Time Warner Cable 2010 Annual Report Download - page 13

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PART I
Item 1. Business.
Overview
Time Warner Cable Inc. (together with its subsidiaries, “TWC” or the “Company”) is the second-largest cable operator
in the U.S., with technologically advanced, well-clustered systems located mainly in five geographic areas – New York State
(including New York City), the Carolinas, Ohio, Southern California (including Los Angeles) and Texas. As of
December 31, 2010, TWC served approximately 14.5 million residential and commercial customers who subscribed to
one or more of its three primary subscription services – video, high-speed data and voice – totaling approximately
26.7 million primary service units (“PSUs”). TWC markets its services separately and in “bundled” packages of
multiple services and features. As of December 31, 2010, 59.0% of TWC’s residential and commercial customers
subscribed to two or more of its primary services, including 25.4% of its customers who subscribed to all three
primary services. TWC also sells advertising to a variety of national, regional and local advertising customers.
Recent Developments
Dividend and Stock Repurchase Program
In March 2010, the Company began paying a quarterly cash dividend of $0.40 per share of TWC common stock to
TWC stockholders, which totaled $576 million during 2010. On January 26, 2011, TWC’s Board of Directors declared an
increased quarterly cash dividend of $0.48 per share of TWC common stock. Additionally, on October 29, 2010, TWC’s
Board of Directors authorized a $4.0 billion common stock repurchase program (the “Stock Repurchase Program”).
Purchases under the Stock Repurchase Program may be made from time to time on the open market and in privately
negotiated transactions. The size and timing of the Company’s purchases under the Stock Repurchase Program are based
on a number of factors, including price and business and market conditions. Through December 31, 2010, the Company
repurchased 8.0 million shares of TWC common stock for $515 million, including 0.6 million shares repurchased for
$43 million that settled in January 2011.
2010 Bond Offering and $4.0 Billion Revolving Credit Facility
On November 15, 2010, the Company issued $1.9 billion in aggregate principal amount of senior unsecured notes
and debentures under a shelf registration statement on Form S-3 in a public offering (the “2010 Bond Offering”). The
Company’s obligations under the debt securities issued in the 2010 Bond Offering are guaranteed by Time Warner
Entertainment Company, L.P. (“TWE”) and TW NY Cable Holding Inc. (“TW NY”). The Company used a portion of the
net proceeds from the 2010 Bond Offering for general corporate purposes, including the repurchase of its common stock
under the Stock Repurchase Program.
On November 3, 2010, the Company entered into a credit agreement for a $4.0 billion senior unsecured three-year
revolving credit facility maturing in November 2013 (the “$4.0 billion Revolving Credit Facility”). In connection with the
entry into this facility, the Company’s $5.875 billion senior unsecured five-year revolving credit facility, scheduled to
mature in February 2011, was terminated, and the Company’s unsecured commercial paper program was reduced from
$6.0 billion to $4.0 billion. The Company’s obligations under the $4.0 billion Revolving Credit Facility are guaranteed by
TWE and TW NY.
For more information about the 2010 Bond Offering and the $4.0 billion Revolving Credit Facility, see
“Management’s Discussion and Analysis of Results of Operations and Financial Condition—Overview—Recent
Developments—2010 Bond Offering and $4.0 Billion Revolving Credit Facility” and Note 9 to the accompanying
consolidated financial statements.
NaviSite Acquisition
On February 1, 2011, TWC entered into an agreement to acquire NaviSite, Inc. (“NaviSite”) for $5.50 per share of
NaviSite common stock in cash, or a total equity value of approximately $230 million. As of February 1, 2011, NaviSite
had approximately $50 million of debt and approximately $35 million of preferred equity. NaviSite provides enterprise-
class hosting, managed application, messaging and cloud services. Its common stock is listed on the NASDAQ Capital
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