Time Warner Cable 2012 Annual Report Download - page 54

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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)
Business services revenue. The major components of business services revenue were as follows (in millions):
Year Ended December 31,
2012(a) 2011(a) % Change(a)
Business services:
Video ...........................................................$ 323 $ 286 12.9%
High-speed data .................................................. 912 727 25.4%
Voice ........................................................... 306 197 55.3%
Wholesale transport ............................................... 184 154 19.5%
Other ........................................................... 176 105 67.6%
Total business services ...............................................$ 1,901 $ 1,469 29.4%
(a) Business services revenue for 2012 and 2011 include revenue from Insight since its acquisition on February 29, 2012, the cable systems acquired from
NewWave on November 1, 2011 and NaviSite, which was acquired on April 21, 2011, as follows (in millions):
Year Ended December 31,
2012 2011
Insight NewWave NaviSite NewWave NaviSite
Business services:
Video .........................................$ 14 $ 2 $ — $ 1 $ —
High-speed data ................................ 28 3———
Voice ......................................... 11 1———
Wholesale transport ............................. 2————
Other ......................................... — — 159 — 94
Total business services .............................$ 55 $ 6 $ 159 $ 1 $ 94
Business services revenue increased primarily due to organic growth in high-speed data and voice subscribers, the
acquisitions of Insight and NaviSite and an organic increase in Metro Ethernet revenue of $29 million.
Advertising revenue. Advertising revenue increased primarily due to growth in political advertising revenue, as well as the
Insight acquisition, growth in lower margin revenue from advertising inventory sold on behalf of other video distributors (“ad rep
agreements”) and the advertising sold on the LA RSNs, which launched on October 1, 2012. For 2012, political advertising revenue
was $114 million (including political advertising revenue from Insight and ad rep agreements) compared to $15 million for 2011.
The Company expects advertising revenue in 2013 to be similar to 2012 as growth in the advertising sold on the LA RSNs and
lower margin revenue from ad rep agreements will offset a significant decline in high margin political advertising revenue.
Other revenue. Other revenue increased primarily due to LA RSN affiliate fees of $20 million during the fourth quarter of
2012. The Company expects other revenue to increase significantly in 2013 as a result of a full year of LA RSN affiliate fees.
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