Time Magazine 2014 Annual Report Download - page 42

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
Recent Accounting Guidance
See Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies,” to the
accompanying consolidated financial statements for a discussion of recent accounting guidance.
Transactions and Other Items Affecting Comparability
As more fully described herein and in the related notes to the accompanying consolidated financial statements, the
comparability of Time Warner’s results from continuing operations has been affected by transactions and certain other items
in each period as follows (millions):
Year Ended December 31,
2014 2013 2012
(recast) (recast)
Asset impairments ........................................... $ (69) $ (61) $ (180)
Gain on operating assets, net ................................... 464 129 45
Venezuelan foreign currency loss ............................... (173) - -
Other ...................................................... (80) 5 (30)
Impact on Operating Income ................................... 142 73 (165)
Investment gains (losses), net ................................... 30 61 (30)
Amounts related to the separation of Time Warner Cable Inc. ......... (11) 3 4
Amounts related to the disposition of Warner Music Group ........... 2 (1) (7)
Amounts related to the separation of Time Inc. ..................... 3 - -
Items affecting comparability relating to equity method investments .... (97) (30) (94)
Pretax impact ............................................... 69 106 (292)
Income tax impact of above items ............................... 165 (59) 86
Impact of items affecting comparability on income from continuing
operations attributable to Time Warner Inc. shareholders ........... $ 234 $ 47 $ (206)
In addition to the items affecting comparability described above, the Company incurred Restructuring and severance costs of $512
million, $183 million and $92 million for the years ended December 31, 2014, 2013 and 2012, respectively. For the year ended
December 31, 2014, the Company also incurred $388 million of programming impairments, reflecting $526 million of charges at the
Turner segment, partially offset by $138 million of intercompany eliminations. For further discussion of Restructuring and severance
costs and the programming impairments, see “Overview,” “Consolidated Results” and “Business Segment Results.”
Asset Impairments
During the year ended December 31, 2014, the Company recognized asset impairments of $17 million at the Turner segment
related to miscellaneous assets, $4 million at the Home Box Office segment related to an international tradename and $41 million at
the Warner Bros. segment, including $12 million related to a tradename and the remaining amount primarily related to various
fixed assets and certain internally developed software, and $7 million at Corporate related to certain internally developed software.
During the year ended December 31, 2013, the Company recorded noncash impairments of $47 million at the Turner
segment, of which $18 million related to certain of Turner’s international intangible assets, $18 million related to a building,
$10 million related to programming assets resulting from Turner’s decision to shut down certain of its entertainment
networks in Spain and Belgium and $1 million related to miscellaneous assets, $7 million at the Warner Bros. segment
related to miscellaneous assets and $7 million at Corporate related to certain internally developed software.
During the year ended December 31, 2012, the Company recognized $174 million of charges at the Turner segment in
connection with the shutdown of Turner’s general entertainment network, Imagine, in India and its TNT television operations
in Turkey (the “Imagine and TNT Turkey Shutdowns”) primarily related to certain receivables, including value added tax
receivables, inventories and long-lived assets, including Goodwill. For the year ended December 31, 2012, the Company also
recognized $6 million of other miscellaneous noncash asset impairments consisting of $2 million at the Turner segment and
$4 million at the Warner Bros. segment.
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