Time Magazine 2009 Annual Report Download - page 52

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remainder of the increase in selling, general and administrative expenses reflected, in part, higher marketing
expenses and increased costs related to international expansion.
As previously noted under “Significant Transactions and Other Items Affecting Comparability,” the 2008
results included a $3 million loss on the sale of GameTap, an online video game business, and an $18 million
noncash impairment of GameTap. The 2007 results included a $34 million noncash impairment of the Court TV
tradename as a result of rebranding the network’s name to truTV, effective January 1, 2008. In addition, the 2007
results included a charge of $37 million related to senior management changes at HBO, $3 million of which was
reversed in 2008 due to changes in estimates.
Operating Income before Depreciation and Amortization increased primarily due to an increase in revenues, a
decline in restructuring costs and the absence of the tradename impairment, partially offset by increases in selling,
general and administrative expenses, which included the $281 million trial court judgment against Turner, costs of
revenues and the impairment of GameTap. Operating Income increased due primarily to the increase in Operating
Income before Depreciation and Amortization described above, offset in part by increased depreciation and
amortization expenses related to the impact of international expansion.
Filmed Entertainment. Revenues, Operating Income before Depreciation and Amortization and Operating
Income of the Filmed Entertainment segment for the years ended December 31, 2008 and 2007 are as follows
(millions):
2008 2007 % Change
Years Ended December 31,
Revenues:
Subscription ...................................... $ 39 $ 30 30%
Advertising ....................................... 88 48 83%
Content ......................................... 11,030 11,355 (3%)
Other ........................................... 241 249 (3%)
Total revenues ...................................... 11,398 11,682 (2%)
Costs of revenues
(a)
.................................. (8,161) (8,856) (8%)
Selling, general and administrative
(a)
...................... (1,867) (1,611) 16%
Restructuring costs ................................... (142) — NM
Operating Income before Depreciation and Amortization ....... 1,228 1,215 1%
Depreciation ........................................ (167) (153) 9%
Amortization ....................................... (238) (217) 10%
Operating Income .................................... $ 823 $ 845 (3%)
(a)
Costs of revenues and selling, general and administrative expenses exclude depreciation.
40
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)