Time Warner Cable 2008 Annual Report Download - page 152

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TIME WARNER CABLE INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
Time Warner Entertainment Company, L.P. (“TWE”) and TW NY Cable Holding Inc. (“TW NY” and,
together with TWE, the “Guarantor Subsidiaries”) are subsidiaries of Time Warner Cable Inc. (the “Parent
Company”). The Guarantor Subsidiaries have fully and unconditionally, jointly and severally, directly or indirectly,
guaranteed the debt issued by the Parent Company in its 2007 registered exchange offer and its 2008 public
offerings. The Parent Company owns 100% of the voting interests, directly or indirectly, of both TWE and TW NY.
The Securities and Exchange Commission’s rules require that condensed consolidating financial information
be provided for subsidiaries that have guaranteed debt of a registrant issued in a public offering, where each such
guarantee is full and unconditional and where the voting interests of the subsidiaries are 100% owned by the
registrant. Set forth below are condensed consolidating financial statements presenting the financial position,
results of operations, and cash flows of (i) the Parent Company, (ii) the Guarantor Subsidiaries on a combined basis
(as such guarantees are joint and several), (iii) the direct and indirect non-guarantor subsidiaries of the Parent
Company (the “Non-Guarantor Subsidiaries”) on a combined basis and (iv) the eliminations necessary to arrive at
the information for Time Warner Cable Inc. on a consolidated basis.
There are no legal or regulatory restrictions on the Parent Company’s ability to obtain funds from any of its
subsidiaries through dividends, loans or advances.
These condensed consolidating financial statements should be read in conjunction with the consolidated
financial statements of Time Warner Cable Inc.
Basis of Presentation
In presenting the condensed consolidating financial statements, the equity method of accounting has been
applied to (i) the Parent Company’s interests in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries and
(ii) the Guarantor Subsidiaries’ interests in the Non-Guarantor Subsidiaries, where applicable, even though all such
subsidiaries meet the requirements to be consolidated under U.S. generally accepted accounting principles. All
intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-
Guarantor Subsidiaries have been eliminated, as shown in the column “Eliminations.”
The accounting bases in all subsidiaries, including goodwill and identified intangible assets, have been
allocated to the applicable subsidiaries. Interest income (expense) is determined based on third-party debt and the
relevant intercompany amounts within the respective legal entity.
Time Warner Cable Inc. is not a separate taxable entity for U.S. federal and various state income tax purposes
and its results are included in the consolidated U.S. federal and certain state income tax returns of Time Warner Inc.
In the condensed consolidating financial statements, tax expense has been presented based on each subsidiary’s
legal entity basis. Deferred taxes of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor
Subsidiaries have been presented based upon the temporary differences between the carrying amounts of the
respective assets and liabilities of the applicable entities.
Costs incurred by the Parent Company, the Guarantor Subsidiaries or the Non-Guarantor Subsidiaries are
allocated to the various entities based on the relative usage of such expenses.
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