Time Magazine 2011 Annual Report Download - page 51

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
Other Loss, Net. Other loss, net detail is shown in the table below (millions):
Year Ended December 31,
2010 2009
Investment gains (losses), net ....................................... $ 32 $ (21)
Amounts related to the separation of TWC ............................. (6) 14
Costs related to the separation of AOL ................................ — (15)
Premiums paid and transaction costs incurred in connection with debt
redemptions ................................................... (364) —
Income (loss) from equity method investees ............................ 6 (32)
Other .......................................................... 1 (13)
Other loss, net ................................................... $ (331) $ (67)
The changes in Other loss, net for the year ended December 31, 2010 related to investment gains (losses),
net, amounts related to the separation of TWC, costs related to the separation of AOL and premiums paid and
transaction costs incurred in connection with debt redemptions are discussed under “Transactions and Other
Items Affecting Comparability.” The remaining change for the year ended December 31, 2010 reflects income
from equity method investees and the favorable impact of foreign exchange rates.
Income Tax Provision. Income tax provision from continuing operations increased to $1.348 billion in
2010 from $1.153 billion in 2009. The Company’s effective tax rate for continuing operations was 34% in 2010
compared to 36% in 2009. This decrease was primarily due to the benefit of valuation allowance releases on tax
attributes and higher domestic production deductions.
Income from Continuing Operations. Income from continuing operations increased to $2.571 billion in
2010 from $2.084 billion in 2009. Excluding the items previously noted under “Transactions and Other
Items Affecting Comparability” totaling $179 million and $109 million of expense, net for the years ended
December 31, 2010 and 2009, respectively, Income from continuing operations increased by $557 million,
primarily reflecting higher Operating Income, partially offset by higher income tax expense. Basic and Diluted
income per common share from continuing operations attributable to Time Warner Inc. common shareholders
were $2.27 and $2.25, respectively, in 2010 compared to $1.76 and $1.75, respectively, in 2009.
Discontinued Operations, Net of Tax. The financial results for the year ended December 31, 2009
included the impact of treating the results of operations and financial condition of AOL and TWC as
discontinued operations. Discontinued operations, net of tax was income of $428 million and included AOL’s
results for the period January 1, 2009 through December 9, 2009 and TWC’s results for the period from
January 1, 2009 through March 12, 2009. For additional information, see Note 3 to the accompanying
consolidated financial statements.
Net Income (Loss) Attributable to Noncontrolling Interests. For the year ended December 31, 2010, Net
loss attributable to noncontrolling interests was $7 million, and for the year ended December 31, 2009, Net
income attributable to noncontrolling interests was $35 million.
Net Income Attributable to Time Warner Inc. Shareholders. Net income attributable to Time Warner Inc.
shareholders was $2.578 billion and $2.477 billion for the years ended December 31, 2010 and 2009,
respectively. Basic and Diluted net income per common share attributable to Time Warner Inc. common
shareholders were $2.27 and $2.25, respectively, in 2010 compared to $2.08 and $2.07, respectively, in 2009.
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