NEW YORK--(BUSINESS WIRE)-- Time Warner Cable Inc. (NYSE: TWC) today reported financial results for its first quarter ended March 31, 2013.
Time Warner Cable Chief Executive Officer Glenn Britt said: “Business Services continues to perform very well, generating 25% year-over-year revenue growth, and is on track for another terrific year. In Residential Services, we’re executing on our revitalization plans to build a fundamentally stronger and more agile operation. As a result, I remain very excited about the long-term prospects for this business.”
Revenue for the first quarter of 2013 increased 6.6% from the first quarter of 2012 to $5.5 billion. Residential services revenue increased 4.0% to $4.6 billion, business services revenue grew 25.2% to $537 million, advertising revenue increased 8.1% to $228 million and other revenue grew 62.3% to $99 million.
Excluding the impact from Insight revenue during the first two months of the first quarter of 2013:
Residential services revenue
Residential services revenue growth was primarily driven by an increase in high-speed data revenue, partially offset by declines in video and voice revenue.
- The growth in residential high-speed data revenue was the result of an increase in average revenue per subscriber, primarily due to an increase in equipment rental charges and a greater percentage of subscribers purchasing higher-priced tiers of service, as well as growth in high-speed data subscribers.
- Residential video revenue decreased driven by declines in video subscribers and premium network and transactional video-on-demand revenue, partially offset by price increases and a greater percentage of subscribers purchasing higher-priced tiers of service.
- Residential voice revenue decreased due to a decrease in average revenue per subscriber, partially offset by growth in voice subscribers.
Business services revenue
Business services revenue growth was primarily due to increases in high-speed data and voice subscribers and growth in cell tower backhaul revenue.
Advertising revenue increased primarily as a result of growth in revenue from advertising inventory sold on behalf of other video distributors.
Other revenue increased primarily as a result of fees from distributors of the Company’s two Los Angeles regional sports networks, which were launched on October 1, 2012.
Adjusted Operating Income before Depreciation and Amortization (“Adjusted OIBDA”) for the first quarter of 2013 increased 2.1% from the first quarter of 2012 to $1.9 billion. The increase was driven by revenue growth, partially offset by a 9.3% increase in operating expenses.
Operating expenses grew primarily due to higher employee costs and video programming expenses, as well as the costs associated with the Company’s Los Angeles regional sports networks and the advertising inventory sold on behalf of other video distributors, both of which are included in other direct operating costs in cost of revenue.
- Employee costs were up 10.4% to $1.2 billion primarily due to two additional months of costs associated with Insight that are included in the results for the first quarter of 2013, as well as a net increase in headcount driven by growth in business services and higher compensation costs per employee. Employee medical and pension costs increased $13 million and $9 million, respectively.
- Video programming expenses grew 6.8% to $1.2 billion due to an increase in average monthly video programming costs per video subscriber and two additional months of Insight costs, offset, in part, by a decline in video subscribers. Average monthly video programming costs per video subscriber increased 7.5% year-over-year to $33.16 for the first quarter of 2013, primarily driven by contractual rate increases and the carriage of new networks.
- Voice costs were up 4.7% to $156 million primarily as a result of an increase in voice subscribers and two additional months of Insight costs, partially offset by a decrease in delivery costs per subscriber related to the in-sourcing of voice transport, switching and interconnection services.
Operating Income for the first quarter of 2013 increased 1.7% from the first quarter of 2012 to $1.1 billion driven by higher Adjusted OIBDA and a decrease in merger-related and restructuring costs, partially offset by higher depreciation and amortization expenses primarily as a result of two additional months of Insight costs associated with its property, plant and equipment and customer relationship intangible assets. The increase in depreciation expense was partially offset by certain assets acquired in the 2006 transactions with Adelphia Communications Corporation and Comcast Corporation that were fully depreciated as of July 31, 2012.
About Time Warner Cable
Time Warner Cable Inc. (NYSE: TWC) is among the largest providers of video, high-speed data and voice services in the United States, connecting more than 15 million customers to entertainment, information and each other. Time Warner Cable Business Class offers data, video and voice services to businesses of all sizes, cell tower backhaul services to wireless carriers and enterprise-class, cloud-enabled hosting, managed applications and services. Time Warner Cable Media, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions. More information about the services of Time Warner Cable is available at www.twc.com, www.twcbc.com and www.twcmedia.com.
Additional details on financial and subscriber metrics are included in the Trending Schedules and Presentation Slides posted on the Company’s Investor Relations website at www.twc.com/investors.
Source: Time Warner Cable Inc.
Time Warner Cable Inc.