Time Magazine 2011 Annual Report Download - page 63

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
The following table summarizes the Company’s aggregate contractual obligations at December 31, 2011, and
the estimated timing and effect that such obligations are expected to have on the Company’s liquidity and cash
flows in future periods (millions):
Contractual Obligations(a)(b)(c) Total 2012 2013-2014 2015-2016 Thereafter
Outstanding debt obligations (Note 8) . . . $ 19,595 $ 649 $ 732 $ 2,150 $ 16,064
Interest (Note 8) .................... 19,346 1,200 2,273 2,199 13,674
Capital lease obligations (Note 8) ...... 97 17 29 21 30
Operating lease obligations (Note 16) . . . 2,351 403 764 616 568
Purchase obligations ................ 19,663 4,534 4,883 3,095 7,151
Total contractual obligations and
outstanding debt .................. $ 61,052 $ 6,803 $ 8,681 $ 8,081 $ 37,487
(a) The table does not include the effects of certain put/call or other buy-out arrangements that are contingent in nature involving certain of
the Company’s investees (Note 16).
(b) The table does not include the Company’s reserve for uncertain tax positions and related accrued interest and penalties, which at
December 31, 2011 totaled $2.509 billion, as the specific timing of any cash payments relating to this obligation cannot be projected with
reasonable certainty.
(c) The references to Note 8 and Note 16 refer to the notes to the accompanying consolidated financial statements.
The following is a description of the Company’s material contractual obligations at December 31, 2011:
• Outstanding debt obligations — represents the principal amounts due on outstanding debt obligations as
of December 31, 2011. Amounts do not include any fair value adjustments, bond premiums, discounts,
interest payments or dividends.
• Interest — represents amounts based on the outstanding debt balances, interest rates and maturity
schedules of the respective instruments as of December 31, 2011. Interest ultimately paid on these
obligations may differ based on changes in interest rates for variable-rate debt, as well as any potential
future refinancings entered into by the Company.
• Capital lease obligations — represents the minimum lease payments under noncancelable capital leases,
primarily for certain transponder leases at the Networks segment.
• Operating lease obligations — represents the minimum lease payments under noncancelable operating
leases, primarily for the Company’s real estate and operating equipment in various locations around the
world.
• Purchase obligations — represents an agreement to purchase goods or services that is enforceable and
legally binding on the Company and that specifies all significant terms, including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of
the transaction. The purchase obligation amounts do not represent the entire anticipated purchases in the
future, but represent only those items for which the Company is contractually obligated. Additionally,
the Company also purchases products and services as needed, with no firm commitment. For this reason,
the amounts presented in the table alone do not provide a reliable indicator of the Company’s expected
future cash outflows. For purposes of identifying and accumulating purchase obligations, the Company
has included all material contracts meeting the definition of a purchase obligation (i.e., legally binding
for a fixed or minimum amount or quantity). For those contracts involving a fixed or minimum quantity,
but with variable pricing terms, the Company has estimated the contractual obligation based on its best
estimate of the pricing that will be in effect at the time the obligation is incurred. Additionally, the
Company has included only the obligations represented by those contracts as they existed at
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