SEC Filings

10-Q
TIME WARNER INC. filed this Form 10-Q on 08/02/2017
Entire Document
 


Table of Contents

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

 

Business Segment Results

Turner.  Revenues and Operating Income of the Turner segment for the three and six months ended June 30, 2017 and 2016 are as follows (millions):

 

                                                                                                                                                     
     Three Months Ended June 30,    Six Months Ended June 30,
     2017   2016       % Change        2017   2016       % Change    

Revenues:

             

Subscription

   $ 1,672     $ 1,485       13%      $ 3,337     $ 2,975       12%  

Advertising

     1,265       1,345       (6)%        2,478       2,580       (4)%  

Content and other

     165       180       (8)%        375       361       4%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Total revenues

     3,102       3,010       3%        6,190       5,916       5%  

Costs of revenues (a)

     (1,515     (1,356     12%        (2,928     (2,570     14%  

Selling, general and
administrative (a)

     (525     (463     13%        (980     (864     13%  

Gain (loss) on operating
assets

     49       (2     NM        55       (2     NM  

Restructuring and
severance costs

     (5     (6     (17)%        (7     (7     —%  

Depreciation

     (51     (48     6%        (101     (95     6%  

Amortization

     (5     (5     —%        (9     (9     —%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Operating Income

   $ 1,050     $ 1,130       (7)%      $ 2,220     $ 2,369       (6)%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

(a)

Costs of revenues and Selling, general and administrative expenses exclude depreciation.

For the three and six months ended June 30, 2017, Subscription revenues increased primarily due to higher domestic subscription revenues of $174 million and $339 million, respectively, reflecting higher contractual rates, partially offset by a decrease in subscribers.

For the three and six months ended June 30, 2017, the decrease in Advertising revenues reflected lower domestic revenues of $94 million and $121 million, respectively, primarily driven by the comparison to the revenues associated with the NCAA Division I Men’s Basketball Championship Tournament (the “NCAA Tournament”) in the prior year period when Turner’s networks aired the championship and two Final Four games, as well as lower audience delivery at Turner’s entertainment networks, partially offset by increases at Turner’s news businesses.

The components of Costs of revenues for the Turner segment are as follows (millions):

 

                                                                                                                                                     
     Three Months Ended June 30,    Six Months Ended June 30,
     2017   2016       % Change        2017   2016       % Change    

Programming costs:

             

Originals and sports

   $ 1,069     $ 954       12%      $ 2,051     $ 1,771       16%  

Acquired films and
syndicated series

      210        189       11%        420       390       8%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Total programming
costs

      1,279         1,143        12%         2,471         2,161        14%  

Other direct operating
costs

     236       213       11%        457       409       12%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Costs of revenues (a)

   $ 1,515      $ 1,356        12%      $ 2,928      $ 2,570        14%  
  

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

(a)

Costs of revenues exclude depreciation.

 

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