Time Inc. Archives
Time Inc.’s Audiences Continue To Be The Largest In The Company’s History With Mobile UVs Up 29%, Video UVs Up 57%, And Social Media Footprint Up 37% Year-Over-Year*
Time Inc. Grew Digital Advertising Revenues 65% in the Second Quarter
Time Inc. Announced in July an Extensive Realignment Program to Drive Transformation for Long-Term Growth
Time Inc. Revises 2016 Revenue Outlook to Flat to +1.5%, Operating Income to $215 Million to $240 Million, and Adjusted OIBDA to $400 Million to $430 Million
Time Inc. Repurchased 2.17 Million Shares During the Second Quarter, and Retired $10 Million of Our Debt
Sep 23, 2016
Results Summary | ||||||||||||||||
In millions (except per share amounts) |
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Three Months Ended |
Six Months Ended |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
GAAP Measures | ||||||||||||||||
Revenues | $ | 769 | $ | 773 | $ | 1,459 | $ | 1,453 | ||||||||
Operating income (loss) | 50 | 61 | 47 | 66 | ||||||||||||
Net income (loss) | 18 | 24 | 8 | 15 | ||||||||||||
Diluted EPS | 0.18 | 0.22 | 0.08 | 0.13 | ||||||||||||
Cash provided by (used in) operations | 79 | 63 | 27 | 43 | ||||||||||||
Non-GAAP Measures | ||||||||||||||||
Adjusted OIBDA | $ | 89 | $ | 117 | $ | 132 | $ | 168 | ||||||||
Adjusted Net income (loss) | 22 | 30 | 11 | 23 | ||||||||||||
Adjusted Diluted EPS | 0.22 | 0.27 | 0.11 | 0.20 | ||||||||||||
Free Cash Flow | 53 | 4 | (34 | ) | (20 | ) | ||||||||||
The Company’s Adjusted OIBDA, Adjusted Net income (loss), Adjusted Diluted EPS and Free Cash Flow are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” below and the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in Schedules I through IV attached hereto.
*Excluding All You and This Old House
SECOND QUARTER RESULTS
Revenues decreased
Advertising Revenues increased
Circulation Revenues decreased
Other Revenues, which include marketing and support services provided to third parties, branded book publishing, events, and licensing, increased
Revenues Summary | ||||||||||||||||||||
In millions |
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Three Months Ended |
Six Months Ended |
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2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||
Print and other advertising | $ | 299 | $ | 343 | (13)% | $ | 569 | $ | 623 | (9)% | ||||||||||
Digital advertising | 127 | 77 | 65% | 217 | 150 | 45% | ||||||||||||||
Advertising revenues | 426 | 420 | 1% | 786 | 773 | 2% | ||||||||||||||
Subscription | 154 | 166 | (7)% | 315 | 331 | (5)% | ||||||||||||||
Newsstand | 74 | 82 | (10)% | 142 | 159 | (11)% | ||||||||||||||
Other circulation | 8 | 6 | 33% | 17 | 14 | 21% | ||||||||||||||
Circulation revenues | 236 | 254 | (7)% | 474 | 504 | (6)% | ||||||||||||||
Other revenues | 107 | 99 | 8% | 199 | 176 | 13% | ||||||||||||||
Revenues | $ | 769 | $ | 773 | (1)% | $ | 1,459 | $ | 1,453 | —% | ||||||||||
Operating Expense, which consists of Cost of Revenues and Selling, General and Administrative Expenses ("SG&A"), increased
Operating Income (Loss) was income of
Adjusted OIBDA of
Cash Flow Provided By (Used in) Operations was an inflow of
Free Cash Flow was an inflow of
During the three months ended
OUTLOOK
Our Outlook for 2016 is as follows: |
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$ in millions | ||||||||||||||
2015 Actual |
Previous Full Year 2016 |
Current Full Year 2016 |
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Revenues | (5%) | 1% | to | 5% | —% | to | 1.5% | |||||||
Operating income (loss) | $(823) | $305 | $340 | $215 | $240 | |||||||||
Adjusted OIBDA | $440 | $440 | to | $490 | $400 | to | $430 | |||||||
Investment spending, net | $(30) |
|
$(25) |
|
($20) |
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Capital expenditures | $166 | $85 | to | $105 | $95 | to | $105 | |||||||
Real estate related(2) | $115 |
|
$40 |
|
$50 |
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Core & growth | $51 | $45 | to | $65 | $45 | to | $55 | |||||||
(1) | 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. | ||
(2) | 2015 Actual capital expenditures were offset by $46 million of tenant improvements allowances. |
_______________________________________________________________________________
The Company’s Adjusted OIBDA is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” below and the reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure in Schedule V attached hereto.
CONFERENCE CALL WEBCAST
The Company’s conference call can be heard live at
To access a live audio webcast of the conference call, visit the Events and Presentations section of invest.timeinc.com.
The earnings press release and management presentation will be available on our website at invest.timeinc.com.
USE OF NON-GAAP FINANCIAL MEASURES
Some limitations of OIBDA, Adjusted OIBDA, Adjusted Net income (loss), Adjusted Diluted EPS and Free Cash Flow are that they do not reflect certain charges that affect the operating results of the Company’s business and they involve judgment as to whether items affect fundamental operating performance.
A general limitation of these measures is that they are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and may not be comparable to similarly titled measures of other companies due to differences in methods of calculation and excluded items. OIBDA, Adjusted OIBDA, Adjusted Net income (loss), Adjusted Diluted EPS and Free Cash Flow should be considered in addition to, not as a substitute for, the Company’s Operating income (loss), Net income (loss), Diluted Net income (loss) per common share 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 GAAP.
ABOUT
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of Time Inc.’s businesses. More detailed information about these factors may be found in filings by
TIME INC. |
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June 30, |
December 31, |
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ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 320 | $ | 651 | ||||
Short-term investments | 60 | 60 | ||||||
Receivables, less allowances of $217 and $248 at June 30, 2016 and December 31, 2015, respectively | 431 | 484 | ||||||
Inventories, net of reserves | 33 | 35 | ||||||
Prepaid expenses and other current assets | 162 | 187 | ||||||
Total current assets | 1,006 | 1,417 | ||||||
Property, plant and equipment, net | 300 | 267 | ||||||
Intangible assets, net | 1,041 | 1,046 | ||||||
Goodwill | 2,017 | 2,038 | ||||||
Other assets | 140 | 116 | ||||||
Total assets | $ | 4,504 | $ | 4,884 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 520 | $ | 683 | ||||
Deferred revenue | 419 | 436 | ||||||
Current portion of long-term debt | 7 | 7 | ||||||
Total current liabilities | 946 | 1,126 | ||||||
Long-term debt | 1,240 | 1,286 | ||||||
Deferred tax liabilities | 242 | 242 | ||||||
Deferred revenue | 88 | 89 | ||||||
Other noncurrent liabilities | 318 | 332 | ||||||
Stockholders' Equity | ||||||||
Common stock, $0.01 par value, 400 million shares authorized; 100.45 million and 106.03 |
1 | 1 | ||||||
million shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively |
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Preferred stock, $0.01 par value, 40 million shares authorized; none issued | — | — | ||||||
Additional paid-in-capital | 12,573 | 12,604 | ||||||
Accumulated deficit | (10,654 | ) | (10,570 | ) | ||||
Accumulated other comprehensive loss, net | (250 | ) | (226 | ) | ||||
Total stockholders' equity | 1,670 | 1,809 | ||||||
Total liabilities and stockholders' equity | $ | 4,504 | $ | 4,884 | ||||
TIME INC. |
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Three Months Ended |
Six Months Ended |
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2016 | 2015 | 2016 |
2015 |
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Revenues | |||||||||||||||
Advertising | |||||||||||||||
Print and other advertising | $ | 299 | $ | 343 | $ | 569 | $ | 623 | |||||||
Digital advertising | 127 | 77 | 217 | 150 | |||||||||||
Total advertising | 426 | 420 | 786 | 773 | |||||||||||
Circulation | |||||||||||||||
Subscription | 154 | 166 | 315 | 331 | |||||||||||
Newsstand | 74 | 82 | 142 | 159 | |||||||||||
Other circulation | 8 | 6 | 17 | 14 | |||||||||||
Total circulation | 236 | 254 | 474 | 504 | |||||||||||
Other | 107 | 99 | 199 | 176 | |||||||||||
Total revenues | 769 | 773 | 1,459 | 1,453 | |||||||||||
Costs of revenues | |||||||||||||||
Production costs | 165 | 176 | 324 | 336 | |||||||||||
Editorial costs | 96 | 93 | 188 | 182 | |||||||||||
Other | 69 | 26 | 114 | 48 | |||||||||||
Total costs of revenues | 330 | 295 | 626 | 566 | |||||||||||
Selling, general and administrative expenses | 357 | 362 | 722 | 721 | |||||||||||
Amortization of intangible assets | 20 | 20 | 41 | 39 | |||||||||||
Depreciation | 14 | 23 | 27 | 47 | |||||||||||
Restructuring and severance costs | 10 | 12 | 11 | 14 | |||||||||||
Asset impairments | 1 | — | 1 | — | |||||||||||
(Gain) loss on operating assets, net | (13 | ) | — | (16 | ) | — | |||||||||
Operating income (loss) | 50 | 61 | 47 | 66 | |||||||||||
Bargain purchase (gain) | 2 | — | (3 | ) | — | ||||||||||
Interest expense, net | 18 | 20 | 35 | 39 | |||||||||||
Other (income) expense, net | 1 | 2 | 7 | 5 | |||||||||||
Income (loss) before income taxes | 29 | 39 | 8 | 22 | |||||||||||
Income tax provision (benefit) | 11 | 15 | — | 7 | |||||||||||
Net income (loss) | $ | 18 | $ | 24 | $ | 8 | $ | 15 | |||||||
Per share information attributable to Time Inc. common stockholders: | |||||||||||||||
Basic net income (loss) per common share | $ | 0.18 | $ | 0.22 | $ | 0.08 | $ | 0.13 | |||||||
Weighted average basic common shares outstanding | 100.56 | 109.78 | 100.42 | 109.67 | |||||||||||
Diluted net income (loss) per common share | $ | 0.18 | $ | 0.22 | $ | 0.08 | $ | 0.13 | |||||||
Weighted average diluted common shares outstanding | 101.25 | 110.18 | 100.94 | 110.06 | |||||||||||
Cash dividends declared per share of common stock | $ | 0.19 | $ | 0.19 | $ | 0.38 | $ | 0.38 | |||||||
TIME INC. |
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Six Months Ended |
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2016 | 2015 | |||||||
Cash provided by (used in) operations | $ | 27 | $ | 43 | ||||
Cash provided by (used in) investing activities | (164 | ) | (168 | ) | ||||
Cash provided by (used in) financing activities | (186 | ) | (57 | ) | ||||
Effect of exchange rate changes on Cash and cash equivalents | (8 | ) | 1 | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (331 | ) | (181 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 651 | 519 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 320 | $ | 338 | ||||
Schedule I |
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TIME INC. |
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Three Months Ended |
Six Months Ended June 30, |
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2016 | 2015 | 2016 | 2015 | |||||||||
Operating income (loss) | $ | 50 | $ | 61 | $ | 47 | $ | 66 | ||||
Depreciation | 14 | 23 | 27 | 47 | ||||||||
Amortization of intangible assets | 20 | 20 | 41 | 39 | ||||||||
OIBDA(1) | 84 | 104 | 115 | 152 | ||||||||
Asset impairments | 1 | — | 1 | — | ||||||||
Restructuring and severance costs | 10 | 12 | 11 | 14 | ||||||||
(Gain) loss on operating assets, net(2) | (13) | — | (16) | — | ||||||||
Other costs(3) | 7 | 1 | 21 | 2 | ||||||||
Adjusted OIBDA(4) | $ | 89 | $ | 117 | $ | 132 | $ | 168 |
______________
(1) | OIBDA is defined as Operating income (loss) excluding Depreciation and Amortization of intangible assets. | ||
(2) | (Gain) loss on operating assets, net primarily reflects the recognition of a gain on sale of certain of our titles and the deferred gain from the sale-leaseback of the Blue Fin Building in the fourth quarter of 2015. | ||
(3) | Other costs related to mergers, acquisitions, investments and dispositions during the periods presented are included within Selling, general and administrative expenses within the Statements of Operations. | ||
(4) | Adjusted OIBDA is defined 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. | ||
Schedule II |
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TIME INC. |
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Three Months Ended |
Three Months Ended June 30, 2015 |
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Gross |
Tax Impact | Net Impact |
Gross |
Tax Impact | Net Impact | |||||||||||||||||||
Net income (loss) | $ | 29 | $ | (11 | ) | $ | 18 | $ | 39 | $ | (15 | ) | $ | 24 | ||||||||||
Asset impairments | 1 | — | 1 | — | — | — | ||||||||||||||||||
Restructuring and severance costs | 10 | (4 | ) | 6 | 12 | (5 | ) | 7 | ||||||||||||||||
(Gain) loss on operating assets, net(1) | (13 | ) | 4 | (9 | ) | — | — | — | ||||||||||||||||
Bargain purchase (gain)(2) | 2 | — | 2 | — | — | — | ||||||||||||||||||
(Gain) loss on extinguishment of debt(3) | — | 1 | 1 | — | — | — | ||||||||||||||||||
Other costs | 7 | (4 | ) | 3 | 1 | — | 1 | |||||||||||||||||
(Gain) loss on non-operating assets, net | — | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||
Adjusted Net income (loss)(4) | $ | 36 | $ | (14 | ) | $ | 22 | $ | 50 | $ | (20 | ) | $ | 30 | ||||||||||
Six Months Ended |
Six Months Ended June 30, 2015 |
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Gross |
Tax Impact | Net Impact |
Gross |
Tax Impact | Net Impact | |||||||||||||||||||
Net income (loss) | $ | 8 | $ | — | $ | 8 | $ | 22 | $ | (7 | ) | $ | 15 | |||||||||||
Asset impairments | 1 | — | 1 | — | — | — | ||||||||||||||||||
Restructuring and severance costs | 11 | (4 | ) | 7 | 14 | (6 | ) | 8 | ||||||||||||||||
(Gain) loss on operating assets, net(1) | (16 | ) | 4 | (12 | ) | — | — | — | ||||||||||||||||
Bargain purchase (gain)(2) | (3 | ) | — | (3 | ) | — | — | — | ||||||||||||||||
(Gain) loss on extinguishment of debt(3) | (4 | ) | 2 | (2 | ) | — | — | — | ||||||||||||||||
Other costs | 21 | (9 | ) | 12 | 2 | — | 2 | |||||||||||||||||
(Gain) loss on non-operating assets, net | — | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||
Adjusted Net income (loss)(4) | $ | 18 | $ | (7 | ) | $ | 11 | $ | 36 | $ | (13 | ) | $ | 23 |
______________
(1) | (Gain) loss on operating assets, net primarily relates to the recognition of a gain on sale of certain of our titles and the deferred gain from the sale-leaseback of the Blue Fin Building in the fourth quarter of 2015. | ||
(2) | Bargain purchase (gain) relates to the acquisition of certain assets of Viant in the first quarter of 2016. | ||
(3) | Gain on extinguishment of debt in connection with repurchases of our Senior Notes are included within Other (income) expense, net on the Statements of Operations. | ||
(4) | Adjusted Net income (loss) is defined as Net income (loss) adjusted for impairments of Goodwill, intangibles, fixed assets and investments; Restructuring and severance costs; gains and losses on operating and/or non-operating assets; pension plan settlements and/or curtailments; Bargain purchase (gain); gains and losses on extinguishment of debt; and Other costs related to mergers, acquisitions, investments and dispositions; as well as the impact of income taxes on the above items. | ||
Schedule III |
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TIME INC. |
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Three Months Ended |
Six Months Ended June 30, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Diluted EPS | $ | 0.18 | $ | 0.22 | $ | 0.08 | $ | 0.13 | ||||||||
Asset impairments | 0.01 | — | 0.01 | — | ||||||||||||
Restructuring and severance costs | 0.06 | 0.06 | 0.07 | 0.07 | ||||||||||||
(Gain) loss on operating assets, net(1) | (0.09 | ) | — | (0.12 | ) | — | ||||||||||
Bargain purchase (gain)(2) | 0.02 | — | (0.03 | ) | — | |||||||||||
(Gain) loss on extinguishment of debt(3) | 0.01 | — | (0.02 | ) | — | |||||||||||
Other costs | 0.03 | 0.01 | 0.12 | 0.02 | ||||||||||||
(Gain) loss on non-operating assets, net | — | (0.02 | ) | — | (0.02 | ) | ||||||||||
Adjusted Diluted EPS(4)(5) | $ | 0.22 | $ | 0.27 | $ | 0.11 | $ | 0.20 |
______________
(1) | (Gain) loss on operating assets, net primarily relates to the recognition of a gain on sale of certain of our titles and the deferred gain from the sale-leaseback of the Blue Fin Building in the fourth quarter of 2015. | ||
(2) | Bargain purchase (gain) relates to the acquisition of certain assets of Viant in the first quarter of 2016. | ||
(3) | Gain on extinguishment of debt in connection with repurchases of our Senior Notes are included within Other (income) expense, net on the Statements of Operations. | ||
(4) | Adjusted Diluted EPS is defined as Diluted EPS adjusted for impairments of Goodwill, intangibles, fixed assets and investments; Restructuring and severance costs; gains and losses on operating and/or non-operating assets; pension plan settlements and/or curtailments; Bargain purchase (gain); gains and losses on extinguishment of debt; and Other costs related to mergers, acquisitions, investments and dispositions; as well as the impact of income taxes on the above items. | ||
(5) | For periods in which we were in a net loss position, we have used the expected diluted shares in the calculation of Adjusted Diluted EPS as if we were in a net income position, without giving effect to the impact of participating securities. | ||
Schedule IV |
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TIME INC. |
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Three Months Ended |
Six Months Ended June 30, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Cash provided by (used in) operations | $ | 79 | $ | 63 | $ | 27 | $ | 43 | ||||||||
Less: Capital expenditures | (26 | ) | (59 | ) | (61 | ) | (63 | ) | ||||||||
Free Cash Flow(1) | $ | 53 | $ | 4 | $ | (34 | ) | $ | (20 | ) |
______________
(1) | Free Cash Flow is defined as Cash provided by (used in) operations, less Capital expenditures. Capital expenditures in the three and six months ended June 30, 2016 are primarily associated with concluding our real estate relocations. | ||
Schedule V |
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TIME INC. |
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Previous 2016 Outlook |
Current 2016 Outlook | ||||||||||||||||||
2015 Actual | Low | High | Low | High | |||||||||||||||
Operating income (loss) | $ | (823 | ) | $ | 305 | $ | 340 | $ | 215 | $ | 240 | ||||||||
Depreciation | 92 | 60 | 70 | 60 | 60 | ||||||||||||||
Amortization of intangible assets | 80 | 75 | 80 | 80 | 80 | ||||||||||||||
OIBDA(1) | $ | (651 | ) | $ | 440 | $ | 490 | $ | 355 | $ | 380 | ||||||||
Asset impairments, Goodwill | |||||||||||||||||||
impairment, Restructuring and | |||||||||||||||||||
severance costs, (Gains) losses on | |||||||||||||||||||
operating assets, net; Pension plan | |||||||||||||||||||
settlements and/or curtailments; and | |||||||||||||||||||
Other costs related to mergers, | |||||||||||||||||||
acquisitions, investments and | |||||||||||||||||||
dispositions | 1,091 | — | — | 45 | 50 | ||||||||||||||
Adjusted OIBDA(2) | $ | 440 | $ | 440 | $ | 490 | $ | 400 | $ | 430 | |||||||||
______________
(1) | OIBDA is defined as Operating income (loss) excluding Depreciation and Amortization of intangible assets. | ||
(2) | Adjusted OIBDA is defined 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. | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005405/en/
Source:
Time Inc.
Investor Relations and Corporate Communications
Jaison Blair, 212-522-5952
or
Tanya Levy-Odom, 212-522-9225