TWX » Topics » Notes to Quarterly Financial Information

These excerpts taken from the TWX 10-K filed Feb 20, 2009.
Notes to Quarterly Financial Information
 
(a) Time Warner’s operating income (loss) per common share in 2008 was affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $45 million noncash impairment of certain non-core cable systems and an $18 million noncash impairment of GameTap, an online video game business, during the second quarter, a $9 million noncash impairment of an office building, a $30 million noncash asset impairment related to the sub-lease with a tenant that filed for bankruptcy in September 2008 during the third quarter, a $9.346 billion noncash impairment to reduce the carrying value of goodwill and intangible assets, a $13 million noncash impairment related to asset writedowns in connection with facility consolidations, a $14.822 billion noncash impairment of cable franchise rights, a $21 million noncash impairment of Southern Living At Home, which is held for sale, and a $5 million noncash impairment related to certain other asset write-offs during the fourth quarter, (ii) the following restructuring and merger-related costs: $145 million in net restructuring costs during the first quarter, $9 million in net restructuring costs during the second quarter, $28 million in net restructuring costs during the third quarter and $177 million in net restructuring costs during the fourth quarter (Note 12), (iii) net losses from the disposal of consolidated assets of $3 million in the third quarter and a $13 million loss on the sale of certain non-core cable systems in the fourth quarter, (iv) $4 million in net expenses related to securities litigation and government investigations in both the first and second quarters, $5 million in net expenses related to securities litigation and government investigations in the third quarter and $8 million in net expenses related to securities litigation and government investigations in the fourth quarter.
(b) Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.
(c) Time Warner’s operating income per common share in 2007 was affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $1 million noncash asset impairment during the first quarter, a $34 million noncash impairment of the Court TV tradename as a result of rebranding the Court TV network name to truTV, effective January 1, 2008, during the second quarter and a $1 million noncash asset impairment during the third quarter, (ii) the following restructuring and merger-related costs: $68 million in net restructuring costs during the first quarter, $33 million in net restructuring costs during the second quarter, $12 million in net restructuring costs during the third quarter and $149 million in net restructuring costs during the fourth quarter (Note 12), (iii) net gains from the disposal of consolidated assets of $670 million in the first quarter, net losses from the disposal of consolidated assets of $1 million in the second quarter, net gains from the disposal of consolidated assets of $4 million in the third quarter and net gains from the disposal of consolidated assets of $16 million in the fourth quarter, (iv) $152 million in legal reserves related to securities litigation and $11 million in net expenses related to securities litigation and government investigations in the first quarter, $1 million in legal reserves related to securities litigation and $3 million in net expenses related to securities litigation and government investigations in the second quarter, $2 million in net expenses related to securities litigation and government investigations in the third quarter and $2 million in net expenses related to securities litigation and government investigations in the fourth quarter.


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Notes to
Quarterly Financial Information



 



































(a)

Time Warner’s operating income
(loss) per common share in 2008 was affected by certain
significant transactions and other items affecting
comparability. These items consisted of (i) a
$45 million noncash impairment of certain non-core cable
systems and an $18 million noncash impairment of GameTap,
an online video game business, during the second quarter, a
$9 million noncash impairment of an office building, a
$30 million noncash asset impairment related to the
sub-lease with a tenant that filed for bankruptcy in September
2008 during the third quarter, a $9.346 billion noncash
impairment to reduce the carrying value of goodwill and
intangible assets, a $13 million noncash impairment related
to asset writedowns in connection with facility consolidations,
a $14.822 billion noncash impairment of cable franchise
rights, a $21 million noncash impairment of Southern Living
At Home, which is held for sale, and a $5 million noncash
impairment related to certain other asset write-offs during the
fourth quarter, (ii) the following restructuring and
merger-related costs: $145 million in net restructuring
costs during the first quarter, $9 million in net
restructuring costs during the second quarter, $28 million
in net restructuring costs during the third quarter and
$177 million in net restructuring costs during the fourth
quarter (Note 12), (iii) net losses from the disposal
of consolidated assets of $3 million in the third quarter
and a $13 million loss on the sale of certain non-core
cable systems in the fourth quarter, (iv) $4 million
in net expenses related to securities litigation and government
investigations in both the first and second quarters,
$5 million in net expenses related to securities litigation
and government investigations in the third quarter and
$8 million in net expenses related to securities litigation
and government investigations in the fourth quarter.

(b)

Per common share amounts for the
quarters and full years have each been calculated separately.
Accordingly, quarterly amounts may not add to the annual amounts
because of differences in the average common shares outstanding
during each period and, with regard to diluted per common share
amounts only, because of the inclusion of the effect of
potentially dilutive securities only in the periods in which
such effect would have been dilutive.

(c)

Time Warner’s operating income
per common share in 2007 was affected by certain significant
transactions and other items affecting comparability. These
items consisted of (i) a $1 million noncash asset
impairment during the first quarter, a $34 million noncash
impairment of the Court TV tradename as a result of rebranding
the Court TV network name to truTV, effective January 1,
2008, during the second quarter and a $1 million noncash
asset impairment during the third quarter, (ii) the
following restructuring and merger-related costs:
$68 million in net restructuring costs during the first
quarter, $33 million in net restructuring costs during the
second quarter, $12 million in net restructuring costs
during the third quarter and $149 million in net
restructuring costs during the fourth quarter (Note 12),
(iii) net gains from the disposal of consolidated assets of
$670 million in the first quarter, net losses from the
disposal of consolidated assets of $1 million in the second
quarter, net gains from the disposal of consolidated assets of
$4 million in the third quarter and net gains from the
disposal of consolidated assets of $16 million in the
fourth quarter, (iv) $152 million in legal reserves
related to securities litigation and $11 million in net
expenses related to securities litigation and government
investigations in the first quarter, $1 million in legal
reserves related to securities litigation and $3 million in
net expenses related to securities litigation and government
investigations in the second quarter, $2 million in net
expenses related to securities litigation and government
investigations in the third quarter and $2 million in net
expenses related to securities litigation and government
investigations in the fourth quarter.





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These excerpts taken from the TWX 10-K filed Feb 22, 2008.
Notes to Quarterly Financial Information
 
 
(a) Time Warner’s operating income per common share in 2007 was affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $1 million noncash asset impairment charge during the first quarter, a $34 million noncash charge related to the impairment of the Court TV tradename as a result of rebranding the Court TV network name to truTV, effective January 1, 2008, during the second quarter and a $1 million noncash asset impairment charge during the third quarter, (ii) the following restructuring and merger-related costs: $68 million in net restructuring costs during the first quarter, $33 million in net restructuring costs during the second quarter, $12 million in net restructuring costs during the third quarter and $149 million in net restructuring costs during the fourth quarter (Note 12), (iii) net gains from the disposal of consolidated assets of $670 million in the first quarter, net losses from the disposal of consolidated assets of $1 million in the second quarter, net gains from the disposal of consolidated assets of $4 million in the third quarter and net gains from the disposal of consolidated assets of $16 million in the fourth quarter, (iv) $152 million in legal reserves related to securities litigation and $11 million in net expenses related to securities litigation and government investigations in the first quarter, $1 million in legal reserves related to securities litigation and $3 million in net expenses related to securities litigation and government investigations in the second quarter, $2 million in net expenses related to securities litigation and government investigations in the third quarter and $2 million in net expenses related to securities litigation and government investigations in the fourth quarter.
(b) Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.
(c) The 2006 financial information has been recast so that the basis of presentation is consistent with that of the 2007 financial information. Specifically, the Company has reflected as discontinued operations for all periods presented the financial condition and results of operations of certain businesses sold during the year ended December 31, 2007, which included Tegic, Wildseed, the Parenting Group, most of the Time4 Media magazine titles, The Progressive Farmer magazine, Leisure Arts and the Braves. In 2006, the Company completed the acquisition of certain assets of Adelphia, the related exchange of certain cable systems with Comcast and the redemption of Comcast’s interests in TWC and Time Warner Entertainment Company, L.P. The operations of the cable systems previously owned by TWC and transferred to Comcast in connection with the Redemptions and the Exchange, including gains recognized on the transfers, have been reflected as discontinued operations for 2006. Also included in discontinued operations for 2006 are the operations of the Turner South and TWBG. The recast resulted in an increase of Operating Income of $5 million in the first quarter 2006 and a decrease of Operating Income of $20 million, $20 million and $24 million for the quarters ended June 30, 2006, September 30, 2006, and December 31, 2006, respectively.
(d) Time Warner’s operating income per common share in 2006 was affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $200 million noncash impairment charge related to the reduction of the carrying value of The WB Network’s goodwill during the third quarter and a $13 million of noncash asset impairment charge during the fourth quarter, (ii) the following restructuring and merger-related costs: $30 million in net restructuring costs during the first quarter, $102 million in net restructuring costs during the second quarter, $73 million in net restructuring costs during the third quarter and $195 million in net restructuring costs during the fourth quarter (Note 12), (iii) net gains from the disposal of consolidated assets of $22 million in the first quarter and $769 million in the fourth quarter, (iv) $50 million in legal reserves related to securities litigation and $21 million in net recoveries related to securities litigation and government investigations in the first quarter, $32 million in net expenses related to securities litigation and government investigations in the second quarter, $29 million in net expenses related to securities litigation and government investigations in the third quarter, $600 million in legal reserves related to securities litigation and $15 million in net expenses related to securities litigation and government investigations in the fourth quarter.


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Notes to
Quarterly Financial Information



 


 















































(a)

Time Warner’s operating income
per common share in 2007 was affected by certain significant
transactions and other items affecting comparability. These
items consisted of (i) a $1 million noncash asset
impairment charge during the first quarter, a $34 million
noncash charge related to the impairment of the Court TV
tradename as a result of rebranding the Court TV network name to
truTV, effective January 1, 2008, during the second quarter
and a $1 million noncash asset impairment charge during the
third quarter, (ii) the following restructuring and
merger-related costs: $68 million in net restructuring
costs during the first quarter, $33 million in net
restructuring costs during the second quarter, $12 million
in net restructuring costs during the third quarter and
$149 million in net restructuring costs during the fourth
quarter (Note 12), (iii) net gains from the disposal
of consolidated assets of $670 million in the first
quarter, net losses from the disposal of consolidated assets of
$1 million in the second quarter, net gains from the
disposal of consolidated assets of $4 million in the third
quarter and net gains from the disposal of consolidated assets
of $16 million in the fourth quarter,
(iv) $152 million in legal reserves related to
securities litigation and $11 million in net expenses
related to securities litigation and government investigations
in the first quarter, $1 million in legal reserves related
to securities litigation and $3 million in net expenses
related to securities litigation and government investigations
in the second quarter, $2 million in net expenses related
to securities litigation and government investigations in the
third quarter and $2 million in net expenses related to
securities litigation and government investigations in the
fourth quarter.

(b)

Per common share amounts for the
quarters and full years have each been calculated separately.
Accordingly, quarterly amounts may not add to the annual amounts
because of differences in the average common shares outstanding
during each period and, with regard to diluted per common share
amounts only, because of the inclusion of the effect of
potentially dilutive securities only in the periods in which
such effect would have been dilutive.

(c)

The 2006 financial information has
been recast so that the basis of presentation is consistent with
that of the 2007 financial information. Specifically, the
Company has reflected as discontinued operations for all periods
presented the financial condition and results of operations of
certain businesses sold during the year ended December 31,
2007, which included Tegic, Wildseed, the Parenting Group, most
of the Time4 Media magazine titles, The Progressive Farmer
magazine, Leisure Arts and the Braves. In 2006, the Company
completed the acquisition of certain assets of Adelphia, the
related exchange of certain cable systems with Comcast and the
redemption of Comcast’s interests in TWC and Time Warner
Entertainment Company, L.P. The operations of the cable systems
previously owned by TWC and transferred to Comcast in connection
with the Redemptions and the Exchange, including gains
recognized on the transfers, have been reflected as discontinued
operations for 2006. Also included in discontinued operations
for 2006 are the operations of the Turner South and TWBG. The
recast resulted in an increase of Operating Income of
$5 million in the first quarter 2006 and a decrease of
Operating Income of $20 million, $20 million and
$24 million for the quarters ended June 30, 2006,
September 30, 2006, and December 31, 2006,
respectively.

(d)

Time Warner’s operating income
per common share in 2006 was affected by certain significant
transactions and other items affecting comparability. These
items consisted of (i) a $200 million noncash
impairment charge related to the reduction of the carrying value
of The WB Network’s goodwill during the third quarter and a
$13 million of noncash asset impairment charge during the
fourth quarter, (ii) the following restructuring and
merger-related costs: $30 million in net restructuring
costs during the first quarter, $102 million in net
restructuring costs during the second quarter, $73 million
in net restructuring costs during the third quarter and
$195 million in net restructuring costs during the fourth
quarter (Note 12), (iii) net gains from the disposal of
consolidated assets of $22 million in the first quarter and
$769 million in the fourth quarter,
(iv) $50 million in legal reserves related to
securities litigation and $21 million in net recoveries
related to securities litigation and government investigations
in the first quarter, $32 million in net expenses related
to securities litigation and government investigations in the
second quarter, $29 million in net expenses related to
securities litigation and government investigations in the third
quarter, $600 million in legal reserves related to
securities litigation and $15 million in net expenses
related to securities litigation and government investigations
in the fourth quarter.





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This excerpt taken from the TWX 10-K filed Feb 23, 2007.
Notes to Quarterly Financial Information
 
(a) Time Warner’s operating income per common share in 2006 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $200 million noncash goodwill impairment charge related to The WB Network during the third quarter and $13 million of noncash impairments during the fourth quarter, (ii) the following restructuring and merger-related costs: $30 million in net restructuring costs during the first quarter, $102 million in net restructuring costs during the second quarter, $73 million in net restructuring costs during the third quarter and $195 million in net restructuring costs during the fourth quarter (Note 14), (iii) net gains from the disposal of consolidated assets of $22 million in the first quarter and $774 million in the fourth quarter, (iv) $50 million in legal reserves related to securities litigation and $21 million in net recoveries related to securities litigation and the government investigations in the first quarter, $32 million in net expenses related to securities litigation and government investigations in the second quarter, $29 million in net expenses related to securities litigation and the government investigations in the third quarter, $600 million in legal reserves related to securities litigation and $15 million in net expenses related to securities litigation and the government investigations in the fourth quarter.
(b) Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.
(c) In the third quarter of 2006, the Company presented the Transferred Systems as discontinued operations, resulting in a reduction of Operating Income of $54 million and $56 million for the quarters ended March 31, 2006 and June 30, 2006, respectively, from amounts previously reported.
(d) Time Warner’s operating income per common share in 2005 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $24 million noncash impairment charge related to goodwill associated with AOLA, (ii) the following restructuring and merger-related costs: $12 million in net restructuring costs during the first quarter, $11 million in net restructuring costs during the second quarter, $5 million in restructuring costs during the third quarter and $89 million in net restructuring costs during the fourth quarter (Note 14), (iii) net gains from the disposal of consolidated assets of $10 million in the first quarter, $8 million in the second quarter, and $5 million in the fourth quarter, (iv) $6 million in net expenses related to securities litigation and the government investigations in the first quarter, $3 billion in legal reserves related to securities litigation and $3 million in net expenses related to securities litigation and the government investigations in the second quarter, $16 million in net expenses related to securities litigation and the government investigations in the third quarter, and $160 million in net recoveries related to securities litigation and the government investigations in the fourth quarter.


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TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
 
TW AOL Holdings Inc. (“TW AOL Holdings”), Historic TW Inc. (“Historic TW”), Time Warner Companies, Inc. (“TW Companies”) and Turner Broadcasting System, Inc. (“TBS” and, together with TW AOL Holdings, Historic TW and TW Companies, the “Guarantor Subsidiaries”) are wholly owned subsidiaries of Time Warner Inc. (“Time Warner”). The Guarantor Subsidiaries have fully and unconditionally, jointly and severally, directly or indirectly, guaranteed outstanding publicly traded indebtedness of Time Warner.
 
The Securities and Exchange Commission’s rules require that condensed consolidating financial information be provided for wholly owned subsidiaries that have guaranteed debt of a registrant issued in a public offering, where each such guarantee is full and unconditional, and joint and several. Set forth below are condensed consolidating financial statements of Time Warner, including each of the Guarantor Subsidiaries. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of (i) the Guarantor Subsidiaries (in each case, reflecting investments in each Guarantor Subsidiary’s consolidated subsidiaries under the equity method of accounting), (ii) the direct and indirect non-guarantor subsidiaries of Time Warner and (iii) the eliminations necessary to arrive at the information for Time Warner on a consolidated basis. There are no restrictions on the Company’s ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances. These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements of Time Warner.
 
This excerpt taken from the TWX 10-K filed Mar 11, 2005.
Notes to Quarterly Financial Information
 
(a)  Time Warner’s net income per common share in 2004 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a noncash gain of $34 million, in the first quarter, upon adoption of FIN 46R (Note 1), (ii) a noncash pretax charge of $10 million in the second quarter to reduce the carrying value of certain fixed assets held for sale, (iii) the following restructuring costs: $2 million reduction in restructuring costs during the second quarter of 2004, reflecting changes in estimates of previously established restructuring accruals; $52 million in restructuring costs during the fourth quarter of 2004 (which includes a $3 million reduction reflecting changes in estimates of previously established restructuring accruals) (Note 3), (iv) net gains from the disposal of consolidated assets of $1 million in the first quarter, $13 million in the third quarter, and $7 million in the fourth quarter, (v) pretax gains on the sale of investments of $39 million in the first quarter, $16 million in the second quarter, $311 million in the third quarter and $87 million in the fourth quarter, thereby aggregating $453 million for the year, (vi) noncash pretax charges of $3 million in the first quarter, $6 million in the second quarter, $15 million in the third quarter and $5 million in the fourth quarter to reduce the carrying value of certain publicly traded and privately held investments and restricted securities that experienced other-than-temporary declines in market value and to reflect market fluctuations in equity derivative instruments, thereby aggregating $29 million for the year (Note 7), (vii) a $50 million fair value adjustment related to the Company’s option in WMG (Note 4), (viii) discontinued operations, net of tax of $215 million in the first quarter, $(105) million in the second quarter, $5 million in the third quarter and $6 million in the fourth quarter, thereby aggregating $121 million for the year, to reflect the deconsolidation of the Music businesses (Note 1) and (ix) legal reserves related to the government investigations of $500 million in the third quarter and $10 million in the fourth quarter.
(b) Time Warner’s net income per common share in 2003 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a noncash charge of $12 million in the third quarter, upon adoption of the provisions of FIN 46, (ii) a noncash pretax charge of $277 million in the second quarter and $41 million in the third quarter to reduce the carrying value of goodwill and other intangible assets, (iii) certain restructuring costs of $24 million in the first quarter, $6 million in the second quarter, $42 million in the third quarter and $37 million in the fourth quarter relating to certain restructurings, thereby aggregating $109 million for the year (Note 3), (iv) net gains from the disposal of consolidated businesses of $43 million in the second quarter offset by a loss of $29 million in the fourth quarter, (v) pretax gains on the sale of investments of $109 million in the first quarter, $542 million in the second quarter, $127 million in the third quarter and $19 million in the fourth quarter, thereby aggregating $797 million for the year, (vi) noncash pretax charges of $6 million in the first quarter, $151 million in the second quarter, $10 million in the third quarter and $37 million in the fourth quarter to reduce the carrying value of certain publicly traded and privately held investments and restricted securities that experienced other-than-temporary declines in market value and to reflect market fluctuations in equity derivative instruments, thereby aggregating $204 million for the year (Note 7), (vii) a gain of $760 million recognized by Time Warner as a result of the Microsoft Settlement (Note 8) and (viii) discontinued operations, net of tax of $(34) million in the first quarter, $3 million in the second quarter, $2 million in the third quarter and $(466) million in the fourth quarter, thereby aggregating $(495) million for the year, to reflect the deconsolidation of the Music businesses (Note 1).
(c) Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.
(d) As a result of the disposal of the Company’s entire Music segment, the Company has presented the results of operations of the Music segment as discontinued operations for all previously reported periods. In 2003, this resulted in a reduction of revenues by $762 million in the first quarter, $896 million in the second quarter and $831 million in the third quarter. In 2003, this also resulted in an increase in operating income by $14 million in the first quarter, a reduction of $6 million in the second quarter, and an increase of $1 million in the third quarter.

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TIME WARNER INC.

SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

      America Online, Inc. (“America Online”), Historic TW Inc. (“Historic TW”), Time Warner Companies, Inc. (“TW Companies”) and Turner Broadcasting System, Inc. (“TBS” and, together with America Online, Historic TW and TW Companies, the “Guarantor Subsidiaries”) are wholly-owned subsidiaries of Time Warner Inc. (“Time Warner”). Time Warner, America Online, Historic TW, TW Companies and TBS have fully and unconditionally, jointly and severally, and directly or indirectly, guaranteed all of the outstanding publicly traded indebtedness of each other. Set forth below are condensed consolidating financial statements of Time Warner, including each of the Guarantor Subsidiaries, presented for the information of each company’s public debtholders. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of (i) America Online, Historic TW, TW Companies and TBS (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the direct and indirect non-guarantor subsidiaries of Time Warner and (iii) the eliminations necessary to arrive at the information for Time Warner on a consolidated basis. There are no restrictions on the Company’s ability to obtain funds from any of its wholly-owned subsidiaries through dividends, loans or advances. These condensed consolidating financial statements should be read in conjunction with the accompanying consolidated financial statements of Time Warner.

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