Time Magazine 2009 Annual Report Download - page 37

In connection with the TWC Separation, prior to the Distribution Record Date, on March 12, 2009, TWC paid a
special cash dividend of $10.27 per share to all holders of TWC Class A common stock and TWC Class B common
stock as of the close of business on March 11, 2009, which resulted in the receipt by Time Warner of $9.253 billion.
Also in connection with the TWC Separation, the Company implemented a 1-for-3 reverse stock split on
March 27, 2009.
Common Stock Repurchase Program
On July 26, 2007, Time Warner’s Board of Directors authorized a common stock repurchase program that
allows the Company to purchase up to an aggregate of $5 billion of common stock. Purchases under this stock
repurchase program may be made from time to time on the open market and in privately negotiated transactions.
The size and timing of these purchases are based on a number of factors, including price and business and market
conditions. From the program’s inception through February 17, 2010, the Company repurchased approximately
102 million shares of common stock for approximately $4.2 billion, pursuant to trading programs under
Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. This number included approximately
51 million shares of common stock purchased for approximately $1.4 billion in 2009 and 2010 (Note 9). As of
December 31, 2009, the Company had approximately $1.0 billion remaining on its stock repurchase program. On
January 28, 2010, Time Warner’s Board of Directors increased this amount to $3.0 billion.
HBO Central Europe Acquisition
On January 27, 2010, HBO purchased the remainder of its partners’ interests in the HBO CE joint venture for
approximately $155 million in cash. HBO CE operates the HBO and Cinemax premium pay television
programming services serving 11 territories in Central Europe. This transaction resulted in HBO owning 100%
of the interests of HBO CE. Prior to this transaction, HBO owned 33% of the interests in HBO CE and accounted for
this investment under the equity method of accounting. See Note 3 to the accompanying consolidated financial
statements.
CME Investment
On May 18, 2009, the Company completed an investment in Central European Media Enterprises Ltd.
(“CME”) in which the Company received a 31% economic interest for $246 million in cash. As of December 31,
2009, the Company was deemed to beneficially hold an approximate 36% voting interest. CME is a publicly-traded
broadcasting company operating leading networks in seven Central and Eastern European countries. In connection
with its investment, Time Warner agreed to allow CME founder and Non-Executive Chairman Ronald S. Lauder to
vote Time Warner’s shares of CME for at least four years, subject to certain exceptions. The Company’s investment
in CME is being accounted for under the cost method of accounting. See Note 3 to the accompanying consolidated
financial statements.
RESULTS OF OPERATIONS
Changes in Basis of Presentation
As discussed more fully in Note 1 to the accompanying consolidated financial statements, the 2008 and 2007
financial information has been recast so that the basis of presentation is consistent with that of the 2009 financial
information. This recast reflects (i) the financial condition and results of operations of TWC and AOL as
discontinued operations for all periods presented, (ii) the adoption of recent accounting guidance pertaining to
noncontrolling interests, (iii) the adoption of recent accounting guidance pertaining to participating securities and
(iv) the 1-for-3 reverse stock split of the Company’s common stock that became effective on March 27, 2009.
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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)