Time Magazine 2012 Annual Report Download - page 45

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
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 Film and TV 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
Film and TV Entertainment segment related to the termination of a videogames licensing relationship and
$11 million at the Publishing segment related to certain intangible assets.
Gain on Operating Assets, Net
For the year ended December 31, 2012, the Company recognized net gains on operating assets of $9 million,
including a $34 million gain at the Networks segment on the settlement of an indemnification obligation related
to the Company’s 2007 sale of the Atlanta Braves baseball franchise (the “Braves”), $1 million of noncash
income at the Film and TV Entertainment segment related to a fair value adjustment on certain contingent
consideration arrangements, a $36 million loss at the Publishing segment in connection with the sale in the first
quarter of 2012 of Time Inc.’s school fundraising business, QSP (the “QSP Business”), and a $10 million gain at
the Corporate segment on the disposal of certain corporate 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 Film and TV Entertainment segment associated with a fair value
adjustment on certain contingent consideration arrangements.
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 Europe (formerly HBO Central Europe), reflecting the
recognition of the excess of the fair value over the Company’s carrying costs of its original investment in HBO
Europe. For the year ended December 31, 2010, the Company also recorded noncash income of $11 million at
the Film and TV Entertainment segment associated with a fair value adjustment on certain contingent
consideration arrangements.
Other
Other reflects legal and other professional fees related to the defense of securities litigation matters for
former employees totaling $3 million, $8 million and $22 million for the years ended December 31, 2012, 2011
and 2010, respectively.
Other also reflects external costs related to mergers, acquisitions or dispositions of $28 million and
$14 million for the years ended December 31, 2012 and 2011, respectively. The external costs related to mergers,
acquisitions or dispositions for the year ended December 31, 2012 included $18 million related to the Imagine
and TNT Turkey Shutdowns.
Amounts related to securities litigation and government investigations and external costs related to mergers,
acquisitions or dispositions are included in Selling, general and administrative expenses in the accompanying
Consolidated Statement of Operations.
Investment Gains (Losses), Net
For the year ended December 31, 2012, the Company recognized $73 million of net investment losses,
including a $43 million noncash impairment related to the Company’s investment in CME, $19 million of net
miscellaneous losses, a $16 million loss on an investment in a network in Turkey recognized as part of the
Imagine and TNT Turkey Shutdowns and noncash income of $5 million associated with a fair value adjustment
on certain options to redeem securities.
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