Time Warner Cable 2010 Annual Report Download - page 68

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Operating Activities
Details of cash provided by operating activities are as follows (in millions):
2010 2009 2008
Year Ended December 31,
OIBDA ................................................... $ 6,818 $ 6,402 $ (8,694)
Noncash impairment of cable franchise rights ....................... — — 14,822
Noncash loss on sale of cable systems............................. — — 58
Noncash equity-based compensation .............................. 109 97 78
Net interest payments
(a)
....................................... (1,359) (1,221) (707)
Pension plan contributions ..................................... (104) (170) (402)
Net income tax payments
(b)
.................................... (388) (37) (36)
Net restructuring accruals (payments) ............................. (1) 14 (7)
All other, net, including working capital changes ..................... 143 94 188
Cash provided by operating activities ............................. $ 5,218 $ 5,179 $ 5,300
(a)
Amounts include interest income received (including amounts received under interest rate swap contracts) of $99 million, $13 million and
$38 million in 2010, 2009 and 2008, respectively.
(b)
Amounts include income tax refunds received of $93 million, $53 million and $4 million in 2010, 2009 and 2008, respectively.
Cash provided by operating activities increased from $5.179 billion in 2009 to $5.218 billion in 2010. This increase
was primarily related to an increase in OIBDA (as previously discussed) and decreases in pension plan contributions and
working capital requirements, largely offset by increases in net income tax and interest payments.
The Company contributed $104 million to its qualified and nonqualified noncontributory defined benefit pension
plans during 2010 and may make discretionary cash contributions to its pension plans during 2011. As of December 31,
2010, the Company’s qualified defined benefit pension plans were fully funded. See Note 15 to the accompanying
consolidated financial statements for additional discussion of the Company’s pension plans.
Net income taxes paid during 2009 benefited from 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 provided for a first year bonus depreciation
deduction of 50% of the cost of the Company’s qualified capital expenditures for the year.
Net income taxes paid during 2010 were impacted by the absence of bonus depreciation during the first nine months
of 2010 (prior to the retroactive application of the Small Business Jobs Act, discussed below) and the reversal of a portion
of the bonus depreciation benefits received in 2008 and 2009. On September 27, 2010, the Small Business Jobs Act was
enacted, which provided for a bonus depreciation deduction of 50% of the cost of the Company’s qualified capital
expenditures retroactive to the beginning of 2010. Additionally, on December 17, 2010, the Tax Relief, Unemployment
Insurance Reauthorization and Job Creation Act of 2010 was enacted, which provides for a bonus depreciation deduction
of 100% of the cost of the Company’s qualified capital expenditures from September 8, 2010 through December 31, 2011.
As a result of these Acts, no U.S. federal income tax payments were made during the fourth quarter of 2010 and the
Company had prepaid income taxes of $287 million as of December 31, 2010, of which $270 million was refunded to the
Company in January 2011. Due to this refund and the benefit of 100% bonus depreciation through December 31, 2011, the
Company does not expect the net income taxes paid in 2011 to be significant.
Net interest payments increased primarily as a result of the timing of interest payments related to the public debt
issuances in March, June and December 2009 (the “2009 Bond Offerings”). The Company expects that its net interest
payments will increase in 2011 primarily as a result of interest payments related to the public debt issuance in December
2009 and the 2010 Bond Offering.
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
56
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)