Time Warner Cable (NYSE: TWC) (formerly Warner Cable Communications) is an American national cable television company that operates in 28 states and has 31 operating divisions. Its corporate headquarters are located in the Time Warner Center in Midtown Manhattan, New York City, and the company has other corporate offices in Cambridge, Massachusetts; Columbus, Ohio; Buffalo, New York; Charlotte, North Carolina; and Herndon, Virginia. For its first 20 years, Time Warner Cable was controlled by Time Warner. However, despite being headquartered in the same building as Time Warner, Time Warner Cable is no longer affiliated with Time Warner, having been spun out to shareholders in March 2009.
Prior to the spin-out, Time Warner had held an 84 percent stake in Time Warner Cable. Non-Time Warner shareholders received 0.083670 shares for each share already owned. This move made Time Warner Cable the largest cable operator in the United States owned solely by a single class of shareholders (without supervoting stock).
Time Warner Cable Inc. (TWC), incorporated on March 21, 2003, is a cable operator in the United States with systems located in five geographic areas: New York State, the Carolinas, Ohio, Southern California and Texas. TWC offers video, high-speed data and voice services over its broadband cable systems to residential and commercial customers. As of December 31, 2010, TWC served approximately 14.5 million residential and commercial customers who subscribed to one or more of its three primary subscription services: video, high-speed data and voice, totaling approximately 26.7 million primary service units (PSUs). TWC markets its services separately and in bundled packages of multiple services and features. As of December 31, 2010, 59% of TWC’s residential and commercial customers subscribed to two or more of its primary services, including 25.4% of its customers who subscribed to all three primary services. TWC also sells advertising to a variety of national, regional and local advertising customers. On February 1, 2011, TWC acquired NaviSite, Inc.
Residential Services
TWC offers a range of residential video services, including advanced services such as On-Demand, high-definition (HD) and digital video recorder (DVR) services. As of December 31, 2010, TWC had approximately 12.3 million residential video subscribers. TWC generally offers three main levels or tiers of video programming and music services: Basic Service Tier (BST), Expanded Basic Service Tier and Digital Basic Service Tier.
BST includes broadcast television signals, satellite-delivered broadcast networks and superstations, local origination channels, a few other networks and public access, educational and government channels. CPST enables BST subscribers to add to their service national, regional and local cable entertainment, news and other networks, such as CNN, USA and ESPN. In certain areas, BST and CPST also include local programming devoted to the communities TWC serves, including 24-hour local news channels and sports channels in a number of cities.
On-Demand services are generally available to digital video subscribers. Available On-Demand services include a range of featured movies and special events, including select movies and special events in three dimensional (3-D), for which separate per-use fees are charged and free access to selected movies, programming from broadcast and cable networks, music videos, local programming and other content. In addition, service subscribers generally have access to the service’s On-Demand content without additional fees.
As of December 31, 2010, 51.7%, approximately 4.6 million, of TWC’s residential and commercial digital video subscribers also subscribed to its DVR service. During the year ended December 31, 2010, TWC launched remote DVR management, which provides customers with the ability to program their DVRs via a Website, and a multi-room DVR service, which allows a program recorded on a DVR to be watched on any other connected television in a customer’s home, in the majority of its service areas.
During 2010, TWC launched remote DVR management, which provides customers with the ability to program their DVRs via a Website, and a multi-room DVR service, which allows a program recorded on a DVR to be watched on any other connected television in a customer’s home, in the majority of its service areas.
TWC’s high-speed data services provide customers with a always-on connection to the Internet. As of December 31, 2010, TWC served approximately 9.5 million residential high-speed data subscribers. TWC offers multiple tiers of Road Runner Broadband service to meet the different needs of its subscribers. Utilizing DOCSIS 3.0 technology, TWC offers Wideband, Extreme and Turbo Plus to subscribers in a number of its service areas. Wideband offers subscribers speeds of up to 50 Megabytes per second downstream and up to 5 Megabytes per second upstream. TWC also offers Turbo, Standard, Basic and Lite tiers in all of its service areas. Turbo offers subscribers speeds of up to 15 Megabytes per second downstream and up to 2 Megabytes per second upstream. In the majority of its service areas, TWC provides Turbo and Standard subscribers with PowerBoost at no additional charge, which allows users to initiate brief download speed bursts when TWC’s network capacity permits.
TWC’s Road Runner Broadband service provides communication tools and personalized services, including e-mail, PC security, parental controls and online radio, without any additional charge. The Roadrunner.com portal provides access to content and media from local, national and international providers and topic-specific channels, including entertainment, dating, games, news, sports, travel, music, movie listings, shopping, ticketing and coupon sites.
As of December 31, 2010, the Company had 13,000 wireless mobile broadband subscribers. This service provides customers with mobile broadband Internet access inside or outside their homes on their laptops via a TWC-provided data card or any WiFi-enabled device with IntelliGo, a mobile hotspot device that TWC began offering its mobile broadband subscribers during 2010, which provides wireless connectivity to up to five devices simultaneously. TWC offers wireless mobile broadband services delivered over Clearwire Corporation’s (Clearwire) fourth-generation (4G) WiMax network and Sprint Nextel Corporation’s (Sprint) third-generation (3G) CDMA network, with speeds of up to 6 Megabytes per second on Clearwire’s 4G WiMax network and up to 1.5 Megabytes per second on Sprint’s 3G CDMA network.
TWC’s residential Digital Phone service, Digital Home Phone, offers customers unlimited local, in-state and U.S., Canada and Puerto Rico calling and a number of calling features, including call waiting, caller ID and Enhanced 911 (E911) services, for a fixed monthly fee. TWC also offers additional calling plans with a variety of options that are designed to meet customers’ particular needs, including a local-only calling plan, an unlimited in-state calling plan and an international calling plan. As of December 31, 2010, TWC served approximately 4.4 million residential Digital Home Phone subscribers. During 2010, TWC launched a residential Web portal, VoiceZone, in the majority of its service areas, which allows Digital Home Phone subscribers who subscribe to voicemail service to use a Web portal to customize their Digital Home Phone features, access caller ID and listen to their voicemail on their computer at no additional charge.
Commercial Services
TWC offers video, high-speed data, voice, networking and transport services to commercial customers marketed under the Time Warner Cable Business Class brand. TWC offers small- and medium-sized businesses a range of video programming tiers and music services. Packages are designed with a variety of options to meet the specific demands of a business environment, with access to entertainment and news programming covering world events, local news, weather and financial markets. Video services are provided to commercial subscribers at contractually established fees based on the tier of service. As of December 31, 2010, TWC served 165,000 commercial video subscribers.
TWC provides high-speed Internet access service to small businesses with speeds of up to 15 Megabytes per second downstream and up to 2 Megabytes per second upstream and, in several of its service areas, up to 50 Megabytes per second downstream and up to 5 Megabytes per second upstream with Wideband. TWC also provides dedicated Internet access to small- and medium-sized businesses through a fiber connection to the Internet (Dedicated Internet Access). TWC began offering its wireless mobile broadband Internet service, Time Warner Cable Business Class Mobile, to commercial customers in certain of its service areas during 2010.
TWC offers Metro Ethernet service that connects two or more locations for commercial customers with geographically dispersed locations with speeds up to 10 Gbps. In addition, TWC offers cell tower backhaul services to wireless telephone providers, Internet service providers and competitive carriers on a wholesale basis.
TWC offers its commercial Digital Phone service, Business Class Phone, to a range of businesses. Business Class Phone is a multi-line voice service developed for small businesses, which provides various calling plans, along with other key business features, such as call restrictions, non-verified account codes and three-way call transfer. TWC also offers Business Class PRI, which is designed for medium-sized businesses and supports up to twenty-three simultaneous voice calls on each two-way trunk line. Business Class Phone is provided to subscribers at contractually established fees based on the services received. As of December 31, 2010, TWC had 111,000 commercial Digital Phone subscribers.
The Company competes with AT&T Inc., Verizon Communications Inc., Frontier Communications Corporation, Cincinnati Bell, Inc., DISH Network Corporation, DirecTV Group Inc., Netflix Inc., Apple Inc., Sprint, T-Mobile USA, Inc., Clearwire, Vonage, Skype, magicJack and Google Voice.
Time Warner Cable was formed in 1989 through the merger of Time Inc.'s cable television company, American Television and Communications Corp., and Warner Cable, a division of Warner Communications. It also includes the remnants of the defunct QUBE interactive TV service. In 1995, the company launched the Southern Tier On-Line Community, a cable modem service now known as Road Runner High Speed Online.
On July 31, 2006, Time Warner Cable and Comcast completed a deal to purchase practically all of Adelphia's assets for $17 billion. Time Warner Cable gained 3.3 million of Adelphia's subscribers, a 29 percent increase, while Comcast gained almost 1.7 million subscribers. Adelphia stockholders received 16% of Time Warner Cable. Time Warner Cable went public effective February 13, 2007, and the company began trading on the New York Stock Exchange on March 1, 2007.
In addition to Adelphia's coverage being divided up, Time Warner Cable and Comcast also agreed to exchange some of their own subscribers in order to consolidate key regions. An example of this is the Los Angeles market, which was mostly covered by Comcast and Adelphia (and some areas of the region already served by TWC), is now under Time Warner Cable. Philadelphia, previously was split between Time Warner and Comcast, with the majority of cable subscribers belonging to Comcast. Time Warner subscribers in Philadelphia were swapped with Comcast in early 2007. Similarly, the Houston area, which was under Time Warner, was swapped to Comcast, while the Dallas metro area was changed to Time Warner (RR).In the Twin Cities, Minneapolis was Time Warner and Saint Paul was Comcast. That whole market is now Comcast. There have also been rumors of a Charter purchase as well, much like how Adelphia was acquired in conjunction with Comcast.
Some of the regional cable system clusters operated by Time Warner Cable are owned by the Time Warner Entertainment - Advance/Newhouse Partnership (TWEAN). In 2002, Advance/Newhouse Communications, unhappy with some of the operating policies of Time Warner Cable in the AOL Time Warner era, forced a restructuring of the TWEAN partnership such that Advance/Newhouse would actively manage and operate a portion of the jointly owned cable systems equal to their percentage of equity. Under this arrangement, Advance/Newhouse enjoys the proceeds of their actively managed systems rather than simply a percentage of the partnership's total earnings. The majority of the affected systems are in the Tampa and Orlando markets under the Bright House Networks brand.
The value of this deal is that it allows Advance/Newhouse to more directly control their cable investments without having to completely unravel the TWEAN partnership, which does bring some benefits via Time Warner's development and purchasing clout.
OVERALL
Beta: 0.71
Market Cap (Mil.): $26,262.88
Shares Outstanding (Mil.): 336.40
Annual Dividend: 1.92
Yield (%): 2.46
FINANCIALS
TWC.N Industry Sector
P/E (TTM): 19.83 628.15 21.07
EPS (TTM): 25.04 -- --
ROI: 3.47 3.96 1.78
ROE: 16.08 7.13 2.74
Name Age Since Current Position
Glenn Britt 62 2010 Chairman of the Board, Chief Executive Officer
Robert Marcus 45 2010 President, Acting Chief Financial Officer, Chief Operating Officer
Michael LaJoie 56 2004 Chief Technology Officer, Executive Vice President
Marc Lawrence-Apfelbaum 55 2003 Executive Vice President, General Counsel, Secretary
Tomas Mathews 50 2010 Executive Vice President - Human Resources
Carl Rossetti 62 2009 Executive Vice President; President - Time Warner Cable Ventures
Ellen East 49 2007 Executive Vice President, Chief Communications Officer
Peter Stern 39 2008 Executive Vice President, Chief Strategy Officer
Gail MacKinnon 48 2008 Executive Vice President, Chief Government Affairs Officer
Melinda Witmer 49 2010 Executive Vice President, Chief Programming Officer
Peter Haje 76 2009 Lead Independent Director
Don Logan 65 2009 Director
Wayne Pace 64 2003 Director
Carole Black 67 2006 Independent Director
Thomas Castro 56 2006 Independent Director
David Chang 69 2003 Independent Director
James Copeland 66 2006 Independent Director
N. Nicholas 71 2003 Independent Director
Donna James 53 2009 Independent Director
Edward Shirley 54 2009 Independent Director
John Sununu 46 2009 Independent Director
COMPANY ADDRESS
Time Warner Cable Inc
60 Columbus Circle
New York NY 10023
Prior to the spin-out, Time Warner had held an 84 percent stake in Time Warner Cable. Non-Time Warner shareholders received 0.083670 shares for each share already owned. This move made Time Warner Cable the largest cable operator in the United States owned solely by a single class of shareholders (without supervoting stock).
Time Warner Cable Inc. (TWC), incorporated on March 21, 2003, is a cable operator in the United States with systems located in five geographic areas: New York State, the Carolinas, Ohio, Southern California and Texas. TWC offers video, high-speed data and voice services over its broadband cable systems to residential and commercial customers. As of December 31, 2010, TWC served approximately 14.5 million residential and commercial customers who subscribed to one or more of its three primary subscription services: video, high-speed data and voice, totaling approximately 26.7 million primary service units (PSUs). TWC markets its services separately and in bundled packages of multiple services and features. As of December 31, 2010, 59% of TWC’s residential and commercial customers subscribed to two or more of its primary services, including 25.4% of its customers who subscribed to all three primary services. TWC also sells advertising to a variety of national, regional and local advertising customers. On February 1, 2011, TWC acquired NaviSite, Inc.
Residential Services
TWC offers a range of residential video services, including advanced services such as On-Demand, high-definition (HD) and digital video recorder (DVR) services. As of December 31, 2010, TWC had approximately 12.3 million residential video subscribers. TWC generally offers three main levels or tiers of video programming and music services: Basic Service Tier (BST), Expanded Basic Service Tier and Digital Basic Service Tier.
BST includes broadcast television signals, satellite-delivered broadcast networks and superstations, local origination channels, a few other networks and public access, educational and government channels. CPST enables BST subscribers to add to their service national, regional and local cable entertainment, news and other networks, such as CNN, USA and ESPN. In certain areas, BST and CPST also include local programming devoted to the communities TWC serves, including 24-hour local news channels and sports channels in a number of cities.
On-Demand services are generally available to digital video subscribers. Available On-Demand services include a range of featured movies and special events, including select movies and special events in three dimensional (3-D), for which separate per-use fees are charged and free access to selected movies, programming from broadcast and cable networks, music videos, local programming and other content. In addition, service subscribers generally have access to the service’s On-Demand content without additional fees.
As of December 31, 2010, 51.7%, approximately 4.6 million, of TWC’s residential and commercial digital video subscribers also subscribed to its DVR service. During the year ended December 31, 2010, TWC launched remote DVR management, which provides customers with the ability to program their DVRs via a Website, and a multi-room DVR service, which allows a program recorded on a DVR to be watched on any other connected television in a customer’s home, in the majority of its service areas.
During 2010, TWC launched remote DVR management, which provides customers with the ability to program their DVRs via a Website, and a multi-room DVR service, which allows a program recorded on a DVR to be watched on any other connected television in a customer’s home, in the majority of its service areas.
TWC’s high-speed data services provide customers with a always-on connection to the Internet. As of December 31, 2010, TWC served approximately 9.5 million residential high-speed data subscribers. TWC offers multiple tiers of Road Runner Broadband service to meet the different needs of its subscribers. Utilizing DOCSIS 3.0 technology, TWC offers Wideband, Extreme and Turbo Plus to subscribers in a number of its service areas. Wideband offers subscribers speeds of up to 50 Megabytes per second downstream and up to 5 Megabytes per second upstream. TWC also offers Turbo, Standard, Basic and Lite tiers in all of its service areas. Turbo offers subscribers speeds of up to 15 Megabytes per second downstream and up to 2 Megabytes per second upstream. In the majority of its service areas, TWC provides Turbo and Standard subscribers with PowerBoost at no additional charge, which allows users to initiate brief download speed bursts when TWC’s network capacity permits.
TWC’s Road Runner Broadband service provides communication tools and personalized services, including e-mail, PC security, parental controls and online radio, without any additional charge. The Roadrunner.com portal provides access to content and media from local, national and international providers and topic-specific channels, including entertainment, dating, games, news, sports, travel, music, movie listings, shopping, ticketing and coupon sites.
As of December 31, 2010, the Company had 13,000 wireless mobile broadband subscribers. This service provides customers with mobile broadband Internet access inside or outside their homes on their laptops via a TWC-provided data card or any WiFi-enabled device with IntelliGo, a mobile hotspot device that TWC began offering its mobile broadband subscribers during 2010, which provides wireless connectivity to up to five devices simultaneously. TWC offers wireless mobile broadband services delivered over Clearwire Corporation’s (Clearwire) fourth-generation (4G) WiMax network and Sprint Nextel Corporation’s (Sprint) third-generation (3G) CDMA network, with speeds of up to 6 Megabytes per second on Clearwire’s 4G WiMax network and up to 1.5 Megabytes per second on Sprint’s 3G CDMA network.
TWC’s residential Digital Phone service, Digital Home Phone, offers customers unlimited local, in-state and U.S., Canada and Puerto Rico calling and a number of calling features, including call waiting, caller ID and Enhanced 911 (E911) services, for a fixed monthly fee. TWC also offers additional calling plans with a variety of options that are designed to meet customers’ particular needs, including a local-only calling plan, an unlimited in-state calling plan and an international calling plan. As of December 31, 2010, TWC served approximately 4.4 million residential Digital Home Phone subscribers. During 2010, TWC launched a residential Web portal, VoiceZone, in the majority of its service areas, which allows Digital Home Phone subscribers who subscribe to voicemail service to use a Web portal to customize their Digital Home Phone features, access caller ID and listen to their voicemail on their computer at no additional charge.
Commercial Services
TWC offers video, high-speed data, voice, networking and transport services to commercial customers marketed under the Time Warner Cable Business Class brand. TWC offers small- and medium-sized businesses a range of video programming tiers and music services. Packages are designed with a variety of options to meet the specific demands of a business environment, with access to entertainment and news programming covering world events, local news, weather and financial markets. Video services are provided to commercial subscribers at contractually established fees based on the tier of service. As of December 31, 2010, TWC served 165,000 commercial video subscribers.
TWC provides high-speed Internet access service to small businesses with speeds of up to 15 Megabytes per second downstream and up to 2 Megabytes per second upstream and, in several of its service areas, up to 50 Megabytes per second downstream and up to 5 Megabytes per second upstream with Wideband. TWC also provides dedicated Internet access to small- and medium-sized businesses through a fiber connection to the Internet (Dedicated Internet Access). TWC began offering its wireless mobile broadband Internet service, Time Warner Cable Business Class Mobile, to commercial customers in certain of its service areas during 2010.
TWC offers Metro Ethernet service that connects two or more locations for commercial customers with geographically dispersed locations with speeds up to 10 Gbps. In addition, TWC offers cell tower backhaul services to wireless telephone providers, Internet service providers and competitive carriers on a wholesale basis.
TWC offers its commercial Digital Phone service, Business Class Phone, to a range of businesses. Business Class Phone is a multi-line voice service developed for small businesses, which provides various calling plans, along with other key business features, such as call restrictions, non-verified account codes and three-way call transfer. TWC also offers Business Class PRI, which is designed for medium-sized businesses and supports up to twenty-three simultaneous voice calls on each two-way trunk line. Business Class Phone is provided to subscribers at contractually established fees based on the services received. As of December 31, 2010, TWC had 111,000 commercial Digital Phone subscribers.
The Company competes with AT&T Inc., Verizon Communications Inc., Frontier Communications Corporation, Cincinnati Bell, Inc., DISH Network Corporation, DirecTV Group Inc., Netflix Inc., Apple Inc., Sprint, T-Mobile USA, Inc., Clearwire, Vonage, Skype, magicJack and Google Voice.
Time Warner Cable was formed in 1989 through the merger of Time Inc.'s cable television company, American Television and Communications Corp., and Warner Cable, a division of Warner Communications. It also includes the remnants of the defunct QUBE interactive TV service. In 1995, the company launched the Southern Tier On-Line Community, a cable modem service now known as Road Runner High Speed Online.
On July 31, 2006, Time Warner Cable and Comcast completed a deal to purchase practically all of Adelphia's assets for $17 billion. Time Warner Cable gained 3.3 million of Adelphia's subscribers, a 29 percent increase, while Comcast gained almost 1.7 million subscribers. Adelphia stockholders received 16% of Time Warner Cable. Time Warner Cable went public effective February 13, 2007, and the company began trading on the New York Stock Exchange on March 1, 2007.
In addition to Adelphia's coverage being divided up, Time Warner Cable and Comcast also agreed to exchange some of their own subscribers in order to consolidate key regions. An example of this is the Los Angeles market, which was mostly covered by Comcast and Adelphia (and some areas of the region already served by TWC), is now under Time Warner Cable. Philadelphia, previously was split between Time Warner and Comcast, with the majority of cable subscribers belonging to Comcast. Time Warner subscribers in Philadelphia were swapped with Comcast in early 2007. Similarly, the Houston area, which was under Time Warner, was swapped to Comcast, while the Dallas metro area was changed to Time Warner (RR).In the Twin Cities, Minneapolis was Time Warner and Saint Paul was Comcast. That whole market is now Comcast. There have also been rumors of a Charter purchase as well, much like how Adelphia was acquired in conjunction with Comcast.
Some of the regional cable system clusters operated by Time Warner Cable are owned by the Time Warner Entertainment - Advance/Newhouse Partnership (TWEAN). In 2002, Advance/Newhouse Communications, unhappy with some of the operating policies of Time Warner Cable in the AOL Time Warner era, forced a restructuring of the TWEAN partnership such that Advance/Newhouse would actively manage and operate a portion of the jointly owned cable systems equal to their percentage of equity. Under this arrangement, Advance/Newhouse enjoys the proceeds of their actively managed systems rather than simply a percentage of the partnership's total earnings. The majority of the affected systems are in the Tampa and Orlando markets under the Bright House Networks brand.
The value of this deal is that it allows Advance/Newhouse to more directly control their cable investments without having to completely unravel the TWEAN partnership, which does bring some benefits via Time Warner's development and purchasing clout.
OVERALL
Beta: 0.71
Market Cap (Mil.): $26,262.88
Shares Outstanding (Mil.): 336.40
Annual Dividend: 1.92
Yield (%): 2.46
FINANCIALS
TWC.N Industry Sector
P/E (TTM): 19.83 628.15 21.07
EPS (TTM): 25.04 -- --
ROI: 3.47 3.96 1.78
ROE: 16.08 7.13 2.74
Name Age Since Current Position
Glenn Britt 62 2010 Chairman of the Board, Chief Executive Officer
Robert Marcus 45 2010 President, Acting Chief Financial Officer, Chief Operating Officer
Michael LaJoie 56 2004 Chief Technology Officer, Executive Vice President
Marc Lawrence-Apfelbaum 55 2003 Executive Vice President, General Counsel, Secretary
Tomas Mathews 50 2010 Executive Vice President - Human Resources
Carl Rossetti 62 2009 Executive Vice President; President - Time Warner Cable Ventures
Ellen East 49 2007 Executive Vice President, Chief Communications Officer
Peter Stern 39 2008 Executive Vice President, Chief Strategy Officer
Gail MacKinnon 48 2008 Executive Vice President, Chief Government Affairs Officer
Melinda Witmer 49 2010 Executive Vice President, Chief Programming Officer
Peter Haje 76 2009 Lead Independent Director
Don Logan 65 2009 Director
Wayne Pace 64 2003 Director
Carole Black 67 2006 Independent Director
Thomas Castro 56 2006 Independent Director
David Chang 69 2003 Independent Director
James Copeland 66 2006 Independent Director
N. Nicholas 71 2003 Independent Director
Donna James 53 2009 Independent Director
Edward Shirley 54 2009 Independent Director
John Sununu 46 2009 Independent Director
COMPANY ADDRESS
Time Warner Cable Inc
60 Columbus Circle
New York NY 10023