Time Warner Cable 2014 Annual Report Download - page 26

TWC’s business is characterized by rapid technological change, and if TWC does not adapt to technological changes
and respond appropriately to changes in consumer demand, its competitive position may be harmed.
TWC operates in a highly competitive, consumer-driven and rapidly changing environment. Its success is, to a large
extent, dependent on its ability to acquire, develop, adopt, upgrade and exploit new and existing technologies to address
consumers’ changing demands and distinguish its services from those of its competitors. TWC may not be able to
accurately predict technological trends or the success of new products and services. If TWC chooses technologies or
equipment that are less effective, cost-efficient or attractive to its customers than those chosen by its competitors, or if
TWC offers services that fail to appeal to consumers, are not available at competitive prices or that do not function as
expected, TWC’s competitive position could deteriorate, and TWC’s business and financial results could suffer.
The ability of some of TWC’s competitors to introduce new technologies, products and services more quickly than
TWC may adversely affect TWC’s competitive position. Furthermore, advances in technology, decreases in the cost of
existing technologies or changes in competitors’ product and service offerings may require TWC in the future to make
additional research and development expenditures or to offer at no additional charge or at a lower price certain products
and services TWC currently offers to customers separately or at a premium. In addition, the uncertainty of the Company’s
ability and the costs to obtain intellectual property rights from third parties could impact TWC’s ability to respond to
technological advances in a timely and effective manner.
TWC relies on network and information systems and other technology, and a disruption or failure of such networks,
systems or technology as a result of computer viruses, “cyber attacks,” misappropriation of data or other malfeasance,
as well as outages, natural disasters (including extreme weather), terrorist attacks, accidental releases of information
or similar events, may disrupt TWC’s business.
Network and information systems and other technologies are critical to TWC’s operating activities, both to its
internal uses and in supplying services to customers. Network or information system shutdowns or other service
disruptions caused by events such as computer hacking, dissemination of computer viruses, worms and other destructive
or disruptive software, “cyber attacks,” process breakdowns, denial of service attacks and other malicious activity pose
increasing risks. Both unsuccessful and successful “cyber attacks” on companies have continued to increase in frequency,
scope and potential harm in recent years and, because the techniques used in such attacks have become more sophisticated
and change frequently, TWC may be unable to anticipate these techniques or implement adequate preventative measures.
While from time to time attempts are made to access TWC’s network, these attempts have not as yet resulted in any
material release of information, degradation or disruption to the Company’s network and information systems.
TWC’s network and information systems are also vulnerable to damage or interruption from power outages, natural
disasters (including extreme weather arising from short-term weather patterns or any long-term changes), terrorist attacks
and similar events. Any of these events could have an adverse impact on TWC and its customers, including degradation of
service, service disruption, excessive call volume to call centers and damage to TWC’s plant, equipment, data and
reputation. Such an event also could result in large expenditures necessary to repair or replace such networks or
information systems or to protect them from similar events in the future. Further, the impacts associated with extreme
weather or any long-term changes, such as rising sea levels or increased and intensified storm activity, may cause
increased business interruptions or may require the relocation of some of TWC’s facilities. Significant incidents could
result in a disruption of TWC’s operations, customer dissatisfaction or a loss of customers or revenue.
Furthermore, TWC’s operating activities could be subject to risks caused by misappropriation, misuse, leakage,
falsification or accidental release or loss of information maintained in the information technology systems and networks
of TWC and third-party vendors, including customer, personnel and vendor data. TWC provides certain confidential,
proprietary and personal information to third parties in connection with its business, and there is a risk that this
information may be compromised.
As a result of the increasing awareness concerning the importance of safeguarding personal information, the potential
misuse of such information and legislation that has been adopted or is being considered regarding the protection, privacy
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