Time Warner Cable Reports 2012 Third-Quarter Results

Time Warner Cable Reports 2012 Third-Quarter Results

NEW YORK--(BUSINESS WIRE)-- Time Warner Cable Inc. (NYS: TWC) today reported financial results for its third quarter ended September 30, 2012.

Time Warner Cable Chief Executive Officer Glenn Britt said: "Our third-quarter results were good, with most trends similar to the preceding quarter. Our operating results were driven by continued strong performance in residential high-speed data and business services, an acceleration in high-margin political advertising and the contributions from our Insight systems. During the quarter, we remained focused on investing in growing our business, while at the same time ramping capital returns to our shareholders."


Britt continued, "Our sympathies go out to those suffering in the wake of Hurricane Sandy, and we are thankful for the efforts of our employees who worked in many ways to help keep our customers informed and connected during the storm, as well as those who have been dealing with the many after-effects."

FINANCIAL RESULTS

Revenues for the third quarter of 2012 increased 9.2% from the third quarter of 2011 to $5.4 billion. Residential services revenues increased 7.0% to $4.5 billion and business services revenues grew 27.4% to $493 million, while advertising revenues increased 22.2% to $264 million.

(in millions; unaudited)

3rd Quarter

Year-to-Date 9/30

Change

Change

2012

2011

$

%

2012

2011

$

%

Residential services revenues:

Video

$

2,722

$

2,624

$

98

3.7%

$

8,230

$

7,961

$

269

3.4%

High-speed data

1,279

1,119

160

14.3%

3,744

3,328

416

12.5%

Voice

530

494

36

7.3%

1,577

1,484

93

6.3%

Other

17

13

4

30.8%

47

36

11

30.6%

Total residential services revenues

4,548

4,250

298

7.0%

13,598

12,809

789

6.2%

Business services revenues:

Video

83

73

10

13.7%

240

212

28

13.2%

High-speed data

235

187

48

25.7%

667

531

136

25.6%

Voice

83

52

31

59.6%

219

140

79

56.4%

Wholesale transport

47

39

8

20.5%

132

110

22

20.0%

Other

45

36

9

25.0%

128

67

61

91.0%

Total business services revenues

493

387

106

27.4%

1,386

1,060

326

30.8%

Advertising revenues

264

216

48

22.2%

740

638

102

16.0%

Other revenues

58

58

177

175

2

1.1%

Total revenues

$

5,363

$

4,911

$

452

9.2%

$

15,901

$

14,682

$

1,219

8.3%

Revenues for the third quarter of 2012 benefited from acquisitions, as detailed below.

(in millions; unaudited)

3rd Quarter 2012

Historical

Organic

Acquisitions

Total

TWC(a)

% Change(b)

Insight

NewWave

Total

TWC

Residential services revenues:

Video

$

2,573

(1.9

%)

$

138

$

11

$

149

$

2,722

High-speed data

1,209

8.0

%

66

4

70

1,279

Voice

489

(1.0

%)

38

3

41

530

Other

17

30.8

%

17

Total residential services revenues

4,288

0.9

%

242

18

260

4,548

Business services revenues

474

22.5

%

17

2

19

493

Advertising revenues

253

17.1

%

11

11

264

Other revenues

58

58

Total revenues

$

5,073

3.3

%

$

270

$

20

$

290

$

5,363

(a) Historical TWC amounts exclude the results of (i) Insight Communications Company, Inc. (acquired on February 29, 2012) and (ii) the cable systems acquired from NewWave Communications on November 1, 2011.

(b) Organic % Change represents the change between the Historical TWC amounts for the third quarter of 2012 and TWC's results for the third quarter of 2011 included in the table on page 1.

(in millions; unaudited)

Year-to-Date 9/30/2012

Historical

Organic

Acquisitions

Total

TWC(a)

% Change(b)

Insight(c)

NewWave

NaviSite(d)

Total

TWC

Residential services revenues:

Video

$

7,872

(1.1

%)

$

325

$

33

$

$

358

$

8,230

High-speed data

3,577

7.5

%

154

13

167

3,744

Voice

1,480

(0.3

%)

89

8

97

1,577

Other

45

25.0

%

2

2

47

Total residential services revenues

12,974

1.3

%

570

54

624

13,598

Business services revenues

1,294

22.1

%

38

5

49

92

1,386

Advertising revenues

714

11.9

%

26

26

740

Other revenues

175

2

2

177

Total revenues

$

15,157

3.2

%

$

636

$

59

$

49

$

744

$

15,901

(a) Historical TWC amounts include the results of NaviSite, Inc. (acquired on April 21, 2011) for the period of April 21 through September 30, 2012 and exclude the results of (i) NaviSite from January 1 through April 20, 2012, (ii) Insight and (iii) the cable systems acquired from NewWave.

(b) Organic % Change represents the change between the Historical TWC amounts for the nine months ended September 30, 2012 and TWC's results for the nine months ended September 30, 2011 included in the table on page 1.

(c) Insight amounts represent the financial results of Insight from the date of acquisition (February 29, 2012) through September 30, 2012.

(d) NaviSite amounts represent NaviSite's results for the period from January 1 through April 20, 2012.

Excluding the impact from acquisitions:

Residential services revenues

Residential services revenue growth was primarily driven by an increase in high-speed data revenues, partially offset by declines in video and voice revenues.

  • The growth in residential high-speed data revenues was the result of growth in high-speed data subscribers and an increase in average revenues per subscriber (due to both price increases and a greater percentage of subscribers purchasing higher-priced tiers of service).

  • Residential video revenues decreased driven by declines in video subscribers and transactional video-on-demand revenues, partially offset by price increases, a greater percentage of subscribers purchasing higher-priced tiers of service and increased revenues from equipment rental charges.

  • Residential voice revenues decreased slightly due to a decrease in average revenues per subscriber, primarily due to promotional offers, partially offset by growth in voice subscribers.

Business services revenues

Business services revenue growth was primarily due to increases in high-speed data and voice subscribers and growth in Metro Ethernet revenues.

Advertising revenues

Advertising revenues increased primarily as a result of increases in political advertising and revenues from advertising inventory sold on behalf of other video distributors.

Adjusted Operating Income before Depreciation and Amortization ("Adjusted OIBDA") for the third quarter of 2012 increased 9.2% from the third quarter of 2011 to $1.9 billion. The increase was driven by revenue growth, partially offset by a 9.2% increase in operating expenses.

Operating expenses grew primarily due to higher employee costs, video programming expenses, other operating costs and voice costs. Employee costs were up 10.0% to $