Time Magazine 2009 Annual Report Download - page 40

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“Financial Condition and Liquidity — Outstanding Debt and Other Financing Arrangements — Consent
Solicitation.”
Share of Equity Investment Gain on Disposal of Assets
For the year ended December 31, 2008, the Company recognized $30 million as its share of a pretax gain on the
sale of a Central European documentary channel of an equity method investee.
Income Tax Impact and Tax Items Related to TWC
The income tax impact reflects the estimated tax or tax benefit associated with each item affecting
comparability. Such estimated taxes or tax benefits vary based on certain factors, including the taxability or
deductibility of the items and foreign tax on certain transactions. For the years ended December 31, 2009, 2008 and
2007, the Company also recognized approximately $24 million of tax benefits, $9 million of tax expense and
$6 million of tax benefits, respectively, attributable to the impact of certain state tax law changes on TWC net
deferred liabilities.
Noncontrolling Interest Impact
For the year ended December 31, 2009, the noncontrolling interest impact of $5 million reflects the minority
owner’s share of the tax provision related to changes in certain state tax laws on TWC net deferred liabilities.
2009 vs. 2008
Consolidated Results
The following discussion provides an analysis of the Company’s results of operations and should be read in
conjunction with the accompanying consolidated statement of operations.
Revenues. The components of revenues are as follows (millions):
2009 2008 % Change
Years Ended December 31,
(recast)
Subscription ........................................ $ 8,859 $ 8,397 6%
Advertising......................................... 5,161 5,798 (11%)
Content ........................................... 11,020 11,435 (4%)
Other ............................................. 745 886 (16%)
Total revenues ...................................... $ 25,785 $ 26,516 (3%)
The increase in Subscription revenues for the year ended December 31, 2009 was primarily related to an
increase at the Networks segment, offset partially by a decline at the Publishing segment. The increase in
Subscription revenues at the Networks segment was due primarily to higher subscription rates at both Turner and
HBO and international subscriber growth including the effect of the consolidation of HBO LAG, partially offset by
the negative impact of foreign exchange rates at Turner. The decrease at the Publishing segment was primarily due
to softening domestic newsstand sales and declines in domestic subscription sales, both due in part to the effect of
the current economic environment, as well as decreases at IPC resulting primarily from the negative impact of
foreign exchange rates.
The decrease in Advertising revenues for the year ended December 31, 2009 was primarily due to declines at
the Publishing segment and, to a lesser extent, a decline at the Networks segment. The decrease at the Publishing
segment was primarily due to declines in domestic print Advertising revenues and international print Advertising
revenues, including the effect of foreign exchange rates at IPC, and lower online revenues. The decrease at the
28
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)