Time Warner Cable 2014 Annual Report Download - page 53

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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)
The income tax provision and effective tax rate for 2012 include (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 fourth-quarter 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 Corporation (“Clearwire”) and (iv) a charge of $15 million related
to the recording of a deferred income tax liability associated with a partnership basis difference.
Absent the impacts of the above items, the effective tax rates would have been 38.2%, 39.1% and 39.5% for 2014,
2013 and 2012, respectively.
Net income attributable to TWC shareholders and net income per common share attributable to TWC common
shareholders. Net income attributable to TWC shareholders and net income per common share attributable to TWC
common shareholders were as follows for 2014, 2013 and 2012 (in millions, except per share data):
Year Ended December 31, % Change
2014 2013 2012 2014 vs. 2013 2013 vs. 2012
Net income attributable to TWC
shareholders ......................... $ 2,031 $ 1,954 $ 2,155 3.9% (9.3%)
Net income per common share attributable to
TWC common shareholders:
Basic ............................... $ 7.21 $ 6.76 $ 6.97 6.7% (3.0%)
Diluted ............................. $ 7.17 $ 6.70 $ 6.90 7.0% (2.9%)
Net income attributable to TWC shareholders increased in 2014 primarily due to a decrease in interest expense, net,
and an increase in Operating Income, partially offset by an increase in income tax provision. Net income per common
share attributable to TWC common shareholders for 2014 benefited from lower average common shares outstanding as a
result of share repurchases under the Stock Repurchase Program.
Net income attributable to TWC shareholders decreased in 2013 primarily due to the decrease in other income, net
(which, as discussed above, included SpectrumCo and Clearwire-related gains in 2012), partially offset by an increase in
Operating Income and decreases in income tax provision and interest expense, net. Net income per common share
attributable to TWC common shareholders for 2013 benefited from lower average common shares outstanding as a result
of share repurchases under the Stock Repurchase Program.
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