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Time Warner Cable Inc. (NYSE:TWC)

This company has been moved to the archive! The financial data has not been updated since April 28, 2016.

Common-Size Income Statement
Quarterly Data

Time Warner Cable Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012 Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011
Revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Programming and content -25.05 -23.81 -24.67 -25.13 -24.56 -22.76 -23.21 -23.42 -23.45 -22.07 -21.93 -22.23 -23.29 -46.76 -46.60 -45.78 -46.83 -45.72 -46.55 -46.46 -47.07
Gross profit 74.95% 76.19% 75.33% 74.87% 75.44% 77.24% 76.79% 76.58% 76.55% 77.93% 78.07% 77.77% 76.71% 53.24% 53.40% 54.22% 53.17% 54.28% 53.45% 53.54% 52.93%
Sales and marketing -9.90 -10.14 -10.27 -10.06 -9.68 -9.27 -9.73 -9.50 -9.94 -9.88 -9.57 -8.94 -8.64 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Technical operations -6.88 -7.03 -7.38 -6.85 -6.91 -6.68 -7.02 -6.48 -6.65 -6.65 -7.14 -6.54 -6.79 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Customer care -3.84 -3.72 -3.78 -3.78 -3.91 -3.75 -3.68 -3.62 -3.67 -3.42 -3.46 -3.37 -3.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other operating -19.45 -20.17 -20.47 -19.93 -20.39 -20.57 -20.42 -21.11 -20.82 -21.64 -21.57 -22.22 -22.76 -16.88 -17.12 -17.01 -16.69 -16.44 -17.17 -16.65 -17.07
Depreciation -15.18 -15.18 -15.21 -14.93 -14.75 -14.54 -14.42 -13.88 -13.88 -14.06 -14.32 -14.27 -14.41 -14.17 -14.71 -15.12 -15.02 -15.14 -15.27 -15.05 -15.41
Amortization -0.55 -0.56 -0.57 -0.57 -0.59 -0.59 -0.58 -0.61 -0.59 -0.56 -0.58 -0.56 -0.58 -0.57 -0.58 -0.61 -0.29 -0.20 -0.18 -0.16 -0.12
Merger-related and restructuring costs -0.65 -0.84 -0.74 -1.38 -0.45 -0.66 -0.81 -1.07 -1.43 -0.68 -0.42 -0.49 -0.57 -0.31 -0.60 -0.39 -0.88 -0.68 -0.43 -0.18 -0.12
Asset impairments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -1.20 0.00 0.00 0.00
Operating income 18.49% 18.53% 16.90% 17.36% 18.76% 21.17% 20.14% 20.31% 19.56% 21.03% 21.02% 21.39% 19.36% 21.31% 20.40% 21.10% 20.30% 20.61% 20.40% 21.50% 20.20%
Interest expense, net -5.65 -5.80 -5.93 -5.91 -6.02 -6.10 -6.18 -6.10 -6.52 -6.76 -6.87 -7.17 -7.27 -7.33 -7.50 -7.35 -7.89 -8.13 -7.80 -7.40 -7.52
Other income (expense), net 0.18 0.05 0.17 2.14 0.17 0.12 0.09 0.14 0.27 0.02 0.00 0.20 -0.02 0.07 9.25 0.00 -0.06 -0.10 -0.45 -0.65 -0.62
Income before income taxes 13.02% 12.78% 11.14% 13.60% 12.91% 15.20% 14.05% 14.36% 13.31% 14.29% 14.15% 14.41% 12.07% 14.06% 22.15% 13.75% 12.35% 12.38% 12.16% 13.45% 12.06%
Income tax provision -5.04 -4.78 -3.77 -5.79 -4.99 -5.63 -5.32 -5.64 -4.73 -4.61 -4.51 -5.75 -4.75 -4.69 -7.07 -5.37 -4.89 -1.08 -4.91 -4.94 -5.30
Net income 7.98% 8.00% 7.38% 7.81% 7.93% 9.57% 8.73% 8.71% 8.58% 9.68% 9.64% 8.67% 7.32% 9.37% 15.08% 8.38% 7.46% 11.30% 7.25% 8.52% 6.75%
Net income attributable to noncontrolling interests 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.02 -0.02 -0.02 -0.02 0.00 0.00 -0.02 -0.02
Net income attributable to TWC shareholders 7.98% 8.00% 7.38% 7.81% 7.93% 9.57% 8.73% 8.71% 8.58% 9.68% 9.64% 8.67% 7.32% 9.35% 15.07% 8.36% 7.44% 11.30% 7.25% 8.50% 6.73%

Based on: 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).

A comprehensive review of the quarterly common-size income statements reveals a significant shift in cost structure beginning in the first quarter of 2013, alongside a gradual reduction in financial leverage over the observed five-year period.

Gross Profitability and Cost of Revenue
Between March 2011 and December 2012, programming and content costs consistently represented approximately 46% of revenue, resulting in gross profit margins of roughly 53%. Starting in March 2013, these costs dropped precipitously to approximately 23%, effectively increasing gross profit margins to a range between 74% and 78%. This suggests a fundamental change in the accounting treatment of content costs or a substantial shift in the revenue mix.
Operating Expense Evolution
Concurrent with the shift in gross profit reporting in March 2013, the company began disclosing specific line items for sales and marketing, technical operations, and customer care. Sales and marketing expenses ranged from 8.6% to 10.3% of revenue. Technical operations remained relatively stable between 6.4% and 7.4%, while customer care costs hovered between 3.4% and 3.9%. The emergence of these detailed expenses, paired with other operating costs that rose from an average of 17% to approximately 20%, effectively offset the increase in gross profit.
Operating Income Stability
Despite the volatility in gross margin and the redistribution of operating expenses, operating income remained remarkably consistent. The operating margin generally fluctuated between 17% and 21% of revenue throughout the analyzed period. A slight contraction is observed in the second and third quarters of 2015, where margins dipped to 17.36% and 16.90%, respectively, before recovering to 18.49% by March 2016.
Financial Leverage and Net Income
Interest expense as a percentage of revenue exhibited a steady downward trajectory, decreasing from a peak of 8.13% in December 2011 to 5.65% by March 2016, indicating a reduction in the relative burden of debt service. Net income remained relatively stable, typically averaging between 7% and 9% of revenue. A significant outlier occurred in September 2012, where net income reached 15.08% due to a one-time spike in other income, which contributed 9.25% to the total revenue for that quarter.

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