TIME WARNER [LOGO] TELECOM
Time Warner Telecom
Investor Relations Presentation
November 1, 2000
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Safe Harbor Statement
"Statements made during today's presentation may include certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on management's
current expectations and are naturally subject to uncertainty and changes in
circumstances. Actual results may vary materially from the expectations
contained herein due to changes in economic, business, competitive and/or
regulatory factors. More detailed information about those factors is set forth
in our most recent quarterly report and other filings with the Securities and
Exchange Commission.
Time Warner Telecom Inc. is under no obligation, and expressly disclaims any
obligation, to update or alter its forward-looking statements whether as a
result of new information, future events or otherwise."
Time Warner [Logo] Telecom
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TIME WARNER [LOGO] TELECOM
Larissa Herda
President & CEO
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Overview
[] Our perspective
[] Our plan
[] Our network
[] Our opportunity
[] Our performance
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Our Perspective
[] Market opportunity
[] Sound business plan
[] Execution
[] Focus
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Our Plan
[] Fiber-based-to end user
[] Focus on quality
[] Leverage infrastructure
[] Broad product suite
[] Medium/large customer focus
[] Diverse customer base
[] Make money
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Combined Markets with National IP Network
[Graphic of Map Omitted]
Seattle o
o Spokane
Portland/ o
Vancouver Albany
National Rochester o Manhattan (NY)
Operations Minneapolis o o Binghamton o o
Center o Boise Milwaukee o o Northern New Jersey
Chicago o o Columbus
o Sacramento Oakland Dayton o
San Francisco o o o Indianapolis o o
o Fresno Salt Lake City o Cincinnati Greenboro
San Luis Obispo o Bakersfield Denver o Raleigh
Santa Barbara o o National Operations Center Charlotte o o
Los Angeles o o o o o Fayetteville
Orange County o Las Vegas o Albuquerque Memphis Columbia
San Diego o o Phoenix o Atlanta
o o Dallas
Tucson Austin o o Orlando
San Antonio o o Houston Tampa o
o Honolulu
Legend
o TWTC Markets o GST Acquired Market --- Combined --- National IP Network
o Planned 2000 o No Local Fiber Regional Networks
o Planned 2001
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[Graphic of Map Omitted]
North Carolina Fiber Rings
Winston-Salem
Greensboro
Durham
Raleigh
Route Miles:
1,608
Charlotte
Buildings Fayetteville
* on-fiber-net
459
* Type II
837
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[Graphic of Map Omitted]
Raleigh-Durham Fiber
[Graphic of Map Omitted
Durham
Raleigh
Chapel Hill
Research
Route miles: Triangle
587 Park
TWTC Fiber Network
Highways
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[Graphic of Map Omitted]
Raleigh-Durham Building Locations
Durham
Chapel Hill Raleigh
Research
Triangle
Park
Buildings:
*on-fiber-net:
149 TWTC Active Buildings
*Type II: TWTC Fiber Network
321 Highways
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[Graphic of Map Omitted]
Metro Area Optical Network Design
TWTC
National IP
Backbone
Customer Type II
Distribution Customer
Ring ("off-net")
TWTC
Central Office
Network ILEC
Backbone Central Office
Class - I TWTC
Data Center Central Office
Carrier POP (IXC, DSL, CLEC,
Wireless)
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Our Opportunity
[] Market
[] Customers
[] Product
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[Graphics Omitted]
TWTC -- The Metro Bottleneck Solution
Long Haul Fixed Wireless
o AT&T Mobile Wireless
o WorldCom Hosted Data Centers
o Qwest CLEC
o Level3 DLEC
o Williams ISP
o Broadwing TWTC
o 360 Networks
Metro Fiber
Networks
End User End User
Customers Customers
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[Graphics Omitted]
TIME WARNER [LOGO] TELECOM
[Picture Omitted] [Picture Omitted]
Providing Digital Pictures and Voice
For Austin Radiological Association
11 OC-3 Transport Lines Digital X-rays
1 DS 3 Line [Picture Omitted] Mammograms
Multiple T1 Lines CT Scans
MRI Scans
Sonography
Picture Archiving and
Communications
System [PAC]
[Picture Omitted] Connecting 14 Imaging Centers [Picture Omitted]
o 13 Outpatient Centers
o 8 Surrounding Hospitals
o Serving 100,000+ patients yearly
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[Graphics Omitted]
Medical Park Tower OC-3
Medical Science Center DS-1
DS-1 to Ceder Park West Ave. OC-3
Business Office OC-48 Bailey Square OC-3
This link represents 11 separate DS-1s
from the hospitals
TWTC NETWORK
ABS House DS-3 Southwood OC-3
San Maroos DS-3 Bee Caves OC-3
Archive OC-3 Stratum OC-3
Austin Center Blvd OC-3 Rock Creek Plaza OC-3
Anderson Mill OC-3 Medical Arts Square OC-3
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More Customer Applications
State DOT - Data network for highways, harbors and airports.
[] Hubbed Transparent LAN - 10/100 Ethernet
Gas Utility - Emergency Services Network
[] High speed data & switched voice
[] Critical need - 24X7 - with disaster routing
Multi National Energy - Local & Regional Data Network
[] OC12 data network across 3 nodes with dual OC-3c to hub.
[] PR1 service to connect remote access service to MAN.
[] Currently upgrading OC-3c to GIGABIT Ethernet.
Police Department - data network connecting precincts to each other & HQ
[] 10/100 Ethernet
[] Automatic access to HQ database
[] Video for real time surveillance of downtown Charlotte - live video
arraignments.
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TWTC Product Innovations - 2000
Hosted Web
Managed ATM Managed
Server
New Product
Innovation Wavelength Services Gig-E
-----------------------------------------------------------------------------
Media Gateway/Softswitch Deployment
DWDM Deployment
Foundational Gigabit Router Integration
Infrastructure Internet Backbone Next Gen Optical
Upgrade Service Multiplexers
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Q1 Q2 Q3 Q4
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TWTC Product Roadmap - 2001
Streaming Media
Services
Storage Area Networks
Fiber Channel Transport
Site Blocking, Intrusion
Detection
Network Centric VPNs
VoIP - Business Class of Service
Regional Calling Plans Unified Messaging
------------------------------------------------------------------------------
Q1 Q2 Q3 Q4
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TIME WARNER [LOGO] TELECOM
David Rayner
Senior Vice President & CFO
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Exceptional History of Execution
[] 15 consecutive quarters of revenue growth
[] 6 consecutive quarters of increasing positive EBITDA
[] Industry-leading Gross Margins exceeding 60%
[] Industry-leading EBITDA margins exceeding 20%
* Excludes one-time favorable reciprocal compensation settlements
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Strong Track Record
($ in millions)
Quarterly Recurring Revenue
$140----------------------------------------$121.2
$120
$100
$80 [Bar Chart Omitted]
$60
$40
$20
$0--------------------------------------------
1Q97 3Q97 1Q98 3Q98 1Q99 3Q99 1Q00 3Q00
Quarterly Recurring EBITDA
$30------------------------------------------$28.4
$25
$20
$15
$10 [Bar Chart Omitted
$5
$0
-$5
-$10
-$15----------------------------------------------
1Q97 3Q97 1Q98 3Q98 1Q99 3Q99 1Q00 3Q00
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DSO Equivalent Chart
(In Thousands)
9000
7,982
8000
7000
6000
[Bar Chart Omitted]
5000
4000
3000
2000
1000
0-------------------------------------------------------------------------
1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
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Customer Mix
[Pie Chart Omitted]
ISP-Other
ISP-Tier 1 5% Carrier
14% 34%
Reciprocal
Comp
6%
Switched
Access
10%
End-user
31%
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Industry-Leading EBITDA
[] Field operations- 57% weighted average EBITDA margin in 2000 vs. 45% in
1999
[] 13 TWTC markets exhibit EBITDA margins greater than or equal to 50%
[] Historically, TWTC markets have turned EBITDA positive approximately 18
months after launching service
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Market Performance - Q3-00
Annualized EBITDA LTD Capital
Revenue YOY Growth Margin Expenditure
---------------- ------------- -------- --------------
1994 Launch
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Austin $34,236 53%/76%(1) 70% $52,514
Charlotte $32,316 80% 61% $57,416
1996 Launch
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Houston $44,868 67%/79%(1) 55% $80,667
Milwaukee $21,728 97% 57% $37,458
1999 Launch
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Dallas $8,776 N/M 33% $35,792
Jersey City $2,784 N/M 52% $11,202
(1) - without recip comp reduction
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GST Acquisition Highlights
[] $690 million purchase price
[] $ 640 M asset purchase
[] $ 50 M assumed liabilities and fees
[] Fully financed acquisition and expansion
[] $1.2 billion of additional financing committed
[] Leaving behind problems
[] Debt
[] Undesirable and operations
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Network Operating Data
TWTC
TWTC(1) GST(2) Pro Forma
MSAs 22/7(3) 15 37/44(3)
ATM Switches 26 62 88
Gross Plant $1 billion $690 million $1.69 billion
Route Miles
Metro 7,266 979 8,245
Regional 2,005 3,231 5,236
Fiber Miles
Metro 320,208 53,916 374,124
Regional 24,169 173,758 197,927
LEC Collocations 169 57 226
Data Centers 22 markets 13 markets 42 markets
DS-0 Equivalents (VGEs) 7,982,000 NA NA
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(1) As of June 30, 2000 except MSA
(2) Source: GST; all approximate pending closing; excludes fiber under
construction and Hawaii ($73 million); unaudited
(3) Includes 7 markets under construction.
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Financing - Pro Forma GST Acquisition
[] Fully funded
[] GST acquisition - $690 million
[] TWTC announced expansion markets
[] Continued growth in TWTC markets
[] Extend GST local networks
[] Structure (commitments totaling $1.2 billion)
[] Increase size of existing secured bank facility to
$1.0 billion (incremental $525 million)
[] Unsecured bridge loan of $700 million (convertible to
10-year term notes)
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TIME WARNER [LOGO] TELECOM
Larissa Herda
President & CEO
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Summary
[] Experienced and proven management team
[] Substantial growth opportunities
[] Industry-leading gross margins and EBITDA
[] Highly accretive GST purchase
[] Excellent outlook
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