Time Warner Cable Reports Results for 2009 Fourth-Quarter and Full-Year

Time Warner Cable, a cable operator in the United States, announced it has reported financial results for its fourth quarter and full year ended December 31.

In a January 28 release, Time Warner said that fourth-quarter 2009 revenues increased 3.0 percent from the fourth quarter of 2008 to $4.5 billion. Subscription revenues grew 4.2 percent year-over-year to $4.3 billion, driven by a 3.6 percent increase in residential subscription revenues and a 14.1 percent increase in commercial subscription revenues. Advertising revenues declined 17.6 percent to $201 million.

"We enter 2010 with a solid balance sheet, and we are very pleased to demonstrate confidence in our free cash flow by initiating a meaningful quarterly dividend," said Time Warner Cable CEO Glenn Britt. "In the year ahead, we are encouraged about the investments we are making to drive further growth, and we expect to execute with the same discipline our investors have come to expect."

Full-year revenues increased 3.9 percent over 2008 to $17.9 billion. Subscription revenues grew 5.3 percent to $17.2 billion, with residential subscription revenues increasing 4.8 percent and commercial subscription revenues growing 15.4 percent. Advertising revenues declined 21.8 percent to $702 million.

Full-year 2009 Adjusted OIBDA rose 4.7 percent over 2008 to $6.5 billion. The year-over-year increase in Adjusted OIBDA was driven by revenue growth, partially offset by a 3.4 percent increase in operating expenses. For the full year, video programming expenses grew 6.5 percent to $4.0 billion, employee costs were up 2.5 percent to $3.7 billion, and voice costs increased 14.7 percent to $633 million, while bad debt expense declined by $38 million. Operating income was $3.3 billion in 2009 compared to an Operating loss of $11.8 billion in 2008.

In both the fourth-quarter and full-year 2009, video programming expenses increased due to contractual rate increases, incremental retransmission consent expense and the expansion of service offerings, offset, in part, by a decline in video and premium channel subscriptions; employee costs increased primarily as a result of higher employee pension and medical expenses; and voice costs increased due to growth in digital phone subscribers. Declines in bad debt expense in both periods reflected improvements in collection efforts and a reduction in the allowance for doubtful accounts to reflect the quality of residential receivables as of the end of 2009.

Fourth-quarter 2009 net income attributable to TWC was $322 million, or $0.91 per basic and diluted common share, and full-year net income attributable to TWC was $1.1 billion, or $3.07 per basic common share and $3.05 per diluted common share. Note 2 to the accompanying consolidated financial statements details certain items affecting the comparability of net income (loss) attributable to TWC for the fourth quarter and full year of 2009 to that for the fourth quarter and full year of 2008. Excluding these items, fourth-quarter and full-year 2009 net income attributable to TWC decreased compared to the prior year periods, primarily reflecting an increase in interest expense related to the debt incurred to fund the company's March 2009 $10.9 billion special cash dividend, partly offset by a decrease in net income attributable to noncontrolling interests and higher operating income.

Free Cash Flow for the full-year 2009 increased 10.2 percent to $1.9 billion from $1.7 billion in 2008, due mainly to lower capital expenditures, partially offset by a decrease in cash provided by operating activities. Cash Provided by Operating Activities for the full-year 2009 was $5.2 billion, a 2.3 percent decrease from $5.3 billion in the full-year 2008. This decrease was related primarily to an increase in net cash interest payments, a change in working capital requirements and higher restructuring payments, offset partly by higher Adjusted OIBDA and lower pension plan contributions.

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