Time Magazine 2015 Annual Report Download - page 48

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION - (Continued)
Restructuring and Severance Costs. For the years ended December 31, 2015, 2014 and 2013, the Company incurred
Restructuring and severance costs primarily related to employee terminations and other exit activities. Restructuring and
severance costs are as follows (millions):
Year Ended December 31,
2015 2014 2013
Turner ....................................................... $ 58 $ 249 $ 93
Home Box Office .............................................. — 63 39
Warner Bros. ................................................. 1 169 49
Corporate .................................................... 1 31 2
Total restructuring and severance costs ............................. $ 60 $ 512 $ 183
The total number of employees terminated across the segments for the years ended December 31, 2015, 2014 and 2013
was approximately 700, 4,000 and 1,000, respectively.
Operating Income. Operating Income was $6.865 billion, $5.975 billion and $6.268 billion for the years ended
December 31, 2015, 2014 and 2013, respectively. Excluding the items noted under “Transactions and Other Items Affecting
Comparability” totaling $58 million of expense, $142 million of income and $73 million of income for the years ended
December 31, 2015, 2014 and 2013, respectively, Operating Income increased $1.090 billion and decreased $362 million in
2015 and 2014, respectively. Operating Income increased in 2015, despite the unfavorable impact of foreign currency
exchange rates of approximately $480 million, reflecting increases at all of the segments and Corporate. The decrease in
2014 reflected decreases at the Turner and Warner Bros. segments and Corporate, partially offset by an increase at Home
Box Office. The segment variations are discussed under “Business Segment Results.” 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 Operating Income will be negatively
affected.
Interest Expense, Net. Interest expense, net detail is shown in the table below (millions):
Year Ended December 31,
2015 2014 2013
Interest expense ............................................... $ (1,382) $ (1,353) $ (1,281)
Interest income ................................................ 219 184 92
Total interest expense, net ....................................... $ (1,163) $ (1,169) $ (1,189)
The increase in interest expense for the year ended December 31, 2015 was primarily due to higher average debt
balances, partially offset by lower average interest rates. The increase in interest income for the year ended December 31,
2015 was primarily related to noncash interest income accretion related to the CME transactions completed in 2014, partially
offset by the recognition of interest income during the year ended December 31, 2014 on a note receivable that was collected
in March 2014.
The increase in interest expense for the year ended December 31, 2014 was due to higher average debt balances,
partially offset by lower average interest rates. The increase in interest income for the year ended December 31, 2014 was
mainly related to a note receivable that was collected in March 2014 and the CME transactions completed in the second
quarter of 2014.
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