UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from                      to                     

TIME WARNER CABLE INC.

Delaware (State or other jurisdiction of incorporation or organization)		84-1496755 (I.R.S. Employer Identification No.)

One Time Warner Center
North Tower
New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)

(212) 364-8200
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o           Accelerated filer o           Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Act). Yes o No þ

		Shares Outstanding
Description of Class		as of November 2, 2007
Class A Common Stock — $.01 par value			901,916,314
Class B Common Stock — $.01 par value			75,000,000

 

 

TIME WARNER CABLE INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER FINANCIAL INFORMATION

		Page
PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Results of Operations and Financial Condition			1
Item 4. Controls and Procedures			26
Consolidated Balance Sheet as of September 30, 2007 and December 31, 2006			27
Consolidated Statement of Operations for the Three and Nine Months Ended September 30, 2007 and 2006			28
Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2007 and 2006			29
Consolidated Statement of Shareholders’ Equity			30
Notes to Consolidated Financial Statements			31
Supplementary Information			53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			62
Item 6. Exhibits			62
EX-31.1 SECTION 302 CERTIFICATION OF PEO
EX-31.2 SECTION 302 CERTIFICATION OF PFO
EX-32 SECTION 906 CERTIFICATION OF PEO & PFO

TIME WARNER CABLE INC.

INTRODUCTION

     Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is provided as a supplement to the accompanying consolidated financial statements and notes to help provide an understanding of Time Warner Cable Inc.’s (together with its subsidiaries, “TWC” or the “Company”) financial condition, cash flows and results of operations. MD&A is organized as follows:

	•		Overview. This section provides a general description of TWC’s business, as well as recent developments the Company believes are important in understanding the results of operations and financial condition or in understanding anticipated future trends.
	•		Financial statement presentation. This section provides a brief summary of how the Company’s operations are presented in the accompanying consolidated financial statements.
	•		Results of operations. This section provides an analysis of the Company’s results of operations for the three and nine months ended September 30, 2007.
	•		Financial condition and liquidity. This section provides an analysis of the Company’s financial condition as of September 30, 2007 and cash flows for the nine months ended September 30, 2007.
	•		Caution concerning forward-looking statements. This section provides a description of the use of forward-looking information appearing in this report, including in MD&A and the consolidated financial statements. Such information is based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (the “2006 Form 10-K”) for a discussion of the risk factors applicable to the Company.

OVERVIEW

     TWC is the second-largest cable operator in the U.S. and is an industry leader in developing and launching innovative video, data and voice services. As of September 30, 2007, TWC had approximately 13.3 million basic video subscribers in technologically advanced, well-clustered systems located mainly in five geographic areas — New York state, the Carolinas, Ohio, southern California and Texas. As of September 30, 2007, TWC was the largest cable operator in a number of large cities, including New York City and Los Angeles.

     On July 31, 2006, a subsidiary of TWC, Time Warner NY Cable LLC (“TW NY”), and Comcast Corporation (together with its subsidiaries, “Comcast”) completed the acquisition of substantially all of the cable assets of Adelphia Communications Corporation (“Adelphia”) and related transactions. In addition, effective January 1, 2007, TWC began consolidating the results of certain cable systems located in Kansas City, south and west Texas and New Mexico (the “Kansas City Pool”) upon the distribution of the assets of Texas and Kansas City Cable Partners, L.P. (“TKCCP”) to TWC and Comcast. Prior to January 1, 2007, TWC’s interest in TKCCP was reported as an equity method investment. Refer to “—Recent Developments” for further details.

     Time Warner Inc. (“Time Warner”) currently owns approximately 84.0% of the common stock of TWC (representing a 90.6% voting interest). The financial results of TWC’s operations are consolidated by Time Warner.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     TWC principally offers three services — video, high-speed data and voice, which have been primarily targeted to residential customers. Video is TWC’s largest service in terms of revenues generated, and providing video services is a competitive and highly penetrated business. TWC expects to continue to increase video revenues through the offering of advanced digital video services, as well as through price increases and digital video subscriber growth. TWC’s digital video subscribers provide a broad base of potential customers for additional advanced services. Video programming costs represent a major component of TWC’s expenses and are expected to continue to increase, reflecting contractual rate increases, subscriber growth and the expansion of service offerings. TWC expects that its video service margins will decline over the next few years as increases in programming costs outpace growth in video revenues.

     High-speed data has been one of TWC’s fastest-growing services over the past several years and is a key driver of its results. As of September 30, 2007, TWC had approximately 7.4 million residential high-speed data subscribers. TWC expects continued strong growth in residential high-speed data subscribers and revenues for the foreseeable future; however, the rate of growth of both subscribers and revenues is expected to continue to slow over time as high-speed data services become increasingly well-penetrated. TWC also offers commercial high-speed data services and had approximately 272,000 commercial high-speed data subscribers as of September 30, 2007.

     Approximately 2.6 million subscribers received Digital Phone service, TWC’s voice service, as of September 30, 2007. Under TWC’s primary calling plan, for a monthly fixed fee, Digital Phone customers typically receive the following services: an unlimited local, in-state and U.S., Canada and Puerto Rico calling plan, as well as call waiting, caller ID and E911 services. TWC also offers additional calling plans with a variety of calling options that are designed to meet customers’ particular usage patterns. TWC is currently introducing an international calling plan and it intends to offer additional plans in the future. Digital Phone enables TWC to offer its customers a convenient package, or “bundle,” of video, high-speed data and voice services, and to compete effectively against bundled services available from its competitors. TWC expects strong increases in Digital Phone subscribers and revenues for the foreseeable future. TWC has begun to introduce Business Class Phone, a commercial Digital Phone service, to small- and medium-sized businesses and will continue to roll out this service during the fourth quarter of 2007 in most of the systems TWC owned before and retained after the transactions with Adelphia and Comcast (the “Legacy Systems”). TWC has also been introducing this service in the systems acquired in and retained after the transactions with Adelphia and Comcast (the “Acquired Systems”) during 2007 and will continue the roll-out in the Acquired Systems during 2008.

     In November 2005, TWC and several other cable companies, together with Sprint Nextel Corporation (“Sprint”), announced the formation of a joint venture to develop integrated wireline and wireless video, data and voice services. Since 2006, TWC has offered a bundle that includes Sprint wireless service (with some unique TWC features) in some of its operating areas. Additionally, TWC is a participant in a wireless spectrum joint venture with several other cable companies (the “Wireless Joint Venture”), which, on November 29, 2006, was awarded certain advanced wireless spectrum licenses in an FCC auction.

     Some of TWC’s principal competitors, direct broadcast satellite operators and incumbent local telephone companies in particular, either offer or are making significant capital investments that will allow them to offer services that provide features and functions comparable to the video, data and/or voice services that TWC offers, and they also offer them in bundles similar to TWC’s. The availability of these bundled service offerings has intensified competition and TWC expects that competition will continue to intensify in the future as these offerings become more prevalent.

     In addition to the subscription services described above, TWC also earns revenues by selling advertising time to national, regional and local businesses.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     As of July 31, 2006, the date the transactions with Adelphia and Comcast closed, the penetration rates for basic video, digital video and high-speed data services were generally lower in the Acquired Systems than in the Legacy Systems. Furthermore, certain advanced services were not available in some of the Acquired Systems, and an IP-based telephony service was not available in any of the Acquired Systems. To increase the penetration of these services in the Acquired Systems, TWC has undertaken a significant integration effort that includes upgrading the capacity and technical performance of these systems to levels that will allow the delivery of these advanced services and features. Such integration-related efforts are expected to be substantially complete by the end of 2007. As of September 30, 2007, Digital Phone was available to nearly 80% of the homes passed in the Acquired Systems. TWC expects the roll-out of Digital Phone service across the remainder of the Acquired Systems to be substantially complete by the end of 2007.

     Improvement in the financial and operating performance of the Acquired Systems depends in part on the completion of these initiatives and the subsequent availability of the Company’s bundled advanced services in the Acquired Systems. In addition, due to both historical and current operational and competitive challenges, the Company expects that the acquired systems located in Los Angeles, CA and Dallas, TX will continue to require more time and resources than the other acquired systems to stabilize and then meaningfully improve their financial and operating performance. As of September 30, 2007, the Los Angeles and Dallas acquired systems together served approximately 1.9 million basic video subscribers (about 50% of the basic video subscribers served by the Acquired Systems). TWC believes that by upgrading the plant and integrating the Acquired Systems into its operations, there is a significant opportunity over time to increase service penetration rates, and improve Subscription revenues and Operating Income before Depreciation and Amortization in the Acquired Systems.

Recent Developments

Time Warner’s Interest in TW NY Cable Holding Inc.

     In September 2007, Time Warner proposed to TWC that it enter into discussions regarding a transaction pursuant to which the Company’s subsidiary, TW NY Cable Holding Inc. (“TW NY Holding”), would redeem a significant portion of Time Warner’s 12.43% non-voting, equity interest in it. On September 13, 2007, the Company’s Board of Directors appointed a special committee of independent directors and authorized it to consider any proposal Time Warner may make in this regard and negotiate with Time Warner regarding the terms of such a transaction. No assurance can be given that any proposal made by Time Warner will result in an agreement for TW NY Holding to redeem a portion of Time Warner’s interest in it or, if an agreement is reached, that a redemption transaction will be consummated. In April 2005, in connection with the announcement of the Transactions (as defined below), the Company valued this interest (as if the Transactions had occurred at that time) at approximately $2.9 billion. This valuation is not necessarily indicative of the fair value of the interest as of the date of this report. If a redemption transaction takes place, the Company would expect to finance the transaction through available borrowing capacity under its existing committed revolving credit facility or by accessing the bank credit or debt capital markets. If a redemption transaction is completed, it will not change the 84% ownership interest Time Warner has in the Company’s common stock.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Sale of Certain North Carolina Cable Systems

     The closing of the transactions with Adelphia (discussed below), which included the Company’s acquisition from Adelphia of certain cable systems in Mooresville, Cornelius, Davidson and unincorporated Mecklenburg County, North Carolina, triggered a right of first refusal under the franchise agreements covering these systems. In August 2007, the Company received notice from these municipalities (“the Consortium”) that they have exercised their right to acquire these systems. As a result, the Company expects these cable systems, serving approximately 14,000 basic video subscribers as of September 30, 2007, will be sold to the Consortium during the fourth quarter of 2007 for a purchase price of approximately $50 million. The Company does not expect the sale of these systems will have a material impact on the Company’s results of operations or cash flows.

2007 Bond Offering

     On April 9, 2007, TWC issued $5.0 billion in aggregate principal amount of senior unsecured notes and debentures (the “2007 Bond Offering”) consisting of $1.5 billion principal amount of 5.40% Notes due 2012, $2.0 billion principal amount of 5.85% Notes due 2017 and $1.5 billion principal amount of 6.55% Debentures due 2037 pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Company used the net proceeds from this issuance to repay all of the outstanding indebtedness under its $4.0 billion three-year term loan facility and a portion of the outstanding indebtedness under its $4.0 billion five-year term loan facility. On November 5, 2007, the Company and the two subsidiaries of the Company that guarantee the Company’s obligations under the securities exchanged substantially all of the securities issued in the 2007 Bond Offering for a like aggregate principal amount of registered securities with the same terms pursuant to a registered exchange offer. See “Financial Condition and Liquidity—Debt Securities” for further details.

TKCCP Joint Venture

     As discussed further in Note 3 to the accompanying consolidated financial statements, TKCCP was a 50-50 joint venture between a consolidated subsidiary of TWC (Time Warner Entertainment-Advance/Newhouse Partnership (“TWE-A/N”)) and Comcast. On January 1, 2007, TKCCP distributed its assets to TWC and Comcast. TWC received the Kansas City Pool, which served approximately 788,000 basic video subscribers as of December 31, 2006, and Comcast received the pool of assets consisting of the Houston cable systems (the “Houston Pool”), which served approximately 795,000 basic video subscribers as of December 31, 2006. TWC began consolidating the results of the Kansas City Pool on January 1, 2007. TKCCP was formally dissolved on May 15, 2007. For accounting purposes, the Company has treated the distribution of TKCCP’s assets as a sale of the Company’s 50% equity interest in the Houston Pool and as an acquisition of Comcast’s 50% equity interest in the Kansas City Pool. As a result of the sale of the Company’s 50% equity interest in the Houston Pool, the Company recorded a pretax gain of approximately $146 million in the first quarter of 2007, which is included as a component of other income, net, in the accompanying consolidated statement of operations for the nine months ended September 30, 2007.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Adelphia Acquisition and Related Transactions

     As discussed further in Note 3 to the accompanying consolidated financial statements, on July 31, 2006, TW NY and Comcast completed their respective acquisitions of assets comprising in the aggregate substantially all of the cable assets of Adelphia (the “Adelphia Acquisition”). Additionally, on July 31, 2006, immediately before the closing of the Adelphia Acquisition, Comcast’s interests in TWC and Time Warner Entertainment Company, L.P. (“TWE”), a subsidiary of TWC, were redeemed (the “TWC Redemption” and the “TWE Redemption,” respectively, and, collectively, the “Redemptions”). Following the Redemptions and the Adelphia Acquisition, on July 31, 2006, TW NY and Comcast swapped certain cable systems, most of which were acquired from Adelphia, in order to enhance TWC’s and Comcast’s respective geographic clusters of subscribers (the “Exchange” and, together with the Adelphia Acquisition and the Redemptions, the “Transactions”). In addition, on July 28, 2006, American Television and Communications Corporation (“ATC”), a subsidiary of Time Warner, contributed its 1% common equity interest and $2.4 billion preferred equity interest in TWE to TW NY Holding, a subsidiary of TWC and the parent of TW NY, in exchange for a 12.43% non-voting common stock interest in TW NY Holding (the “ATC Contribution”).

     The results of the systems acquired in connection with the Transactions have been included in the accompanying consolidated statement of operations since the closing of the Transactions. The systems previously owned by TWC that were transferred to Comcast in connection with the Redemptions and the Exchange (the “Transferred Systems”) have been reflected as discontinued operations in the accompanying consolidated financial statements for all periods presented (Note 3).

     As a result of the closing of the Transactions, TWC acquired systems with approximately 4.0 million basic video subscribers and disposed of the Transferred Systems, with approximately 0.8 million basic video subscribers, for a net gain of approximately 3.2 million basic video subscribers. As of September 30, 2007, Time Warner owned approximately 84.0% of TWC’s outstanding common stock (including 82.7% of TWC’s outstanding Class A common stock and all outstanding shares of TWC’s Class B common stock), as well as a 12.43% non-voting common stock interest in TW NY Holding. As a result of the Redemptions, Comcast no longer had an interest in TWC or TWE.

     On February 13, 2007, Adelphia’s Chapter 11 reorganization plan became effective and, under applicable securities law regulations and provisions of the U.S. bankruptcy code, TWC became a public company subject to the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under the terms of the reorganization plan, most of the 155,913,430 shares of TWC’s Class A common stock that Adelphia received in the Adelphia Acquisition (representing approximately 16% of TWC’s outstanding common stock) are being distributed to Adelphia’s creditors. As of September 30, 2007, approximately 96% of these shares of Class A common stock had been distributed to Adelphia’s creditors. The remaining shares are expected to be distributed during the coming months as the remaining disputes are resolved by the bankruptcy court. On March 1, 2007, TWC’s Class A common stock began trading on the New York Stock Exchange under the symbol “TWC” (Note 3).

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

FINANCIAL STATEMENT PRESENTATION

Revenues

     The Company’s revenues consist of Subscription and Advertising revenues. Subscription revenues consist of revenues from video, high-speed data and voice services.

     Video revenues include monthly fees for basic, standard and digital services from both residential and commercial subscribers, together with charges for premium programming and subscription-video-on-demand services and related equipment rental charges, including charges for set-top boxes. Video revenues also include installation, pay-per-view and video-on-demand charges and franchise fees collected on behalf of local franchising authorities. Several ancillary items are also included within video revenues, such as commissions earned on the sale of merchandise by home shopping services and rental income earned on the leasing of antenna attachments on the Company’s transmission towers. In each period presented, these ancillary items constitute less than 2% of video revenues.

     High-speed data revenues include monthly subscriber fees from both residential and commercial subscribers, along with related equipment rental charges, home networking fees and installation charges. High-speed data revenues also include fees received from third-party internet service providers, certain cable systems owned by a subsidiary of TWE-A/N and managed by the Advance/Newhouse Partnership (“A/N”) and, in 2006, fees received from TKCCP.

     Voice revenues include monthly subscriber fees principally from voice subscribers, including Digital Phone subscribers and approximately 43,000 circuit-switched subscribers (as of September 30, 2007) acquired from Comcast in the Exchange, along with related installation charges. TWC continues to provide traditional, circuit-switched services to some of those subscribers, but is in the process of discontinuing the circuit-switched offering in accordance with regulatory requirements. In those areas where the circuit-switched offering is discontinued, Digital Phone is the only voice service TWC provides.

     Advertising revenues include the fees charged to local, regional and national advertising customers for advertising placed on the Company’s video and high-speed data services. Nearly all Advertising revenues are attributable to the Company’s video service.

Costs and Expenses

     Costs of revenues include: video programming costs (including fees paid to the programming vendors net of certain amounts received from the vendors); high-speed data connectivity costs; Digital Phone network costs; other service-related expenses, including non-administrative labor costs directly associated with the delivery of services to subscribers; maintenance of the Company’s delivery systems; franchise fees; and other related costs. The Company’s programming agreements are generally multi-year agreements that provide for the Company to make payments to the programming vendors at agreed upon rates based on the number of subscribers to which the Company provides the service.

     Selling, general and administrative expenses include amounts not directly associated with the delivery of services to subscribers or the maintenance of the Company’s delivery systems, such as administrative labor costs, marketing expenses, billing charges, non-plant repair and maintenance costs, management fees paid to Time Warner and other administrative overhead costs, net of management fees received from TKCCP. Effective August 1, 2006, TWC no longer receives management fees from TKCCP.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Use of Operating Income before Depreciation and Amortization and Free Cash Flow

     Operating Income before Depreciation and Amortization (“OIBDA”) is a financial measure not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company defines OIBDA as Operating Income before depreciation of tangible assets and amortization of intangible assets. Management utilizes OIBDA, among other measures, in evaluating the performance of the Company’s business because OIBDA eliminates the uneven effect across its business of considerable amounts of depreciation of tangible assets and amortization of intangible assets recognized in business combinations. Additionally, management utilizes OIBDA because it believes this measure provides valuable insight into the underlying performance of the Company’s individual cable systems by removing the effects of items that are not within the control of local personnel charged with managing these systems such as income tax provision, other income (expense), net, minority interest expense, net, income from equity investments, net, and interest expense, net. In this regard, OIBDA is a significant measure used in the Company’s annual incentive compensation programs. OIBDA also is a metric used by the Company’s parent, Time Warner, to evaluate the Company’s performance and is an important measure in the Time Warner reportable segment disclosures. A limitation of this measure, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. To compensate for this limitation, management evaluates the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analyses. Another limitation of this measure is that it does not reflect the significant costs borne by the Company for income taxes, debt servicing costs, the share of OIBDA related to the minority ownership, the results of the Company’s equity investments or other non-operational income or expense. Management compensates for this limitation through other financial measures such as a review of net income and earnings per share.

     Free Cash Flow is a non-GAAP financial measure. The Company defines Free Cash Flow as cash provided by operating activities (as defined under GAAP) plus excess tax benefits from the exercise of stock options, less cash provided by (used by) discontinued operations, capital expenditures, partnership distributions and principal payments on capital leases. Management uses Free Cash Flow to evaluate the Company’s business. It is also a significant component of the Company’s annual incentive compensation programs. The Company believes this measure is an important indicator of its liquidity, including its ability to reduce net debt and make strategic investments, because it reflects the Company’s operating cash flow after considering the significant capital expenditures required to operate its business. A limitation of this measure, however, is that it does not reflect payments made in connection with investments and acquisitions, which reduce liquidity. To compensate for this limitation, management evaluates such expenditures through other financial measures such as return on investment analyses.

     Both OIBDA and Free Cash Flow should be considered in addition to, not as a substitute for, the Company’s Operating Income, net income 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. A reconciliation of OIBDA to Operating Income is presented under “Results of Operations.” A reconciliation of Free Cash Flow to cash provided by operating activities is presented under “Financial Condition and Liquidity.”

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

RESULTS OF OPERATIONS

Basis of Presentation

Consolidation of Kansas City Pool

     On January 1, 2007, the Company began consolidating the results of the Kansas City Pool it received upon the distribution of the assets of TKCCP to TWC and Comcast. The results of operations for the Kansas City Pool have been presented below separately from the results of the Legacy Systems.

Discontinued Operations

     The Company has reflected the operations of the Transferred Systems as discontinued operations for all periods presented. See Note 3 to the accompanying consolidated financial statements for additional information regarding the discontinued operations.

Reclassifications

     Certain reclassifications have been made to the prior year’s financial information to conform to the September 30, 2007 presentation.

Recent Accounting Standards

Accounting for Sabbatical Leave and Other Similar Benefits

     On January 1, 2007, the Company adopted the provisions of Emerging Issues Task Force (“EITF”) Issue No. 06-02, Accounting for Sabbatical Leave and Other Similar Benefits (“EITF 06-02”), related to certain sabbatical leave and other employment arrangements that are similar to a sabbatical leave. EITF 06-02 provides that an employee’s right to a compensated absence under a sabbatical leave or similar benefit arrangement in which the employee is not required to perform any duties during the absence is an accumulating benefit. Therefore, such arrangements should be accounted for as a liability with the cost recognized over the service period during which the employee earns the benefit. Adoption of this guidance resulted in a decrease in retained earnings of $62 million ($37 million, net of tax) on January 1, 2007. The resulting change in the accrual for the nine months ended September 30, 2007 was not material.

Accounting for Uncertainty in Income Taxes

     On January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in income tax positions. This interpretation requires the Company to recognize in the consolidated financial statements those tax positions determined to be more likely than not of being sustained upon examination, based on the technical merits of the positions. Upon adoption, the Company recognized a $3 million reduction of previously recorded tax reserves, which was accounted for as an increase to the retained earnings balance as of January 1, 2007.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Three and Nine Months Ended September 30, 2007 Compared to Three and Nine Months Ended September 30, 2006

     As previously noted under “Recent Developments,” on July 31, 2006, the Company completed the Transactions and began consolidating the results of the Acquired Systems. Additionally, on January 1, 2007, the Company began consolidating the results of the Kansas City Pool. Accordingly, the operating results for the three and nine months ended September 30, 2007 include the results for the Legacy Systems, the Acquired Systems and the Kansas City Pool for the full three- and nine-month periods, and the operating results for the three and nine months ended September 30, 2006 include the results of the Legacy Systems for the full three- and nine-month periods and the Acquired Systems for only the two months following the closing of the Transactions and do not include the results of the Kansas City Pool. The impact of the incremental one month and seven months of revenues and expenses of the Acquired Systems on the results for the three and nine months ended September 30, 2007, respectively, is referred to as the “impact of the Acquired Systems” in this report.

     Revenues. Revenues by major category were as follows (in millions):

		Three Months Ended September 30,										Nine Months Ended September 30,
		2007				2006				% Change		2007				2006				% Change
Subscription:
Video		$	2,530			$	2,090			21%		$	7,613			$	5,289			44%
High-speed data			942				745			26%			2,760				1,914			44%
Voice			308				196			57%			857				493			74%
Total Subscription			3,780				3,031			25%			11,230				7,696			46%
Advertising			221				178			24%			636				420			51%
Total		$	4,001			$	3,209			25%		$	11,866			$	8,116			46%

     Revenues, including the components of Subscription revenues, for the Legacy Systems, the Acquired Systems, the Kansas City Pool and the Total Systems were as follows (in millions):

		Three Months Ended
		September 30, 2007																September 30, 2006
		Legacy				Acquired				Kansas				Total				Legacy				Acquired				Total
		Systems				Systems				City Pool				Systems				Systems				Systems(a)				Systems
Subscription:
Video		$	1,705			$	689			$	136			$	2,530			$	1,623			$	467			$	2,090
High-speed data			679				212				51				942				616				129				745
Voice			260				26				22				308				184				12				196
Total Subscription			2,644				927				209				3,780				2,423				608				3,031
Advertising			144				71				6				221				132				46				178
Total		$	2,788			$	998			$	215			$	4,001			$	2,555			$	654			$	3,209

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

		Nine Months Ended
		September 30, 2007																September 30, 2006
		Legacy				Acquired				Kansas				Total				Legacy				Acquired				Total
		Systems				Systems				City Pool				Systems				Systems				Systems(a)				Systems
Subscription:
Video		$	5,108			$	2,096			$	409			$	7,613			$	4,822			$	467			$	5,289
High-speed data			1,993				616				151				2,760				1,785				129				1,914
Voice			735				60				62				857				481				12				493
Total Subscription			7,836				2,772				622				11,230				7,088				608				7,696
Advertising			401				211				24				636				374				46				420
Total		$	8,237			$	2,983			$	646			$	11,866			$	7,462			$	654			$	8,116

     Subscriber numbers were as follows (in thousands):

		Consolidated Subscribers(a)										Managed Subscribers(a)
		as of September 30,										as of September 30,
		2007				2006				% Change		2007				2006				% Change
Basic video(b)			13,308				12,643			5%			13,308				13,425			(1%)
Digital video(c)			7,860				6,700			17%			7,860				7,024			12%
Residential high-speed data(d)			7,412				6,041			23%			7,412				6,398			16%
Commercial high-speed data(d)			272				218			25%			272				234			16%
Digital Phone(e)			2,610				1,524			71%			2,610				1,649			58%

     Subscription revenues increased for the three and nine months ended September 30, 2007 as a result of increases in video, high-speed data and voice revenues. The increase in video revenues was primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool, the continued penetration of digital video services and video price increases. Aggregate revenues associated with the Company’s digital video services, including digital tiers, digital pay channels, pay-per-view, video-on-demand, subscription-video-on-demand and digital video recorders, increased 27% to $587 million for the three months ended September 30, 2007 from $464 million for the three months ended September 30, 2006, and increased 53% to $1.759 billion for the nine months ended September 30, 2007 from $1.153 billion for the nine months ended September 30, 2006.

     High-speed data revenues for the three and nine months ended September 30, 2007 increased primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool and growth in high-speed data subscribers. Commercial high-speed data revenues increased to $111 million for the three months ended September 30, 2007 from $83 million for the three months ended September 30, 2006, and increased to $318 million for the nine months ended September 30, 2007 from $227 million for the nine months ended September 30, 2006. Strong growth rates for high-speed data service revenues are expected to continue during the fourth quarter of 2007.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     The increase in voice revenues for the three and nine months ended September 30, 2007 was primarily due to growth in Digital Phone subscribers and the consolidation of the Kansas City Pool. Voice revenues for the Acquired Systems also included revenues associated with subscribers acquired from Comcast who received traditional, circuit-switched telephone service of $8 million and $33 million for the three and nine months ended September 30, 2007, respectively, and $12 million for both the three and nine months ended September 30, 2006. Strong growth rates for voice revenues are expected to continue during the fourth quarter of 2007.

     Average monthly subscription revenue (which includes video, high-speed data and voice revenues) per basic video subscriber (“subscription ARPU”) increased 6% to approximately $95 for the three months ended September 30, 2007 from approximately $90 for the three months ended September 30, 2006, and increased 3% to approximately $93 for the nine months ended September 30, 2007 from approximately $90 for the nine months ended September 30, 2006. These increases were primarily a result of the increased penetration of advanced services (including digital video, high-speed data and Digital Phone) in the Legacy Systems and higher video prices, as discussed above, partially offset by lower penetration of advanced services in both the Acquired Systems and the Kansas City Pool as compared to the Legacy Systems.

     For the three months ended September 30, 2007, Advertising revenues increased due to a $36 million increase in local advertising and a $7 million increase in national advertising. For the nine months ended September 30, 2007, Advertising revenues increased due to a $187 million increase in local advertising and a $29 million increase in national advertising. These increases were primarily due to the impact of the Acquired Systems and, to a lesser extent, growth in the Legacy Systems and the consolidation of the Kansas City Pool.

     Costs of revenues. The major components of costs of revenues were as follows (in millions):

		Three Months Ended September 30,										Nine Months Ended September 30,
		2007				2006				% Change		2007				2006				% Change
Video programming		$	881			$	708			24%		$	2,643			$	1,749			51%
Employee			546				423			29%			1,624				1,028			58%
High-speed data			42				45			(7%)			125				115			9%
Voice			115				86			34%			338				217			56%
Other			306				233			31%			915				588			56%
Total		$	1,890			$	1,495			26%		$	5,645			$	3,697			53%

     For the three and nine months ended September 30, 2007, costs of revenues increased 26% and 53%, respectively, and, as a percentage of revenues, were 47% and 48% for the three and nine months ended September 30, 2007, respectively, compared to 47% and 46% for the three and nine months ended September 30, 2006, respectively. The increases in costs of revenues were primarily related to the impact of the Acquired Systems and the consolidation of the Kansas City Pool, as well as increases in video programming, employee, voice and other costs. The increase in costs of revenues as a percentage of revenues for the nine months ended September 30, 2007 reflects lower margins in the Acquired Systems.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Video programming costs for the Legacy Systems, the Acquired Systems, the Kansas City Pool and the Total Systems were as follows for the three and nine months ended September 30, 2007 and 2006 (in millions):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2007				2006				2007				2006
Video programming costs:
Legacy Systems		$	576			$	540			$	1,724			$	1,581
Acquired Systems(a)			254				168				767				168
Kansas City Pool			51				—				152				—
Total Systems		$	881			$	708			$	2,643			$	1,749

     The increase in video programming costs was due primarily to the impact of the Acquired Systems and the consolidation of the Kansas City Pool, as well as contractual rate increases and the expansion of service offerings. Average per subscriber programming costs increased 6% to $22.03 per month for the three months ended September 30, 2007 from $20.77 per month for the three months ended September 30, 2006. Average per subscriber programming costs increased 8% to $21.94 per month for the nine months ended September 30, 2007 from $20.30 per month for the nine months ended September 30, 2006.

     Employee costs for the three and nine months ended September 30, 2007 increased primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool, higher headcount resulting from the continued roll-out of advanced services and salary increases. Additionally, employee costs for the nine months ended September 30, 2006 included a benefit of approximately $16 million (with an additional benefit of approximately $5 million included in selling, general and administrative expenses) due to changes in estimates related to prior period medical benefit accruals.

     High-speed data service costs consist of the direct costs associated with the delivery of high-speed data services, including network connectivity costs, and certain other costs. High-speed data service costs decreased for the three months ended September 30, 2007 due to a decrease in per subscriber connectivity costs, offset partially by the impact of the Acquired Systems, the consolidation of the Kansas City Pool and subscriber growth. High-speed data service costs increased for the nine months ended September 30, 2007 due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool and subscriber growth, offset partially by a decrease in per subscriber connectivity costs.

     Voice costs consist of the direct costs associated with the delivery of voice services, including network connectivity costs. Voice costs increased for the three and nine months ended September 30, 2007 primarily due to growth in Digital Phone subscribers and the consolidation of the Kansas City Pool, offset partially by a decline in per subscriber connectivity costs.

     Other costs increased primarily due to the impact of the Acquired Systems and the consolidation of the Kansas City Pool, as well as certain other increases in costs associated with the continued roll-out of advanced services. In addition, other costs for the nine months ended September 30, 2006 included a benefit of $10 million related to third-party maintenance support payment fees, reflecting the resolution of terms with an equipment vendor.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Selling, general and administrative expenses. The major components of selling, general and administrative expenses were as follows (in millions):

		Three Months Ended September 30,										Nine Months Ended September 30,
		2007				2006				% Change		2007				2006				% Change
Employee		$	257			$	231			11%		$	803			$	631			27%
Marketing			126				102			24%			381				268			42%
Other			296				240			23%			838				557			50%
Total		$	679			$	573			18%		$	2,022			$	1,456			39%

     For the three and nine months ended September 30, 2007, selling, general and administrative expenses increased as a result of higher employee, marketing and other costs. For the three and nine months ended September 30, 2007, employee costs increased primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool, increased headcount resulting from the continued roll-out of advanced services and salary increases. Marketing costs for the three and nine months ended September 30, 2007 increased as a result of the Acquired Systems and higher marketing costs associated with the continued roll-out of advanced services. Other costs for the three and nine months ended September 30, 2007 increased primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool and increases in administrative costs associated with the increase in headcount discussed above. Other costs for the nine months ended September 30, 2006 also included an $11 million charge (with an additional $2 million charge included in costs of revenues) reflecting an adjustment to prior period facility rent expense.

     Merger-related and restructuring costs. The Company expensed non-capitalizable merger-related costs associated with the Transactions of $3 million and $10 million for the three and nine months ended September 30, 2007, respectively, and $18 million and $29 million for the three and nine months ended September 30, 2006, respectively. In addition, the results included restructuring costs of $1 million and $10 million for the three and nine months ended September 30, 2007, respectively, and $4 million and $14 million for the three and nine months ended September 30, 2006, respectively.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Reconciliation of Operating Income to OIBDA. The following table reconciles Operating Income to OIBDA. In addition, the table provides the components from Operating Income to net income for purposes of the discussions that follow (in millions):

		Three Months Ended September 30,													Nine Months Ended September 30,
		2007				2006				% Change					2007				2006				% Change
Net income		$	248			$	1,180				(79	%)			$	796			$	1,710				(53	%)
Discontinued operations, net of tax			—				(954	)			(100	%)				—				(1,018	)			(100	%)
Cumulative effect of accounting change, net of tax			—				—				NM					—				(2	)			(100	%)
Income before discontinued operations and cumulative effect of accounting change			248				226				10	%				796				690				15	%
Income tax provision			166				145				14	%				525				452				16	%
Income before income taxes, discontinued operations and cumulative effect of accounting change			414				371				12	%				1,321				1,142				16	%
Interest expense, net			227				186				22	%				681				411				66	%
(Income) loss from equity investments, net			3				(37	)			(108	%)				(4	)			(79	)			(95	%)
Minority interest expense, net			38				30				27	%				117				73				60	%
Other income, net			(1	)			—				NM					(144	)			(1	)			NM
Operating Income			681				550				24	%				1,971				1,546				27	%
Depreciation			683				513				33	%				2,001				1,281				56	%
Amortization			64				56				14	%				207				93				123	%
OIBDA		$	1,428			$	1,119				28	%			$	4,179			$	2,920				43	%

     OIBDA. OIBDA increased for the three and nine months ended September 30, 2007 principally due to revenue growth, partially offset by higher costs of revenues and selling, general and administrative expenses, as discussed above.

     Depreciation expense. Depreciation expense increased for the three and nine months ended September 30, 2007 primarily due to the impact of the Acquired Systems, the consolidation of the Kansas City Pool and demand-driven increases in recent years of purchases of customer premise equipment.

     Amortization expense. Amortization expense increased for the three and nine months ended September 30, 2007 primarily as a result of the amortization of intangible assets related to customer relationships associated with the Acquired Systems. This was partially offset by a decrease due to the absence during the second and third quarters of 2007 of amortization expense associated with customer relationships recorded in connection with the restructuring of TWE in 2003 that were fully amortized at the end of the first quarter of 2007.

     Operating Income. Operating Income increased for the three and nine months ended September 30, 2007 primarily due to the increase in OIBDA, partially offset by increases in both depreciation and amortization expense, as discussed above.

     The Company anticipates that OIBDA and Operating Income will continue to increase during the fourth quarter of 2007 as compared to the fourth quarter of 2006, although the full year rate of growth is expected to be lower than that experienced during the nine months ended September 30, 2007 because the last five months of 2006 included contributions from the Acquired Systems.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Interest expense, net. Interest expense, net, increased for the three and nine months ended September 30, 2007 primarily due to an increase in long-term debt and mandatorily redeemable preferred membership units issued by a subsidiary in connection with the Transactions, partially offset by a decrease in mandatorily redeemable preferred equity issued by a subsidiary as a result of the ATC Contribution.

     (Income) loss from equity investments, net. The change in (income) loss from equity investments, net, for the three and nine months ended September 30, 2007 was primarily due to the Company no longer treating TKCCP as an equity method investment. Refer to “Overview—Recent Developments—TKCCP Joint Venture” for additional information.

     Minority interest expense, net. Minority interest expense, net, increased for the three and nine months ended September 30, 2007, primarily reflecting the change in the ownership structure of the Company and TWE as a result of the ATC Contribution and the Redemptions.

     Other income, net. During the nine months ended September 30, 2007, the Company recorded a pretax gain of approximately $146 million as a result of the distribution of TKCCP’s assets, which was treated as a sale of the Company’s 50% equity interest in the Houston Pool. Refer to “Overview—Recent Developments—TKCCP Joint Venture” for additional information.

     Income tax provision. TWC’s income tax provision has been prepared as if the Company operated as a stand-alone taxpayer for all periods presented. For the three months ended September 30, 2007 and 2006, the Company recorded income tax provisions of $166 million and $145 million, respectively. For the nine months ended September 30, 2007 and 2006, the Company recorded income tax provisions of $525 million and $452 million, respectively. The effective tax rate was approximately 40% for both the three and nine months ended September 30, 2007 and approximately 39% and 40% for the three and nine months ended September 30, 2006, respectively.

     Income before discontinued operations and cumulative effect of accounting change. Income before discontinued operations and cumulative effect of accounting change was $248 million and $796 million for the three and nine months ended September 30, 2007, respectively, compared to $226 million and $690 million for the three and nine months ended September 30, 2006, respectively. Basic and diluted income per common share before discontinued operations and cumulative effect of accounting change were $0.25 and $0.81 for the three and nine months ended September 30, 2007, respectively, compared to $0.23 and $0.69 for the three and nine months ended September 30, 2006, respectively. For the three months ended September 30, 2007, the increases were primarily due to an increase in Operating Income, partially offset by increases in interest expense, net and income tax provision and a decrease in income from equity investments, net. For the nine months ended September 30, 2007, the increases were due to an increase in Operating Income and other income, net, partially offset by increases in interest expense, net, income tax provision and minority interest expense, net, and a decrease in income from equity investments, net.

     Discontinued operations, net of tax. Discontinued operations, net of tax, reflect the impact of treating the Transferred Systems as discontinued operations. For the three and nine months ended September 30, 2006, the Company recognized pretax income applicable to these systems of $158 million ($954 million, net of a tax benefit) and $265 million ($1.018 billion, net of a tax benefit), respectively. Included in the results for the three and nine months ended September 30, 2006 were a pretax gain of approximately $145 million on the Transferred Systems and a tax benefit of approximately $804 million, comprised of a tax benefit of $817 million on the Redemptions, partially offset by a provision of $13 million on the Exchange. The tax benefit of $817 million resulted primarily from the reversal of historical deferred tax liabilities that had existed on systems transferred to Comcast in the TWC Redemption. The TWC Redemption was designed to qualify as a tax-free split-off under section 355 of the Internal Revenue Code of 1986, as amended, and, as a result, such liabilities were no longer required. However, if the Internal Revenue Service were successful in challenging the tax-free characterization of the TWC Redemption, an additional cash liability on account of taxes of up to an estimated $900 million could become payable by the Company.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Cumulative effect of accounting change, net of tax. For the nine months ended September 30, 2006, the Company recorded a benefit of $2 million, net of tax, as the cumulative effect of a change in accounting principle upon the adoption of FAS 123R to recognize the effect of estimating the number of Time Warner equity-based awards granted to TWC employees prior to January 1, 2006 that are not ultimately expected to vest.

     Net income and net income per common share. Net income was $248 million for the three months ended September 30, 2007 compared to $1.180 billion for the three months ended September 30, 2006. Basic and diluted net income per common share were $0.25 for the three months ended September 30, 2007 compared to $1.20 for the three months ended September 30, 2006. Net income was $796 million for the nine months ended September 30, 2007 compared to $1.710 billion for the nine months ended September 30, 2006. Basic and diluted net income per common share were $0.81 for the nine months ended September 30, 2007 compared to $1.72 for the nine months ended September 30, 2006.

FINANCIAL CONDITION AND LIQUIDITY

Current Financial Condition

     Management believes that cash generated by or available to TWC should be sufficient to fund its capital and liquidity needs for the foreseeable future. TWC’s sources of cash include cash provided by operating activities, cash and equivalents on hand, available borrowing capacity under its committed credit facilities and commercial paper program and access to the capital markets. TWC’s unused committed available funds were $3.557 billion as of September 30, 2007, including $511 million in cash and equivalents and $3.046 billion of available borrowing capacity under the Company’s $6.0 billion senior unsecured five-year revolving credit facility.

     As of September 30, 2007, the Company had $14.179 billion of debt, $511 million of cash and equivalents (net debt of $13.668 billion, defined as total debt less cash and equivalents), $300 million of mandatorily redeemable non-voting Series A Preferred Membership Units issued by TW NY in connection with the Adelphia Acquisition (the “TW NY Series A Preferred Membership Units”) and $24.400 billion of shareholders’ equity. As of December 31, 2006, the Company had $14.432 billion of debt, $51 million of cash and equivalents (net debt of $14.381 billion), $300 million of TW NY Series A Preferred Membership Units and $23.564 billion of shareholders’ equity.

     The following table shows the significant items contributing to the decrease in net debt from December 31, 2006 to September 30, 2007 (in millions):

Balance as of December 31, 2006(a)		$	14,381
Cash provided by operating activities			(3,253	)
Capital expenditures from continuing operations			2,415
All other, net			125
Balance as of September 30, 2007(a)		$	13,668

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Cash Flows

     Cash and equivalents increased by $460 million for the nine months ended September 30, 2007 and decreased by $12 million for the nine months ended September 30, 2006. Components of these changes are discussed below in more detail.

Operating Activities

     Details of cash provided by operating activities are as follows (in millions):

		Nine Months Ended September 30,
		2007				2006
OIBDA		$	4,179			$	2,920
Net interest payments(a)			(610	)			(455	)
Net income taxes paid(b)			(199	)			(269	)
Noncash equity-based compensation			49				27
Net cash flows from discontinued operations(c)			43				89
Merger-related and restructuring payments, net of accruals(d)			(10	)			(8	)
All other, net, including working capital changes			(199	)			257
Cash provided by operating activities		$	3,253			$	2,561

     Cash provided by operating activities increased from $2.561 billion for the nine months ended September 30, 2006 to $3.253 billion for the nine months ended September 30, 2007. This increase was primarily related to an increase in OIBDA (due to revenue growth, partially offset by increases in costs of revenues and selling, general and administrative expenses, as described above) and a decrease in net income taxes paid (primarily as a result of the timing of tax-related payments to Time Warner under the Company’s tax sharing arrangement, as well as tax benefits related to the Transactions), which were partially offset by an increase in working capital requirements, an increase in net interest payments reflecting the increase in debt levels attributable to the Transactions and a decrease in cash relating to discontinued operations. The increase in working capital requirements was primarily due to the timing of payments and collections of accounts receivable.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Investing Activities

     Details of cash used by investing activities are as follows (in millions):

		Nine Months Ended September 30,
		2007				2006
Investments and acquisitions, net of cash acquired and distributions received:
Distributions received from an investee		$	47			$	—
Adelphia Acquisition and the Exchange(a)			(25	)			(9,065	)
Wireless Joint Venture(b)			(30	)			(182	)
Redemption of Comcast’s interest in TWE			—				(147	)
All other			(32	)			(47	)
Capital expenditures from continuing operations			(2,415	)			(1,720	)
Capital expenditures from discontinued operations			—				(56	)
Proceeds from disposal of property, plant and equipment			7				6
Cash used by investing activities		$	(2,448	)		$	(11,211	)

     Cash used by investing activities decreased from $11.211 billion for the nine months ended September 30, 2006 to $2.448 billion for the nine months ended September 30, 2007. This decrease was principally due to payments associated with the Transactions, which closed on July 31, 2006, a decrease in investment spending related to the Company’s investment in the Wireless Joint Venture and an increase in net cash received from investments, which included distributions received from Sterling Entertainment Enterprises, LLC (dba SportsNet New York), an equity method investee, as well as a decrease in capital expenditures from discontinued operations. This decrease was partially offset by an increase in capital expenditures from continuing operations, driven by the Acquired Systems, as well as the continued roll-out of advanced digital services in the Legacy Systems.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     TWC’s capital expenditures from continuing operations included the following major categories (in millions):

		Nine Months Ended September 30,
		2007				2006
Customer premise equipment(a)		$	1,126			$	782
Scalable infrastructure(b)			378				296
Line extensions(c)			261				195
Upgrades/rebuilds(d)			213				83
Support capital(e)			437				364
Total capital expenditures		$	2,415			$	1,720

     TWC incurs expenditures associated with the construction of its cable systems. Costs associated with the construction of the cable transmission and distribution facilities and new cable service installations are capitalized. TWC generally capitalizes expenditures for tangible fixed assets having a useful life of greater than one year. Capitalized costs include direct material, labor and overhead and interest. Sales and marketing costs, as well as the costs of repairing or maintaining existing fixed assets, are expensed as incurred. With respect to certain customer premise equipment, which includes set-top boxes and high-speed data and telephone cable modems, TWC capitalizes installation charges only upon the initial deployment of these assets. All costs incurred in subsequent disconnects and reconnects are expensed as incurred. Depreciation on these assets is provided, generally using the straight-line method, over their estimated useful lives. For set-top boxes and modems, the useful life is 3 to 5 years, and, for distribution plant, the useful life is up to 16 years.

     In connection with the Transactions, TW NY acquired significant amounts of property, plant and equipment, which were recorded at their estimated fair values. The remaining useful lives assigned to such assets were generally shorter than the useful lives assigned to comparable new assets, to reflect the age, condition and intended use of the acquired property, plant and equipment.

     As a result of the Transactions, the Company has made significant capital expenditures and anticipates making additional capital expenditures related to the continued integration of the Acquired Systems, including improvements to plant and technical performance and upgrading system capacity to allow the Company to offer its advanced services and features in the Acquired Systems. Through December 31, 2006, TWC incurred approximately $200 million of such expenditures, and the Company estimates that it will incur additional expenditures of approximately $200 million during 2007 (including approximately $140 million incurred during the nine months ended September 30, 2007). TWC expects that these upgrades will be substantially complete by the end of 2007. TWC does not believe that these expenditures will have a material negative impact on its liquidity or capital resources.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Financing Activities

     Details of cash provided (used) by financing activities are as follows (in millions):

		Nine Months Ended September 30,
		2007				2006
Borrowings (repayments), net(a)		$	(1,029	)		$	315
Borrowings(b)			7,683				9,900
Repayments(b)			(6,921	)			—
Issuance of TW NY Series A Preferred Membership Units			—				300
Redemption of Comcast’s interest in TWC			—				(1,857	)
Excess tax benefit from exercise of stock options			6				—
Principal payments on capital leases			(3	)			—
Distributions to owners, net(c)			(20	)			(20	)
Other financing activities			(61	)			—
Cash provided (used) by financing activities		$	(345	)		$	8,638

     Cash used by financing activities was $345 million for the nine months ended September 30, 2007 compared to cash provided by financing activities of $8.638 billion for the nine months ended September 30, 2006. Cash used by financing activities for the nine months ended September 30, 2007 included net repayments under the Company’s debt obligations and payments for other financing activities, while cash provided by financing activities for the nine months ended September 30, 2006 included significant net borrowings primarily associated with the financing of the Transactions and the issuance of the TW NY Series A Membership Units in connection with the Transactions, net of cash used in the TWC Redemption on July 31, 2006.

Free Cash Flow

     Reconciliation of Cash provided by operating activities to Free Cash Flow. The following table reconciles Cash provided by operating activities to Free Cash Flow (in millions):

		Nine Months Ended September 30,
		2007				2006
Cash provided by operating activities		$	3,253			$	2,561
Reconciling items:
Discontinued operations, net of tax			—				(1,018	)
Adjustments relating to the operating cash flow of discontinued operations			(43	)			929
Cash provided by continuing operating activities			3,210				2,472
Add: Excess tax benefit from exercise of stock options			6				—
Less:
Capital expenditures from continuing operations			(2,415	)			(1,720	)
Partnership tax distributions, stock option distributions and principal payments on capital leases of continuing operations			(23	)			(20	)
Free Cash Flow		$	778			$	732

     Free Cash Flow increased from $732 million for the nine months ended September 30, 2006 to $778 million for the nine months ended September 30, 2007 primarily as a result of an increase in cash provided by continuing operating activities, partially offset by an increase in capital expenditures from continuing operations, as discussed above.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Outstanding Debt and Mandatorily Redeemable Preferred Equity and Available Financial Capacity

     Debt and mandatorily redeemable preferred equity as of September 30, 2007 and December 31, 2006 were as follows:

		Interest Rate at				Outstanding Balance as of
		September 30, 2007		Maturity		September 30, 2007				December 31, 2006
						(in millions)
Bank credit agreements and commercial paper program(a)(b)		5.725%(c)		2011		$	5,855			$	11,077
TWE notes and debentures(d)(e)		7.250%(f)		2008			601				602
		10.150%(f)		2012			268				271
		8.875%(f)		2012			366				369
		8.375%(f)		2023			1,041				1,043
		8.375%(f)		2033			1,054				1,055
TWC notes and debentures		5.400%(g)		2012			1,497				—
		5.850%(g)		2017			1,996				—
		6.550%(g)		2037			1,491				—
TW NY Series A Preferred Membership Units		8.210%		2013			300				300
Capital leases and other							10	(h)			15	(h)
Total						$	14,479			$	14,732

Debt Securities

     On April 9, 2007, the Company issued $1.5 billion principal amount of 5.40% Notes due 2012 (the “2012 Initial Notes”), $2.0 billion principal amount of 5.85% Notes due 2017 (the “2017 Initial Notes”) and $1.5 billion principal amount of 6.55% Debentures due 2037 (the “2037 Initial Debentures” and, together with the 2012 Initial Notes and the 2017 Initial Notes, the “Initial Debt Securities”) pursuant to Rule 144A and Regulation S under the Securities Act. The Initial Debt Securities are guaranteed by TWE and TW NY Holding (the “Guarantors”).

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     In connection with the issuance of the Initial Debt Securities, on April 9, 2007, the Company, the Guarantors and the initial purchasers of the Initial Debt Securities entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to use its commercially reasonable efforts to consummate a registered exchange offer for the Initial Debt Securities within 270 days after the issuance date of the Initial Debt Securities or cause a shelf registration statement covering the resale of the Initial Debt Securities to be declared effective within specified periods. On November 5, 2007, pursuant to a registered exchange offer, the Company and the Guarantors exchanged (i) substantially all of the 2012 Initial Notes for a like aggregate principal amount of registered debt securities without transfer restrictions or registration rights (the “2012 Registered Notes,” and, together with the 2012 Initial Notes, the “2012 Notes”), (ii) all of the 2017 Initial Notes for a like aggregate principal amount of registered debt securities without transfer restrictions or registration rights (the “2017 Registered Notes,” and, together with the 2017 Initial Notes, the “2017 Notes”), and (iii) substantially all of the 2037 Initial Debentures for a like aggregate principal amount of registered debt securities without transfer restrictions or registration rights (the “2037 Registered Debentures,” and, together with the 2037 Initial Debentures, the “2037 Debentures”). Collectively, the 2012 Notes, the 2017 Notes and the 2037 Debentures are referred to as the “Debt Securities.”

     The Debt Securities were issued pursuant to an Indenture, dated as of April 9, 2007 (the “Base Indenture”), by and among the Company, the Guarantors and The Bank of New York, as trustee, as supplemented by the First Supplemental Indenture, dated as of April 9, 2007 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), by and among the Company, the Guarantors and The Bank of New York, as trustee.

     The 2012 Notes mature on July 2, 2012, the 2017 Notes mature on May 1, 2017 and the 2037 Debentures mature on May 1, 2037. Interest on the 2012 Notes is payable semi-annually in arrears on January 2 and July 2 of each year, beginning on July 2, 2007. Interest on the 2017 Notes and the 2037 Debentures is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2007. The Debt Securities are unsecured senior obligations of the Company and rank equally with its other unsecured and unsubordinated obligations. The guarantees of the Debt Securities are unsecured senior obligations of the Guarantors and rank equally in right of payment with all other unsecured and unsubordinated obligations of the Guarantors.

     The Debt Securities may be redeemed in whole or in part at any time at the Company’s option at a redemption price equal to the greater of (i) 100% of the principal amount of the Debt Securities being redeemed and (ii) the sum of the present values of the remaining scheduled payments on the Debt Securities discounted to the redemption date on a semi-annual basis at a government treasury rate plus 20 basis points for the 2012 Notes, 30 basis points for the 2017 Notes and 35 basis points for the 2037 Debentures as further described in the Indenture, plus, in each case, accrued but unpaid interest to the redemption date.

     The Indenture contains customary covenants relating to restrictions on the ability of the Company or any material subsidiary to create liens and on the ability of the Company and the Guarantors to consolidate, merge or convey or transfer substantially all of their assets. The Indenture also contains customary events of default.

Bank Credit Agreements and Commercial Paper Program

     In the first quarter of 2006, the Company entered into $14.0 billion of bank credit agreements, consisting of an amended and restated $6.0 billion senior unsecured five-year revolving credit facility maturing February 15, 2011 (the “Cable Revolving Facility”), a $4.0 billion five-year term loan facility maturing February 21, 2011 (the “Five-Year Term Facility”) and a $4.0 billion three-year term loan facility maturing February 24, 2009 (the “Three-Year Term Facility” and, together with the Five-Year Term Facility, the “Term Facilities”). The Term Facilities, together with the Cable Revolving Facility, are referred to as the “Cable Facilities.” Collectively, the Cable Facilities refinanced $4.0 billion of previously existing committed bank financing, and $2.0 billion of the Cable Revolving Facility and $8.0 billion of the Term Facilities were used to finance, in part, the cash portions of the Transactions. The Cable Facilities are guaranteed by TWE and TW NY Holding (or, in the case of the Three-Year Term Facility, was guaranteed by TWE and TW NY Holding, as discussed below).

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     In April 2007, TWC used the net proceeds of the 2007 Bond Offering to repay all of the outstanding indebtedness under the Three-Year Term Facility, which was terminated on April 13, 2007. The balance of the net proceeds was used to repay a portion of the outstanding indebtedness under the Five-Year Term Facility on April 27, 2007, which reduced the outstanding indebtedness under such facility to $3.045 billion as of such date.

     Borrowings under the Cable Revolving Facility bear interest at a rate based on the credit rating of TWC, which rate was LIBOR plus 0.27% per annum at September 30, 2007. In addition, TWC is required to pay a facility fee on the aggregate commitments under the Cable Revolving Facility at a rate determined by the credit rating of TWC, which rate was 0.08% per annum at September 30, 2007. TWC may also incur an additional usage fee of 0.10% per annum on the outstanding loans and other extensions of credit under the Cable Revolving Facility if and when such amounts exceed 50% of the aggregate commitments thereunder. Borrowings under the Five-Year Term Facility accrue interest at a rate based on the credit rating of TWC, which rate was LIBOR plus 0.40% per annum at September 30, 2007.

     The Cable Revolving Facility provides same-day funding capability and a portion of the commitment, not to exceed $500 million at any time, may be used for the issuance of letters of credit. The Cable Revolving Facility and the Five-Year Term Facility contain a maximum leverage ratio covenant of 5.0 times the consolidated EBITDA of TWC. The terms and related financial metrics associated with the leverage ratio are defined in the applicable agreements. At September 30, 2007, TWC was in compliance with the leverage covenant, with a leverage ratio, calculated in accordance with the agreements, of approximately 2.5 times. The Cable Revolving Facility and the Five-Year Term Facility do not contain any credit ratings-based defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse change in the financial condition or results of operations of Time Warner or TWC. Borrowings under the Cable Revolving Facility may be used for general corporate purposes and unused credit is available to support borrowings under TWC’s commercial paper program.

     In addition to the Cable Revolving Facility and the Five-Year Term Facility, TWC maintains a $6.0 billion unsecured commercial paper program (the “CP Program”) that is also guaranteed by TW NY Holding and TWE. Commercial paper issued under the CP Program is supported by unused committed capacity under the Cable Revolving Facility and ranks pari passu with other unsecured senior indebtedness of TWC, TWE and TW NY Holding. As a result of recent market volatility in the U.S. debt markets, including the dislocation of the overall commercial paper market, TWC has decreased the amount of commercial paper outstanding under the CP Program, and has offset this decrease by increasing borrowings outstanding under the Cable Revolving Facility.

     As of September 30, 2007, there were borrowings of $3.045 billion outstanding under the Five-Year Term Facility, borrowings of $1.800 billion and letters of credit totaling $135 million outstanding under the Cable Revolving Facility, and $1.018 billion of commercial paper outstanding under the CP Program. TWC’s available committed capacity under the Cable Revolving Facility as of September 30, 2007 was approximately $3.046 billion, and TWC had $511 million of cash and equivalents on hand.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Time Warner Approval Rights

     Under a shareholder agreement entered into between TWC and Time Warner on April 20, 2005 (the “Shareholder Agreement”), TWC is required to obtain Time Warner’s approval prior to incurring additional debt (except for ordinary course issuances of commercial paper or borrowings under the Cable Revolving Facility up to the limit of that credit facility, to which Time Warner has consented) or rental expenses (other than with respect to certain approved leases) or issuing preferred equity, if its consolidated ratio of debt, including preferred equity, plus six times its annual rental expense to EBITDAR (the “TW Leverage Ratio”) then exceeds, or would as a result of the incurrence or issuance exceed, 3:1. Under certain circumstances, TWC is required to include the indebtedness, annual rental expense obligations and EBITDAR of certain unconsolidated entities that it manages and/or in which it owns an equity interest, in the calculation of the TW Leverage Ratio. The Shareholder Agreement defines EBITDAR, at any time of measurement, as operating income plus depreciation, amortization and rental expense (for any lease that is not accounted for as a capital lease) for the twelve months ending on the last day of TWC’s most recent fiscal quarter, including certain adjustments to reflect the impact of significant transactions as if they had occurred at the beginning of the period.

     The following table sets forth the calculation of the TW Leverage Ratio for the twelve months ended September 30, 2007 (in millions, except ratio):

Indebtedness		$	14,179
Preferred Membership Units			300
Six times annual rental expense			1,092
Total		$	15,571
EBITDAR		$	5,742
TW Leverage Ratio			2.71x

     As indicated in the table above, as of September 30, 2007, the TW Leverage Ratio did not exceed 3:1.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

     This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues, OIBDA, cash provided by operating activities and other financial measures. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

     Various factors could adversely affect the operations, business or financial results of TWC in the future and cause TWC’s actual results to differ materially from those contained in the forward-looking statements, including those factors discussed in detail in Item 1A, “Risk Factors,” in the 2006 Form 10-K, and in TWC’s other filings made from time to time with the Securities and Exchange Commission (the “SEC”) after the date of this report. In addition, the Company operates in a highly competitive, consumer and technology-driven and rapidly changing business. The Company’s business is affected by government regulation, economic, strategic, political and social conditions, consumer response to new and existing products and services, technological developments and, particularly in view of new technologies, the continued ability to protect and secure any necessary intellectual property rights. TWC’s actual results could differ materially from management’s expectations because of changes in such factors.

TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

     Further, lower than expected valuations associated with the Company’s cash flows and revenues may result in the Company’s inability to realize the value of recorded intangibles and goodwill. Additionally, achieving the Company’s financial objectives could be adversely affected by the factors discussed in detail in Item 1A, “Risk Factors,” in the 2006 Form 10-K, as well as:

	•		economic slowdowns;
	•		the impact of terrorist acts and hostilities;
	•		changes in the Company’s plans, strategies and intentions;
	•		the impacts of significant acquisitions, dispositions and other similar transactions;
	•		the failure to meet earnings expectations; and
	•		decreased liquidity in the capital markets, including any reduction in the ability to access the capital markets for debt securities or bank financings.

TIME WARNER CABLE INC.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

     The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by the Company is accumulated and communicated to the Company’s management to allow timely decisions regarding the required disclosure.

Changes in Internal Control Over Financial Reporting

     There have not been any changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2007 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

TIME WARNER CABLE INC.

(Unaudited)

		September 30,				December 31,
		2007				2006
		(in millions)
ASSETS
Current assets
Cash and equivalents		$	511			$	51
Receivables, less allowances of $88 million in 2007 and $73 million in 2006			758				632
Receivables from affiliated parties			1				98
Other current assets			120				77
Current assets of discontinued operations			—				52
Total current assets			1,390				910
Investments			733				2,072
Property, plant and equipment, net			12,455				11,601
Intangible assets subject to amortization, net			772				876
Intangible assets not subject to amortization			38,957				38,051
Goodwill			2,126				2,059
Other assets			160				174
Total assets		$	56,593			$	55,743
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	301			$	516
Deferred revenue and subscriber-related liabilities			185				156
Payables to affiliated parties			166				165
Accrued programming expense			500				524
Other current liabilities			1,244				1,113
Current liabilities of discontinued operations			9				16
Total current liabilities			2,405				2,490
Long-term debt			14,178				14,428
Mandatorily redeemable preferred membership units issued by a subsidiary			300				300
Deferred income tax obligations, net			13,127				12,902
Long-term payables to affiliated parties			62				137
Other liabilities			423				296
Noncurrent liabilities of discontinued operations			1				2
Minority interests			1,697				1,624
Commitments and contingencies (Note 8)
Shareholders’ equity
Class A common stock, $0.01 par value, 902 million shares issued and outstanding as of September 30, 2007 and December 31, 2006			9				9
Class B common stock, $0.01 par value, 75 million shares issued and outstanding as of September 30, 2007 and December 31, 2006			1				1
Paid-in-capital			19,381				19,314
Accumulated other comprehensive loss, net			(123	)			(130	)
Retained earnings			5,132				4,370
Total shareholders’ equity			24,400				23,564
Total liabilities and shareholders’ equity		$	56,593			$	55,743

See accompanying notes.

TIME WARNER CABLE INC.

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2007				2006				2007				2006
		(in millions, except per share data)								(in millions, except per share data)
Revenues:
Subscription:
Video		$	2,530			$	2,090			$	7,613			$	5,289
High-speed data			942				745				2,760				1,914
Voice			308				196				857				493
Total Subscription			3,780				3,031				11,230				7,696
Advertising			221				178				636				420
Total revenues(a)			4,001				3,209				11,866				8,116
Costs and expenses:
Costs of revenues(a)(b)			1,890				1,495				5,645				3,697
Selling, general and administrative(a)(b)			679				573				2,022				1,456
Depreciation			683				513				2,001				1,281
Amortization			64				56				207				93
Merger-related and restructuring costs			4				22				20				43
Total costs and expenses			3,320				2,659				9,895				6,570
Operating Income			681				550				1,971				1,546
Interest expense, net(a)			(227	)			(186	)			(681	)			(411	)
Income (loss) from equity investments, net			(3	)			37				4				79
Minority interest expense, net			(38	)			(30	)			(117	)			(73	)
Other income, net			1				—				144				1
Income before income taxes, discontinued operations and cumulative effect of accounting change			414				371				1,321				1,142
Income tax provision			(166	)			(145	)			(525	)			(452	)
Income before discontinued operations and cumulative effect of accounting change			248				226				796				690
Discontinued operations, net of tax			—				954				—				1,018
Cumulative effect of accounting change, net of tax			—				—				—				2
Net income		$	248			$	1,180			$	796			$	1,710
Basic income per common share before discontinued operations and cumulative effect of accounting change		$	0.25			$	0.23			$	0.81			$	0.69
Discontinued operations			—				0.97				—				1.03
Cumulative effect of accounting change			—				—				—				—
Basic net income per common share		$	0.25			$	1.20			$	0.81			$	1.72
Average basic common shares			976.9				984.6				976.9				994.9
Diluted income per common share before discontinued operations and cumulative effect of accounting change		$	0.25			$	0.23			$	0.81			$	0.69
Discontinued operations			—				0.97				—				1.03
Cumulative effect of accounting change			—				—				—				—
Diluted net income per common share		$	0.25			$	1.20			$	0.81			$	1.72
Average diluted common shares			977.5				984.6				977.2				994.9

(a)         Includes the following income (expenses) resulting from transactions with related companies:
		Three Months Ended September 30,								Nine Months Ended September 30,
		2007				2006				2007				2006
		(in millions)								(in millions)
Revenues		$	6			$	29			$	15			$	83
Costs of revenues			(249	)			(222	)			(776	)			(610	)
Selling, general and administrative			4				1				12				15
Interest expense, net			—				(1	)			—				(74	)
(b)         Costs of revenues and selling, general and administrative expenses exclude depreciation.

See accompanying notes.

TIME WARNER CABLE INC.

(Unaudited)

		Nine Months Ended September 30,
		2007				2006
		(in millions)
OPERATING ACTIVITIES
Net income(a)		$	796			$	1,710
Adjustments for noncash and nonoperating items:
Cumulative effect of accounting change, net of tax			—				(2	)
Depreciation and amortization			2,208				1,374
Pretax gain on sale of 50% equity interest in the Houston Pool of TKCCP			(146	)			—
(Income) loss from equity investments, net of cash distributions			13				(79	)
Minority interest expense, net			117				73
Deferred income taxes			225				120
Equity-based compensation			49				27
Changes in operating assets and liabilities, net of acquisitions:
Receivables			5				(110	)
Accounts payable and other liabilities			(65	)			367
Other changes			8				10
Adjustments relating to discontinued operations(a)			43				(929	)
Cash provided by operating activities			3,253				2,561
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired and distributions received			(10	)			(9,259	)
Investment in Wireless Joint Venture			(30	)			(182	)
Capital expenditures from continuing operations			(2,415	)			(1,720	)
Capital expenditures from discontinued operations			—				(56	)
Proceeds from disposal of property, plant and equipment			7				6
Cash used by investing activities			(2,448	)			(11,211	)
FINANCING ACTIVITIES
Borrowings (repayments), net(b)			(1,029	)			315
Borrowings			7,683				9,900
Repayments			(6,921	)			—
Issuance of mandatorily redeemable preferred membership units			—				300
Redemption of Comcast’s interest in TWC			—				(1,857	)
Excess tax benefit from exercise of stock options			6				—
Principal payments on capital leases			(3	)			—
Distributions to owners, net			(20	)			(20	)
Other			(61	)			—
Cash provided (used) by financing activities			(345	)			8,638
INCREASE (DECREASE) IN CASH AND EQUIVALENTS			460				(12	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD			51				12
CASH AND EQUIVALENTS AT END OF PERIOD		$	511			$	—

See accompanying notes.

TIME WARNER CABLE INC.

(Unaudited)

		Nine Months Ended September 30,
		2007				2006
		(in millions)
BALANCE AT BEGINNING OF PERIOD		$	23,564			$	20,347
Net income(a)			796				1,710
Other comprehensive income			7				—
Comprehensive income			803				1,710
Impact of adopting new accounting pronouncements(b)			(34	)			—
Shares of Class A common stock issued in the Adelphia acquisition			—				5,500
Redemption of Comcast’s interest in TWC			—				(4,327	)
Adjustment to goodwill resulting from pushdown of Time Warner’s basis in TWC			—				(710	)
Reclassification of mandatorily redeemable Class A common stock(c)			—				984
Allocations from Time Warner and other, net			67				11
BALANCE AT END OF PERIOD		$	24,400			$	23,515

See accompanying notes.

TIME WARNER CABLE INC.

(Unaudited)

1. DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION

Description of Business

     Time Warner Cable Inc. (together with its subsidiaries, “TWC” or the “Company”) is the second-largest cable operator in the U.S. and is an industry leader in developing and launching innovative video, data and voice services. As of September 30, 2007, TWC had approximately 13.3 million basic video subscribers in technologically advanced, well-clustered systems located mainly in five geographic areas — New York state, the Carolinas, Ohio, southern California and Texas. As of September 30, 2007, TWC was the largest cable operator in a number of large cities, including New York City and Los Angeles.

     On July 31, 2006, a subsidiary of TWC, Time Warner NY Cable LLC (“TW NY”), and Comcast Corporation (together with its subsidiaries, “Comcast”) completed the acquisition of substantially all of the cable assets of Adelphia Communications Corporation (“Adelphia”) and related transactions. In addition, effective January 1, 2007, TWC began consolidating the results of certain cable systems located in Kansas City, south and west Texas and New Mexico (the “Kansas City Pool”) upon the distribution of the assets of Texas and Kansas City Cable Partners, L.P. (“TKCCP”) to TWC and Comcast. Prior to January 1, 2007, TWC’s interest in TKCCP was reported as an equity method investment. Refer to Note 3 for further details.

     Time Warner Inc. (“Time Warner”) currently owns approximately 84.0% of the common stock of TWC (representing a 90.6% voting interest). The financial results of TWC’s operations are consolidated by Time Warner.

     TWC principally offers three services — video, high-speed data and voice, which have been primarily targeted to residential customers. Video is TWC’s largest service in terms of revenues generated, and providing video services is a competitive and highly penetrated business. TWC continues to increase video revenues through the offering of advanced digital video services, as well as through price increases and digital video subscriber growth. TWC’s digital video subscribers provide a broad base of potential customers for additional advanced services.

     High-speed data has been one of TWC’s fastest-growing services over the past several years and is a key driver of its results. As of September 30, 2007, TWC had approximately 7.4 million residential high-speed data subscribers. TWC also offers commercial high-speed data services and had approximately 272,000 commercial high-speed data subscribers as of September 30, 2007.

     Approximately 2.6 million subscribers received Digital Phone service, TWC’s voice service, as of September 30, 2007. Under TWC’s primary calling plan, for a monthly fixed fee, Digital Phone customers typically receive the following services: an unlimited local, in-state and U.S., Canada and Puerto Rico calling plan, as well as call waiting, caller ID and E911 services. TWC also offers additional calling plans with a variety of calling options that are designed to meet customers’ particular usage patterns. TWC is currently introducing an international calling plan and it intends to offer additional plans in the future. Digital Phone enables TWC to offer its customers a convenient package, or “bundle,” of video, high-speed data and voice services, and to compete effectively against bundled services available from its competitors. TWC has begun to introduce Business Class Phone, a commercial Digital Phone service, to small- and medium-sized businesses.

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

     In November 2005, TWC and several other cable companies, together with Sprint Nextel Corporation (“Sprint”), announced the formation of a joint venture to develop integrated wireline and wireless video, data and voice services. Since 2006, TWC has offered a bundle that includes Sprint wireless service (with some unique TWC features) in some of its operating areas. Additionally, TWC is a participant in a wireless spectrum joint venture with several other cable companies (the “Wireless Joint Venture”), which, on November 29, 2006, was awarded certain advanced wireless spectrum licenses in an FCC auction.

     Some of TWC’s principal competitors, direct broadcast satellite operators and incumbent local telephone companies in particular, either offer or are making significant capital investments that will allow them to offer services that provide features and functions comparable to the video, data and/or voice services that TWC offers, and they also offer them in bundles similar to TWC’s. The availability of these bundled service offerings has intensified competition.

     In addition to the subscription services described above, TWC also earns revenues by selling advertising time to national, regional and local businesses.

     As of July 31, 2006, the date the transactions with Adelphia and Comcast closed, the penetration rates for basic video, digital video and high-speed data services were generally lower in the Acquired Systems than in the Legacy Systems. Furthermore, certain advanced services were not available in some of the Acquired Systems, and an IP-based telephony service was not available in any of the Acquired Systems. To increase the penetration of these services in the Acquired Systems, TWC has undertaken a significant integration effort that includes upgrading the capacity and technical performance of these systems to levels that will allow the delivery of these advanced services and features. Such integration-related efforts are expected to be substantially complete by the end of 2007. As of September 30, 2007, Digital Phone was available to nearly 80% of the homes passed in the Acquired Systems.

Recent Developments

Time Warner’s Interest in TW NY Cable Holding Inc.

     In September 2007, Time Warner proposed to TWC that it enter into discussions regarding a transaction pursuant to which the Company’s subsidiary, TW NY Cable Holding Inc. (“TW NY Holding”), would redeem a significant portion of Time Warner’s 12.43% non-voting, equity interest in it. On September 13, 2007, the Company’s Board of Directors appointed a special committee of independent directors and authorized it to consider any proposal Time Warner may make in this regard and negotiate with Time Warner regarding the terms of such a transaction. No assurance can be given that any proposal made by Time Warner will result in an agreement for TW NY Holding to redeem a portion of Time Warner’s interest in it or, if an agreement is reached, that a redemption transaction will be consummated. In April 2005, in connection with the announcement of the Transactions (as defined below), the Company valued this interest (as if the Transactions had occurred at that time) at approximately $2.9 billion. This valuation is not necessarily indicative of the fair value of the interest as of the date of this report. If a redemption transaction takes place, the Company would expect to finance the transaction through available borrowing capacity under its existing committed revolving credit facility or by accessing the bank credit or debt capital markets. If a redemption transaction is completed, it will not change the 84% ownership interest Time Warner has in the Company’s common stock.

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Basis of Presentation

Changes in Basis of Presentation

     Consolidation of Kansas City Pool. As discussed more fully in Note 3, on January 1, 2007, the Company began consolidating the results of the Kansas City Pool it received upon the distribution of the assets of TKCCP to TWC and Comcast.

     Discontinued Operations. As discussed more fully in Note 3, the Company has reflected the operations of the Transferred Systems (as defined in Note 3 below) as discontinued operations for all periods presented.

Basis of Consolidation

     The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of TWC and all companies in which TWC has a controlling voting interest, as well as allocations of certain Time Warner corporate costs deemed reasonable by management to present the Company’s consolidated results of operations, financial position, changes in equity and cash flows on a stand-alone basis. The consolidated financial statements include the results of Time Warner Entertainment-Advance/Newhouse Partnership (“TWE-A/N”) only for the systems that are controlled by TWC and for which TWC holds an economic interest. The Time Warner corporate costs include specified administrative services, including selected tax, human resources, legal, information technology, treasury, financial, public policy and corporate and investor relations services, and approximate Time Warner’s estimated cost for services rendered. Intercompany accounts and transactions between consolidated companies have been eliminated.

Use of Estimates

     The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ from those estimates.

     Significant estimates inherent in the preparation of the consolidated financial statements include accounting for asset impairments, allowances for doubtful accounts, investments, depreciation, amortization, business combinations, pension benefits, equity-based compensation, income taxes, contingencies and certain programming arrangements. Allocation methodologies used to prepare the consolidated financial statements are based on estimates and have been described in the notes, where appropriate.

Reclassifications

     Certain reclassifications have been made to the prior year’s financial information to conform to the September 30, 2007 presentation.

Interim Financial Statements

     The consolidated financial statements are unaudited; however, in the opinion of management, they contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, the results of operations and cash flows for the periods presented in conformity with GAAP applicable to interim periods. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements of TWC included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Income per Common Share

     Basic income per common share is computed by dividing net income by the weighted average of common shares outstanding during the period. Weighted-average common shares include shares of Class A common stock and Class B common stock. Diluted income per common share adjusts basic income per common share for the effects of stock options, restricted stock, restricted stock units and other potentially dilutive financial instruments, only in the periods in which such effect is dilutive. Refer to Note 6 for further details. Set forth below is a reconciliation of basic and diluted income per common share before discontinued operations and cumulative effect of accounting change (in millions, except per share data):

		Three Months Ended September 30,								Nine Months Ended September 30,
		2007				2006				2007				2006
Income before discontinued operations and cumulative effect of accounting change — basic and diluted		$	248			$	226			$	796			$	690
Average common shares — basic			976.9				984.6				976.9				994.9
Dilutive effect of equity awards			0.6				—				0.3				—
Average common shares — diluted			977.5				984.6				977.2				994.9
Income per common share before discontinued operations and cumulative effect of accounting change:
Basic		$	0.25			$	0.23			$	0.81			$	0.69
Diluted		$	0.25			$	0.23			$	0.81			$	0.69

Equity-based Compensation

     The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“Statement”) No. 123 (revised 2004), Share-Based Payment (“FAS 123R”), which require that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the statement of operations over the period during which an employee is required to provide service in exchange for the award. FAS 123R also requires that excess tax benefits, as defined, realized from the exercise of stock options be reported as a financing cash inflow rather than as a reduction of taxes paid in cash flow from operations.

     Historically, TWC employees were granted equity awards under Time Warner’s equity plans. Since April 2007, grants of equity awards to TWC employees have been and will continue to be made under TWC’s equity plans.

     With respect to Time Warner equity grants to TWC employees, the grant-date fair value of a stock option award is estimated using the Black-Scholes option-pricing model, consistent with the provisions of FAS 123R and the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options with respect to Time Warner stock options issued to TWC employees. The Company determines the volatility assumption for these stock options using implied volatilities from Time Warner’s traded options as well as quotes from third-party investment banks. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on the historical exercise experience of all Time Warner employees with respect to their ownership of Time Warner stock options. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Time Warner common stock at the date of grant.

     Prior to the adoption of FAS 123R on January 1, 2006, the Company recognized equity-based compensation expense for awards with graded vesting by treating each vesting tranche as a separate award and recognizing compensation expense ratably for each tranche. For equity awards granted subsequent to the adoption of FAS 123R, the Company treats such awards as a single award and recognizes equity-based compensation expense on a straight-line basis (net of estimated forfeitures) over the employee service period. Equity-based compensation expense is recorded in costs of revenues or selling, general and administrative expense depending on the employee’s job function.

     When recording compensation cost for equity awards, FAS 123R requires companies to estimate the number of equity awards granted that are expected to be forfeited. Prior to the adoption of FAS 123R, the Company recognized forfeitures when they occurred, rather than using an estimate at the grant date and subsequently adjusting the estimated forfeitures to reflect actual forfeitures. The Company recorded a benefit of $2 million, net of tax, as the cumulative effect of a change in accounting principle upon the adoption of FAS 123R in the first quarter of 2006, to recognize the effect of estimating the number of awards granted prior to January 1, 2006 that are not ultimately expected to vest.

     In April 2007, the Company started granting stock options and restricted stock units based on its Class A common stock. The valuation of, as well as the expense recognition for, such awards is generally consistent with the treatment of Time Warner awards that have been granted to TWC employees as described above. However, because the Class A common stock has a limited trading history, the volatility assumption is determined by reference to a comparable peer group of publicly traded companies. Furthermore, the volatility assumption is calculated using a 75%-25% weighted average of implied volatilities from traded options and the historical stock price volatility of the peer group. Refer to Note 6 for a discussion of the Company’s stock option and restricted stock unit awards granted through September 30, 2007.

Classification of Taxes Collected from Customers

     In the normal course of business, TWC is assessed non-income related taxes by governmental authorities, including franchising authorities, and collects such taxes from its customers. TWC’s policy is that, in instances where the tax is being assessed directly on the Company, amounts paid to the governmental authorities and amounts received from the customers are recorded on a gross basis. That is, amounts paid to the governmental authorities are recorded as costs of revenues and amounts received from the customer are recorded as Subscription revenues. The amount of non-income related taxes recorded on a gross basis was $371 million and $265 million during the nine months ended September 30, 2007 and 2006, respectively.

2. RECENT ACCOUNTING STANDARDS

Accounting for Sabbatical Leave and Other Similar Benefits

     On January 1, 2007, the Company adopted the provisions of Emerging Issues Task Force (“EITF”) Issue No. 06-02, Accounting for Sabbatical Leave and Other Similar Benefits (“EITF 06-02”), related to certain sabbatical leave and other employment arrangements that are similar to a sabbatical leave. EITF 06-02 provides that an employee’s right to a compensated absence under a sabbatical leave or similar benefit arrangement in which the employee is not required to perform any duties during the absence is an accumulating benefit. Therefore, such arrangements should be accounted for as a liability with the cost recognized over the service period during which the employee earns the benefit. Adoption of this guidance

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

resulted in a decrease in retained earnings of $62 million ($37 million, net of tax) on January 1, 2007. The resulting change in the accrual for the nine months ended September 30, 2007 was not material.

Accounting for Uncertainty in Income Taxes

     The Company does not file as a separate taxpayer for U.S. federal and certain state income tax purposes and its results are included on a consolidated, combined or unitary basis with Time Warner in such cases. Under the Company’s tax sharing agreement with Time Warner, the Company is indemnified for U.S. federal and state income taxes with respect to periods ending on or prior to March 31, 2003. For periods after such date, the Company is responsible for U.S. federal and state income taxes as if it were a stand-alone taxpayer. The Company makes tax sharing payments to Time Warner consistent with such responsibility in accordance with the tax sharing agreement.

     On January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in income tax positions. This interpretation requires the Company to recognize in the consolidated financial statements those tax positions determined to be more likely than not of being sustained upon examination, based on the technical merits of the positions. Upon adoption, the Company recognized a $3 million reduction of previously recorded tax reserves, which was accounted for as an increase to the retained earnings balance as of January 1, 2007. After considering the impact of adopting FIN 48, the Company had an $11 million reserve for uncertain income tax positions as of January 1, 2007.

     During the nine months ended September 30, 2007, changes in the reserve balance were not material. The Company does not presently anticipate that its existing reserves related to uncertain income tax positions as of September 30, 2007 will significantly increase or decrease during the twelve month period ended September 30, 2008; however, various events could cause the Company’s current expectations to change in the future. These uncertain tax positions, if ever recognized in the financial statements, would be recorded in the statement of operations as part of the income tax provision.

     The income tax reserve as of January 1, 2007 included an accrual for interest and penalties of approximately $1 million. The change in the accrual for interest and penalties for the nine months ended September 30, 2007 was not material. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as part of income tax expense.

     With few exceptions, periods ending after March 31, 2003 are subject to U.S., state and local income tax examinations by tax authorities.

3. TRANSACTIONS WITH ADELPHIA AND COMCAST

Adelphia Acquisition and Related Transactions

     On July 31, 2006, TW NY and Comcast completed their respective acquisitions of assets comprising in the aggregate substantially all of the cable assets of Adelphia (the “Adelphia Acquisition”). At the closing of the Adelphia Acquisition, TW NY paid approximately $8.9 billion in cash, after giving effect to certain purchase price adjustments, and shares representing 17.3% of TWC’s Class A common stock (approximately 16% of TWC’s outstanding common stock) valued at approximately $5.5 billion for the portion of the Adelphia assets it acquired. The valuation of approximately $5.5 billion for the approximately 16% interest in TWC as of July 31, 2006 was determined by management using a discounted cash flow and market comparable valuation model. The discounted cash flow valuation model was based upon the Company’s estimated future cash flows derived from its business plan and utilized a discount rate consistent with the inherent risk in the business. The 16% interest reflects 155,913,430 shares

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

of TWC Class A common stock issued to Adelphia, which were valued at $35.28 per share for purposes of the Adelphia Acquisition.

     In addition, on July 28, 2006, American Television and Communications Corporation (“ATC”), a subsidiary of Time Warner, contributed its 1% common equity interest and $2.4 billion preferred equity interest in Time Warner Entertainment Company, L.P. (“TWE”) to TW NY Holding, a newly created subsidiary of TWC and the parent of TW NY, in exchange for a 12.43% non-voting common stock interest in TW NY Holding having an equivalent fair value.

     On July 31, 2006, immediately before the closing of the Adelphia Acquisition, Comcast’s interests in TWC and TWE were redeemed. Specifically, Comcast’s 17.9% interest in TWC was redeemed in exchange for 100% of the capital stock of a subsidiary of TWC holding both cable systems serving approximately 589,000 subscribers, with an estimated fair value of approximately $2.470 billion, as determined by management using a discounted cash flow and market comparable valuation model, and approximately $1.857 billion in cash (the “TWC Redemption”). In addition, Comcast’s 4.7% interest in TWE was redeemed in exchange for 100% of the equity interests of a subsidiary of TWE holding both cable systems serving approximately 162,000 subscribers, with an estimated fair value of approximately $630 million, as determined by management using a discounted cash flow and market comparable valuation model, and approximately $147 million in cash (the “TWE Redemption” and, together with the TWC Redemption, the “Redemptions”). The discounted cash flow valuation model was based upon the Company’s estimated future cash flows derived from its business plan and utilized a discount rate consistent with the inherent risk in the business. The TWC Redemption was designed to qualify as a tax-free split-off under section 355 of the Internal Revenue Code of 1986, as amended (the “Tax Code”). For accounting purposes, the Redemptions were treated as an acquisition of Comcast’s minority interests in TWC and TWE and a disposition of the cable systems that were transferred to Comcast. As of December 31, 2006, the purchase of the minority interests resulted in a reduction of goodwill of $738 million related to the excess of the carrying value of the Comcast minority interests over the total fair value of the Redemptions. In addition, the disposition of the cable systems resulted in an after-tax gain of $945 million included in discontinued operations for the year ended December 31, 2006, which is comprised of a $131 million pretax gain (calculated as the difference between the carrying value of the systems acquired by Comcast in the Redemptions totaling $2.969 billion and the estimated fair value of $3.100 billion) and a net tax benefit of $814 million, including the reversal of historical deferred tax liabilities of approximately $838 million that had existed on systems transferred to Comcast in the TWC Redemption.

     Following the Redemptions and the Adelphia Acquisition, on July 31, 2006, TW NY and Comcast swapped certain cable systems, most of which were acquired from Adelphia, each with an estimated value of approximately $8.7 billion, as determined by management using a discounted cash flow and market comparable valuation model, in order to enhance TWC’s and Comcast’s respective geographic clusters of subscribers (the “Exchange” and, together with the Adelphia Acquisition and the Redemptions, the “Transactions”), and TW NY paid Comcast approximately $67 million for certain adjustments related to the Exchange. The discounted cash flow valuation model was based upon estimated future cash flows and utilized a discount rate consistent with the inherent risk in the business. The Exchange was accounted for as a purchase of cable systems from Comcast and a sale of TW NY’s cable systems to Comcast. The systems exchanged by TW NY included Urban Cable Works of Philadelphia, L.P. (“Urban Cable”) and systems acquired from Adelphia. The Company did not record a gain or loss on systems TW NY acquired from Adelphia and transferred to Comcast in the Exchange because such systems were recorded at fair value in the Adelphia Acquisition. The Company did, however, record a pretax gain of $34 million ($20 million, net of tax) on the Exchange related to the disposition of Urban Cable, which is included in discontinued operations for the year ended December 31, 2006.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

     The purchase price for each of the Adelphia Acquisition and the Exchange is as follows as of September 30, 2007 (in millions):

Cash consideration for the Adelphia Acquisition		$	8,935
Fair value of equity consideration for the Adelphia Acquisition			5,500
Fair value of Urban Cable			190
Other costs			227
Total purchase price		$	14,852

     Other costs consist of (i) contractual closing adjustments totaling $56 million, (ii) $116 million of total transaction costs and (iii) $55 million of transaction-related taxes.

     The purchase price allocation for the Adelphia Acquisition and the Exchange is as follows (in millions):

						Depreciation/
						Amortization
						Periods(a)
Intangible assets not subject to amortization (cable franchise rights)		$	10,487			non-amortizable
Intangible assets subject to amortization (primarily customer relationships)			882			4 years
Property, plant and equipment (primarily cable television equipment)			2,426			1-20 years
Other assets			162			not applicable
Goodwill			1,114			non-amortizable
Liabilities			(219	)		not applicable
Total purchase price		$	14,852