Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxx Xxxx
AT&T Excite@Home Comcast Corp. Cox Communications
000-000-0000 000-000-0000 000-000-0000 000-000-0000
XXXXXX@XXXX'S PRINCIPAL CABLE PARTNERS EXTEND DISTRIBUTION AGREEMENTS,
AT&T ASSUMES MORE PROMINENT ROLE
FOR RELEASE WEDNESDAY, MARCH 29, 2000
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NEW YORK AND REDWOOD CITY, CALIF. -- Excite@Home (Nasdaq: ATHM) and its
principal cable partners - AT&T, Comcast Corporation and Cox Communications -
announced today that they have agreed to new extended distribution arrangements
and a reorganization of the governance of the company. This will enhance
Excite@Home's decision-making and ability to capitalize on growth opportunities.
Based on these new agreements, AT&T and Excite@Home have extended their
relationship through 2008, and Comcast and Cox have extended their relationship
with Excite@Home through 2006. The new distribution agreements reflect a common
belief among Excite@Home and its cable partners that growing subscribers on
high-speed cable Internet services is a key objective over the coming years.
Excite@Home will be the provider of platform/connectivity services used by
its principal cable partners in delivering their high-speed Internet services.
Excite@Home's portal also will be featured on AT&T's high-speed Internet service
start page for the length of the new agreement. In addition, Excite@Home will
work with AT&T to deliver services to consumers via advanced TV, narrowband
initiatives and, subject to negotiation with AT&T Wireless Group, wireless
services. Overall, these new arrangements expand Excite@Home's current business
model and represent a significant opportunity for the company as it provides
connectivity and content distribution services in partnership with cable
companies.
Specifically, AT&T agreed to extend its distribution relationship with
Excite@Home through 2008 and to feature the Excite@Home portal on its cable
Internet service through the same period. Excite@Home will also work with AT&T
to provide connectivity services to third party Internet Service Providers who
want to use AT&T's platform to deliver broadband services to consumers. AT&T
reiterated its intention to offer a choice of multiple service providers and
portals on its high-speed Internet systems following the June, 2002 expiration
of its current exclusive arrangements with Excite@Home. In addition Excite@Home
will work with AT&T to deliver services to consumers via advanced TV, wireless
and narrowband initiatives.
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The exclusivity provisions of the Comcast and Cox distribution agreements
with Excite@Home remain in effect until June 2002. Comcast and Cox have also
agreed to use Excite@Home to provide platform/connectivity services, and to be
their featured portal, in delivering their high-speed Internet services through
June, 2006. Subject to the forfeiture of certain warrants, and based on their
other business considerations, Comcast and Cox will each have the right to end
the exclusivity provisions and may also terminate the entire distribution
arrangement beginning in June 2001.
Under today's agreements, Comcast and Cox will give up certain veto rights
they have at the Excite@Home board level and their representatives will resign
from the board. AT&T will have the right to elect a majority of the board
members and Excite@Home will amend its charter to allow board action by simple
majority.
The agreements announced today have been approved by a committee of the
Excite@Home's independent directors, as well as by unanimous vote of the full
Board.
"Now, we can work even more effectively with Excite@Home to realize our
common vision of putting the Internet to work for individuals, families and
businesses," said X. Xxxxxxx Xxxxxxxxx, chairman and chief executive officer of
AT&T. "We can extend Excite@Home across access platforms, add new capabilities
of our own, and engage the creativity of third parties, such as content
providers and other web portals, to enrich the service. Working with
Excite@Home, we can bring broadband communications, information and transaction
services to millions of the world's homes, offices, and shops."
Xxxxx X. Xxxxxxx, president of Comcast Corporation said, "From the outset,
we have viewed Excite@Home as an invaluable strategic partner. Together, we have
made significant progress in reducing installation time and in expanding the
online marketing, OEM, and retail channels that have accelerated our deployment
of high-speed cable Internet services. The extension of our agreements gives us
clarity and the ability to continue our aggressive deployment of Comcast@Home."
"From the beginning, we have combined broadband content and high-speed
access to offer our customers a superior online experience," said Xxxxx Xxxxxxx,
executive vice president of business development, Cox Communications. "However,
this is just the tip of the iceberg in terms of how broadband information,
communications, and entertainment services, combined with digital television
technologies will dramatically change the way consumers use and view the
Internet. We are pleased to extend our relationship with Excite@Home."
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"When we began deploying high-speed Internet services in 1996, many
doubted that we would be able to use the cable networks to deliver broadband at
a price consumers could afford. But by working closely with our cable partners,
we were able to bring efficiencies to our network that lowered prices for
consumers and thereby sparked a broadband explosion," said Xxx Xxxxxxxx,
chairman of Excite@Home. "Now we are ready to move into the next phase of
leading the broadband revolution. We have established terms of carriage for the
post-exclusive period and this clarity will help drive new forms of business,
such as advanced TV and connectivity, that Excite@Home can exploit in
conjunction with its existing business model."
The Excite@Home Board of Directors also announced its intention to
withdraw plans for establishing a tracking stock for the media assets of its
business. "Through the new long-term extensions of our cable agreements, we have
achieved platform and content alignment with our partners," said Xxxxxx Xxxx,
president and CEO, Excite@Home. "Given this clarity, we believe we are better
served with a single unified company."
In addition, AT&T has agreed to give Comcast and Cox the right to sell
their shares in Excite@Home to AT&T for a minimum price of $48 a share any time
between January 1, 2001, and June 4, 2002. Comcast and Cox each own
approximately 30 million Class A shares, or about 8 percent, of Excite@Home.
AT&T's purchase obligation is limited to an aggregate value of approximately $3
billion. If Excite@Home's average share price exceeds $48 for 15 days before and
15 days after Comcast or Cox exercises their right to sell, they will receive
the higher price per share and the number of shares AT&T purchases will be
reduced commensurately. Comcast and Cox have the right to take payment in cash
or in shares of AT&T stock.
Under the agreements announced today, Comcast and Cox will each receive
new warrants to purchase two Series A shares for each home its system passes.
These warrants will vest in installments every six months beginning in June,
2001, and be fully vested in June, 2006, if Comcast and Cox have elected to
continue their extended non-exclusive distribution agreements through that
period. Excite@Home will also convert about 50 million of AT&T's Series A shares
into Series B shares, each of which has 10 votes. In connection with the new
distribution agreements through 2008, AT&T will also have the right to purchase
up to approximately 25 million Series A shares and 25 million Series B shares.
As a result, AT&T will have, on a fully diluted basis, 25 percent of the
economic interest in Excite@Home and 74 percent of the voting interest, as
compared to the 25 percent economic interest and 56 percent voting interest it
has today.
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Following the closing of the transactions announced today, AT&T will
consolidate Excite@Home's financial results with its own. This is expected to
increase AT&T's revenue in 2000 by approximately $400 million and will have no
significant impact on cash earnings. However, due to the amortization of
goodwill and other non-cash charges, it is expected to reduce 2000 operational
earnings per share by approximately 20 cents. Reported earnings per share for
2000 are expected to be reduced by approximately 5 cents as a result of the
agreements.
The changes to be made to Excite@Home's charter and the issuance of
additional Excite@Home stock require shareowner approval and other approvals.
The companies expect these transactions to be completed by the third quarter of
2000.
With more than one million cable modem subscribers, Excite@Home is setting
the pace for broadband and winning the hearts of consumers worldwide who are
enjoying the benefits of a high-speed, "always-on," and open connection to the
Internet afforded by the @Home service. Through the combination of content and
distribution, Excite@Home is changing the way consumers use and view the
Internet. Recognizing their positive impact on consumers, Excite@Home and its
cable partners look forward to accelerating and expanding the delivery of
high-speed services.
Excite@Home, the leader in broadband, offers media services through Excite
Network (xxx.xxxxxx.xxx, xxx.xxxxxxxxxxxx.xxx and other properties), and
broadband subscription services through @Home (xxx.xxxx.xxx) and @Work
(xxx.xxxx.xxxx.xxx). The company has a worldwide footprint of 72 million cable
homes under long-term contract. Excite@Home's MatchLogic subsidiary
(xxx.xxxxxxxxxx.xxx) offers marketers industry-leading digital advertising
solutions including rich media production, targeted ad and email services, and
datamart management and analysis. 2000 At Home Corporation. Excite@Home, @Home,
@Work, Excite, the stylized logo and MatchLogic are trademarks of At Home
Corporation and may be registered in certain jurisdictions. All other brand
names are trademarks of their respective owners.
AT&T Corp (xxx.xxx.xxx) is among the world's premier voice, video and data
communications companies, serving more than 80 million customers, including
consumers, businesses and government. With annual revenues of more than $62
billion and 148,000 employees, AT&T provides services to customers worldwide.
Backed by the research and development capabilities of AT&T Labs the company
runs the world's largest, most sophisticated communications network and has one
of the largest digital wireless networks in North America. The company is a
leading supplier of data and Internet services for businesses and offers
outsourcing, consulting and networking-integration to large businesses. It is
also one of the nation's largest Internet service providers for consumers.
Through its recent cable acquisitions, AT&T will bring its bundle of broadband
video, voice and data services to customers throughout the United States.
Internationally, the AT&T/BT Global Venture - recently named Concert - will
serve the communications needs of multinational companies and international
carriers worldwide.
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Comcast Corporation (xxx.xxxxxxx.xxx) is principally involved in the
development, management and operation of broadband cable networks and in the
provision of programming content through majority ownership of QVC,
Comcast-Spectacor, Comcast SportsNet, and The Golf Channel, a controlling
interest in E! Entertainment Television and through other programming
investments. Comcast Cable is the third largest cable company in the nation and,
incorporating pending cable transactions, will serve more than 8.2 million
subscribers. Comcast's Class A Special and Class A Common Stock are traded on
The Nasdaq Stock Market under the symbols CMCSK and CMCSA, respectively.
Cox Communications serves approximately 6 million customers nationwide,
making it the nation's fifth largest cable television company. A full-service
provider of telecommunications products, Cox offers an array of services,
including Xxx Cable; local and long distance telephone services under the Cox
Digital Telephone brand; high-speed Internet access under the brands Cox@Home,
Road Runner and Cox Express; advanced digital video programming services under
the Cox Digital Cable brand; and commercial voice and data services via Cox
Business Services. Cox is an investor in telecommunications companies including
Sprint PCS and Excite@Home, as well as programming networks including Discovery
Channel, The Learning Channel, Outdoor Life and Speedvision. More information
about Cox Communications can be accessed on the Internet at xxx.xxx.xxx.
The foregoing are "forward-looking statements" which are based on management's
beliefs as well as on a number of assumptions concerning future events made by
and information currently available to management. Readers are cautioned not to
put undue reliance on such forward-looking statements, which are not a guarantee
of performance and are subject to a number of uncertainties and other factors,
many of which are outside the control of AT&T, Excite@Home, Comcast Corporation
and Xxx Communications, that could cause actual results to differ materially
from such statements. The transactions described in this release are subject to
shareowner and other approvals and there can be no assurance the transactions
will be consummated or that the anticipated results of the transactions will be
realized. For a more detailed description of the factors that could affect the
companies' future results, please see the companies' filings with the Securities
and Exchange Commission. The companies disclaim any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. This information is presented solely to
provide additional information to further understand the results of the
companies.
EDITOR'S NOTE: AT&T, Excite@Home, Comcast Corporation and Cox Communications
will host a conference call for the news media at 11 a.m. EST today. AT&T
Chairman and CEO X. Xxxxxxx Xxxxxxxxx and Excite@Home President and CEO Xxxxxx
Xxxx will make remarks, and will be joined in taking questions by Excite@Home
Chairman Xxx Xxxxxxxx, Comcast Executive Vice President and Treasurer Xxxx
Xxxxxx, and Xxx Communications Executive Vice President of Business Development
Xxxxx Xxxxxxx. Reporters can call 000-000-0000 in the U.S. or 000-000-0000
elsewhere. A replay of the news conference will be available beginning at 1 p.m.
EST today until midnight on March 31 at 000-000-0000, access code 511069 in the
U.S. and 000-000-0000, access code 511069 elsewhere.
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