Time Magazine 2011 Annual Report Download - page 49

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
Selling, general and administrative expenses decreased primarily due to cost savings initiatives as well as
$17 million of reductions in expenses due to the transfer of the management of the SI.com and Golf.com websites
to Turner in the fourth quarter of 2010 and the IPC Sales.
As previously noted under “Transactions and Other Items Affecting Comparability,” the 2011 results
included $17 million of noncash impairments of which $11 million related to a tradename impairment. The 2010
results included $11 million of noncash impairments related to certain intangible assets.
Operating Income increased due primarily to lower Selling, general and administrative expenses and lower
Restructuring and severance costs, partially offset by an increase in Costs of revenues.
The Company anticipates that Operating Income at the Publishing segment will decline in the first half of
2012 due primarily to expenses associated with investments related to its digital strategy and increases in
production costs. In addition, the Company is anticipating continued softness in domestic magazine advertising
and newsstand sales during the first quarter of 2012.
Corporate. Operating Loss of the Corporate segment for the years ended December 31, 2011 and 2010 was
as follows (millions):
Year Ended December 31,
2011 2010 % Change
Selling, general and administrative(a) ......................... $ (316) $ (336) (6%)
Restructuring and severance costs ........................... (2) — NM
Depreciation ............................................ (29) (38) (24%)
Operating Loss .......................................... $ (347) $ (374) (7%)
(a) Selling, general and administrative expenses exclude depreciation.
Operating Loss decreased due primarily to lower legal and other professional fees of $14 million related to
the defense of former employees in various lawsuits and lower depreciation expense due to building
improvements becoming fully depreciated.
For the years ended December 31, 2011 and 2010, Selling, general and administrative expenses included $21
million and $8 million, respectively, of costs related to enterprise efficiency initiatives.
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.
Revenues. The components of revenues are as follows (millions):
Year Ended December 31,
2010 2009 % Change
Subscription ........................................... $ 9,028 $ 8,445 7%
Advertising ........................................... 5,682 5,161 10%
Content .............................................. 11,565 11,074 4%
Other ................................................ 613 708 (13%)
Total revenues ......................................... $ 26,888 $ 25,388 6%
35