1377013--2/19/2010--TIME_WARNER_CABLE

related topics

{system, service, information}

{capital, credit, financial}

{regulation, change, law}

{debt, indebtedness, cash}

{product, candidate, development}

{property, intellectual, protect}

{condition, economic, financial}

{loss, insurance, financial}

{product, market, service}

{tax, income, asset}

Risks Related to TWC s Operations A prolonged economic downturn, especially a continued downturn in the housing market, may negatively impact TWC s ability to attract new subscribers and generate increased subscription revenues. TWC s business is characterized by rapid technological change, and if TWC does not respond appropriately to technological changes, its competitive position may be harmed. Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase TWC s costs. TWC may encounter unforeseen difficulties as it increases the scale of its service offerings to commercial customers. TWC relies on network and information systems and other technology, and a disruption or failure of such networks, systems or technology as a result of computer viruses, misappropriation of data or other malfeasance, as well as outages, natural disasters, accidental releases of information or similar events, may disrupt TWC s business. TWC s business may be adversely affected if TWC cannot continue to license or enforce the intellectual property rights on which its business depends. TWC is party to agreements with Time Warner and an affiliate of Time Warner governing the use of Time Warner Cable and Road Runner that may be terminated if TWC fails to perform its obligations under those agreements or if TWC undergoes a specified change of control. The accounting treatment of goodwill and other identified intangibles could result in future asset impairments, which would be recorded as operating losses. TWC has incurred substantial debt, which may limit its flexibility and prevent it from taking advantage of business opportunities. Risks Related to Dependence on Third Parties Increases in programming and retransmission costs or the inability to obtain popular programming could adversely affect TWC s operations, business or financial results. TWC may not be able to obtain necessary hardware, software and operational support. TWC may encounter substantially increased pole attachment costs. Risks Related to Government Regulation TWC s business is subject to extensive governmental regulation, which could adversely affect its business. Changes in broadcast carriage regulations could impose significant additional costs on TWC. Under the program carriage rules, TWC could be compelled to carry programming services that it would not otherwise carry. Net neutrality legislation or regulation could limit TWC s ability to operate its high-speed data business profitably and to manage its broadband facilities efficiently to respond to growing bandwidth usage by TWC s high-speed data customers. Rate regulation could materially adversely impact TWC s operations, business, financial results or financial condition. TWC may have to pay fees in connection with its cable modem service. The IRS and state and local tax authorities may challenge the tax characterizations of the Adelphia Acquisition (as defined below), the Redemptions (as defined below) and the Exchange (as defined below), or TWC s related valuations, and any successful challenge by the IRS or state or local tax authorities could materially adversely affect TWC s tax profile, significantly increase TWC s future cash tax payments and significantly reduce TWC s future earnings and cash flow. If the Separation Transactions, including the Distribution, do not qualify as tax-free, either as a result of actions taken or not taken by TWC or as a result of the failure of certain representations by TWC to be true, TWC has agreed to indemnify Time Warner for its taxes resulting from such disqualification, which would be significant. In addition, the restrictions imposed on TWC in connection with the tax treatment of the Distribution could limit TWC s ability to engage in certain corporate transactions.

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1377013--2/19/2010--TIME_WARNER_CABLE_INC.