Time Warner Cable 2011 Annual Report Download - page 46

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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, 2011.
•Financial condition and liquidity. This section provides an analysis of the Company’s cash flows for the three
years ended December 31, 2011, as well as a discussion of the Company’s outstanding debt and commitments that
existed as of December 31, 2011. 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 among the largest providers of video, high-speed data and voice services in the U.S., with technologically
advanced, well-clustered cable 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, 2011, TWC served
approximately 14.5 million customers who subscribed to one or more of its three primary services, totaling approximately
27.1 million primary service units.
TWC offers its residential and business services customers video, high-speed data and voice services over its broadband
cable systems. TWC’s business services also include networking and transport services (including cell tower backhaul
services) and, through its wholly owned subsidiary, NaviSite, Inc. (“NaviSite”) (discussed further in “—Recent
Developments”), managed and outsourced information technology (“IT”) solutions and cloud services. During the year
ended December 31, 2011, TWC generated total revenues of approximately $19.7 billion. Of this total, approximately $17.1
billion and $1.5 billion were from the provision of residential and business services, respectively. TWC also sells advertising
to a variety of national, regional and local customers, resulting in advertising revenues of $880 million during the year ended
December 31, 2011. Additionally, TWC generated $233 million of revenues from other sources during the year ended
December 31, 2011.
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