Time Warner Cable 2010 Annual Report Download - page 64

and full year 2009. Casualty insurance expense in 2009 and 2008 included benefits of approximately $11 million and
$16 million, respectively, due to changes in estimates of previously established casualty insurance accruals. Employee
costs in 2009 remained essentially flat as an increase in pension expense was primarily offset by a decrease in employee
headcount.
Restructuring costs. The results for 2009 and 2008 included restructuring costs of $81 million and $15 million,
respectively. The Company eliminated approximately 1,300 positions during 2009.
Impairment of cable franchise rights. During the fourth quarter of 2008, the Company recorded a noncash
impairment charge of $14.822 billion to reduce the carrying value of its cable franchise rights as a result of its
annual impairment testing of goodwill and indefinite-lived intangible assets. There was no such impairment charge in
2009.
Loss on sale of cable systems. During 2008, the Company recorded a loss of $58 million as a result of the sale of
certain non-core cable systems, which closed in December 2008.
Reconciliation of OIBDA to Operating Income (Loss). The following table reconciles OIBDA to Operating Income
(Loss). In addition, the table provides the components from Operating Income (Loss) to net income (loss) attributable to
TWC shareholders for purposes of the discussions that follow (in millions):
2009 2008 % Change
Year Ended December 31,
OIBDA ..................................................... $ 6,402 $ (8,694) NM
Depreciation ................................................ (2,836) (2,826) 0.4%
Amortization ............................................... (249) (262) (5.0%)
Operating Income (Loss) ........................................ 3,317 (11,782) NM
Interest expense, net ........................................ (1,319) (923) 42.9%
Other expense, net.......................................... (86) (367) (76.6%)
Income (loss) before income taxes................................ 1,912 (13,072) NM
Income tax benefit (provision) ................................. (820) 5,109 NM
Net income (loss) .............................................. 1,092 (7,963) NM
Less: Net (income) loss attributable to noncontrolling interests ........... (22) 619 NM
Net income (loss) attributable to TWC shareholders .................... $ 1,070 $ (7,344) NM
NM—Not meaningful.
OIBDA. As discussed above, in 2008, OIBDAwas impacted by the impairment of cable franchise rights and the loss
on sale of cable systems. Excluding these items, OIBDA increased principally as a result of revenue growth, partially
offset by higher costs of revenues and restructuring costs, each as discussed above. Additionally, OIBDA in 2008 was
negatively impacted by $14 million of costs resulting from the impact of Hurricane Ike on certain of the Company’s cable
systems in southeast Texas and Ohio.
Depreciation expense. The slight increase in depreciation expense was primarily associated with continued
purchases of customer premise equipment, scalable infrastructure and line extensions occurring during or subsequent
to 2008, partially offset primarily by certain property, plant and equipment acquired in the Adelphia/Comcast
Transactions that was fully depreciated as of July 31, 2008.
Amortization expense. Amortization expense in 2009 benefited from an approximate $13 million adjustment to
reduce excess amortization recorded in prior years.
Operating Income (Loss). As discussed above, in 2008, Operating Loss was impacted by the impairment of cable
franchise rights and the loss on sale of cable systems. Excluding these items, Operating Income increased primarily due to
the increase in OIBDA, as discussed above.
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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)