Time Warner Cable 2007 Annual Report Download - page 64

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Selected subscriber-related statistics were as follows (in thousands):
2006 2005 % Change 2006 2005 % Change
Consolidated Subscribers
as of December 31,
Managed Subscribers
(a)
as of December 31,
Basic video
(b)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,614 8,603 47% 13,402 9,384 43%
Digital video
(c)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,938 4,294 62% 7,270 4,595 58%
Residential high-speed data
(d)
. . . . . . . . . . . . . . . . . . . 6,270 3,839 63% 6,644 4,141 60%
Commercial high-speed data
(d)
. . . . . . . . . . . . . . . . . . 230 169 36% 245 183 34%
Digital Phone
(e)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719 913 88% 1,860 998 86%
Revenue generating units
(f)
. . . . . . . . . . . . . . . . . . . . 27,877 17,818 56% 29,527 19,301 53%
Customer relationships
(g)
. . . . . . . . . . . . . . . . . . . . . . 13,710 9,248 48% 14,565 10,088 44%
(a)
Managed subscribers include TWC’s consolidated subscribers and subscribers in the Kansas City Pool of TKCCP, which TWC received
on January 1, 2007 in the TKCCP asset distribution.
(b)
Basic video subscriber numbers reflect billable subscribers who receive at least basic video service.
(c)
Digital video subscriber numbers reflect billable subscribers who receive any level of video service via digital transmissions.
(d)
High-speed data subscriber numbers reflect billable subscribers who receive TWC’s Road Runner high-speed data service or any of the
other high-speed data services offered by TWC.
(e)
Digital Phone subscriber numbers reflect billable subscribers who receive an IP-based telephony service. Digital Phone subscribers
exclude subscribers acquired from Comcast in the Exchange who receive traditional, circuit-switched telephone service (which totaled
106,000 subscribers as of December 31, 2006).
(f)
Revenue generating units represent the total of all basic video, digital video, high-speed data, Digital Phone and circuit-switched
telephone service subscribers.
(g)
Customer relationships represent the number of subscribers that receive at least one level of service, encompassing video, high-speed data
and voice (including circuit-switched telephone) services, without regard to the number of services purchased. For example, a subscriber
who purchases only high-speed data service and no video service will count as one customer relationship, and a subscriber who purchases
both video and high-speed data services will also count as only one customer relationship.
Subscription revenues increased in 2006 as a result of increases in video, high-speed data and Digital Phone
revenues. The increase in video revenues in 2006 was primarily due to the Acquired Systems, the continued
penetration of digital video services and video price increases and growth in basic video subscriber levels in the
Legacy Systems. Digital video revenues represented 22% and 20% of video revenues in 2006 and 2005,
respectively.
High-speed data revenues in 2006 increased primarily due to the Acquired Systems and growth in high-speed
data subscribers. Commercial high-speed data revenues increased to $318 million in 2006 from $241 million in
2005.
The increase in voice revenues in 2006 was primarily due to growth in Digital Phone subscribers. Voice
revenues in 2006 also included $27 million of revenues associated with subscribers acquired from Comcast who
received traditional, circuit-switched telephone service. As of December 31, 2006, Digital Phone service was only
available in some of the Acquired Systems on a limited basis.
Subscription ARPU increased 11% to approximately $90 in 2006 from approximately $81 in 2005 as a result
of the increased penetration in advanced services and higher video rates, as discussed above.
Advertising revenues increased primarily due to a $136 million increase in local advertising and a $29 million
increase in national advertising in 2006, primarily attributable to the Acquired Systems. Excluding the results of the
Acquired Systems, Advertising revenues increased slightly as a result of an increase in political advertising
revenues in 2006.
59
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)