SEC Filings

8-K
TIME WARNER INC. filed this Form 8-K on 10/26/2017
Entire Document
 


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

TURNER

Revenues increased 6% ($158 million) to $2.8 billion, due to increases of 13% ($186 million) in Subscription revenues and 4% ($5 million) in Content and other revenues, partially offset by a decline of 3% ($33 million) in Advertising revenues. Subscription revenues benefited from higher domestic rates and growth at Turner’s international networks, partially offset by lower domestic subscribers. Content and other revenues increased due to higher licensing revenues. The decline in Advertising revenues was due to lower delivery at certain domestic networks, partially offset by increases at Turner’s news businesses.

Operating Income increased 7% ($81 million) to $1.2 billion due to the growth in revenues partially offset by higher expenses, including increased programming and marketing costs. Programming expenses grew 8% primarily due to higher original programming costs at Turner’s domestic entertainment networks. Marketing expenses increased mainly to support original series on Turner’s domestic entertainment networks.

Adjusted Operating Income increased 5% ($64 million) to $1.3 billion.

Year-to-date through the third quarter, Turner had three of the top five ad-supported cable networks in primetime among adults 18-49 and Adult Swim’s Rick and Morty ranked as the #1 comedy across all of television among adults 18-34. During the third quarter of 2017, CNN was the #1 news network among adults 18-49 in both primetime and total day, had its most-watched third quarter ever among total viewers, and was the leading digital news destination for multiplatform unique visitors and video starts for the seventh and tenth consecutive quarter, respectively. Viewership of TNT’s NBA Opening Night doubleheader averaged 4.9 million total viewers, up 53% compared to last year. TBS’ Major League Baseball postseason coverage averaged 4.6 million total viewers, up 46% over the prior year.

HOME BOX OFFICE

Revenues increased 13% ($179 million) to $1.6 billion, due to increases of 12% ($156 million) in Subscription revenues and 14% ($23 million) in Content and other revenues. Subscription revenues increased due to higher domestic subscribers and rates and international growth. The increase in Content and other revenues was primarily due to higher international licensing and home entertainment revenues.

Operating Income increased 4% ($22 million) to $552 million. The growth in revenues more than offset increased expenses, including higher marketing and programming costs. Programming expenses increased 7% due to higher original programming costs, primarily related to the timing of original series. The increase in marketing costs was related to HBO’s OTT products and original programming.

Adjusted Operating Income increased 7% ($35 million) to $565 million.

In September, HBO received 29 Primetime Emmy Awards, the most of any network for the 16th consecutive year, including Outstanding Comedy Series for Veep, Outstanding Limited Series for Big Little Lies and Outstanding Variety Talk Series for Last Week Tonight with John Oliver. Average viewership for the seventh season of Game of Thrones increased 27% year over year to 33 million viewers, a record for an HBO original series. The second season of Insecure saw average viewership increase 51%.

WARNER BROS.

Revenues increased 2% ($58 million) to $3.5 billion, reflecting higher theatrical and videogames revenues partially offset by lower television revenues. Theatrical revenues increased due to higher home entertainment and television licensing revenues of theatrical product. Videogames revenues increased primarily due to carryover revenue from Injustice 2. The decrease in television revenues was mainly related to lower initial telecast revenues.

 

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