SEC Filings

8-K
TIME WARNER INC. filed this Form 8-K on 08/02/2017
Entire Document
 


Presented below is a discussion of the performance of Time Warner’s segments for the second quarter of 2017. Unless otherwise noted, the dollar amounts in parentheses represent year-over-year changes.

TURNER

Revenues increased 3% ($92 million) to $3.1 billion, due to increases of 13% ($187 million) in Subscription revenues, partially offset by declines of 6% ($80 million) in Advertising revenues and 8% ($15 million) in Content and other revenues. Subscription revenues benefited from higher domestic rates and growth at Turner’s international networks, partially offset by lower domestic subscribers. The decline in Advertising revenues was due to the comparison to Turner’s networks airing the NCAA Division I Men’s Basketball National Championship and Final Four games in the prior year quarter, the airing of two fewer NBA playoff games in this year’s quarter, and lower delivery at Turner’s domestic entertainment networks, partially offset by increases at Turner’s news businesses and growth at Turner’s international networks. The negative impact on Advertising revenues from not airing the NCAA Division I Men’s Basketball National Championship and Final Four games and airing fewer NBA playoff games was approximately 8%.

Operating Income decreased 7% ($80 million) to $1.1 billion. The growth in revenues was more than offset by higher expenses, mainly due to increased programming costs. Programming expenses grew 12% due to higher costs related to the first year of Turner’s new agreement with the NBA, partly offset by the lower costs associated with Turner’s networks not airing the 2017 NCAA Division I Men’s Basketball National Championship and Final Four games.

Adjusted Operating Income decreased 9% ($103 million) to $1.0 billion.

During the second quarter of 2017: Turner had three of the top five ad-supported cable networks in primetime among adults 18-49 with TNT, TBS and Adult Swim ranking #1, #2, and #5, respectively; Adult Swim was the #1 ad-supported cable network in total day among adults 18-34; and CNN had its most-watched second quarter ever. In July, Turner received 21 Primetime Emmy nominations, including seven nominations for Full Frontal with Samantha Bee and five for Anthony Bourdain: Parts Unknown. In the second quarter, CNN was the leading digital news destination for multiplatform unique visitors and video starts for the sixth and ninth consecutive quarter, respectively.

HOME BOX OFFICE

Revenues increased 1% ($9 million) to $1.5 billion, due to an increase of 8% ($104 million) in Subscription revenues, partially offset by a decline of 44% ($95 million) in Content and other revenues. Subscription revenues increased due to higher domestic rates and subscribers and international growth. Content and other revenues declined due to lower home entertainment and international licensing revenues.

Operating Income increased 10% ($50 million) to $531 million, reflecting growth in revenues and lower expenses, including declines in restructuring and severance, programming and distribution costs. Programming costs decreased 3% due to lower original programming expenses, including lower programming charges and the timing of original series. This was partially offset by a reduction in amortization recognized in the prior year quarter due to the change in the estimate of the utilization period of original programming related to the prior year’s first quarter.

Adjusted Operating Income increased 14% ($65 million) to $546 million.

In July, HBO received 111 Primetime Emmy nominations, the most of any network for the 17th straight year, and Westworld received 22 nominations, the most of any show, including for Outstanding Drama Series. HBO’s nominations also included Outstanding Comedy Series for Silicon Valley and Veep, and Outstanding Limited Series for Big Little Lies and The Night Of. Through the first two weeks, the premiere of the seventh season of Game of Thrones has totaled 26 million viewers across all platforms, and is the most-watched season premiere episode of

 

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