Time Warner Telecom EBITDA Positive, Posts 116% Revenue Increase for Q2 1999 - Company Financial Information

Cambridge Telcom Report, August 9, 1999

Time Warner Telecom Inc. (Nasdaq: TWTC), a leading fiber facilities-based integrated communications provider, Monday reported its second quarter and six month financial results for the period ending June 30, 1999.

The Company reported revenues for the second quarter of 1999 of $58.4 million, an increase of 116% compared to revenues of $27.0 million for the previous year's period, and an increase of 23% over the first quarter of 1999. For the six months ended June 30, 1999, total revenues were $106.0 million, up 116% from the same period in 1998.

During the second quarter 1999, the Company achieved, for the first time in its operational history, positive EBITDA, defined as operating income (loss) before depreciation and amortization expense and excluding charges for interest expense and provision for income taxes, which increased to $4.6 million from a loss of $(7.0) million in the 1998 comparable period.

On May 12, 1999, Time Warner Telecom completed a successful initial public offering (IPO), selling 20.7 million shares of Class A Common Stock at a price of $14 per share, raising $289.8 million before underwriters' discounts and fees. The Company used the proceeds to repay $180 million of indebtedness and will use the balance to fund its continued growth.

Other achievements during the quarter include closing the acquisition of Internet Connect, Inc., an Internet service provider, and acquiring the remaining 50% interest in MetroComm, a competitive local exchange carrier in Columbus, OH.

               SELECTED OPERATING DATA
               As of -     6/30/99        03/31/99         6/30/98

Operating Networks              19              19              19
Route Miles                  7,326           7,069           6,309
Fiber Miles                289,803         276,692         248,574
Voice Grade Equivalent
 Circuits (in 000's)         3,902           3,344           2,272
Digital Switches                16              16              16
Access Lines               126,932         101,365          37,661
Employees                    1,118             967             797
>TB

Regarding the Company's second quarter results, Larissa Herda, President
and Chief Executive Officer commented, "We are very pleased with our
performance this past quarter. We established an ambitious business
strategy for our Company and as shown in our results, we are exceeding our
stated milestones and objectives."

Ms. Herda continued, "We enjoyed a successful IPO that allowed us to
reduce our debt and will allow us to fund our current business plan into
2001. Furthermore, we achieved positive cash flow. Our strategy remains
focused on penetrating attractive markets that deliver a high return on
investment for our company and for our shareholders. We have started the
third quarter of 1999 strongly by turning on our Jersey City network, Time
Warner Telecom's 20th city, and adding our first customers to the
Greensboro switch in July."

Time Warner Telecom offers a wide range of fiber optic facilities-based
business telephony and data services to medium- and large-sized business
customers. Key to the Company's strategy is leveraging its existing
fiber-optic networks by adding additional services such as Internet and
data, and an integrated voice, data, and long-distance product for smaller
businesses. In the second quarter of 1999, the Company completed the
interconnection of its North Carolina cluster, joining Charlotte, Raleigh
and Greensboro with the Company's own fiber ring. By creating
complimentary "clusters," the Company captures additional revenue by
providing regional data, Internet and voice services.

Time Warner Telecom has gross Property, Plant, and Equipment of $740
million and expects to spend approximately $200 million in total in each
of 1999 and 2000 for capital expenditures.

Revenues increase 116%
Most of Time Warner Telecom's revenues for the second quarter of 1999 were
derived from "on-net" services. On-net services ride exclusively on Time
Warner Telecom's fiber-optic network, with minimal dependence on incumbent
local exchange carriers.

Total revenues were bolstered by a 194% year-over-year increase in
revenues from switched services, which accounted for $23.0 million in the
second quarter of 1999 versus $7.8 million in the comparable 1998 period.
For the six months ended June 30, 1999, switched services revenues were
$40.9 million, a 212% increase over the comparable 1998 period.

Dedicated transport services revenues grew to $35.4 million, an 84%
increase over the second quarter 1998. For the six months ending June 30,
1999, dedicated transport services revenues were $65.1 million, an 81%
increase over the comparable 1998 period.

Internet Connect, Inc. and MetroComm contributed approximately $1.5
million to revenue in the second quarter, the first period in which they
where consolidated in the company's financial results.

Reciprocal Compensation represented less than 7% of total revenue for the
quarter and year-to-date.

Cash Flow -- Positive EBITDA
"In the second quarter of 1999, the Company reached a major milestone --
positive EBITDA," said David Rayner, Senior Vice President and CFO of Time
Warner Telecom. "This achievement marks another significant step in Time
Warner Telecom's distinction within the sector. By staying focused on our
core business of "on-net" services, we have been able to achieve positive
EBITDA relatively quickly."

For the second quarter of 1999, gross margin, defined as revenue less
operating expenses, improved to 53% from 40% in the same period in 1998.
In the first six months of 1999, gross margin improved to 51% versus 39%
in the prior year's same period.

For the second quarter of 1999, selling, general and administrative
expenses (SG&A) increased to $26.3 million versus $17.9 million in the
same period in 1998. In the first six months of 1999, SG&A expenses
increased to $50.4 million over $34.2 million in the prior year's same
period. As a percentage of total revenues, SG&A expenses in the second
quarter of 1999 improved to 45%, versus 66% in the previous year's same
period. For the first half of 1999, SG&A expenses as a percentage of total
revenues improved to 48% versus 70% for the first half of 1998.

Net loss for the second quarter was $(53.2) million as compared to a net
loss of $(22.1) million for the same period of 1998. A one-time charge to
earnings of $39.4 million was recorded in the second quarter to reflect
the deferred tax liability associated with a change from a limited
liability company to a corporation. Without this one-time charge, net of a
$4.4 million deferred tax benefit, net loss for the second quarter was
$(18.1) million, which was $4.0 million better than the same period of
1998 despite an increase of net interest expense of $4.2 million as
compared to the same period last year.

For the six months ended June 30, 1999, net loss was $(77.8) million as
compared to net loss of $(43.9) million for the comparable period in 1998.
Net loss without the one-time charge to earnings, net of a $4.4 million
deferred tax benefit, was $(42.8) million for the six months ended June
30, 1999, an improvement of $1.1 million as compared to $(43.9) million
last year, despite the increase in net interest expense in 1999 of $11.5
million.

Time Warner Telecom is a leading fiber, facilities-based integrated
communications carrier offering local business "last-mile" broadband
connections for data, high-speed Internet access, local voice, and
long-distance. The Company serves customers in 20 U.S. metropolitan areas.
These markets include: Austin, Houston and San Antonio, Texas; Charlotte,
Greensboro and Raleigh, North Carolina; Albany, Binghamton, New York City
and Rochester, New York; Jersey City, New Jersey; Cincinnati and Columbus,
Ohio; Memphis, Tennessee; Orlando and Tampa, Florida; Indianapolis,
Indiana; Milwaukee, Wisconsin; San Diego, California and Honolulu, Hawaii.
Time Warner Telecom plans to enter Dallas, Texas later this year. The
Company is headquartered in Greenwood Village, Colorado. FMI:
www.twtelecom.com.

>TB

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
  (unaudited) (in thousands, except per share data)

                           Three Months           Six Months
                          Ended June 30,        Ended June 30,
                          1999       1998       1999       1998

Revenues
 Dedicated transport
  services               $35,396   $19,240     $65,061   $35,973
 Switched services        22,985     7,807      40,909    13,122
  Total Revenues          58,381    27,047     105,970    49,095

Costs and expenses
 Operating                27,466    16,207      51,461    29,726
 Selling, general and
  administrative          26,268    17,854      50,404    34,170
 Depreciation and
  amortization            15,987    12,393      30,981    24,325
  Total costs and expenses69,721    46,454     132,846    88,221

Operating loss           (11,340)  (19,407)    (26,876)  (39,126)

Equity in income (losses) of
 unconsolidated affiliates    97       (29)        285       (87)
Interest expense, net     (6,873)   (2,699)    (16,168)   (4,710)
Net loss before taxes    (18,116)  (22,135)    (42,759)  (43,923)

Income tax expense*       35,062        --      35,062        --

Net loss                $(53,178) $(22,135)   $(77,821) $(43,923)
Basic and diluted loss per
 common share            $(0.57)    $(0.27)    $(0.89)    $(0.54)
Basic and diluted loss per
 common share (excluding deferred
 tax charges)*           $(0.20)    $(0.27)    $(0.49)    $(0.54)
Average common shares
 outstanding              92,885    81,250      87,099    81,250
>TB

*During the quarter ending June 30, 1999, the Company recorded a one-time
$39.4 million charge to earnings to record a net deferred tax liability
associated with the change from a limited liability company to a
corporation. This change occurred immediately prior to the Company's
initial public offering. In addition, a deferred tax benefit of $4.4
million was recorded in the period.

>TB

         SELECTED BALANCE SHEET DATA
          (Unaudited) (in thousands)

                               June 30, 1999     December 31, 1998

Cash and marketable securities         $324,474           $355,997
Property, Plant and Equipment (gross)   739,608            612,119
Total Assets                            994,398            904,344
9 3/4 % Senior Dotes due 2008           400,000            400,000
Loans Payable to the Parent Companies        --            174,940
Total Stockholders' Equity              427,876            207,651

>TB