Time Magazine 2009 Annual Report Download - page 100

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During 2009, 2008 and 2007, $20 million, $6 million and $32 million, respectively, of net unrealized gains were
reclassified from Accumulated other comprehensive income, net, to Other income, net, in the consolidated
statement of operations, based on the specific identification method.
Cost-Method Investments
During 2009, the Company acquired an interest in CME for $246 million in cash (see Note 3). The Company’s
other cost-method investments typically include investments in start-up companies and investment funds. The
Company uses available qualitative and quantitative information to evaluate all cost-method investments for
impairment at least quarterly.
Gain on Sale of Investments
For the year ended December 31, 2009, the Company recognized net gains of $52 million related to the sale of
investments, primarily consisting of a $28 million gain on the sale of the Company’s investment in TiVo Inc. and a
$17 million gain on the sale of the Company’s investment in Eidos, plc (formerly SCi Entertainment Group plc)
(“Eidos”).
For the year ended December 31, 2008, the Company recognized net gains of $32 million related to the sale of
investments, primarily consisting of a $16 million gain on the sale of the Company’s investment in Adify
Corporation and a $6 million gain on the sale of the Company’s investment in BigBand Networks, Inc.
For the year ended December 31, 2007, the Company recognized net gains of $214 million related to the sale of
investments, primarily consisting of a $56 million gain on the sale of the Company’s investment in Oxygen Media
Corporation and a $100 million gain on the Company’s sale of its 50% interest in Bookspan.
Investment Writedowns
For the years ended December 31, 2009, 2008 and 2007 the Company incurred writedowns to reduce the
carrying value of certain investments that experienced other-than-temporary impairments. For the year ended
December 31, 2009, the writedowns were $73 million, including $41 million related to equity-method investments,
primarily Networks investments, and $15 million of available-for-sale securities. For the year ended December 31,
2008, the writedowns were $83 million including $56 million of available-for-sale securities, primarily the
writedown of the Company’s investment in Eidos (which was sold in 2009), and $2 million related to equity-method
investments. For the year ended December 31, 2007, the writedowns were $142 million, including $59 million of
available-for-sale securities, primarily the writedown of Eidos, and $74 million related to equity-method
investments, primarily the writedown of the investment in The CW.
The years ended December 31, 2008 and 2007 also included $10 million of losses and $2 million of gains,
respectively, to reflect market fluctuations in equity derivative instruments.
While Time Warner has recognized all declines that are believed to be other-than-temporary as of December 31,
2009, it is reasonably possible that individual investments in the Company’s portfolio may experience an
other-than-temporary decline in value in the future if the underlying investee experiences poor operating
results or the U.S. or certain foreign equity markets experience further declines in value.
88
TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)