Time Warner Inc. (NYSE:TWX)

The annual financial data reveals significant fluctuations in the capital structure of the company over the examined period. The total debt exhibits an overall increasing trend with distinct variations across years. Initially, total debt grows sharply from 20,330 million US dollars in 2005 to a peak of 39,683 million US dollars in 2008. This surge is followed by a steep decline in 2009 to 15,416 million US dollars, after which the debt gradually rises again, reaching approximately 23,744 million US dollars by the end of 2017.

Shareholders' equity shows a contrasting trajectory. It declines steadily from 62,715 million US dollars in 2005 to 29,957 million US dollars in 2011, indicating a sustained reduction in equity value during this period. From 2012 onwards, the equity stabilizes around the 29,000 million US dollar mark until 2014, after which it decreases further to 23,619 million US dollars in 2015 and then slowly recovers to 28,375 million US dollars by 2017.

The debt to equity ratio aligns with these movements, reflecting increased leverage. This ratio climbs from a low of 0.32 in 2005 to a peak of 0.94 in 2008, corresponding with the rise in total debt and decline in equity. Following the debt reduction in 2009, the ratio drops to 0.46 but then trends upward again, reaching levels exceeding 1.0 in 2014 and 2015, which indicates that total debt surpasses shareholders’ equity during these years. The ratio slightly decreases thereafter, ending at 0.84 in 2017.

Total Debt

Sharp increase from 2005 to 2008, followed by a significant drop in 2009, and a gradual increase from 2010 to 2017.

Shareholders’ Equity

Consistent decline from 2005 to 2011, stabilization around 29,000 million US dollars until 2014, further decrease in 2015, and moderate recovery by 2017.

Debt to Equity Ratio

Increasing leverage from 2005 with a peak in 2008, reduction in 2009, followed by a resurgence to above 1.0 in 2014-2015, then declining moderately by 2017.

Overall, the financial position indicates an elevated reliance on debt financing relative to equity capital, particularly acute around 2008 and again in the mid-2010s. The period reflects financial restructuring or operational challenges that impacted equity value and prompted variations in borrowing levels. The decline in equity alongside periods of high leverage may suggest increased financial risk during these years, with some signs of stabilization and deleveraging towards the end of the period under review.