Name: Time Warner Inc. (NYSE:TWX) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Time Warner Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net income	5,244)	3,925)	3,832)	3,827)	3,691)
Discontinued operations, net of tax	—)	(11)	(37)	67)	(137)
Net income from continuing operations	5,244)	3,914)	3,795)	3,894)	3,554)
Depreciation and amortization	694)	669)	681)	733)	886)
Amortization of film and television costs	9,162)	8,324)	8,030)	8,040)	7,262)
Asset impairments	16)	43)	25)	69)	140)
Venezuelan foreign currency loss	—)	—)	—)	173)	—)
(Gain) loss on investments and other assets, net	(367)	(131)	31)	(464)	(65)
Equity in losses of investee companies, net of cash distributions	191)	324)	161)	232)	218)
Equity-based compensation	227)	277)	182)	219)	256)
Deferred income taxes	(1,010)	236)	328)	166)	759)
Premiums paid and costs incurred on debt redemption	1,087)	1,008)	72)	—)	—)
Adjustments for noncash and nonoperating items	10,000)	10,750)	9,510)	9,168)	9,456)
Receivables	(704)	(1,201)	(112)	(403)	(366)
Inventories and film costs	(9,574)	(8,774)	(8,526)	(7,789)	(7,194)
Accounts payable and other liabilities	624)	631)	(200)	592)	(492)
Other changes	(496)	(637)	(616)	(1,781)	(1,242)
Changes in operating assets and liabilities, net of acquisitions	(10,150)	(9,981)	(9,454)	(9,381)	(9,294)
Cash provided by operations	5,094)	4,683)	3,851)	3,681)	3,716)
Investments in available-for-sale securities	(1)	(9)	(41)	(30)	(27)
Investments and acquisitions, net of cash acquired	(706)	(1,228)	(672)	(950)	(485)
Capital expenditures	(656)	(432)	(423)	(474)	(602)
Proceeds from Time Inc. in the Time Separation	—)	—)	—)	1,400)	—)
Proceeds from the sale of Time Warner Center	—)	—)	—)	1,264)	—)
Other investment proceeds	367)	309)	143)	173)	204)
Cash (used) provided by investing activities	(996)	(1,360)	(993)	1,383)	(910)
Borrowings	4,270)	3,830)	3,768)	2,409)	1,028)
Debt repayments	(5,001)	(3,304)	(2,344)	(72)	(762)
Proceeds from exercise of stock options	206)	172)	165)	338)	674)
Excess tax benefit from equity instruments	—)	88)	151)	179)	179)
Principal payments on capital leases	(39)	(14)	(11)	(11)	(9)
Repurchases of common stock	—)	(2,322)	(3,632)	(5,504)	(3,708)
Dividends paid	(1,265)	(1,269)	(1,150)	(1,109)	(1,074)
Other financing activities	(1,172)	(1,103)	(260)	(173)	(111)
Cash used by financing activities	(3,001)	(3,922)	(3,313)	(3,943)	(3,783)
Cash used by operations from discontinued operations	(15)	(17)	(8)	(16)	(2)
Cash used by investing activities from discontinued operations	—)	—)	—)	(51)	—)
Cash used by financing activities from discontinued operations	—)	—)	—)	(36)	—)
Effect of change in cash and equivalents of discontinued operations	—)	—)	—)	(87)	—)
Cash used by discontinued operations	(15)	(17)	(8)	(190)	(2)
Effect of Venezuelan exchange rate changes on cash and equivalents	—)	—)	—)	(129)	—)
Increase (decrease) in cash and equivalents	1,082)	(616)	(463)	802)	(979)
Cash and equivalents at beginning of period	1,539)	2,155)	2,618)	1,816)	2,841)
Cash and equivalents at end of period	2,621)	1,539)	2,155)	2,618)	1,862)

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Cash flow patterns from 2013 to 2017 indicate a steady growth in operational liquidity and a strategic shift in capital allocation, characterized by significant shareholder returns and active debt management. Net income exhibited a consistent upward trajectory, culminating in a peak of 5,244 million USD in 2017, which supported a corresponding increase in cash provided by operations.

Operating Cash Flow Dynamics: Cash provided by operations grew from 3,716 million USD in 2013 to 5,094 million USD in 2017. This growth was heavily influenced by substantial non-cash adjustments, most notably the amortization of film and television costs, which remained a primary driver of cash add-backs, ranging from 7,262 million USD to 9,162 million USD annually. Conversely, a consistent drag on operating cash flow was observed in inventories and film costs, which saw increasing outflows reaching 9,574 million USD by 2017.
Investing Activities and Asset Strategy: Investing activities were predominantly characterized by net outflows, with the exception of 2014. A significant liquidity surge occurred in 2014 due to one-time proceeds from the Time Separation (1,400 million USD) and the sale of the Time Warner Center (1,264 million USD), resulting in a net cash inflow from investing activities of 1,383 million USD. Outside of this period, capital expenditures remained relatively stable, fluctuating between 423 million USD and 656 million USD.
Financing and Capital Distribution: Financing activities consistently resulted in net cash outflows, reflecting a prioritized return of capital to shareholders. Dividends remained stable, averaging approximately 1,170 million USD per year. Common stock repurchases were aggressive, particularly in 2014 with an outflow of 5,504 million USD, though this activity ceased by 2017. Debt management showed a pattern of increasing borrowings, which peaked at 4,270 million USD in 2017, balanced by an accelerating debt repayment schedule that reached 5,001 million USD in the final year of the period.
Net Liquidity Position: The net change in cash and equivalents exhibited volatility, influenced by the timing of asset sales and financing decisions. After several years of fluctuating cash balances, the period ended with a significant increase in liquidity, with cash and equivalents at the end of 2017 rising to 2,621 million USD from 1,539 million USD in 2016.

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