Time Magazine 2009 Annual Report Download - page 137

On March 10, 2009, Anderson News L.L.C. and Anderson Services L.L.C. (collectively, “Anderson News”)
filed an antitrust lawsuit in the U.S. District Court for the Southern District of New York against several magazine
publishers, distributors and wholesalers, including Time Inc. and one of its subsidiaries, Time/Warner Retail
Sales & Marketing, Inc. Plaintiffs allege that defendants violated Section 1 of the Sherman Antitrust Act by
engaging in an antitrust conspiracy against Anderson News, as well as other related state law claims. Plaintiffs are
seeking unspecified monetary damages. On December 14, 2009, defendants filed motions to dismiss the complaint.
The Company intends to defend against this lawsuit vigorously.
On January 17, 2002, former AOL Community Leader volunteers filed a class action lawsuit in the U.S. District
Court for the Southern District of New York against the Company, AOL and AOL Community, Inc. under the
Employee Retirement Income Security Act of 1974. The complaint was later amended to name the Administrative
Committees of the Company and AOL. While the Company has reported on this case in its notes to financial
statements and still intends to defend against this lawsuit vigorously, following the separation of AOL from the
Company in December 2009, the Company does not view the remaining claims brought against the Company or its
Administrative Committee to be material. As a result, the Company does not intend to include disclosure regarding
this matter in its future notes to financial statements.
From time to time, the Company receives notices from third parties claiming that it infringes their intellectual
property rights. Claims of intellectual property infringement could require Time Warner to enter into royalty or
licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or
permanently from further use of the intellectual property in question. In addition, certain agreements entered into by
the Company may require the Company to indemnify the other party for certain third-party intellectual property
infringement claims, which could increase the Company’s damages and its costs of defending against such claims.
Even if the claims are without merit, defending against the claims can be time-consuming and costly.
The costs and other effects of pending or future litigation, governmental investigations, legal and administrative
cases and proceedings (whether civil or criminal), settlements, judgments and investigations, claims and changes in
those matters (including those matters described above), and developments or assertions by or against the Company
relating to intellectual property rights and intellectual property licenses, could have a material adverse effect on the
Company’s business, financial condition and operating results.
16. RELATED PARTY TRANSACTIONS
The Company has entered into certain transactions in the ordinary course of business with unconsolidated
investees accounted for under the equity method of accounting. These transactions have been executed on terms
comparable to those of transactions with unrelated third parties and primarily include the licensing of broadcast
rights to The CW for film and television product by the Filmed Entertainment segment and the licensing of rights to
carry cable television programming provided by the Networks segment.
Income (expense) resulting from transactions with related parties consists of (millions):
2009 2008 2007
Years Ended December 31,
(recast) (recast)
Revenues ............................................. $ 261 $ 389 $ 329
Costs of revenues ....................................... (10) (8) (35)
Selling, general and administrative .......................... (17) (12) (10)
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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)