Time Warner Cable 2014 Annual Report Download - page 137

TIME WARNER CABLE INC.
SELECTED FINANCIAL INFORMATION
The selected financial information set forth below as of December 31, 2014 and 2013 and for the years ended
December 31, 2014, 2013 and 2012 has been derived from and should be read in conjunction with the audited
consolidated financial statements and other financial information presented elsewhere herein. The selected financial
information set forth below as of December 31, 2012, 2011 and 2010 and for the years ended December 31, 2011 and
2010 has been derived from audited consolidated financial statements not included herein. Capitalized terms are as
defined and described in the consolidated financial statements or elsewhere herein.
Year Ended December 31,
2014 2013 2012 2011 2010
(in millions, except per share data)
Selected Operating Statement Information:
Revenue ................................... $ 22,812 $ 22,120 $ 21,386 $ 19,675 $ 18,868
Costs and expenses(a) ......................... 18,180 17,540 16,941 15,606 15,179
Operating Income(a) .......................... 4,632 4,580 4,445 4,069 3,689
Interest expense, net .......................... (1,419) (1,552) (1,606) (1,518) (1,394)
Other income (expense), net(b) .................. 35 11 497 (89) (99)
Income before income taxes ................... 3,248 3,039 3,336 2,462 2,196
Income tax provision(c) ........................ (1,217) (1,085) (1,177) (795) (883)
Net income ................................. 2,031 1,954 2,159 1,667 1,313
Less: Net income attributable to noncontrolling
interests ................................. — — (4) (2) (5)
Net income attributable to TWC shareholders ..... $ 2,031 $ 1,954 $ 2,155 $ 1,665 $ 1,308
Net income per common share attributable to TWC
common shareholders:
Basic ...................................... $ 7.21 $ 6.76 $ 6.97 $ 5.02 $ 3.67
Diluted .................................... $ 7.17 $ 6.70 $ 6.90 $ 4.97 $ 3.64
Average common shares outstanding:
Basic ...................................... 279.3 287.6 307.8 329.7 354.2
Diluted .................................... 283.0 291.7 312.4 335.3 359.5
Cash dividends declared per share ............... $ 3.00 $ 2.60 $ 2.24 $ 1.92 $ 1.60
(a) Costs and expenses and Operating Income include merger-related and restructuring costs of $225 million in 2014, $119 million in 2013, $115
million in 2012, $70 million in 2011 and $52 million in 2010. Costs and expenses and Operating Income in 2011 includes a $60 million impairment
charge on wireless assets that will no longer be utilized.
(b) Other income (expense), net, includes income (losses) from equity-method investments of $33 million in 2014, $19 million in 2013, $454 million in
2012, $(88) million in 2011 and $(110) million in 2010. Income from equity-method investments in 2012 primarily consists of a pretax gain of $430
million associated with SpectrumCo’s sale of its advanced wireless spectrum licenses to Verizon Wireless. Other income (expense), net, in 2012
includes a $64 million gain on the sale of the Company’s investment in Clearwire.
(c) Income tax provision in 2014 includes a benefit of $24 million as a result of the passage of the New York State budget during the first quarter of
2014 that, in part, lowers the New York State business tax rate beginning in 2016. Income tax provision in 2013 includes (i) a benefit of $77 million
primarily related to changes in the tax rate applied to calculate the Company’s net deferred income tax liability as a result of changes in state tax
apportionment factors and (ii) a benefit of $27 million resulting from income tax reform legislation enacted in North Carolina, which, along with
other changes, phases in a reduction in North Carolina’s corporate income tax rate over several years. Income tax provision in 2012 includes (i) a
benefit of $63 million related to a change in the tax rate applied to calculate the Company’s net deferred income tax liability as a result of an internal
reorganization effective on September 30, 2012, (ii) a benefit of $47 million primarily related to a California state tax law change, (iii) a benefit of
$46 million related to the reversal of a valuation allowance against a deferred income tax asset associated with the Company’s investment in
Clearwire and (iv) a charge of $15 million related to the recording of a deferred income tax liability associated with a partnership basis difference.
During the fourth quarter of 2011, TWC completed its income tax returns for the 2010 taxable year, its first full-year income tax returns subsequent
to the Company’s separation from Time Warner, reflecting the income tax positions and state tax apportionments of TWC as a standalone taxpayer.
Based on these returns, the Company concluded that an approximate 65 basis point change in the estimate of the effective tax rate applied to
calculate its net deferred income tax liability was required. As a result, TWC recorded a noncash income tax benefit of $178 million during the
fourth quarter of 2011. Additionally, income tax provision in 2011 includes net income tax expense of $14 million as a result of the impact of the
reversal of deferred income tax assets associated with Time Warner stock option awards held by TWC employees, net of excess tax benefits realized
upon the exercise of TWC stock options or vesting of TWC RSUs. Income tax provision in 2010 includes net income tax expense of $68 million as
a result of the impact of the reversal of deferred income tax assets associated with Time Warner stock option awards held by TWC employees, net of
excess tax benefits realized upon the exercise of TWC stock options or vesting of TWC RSUs.
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