Time Magazine 2014 Annual Report Download - page 43

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
Gain (Loss) on Operating Assets, Net
For the year ended December 31, 2014, the Company recognized net gains on operating assets of $464 million, including
$16 million of net gains at the Turner segment, consisting of a $13 million gain related to the sale of Zite, Inc., a news
content aggregation and recommendation platform, a $4 million gain related to the sale of certain fixed assets, a $3 million
loss related to the shutdown of a business and a $2 million gain primarily related to the sale of a building in South America, a
$7 million gain at the Warner Bros. segment primarily related to the sale of certain fixed assets and a $441 million gain at
Corporate in connection with the sale and leaseback of the Company’s space in Time Warner Center.
For the year ended December 31, 2013, the Company recognized net gains on operating assets of $129 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
Home Box Office’s acquisition of its former partner’s interests in HBO Asia and HBO South Asia (collectively, “HBO
Asia”), a $9 million gain at the Home Box Office segment upon Home Box Office’s acquisition of its former partner’s
interest in HBO Nordic, a $6 million gain at the Warner Bros. segment related to miscellaneous operating assets 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 $45 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, $1 million of noncash income at the Warner Bros. segment related to a fair value
adjustment on certain contingent consideration arrangements and a $10 million gain at Corporate on the disposal of certain
corporate assets.
Venezuelan Foreign Currency Loss
For the year ended December 31, 2014, the Company recognized a pretax foreign exchange loss of $173 million,
consisting of $137 million at the Turner segment and $36 million at the Warner Bros. segment, related to the remeasurement
of the Company’s net monetary assets denominated in Venezuelan currency resulting from a change in the foreign currency
exchange rate used by the Company from the official rate to the SICAD 2 exchange rate. See “Recent Developments” for
more information.
Other
Other reflects external costs related to mergers, acquisitions or dispositions of $80 million, $33 million and $27 million
for the years ended December 31, 2014, 2013 and 2012 respectively. External costs related to mergers, acquisitions or
dispositions for the year ended December 31, 2014 consisted of $14 million at the Turner segment primarily related to exit
costs in connection with the shutdown of CNN Latino, $19 million at the Warner Bros. segment primarily related to the
Eyeworks Acquisition and $47 million at Corporate primarily related to the Time Separation. External costs related to
mergers, acquisitions or dispositions for the year ended December 31, 2013 were primarily related to the Time Separation.
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.
For the year ended December 31, 2013, other includes a gain of $38 million related to the curtailment of post-retirement
benefits (the “Curtailment”).
For the year ended December 31, 2012, other includes legal and other professional fees related to the defense of securities
litigation matters for former employees of $3 million.
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.
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