HomeMy WebLinkAboutTime Warner - Financial Statements - 2000 TIME WARNER
CABLE
October 4, 2000
Ms. Julie Holcomb, Clerk V 6
City of Ithaca
City Hall
108 E. Green Street CITY CLERKS OFFIC
Ithaca, NY 14850
Dear Ms. Holcomb:
Enclosed please find the financial statements for Time Warner Cable for the fiscal year beginning
July 1, 1999 and ending June 30, 2000.
If you have any questions, please don't hesitate to call.
Sincerely
Thomas P. Doheny
General Manager
cc: The Honorable Alan Cohen
• Time Warner Entertainment-Advance/Newhouse Partnership
Syracuse Division d/b/a Time Warner Cable
Ithaca System
Statement of Assets, Liabilities and Net Assets
June 30, 2000
(Unaudited)
Assets
Cash $ 79,537
Accounts receivable, less allowance
for doubtful accounts of$94,236 1,072,579
Prepaid expenses and other assets 48,154
Property,plant and equipment, at cost(7Vote2):
Land,building and improvements $ 2,224,239
Distribution system 27,902,595
Vehicles and other equipment 4,381,596
Construction in progress 224,941
34,733,371
Less accumulated depreciation (19.257,780)
Net property, plant and equipment 15,475,591
Franchise costs, less accumulated
amortization of$1,726,486 (Note 2) 972,151
$1 4 012
Liabilities and Net Assets
Accounts payable $ 150,157
Accrued liabilities 966,281
Deferred income 1,024,275
Subscribers' advance payments 65,643
2,206,356
Net assets (Note 1) 15,441.656
$17 48 12
See notes to financial statements
Time Warner Entertainment-Advance/Newhouse Partnership
Syracuse Division d/b/a Time Warner Cable
Ithaca System
Statement of Revenues and Expenses and Changes in Net Assets
June 30, 2000
(Unaudited)
Revenues
Service $9,866,810
Connection and other 2,852,902
$ 12,719,712
Expenses
Operating and origination 5,110,913
Selling, general and administrative 1,060,455
Depreciation and amortization (Note 2) 2,464,990
Interest, net 215,712
8,.852,070
v
Income before charge equivalent to income taxes 3,867,642
Charge equivalent to income taxes (Note 2) 1,585,600
Net income 2,282,042
Net assets at beginning of year 15,395,599
Net payments to Time Warner Entertainment-
Advance/Newhouse Partnership (2,235,985)
Net assets at end of year $15441 65
See notes to financial statements
,
Time Warner Entertainment-Advance/Newhouse Partnership
Syracuse Division d/b/a Time Warner Cable
Ithaca System
Statement of Cash Flows
June 30,2000
(Unaudited)
Operating Activities
Net income $2,282,042
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,464,990
Change in non-cash working capital:
Accounts receivable and prepaid expenses
and other assets (133,424)
Accounts payable, accrued liabilities, deferred
income and subscriber advance payment (1 974)
d
Net cash provided by operating activities $ 4,611,634
Investing Activities
Purchases of property,plant and equipment (2,198,466)
Franchise Acquisition (5,331)
Net cash used in investing activities (2,383 273)
Financing Activities
Net payments to Time Warner Entertainment -
Advance/Newhouse Partnership (2,235,985)
Net decrease in cash (7,624)
Cash at beginning of year 161
Cash at end of year $ 79
See notes to financial statements
Time Warner Entertainment-Advance/Newhouse Partnership
Syracuse Division d/b/a Time Warner Cable
Ithaca System
Notes to Financial Statements
June 30, 2000
(Unaudited)
1. Description of Business
The Syracuse Division of Time Warner Entertainment-Advance/Newhouse Partnership
(TWE-A/N),doing business as Time Warner Cable (the Division), is principally engaged in
the cable television business. Such operations consist primarily of selling video
programming which is distributed to subscribers for a monthly fee through a network of
coaxial cables and fiber optics. The Division operates in the City of Ithaca,New York, and
contiguous areas under non-exclusive franchise agreements which are in effect until 1999
(the System).
Effective April 1, 1995, Time Warner Entertainment Company, L.P. (TWE), an affiliate of
Time Warner Inc. (Time Warner), formed TWE-A/N, a general partnership, with
Advance/Newhouse Partnership (Advance/Newhouse). The TWE and Advance/Newhouse
interests in TWE-A/N are 66.67% and 33.33%, respectively. The majority of the assets of
the Division were contributed to TWE-A/N, which is managed by, and an affiliate of TWE.
The System has no separate legal status or existence. The System's resources and existence
are at the disposal of TWE-A/N management, subject to contractual commitments by TWE-
AN to perform certain long-term contracts within the present divisional structure. The
System's assets are legally available for the satisfaction of debts of TWE-A/N, not solely
those appearing in the accompanying statements; and its debts may result in claims against
assets not appearing therein. The Division is one of several divisions of TWE-A/N and
transactions and the terms thereof may be arranged by and among members of the affiliated
group.
2. Significant Accounting Policies
Property,Plant and Equipment
Depreciation is provided on the straight-line basis over the estimated useful lives of the
assets as follows:
Building and improvements 5-20 years
Distribution system 3-15 years
Vehicles and other equipment 3-10 years
Time Warner Entertainment-Advance/Newhouse Partnership
Syracuse Division d/b/a Time Warner Cable
Ithaca System
Notes to Financial Statements
June 30, 2000
(Unaudited)
2. Significant Accounting Policies (continued)
Franchise Costs
The System has deferred costs incurred to acquire the franchises. Amortization of these costs
is provided on the straight-line basis over periods of up to thirty-six years.
Charge Equivalent to Income Taxes
The Division is included in the TWE-A/N Federal Partnership Return of Income. In
accordance with the TWE-A/N partnership agreement, cash distributions by TWE-A/N
generally are required to be made to the partners to permit them to pay taxes. E
Statement of Cash Flows
For purposes of this statement, cash includes all highly liquid investments purchased with
original maturities of three months or less.
3. Related Party Transactions
Interest charged to the System by TWE-A/N was computed by allocating the interest
calculated on TWE-A/N's outstanding borrowings by the proportion of the System's average
net assets to TWE-A/N's average net assets. During the year ended June 30, 2000, interest
was charged at an average rate of 6.62% and aggregated $215,712.
The statement of revenues and expenses and changes in net assets includes charges for
programming and promotional services provided by Home Box Office and other affiliates
of TWE-A/N. These charges are based upon customary rates.
4. Leases
Rental expenses for all operating leases,principally pole attachment fees, for the year ended
June 30,2000, amounted to $131,869. The System has no significant noncancelable rental
commitments.
r
Time Warner Entertainment-Advance/Newhouse Partnership
. Syracuse Division d/b/a Time Warner Cable
Ithaca System
Notes to Financial Statements
June 30, 2000
(Unaudited)
5. Benefit Plans
The System participates in a noncontributory defined benefit pension plan(the Pension Plan)
which is maintained by TWE-A/N and covers substantially all employees. Benefits under
the Pension Plan are determined based on formulas which reflect the employees' years of
service and average compensation for the highest five consecutive years of the last ten years
of service. Total pension cost for the year ended June 30, 2000,was $77,108.
The System also participates in a defined contribution plan maintained by TWE (The Time
Warner Cable Savings Plan- Savings Plan) which covers substantially all employees. The
System's contributions to the Savings Plan can amount to up to 6.67% of the employee's
eligible compensation during the plan year. The plan sponsor has the right in any year to set
the maximum amount of the System's contribution. Defined contribution plan expense
totaled $42,692 for the year ended June 30, 2000.
c
TIME WARNER
CABLE
November 29, 2000
Ms. Julie Holcomb, Clerk
City of Ithaca
108 E. Green Street
Ithaca,NY 14850
Dear Ms. Holcomb:
I wanted you to be aware that we are notifying our Tompkins County customers of changes in some
service rates taking effect January 1, 2001. I have attached a copy of our customer notification letter for
your information; our customers will be receiving their notices by December 1.
At this time, we're pleased to announce the addition of the fX Network(FOX basic cable network)
to our StandardPlus lineup, as well as the addition of the Sci-Fi Channel to this tier of service. In addition
to its many popular television series, fX also features Major League Baseball.
Additionally,we are adding seven new channels to our popular Digital Cable service. In addition
to Toon Disney and BBC America, which were recently added, we're introducing Bloomberg, CNBC2,
MTV2, Noggin, Lifetime Movie Network, TRIO and Newsworld. We continue to expand our Digital
channel lineup as services become available to us.
The rates we charge for cable service reflect our ongoing costs of doing business in your community
including our technological investments in the cable system, and include the increased programming costs
for channels our customers enjoy as part of our channel lineup. Over the past few years, these
programming costs have risen and our once-a-year rate adjustments allow us to recover some of the costs
associated with that programming expense. I'm pleased to report that the rates for our Premium (movie)
channels,the Custom Choice package, and our Digital Cable packages will remain the same.
We understand that any billing change may generate questions from customers. Should you or your
office receive any calls, please feel free to forward them to us. Our customer service representatives will
be able to answer and resolve their questions or concerns. If you have additional questions about these
changes, please give me a call. I'd be happy to meet with you personally to answer them. My number is
272-7875 extension 3328.
As competition grows, we at Time Warner Cable understand how important it is to offer our
customers the best possible service at the best possible price. We value our customers and believe that
they, in turn, receive great service from our local employees and value in our offerings.
Sincere,W,
Tom Doheny
General Manager
cc: The Honorable Alan Cohen,Mayor
i
T`
TIME WARNER
C A B L E Tompkins County
(including Candor) C ng jams 2:
11I a .
V
December 1,2000
Dear Time Warner Cable Customer:
It's the Digital age at Time Warner Cable. Since we launched our Digital Cable service,nearly 50,000 of our Syracuse Division
customers have already taken advantage of the new channels,new choices and convenience offered by this service,which
currently offers more than 200 channels. We're pleased to announce the addition of 7 new channels to Digital Cable effective
Monday,December 18: Lifetime Movie Network,CNBC2,Newsworld,Bloomberg,MTV2,TRIO and Noggin. (And don't
forget BBC America,added recently to channel 124;Toon Disney,on 163;and ESPNews,on 107.)These new channels offer a
vast array of programming including movies,business news,music,arts,and children's educational programs. If you already
enjoy Digital Cable,you'll receive these new channels automatically as part of your Digital Plus service. If you don't have Digital
Cable,now is a great time to add it:see the special offer below!
We have enclosed a new lineup card for your convenience and to help you locate our new services. We're pleased to announce the
addition of the fX Network on channel 64,while the Sci-Fi Channel will also now be available as part of our Standard Plus
service on channel 63. The fX Network features a slate of distinctive programs,an award-winning lineup of hit series,a
blockbuster film library featuring network and cable television premieres,plus sports such as Major League Baseball.
To enable us to continue providing your best choice for television programming,dedicated local customer service,and all the
benefits of our technological investments,our system will soon introduce new prices for some of its services and equipment. Our
customers taking our Basic&Standard Plus services will see a new monthly price effective January 1 of$38.10. We are pleased
that our current rates for the Custom Choice package,Digital Cable packages,and all premium movie services will remain the
same. Our monthly rates for some home equipment will change January 1:the rate for a Home Terminal(including Digital
Terminal)will be$3.99,and remotes will be$0.37. Our price adjustments reflect inflation and changes in our costs such as
increases in programming fees,plus investments in our technological improvements to the cable system. Detailed rate information
can be found on the back of this notice.
We are working hard to ensure that our service to you is the best it can be,and we appreciate the opportunity to provide your
cable television service. Stay tuned:we're pleased to announce our brand new Local News Channel,offering news and weather
for and from Central New York,24-hours-a-day! This exclusive channel is scheduled to launch late next year,and we're proud to
continue our commitment to your community.
It is our privilege to serve you.
Tom Doheny
General Manager
Energize Your Television: Time Warner Security Faster than Santa!
Special Digital Holiday Road Runner
Cable Offer! Installation Offer! High Speed
Add Digital Cable for as little as $6.95 per Install a FREE basic residential security Online
month,and receive your first two issues of package and we will include a FREE
your"Channel Guide"subscn_ ____ for wireless remote with thesy t mti , , � Get 3 months.of_s rvice„plt ins_taIlation -
free, plus your choice of 5 channels of HURRY, offer ends soon. for only $89! Save up to $99!
SfARZ!or 4 channels of Showtime,free CALL NOW: (800) 479-0624 Call toll-free 1-877-313-BEEP.
for one month.Call our office at
1 11 0111, 1
for
r - _
NOW,
TIME WARNER Effective 1/1/01
CABLE
Tompkins County (including candor) Rates & Services
A. Cable Service: Current Rate Effective 1/1/01
Basic Service: $15.59 $18.65
P.E.G.Access Fee(City of Ithaca only) $1.26
Standard Plus:
(Consists of Basic Service @$18.65/mo.+all Standard Plus channels @$19.-15/mo.) $36.05 $38.10
(Services above Standard Plus require an addressable Home Terminal)
Custom Choice: $4.95
Channel Guide Monthly Publication $2.75
B. Premium Services:
Home Box Office $10.95
Cinemax $10.95
Showtime $10.95
The Disney Channel $10.95
The Movie Channel(Digital Only) $1Q.95
STARZ! $10.95
(2 or more Premium Services are discounted)
C. Special Packages
TV Marquee:Includes Basic Cable,Standard Plus,Custom Choice,Home Terminal and Remote Control $44.38
Movie Marquee:TV Marquee plus any 3 Premium Services $60.43
Digital Marquee:Includes TV Marquee plus Full Digital Cable service $51.33
Digital Movie Marquee:Digital Marquee plus any 3 Premium services $67.38
D. Digital Cable Packages*
Full Digital Cable Service(includes channels 100-208,plus Digital Navigator Package) $6.95
Digital Plus(channels 100-200,plus Digital Navigator Package) $5.95
Digital Encore Movie Pak(includes channels 201-208,plus Digital Navigator Package) $5.95
Digital Navigator Package(includes Interactive Program Guide,40 Music Choice channels,plus
access to iNDemand and premium services) $2.95
Digital Programming on Additional Outlet(each) $1.95
*TV Marquee required for Digital Cable service.
E. Equipment:
Converter(non-addressable) $0.88
Home Terminal(analo#Digital Terminal $3.99
Remote/Digital Remote $.37
F. Installation Charges:
Standard Install/Reconnect(pre-wired home) $24.70
Standard Installation(unwired home) $38.02
Hourly Service Charge $35.19
Service Charge $22.14
Additional Oudet(s)at time of initial installation $13.84
Additional Outlet(s),separate trip $24.16
(Sales tax will be applied to installation charges)
Basic service required by federal law as prerequisite to other services.Rates and charges apply to standard residential installations and service.
The above rates for cable service packages and equipment do not include franchise fees or FCC regulatory fees.
Coming to Digital Cable December 18!
•rovie werworaK Li Lifer TeleNetwork:
et no�hour network featuring contemporary made-for-television movies,select theatrical films,and miniseries from
�� CNBC2:Market news from around the globe,supplied by CNBC's Asian and European channels,which are partnerships with Dow Jones
&Co.The channel features live market news from around the world focusing on places like London,Singapore and Hong Kong.
CAN BC2 Newsworid:24-hour international news,with broadcasts from around the world offering a global perspective. Features newscasts from the
CBC(Canadian Broadcasting Company),as well as unedited newscasts from major countries around the world,available in both English
and the originating language.
gr g
Bloomberg:24-hour money trews channel with up-to-the-minute market information,including index updates and live stock tickets,along
INGOGINI with foreign markets and weekend financial updates.
MTV2:The sister channel of MTV,features videos 24 hours a day with a play list focusing on new artists and clips from the early days of
B � music video.
T I t I V s 1 o N TRIO:Dramas,documentaries and films channel. With 90%original programming,TRIO delivers top-rated shows from the U.K.,
Canada,Australia,New Zealand and South Africa,never before seen on U.S.screens.
Noggin The first kids'"thinking"channel,a partnership between Nickelodeon and the Children's Television Workshop. Designed to reach
kids 2 l2z Noggut's cot t�aucral flee g feattuegogtans as Su�tR .WROT-7-M
. s
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