Time Warner Cable Reports 2012 Fourth-Quarter And Full-Year Results

Additionally, Adjusted Diluted EPS for the fourth quarter and full year of 2012 benefited from lower average common shares outstanding as a result of share repurchases under the Company’s stock repurchase program.

(in millions, except per share data; unaudited)										4th Quarter																		Full Year
																		Change																		Change
										2012				2011				$					%					2012				2011				$				%
Net income attributable to TWC
shareholders										$	513			$	564			$	(51	)			(9.0		%)			$	2,155			$	1,665			$	490			29.4	%
Adjusted net income attributable to TWC
shareholders (a)										$	479			$	447			$	32				7.2		%			$	1,797			$	1,573			$	224			14.2	%
Net income per common share attributable
to TWC common shareholders:
Basic										$	1.70			$	1.76			$	(0.06	)			(3.4		%)			$	6.97			$	5.02			$	1.95			38.8	%
Diluted										$	1.68			$	1.75			$	(0.07	)			(4.0		%)			$	6.90			$	4.97			$	1.93			38.8	%
Adjusted Diluted EPS (a)										$	1.57			$	1.38			$	0.19				13.8		%			$	5.75			$	4.69			$	1.06			22.6	%

(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of Adjusted net income attributable to TWC shareholders andAdjusted Diluted EPS.

Free Cash Flow for the full-year 2012 decreased 7.1%, or $194 million, to $2.6 billion due mainly to lower cash provided by operating activities and an increase in capital expenditures. Cash Provided by Operating Activities for the full-year 2012 was $5.5 billion, a 2.9% decrease from $5.7 billion in 2011. This decrease was driven by an increase in income tax payments, a significant income tax refund (received in the first quarter of 2011) and higher net interest payments, partially offset by higher Adjusted OIBDA and lower pension plan contributions.

(in millions; unaudited)					4th Quarter																				Full Year
															Change																				Change
					2012					2011					$					%					2012					2011					$					%
Adjusted OIBDA (a)					$	1,994				$	1,889				$	105				5.6		%			$	7,824				$	7,226				$	598				8.3	%
Net interest payments						(300	)				(306	)				6				(2.0		%)			(1,602		)			(1,434		)				(168	)			11.7	%
Net income tax refunds (payments)						(253	)				(5	)				(248	)			NM					(544		)			162						(706	)	(435.8			%)
Pension plan contributions						(137	)				(326	)				189				(58.0		%)				(289	)				(405	)				116				(28.6	%)
All other, net, including working capital
changes						106					92					14			15.2			%				136					139					(3	)	(2.2			%)
Cash provided by operating activities						1,410					1,344					66				4.9		%				5,525					5,688					(163	)			(2.9	%)
Add:
Income taxes paid on investment sales						84					—					84				NM						84					—					84				NM
Excess tax benefit from exercise of
stock options						8					2					6				300.0		%				81					48					33				68.8	%
Less:
Capital expenditures						(904	)				(942	)				38				(4.0		%)			(3,095		)			(2,937		)				(158	)			5.4	%
Cash paid for other intangible assets						(10	)				(11	)				1				(9.1		%)				(37	)				(47	)				10				(21.3	%)
Other						(1	)				(2	)				1				(50.0		%)				(6	)				(6	)				—				—
Free Cash Flow (a)						587					391					196				50.1		%				2,552					2,746					(194	)			(7.1	%)
Economic Stimulus Act impacts (b)						26					(83	)				109			(131.3			%)				102					(619	)				721		(116.5			%)
Free Cash Flow excluding Economic
Stimulus Act impacts					$	613				$	308				$	305				99.0		%			$	2,654				$	2,127				$	527				24.8	%

NM—Not meaningful.
(a)		Refer to Note 2 to the accompanying consolidated financial statements for a definition of Adjusted OIBDA and Free Cash Flow.
(b)		Additional information on the Economic Stimulus Acts is available in the Trending Schedules posted on the Company’s website at www.twc.com/investors .

Net Debt and Mandatorily Redeemable Preferred Equity totaled $23.5 billion as of December 31, 2012 compared to $21.6 billion as of December 31, 2011, as the cash used for the acquisition of Insight, share repurchases and dividend payments was greater than Free Cash Flow and the proceeds from the sale of SpectrumCo’s advanced wireless spectrum licenses.

(in millions; unaudited)							12/31/2012				12/31/2011
Long-term debt							$	25,171			$	24,320
Debt due within one year								1,518				2,122
Total debt								26,689				26,442
Cash and equivalents								(3,304)				(5,177)
Short-term investments in U.S. Treasury securities								(150)				—
Net debt (a)								23,235				21,265
Mandatorily redeemable preferred equity								300				300
Net debt and mandatorily redeemable preferred equity							$	23,535			$	21,565

(a)		Net debt is defined as total debt less cash and equivalents and short-term investments in U.S. Treasury securities.

RETURN OF CAPITAL

Time Warner Cable returned $742 million and $2.6 billion to shareholders during the fourth quarter and full year of 2012, respectively. Share repurchases totaled $571 million, or 6.0 million shares of common stock, during the fourth quarter of 2012 and totaled $1.9 billion, or 22.1 million shares of common stock, during the full year of 2012. As of December 31, 2012, $2.2 billion remained under the Company’s share repurchase authorization. Time Warner Cable also paid regular dividends of $171 million and $700 million during the fourth quarter and full year of 2012, respectively.

SUBSCRIBER METRICS
(in thousands)
					9/30/2012				Net Additions (Declines)				12/31/2012
Residential services subscribers:
Video						12,159				(129)				12,030
High-speed data						10,860				75				10,935
Voice						4,990				34				5,024
Business services subscribers:
Video						185				3				188
High-speed data						446				14				460
Voice						212				12				224
Single play subscribers						5,936				(29)				5,907
Double play subscribers						5,070				(34)				5,036
Triple play subscribers						4,258				36				4,294
Customer relationships						15,264				(27)				15,237

For definitions related to the Company’s subscriber metrics, refer to the Trending Schedules posted on the Company’s website at www.twc.com/investors.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including OIBDA, Adjusted OIBDA, Adjusted OIBDA less capital expenditures, Adjusted net income attributable to TWC shareholders, Adjusted Diluted EPS and Free Cash Flow. Refer to Note 2 to the accompanying consolidated financial statements for a discussion of the Company’s use of non-GAAP financial measures.

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