By William Launder
Time Inc. will carry an initial debt load of $1.3 billion
following its spinoff from Time Warner Inc., the parent company
said Wednesday.
The disclosure, made during Time Warner's fourth-quarter
earnings call, addresses one of the biggest remaining questions
about how Time Inc. will be positioned as its own publicly traded
company following the spinoff.
Time Inc., which is due to be spun off in the second quarter,
publishes magazines such as Sports Illustrated, People, Fortune and
Time.
The details on debt were made public as Time Warner reported
that Time Inc.'s operating income fell 47% in the fourth quarter,
partly because of impairment charges. Revenue at the magazine unit
was flat at $966 million, amid a 6% decline in subscription revenue
and a 2% increase in advertising revenue. The results included
American Express publishing business, home to titles such as Travel
+ Leisure and Food & Wine, which Time acquired last year.
Excluding the impact of the acquisition of American Express
Publishing, total revenue for the quarter would have fallen 8%,
Time Warner said.
The earnings report came a day after Time Inc.'s Chief Executive
Joe Ripp outlined steps to streamline Time Inc.'s management and
operational structure. The restructuring process will include the
laying off nearly 500 employees, or about 6% of Time Inc.'s global
staff, according to a person close to the company.
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