Time Warner Cable residential video subscribers down 532,000 in 2012

Thursday, January 31st, 2013
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Time Warner Cable Reports 2012 Fourth-Quarter and Full-Year Results

NEW YORK — Time Warner Cable Inc. (NYSE: TWC) today reported financial results for its fourth quarter and full year ended December 31, 2012.

Residential video revenue decreased driven by declines in video subscribers and transactional video-on-demand and premium network revenue, partially offset by price increases, a greater percentage of subscribers purchasing higher-priced tiers of service and increased revenue from equipment rentals.

Residential (in thousands):

                                                  2011                                    2012
                        ------------------------------  --------------------------------------
                            1Q      2Q      3Q      4Q      1Q      2Q      3Q      4Q      FY
                        ------  ------  ------  ------  ------  ------  ------  ------  ------
Video
 Subscribers(1)(2)(3)   12,191  12,067  11,939  11,889  12,468  12,299  12,159  12,030
 Net additions(1)(2)      (66)   (130)   (128)   (129)    (94)   (169)   (140)   (129)   (532)
Digital Video Recorder
 Subscribers(1)(2)(4)    4,672   4,625   4,590   4,654   5,039   5,075   5,083   5,124
 Net additions(1)(2)        42    (47)    (35)      53      92      36       8      41     177
 Penetration(5)          51.7%   51.2%   51.1%   51.8%   52.2%   52.8%   53.4%   53.9%

[Digital Video
 Subscribers*            9,037   9,033   8,982   8,985   9,653   9,612   9,519   9,506

* Digital Video Recorder subscribers divided by DVR penetration(5).]

1. The Company has recorded certain subscriber adjustments during the periods presented, as follows:

During the second quarter of 2010, the Company recorded adjustments that decreased customer relationships by 76,000; single play subscribers by 81,000 and double play subscribers by 64,000; and increased triple play subscribers by 69,000; bundled subscribers by 5,000 and digital video recorder subscribers by 9,000.

During the fourth quarter of 2010, the Company recorded adjustments that increased customer relationships by 136,000; residential video subscribers by 12,000; residential primary service units by 12,000; total primary service units by 9,000; single play subscribers by 199,000 and double play subscribers by 1,000; and decreased business high-speed data subscribers by 1,000, business voice subscribers by 2,000; business primary service units by 3,000; triple play subscribers by 64,000 and bundled subscribers by 63,000.

During the first quarter of 2012, the Company recorded adjustments that decreased customer relationships by 4,000; business video subscribers by 1,000; business high-speed data subscribers by 3,000; business voice subscribers by 1,000; business primary service units by 5,000; total primary service units by 5,000; single play subscribers by 3,000; double play subscribers by 1,000; bundled subscribers by 1,000 and digital video recorder subscribers by 75,000.

These adjustments are not reflected in net additions (declines) for the respective quarterly and annual periods.

2. The Company has recorded subscriber changes resulting from acquisitions during the periods presented, as follows:

During the second quarter of 2011, the Company acquired a small cable system, resulting in, as of the date of acquisition, an increase of 6,000 customer relationships, 6,000 residential video subscribers, 3,000 residential high-speed data subscribers, 9,000 residential primary service units, 9,000 total primary service units, 3,000 single play subscribers, 3,000 double play subscribers and 3,000 bundled subscribers.

During the fourth quarter of 2011, the Company acquired cable systems from NewWave Communications, as well as another small cable system, resulting in, as of the dates of acquisition, an increase of 91,000 customer relationships, 79,000 residential video subscribers, 45,000 residential high-speed data subscribers, 26,000 residential voice subscribers, 150,000 residential primary service units, 2,000 business video subscribers, 2,000 business high-speed data subscribers, 1,000 business voice subscribers, 5,000 business primary service units, 155,000 total primary service units, 48,000 single play subscribers, 22,000 double play subscribers, 21,000 triple play subscribers, 43,000 bundled subscribers and 11,000 digital video recorder subscribers.

On February 29, 2012, the Company acquired Insight Communications Company, Inc., resulting in, as of the date of acquisition, an increase of 777,000 customer relationships, 673,000 residential video subscribers, 548,000 residential high-speed data subscribers, 289,000 residential voice subscribers, 1,510,000 residential primary service units, 10,000 business video subscribers, 20,000 business high-speed data subscribers, 10,000 business voice subscribers, 40,000 business primary service units, 1,550,000 total primary service units, 231,000 single play subscribers, 319,000 double play subscribers, 227,000 triple play subscribers, 546,000 bundled subscribers and 368,000 digital video recorder subscribers.

The acquired subscribers are reflected in the Company’s subscriber numbers in the period in which they were acquired and in subsequent periods; however, they are not reflected in net additions (declines) for the respective quarterly and annual periods.

3. Video subscriber numbers reflect billable subscribers who purchase at least the basic service video programming tier. The determination of whether a video subscriber is categorized as residential or business is based on the type of subscriber purchasing the service.

4. Digital video recorder subscriber numbers reflect subscribers who purchase digital video recorder service. Digital video recorder subscribers are not included as separate primary service units.

5. Digital video recorder penetration represents digital video recorder subscribers as a percentage of digital video subscribers.