1377013--2/22/2008--TIME_WARNER_CABLE

related topics

{capital, credit, financial}

{system, service, information}

{regulation, change, law}

{product, market, service}

{stock, price, share}

{property, intellectual, protect}

{product, candidate, development}

{operation, international, foreign}

{loss, insurance, financial}

{competitive, industry, competition}

{tax, income, asset}

TWC operates its cable systems under franchises that are non-exclusive. State and local franchising authorities can grant additional franchises and foster additional competition. 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. TWC may encounter unforeseen difficulties as it increases the scale of its video, high-speed data and voice offerings to commercial customers. Additional Risks of TWC s Operations 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. TWC may continue to face challenges in its systems in Dallas, Texas and Los Angeles, California. Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase TWC s costs. Availability of SDV technology may not enable TWC to effectively manage its existing bandwidth. A weakening economy, especially a continued downturn in the housing market, may negatively impact TWC s ability to attract new subscribers and generate increased subscription revenues. 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 and the Exchange, 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. Risks Related to Dependence on Third Parties Increases in programming 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. The adoption of, or the failure to adopt, certain consumer electronics devices or computers may negatively impact TWC s offerings of new and enhanced services. Risks Related to Government Regulation TWC s business is subject to extensive governmental regulation, which could adversely affect its business. Changes in carriage regulations could impose significant additional costs on TWC. Net neutrality legislation or regulation could limit TWC s ability to operate its high-speed data business profitably, to manage its broadband facilities efficiently and to make upgrades to those facilities sufficient to respond to growing bandwidth usage by TWC s high-speed data customers. Under the program carriage rules, TWC could be compelled to carry programming services that it would not otherwise carry. 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 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 party to 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 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 approval right over TWC s ability to incur indebtedness may harm TWC s liquidity and operations and restrict TWC s growth. Time Warner s capital markets and debt activity could adversely affect capital resources available to TWC. TWC is exempt from certain corporate governance requirements since TWC is a controlled company within the meaning of the NYSE rules and, as a result, its stockholders do not have the protections afforded by these corporate governance requirements.

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1377013--2/22/2008--TIME_WARNER_CABLE_INC.