Time Warner Cable 2007 Annual Report Download - page 69

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Operating Activities
Details of cash provided by operating activities are as follows (in millions):
2007 2006 2005
Years Ended December 31,
OIBDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,742 $4,229 $3,323
Net interest payments
(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (845) (662) (507)
Net income taxes paid
(b)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (292) (474) (535)
Noncash equity-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 33 53
Net cash flows from discontinued operations
(c)
................................. 47 112 237
Merger-related and restructuring payments, net of accruals
(d)
....................... (11) (3) 30
Pension plan contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (101) (91)
All other, net, including working capital changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (136) 461 30
Cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,563 $3,595 $2,540
(a)
Amounts include interest income received of $10 million and $5 million in 2007 and 2006, respectively (none in 2005).
(b)
Amounts include income tax refunds received of $6 million, $4 million and $6 million in 2007, 2006 and 2005, respectively.
(c)
Amounts reflect net income from discontinued operations of $1.038 billion and $104 million in 2006 and 2005, respectively (none in
2007), as well as noncash gains and expenses and working capital-related adjustments of $47 million, $(926) million and $133 million in
2007, 2006 and 2005, respectively.
(d)
Amounts include payments for merger-related and restructuring costs and payments for certain other merger-related liabilities, net of
accruals.
Cash provided by operating activities increased from $3.595 billion in 2006 to $4.563 billion in 2007. This
increase was primarily related to an increase in OIBDA (due to revenue growth, partially offset by increases in costs
of revenues and selling, general and administrative expenses, as described above) and a decrease in net income taxes
paid (primarily as a result of the timing of tax-related payments to Time Warner under the Company’s tax sharing
arrangement, as well as tax benefits related to the Transactions) and a decrease in pension plan contributions, which
were partially offset by a change in working capital requirements, an increase in net interest payments reflecting the
increase in debt levels attributable to the Transactions and a decrease in cash relating to discontinued operations.
The change in working capital requirements was primarily due to the timing of payments and collections of
accounts receivable.
The Economic Stimulus Act of 2008, enacted in the first quarter of 2008, provides for a bonus first year
depreciation deduction of 50% of qualified property. The benefits of this legislation will be applicable to certain of
the Company’s capital expenditures and are expected to reduce the Company’s net income tax payments in 2008.
The Company expects to make discretionary cash contributions of approximately $150 million to its defined
benefit pension plans during 2008, subject to market conditions and other considerations.
Cash provided by operating activities increased from $2.540 billion in 2005 to $3.595 billion in 2006. This
increase was primarily related to an increase in OIBDA (due to revenue growth, partially offset by increases in costs
of revenues and selling, general and administrative expenses, as described above), a decrease in working capital
requirements and a decrease in net income taxes paid, partially offset by lower net cash flows from discontinued
operations, an increase in net interest payments and an increase in merger-related and restructuring payments. The
decrease in working capital requirements was primarily due to impact of the Transactions, as well as the timing of
payments of accounts payable and accrued liabilities, partially offset by lower cash collections on receivables.
64
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)