Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Time Inc. | a8k6302016cover.htm |
| EX-99.1 - EXHIBIT 99.1 - Time Inc. | exhibit9912q16pr.htm |
SECOND QUARTER 2016
Financial Results
AUGUST 4, 2016
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995;
particularly statements regarding future financial and operating results of Time Inc. (the “Company”) and its business. These
statements are based on management’s current expectations or beliefs, and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those expressed or implied in this presentation due to changes in
economic, business, competitive, technological, strategic, regulatory and/or other factors. More detailed information about these
factors may be found in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual
Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company is under no obligation, and expressly
disclaims any such obligation, to update or alter its forward-looking statements, whether as a result of new information, future
events or otherwise.
Non-GAAP financial measures such as Operating income before depreciation and amortization (“OIBDA”), Adjusted OIBDA,
Adjusted Diluted EPS and Free Cash Flow, as included in this presentation, are supplemental measures that are not calculated in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Definitions of these measures and reconciliations to the
most directly-comparable U.S. GAAP measures are included at the end of this presentation deck. Our non-GAAP financial
measures have limitations as analytical and comparative tools and you should consider OIBDA, Adjusted OIBDA, Adjusted Diluted
EPS and Free Cash Flow in addition to, and not as a substitute for, the Company’s Operating income (loss), Net income (loss),
Diluted EPS and various cash flow measures (e.g., Cash provided by (used in) operations), as well as other measures of financial
performance and liquidity reported in accordance with U.S. GAAP.
Note: Throughout the presentation, certain numbers will not sum to the total due to rounding.
2
Disclaimer
Total revenues declined 1% year-over-year.
Total advertising revenues increased 1% year-over year. Digital advertising revenues increased 65%.
Operating expenses were lower than expectations.
Operating income was $50 million versus $61 million last year.
Adjusted OIBDA was $89 million versus $117 million last year.
Quarter-end cash, cash equivalents and short-term investments of $380 million or $3.78 per share.
Bought back $34 million of stock with $145 million remaining under the authorization as of June 30th. Bought back
$10 million face value of our senior notes with $80 million remaining under the authorization.
We now expect annual revenue for 2016 of flat to +1.5% year-over-year.
In conjunction with our realignment program, we expect to incur approximately $35 million of restructuring costs
for actions identified to date.
We now expect 2016 Operating Income of $215 million to $240 million, and Adjusted OIBDA of $400 million to
$430 million.
2Q16 Financial Highlights
3
$343
$299
$77
$127
2015 2016
Digital Advertising
Print and Other Advertising
2Q16 Advertising Revenues
Total advertising revenues up 1%
Print and other advertising down 13%
Digital advertising up 65%
- Includes the benefit of acquisitions
- Excluding the Viant acquisition, digital
advertising revenues would have increased
10% year-over-year
$420 $426
4
HIGHLIGHTS
2Q 2Q
$MM
$166
$154
$82
$74
$6
$8
Other Circulation Revenues
Newsstand Revenues
Subscription Revenues
Subscription revenues down 7%
Newsstand revenues down 10%
$MM
$254
$236
2Q16 Circulation Revenues
HIGHLIGHTS
2Q15 2Q16
5
2Q16 Other Revenues
Other revenues up 8%
- Includes the benefit of acquisitions
$99
$107
HIGHLIGHTS
2Q15 2Q16
$MM
6
$362 $357
$295 $330
Costs of Revenues (COR)
SG&A
2Q16 Operating Expenses
Costs of revenues and SG&A
combined increased 5%
- Includes costs related to our growth
initiatives and operations of newly
acquired businesses
- Includes transaction-related expenses
which are excluded from our Adjusted
OIBDA calculation:
2Q15 2Q16
Transaction-related $1 $7
$687
$657
HIGHLIGHTS
2Q15 2Q16
$MM
7
1 2
2Q16 Adjusted OIBDA
$117
$89
2Q16 Operating Income of $50 million
vs. $61 million in the prior year
2Q16 Adjusted OIBDA of $89 million
Diluted EPS of $0.18 vs. $0.22 in the
prior year
Adjusted Diluted EPS of $0.22 vs.
$0.27 in the prior year
HIGHLIGHTS
2Q15 2Q16
$MM
8
2Q16 Cash Update
HIGHLIGHTS
2Q16 ending cash, cash equivalents and short-term
investments of $380 million
Cash provided by operations of $79 million
Quarterly dividend of $0.19 per share, or
$19 million, paid on 6/15/16
$10 million face value of debt purchased at a
discount of $9.5 million (excluding accrued interest)
Stock buyback of $36 million (on settlement date basis)
As of 6/30/16, net leverage ratio of 2.19x
- Target net leverage ratio 2.0x to 2.5x
9
CHANGES IN CASH, CASH EQUIVALENTS
AND SHORT-TERM INVESTMENTS
Beginning Cash Balance 4/1/16 $400
Free Cash Flow
Proceeds from dispositions
Acquisitions/Divestitures, net
Purchase of common stock
Dividends paid
Repurchase of Senior Notes
Other
53
28
(11)
(36)
(19)
(9)
(26)
Ending Cash Balance 6/30/16 $380
Time Inc. Outlook For 2016
1 We define Adjusted OIBDA as OIBDA adjusted for impairments of Goodwill, intangibles, fixed assets and investments; Restructuring and severance costs; gains
and losses on operating assets; pension plan settlements and/or curtailments; and Other costs related to mergers, acquisitions, investments and dispositions.
2 The Previous Full Year 2016 Outlook assumed USD to GBP exchange rate of 1.42 for the remainder of the year. The Current Full Year 2016 Outlook assumes
USD to GBP exchange rate of 1.3 for the remainder of the year.
3 The Full Year 2015 Actuals include capital expenditures of $161 million offset by $46 million of tenant improvement allowances.
$MM
FY 2015
ACTUALS
PREVIOUS FY 2016
OUTLOOK RANGE2
FY 2016
OUTLOOK RANGE2
Revenues (5)% 1% - 5% 0% - 1.5%
Operating income (loss) ($823) $305 - $340 $215 - $240
Adjusted OIBDA1 $440 $440 - $490 $400 - $430
Investment spending, net ($30) ($25) ($20)
Capital expenditures $166 $85 - $105 $95 - $105
Real estate related3 $115 $40 $50
Core & growth $51 $45 - $65 $45 - $55
10
Q&A
Appendix
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