(Source: Business Wire)
Time Warner Cable Inc. (NYSE: TWC) today reported financial results for
its third quarter ended September 30, 2009.
Time Warner Cable Chief Executive Officer Glenn Britt said: "In the
third quarter we grew both Revenues and Adjusted OIBDA by 4%, and we
continued to generate a considerable amount of cash. This has enabled us
to furtherpay down the debt we incurred to fund our special dividend.
We're on track to return to our target leverage in the first quarter of
2010."
Britt added: "Our business model is resilient even in a tough economy
and in the face of intense competition. We've built great assets in our
plant and customer relationships that provide a strong foundation for
continuing growth. We intend to continue operating the business
aggressively yet prudently to generate attractive returns for our
shareholders."
FINANCIAL RESULTS
Revenues for the third quarter of 2009 increased 4% over
the prior year quarter to $4.5 billion. Subscription revenues grew 5% to
$4.3 billion driven by video price increases and continued growth in
digital video, high-speed data and Digital Phone subscribers, partially
offset by a year-over-year decrease in basic video subscribers
(resulting, in part, from the sale of a group of small cable systems in
December 2008). Advertising revenues declined 19% to $182 million, due
primarily to year-over-year declines in the auto, media and political
categories.
(in millions; unaudited) 3rd Quarter Year-to-Date 9/30
2009 2008 Change 2009 2008 Change
Subscription revenues:
Video $ 2,698 $ 2,639 2 % $ 8,071 $ 7,878 2 %
High-speed data 1,138 1,056 8 % 3,362 3,082 9 %
Voice 480 421 14 % 1,402 1,184 18 %
Total Subscription revenues 4,316 4,116 5 % 12,835 12,144 6 %
Advertising revenues 182 224 (19 %) 501 654 (23 %)
Total revenues $ 4,498 $ 4,340 4 % $ 13,336 $ 12,798 4 %
-------------------------------------------------------------------------------
Adjusted Operating Income before Depreciation and Amortization
("Adjusted OIBDA") rose 4% over the third quarter of 2008 to $1.6
billion. The year-over-year increase in Adjusted OIBDA was driven by
revenue growth, partially offset by higher video programming, employee
and voice costs. Video programming expenses grew 6% to $1.0 billion due
to contractual rate increases, incremental retransmission consent
expense and the expansion of service offerings, offset, in part, by a
decline in basic video and premium channel subscriptions. Employee costs
were up 4% to $911 million, resulting primarily from higher employee
medical and pension expenses. Voice costs increased 12% to $161 million
primarily reflecting growth in Digital Phone subscribers. Adjusted OIBDA
for the third quarter of 2009 excludes restructuring costs and
separation-related "make-up" equity award costs, while Adjusted OIBDA in
the prior year period excludes restructuring costs. Operating Income
was up 5% over the third quarter of 2008 to $828 million as depreciation
expense grew less than Adjusted OIBDA.
Exception caught in main.
Net Income Attributable to TWC was $268 million, or $0.76 per
basic and diluted common share, for the third quarter of 2009. Net
income attributable to TWC decreased for the third quarter of 2009
compared to the third quarter of 2008 due primarily to higher interest
expense related to the debt incurred to fund the Company's $10.9 billion
special cash dividend paid in March 2009, partly offset by an increase
in Operating Income and decreases in net income attributable to
noncontrolling interests and income tax expense. Refer to Note 2 to the
accompanying consolidated financial statements for details regarding
certain items affecting the comparability of net income attributable to
TWC for the third quarter of 2009 to that of the third quarter of 2008.
(in millions, except per share data; unaudited) 3rd Quarter Year-to-Date 9/30
2009 2008 Change 2009 2008 Change
Net income attributable to TWC $ 268 $ 301 (11 %) $ 748 $ 820 (9 %)
Net income attributable to TWC per common share:
Basic $ 0.76 $ 0.92 (17 %) $ 2.15 $ 2.52 (15 %)
Diluted $ 0.76 $ 0.92 (17 %) $ 2.14 $ 2.52 (15 %)
-------------------------------------------------------------------------------
Adjusted OIBDA less Capital Expenditures for the first nine
months of 2009 was $2.5 billion, a 27% increase over the first nine
months of 2008, due to lower capital expenditures and higher Adjusted
OIBDA. Capital Expenditures for the first nine months of 2009
totaled $2.3 billion, an 11% decrease compared to the first nine months
of 2008, largely reflecting lower residential capital spending,
particularly lower spending on customer premise equipment,
upgrades/rebuilds and line extensions, partially offset by higher
commercial capital spending.
(in millions; unaudited) 3rd Quarter Year-to-Date 9/30
2009 2008 Change 2009 2008 Change
Adjusted OIBDA $ 1,623 $ 1,562 4 % $ 4,782 $ 4,540 5 %
Capital expenditures (758 ) (874 ) (13 %) (2,287 ) (2,582 ) (11 %)
Adjusted OIBDA less Capital expenditures $ 865 $ 688 26 % $ 2,495 $ 1,958 27 %
-------------------------------------------------------------------------------
Free Cash Flow for the first nine months of 2009 increased 19% to
$1.5 billion from $1.3 billion in the first nine months of 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 first nine months of 2009 was $3.8 billion, a 2%
decrease from $3.9 billion in the first nine months of 2008. This
decrease was related primarily to an increase in net cash interest
payments, offset partly by higher Adjusted OIBDA, lower pension plan
contributions and a change in working capital requirements. Free Cash
Flow per diluted common share was $4.29 for the first nine months of
2009 compared to $3.85 in the first nine months of 2008.
(in millions, except per share data; unaudited) 3rd Quarter Year-to-Date 9/30
2009 2008 Change 2009 2008 Change
Cash provided by operating activities $ 1,234 $ 1,329 (7 %) $ 3,805 $ 3,864 (2 %)
Capital expenditures (758 ) (874 ) (13 %) (2,287 ) (2,582 ) (11 %)
Cash paid for other intangible assets (7 ) (6 ) 17 % (17 ) (25 ) (32 %)
Partnership distributions and principal payments on capital leases (4 ) (1 ) 300 % (5 ) (3 ) 67 %
Free Cash Flow((a)) $ 465 $ 448 4 % $ 1,496 $ 1,254 19 %
Free Cash Flow per diluted common share $ 1.31 $ 1.37 (4 %) $ 4.29 $ 3.85 11 %
Average diluted common shares outstanding 354.5 326.1 9 % 348.9 325.9 7 %
(a) Refer to Note 3 to the accompanying consolidated financial statements for a definition of Free Cash Flow.
-------------------------------------------------------------------------------
Net Debt and Mandatorily Redeemable Preferred Equity totaled
$22.0 billion as of September 30, 2009 compared to $12.6 billion as of
December 31, 2008, due to net borrowings to fund the Company's special
cash dividend paid in March 2009.
