Financial Analysis

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Financial Analysis

Time Warner Cable’s Company is the most common conglomerate responsible for the provision of News Corporation. Time Company provides services such as high quality data as well as voice services in United States. The company has been able to put up with the constantly developing technology by placing well clustered cable arrangements in five major locations being: New York, Carolina states, Midwest, South Carolina and lastly in Texas. At the close of the year 2012, as at December 31st, the company was approximated to be at the service of 15.4 million clients which was an inclusive of both residential clients as well as business entities. The clientele are those who subscribed to one or more of the services provided. Regardless of the commonalities of the Time Warner Cable’s accompany activities; there are a number of various platforms of the company’s functionalities. One of the main factors that help the company achieve its financial objectives over the years is the fact that the company has been able to broaden its networks both horizontally and vertically. The company has been able to venture in to the market while taking note of the market segmentation (Time Warner Cable’s Inc. 2012)

In the year 2012, the times Warner Company initiated a marketing and sales platform that was termed “enjoy better”. The objective of the mission was to inform the potential clients as well as the existing clients to who utilise the company’s services to enjoy the most the things that they love. This information was passed across through broadcasts and the company’s website and also through other major media outlets. There have been direct channels employed the company to reach the potential clients such As door to door marketing, email, the company’s website and also through third party mediums. Social media applications have also been used by the company to reach its clientele.

Time Warner Cable’s faces stiff competition from companies that offer the same services to the broad clientele from the main principle competitors being the AT&T and the Verizon. These companies have been able to provide high quality services just like the Time Warner Cable’s. The client coverage for these companies is also the same and as such each and every service that the company has faces an equal level of competition from these competitors. Other companies give very stiff competition to the time warner company because they are stand alone in the specified service they offer, this specialisation of the different services gives a very tricky competition for the company. Company like DBS which is one of the main competitors offers video services while trying to distinctively differentiate its services by carrying out aggressive promotion services in the pricing with incorporated exclusive programming. The DBS Company also tends to provide high quality services as well as offerings. Other completion grounds are from the companies that offer video services over the internet and mobile devices while not placing charges for the services.

The tendency of the services from the competitors from the competitors has attributed to the negatively to the market demand of the Time Warner cable’s company video services and majorly on the high premium services. This has also prompted the potential content providers to ask for large amounts of licence fee from the Time Warner Cable so as to be able to subsidize the charges on the distribution of the contents. The wireless data together with the over the top phones service providers have provided a stiff competition especially for the fact that the wire lines are being replaced by over the top services. The inability to be able to deliver effectively in the dynamic technology market or increased competition is inversely proportional to the

the success of the time warner company is entirely dependent on the various market variables that need to be put together in order to be able to address the current financial threats such as recession, higher interest rates as well as global competition. These are the main challenging factors that are faced by current operating businesses. Factors that determine that determine the ability of a company to stay relevant to their clientele are factors such as the product, place, price as well as promotion. These elements are necessary for a company to be able to produce the targeted profit. Most of the marketers are keen on the emphasis of these factors that are necessary in the determination of the success of a product in the market. The time warner company has been keen on the utilisation of these important factors in an attempt to be successful in the market (Achua 2012).

The time warner company has been able to provide its clients with the necessary services amidst a vast range of challenges it has faced. With the latest changes in technology data speed as well as phone services that are constantly revolving around technology that are initiated by cable industries that necessitate a wider coverage. Changes in the market requirements have been observed that most of the customers prefer to have most of their data in the phones, in the device signalling; this is change that the time warner company has been able to embrace through its existing mechanisms. Once an initiative was placed into the market, Time Warner Cable’s industry took the mandate to give extra services while the marketing techniques provided a pivot role in the establishment of the product into the market. The company can pride in being able to realise a huge profit margin in its financial establishment. The company came to realise that most of the clients did not have the knowledge that their phones were functional because of the absence of the dial tone during the testing period. The analogue lines did not have the dial tones due to the presence of the static in the tones; the company then had to come up with a fake counterpart of the tone to their clients for that need customer satisfaction (La Monica 2011).

Time Warner Cable’s company main rival being the At&T has been noted to make pricing a very big feat for the company. AT&T can be valued at a much higher capacity in terms of its growth compared to the Time Warner Cables.  AT&T further as a more recognised reputation in the market due to the longer period it has taken into the market. A strategy that the Time Warner Cable’s Company utilised was the intense investments on the features that the AT&T had higher prices for its clients. Time warner gave this services at a lower cost compared to the AT&T, such features were like the caller identification, identification on the call waiting, the three way calling system, unknown call rejection as well as the speed dialling. Other competitive matrixes have been mainly applied to the Time Warner Cable’s Company is the Walt Disney in relation to being a close competitor. Regardless of the ability to analyse the competition landscape, it is worthy to note that these companies do not function in the same landscape. The Time Warner Cable’s company has been able to define its own position niche in the market and has been able to carry outs its objectives in a distinctive manner that is only able to face the Walt Disney in a one front, being the Media Network (La Monica 2011).

The company has internal strengths that has enabled it is composed mainly of the innovative abilities in the financial abilities that can be identified with a strong brand state in the market enabling the company to expand its limits in existing as well as new markets. Innovation has been the company’s main stronghold to maintain and grow in to the market segments. The presentation of a very broaden portfolio is also a factor that gives the company an added advantage when considering the risk involvements. On the contrary, this is able to provide the company with a massive level of security that maybe countered in any case of a macroeconomic turbulence. One major challenge that the Time Warner Cable’s company has in the recent past is in the profits of investments that are incurred to the studio products. This has definitely been an agony because of the constant piracy in their movies in the industry. This observed case has been responsible for the incurred losses in the evaluation of investments for the company. As such during the recession period the company had a lot of financial crunch witnessed in its operating finances (Achua 2012).

As has been stated before, the diversification of the time warner company in its market holdings has enabled a vast number of mainstream kinds of analysis pertaining to the cooperate level. The company has been able to enjoy various advantages in the market such as a positive response in to the market segments, considerable asset finance, and diversified product portfolio with strong brand recognition in the market.

The time warner company on the other hand has been vigilant in the maintenance of the consolidated accounts in the attempt of proper accounts keeping. As at 2011 December, the cash that was set for the investment activities decreased from $3.650billion to a value of $3.354 for the year 2012. This can be credited to the sales of SpectrumCo licenses. This was further partially offset by increased attainment as well as reserves, the net and also the capital expenditures. The short term investments in the United States treasuries securities in the year 2012 can also be a factor in the figures obtained. The attainment of assets as well as investments, the net and also the capital that were used in the year 2012 was basically an inclusive of the insight acquisition, while the values for the year 2011 were inclusive of the value that was obtained from NaviSite as well as the New Wave cable methodologies. The cash that was used to invest in the company’s activities was observed to increase from value of $2.782 billion for the year 2010 to a value of $3.540 billion for the year 2011.

The total expenditure by category summary for the three consecutive years for the company can be summarised as in the table below

As at 31st December every year
  2012 2011 2010
Client locations 1.143 1008 1136
infrastructure 748 774 713
Line addition 428 320 351
Advancements 101 106 150
Support capital 675 729 580
Total 3095 2937 2930

Table 1 (Time Warner Cable’s Inc. 2013)

On the other hand, the financial expenses for the three years was as represented in the tables below

As at 31st December every year
  2012 2011 2010
Short term repayments 1261
Proceeds from Insurances and long term debt 2258 3227 1872
Long term debt repayments 2100 8
Repayments of the long term debts in acquisition 1730 44
Debt issuance cost 26 25 25
Profits from exercise of stock 140 114 112
Tax expenses 49 29 9
Excess tax benefits 81 48 19
Dividends paid out 700 642 676
Non-controlling profits 32
Other services 49 20 9
 
totals 4053 28 347

Table 2 (Time Warner Cable’s Inc. 2013)

Throughout this expenditure observation, the company was targeting a capital expenditure of an average of $3.2 billion for the year 2013. The cash that was used in the 2011 in the financing of the activities was $28million which in comparison to the $347 million that was used in the year 2010. The expenditure cash that was used in the year 2011 was that cash that was used in the purchase of TWC general stock as well as in the settling of services in the quarterly payments of dividends.  On the other hand, the cash that was used in the year 2010 was that used basically in the net repayments that were carried out within the mandate of the company’s commercial programmes.

From the figures in the table above regarding the expenditure as well as the financial trends for the time warner company, it can be deduced that the company should be able to cater for the future payments for its transactions in a given predetermined arrangements. The arrangements made should be able to protect the forthcoming rights to several assets as well as services that are to be used in the general courses of the company’s operations. Taking for instance the case of a contractual commitment that the company makes in an attempt to minimise the amounts paid in the lease of properties that are to be utilised under the agreement of the lease, through properly acknowledged accounting regulations, the fourth coming rights as well as the responsibilities relating to the companies commitments, like the functioning lease commitments and other regulations that guard the purchase managements contracts, are not portrayed as to whether they fall in the assets or liabilities in the final consolidated balance sheet.

The total amount that was accounted for as the rent expanses, which basically was inclusive of the facility rent expenditure as well as the pole accessory rental expenditure was valued at $237million for the year 2012, $201 million for the year 2011 while $212 for the year 2010. The company is in possession of lease responsibilities that operates under numerous functioning leases that include the least lease requirement pertaining to real estates as well as the functioning equipment. The least rental obligation in relation to an elongated term lease needed for a five year plan would be ranging an average of $138million for the year 2013. The same would be of a value of $130 million for the year 2014, a $116 million in the year 2015, a value of $108 million for the year 2016 and a value of $83 million for the year 2017 and a value of $299 million from then hence forth (Time Warner Cable’s Inc. 2013).

As at 31st of December the year 2012, the table below can be used to predict the future financial operations in relation to the previous financial performances.

Year Amount in $million
2013 5099
2014-2015 7620
2016-2017 5303
There after 6510
Total 24, 532

Table 3 (Time Warner Cable’s Inc. 2013)

It can be concluded that the company’s growth is relatively dependent on its growth ambitions and objectives that need to be coupled up with innovative initiatives that can be derived from the mainstream Time Warner Cable’s company functioning systems. In addition, the company must be able to thoroughly comb through the existing opportunities like the real estate development which is viewed to be absolutely outside the mainstream hierarchy. To be able to thrive through the growth ladder, time Warner Company has to be very vigilant in innovative measures which are mainly built begging from the bottom to the top. To maintain a constant innovation through the company has already exhibited by the company, the company is forced to continuously revitalise the company in the attempt to keep the culture alive in the company while not maintaining it at a stagnant point. This is on the other hand can be translated to giving more room that may be needed in the course as well as rewarding the successful cases. Finally it is important to note that the success of the company has to be focused on the proposed points needed in the innovation as well as in acquisition of property and services

 

References

La Monica, P. 2011. “Time Warner Cables Inc. 2011 Stock Incentive Plan (incorporated herein by reference to Annex A to TWC’sdefinitive Proxy Statement dated April 6, 2011 and filed with the SEC on April 6, 2011”. 20, 47-89

Lussier, R. N.,. 2013 “The Walt Disney Company. (n.d.). Investor relations”. Retrieved from http://corporate.disney.go.com/investors/index.html

Achua, C. F 2012 “Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012”. 34, 23-80

Time Warner Cable’s Inc. 2013.  “Stock Incentive Plan, as amended, effective March 12, 2009 (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,2012” 21, 56-89

 

 

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