1377013--2/20/2009--TIME_WARNER_CABLE

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{capital, credit, financial}

{system, service, information}

{regulation, change, law}

{property, intellectual, protect}

{product, market, service}

{debt, indebtedness, cash}

{stock, price, share}

{product, candidate, development}

{cost, operation, labor}

{tax, income, asset}

{loss, insurance, financial}

TWC faces risks relating to competition for the leisure and entertainment time of audiences, which has intensified in part due to advances in technology. TWC s competitive position and business and financial results could suffer if it does not develop a compelling wireless offering. Risks Related to TWC s Operations Weakening economic conditions, including a continued downturn in the housing market, may negatively impact TWC s ability to attract new subscribers, increase rates and maintain or increase 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. The accounting treatment of goodwill and other identified intangibles could result in future asset impairments, which would be recorded as operating losses. The IRS and state and local tax authorities may challenge the tax characterizations of the Adelphia Acquisition, 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. TWC has incurred substantial debt, which may limit its flexibility, prevent it from taking advantage of business opportunities and negatively affect its ability to refinance existing debt. TWC is exposed to risks associated with turmoil in the financial markets. 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. If TWC is prohibited by regulation from using SDV technology, it may be forced to make costly upgrades to its system in order to remain competitive. 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. Applicable law is subject to change. Risks Related to the Separation TWC may not realize some or all of the benefits that it expects from the Separation. 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. Risks Related to TWC s Relationship with Time Warner Time Warner controls approximately 90.6% of the voting power of TWC s outstanding common stock and has the ability to elect a majority of TWC s directors, and its interest may conflict with the interests of TWC s other stockholders. Some of TWC s officers and directors may have interests that diverge from TWC in favor of Time Warner because of past and ongoing relationships with Time Warner and its affiliates. Time Warner and its affiliates may compete with TWC in one or more lines of business and may provide some services under the Time Warner brand or similar brand names. TWC is currently party to agreements and, following the Separation, will be party to new agreements with Time Warner governing the use of TWC s brand names, including the Time Warner Cable brand name, that may be terminated by Time Warner if TWC fails to perform its obligations under those agreements or if TWC undergoes a specified change of control. A change in Time Warner s controlling interest in TWC may cause short-term volatility in trading volume and market price of TWC s common stock. Time Warner s capital markets and debt activity could adversely affect capital resources available to TWC.

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1377013--2/20/2009--TIME_WARNER_CABLE_INC.