Time Magazine 2015 Annual Report Download - page 37

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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, 2015. 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, 2015 and the Company’s outstanding debt and commitments as of
December 31, 2015. 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 2015 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 2015 Annual Report to Shareholders for a discussion of the risk factors applicable to the
Company.
OVERVIEW
Time Warner is a leading media and entertainment company whose major businesses encompass an array of the most
respected and successful media brands. Among the Company’s brands are TNT, TBS, Adult Swim, Cartoon Network, CNN,
HBO, Cinemax, Warner Bros. and New Line Cinema. During the year ended December 31, 2015, the Company generated
Revenues of $28.118 billion (up 3% from $27.359 billion in 2014), Operating Income of $6.865 billion (up 15% from $5.975
billion in 2014), Income from continuing operations of $3.795 billion (down 3% from $3.894 billion in 2014), Net Income
attributable to Time Warner shareholders of $3.833 billion (essentially flat compared to $3.827 billion in 2014) and Cash
provided by operations from continuing operations of $3.851 billion (up 5% from $3.681 billion in 2014). The Company’s
results for the year ended December 31, 2014 were significantly impacted by the sale and leaseback of the Company’s space
in Time Warner Center in January 2014, the reversal of certain tax reserves in connection with an audit settlement,
restructuring and severance costs and programming impairments.
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