Time Warner Cable 2007 Annual Report Download - page 63

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were no longer required. However, if the Internal Revenue Service (the “IRS”) were successful in challenging the
tax-free characterization of the TWC Redemption, an additional cash liability on account of taxes of up to an
estimated $900 million could become payable by the Company.
Cumulative effect of accounting change, net of tax. In 2006, the Company recorded a benefit of $2 million,
net of tax, as the cumulative effect of a change in accounting principle upon the adoption of Financial Accounting
Standards Board (“FASB”) Statement of Financial Accounting Standards (“Statement”) No. 123 (revised 2004),
Share-Based Payment (“FAS 123R”) to recognize the effect of estimating the number of Time Warner equity-based
awards granted to TWC employees prior to January 1, 2006 that are not ultimately expected to vest.
Net income and net income per common share. Net income was $1.123 billion in 2007 compared to
$1.976 billion in 2006. Basic and diluted net income per common share were $1.15 in 2007 compared to $2.00 in
2006.
2006 vs. 2005
Revenues. Revenues by major category were as follows (in millions):
2006 2005 % Change
Years Ended December 31,
Subscription:
Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,632 $6,044 26%
High-speed data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,756 1,997 38%
Voice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 272 163%
Total Subscription . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,103 8,313 34%
Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664 499 33%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,767 $8,812 34%
Revenues by major category for the Legacy Systems, the Acquired Systems and the total systems were as
follows (in millions):
Legacy
Systems
Acquired
Systems
(a)
Total
Systems
Legacy
Systems
Acquired
Systems
Total
Systems
Year Ended December 31, 2006 Year Ended December 31, 2005
Subscription:
Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,467 $1,165 $ 7,632 $6,044 $— $6,044
High-speed data . . . . . . . . . . . . . . . . . . . . . . . . . 2,435 321 2,756 1,997 — 1,997
Voice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687 28 715 272 — 272
Total Subscription . . . . . . . . . . . . . . . . . . . . . . . . . 9,589 1,514 11,103 8,313 — 8,313
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 137 664 499 — 499
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,116 $1,651 $11,767 $8,812 $— $8,812
(a)
Amounts reflect revenues for the Acquired Systems for the five months following the closing of the Transactions.
58
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)