Comcast Corp. said Thursday that it and Time Warner Cable are dissolving the partnership through which they jointly owned cable-television systems in the Midwest and Southwest.

The dissolution of Texas and Kansas City Partners LP will result in Comcast (NASDAQ: CMCSA - News, CMCSK - News) getting systems in Houston and the unit of Time-Warner Inc. (NYSE: TWX - News) getting systems in Kansas City, southwest Texas and New Mexico.

As part of the transaction, Comcast will assume $1.4 billion in debt, including a $600 million payment to Time Warner of New York for debt owned by the joint venture.

Comcast said dissolving the partnership will enable it to convert a passive investment -- its interest in the joint venture -- into direct ownership in cash-flow-generating cable systems in one of the fastest-growing markets in the country. The Houston systems passed 1.7 million homes and served 790,000 basic video and 480,000 digital video subscribers, 430,000 high-speed Internet subscribers and 90,000 digital voice subscribers as of June 30.

Comcast of Philadelphia expects the systems will generate about $325 million of operating cash flow and require about $185 million of capital expenditures this year.

It expects the deal to close in the first quarter of next year.

In a separate deal, Comcast and Time Warner are divvying up the cable-TV systems of Adelphia Communications Corp., after closing earlier this week on their purchase of Adelphia's assets.

Comcast and Time Warner are also swapping some of their own cable systems to make their respective service areas more contiguous. Through the swaps, Comcast will take over Philadelphia's Area 2 from Time Warner within the next six to nine months, giving Comcast cable-TV operations throughout the entire city.

Area 2 consists of parts of North and West Philadelphia, East Falls, Germantown, Manayunk and Roxborough.

Published August 3, 2006 by the Philadelphia Business Journal


http://biz.yahoo.com/bizj/060803/1325821.html?.v=1