Time Magazine 2014 Annual Report Download - page 36

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
INTRODUCTION
Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the
accompanying consolidated financial statements and provides additional information on Time Warner Inc.’s (“Time Warner”
or the “Company”) businesses, current developments, financial condition, cash flows and results of operations. MD&A is
organized as follows:
•Overview. This section provides a general description of Time Warner’s business segments, as well as recent
developments the Company believes are important in understanding the results of its operations and financial
condition or in understanding anticipated future trends.
•Results of operations. This section provides an analysis of the Company’s results of operations for the three years
ended December 31, 2014. This analysis is presented on both a consolidated and a business segment basis. In
addition, a brief description of transactions and other items that affect the comparability of the results being analyzed
is provided.
•Financial condition and liquidity. This section provides an analysis of the Company’s cash flows for the three years
ended December 31, 2014 and the Company’s outstanding debt and commitments as of December 31, 2014. Included
in the analysis of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s
ongoing operations and future commitments, as well as a discussion of other financing arrangements.
•Market risk management. This section discusses how the Company monitors and manages exposure to potential
gains and losses arising from changes in market rates and prices, such as interest rates, foreign currency exchange
rates and changes in the market value of financial instruments.
•Critical accounting policies. This section identifies those accounting policies that are considered important to the
Company’s results of operations and financial condition, require significant judgment and involve significant
management estimates. The Company’s significant accounting policies, including those considered to be critical
accounting policies, are summarized in Note 1, “Description of Business, Basis of Presentation and Summary of
Significant Accounting Policies,” to the accompanying consolidated financial statements.
•Caution concerning forward-looking statements. This section provides a description of the use of forward-looking
information appearing in this 2014 Annual Report to Shareholders, including in MD&A and the consolidated
financial statements. Such information is based on management’s current expectations about future events, which are
inherently susceptible to uncertainty and changes in circumstances. Refer to “Risk Factors” in this 2014 Annual
Report to Shareholders for a discussion of the risk factors applicable to the Company.
Separation of Time Inc.
On June 6, 2014, the Company completed the legal and structural separation of the Company’s Time Inc. segment from
the Company (the “Time Separation”). With the completion of the Time Separation, the Company disposed of the Time Inc.
segment in its entirety and ceased to consolidate its assets, liabilities and results of operations in the Company’s consolidated
financial statements. Accordingly, the Company has recast its financial information to present the financial position and
results of operations of its former Time Inc. segment as discontinued operations in the accompanying consolidated financial
statements for all periods presented. See Note 1, “Description of Business, Basis of Presentation and Summary of Significant
Accounting Policies,” to the accompanying consolidated financial statements. In connection with the Time Separation, the
Company received $1.4 billion from Time Inc. consisting of proceeds from Time Inc.’s acquisition of the IPC publishing
business in the U.K. from a wholly-owned subsidiary of Time Warner and a special dividend.
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