Time Warner Cable Reports Strong Q2 - Broadcasting & Cable

Time Warner Cable Reports Strong Q2

MSO looks for new ways to return cash to investors
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Time Warner Cable continued
the trend of strong cable second quarter results, reporting better than
expected growth and hunting that it is making moves to put even more
cash in investors' pockets.

Time Warner Cable results follow
Comcast, which reported last week, and while basic subscriber losses
were up from last year (111,000 vs. 76,000 in Q209), advanced service
growth continued at a healthy pace. Time Warner Cable added 85,000 high-speed
Internet customers and 75,000 digital phone customers, in line with
analysts' consensus estimates.

Revenue at the second largest
cable operator rose 5.8% to $4.7 billion in the period and adjusted
operating income before depreciation and amortization (a measure of
cash flow) increased 6% to $1.8 billion. While free cash flow declined
14% in the period to $664 million, year to date it is up 18.6% to $1.2
billion. It was that continued growth in free cash flow - and a subsequent
decline in debt - that had some investors guessing what the company
would do with its cash and excess borrowing capacity. Time Warner Cable
has set a target leverage ratio of 3.25 times cash flow. As of June
30, the company's leverage was at about 3 times.

Chief financial officer Rob
Marcus attempted to address any potential speculation on a conference
call with analysts, saying that the company is currently in discussions
concerning additional ways it can return capital to shareholders. Time
Warner Cable will provide further detail on its third quarter conference
call, Marcus added.

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