Time Warner Cable Inc. (NYSE:TWC) today reported financial results for its third quarter ended September 30, 2013.
Time Warner Cable Chairman and CEO Glenn Britt said: "As I leave the business after 41 years, I am proud of this company and its many accomplishments. We have tremendous opportunity ahead, and I have full confidence in Rob and his team."
SELECTED FINANCIAL RESULTS
|(in millions, except per share data;||3rd Quarter||Year-to-Date 9/30|
|Adjusted OIBDA (a)||$||2,005||$||1,946||$||59||3.0%||$||5,954||$||5,830||$||124||2.1%|
|Diluted EPS (b)||$||1.84||$||2.60||$||(0.76)||(29.2%)||$||4.81||$||5.22||$||(0.41)||(7.9%)|
|Adjusted Diluted EPS (a)||$||1.69||$||1.41||$||0.28||19.9%||$||4.80||$||4.19||$||0.61||14.6%|
|Cash provided by operating activities||$||1,209||$||1,195||$||14||1.2%||$||4,154||$||4,115||$||39||0.9%|
|Free Cash Flow (a)||$||440||$||423||$||17||4.0%||$||1,833||$||1,965||$||(132)||(6.7%)|
|Return of capital (c)||$||732||$||673||$||59||8.8%||$||2,416||$||1,822||$||594||32.6%|
|(a)||Refer to Note 3 to the accompanying consolidated financial statements for definitions of Adjusted OIBDA, Adjusted Diluted EPS and Free Cash Flow and below for reconciliations.|
|(b)||Diluted EPS represents net income per diluted common share attributable to TWC common shareholders.|
|(c)||Return of capital represents dividends paid and share repurchases and does not reflect the fees, commissions or other costs associated with the stock repurchase program.|
- Total Company revenue grew 2.9% year over year, driven primarily by growth of 20.5% in business services revenue and 14.2% in residential high-speed data revenue.
- Average monthly revenue per residential customer relationship (ARPU) grew 1.9% to $105.06 driven by robust growth in ARPU per new customer relationship.
- Adjusted OIBDA grew 3.0% year over year to $2.0 billion and Operating Income increased 6.0% to $1.2 billion.
- Adjusted Diluted EPS increased 19.9% to $1.69. Diluted EPS decreased 29.2% to $1.84, driven primarily by 2012 SpectrumCo and Clearwire-related gains.
- Capital expenditures in the first nine months totaled $2.4 billion, consistent with the Company’s expectation of full-year capital spending of $3.2 billion.
- Free Cash Flow in the first nine months of 2013 was $1.8 billion. The Company continues to expect full-year Free Cash Flow to be approximately $2.5 billion.
- Time Warner Cable repurchased 4.8 million shares of its common stock, bringing total repurchases since program inception to nearly 86 million shares. In the first nine months of 2013, the Company returned more than 130% of Free Cash Flow to shareholders.
- The Company announced its agreement to acquire DukeNet – a regional fiber optic network company primarily serving the Carolinas. The acquisition is expected to close during the first quarter of 2014.
- Subscriber activity in the quarter was negatively impacted by programming disputes with CBS and Journal Communications.
- Residential wideband high-speed data subscribers (which includes the 30, 50, 75 and 100 Mbps tiers) doubled year over year to 719,000 subscribers.
- The Company continued to expand its WiFi initiative; aggressive deployment in New York City increased total TWC WiFi TM access points to 24,000. Through the Cable WiFi® network, most TWC high-speed data customers have access to 200,000 hotspots across the U.S.
- At the end of the third quarter, Time Warner Cable had 32,000 IntelligentHome customers. The Company launched this service in New York City in October, expanding its availability to over 90% of the Company’s footprint.
|(in millions; unaudited)||3rd Quarter||Year-to-Date 9/30 (a)|
|Residential services revenue:|
|Total residential services revenue||4,579||4,548||31||0.7%||13,822||13,598||224||1.6%|
|Business services revenue:|
|Total business services revenue||594||493||101||20.5%||1,696||1,386||310||22.4%|
|(a)||Revenue for the nine months ended September 30, 2013 benefited from two additional months of Insight Communications Company, Inc. revenue, which is discussed further in Note 2 to the accompanying consolidated financial statements.|
- The growth in residential high-speed data revenue was the result of an increase in average revenue per subscriber, primarily due to an increase in equipment rental charges and a greater percentage of subscribers purchasing higher-priced tiers of service, as well as year-over-year growth in the number of high-speed data subscribers.
- Residential video revenue decreased driven by declines in video subscribers and premium network revenue (which was reduced by approximately $15 million of subscriber credits issued in connection with a temporary blackout of Showtime resulting from a dispute with CBS), partially offset by price increases and a greater percentage of subscribers purchasing higher-priced tiers of service.
- Residential voice revenue decreased due to a decline in average revenue per subscriber and fewer voice subscribers.
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