SEC Filings

10-Q
TIME WARNER INC. filed this Form 10-Q on 10/26/2017
Entire Document
 


Table of Contents

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

 

Corporate.  Corporate’s Operating Loss for the three and nine months ended September 30, 2017 and 2016 was as follows (millions):

 

                 Three Months Ended September 30,                            Nine Months Ended September 30,             
               2017                          2016                        % Change                     2017                          2016                        % Change        

Selling, general and administrative (a)

   $ (83)      $ (86)      (3)%   $ (312)      $ (305)      2%

Asset impairments

     —         —       —%     —         (4)      NM

Restructuring and
severance costs

     (2)        (2)      —%     (1)        (2)      (50)%

Depreciation

     (7)        (7)      —%     (21)        (19)      11%
  

 

 

    

 

 

      

 

 

    

 

 

    

Operating Loss

   $ (92)      $ (95)      (3)%   $ (334)      $ (330)      1%
  

 

 

    

 

 

      

 

 

    

 

 

    

 

(a)

Selling, general and administrative expenses exclude depreciation.

Refer to “Transactions and Other Items Affecting Comparability” for a discussion of Asset impairments, costs related to the AT&T merger and external costs related to mergers, acquisitions and dispositions for the three and nine months ended September 30, 2017 and 2016, which affected the comparability of Corporate’s results.

For the three months ended September 30, 2017, Operating loss decreased primarily due to lower equity-based compensation expense, partially offset by costs related to the AT&T merger of $19 million. For the nine months ended September 30, 2017, Operating loss increased primarily due to costs related to the AT&T merger of $75 million, partially offset by lower equity-based compensation expense and lower costs of $14 million primarily related to technology initiatives. In addition, the results for the three and nine months ended September 30, 2016 included $10 million of pension settlement charges.

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 and quarterly dividend payments. 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 September 30, 2017 was $7.639 billion, which included $2.621 billion of Cash and equivalents.

Current Financial Condition

At September 30, 2017, Time Warner had $23.055 billion of debt and $2.621 billion of Cash and equivalents, resulting in net debt of $20.434 billion, compared to $24.339 billion of debt and $1.539 billion of Cash and equivalents, or net debt of $22.800 billion, at December 31, 2016. At September 30, 2017, Total equity was $27.268 billion compared to $24.337 billion at December 31, 2016.

The following table shows the significant items contributing to the decrease in net debt from December 31, 2016 to September 30, 2017 (millions):

 

Balance at December 31, 2016

   $ 22,800   

Cash provided by operations

     (3,947)  

Capital expenditures

     362   

Dividends paid to common stockholders

     948   

Investments and acquisitions, net of cash acquired, including available-for-sale securities

     511   

Proceeds from the exercise of stock options

     (167)  

Other investment proceeds, including available-for-sale securities

     (341)  

All other, net

     268   
  

 

 

 

Balance at September 30, 2017

   $             20,434   
  

 

 

 

 

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