Time Magazine 2012 Annual Report Download - page 58

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
FINANCIAL CONDITION AND LIQUIDITY
Management believes that cash generated by or available to the Company should be sufficient to fund its
capital and liquidity needs for the foreseeable future, including scheduled debt repayments, quarterly dividend
payments and the purchase of common stock under the Company’s stock repurchase program. Time Warner’s
sources of cash include Cash provided by operations from continuing operations, Cash and equivalents on hand,
available borrowing capacity under its committed credit facilities and commercial paper program and access to
capital markets. Time Warner’s unused committed capacity at December 31, 2012 was $7.863 billion, which
included $2.841 billion of Cash and equivalents.
Current Financial Condition
At December 31, 2012, Time Warner had net debt of $17.030 billion ($19.871 billion of debt less
$2.841 billion of Cash and equivalents) and $29.877 billion of Shareholders’ equity, compared to net debt of
$16.048 billion ($19.524 billion of debt less $3.476 billion of Cash and equivalents) and $29.957 billion of
Shareholders’ equity at December 31, 2011.
The following table shows the significant items contributing to the increase in net debt from December 31,
2011 to December 31, 2012 (millions):
Balance at December 31, 2011 ................................................. $ 16,048
Cash provided by operations from continuing operations ............................ (3,476)
Capital expenditures ......................................................... 643
Repurchases of common stock ................................................. 3,272
Dividends paid to common stockholders ......................................... 1,011
Investments and acquisitions, net of cash acquired ................................. 705
Proceeds from the exercise of stock options ...................................... (1,107)
All other, net ............................................................... (66)
Balance at December 31, 2012 ................................................. $ 17,030
On January 31, 2012, the Company’s Board of Directors authorized a $4.0 billion stock repurchase program
that commenced after the completion of the Company’s $5.0 billion stock repurchase program in February 2012.
On January 31, 2013, Time Warner’s Board of Directors authorized up to $4.0 billion of share repurchases
beginning January 1, 2013, including amounts available under the Company’s prior stock repurchase program as
of December 31, 2012. Purchases under the stock repurchase program may be made from time to time on the
open market and in privately negotiated transactions. The size and timing of these purchases are based on a
number of factors, including price and business and market conditions. From January 1, 2012 through
December 31, 2012, the Company repurchased 80 million shares of common stock for $3.302 billion pursuant to
trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
From January 1, 2013 through February 15, 2013, the Company repurchased 4 million shares of common stock
for $201 million pursuant to trading plans under Rule 10b5-1 of the Exchange Act.
Time Warner’s $432 million aggregate principal amount of 9.125% debentures due 2013 matured on
January 15, 2013, and the Company paid such aggregate principal amount and the accrued interest in cash on the
maturity date.
Cash Flows
Cash and equivalents decreased by $635 million for the year ended December 31, 2012, $187 million for the
year ended December 31, 2011 and $1.070 billion for the year ended December 31, 2010. Components of these
changes are discussed below in more detail.
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