UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Commission File Number: 001-33335

TIME WARNER CABLE INC.

(Exact name of registrant as specified in its charter)

60 Columbus Circle

New York, New York 10023

(Address of principal executive offices) (Zip Code)

(212) 364-8200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesþ    No¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yesþ    No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes¨    Noþ

TIME WARNER CABLE INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND OTHER FINANCIAL INFORMATION

TIME WARNER CABLE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION

INTRODUCTION

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying consolidated financial statements and provides additional information on Time Warner Cable Inc.’s (together with its subsidiaries, “TWC” or the “Company”) business, any recent developments, financial condition, cash flows and results of operations. MD&A is organized as follows:

OVERVIEW

TWC is among the largest providers of video, high-speed data and voice services in the U.S., with technologically advanced, well-clustered cable systems located mainly in five geographic areas – New York State (including New York City), the Carolinas, the Midwest (including Ohio, Kentucky and Wisconsin), Southern California (including Los Angeles) and Texas. TWC’s mission is to connect its customers to the world—simply, reliably and with superior service. As of September 30, 2015,March 31, 2016, TWC served approximately 15.716.1 million residential and business services customers who subscribed to one or more of its video, high-speed data and voice services. During the ninethree months ended September 30, 2015,March 31, 2016, TWC’s revenue increased 3.5%7.2% to approximately $17.6$6.2 billion.

Recent Developments

Charter Merger

On May 23, 2015, TWC entered into an Agreement and Plan of Mergers (the “Charter Merger Agreement”) with Charter Communications, Inc. (“Charter”) and certain of its subsidiaries, pursuant to which the parties will engage in a series of transactions (the “Charter merger”) that will result in the Company and Charter becoming 100% owned subsidiaries of a new public parent company (“New Charter”), on the terms and subject to the conditions set forth in the Charter Merger Agreement.

Upon the consummation of the Charter merger, each share of TWC common stock (other than treasury shares held by the Company and TWC stock held by the Liberty Parties (as defined below)) will be converted into the right to receive, at the option of each stockholder, either (i) $100 in cash and shares of New Charter Class A common stock equivalent to 0.5409 shares of Charter Class A common stock (“Charter common stock”) or (ii) $115 in cash and shares of New Charter Class A common stock equivalent to 0.4562 shares of Charter common stock. Upon the consummation of the Charter merger, subject to certain exceptions, each share of TWC common stock held by Liberty Broadband Corporation or Liberty Interactive Corporation (together, the “Liberty Parties”) will convert only into the right to receive shares of New Charter Class A common stock.

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On September 21, 2015, the Company’s stockholders approved the adoption of the Charter Merger Agreement, and Charter’s stockholders approved, among other things, the adoption of the Charter Merger Agreement and the issuance of New Charter Class A common stock to TWC stockholders in the Charter merger. The Charter merger is subject to regulatory approvals and certain other closing conditions.

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Bright House Networks Transaction

On May 23, 2015, Charter and Advance/Newhouse Partnership (“A/N”) and certain of their affiliates amended an agreement the parties had signed on March 31, 2015 (the “Bright House Networks Agreement”). Under the amended Bright House Networks Agreement, Charter will acquire Bright House Networks, LLC (“Bright House Networks”), subject to, among other conditions, the closing of the Charter merger. Bright House Networks is a 100% owned subsidiary of a partnership (“TWE-A/N”) between A/N and Time Warner Cable Enterprises LLC (“TWCE”), a subsidiary of TWC. The closing of Charter’s acquisition of Bright House Networks is expected to occur concurrently with the closing of the Charter merger. However, the closing of the Charter merger is not conditioned on the closing of the Bright House Networks transaction.

In the Charter Merger Agreement, the Company and TWCE agreed to irrevocably and unconditionally waive their “right of first offer” to acquire the assets of Bright House Networks during the pendency of the Charter merger. This waiver will expire if the Charter Merger Agreement is terminated in accordance with its terms, provided that the Company or any of its Affiliates (as defined in the Charter Merger Agreement) does not, within nine months following such a termination, enter into an agreement or understanding in respect of, or consummate, an alternative acquisition transaction. As discussed further in “—Financial Statement Presentation—Reportable Segments—Other Operations Segment,” TWC receives a fee from A/N for providing Bright House Networks with high-speed data services and certain management functions, which is included in Other Operations revenue.

Termination of Comcast Merger

On April 24, 2015, Comcast Corporation (“Comcast”) and the Company terminated their February 12, 2014 Agreement and Plan of Merger, under which the Company had agreed, on the terms and subject to the conditions set forth therein, to merge with and into a 100% owned subsidiary of Comcast.

Reportable Segments

The Company has three reportable segments: Residential Services, Business Services and Other Operations, which have been determined based on how management evaluates and manages the business. For additional information about the components of each of the Company’s reportable segments, as well as shared functions, refer to “—Financial Statement Presentation—Reportable Segments,” below.

Residential Services Segment

TWC offers video, high-speed data and voice services, as well as security and home management services, to residential customers. As of September 30, 2015,March 31, 2016, the Company served 14.9approximately 15.4 million residential services customers and, during the ninethree months ended September 30, 2015, TWC generated approximately $14.2 billion ofMarch 31, 2016, revenue from the provision of residential services which represented 80.3%increased 5.8% to approximately $4.9 billion, representing 79.7% of TWC’s total revenue.

TWC’s video service provides over 300 channels (including, on average, over 200 high-definition (“HD”) channels) and over 20,00030,000 video-on-demand choices, an increasing subset of which increasingly, consumers can watch on the device of their choosing, both inside and outside the home. TWC’s high-speed data service is available in a range of speed (from up to 2 to up to 300 megabits per second (“Mbps”) downstream), price and monthly consumption (unlimited, 30 gigabyte (“GB”) and 5 GB) levels and, for most high-speed data customers, includes access to a nationwide network of more than 400,000 Cablenearly 500,000 WiFi hotspots along with communications and Internet security features. TWC’s voice service provides unlimited calling throughout the U.S. and its territories and to Canada, Puerto Rico, Mexico, China, Hong Kong, India, Norway and the European Union and Norway, among others, and access to popular features in one simple package. TWC’s IntelligentHome service provides state-of-the-artresidential customers with advanced security and home management technology, taking advantage of TWC’s always-on broadband networktechnology. The Company expects growth in Residential Services revenue in 2016 driven by an increase in customers and around-the-clock security monitoring centers.

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higher revenue per customer.

Residential Services programming costs represent a significant portion of the Company’s operating costs and expenses and are expected to continue to increase, reflecting rate increases on existing programming services and the carriage of new networks.services. TWC expects that its programming costs as a percentage of video revenue will continue to increase, in part due to an increasingly competitive environment.

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Business Services Segment

TWC offers a wide range of business high-speed data, networking, voice, video, hosting and cloud computing services. As of September 30, 2015,March 31, 2016, TWC served 734,000765,000 business customers, including small and medium businesses; large enterprises; government, education and non-profit institutions; and telecommunications carriers. TWC offers businessthese services atto retail and wholesale businesses using its own network infrastructure and third-party infrastructure as required to meet customer needs.

During the ninethree months ended September 30, 2015,March 31, 2016, revenue from the provision of business services increased 16.2%13.4% to $2.4 billion, which represented 13.7%$886 million, representing 14.3% of TWC’s total revenue. The Company expects continued strong growth in Business Services revenue driven by an increase in the number of customers, (the result of continued penetration of buildings currently on its network and investment to connect new buildings to its network) and revenue per customer (due tohigher wholesale access, growing product penetration, demand for higher-priced tiers of service and price increases). Given the large opportunity and TWC’s still modest share in business services, the Company has established a target of growing Business Services to exceed $5 billion in annual revenue by 2018.increases.

Other Operations Segment

TWC’s Other Operations segment principally consists of (i) Time Warner Cable Media (“TWC Media”), the advertising sales arm of TWC; (ii) the Company’s regional sports networks that carry Los Angeles Lakers’ basketball games and other sports programming (Time Warner Cable SportsNet and Time Warner Cable Deportes and, collectively, the “Lakers’ RSNs”); (iii) the Company’s local sports, news and lifestyle channels (e.g., Time Warner Cable News NY1); (iv) other operating revenue and costs, including those derived from A/N and home shopping network-related services; and (v) operating revenue and costs associated with SportsNet LA, a regional sports network carrying the Los Angeles Dodgers’ baseball games and other sports programming. During the ninethree months ended September 30, 2015,March 31, 2016, TWC generated revenue from Other Operations of $1.2 billion.$440 million.

As discussed further below in “—Financial Statement Presentation,” TWC Media sells its video and online advertising inventory to local, regional and national advertising customers and also sells third-party advertising inventory on behalf of other video distributors, including, among others, Verizon Communications Inc.’s (“Verizon”) FiOS, AT&T Inc.’s (“AT&T”) U-verse and DIRECTV and Charter. Advertising revenue generated by TWC Media is cyclical, benefiting in years that include political elections as a result of political candidate and issue-related advertising.

Competition

The operations of each of TWC’s reportable segments face intense competition, both from existing competitors and, as a result of the rapid development of new technologies, services and products, from new entrants.

Residential Services Segment

TWC faces intense competition for residential customers from a variety of alternative communications, information and entertainment delivery sources. TWC competes with companies providing telecommunication services and direct broadcast satellite services as well as overbuilderssources across each of its residential services. Some of these competitors offer a broad range of services with features and functions comparable to those provided by TWC and in bundles similar to those offered by TWC, sometimes including wireless service. Each of TWC’s residential services also faces competition from other companies that provide services on a stand-alone basis. TWC’s residential video service faces competition from direct broadcast satellite services, and increasingly from companies that deliver content to consumers over the Internet.Internet, including in many cases the same networks that supply programming to TWC. TWC’s residential high-speed data service faces competition from wireless Internet providers and direct broadcast satellite services. TWC’s residential voice service faces competition from wireless voice providers, “over-the-top” phone services and other communications alternatives.

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Business Services Segment

TWC faces significantintense competition as to each of its business services offerings. Its business high-speed data, networking and voice services face competition from a variety of telecommunications carriers,providers, including incumbent local telephone companies. TWC’s cell tower backhaul service also faces competition from traditional telephone companies as well as other telecommunications carriers, such as metro and regional fiber-based carriers. TWC’s business video service faces competition from direct broadcast satellite providers. TWC also competes with cloud, hosting and related service providers and application-service providers.

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Other Operations Segment

TWC faces intense competition in itsfor advertising businessrevenue across many different platforms and from a wide range of local and national competitors. CompetitionAdvertising competition has increased and will likely continue to increase as new formats for advertising seek to attract the same advertisers. TWC competes for advertising revenue against, among others, local broadcast stations, national cable and broadcast networks, radio newspapers, magazinesstations, print media and outdoor advertisers, as well as online advertising companies.companies and content providers.

Financial Statement Presentation

Basis of Presentation

Reclassifications

Certain reclassifications have been made to the prior period financial information presented herein to conform to the current year presentation.

Consolidated

Revenue. The Company generates revenue from each of its reportable segments: Residential Services, Business Services and Other Operations, which includes revenue generated by TWC Media, the Lakers’ RSNs, SportsNet LA and other operating revenue, including amounts derived from A/N and home shopping network-related services. Eacheach of the reportable segmentswhich is discussed below under “Reportable Segments.”

Operating costs and expenses

Programming and content. Programming and content costs include (i) programming costs for the Residential Services and Business Services segments and (ii) content costs, which include (a) the content acquisition costs associated with the Lakers’ RSNs and SportsNet LA and (b) other content production costs for the Lakers’ RSNs, SportsNet LA and the Company’s local sports, news and lifestyle channels. Content acquisition costs for the Los Angeles Lakers’ basketball games and Los Angeles Dodgers’ baseball games are recorded as games are exhibited over the applicable season.

Sales and marketing. Sales and marketing costs consist of the costs incurred at the Residential Services, Business Services and Other Operations segments to sell and market the Company’s services. Costs primarily include employee-related and third-party marketing costs (e.g., television, online, print and radio advertising). Employee-related costs primarily include costs associated with retail centers and activities related to direct sales, in-bound sales and retention sales.

Technical operations. Technical operations costs consist of the costs incurred at the Residential Services, Business Services and Other Operations segments associated with the installation, repair and maintenance of the Company’s distribution plant. Costs primarily include employee-related costs and materials costs associated with non-capitalizable activities.

Customer care. Customer care costs consist of the costs incurred at the Residential Services and Business Services segments associated with the Company’s customer service activities. Costs primarily include employee-related costs and outsourced customer care costs.

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Other operating.Other operating costs consist of all other operating costs incurred at the Residential Services, Business Services and Other Operations segments that are not specifically identified above, including Residential Services and Business Services video franchise and other fees. Other operating costs also include operating costs associated with broad “corporate” functions (e.g., accounting and finance, information technology, executive management, legal and human resources). In addition, other operating costs include functions supporting more than one reportable segment that are centrally managed, including costs associated with facilities (e.g., rent, property taxes and utilities), network operations (e.g., employee costs associated with central engineering activities), vehicles and procurement.

Reportable Segments

The Company’s segment results include intercompany transactions related to programming provided to the Residential Services and Business Services segments by the Lakers’ RSNs, SportsNet LA and the Company’s local sports, news and lifestyle channels. These services are reflected as programming expense for the Residential Services and Business Services segments and as revenue for the Other Operations segment and are eliminated in consolidation. Additionally, the operating costs described above that are associated with broad “corporate” functions or functions supporting more than one reportable segment are recorded as shared functions and are not allocated to the reportable segments. As such, the reportable segment results reflect how management views such segments in assessing financial performance and allocating resources and are not necessarily indicative of the results of operations that each segment would have achieved had they operated as stand-alone entities during the periods presented.

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Residential Services Segment

Revenue. Residential Services segment revenue consists of revenue from video, high-speed data, voice and other services offered to residential subscribers. The Company sells video, high-speed data and voice services to residential subscribers separately and in bundled packages at rates lower than if the subscriber purchases each product on an individual basis. Revenue received from subscribers to bundled packages is allocated to each product in a pro-rata manner based on the standalone selling price of each of the respective services.

Operating costs and expenses.. Residential Services segment operating costs and expenses include the operating costs and expenses that management believes are necessary to assess the performance of and allocate resources to the Residential Services segment. Such costs include programming costs, sales and marketing costs, technical operations costs, customer care costs, video franchise and other fees and other operating costs (e.g., high-speed data connectivity costs, voice network costs and bad debt expense). Employee costs directly attributable to the Residential Services segment are included within each operating cost and expense category as applicable. Operating costs and expenses exclude costs and expenses related to “corporate” functions and functions supporting more than one reportable segment that are centrally managed (e.g., facilities, network operations, vehicles and procurement) and are not within the control of segment management.

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Business Services Segment

Revenue. Business Services segment revenue consists of revenue from video, high-speed data, voice, wholesale transport and other services offered to business customers. The Company sells video, high-speed data and voice services to business subscribers separately and in bundled packages, and the revenue is allocated to each product in a pro-rata manner based on the standalone selling price of each of the respective services.

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Operating costs and expenses.. Business Services segment operating costs and expenses include the operating costs and expenses that management believes are necessary to assess the performance of and allocate resources to the Business Services segment. Such costs are consistent with the operating costs and expense categories described above under Residential Services operating costs and expenses. Operating costs and expenses exclude costs and expenses related to “corporate” functions and functions supporting more than one reportable segment that are centrally managed (e.g., facilities, network operations, vehicles and procurement) and are not within the control of segment management.

Other Operations Segment

Revenue

Operating costs and expenses. Other operating costs and expenses primarily include operating costs associated with TWC Media, the Lakers’ RSNs, SportsNet LA and the Company’s local sports, news and lifestyle channels.

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Shared Functions

Operating costs and expenses.. Shared functions operating costs and expenses consist of costs associated with broad “corporate” functions (e.g., accounting and finance, information technology, executive management, legal and human resources) or functions supporting more than one reportable segment that are centrally managed (e.g., facilities, network operations, vehicles and procurement) as well as other activities not attributable to a reportable segment.

Merger-related and restructuring costs.. All merger-related and restructuring costs incurred by the Company are recorded as shared functions.

Use of Operating Income before Depreciation and Amortization

In discussing its segment performance, the Company may use certain measures that are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These measures include Operating Income before Depreciation and Amortization (“OIBDA”), which the Company defines as Operating Income before depreciation of tangible assets and amortization of intangible assets. For additional information regarding the use of segment OIBDA, see Note 109 to the accompanying consolidated financial statements.

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Recent Accounting Standards

See Note 2 to the accompanying consolidated financial statements for accounting standards adopted in 2016 and recently issued accounting standards not yet to be adopted.

RESULTS OF OPERATIONS

Three and Nine Months Ended September 30, 2015March 31, 2016 Compared to Three and Nine Months Ended September 30, 2014March 31, 2015

The following discussion provides an analysis of the Company’s results of operations and should be read in conjunction with the accompanying consolidated statement of operations, as well as the consolidated financial statements and notes thereto and MD&A included in the 20142015 Form 10-K.

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Consolidated Results

The consolidated financial results for the Company for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 were as follows (in millions):

NM—Not meaningful.

Revenue. The increase in revenue for the three and nine months ended September 30, 2015March 31, 2016 was due to increases in revenue at the Residential Services and Business Services segments, partially offset by a decrease at the Other Operations segment.all segments. Revenue by segment is discussed in greater detail below in “Segment Results.”

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Costs and expenses

Operating costs and expenses.The increase in operating costs and expenses for the three and nine months ended September 30, 2015March 31, 2016 was primarily due to increases in programming and employee and maintenance costs, as well as higher content costs associated with SportsNet LA, partially offset by a decline in bad debt expense and, for the nine months ended September 30, 2015, lower marketing expense.

For both the three and nine months ended September 30, 2015, the The increase in employee costs reflects the Company’s continued investments in sales and marketing, technical operations and customer care initiatives, and anas well as a $26 million increase in pension

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expenseemployee medical costs (as a result of $28 million and $81 million, respectively. The Company expects pension expense to increase to approximately $190 millionprior year changes in 2015 from $81 million in 2014.

estimates of previously established employee medical accruals, partially offset by lower claims activity). Operating costs and expenses by segment are discussed in greater detail below in “Segment Results.”

Depreciation.Depreciation for the three and nine months ended September 30, 2015 increased primarily due to the continued investment in customer premise equipment and scalable infrastructure, as well as shorter-lived capitalized software assets.infrastructure.

Merger-related and restructuring costs.Merger-related costs for the three and nine months ended September 30, 2015 and 2014March 31, 2016 were as follows (in millions):

The Company expects to incur additional merger-related costs in connection with the Charter merger through the closing of the merger.

The Company incurred restructuring costs of $3$5 million and $18$2 million for the three and nine months ended September 30,March 31, 2016 and 2015, respectively, and a net reversal of $2 million and costs of $24 million for the three and nine months ended September 30, 2014, respectively, primarily related to employee terminations and other exit costs. The Company expects to incur additional restructuring costs during the remainder of 2015.in 2016.

Operating Income. Operating Income for the three and nine months ended September 30, 2015 decreasedincreased primarily due to growth in revenue, partially offset by higher operating costs and expenses, and depreciation partially offset by growth in revenue and for the nine months ended September 30, 2015, lower merger-related and restructuring costs, as discussed above.

Interest expense.expense, net. The decrease inInterest expense, net, increased slightly due to higher average interest expense for the three and nine months ended September 30, 2015 was impactedrates, partially offset by lower average debt outstanding during the periodsthree months ended March 31, 2016 compared to 2014 and an increase in average interest rates on such debt.

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2015.

Other income, net. Other income, net, detail is shown in the table below (in millions):

Income tax provision.For the three months ended September 30,March 31, 2016 and 2015, and 2014, the Company recorded income tax provisions of $223$312 million and $304 million, respectively. For the nine months ended September 30, 2015 and 2014, the Company recorded income tax provisions of $854 million and $891$288 million, respectively. The effective tax rates were 33.8%38.7% and 37.9%38.6% for the three months ended September 30,March 31, 2016 and 2015, and 2014, respectively, and 38.6% and 37.6% for the nine months ended September 30, 2015 and 2014, respectively.

The income tax provision and effective tax rate for the nine months ended September 30, 2014 include a benefit of $24 million as a result of the passage of the New York State budget during the first quarter of 2014 that, in part, lowers the New York State business tax rate beginning in 2016. Absent the impact of this item, the effective tax rate would have been 38.6% for the nine months ended September 30, 2014.

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Net income attributable to TWC shareholders and net income per common share attributable to TWC common shareholders. Net income attributable to TWC shareholders and net income per common share attributable to TWC common shareholders were as follows (in millions, except per share data):

Net income attributable to TWC shareholders for the three months ended September 30, 2015 decreased primarily due a decrease in Operating Income, partially offset by a decrease in income tax provision.

Net income attributable to TWC shareholders for the nine months ended September 30, 2015 decreased primarily due a decrease in Operating Income, partially offset by an increase in other income, net, which included a gain from the settlement of a Verizon Wireless agency agreement, and a decrease in income tax provision.

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Segment Results

Residential Services. The financial results of the Residential Services segment for the three and nine months ended September 30, 2015 and 2014 were as follows (in millions):

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Selected residential subscriber-related statistics as of September 30,March 31, 2016 and 2015 and 2014 were as follows (in thousands):

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Revenue. Residential Services segment revenue for the three months ended September 30, 2015 increased due to increases in video, high-speed data and voice revenue, partially offset by a decrease in video revenue. Residential Services segment revenue for the nine months ended September 30, 2015 increased due to an increase in high-speed data revenue, partially offset by decreases in video and voice revenue. Eacheach of the revenue categorieswhich is discussed further below.

Average monthly revenue per unit for the Residential Services segment for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 was as follows:

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The major components of residential video revenue for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 were as follows (in millions):

Video. For the three months ended September 30, 2015, the decreaseThe increase in residential video revenue was due to year-over-year declines in video subscribers and average revenue per subscriber. The decrease in average revenue per subscriber was primarily the result of lower programming tier and transactional video-on-demand revenue, partially offset by growth in video equipment rental and premium network revenue.

For the nine months ended September 30, 2015, the decrease in residential video revenue was due to a year-over-year decline in video subscribers, partially offset by an increase in average revenue per subscriber.subscriber and growth in video subscribers. The increase in average revenue per subscriber was primarily the result of growth in video equipment rental and premium network revenue, and higher transactional video-on-demand revenue (due to the May 2015 Mayweather vs. Pacquiao fight), partially offset by lower transactional video-on-demand, programming tier and DVR service revenue.

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High-speed data.Residential high-speed data revenue for the three and nine months ended September 30, 2015 increased due to an increasegrowth in high-speed data subscribers and growthan increase in average revenue per subscriber. The increase in average revenue per subscriber was primarily due to increases in prices and equipment rental charges and a greater percentage of subscribers purchasing higher-priced tiers of service.charges.

Voice.The increase in residential voice revenue for the three months ended September 30, 2015 was due to growth in voice subscribers, partially offset by a decrease in average revenue per subscriber.

The decrease in residential voice revenue for the nine months ended September 30, 2015 was due to a decrease in average revenue per subscriber, partially offset by growth in voice subscribers.

Operating costs and expenses. Operating costs and expenses for the three and nine months ended September 30, 2015 increased primarily due to higher programming, sales and marketing and technical operations and customer care costs, partially offset by lowera decrease in other operating costs. Employee costs (which are included in each category, as applicable) were impacted by increased pension costs of $14 million and $43 million for the three and nine months ended September 30, 2015, respectively.

Selected Residential Services average monthly costs per subscriber for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 were as follows:

Programming. For the three months ended September 30, 2015, theThe increase in programming costs (which include intercompany expense from the Other Operations segment for programming costs associated with the Lakers’ RSNs, SportsNet LA and the Company’s local sports, news and lifestyle channels) was primarily due to contractual rate increases, partially offset by a year-over-year decline in video subscribers.increases.

For the nine months ended September 30, 2015, the increase in programming costs was primarily due to contractual rate increases and the carriage of new networks (including SportsNet LA, which launched on February 25, 2014), partially offset by a year-over-year decline in video subscribers.

Sales and marketing.Sales and marketing costs for the three and nine months ended September 30, 2015 increased primarily due to increased sales-related headcount and higher compensation costs per employee related to the Company’s subscriber growth initiatives, as well as higher marketing costs.

Technical operations costs as a result ofincreased primarily due to increased headcount, higher compensation costs per employee and increased headcount related to the Company’sinstallation-related activities (reflecting subscriber growth initiatives. For the nine months ended September 30, 2015, this increase was partially offset by lower marketing expense.

Technical operations. Technical operations costs for the three and nine months ended September 30, 2015 increased primarily due to higher headcount and increased maintenance costs, reflecting subscriber growth, as well as the Company’s continued investments to improve the customer experience.experience).

Customer care.Customer care costs for the three and nine months ended September 30, 2015 increased primarily due to increased headcount and higher compensation costs per employee and increased headcount, reflecting(reflecting subscriber growth as well asand the Company’s continued investments to improve the customer experience.experience).

Other operating.

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OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Other operating costs for the three and nine months ended September 30, 2015 decreased primarily due to lower bad debt expense, partially offset by increases in a number of other categories.

OIBDA. OIBDA forincreased due to the three and nine months ended September 30, 2015 decreased due toincrease in revenue, partially offset by higher operating costs and expenses, partially offset by the increase in revenue, as discussed above.

TIME WARNER CABLE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Business Services.The financial results of the Business Services segment for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 were as follows (in millions):

TIME WARNER CABLE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Selected business subscriber-related statistics as of September 30,March 31, 2016 and 2015 and 2014 were as follows (in thousands):

TIME WARNER CABLE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION—(Continued)

Revenue. Business services revenue for the three and nine months ended September 30, 2015 increased primarily due to growth in high-speed data and voice subscribers and higher wholesale transport revenue. The growth in wholesale transport revenue included an increase in cell tower backhaul revenue of $8 million and $33 million for the three and nine months ended September 30, 2015, respectively.

Operating costs and expenses. Operating costs and expenses for the three and nine months ended September 30, 2015 increased primarily as a result of increased headcount and higher compensation costs per employee, (including increased pension costs of $5 million and $13 million, respectively) as well as growth in programming, voice and marketing costs.

OIBDA. OIBDA for the three and nine months ended September 30, 2015 increased due to the increase in revenue, partially offset by higher operating costs and expenses, as discussed above.

Other Operations. The financial results of the Other Operations segment for the three and nine months ended September 30,March 31, 2016 and 2015 and 2014 were as follows (in millions):