Time Magazine 2013 Annual Report Download - page 46

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
Turner segment primarily related to a tradename impairment, $21 million at the Warner Bros. segment of which
$12 million related to capitalized software costs and $17 million at the Time Inc. segment of which $11 million
related to a tradename impairment.
Gain on Operating Assets, Net
For the year ended December 31, 2013, the Company recognized net gains on operating assets of $142
million, including a $2 million gain at the Turner segment on the sale of a building, a $104 million gain at the
Home Box Office segment upon the Company’s acquisition of the controlling interests in HBO Asia, a $9
million gain at the Home Box Office segment upon the Company’s acquisition of the controlling interest in HBO
Nordic, a $6 million gain at the Warner Bros. segment related to miscellaneous operating assets, a $13 million
gain at the Time Inc. segment resulting from the settlement of a pre-existing contractual arrangement with AEP
in connection with the AEP Acquisition, and an $8 million gain at Corporate on the disposal of certain corporate
assets.
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 Turner 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 Warner Bros. segment related to a fair value adjustment on certain contingent consideration arrangements,
a $36 million loss at the Time Inc. 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 Corporate 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 Warner Bros. segment associated with a fair value adjustment on
certain contingent consideration arrangements.
Other
Other reflects external costs related to mergers, acquisitions or dispositions of $34 million, $28 million and
$14 million for the years ended December 31, 2013, 2012 and 2011, respectively. External costs related to
mergers, acquisitions or dispositions for the year ended December 31, 2013 were primarily related to the pending
separation of Time Inc. from Time Warner. 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.
Other also includes a gain of $38 million for the year ended December 31, 2013 related to the curtailment of
post-retirement benefits (the “Curtailment”).
In addition, other includes legal and other professional fees related to the defense of securities litigation
matters for former employees totaling $0, $3 million and $8 million for the years ended December 31, 2013,
2012 and 2011, respectively.
External costs related to mergers, acquisitions or dispositions, the gain related to the Curtailment and the
amounts related to securities litigation and government investigations 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, 2013, the Company recognized $61 million of net miscellaneous
investment gains, consisting of a $65 million gain on the sale of the Company’s investment in a theater venture in
Japan, which included a $10 million gain related to a foreign currency contract, $6 million of net miscellaneous
losses and a net noncash gain of $2 million associated with an option to acquire securities that was terminated
during the third quarter of 2013.
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