|TIME WARNER INC. filed this Form 10-Q on 10/26/2017|
MANAGEMENTS DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Managements discussion and analysis of results of operations and financial condition (MD&A) is a supplement to the accompanying consolidated financial statements and provides additional information on Time Warner Inc.s (Time Warner or the Company) businesses, current developments, financial condition, cash flows and results of operations. MD&A is organized as follows:
Time Warner is a leading media and entertainment company whose major businesses encompass an array of the most respected and successful media brands. Among the Companys brands are TNT, TBS, Adult Swim, Cartoon Network, CNN, HBO, Cinemax, Warner Bros. and New Line Cinema. During the nine months ended September 30, 2017, the Company generated Revenues of $22.660 billion (up 6% from $21.427 billion in 2016), Operating Income of $6.013 billion (up 3% from $5.856 billion in 2016), Income from continuing operations of $3.856 billion (up 7% from $3.597 billion in 2016), Net Income attributable to Time Warner shareholders of $3.858 billion (up 6% from $3.633 billion in 2016) and Cash provided by operations of $3.947 billion (up 12% from $3.534 billion in 2016).
Time Warner Businesses
Time Warner classifies its operations into three reportable segments: Turner, Home Box Office and Warner Bros. For additional information regarding Time Warners segments, refer to Note 13, Segment Information, to the accompanying consolidated financial statements.
As used in MD&A, the term affiliates refers to distributors that deliver packages of networks to their subscribers, including cable system operators, satellite service distributors and telephone companies (traditional affiliates) and virtual multichannel video programming distributors (virtual MVPDs); and the term OTT services refers to services that deliver video content to consumers over the internet and includes subscription video-on-demand (SVOD) services and advertising-supported VOD (AVOD) services such as social media platforms and user-generated content digital platforms, but does not include virtual MVPDs.
Turner. The Turner segment consists of businesses managed by Turner Broadcasting System, Inc. (Turner). During the nine months ended September 30, 2017, the Turner segment recorded Revenues of $8.958 billion (39% of the Companys total Revenues) and Operating Income of $3.463 billion.
Turner creates and programs branded news, entertainment, sports and kids multi-platform content for consumers around the world. The Turner networks and related businesses and brands include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Bleacher Report, Cartoon Network, Boomerang, CNN, HLN and iStreamPlanet. The Turner networks generate revenues principally from licensing programming to affiliates that have contracted to receive and distribute this programming to subscribers, from the sale of advertising and from licensing its original programming and its brands and characters for consumer products and other business ventures. Turner also generates revenues from the sale of advertising and sponsorships through its digital