Time Warner Cable 2009 Annual Report Download - page 47

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Common Stock Dividend
On January 27, 2010, the Company’s Board of Directors declared a quarterly cash dividend on TWC Common Stock. The quarterly
dividend of $0.40 per share of TWC Common Stock, representing the first payment of a planned annual dividend of $1.60 per share, will
be payable in cash on March 15, 2010 to stockholders of record at the close of business on February 26, 2010.
FINANCIAL STATEMENT PRESENTATION
Revenues
The Company’s revenues consist of Subscription and Advertising revenues. Subscription revenues consist of revenues from video,
high-speed data and voice services.
Video revenues include residential and commercial subscriber fees for the Company’s three main levels or “tiers” of video
programming—Basic Service Tier (“BST”), Expanded Basic Service Tier (or Cable Programming Service Tier) (“CPST”) and Digital
Basic Service Tier (“DBT”), as well as fees for genre-based programming tiers, such as movies, sports and Spanish language tiers. Video
revenues also include related equipment rental charges, installation charges and franchise fees collected on behalf of local franchising
authorities. Additionally, video revenues include revenues from premium channels, transactional video-on-demand (e.g., events and
movies) and digital video recorder services. Several ancillary items are also included within video revenues, such as commissions earned
on the sale of merchandise by home shopping networks and revenues from home security services.
High-speed data revenues primarily include subscriber fees from both residential and commercial subscribers, along with related
home networking fees and installation charges. High-speed data revenues also include fees paid to TWC by (a) the Advance/Newhouse
Partnership for the ability to distribute TWC’s Road Runner
TM
high-speed data service and TWC’s management of certain functions for
the Advance/Newhouse Partnership, including, among others, programming and engineering, and (b) other distributors of TWC’s Road
Runner high-speed data service, which together totaled $127 million, $139 million and $132 million in 2009, 2008 and 2007,
respectively. In addition, high-speed data revenues include fees received from third-party internet service providers whose on-line
services are provided to some of TWC’s customers (e.g., Earthlink). Commercial high-speed data revenues also include amounts
generated by the sale of networking and transport services (e.g., Metro Ethernet services and point-to-point transport services offered to
wireless telephone providers, Internet service providers and competitive carriers on a wholesale basis).
Voice revenues include subscriber fees from residential and commercial Digital Phone subscribers, along with related installation
charges. For the year ended December 31, 2007, voice revenues also included subscriber fees from circuit-switched telephone (9,000
subscribers as of December 31, 2007). During the first half of 2008, TWC completed the process of discontinuing the provision of
circuit-switched telephone service in accordance with regulatory requirements.
Advertising revenues include the fees charged to local, regional and national advertising customers for advertising placed on the
Company’s video and high-speed data services. Nearly all Advertising revenues are attributable to advertising placed on the Company’s
video service.
Costs and Expenses
Costs of revenues include the following costs directly associated with the delivery of services to subscribers or the maintenance of
the Company’s delivery systems: video programming costs; high-speed data connectivity costs and certain high-speed data customer care
support service costs; voice network costs; other service-related expenses, including non-administrative labor; franchise fees; and other
related costs.
Selling, general and administrative expenses include amounts not directly associated with the delivery of services to subscribers or
the maintenance of the Company’s delivery systems, such as administrative labor costs, marketing expenses, billing system charges,
non-plant repair and maintenance costs, other administrative overhead costs and, prior to the Separation, fees paid to Time Warner for
reimbursement of certain administrative support functions.
35
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)