the
currency or currency unit in which the debt securities are payable;
o the currency, currencies or currency units for which you may purchase
the debt securities and the currency, currencies or currency units in
which principal and interest, if any, on the debt securities may be
payable;
o the terms and conditions, if any, pursuant to which the debt securities
may be converted or exchanged for the cash value of other securities
issued by us or by a third party; and
o any other terms of the debt securities, including any additional events
of default or covenants provided for with respect to the debt
securities, and any terms which may be required by or advisable under
applicable laws or regulations.
You may present debt securities for exchange and for transfer in the
manner, at the places and subject to the restrictions set forth in the debt
securities and the prospectus supplement. We will provide you those services
without charge, although you may have to pay any tax or other governmental
charge payable in connection with any exchange or transfer, as set forth in the
indenture.
Debt securities will bear interest at a fixed rate or a floating rate. Debt
securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted debt securities or to certain
debt securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
relevant prospectus supplement.
We may issue debt securities with the principal amount payable on any
principal payment date, or the amount of interest payable on any interest
payment date, to be determined by reference to one or more currency exchange
rates, securities or baskets of securities, commodity prices or indices. You may
receive a payment of principal on any principal payment date, or a payment of
interest on any interest payment date, that is greater than or less than the
amount of principal or interest otherwise payable on such dates, depending upon
the value on such dates of the applicable currency, security or basket of
securities, commodity or index. Information as to the methods for determining
the amount of principal or interest payable on any date, the currencies,
securities or baskets of securities, commodities or indices to which the amount
payable on such date is linked and certain additional tax considerations will be
set forth in the applicable prospectus supplement.
Certain Terms of the Senior Debt Securities
Cable Guarantees
Our obligations under the senior debt securities, including the payment of
principal, premium, if any, and interest, will be fully and unconditionally
guaranteed by each of the cable guarantors. The cable guarantees will rank
equally with all other general unsecured and unsubordinated obligations of the
cable guarantors.
The cable guarantees will not contain any restrictions on the ability of
any cable guarantor to:
o pay dividends or distributions on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of that cable
guarantor's capital stock or
o make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of that cable
guarantor.
15
Certain Covenants
We and the cable guarantors will agree to some restrictions on our
activities for the benefit of holders of all series of senior debt securities
issued under the senior indenture. The restrictive covenants summarized below
will apply, unless the covenants are waived or amended, so long as any of the
senior debt securities are outstanding.
The senior indenture will not contain any financial covenants other than
those summarized below and will not restrict us or our subsidiaries from paying
dividends or incurring additional debt. In addition, the senior indenture will
not protect holders of notes issued under it in the event of a highly leveraged
transaction or a change in control.
Limitation on Liens Securing Indebtedness. Neither we nor any cable
guarantor shall create, incur or assume any Lien (other than any Permitted
Lien) on such person's assets, including the Capital Stock of such person's
wholly-owned subsidiaries' to secure the payment of our Indebtedness or that of
any cable guarantor, unless we secure the outstanding senior debt securities or
cable guarantee, as the case may be, equally and ratably with (or prior to) all
Indebtedness secured by such Lien, so long as such Indebtedness shall be so
secured.
Limitation on Sale and Leaseback Transactions. Neither we nor any cable
guarantor shall enter into any Sale and Leaseback Transaction involving any of
such person's assets, including the Capital Stock of such person's wholly-owned
subsidiaries.
The restriction in the foregoing paragraph shall not apply to any Sale and
Leaseback Transaction if:
o the lease is for a period not in excess of three years, including
renewal of rights;
o the lease secures or relates to industrial revenue or similar
financing;
o the transaction is solely between us and a cable guarantor or between
or among cable guarantors; or
o we or the applicable cable guarantor, within 270 days after the sale is
completed, applies an amount equal to or greater than (a) the net
proceeds of the sale of the assets or part thereof leased or (b) the
fair market value of the assets or part thereof leased (as determined
in good faith by our Board of Directors) either to:
o the retirement (or open market purchase) of senior debt
securities, our other long-term Indebtedness ranking on a parity
with or senior to the senior debt securities or long-term
Indebtedness of a cable guarantor; or
o the purchase by us or any cable guarantor of other property, plant
or equipment related to our business or the business of any cable
guarantor having a value at least equal to the value of the assets
or part thereof leased.
This provision and the provision described under "-- Limitation on Liens
Securing Indebtedness" do not apply to any of our subsidiaries other than the
cable guarantors.
"Capitalized Lease" means, as applied to any person, any lease of any
property (whether real, personal, or mixed) of which the discounted present
value of the rental obligations of such person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such person; and
"Capitalized Lease Obligation" is defined to mean the rental obligations, as
aforesaid, under such lease.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, or other equivalents (however designated, whether
voting or non-voting) of such person's capital stock or other ownership
interests, whether now outstanding or issued after the date of hereof,
including, without limitation, all common stock and preferred stock.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, or other similar agreement or arrangement designed to protect against
the fluctuation in currency values.
16
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of determination, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained in the
senior indenture shall be computed in conformity with GAAP applied on a
consistent basis.
"Guarantee" means any obligation, contingent or otherwise, of any person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such person:
o to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other person
(whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities, or services, to
take-or-pay, or to maintain financial statement conditions or
otherwise); or
o entered into for purposes of assuring in any other manner the obligee
of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
provided that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Indebtedness" means, with respect to any person at any date of
determination (without duplication):
o all indebtedness of such person for borrowed money;
o all obligations of such person evidenced by bonds, debentures, notes,
or other similar instruments;
o all obligations of such person in respect of letters of credit or
other similar instruments (including reimbursement obligations with
respect thereto);
o all obligations of such person to pay the deferred and unpaid purchase
price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business);
o all obligations of such person as lessee under Capitalized Leases;
o all Indebtedness of other persons secured by a Lien on any asset of
such person, whether or not such Indebtedness is assumed by such
person; provided that the amount of such Indebtedness shall be the
lesser of:
o the fair market value of such asset at such date of determination;
and
o the amount of such Indebtedness;
o all Indebtedness of other persons Guaranteed by such person to the
extent such Indebtedness is Guaranteed by such person;
o to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements.
17
The amount of Indebtedness of any person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation; provided:
o that the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of
such Indebtedness at such time as determined in conformity with GAAP;
and
o that Indebtedness shall not include any liability for federal, state,
local, or other taxes.
"Interest Rate Agreements" means any obligations of any person pursuant to
any interest rate swaps, caps, collars, and similar arrangements providing
protection against fluctuations in interest rates. For purposes of the senior
indenture, the amount of such obligations shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such person, based on the assumption that such obligation had terminated at the
end of such fiscal quarter, and in making such determination, if any agreement
relating to such obligation provides for the netting of amounts payable by and
to such person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such person, then in each such case, the amount of
such obligations shall be the net amount so determined, plus any premium due
upon default by such person.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of the senior indenture, we
or any cable guarantor shall be deemed to own subject to a Lien any asset
acquired or held subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Permitted Liens" means:
o any Lien on any asset incurred prior to the date of the senior
indenture;
o any Lien on any assets acquired after the date of the senior indenture
(including by way of merger or consolidation) by us or any cable
guarantor, which Lien is created, incurred or assumed contemporaneously
with such acquisition, or within 270 days thereafter, to secure or
provide for the payment or financing of any part of the purchase price
thereof, or any Lien upon any assets acquired after the date of the
senior indenture existing at the time of such acquisition (whether or
not assumed by us or any cable guarantor), provided that any such Lien
shall attach only to the assets so acquired;
o any Lien on any assets in favor of us or any cable guarantor;
o any Lien on assets incurred in connection with the issuance of
tax-exempt governmental obligations (including, without limitation,
industrial revenue bonds and similar financing);
o any Lien granted by any cable guarantor on assets to the extent
limitations on the incurrence of such Liens are prohibited by any
agreement to which such cable guarantor is subject as of the date of
the senior indenture; and
o any renewal of or substitution for any Lien permitted by any of the
preceding bullet points, including any Lien securing reborrowing of
amounts previously secured within 270 days of the repayment thereof,
provided that no such renewal or substitution shall extend to any
assets other than the assets covered by the Lien being renewed or
substituted.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any person or to which any such person is a party, providing for the
leasing to us or a cable guarantor of any property, whether owned by us or such
cable guarantor at the date of the original issuance of the debt securities or
later acquired, which has been or is to be sold or transferred by us or such
cable guarantor to such person or to any other person by whom funds have been or
are to be advanced on the security of such property.
18
Financial Information. We will file, whether or not required to do so under
applicable law, with the trustee, within 15 days after being required to file
the same under the Securities Exchange Act of 1934, copies of the annual reports
and the information, documents and other reports to be filed pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. We intend to file all such
reports, information and documents with the SEC, whether or not required by
Section 13 or 15(d), and will send copies to the trustee within such 15-day
period.
Consolidation, Merger and Sale of Assets. The senior indenture will
restrict our ability to consolidate with, merge with or into, or sell, convey,
transfer, lease, or otherwise dispose of all or substantially all of our
property and assets as an entirety or substantially an entirety in one
transaction or a series of related transactions to any person (other than a
consolidation with or merger with or into or a sale, conveyance, transfer, lease
or other disposition to a wholly-owned subsidiary with a positive net worth;
provided that, in connection with any merger of us and a wholly-owned
subsidiary, no consideration other than common stock in the surviving person
shall be issued or distributed to our stockholders) or permit any person to
merge with or into such party unless:
o we are the continuing person or the person formed by such consolidation
or into which such party is merged or that acquired or leased such
property and assets shall be a corporation or limited liability company
organized and validly existing under the laws of the United States of
America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the trustee, all of
our obligations on all of the senior debt securities and under the
senior indenture;
o immediately after giving effect to such transaction, no default or
event of default shall have occurred and be continuing; and
o we deliver to the trustee an officers' certificate and opinion of
counsel, in each case stating that such consolidation, merger, or
transfer and such supplemental indenture complies with this provision
and that all conditions precedent provided for in the senior indenture
and notes relating to such transaction have been complied with;
provided, however, that the foregoing limitations will not apply if, in the good
faith determination of our board of directors set forth in a board resolution,
the principal purpose of such transaction is to change the state of
incorporation of such party; and provided further that any such transaction
shall not have as one of its purposes the evasion of the foregoing limitations.
Upon any express assumption of our obligations as described above, we will
be released and discharged from all obligations and covenants under the senior
indenture and all the senior debt securities.
The senior indenture and the cable guarantees do not limit the ability of
any cable guarantor to consolidate with or merge into or sell all or
substantially all its assets. Upon the sale or disposition of any cable
guarantor (whether by merger, consolidation, the sale of its capital stock or
the sale of all or substantially all of its assets) to any person, that cable
guarantor will be deemed released from all its obligations under the senior
indenture and its cable guarantee.
Events of Default
For purposes of this section, the term "Obligor" shall mean each of us,
Comcast Cable, Comcast Cable Communications Holdings, Comcast Cable Holdings and
Comcast MO Group, in each case excluding such entity's subsidiaries.
An event of default for a series of senior debt securities is defined under
the senior indenture as being:
(1) a default by any Obligor in the payment of principal or premium on the
senior debt securities of such series when the same becomes due and payable
whether at maturity, upon acceleration, redemption or otherwise;
(2) a default by any Obligor in the payment of interest on the senior debt
securities of such series when the same becomes due and payable, if that default
continues for a period of 30 days;
19
(3) default by any Obligor in the performance of or breach by any Obligor
of any of its other covenants or agreements in the senior indenture applicable
to all the senior debt securities or applicable to the senior debt securities of
any series and that default or breach continues for a period of 30 consecutive
days after written notice is received from the trustee or from the holders of
25% or more in aggregate principal amount of the senior debt securities of all
affected series;
(4) any cable guarantee is not (or is claimed by any cable guarantor not
to be) in full force and effect;
(5) a court having jurisdiction enters a decree or order for:
o relief in respect of any Obligor in an involuntary case under any
applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect;
o appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of any Obligor for any
substantial part of such party's property and assets; or
o the winding up or liquidation of any Obligor's affairs
and such decree or order shall remain unstayed and in effect for a period of
180 consecutive days; or
(6) any Obligor:
o commences a voluntary case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case
under any such law;
o consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or similar
official of such party or for any substantial part of such party's
property; or
o effects any general assignment for the benefit of creditors.
A default under any Obligor's other indebtedness is not a default under the
senior indenture.
If an event of default other than an event of default specified in clauses
(5) and (6) above occurs with respect to an issue of senior debt securities and
is continuing under the senior indenture, then, and in each and every such case,
either the trustee or the holders of not less than 25% in aggregate principal
amount of such senior debt securities then outstanding under the senior
indenture by written notice to us and to the trustee, if such notice is given by
the holders, may, and the trustee at the request of such holders shall, declare
the principal amount of and accrued interest, if any, on such senior debt
securities to be immediately due and payable. The amount due upon acceleration
shall include only the original issue price of the senior debt securities and
accrued to the date of acceleration and accrued interest, if any. Upon a
declaration of acceleration, such principal amount of and accrued interest, if
any, on such senior debt securities shall be immediately due and payable. If an
event of default specified in clauses (5) and (6) above occurs with respect to
any Obligor, the principal amount of and accrued interest, if any, on each issue
of senior debt securities then outstanding shall be and become immediately due
and payable without any notice or other action on the part of the trustee or any
holder.
Upon certain conditions such declarations may be rescinded and annulled and
past defaults may be waived by the holders of a majority in aggregate principal
amount of an issue of senior debt securities that has been accelerated.
Furthermore, subject to various provisions in the senior indenture, the holders
of at least a majority in aggregate principal amount of an issue of senior debt
securities by notice to the trustee may waive an existing default or event of
default with respect to such senior debt securities and its consequences, except
a default in the payment of principal of or interest on such senior debt
securities or in respect of a covenant or provision of the senior indenture
which cannot be modified or amended without the consent of the holders of each
such senior debt securities. Upon any such waiver, such default shall cease to
exist, and any event of default with respect to such
20
senior debt securities shall be deemed to have been cured, for every purpose of
the senior indenture; but no such waiver shall extend to any subsequent or other
default or event of default or impair any right consequent thereto. For
information as to the waiver of defaults, see "-- Modification and Waiver."
The holders of at least a majority in aggregate principal amount of an
issue of senior debt securities may direct the time, method, and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to such senior debt
securities. However, the trustee may refuse to follow any direction that
conflicts with law or the senior indenture, that may involve the trustee in
personal liability, or that the trustee determines in good faith may be unduly
prejudicial to the rights of holders of such issue of senior debt securities not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from holders of
such issue of senior debt securities. A holder may not pursue any remedy with
respect to the senior indenture or any series of senior debt securities unless:
o the holder gives the trustee written notice of a continuing event of
default;
o the holders of at least 25% in aggregate principal amount of such
series of senior debt securities make a written request to the trustee
to pursue the remedy in respect of such event of default;
o the requesting holder or holders offer the trustee indemnity
satisfactory to the trustee against any costs, liability, or expense;
o the trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
o during such 60-day period, the holders of a majority in aggregate
principal amount of such series of senior debt securities do not give
the trustee a direction that is inconsistent with the request.
These limitations, however, do not apply to the right of any holder of a
senior debt security to receive payment of the principal of, premium, if any, or
interest on such senior debt security, or to bring suit for the enforcement of
any such payment, on or after the due date for the senior debt securities, which
right shall not be impaired or affected without the consent of the holder.
The senior indenture will require certain of our officers to certify, on or
before a date not more than 120 days after the end of each fiscal year, as to
their knowledge of our compliance with all conditions and covenants under the
senior indenture, such compliance to be determined without regard to any period
of grace or requirement of notice provided under the senior indenture.
Discharge and Defeasance
The senior indenture provides that, except as otherwise provided in this
paragraph, we may discharge our obligations with respect to an issue of senior
debt securities and the senior indenture with respect to that series of senior
debt securities if:
o the senior debt securities of the affected series previously
authenticated and delivered with certain exceptions, have been
delivered to the trustee for cancellation and we have paid all sums
payable under the senior indenture; or
o the senior debt securities of the affected series mature within one
year or all of them are to be called for redemption within one year
under arrangements satisfactory to the trustee for giving the notice of
redemption and:
o we irrevocably deposit in trust with the trustee, as trust funds
solely for the benefit of the holders of the senior debt
securities of the affected series, for that purpose, money or U.S.
government obligations or a combination thereof sufficient (unless
such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification
21
thereof delivered to the trustee), without consideration of any
reinvestment and after payment of all federal, state and local
taxes or other charges and assessments in respect thereof payable
by the trustee, to pay principal of and interest on the senior
debt securities of the affected series to maturity or redemption,
as the case may be, and to pay all other sums payable by it under
the senior indenture; and
o we deliver to the trustee an officers' certificate and an opinion
of counsel, in each case stating that all conditions precedent
provided for in the senior indenture relating to the satisfaction
and discharge of the senior indenture with respect to the senior
debt securities of the affected series have been complied with.
With respect to all senior debt securities which have been delivered to the
trustee for cancellation and for which have been paid all sums payable by us
under the senior indenture, only our obligations to compensate and indemnify the
trustee and our right to recover excess money held by the trustee under the
senior indenture shall survive. With respect to senior debt securities which
mature within one year or are to be called for redemption within one year under
redemption arrangements deemed appropriate by the trustee, only our obligations
with respect to the issue of defeased senior debt securities to execute and
deliver such senior debt securities for authentication, to set the terms of such
senior debt securities, to maintain an office or agency in respect of such
senior debt securities, to have moneys held for payment in trust, to register
the transfer or exchange of such senior debt securities, to deliver such senior
debt securities for replacement or cancellation, to compensate and indemnify the
trustee and to appoint a successor trustee, and our right to recover excess
money held by the trustee shall survive until such senior debt securities are no
longer outstanding. Thereafter, only our obligations to compensate and indemnify
the trustee, and our right to recover excess money held by the trustee shall
survive.
The senior indenture also provides that, except as otherwise provided in
this paragraph, we:
o will be deemed to have paid and will be discharged from any and all
obligations in respect of a series of senior debt securities, and the
provisions of the senior indenture and the cable guarantees will no
longer be in effect with respect to those senior debt securities
("legal defeasance"); and
o may omit to comply with any term, provision or condition of the senior
indenture described above under "-- Certain Covenants" and such
omission shall be deemed not to be an event of default under the third
clause of the first paragraph of "-- Events of Default" with respect to
that series of senior debt securities ("covenant defeasance");
provided that the following conditions shall have been satisfied:
o we have irrevocably deposited in trust with the trustee as trust funds
solely for the benefit of the holders of the senior debt securities of
such series, for payment of the principal of and interest on the senior
debt securities of such series, money or U.S. government obligations or
a combination thereof sufficient (unless such funds consist solely of
money, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the trustee) without consideration of any reinvestment and
after payment of all federal, state and local taxes or other charges
and assessments in respect thereof payable by the trustee, to pay and
discharge the principal of and accrued interest on the senior debt
securities of such series to maturity or earlier redemption
(irrevocably provided for under arrangements satisfactory to the
trustee), as the case may be;
o such deposit will not result in a breach or violation of, or constitute
a default under, the senior indenture, the cable guarantees or any
other material agreement or instrument to which we are a party or by
which we are bound;
o no default or event of default with respect to the senior debt
securities of such series shall have occurred and be continuing on the
date of such deposit;
o we shall have delivered to the trustee:
22
o either an opinion of counsel that the holders of the senior debt
securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of our exercising our
option under this provision of the senior indenture and will be
subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (which opinion, in the
case of a legal defeasance, shall be based upon a change in law)
or a ruling directed to the trustee received from the Internal
Revenue Service to the same effect; and
o an opinion of counsel that the holders of the senior debt
securities of such series have a valid security interest in the
trust funds subject to no prior liens under the Uniform Commercial
Code; and
o we have delivered to the trustee an officers' certificate and an
opinion of counsel, in each case stating that all conditions precedent
provided for in the senior indenture relating to the defeasance
contemplated of the senior debt securities of such series have been
complied with.
Subsequent to legal defeasance under the first bullet point above, our
obligations with respect to the issue of defeased senior debt securities to
execute and deliver such senior debt securities for authentication, to set the
terms of such senior debt securities, to maintain an office or agency in respect
of such senior debt securities, to have moneys held for payment in trust, to
register the transfer or exchange of such senior debt securities, to deliver
such senior debt securities for replacement or cancellation, to compensate and
indemnify the trustee and to appoint a successor trustee, and our right to
recover excess money held by the trustee shall survive until such senior debt
securities are no longer outstanding. After such senior debt securities are no
longer outstanding, in the case of legal defeasance under the first bullet point
above, only our obligations to compensate and indemnify the trustee and our
right to recover excess money held by the trustee shall survive.
Modification and Waiver
We and the trustee may amend or supplement the senior indenture or the
senior debt securities without notice to or the consent of any holder:
o to cure any ambiguity, defect, or inconsistency in the senior industry;
provided that such amendments or supplements shall not adversely affect
the interests of the holders in any material respect;
o to comply with the provisions described under "--Certain Covenants--
Consolidation, Merger and Sale of Assets;"
o to comply with any requirements of the SEC in connection with the
qualification of the senior indenture under the Trust Indenture Act;
o to evidence and provide for the acceptance of appointment hereunder by
a successor trustee;
o to establish the form or forms or terms of the senior debt securities
as permitted by the senior indenture;
o to provide for uncertificated notes and to make all appropriate changes
for such purpose;
o to make any change that does not adversely affect the rights of any
holder;
o to add to its covenants such new covenants, restrictions, conditions or
provisions for the protection of the holders, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an event
of default; or
o to make any change so long as no senior debt securities are
outstanding.
Subject to certain conditions, without prior notice to any holder of senior
debt securities, modifications and amendments of the senior indenture may be
made by us and the trustee with respect to any series of senior debt
23
securities with the written consent of the holders of a majority in principal
amount of the affected series of senior debt securities, and our compliance with
any provision of the senior indenture with respect to any series of senior debt
securities may be waived by written notice to the trustee by the holders of a
majority in principal amount of the affected series of senior debt securities
outstanding; provided, however, that each affected holder must consent to any
modification, amendment or waiver that:
o changes the stated maturity of the principal of, or any installment of
interest on, the senior debt securities of the affected series;
o reduces the principal amount of, or premium, if any, or interest on,
the senior debt securities of the affected series;
o changes the place or currency of payment of principal of, or premium,
if any, or interest on, the senior debt securities of the affected
series;
o changes the provisions for calculating the optional redemption price,
including the definitions relating thereto;
o changes the provisions relating to the waiver of past defaults or
changes or impairs the right of holders to receive payment or to
institute suit for the enforcement of any payment of the senior debt
securities of the affected series on or after the due date therefor;
o reduces the above-stated percentage of outstanding senior debt
securities of the affected series the consent of whose holders is
necessary to modify or amend or to waive certain provisions of or
defaults under the senior indenture;
o waives a default in the payment of principal of, premium, if any, or
interest on the senior debt securities; or
o modifies any of the provisions of this paragraph, except to increase
any required percentage or to provide that certain other provisions
cannot be modified or waived without the consent of the holder of each
senior debt security of the series affected by the modification.
It is not necessary for the consent of the holders under the senior
indenture to approve the particular form of any note amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under the senior indenture
becomes effective, notice must be given to the holders affected thereby briefly
describing the amendment, supplement, or waiver. Supplemental indentures will be
mailed to holders upon request. Any failure to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture or waiver.
No Personal Liability of Incorporators, Stockholders, Officers, Directors,
or Employees
The senior indenture provides that no recourse shall be had under or upon
any obligation, covenant, or agreement of ours or the cable guarantors in the
senior indenture or any supplemental indenture, or in any of the senior debt
securities or because of the creation of any indebtedness represented thereby,
against any incorporator, stockholder, officer, director, employee of ours or
any cable guarantor or of any successor person thereof under any law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise. Each holder, by accepting the senior debt
securities, waives and releases all such liability.
Concerning the Trustee
The senior indenture provides that, except during the continuance of a
default, the trustee will not be liable, except for the performance of such
duties as are specifically set forth in the senior indenture. If an event of
default has occurred and is continuing, the trustee will exercise such rights
and powers vested in it under the senior indenture and will use the same degree
of care and skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
24
Governing Law
The senior indenture and the debt securities will be governed by, and
construed in accordance with, the internal laws of the State of New York.
The Trustees
We may have normal banking relationships with the trustee under the senior
indenture in the ordinary course of business.
Certain Terms of the Subordinated Debt Securities
Other than the terms of the subordinated indenture and subordinated debt
securities relating to subordination, or otherwise as described in the
prospectus supplement relating to a particular series of subordinated debt
securities, the terms of the subordinated indenture and subordinated debt
securities are identical in all material respects to the terms of the senior
indenture and senior debt securities.
Subordination
The indebtedness evidenced by the subordinated debt securities is
subordinate to the prior payment in full of all our Senior Indebtedness, as
defined in the subordinated indenture. During the continuance beyond any
applicable grace period of any default in the payment of principal, premium,
interest or any other payment due on any of our Senior Indebtedness, we may not
make any payment of principal of, or premium, if any, or interest on the
subordinated debt securities. In addition, upon any distribution of our assets
upon any dissolution, winding up, liquidation or reorganization, the payment of
the principal of, or premium, if any, and interest on the subordinated debt
securities is to be subordinated to the extent provided in the subordinated
indenture in right of payment to the prior payment in full of all our Senior
Indebtedness. Because of this subordination, if we dissolve or otherwise
liquidate, holders of our subordinated debt securities may receive less,
ratably, than holders of our Senior Indebtedness. The subordination provisions
do not prevent the occurrence of an event of default under the subordinated
indenture.
The subordination provisions also apply in the same way to each cable
guarantor with respect to the Senior Indebtedness of such cable guarantor.
The term "Senior Indebtedness" of a person means with respect to such
person the principal of, premium, if any, interest on, and any other payment due
pursuant to any of the following, whether outstanding today or incurred by that
person in the future:
o all of the indebtedness of that person for money borrowed, including
any indebtedness secured by a mortgage or other lien which is (1) given
to secure all or part of the purchase price of property subject to the
mortgage or lien, whether given to the vendor of that property or to
another lender, or (2) existing on property at the time that person
acquires it;
o all of the indebtedness of that person evidenced by notes, debentures,
bonds or other securities sold by that person for money;
o all of the lease obligations which are capitalized on the books of that
person in accordance with generally accepted accounting principles;
o all indebtedness of others of the kinds described in the first two
bullet points above and all lease obligations of others of the kind
described in the third bullet point above that the person, in any
manner, assume or guarantee or that the person in effect guarantees
through an agreement to purchase, whether that agreement is contingent
or otherwise; and
25
o all renewals, extensions or refundings of indebtedness of the kinds
described in the first, second or fourth bullet point above and all
renewals or extensions of leases of the kinds described in the third or
fourth bullet point above;
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing it or the assumption
or guarantee relating to it expressly provides that such indebtedness, lease,
renewal, extension or refunding is not superior in right of payment to the
subordinated debt securities. Our senior debt securities, and any unsubordinated
guarantee obligations of ours or any cable guarantor to which we and the cable
guarantors are a party, including the cross guarantees, constitute Senior
Indebtedness for purposes of the subordinated debt indenture.
Convertible Debt Securities
The terms, if any, on which debt securities being offered may be exchanged
for or converted into other debt securities or shares of preferred stock, Class
A Common Stock or Class A Special Common Stock or other securities or rights of
ours (including rights to receive payments in cash or securities based on the
value, rate or price of one or more specified commodities, currencies or
indices) or securities of other issuers or any combination of the foregoing will
be set forth in the prospectus supplement for such debt securities being
offered.
Unless otherwise indicated in the prospectus supplement, the following
provisions will apply to debt securities being offered that may be exchanged for
or converted into capital stock:
The holder of any debt securities convertible into capital stock will have
the right exercisable at any time during the time period specified in the
prospectus supplement, unless previously redeemed by us, to convert such debt
securities into shares of capital stock, which may include preferred stock,
Class A Common Stock or Class A Special Common Stock, as specified in the
prospectus supplement, at the conversion rate for each $1,000 principal amount
of debt securities set forth in the prospectus supplement, subject to
adjustment.
The holder of a convertible debt security may convert a portion thereof
which is $1,000 or any integral multiple of $1,000. In the case of debt
securities called for redemption, conversion rights will expire at the close of
business on the business day prior to the date fixed for the redemption as may
be specified in the prospectus supplement, except that in the case of redemption
at the option of the debt security holder, if applicable, such right will
terminate upon receipt of written notice of the exercise of such option.
Unless the terms of the specific debt securities being offered provide
otherwise, in certain events, the conversion rate will be subject to adjustment
as set forth in the indentures. Such events include:
o the issuance of shares of any class of capital stock of ours as a
dividend on the class of capital stock into which the debt securities
of such series are convertible;
o subdivisions, combinations and reclassifications of the class of
capital stock into which debt securities of such series are
convertible;
o the issuance to all holders of the class of capital stock into which
debt securities of such series are convertible of rights or warrants
entitling the debt security holders (for a period not exceeding 45
days) to subscribe for or purchase shares of such class of capital
stock at a price per share less than the current market price per share
of such class of capital stock;
o the distribution to all holders of the class of capital stock into
which debt securities of such series are convertible of evidences of
indebtedness of ours or of assets or subscription rights or warrants
(other than those referred to above); and
o distributions of cash in excess of certain threshold amounts.
26
In the case of cash dividends in excess of threshold amounts, we may, at
our option, choose to set aside the amount of such distribution in cash for
distribution to the holder upon conversion rather than adjust the conversion
rate; we do not intend to pay interest on the cash set aside.
No adjustment of the conversion rate will be required unless an adjustment
would require a cumulative increase or decrease of at least 1% in such rate.
Fractional shares of capital stock will not be issued upon conversion but, in
lieu thereof, we will pay a cash adjustment. Convertible debt securities
surrendered for conversion between the record date for an interest payment, if
any, and the interest payment date, except convertible debt securities called
for redemption on a redemption date during such period, must be accompanied by
payment of an amount equal to the interest thereon which the registered holder
is to receive.
DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase securities or other securities or rights
of ours, including rights to receive payment in cash or securities based on the
value, rate or price of one or more specified commodities, currencies or
indices, or securities of other issuers or any combination of the foregoing.
Warrants may be issued independently or together with any securities and may be
attached to or separate from such securities. Each series of warrants will be
issued under a separate warrant agreement to be entered into between us and a
warrant agent. The following sets forth certain general terms and provisions of
the warrants offered hereby. Further terms of the warrants and the applicable
warrant agreement are set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the following terms of
any warrants in respect of which this prospectus is being delivered:
o the title of such warrants;
o the aggregate number of such warrants;
o the price or prices at which such warrants will be issued;
o the currency or currencies, including composite currencies, in which
the price of such warrants may be payable;
o the securities or other rights, including rights to receive payment in
cash or securities based on the value, rate or price of one or more
specified commodities, currencies or indices, or securities of other
issuers or any combination of the foregoing, purchasable upon exercise
of such warrants;
o the price at which and the currency or currencies, including composite
currencies, in which the securities purchasable upon exercise of such
warrants may be purchased;
o the date on which the right to exercise such warrants shall commence
and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such warrants which may
be exercised at any one time;
o if applicable, the designation and terms of the securities with which
such warrants are issued and the number of such warrants issued with
each such security;
o if applicable, the date on and after which such warrants and the
related securities will be separately transferable;
o information with respect to book-entry procedures, if any;
27
o if applicable, a discussion of certain United States Federal income tax
considerations;
o if applicable, the identity of any of our cable subsidiaries
guaranteeing our obligations with respect to such warrants; and
o any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts for the purchase or sale of:
o our securities or securities of an entity unaffiliated or affiliated
with us, a basket of such securities, an index or indices of such
securities or any combination of the above as specified in the
applicable prospectus supplement;
o currencies or composite currencies; or
o commodities.
Each purchase contract will entitle the holder thereof to purchase or sell,
and obligate us to sell or purchase, on specified dates, such securities,
currencies or commodities at a specified purchase price, all as set forth in the
applicable prospectus supplement. We must, however, satisfy our obligations, if
any, with respect to any purchase contract by delivering the cash value thereof
or, in the case of underlying currencies, by delivering the underlying
currencies, as set forth in the applicable prospectus supplement. The applicable
prospectus supplement will also specify the methods by which the holders may
purchase or sell such securities, currencies or commodities, any acceleration,
cancellation or termination provisions or other provisions relating to the
settlement of a purchase contract and, if applicable, the identity of any of our
cable subsidiaries guaranteeing our obligations with respect to such purchase
contracts.
Purchase contracts may require holders to satisfy their obligations
thereunder when the purchase contracts are issued. Our obligation to settle such
pre-paid purchase contracts on the relevant settlement date may constitute
indebtedness. Accordingly, the pre-paid purchase contracts will be issued under
one of the indentures.
DESCRIPTION OF UNITS
As specified in the applicable prospectus supplement, units will consist of
one or more purchase contracts, warrants, debt securities, preferred stock,
Class A Common Stock or Class A Special Common Stock or any combination thereof.
Reference is made to the applicable prospectus supplement for:
o all terms of the units and of the purchase contracts, warrants, debt
securities, shares of preferred stock, shares of Class A Common Stock
or shares of Class A Special Common Stock, or any combination thereof,
comprising the units, including whether and under what circumstances
the securities comprising the units may or may not be traded
separately;
o a description of the terms of any unit agreement governing the units;
o if applicable, a description of any guarantee by any of our
subsidiaries of our obligations under the units; and
o a description of the provisions for the payment, settlement, transfer
or exchange of the units.
28
GLOBAL SECURITIES
We may issue the debt securities, warrants, purchase contracts and units of
any series in the form of one or more fully registered global securities that
will be deposited with a depositary or with a nominee for a depositary
identified in the prospectus supplement relating to such series and registered
in the name of the depositary or its nominee. In that case, one or more global
securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal or face amount of outstanding registered
securities of the series to be represented by such global securities. Unless and
until the depositary exchanges a global security in whole for securities in
definitive registered form, the global security may not be transferred except as
a whole by the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any of its nominees to a successor of the depositary or a nominee
of such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of securities to be represented by a global security will be
described in the prospectus supplement relating to such series. We anticipate
that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a global security will be limited to
persons that have accounts with the depositary for such global security known as
"participants" or persons that may hold interests through such participants.
Upon the issuance of a global security, the depositary for such global security
will credit, on its book-entry registration and transfer system, the
participants' accounts with the respective principal or face amounts of the
securities represented by such global security beneficially owned by such
participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such securities.
Ownership of beneficial interests in such global security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the depositary for such global security (with respect to interests
of participants) and on the records of participants (with respect to interests
of persons holding through participants). The laws of some states may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge beneficial interests in global securities.
So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the securities
represented by such global security for all purposes under the applicable
indenture, warrant agreement, purchase contract or unit agreement. Except as set
forth below, owners of beneficial interests in a global security will not be
entitled to have the securities represented by such global security registered
in their names, will not receive or be entitled to receive physical delivery of
such securities in definitive form and will not be considered the owners or
holders thereof under the applicable indenture, warrant agreement, purchase
contract or unit agreement. Accordingly, each person owning a beneficial
interest in a global security must rely on the procedures of the depositary for
such global security and, if such person is not a participant, on the procedures
of the participant through which such person owns its interest, to exercise any
rights of a holder under the applicable indenture, warrant agreement, purchase
contract or unit agreement. We understand that under existing industry
practices, if we request any action of holders or if an owner of a beneficial
interest in a global security desires to give or take any action which a holder
is entitled to give or take under the applicable indenture, warrant agreement,
purchase contract or unit agreement, the depositary for such global security
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt securities, and
any payments to holders with respect to warrants, purchase contracts or units
represented by a global security registered in the name of a depositary or its
nominee will be made to such depositary or its nominee, as the case may be, as
the registered owner of such global security. None of us, the trustees, the
warrant agents, the unit agents or any of our other agents, agent of the
trustees or agent of the warrant agents or unit agents will have any
responsibility or liability for any aspect of the records
29
relating to or payments made on account of beneficial ownership interests in
such global security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
We expect that the depositary for any securities represented by a global
security, upon receipt of any payment of principal, premium, interest or other
distribution of underlying securities or commodities to holders in respect of
such global security, will immediately credit participants' accounts in amounts
proportionate to their respective beneficial interests in such global security
as shown on the records of such depositary. We also expect that payments by
participants to owners of beneficial interests in such global security held
through such participants will be governed by standing customer instructions and
customary practices, as is now the case with the securities held for the
accounts of customers in bearer form or registered in "street name," and will be
the responsibility of such participants.
If the depositary for any securities represented by a global security is at
any time unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, and we do
not appoint a successor depositary registered as a clearing agency under the
Securities Exchange Act of 1934 within 90 days, we will issue such securities in
definitive form in exchange for such global security. In addition, we may at any
time and in our sole discretion determine not to have any of the securities of a
series represented by one or more global securities and, in such event, will
issue securities of such series in definitive form in exchange for all of the
global security or securities representing such securities. Any securities
issued in definitive form in exchange for a global security will be registered
in such name or names as the depositary shall instruct the relevant trustee,
warrant agent or other relevant agent of ours. We expect that such instructions
will be based upon directions received by the depositary from participants with
respect to ownership of beneficial interests in such global security.
DESCRIPTION OF PREFERRED STOCK
Our board of directors is authorized to issue in one or more series up to a
maximum of 20,000,000 shares of preferred stock, without par value. The shares
can be issued with such designations, preferences, qualifications, privileges,
limitations, restrictions, options, conversion or exchange rights and other
special or relative rights as the board of directors shall from time to time fix
by resolution. The dividend, voting, conversion, exchange, repurchase and
redemption rights, if applicable, the liquidation preference, and other specific
terms of each series of the preferred stock will be set forth in the prospectus
supplement.
The applicable prospectus supplement will describe the following terms to
the extent that they may apply to an issuance of preferred stock in respect of
which this prospectus is being delivered:
o the specific designation, number of shares, seniority and purchase
price;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates on which any such dividends
will be payable (or the method by which such rates or dates will be
determined);
o any voting rights;
o if other than the currency of the United States of America, the
currency or currencies including composite currencies in which such
preferred stock is denominated and/or in which payments will or may be
payable;
o the method by which amounts in respect of such preferred stock may be
calculated and any commodities, currencies or indices, or value, rate
or price, relevant to such calculation;
30
o whether the preferred stock is convertible or exchangeable and, if so,
the securities or rights into which such preferred stock is convertible
or exchangeable, and the terms and conditions upon which such
conversions or exchanges will be effected including the initial
conversion or exchange prices or rates, the conversion or exchange
period and any other related provisions;
o the place or places where dividends and other payments on the preferred
stock will be payable; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares," we may, at our
option, elect to offer depositary shares evidenced by depositary receipts, each
representing an interest (to be specified in the prospectus supplement relating
to the particular series of the preferred stock) in a share of the particular
series of the preferred stock issued and deposited with a bank or trust company
selected by us as the depositary.
All shares of preferred stock offered hereby, or issuable upon conversion,
exchange or exercise of securities, will, when issued, be fully paid and
non-assessable. We have been advised that the preferred stock will be exempt
from existing Pennsylvania personal property tax.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any prospectus supplement of certain
provisions of the deposit agreement and of the depositary shares and depositary
receipts does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the form of deposit agreement and form of depositary
receipts relating to each series of the preferred stock.
General
We may, at our option, elect to have shares of preferred stock be
represented by depositary shares. The shares of any series of the preferred
stock underlying the depositary shares will be deposited under a separate
deposit agreement between us and a bank or trust company selected by us as the
depositary. The prospectus supplement relating to a series of depositary shares
will set forth the name and address of the depositary. Subject to the terms of
the deposit agreement, each owner of a depositary share will be entitled, in
proportion to the applicable interest in the number of shares of preferred stock
underlying such depositary share, to all the rights and preferences of the
preferred stock underlying such depositary share, including dividend, voting,
redemption, conversion, exchange and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the preferred stock
described in the applicable prospectus supplement.
Unless otherwise specified in the prospectus supplement, a holder of
depositary shares is not entitled to receive the shares of preferred stock
underlying the depositary shares.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary shares representing such preferred stock in proportion to the
numbers of such depositary shares owned by such holders on the relevant record
date.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
entitled thereto or the depositary may, with our approval, sell such property
and distribute the net proceeds from such sale to such holders.
31
The deposit agreement also contains provisions relating to the manner in
which any subscription or similar rights offered by us to holders of preferred
stock shall be made available to holders of depositary shares.
Conversion and Exchange
If any preferred stock underlying the depositary shares is subject to
provisions relating to its conversion or exchange as set forth in the prospectus
supplement relating thereto, each record holder of depositary shares will have
the right or obligation to convert or exchange such depositary shares pursuant
to the terms thereof.
Redemption of Depositary Shares
If preferred stock underlying the depositary shares is subject to
redemption, the depositary shares will be redeemed from the proceeds received by
the depositary resulting from the redemption, in whole or in part, of the
preferred stock held by the depositary. The redemption price per depositary
share will be equal to the aggregate redemption price payable with respect to
the number of shares of preferred stock underlying the depositary shares.
Whenever we redeem preferred stock from the depositary, the depositary will
redeem as of the same redemption date a proportionate number of depositary
shares representing the shares of preferred stock that were redeemed. If less
than all the depositary shares are to be redeemed, the depositary shares to be
redeemed will be selected by lot or pro rata as may be determined by us.
After the date fixed for redemption, the depositary shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price payable upon such redemption. Any funds deposited by us with
the depositary for any depositary shares which the holders thereof fail to
redeem shall be returned to us after a period of two years from the date such
funds are so deposited.
Voting
Upon receipt of notice of any meeting or action in lieu of any meeting at
which the holders of any shares of preferred stock underlying the depositary
shares are entitled to vote, the depositary will mail the information contained
in such notice to the record holders of the depositary shares relating to such
preferred stock. Each record holder of such depositary shares on the record date
(which will be the same date as the record date for the preferred stock) will be
entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the number of shares of preferred stock underlying such holder's
depositary shares. The depositary will endeavor, insofar as practicable, to vote
the number of shares of preferred stock underlying such depositary shares in
accordance with such instructions, and we will agree to take all action which
may be deemed necessary by the depositary in order to enable the depositary to
do so.
Amendment of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary, provided, however, that any amendment which
materially and adversely alters the rights of the existing holders of depositary
shares will not be effective unless such amendment has been approved by at least
a majority of the depositary shares then outstanding.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges that
arise solely from the existence of the depositary arrangements. We will pay
charges of the depositary in connection with the initial deposit of the
preferred stock and any exchange or redemption of the preferred stock. Holders
of depositary shares will pay all other transfer and other taxes and
governmental charges, and, in addition, such other charges as are expressly
provided in the deposit agreement to be for their accounts.
32
Miscellaneous
We, or at our option, the depositary, will forward to the holders of
depositary shares all reports and communications from us which we are required
to furnish to the holders of preferred stock.
Neither the depositary nor we will be liable if either of us is prevented
or delayed by law or any circumstances beyond our control in performing our
obligations under the deposit agreement. Our obligations and those of the
depositary under the deposit agreement will be limited to performance in good
faith of our duties thereunder and we and the depositary will not be obligated
to prosecute or defend any legal proceeding in respect of any depositary share
or preferred stock unless satisfactory indemnity has been furnished. We and the
depositary may rely upon written advice of counsel or accountants, or
information provided by persons presenting preferred stock for deposit, holders
of depositary shares or other persons believed to be competent and on documents
believed to be genuine.
Resignation and Removal of Depositary; Termination of the Deposit Agreement
The depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the depositary, any such
resignation or removal to take effect upon the appointment of a successor
depositary and its acceptance of such appointment. Such successor depositary
will be appointed by us within 60 days after delivery of the notice of
resignation or removal. The deposit agreement may be terminated at our direction
or by the depositary if a period of 90 days shall have expired after the
depositary has delivered to us written notice of its election to resign and a
successor depositary shall not have been appointed. Upon termination of the
deposit agreement, the depositary will discontinue the transfer of depositary
receipts, will suspend the distribution of dividends to the holders thereof, and
will not give any further notices (other than notice of such termination) or
perform any further acts under the deposit agreement except that the depositary
will continue to deliver preferred stock certificates, together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property in exchange for depositary receipts
surrendered. Upon our request, the depositary shall deliver all books, records,
certificates evidencing preferred stock, depositary receipts and other documents
relating to the subject matter of the depositary agreement to us.
DESCRIPTION OF COMMON STOCK
The statements made under this caption include summaries of certain
provisions contained in our articles of incorporation and by-laws. These
statements do not purport to be complete and are qualified in their entirety by
reference to such articles of incorporation and by-laws.
We have three classes of common stock outstanding: Class A Common Stock,
$0.01 par value per share; Class A Special Common Stock, $0.01 par value per
share; and Class B Common Stock, $0.01 par value per share. There are currently
authorized 7.5 billion shares of Class A Common Stock, 7.5 billion shares of
Class A Special Common Stock and 75 million shares of Class B Common Stock. At
the close of business on December 13, 2002 there were outstanding 1.355
billion shares of Class A Common Stock, 930.6 million shares of Class A Special
Common Stock and 9.4 million shares of Class B Common Stock.
Dividends
Subject to the preferential rights of any preferred stock then outstanding,
Holders of our Class A Common Stock, Class A Special Common Stock, and Class B
Common Stock are entitled to receive, from time to time, when, as and if
declared, in the discretion of our Board, such cash dividends as our Board may
from time to time determine, out of such funds as are legally available
therefore, in proportion to the number of shares held by them, respectively,
without regard to class.
Holders of our Class A Common Stock, Class A Special Common Stock, and
Class B Common Stock will also be entitled to receive, from time to time, when,
as and if declared by our Board, such dividends of our stock or other property
as our Board may determine, out of such funds as are legally available
therefore. However, stock dividends
33
on, or stock splits of, any class of common stock will not be paid or issued
unless paid or issued on all classes of our common stock, in which case they
will be paid or issued only in shares of that class; provided, however, that
stock dividends on, or stock splits of, our Class B Common Stock may also be
paid or issued in shares of our Class A Special Common Stock.
We do not intend to pay dividends on our common stock for the foreseeable
future.
Voting Rights
Except as required by law, holders of our Class A Special Common Stock are
not be entitled to vote. When holders of our Class A Special Common Stock are
entitled to vote by applicable law, each share of our Class A Special Common
Stock has the same number of votes as each share of our Class A Common Stock.
On all matters submitted for a vote of holders of all classes of our voting
stock, holders of our Class A Common Stock in the aggregate hold 66 2/3% of the
aggregate voting power of our capital stock as of completion of the AT&T Comcast
transaction.
Each share of our Class A Common Stock has the number of votes equal to a
quotient the numerator of which is the excess of (1) the Total Number of Votes
(as defined below in this paragraph) over (2) the sum of (A) the Total Number of
B Votes (as defined below in this paragraph) and (B) the Total Number of Other
Votes (as defined below in this paragraph) and the denominator of which is the
number of outstanding shares of our Class A Common Stock. "Total Number of
Votes" on any record date is equal to a quotient the numerator of which is the
Total Number of B Votes on such record date and the denominator of which is the
B Voting Percentage (as defined below in this paragraph) on such record date.
"Total Number of B Votes" on any record date is equal to the product of (1) 15
and (2) the number of outstanding shares of our Class B Common Stock on such
record date. "Total Number of Other Votes" on any record date means the
aggregate number of votes to which holders of all classes of our capital stock
other than holders of our Class A Common Stock and our Class B Common Stock are
entitled to cast on such record date in an election of directors. "B Voting
Percentage" on any record date means the portion (expressed as a percentage) of
the total number of votes to which all holders of our Class B Common Stock are
entitled to cast on such record date in an election of directors. Initially, the
B Voting Percentage will be 33 1/3%.
If the number of shares of our Class A Common Stock or our Class B Common
Stock outstanding is reduced for any reason (e.g., by repurchase or, in the case
of our Class B Common Stock only, conversion), the aggregate voting power of the
applicable class of our capital stock will be proportionately reduced. If
additional shares of our Class A Common Stock or our Class B Common Stock are
issued, the relative aggregate voting power of the two classes of our common
stock will change (based on the principle that each share of our Class B Common
Stock will be entitled to 15 times the vote of each share of our Class A Common
Stock) to the extent such issuance is disproportionate as between the relative
number of shares of the two classes outstanding prior to the issuance, but the
combined aggregate voting power of the two classes of stock will remain constant
at approximately 38 47/100% (except to the extent there has been a reduction in
the aggregate voting power of either class of stock as described in the
preceding sentence).
Subject to the next sentence, on all matters submitted for a vote of
holders of one or more classes of our voting stock, holders of our Class B
Common Stock in the aggregate will hold 33 1/3% of the aggregate voting power
of our capital stock, regardless of the number of shares of our Class A Common
Stock or any other class of our capital stock outstanding at any time. If the
number of shares of our Class B Common Stock outstanding is reduced for any
reason (e.g., by repurchase or conversion), the aggregate voting power of our
Class B Common Stock will be proportionately reduced.
Each share of our Class B Common Stock has 15 votes.
34
Approval Rights
Except as required by law, holders of Class A Special Common Stock and
Class A Common Stock have no specific approval rights over any corporate
actions.
Holders of our Class B Common Stock have an approval right over (1) any
merger of us with another company or any other transaction, in each case that
requires our shareholders' approval under applicable law, or any other
transaction that would result in any person or group owning shares representing
in excess of 10% of the aggregate voting power of the resulting or surviving
corporation, or any issuance of securities (other than pursuant to director or
officer stock option or purchase plans) requiring our shareholders' approval
under the rules and regulations of any stock exchange or quotation system; (2)
any issuance of our Class B Common Stock or any securities exercisable or
exchangeable for or convertible into our Class B Common Stock; and (3) charter
or bylaw amendments (such as a charter amendment to opt in to any of the
Pennsylvania antitakeover statutes) and other actions (such as the adoption,
amendment or redemption of a shareholder rights plan) that limit the rights of
holders of our Class B Common Stock or any subsequent transferee of our Class B
Common Stock to transfer, vote or otherwise exercise rights with respect to our
capital stock.
Principal Shareholder
Brian L. Roberts, our CEO and President, through his control of BRCC
Holdings LLC and certain trusts, which own all outstanding shares of our Class B
Common Stock, holds a nondilutable 33 1/3% of the combined voting power of our
stock and also has separate approval rights over certain material transactions
involving us, as described above under "--Approval Rights." The Class B Common
Stock is convertible on a share-for-share basis into Class A Common Stock or
Class A Special Common Stock. As of December 13, 2002, if BRCC Holdings LLC, the
trusts and Mr. Roberts were to convert the Class B Common Stock which they are
deemed to beneficially own into Class A Common Stock, Mr. Roberts would
beneficially own 9,445,731 shares of Class A Common Stock, which is
approximately 0.7% of the Class A Common Stock that would be outstanding after
the conversion.
Conversion of Class B Common Stock
The Class B Common Stock is convertible share for share into either the
Class A Common Stock or the Class A Special Common Stock.
Preference on Liquidation
In the event of our liquidation, dissolution or winding up, either
voluntary or involuntary, the holders of Class A Special Common Stock, Class A
Common Stock and Class B Common Stock are entitled to receive, subject to any
liquidation preference of any preferred stock then outstanding, our remaining
assets, if any, in proportion to the number of shares held by them without
regard to class.
Mergers, Consolidations, Etc.
Our charter provides that if in a transaction such as a merger,
consolidation, share exchange or recapitalization holders of each class of our
common stock outstanding on completion of the AT&T Comcast transaction do not
receive the same consideration for each of their shares of our common stock
(i.e., the same amount of cash or the same number of shares of each class of
stock issued in the transaction in proportion to the number of shares of our
common stock held by them, respectively, without regard to class), holders of
each such class of our common stock will receive "mirror" securities (i.e.,
shares of a class of stock having substantially equivalent rights as the
applicable class of our common stock).
Miscellaneous
The holders of Class A Special Common Stock, Class A Common Stock and Class
B Common Stock do not have any preemptive rights. All shares of Class A Special
Common Stock, Class A Common Stock and Class B Common Stock presently
outstanding are, and all shares of the Class A Special Common Stock and Class A
35
Common Stock offered hereby, or issuable upon conversion, exchange or exercise
of securities offered hereby, will, when issued, be, fully paid and
non-assessable. We have been advised that the Class A Special Common Stock and
Class A Common Stock are exempt from existing Pennsylvania personal property
tax.
The transfer agent and registrar for our Class A Special Common Stock and
Class A Common Stock is Equiserve, 525 Washington Blvd., Jersey City, New Jersey
07310. Their telephone number is (888) 883-8903.
DESCRIPTION OF SHAREHOLDER RIGHTS PLAN
The following description of the material terms of a rights agreement with
respect to a shareholder rights plan which we entered into in connection with
the completion of the AT&T Comcast transaction is qualified by reference to the
terms of the rights agreement, which is included as an exhibit to the
registration statement of which this prospectus is a part.
The Rights. Pursuant to the rights agreement, our board declared on
November 18, 2002 a dividend of one preferred stock purchase right (the
"Rights") for each outstanding share of our Class A Common Stock, Class A
Special Common Stock, and Class B Common Stock payable to holders of record at
3:40 p.m., New York City time, on November 18, 2002.
After giving effect to the closing of AT&T Comcast transaction on November
18, 2002, (i) there were outstanding approximately 1.355 billion shares of Class
A Common Stock, 9.4 million shares of Class B Common Stock and 930.6 million
shares of Class A Special Common Stock and (ii) there was reserved for issuance
under the Company's stock option plans 95.8 million shares of Class A Common
Stock and 66.2 million shares of Class A Special Common Stock. Each outstanding
share of Common Stock at 3:40 p.m., New York City time, on the record date will
receive one Right. Shares of Common Stock issued after the record date and prior
to the Distribution Date will be issued with a Right attached so that all shares
of Common Stock outstanding prior to the Distribution Date will have Rights
attached. 2.5 million shares of Preferred Stock have been reserved for issuance
upon exercise of the Rights.
Rights holders have no rights as a shareholder of the Company, including
the right to vote or to receive dividends.
The rights agreement includes antidilution provisions designed to prevent
efforts to diminish the effectiveness of the Rights.
The transferability and exercisability of the Rights will depend on whether
a "Distribution Date" has occurred. A Distribution Date generally means the
earlier of (1) the close of business on the tenth day after a public
announcement that any person or group has become an "Acquiring Person" and (2)
the close of business on the tenth business day after the date of the
commencement of a tender or exchange offer by any person that could result in
such person becoming an Acquiring Person. An Acquiring Person generally means
any person or group (other than any holder of our Class B common stock or any of
such holder's affiliates) who becomes the beneficial owner of our voting capital
stock that represents 10% or more of the total number of votes that holders of
our capital stock are entitled to cast with respect to any matter presented for
a shareholder vote.
Transferability. Prior to the Distribution Date, (1) the Rights will be
evidenced by the certificates of the relevant underlying common stock and the
registered holders of the common stock shall be deemed the registered holders of
the associated Rights and (2) the Rights will be transferable only in connection
with transfers of shares of the underlying common stock. After the Distribution
Date, the rights agent will mail separate certificates evidencing the Rights to
each holder of the relevant underlying common stock as of the close of business
on the Distribution Date. Thereafter, the Rights will be transferable separately
from the common stock.
Exercisability. The Rights will not be exercisable prior to the
Distribution Date. After the Distribution Date, but prior to the occurrence of
an event described below under "--'Flip In' Feature" or "--'Flip Over' Feature,"
each
36
Right will be exercisable to purchase for $125 one one-thousandth of a share of
our Series A Participating Cumulative Preferred Stock.
"Flip In" Feature. If any person becomes an Acquiring Person, each holder
of a Right, except for the Acquiring Person or certain affiliated persons, will
have the right to acquire, instead of one one-thousandth of a share of our
Series A Participating Cumulative Preferred Stock, a number of shares of our
Class A common stock, in each case having a market value equal to twice the
exercise price of the Right. For example, if an initial purchase price of $125
were in effect on the date that the flip in feature of the Rights were
exercised, any holder of a Right, except for the person that has become an
Acquiring Person or certain affiliated persons, could exercise his or her Right
by paying to us $125 in order to receive shares of our Class A common stock
having a value equal to $250.
"Exchange" Feature. At any time after a person becomes an Acquiring Person
(but before any person becomes the beneficial owner of our voting capital stock
representing 50% or more of the total number of votes which holders of our
capital stock are entitled to cast with respect to any matter presented for a
shareholder vote), our Board may exchange all or some of the Rights, except for
those held by any Acquiring Person or certain affiliated persons, for our Class
A common stock at an exchange ratio of one share of our Class A common stock for
each Right. Use of this exchange feature means that eligible Rights holders
would not have to pay cash before receiving shares of our Class A common stock.
"Flip Over" Feature. If, after a person becomes an Acquiring Person, (1) we
are involved in a merger or other business combination in which we are not the
surviving corporation or any of our common stock is exchanged for other
securities or assets or (2) we and/or one or more of our subsidiaries sell or
transfer assets or earning power aggregating 50% or more of the assets or
earning power of us and/or our subsidiaries, then each Right will entitle the
holder, except for any Acquiring Person or certain affiliated persons, to
purchase a number of shares of common stock of the other party to the
transaction having a value equal to twice the exercise price of the Right.
Redemption of Rights. Our Board may redeem all of the Rights at a price of
$0.001 per Right at any time prior to the time that any person becomes an
Acquiring Person. The right to exercise will terminate upon redemption, and at
that time, holders of the Rights will have the right to receive only the
redemption price for each Right they hold.
Amendment of Rights. For so long as the Rights are redeemable, the rights
agreement may be amended in any respect. At any time when the Rights are no
longer redeemable, the rights agreement may be amended in any respect that does
not adversely affect Rights holders (other than any Acquiring Person and certain
affiliated persons), cause the rights agreement to become amendable except as
set forth in this sentence or cause the Rights again to become redeemable.
Expiration of Rights. If not previously exercised or redeemed, the Rights
will expire on November 18, 2012, unless earlier exchanged.
Anti-Takeover Effects. The Rights have certain anti-takeover effects. The
Rights may cause substantial dilution to a person that attempts to acquire us
without a condition to such an offer that a substantial number of the Rights be
acquired or that the Rights be redeemed or declared invalid. The Rights should
not interfere with any merger or other business combination approved by our
Board since the Rights may be redeemed by us as described above.
Taxation. While the dividend of the Rights will not be taxable to
stockholders or to us, stockholders or we may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable as set
forth above.
Series A Preferred Stock. In connection with the creation of the Rights,
our Board authorized the issuance of shares of our preferred stock designated as
our Series A Participating Cumulative Preferred Stock. We will design the
dividend, liquidation, voting and redemption features of our Series A
Participating Cumulative Preferred Stock so that the value of one-thousandth of
a share of our Series A Participating Cumulative Preferred Stock approximates
the value of one share of our Class A common stock. Shares of our Series A
Participating Cumulative
37
Preferred Stock will be purchasable only after the Rights have become
exercisable. The rights of our Series A Participating Cumulative Preferred Stock
as to dividends, liquidation and voting, and in the event of mergers or
consolidations, are protected by customary antidilution provisions.
DESCRIPTION OF AT&T COMCAST TRANSACTION
The following summary of our continuing obligations under the terms of the
merger agreement for the AT&T Comcast transaction is qualified by reference to
the merger agreement, as amended, which is included as an exhibit to the
registration statement of which this prospectus is a part.
The Merger Agreement
Governance Arrangements.
Our Board of Directors. Our Board has twelve members, five of whom were
designated at the time of the AT&T Comcast transaction by Comcast Holdings from
the then-existing Comcast Holdings Board, five of whom were designated by AT&T
from the then-existing AT&T Board and two of whom were independent persons
jointly designated by Comcast Holdings and AT&T. At all times, our Board will
consist of a majority of independent persons. Except for pre-approved designees,
the individuals designated by each of Comcast Holdings and AT&T were mutually
agreed upon by Comcast Holdings and AT&T. Ralph J. Roberts, Brian L. Roberts,
Sheldon M. Bonovitz, Julian A. Brodsky and Decker Anstrom were the pre-approved
Comcast Holdings director designees and C. Michael Armstrong was a pre-approved
AT&T director designee. All of the initial director designees will hold office
until the 2004 annual meeting of our shareholders, which will be held in April
2004. After this initial term, our entire Board will be elected annually. Brian
L. Roberts, through his control of BRCC Holdings LLC, holds a 33 1/3%
nondilutable voting interest in our stock.
Management. Under the merger agreement, C. Michael Armstrong, AT&T's
Chairman of the Board, will be our Chairman of the Board until the 2005 annual
meeting of our shareholders and will serve as non-executive Chairman of the
Board from April 1, 2004 until the 2005 annual meeting of our shareholders.
Thereafter, Brian L. Roberts will be the Chairman of the Board. Removal of the
Chairman of the Board will require the vote of at least 75% of the entire Board
until the earlier to occur of (1) the date on which neither C. Michael Armstrong
nor Brian L. Roberts is Chairman of the Board and (2) the sixth anniversary of
the 2004 annual meeting of our shareholders.
Upon completion of the AT&T Comcast transaction, Brian L. Roberts, Comcast
Holdings' President, became our CEO. Brian L. Roberts will also be President for
as long as he is the CEO. Removal of the CEO requires the vote of at least 75%
of our entire Board until the earlier of the date when Brian L. Roberts is not
the CEO and the sixth anniversary of the 2004 annual meeting of shareholders.
We will also have an Office of the Chairman comprised of the Chairman of
the Board and the CEO until the earlier to occur of (1) the 2005 annual meeting
of our shareholders and (2) the date on which C. Michael Armstrong ceases to be
the Chairman of the Board. The Office of the Chairman will be our principal
executive deliberative body with responsibility for corporate strategy, policy
and direction, governmental affairs and other significant matters.
Our initial senior officers have been designated by Brian L. Roberts in
consultation with C. Michael Armstrong.
Our charter provisions that implement the foregoing governance arrangements
may not be amended or changed except with the approval of at least 75% of our
entire Board until the earlier to occur of (1) the date on which Brian L.
Roberts is no longer serving as Chairman of the Board or CEO and (2) the sixth
anniversary of the 2004 annual meeting of our shareholders.
38
BRCC Holdings LLC hold shares of our Class B common stock constituting 33
1/3% of the combined voting power of our common stock. Brian L. Roberts has sole
voting power over membership interests representing a majority of the voting
power of all BRCC Holdings LLC equity.
Employee Benefits Matters; Indemnification and Insurance.
In the merger agreement, we agreed to honor the terms of all Comcast Cable
Communications Holdings' employee benefit plans and arrangements and to pay and
provide the benefits required thereunder, recognizing that the AT&T Comcast
transaction is a change in control under the plans, and to provide, until
December 31, 2003, to employees of Comcast Cable Communications Holdings and its
subsidiaries (other than those subject to collective bargaining obligations or
agreements) aggregate employee benefits and compensation that are substantially
comparable in the aggregate to those provided by Comcast Cable Communications
Holdings and its subsidiaries as of the completion of the AT&T Comcast
transaction, other than benefits provided under severance or separation plans of
Comcast Cable Communications Holdings or its subsidiaries. Until December 31,
2003, we have agreed to continue certain severance plans of Comcast Cable
Communications Holdings and its subsidiaries without adverse change, including
those that provide certain enhanced benefits to AT&T executive officers who
became employees of Comcast Cable Communications Holdings prior to consummation
of the AT&T Comcast transaction. Based on currently available information, if
all such executive officers were terminated without cause immediately following
completion of the AT&T Comcast transaction, they would receive severance
payments equal in the aggregate to approximately $44.7 million.
Obligations Relating to Comcast Cable Communications Holdings' TOPrS Securities.
We have agreed, on the earliest date on which the Comcast Cable
Communications Holdings debt known by the acronym TOPrS as to which AT&T has
guaranteed certain obligations may be redeemed, to either redeem such series of
TOPrS, cause AT&T to be released from any such guarantee or post a letter of
credit in respect of such debt. As of the date of this filing, approximately
$500 million of outstanding TOPrS remains subject to this obligation.
The Separation and Distribution Agreement
The following summary of the separation and distribution agreement, as
amended, is qualified in its entirety by reference to the complete text of the
agreement which is incorporated by reference in this prospectus.
The Separation.
Assignment. AT&T assigned and transferred to Comcast Cable Communications
Holdings all of AT&T's and its subsidiaries' right, title and interest in all of
the assets of AT&T's broadband business which are not already held by Comcast
Cable Communications Holdings or a Comcast Cable Communications Holdings
subsidiary. The assets comprising AT&T's broadband business are generally
determined in the following manner:
o assets reflected in the AT&T Broadband Group balance sheet dated as of
December 31, 2000 are assets of AT&T's broadband business, except as
described below;
o assets reflected in the AT&T Communications balance sheet dated as of
December 31, 2000 are assets of AT&T's communications business, except
as described below;
o assets acquired after December 31, 2000 by AT&T or any of its
subsidiaries utilizing assets of AT&T's broadband business are assets
of AT&T's broadband business, except as described below;
o assets acquired after December 31, 2000 by AT&T or any of its
subsidiaries utilizing assets of AT&T's communications business are
assets of AT&T's communications business, except as described below;
o certain assets are specifically assigned to AT&T's broadband business
regardless of whether or not they are reflected in the AT&T Broadband
Group balance sheet dated as of December 31, 2000;
o certain assets are specifically assigned to AT&T's communications
business regardless of whether or not they are reflected in the AT&T
Communications balance sheet dated as of December 31, 2000; and
39
o assets that are not reflected in the AT&T Broadband Group balance sheet
or the AT&T Communications balance sheet, in each case dated as of
December 31, 2000, or specifically assigned to AT&T's broadband
business or AT&T's communications business are assigned to the business
to which they primarily relate.
Assumption. At the same time as the assignment, Comcast Cable
Communications Holdings assumed all of the liabilities of AT&T's broadband
business that were not already liabilities of Comcast Cable Communications
Holdings or a Comcast Cable Communications Holdings subsidiary. The liabilities
of AT&T's broadband business were generally determined in the following manner:
o liabilities reflected in the AT&T Broadband Group balance sheet dated
as of December 31, 2000 are liabilities of AT&T's broadband business,
except as described below;
o liabilities reflected in the AT&T Communications balance sheet dated as
of December 31, 2000 are liabilities of AT&T's communications business,
except as described below;
o liabilities incurred after December 31, 2000 by entities transferred
as part of AT&T's broadband business are liabilities of AT&T's
broadband business, except as described below;
o liabilities incurred after December 31, 2000 by entities not
transferred as part of broadband business are liabilities of AT&T's
communications business, except as described below;
o certain liabilities are specifically assigned to AT&T's broadband
business regardless of whether or not they are reflected in the AT&T
Broadband Group balance sheet dated as of December 31, 2000;
o certain liabilities are specifically assigned to AT&T's communications
business regardless of whether or not they are reflected in the AT&T
Communications balance sheet dated as of December 31, 2000;
o certain liabilities such as liabilities arising out of the AT&T Comcast
transaction or involving At Home or AT&T Wireless (to the extent AT&T
is not indemnified by AT&T Wireless for such liabilities) are divided
evenly between AT&T's broadband business and AT&T's communications
business regardless of whether or not they are reflected in the AT&T
Broadband Group balance sheet or the AT&T Communications balance sheet,
in each case dated as of December 31, 2000; and
o liabilities that are not reflected in the AT&T Broadband Group balance
sheet or the AT&T Communications balance sheet, in each case dated as
of December 31, 2000, or specifically assigned to AT&T's broadband
business or AT&T's communications business are assigned to the business
to which they primarily relate.
The separation occurred on November 18, 2002, immediately prior to the
mergers.
Repayment of Intracompany Debt.
In connection with the closing of the AT&T Comcast transaction, Comcast
Cable Communications Holdings repaid all intracompany debt owed by AT&T's
broadband business to AT&T's communications business. Comcast Cable
Communications Holdings effected this repayment by making a cash payment to AT&T
in an amount equal to $5.85 billion and by issuing approximately $3.50 billion
in debt to retire existing AT&T debt. The cash payment referred to in the
preceding sentence reflected certain adjustments and was made with the proceeds
of (i) a borrowing by Comcast Cable Communications Holdings of $4 billion under
a bridge credit agreement dated April 26, 2002 among Comcast Cable
Communications Holdings, us, the lenders party thereto and JPMorgan Chase Bank,
as administrative agent, Citibank N.A., as syndication agent, and Bank of
America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley Senior Funding, Inc., as co-documentation agents, and (ii) a borrowing
by Comcast Cable Communications Holdings of $2.5 billion under a credit
agreement dated April 26, 2002 among Comcast Cable Communications Holdings, us,
the lenders party thereto and JPMorgan Chase Bank, as administrative agent,
swingline lender and issuing lender, Citibank N.A., as syndication agent, and
Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as co-documentation agents, together
referred to as the New Credit Facility in this prospectus. The retirement of
existing AT&T debt by Comcast Cable Communications Holdings referred to above
resulted from a recently completed debt exchange offer pursuant to which Comcast
Cable Communications Holdings issued debt guaranteed by us and the cable
guarantors in an aggregate principal amount of approximately $3.50 billion
consisting of approximately $2.43 billion of 8.375% Notes Due 2013 and
approximately $1.07 billion of 9.455% Notes Due 2022.
40
Post-Spin-Off Transactions.
Our ability and the ability of Comcast Cable Communications Holdings to
engage in specified acquisitions, redeem stock, issue equity securities or take
any other action or actions that in the aggregate would be reasonably likely to
have the effect of causing or permitting one or more persons to acquire directly
or indirectly stock representing a 50% or greater interest, within the meaning
of Section 355(e) of the Code, in Comcast Cable Communications Holdings or
otherwise jeopardize the non-recognition of taxable gain or loss for U.S.
federal income tax purposes to AT&T, AT&T affiliates and AT&T shareholders in
connection with the separation and the Comcast Cable Communications Holdings
spin-off may be limited until December 18, 2004.
Disposition of Time Warner Entertainment Interest.
Sharing of Proceeds. The separation and distribution agreement provides
that upon any disposition of all or any portion of its interest in TWE after
the signing of the merger agreement, Comcast Cable Communications Holdings will
pay AT&T 50% of the proceeds received from such disposition in excess of the
threshold amount described in the next sentence reduced by taxes on 50% of such
excess. The threshold amount is equal to the balance, plus 7% simple interest
per annum on the balance, of $10.2 billion reduced by the aggregate proceeds of
any previous dispositions of any portion of the TWE interest. If the TWE
interest has not been fully disposed of within 54 months of the completion of
the AT&T Comcast transaction, the remaining TWE interest will be appraised at
fair market value. To the extent that the amount of such appraisal exceeds the
threshold amount specified above, Comcast Cable Communications Holdings has
agreed to pay AT&T 50% of such excess, on a tax-adjusted basis.
Restructuring Agreement. On August 21, 2002, AT&T and Comcast Holdings
announced that they had entered into an agreement with AOL Time Warner providing
for the restructuring of TWE. The restructuring agreement was intended to
provide for a more orderly and timely disposition of AT&T Broadband Group's
entire stake in TWE than would likely be available under the registration rights
provisions of the TWE partnership agreement, which AT&T Broadband Group had been
pursuing. Upon consummation of the AT&T Comcast transaction, we assumed all of
AT&T's interest in TWE and in the restructuring agreement.
Under the restructuring agreement, which is expected to close in the first
quarter of 2003, for its 27.64% interest in TWE, Comcast Cable Communications
Holdings will receive $1.5 billion in common stock of AOL Time Warner Inc.
(valued at the time of the closing and subject to certain limitations) and an
effective 21% equity interest in all of AOL Time Warner's cable properties,
including those already in TWE, and Comcast Cable Communications Holdings will
also receive $2.1 billion in cash. As part of the restructuring, TWE will
distribute to AOL Time Warner all of TWE's major content assets, which include
Home Box Office (HBO), Warner Bros., and stakes in The WB Network, Comedy
Central and Court TV. Time Warner Cable, which will own substantially all of AOL
Time Warner's cable interests, is expected to conduct an initial public offering
of common stock following the restructuring. Under the restructuring agreement,
Comcast Cable Communications Holdings has registration rights enabling it to
dispose of its shares in Time Warner Cable and in AOL Time Warner. In connection
with the transactions, Comcast Holdings and Comcast Cable Communications
Holdings will also enter into a three-year non-exclusive agreement with AOL Time
Warner under which AOL High-Speed Broadband service would be made available on
certain of our cable systems which pass approximately 10 million homes.
On November 13, 2002, the FCC gave conditional approval to the transfer of
certain FCC licenses required to complete the AT&T Comcast transaction. The
Memorandum Opinion and Order issued by the FCC ordered AT&T and Comcast Holdings
to place Comcast Cable Communications Holdings' interest in TWE into irrevocable
trust prior to completion of the transaction and to fully divest the TWE
interest within five-and-a-half years after completion of the transaction.
During the divestiture period, the divestiture order prohibits us from any
involvement in the video programming activities of TWE. Copies of the trust
agreements pursuant to which Comcast Cable Communications Holdings' TWE interest
will be placed into irrevocable trust are attached as exhibits to our Current
Report on Form 8-K filed on November 18, 2002 incorporated by reference herein.
41
AT&T acquired its stake in TWE as part of its June 2000 acquisition of the
MediaOne Group. In February of 2001, AT&T requested that TWE convert from a
limited partnership into a corporation and create equity securities for
registration with the Securities and Exchange Commission. On July 30, 2002, AT&T
and TWE agreed to suspend the registration process to explore alternative
approaches that led to the transactions contemplated by the restructuring
agreement. In connection with the Comcast Cable Communications Holdings
spin-off, all of AT&T Broadband Group's interests and rights with respect to TWE
were transferred to Comcast Cable Communications Holdings subsidiaries, and
subsequently placed in trust for orderly disposition. The TWE restructuring is
subject to receipt of certain regulatory approvals and other closing conditions,
certain of which are outside our control. There can be no assurance that the
transactions contemplated by the TWE restructuring agreement will be
consummated. If the restructuring agreement is terminated without the
restructuring being consummated, the parties will return to the registration
rights process under the TWE partnership agreement.
Mutual Release; Indemnification.
Mutual Release of Pre-Closing Claims. AT&T and Comcast Cable Communications
Holdings have each released the other from any and all claims that it may have
against the other party arising from any acts or events occurring or failing to
occur prior to the completion of the Comcast Cable Communications Holdings
spin-off, subject to certain exceptions specified in the separation and
distribution agreement.
Indemnification by AT&T. AT&T has indemnified Comcast Cable Communications
Holdings from any and all liabilities relating to, arising out of or resulting
from any of the following:
o the failure of AT&T or any of its subsidiaries or any other person to
pay any liabilities, or perform under any contracts, of AT&T's
communications business;
o the assets or contracts of AT&T's communications business; and
o any breach of the separation and distribution agreement or any of the
ancillary agreements by AT&T.
Indemnification by Comcast Cable Communications Holdings. Comcast Cable
Communications Holdings has indemnified AT&T from any and all liabilities
relating to, arising out of or resulting from any of the following:
o the failure of Comcast Cable Communications Holdings or any of its
subsidiaries or any other person to pay any liabilities, or perform
under any contracts, of AT&T's broadband business;
o the assets or contracts of AT&T's broadband business; and
o any breach of the separation and distribution agreement or any of the
ancillary agreements by Comcast Cable Communications Holdings;
Tax Indemnification. Subject to the exceptions described below, Comcast
Cable Communications Holdings has indemnified AT&T against 50% of the taxes and
related costs assessed against AT&T resulting from the disqualification of the
separation and the Comcast Cable Communications Holdings spin-off as tax-free
transactions under Section 355 of the Code.
If such disqualification results from a transaction involving the stock or
assets of Comcast Cable Communications Holdings occurring after the Comcast
Cable Communications Holdings spin-off, from Comcast Cable Communications
Holdings' failure to remain actively engaged in a trade or business or from the
failure of any representation made with respect to Comcast Cable Communications
Holdings in connection with certain tax opinions and Internal Revenue Service
rulings, then Comcast Cable Communications Holdings will be required to
indemnify AT&T against all such taxes and related costs.
If such disqualification results from a transaction involving the stock or
assets of AT&T occurring after the Comcast Cable Communications Holdings
spin-off, from AT&T's failure to remain actively engaged in a trade or business
or from the failure of any representation made with respect to AT&T in
connection with certain tax
42
opinions and Internal Revenue Service rulings, then Comcast Cable Communications
Holdings is not required to indemnify AT&T against any such taxes or related
costs.
Comcast Cable Communications Holdings has also indemnified AT&T against 50%
of the taxes and related costs resulting from the Liberty Media or AT&T Wireless
spin-offs failing to be tax-free, unless either spin-off becomes taxable as a
result of an action taken by AT&T or Comcast Cable Communications Holdings, in
which case the acting party bears full responsibility for any resulting AT&T
liabilities. Comcast Cable Communications Holdings' obligation described in the
preceding sentence is reduced by Comcast Cable Communications Holdings' share of
any indemnification that AT&T receives from Liberty Media or AT&T Wireless as a
result of the relevant spin-off failing to qualify as tax-free.
Other Indemnification. Subject to the next sentence, AT&T and Comcast Cable
Communications Holdings have indemnified each other for 50% of any liability
resulting from any untrue statement or omission of a material fact in any
registration statement relating to the Comcast Cable Communications Holdings
spin-off or in any other filing made by AT&T or Comcast Cable Communications
Holdings with the Securities and Exchange Commission in connection with the
separation, the Comcast Cable Communications Holdings spin-off, the Comcast
Cable Communications Holdings merger or any related agreements. AT&T also
indemnified us and Comcast Cable Communications Holdings for any liability
resulting from any untrue statement or omission of a material fact in any
registration statement relating to the Consumer Services charter amendment
proposal, any other proposal related to the creation of AT&T Consumer Services
Group tracking stock, the reverse stock split proposal or any AT&T 2002 annual
meeting proposal other than the AT&T transaction proposal or the AT&T Comcast
charter proposal.
The Tax Sharing Agreement
The following summary of the tax sharing agreement is qualified by
reference to the tax sharing agreement, which is included as an exhibit to the
registration statement of which this prospectus is a part.
In General. Comcast Cable Communications Holdings' tax liability, as
described below, for the period beginning January 1, 2002 through November 18,
2002 will be included in the consolidated federal income tax return of AT&T for
2002 and for the period beginning November 19, 2002 through December 31, 2002
will be included in the consolidated federal income tax return of Comcast. The
tax sharing agreement provides for tax sharing payments between Comcast Cable
Communications Holdings and AT&T for periods prior to the Comcast Cable
Communications Holdings spin-off, based on the taxes or tax benefits of
hypothetical affiliated groups consisting of the businesses, assets and
liabilities that make up Comcast Cable Communications Holdings, on the one hand,
and all other businesses, assets and liabilities of AT&T, on the other hand.
Each group is generally responsible for the taxes attributable to its lines of
business and entities comprising its group.
AT&T and Comcast Cable Communications Holdings have agreed that the
consolidated tax liability (before credits) of the hypothetical group will be
allocated to each group based on such group's contribution to consolidated
taxable income. This allocation will take into account losses, deductions and
other tax attributes that are utilized by the hypothetical group even if these
attributes could not be utilized on a stand-alone basis. Tax sharing payments in
respect of the consolidated tax liability of the hypothetical group, after
allocation of consolidated tax credits, will be made between AT&T and Comcast
Cable Communications Holdings consistent with the allocations under the tax
sharing agreement. As between AT&T and Comcast Cable Communications Holdings,
certain tax items are specially allocated to the AT&T group and Comcast Cable
Communications Holdings group under the tax sharing agreement.
Comcast Cable Communications Holdings Spin-off. AT&T and Comcast Cable
Communications Holdings have agreed that taxes related to intercompany
transactions that are triggered by the Comcast Cable Communications Holdings
spin-off will be generally allocated to Comcast Cable Communications Holdings.
Non-Income Tax Liabilities. AT&T and Comcast Cable Communications Holdings
have agreed that joint non-income tax liabilities will generally be allocated
between AT&T and Comcast Cable Communications Holdings based on the amount of
such taxes attributable to each group's line of business. If the line of
business with respect to
43
which the liability is appropriately associated cannot be readily determined,
the tax liability will be allocated to the AT&T group.
Audit Adjustments. AT&T and Comcast Cable Communications Holdings have
agreed that taxes resulting from audit adjustments will generally be allocated
between the two groups based on line of business. In general, AT&T controls
audits and administrative matters related to pre-spin-off periods.
Post-Spin-off Tax Attributes. Generally, Comcast Cable Communications
Holdings may not carry back a loss, credit or other tax attribute from a
post-spin-off period to a pre-spin-off period, unless Comcast Cable
Communications Holdings obtains AT&T's consent (which, in the case of
significant net operating or capital loss carrybacks, may not be unreasonably
withheld) and then only to the extent permitted by applicable law.
The Ancillary Agreements
In addition to the other agreements described in this section, AT&T and
Comcast Cable Communications Holdings entered into various other commercial
agreements in connection with the AT&T Comcast transaction. A brief summary of
these agreements follows:
Network Service Agreements. AT&T and Comcast Cable Communications
Holdings entered into principal network service agreements as follows.
o Master Carrier Agreement. This agreement reflects the rates, terms and
conditions on which AT&T Business Services Group will provide voice,
data and Internet services to Comcast Cable Communications Holdings,
including both wholesale services (those used as a component in Comcast
Cable Communications Holdings' services to its customers) and
"administrative" services (for internal Comcast Cable Communications
Holdings usage). Pricing is market based, with provisions defining an
ongoing process to ensure that the prices remain competitive.
o First Amended and Restated Local Network Connectivity Services
Agreement. This agreement reflects the rates, terms and conditions on
which AT&T Business Services Group will provide certain local network
connectivity services to Comcast Cable Communications Holdings for use
in providing local telephone services to Comcast Cable Communications
Holdings' subscribers. This agreement consists of two parts:
o a capital lease from AT&T Business Services Group to Comcast Cable
Communications Holdings of certain network switching and transport
assets to be used exclusively by Comcast Cable Communications
Holdings for a term of up to ten years, commencing January 1, 2002
for initial assets leased under the agreement; and
o an operating agreement for the provision of local network
connectivity, management and operational services in support of
Comcast Cable Communications Holdings' local cable telephone
services, with a minimum term of five years commencing January 1,
2002.
o Master Facilities Agreement. This agreement permits AT&T or any of its
subsidiaries to use existing fiber facilities owned or leased by
Comcast Cable Communications Holdings or its controlled affiliates,
together with related services. In addition, Comcast Cable
Communications Holdings will construct and lease to AT&T new fiber
facilities in the areas served by Comcast Cable Communications
Holdings' cable systems for use in providing telecommunications
services. The term of the build-out period will expire on January 8,
2012. Subject to certain termination rights specified in this
agreement, the term of AT&T's right to use facilities leased under this
agreement will expire on January 8, 2028, renewable at AT&T's option
for successive 20-year terms in perpetuity.
o Interconnection and Intercarrier Compensation Term Sheet. This
agreement, which has a five-year initial term commencing January 1,
2002, specifies the terms of interconnection of the parties' networks,
and compensation for:
44
o the origination or termination of interexchange traffic for the
other party; and
o the exchange of local traffic between the parties' local
customers.
o High Speed Internet Services Binding Term Sheet. This agreement
reflects the rates, terms and conditions on which AT&T will provide
specified processes, procedures and services to support Comcast Cable
Communications Holdings in its provision of broadband Internet services
to Comcast Cable Communications Holdings subscribers. This agreement
has a four-year initial term commencing December 4, 2001.
o Intellectual Property Agreement. This agreement specifies the ownership
and license rights granted by each party to the other in specified
patents, software, copyrights and trade secrets. Among other rights
granted, the effect of this agreement is to allow Comcast Cable
Communications Holdings and AT&T to continue to have the same rights to
use the intellectual property that they had at the time of the
separation and Comcast Cable Communications Holdings spin-off.
o Corporate Name Agreement. AT&T and we entered into a corporate name
agreement immediately prior to the completion of the AT&T Comcast
transaction pursuant to which AT&T will grant to us the right to use
the term "AT&T" as part of our full corporate name, but prohibit any
use of "AT&T" as a trade name, trademark, or service mark, or in a
domain name other than specified domain names permitted for certain
purposes. Such grant of rights will be perpetual unless terminated as a
result of the Roberts family's voting power falling below 33% or
pursuant to any other terms of the agreement. On November 18, 2002, we
changed our name from AT&T Comcast Corporation to Comcast Corporation.
The QUIPS Exchange
Prior to the AT&T Comcast transaction, Microsoft (through a wholly owned
subsidiary) held $5 billion in aggregate liquidation preference amount of 5%
Convertible Quarterly Income Preferred Securities, referred to in this
prospectus by their acronym "QUIPS," of AT&T Finance Trust I, a Delaware
business trust. The QUIPS were convertible into $5 billion aggregate face amount
of 5% Junior Convertible Subordinated Debentures due 2029 of AT&T, which were in
turn convertible into AT&T common stock. In connection with the AT&T Comcast
transaction, Comcast Holdings and Microsoft entered into an exchange agreement
dated December 7, 2001 relating to the exchange of the QUIPS for a combination
of our voting and non-voting shares to be issued in the merger, and on December
19, 2001 we became a party to the exchange agreement by executing the instrument
of admission. On March 11, 2002, the parties amended the exchange agreement and
instrument of admission. The following summary of the exchange agreement and the
instrument of admission, in each case as amended, is qualified in its entirety
by reference to the complete texts of the exchange agreement and the instrument
of admission, in each case as amended, which are incorporated by reference and
attached as exhibits to the registration statement in which this prospectus is
included.
The Exchange. In the exchange agreement and instrument of admission, we
agreed to exchange the QUIPS for approximately 100.6 million shares of our Class
A Common Stock, and approximately 14.4 million shares of our non-voting Class A
Special Common Stock in the AT&T Comcast transaction. If Microsoft transfers
shares of our Class A Common Stock or its voting interest in us is diluted below
4.95%, subject to certain conditions, Microsoft will have the right to cause us
to exchange the shares of our non-voting Class A Special Common Stock received
in the AT&T Comcast transaction for shares of our voting Class A Common Stock
provided that its voting interest in us does not exceed 4.95% after the
exchange. Prior to six months after completion of the Microsoft transaction,
subject to certain exceptions, Microsoft has agreed that neither Microsoft nor
any of its wholly-owned subsidiaries will sell, or enter into any agreement,
arrangement or negotiations relating to the sale of, any of the shares of our
Class A Special Common Stock that it received in connection with the Microsoft
transaction. Comcast Holdings agreed to indemnify Microsoft against any claim by
Comcast Holdings, AT&T or any shareholder of Comcast Holdings, AT&T or us for
any loss arising as a result of the Comcast Cable Communications Holdings
spin-off or the mergers failing to be tax-free, except to the extent such a
failure results directly from a breach by Microsoft of
45
the lock-up agreement described above or of the failure of a related
representation and warranty made by Microsoft in the exchange agreement.
Internet Access. Until the fifth anniversary of the Microsoft transaction,
we have agreed that if we offer a high-speed Internet access agreement to any
third party, then we will be obligated to offer an agreement on
nondiscriminatory terms with respect to the same cable systems to Microsoft for
its ISP, The Microsoft Network. In connection with Comcast Holdings' and AT&T's
agreement with AOL Time Warner providing for the restructuring of TWE, Comcast
Holdings and Comcast Cable Communications will enter into a three-year
non-exclusive access agreement with AOL Time Warner. Because Comcast Holdings
has also entered into an access agreement with United Online and Comcast Cable
Communications Holdings has also entered into an access agreement with each of
Earthlink, Internet Central, Connected Data Systems, Galaxy Internet Services
and Connect Plus International, we will be required after the consummation of
the AT&T Comcast transaction, with respect to each such agreement with another
ISP, including the agreement to be entered into with AOL Time Warner, to offer
an access agreement to Microsoft on terms no less favorable than those provided
to the other ISP with respect to the specific cable systems covered under the
agreement with the other ISP.
Interactive Technology Agreement. In connection with the exchange
agreement, Microsoft and Comcast Cable entered into a letter of intent and are
currently negotiating a definitive agreement pursuant to which the parties will
conduct a trial during 2003 of an interactive television platform, including
set-top box middleware. If the trial results meet agreed technical standards,
the platform meets defined competitive requirements and a launch would meet
Comcast Cable's reasonable business objectives, Comcast Cable has agreed that it
will commercially launch the Microsoft platform to at least 25% of its newly
installed middleware customer base.
The Cross Guarantees
To simplify our capital structure and to insure that our traded debt
securities and those of Comcast Cable, Comcast Cable Communications Holdings,
Comcast Cable Holdings and Comcast MO Group will be treated equally, upon
completion of the AT&T Comcast transaction, we, Comcast Cable, Comcast Cable
Communications Holdings, Comcast Cable Holdings and Comcast MO Group each fully
and unconditionally guaranteed each other's traded debt securities.
Comcast Holdings did not become a guarantor, and its debt securities were
not guaranteed, because we believe that future investors will be interested in
"pure play" debt securities of our cable communications operations and not
Comcast Holdings' commerce and content assets, such as QVC, E! Entertainment and
Comcast Spectacor. Comcast MO of Delaware, Inc., formerly known as MediaOne of
Delaware, Inc., and one of AT&T's cable subsidiaries that was transferred to
Comcast Cable Communications Holdings in the AT&T Comcast transaction, which we
refer to in this prospectus as Continental, also did not become a guarantor, and
its debt securities were not guaranteed, because Continental's indentures
contain covenants that effectively prohibit Continental from guaranteeing its
affiliates' debt obligations. If these indentures were amended to permit
guarantees of affiliate debt obligations, Continental might become a guarantor
and its debt securities might be cross-guaranteed.
The following table presents as of September 30, 2002 for each of Comcast
Cable, Comcast Cable Holdings, Comcast MO Group and Continental, their pro forma
payment obligations for principal, excluding obligations of their subsidiaries
and excluding interest but including principal accreted under discount
obligations, under (a) debt securities that are subject, or in the case of
Continental, might be subject, to the cross guarantees, (b) other contractual
liabilities, including capital leases, none of which will be subject to the
cross-guarantees and (c) operating leases, none of which will be subject to the
cross guarantees. For purposes of the table, amounts set forth opposite
"guaranteed debt securities" only include amounts with respect to the person who
is the primary obligor and not with respect to amounts for which that person may
be secondarily liable as guarantor. The table presents for Comcast Cable
Communications Holdings the pro forma effect of its issuance in connection with
the AT&T Comcast transaction of approximately $3.50 billion in debt securities
to retire existing AT&T debt. The table also presents for us the pro forma
effect of our borrowings under the New Credit Facility in connection with the
closing of the AT&T Comcast transaction.
46
Payments Due by Period
--------------------------------------------------
Payment Remainder After 5
Contractual Obligation Total of 2002 1-2 Years 3-5 Years Years
- ------------------------------------------------- --------- ---------- ----------- --------- ----------
(In millions, unaudited)
Comcast:
New Credit Facility........................... $7,180.0 $ - $7,180.0 $ $-
Other liabilities, including capital leases... - - - - -
Operating leases.............................. - - - - -
--------- --------- ---------- -------- ---------
Total Comcast............................... 7,180.0 - 7,180.0 -
Comcast Cable:
Guaranteed debt securities.................... 7,821.7 - 315.8 2,887.6 4,618.3
Other liabilities, including capital leases... 6.8 1.1 2.8 0.5 2.4
Operating leases.............................. - - - - -
--------- --------- ---------- -------- ---------
Total Comcast Cable......................... 7,828.5 1.1 318.6 2,888.1 4,620.7
Comcast Cable Communications Holdings:
Guaranteed debt securities.................... 3,505.1 - - - 3,505.1
Other liabilities, including capital leases... - - - - -
Operating leases.............................. - - - - -
--------- --------- ---------- -------- ---------
Total Comcast Cable Communications Holdings.. 3,505.1 - - - 3,505.1
Comcast Cable Holdings:
Guaranteed debt securities.................... 5,883.9 30.0 1,748.7 1,165.5 2,939.7
Other liabilities, including capital leases... - - - - -
Operating leases.............................. 52.2 3.6 25.8 15.9 6.9
--------- --------- ---------- -------- ---------
Total Comcast Cable Holdings................ 5,936.1 33.6 1,774.5 1,181.4 2,946.6
--------- --------- ---------- -------- ---------
Comcast MO Group:
Guaranteed debt securities.................... 302.8 10.4 7.2 82.3 202.9
Other liabilities, including capital leases... - - - - -
Operating leases.............................. 4.3 0.5 3.8 - -
--------- --------- ---------- -------- ---------
Total Comcast MO Group...................... 307.1 10.9 11.0 82.3 202.9
Total............................................ $24,756.8 $45.6 $9,284.1 $4,151.8 $11,275.3
========= ========= ========== ======== =========
Continental:
Potentially guaranteed debt securities........ $1,800.0 $ - $100.0 $875.0 $825.0
Other liabilities, including capital leases... 3.8 0.7 3.1 - -
Operating leases.............................. 1.1 0.2 0.9 - -
--------- --------- ---------- -------- ---------
Total Continental........................... $1,804.9 $0.9 $104.0 $875.0 $825.0
========= ========= ========== ======== =========
47
PLAN OF DISTRIBUTION
We may sell the securities being offered hereby in four ways:
o directly to purchasers;
o through agents;
o through underwriters; and
o through dealers.
We may directly solicit offers to purchase securities, or we may designate
agents to solicit such offers. We will, in the prospectus supplement relating to
such offering, name any agent that could be viewed as an underwriter under the
Securities Act of 1933 and describe any commissions we or our trust subsidiaries
must pay. Any such agent will be acting on a best efforts basis for the period
of its appointment or, if indicated in the applicable prospectus supplement, on
a firm commitment basis. Agents, dealers and underwriters may be customers of,
engage in transactions with, or perform services for us in the ordinary course
of business.
If any underwriters are utilized in the sale of the securities in respect
of which this prospectus is delivered, we will enter into an underwriting
agreement with them at the time of sale to them, and we will set forth in the
prospectus supplement relating to such offering their names and the terms of our
agreement with them.
If a dealer is utilized in the sale of the securities in respect of which
the prospectus is delivered, we will sell such securities to the dealer, as
principal. The dealer may then resell such securities to the public at varying
prices to be determined by such dealer at the time of resale.
Remarketing firms, agents, underwriters and dealers may be entitled under
agreements which they may enter into with us to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act of
1933, and may be customers of, engage in transactions with or perform services
for us in the ordinary course of business.
In order to facilitate the offering of the securities, any underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the securities or any other securities the prices of which may be used to
determine payments on such securities. Specifically, any underwriters may
overallot in connection with the offering, creating a short position for their
own accounts. In addition, to cover overallotments or to stabilize the price of
the securities or of any such other securities, the underwriters may bid for,
and purchase, the securities or any such other securities in the open market.
Finally, in any offering of the securities through a syndicate of underwriters,
the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing the securities in the offering if the
syndicate repurchases previously distributed securities in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the securities
above independent market levels. Any such underwriters are not required to
engage in these activities, and may end any of these activities at any time.
Any underwriter, agent or dealer utilized in the initial offering of
securities will not confirm sales to accounts over which it exercises
discretionary authority without the prior specific written approval of its
customer.
LEGAL MATTERS
As to matters governed by Pennsylvania law, Arthur R. Block, Esquire,
Senior Vice President, General Counsel and Secretary of Comcast, and as to
matters governed by New York and Delaware law, Davis Polk & Wardwell, will pass
upon the validity of the securities on our behalf and on behalf of the cable
guarantors, although we may use
48
other counsel, including our employees, to do so. Unless otherwise indicated in
the accompanying prospectus supplement, Cahill Gordon & Reindel will represent
the underwriters.
EXPERTS
Comcast
The balance sheet of Comcast at December 31, 2001 in Comcast's Current
Report on Form 8-K/A dated November 18, 2002 filed on December 16, 2002 has
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
herein in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
Comcast Holdings
The consolidated financial statements and the related financial statement
schedule of Comcast Holdings incorporated in this prospectus by reference from
Comcast's Current Report on Form 8-K/A dated November 18, 2002 filed on December
16, 2002 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports (which report on the financial statements expresses an
unqualified opinion and includes an explanatory paragraph related to the
adoption of Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, effective January 1,
2001), which are incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
Comcast Cable
The financial statements and the related financial statement schedule of
Comcast Cable, an indirect wholly-owned subsidiary of Comcast, and subsidiaries
incorporated in this prospectus by reference from Comcast Cable's Annual Report
on Form 10-K for the year ended December 31, 2001 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their reports (which report on
the financial statements expresses an unqualified opinion and includes an
explanatory paragraph related to the adoption of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, effective January 1, 2001), which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
AT&T Broadband Group
The audited historical combined financial statements of AT&T Broadband
Group incorporated in this prospectus by reference to Comcast's Current Report
on Form 8-K/A dated November 18, 2002 filed on December 16, 2002, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
We, along with the cable guarantors, have filed this prospectus as part of
a combined registration statement on Form S-3 with the SEC. The registration
statement contains exhibits and other information that are not contained in this
prospectus. In particular, the registration statement includes as exhibits forms
of our underwriting agreements, copies of our senior indenture and subordinated
indenture, forms of our senior debt security and subordinated debt security, a
form of preferred security, a form of unit agreement, a form of purchase
contract agreement, a form of pledge agreement, a form of warrant agreement for
warrants sold separately, a form of warrant for warrants sold separately, a form
of warrant agreement for warrants sold attached to securities, a form of warrant
for warrants sold attached to securities, a form of deposit agreement and a form
of depositary share. Our descriptions in this prospectus of the provisions of
documents filed as an exhibit to the registration statement or otherwise filed
with the
49
SEC are only summaries of the documents' material terms. If you want a complete
description of the content of the documents, you should obtain the documents by
following the procedures described below.
Comcast Cable Communications Holdings, Comcast MO Group and Comcast Cable
Holdings do not currently file information with the SEC. We, and Comcast
Holdings as our predecessor, file annual, quarterly and special reports and
other information with the SEC. Although Comcast Cable, which currently files
annual, quarterly and special reports and other information with the SEC, and
the other cable guarantors would normally be required to file information with
the SEC on an ongoing basis, we expect that Comcast Cable and the cable
guarantors will be exempt from this filing obligation for as long as we continue
to file our information with the SEC. You may read and copy any document we,
Comcast Holdings or Comcast Cable file at the SEC's public reference room
located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings, including the complete registration statement and all of the exhibits
to it, and the SEC filings of Comcast Holdings and Comcast Cable are available
through the SEC's web site at http://www.sec.gov.
You should rely only on the information contained in this prospectus, in
the accompanying prospectus supplement and in material we, Comcast Holdings and
Comcast Cable file with the SEC and incorporate by reference herein. We have not
authorized anyone to provide you with information that is different. We are
offering to sell, and seeking offers to buy, the securities described in the
prospectus only where offers and sales are permitted. The information contained
in this prospectus, the prospectus supplement and our filings and the filings of
Comcast Holdings and Comcast Cable with the SEC is accurate only as of its date,
regardless of the time of delivery of this prospectus and the prospectus
supplement or of any sale of the securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you directly to those documents. The information incorporated by
reference is considered to be part of this prospectus. In addition, information
we file with the SEC in the future will automatically update and supersede
information contained in this prospectus and any accompanying prospectus
supplement.
This prospectus incorporates by reference the documents set forth below
that we, Comcast Holdings and Comcast Cable have previously filed with the SEC.
Comcast SEC Filings (File No. 333-82460)
o Current Report on Form 8-K filed on October 30, 2002 and Current Report
on Form 8-K/A dated November 18, 2002 filed on December 16, 2002.
Comcast Holdings SEC Filings (File No. 001-15471)
o Annual Report on Form 10-K (except for Item 8) for the year ended
December 31, 2001, filed on March 29, 2002.
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002,
filed on May 15, 2002, June 30, 2002, filed on August 14, 2002, and
September 30, 2002, filed on October 30, 2002.
o Current Reports on Form 8-K filed on May 3, 2002, July 10, 2002, August
1, 2002, September 26, 2002, October 4, 2002 and November 18, 2002.
Comcast Cable SEC Filings (File No. 333-30745)
o Annual Report on Form 10-K for the year ended December 31, 2001, filed
on March 29, 2002.
50
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002,
filed on May 15, 2002, June 30, 2002, filed on August 14, 2002, and
September 30, 2002, filed on November 13, 2002.
o Current Report on Form 8-K filed on November 18, 2002.
We also incorporate by reference into this prospectus additional documents
that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the securities we are
offering. Any statements contained in a previously filed document incorporated
by reference into this prospectus is deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement contained in this
prospectus, or in a subsequently filed document also incorporated by reference
herein, modifies or supersedes that statement.
We will provide free copies of any of those documents, if you write or
telephone us at: 1500 Market Street, Philadelphia, Pennsylvania 19102-2148,
(215) 665-1700.
51
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
All of the expenses in connection with the offering are as follows:
Securities and Exchange Commission registration fee............. $ 920,000
Legal fees and expenses......................................... 125,000
Printing and engraving fees..................................... 50,000
Accountants' fees and expenses.................................. 75,000
Miscellaneous................................................... 30,000
----------
Total.................................................. $1,200,000
----------
Item 15. Indemnification of Directors and Officers.
Comcast Corporation
Indemnification under Pennsylvania Law and Comcast Charter and Bylaws.
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the Pennsylvania
Business Corporation Law ("PBCL") contain provisions for mandatory and
discretionary indemnification of a corporation's directors, officers and other
personnel, and related matters.
Under Section 1741 of the PBCL, subject to certain limitations, a
corporation has the power to indemnify directors and officers under certain
prescribed circumstances against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with an action or proceeding, whether civil, criminal,
administrative or investigative (other than derivative actions), to which any
such officer or director is a party or is threatened to be made a party by
reason of such person being a representative of the corporation or serving at
the request of the corporation as a representative of another domestic or
foreign corporation for profit or not-for-profit, partnership, joint venture,
trust or other enterprise, so long as the director or officer acted in good
faith and in a manner reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding, such
officer or director had no reasonable cause to believe his/her conduct was
unlawful.
Section 1742 of the PBCL permits indemnification in derivative and
corporate actions if the appropriate standard of conduct is met, except in
respect of any claim, issue or matter as to which the person has been adjudged
to be liable to the corporation unless and only to the extent that the proper
court determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses that the court deems proper.
Under Section 1743 of the PBCL, indemnification is mandatory to the extent
that the officer or director has been successful on the merits or otherwise in
defense of any action or proceeding referred to in Section 1741 or 1742 of the
PBCL.
Section 1744 of the PBCL provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 of the PBCL shall be made by the
corporation only as authorized in the specific case upon a determination that
the representative met the applicable standard of conduct, and such
determination will be made by (i) the board of directors by a majority vote of a
quorum of directors not parties to the action or proceeding, (ii) if a quorum is
not obtainable, or if obtainable and a majority of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
shareholders.
Section 1745 of the PBCL provides that expenses (including attorneys' fees)
incurred by an officer, director, employee or agent in defending any action or
proceeding referred to in Subchapter D of Chapter 17 of the PBCL
II-1
may be paid by the corporation in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation. Except as otherwise provided in
the corporation's bylaws, advancement of expenses must be authorized by the
board of directors.
Section 1746 of the PBCL provides generally that the indemnification and
advancement of expenses provided by Subchapter D of Chapter 17 of the PBCL shall
not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding that office. In no event may indemnification be made in any case where
the act or failure to act giving rise to the claim for indemnification is
determined by a court to have constituted willful misconduct or recklessness.
Section 1747 of the PBCL grants a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any liability
incurred by him in his capacity as officer or director, whether or not the
corporation would have the power to indemnify him against that liability under
Subchapter D of Chapter 17 of the PBCL.
Sections 1748 and 1749 of the PBCL extend the indemnification and
advancement of expenses provisions contained in Subchapter D of Chapter 17 of
the PBCL to successor corporations in fundamental changes and to representatives
serving as fiduciaries of employee benefit plans.
Section 1750 of the PBCL provides that the indemnification and advancement
of expenses provided by, or granted pursuant to, Subchapter D of Chapter 17 of
the PBCL shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs and personal representatives of such
person.
Article Eleventh of the Comcast charter and Article VII of the Comcast
bylaws provide that no director of Comcast will be personally liable, as such,
for monetary damages (other than under criminal statutes and under laws imposing
such liability on directors or officers for the payment of taxes) unless such
person's conduct constitutes self-dealing, willful misconduct or recklessness.
Article Eleventh of the Comcast charter also extends such protection to
officers.
Article VII of the Comcast bylaws provides that each officer and director
of Comcast is indemnified and held harmless by Comcast for all actions taken by
him or her and for all failures to take action (regardless of the date of any
such action or failure to take action) to the fullest extent permitted by
Pennsylvania law against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, taxes, penalties and amounts paid
or to be paid in settlement) reasonably incurred or suffered by such officer or
director in connection with any threatened, pending or completed action, suit or
proceeding (including, without limitation, an action, suit or proceeding by or
in the right of Comcast), whether civil, criminal, administrative or
investigative.
The foregoing statements are subject to the detailed provisions of the PBCL
and to the applicable provisions of the Comcast charter and bylaws.
Merger Agreement Provision Relating to AT&T and Comcast Holdings Directors
and Officers
Comcast has agreed in the merger agreement to indemnify the present and
former officers and directors of AT&T, the AT&T subsidiaries, Comcast Cable
Communications Holdings, the Comcast Cable Communications Holdings subsidiaries,
Comcast Holdings and the Comcast Holdings subsidiaries, and each individual who
prior to the completion of the AT&T Comcast transaction becomes such an officer
or director, from their acts or omissions in those capacities occurring at or
prior to the completion of such transaction to the maximum extent permitted by
law; provided, however, no such indemnification will be required for officers or
directors acting in a capacity for AT&T and its subsidiaries other than in
connection with either AT&T's broadband business or the merger agreement and the
transactions contemplated by the merger agreement.
II-2
AT&T (and not Comcast Cable Communications Holdings) will indemnify and
hold harmless Comcast for 50% of any losses described in the preceding paragraph
arising out of acts or omissions of the AT&T officers and directors in
connection with the merger agreement and the transactions contemplated by the
merger agreement.
For six years after completion of the AT&T Comcast transaction, Comcast
will provide officers' and directors' liability insurance in respect of acts or
omissions occurring prior to completion of the transactions covering each
officer and director identified in the second preceding paragraph (for officers
and directors of AT&T and its subsidiaries, only for acts or omissions of such
person acting in connection with either AT&T's broadband business or the merger
agreement and the transactions contemplated by the merger agreement) currently
covered by the officers' and directors' liability insurance policy of AT&T or
Comcast Holdings, as the case may be, on terms no less favorable than those of
such policy in effect on December 19, 2001, except that Comcast will only be
obligated to pay up to 300% of the annual premium paid for such insurance by
either AT&T or Comcast Holdings as of December 19, 2001.
Comcast Cable Communications Holdings, Inc.
Comcast Cable Communications Holdings, Inc. is a corporation organized
under the laws of the State of Delaware. Subsection (a) of Section 145 of the
General Corporation Law of the State of Delaware empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification may be made in respect to any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
or suit was brought shall determine that despite the adjudication of liability
but in view of all the circumstances of the case such person is fairly and
reasonably entitled to indemnify for such expenses which the court shall deem
proper.
Section 145 further provides that to the extent a director, officer,
employee or agent of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) or (b) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification or advancement of expenses provided
for by Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; and empowers the corporation to purchase
and maintain insurance on behalf of a director, officer, employee or agent of
the corporation against any liability asserted against him or incurred by him in
any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.
Article VIII, Section 1 of Comcast Cable Communications Holdings'
Certificate of Incorporation provides that a director of Comcast Cable
Communications Holdings will not be personally liable to Comcast Cable
Communications Holdings or its shareholder for monetary damages for breach of
fiduciary duty as director, except if this exemption is not permitted by the
General Corporation Law of the State of Delaware. Any repeal or
II-3
modification of this provision will not affect the rights of a director of
Comcast Cable Communications Holdings prior to such repeal or modification.
Article VIII, Section 2 of Comcast Cable Communications Holdings'
Certificate of Incorporation provides that each person who was or is made a
party or is otherwise in any way involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he, or the person from whom he is
legal representative, is or was a director or officer of Comcast Cable
Communications Holdings or is or was serving at its request as a director,
officer or employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of the
proceeding is alleged action in an official capacity or in any other capacity
while serving as a director, officer or employee, will be indemnified and held
harmless by Comcast Cable Communications Holdings to the fullest extent
authorized by the General Corporation Law of the State of Delaware against all
expense, liability and loss (including attorneys' fees, judgments, fines,
Employee Retirement Income Security Act of 1974 excise taxes or penalties and
amounts paid in settlement) reasonably incurred or suffered by the indemnitee in
connection with the proceeding. In the event that the General Corporation Law of
the State of Delaware is amended, the indemnification provided will change only
to the extent that the amendment permits Comcast Cable Communications Holdings
to provide broader indemnification rights than previously permitted. However,
except in the case of proceedings to enforce rights to indemnification, Comcast
Cable Communications Holdings will indemnify an indemnitee in connection with a
proceeding (or part thereof) initiated by the indemnitee only if the proceeding
was authorized by the Board of Directors of Comcast Cable Communications
Holdings. The right to indemnification includes the right to be paid by Comcast
Cable Communications Holdings the advancement of expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that, if
the General Corporation Law of the State of Delaware requires, an advancement of
expenses incurred by an indemnitee in his capacity as a director or officer only
will be made only upon delivery to Comcast Cable Communications Holdings of an
undertaking, by or on behalf of the indemnitee, to repay all amounts so advanced
if it is ultimately determined that the indemnitee is not entitled to be
indemnified for the expenses. Also, the Board of Directors of Comcast Cable
Communications Holdings may grant rights to indemnification as described above
to any of Comcast Cable Communications Holdings' employees and agents.
If a claim for indemnification is not paid in full within 30 days after a
written claim is received by Comcast Cable Communications Holdings, the
indemnitee may bring suit to recover the unpaid amount of the claim, and if
successful in whole or in part, the indemnitee will be entitled to be paid also
the expense of prosecuting the suit. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered) that the claimant has not
met the standards of conduct which make it permissible under the General
Corporation Law of the State of Delaware for Comcast Cable Communications
Holdings to indemnify the claimant for the amount claimed, but Comcast Cable
Communications Holdings would bear the burden of proving this defense.
Comcast Cable Communications Holdings may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
Comcast Cable Communications Holdings or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss,
whether or not Comcast Cable Communications Holdings would have the power to
indemnify such person under the General Corporation Law of the State of
Delaware.
Comcast Cable Communications, Inc.
Comcast Cable Communications, Inc. is a corporation organized under the
laws of the State of Delaware. The applicable provisions relating to the
indemnification of officers and directors under the General Corporation Law of
the State of Delaware are described above under "-- Comcast Cable Communications
Holdings, Inc."
In addition, Section 7-1 of Comcast Cable's By-laws provides that Comcast
Cable will indemnify any of its directors or officers or any director or officer
who is or was serving as a director, officer, employee or agent of another
company, partnership, joint venture, trust or other enterprise (any such person
is hereinafter referred to as a
II-4
"director or officer") against expenses (including, but not limited to,
attorneys' fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by such director or officer, to the fullest extent now or
hereafter permitted by law in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), brought or threatened to be brought against such
director or officer by reason of the fact that he or she is or was serving in
any such capacity or in any other capacity on behalf of the company, its parent
or any of its subsidiaries.
Section 7-2 of Comcast Cable's By-laws provides that expenses incurred by
any director or officer in defending a Proceeding will be paid by Comcast Cable
in advance of the final disposition of such Proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking, by or on
behalf of such director or officer, to repay such amount without interest if it
is ultimately determined that he or she is not entitled to be indemnified by
Comcast Cable as authorized by law.
Section 7-4 of Comcast Cable's By-laws provides that Comcast Cable may
purchase and maintain insurance on behalf of any person who is or was a director
or officer of Comcast Cable against any liability asserted against him or her
and incurred by him or her in any such capacity, or arising out of his or her
status as such, whether or not Comcast Cable would have the power to indemnify
him or her against such liability under law.
Comcast Cable Holdings, LLC
Comcast Cable Holdings, LLC is a limited liability company organized under
the laws of the State of Delaware. Section 18-108 of the Delaware Limited
Liability Company Act permits a limited liability company, subject to any
restrictions that may be set forth in its limited liability company agreement,
to indemnify its members and managers from and against any and all claims and
demands.
Section 12(a) of Comcast Cable Holdings' LLC Agreement provides that
Comcast Cable Holdings will indemnify the manager and the member, which in each
case is Comcast Cable Communications Holdings, and any current or former
director or officer of Comcast Cable Communications Holdings (each, an
"indemnitee") from and against all loss, damage, expense (including reasonable
attorney's and other advisor's fees, court costs and other liabilities incurred
in any proceeding to which Comcast Cable Communications Holdings is made a
party) incurred because of Comcast Cable Communications Holdings' role as
manager or member. Also, each indemnitee will be indemnified for losses
resulting from the indemnitee's acts or failures to act with respect to the
business or affairs of Comcast Cable Holdings, if the indemnitee (a) acts in
good faith, (b) if acting in an official capacity, reasonably believed the
action was in the best interests of Comcast Cable Holdings, and if not acting in
an official capacity, believed that the conduct was not opposed to Comcast Cable
Holdings' best interests, and (c) if in a criminal proceeding, had no reasonable
cause to believe its conduct was unlawful. Section 12(c) of Comcast Cable
Holdings' LLC Agreement provides that Comcast Cable Holdings may advance funds
to Comcast Cable Communications Holdings in respect of expenses incurred by
Comcast Cable Communications Holdings in a proceeding prior to the final
disposition of the proceeding if Comcast Cable Communications Holdings gives
written affirmation of its good-faith belief that it has complied with the
standards of conduct described in the preceding sentence, agrees to repay the
advancement with interest if it is determined that the standards of conduct were
not met, and Comcast Cable Holdings determines that indemnification is
permissible under these standards. Also, Section 12(e) provides that Comcast
Cable Holdings will indemnify specified officers, and it may in its discretion
indemnify employees, on the same basis as it indemnifies Comcast Cable
Communications Holdings as described above.
Section 12(b) of Comcast Cable Holdings' LLC Agreement provides that,
notwithstanding the above paragraph, Comcast Cable Holdings will not indemnify
an indemnitee in connection with any proceeding in which Comcast Cable
Communications Holdings is adjudged liable to Comcast Cable Holdings or any
proceeding charging improper personal benefit to Comcast Cable Communications
Holdings wherein the indemnitee was adjudged liable on the basis of improperly
receiving a personal benefit.
Section 12(f) of Comcast Cable Holdings' LLC Agreement provides that
neither Comcast Cable Communications Holdings nor specified officers will be
liable to Comcast Cable Holdings for any loss, damage or expense if Comcast
Cable Communications Holdings or such officers, as the case may be (a) acts in
good faith, (b)
II-5
if acting in an official capacity, reasonably believed the action was in the
best interests of Comcast Cable Holdings, and if not in an official capacity,
believed that the conduct was not opposed to Comcast Cable Holdings' best
interests, and (c) if in a criminal proceeding, had no reasonable cause to
believe its conduct was unlawful. However, Comcast Cable Communications Holdings
or the specified officers will be liable for any loss, expense or damage
incurred in connection with a proceeding in which Comcast Cable Communications
Holdings or such officers is adjudged liable to Comcast Cable Holdings as a
result of not meeting the standards of conduct described in the preceding
sentence or a proceeding charging improper personal benefit to Comcast Cable
Communications Holdings wherein the indemnitee was adjudged liable on the basis
of improperly receiving a personal benefit.
Comcast MO Group, Inc.
Comcast MO Group, Inc. is a corporation organized under the laws of the
State of Delaware. The indemnification of officers and directors provided for by
Comcast MO Group's organizational documents and the General Corporation Law of
the State of Delaware is identical to the indemnification provisions described
above under "-- Comcast Cable Communications Holdings, Inc."
Item 16. Exhibits.
The following exhibits are filed as part of the Registration Statement:
Exhibit
Number Description
- ------- -----------
1.1 Form of Underwriting Agreement (Debt Securities, Warrants,
Purchase Contracts and Units).*
1.2 Form of Underwriting Agreement (Preferred Stock, Depositary
Shares, Common Stock).*
2.1 Composite copy of Agreement and Plan of Merger dated as of
December 19, 2001, as amended, among Comcast Holdings
Corporation (formerly known as Comcast Corporation), AT&T
Corp., Comcast Cable Communications Holdings, Inc. (formerly
known as AT&T Broadband Corp.), Comcast Corporation (formerly
known as AT&T Comcast Corporation) and the other parties
signatory thereto.**
2.2 Composite copy of Separation and Distribution Agreement dated
as of December 19, 2001, as amended, between AT&T Corp. and
Comcast Cable Communications Holdings, Inc. (formerly known as
AT&T Broadband Corp.).**
2.3 Support Agreement dated as of December 19, 2001, as amended,
among AT&T Corp., Comcast Holdings Corporation (formerly known
as Comcast Corporation), Comcast Corporation (formerly known as
AT&T Comcast Corporation), Sural LLC and Brian L. Roberts.***
2.4 Tax Sharing Agreement dated as of December 19, 2001 between
AT&T Corp. and Comcast Cable Communications Holdings, Inc.
(formerly known as AT&T Broadband Corp.).***
2.5 Employee Benefits Agreement dated as of December 19, 2001
between AT&T Corp. and Comcast Cable Communications Holdings,
Inc. (formerly known as AT&T Broadband Corp.).****
2.6 Exchange Agreement dated as of December 7, 2001, as amended,
between Microsoft Corporation and Comcast Holdings Corporation
(formerly known as Comcast Corporation).***
2.7 Instrument of Admission dated as of December 19, 2001, as
amended, between Comcast Corporation (formerly known as AT&T
Comcast Corporation) and AT&T Corp.***
II-6
Exhibit
Number Description
- ------- -----------
4.1 Rights Agreement dated as of November 18, 2002 between Comcast
Corporation (formerly known as AT&T Comcast Corporation) and
EquiServe Trust Company, N.A., as Rights Agent, which includes
the Form of Certificate of Designation of Series A Participant's
Cumulative Preferred Stock as Exhibit A and the Form of Right
Certificate as Exhibit B.*****
4.2 Credit Agreement dated as of April 26, 2002 among Comcast
Corporation (formerly known as AT&T Comcast Corporation),
Comcast Cable Communications Holdings, Inc. (formerly known as
AT&T Broadband Corp.), the Financial Institutions party
thereto, JP Morgan Chase Bank, as Administrative Agent, Swing
Line Lender and Issuing Lender, Citibank, N.A., as Syndication
Agent, and Bank of America, N.A., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley
Senior Funding, Inc., as Co-Documentation Agents.******
4.3 Bridge Credit Agreement dated as of April 26, 2002 among
Comcast Corporation (formerly known as AT&T Comcast
Corporation), Comcast Cable Communications Holdings, Inc.
(formerly known as AT&T Broadband Corp.), the Financial
Institutions party thereto, JP Morgan Chase Bank, as
Administrative Agent, Swing Line Lender and Issuing Lender,
Citibank, N.A., as Syndication Agent, and Bank of America,
N.A., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as
Co-Documentation Agents.******
4.4 Credit Agreement dated as of May 3, 2002 among Comcast Cable
Communications Holdings, Inc. (formerly known as AT&T Broadband
Corp.), Comcast Corporation (formerly known as AT&T Comcast
Corporation), the Financial Institutions party thereto, JP
Morgan Chase Bank, as Administrative Agent, Citibank, N.A.,
Bank of America, N.A., Merrill Lynch Capital Corporation and
Morgan Stanley Senior Funding, Inc.******
4.5 Form of Senior Indenture among the Company, the cable
guarantors party thereto and The Bank of New York, as Trustee.
4.6 Form of Subordinated Indenture among the Company, the cable
guarantors party thereto and The Bank of New York, as Trustee.
4.7 Form of Senior Debt Security.
4.8 Form of Subordinated Debt Security.
4.9 Form of Purchase Contract Agreement relating to Purchase
Contracts (to be included in Exhibit 4.10).
4.10 Form of Unit Agreement.*
4.11 Form of Warrant Agreement for Warrants sold separately.*
4.12 Form of Warrant for Warrants sold separately (to be included in
Exhibit 4.11).
4.13 Form of Warrant Agreement for Warrants sold attached to other
Securities.*
4.14 Form of Warrant for Warrants sold attached to other Securities
(to be included in Exhibit 4.13).
4.15 Form of Pledge Agreement.*
4.16 Form of Deposit Agreement.
4.17 Form of Depositary Share (included in Exhibit 4.16).
II-7
Exhibit
Number Description
- ------- -----------
4.18 Form of Guarantee (Warrants, Purchase Contracts and Units).*
5.1 Opinion of Arthur R. Block, Esquire.*
5.2 Opinion of Davis Polk & Wardwell.*
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Corporation.
12.2 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Communications, Inc.
12.3 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Communications Holdings, Inc.
12.4 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Holdings, LLC.
12.5 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast MO Group, Inc.
12.6 Statement Regarding Computation of Pro Forma Ratio of Earnings
to Fixed Charges of Comcast Corporation.
12.7 Statement Regarding Computation of Pro Forma Ratio of Earnings
to Combined Fixed Charges and Preferred Dividends of Comcast
Corporation.
12.8 Statement Regarding Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Dividends of Comcast
Corporation.
23.1 Consent of Deloitte & Touche LLP with respect to Comcast
Corporation (formerly known as AT&T Comcast Corporation).
23.2 Consent of Deloitte & Touche LLP with respect to Comcast
Holdings Corporation (formerly known as Comcast Corporation).
23.3 Consent of Deloitte & Touche LLP with respect to Comcast Cable
Communications, Inc.
23.4 Consent of PricewaterhouseCoopers LLP with respect to AT&T
Broadband Group.
23.5 Consent of Arthur R. Block, Esquire (to be included in Exhibit
5.1).
23.6 Consent of Davis Polk & Wardwell (to be included in Exhibit
5.2).
24.1 Powers of Attorney (included on the signature pages hereof).
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Senior Indenture.
25.2 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Subordinated Indenture.
- ---------------
* To be filed by amendment.
** Incorporated by reference to our Current Report on Form 8-K12g3, filed on
November 18, 2002.
*** Incorporated by reference to our registration statement on Form S-4, filed
on February 11, 2002.
II-8
**** Incorporated by reference to AT&T Corp.'s Annual Report on Form 10-K
for the year ended December 31, 2001, filed on April 1, 2002.
***** Incorporated by reference to our registration statement on Form 8-A12g,
filed on November 18, 2002.
****** Incorporated by reference to our Amended Registration Statement on Form
S-4/A, filed on May 14, 2002.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
1. (a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that subparagraphs (a) (i) and (a) (ii) shall not
apply to the extent that information required to be included in a
post-effective amendment by those subparagraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that
are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. If the securities to be registered are to be offered at competitive
bidding, the undersigned registrants hereby undertake (1) to use their best
efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at that time meets the requirements of Section 10(a) of the Securities Act, and
relating to the securities offered at competitive bidding, as contained in the
Registration Statement, together with any supplements thereto, and (2) to file
an amendment to the Registration Statement reflecting the results of bidding,
the terms of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the issuer after
the opening of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such securities by the
issuer and no reoffering of such securities by the purchasers is proposed to be
made.
4. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrants
II-9
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-10
SIGNATURES AND POWER OF ATTORNEY FOR COMCAST CORPORATION
Pursuant to the requirements of the Securities Act of 1933, Comcast
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Philadelphia, Pennsylvania, on the 16th day of December,
2002.
COMCAST CORPORATION
By: /s/ Arthur R. Block
------------------------------------
Name: Arthur R. Block
Title: Senior Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Brian L. Roberts, Lawrence S. Smith, John
R. Alchin, David L. Cohen, Lawrence J. Salva and Arthur R. Block and each of
them, his (her) true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him (her) and in his (her) name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement (including post-effective amendments, as well as any
related registration statement for amendment thereto) filed pursuant to Rule 462
promulgated under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he (she) might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Ralph J. Roberts Chairman of the Executive and Finance December 16, 2002
- --------------------------------------------- Committee of the Board of Directors;
Ralph L. Roberts Director
/s/ C. Michael Armstrong Chairman of the Board of Directors; December 16, 2002
- --------------------------------------------- Director
C. Michael Armstrong
/s/ Julian A. Brodsky Vice Chairman of the Board of Directors; December 16, 2002
- --------------------------------------------- Director
Julian A. Brodsky
/s/ Brian L. Roberts President and Chief Executive Officer December 16, 2002
- --------------------------------------------- (Principal Executive Officer); Director
Brian L. Roberts
/s/ Lawrence S. Smith Executive Vice President December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
Lawrence S. Smith
/s/ John R. Alchin Executive Vice President and Treasurer December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
John R. Alchin
II-11
/s/ Lawrence J. Salva Senior Vice President and Controller December 16, 2002
- --------------------------------------------- (Principal Accounting Officer)
Lawrence J. Salva
/s/ S. Decker Anstrom Director December 16, 2002
- ---------------------------------------------
S. Decker Anstrom
/s/ Sheldon M. Bonovitz Director December 16, 2002
- ---------------------------------------------
Sheldon M. Bonovitz
/s/ J. Michael Cook Director December 16, 2002
- ---------------------------------------------
J. Michael Cook
/s/ George M. C. Fisher Director December 16, 2002
- ---------------------------------------------
George M. C. Fisher
/s/ Dr. Judith Rodin Director December 16, 2002
- ---------------------------------------------
Dr. Judith Rodin
/s/ Louis A. Simpson Director December 16, 2002
- ---------------------------------------------
Louis A. Simpson
/s/ Michael I. Sovern Director December 16, 2002
- ---------------------------------------------
Michael I. Sovern
II-12
SIGNATURES AND POWER OF ATTORNEY FOR COMCAST CABLE COMMUNICATIONS, INC.
Pursuant to the requirements of the Securities Act of 1933, Comcast Cable
Communications, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Philadelphia, Pennsylvania, on the 16th day of December,
2002.
COMCAST CABLE COMMUNICATIONS, INC.
By: /s/ Arthur R. Block
------------------------------------
Name: Arthur R. Block
Title: Senior Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Brian L. Roberts, Lawrence S. Smith, John
R. Alchin, David L. Cohen, Lawrence J. Salva and Arthur R. Block and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments, as well as any related
registration statement for amendment thereto) filed pursuant to Rule 462
promulgated under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Brian L. Roberts President and Chief Executive Officer December 16, 2002
- --------------------------------------------- (Principal Executive Officer); Director
Brian L. Roberts
/s/ Lawrence S. Smith Executive Vice President December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer); Director
Lawrence S. Smith
/s/ John R. Alchin Executive Vice President and Treasurer December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
John R. Alchin
/s/ David L. Cohen Executive Vice President; Director December 16, 2002
- ---------------------------------------------
David L. Cohen
/s/ Arthur R. Block Senior Vice President; Director December 16, 2002
- ---------------------------------------------
Arthur R. Block
/s/ Lawrence J. Salva Senior Vice President and Controller December 16, 2002
- --------------------------------------------- (Principal Accounting Officer)
Lawrence J. Salva
II-13
SIGNATURES AND POWER OF ATTORNEY FOR
COMCAST CABLE COMMUNICATIONS HOLDINGS, INC.
Pursuant to the requirements of the Securities Act of 1933, Comcast Cable
Communications Holdings, Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Philadelphia, Pennsylvania, on the
16th day of December, 2002.
COMCAST CABLE COMMUNICATIONS, INC. HOLDINGS, INC.
By: /s/ Arthur R. Block
------------------------------------
Name: Arthur R. Block
Title: Senior Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Brian L. Roberts, Lawrence S. Smith, John
R. Alchin, David L. Cohen, Lawrence J. Salva and Arthur R. Block and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), as well as any related
registration statement for amendment thereto filed pursuant to Rule 462
promulgated under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Brian L. Roberts President and Chief Executive Officer December 16, 2002
- --------------------------------------------- (Principal Executive Officer)
Brian L. Roberts
/s/ Lawrence S. Smith Executive Vice President December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer); Director
Lawrence S. Smith
/s/ John R. Alchin Executive Vice President and Treasurer December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
John R. Alchin
/s/ David L. Cohen Executive Vice President; Director December 16, 2002
- ---------------------------------------------
David L. Cohen
/s/ Arthur R. Block Senior Vice President; Director December 16, 2002
- ---------------------------------------------
Arthur R. Block
/s/ Lawrence J. Salva Senior Vice President December 16, 2002
- --------------------------------------------- (Principal Accounting Officer)
Lawrence J. Salva
II-14
SIGNATURES AND POWER OF ATTORNEY FOR COMCAST CABLE HOLDINGS, LLC
Pursuant to the requirements of the Securities Act of 1933, Comcast Cable
Holdings, LLC certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Philadelphia, Pennsylvania, on the 16th day of December,
2002.
COMCAST CABLE HOLDINGS, LLC
By: /s/ Arthur R. Block
-------------------------------
Name: Arthur R. Block
Title: Senior Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Brian L. Roberts, Lawrence S. Smith, John
R. Alchin, David L. Cohen, Lawrence J. Salva and Arthur R. Block and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments, as well as any related
registration statement for amendment thereto) filed pursuant to Rule 462
promulgated under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Brian L. Roberts President and Chief Executive Officer December 16, 2002
- --------------------------------------------- (Principal Executive Officer)
Brian L. Roberts
/s/ Lawrence S. Smith Executive Vice President December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
Lawrence S. Smith
/s/ John R. Alchin Executive Vice President and Treasurer December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
John R. Alchin
/s/ Lawrence J. Salva Senior Vice President December 16, 2002
- --------------------------------------------- (Principal Accounting Officer)
Lawrence J. Salva
COMCAST CABLE COMMUNICATIONS
HOLDINGS, INC.
By: /s/ Arthur R. Block Sole Member
-----------------------------------
Arthur R. Block December 16, 2002
Senior Vice President
II-15
SIGNATURES AND POWER OF ATTORNEY FOR COMCAST MO GROUP, INC.
Pursuant to the requirements of the Securities Act of 1933, Comcast MO
Group, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Philadelphia, Pennsylvania, on the 16th day of December,
2002.
COMCAST MO GROUP, INC.
By: /s/ Arthur R. Block
-------------------------------
Name: Arthur R. Block
Title: Senior Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Brian L. Roberts, Lawrence S. Smith, John
R. Alchin, David L. Cohen, Lawrence J. Salva and Arthur R. Block and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), as well as any related
registration statement for amendment thereto) filed pursuant to Rule 462
promulgated under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Brian L. Roberts President and Chief Executive Officer December 16, 2002
- --------------------------------------------- (Principal Executive Officer)
Brian L. Roberts
/s/ Lawrence S. Smith Executive Vice President December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer); Director
Lawrence S. Smith
/s/ John R. Alchin Executive Vice President and Treasurer December 16, 2002
- --------------------------------------------- (Co-Principal Financial Officer)
John R. Alchin
/s/ David L. Cohen Executive Vice President; Director December 16, 2002
- ---------------------------------------------
David L. Cohen
/s/ Arthur R. Block Senior Vice President; Director December 16, 2002
- ---------------------------------------------
Arthur R. Block
/s/ Lawrence J. Salva Senior Vice President December 16, 2002
- --------------------------------------------- (Principal Accounting Officer)
Lawrence J. Salva
II-16
EXHIBIT LIST
Exhibit
Number Description
- ------- -----------
1.1 Form of Underwriting Agreement (Debt Securities, Warrants,
Purchase Contracts and Units).*
1.2 Form of Underwriting Agreement (Preferred Stock, Depositary
Shares, Common Stock).*
2.1 Composite copy of Agreement and Plan of Merger dated as of
December 19, 2001, as amended, among Comcast Holdings
Corporation (formerly known as Comcast Corporation), AT&T
Corp., Comcast Cable Communications Holdings, Inc. (formerly
known as AT&T Broadband Corp.), Comcast Corporation (formerly
known as AT&T Comcast Corporation) and the other parties
signatory thereto.**
2.2 Composite copy of Separation and Distribution Agreement dated
as of December 19, 2001, as amended, between AT&T Corp. and
Comcast Cable Communications Holdings, Inc. (formerly known as
AT&T Broadband Corp.).**
2.3 Support Agreement dated as of December 19, 2001, as amended,
among AT&T Corp., Comcast Holdings Corporation (formerly known
as Comcast Corporation), Comcast Corporation (formerly known as
AT&T Comcast Corporation), Sural LLC and Brian L. Roberts.***
2.4 Tax Sharing Agreement dated as of December 19, 2001 between
AT&T Corp. and Comcast Cable Communications Holdings, Inc.
(formerly known as AT&T Broadband Corp.).***
2.5 Employee Benefits Agreement dated as of December 19, 2001
between AT&T Corp. and Comcast Cable Communications Holdings,
Inc. (formerly known as AT&T Broadband Corp.).****
2.6 Exchange Agreement dated as of December 7, 2001, as amended,
between Microsoft Corporation and Comcast Holdings Corporation
(formerly known as Comcast Corporation).***
2.7 Instrument of Admission dated as of December 19, 2001, as
amended, between Comcast Corporation (formerly known as AT&T
Comcast Corporation) and AT&T Corp.***
4.1 Rights Agreement dated as of November 18, 2002 between Comcast
Corporation (formerly known as AT&T Comcast Corporation) and
EquiServe Trust Company, N.A., as Rights Agent, which includes
the Form of Certificate of Designation of Series A Participant's
Cumulative Preferred Stock as Exhibit A and the Form of Right
Certificate as Exhibit B.*****
4.2 Credit Agreement dated as of April 26, 2002 among Comcast
Corporation (formerly known as AT&T Comcast Corporation),
Comcast Cable Communications Holdings, Inc. (formerly known as
AT&T Broadband Corp.), the Financial Institutions party
thereto, JP Morgan Chase Bank, as Administrative Agent, Swing
Line Lender and Issuing Lender, Citibank, N.A., as Syndication
Agent, and Bank of America, N.A., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley
Senior Funding, Inc., as Co-Documentation Agents.******
II-17
Exhibit
Number Description
- ------- -----------
4.3 Bridge Credit Agreement dated as of April 26, 2002 among
Comcast Corporation (formerly known as AT&T Comcast
Corporation), Comcast Cable Communications Holdings, Inc.
(formerly known as AT&T Broadband Corp.), the Financial
Institutions party thereto, JP Morgan Chase Bank, as
Administrative Agent, Swing Line Lender and Issuing Lender,
Citibank, N.A., as Syndication Agent, and Bank of America,
N.A., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as
Co-Documentation Agents.******
4.4 Credit Agreement dated as of May 3, 2002 among Comcast Cable
Communications Holdings, Inc. (formerly known as AT&T Broadband
Corp.), Comcast Corporation (formerly known as AT&T Comcast
Corporation), the Financial Institutions party thereto, JP
Morgan Chase Bank, as Administrative Agent, Citibank, N.A.,
Bank of America, N.A., Merrill Lynch Capital Corporation and
Morgan Stanley Senior Funding, Inc.******
4.5 Form of Senior Indenture among the Company, the cable
guarantors party thereto and The Bank of New York, as Trustee.
4.6 Form of Subordinated Indenture among the Company, the cable
guarantors party thereto and The Bank of New York, as Trustee.
4.7 Form of Senior Debt Security.
4.8 Form of Subordinated Debt Security.
4.9 Form of Purchase Contract Agreement relating to Purchase
Contracts (to be included in Exhibit 4.10).
4.10 Form of Unit Agreement.*
4.11 Form of Warrant Agreement for Warrants sold separately.*
4.12 Form of Warrant for Warrants sold separately (to be included in
Exhibit 4.11).
4.13 Form of Warrant Agreement for Warrants sold attached to other
Securities.*
4.14 Form of Warrant for Warrants sold attached to other Securities
(to be included in Exhibit 4.13).
4.15 Form of Pledge Agreement.*
4.16 Form of Deposit Agreement.
4.17 Form of Depositary Share (included in Exhibit 4.16).
4.18 Form of Guarantee (Warrants, Purchase Contracts and Units).*
5.1 Opinion of Arthur R. Block, Esquire.*
5.2 Opinion of Davis Polk & Wardwell.*
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Corporation.
12.2 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Communications, Inc.
12.3 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Communications Holdings, Inc.
II-18
Exhibit
Number Description
- ------- -----------
12.4 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast Cable Holdings, LLC.
12.5 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges of Comcast MO Group, Inc.
12.6 Statement Regarding Computation of Pro Forma Ratio of Earnings
to Fixed Charges of Comcast Corporation.
12.7 Statement Regarding Computation of Pro Forma Ratio of Earnings
to Combined Fixed Charges and Preferred Dividends of Comcast
Corporation.
12.8 Statement Regarding Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Dividends of Comcast
Corporation.
23.1 Consent of Deloitte & Touche LLP with respect to Comcast
Corporation (formerly known as AT&T Comcast Corporation).
23.2 Consent of Deloitte & Touche LLP with respect to Comcast
Holdings Corporation (formerly known as Comcast Corporation).
23.3 Consent of Deloitte & Touche LLP with respect to Comcast Cable
Communications, Inc.
23.4 Consent of PricewaterhouseCoopers LLP with respect to AT&T
Broadband Group.
23.5 Consent of Arthur R. Block, Esquire (to be included in Exhibit
5.1).
23.6 Consent of Davis Polk & Wardwell (to be included in Exhibit
5.2).
24.1 Powers of Attorney (included on the signature pages hereof).
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Senior Indenture.
25.2 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Subordinated Indenture.
- ---------------
* To be filed by amendment.
** Incorporated by reference to our Current Report on Form 8-K12g3, filed
on November 18, 2002.
*** Incorporated by reference to our registration statement on Form S-4
filed on February 11, 2002.
**** Incorporated by reference to AT&T Corp.'s Annual Report on Form 10-K
for the year ended December 31, 2001, filed on April 1, 2002.
***** Incorporated by reference to our registration statement on Form
8-A12g, filed on November 18, 2002.
****** Incorporated by reference to our Amended Registration Statement on
Form S-4/A, filed on May 14, 2002.
II-19