[April 26, 2012]

Time Warner Cable Reports 2012 First-Quarter Results

Time Warner Cable Inc. (NYSE: TWC) today reported financial results for its first quarter ended March 31, 2012.

Time Warner Cable Chief Executive Officer Glenn Britt said: "Time Warner Cable's first quarter results reflect continued strong performance, and residential Internet and business services were standouts. Now that we have closed the Insight acquisition, our increased cash flow is available to fuel further investments in the business and capital returns to our shareholders."

FINANCIAL RESULTS

Revenues for the first quarter of 2012 increased 6.4% from the first quarter of 2011 to $5.1 billion. Residential services revenues increased 4.1% year-over-year to $4.4 billion, business services revenues grew 37.5% to $429 million, while advertising revenues increased 7.1% to $211 million and other revenues grew 3.4% to $61 million.

Revenues for the first quarter of 2012 benefited from the acquisitions of Insight Communications Company, Inc. (on February 29, 2012), the NewWave Communications cable systems (during the fourth quarter of 2011) and NaviSite, Inc. (during the second quarter of 2011), as detailed below.

Excluding the impacts from acquisitions, residential services revenue growth was primarily driven by an increase in high-speed data revenues, partially offset by a slight decline in video revenues.

• The growth in residential high-speed data revenues was the result of growth in high-speed data subscribers and an increase in average revenues per subscriber (due to both price increases and a greater percentage of subscribers purchasing higher-priced tiers of service).
• Residential video revenues decreased slightly as price increases, a greater percentage of subscribers purchasing higher-priced tiers of service and increased revenues from equipment rental charges and DVR service were more than offset by a decline in video subscribers and revenues from transactional video-on-demand and premium channels.
• Residential voice revenues remained essentially flat as growth in voice subscribers was offset by a decrease in average revenues per subscriber.

Excluding the impacts from acquisitions, business services revenue growth was due primarily to increases in high-speed data and voice subscribers and growth in cell tower backhaul and Metro Ethernet revenues.

Excluding the impacts from acquisitions, advertising revenues increased primarily as a result of a year-over-year increase in revenues from advertising inventory sold on behalf of other video distributors.

Adjusted Operating Income before Depreciation and Amortization ("Adjusted OIBDA") for the first quarter of 2012 increased 8.2% from the first quarter of 2011 to $1.9 billion. The increase was driven by revenue growth, partially offset by a 5.3% increase in operating expenses.

Operating expenses grew primarily due to higher employee costs, video programming expenses and other operating costs, partially offset by a decrease in voice costs. Employee costs were up 10.1% to $1.1 billion, primarily as a result of increased headcount (which increased by approximately 3,500 employees, including Insight, NaviSite and NewWave employees) and higher compensation costs per employee. Pension and equity-based compensation costs increased $15 million and $12 million, respectively. Business services employee costs increased 42.7% year-over-year. Video programming expenses grew 4.6% to $1.1 billion due to contractual rate increases and the acquisition of Insight offset, in part, by an organic decline in video subscribers. For the first quarter of 2011, video programming costs were reduced by approximately $18 million as a result of changes in cost estimates for programming services carried without a contract. Average monthly video programming costs per video subscriber increased 5.9% year-over-year to $30.85 for the first quarter of 2012. Voice costs were down 10.8% to $149 million due to a decrease in delivery costs per subscriber related to the in-sourcing of voice transport, switching and interconnection services, partially offset by an organic increase in subscribers.

Operating Income for the first quarter of 2012 increased 6.9% from the first quarter of 2011 to $1.0 billion. Note 1 to the accompanying consolidated financial statements details certain items affecting the comparability of TWC's results for the first quarters of 2012 and 2011. Excluding these items, first-quarter 2012 Operating Income would have grown 10.8% to $1.1 billion, driven by higher Adjusted OIBDA, partially offset by higher depreciation and amortization expenses primarily as a result of the Company's recent acquisitions (largely Insight).

Adjusted OIBDA less Capital Expenditures for the first three months of 2012 totaled $1.2 billion, a 9.3% increase over the first three months of 2011, due to higher Adjusted OIBDA, partially offset by higher capital expenditures. Capital Expenditures were $706 million for the first three months of 2012, a 6.5% increase over the first three months of 2011, largely reflecting higher support capital spending in residential services and other.

Net Income Attributable to TWC Shareholders was $382 million, or $1.21 per basic common share and $1.20 per diluted common share, for the first quarter of 2012 compared to $325 million, or $0.94 per basic common share and $0.93 per diluted common share, for the first quarter of 2011. Note 1 to the accompanying consolidated financial statements details certain items affecting the comparability of TWC's net income attributable to TWC shareholders for the first quarter of 2012 and 2011, the most significant of which for 2012 was a negative $0.09 per diluted common share impact from merger-related and restructuring costs and, for 2011, was a negative $0.06 per diluted common share net impact from expired Time Warner Inc. stock options.

Adjusted Net Income Attributable to TWC Shareholders and Adjusted Diluted EPS, which exclude the items detailed in Note 1, were $414 million and $1.30, respectively, for the first quarter of 2012 compared to $352 million and $1.01, respectively, for the first quarter of 2011. These year-over-year increases were primarily due to higher Operating Income and lower other expense, net (reflecting a decline in losses from Clearwire Communications LLC as the Company's investment was reduced to $0 during the third quarter of 2011), partially offset by higher interest expense, net, and income tax provision. Additionally, Adjusted Diluted EPS for the first quarter of 2012 benefited from lower average common shares outstanding as a result of share repurchases under the Company's stock repurchase program.

Free Cash Flow for the first three months of 2012 decreased 22.5% to $718 million from $927 million in the first three months of 2011, due mainly to lower cash provided by operating activities and an increase in capital expenditures. Cash Provided by Operating Activities for the first three months of 2012 was $1.4 billion, an 11.9% decrease from $1.6 billion in the first three months of 2011. This decrease was driven by a change in working capital (primarily due to a significant income tax refund received in the first quarter of 2011 and an increase in net interest payments), partially offset by higher Adjusted OIBDA.

Net Debt and Mandatorily Redeemable Preferred Equity totaled $24.5 billion as of March 31, 2012 compared to $21.6 billion as of December 31, 2011, as the cash used for the acquisition of Insight, share repurchases and the dividend payment was greater than Free Cash Flow.

RETURN OF CAPITAL

Time Warner Cable returned $532 million to shareholders during the quarter. Share repurchases during the first quarter of 2012 totaled $353 million or 4.8 million shares of common stock. As of March 31, 2012, $3.7 billion remained under the Company's share repurchase authorization. Time Warner Cable also paid a regular dividend of $0.56 per share of common stock, $179 million in aggregate, during the first quarter of 2012.

SUBSCRIBER METRICS

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.

About Time Warner Cable

Time Warner Cable Inc. (NYSE: TWC) is among the largest providers of video, high-speed data and voice services in the United States, connecting more than 15 million customers to entertainment, information and each other. Time Warner Cable Business Class offers data, video and voice services to businesses of all sizes, cell tower backhaul services to wireless carriers and, through its NaviSite subsidiary, managed and outsourced information technology solutions and cloud services. Time Warner Cable Media, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions. More information about the services of Time Warner Cable is available at www.twc.com, www.twcbc.com, www.navisite.com, and www.twcmedia.com.

Additional details on financial and subscriber metrics are included in the Trending Schedules and Presentation Slides posted on the Company's Investor Relations website at www.twc.com/investors.

Information on Conference Call

Time Warner Cable's earnings conference call can be heard live at 8:30 am ET on Thursday, April 26, 2012. To listen to the call, visit www.twc.com/investors.

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, and other factors affecting the operations of Time Warner Cable Inc. More detailed information about these factors may be found in filings by Time Warner Cable Inc. with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Time Warner Cable is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

2. USE OF NON-GAAP FINANCIAL MEASURES

In discussing its performance, the Company may use certain measures that are not calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These measures include OIBDA, Adjusted OIBDA, Adjusted OIBDA less capital expenditures, Adjusted net income attributable to TWC shareholders, Adjusted Diluted EPS and Free Cash Flow, which the Company defines as follows:

• OIBDA (Operating Income before Depreciation and Amortization) means Operating Income before depreciation of tangible assets and amortization of intangible assets.
• Adjusted OIBDA means OIBDA excluding the impact, if any, of noncash impairments of goodwill, intangible and fixed assets; gains and losses on asset sales; merger-related and restructuring costs; and costs associated with certain equity awards granted to employees to offset value lost as a result of the Company's separation from Time Warner (the "Separation").
• Adjusted OIBDA less capital expenditures means Adjusted OIBDA minus capital expenditures.
• Adjusted net income attributable to TWC shareholders means net income attributable to TWC shareholders (as defined under GAAP) excluding the impact, if any, of noncash impairments of goodwill, intangible and fixed assets and investments; gains and losses on asset sales; merger-related and restructuring costs; changes in the Company's equity award reimbursement obligation to Time Warner; certain changes to income tax provision; and costs associated with certain equity awards granted to employees to offset value lost as a result of the Separation; as well as the impact of taxes and noncontrolling interests on the above items. Similarly, Adjusted Diluted EPS means net income per diluted common share attributable to TWC common shareholders excluding the above items.
• Free Cash Flow means cash provided by operating activities (as defined under GAAP) excluding the impact, if any, of cash provided or used by discontinued operations, plus (i) any income taxes paid on investment sales and (ii) any excess tax benefit from equity-based compensation, less (i) capital expenditures, (ii) cash paid for other intangible assets (excluding those associated with business combinations), (iii) partnership distributions to third parties and (iv) principal payments on capital leases.

Management uses OIBDA and Adjusted OIBDA, among other measures, in evaluating the performance of the Company's business because they eliminate the effects of (1) considerable amounts of noncash depreciation and amortization and (2) items not within the control of the Company's operations managers (such as net income attributable to noncontrolling interests, income tax provision, other income (expense), net, and interest expense, net). Adjusted OIBDA further eliminates the effects of certain noncash items identified in the definition of Adjusted OIBDA above. Adjusted OIBDA less capital expenditures also allows management to evaluate performance including the effect of capital spending decisions. Adjusted OIBDA and Adjusted OIBDA less capital expenditures are also significant performance measures used in the Company's annual incentive compensation programs. Adjusted net income attributable to TWC shareholders and Adjusted Diluted EPS are considered important indicators of the operational strength of the Company as these measures eliminate amounts that do not reflect the fundamental performance of the Company. The Company utilizes Adjusted Diluted EPS, among other measures, to evaluate its performance both on an absolute basis and relative to its peers and the broader market. Management believes that Free Cash Flow is an important indicator of the Company's ability to generate cash, reduce net debt, pay dividends, repurchase common stock and make strategic investments, after the payment of cash taxes, interest and other cash items. In addition, all of these measures are commonly used by analysts, investors and others in evaluating the Company's performance and liquidity.

These measures have inherent limitations. For example, OIBDA and Adjusted OIBDA do not reflect capital expenditures or the periodic costs of certain capitalized assets used in generating revenues. To compensate for such limitations, management evaluates performance through Adjusted OIBDA less capital expenditures and Free Cash Flow, which reflect capital expenditure decisions, and net income attributable to TWC shareholders, which reflects the periodic costs of capitalized assets. Adjusted OIBDA and Adjusted OIBDA less capital expenditures do not reflect any of the items noted as exclusions in the definition of Adjusted OIBDA above. To compensate for these limitations, management evaluates performance through OIBDA and net income attributable to TWC shareholders, which do reflect such items. OIBDA, Adjusted OIBDA and Adjusted OIBDA less capital expenditures also fail to reflect the significant costs borne by the Company for income taxes and debt servicing costs, the share of OIBDA, Adjusted OIBDA and Adjusted OIBDA less capital expenditures attributable to noncontrolling interests, the results of the Company's equity investments and other non-operational income or expense. Additionally, Adjusted net income attributable to TWC shareholders and Adjusted Diluted EPS do not reflect certain charges that affect the operating results of the Company and they involve judgment as to whether items affect fundamental operating performance. Management compensates for these limitations by using other analytics such as a review of net income attributable to TWC shareholders. Free Cash Flow, a liquidity measure, does not reflect payments made in connection with investments and acquisitions, which reduce liquidity. To compensate for this limitation, management evaluates such investments and acquisitions through other measures such as return on investment analyses.

These non-GAAP measures should be considered in addition to, not as substitutes for, the Company's Operating Income, net income attributable to TWC shareholders and various cash flow measures (e.g., cash provided by operating activities), as well as other measures of financial performance and liquidity reported in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies.

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