Time Magazine 2011 Annual Report Download - page 91

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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Summary of Discontinued Operations
AOL Separation from Time Warner
On July 8, 2009, the Company repurchased Google Inc.’s (“Google”) 5% interest in the AOL business for
$283 million in cash, which amount included a payment in respect of Google’s pro rata share of cash
distributions to Time Warner by AOL attributable to the period of Google’s investment in AOL. After
repurchasing this stake, Time Warner owned all of the shares of AOL.
On December 9, 2009 (the “Distribution Date”), the Company disposed of all of its shares of AOL Inc.
(“AOL”) common stock. The disposition was made pursuant to a separation and distribution agreement entered
into on November 16, 2009 by Time Warner and AOL for the purpose of legally and structurally separating AOL
from Time Warner (the “AOL Separation”). The AOL Separation was effected as a pro rata dividend of all shares
of AOL common stock held by Time Warner in a spin-off to Time Warner stockholders.
With the completion of the AOL Separation, the Company disposed of its AOL segment in its entirety.
Accordingly, the Company has presented the financial condition and results of operations of its former AOL
segment in the consolidated financial statements through December 9, 2009 as discontinued operations.
TWC Separation from Time Warner
On March 12, 2009 (the “Distribution Record Date”), the Company disposed of all of its shares of Time
Warner Cable Inc. (“TWC”) common stock. The disposition was made pursuant to a separation agreement
entered into on May 20, 2008, among Time Warner, TWC and certain of their subsidiaries (the “Separation
Agreement”) for the purpose of legally and structurally separating TWC from Time Warner (the “TWC
Separation”). The TWC Separation was effected as a pro rata dividend of all shares of TWC common stock held
by Time Warner in a spin-off to Time Warner stockholders.
Prior to the Distribution Record Date, on March 12, 2009, TWC, in accordance with the terms of the
Separation Agreement, paid a special cash dividend of $10.27 per share to all holders of TWC Class A common
stock and TWC Class B common stock as of the close of business on March 11, 2009 (aggregating $10.856
billion) (the “Special Dividend”), which resulted in the receipt by Time Warner of $9.253 billion.
With the completion of the TWC Separation, the Company disposed of its Cable segment in its entirety.
Accordingly, the Company has presented the financial condition and results of operations of its former Cable
segment in the consolidated financial statements through March 12, 2009 as discontinued operations.
Financial data for the discontinued operations is as follows (millions, except per share amounts):
Year Ended
December 31, 2009
Total revenues ........................................................ $ 6,500
Pretax income ........................................................ 849
Income tax provision ................................................... (421)
Net income ........................................................... $ 428
Net income attributable to Time Warner Inc. shareholders ...................... $ 389
Per share information attributable to Time Warner Inc. common shareholders:
Basic net income per common share ....................................... $ 0.32
Diluted net income per common share ..................................... $ 0.32
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