Time Magazine 2015 Annual Report Download - page 47

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TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION - (Continued)
For the year ended December 31, 2015, Revenues at the Turner segment increased primarily driven by higher Content
and other and Advertising revenues. Revenues at the Home Box Office segment increased for the year ended December 31,
2015 due to higher Subscription and Content and other revenues. For the year ended December 31, 2015, Revenues at the
Warner Bros. segment increased driven by higher Videogames and other revenues as well as higher Television product
revenues, partly offset by lower Theatrical product revenues. The strengthening of the U.S. Dollar during 2015 relative to
foreign currencies to which the Company is exposed negatively impacted the Company’s Revenues by approximately $1.1
billion for the year ended December 31, 2015, consisting of approximately $685 million, $340 million and $30 million at the
Warner Bros., Turner and Home Box Office segments, respectively. If the foreign exchange rates relative to the U.S. Dollar
remain at the levels they were at as of December 31, 2015 or if the U.S. Dollar strengthens further in 2016 relative to the
foreign currencies to which the Company is exposed, the Company’s Revenues will be negatively affected.
For the year ended December 31, 2014, Revenues at the Turner segment increased primarily driven by higher
Subscription and Advertising revenues. Revenues at the Home Box Office segment increased for the year ended
December 31, 2014 due to higher Subscription and Content and other revenues. For the year ended December 31, 2014,
Revenues at the Warner Bros. segment increased driven by higher Television product and Videogames and other revenues,
partly offset by lower Theatrical product revenues.
Each of the revenue categories is discussed in greater detail by segment in “Business Segment Results.”
Costs of Revenues. Costs of revenues were $16.154 billion, $15.875 billion and $14.935 billion for the years ended
December 31, 2015, 2014 and 2013, respectively. The increase for the year ended December 31, 2015 reflected increases at
the Warner Bros. and Home Box Office segments, partially offset by a decrease at the Turner segment. The increase for the
year ended December 31, 2014 reflected increases across all of the segments.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $4.824 billion,
$5.190 billion and $4.934 billion for the years ended December 31, 2015, 2014 and 2013, respectively. The decrease for the
year ended December 31, 2015 reflected decreases at Corporate and the Turner and Warner Bros. segments, partially offset
by an increase at the Home Box Office segment. In addition, for the year ended December 31, 2015, Selling, general and
administrative expenses included a $22 million foreign currency charge related to the remeasurement of the Company’s net
monetary assets denominated in Venezuelan currency resulting from a change in the foreign exchange rated used by the
Company from the SICAD 2 exchange rate to the Simadi exchange rate. See “Recent Developments” for more information.
The increase for the year ended December 31, 2014 primarily related to increases at the Turner segment and Corporate. In
addition, for the year ended December 31, 2014, Selling, general and administrative expenses included a $173 million
foreign currency charge 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.
Included in Costs of revenues and Selling, general and administrative expenses was depreciation expense of $492
million, $531 million and $550 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Amortization Expense. Amortization expense was $189 million, $202 million and $209 million for the years ended
December 31, 2015, 2014 and 2013, respectively.
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