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)

 

Transactions and Other Items Affecting Comparability

As more fully described herein and in the related notes to the accompanying consolidated financial statements, the comparability of Time Warner’s results from continuing operations has been affected by transactions and certain other items in each period as follows (millions):

 

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

Asset impairments

   $ (1   $ (2   $ (2   $ (5

Gain on operating assets, net

     49       89       56       89  

Costs related to the AT&T merger

     (101           (183      

Other

     (10     (1     (11     (14
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact on Operating Income

     (63     86       (140     70  

Investment gains, net

     96       47       255       36  

Amounts related to the separation or disposition of former Time Warner segments

     (2     (5     (6     (9

Items affecting comparability relating to equity method investments

     1       (149           (140
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax impact

     32       (21     109       (43

Income tax impact of above items

     (24     (57     15       (53
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of items affecting comparability on income from continuing operations

   $ 8     $ (78   $ 124     $ (96
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition to the items affecting comparability described above, the Company incurred Restructuring and severance costs of $8 million and $20 million for the three and six months ended June 30, 2017, respectively, and $48 million and $53 million for the three and six months ended June 30, 2016, respectively. For further information regarding the Restructuring and severance costs, see “Consolidated Results” and “Business Segment Results.”

Asset Impairments

During the three and six months ended June 30, 2017, the Company recognized miscellaneous asset impairments of $1 million and $2 million, respectively, at the Warner Bros. segment. During the three and six months ended June 30, 2016, the Company recognized miscellaneous asset impairments of $2 million and $4 million, respectively, at Corporate, and, for the six months ended June 30, 2016, $1 million at the Warner Bros. segment.

Gain on Operating Assets, Net

During the three and six months ended June 30, 2017, the Company recognized a $49 million gain on the sale of an Atlanta broadcast television station at the Turner segment. During the six months ended June 30, 2017, the Company also recognized miscellaneous gains of $6 million at the Turner segment and $1 million at the Warner Bros. segment. For the three and six months ended June 30, 2016, the Company recognized $89 million of net gains principally at the Warner Bros. segment related to the gain on the sale of the net assets of Warner Bros.’ Flixster business to Fandango Media, LLC.

Costs related to the AT&T merger

For the three and six months ended June 30, 2017, the Company recognized $101 million and $183 million, respectively, of costs related to the AT&T merger, consisting of $30 million and $56 million, respectively, at Corporate, $29 million and $51 million, respectively, at the Turner segment, $27 million and $49 million, respectively, at the Warner Bros. segment and $15 million and $27 million, respectively, at the Home Box Office segment. For the three and six months ended June 30, 2017, these costs reflected $18 million and $36 million, respectively, of external transaction costs and $83 million and $147 million, respectively, of costs from employee retention programs (as discussed below). For the three and six months ended June 30, 2017, $98 million and $178 million, respectively, of these costs are included in Selling, general and administrative expenses and the remainder in Costs of revenues in the accompanying Consolidated Statement of Operations.

 

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