Time Warner Cable 2010 Annual Report Download - page 49

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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
INTRODUCTION
Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to
the accompanying consolidated financial statements and provides additional information on Time Warner Cable Inc.’s
(together with its subsidiaries, “TWC” or the “Company”) business, current developments, financial condition, cash flows
and results of operations. MD&A is organized as follows:
•Overview. This section provides a general description of TWC’s business, as well as recent developments the
Company believes are important in understanding the results of operations and financial condition or in
understanding anticipated future trends.
•Financial statement presentation. This section provides a summary of how the Company’s operations are
presented in the accompanying consolidated financial statements.
•Results of operations. This section provides an analysis of the Company’s results of operations for the three years
ended December 31, 2010.
•Financial condition and liquidity. This section provides an analysis of the Company’s cash flows for the three
years ended December 31, 2010, as well as a discussion of the Company’s outstanding debt and commitments that
existed as of December 31, 2010. Also included is a discussion of the amount of financial capacity available to fund
the Company’s future commitments, as well as a discussion of other financing arrangements.
•Market risk management. This section discusses how the Company monitors and manages exposure to potential
gains and losses arising from changes in market rates and prices, such as interest rates.
•Critical accounting policies and estimates. This section discusses accounting policies and estimates that require
the use of assumptions that were uncertain at the time the estimate was made and that could have a material effect
on the Company’s consolidated results of operations or financial condition if there were changes in the estimate or
if a different estimate was made. The Company’s significant accounting policies, including those considered to be
critical accounting policies and estimates, are summarized in Note 3 to the accompanying consolidated financial
statements.
•Caution concerning forward-looking statements. This section provides a description of the use of forward-
looking information appearing in this report, including in MD&A and the consolidated financial statements. Such
information is based on management’s current expectations about future events, which are susceptible to
uncertainty and changes in circumstances. Refer to Item 1A, “Risk Factors,” in Part I of this report for a
discussion of the risk factors applicable to the Company.
OVERVIEW
TWC 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.
TWC offers video, high-speed data and voice services over its broadband cable systems to residential and
commercial customers. 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. During 2010, TWC
generated approximately $18.0 billion of subscription revenues. TWC also sells advertising to a variety of national,
regional and local advertising customers, resulting in advertising revenues of $881 million during 2010.
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