Time Warner Cable 2014 Annual Report Download - page 25

A/N Systems, thereby granting TWCE the right of first offer to purchase the specified assets. Following delivery of this
notice, an appraiser will determine the value of the assets proposed to be transferred. Once the value of the assets has been
determined, A/N has the right to terminate its offer to sell the specified assets. If A/N does not terminate its offer,
TWCE will have the right to purchase the specified assets at a price equal to the value of the specified assets determined
by the appraiser. If TWCE does not exercise its right to purchase the specified assets, A/N has the right to sell the
specified assets to an unrelated third party within 180 days on substantially the same terms as were available to TWCE.
Item 1A. Risk Factors.
TWC faces a wide range of competition, and its business and financial results could be adversely affected if it does not
compete effectively.
TWC faces significant competition, and the rapid development of new technologies, services and products has led to
the entry of many new competitors, further intensifying the competitive environment. Any inability to compete effectively
could have an adverse effect on TWC’s financial and operating results and return on capital expenditures due to possible
increases in the cost of gaining and retaining subscribers and lower per subscriber revenue, could slow or cause a decline
in TWC’s growth rates, and reduce TWC’s revenue. As TWC expands and introduces new and enhanced services, TWC
may be subject to competition from other providers of those services. TWC cannot predict the extent to which this
competition will affect its future business and financial results or return on capital expenditures.
Future advances in technology, as well as changes in the marketplace, in the economy and in the regulatory and
legislative environments, may result in changes to the competitive landscape. For additional information regarding the
competition faced by TWC, see “Business—Competition” and “—Regulatory Matters.”
TWC faces risks relating to competition for the leisure time and discretionary spending of audiences, which has
intensified in part due to advances in technology and changes in consumer expectations and behavior.
In addition to the various competitive factors discussed above, TWC’s business is subject to risks relating to
increasing competition for the leisure time and discretionary spending of consumers. TWC’s business competes with all
other sources of entertainment and information delivery. Technological advancements, such as new video formats and
Internet streaming and downloading of programming that can be viewed on televisions, computers and mobile devices,
many of which have been beneficial to TWC’s business, have nonetheless increased the number of entertainment and
information delivery choices available to consumers and intensified the challenges posed by audience fragmentation. The
increasing number of choices available to audiences, including low-cost or free choices, could negatively impact not only
consumer demand for TWC’s products and services, but also advertisers’ willingness to purchase advertising from TWC.
TWC’s failure to effectively anticipate or adapt to new technologies and changes in consumer expectations and behavior
could significantly adversely affect TWC’s competitive position and its business and results of operations.
An extended period of slow growth or a significant deterioration in the economy may negatively impact TWC’s ability
to attract new subscribers and generate increased revenue.
The U.S. economy is experiencing an uneven recovery following a protracted slowdown, and the future economic
environment may continue to be challenging. A continuation or further weakening of these economic conditions could
lead to further reductions in consumer demand for the Company’s services, especially services for which additional
charges are imposed, and to a continued increase in the number of homes that replace their video service with Internet-
delivered and/or over-air content, which would negatively impact TWC’s ability to attract customers, increase rates and
maintain or increase revenue. In addition, providing video services is an established and highly penetrated business.
TWC’s ability to gain new video subscribers is dependent to a large extent on growth in occupied housing in TWC’s
service areas, which is influenced by both national and local economic conditions. In the absence of renewed growth in
the number of occupied homes in TWC’s operating areas, TWC’s ability to gain new video subscribers may be negatively
impacted. Weak economic conditions may also have a negative impact on the Company’s advertising revenue.
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