Time Warner Cable 2008 Annual Report Download - page 75

Selected subscriber-related statistics were as follows (in thousands):
2007 2006 % Change 2007 2006 % Change
Consolidated Subscribers
as of December 31,
Managed Subscribers
(a)
as of December 31,
Basic video
(b)
........................ 13,251 12,614 5% 13,251 13,402 (1%)
Digital video
(c)
....................... 8,022 6,938 16% 8,022 7,270 10%
Residential high-speed data
(d)(e)
........... 7,620 6,270 22% 7,620 6,644 15%
Commercial high-speed data
(d)(e)
.......... 280 230 22% 280 245 14%
Residential Digital Phone
(e)(f)
............ 2,890 1,719 68% 2,890 1,860 55%
Commercial Digital Phone
(e)(f)
........... 5 — NM 5 — NM
Revenue generating units
(g)
.............. 32,077 27,877 15% 32,077 29,527 9%
Customer relationships
(h)
............... 14,626 13,710 7% 14,626 14,565 —
Double play
(i)
........................ 4,703 4,406 7% 4,703 4,647 1%
Triple play
(j)
......................... 2,363 1,411 67% 2,363 1,523 55%
NM—Not meaningful.
(a)
For 2006, managed subscribers included 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. Beginning January 1, 2007, subscribers in the Kansas City Pool are included
in both managed and consolidated subscriber results as a result of the consolidation of the Kansas City Pool.
(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 at their dwelling or commercial
establishment 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)
The determination of whether a high-speed data or Digital Phone subscriber is categorized as commercial or residential is generally based
upon the type of service provided to that subscriber. For example, if TWC provides a commercial service, the subscriber is classified as
commercial.
(f)
Digital Phone subscriber numbers reflect billable subscribers who receive an IP-based telephony service. Residential Digital Phone
subscriber numbers as of December 31, 2007 and 2006 exclude 9,000 and 106,000 subscribers, respectively, who received traditional,
circuit-switched telephone service.
(g)
Revenue generating units represent the total of all basic video, digital video, high-speed data and voice (including circuit-switched
telephone service) subscribers.
(h)
Customer relationships represent the number of subscribers who receive at least one level of service, encompassing video, high-speed data
and voice 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.
(i)
Double play subscriber numbers reflect customers who subscribe to two of the Company’s primary services (video, high-speed data and
voice).
(j)
Triple play subscriber numbers reflect customers who subscribe to all three of the Company’s primary services.
Subscription revenues increased as a result of increases in video, high-speed data and voice revenues. The
increase in video revenues was primarily due to the impact of the Acquired Systems, the consolidation of the Kansas
City Pool, the continued penetration of digital video services and video price increases. Digital video revenues
represented 23% and 22% of video revenues in 2007 and 2006, respectively.
High-speed data revenues increased primarily due to the impact of the Acquired Systems, the consolidation of
the Kansas City Pool and growth in high-speed data subscribers.
The increase in voice revenues was primarily due to growth in Digital Phone subscribers and the consolidation
of the Kansas City Pool. Voice revenues for the Acquired Systems also included revenues associated with
subscribers acquired from Comcast who received traditional, circuit-switched telephone service of $34 million
and $27 million in 2007 and 2006, respectively.
Subscription ARPU increased 5% to $94.09 in 2007 from $89.75 in 2006. This increase was primarily a result
of the increased penetration of advanced services (including digital video, high-speed data and Digital Phone) in the
Legacy Systems and higher video prices, as discussed above, partially offset by lower penetration of advanced
services in both the Acquired Systems and the Kansas City Pool as compared to the Legacy Systems.
65
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)