SEC Filings

10-Q
TIME WARNER INC. filed this Form 10-Q on 10/26/2017
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 September 30,     Nine Months Ended September 30,  
    2017     2016     2017     2016  

Asset impairments

  $ (9)     $ (30)     $ (11)     $ (35)  

Gain (loss) on operating assets, net

    13        (12)       69        77   

Costs related to the AT&T merger

    (93)       —        (276)       —   

Other

    (5)       (14)       (16)       (28)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Impact on Operating Income

    (94)       (56)       (234)       14   

Investment gains, net

    —        57        255        93   

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

    (4)       (8)       (10)       (17)  

Items affecting comparability relating to equity method investments

                      (139)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Pretax impact

    (97)       (6)       12        (49)  

Income tax impact of above items

    30        35        45        (18)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Impact of items affecting comparability on income from
continuing operations

  $ (67)     $ 29      $ 57      $ (67)  
 

 

 

   

 

 

   

 

 

   

 

 

 

In addition to the items affecting comparability described above, the Company incurred Restructuring and severance costs of $3 million and $23 million for the three and nine months ended September 30, 2017, respectively, and $11 million and $64 million for the three and nine months ended September 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 nine months ended September 30, 2017, the Company recognized asset impairments, relating primarily to software, of $9 million and $11 million, respectively, which consisted of $4 million and $6 million, respectively, at the Warner Bros. segment and $5 million for both periods at the Turner segment. During the three and nine months ended September 30, 2016, the Company recognized asset impairments of $30 million and $35 million, respectively, which consisted of $25 million at Turner for both periods relating to an international broadcast license, $5 million and $6 million, respectively, at Warner Bros. relating to certain internally developed software and, for the nine months ended September 30, 2016, $4 million at Corporate relating to miscellaneous assets.

Gain (Loss) on Operating Assets, Net

During the three and nine months ended September 30, 2017, the Company recognized a $13 million gain on operating assets primarily relating to a non-income tax receivable at the Turner segment. During the nine months ended September 30, 2017, the Company also recognized a $49 million gain on the sale of an Atlanta broadcast television station at the Turner segment as well as miscellaneous gains of $6 million at the Turner segment and $1 million at the Warner Bros. segment. For the three months ended September 30, 2016, the Company recognized $12 million of loss on operating assets, primarily relating to the pending disposition of a business at the Turner segment. For the nine months ended September 30, 2016, the Company recognized $77 million of net gain on operating assets, consisting of $92 million of gains at the Warner Bros. segment, principally relating to the gain on the sale of the net assets of Warner Bros.’ Flixster business to Fandango Media, LLC, and $15 million of losses at the Turner segment, principally relating to the pending disposition of a business.

 

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