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Patient Investor

Patient Investor 1/27/2013 7:00 PM Eastern

During her brief tenure at Time Warner Cable, Irene Esteves has demonstrated nerves of steel, discipline and a willingness to make unpopular decisions. And the company’s shareholders should thank their lucky stars for that.

Esteves, who joined the nation’s second-largest cable company in May 2011, has made her mark, dramatically so.

She spearheads Time Warner Cable’s mergers and acquisitions, and oversaw its purchase of Insight Communications last year. Insight’s initial asking price was $3.5 billion to $4 billion, according to reports. But led by Esteves, Time Warner Cable’s strategy was to be patient, willing to wait and to risk losing the acquisition, rather than pay top dollar.

Esteves drove a hard bargain. In the end, the MSO captured Insight for a tidy $3 billion, with Esteves probably saving Time Warner Cable between $500,000 and $1 billion on that prized purchase.

‘WILL FORCE ACTION’

“It was a tough negotiation,” Esteves, who lives in New York, said. “We went through three different times of talking to them and walking away until we really got a good deal for our shareholders.”

Most recently, Esteves has played a big role in Time Warner Cable’s hard-line — and very public — stance to drop networks that don’t attract eyeballs. It dumped the arts channel Ovation and immediately dropped Current TV, Al Gore’s network, when news broke that pan-Arab news channel Al Jazeera was buying it. The MSO’s actions made headlines and stirred controversy.

“You have to make decisions that are unpopular,” said Loren Starr, CFO of Invesco, who worked for Esteves at Putnam Investments, a money-management firm in Boston, from 1998 to 2001.

“What is great about Irene is that she is not afraid to make decisions,” Starr said. “She is the one who will force action in any company.”

Esteves, who calls soaring programming costs “the bane of my existence,” said if Time Warner Cable subscribers aren’t watching a network, they don’t value it.

“We’re not going to pay for it and then have to increase their rates,” Esteves said. “It’s simple value-versus-cost. … So we have to cull the ones that our consumers are not watching. And some of those are tough decisions and some of them are a little bit easier. And one of my key roles is making those tradeoff decisions. … You can’t get emotional about it.”

Esteves, whose father was Puerto Rican and mother was “basic WASPy,” describes herself as one the few people she knows who decided in high school what they wanted to do as a career and actually did it.

“I was a very good math student, and I had an interest in business,” she said. “And somewhere along my high school years somebody said, ‘Oh, that’s a CFO.’ So that’s what I started telling people, that I wanted to be a CFO.”

Esteves received a bachelor’s degree in business administration, and then got an MBA from Northwestern University’s Kellogg School of Management.

After college, Esteves worked in a wide range of industries around the country. She joined Time Warner Cable from XL Group, a global insurance and reinsurance company, where she served as executive vice president and CFO. She had those same titles at Regions Financial, and held executive positions at Wachovia, Putnam Investments and Miller Brewing.

Before she was recruited by Time Warner Cable following a long hunt, Esteves said she didn’t know how rare it was for cable companies to hire from outside their industry. Company chairman and CEO Glenn Britt, himself a former CFO, and Rob Marcus, the company’s ex-CFO and current president, liked what they saw in her.

“Irene was a standout during our executive search and has exceeded our expectations at every turn,” Britt said.

Beyond her “classic CEO background,” Britt said, “she has a great strategic mind, serves as an example to those she leads, and is a great asset to this company. She has been a quick study on the cable business and has already built an impressive list of successes as CFO of Time Warner Cable.”

Discipline and patience in decision-making is a CFO virtue that Esteves said she shares with Britt and Marcus.

Starr described Esteves as “very warm and very personable,” adding that she also had great strength. A tireless worker, she was no pushover as a boss and was very resultsoriented, he said.

Starr recalled that she had a sign on her desk that said, “Don’t confuse efforts with results,” a quote from retired basketball coach Bobby Knight. Esteves still has that sign, an inscribed crystal pyramid she got from Miller Brewing, ensconced in her Time Warner Cable office.

Amrit Kanwal, CFO of MFS Investment Management, worked for Esteves at both Miller Brewing and Putnam. He said while she was a demanding boss, she was also whipsmart and equally demanding of herself.

“But she can kick it with the guys,” said Kanwal, who noted that the culture in the brewing industry when you were traveling was “to be out and drink beer at accounts where they served product, and she could hang with the best of them.”

ORGANIZATIONAL VIEW

She said her career has been rewarding because she enjoys using her creativity and objectivity to look at an organization and “take disparate inputs and come to some kind of clarity” about what must be done to improve the business. It’s that ability to take a million inputs and be able to make a concise picture for the decision makers of what our options are, and then advising and supporting those decisions.”

Surprisingly, Esteves claims that some of the best decisions ever made were to put the kibosh on deals, even after much due diligence and work.

“The mistakes people make are feeling like they have to complete something that they started,” she said. “They fell in love with [a deal] at $30 [per share] so it must still be worth something at $32, when in fact you should walk away at $30.10.”

That kind of a comment from Esteves wouldn’t surprise Starr.

“She is the master of self-discipline,” he said.

IRENE ESTEVES

TITLE: EVP and Chief Financial Officer, Time Warner Cable

AGE: 54

CAREER: Held executive roles at Wachovia, Putnam Investments and Miller Brewing; Senior EVP and CFO of Regions Financial; EVP and CFO of XL Group

QUOTABLE: “The trick is not to fall in love [when negotiating an acquisition]. We’re just dating. Nobody is in love. Until we get the ring on our finger, we’re not falling in love. We can always walk away.”

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