Time Magazine 2009 Annual Report Download - page 97

The Company recorded amortization expense of $319 million in 2009 compared to $356 million in 2008 and
$306 million in 2007. Based on the amount of intangible assets subject to amortization at December 31, 2009, the
estimated amortization expense for each of the succeeding five years ended December 31 is as follows: 2010 —
$301 million; 2011 — $298 million; 2012 — $284 million; 2013 — $255 million; and 2014 — $248 million.
These amounts may vary as acquisitions and dispositions occur in the future and as purchase price allocations are
finalized.
3. BUSINESS ACQUISITIONS, DISPOSITIONS AND RELATED TRANSACTIONS
Separations of TWC and AOL from Time Warner
As discussed in Note 1, on March 12, 2009, the Company completed the legal and structural separation of TWC
from the Company. In addition, on December 9, 2009, the Company completed the legal and structural separation of
AOL from the Company. With the completion of these separations, the Company disposed of its Cable and AOL
segments in their entirety and ceased to consolidate their financial condition and results of operations in its
consolidated financial statements. Accordingly, the Company has presented the financial condition and results of
operations of its former Cable and AOL segments as discontinued operations in the consolidated financial
statements for all periods presented.
HBO Central Europe Acquisition
On January 27, 2010, HBO purchased the remainder of its partners’ interests in the HBO Central Europe (“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.
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.
HBO Acquisitions
On December 27, 2007 and January 2, 2008, the Company, through its Networks segment, purchased additional
interests in HBO Asia and HBO South Asia and on December 19, 2008 purchased an additional interest in HBO
LAG. The additional interests purchased in each of these three multi-channel pay-television programming services
ranged in size from approximately 20% to 30%, and the aggregate purchase price was approximately $275 million,
net of cash acquired. As a result of purchasing the additional interests, the Company became the primary beneficiary
of each of these variable interest entities and began consolidating the results of HBO Asia, HBO South Asia and
HBO LAG as of the approximate dates the respective transactions occurred. See “Description of Business, Basis of
Presentation and Summary of Significant Accounting Policies — Recent Accounting Guidance Not Yet Adopted”
in Note 1 for a description of amendments to the guidance to accounting for VIEs, which became effective for Time
Warner on January 1, 2010 and will be applied on a retrospective basis beginning in the first quarter of 2010.
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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)