Time Magazine 2014 Annual Report Download - page 85

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Discontinued Operations
In determining whether a group of assets disposed (or to be disposed) of should be presented as a discontinued operation,
for periods prior to January 1, 2015 the Company made a determination of whether the group of assets being disposed of
comprised a component of the entity; that is, whether it had historic operations and cash flows that were clearly distinguished
(both operationally and for financial reporting purposes). The Company also determined whether the cash flows associated
with the group of assets had been significantly (or will be significantly) eliminated from the ongoing operations of the
Company as a result of the disposal transaction and whether the Company had no significant continuing involvement in the
operations of the group of assets after the disposal transaction. If so, the results of operations of the group of assets disposed
of (as well as any gain or loss on the disposal transaction) were aggregated for separate presentation, if material, apart from
continuing operating results of the Company in the consolidated financial statements.
In connection with the Time Separation, 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. For more information on the Time Separation, see Note 3.
2. GOODWILL AND INTANGIBLE ASSETS
Time Warner has a significant number of intangible assets, acquired film and television libraries and other copyrighted
products and tradenames. Certain intangible assets are deemed to have finite lives and, accordingly, are amortized over their
estimated useful lives, while others are deemed to be indefinite-lived and therefore are not amortized. Goodwill and
indefinite-lived intangible assets, primarily certain tradenames, are tested annually for impairment during the fourth quarter,
or earlier upon the occurrence of certain events or substantive changes in circumstances.
Goodwill
The following summary of changes in the Company’s Goodwill during the years ended December 31, 2014 and 2013, by
reportable segment, is as follows (millions):
Turner Home Box Office Warner Bros. Total
Balance at December 31, 2012 (recast) .......... $ 13,991 $ 7,309 $ 5,996 $ 27,296
Acquisitions, dispositions and
adjustments .............................. 7 122 (9) 120
Translation adjustments ...................... (18) - 3 (15)
Balance at December 31, 2013 (recast) .......... $ 13,980 $ 7,431 $ 5,990 $ 27,401
Acquisitions, dispositions and
adjustments .............................. (6) 2 206 202
Translation adjustments ...................... (18) - (20) (38)
Balance at December 31, 2014 ................. $ 13,956 $ 7,433 $ 6,176 $ 27,565
The carrying amount of goodwill for all periods presented was net of accumulated impairments of $13.338 billion and
$4.091 billion at the Turner segment and the Warner Bros. segment, respectively.
The performance of the Company’s annual impairment analysis did not result in any impairments of Goodwill for any of
the years in the three-year period ended December 31, 2014. Refer to Note 1 for a discussion of the 2014 annual impairment
test.
The increase in Goodwill at the Warner Bros. segment for the year ended December 31, 2014 is primarily related to the
acquisition of the operations outside the U.S. of Eyeworks Group and the increase at the Home Box Office segment for the
year ended December 31, 2013 is primarily related to the acquisition of its former partner’s interests in HBO Asia and HBO
South Asia (see Note 3 for additional information).
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