Time Magazine 2009 Annual Report Download - page 99

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4. INVESTMENTS
The Company’s investments consist of equity-method investments, fair-value and other investments, including
available-for-sale securities, and cost-method investments. Time Warner’s investments, by category, consist of
(millions):
2009 2008
December 31,
(recast)
Equity-method investments ....................................... $ 280 $ 313
Fair-value and other investments, including available-for-sale securities ...... 578 608
Cost-method investments......................................... 323 106
Total ....................................................... $ 1,181 $ 1,027
Equity-Method Investments
At December 31, 2009, investments accounted for using the equity method primarily represented certain
network and filmed entertainment ventures which are generally 20-50% owned. No single investment individually
or in the aggregate is considered significant for the periods presented.
Fair-Value and Other Investments, Including Available-for-Sale Securities
Fair-value and other investments include deferred compensation-related investments, available-for-sale
securities and equity derivative instruments of $544 million, $33 million and $1 million, respectively, as of
December 31, 2009 and $527 million, $80 million and $1 million, respectively, as of December 31, 2008.
Deferred compensation-related investments included $238 million and $230 million at December 31, 2009 and
2008, respectively, which were recorded at fair value, and $306 million and $297 million at December 31, 2009 and
2008, respectively, of Corporate Owned Life Insurance investments, which were recorded at cash surrender value.
The deferred compensation program is an elective unfunded program whereby eligible employees may defer receipt
of a portion of their annual compensation. The amount deferred increases or decreases based on the valuations of the
various hypothetical investment options chosen by the employee. The Company acquires assets in order to
economically hedge the Company’s liability under the deferred compensation program, which varies based on the
performance of the various hypothetical investment options. The corresponding liability for the deferred
compensation program is included within Current or Noncurrent other liabilities as appropriate.
Equity derivatives instruments and available-for-sale securities are recorded at fair value in the consolidated
balance sheet, and the realized gains and losses are included as a component of Other income, net. The cost basis,
unrealized gains, unrealized losses and fair market value of available-for-sale securities are set forth below
(millions):
2009 2008
December 31,
(recast)
Cost basis of available-for-sale securities ............................... $ 21 $ 49
Gross unrealized gain .............................................. 14 31
Gross unrealized loss .............................................. (2) —
Fair value of available-for-sale securities................................ $ 33 $ 80
Deferred tax liability .............................................. $ 5 $ 12
87
TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)