Time Warner Cable 2012 Annual Report Download - page 11

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PART I
Item 1. Business.
Overview
Time Warner Cable Inc. (together with its subsidiaries, “TWC” or the “Company”) 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, the Midwest (including Ohio,
Kentucky and Wisconsin), Southern California (including Los Angeles) and Texas. As of December 31, 2012, TWC served
approximately 15.2 million customers (approximately 14.7 million residential services customers and 563,000 business
services customers) who subscribed to one or more of its three primary services, totaling approximately 28.9 million primary
service units.
TWC offers video, high-speed data and voice services to residential and business services customers over the
Company’s broadband cable systems. TWC’s business services also include networking and transport services (including cell
tower backhaul services) and managed and outsourced information technology (“IT”) solutions and cloud services. TWC
also sells advertising to a variety of national, regional and local customers.
TWC markets its services separately and in “bundled” packages of multiple services and features. As of December 31,
2012, 61.2% of TWC’s customers subscribed to two or more of its primary services, including 28.2% of its customers who
subscribed to all three primary services.
Recent Developments
Wireless-related Transactions
On August 24, 2012, SpectrumCo, LLC (“SpectrumCo”), a joint venture between TWC, Comcast Corporation
(“Comcast”) and Bright House Networks, LLC (“Bright House”), sold all of its advanced wireless spectrum licenses to
Cellco Partnership (doing business as Verizon Wireless), a joint venture between Verizon Communications Inc. (“Verizon”)
and Vodafone Group Plc, for $3.6 billion in cash. Upon closing, TWC, which owns 31.2% of SpectrumCo, received
$1.112 billion and recorded a pretax gain of $430 million ($261 million on an after-tax basis). For additional information, see
“—Services—Residential Services—Verizon Wireless.”
In addition, on September 13, 2012, the Company exchanged all of its beneficially owned shares of Class B common
stock of Clearwire Corporation (“Clearwire”) together with all of its beneficially owned Class B common units of Clearwire
Communications LLC (“Clearwire Communications”) for shares of Class A common stock of Clearwire. On September 27,
2012, the Company sold these shares of Class A common stock for $64 million in cash. For additional information, see
“Management’s Discussion and Analysis of Results of Operations and Financial Condition—Overview—Recent
Developments—Wireless-related Transactions.”
Insight Acquisition
On February 29, 2012, TWC completed its acquisition of Insight Communications Company, Inc. (“Insight”) for
$1.339 billion in cash, net of cash acquired and including a third-quarter 2012 post-closing purchase price adjustment of
$4 million, and repaid $1.164 billion outstanding under Insight’s senior secured credit facility (including accrued interest),
and terminated the facility. Additionally, during 2012, Insight’s $495 million in aggregate principal amount of 9.375% senior
notes due 2018 were redeemed for $579 million in cash (including premiums and accrued interest). The financial results for
Insight, which served subscribers in Kentucky, Indiana and Ohio representing approximately 1.6 million primary service
units as of the acquisition date, have been included in the Company’s consolidated financial statements from the acquisition
date. See Note 5 to the accompanying consolidated financial statements for additional information on the Insight acquisition.
Caution Concerning Forward-Looking Statements and Risk Factors
This Annual Report on Form 10-K includes certain “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and
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