Time Magazine 2011 Annual Report Download - page 36

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
INTRODUCTION
Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a
supplement to the accompanying consolidated financial statements and provides additional information on Time
Warner Inc.’s (“Time Warner” or the “Company”) businesses, current developments, financial condition, cash
flows and results of operations. MD&A is organized as follows:
•Overview. This section provides a general description of Time Warner’s business segments, as well as
recent developments the Company believes are important in understanding the results of operations and
financial condition or in understanding anticipated future trends.
•Results of operations. This section provides an analysis of the Company’s results of operations for the
three years ended December 31, 2011. This analysis is presented on both a consolidated and a business
segment basis. In addition, a brief description of transactions and other items that affect the
comparability of the results being analyzed is provided.
•Financial condition and liquidity. This section provides an analysis of the Company’s cash flows for
the three years ended December 31, 2011, as well as a discussion of the Company’s outstanding debt
and commitments that existed as of December 31, 2011. Included in the analysis of outstanding debt is a
discussion of the amount of financial capacity available to fund the Company’s future commitments, as
well as a discussion of other financing arrangements.
•Market risk management. This section discusses how the Company monitors and manages exposure to
potential gains and losses arising from changes in market rates and prices, such as interest rates, foreign
currency exchange rates and changes in the market value of financial instruments.
•Critical accounting policies. This section identifies those accounting policies that are considered
important to the Company’s results of operations and financial condition, require significant judgment
and require estimates on the part of management in application. The Company’s significant accounting
policies, including those considered to be critical accounting policies, are summarized in Note 1 to the
accompanying consolidated financial statements.
•Caution concerning forward-looking statements. This section provides a description of the use of
forward-looking information appearing in this 2011 Annual Report to Stockholders, including in MD&A
and the consolidated financial statements. Such information is based on management’s current
expectations about future events, which are inherently susceptible to uncertainty and changes in
circumstances. Refer to “Risk Factors” in this 2011 Annual Report to Stockholders for a discussion of
the risk factors applicable to the Company.
OVERVIEW
Time Warner is a leading media and entertainment company whose major businesses encompass an array of
the most respected and successful media brands. Among the Company’s brands are TNT, TBS, CNN, HBO,
Cinemax, Warner Bros., New Line Cinema, People,Sports Illustrated and Time. During the year ended
December 31, 2011, the Company generated Revenues of $28.974 billion (up 8% from $26.888 billion in 2010),
Operating Income of $5.805 billion (up 7% from $5.428 billion in 2010), Net Income attributable to Time
Warner shareholders of $2.886 billion (up 12% from $2.578 billion in 2010) and Cash Provided by Operations
from Continuing Operations of $3.448 billion (up 4% from $3.314 billion in 2010).
Time Warner Businesses
Time Warner classifies its operations into three reportable segments: Networks, Filmed Entertainment and
Publishing. For additional information regarding Time Warner’s segments, refer to Note 15, “Segment
Information,” in the accompanying consolidated financial statements.
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