Time Magazine 2014 Annual Report Download - page 56

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
costs related to mergers, acquisitions or dispositions of $25 million related to the separation of Time Inc. from Time Warner,
higher compensation expense of $22 million and Asset impairments of $7 million, partially offset by the $38 million gain
related to the Curtailment.
Selling, general and administrative expenses included costs related to the enterprise efficiency initiatives described above
of $49 million and $48 million for the years ended December 31, 2013 and 2012, respectively.
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, 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, 2014
was $7.637 billion, which included $2.618 billion of Cash and equivalents.
Current Financial Condition
At December 31, 2014, Time Warner had net debt of $19.876 billion ($22.494 billion of debt less $2.618 billion of Cash
and equivalents) and $24.476 billion of Shareholders’ equity, compared to net debt of $18.311 billion ($20.127 billion of
debt less $1.816 billion of Cash and equivalents) and $29.904 billion of Shareholders’ equity at December 31, 2013.
The following table shows the significant items contributing to the increase in net debt from December 31, 2013 to
December 31, 2014 (millions):
Balance at December 31, 2013 (recast) .................................................... $ 18,311
Cash provided by operations from continuing operations ..................................... (3,681)
Capital expenditures .................................................................. 474
Repurchases of common stock .......................................................... 5,504
Dividends paid to common stockholders .................................................. 1,109
Investments and acquisitions, net of cash acquired .......................................... 980
Proceeds from Time Inc. in the Time Separation ............................................ (1,400)
Proceeds from the sale of the Time Warner Center .......................................... (1,264)
Proceeds from the exercise of stock options ................................................ (338)
Other investment and sale proceeds ...................................................... (173)
All other, net ........................................................................ 354
Balance at December 31, 2014 .......................................................... $ 19,876
In connection with the Time Separation, the Company received $1.4 billion from Time Inc. consisting of proceeds from
Time Inc.’s acquisition of the IPC publishing business in the U.K. from a wholly-owned subsidiary of Time Warner and a
special dividend.
On June 13, 2014, Time Warner’s Board of Directors authorized up to $5.0 billion of share repurchases in addition to the
$5.0 billion it had previously authorized for share repurchases beginning January 1, 2014. 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, 2014 through February 20, 2015, the Company repurchased 82 million shares of common stock for $5.918 billion
pursuant to trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
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