Massive $4 Billion Time Warner Cable Share Buy-Back

Time Warner Cable beat profit estimates and announced a $4 billion massive share buy-back on Thursday, sending shares up sharply, despite losing 155,000 basic cable subscribers.

"The business is generating a great deal of cash flow so that tends to cause us to deleverage. What we've been saying consistently is we will return capital to shareholders to maintain that leverage," Genn Britt, CEO of Time Warner Cable , told CNBC's "The Strategy Session" on Thursday.

"We need to keep the debt at a certain level. We think we need to be investment grade because we have a pretty big absolute amount of debt—over $20 billion—so we need access to the market. And in discussions with the rating agencies we've arrived at a target leverage of three and a quarter times EBITDA—that's really our North Star," Britt said.

There has been a lot of speculation about "cord-cutting"—customers opting to get rid of their cable box and instead watching television and movies via the Internet.

"The actual viewership on-line is still very small," he said, adding, "most of what's been going on with our business is the economy and it's pretty simple that household vacancy rates are at an all time high—empty homes don't buy cable service."

"These businesses, cable and its competitors, have traditionally been run almost like a utility (one size fits all). What we've been doing is a lot of work on segmenting our marketplace and looking at different groups of people to figure out what package of products and services would fit that demographic," Britt concluded.