Time Magazine 2011 Annual Report Download - page 40

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
In addition to the items affecting comparability described above, the Company incurred Restructuring and
severance costs of $113 million, $97 million and $212 million for the years ended December 31, 2011, 2010 and
2009, respectively. During the year ended December 31, 2010, the Company also recognized a $58 million
reserve reversal in connection with the resolution of litigation related to the sale of the Atlanta Hawks and
Thrashers sports franchises and certain operating rights to the Philips Arena (the “Winter Sports Teams”). For
further discussion of Restructuring and severance costs, refer to “Consolidated Results” and “Business Segment
Results.”
Asset Impairments
During the year ended December 31, 2011, the Company recorded noncash impairments of $6 million at the
Networks segment primarily related to a tradename impairment, $21 million at the Filmed Entertainment
segment of which $12 million related to capitalized software costs and $17 million at the Publishing segment of
which $11 million related to a tradename impairment.
During the year ended December 31, 2010, the Company recorded noncash impairments of $9 million at the
Filmed Entertainment segment related to the termination of a videogames licensing relationship and $11 million
at the Publishing segment related to certain intangible assets.
During the year ended December 31, 2009, the Company recorded noncash impairments of $52 million at the
Networks segment related to Turner’s interest in a general entertainment network in India and $33 million at the
Publishing segment related to certain fixed assets in connection with the Publishing segment’s restructuring
activities.
Gain (Loss) on Operating Assets
For the year ended December 31, 2011, the Company recognized net gains on operating assets of $7 million,
including noncash income of $9 million at the Filmed Entertainment segment related to a fair value adjustment
on certain contingent consideration arrangements relating to acquisitions.
For the year ended December 31, 2010, the Company recognized a $59 million gain at the Networks segment
upon the acquisition of the controlling interest in HBO Central Europe (“HBO CE”), reflecting the recognition of
the excess of the fair value over the Company’s carrying costs of its original investment in HBO CE. For the year
ended December 31, 2010, the Company also recorded noncash income of $11 million at the Filmed
Entertainment segment related to a fair value adjustment on certain contingent consideration arrangements
relating to acquisitions.
For the year ended December 31, 2009, the Company recognized a $33 million loss at the Filmed
Entertainment segment on the sale of Warner Bros.’ Italian cinema assets.
Other
Other reflects legal and other professional fees related to the defense of securities litigation matters for
former employees totaling $8 million, $22 million and $30 million for the years ended December 31, 2011, 2010
and 2009, respectively. Other also reflects external costs related to mergers, acquisitions or dispositions of $14
million for the year ended December 31, 2011.
Investment Gains (Losses), Net
For the year ended December 31, 2011, the Company recognized net investment losses of $168 million,
including a $163 million noncash impairment related to the Company’s investment in Central European Media
Enterprises Ltd. (“CME”).
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