Hello, and welcome to the Time Warner Cable Fourth Quarter 2013 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Tom Robey, Senior Vice President of Time Warner Cable, Investor Relations. Thank you. You may begin.

Thanks, Candy, and good morning, everyone. Welcome to Time Warner Cable's 2013 fourth quarter and full year earnings conference call. This morning, we issued 2 press releases. One, detailing our 2013 fourth quarter and full year results and the other announcing an increase in our regular quarterly dividend. We also had posted 3 presentations to our IR website. The first, detailing our 2013 fourth quarter and full year results; a second, outlining our 3-year plan; and a third, presenting a side-by-side comparison of Time Warner Cable and Charter Communications on some key metrics. Before we begin, there are several items I need to cover. First, we refer to certain non-GAAP measures. Definitions and schedules setting out reconciliations of these historical non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release and trending schedules. Second, today's conference call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to various factors, which are discussed in detail in our SEC filings. Time Warner Cable is under no obligation to and, in fact, expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Third, the quarterly growth rates disclosed in this conference call are on a year-over-year basis, unless otherwise noted as being sequential. And finally, today's press releases, trending schedules, presentation slides and related reconciliation schedules are available on our website at twc.com/investors. With that covered, I'll thank you, and turn the call over to Rob. Rob?

Thanks, Tom, and good morning, everyone. Let me start my first call as Time Warner Cable's CEO by saying that I am honored and thrilled to lead this great company, the premier pure-play cable company in the United States. I couldn't be more enthusiastic about our future, and I look forward to building on our long tradition of delivering great experiences to our 15 million customers and maximizing value for our shareholders. In a few moments, I'll spend some time on our customer-focused view of the world but, before I do, I want to reconfirm our long-standing commitment to you, our shareholders. Since our separation from Time Warner a little less than 5 years ago, Time Warner Cable has generated total shareholder returns of over 450%, far exceeding the indices. We have focused on building shareholder value, both through operations and through capital allocation. I want to make it very clear this morning that as CEO, I remain totally committed to maximizing shareholder value. Clearly, today's call differs a bit from the typical earnings call. As all of you know, 17 days ago, Charter Communications made a public unsolicited bid to acquire our company for $132.50 per share. This was the third in a series of bids that our board has unanimously rejected as not in the best interest of our shareholders. As I said at the time and I'll say it again today, Charter's most recent bid to acquire Time Warner Cable substantially undervalues our company. The headline value of the Charter proposal equates to roughly 7x our forward adjusted OIBDA and is substantially below the multiples at which recent cable transactions have been completed. Moreover, as we'll make clear this morning, the value offered by Charter falls well short of the value that we can create by executing…

Thanks, Rob, and good morning, everyone. Process-wise, I'm going to limit my initial remarks to Q4 performance. I will then come back later in the call and walk you through our 3-year operating plan, including a detailed discussion of 2014 and related guidance. Let me walk you through the key Q4 highlights. I will start with residential subscriber performance. As I noted in my remarks at an investor conference a few weeks ago, about halfway through the fourth quarter, our residential subscriber performance began to improve meaningfully, with HSD and phone net adds of 58,000 and 18,000 in December, respectively, and our video losses cut meaningfully compared to earlier in the quarter. I'm happy to report that this year-over-year trend improvement has accelerated into January. On the residential side for January, we added approximately 25,000 customer relationships, which compares to a loss of 28,000 customer relationships in January 2013. The improved customer relationship trends translated into PSUs being up over 100,000 year-over-year for the month of January, making this the best January from a residential subscriber perspective in the last 5 years. I'm also confident that this momentum will continue. So what has caused this momentum shift and why am I confident that it will continue? Put simply, the initiatives we invested in last year are beginning to take hold. As a result, we are seeing a combination of reduced churn from the meaningful improvements in our retention efforts and we're also seeing improved connect and migration trends as we continue to enhance our marketing efforts to both new and existing customers. We are currently executing on a number of very specific initiatives that I'm confident, as we move into 2014, will continue to improve our results. For example, the residential team is currently executing very specific plans to improve…

Thanks, Artie. I'm really encouraged by the progress we made in Q4 and the significantly better trends we're driving as we enter 2014. Of course, there's much more work to do, which leads me to my thoughts on the future of our company. Given the circumstances, we thought it was important to spend some time this morning on Time Warner Cable's 3-year operating plan. A plan that we worked -- we've been working on for quite some time and that we presented to our Board back in December as part of our annual budget process. Before we turn to the plan itself, though, I'd like to start with some broad principles. Our success going forward is dependent on some very basic elements: great people, a winning culture, a solid operating plan and a relentless focus on execution. As a result, I've spent the time, leading up to my becoming CEO, focusing on these foundational elements. I firmly believe that we are only as good as our people; that means the right people in the right roles. Early in 2013, we reorganized our management structure to better align our organization around our customers, facilitate standardized business practices, streamline decision-making, enhance efficiency and drive accountability. Organizational change is never easy, but the really hard work is now behind us, and we're seeing the benefits of the new, more centralized structure. Starting in May, we began to fill in key gaps within our leadership team with world-class talent from outside the company. First, adding Phil Meeks to lead our Business Services team, then recruiting Artie Minson as CFO and, most recently, bringing in Dinni Jain as Chief Operating Officer. Let me say just a couple of words about Dinni, who I believe is well known to many of you. I couldn't be more…

Thanks, Rob, and good morning, everyone. Though my official start date was only a couple of weeks ago, my involvement with the team here began shortly after I was announced in early December. Since then, I've spent a lot of time getting to know the company. And overall, what I've discovered has pleasantly surprised me. My primary objective today is to review some of what I've learned and why it's changed my sense of the opportunity here. In order to do that well, let me start with a bit of background. I've been in the cable industry for 20 years, splitting that time almost evenly between 2 companies. A company formerly called NTL based in the U.K. and Insight Communications here in the U.S. I was part of NTL from day one, as the first employee in a company which eventually grew to almost 30,000 employees throughout the U.K. and Europe. Our sales and marketing playbook at NTL allowed us to grow to over 50% market share in our early markets, whereas our peers rarely even got to 30%. And with intensive focus on driving customer satisfaction through reducing error rates and call volume, we also created a new standard for low churn in an industry in which churn hovered around 3% per month. For more than 4 years, our churn rates rarely broke 1%. For an almost 7-year period, our growth was spectacular, fueled primarily by our abilities in operations. During that time, we consolidated much of the U.K. cable industry. I led the operational due diligence on 9 of the companies we acquired and I help integrate them after the deal was closed. Those experiences taught me how to quickly diagnose issues within cable companies and, more importantly, how to fix them. Over and over again, we hear…

Thanks, Dinni, and good morning, everyone. As Rob mentioned earlier on the call, I joined TWC 8 months ago after spending the past 5 years running Cox Business and, prior to that, 18 years at MCI. I share this with you because, after spending virtually my entire career in the commercial telecom industry, I have a strong appreciation for the market opportunity available to us. As you may recall, MCI had a reputation for speed and aggressiveness in the marketplace. As a result of that experience, I have a high propensity for moving quickly and will not waste a single day that might help us realize our potential. It is important that I instill a deeper sense of urgency and a deeper culture of action that moves at greater velocity, which I define as speed plus focus. Business services is a high-growth line of business with a very compelling value proposition. We offer flexible and affordable products, delivered by dependable local teams via our reliable next-generation, fiber-rich network and data centers. Without question, a network with higher reliability and availability is critical to the businesses we serve and we make significant investments to properly scale and fortify the network ahead of customer demand. We offer best-in-class products, bundled to offer value to our business customers. These products span a wide range, including Internet, data, voice, video and cloud services, with solutions and pricing that is appropriately targeted for the segments we serve. Best-in-class products, network and reach through our local people and presence, combined with a winning culture, is how we will continue to succeed. My objectives for Time Warner Cable business services are very clear: exceed $5 billion in annual revenue by 2018 while simultaneously building the scale that sets the stage for many more years of profitable revenue…

Thanks, Phil. Let me start by spending a few minutes on our most recent 3-year business planning process, which we began over the summer. We completed the process about a month ago with the presentation that we share with our Board of Directors, the details of which are included in the TWC operational and financial plan slides we posted to our website this morning. I'm not going to go slide by slide, but if you -- as you have heard this morning, our key operating initiatives include the following: one, investing to improve the overall residential customer experience; two, continuing to fund growth investments in business services; and three, continuing to pursue operating efficiencies in order to offset specific cost pressures. I believe the plan I will share with you today accomplishes all 3 of those operating initiatives while, at the same time, providing for strong growth over the plan period in revenue, adjusted OIBDA and free cash flow and continue the dividend growth and a continued healthy stock buyback program. I believe this will drive meaningful stock appreciation, all while maintaining a solid investment-grade rating. Let me start here by saying there isn't a patent on how to run a cable company or any company well. It's really all about a relentless focus on execution, as you continually invest to improve your products and services, which leads to happy and loyal customers. So as we entered the 3-year planning process, we knew there were areas where we wanted to invest to achieve our long-term operating goals. I will start with our network as it is our greatest physical asset. Over the next 3 years, we will invest to harden the plan to improve overall reliability and quality of service. As Rob noted, we will also invest meaningfully in the…

Thanks, Artie. Candy, we're ready to begin the Q&A portion of the conference call. [Operator Instructions].

Our first question is from Ben Swinburne, Morgan Stanley.

I'll limit myself to one, focus on the improvement that you expect on the residential side. Rob, you mentioned more volume than rate. So I wanted to just ask if you could sort of dive into that a little bit more? One of the ways that the industry has been driving better revenue growth is through higher ARPU, particularly putting more equipment in the home and attaching revenue to it. You noted that in some of your presentations around additional set-tops, additional D-to-As. Is that something that you think doesn't make sense going forward for the company? Do you think that's a source of upside to your plan? Maybe speak about how you look at the revenue growth mix over the next 3 years and the potential around pricing?

Sure, Ben. I'll start, and I'll ask Artie to chime in. Look, we've had -- we've actually had tremendous success over the course of 2013 in driving monthly recurring revenue from our residential customers. In particular, we've had significant increases in monthly recurring revenue per new connect customer. So I think we've done quite well on that front. And that continues to be a focus. Quality of subs and revenue generated by individual subs will always be important. What I've said repeatedly is that we like to see the source of our revenue growth become more balanced. And we haven't generated the kind of volumes that we ideally like to see. So what we're talking about today is a refocusing on generating volumes through better retention, which I think we're well on our way to doing, and amping up the connect machine. So I don't want to suggest that it's an either/or, but I think as the recent past, we've been very dependent upon rate and incremental revenue per customer, and I'd like to balance that out with greater volume. Artie, you want to chime in?

Sure. Ben, what I would add about the plan is, obviously, on its face, it's more of a market share plan. And Rob talked about the growth we're expecting, customer relationships. But let me talk about places in the plan that I think are conservative because I'm a big believer in having multiple paths to achieve your overall operating and financial plan. So while we have, obviously, meaningful aspirations in growing customer relationships, I would argue that the PSUs per customer relationship we have in the plan are pretty conservative. And we're also pretty conservative in the plan on the rate side because it's a market share-based plan. I also think expenses, and Tom handed me a note that said that I may have missed a key word in my script when I noted that non-programming, non-business service expenses would grow. It should have said low single-digits; I think I just said single digits. And I will tell you, expenses are going to be a big focus for us in the plan. To put a finer point on expenses, non-programming, non-business services are going to grow in about the 2% range over the plan period. Now you -- we pick up about 1 point because of the reduction in telephony costs so, absent that, it's 3% growth. And you saw this quarter that we continue to reduce year-over-year growth and operating expenses, so that will be a place that we'll be particularly focused on through the plan period and I'd hope to do, frankly, a little bit better than that. In terms of revenue from going all digital and rolling out some of the new devices, we do have some of that in the plan. But I would -- it's pretty de minimis.

Next question, Jessica Reif Cohen, Bank of America Merrill Lynch.

Here's my long one question. So on the cloud-based guide, you gave guidance of $6 million by year-end '14, which is just about double what you had at the end of fourth quarter. I'm just wondering why -- I think you started rolling these out in Q4, can you do better? Is there is a gating factor? And what is the expected impact from these guides because they're so much better than anything that we've seen as customers in the past. So if you could just elaborate on what you expect or what you're seeing in terms of churn and usage and how it drives revenue? And my second part of my first question is what are you seeing in terms of overbuild activity in 2013 and expectations for '14? I know Comcast had mentioned that there were 2.3 million new homes built by telcos in 2013. I'm just -- if you could elaborate on that, that would be great.

Sure. So first, with the cloud-based guide, Jessica, it's -- this is not a pacing issue. The guide works on -- potentially could work on roughly 6 million of our set-top boxes, so we will be fully rolled out. It's not that we can't do it faster. That's the total number of boxes that the new cloud-based guide can work on. One of the requirements is that, essentially, they have a cable modem in them and some of the older boxes just don't have that cable capability to deliver the metadata from the cloud. So actually, I expect to be rolled out to the full 6 million boxes relatively early in the new year. In terms of impact, a little too early to tell. We really haven't heavily marketed the new guide and let people -- let customers know about it. Again, part of what we're doing here is trying to make sure that we have a more fulsome, complete rollout before we make a lot of noise about it. But I totally agree with you. It is light-years ahead of anything we've delivered before. In particular, the VOD portal, with the terrific box art and the advanced search capability, are head and shoulders above the prior experience. And ultimately, what we expect is that it will just increase the overall attractiveness of our video offering and also should allow for greater discoverability of our VOD offerings, and I would hope an uptick in transactional VOD. But it's a little early to tell on both of those, although I'm confident that that's where we're headed. In terms of overbuild activity, if you look at U-verse, I think we're now at roughly 28% overbuild of our entire footprint and, on the FiOS side, about 13%. The U-verse growth is a little bit faster, FiOS has been fairly static in that 11%, 12%, 13% range for some time. It's very hard to judge how many of the FiOS homes that are built to but not yet marketed are in our footprint. I suspect there are some in New York City, although Staten Island is virtually completely overbuilt at this point, so it would be Manhattan primarily where additional overbuild would occur. We've assumed kind of current course for the next year and then it flattens out.

Rob, just follow up on the VOD, on the new guides. Are you planning to offer electronic sell-through because we've heard terrific feedback from the studios? And what does it do? What do the new guides do for targeted advertising?

Yes. So on electronic sell-through, certainly, some of our peers have embarked on that. And it sounds like a very interesting opportunity, which we will certainly be evaluating. It's -- we can do it on our new platforms. So it's something we're definitely thinking about. In terms of targeted advertising, look, the primary developments we've made advances on in the targeted advertising realm actually are independent of the new guide, and the key area is our ability to dynamically insert ads in VOD content. And we've made great strides in that, cooperating with our fellow partners in Canoe. And it's a long time coming, but it's now a reality. And we have an increasing number of programmers who are actually dynamically inserting ads. It's generating incremental ad dollars for them, but it's also encouraging them to make more content available on VOD, which makes our platform better. So I think it's good all the way around.

Next question, Richard Greenfield, BTIG.

When you think about the strategic plan, it seems like a big chunk of it for 2014 is the increase in CapEx to accelerate your growth, both in subscribers as well as retaining current subscribers. And just wondering, how did you come up with that level of acceleration? It seems like a lot of what Rutledge, Moffat and Malone want is a dramatically faster acceleration in CapEx to drive even faster EBITDA growth, more likely like in '15 or '16 from that '14 spend. So I guess it's a long-winded way of saying why did you not pick $4.7 billion of CapEx or $5.7 billion of CapEx this year to do some of this even faster than you're currently doing it? Would love to just hear how you think about that.

Yes. Let me start and, again, Artie will jump in. I think it's important to level set here. The plan that some of our other cable peers are dealing with is fundamentally different from our -- the state of our plan today. We actually invested lots of capital over a multi-year period, some number of years ago, to implement switched digital video, which actually gave us the ability to deliver industry-leading numbers of HD channels. So our video product really is in the sense that we long ago freed up bandwidth to deliver HD channels, kind of state-of-the-art. The urgency of moving to All Digital, which is the primary capital spend that I think Charter is advocating, it just plays a different role for us. Over time, going all digital makes sense because freeing up spectrum that's currently utilized for the delivery of analog video, so that we can use it for faster HD, HSD speeds, makes a lot of sense. But it's not the same level of urgency in that we already have a competitive HSD product, which is only going to get better. But on the video side, we're well along. Then there are just the practical limitations to how much capital you can spend in any given year. Sure, we could have chosen a higher number, but you need actual human beings to implement the work and you want to get it right. Our primary objective in rolling out TWC Max is to deliver a better customer experience and we wanted to do it in a way that concentrated our efforts in a given city so that the experience actually was different as opposed to kind of spreading out our efforts across the footprint. So the theory here is focus, get it right in New York City and L.A. and then we'll move on from there. And frankly, as we learn, it may be the case that we feel like we can accelerate the rollout in the rest of the footprint. Artie, you want to comment?

Yes. The only thing I would add, Rich, is financially, our plan, unlike some others, is not based on spending a lot of upfront money on putting a 2-way set-top box on every outlet and then driving revenue and OIBDA growth off of those revenue streams. It's, actually, as we've laid out today, much more of a market share plan. So I think it very much ties into our overall operating strategy. And I think that's really where we started from. We started from an operating plan and the financial plan was an output from that. And so I feel very good about where we stand with that.

And then just a follow-up because I think this is important. In terms of setting lofty goals, how is your compensation tied to hitting the targets you put in for both '14 and '16, meaning if you fail to reach these, does it directly impact everyone on those conference calls on your end's compensation if you don't live up to '14 and '16 targets?

Yes. Well, Rich, we have a very variable heavy compensation structure, both in the form of variable cash bonuses on an annual basis and also the proportion of our total compensation that is in equity which, I think, is reflective of our ability to hit these goals. What's unique about our compensation structure this year is that it's not exclusively based on hitting financial targets, which generally has been in the past, it is based on financial targets, yes. So in other words, we have to hit these '14 numbers to get paid. But it also has components that are subscriber metrics, customer performance, customer satisfaction metrics, rollout of the Max program base metrics, so there are an awful lot of component parts here that we must deliver on in order to earn our variable compensation.

And Rich, the only thing I would add, on a personal level, is I actually have a reputation for being a pretty conservative budgeter. People around here have heard me say often, in all my time as CFO, "I've never missed the budget." And I feel pretty good about where we stand right now.

Next question is Laura Martin of Needham & Company. Laura A. Martin - Needham & Company, LLC, Research Division: A couple -- I want to focus on cost, Artie, a little bit here. So Artie, at AOL, when you were the CFO, you doubled the corporate margins and then, when they gave you the COO title, you actually really, really slowed the demise of the subscription business. So my question to you, one of the things you did there really well is you guys were investing in the business, that you really cut costs to help pay for that. So I'm interested -- thanks for the guidance by the way on many of the line items -- but on programming costs, one of the really biggest negatives for your sub growth was that Time Warner/CBS brouhaha. And you just gave us guidance on programming costs, up low single-digits. I guess my question is can you really achieve those kind of low growth numbers in the programming side? And are you -- should we expect you to be throwing off more unaffiliated channels like DIRECTV is doing with weather right now in order to keep programming costs? And then related to that, any other areas that we should expect to see you cutting costs out to fund some of this extra investment in business services in the residential product?

Sure. Let me hit sort of my overall view on expenses. And as I said in my remarks, programming costs are going to continue to be an external pressure on us. And our best expectation at this point is they will increase double-digits next year, and we have an expectation in low double-digits and an expectation over the plan period that, that trend will continue. And not to say we're not going to fight really hard to provide our customers the best value we can and -- but I think what's important when you build the plan is sort of just to build it on based on the reality you're facing, and that's what we're facing on the programming front these days. We also know, frankly, that there are areas we want to invest. Business services, we have invested meaningfully in the sales force and we're going to continue to invest meaningfully in the sales force. And the residential team, as they roll out Max, we know there are areas that they wanted to continue to invest in, whether it was on the care or the tech ops side. So with that as reality, what, really, we have to do is take a step back and look at all other expenses. And I think what you saw this quarter, and you're going to -- should expect to see more of this, we did a meaningful reorganization. We basically eliminated about 1,000 noncustomer-facing positions, and that should provide about a $75 million annual run rate benefit. And costs are going to continue to be a focus for us, but it'll be a balance between areas we know we want to invest in to grow the business and then doing the best we can to, frankly, eliminate those noncustomer-facing costs that we think we can be more efficient in. So that's going to be a way of life here. I think the entire organization is very focused on it, and I'm personally very focused on it.

Next question is Amy Yong, Macquarie Capital.

I just have a really quick question and clarification on the 1 million residential relationships that you plan on adding over the next few years. Can you just talk about what that means in terms of different DMAs and, I guess, the breakdown between more competitive footprints like New York and L.A.?

Well, Amy, I can -- this builds on a challenge that I talked about on our Q3 call, which was that I challenged the team to win back 0.5 million high-speed data customers from DSL over the subsequent 18-month period, now 15-month period. And we're making good progress on that front. The composition of subs, of customer relationships is a mix. Although admittedly, it is as it -- per our plan, pretty heavy on single plays relative to the past, and that's because of the power we think we have on the HSD front. Artie mentioned that that's a conservative assumption in the plan and we sure like to see us having a higher bundled results than what the plan has, and I think that's doable. So with HSD as a big driver, the DSL markets, the non-fiber overbuild markets, are the most significant contributor to what we hope to achieve. But our game plan is to go full speed ahead in all markets.

And the only thing I would add there is -- one of the ways we look at that number is if you look at 2013, we had about 500,000 incremental passings. So if you assume that's in the zone for the next few years, we, obviously, take a look at markets, given demographic growth are getting more passings growth. And so we do expect -- obviously, right now, Texas is red-hot, so that's going to be a place we look to. So passings is going to play a part in getting those customer relationships.

Next question is Bryan Kraft, Evercore.

Rob or Dinni, can you talk about what you need to do to meaningfully improve the service levels and reliability in New York City, and how that fits into the operating plan?

Sure. Look, I think that New York City is kind of representative of the rest of the footprint. I think it starts with reliability, making sure the products work because the best form of customer service is that the customer doesn't have to reach out to us in the first instance for an issue. So we're really emphasizing improving the quality of the plant and the actual in-home customer experience. It also extends to ensuring that CPE is both functional, but also in spec, and we're going through our process of ensuring that all of our CPE is appropriately responding in the network. So it starts there. And then it goes to a very deliberate focus on executing in call centers and amongst our texts to get the problem solved right the first time to eliminating call volume that we create for ourselves, and Dinni will talk about it, and make life easier for customers in how they interact with us. So Dinni, maybe you can add a little bit?

Yes. I mean, I think that Rob said all of the major things. I'd just highlight one thing in particular that he was talking about. Within New York City, we know exactly why customers call us. We know the things that are really bothering them the most. And now it's incumbent upon us to just make sure that we get those things prioritized very clearly and start taking them off one by one. And I think that it's kind of a boring answer but, at the end of the day, it's that boring type of execution that delivers better and better customer service.

So there's nothing unique to New York City in terms of hardening the plans that is uniquely challenging because of the buildings in Manhattan or anything?

There really isn't. We probably talked about this in the past. There, historically, have been issues of relating to older in-building wiring in New York City. But by and large, we've been methodically going through the New York City, the Manhattan footprint, and accomplishing rewiring in buildings where it's necessary. It actually does have the effect of meaningfully reducing customer issues and trouble calls. And as necessary, we'll continue to do that. But it's not -- that's not a new -- it's a not a new function for us. We've historically done it on a regular basis.

Next question, Doug Mitchelson, Deutsche Bank.

Rob, 2 questions on the long range plan. And not to oversimplify the plan, but it was mentioned earlier the focus is to deliver market share gains partly by spending more on CapEx, right? So first, your competitors are now standing still, they're all spending more as well. And I'm sure it is, but is that accommodating your plan that the market is not static? What gives you confidence the pot of gold will be there at the end of the rainbow?

Yes. Of course, we're -- when we contemplate our plan, we assume that all of our competitors will continue to strive to win customers just like we are. But we feel confident that one, we can stay ahead of them; and two, a place where everybody has talked for a long time but not succeeded is improving that customer service experience, and we really think that that's an opportunity to differentiate ourselves. And try as they may, we just don't think the other guys are going to get there. So we feel very good about our ability to deliver a better customer experience.

The second part of it is where will the market share gains come from? So when you segment the marketplace, where are the soft spots? Is it the high end, the low end, the middle? Is it -- do you have to win better everywhere?

I think there are opportunities everywhere. But again, I always point to some -- to say low-hanging fruit maybe trivializes the effort that's going to go into executing on it, but I continue to see a huge opportunity in our video-only base, who I think we can upsell to video HSD given the superiority of our HSD product. We made some good strides upselling video-onlys this past quarter. I think we added something like 100,000 -- we've migrated something like 100,000 customers from video-only to video Internet, doubles and triples. And we'll continue to seize that opportunity. And then generally, in DSL markets, I continue to believe that our share ought to be much higher than it is today on HSD.

And Doug, the only thing I would add is one of the reasons we added a little bit of color today on the connect and disconnect is just to give a sense in the plan of how it was built because what we expect to see over the next few years in the plan is continued churn improvements, and that will happen as a result of having better products and services and better reliability. And that becomes self-fulfilling and helps on the connect side over time with those better products, with the rollout of our new branding. So as I've said, 5% improvements in the connects and disconnects can have really meaningful impact on the net add numbers. And I think with that investment, that's a very reasonable assumption.

Well -- and I guess where I was going, we'll get more details on future calls. But we all understand how you attack the high end and the middle of the market, but the low end is the area where I think it could be really interesting if you could figure out something economical. And if you're going to gain 1 million customers, right, it has to be beyond just the better churn. So...

Doug, I certainly agree with that. And we've been, I think, industry-leading in terms of our focus on segmenting our potential customer base. We had great success in Q4 with our $14.95, 2-buy-1 HSD service that was designed to accomplish just what you described, which is hit a portion of the market that was particularly price-sensitive. And that was fairly statically connected to their DSL subscriptions. We knew that we had to deliver an affordable, superior offering to what DSL was offering in order to jar them loose, and I think we're making great strides there. So I think you could expect to continue to see us do that type of thing.

Next question, Frank Louthan of Raymond James. Frank G. Louthan - Raymond James & Associates, Inc., Research Division: So looking at the long-term plan here, I see a couple of things make some changes to some outside plant and equipment and some major cultural changes, that in my observation of network industries can take you 2- to 3-year kind of a period. Looks like you're targeting and doing this a little bit faster. What sort of confidence do you have that you can sort of realistically hit those goals and make those changes within an 18- to 24-month period and it won't stretch out longer into 2016, 2017?

Yes. Frank, I guess, I would very simply start by saying I feel very good about the plan. I think we're realistic about which changes take effect when. So largely, the improvements we're going to see in 2014 in subscriber performance are very much driven by building on the momentum we've got on the acquisition and retention side already underway. The improvements in customer experience clearly takes some time to sink in to have an impact on overall subscriber trends. But that's essentially what we've built into the plan. We contemplate that, that will take a little bit of time to kick in. And that's why you see stabilization of residential customer relationships in 2014, and then you really start to see growth in '15 and '16 when the benefits of our acquisition retention strategies, together with really improved customer experience, start to take hold.

The only thing I would add, Frank, is when you break it down into its component parts, the incremental spending, I think it's very manageable and we have very exact plans around what we're doing. If you take the incremental $500 million of CPE -- $500 million of capital this year, it breaks down roughly CPE up $250 million. About $100 million of that is in video, about $150 million in HSD and there are specific projects and work streams around that. You then have about $150 million increase in scalable infrastructure as we continue to invest in the plan to increase HSD speeds and, again, very discrete projects with very specific work plans around that. The only other thing I would add, too, is just organizationally, I think Dinni noted, all the heavy lifting has been done. And so really, the teams are set up well and very organized to execute. Frank G. Louthan - Raymond James & Associates, Inc., Research Division: So is the equipment and plant impacts were felt first and then the cultural change, then your organization kind of following up a little later to finish this off?

I wouldn't say that. I think cultural change clearly requires an evolution. It starts with the tone that's set from the senior leadership team and I think we're well along on accomplishing that. And that'll continue to permeate the organization over time. I wouldn't set it up as plan first, culture follows. This is something that is all taking place essentially simultaneously.

Next question, Craig Moffett, MoffettNathanson.

First, Dinni, congratulations, and Rob, congratulations on officially taking the new role. I wanted to ask about usage-based pricing and your broadband pricing model for a minute. I think you and John Malone have both articulated a view that there's opportunities to move toward sort of more transparent pricing of transport, if you will. But my sense is you've always preferred a more usage-based pricing model and the Malone model seems to be more focused on a two-sided market and charging. In the wake of Verizon, can you give us some thoughts on, now that you're in your new tier, how do you think that's going to play out and how you think Time Warner Cable is going to lead in that area?

Yes. Let me start by addressing the Verizon decision. I think it's -- at this point, the outcome of the Verizon decision is not going to affect the policy approach that we take towards HSD and HSD pricing. We've never had any interest in blocking or discriminating against any particular content. We're really about delivering the best possible HSD customer experience. So the -- to the extent that the FCC's blocking and nondiscrimination rules were struck down, that's not going to change the way we behave. Our usage-based pricing view has always been that we think that it's an elegant economic model to have customers who use more, pay more, and not have customers who are light users have to subsidize the use of heavy users. And as a result, we felt strongly that it was important for us to get usage-based offerings into the market. And we now have a 5-gigabyte tier and a 30-gigabyte tier offered across our footprint. At the same time, as we felt those models make sense, we also think that an unlimited offering is incredibly attractive to customers. And I think customers have spoken with their actions because, still, the vast, vast majority of our customers take the unlimited offering. In fact, the uptake of our usage-based here is still very small. Will that always be the case? Might it differ as pricing differentials between unlimited and usage-based tiers evolve? Sure, it might. I think our -- we view our mandate as to provide customers with a whole lot of choice. So I expect we'll continue to pursue both models. The idea of charging content companies for some preferential access or for not having bits counted in a lot of the AT&T Wireless sort of 800-number analog, I think it's early to say how all that will play out and whether or not that will pass muster from whatever the FCC ends up doing post the Verizon decision. I think we'll watch those models closely and see where it goes.

Does your guidance that you gave today include any meaningful component of usage-based fees from broadband consumption?

So remember, our view on usage-based tiers has really never been about that being a significant driver of ARPU. We've always viewed it as an opportunity to do a better job at target pricing or segmenting our markets so that we could charge light users a more affordable price and not force them to subsidize heavy users. So to the extent that there were benefits on the revenue side, we always thought that they would come from having happier customers where the price-value equation was more synced up and, therefore, it would create a more stable customer base and less churn. We really didn't focus on this notion of having overcharges because our theory has been that we would always offer an unlimited tier, and then customers who use a lot would always opt for the unlimited tier.

Our final question is from Vijay Jayant, ISI Group.

Rob, you presented your long-term plan today. But this -- with that in the context, is Time Warner not interested in engaging with Charter at all on a transaction? Or is there like a level that could sort of come out in a win-win transaction if you actually did engage? And just generally, you talked about $160 value. In your mind, is that where you think the stock should trade today based on your long range plan or is that 3 years out?

Vijay, I'm going to repeat myself, which is we're in the business of maximizing shareholder value. We have said that if, in fact, an offer were presented that exceeds the value that we think we can create by operating the company pursuant to our operating plan ourselves, we would be willing to engage. We said that the price that it would take to transact would be $160, and this is specific to Charter, $100 in cash, $60 in Charter stock. And importantly, the stock component protected by a 20% symmetrical collar because we have concerns about the way Charter stock would trade between signing and closing. So I'm not telling you anything new, but that's a firm position. What I think, hopefully became abundantly clear today, is that we feel very good about our ability to run this business and we think we can create a whole lot of value for shareholders. I'm not going to comment on day-to-day stock trading prices, but we feel very good about our ability to create value at this company.

Thanks, Vijay.

Okay. Thanks, everybody. We certainly covered a lot of ground this morning, but before we wrap up, I just want to leave you with some final thoughts. First, the residential business turnaround is well underway. We're committed to enhancing the customer experience, which will drive significant subscriber growth which, in turn, will accelerate our residential revenue. Second, the robust in profitable revenue growth in business services will continue for years to come. We will continue to invest in this opportunity and we will make this a very large profitable business. And third, even with the investment required to refuel the revitalization of residential and the continued strong growth of business services, we still have the firepower to engage in opportunistic M&A and return very significant amounts of capital to our shareholders. We hope you've gotten a sense of the talent, focus and passion we have on the team. And I know I speak from all 52,000 Time Warner Cable employees when I say that I'm confident that our best days are ahead of us. Thank you, and we look forward to talking to you again soon.

Thanks, Rob. And to give everyone a little advanced notice, Time Warner Cable's next quarterly earnings conference call, which will reflect our first quarter 2014 results, will be held on Thursday, April 24 at 8:30 a.m. Eastern Time. Thanks for joining us.

Thank you for your participation. That does conclude today's conference call. You may disconnect at this time.