Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Time Warner Cable Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Customer relationships	597)	600)	531)	530)	50)
Cable franchise renewals and access rights	306)	297)	287)	269)	252)
Other	57)	42)	38)	41)	37)
Intangible assets subject to amortization, gross	960)	939)	856)	840)	339)
Accumulated amortization	(523)	(416)	(304)	(199)	(111)
Intangible assets subject to amortization, net	437)	523)	552)	641)	228)
Cable franchise rights	26,014)	26,012)	26,012)	26,011)	24,272)
Intangible assets not subject to amortization	26,014)	26,012)	26,012)	26,011)	24,272)
Intangible assets	26,451)	26,535)	26,564)	26,652)	24,500)
Goodwill	3,139)	3,137)	3,196)	2,889)	2,247)
Intangible assets and goodwill	29,590)	29,672)	29,760)	29,541)	26,747)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

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Item	Description	The company
Intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Time Warner Cable Inc. intangible assets decreased from 2013 to 2014 and from 2014 to 2015.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Time Warner Cable Inc. goodwill decreased from 2013 to 2014 but then slightly increased from 2014 to 2015.
Intangible assets and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Time Warner Cable Inc. intangible assets and goodwill decreased from 2013 to 2014 and from 2014 to 2015.

Time Warner Cable Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Adjustment to Total Assets
Total assets (as reported)	49,277)	48,501)	48,273)	49,809)	48,276)
Less: Goodwill	3,139)	3,137)	3,196)	2,889)	2,247)
Total assets (adjusted)	46,138)	45,364)	45,077)	46,920)	46,029)
Adjustment to Total TWC Shareholders’ Equity
Total TWC shareholders’ equity (as reported)	8,995)	8,013)	6,943)	7,279)	7,530)
Less: Goodwill	3,139)	3,137)	3,196)	2,889)	2,247)
Total TWC shareholders’ equity (adjusted)	5,856)	4,876)	3,747)	4,390)	5,283)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Time Warner Cable Inc., Financial Data: Reported vs. Adjusted

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Time Warner Cable Inc., adjusted financial ratios

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Total Asset Turnover
Reported total asset turnover	0.48	0.47	0.46	0.43	0.41
Adjusted total asset turnover	0.51	0.50	0.49	0.46	0.43
Financial Leverage
Reported financial leverage	5.48	6.05	6.95	6.84	6.41
Adjusted financial leverage	7.88	9.30	12.03	10.69	8.71
Return on Equity (ROE)
Reported ROE	20.50%	25.35%	28.14%	29.61%	22.11%
Adjusted ROE	31.49%	41.65%	52.15%	49.09%	31.52%
Return on Assets (ROA)
Reported ROA	3.74%	4.19%	4.05%	4.33%	3.45%
Adjusted ROA	4.00%	4.48%	4.33%	4.59%	3.62%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Time Warner Cable Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Time Warner Cable Inc. adjusted financial leverage ratio decreased from 2013 to 2014 and from 2014 to 2015.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Time Warner Cable Inc. adjusted ROE deteriorated from 2013 to 2014 and from 2014 to 2015.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Time Warner Cable Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Time Warner Cable Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenue	23,697)	22,812)	22,120)	21,386)	19,675)
Total assets	49,277)	48,501)	48,273)	49,809)	48,276)
Activity Ratio
Total asset turnover¹	0.48	0.47	0.46	0.43	0.41
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	23,697)	22,812)	22,120)	21,386)	19,675)
Adjusted total assets	46,138)	45,364)	45,077)	46,920)	46,029)
Activity Ratio
Adjusted total asset turnover²	0.51	0.50	0.49	0.46	0.43

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 23,697 ÷ 49,277 = 0.48

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 23,697 ÷ 46,138 = 0.51

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Time Warner Cable Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets	49,277)	48,501)	48,273)	49,809)	48,276)
Total TWC shareholders’ equity	8,995)	8,013)	6,943)	7,279)	7,530)
Solvency Ratio
Financial leverage¹	5.48	6.05	6.95	6.84	6.41
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	46,138)	45,364)	45,077)	46,920)	46,029)
Adjusted total TWC shareholders’ equity	5,856)	4,876)	3,747)	4,390)	5,283)
Solvency Ratio
Adjusted financial leverage²	7.88	9.30	12.03	10.69	8.71

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ Financial leverage = Total assets ÷ Total TWC shareholders’ equity
= 49,277 ÷ 8,995 = 5.48

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total TWC shareholders’ equity
= 46,138 ÷ 5,856 = 7.88

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Time Warner Cable Inc. adjusted financial leverage ratio decreased from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to TWC shareholders	1,844)	2,031)	1,954)	2,155)	1,665)
Total TWC shareholders’ equity	8,995)	8,013)	6,943)	7,279)	7,530)
Profitability Ratio
ROE¹	20.50%	25.35%	28.14%	29.61%	22.11%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to TWC shareholders	1,844)	2,031)	1,954)	2,155)	1,665)
Adjusted total TWC shareholders’ equity	5,856)	4,876)	3,747)	4,390)	5,283)
Profitability Ratio
Adjusted ROE²	31.49%	41.65%	52.15%	49.09%	31.52%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ ROE = 100 × Net income attributable to TWC shareholders ÷ Total TWC shareholders’ equity
= 100 × 1,844 ÷ 8,995 = 20.50%

² Adjusted ROE = 100 × Net income attributable to TWC shareholders ÷ Adjusted total TWC shareholders’ equity
= 100 × 1,844 ÷ 5,856 = 31.49%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Time Warner Cable Inc. adjusted ROE deteriorated from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to TWC shareholders	1,844)	2,031)	1,954)	2,155)	1,665)
Total assets	49,277)	48,501)	48,273)	49,809)	48,276)
Profitability Ratio
ROA¹	3.74%	4.19%	4.05%	4.33%	3.45%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to TWC shareholders	1,844)	2,031)	1,954)	2,155)	1,665)
Adjusted total assets	46,138)	45,364)	45,077)	46,920)	46,029)
Profitability Ratio
Adjusted ROA²	4.00%	4.48%	4.33%	4.59%	3.62%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ ROA = 100 × Net income attributable to TWC shareholders ÷ Total assets
= 100 × 1,844 ÷ 49,277 = 3.74%

² Adjusted ROA = 100 × Net income attributable to TWC shareholders ÷ Adjusted total assets
= 100 × 1,844 ÷ 46,138 = 4.00%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Time Warner Cable Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Time Warner Cable Inc. (NYSE:TWC)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Time Warner Cable Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Time Warner Cable Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)