Time Warner Cable 2014 Annual Report Download - page 125

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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Subsidiaries”) on a combined basis and (iv) the eliminations necessary to arrive at the information for Time Warner Cable
Inc. on a consolidated basis. The Guarantor Subsidiary has fully and unconditionally guaranteed the debt securities issued
by the Parent Company in its 2007 registered exchange offer and subsequent public offerings. The Parent Company
directly owns all of the voting and economic interests of the Guarantor Subsidiary.
There are no legal or regulatory restrictions on the Parent Company’s ability to obtain funds from any of its 100%
owned subsidiaries through dividends, loans or advances.
These condensed consolidating financial statements should be read in conjunction with the consolidated financial
statements of Time Warner Cable Inc.
Basis of Presentation
In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to
(i) the Parent Company’s interests in the Guarantor Subsidiary and the Non-Guarantor Subsidiaries and (ii) the Guarantor
Subsidiary’s interests in the Non-Guarantor Subsidiaries, where applicable, even though all such subsidiaries meet the
requirements to be consolidated under GAAP. All intercompany balances and transactions between the Parent Company,
the Guarantor Subsidiary and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column
“Eliminations.” All assets and liabilities have been allocated to the Parent Company, the Guarantor Subsidiary and the
Non-Guarantor Subsidiaries generally based on legal entity ownership. Certain administrative costs have been allocated to
the Parent Company, the Guarantor Subsidiary and the Non-Guarantor Subsidiaries based on revenue recorded at the
respective entity. Beginning December 1, 2013, the Parent Company began allocating 100% of its third-party interest
expense, net of interest income received from intercompany loans, to the Guarantor Subsidiary. Prior to December 1,
2013, a portion of the interest expense incurred by the Parent Company was allocated to the Guarantor Subsidiary and the
Non-Guarantor Subsidiaries based on revenue recorded at the respective entity. The income tax provision has been
presented based on each subsidiary’s legal entity activity including income tax benefits related to allocated administrative
costs and interest expense. Deferred income taxes have been presented based upon the temporary differences between the
carrying amounts of the respective assets and liabilities of the applicable entities.
117