Supplementary Information - Condensed Consolidating Financial Statements | 6 Months Ended |
Jun. 30, 2014 |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' |
SUPPLEMENTARY INFORMATION - CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | ' |
Overview |
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Set forth below are condensed consolidating financial statements presenting the financial position, results of operations and cash flows of (i) Time Warner Inc. (the “Parent Company”), (ii) Historic TW Inc. (in its own capacity and as successor by merger to Time Warner Companies, Inc.), Home Box Office, Inc., and Turner Broadcasting System, Inc., each a wholly owned subsidiary of the Parent Company (collectively, the “Guarantor Subsidiaries”), on a combined basis, (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the “Non-Guarantor Subsidiaries”), on a combined basis, and (iv) the eliminations necessary to arrive at the information for Time Warner Inc. on a consolidated basis. The Guarantor Subsidiaries fully and unconditionally, jointly and severally guarantee securities issued under certain of the Company's indentures on an unsecured basis. |
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There are no legal or regulatory restrictions on the Parent Company's ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances. |
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Basis of Presentation |
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The Company's financial information has been recast to reflect the financial condition and results of operations of the Company's former Time Inc. segment as discontinued operations for all periods presented. Amounts presented in the Consolidating Balance Sheet at December 31, 2013 related to discontinued operations of the Parent Company and the Guarantor Subsidiaries principally relate to the impact of the Time Separation on the Parent Company's and the Guarantor Subsidiaries' deferred income taxes. |
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In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company's interests in the Guarantor Subsidiaries and (ii) the Guarantor Subsidiaries' interests in the Non-Guarantor Subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. generally accepted accounting principles. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column “Eliminations.” |
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The Parent Company's accounting bases in all subsidiaries, including goodwill and identified intangible assets, have been “pushed down” to the applicable subsidiaries. Corporate overhead expenses have been reflected as expenses of the Parent Company and have not been allocated to the Guarantor Subsidiaries or the Non-Guarantor Subsidiaries. Interest income (expense) is determined based on outstanding debt and the relevant intercompany amounts at the respective subsidiary. |
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All direct and indirect domestic subsidiaries are included in Time Warner Inc.'s consolidated U.S. tax return. In the condensed consolidating financial statements, tax expense has been allocated based on each such subsidiary's relative pretax income to the consolidated pretax income. With respect to the use of certain consolidated tax attributes (principally operating and capital loss carryforwards), such benefits have been allocated to the respective subsidiary that generated the taxable income permitting such use (i.e., pro-rata based on where the income was generated). For example, to the extent a Non-Guarantor Subsidiary generated a gain on the sale of a business for which the Parent Company utilized tax attributes to offset such gain, the tax attribute benefit would be allocated to that Non-Guarantor Subsidiary. Deferred taxes of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been determined based on the temporary differences between the book and tax basis of the respective assets and liabilities of the applicable entities. |
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Certain transfers of cash between subsidiaries and their parent companies and intercompany dividends are reflected as cash flows from investing and financing activities in the accompanying Condensed Consolidating Statements of Cash Flows. All other intercompany activity is reflected in cash flows from operations. |
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Management believes that the allocations and adjustments noted above are reasonable. However, such allocations and adjustments may not be indicative of the actual amounts that would have been incurred had the Parent Company, Guarantor Subsidiaries and Non-Guarantor Subsidiaries operated independently. |
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Consolidating Balance Sheet |
30-Jun-14 |
(Unaudited; millions) |
| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | |
Cash and equivalents | | $ | 3,455 | | $ | 305 | | $ | 720 | | $ | - | | $ | 4,480 |
Receivables, net | | | 56 | | | 993 | | | 5,970 | | | -5 | | | 7,014 |
Inventories | | | - | | | 429 | | | 1,225 | | | - | | | 1,654 |
Deferred income taxes | | | 424 | | | 62 | | | -39 | | | -23 | | | 424 |
Prepaid expenses and other current assets | | | 105 | | | 88 | | | 418 | | | - | | | 611 |
Current assets of discontinued operations | | | - | | | - | | | - | | | - | | | - |
Total current assets | | | 4,040 | | | 1,877 | | | 8,294 | | | -28 | | | 14,183 |
Noncurrent inventories and theatrical film and television | | | | | | | | | | | | | | | |
production costs | | | - | | | 1,865 | | | 4,774 | | | -90 | | | 6,549 |
Investments in amounts due to and from consolidated | | | | | | | | | | | | | | | |
subsidiaries | | | 44,220 | | | 10,950 | | | 12,660 | | | -67,830 | | | - |
Investments, including available-for-sale securities | | | 97 | | | 454 | | | 1,943 | | | - | | | 2,494 |
Property, plant and equipment, net | | | 80 | | | 397 | | | 2,239 | | | - | | | 2,716 |
Intangible assets subject to amortization, net | | | - | | | - | | | 1,278 | | | - | | | 1,278 |
Intangible assets not subject to amortization | | | - | | | 2,007 | | | 5,030 | | | - | | | 7,037 |
Goodwill | | | - | | | 9,880 | | | 17,719 | | | - | | | 27,599 |
Other assets | | | 382 | | | 204 | | | 2,048 | | | - | | | 2,634 |
Noncurrent assets of discontinued operations | | | - | | | - | | | - | | | - | | | - |
Total assets | | $ | 48,819 | | $ | 27,634 | | $ | 55,985 | | $ | -67,948 | | $ | 64,490 |
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LIABILITIES AND EQUITY | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 779 | | $ | 725 | | $ | 5,146 | | $ | -86 | | $ | 6,564 |
Deferred revenue | | | - | | | 36 | | | 463 | | | -24 | | | 475 |
Debt due within one year | | | 148 | | | 9 | | | 11 | | | - | | | 168 |
Current liabilities of discontinued operations | | | - | | | - | | | - | | | - | | | - |
Total current liabilities | | | 927 | | | 770 | | | 5,620 | | | -110 | | | 7,207 |
Long-term debt | | | 18,105 | | | 4,005 | | | 285 | | | - | | | 22,395 |
Due to (from) affiliates | | | -922 | | | - | | | 922 | | | - | | | - |
Deferred income taxes | | | 2,037 | | | 2,404 | | | 1,635 | | | -4,039 | | | 2,037 |
Deferred revenue | | | - | | | 25 | | | 339 | | | -29 | | | 335 |
Other noncurrent liabilities | | | 2,765 | | | 1,915 | | | 3,561 | | | -1,632 | | | 6,609 |
Noncurrent liabilities of discontinued operations | | | - | | | - | | | - | | | - | | | - |
Equity | | | | | | | | | | | | | | | |
Due to (from) Time Warner Inc. and subsidiaries | | | - | | | -41,486 | | | 7,547 | | | 33,939 | | | - |
Other shareholders’ equity | | | 25,907 | | | 60,001 | | | 36,076 | | | -96,077 | | | 25,907 |
Total Time Warner Inc. shareholders’ equity | | | 25,907 | | | 18,515 | | | 43,623 | | | -62,138 | | | 25,907 |
Noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Total equity | | | 25,907 | | | 18,515 | | | 43,623 | | | -62,138 | | | 25,907 |
Total liabilities and equity | | $ | 48,819 | | $ | 27,634 | | $ | 55,985 | | $ | -67,948 | | $ | 64,490 |
Consolidating Balance Sheet |
31-Dec-13 |
(Unaudited; recast; millions) |
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| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | |
Cash and equivalents | | $ | 1,039 | | $ | 148 | | $ | 629 | | $ | - | | $ | 1,816 |
Receivables, net | | | 73 | | | 901 | | | 6,341 | | | -10 | | | 7,305 |
Inventories | | | - | | | 383 | | | 1,265 | | | - | | | 1,648 |
Deferred income taxes | | | 369 | | | 50 | | | -52 | | | 2 | | | 369 |
Prepaid expenses and other current assets | | | 103 | | | 84 | | | 372 | | | - | | | 559 |
Current assets of discontinued operations | | | 79 | | | 78 | | | 832 | | | -155 | | | 834 |
Total current assets | | | 1,663 | | | 1,644 | | | 9,387 | | | -163 | | | 12,531 |
Noncurrent inventories and theatrical film and television | | | | | | | | | | | | | | | |
production costs | | | - | | | 1,726 | | | 5,371 | | | -81 | | | 7,016 |
Investments in amounts due to and from consolidated | | | | | | | | | | | | | | | |
subsidiaries | | | 48,549 | | | 21,248 | | | 12,288 | | | -82,085 | | | - |
Investments, including available-for-sale securities | | | 130 | | | 460 | | | 1,419 | | | - | | | 2,009 |
Property, plant and equipment, net | | | 373 | | | 377 | | | 2,541 | | | - | | | 3,291 |
Intangible assets subject to amortization, net | | | - | | | - | | | 1,338 | | | - | | | 1,338 |
Intangible assets not subject to amortization | | | - | | | 2,007 | | | 5,036 | | | - | | | 7,043 |
Goodwill | | | - | | | 9,879 | | | 17,522 | | | - | | | 27,401 |
Other assets | | | 322 | | | 194 | | | 1,942 | | | - | | | 2,458 |
Noncurrent assets of discontinued operations | | | - | | | - | | | 4,912 | | | - | | | 4,912 |
Total assets | | $ | 51,037 | | $ | 37,535 | | $ | 61,756 | | $ | -82,329 | | $ | 67,999 |
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LIABILITIES AND EQUITY | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 618 | | $ | 770 | | $ | 5,425 | | $ | -59 | | $ | 6,754 |
Deferred revenue | | | - | | | 28 | | | 524 | | | -10 | | | 542 |
Debt due within one year | | | 48 | | | 9 | | | 9 | | | - | | | 66 |
Current liabilities of discontinued operations | | | 1 | | | - | | | 1,026 | | | -1 | | | 1,026 |
Total current liabilities | | | 667 | | | 807 | | | 6,984 | | | -70 | | | 8,388 |
Long-term debt | | | 16,046 | | | 4,001 | | | 14 | | | - | | | 20,061 |
Due to (from) affiliates | | | -900 | | | - | | | 900 | | | - | | | - |
Deferred income taxes | | | 2,287 | | | 2,666 | | | 2,016 | | | -4,682 | | | 2,287 |
Deferred revenue | | | - | | | 36 | | | 348 | | | -33 | | | 351 |
Other noncurrent liabilities | | | 2,657 | | | 1,939 | | | 3,352 | | | -1,624 | | | 6,324 |
Noncurrent liabilities of discontinued operations | | | 376 | | | 411 | | | 713 | | | -816 | | | 684 |
Equity | | | | | | | | | | | | | | | |
Due to (from) Time Warner Inc. and subsidiaries | | | - | | | -33,497 | | | 6,155 | | | 27,342 | | | - |
Other shareholders’ equity | | | 29,904 | | | 61,172 | | | 41,274 | | | -102,446 | | | 29,904 |
Total Time Warner Inc. shareholders’ equity | | | 29,904 | | | 27,675 | | | 47,429 | | | -75,104 | | | 29,904 |
Noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Total equity | | | 29,904 | | | 27,675 | | | 47,429 | | | -75,104 | | | 29,904 |
Total liabilities and equity | | $ | 51,037 | | $ | 37,535 | | $ | 61,756 | | $ | -82,329 | | $ | 67,999 |
Consolidating Statement of Operations |
For The Three Months Ended June 30, 2014 |
(Unaudited; millions) |
| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
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Revenues | | $ | - | | $ | 1,788 | | $ | 5,177 | | $ | -177 | | $ | 6,788 |
Costs of revenues | | | - | | | -786 | | | -3,294 | | | 155 | | | -3,925 |
Selling, general and administrative | | | -126 | | | -215 | | | -898 | | | 22 | | | -1,217 |
Amortization of intangible assets | | | - | | | - | | | -50 | | | - | | | -50 |
Restructuring and severance costs | | | -1 | | | -6 | | | -10 | | | - | | | -17 |
Asset impairments | | | - | | | - | | | -14 | | | - | | | -14 |
Gain on operating assets, net | | | - | | | - | | | 2 | | | - | | | 2 |
Operating income | | | -127 | | | 781 | | | 913 | | | - | | | 1,567 |
Equity in pretax income (loss) of consolidated subsidiaries | | | 1,625 | | | 920 | | | 539 | | | -3,084 | | | - |
Interest expense, net | | | -236 | | | -77 | | | 15 | | | 2 | | | -296 |
Other income (loss), net | | | 15 | | | 6 | | | -14 | | | -1 | | | 6 |
Income from continuing operations before | | | | | | | | | | | | | | | |
income taxes | | | 1,277 | | | 1,630 | | | 1,453 | | | -3,083 | | | 1,277 |
Income tax provision | | | -434 | | | -540 | | | -491 | | | 1,031 | | | -434 |
Income from continuing operations | | | 843 | | | 1,090 | | | 962 | | | -2,052 | | | 843 |
Discontinued operations, net of tax | | | 7 | | | -2 | | | 10 | | | -8 | | | 7 |
Net income | | | 850 | | | 1,088 | | | 972 | | | -2,060 | | | 850 |
Less Net loss attributable to noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Net income attributable to Time Warner Inc. | | | | | | | | | | | | | | | |
shareholders | | $ | 850 | | $ | 1,088 | | $ | 972 | | $ | -2,060 | | $ | 850 |
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Comprehensive income | | | 817 | | | 1,062 | | | 970 | | | -2,032 | | | 817 |
Less Comprehensive loss attributable to | | | | | | | | | | | | | | | |
noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Comprehensive income attributable to | | | | | | | | | | | | | | | |
Time Warner Inc. shareholders | | $ | 817 | | $ | 1,062 | | $ | 970 | | $ | -2,032 | | $ | 817 |
Consolidating Statement of Operations |
For The Three Months Ended June 30, 2013 |
(Unaudited; recast; millions) |
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| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Revenues | | $ | - | | $ | 1,593 | | $ | 5,187 | | $ | -172 | | $ | 6,608 |
Costs of revenues | | | - | | | -710 | | | -3,342 | | | 144 | | | -3,908 |
Selling, general and administrative | | | -82 | | | -238 | | | -924 | | | 25 | | | -1,219 |
Amortization of intangible assets | | | - | | | - | | | -51 | | | - | | | -51 |
Restructuring and severance costs | | | - | | | -7 | | | -42 | | | - | | | -49 |
Asset impairments | | | - | | | - | | | -3 | | | - | | | -3 |
Gain on operating assets, net | | | - | | | - | | | 9 | | | - | | | 9 |
Operating income | | | -82 | | | 638 | | | 834 | | | -3 | | | 1,387 |
Equity in pretax income (loss) of consolidated subsidiaries | | | 1,348 | | | 818 | | | 443 | | | -2,609 | | | - |
Interest expense, net | | | -217 | | | -84 | | | -1 | | | 2 | | | -300 |
Other income (loss), net | | | -18 | | | 4 | | | -44 | | | 2 | | | -56 |
Income from continuing operations before | | | | | | | | | | | | | | | |
income taxes | | | 1,031 | | | 1,376 | | | 1,232 | | | -2,608 | | | 1,031 |
Income tax provision | | | -333 | | | -458 | | | -419 | | | 877 | | | -333 |
Income from continuing operations | | | 698 | | | 918 | | | 813 | | | -1,731 | | | 698 |
Discontinued operations, net of tax | | | 73 | | | 72 | | | 73 | | | -145 | | | 73 |
Net income | | | 771 | | | 990 | | | 886 | | | -1,876 | | | 771 |
Less Net loss attributable to noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Net income attributable to Time Warner Inc. | | | | | | | | | | | | | | | |
shareholders | | $ | 771 | | $ | 990 | | $ | 886 | | $ | -1,876 | | $ | 771 |
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Comprehensive income | | | 730 | | | 945 | | | 859 | | | -1,804 | | | 730 |
Less Comprehensive loss attributable to | | | | | | | | | | | | | | | |
noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Comprehensive income attributable to | | | | | | | | | | | | | | | |
Time Warner Inc. shareholders | | $ | 730 | | $ | 945 | | $ | 859 | | $ | -1,804 | | $ | 730 |
Consolidating Statement of Operations |
For The Six Months Ended June 30, 2014 |
(Unaudited; millions) |
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| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Revenues | | $ | - | | $ | 3,512 | | $ | 10,446 | | $ | -367 | | $ | 13,591 |
Costs of revenues | | | - | | | -1,612 | | | -6,488 | | | 324 | | | -7,776 |
Selling, general and administrative | | | -239 | | | -479 | | | -1,812 | | | 43 | | | -2,487 |
Amortization of intangible assets | | | - | | | - | | | -100 | | | - | | | -100 |
Restructuring and severance costs | | | -4 | | | -20 | | | -19 | | | - | | | -43 |
Asset impairments | | | -6 | | | - | | | -20 | | | - | | | -26 |
Gain (loss) on operating assets, net | | | - | | | - | | | 456 | | | - | | | 456 |
Operating income | | | -249 | | | 1,401 | | | 2,463 | | | - | | | 3,615 |
Equity in pretax income (loss) of consolidated subsidiaries | | | 3,761 | | | 2,052 | | | 997 | | | -6,810 | | | - |
Interest expense, net | | | -468 | | | -118 | | | 21 | | | 4 | | | -561 |
Other loss, net | | | 5 | | | 15 | | | -24 | | | -1 | | | -5 |
Income from continuing operations before income | | | | | | | | | | | | | | | |
taxes | | | 3,049 | | | 3,350 | | | 3,457 | | | -6,807 | | | 3,049 |
Income tax provision | | | -841 | | | -1,117 | | | -962 | | | 2,079 | | | -841 |
Income from continuing operations | | | 2,208 | | | 2,233 | | | 2,495 | | | -4,728 | | | 2,208 |
Discontinued operations, net of tax | | | -66 | | | -41 | | | -63 | | | 104 | | | -66 |
Net income | | | 2,142 | | | 2,192 | | | 2,432 | | | -4,624 | | | 2,142 |
Less Net loss attributable to noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Net income attributable to Time Warner Inc. | | | | | | | | | | | | | | | |
shareholders | | $ | 2,142 | | $ | 2,192 | | $ | 2,432 | | $ | -4,624 | | $ | 2,142 |
| | | | | | | | | | | | | | | |
Comprehensive income | | | 2,086 | | | 2,147 | | | 2,380 | | | -4,527 | | | 2,086 |
Less Comprehensive loss attributable to | | | | | | | | | | | | | | | |
noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Comprehensive income attributable to | | | | | | | | | | | | | | | |
Time Warner Inc. shareholders | | $ | 2,086 | | $ | 2,147 | | $ | 2,380 | | $ | -4,527 | | $ | 2,086 |
Consolidating Statement of Operations |
For The Six Months Ended June 30, 2013 |
(Unaudited; recast; millions) |
|
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| | | | | | | | | | | | | Time |
| | Parent | | Guarantor | | Non-Guarantor | | | | Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Revenues | | $ | - | | $ | 3,212 | | $ | 9,894 | | $ | -291 | | $ | 12,815 |
Costs of revenues | | | - | | | -1,472 | | | -6,119 | | | 241 | | | -7,350 |
Selling, general and administrative | | | -200 | | | -496 | | | -1,818 | | | 45 | | | -2,469 |
Amortization of intangible assets | | | - | | | - | | | -101 | | | - | | | -101 |
Restructuring and severance costs | | | -2 | | | -18 | | | -56 | | | - | | | -76 |
Asset impairments | | | -7 | | | - | | | -23 | | | - | | | -30 |
Gain (loss) on operating assets, net | | | 8 | | | - | | | 9 | | | - | | | 17 |
Operating income | | | -201 | | | 1,226 | | | 1,786 | | | -5 | | | 2,806 |
Equity in pretax income (loss) of consolidated subsidiaries | | | 2,826 | | | 1,852 | | | 851 | | | -5,529 | | | - |
Interest expense, net | | | -441 | | | -169 | | | 16 | | | 5 | | | -589 |
Other loss, net | | | -7 | | | 1 | | | -34 | | | - | | | -40 |
Income from continuing operations before income | | | | | | | | | | | | | | | |
taxes | | | 2,177 | | | 2,910 | | | 2,619 | | | -5,529 | | | 2,177 |
Income tax provision | | | -715 | | | -964 | | | -888 | | | 1,852 | | | -715 |
Income from continuing operations | | | 1,462 | | | 1,946 | | | 1,731 | | | -3,677 | | | 1,462 |
Discontinued operations, net of tax | | | 63 | | | 60 | | | 61 | | | -121 | | | 63 |
Net income | | | 1,525 | | | 2,006 | | | 1,792 | | | -3,798 | | | 1,525 |
Less Net loss attributable to noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Net income attributable to Time Warner Inc. | | | | | | | | | | | | | | | |
shareholders | | $ | 1,525 | | $ | 2,006 | | $ | 1,792 | | $ | -3,798 | | $ | 1,525 |
| | | | | | | | | | | | | | | |
Comprehensive income | | | 1,413 | | | 1,934 | | | 1,743 | | | -3,677 | | | 1,413 |
Less Comprehensive loss attributable to | | | | | | | | | | | | | | | |
noncontrolling interests | | | - | | | - | | | - | | | - | | | - |
Comprehensive income attributable to | | | | | | | | | | | | | | | |
Time Warner Inc. shareholders | | $ | 1,413 | | $ | 1,934 | | $ | 1,743 | | $ | -3,677 | | $ | 1,413 |
Consolidating Statement of Cash Flows |
For The Six Months Ended June 30, 2014 |
(Unaudited; millions) |
| | Parent | | Guarantor | | Non-Guarantor | | | | Time Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
OPERATIONS | | | | | | | | | | | | | | | |
Net income | | $ | 2,142 | | $ | 2,192 | | $ | 2,432 | | $ | -4,624 | | $ | 2,142 |
Less Discontinued operations, net of tax | | | 66 | | | 41 | | | 63 | | | -104 | | | 66 |
Net income from continuing operations | | | 2,208 | | | 2,233 | | | 2,495 | | | -4,728 | | | 2,208 |
Adjustments for noncash and nonoperating items: | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 9 | | | 58 | | | 301 | | | - | | | 368 |
Amortization of film and television costs | | | - | | | 1,280 | | | 2,655 | | | -22 | | | 3,913 |
Asset impairments | | | 6 | | | - | | | 20 | | | - | | | 26 |
Gain on investments and other assets, net | | | -15 | | | -7 | | | -455 | | | - | | | -477 |
Excess (deficiency) of distributions over equity in pretax | | | | | | | | | | | | | | | |
income of consolidated subsidiaries, net of cash | | | | | | | | | | | | | | | |
distributions | | | -3,761 | | | -2,052 | | | -997 | | | 6,810 | | | - |
Equity in losses of investee companies, net | | | | | | | | | | | | | | | |
of cash distributions | | | 1 | | | -6 | | | 59 | | | - | | | 54 |
Equity-based compensation | | | 41 | | | 39 | | | 46 | | | - | | | 126 |
Deferred income taxes | | | -312 | | | -270 | | | -333 | | | 603 | | | -312 |
Changes in operating assets and liabilities, net of acquisitions | | | 359 | | | -429 | | | -1,148 | | | -2,631 | | | -3,849 |
Intercompany | | | - | | | 1,518 | | | -1,518 | | | - | | | - |
Cash provided by operations from continuing operations | | | -1,464 | | | 2,364 | | | 1,125 | | | 32 | | | 2,057 |
INVESTING ACTIVITIES | | | | | | | | | | | | | | | |
Investments in available-for-sale securities | | | -5 | | | - | | | -23 | | | - | | | -28 |
Investments and acquisitions, net of cash acquired | | | -19 | | | -2 | | | -840 | | | - | | | -861 |
Capital expenditures | | | -18 | | | -32 | | | -156 | | | - | | | -206 |
Investment proceeds from available-for-sale securities | | | 13 | | | 3 | | | - | | | - | | | 16 |
Proceeds from Time Inc. in the Time Separation | | | 590 | | | - | | | 810 | | | - | | | 1,400 |
Proceeds from the sale of Time Warner Center | | | - | | | - | | | 1,264 | | | - | | | 1,264 |
Advances to (from) parent and consolidated subsidiaries | | | 3,946 | | | 5,336 | | | - | | | -9,282 | | | - |
Other investment proceeds | | | 43 | | | 85 | | | 12 | | | -18 | | | 122 |
Cash provided (used) by investing activities from | | | | | | | | | | | | | | | |
continuing operations | | | 4,550 | | | 5,390 | | | 1,067 | | | -9,300 | | | 1,707 |
FINANCING ACTIVITIES | | | | | | | | | | | | | | | |
Borrowings | | | 2,118 | | | - | | | 283 | | | - | | | 2,401 |
Debt repayments | | | - | | | - | | | -15 | | | - | | | -15 |
Proceeds from exercise of stock options | | | 182 | | | - | | | - | | | - | | | 182 |
Excess tax benefit from equity instruments | | | 95 | | | - | | | - | | | - | | | 95 |
Principal payments on capital leases | | | - | | | -4 | | | -1 | | | - | | | -5 |
Repurchases of common stock | | | -2,876 | | | - | | | - | | | - | | | -2,876 |
Dividends paid | | | -568 | | | - | | | - | | | - | | | -568 |
Other financing activities | | | 61 | | | -40 | | | -136 | | | -10 | | | -125 |
Change in due to/from parent and investment in segment | | | - | | | -7,571 | | | -1,707 | | | 9,278 | | | - |
Cash used by financing activities from continuing | | | | | | | | | | | | | | | |
operations | | | -988 | | | -7,615 | | | -1,576 | | | 9,268 | | | -911 |
Cash provided by continuing operations | | | 2,098 | | | 139 | | | 616 | | | - | | | 2,853 |
Cash provided (used) by operations from discontinued | | | | | | | | | | | | | | | |
operations | | | - | | | - | | | -15 | | | - | | | -15 |
Cash provided (used) by investing activities from | | | | | | | | | | | | | | | |
discontinued operations | | | 318 | | | 18 | | | -51 | | | -336 | | | -51 |
Cash provided (used) by financing activities from | | | | | | | | | | | | | | | |
discontinued operations | | | - | | | - | | | -372 | | | 336 | | | -36 |
Effect of change in cash and equivalents of discontinued | | | | | | | | | | | | | | | |
operations | | | - | | | - | | | -87 | | | - | | | -87 |
Cash provided (used) by discontinued operations | | | 318 | | | 18 | | | -525 | | | - | | | -189 |
| | | | | | | | | | | | | | | |
INCREASE IN CASH AND EQUIVALENTS | | | 2,416 | | | 157 | | | 91 | | | - | | | 2,664 |
CASH AND EQUIVALENTS AT BEGINNING | | | | | | | | | | | | | | | |
OF PERIOD | | | 1,039 | | | 148 | | | 629 | | | - | | | 1,816 |
CASH AND EQUIVALENTS AT END OF PERIOD | | $ | 3,455 | | $ | 305 | | $ | 720 | | $ | - | | $ | 4,480 |
Consolidating Statement of Cash Flows |
For The Six Months Ended June 30, 2013 |
(Unaudited; recast; millions) |
| | Parent | | Guarantor | | Non-Guarantor | | | | Time Warner |
| | Company | | Subsidiaries | | Subsidiaries | | Eliminations | | Consolidated |
| | | | | | | | | | | | | | | |
OPERATIONS | | | | | | | | | | | | | | | |
Net income | | $ | 1,525 | | $ | 2,006 | | $ | 1,792 | | $ | -3,798 | | $ | 1,525 |
Less Discontinued operations, net of tax | | | -63 | | | -60 | | | -61 | | | 121 | | | -63 |
Net income from continuing operations | | | 1,462 | | | 1,946 | | | 1,731 | | | -3,677 | | | 1,462 |
Adjustments for noncash and nonoperating items: | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 13 | | | 64 | | | 296 | | | - | | | 373 |
Amortization of film and television costs | | | - | | | 1,223 | | | 2,562 | | | -14 | | | 3,771 |
Asset impairments | | | 7 | | | - | | | 23 | | | - | | | 30 |
Gain on investments and other assets, net | | | -6 | | | 2 | | | -60 | | | - | | | -64 |
Excess (deficiency) of distributions over equity in pretax | | | | | | | | | | | | | | | |
income of consolidated subsidiaries, net of cash | | | | | | | | | | | | | | | |
distributions | | | -2,826 | | | -1,852 | | | -851 | | | 5,529 | | | - |
Equity in losses of investee companies, net | | | | | | | | | | | | | | | |
of cash distributions | | | - | | | 1 | | | 124 | | | - | | | 125 |
Equity-based compensation | | | 39 | | | 39 | | | 62 | | | - | | | 140 |
Deferred income taxes | | | 448 | | | 356 | | | 152 | | | -508 | | | 448 |
Changes in operating assets and liabilities, net of acquisitions | | | -578 | | | -897 | | | -1,958 | | | -1,327 | | | -4,760 |
Intercompany | | | - | | | 1,093 | | | -1,093 | | | - | | | - |
Cash provided by operations from continuing operations | | | -1,441 | | | 1,975 | | | 988 | | | 3 | | | 1,525 |
INVESTING ACTIVITIES | | | | | | | | | | | | | | | |
Investments in available-for-sale securities | | | -2 | | | - | | | -20 | | | - | | | -22 |
Investments and acquisitions, net of cash acquired | | | -5 | | | -1 | | | -411 | | | - | | | -417 |
Capital expenditures | | | -9 | | | -29 | | | -134 | | | - | | | -172 |
Investment proceeds from available-for-sale securities | | | 8 | | | - | | | 25 | | | - | | | 33 |
Advances to (from) parent and consolidated subsidiaries | | | 2,127 | | | 617 | | | - | | | -2,744 | | | - |
Other investment proceeds | | | 16 | | | 48 | | | 105 | | | -17 | | | 152 |
Cash provided (used) by investing activities from | | | | | | | | | | | | | | | |
continuing operations | | | 2,135 | | | 635 | | | -435 | | | -2,761 | | | -426 |
FINANCING ACTIVITIES | | | | | | | | | | | | | | | |
Borrowings | | | - | | | - | | | 14 | | | - | | | 14 |
Debt repayments | | | - | | | -432 | | | -14 | | | - | | | -446 |
Proceeds from exercise of stock options | | | 489 | | | - | | | - | | | - | | | 489 |
Excess tax benefit from equity instruments | | | 130 | | | - | | | - | | | - | | | 130 |
Principal payments on capital leases | | | - | | | -4 | | | - | | | - | | | -4 |
Repurchases of common stock | | | -1,522 | | | - | | | - | | | - | | | -1,522 |
Dividends paid | | | -544 | | | - | | | - | | | - | | | -544 |
Other financing activities | | | 34 | | | -10 | | | -138 | | | 15 | | | -99 |
Change in due to/from parent and investment in segment | | | - | | | -2,325 | | | -418 | | | 2,743 | | | - |
Cash used by financing activities from continuing | | | | | | | | | | | | | | | |
operations | | | -1,413 | | | -2,771 | | | -556 | | | 2,758 | | | -1,982 |
Cash provided by continuing operations | | | -719 | | | -161 | | | -3 | | | - | | | -883 |
Cash provided (used) by operations from discontinued | | | | | | | | | | | | | | | |
operations | | | -1 | | | - | | | 120 | | | - | | | 119 |
Cash provided (used) by investing activities from | | | | | | | | | | | | | | | |
discontinued operations | | | 142 | | | -47 | | | -14 | | | -95 | | | -14 |
Cash provided (used) by financing activities from | | | | | | | | | | | | | | | |
discontinued operations | | | - | | | - | | | -95 | | | 95 | | | - |
Effect of change in cash and equivalents of discontinued | | | | | | | | | | | | | | | |
operations | | | - | | | - | | | 12 | | | - | | | 12 |
Cash provided (used) by discontinued operations | | | 141 | | | -47 | | | 23 | | | - | | | 117 |
INCREASE (DECREASE) IN CASH AND | | | | | | | | | | | | | | | |
EQUIVALENTS | | | -578 | | | -208 | | | 20 | | | - | | | -766 |
CASH AND EQUIVALENTS AT BEGINNING | | | | | | | | | | | | | | | |
OF PERIOD | | | 1,861 | | | 295 | | | 604 | | | - | | | 2,760 |
CASH AND EQUIVALENTS AT END OF PERIOD | | $ | 1,283 | | $ | 87 | | $ | 624 | | $ | - | | $ | 1,994 |