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Release Date: 11/04/2010

(NEW YORK, NY) – Time Warner Cable Inc. (NYSE: TWC) today reported financial results for its third quarter ended September 30, 2010.

Time Warner Cable Chief Executive Officer Glenn Britt said: “This is an exciting time at Time Warner Cable. We’re introducing several new offerings that give our customers control in ways that are simple and easy. We’re performing well financially, despite the economic and competitive climate. And our confidence in the strength and stability of our cash flow makes it possible to return a large amount of capital to shareholders through regular dividends and the $4 billion share repurchase program we announced this morning.”


Revenues for the third quarter of 2010 increased 5.2% from the third quarter of 2009 to $4.7 billion. Subscription revenues grew 4.5% year-over-year to $4.5 billion, driven by a 3.5% increase in residential subscription revenues and a 21.6% increase in commercial subscription revenues. Advertising revenues increased 22.5% to $223 million. Residential subscription revenue growth was driven by increases in high-speed data, video and voice revenues. The growth in residential high-speed data revenues was the result of growth in high-speed data subscribers and, to a lesser extent, increases in average revenues per subscriber. Residential video revenues increased as a result of video price increases, year-over-year growth of digital video subscribers and an increase in DVR service revenues, partially offset by a year-over-year decline in video subscribers and a decrease in transactional video-on-demand revenues. The growth in residential voice revenues was driven by an increase in Digital Phone subscribers, partially offset by a decrease in average monthly revenues per Digital Phone subscriber. Commercial subscription revenue growth was due primarily to an increase in cell tower backhaul revenues and increases in Business Class Phone and commercial high-speed data subscribers. Advertising revenue growth was driven by year-over-year increases in a wide range of categories, most significantly automotive, media and political.


Adjusted Operating Income before Depreciation and Amortization (“Adjusted OIBDA”) rose 5.7% over the third quarter of 2009 to $1.7 billion driven by revenue growth, partially offset by a 5.0% increase in operating expenses, in particular, higher employee, video programming, marketing and voice expenses.

Employee expenses of $979 million were 4.0% higher than the third quarter of 2009, driven by higher headcount and compensation offset, in part, by a decrease in pension expense. Video programming expenses grew 3.5% to $1.0 billion due to contractual rate increases and incremental retransmission consent expense offset, in part, by a decline in video subscribers. Additionally, video programming costs were reduced by approximately $15 million in the third quarter of 2010 and increased by approximately $5 million in the third quarter of 2009 as a result of changes in cost estimates for programming services carried without a contract, reversals of previously accrued audit reserves and certain contract settlements. Marketing expense was up 11.4% to $156 million, while voice costs increased 4.3% to $168 million due to subscriber growth.

Operating Income was up 12.0% over the third quarter of 2009 to $927 million primarily as a result of higher Adjusted OIBDA and a decrease in amortization expense, partially offset by an increase in depreciation expense.

Adjusted OIBDA for the third quarter of 2010 excludes the expenses noted in the table below.

Net Income Attributable to TWC Shareholders was $360 million, or $1.00 per basic and diluted common share, for the third quarter of 2010 compared to $268 million, or $0.76 per basic and diluted common share, in the prior year quarter.

Adjusted OIBDA less Capital Expenditures for the first nine months of 2010 totaled $3.0 billion, a 19.8% increase over the first nine months of 2009, due to higher Adjusted OIBDA and lower capital expenditures.
Capital Expenditures were $2.1 billion in the first nine months of 2010, a 6.1% decrease from the first nine months of 2009, largely reflecting lower residential capital spending, partly offset by higher commercial capital spending. The decline in residential capital spending was primarily attributable to lower spending on support capital, customer premise equipment and scalable infrastructure. The increase in commercial capital spending was primarily related to higher spending on line extensions and scalable infrastructure.

Free Cash Flow for the first nine months of 2010 increased 8.2% to $1.6 billion from $1.5 billion in the first nine months of 2009, due to an increase in Adjusted OIBDA and decreases in capital expenditures and pension plan contributions, offset partly by higher cash tax and interest payments. Cash Provided by Operating Activities for the first nine months of 2010 was $3.8 billion, a 0.8% decrease from the first nine months of 2009. This decrease was related primarily to increases in cash tax and interest payments, offset partly by higher Adjusted OIBDA and lower pension plan contributions.

Net Debt and Mandatorily Redeemable Preferred Equity totaled $20.5 billion as of September 30, 2010, down $1.1 billion since December 31, 2009. The decline in net debt and preferred equity was driven by Free Cash Flow offset, in part, by the quarterly cash dividend payments and the increase in the fair value of debt subject to interest rate swap contracts (which was equal to the increase in the fair value of the underlying swaps which are separately recorded as assets in the accompanying consolidated balance sheet).


In the third quarter, high-speed data subscribers grew by 104,000 and Digital Phone subscribers increased by 34,000, while video subscribers declined by 155,000, resulting in a net loss of 17,000 Primary Service Units (“PSUs”). Double Play Subscriber net additions were 15,000 and Triple Play Subscriber net additions were 14,000 in the third quarter, and bundled subscribers totaled 8.6 million, or 59.4% of total customer relationships, as of September 30, 2010.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Operating Income (Loss) before Depreciation and Amortization, Adjusted OIBDA, Adjusted OIBDA less Capital Expenditures and Free Cash Flow. Refer to Note 2 to the accompanying consolidated financial statements for a discussion of the Company’s use of non-GAAP financial measures.

About Time Warner Cable

Time Warner Cable is the second-largest cable operator in the U.S., with technologically advanced, well-clustered systems located mainly in five geographic areas — New York State (including New York City), the Carolinas, Ohio, Southern California (including Los Angeles) and Texas. Time Warner Cable serves more than 14 million customers who subscribe to one or more of its video, high-speed data and voice services. Time Warner Cable Business Class offers a suite of phone, Internet, Ethernet and cable television services to businesses of all sizes. Time Warner Cable Media Sales, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions that are targeted and affordable. More information about the services of Time Warner Cable is available at, and

Additional details on financial and subscriber metrics are included in the Trending Schedules posted on the Company’s Investor Relations website at

Information on Conference Call

Time Warner Cable’s earnings conference call can be heard live at 8:30 am ET on Thursday, November 4, 2010. To listen to the call, visit

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, and other factors affecting the operations of Time Warner Cable Inc. More detailed information about these factors may be found in filings by Time Warner Cable Inc. with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Time Warner Cable is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

Corporate Communications Investor Relations
Alex Dudley (212) 364-8229 Tom Robey (212) 364-8218 
Justin Venech (212) 364-8242 Laraine Mancini  (212) 364-8202 






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