NEW YORK--(BUSINESS WIRE)-- Time Warner Cable Inc. (TWC) today reported financial results for its first quarter ended March 31, 2012.

Time Warner Cable Chief Executive Officer Glenn Britt said: Time Warner Cable's first quarter results reflect continued strong performance, and residential Internet and business services were standouts. Now that we have closed the Insight acquisition, our increased cash flow is available to fuel further investments in the business and capital returns to our shareholders.

FINANCIAL RESULTS

Revenues for the first quarter of 2012 increased 6.4% from the first quarter of 2011 to $5.1 billion. Residential services revenues increased 4.1% year-over-year to $4.4 billion, business services revenues grew 37.5% to $429 million, while advertising revenues increased 7.1% to $211 million and other revenues grew 3.4% to $61 million.

(in millions; unaudited)																					1st Quarter
																															Change
																					2012					2011					$					%
Residential services revenues:
	Video																				$	2,711				$	2,661				$	50				1.9	%
	High-speed data																					1,199					1,094					105				9.6	%
	Voice																					508					493					15				3.0	%
	Other																					15					11					4				36.4	%
Total residential services revenues																						4,433					4,259					174				4.1	%
Business services revenues:
	Video																					76					69					7				10.1	%
	High-speed data																					208					167					41				24.6	%
	Voice																					63					42					21				50.0	%
	Wholesale transport(a)																					41					32					9				28.1	%
	Other(b)																					41					2					39				NM
Total business services revenues																						429					312					117				37.5	%
Advertising revenues																						211					197					14				7.1	%
Other revenues																						61					59					2				3.4	%
Total revenues																					$	5,134				$	4,827				$	307				6.4	%

NMNot meaningful.
(a)		Wholesale transport revenues primarily include amounts generated by the sale of point-to-point transport services offered to wireless telephone providers (i.e., cell tower backhaul) and competitive carriers.
(b)		2012 amounts primarily consist of revenues from NaviSite, Inc.

Revenues for the first quarter of 2012 benefited from the acquisitions of Insight Communications Company, Inc. (on February 29, 2012), the NewWave Communications cable systems (during the fourth quarter of 2011) and NaviSite, Inc. (during the second quarter of 2011), as detailed below.

(in millions; unaudited)															1st Quarter 2012
															Historical					Acquisitions																					Total
															TWC(a)					Insight(b)					NewWave					NaviSite					Total						TWC
Residential services revenues:
	Video														$	2,651				$	49				$	11				$					$		60				$		2,711
	High-speed data															1,173					22					4											26						1,199
	Voice															492					13					3											16						508
	Other															15																											15
Total residential services revenues																4,331					84					18											102						4,433
Business services revenues																386					5					2					36						43						429
Advertising revenues																207					4																4						211
Other revenues																61																											61
Total revenues															$	4,985				$	93				$	20				$	36				$		149				$		5,134

(a)		Historical TWC amounts represent TWCs financial results excluding the results of Insight, NaviSite and certain cable systems acquired from NewWave.
(b)		Insight amounts represent the financial results of Insight from the date of acquisition (February 29, 2012) through March 31, 2012.

Excluding the impacts from acquisitions, residential services revenue growth was primarily driven by an increase in high-speed data revenues, partially offset by a slight decline in video revenues.

• The growth in residential high-speed data revenues was the result of growth in high-speed data subscribers and an increase in average revenues per subscriber (due to both price increases and a greater percentage of subscribers purchasing higher-priced tiers of service).
• Residential video revenues decreased slightly as price increases, a greater percentage of subscribers purchasing higher-priced tiers of service and increased revenues from equipment rental charges and DVR service were more than offset by a decline in video subscribers and revenues from transactional video-on-demand and premium channels.
• Residential voice revenues remained essentially flat as growth in voice subscribers was offset by a decrease in average revenues per subscriber.

Excluding the impacts from acquisitions, business services revenue growth was due primarily to increases in high-speed data and voice subscribers and growth in cell tower backhaul and Metro Ethernet revenues.

Excluding the impacts from acquisitions, advertising revenues increased primarily as a result of a year-over-year increase in revenues from advertising inventory sold on behalf of other video distributors.

Adjusted Operating Income before Depreciation and Amortization (Adjusted OIBDA) for the first quarter of 2012 increased 8.2% from the first quarter of 2011 to $1.9 billion. The increase was driven by revenue growth, partially offset by a 5.3% increase in operating expenses.

Operating expenses grew primarily due to higher employee costs, video programming expenses and other operating costs, partially offset by a decrease in voice costs. Employee costs were up 10.1% to $1.1 billion, primarily as a result of increased headcount (which increased by approximately 3,500 employees, including Insight, NaviSite and NewWave employees) and higher compensation costs per employee. Pension and equity-based compensation costs increased $15 million and $12 million, respectively. Business services employee costs increased 42.7% year-over-year. Video programming expenses grew 4.6% to $1.1 billion due to contractual rate increases and the acquisition of Insight offset, in part, by an organic decline in video subscribers. For the first quarter of 2011, video programming costs were reduced by approximately $18 million as a result of changes in cost estimates for programming services carried without a contract. Average monthly video programming costs per video subscriber increased 5.9% year-over-year to $30.85 for the first quarter of 2012. Voice costs were down 10.8% to $149 million due to a decrease in delivery costs per subscriber related to the in-sourcing of voice transport, switching and interconnection services, partially offset by an organic increase in subscribers.

Operating Income for the first quarter of 2012 increased 6.9% from the first quarter of 2011 to $1.0 billion. Note 1 to the accompanying consolidated financial statements details certain items affecting the comparability of TWCs results for the first quarters of 2012 and 2011. Excluding these items, first-quarter 2012 Operating Income would have grown 10.8% to $1.1 billion, driven by higher Adjusted OIBDA, partially offset by higher depreciation and amortization expenses primarily as a result of the Companys recent acquisitions (largely Insight).

(in millions; unaudited)																					1st Quarter
																																	Change
																					2012						2011						$						%
Adjusted OIBDA(a)																					$	1,873					$	1,731					$	142					8.2	%
Adjusted OIBDA margin(b)																					36.5		%				35.9		%
	Merger-related and restructuring costs																					(45	)					(6	)					(39	)				NM
OIBDA(a)																						1,828						1,725						103					6.0	%
	Depreciation																					(771	)					(744	)					(27	)				3.6	%
	Amortization																					(15	)					(6	)					(9	)				150.0	%
Operating Income																					$	1,042					$	975					$	67					6.9	%

NMNot meaningful.
(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of OIBDA and Adjusted OIBDA.
(b)		Adjusted OIBDA margin is defined as Adjusted OIBDA as a percentage of total revenues.

Adjusted OIBDA less Capital Expenditures for the first three months of 2012 totaled $1.2 billion, a 9.3% increase over the first three months of 2011, due to higher Adjusted OIBDA, partially offset by higher capital expenditures. Capital Expenditures were $706 million for the first three months of 2012, a 6.5% increase over the first three months of 2011, largely reflecting higher support capital spending in residential services and other.

(in millions; unaudited)																					1st Quarter
																																	Change
																					2012						2011						$						%
Adjusted OIBDA(a)																					$	1,873					$	1,731					$	142					8.2	%
	Capital expenditures																					(706	)					(663	)					(43	)				6.5	%
Adjusted OIBDA less capital expenditures(a)																					$	1,167					$	1,068					$	99					9.3	%

(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of Adjusted OIBDA and Adjusted OIBDA less capital expenditures.

Net Income Attributable to TWC Shareholders was $382 million, or $1.21 per basic common share and $1.20 per diluted common share, for the first quarter of 2012 compared to $325 million, or $0.94 per basic common share and $0.93 per diluted common share, for the first quarter of 2011. Note 1 to the accompanying consolidated financial statements details certain items affecting the comparability of TWCs net income attributable to TWC shareholders for the first quarter of 2012 and 2011, the most significant of which for 2012 was a negative $0.09 per diluted common share impact from merger-related and restructuring costs and, for 2011, was a negative $0.06 per diluted common share net impact from expired Time Warner Inc. stock options.

Adjusted Net Income Attributable to TWC Shareholders and Adjusted Diluted EPS, which exclude the items detailed in Note 1, were $414 million and $1.30, respectively, for the first quarter of 2012 compared to $352 million and $1.01, respectively, for the first quarter of 2011. These year-over-year increases were primarily due to higher Operating Income and lower other expense, net (reflecting a decline in losses from Clearwire Communications LLC as the Companys investment was reduced to $0 during the third quarter of 2011), partially offset by higher interest expense, net, and income tax provision. Additionally, Adjusted Diluted EPS for the first quarter of 2012 benefited from lower average common shares outstanding as a result of share repurchases under the Companys stock repurchase program.

(in millions, except per share data; unaudited)																					1st Quarter
																															Change
																					2012					2011					$					%
Net income attributable to TWC shareholders																					$	382				$	325				$	57				17.5	%
Adjusted net income attributable to TWC shareholders(a)																					$	414				$	352				$	62				17.6	%
Net income per common share attributable to TWC common
	shareholders:
	Basic																				$	1.21				$	0.94				$	0.27				28.7	%
	Diluted																				$	1.20				$	0.93				$	0.27				29.0	%
Adjusted Diluted EPS(a)																					$	1.30				$	1.01				$	0.29				28.7	%

(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of Adjusted net income attributable to TWC shareholders and Adjusted Diluted EPS.

Free Cash Flow for the first three months of 2012 decreased 22.5% to $718 million from $927 million in the first three months of 2011, due mainly to lower cash provided by operating activities and an increase in capital expenditures. Cash Provided by Operating Activities for the first three months of 2012 was $1.4 billion, an 11.9% decrease from $1.6 billion in the first three months of 2011. This decrease was driven by a change in working capital (primarily due to a significant income tax refund received in the first quarter of 2011 and an increase in net interest payments), partially offset by higher Adjusted OIBDA.

(in millions; unaudited)																					1st Quarter
																																	Change
																					2012						2011						$						%
Adjusted OIBDA(a)																					$	1,873					$	1,731					$	142					8.2	%
Net interest payments																						(465	)					(399	)					(66	)				16.5	%
Net income tax refunds (payments)																						(19	)					258						(277	)				(107.4	%)
All other, net, including working capital changes																						(6	)					(20	)					14					(70.0	%)
Cash provided by operating activities																						1,383						1,570						(187	)				(11.9	%)
Add: Excess tax benefit from exercise of stock options																						52						29						23					79.3	%
Less:
	Capital expenditures																					(706	)					(663	)					(43	)				6.5	%
	Cash paid for other intangible assets																					(9	)					(8	)					(1	)				12.5	%
	Other																					(2	)					(1	)					(1	)				100.0	%
Free Cash Flow (a)																					$	718					$	927					$	(209	)				(22.5	%)

(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of Adjusted OIBDA and Free Cash Flow.

Net Debt and Mandatorily Redeemable Preferred Equity totaled $24.5 billion as of March 31, 2012 compared to $21.6 billion as of December 31, 2011, as the cash used for the acquisition of Insight, share repurchases and the dividend payment was greater than Free Cash Flow.

(in millions; unaudited)				3/31/2012						12/31/2011
Long-term debt				$	24,344					$	24,320
Debt due within one year					2,495						2,122
Total debt					26,839						26,442
Cash and equivalents					(2,629	)					(5,177	)
Net debt(a)					24,210						21,265
Mandatorily redeemable preferred equity					300						300
Net debt and mandatorily redeemable preferred equity				$	24,510					$	21,565

(a)		Net debt is defined as total debt less cash and equivalents.

RETURN OF CAPITAL

Time Warner Cable returned $532 million to shareholders during the quarter. Share repurchases during the first quarter of 2012 totaled $353 million or 4.8 million shares of common stock. As of March 31, 2012, $3.7 billion remained under the Companys share repurchase authorization. Time Warner Cable also paid a regular dividend of $0.56 per share of common stock, $179 million in aggregate, during the first quarter of 2012.

SUBSCRIBER METRICS

(in thousands)																								Net
																								Additions				Acquired
																				12/31/2011				(Declines)(a)				Systems(b)				3/31/2012(a)
Residential services subscribers:
	Video																				11,889				(94)				673				12,468
	High-speed data																				9,954				214				548				10,716
	Voice																				4,544				112				289				4,945
	Primary service units																				26,387				232				1,510				28,129
Business services subscribers:
	Video																				172				4				10				185
	High-speed data																				390				13				20				420
	Voice																				163				12				10				184
	Primary service units																				725				29				40				789
Total primary service units																					27,112				261				1,550				28,918
Single play subscribers																					5,748				4				231				5,980
Double play subscribers																					4,925				(59)				319				5,184
Triple play subscribers																					3,838				125				227				4,190
Customer relationships																					14,511				70				777				15,354

Refer to the Trending Schedules posted on the Companys website at www.twc.com/investors for definitions related to the Companys subscriber metrics.
(a)		During the first quarter of 2012, the Company recorded adjustments that decreased business video subscribers by 1,000, business high-speed data subscribers by 3,000, business voice subscribers by 1,000, business primary service units by 5,000, total primary service units by 5,000, single play subscribers by 3,000, double play subscribers by 1,000 and customer relationships by 4,000. The adjustments are reflected in the Companys subscriber numbers as of March 31, 2012; however, they are not reflected in net additions (declines) for the first quarter of 2012.
(b)		On February 29, 2012, the Company acquired Insight. TWC uses a methodology for counting certain subscribers that differs from the methodology used by Insight. TWC has estimated the Insight subscribers under TWC counting methodologies; however, these estimates are subject to adjustments as TWC completes its integration of Insight.

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 OIBDA, Adjusted OIBDA, Adjusted OIBDA less capital expenditures, Adjusted net income attributable to TWC shareholders, Adjusted Diluted EPS and Free Cash Flow. Refer to Note 2 to the accompanying consolidated financial statements for a discussion of the Companys use of non-GAAP financial measures.

About Time Warner Cable

Time Warner Cable Inc. is among the largest providers of video, high-speed data and voice services in the United States, connecting more than 15 million customers to entertainment, information and each other. Time Warner Cable Business Class offers data, video and voice services to businesses of all sizes, cell tower backhaul services to wireless carriers and, through its NaviSite subsidiary, managed and outsourced information technology solutions and cloud services. Time Warner Cable Media, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions. More information about the services of Time Warner Cable is available at www.twc.com, www.twcbc.com, www.navisite.com, and www.twcmedia.com.

Additional details on financial and subscriber metrics are included in the Trending Schedules and Presentation Slides posted on the Companys Investor Relations website at www.twc.com/investors.

Information on Conference Call

Time Warner Cables earnings conference call can be heard live at 8:30 am ET on Thursday, April 26, 2012. To listen to the call, visit www.twc.com/investors.

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 managements 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 Report 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.

TIME WARNER CABLE INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
																				March 31,						December 31,
																				2012						2011
																				(in millions)
ASSETS
Current assets:
	Cash and equivalents																			$	2,629					$	5,177
	Receivables, less allowances of $52 million and $62 million
		as of March 31, 2012 and December 31, 2011, respectively																			647						767
	Deferred income tax assets																				398						267
	Other current assets																				214						187
Total current assets																					3,888						6,398
Investments																					770						774
Property, plant and equipment, net																					14,542						13,905
Intangible assets subject to amortization, net																					635						228
Intangible assets not subject to amortization																					26,197						24,272
Goodwill																					2,817						2,247
Other assets																					447						452
Total assets																				$	49,296					$	48,276
LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable																			$	352					$	545
	Deferred revenue and subscriber-related liabilities																				202						169
	Accrued programming expense																				870						807
	Current maturities of long-term debt																				2,495						2,122
	Other current liabilities																				1,665						1,727
Total current liabilities																					5,584						5,370
Long-term debt																					24,344						24,320
Mandatorily redeemable preferred equity issued by a subsidiary																					300						300
Deferred income tax liabilities, net																					11,022						10,198
Other liabilities																					520						551
TWC shareholders equity:
	Common stock, $0.01 par value, 313.4 million and 315.0 million shares issued and
		outstanding as of March 31, 2012 and December 31, 2011, respectively																			3						3
	Additional paid-in capital																				7,966						8,018
	Retained earnings																				100						68
	Accumulated other comprehensive loss, net																				(551	)					(559	)
Total TWC shareholders equity																					7,518						7,530
Noncontrolling interests																					8						7
Total equity																					7,526						7,537
Total liabilities and equity																				$	49,296					$	48,276
See accompanying notes.

TIME WARNER CABLE INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
																				Three Months Ended March 31,
																				2012						2011
																				(in millions, except
																				per share data)
Revenues																				$	5,134					$	4,827
Costs and expenses:
	Costs of revenues(a)																				2,404						2,272
	Selling, general and administrative(a)																				857						824
	Depreciation																				771						744
	Amortization																				15						6
	Merger-related and restructuring costs																				45						6
Total costs and expenses																					4,092						3,852
Operating Income																					1,042						975
Interest expense, net																					(405	)					(363	)
Other expense, net																					(3	)					(30	)
Income before income taxes																					634						582
Income tax provision																					(251	)					(256	)
Net income																					383						326
Less: Net income attributable to noncontrolling interests																					(1	)					(1	)
Net income attributable to TWC shareholders																				$	382					$	325
Net income per common share attributable to TWC common shareholders:
	Basic																			$	1.21					$	0.94
	Diluted																			$	1.20					$	0.93
Average common shares outstanding:
	Basic																				313.9						343.5
	Diluted																				319.0						349.8
Cash dividends declared per share of common stock																				$	0.56					$	0.48
(a) Costs of revenues and selling, general and administrative expenses exclude depreciation.
See accompanying notes.

TIME WARNER CABLE INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
																				Three Months Ended March 31,
																				2012						2011
																				(in millions)
OPERATING ACTIVITIES
Net income																				$	383					$	326
Adjustments for noncash and nonoperating items:
	Depreciation																				771						744
	Amortization																				15						6
	Loss from equity investments, net of cash distributions																				5						31
	Deferred income taxes																				113						201
	Equity-based compensation expense																				53						41
	Excess tax benefit from equity-based compensation																				(52	)					(29	)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
	Receivables																				156						95
	Accounts payable and other liabilities																				(45	)					(86	)
	Other changes																				(16	)					241
Cash provided by operating activities																					1,383						1,570
INVESTING ACTIVITIES
Acquisitions and investments, net of cash acquired and distributions received																					(1,395	)					(8	)
Capital expenditures																					(706	)					(663	)
Other investing activities																					8						16
Cash used by investing activities																					(2,093	)					(655	)
FINANCING ACTIVITIES
Long-term debt repayments																					(1,350	)
Proceeds from exercise of stock options																					79						66
Taxes paid in cash in lieu of shares issued for equity-based compensation																					(39	)					(17	)
Excess tax benefit from equity-based compensation																					52						29
Dividends paid																					(179	)					(167	)
Repurchases of common stock																					(356	)					(831	)
Other financing activities																					(45	)					(9	)
Cash used by financing activities																					(1,838	)					(929	)
Decrease in cash and equivalents																					(2,548	)					(14	)
Cash and equivalents at beginning of period																					5,177						3,047
Cash and equivalents at end of period																				$	2,629					$	3,033
See accompanying notes.

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ITEMS AFFECTING COMPARABILITY
The following items affected the comparability of Time Warner Cable Inc.s (TWC or the Company) results for the three months ended March 31, 2012 and 2011:
(in millions, except per share data; unaudited)																				Operating										Income Tax					TWC Net					Diluted
										OIBDA(a)					D&A(a)					Income					Other(a)					Provision					Income(a)					EPS(a)
1st Quarter 2012:
As reported										$	1,828				$	(786	)			$	1,042				$	(409	)			$	(251	)			$	382				$	1.20
Year-over-year change, as reported:
	$									$	103				$	(36	)			$	67				$	(15	)			$	5				$	57				$	0.27
	%									6.0		%			4.8		%			6.9		%			3.8		%			(2.0		%)			17.5		%				29.0	%
Items affecting comparability:
	Merger-related and
		restructuring costs									45										45										(17	)				28					0.09
	Asset impairment(b)																									10					(4	)				6					0.02
	Gain on equity award
		reimbursement obligation
		to Time Warner(c)																								(3	)				1					(2	)				(0.01	)
As adjusted										$	1,873				$	(786	)			$	1,087				$	(402	)			$	(271	)			$	414				$	1.30
Year-over-year change, as adjusted:
	$									$	142				$	(36	)			$	106				$	(13	)			$	(31	)			$	62				$	0.29
	%									8.2		%			4.8		%			10.8		%			3.3		%			12.9		%			17.6		%				28.7	%
1st Quarter 2011:
As reported										$	1,725				$	(750	)			$	975				$	(394	)			$	(256	)			$	325				$	0.93
Items affecting comparability:
	Restructuring costs										6										6										(2	)				4					0.01
	Loss on equity award
		reimbursement obligation
		to Time Warner(c)																								5					(2	)				3					0.01
	Impact of expired
		Time Warner
		stock options, net(d)																													20					20					0.06
As adjusted										$	1,731				$	(750	)			$	981				$	(389	)			$	(240	)			$	352				$	1.01

(a)		OIBDA represents Operating Income before Depreciation and Amortization. D&A represents depreciation and amortization. Other consists of interest expense, net, other expense, net, and net income attributable to noncontrolling interests. TWC net income represents net income attributable to TWC shareholders. Diluted EPS represents net income per diluted common share attributable to TWC common shareholders.
(b)		Amount represents an impairment of TWCs investment in Canoe Ventures LLC, an equity-method investee engaged in the development of advanced advertising platforms.
(c)		Pursuant to an agreement with Time Warner Inc. (Time Warner), TWC is obligated to reimburse Time Warner for the cost of certain Time Warner equity awards held by TWC employees upon exercise or vesting of such awards. Amounts represent the change in the reimbursement obligation, which fluctuates primarily with the fair value and expected volatility of Time Warner common stock, and changes in fair value are recorded in other expense, net, in the period of change.
(d)		Amounts represent the impact of the reversal of deferred income tax assets associated with Time Warner stock option awards held by TWC employees, net of excess tax benefits realized upon the exercise of TWC stock options or vesting of TWC restricted stock units.

2. USE OF NON-GAAP FINANCIAL MEASURES

In discussing its performance, the Company may use certain measures that are not calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP). These measures include OIBDA, Adjusted OIBDA, Adjusted OIBDA less capital expenditures, Adjusted net income attributable to TWC shareholders, Adjusted Diluted EPS and Free Cash Flow, which the Company defines as follows:

• OIBDA (Operating Income before Depreciation and Amortization) means Operating Income before depreciation of tangible assets and amortization of intangible assets.
• Adjusted OIBDA means OIBDA excluding the impact, if any, of noncash impairments of goodwill, intangible and fixed assets; gains and losses on asset sales; merger-related and restructuring costs; and costs associated with certain equity awards granted to employees to offset value lost as a result of the Companys separation from Time Warner (the Separation).
• Adjusted OIBDA less capital expenditures means Adjusted OIBDA minus capital expenditures.
• Adjusted net income attributable to TWC shareholders means net income attributable to TWC shareholders (as defined under GAAP) excluding the impact, if any, of noncash impairments of goodwill, intangible and fixed assets and investments; gains and losses on asset sales; merger-related and restructuring costs; changes in the Companys equity award reimbursement obligation to Time Warner; certain changes to income tax provision; and costs associated with certain equity awards granted to employees to offset value lost as a result of the Separation; as well as the impact of taxes and noncontrolling interests on the above items. Similarly, Adjusted Diluted EPS means net income per diluted common share attributable to TWC common shareholders excluding the above items.
• Free Cash Flow means cash provided by operating activities (as defined under GAAP) excluding the impact, if any, of cash provided or used by discontinued operations, plus (i) any income taxes paid on investment sales and (ii) any excess tax benefit from equity-based compensation, less (i) capital expenditures, (ii) cash paid for other intangible assets (excluding those associated with business combinations), (iii) partnership distributions to third parties and (iv) principal payments on capital leases.

Management uses OIBDA and Adjusted OIBDA, among other measures, in evaluating the performance of the Companys business because they eliminate the effects of (1) considerable amounts of noncash depreciation and amortization and (2) items not within the control of the Companys operations managers (such as net income attributable to noncontrolling interests, income tax provision, other income (expense), net, and interest expense, net). Adjusted OIBDA further eliminates the effects of certain noncash items identified in the definition of Adjusted OIBDA above. Adjusted OIBDA less capital expenditures also allows management to evaluate performance including the effect of capital spending decisions. Adjusted OIBDA and Adjusted OIBDA less capital expenditures are also significant performance measures used in the Companys annual incentive compensation programs. Adjusted net income attributable to TWC shareholders and Adjusted Diluted EPS are considered important indicators of the operational strength of the Company as these measures eliminate amounts that do not reflect the fundamental performance of the Company. The Company utilizes Adjusted Diluted EPS, among other measures, to evaluate its performance both on an absolute basis and relative to its peers and the broader market. Management believes that Free Cash Flow is an important indicator of the Companys ability to generate cash, reduce net debt, pay dividends, repurchase common stock and make strategic investments, after the payment of cash taxes, interest and other cash items. In addition, all of these measures are commonly used by analysts, investors and others in evaluating the Companys performance and liquidity.

These measures have inherent limitations. For example, OIBDA and Adjusted OIBDA do not reflect capital expenditures or the periodic costs of certain capitalized assets used in generating revenues. To compensate for such limitations, management evaluates performance through Adjusted OIBDA less capital expenditures and Free Cash Flow, which reflect capital expenditure decisions, and net income attributable to TWC shareholders, which reflects the periodic costs of capitalized assets. Adjusted OIBDA and Adjusted OIBDA less capital expenditures do not reflect any of the items noted as exclusions in the definition of Adjusted OIBDA above. To compensate for these limitations, management evaluates performance through OIBDA and net income attributable to TWC shareholders, which do reflect such items. OIBDA, Adjusted OIBDA and Adjusted OIBDA less capital expenditures also fail to reflect the significant costs borne by the Company for income taxes and debt servicing costs, the share of OIBDA, Adjusted OIBDA and Adjusted OIBDA less capital expenditures attributable to noncontrolling interests, the results of the Companys equity investments and other non-operational income or expense. Additionally, Adjusted net income attributable to TWC shareholders and Adjusted Diluted EPS do not reflect certain charges that affect the operating results of the Company and they involve judgment as to whether items affect fundamental operating performance. Management compensates for these limitations by using other analytics such as a review of net income attributable to TWC shareholders. Free Cash Flow, a liquidity measure, does not reflect payments made in connection with investments and acquisitions, which reduce liquidity. To compensate for this limitation, management evaluates such investments and acquisitions through other measures such as return on investment analyses.

These non-GAAP measures should be considered in addition to, not as substitutes for, the Companys Operating Income, net income attributable to TWC shareholders and various cash flow measures (e.g., cash provided by operating activities), as well as other measures of financial performance and liquidity reported in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies.

Time Warner Cable Inc.
Corporate Communications
Alex Dudley, 212-364-8229
or
Justin Venech, 212-364-8242
or
Investor Relations
Tom Robey, 212-364-8218
or
Laraine Mancini, 212-364-8202

Source: Time Warner Cable Inc.

Copyright Business Wire 2012