Charter Confirms Merger Proposed with Time Warner Cable

Charter Communications (NASDAQ: CHTR)announced today that it has sent a letter to Time Warner Cable (NYSE: TWC) proposing thatthe companies immediately engage in discussions to conclude a merger agreementto combine the companies. Charter believes that, unlike substantially all other cable transactions overthe last five years that were cash transactions, this transaction would bebased on combining shareholder groups and allowing Time Warner Cableshareholders to participate at a substantial premium to Time Warner Cable'sunaffected stock price as well as meaningful upside following completion.Charter has made repeated overtures to Time Warner Cable on this topic formore than six months.  Until December, Time Warner Cable chose not to engageor find out more.  The CEOs and CFOs respectively met in December to walkthrough Charter's plan including the structure, financing, tax and cash flowaspects of a transaction, but the flow of information has been exclusivelyone-way.  Because Time Warner Cable's stock has run up on widespreadshareholder endorsement of a deal to the point where the premium is alreadyreflected in the share price, Time Warner Cable's response led Charter todetermine there is no genuine intent from Time Warner Cable's management andBoard of Directors to engage in a merger agreement, and that it is prudent tobring the matter to shareholders directly.  The full text of the letter isincluded below.Goldman Sachs and LionTree Advisors are serving as lead financial advisors toCharter in connection with this transaction.  Guggenheim Securities is also afinancial advisor to Charter.  BofA Merrill Lynch, Credit Suisse, and DeutscheBank Securities Inc. are also financial advisors to Charter, and together withGoldman Sachs, are leading the financing for the transaction.  The law firmsWachtell, Lipton, Rosen & Katz and Kirkland & Ellis LLP are also representingCharter.Conference CallCharter will host a conference call on Tuesday, January 14, 2014 at 4:30 p.m.Eastern Time (ET) related to the contents of this release.The conference call will be webcast live via the company's website atcharter.com.  The webcast can be accessed by selecting "Investor & NewsCenter" from the lower menu on the home page.  Participants should go to thewebcast link no later than 10 minutes prior to the start time to register.Those participating via telephone should dial 866-919-0894 no later than 10minutes prior to the call.  International participants should dial +1706-679-9379.  The conference ID code for the call is 31454794.Letter Sent To Time Warner Cable ManagementJanuary 13, 2014Time Warner Cable Inc.60 Columbus CircleNew York, New York 10023Attention:    Robert D. MarcusChairman and Chief Executive OfficerDear Rob:I enjoyed spending time with you in December discussing our prior proposalsand the challenges our industry faces.  As you know, I believe we have asignificant opportunity to put our companies together in a way that willcreate maximum, long-term value for shareholders and employees of bothcompanies.  Our financing plan, which gives us the ability to deleverageduring a period where our operating plan has sufficient time to beimplemented, is prudent.  Our history of operating performance is wellunderstood, as are our tax assets.As you know, Time Warner Cable quickly rejected our proposals in June andOctober, and refused to engage until we met in December.  I communicated awillingness to submit a revised proposal in the low $130s, including a cashcomponent of approximately $83.  Following our meeting, you agreed to have ourCFOs meet to review the structure, financing, tax and cash flow aspects of atransaction, which we understand was very helpful for Time Warner Cable.  Webelieved Time Warner Cable and its Board of Directors would recognize thesignificant value of this combination and genuinely engage.  Instead, you cameback with a verbal offer at an unrealistic price expectation which ignores afull 39% premium already reflected in Time Warner Cable's stock (as of lastFriday), widespread shareholder endorsement of a deal, and Time Warner Cableshareholders' approximately 45% ownership in the upside of the proposedtransaction.  Furthermore, your proposal to significantly increase the cashcomponent of the price contradicts Time Warner Cable's own public statementson debt leverage.  The information provided to date has been exclusivelyone-way, which further reinforces the point that there is no genuine interestfrom Time Warner Cable management and Board of Directors to engage on thisopportunity.While we are preserving all options going forward, we remain open to realengagement.  We would like to engage with you to conclude an agreement for abusiness combination that is beneficial for your shareholders and ours.  Wewould be prepared to offer a cash/stock election mechanism that would allowthose shareholders who wish to participate in the benefits of a combination todo so, while others who wish to cash out will be able to do so at a meaningfulpremium.  The financing to complete this transaction is fully negotiated, andwe can be in a position to sign commitment letters in a matter of days.This transaction is beneficial to Time Warner Cable shareholders who remaininvested in the combined company because they realize the value creation fromcost reductions, faster organic growth, and leveraged and tax advantagedreturns.  We also believe that the new combined company, through potentialfuture swaps and divestitures with other industry participants, can helprationalize the geographic holdings of the industry into more efficiententities capable of providing better services and products into a verycompetitive marketplace, thus generating higher returns for the combinedcompany and the industry at large.We are fully prepared to finalize a deal on an extremely expedited basis.  Webelieve that time is of the essence to prepare our companies to meet thechallenges of the industry, which is why we have decided to announce thestatus of our discussions to date to both sets of shareholders.With best regards,/s/ TomThomas M. Rutledge, President and Chief Executive Officer