Time Magazine 2010 Annual Report Download - page 39

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For the year ended December 31, 2009, the Company recognized $20 million of other income related to the
increase in the estimated fair value of Time Warner equity awards held by TWC employees. In addition, the
Company incurred pretax direct transaction costs, primarily legal and professional fees, related to the separation of
TWC of $6 million for the year ended December 31, 2009 and $11 million for the year ended December 31, 2008.
The aforementioned costs have been reflected in other income (loss), net in the accompanying consolidated
statement of operations.
Costs Related to the Separation of AOL
For the year ended December 31, 2009, the Company incurred $15 million of costs related to the separation of
AOL Inc. (“AOL”), which have been recorded in other income (loss), net in the accompanying consolidated
statement of operations. These costs were related to the solicitation of consents from debt holders to amend the
indentures governing certain of the Company’s debt securities.
Premiums Paid and Transaction Costs Incurred in Connection with Debt Redemptions
For the year ended December 31, 2010, the Company recognized $364 million of premiums paid and
transaction costs incurred in connection with the 2010 Debt Redemptions, which were recorded in other
income (loss), net in the accompanying consolidated statement of operations. See “Financial Condition and
Liquidity — Outstanding Debt and Other Financing Arrangements” for more information.
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, which has been reflected in other
income (loss), net in the accompanying consolidated statement of operations.
Income Tax Impact and Tax Items Related to TWC
The income tax impact reflects the estimated tax provision or tax benefit associated with each item affecting
comparability. Such estimated tax provisions 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 and 2008,
the Company also recognized approximately $24 million of tax benefits and $9 million of tax expense, 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
owners’ share of the tax provision related to changes in certain state tax laws on TWC net deferred liabilities.
2010 vs. 2009
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.
27
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)