Time Warner Cable 2009 Annual Report Download - page 59

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Operating Activities
Details of cash provided by operating activities are as follows (in millions):
2009 2008 2007
Year Ended December 31,
Operating Income (Loss) before Depreciation and Amortization ........................ $ 6,402 $ (8,694) $ 5,742
Noncash impairment of cable franchise rights ...................................... — 14,822 —
Noncash equity-based compensation ............................................. 97 78 59
Noncash loss on sale of cable systems ........................................... — 58 —
Net interest payments
(a)
...................................................... (1,221) (707) (845)
Pension plan contributions
(b)
.................................................. (170) (402) (1)
Net income taxes paid
(c)
..................................................... (37) (36) (292)
Net merger-related and restructuring accruals (payments) ............................. 14 (7) (11)
Net cash flows from discontinued operations
(d)
..................................... — — 47
All other, net, including working capital changes ................................... 94 188 (136)
Cash provided by operating activities ............................................ $ 5,179 $ 5,300 $ 4,563
(a)
Amounts include interest income received of $13 million, $38 million and $10 million in 2009, 2008 and 2007, respectively.
(b)
Amounts represent contributions to the Company’s funded and unfunded defined benefit pension plans.
(c)
Amounts include income tax refunds received of $53 million, $4 million and $6 million in 2009, 2008 and 2007, respectively.
(d)
Amount reflects noncash gains and expenses and working capital-related adjustments of $47 million in 2007 (none in 2009 and 2008).
Cash provided by operating activities decreased from $5.300 billion in 2008 to $5.179 billion in 2009. This decrease was primarily
related to an increase in net interest payments and the change in working capital requirements, partially offset by an increase in Operating
Income before Depreciation and Amortization excluding the noncash items noted in the table above (as previously discussed) and the
decrease in pension plan contributions.
The increase in net interest payments resulted from higher average debt outstanding during 2009, as well as the timing of interest
payments. The Company expects that its net interest payments will increase in 2010 primarily as a result of the timing of interest
payments related to the 2009 Bond Offerings.
The Company contributed $160 million to its funded defined benefit pension plans during 2009 and may make discretionary cash
contributions to its funded defined benefit pension plans during 2010. See Note 14 to the accompanying consolidated financial statements
for additional discussion of the funded status of the Company’s defined benefit pension plans.
Net income taxes paid during 2009 benefited from reimbursements from Time Warner in accordance with a tax sharing arrangement
between TWC and Time Warner, as well as the impact of the accelerated depreciation deductions provided by the American Recovery
and Reinvestment Act of 2009, partially offset by the reversal of a portion of similar benefits received in 2008 from the Economic
Stimulus Act of 2008. These Acts provide for a first year bonus depreciation deduction of 50% of the cost of the Company’s qualified
capital expenditures for the year. The Company expects that net income taxes paid will increase significantly in 2010, primarily due to the
absence of bonus depreciation (unless there is a legislative extension of bonus depreciation) and the reversal of a portion of the bonus
depreciation benefits received in 2008 and 2009.
Cash provided by operating activities increased from $4.563 billion in 2007 to $5.300 billion in 2008. This increase was primarily
related to an increase in Operating Income before Depreciation and Amortization excluding the noncash items noted in the table above
(as previously discussed), a favorable change in working capital requirements and decreases in net income tax and net interest payments,
partially offset by 2008 pension plan contributions. The change in working capital requirements was primarily due to the timing of
payments and collections of accounts receivable. The decrease in net income tax payments was primarily due to the impact of the
Economic Stimulus Act of 2008.
47
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)