Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 14, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TIME WARNER INC. | ||
Entity Central Index Key | 1,105,705 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Trading Symbol | TWX | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 779,851,623 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 78,170 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and equivalents | $ 2,621 | $ 1,539 |
Receivables, less allowances of $896 and $981 | 9,401 | 8,699 |
Inventories | 2,401 | 2,062 |
Prepaid expenses and other current assets | 796 | 1,185 |
Total current assets | 15,219 | 13,485 |
Noncurrent inventories and theatrical film and television production costs | 8,275 | 7,916 |
Investments, including available-for-sale securities | 3,924 | 3,337 |
Property, plant and equipment, net | 2,707 | 2,510 |
Intangible assets subject to amortization, net | 585 | 783 |
Intangible assets not subject to amortization | 7,006 | 7,005 |
Goodwill | 27,776 | 27,752 |
Other assets | 3,717 | 3,178 |
Total assets | 69,209 | 65,966 |
Current liabilities | ||
Accounts payable and accrued liabilities | 7,916 | 7,192 |
Deferred revenue | 711 | 564 |
Debt due within one year | 5,450 | 1,947 |
Total current liabilities | 14,077 | 9,703 |
Long-term debt | 18,294 | 22,392 |
Deferred income taxes | 1,584 | 2,678 |
Deferred revenue | 468 | 486 |
Other noncurrent liabilities | 6,375 | 6,341 |
Redeemable noncontrolling interest | 35 | 29 |
Commitments and Contingencies (Note 17) | ||
Equity | ||
Common stock, $0.01 par value, 1.652 billion and 1.652 billion shares issued and 780 million and 772 million shares outstanding | 17 | 17 |
Additional paid-in capital | 145,077 | 146,780 |
Treasury stock, at cost (872 million and 880 million shares) | (47,074) | (47,497) |
Accumulated other comprehensive loss, net | (1,437) | (1,510) |
Accumulated deficit | (68,208) | (73,455) |
Total Time Warner Inc. shareholders’ equity | 28,375 | 24,335 |
Noncontrolling interest | 1 | 2 |
Total equity | 28,376 | 24,337 |
Total liabilities and equity | $ 69,209 | $ 65,966 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Allowances | $ 896 | $ 981 |
Equity | ||
Time Warner common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Time Warner common stock, shares issued (shares) | 1,652 | 1,652 |
Time Warner common stock, shares outstanding (shares) | 780 | 772 |
Treasury stock, shares | 872 | 880 |
Consolidated Statement Of Opera
Consolidated Statement Of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenues | $ 31,271 | $ 29,318 | $ 28,118 |
Costs of revenues | (17,647) | (16,376) | (16,154) |
Selling, general and administrative | (5,438) | (5,123) | (4,824) |
Amortization of intangible assets | (197) | (190) | (189) |
Restructuring and severance costs | (120) | (117) | (60) |
Asset impairments | (16) | (43) | (25) |
Gain (loss) on operating assets, net | 67 | 78 | (1) |
Operating income | 7,920 | 7,547 | 6,865 |
Interest expense, net | (1,005) | (1,161) | (1,163) |
Other loss, net | (970) | (1,191) | (256) |
Income from continuing operations before income taxes | 5,945 | 5,195 | 5,446 |
Income tax provision | (701) | (1,281) | (1,651) |
Income from continuing operations | 5,244 | 3,914 | 3,795 |
Discontinued operations, net of tax | 0 | 11 | 37 |
Net income | 5,244 | 3,925 | 3,832 |
Less Net loss attributable to noncontrolling interests | 3 | 1 | 1 |
Net income attributable to Time Warner Inc. shareholders | 5,247 | 3,926 | 3,833 |
Amounts attributable to Time Warner Inc. shareholders: | |||
Income from continuing operations | 5,247 | 3,915 | 3,796 |
Discontinued operations, net of tax | 0 | 11 | 37 |
Net income attributable to Time Warner Inc. shareholders | $ 5,247 | $ 3,926 | $ 3,833 |
Per share information attributable to Time Warner Inc. common shareholders: | |||
Basic income per common share from continuing operations (dollars per share) | $ 6.73 | $ 5 | $ 4.64 |
Discontinued operations (dollars per share) | 0 | 0.01 | 0.05 |
Basic net income per common share (dollars per share) | $ 6.73 | $ 5.01 | $ 4.69 |
Average basic common shares outstanding (in shares) | 776.6 | 780.8 | 814.9 |
Diluted income per common share from continuing operations (dollars per share) | $ 6.64 | $ 4.94 | $ 4.58 |
Discontinued operations (dollars per share) | 0 | 0.02 | 0.04 |
Diluted net income per common share (dollars per share) | $ 6.64 | $ 4.96 | $ 4.62 |
Average diluted common shares outstanding (in shares) | 790.7 | 792.3 | 829.5 |
Cash dividends declared per share of common stock (dollars per share) | $ 2.0125 | $ 1.61 | $ 1.4 |
Consolidated Statement Of Compr
Consolidated Statement Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 5,244 | $ 3,925 | $ 3,832 |
Foreign currency translation: | |||
Unrealized gains (losses) occurring during the period | 178 | (121) | (289) |
Reclassification adjustment for losses realized in net income | 0 | 0 | 5 |
Change in foreign currency translation | 178 | (121) | (284) |
Securities: | |||
Unrealized gains occurring during the period | 1 | 0 | 1 |
Reclassification adjustment for losses realized in net income | 1 | 0 | 0 |
Change in securities | 2 | 0 | 1 |
Benefit obligations: | |||
Unrealized losses occurring during the period | (98) | (21) | (26) |
Reclassification adjustment for losses realized in net income | 29 | 67 | 22 |
Change in benefit obligations | (69) | 46 | (4) |
Derivative financial instruments: | |||
Unrealized gains (losses) occurring during the period | (94) | 58 | 88 |
Reclassification adjustment for (gains) losses realized in net income | 56 | (47) | (83) |
Change in derivative financial instruments | (38) | 11 | 5 |
Other comprehensive income (loss) | 73 | (64) | (282) |
Comprehensive income | 5,317 | 3,861 | 3,550 |
Less Comprehensive loss attributable to noncontrolling interests | 3 | 1 | 1 |
Comprehensive income attributable to Time Warner Inc. shareholders | $ 5,320 | $ 3,862 | $ 3,551 |
Consolidated Statement Of Cash
Consolidated Statement Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATIONS | |||
Net income | $ 5,244 | $ 3,925 | $ 3,832 |
Less Discontinued operations, net of tax | 0 | (11) | (37) |
Net income from continuing operations | 5,244 | 3,914 | 3,795 |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 694 | 669 | 681 |
Amortization of film and television costs | 9,162 | 8,324 | 8,030 |
Asset impairments | 16 | 43 | 25 |
(Gain) loss on investments and other assets, net | (367) | (131) | 31 |
Equity in losses of investee companies, net of cash distributions | 191 | 324 | 161 |
Equity-based compensation | 227 | 277 | 182 |
Deferred income taxes | (1,010) | 236 | 328 |
Premiums paid and costs incurred on debt redemption | 1,087 | 1,008 | 72 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Receivables | (704) | (1,201) | (112) |
Inventories and film costs | (9,574) | (8,774) | (8,526) |
Accounts payable and other liabilities | 624 | 631 | (200) |
Other changes | (496) | (637) | (616) |
Cash provided by operations from continuing operations | 5,094 | 4,683 | 3,851 |
Cash used by operations from discontinued operations | (15) | (17) | (8) |
Cash provided by operations | 5,079 | 4,666 | 3,843 |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | (1) | (9) | (41) |
Investments and acquisitions, net of cash acquired | (706) | (1,228) | (672) |
Capital expenditures | (656) | (432) | (423) |
Other investment proceeds | 367 | 309 | 143 |
Cash used by investing activities | (996) | (1,360) | (993) |
FINANCING ACTIVITIES | |||
Borrowings | 4,270 | 3,830 | 3,768 |
Debt repayments | (5,001) | (3,304) | (2,344) |
Proceeds from exercise of stock options | 206 | 172 | 165 |
Excess tax benefit from equity instruments | 0 | 88 | 151 |
Principal payments on capital leases | (39) | (14) | (11) |
Repurchases of common stock | 0 | (2,322) | (3,632) |
Dividends paid | (1,265) | (1,269) | (1,150) |
Other financing activities | (1,172) | (1,103) | (260) |
Cash used by financing activities | (3,001) | (3,922) | (3,313) |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 1,082 | (616) | (463) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 1,539 | 2,155 | 2,618 |
CASH AND EQUIVALENTS AT END OF PERIOD | $ 2,621 | $ 1,539 | $ 2,155 |
Consolidated Statement Of Equit
Consolidated Statement Of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | [1] | Time Warner Shareholders' Total | Noncontrolling Interests | |
BALANCE AT BEGINNING OF PERIOD at Dec. 31, 2014 | $ 24,476 | $ 17 | $ 149,282 | $ (42,445) | $ (82,378) | $ 24,476 | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | [2] | 3,833 | 0 | 0 | 0 | 3,833 | 3,833 | 0 | |
Other comprehensive loss | (282) | 0 | 0 | 0 | (282) | (282) | 0 | ||
Cash dividends | (1,150) | 0 | (1,150) | 0 | 0 | (1,150) | 0 | ||
Common stock repurchases | (3,600) | 0 | 0 | (3,600) | 0 | (3,600) | 0 | ||
Amounts related primarily to stock options and restricted stock | 342 | 0 | (91) | 433 | 0 | 342 | 0 | ||
BALANCE AT END OF PERIOD at Dec. 31, 2015 | 23,619 | 17 | 148,041 | (45,612) | (78,827) | 23,619 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | [2] | 3,927 | 0 | 0 | 0 | 3,926 | 3,926 | 1 | |
Other comprehensive loss | (64) | 0 | 0 | 0 | (64) | (64) | 0 | ||
Cash dividends | (1,269) | 0 | (1,269) | 0 | 0 | (1,269) | 0 | ||
Common stock repurchases | (2,307) | 0 | 0 | (2,307) | 0 | (2,307) | 0 | ||
Noncontrolling interests of acquired businesses | 1 | 0 | 0 | 0 | 0 | 0 | 1 | ||
Amounts related primarily to stock options and restricted stock | 430 | 0 | 8 | 422 | 0 | 430 | 0 | ||
BALANCE AT END OF PERIOD at Dec. 31, 2016 | 24,337 | 17 | 146,780 | (47,497) | (74,965) | 24,335 | 2 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | [2] | 5,246 | 0 | 0 | 0 | 5,247 | 5,247 | (1) | |
Other comprehensive loss | 73 | 0 | 0 | 0 | 73 | 73 | 0 | ||
Cash dividends | [3] | (1,583) | 0 | (1,583) | 0 | 0 | (1,583) | 0 | |
Amounts related primarily to stock options and restricted stock | 303 | 0 | (120) | 423 | 0 | 303 | 0 | ||
BALANCE AT END OF PERIOD at Dec. 31, 2017 | $ 28,376 | $ 17 | $ 145,077 | $ (47,074) | $ (69,645) | $ 28,375 | $ 1 | ||
[1] | Includes Accumulated other comprehensive loss, net. | ||||||||
[2] | Net income excludes losses of $2 million, $2 million and $1 million for the years ended December 31, 2017, 2016 and 2015, respectively, relating to redeemable noncontrolling interests. | ||||||||
[3] | Consistent with the Agreement and Plan of Merger with AT&T Inc. dated as of October 22, 2016, Time Warner has aligned the timing of its quarterly dividend with the timing of AT&T Inc.’s dividend, and, on December 18, 2017, Time Warner declared its first quarter 2018 dividend of $0.4025 per share of common stock, which was paid in cash on February 1, 2018 to shareholders of record at the close of business on January 10, 2018. |
Consolidated Statement Of Equi8
Consolidated Statement Of Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Net income (loss) attributable to redeemable noncontrolling interest | $ (2) | $ (2) | $ (1) |
Cash dividends declared per share of common stock (dollars per share) | $ 2.0125 | $ 1.61 | $ 1.4 |
Description of Business, Basis
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Time Warner Inc. (“Time Warner” or the “Company”) is a leading media and entertainment company, whose businesses include television networks, and film and TV entertainment. Time Warner classifies its operations into three reportable segments: Turner : consisting principally of cable networks and digital media properties; Home Box Office : consisting principally of premium pay television services and a service that delivers video content to consumers over the internet (“OTT service”) domestically and premium pay, basic tier television and OTT services internationally; and Warner Bros. : consisting principally of television, feature film, home video and game production and distribution. Basis of Presentation Basis of Consolidation The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of entities in which Time Warner has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include accounting for asset impairments, multiple-element transactions, allowances for doubtful accounts, depreciation and amortization, the determination of ultimate revenues as it relates to amortization or impairment of capitalized film and programming costs and participations and residuals, home video and game product returns, business combinations, pension and other postretirement benefits, equity-based compensation, income taxes, contingencies, litigation matters, reporting revenue for certain transactions on a gross versus net basis, and the determination of whether the Company should consolidate certain entities. Accounting Guidance Adopted in 2017 Share-Based Payments On January 1, 2017, the Company adopted, on a prospective basis, new accounting guidance that changes the reporting for certain aspects of share-based payments. The guidance requires that the income tax effects of share-based awards be recognized in the Income tax provision in the Consolidated Statement of Operations when the awards vest or are settled. Under the previous guidance, excess tax benefits and deficiencies were recognized in Additional paid-in capital in the Consolidated Balance Sheet. For the years ended December 31, 2017 and 2016 , the amount of excess tax benefits, net of deficiencies, recognized in Income tax provision and Additional paid-in capital, respectively, was $149 million and $82 million , respectively. In addition, because excess tax benefits are no longer recognized in Additional paid-in capital, such amounts are no longer included in the determination of assumed proceeds in applying the treasury stock method when computing earnings per share. Another aspect of the new guidance also requires that excess tax benefits be classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows. Under the previous guidance, excess tax benefits were classified as a cash flow from financing activities. Excess tax benefits presented as a cash flow from operating activities was $150 million for the year ended December 31, 2017 . Excess tax benefits presented as a cash flow from financing activities were $88 million and $151 million for the years ended December 31, 2016 and 2015 , respectively. The other aspects of this new guidance did not have a material effect on the Company’s consolidated financial statements. Accounting Guidance Not Yet Adopted Derivatives and Hedging In August 2017, guidance was issued related to hedge accounting. The guidance principally: (i) expands hedge accounting for both financial and non-financial risk components, (ii) eliminates the separate measurement and presentation of hedge ineffectiveness, (iii) changes the presentation of hedge results to require that changes in the value of hedging instruments be presented in the same income statement line item as the earnings effect of the hedged item, and (iv) simplifies the method to assess hedge effectiveness. This guidance will become effective for all existing hedge relationships on January 1, 2019. The Company is evaluating the impact this guidance will have on its consolidated financial statements. Modification of Share-Based Payments In May 2017, guidance was issued that clarifies when changes to the terms and conditions of share-based awards must be accounted for as modifications. The guidance does not change the accounting treatment for modifications. The guidance became effective for the Company on January 1, 2018 and will be adopted on a prospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Net Periodic Benefit Costs In March 2017, guidance was issued that requires that an employer disaggregate the service cost component from the other components of net periodic benefit costs relating to defined benefit pension and other postretirement benefit plans. While the service cost component of net periodic benefit costs will continue to be presented as an operating expense, the other components will be recorded outside of operating income in the Consolidated Statement of Operations. For the years ended December 31, 2017 and 2016 , net periodic benefit costs relating to defined benefit pension and other postretirement benefit plans were $22 million and $46 million , respectively. Included in each of these amounts for both years was $4 million related to the service cost component. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. Simplifying the Accounting for Goodwill Impairment In January 2017, guidance was issued to simplify the accounting for goodwill impairment. The guidance removes the second step of the goodwill impairment test, which requires that a hypothetical purchase price allocation be performed to determine the amount of impairment, if any. Under this new guidance, a goodwill impairment charge will be based on the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will become effective on a prospective basis for the Company on January 1, 2020 and is not expected to have a material impact on the Company’s consolidated financial statements. Definition of a Business In January 2017, guidance was issued that changes the definition of a business for accounting purposes. Under the new guidance, an entity first determines whether substantially all of the fair value of a set of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of assets is not deemed to be a business. If the threshold is not met, the entity then evaluates whether the set of assets meets the requirement to be deemed a business, which at a minimum, requires there to be an input and a substantive process that together significantly contribute to the ability to create outputs. The guidance became effective on a prospective basis for the Company on January 1, 2018 and is not expected to have a material impact on the Company’s consolidated financial statements. Restricted Cash In November 2016, guidance was issued that requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown on the statement of cash flows. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Intra-Entity Transfers of Assets Other than Inventory In October 2016, guidance was issued that requires entities to recognize the income tax consequences of an intercompany transfer of an asset other than inventory when the transfer occurs, rather than deferring the income tax consequences of the intercompany transfer of assets until the asset has been sold to a third party. The guidance became effective for the Company on January 1, 2018 and will be adopted on a modified retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, guidance was issued that clarifies the presentation of certain cash receipts and payments in a company’s statement of cash flows. The guidance primarily relates to the classification of cash flows associated with certain (i) debt transactions, (ii) contingent consideration arrangements related to business combinations, (iii) insurance claims and policies, (iv) distributions received from equity method investees and (v) securitization transactions. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Accounting for Leases In February 2016, guidance was issued regarding accounting for leases. The main difference between the current guidance and the new guidance is the recognition by the lessee of lease assets and liabilities for those leases it classified as operating leases under the current guidance. Under the new guidance, the recognition, measurement and presentation of expenses and cash flows arising from a lease as well as the lessor accounting model have not significantly changed from current guidance. This guidance also requires qualitative and quantitative disclosures of key information about leasing arrangements. The new guidance will become effective on a modified retrospective basis for the Company on January 1, 2019. The Company is still evaluating the impact of the new guidance on its consolidated financial statements. Because the Company is a party to approximately 2,000 operating leases with future minimum rental commitments at December 31, 2017 of $1.128 billion , it expects that the impact of recognizing lease assets and liabilities for these operating leases will be significant to the Consolidated Balance Sheet. Recognition and Measurement of Financial Assets and Liabilities In January 2016, guidance was issued that makes limited changes to the accounting for financial instruments. The changes primarily relate to (i) the requirement to measure equity investments in unconsolidated subsidiaries, other than those accounted for under the equity method of accounting, at fair value, with changes in the fair value recognized in earnings, (ii) an alternative approach for the measurement of equity investments that do not have a readily determinable fair value, (iii) the elimination of the other-than-temporary impairment model and its replacement with a requirement to perform a qualitative assessment to identify the impairment of equity investments, and a requirement to recognize impairment losses in earnings based on the difference between the fair value and the carrying value of the equity investment, (iv) the elimination of the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost, (v) the addition of a requirement to use the exit price concept when measuring the fair value of financial instruments for disclosure purposes and (vi) the addition of a requirement to present financial assets and financial liabilities separately in the notes to the financial statements, grouped by measurement category (e.g., fair value, amortized cost, lower of cost or market) and by form of financial asset (e.g., loans, securities). The guidance became effective for the Company on January 1, 2018 and will be adopted by means of a cumulative effect adjustment to the Consolidated Balance Sheet and will be applied prospectively to equity securities without readily determinable fair values that exist as of that date. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Revenue Recognition In May 2014, guidance was issued that establishes a new revenue recognition framework in GAAP for all companies and industries. The core principle of the new guidance is that an entity should recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive for those goods or services. The guidance includes a five-step framework to determine the timing and amount of revenue to recognize related to contracts with customers. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework. The new guidance became effective on January 1, 2018 and can be adopted using either a full or modified retrospective basis. The Company has completed its assessment of the impact of adopting this new guidance and does not expect that the adoption will have a material impact on the Company’s reported operating results. The Company’s assessment is based on the conclusion that there will not be significant changes in the way it will record subscription revenue, advertising revenue, and a significant portion of its content revenue. Although the Company does not expect the impact of adopting the new guidance to be material, there are several areas where the Company’s revenue recognition is expected to change as compared with historical GAAP. The more significant of these areas are as follows: i. Renewals of Licenses of Intellectual Property - Under the prior guidance, when the term of an existing license agreement is extended, without any other changes to the provisions of the license, revenue for the renewal period is recognized on the date the renewal is agreed to contractually. Under the new guidance, revenue for the renewed license term cannot be recognized until the date the renewal term begins. This change will result in delayed revenue recognition as compared with current revenue recognition guidance. The Company expects that this change will primarily impact the Warner Bros. segment, but it will also, to a lesser degree, impact the Home Box Office and Turner segments. ii. License of Content Library - Under the prior guidance, when a company licenses a completed library of content and agrees to refresh the library with new content as it becomes available, and the licensee is not entitled to a refund if no further library titles are delivered, revenue is recognized once access to the library is granted to the licensee. Pursuant to the new guidance, because there is an implicit obligation for the company to refresh the library with additional content in the future, the company will need to estimate the additional content it will deliver in the future and allocate a portion of the transaction price to that content. As compared with the prior guidance, this will result in a deferral of a portion of the transaction price until delivery of future library content. The Company expects this change will primarily impact the Home Box Office segment. iii. Licenses of Symbolic Intellectual Property - Certain intellectual property, such as brands, tradenames and logos, is categorized in the new guidance as “symbolic” intellectual property. An assumption inherent in the new guidance is that a licensee’s ability to derive benefit from a license of symbolic intellectual property depends on the licensor continuing to support or maintain the intellectual property throughout the license term. Accordingly, under the new guidance, revenue from licenses of symbolic intellectual property is recognized over the corresponding license term. In certain arrangements where the Company has no remaining performance obligations, under the prior guidance, revenue from licenses of symbolic intellectual property is recognized at the inception of the license term. Therefore, the new guidance will result in a deferral of revenue recognition as compared to prior guidance. This change will primarily impact the Warner Bros. segment. iv. Minimum Fees in Multi-Year Affiliate Distribution Arrangements - In several international affiliate arrangements, and more recently in certain multi-year virtual multichannel video programming distributor (“virtual MVPD”) arrangements, the Company is paid an annual minimum guarantee that can vary from year to year. Under the prior guidance, the Company generally recognized the annual minimum guarantee fee ratably within each discrete annual period. In accordance with the new guidance, the Company is required to recognize the cumulative minimum guaranteed fees ratably over the contract term as it continuously delivers the content. Depending on how the minimum guaranteed fees vary in each contract year, this could result in an acceleration of revenue into earlier contractual years or a deferral of revenue into later contractual years as compared with the prior guidance. This change will primarily impact the Home Box Office and Turner segments. Also, under the new guidance, the Company will present certain sales incentives, such as sales returns and price protection reserves, as liabilities instead of as contra-asset allowances within Receivables. The Company adopted the guidance on January 1, 2018 and will use the modified retrospective method of adoption. Summary of Critical and Significant Accounting Policies The following is a discussion of each of the Company’s critical accounting policies, including information and analysis of estimates and assumptions involved in their application, and other significant accounting policies. The Securities and Exchange Commission (“SEC”) considers an accounting policy to be critical if it is important to the Company’s financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have been determined by Time Warner’s management and the related disclosures have been reviewed with the Audit and Finance Committee of the Board of Directors of the Company. Due to the significant judgment involved in selecting certain of the assumptions used in these areas, it is possible that different parties could choose different assumptions and reach different conclusions. The Company considers the policies relating to the following matters to be critical accounting policies: • Impairment of Goodwill and Intangible Assets (see pages 95 to 96); • Film and Television Production Cost Recognition, Participations and Residuals and Impairments (see page 100); • Licensed Programming Inventory Cost Recognition and Impairment (see page 101); • Gross versus Net Revenue Recognition (see pages 99 to 100); • Sales Returns and Pricing Rebates (see page 99); and • Income Taxes (see page 103). Cash and Equivalents Cash equivalents consist of investments that are readily convertible into cash and have original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. The Company monitors concentrations of credit risk with respect to Cash and equivalents by placing such balances with higher quality financial institutions or investing such amounts in liquid, short-term, highly-rated instruments or investment funds holding similar instruments. As of December 31, 2017 , the majority of the Company’s Cash and equivalents were invested with banks with a credit rating of at least A and in Rule 2a-7 money market mutual funds. At December 31, 2017 , the Company did not have more than $500 million invested in any single bank or money market mutual fund. Allowance for Doubtful Accounts The Company monitors customer credit risk related to accounts receivable, including unbilled trade receivables primarily related to the distribution of television product. Significant judgments and estimates are involved in evaluating if such amounts will ultimately be fully collected. Each of the Company’s businesses maintains a comprehensive approval process prior to issuing credit to third-party customers. Counterparties that are determined to be of a higher risk are evaluated to assess whether the credit terms previously granted to them should be modified. The Company monitors customers’ accounts receivable aging, and a provision for estimated uncollectible amounts is maintained based on customer payment levels, historical experience and management’s views on trends in the overall receivable agings. In addition, for larger accounts, the Company performs analyses of risks on a customer-specific basis. At December 31, 2017 and 2016 , total reserves for doubtful accounts were approximately $162 million and $193 million , respectively. For the years ended December 31, 2017 , 2016 and 2015 , the Company recognized $11 million , $38 million and $63 million of bad debt expense, respectively. Consolidation Time Warner consolidates all entities in which it has a controlling voting interest and all variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary. Entities determined to be VIEs primarily consist of HBO Latin America Group (“HBO LAG”) and Hudson Yards North Tower Holdings LLC (“HYNTH”), the limited liability company involved in the construction and development of the Company’s new headquarters building at Hudson Yards. HBO LAG is a VIE because the Company’s ownership interest ( 88% ) and voting rights ( 50% ) in this entity are disproportionate and because other conditions were met. The Company has determined that it is not the primary beneficiary of this VIE because voting control is shared equally with the other investor and, therefore, the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. The carrying value of the Company’s investment in HBO LAG was $535 million as of both December 31, 2017 and 2016 . The investment in HBO LAG is intended to enable the Company to more broadly leverage its programming and digital strategy in the territories served by HBO LAG and to capitalize on growing opportunities in such territories. The Company provides programming as well as certain services, including distribution, licensing and technological and administrative support, to HBO LAG. HBO LAG is financed through cash flows from its operations, and the Company is not obligated to provide HBO LAG any additional financial support. In addition, the assets of HBO LAG are not available to settle the Company’s obligations. The Company has entered into agreements related to the construction and development of office and studio space in the Hudson Yards development on the west side of Manhattan in order to move its Corporate headquarters and New York City-based employees to the new space. The Company funds its proportionate share of the costs for the construction and development through HYNTH, a limited liability company that is controlled by the developer of the Hudson Yards development project and managed by an affiliate of the developer. HYNTH is a VIE because the equity investment at risk is not sufficient to permit HYNTH to carry on its activities without additional subordinated financial support. The Company is not the primary beneficiary of HYNTH because it does not have the power to direct the activities that most significantly impact the entity’s economic performance. As of December 31, 2017 and 2016 , the carrying value of the Company’s investment in HYNTH, which is accounted for using the equity method, was approximately $1.086 billion and $729 million , respectively. Based on construction cost estimates and space projections as of December 31, 2017 , the Company expects to invest an additional $900 million , excluding interest, in the Hudson Yards development project through 2019. Investments Investments in common stock in companies in which Time Warner has significant influence, but less than a controlling voting interest, are accounted for using the equity method. Significant influence is generally presumed to exist when Time Warner owns between 20% and 50% of the voting interests in the investee, holds substantial management rights or holds an interest greater than 3% in an investee that is a limited liability partnership or limited liability corporation that is treated as a flow-through entity. Under the equity method of accounting, only Time Warner’s investment in and amounts due to and from the equity investee are included in the Consolidated Balance Sheet; only Time Warner’s share of the investee’s earnings (losses) is included in the Consolidated Statement of Operations; and only the dividends, cash distributions, loans or other cash received from the investee, additional cash investments, loan repayments or other cash paid to the investee are included in the Consolidated Statement of Cash Flows. If previous equity method losses have reduced the carrying value of the Company’s equity method investment to zero, the Company continues to record its share of equity method losses to the extent it has (i) other investments in the investee, (ii) guaranteed obligations of the investee or (iii) committed to provide further financial support for the investee. Investments in companies in which Time Warner does not have a controlling voting interest or over which it is unable to exert significant influence are generally accounted for at fair value if the investments are publicly traded. If the investment or security is not publicly traded, the investment is accounted for at cost. Unrealized gains and losses on investments accounted for at fair value are reported, net of tax, in Accumulated other comprehensive loss, net. Dividends and other distributions of earnings from investments in companies in which Time Warner does not have a controlling voting interest or over which it is unable to exert significant influence are included in Other loss, net, when declared. For more information, see Notes 4 and 5. The company regularly reviews its investments for impairment. See “Asset Impairments” below for additional information. Foreign Currency Translation Financial statements of subsidiaries whose functional currency is not the U.S. Dollar are translated at the rates of exchange on the balance sheet date for assets and liabilities and at average rates of exchange for revenues and expenses during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net. Derivative Instruments The Company uses derivative instruments principally to manage the risk associated with movements in foreign currency exchange rates, and recognizes all derivative instruments on the Consolidated Balance Sheet at fair value. Changes in fair value of derivative instruments that qualify for hedge accounting will either be offset against the change in fair value of the hedged assets or liabilities through earnings or recognized in shareholders’ equity as a component of Accumulated other comprehensive loss, net, until the hedged item is recognized in earnings, depending on whether the derivative instrument is being used to hedge changes in fair value or cash flows. For qualifying hedge relationships, the Company excludes the impact of forward points or option premiums from its assessment of hedge effectiveness and recognizes changes in the fair value of a derivative instrument due to forward points or option premiums in Other income (loss), net each quarter. The ineffective portion of a derivative instrument’s change in fair value is immediately recognized in earnings. For those derivative instruments that do not qualify for hedge accounting, changes in fair value are recognized immediately in earnings. See Note 8 for additional information regarding derivative instruments held by the Company and risk management strategies. Property, Plant and Equipment Property, plant and equipment are stated at cost. Additions to property, plant and equipment generally include material, labor and overhead. Time Warner also capitalizes certain costs associated with coding, software configuration, upgrades and enhancements incurred for the development of internal use software. Depreciation is recorded on a straight-line basis over estimated useful lives. Leasehold improvements are depreciated over the lesser of the estimated useful life of the improvement or the term of the applicable lease. Time Warner periodically evaluates the depreciation periods of property, plant and equipment to determine whether a revision to its estimates of useful lives is warranted. Property, plant and equipment, including capital leases, consist of (millions): December 31, Estimated Useful Lives 2017 2016 Land (a) $ 269 $ 268 n/a Buildings and improvements 1,757 1,641 7 to 30 years Capitalized software costs 2,045 2,029 3 to 7 years Furniture, fixtures and other equipment (b) 3,226 3,017 3 to 10 years 7,297 6,955 Accumulated depreciation (4,590 ) (4,445 ) Total $ 2,707 $ 2,510 _________________________ (a) Land is not depreciated. (b) Includes $380 million and $183 million of construction in progress as of December 31, 2017 and 2016 , respectively. Intangible Assets Time Warner has a significant number of intangible assets, including acquired film and television libraries and other copyrighted products and tradenames. Time Warner does not recognize the fair value of internally generated intangible assets. Intangible assets acquired in business combinations are recorded at the acquisition date fair value in the Consolidated Balance Sheet. Acquired film libraries are amortized using the film forecast computation model. For more information, see “Film and Television Production Cost Recognition, Participations and Residuals and Impairments” below and Note 3. Asset Impairments Investments The Company’s investments consist of (i) investments carried at fair value, including available-for-sale securities and certain deferred compensation-related investments, (ii) investments accounted for using the cost method of accounting and (iii) investments accounted for using the equity method of accounting. The Company regularly reviews its investments for impairment, including when the carrying value of an investment exceeds its market value. If the Company determines that an investment has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings that is included in Other loss, net. Factors that are considered by the Company in determining whether an other-than-temporary decline in value has occurred include (i) the market value of the security in relation to its cost basis, (ii) the financial condition of the investee and (iii) the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. In evaluating the factors described above for available-for-sale securities, the Company presumes a decline in value to be other-than-temporary if the quoted market price of the security is 20% or more below the investment’s cost basis for a period of six months or more (the “20% criterion”) or the quoted market price of the security is 50% or more below the security’s cost basis at any quarter end (the “50% criterion”). However, the presumption of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., the investee’s operating performance is strong, the market price of the investee’s security is historically volatile, etc.). Additionally, there may be instances in which impairment losses are recognized even if the 20% and 50% criteria are not satisfied (e.g., if there is a plan to sell the security in the near term and the fair value is below the Comp |
Merger Agreement with AT&T Merg
Merger Agreement with AT&T Merger Agreement with AT&T | 12 Months Ended |
Dec. 31, 2017 | |
Merger [Abstract] | |
MERGER AGREEMENT WITH AT&T | MERGER AGREEMENT WITH AT&T On October 22, 2016, Time Warner entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AT&T Inc. (“AT&T”). The Merger Agreement provides for the merger of a newly formed wholly owned subsidiary of AT&T with and into Time Warner, with Time Warner continuing as the surviving company in the merger. Immediately thereafter, Time Warner will merge with and into a limited liability company formed by AT&T, which will continue as the surviving entity and a wholly owned subsidiary of AT&T. The Merger Agreement was unanimously approved by all members of Time Warner’s and AT&T’s boards of directors. Time Warner shareholders adopted the Merger Agreement at a special meeting of shareholders on February 15, 2017. Subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, upon consummation of the merger, each share of the Company’s common stock will be converted into the right to receive $53.75 in cash and a specified number of shares of AT&T stock, as set forth in the Merger Agreement and determined by reference to the average of the volume weighted averages of the trading price of AT&T common stock on the New York Stock Exchange (“NYSE”) on each of the 15 consecutive NYSE trading days ending on and including the trading day that is three trading days prior to the closing of the merger (the “Average Stock Price”). The stock portion of the per share consideration will be subject to a collar such that if the Average Stock Price is between $37.411 and $41.349 , Time Warner shareholders will receive shares of AT&T stock equal to $53.75 in value for each share of Time Warner common stock. If the Average Stock Price is below $37.411 , Time Warner shareholders will receive 1.437 AT&T shares for each share of Time Warner common stock. If the Average Stock Price is an amount greater than $41.349 , Time Warner shareholders will receive 1.300 AT&T shares for each share of Time Warner common stock. Should Time Warner terminate the Merger Agreement in specified circumstances, Time Warner may be required to pay AT&T a termination fee equal to $1.725 billion if Time Warner enters into or consummates an alternative transaction with a third party following such termination of the Merger Agreement. The merger is conditioned on the receipt of certain antitrust and other required regulatory consents. On November 20, 2017, the United States Department of Justice (the “DOJ”) filed a lawsuit in the United States District Court for the District of Columbia (the “Court”) under a federal antitrust statute to enjoin the merger. The Court has set March 19, 2018 as the start date for the trial. Time Warner intends to vigorously contest the action. In addition, Time Warner and AT&T have agreed to extend the termination date of the Merger Agreement to April 22, 2018, and each has agreed to waive, until June 21, 2018, its right to terminate the Merger Agreement if the merger is not completed by April 22, 2018. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Time Warner has a significant number of intangible assets, including acquired film and television libraries and other copyrighted products and tradenames. Certain intangible assets are deemed to have finite lives and, accordingly, are amortized over their estimated useful lives, while others are deemed to be indefinite-lived and therefore are not amortized. Goodwill and indefinite-lived intangible assets, primarily certain tradenames, are tested annually for impairment during the fourth quarter, or earlier upon the occurrence of certain events or substantive changes in circumstances. Goodwill The following summary of changes in the Company’s Goodwill during the years ended December 31, 2017 and 2016 , by reportable segment and in total, is as follows (millions): Turner Home Box Office Warner Bros. Total Balance at December 31, 2015 $ 14,108 $ 7,433 $ 6,148 $ 27,689 Acquisitions, dispositions and adjustments, net 16 — 85 101 Translation adjustments 1 — (39 ) (38 ) Balance at December 31, 2016 $ 14,125 $ 7,433 $ 6,194 $ 27,752 Acquisitions, dispositions and adjustments, net (19 ) — 2 (17 ) Translation adjustments 7 — 34 41 Balance at December 31, 2017 $ 14,113 $ 7,433 $ 6,230 $ 27,776 The carrying amount of goodwill for all periods presented was net of accumulated impairments of $13.338 billion and $4.091 billion at the Turner segment and the Warner Bros. segment, respectively. The performance of the Company’s annual impairment analysis did no t result in any impairments of Goodwill for any of the years in the three-year period ended December 31, 2017 . Refer to Note 1 for a discussion of the 2017 annual impairment test. The increase in Goodwill at the Warner Bros. segment for the year ended December 31, 2016 was primarily related to several insignificant acquisitions made during 2016, offset in part by the sale of its Flixster business. See Note 4 for additional information. Intangible Assets There were no impairments of intangible assets during the year ended December 31, 2017 . During the years ended December 31, 2016 and 2015 , the Company recorded impairments of $25 million and $1 million , respectively, at the Turner segment. The Company’s intangible assets subject to amortization and related accumulated amortization consist of the following (millions): December 31, 2017 December 31, 2016 Gross Accumulated Amortization(a) Net Gross Accumulated Amortization(a) Net Film library $ 3,430 $ (3,062 ) $ 368 $ 3,432 $ (2,914 ) $ 518 Brands, tradenames and other intangible assets 707 (490 ) 217 702 (437 ) 265 Total $ 4,137 $ (3,552 ) $ 585 $ 4,134 $ (3,351 ) $ 783 _________________________ (a) The film library has a weighted-average remaining life of approximately 3 years and is amortized using a film forecast computation methodology. Amortization of brands, tradenames and other intangible assets subject to amortization is provided generally on a straight-line basis over their respective useful lives. The Company recorded amortization expense of $197 million in 2017 compared to $190 million in 2016 and $189 million in 2015 . Amortization expense may vary in the future as acquisitions, dispositions and impairments, if any, occur and as purchase price allocations are finalized. The Company’s estimated amortization expense for the succeeding five years ended December 31 is as follows (millions): 2018 2019 2020 2021 2022 Estimated amortization expense $ 167 $ 155 $ 139 $ 39 $ 35 |
Dispositions and Acquisitions
Dispositions and Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions and Dispositions [Abstract] | |
DISPOSITIONS AND ACQUISITIONS | DISPOSITIONS AND ACQUISITIONS Hulu On August 2, 2016, Time Warner purchased a 10% ownership interest in Hulu, LLC (“Hulu”), a company that provides OTT services, for $590 million in cash, including transaction costs. Time Warner accounts for this investment under the equity method of accounting. Fandango In April 2016, Warner Bros. sold its Flixster business to Fandango Media, LLC (“Fandango”), a subsidiary of NBCUniversal Media LLC, in exchange for a 25% interest in Fandango. For the year ended December 31, 2016, Warner Bros. recorded a pre-tax gain of approximately $90 million in connection with this transaction. Time Warner accounts for its investment in Fandango under the equity method of accounting. iStreamPlanet In August 2015, Turner acquired a majority ownership interest in iStreamPlanet, a provider of streaming and cloud-based video and technology services, for $148 million , net of cash acquired. As a result of Turner’s acquisition of the additional interests in iStreamPlanet, Turner recorded a $3 million gain on a previously held investment accounted for under the cost method and began consolidating iStreamPlanet in the third quarter of 2015. In connection with the acquisition, $29 million of Redeemable noncontrolling interest was recorded in the Consolidated Balance Sheet. Summary of Discontinued Operations Discontinued operations, net of tax, for the year ended December 31, 2016 was income of $11 million ( $0.02 of diluted income per common share). Of this amount, a loss of $29 million , net of tax ( $0.03 of diluted loss from discontinued operations per common share) related to pension settlement charges related to businesses the Company previously disposed of. Discontinued operations, net of tax, for the year ended December 31, 2016 also included income of $40 million ( $0.05 of diluted income from discontinued operations per common share), related to additional tax benefits associated with certain foreign tax attributes of Warner Music Group (“WMG”), which the Company disposed of in 2004. Discontinued operations, net of tax, for the year ended December 31, 2015 was income of $37 million ( $0.04 of diluted net income per common share), primarily related to the final resolution of a tax indemnification obligation associated with the disposition of WMG. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Time Warner’s investments, by category, consist of (millions): December 31, 2017 2016 Equity-method investments $ 2,669 $ 2,347 Fair-value and other investments: Deferred compensation investments, recorded at fair value 156 150 Deferred compensation insurance-related investments, recorded at cash surrender value 453 410 Available-for-sale securities 49 54 Equity warrants 368 159 Total fair-value and other investments 1,026 773 Cost-method investments 229 217 Total $ 3,924 $ 3,337 Available-for-sale securities are recorded at fair value in the Consolidated Balance Sheet, and the realized gains and losses are included as a component of Other loss, net in the Consolidated Statement of Operations. The cost basis, unrealized gains, unrealized losses and fair market value of available-for-sale securities are set forth below (millions): December 31, 2017 2016 Cost basis $ 24 $ 32 Gross unrealized gains 25 23 Gross unrealized losses — (1 ) Fair value $ 49 $ 54 Gains and losses reclassified from Accumulated other comprehensive loss, net to Other loss, net in the Consolidated Statement of Operations are determined based on the specific identification method. CME Central European Media Enterprises Ltd. (“CME”) is a publicly-traded broadcasting company operating leading networks in six Central and Eastern European countries. As of December 31, 2017 , the Company had an approximate 46% voting interest in CME’s common stock and an approximate 75% ownership interest in CME (on a fully diluted basis). As of December 31, 2017 , the Company owned 61.4 million shares of CME’s Class A common stock and 1 share of Series A convertible preferred stock, which is convertible into 11.2 million shares of CME’s Class A common stock and votes with the Class A common stock on an as-converted basis. The Company accounts for its investment in CME’s Class A common stock and Series A convertible preferred stock under the equity method of accounting. Although the book value of the Company’s equity method investment in CME has been reduced to zero through the recognition of equity method losses, the Company has continued to record equity method losses because it has guaranteed an aggregate amount of €905 million of CME’s obligations (as described below). The amount of such equity method losses at December 31, 2017 was $29 million and is presented in Other noncurrent liabilities on the Consolidated Balance Sheet. In addition, in connection with these guarantees, the Company recognized a liability at the inception of each respective arrangement based on the estimated fair value of the applicable guarantee. At December 31, 2017 , the carrying value of liabilities associated with such guarantees was $174 million , which is also included in Other noncurrent liabilities on the Consolidated Balance Sheet. In June 2017, the CME financing arrangements guaranteed by the Company were amended such that the lenders agreed that the pending merger of the Company with AT&T will not constitute an event of default under a change in control provision included in the financing arrangements, and that the loans to CME will remain outstanding following the closing of the AT&T merger. As of December 31, 2017 , the Company owned all of the outstanding shares of CME’s Series B convertible redeemable preferred shares, which are non-voting and may be converted into 109.2 million shares of CME’s Class A common stock at the Company’s option. The Series B convertible redeemable preferred shares accrete in value until June 24, 2018 at an annual rate of 3.75% compounded quarterly. The Company accounts for its investment in CME’s Series B convertible redeemable preferred shares under the cost method of accounting. As of December 31, 2017 , the Company held 101 million warrants each to purchase one share of CME Class A common stock. The warrants, which became exercisable in May 2016, have a four -year term that expires in May 2018, an exercise price of $1.00 per share and do not contain any voting rights. The warrants are carried at fair value in Investments, including available-for-sale securities in the Consolidated Balance Sheet, which at December 31, 2017 , was $368 million . CME Rights Offering and Related Transactions On May 2, 2014, pursuant to a rights offering by CME, Time Warner acquired approximately 2.8 million units, each consisting of $100 principal amount of CME’s 15% senior secured notes due 2017 (the “Senior Secured Notes”) and 21 unit warrants, with each unit warrant entitling the Company to purchase one share of CME Class A common stock. In addition, Time Warner acquired 581,533 units in a private offering, and CME issued warrants to Time Warner to purchase an additional 30 million shares of Class A common stock. The Senior Secured Notes were repaid in April 2016 as more fully described below. CME Revolving Credit Facility and Term Loan Provided by Time Warner On May 2, 2014, Time Warner provided CME a $115 million revolving credit facility (the “CME Revolving Credit Facility”) and a $30 million term loan (the “TW Term Loan”), each with a maturity date of December 1, 2017. The TW Term Loan bore interest at a rate of 15.0% per annum, paid semi-annually either fully in cash or by adding such amount to the principal amount of the loan. The TW Term Loan was repaid in April 2016 as more fully described below. On February 19, 2016, Time Warner and CME agreed to amend and restate the CME Revolving Credit Facility to reduce the size of the facility to $50 million as of January 1, 2018 and to extend its term from December 2017 to February 2021. Amounts outstanding under the CME Revolving Credit Facility bear interest at a rate based on CME’s net leverage. Beginning in April 2016, CME must pay a portion of the interest for each applicable quarterly interest period in cash and may, at CME’s option, pay the remainder in kind by adding such amount to the outstanding principal amount of the CME Revolving Credit Facility. The CME Revolving Credit Facility also contains a commitment fee on the average daily unused amount under the facility of 0.50% per annum. As of December 31, 2017 , there were no amounts outstanding under the CME Revolving Credit Facility. Time Warner Guarantees of CME Debt On November 14, 2014, Time Warner and CME entered into an agreement pursuant to which Time Warner agreed to assist CME in refinancing $261 million aggregate principal amount of its Senior Convertible Notes due 2015 (the “2015 Notes”) and €240 million aggregate principal amount of its Senior Notes due 2017 (the “2017 Notes”). In connection with this agreement, CME entered into a credit agreement (the “2014 Credit Agreement”) with third-party financial institutions the same day for a €251 million senior unsecured term loan (the “2014 Term Loan”) that was funded in December 2014 and had a maturity date of November 1, 2017, which was extended to November 1, 2018 in February 2016. Time Warner has guaranteed CME’s obligations under the 2014 Credit Agreement for a fee to be paid to Time Warner semi-annually. CME used the proceeds of the 2014 Term Loan to redeem the 2017 Notes. CME also entered into unsecured interest rate hedge arrangements to protect against changes in the interest rate on the 2014 Term Loan during its term. Time Warner has also guaranteed CME’s obligations under the hedge arrangements. On February 5, 2018, CME entered into an amendment to extend the maturity of the 2014 Term Loan from November 1, 2018 to May 1, 2019. CME repaid €50 million of the outstanding principal amount of the 2014 Term Loan during 2017 and also in February 2018. On September 30, 2015, CME entered into a credit agreement (the “2015 Credit Agreement”) with third-party financial institutions for a €235 million senior unsecured term loan that was funded in November 2015 and matures on November 1, 2019. Time Warner has guaranteed CME’s obligations under the 2015 Credit Agreement for a fee to be paid to Time Warner semi-annually. CME used the proceeds of the term loan to repay the $261 million aggregate principal amount of the 2015 Notes at maturity on November 15, 2015. As consideration for assisting CME in refinancing the 2015 Notes, Time Warner also earned a commitment fee of $9 million , which accrues interest at a rate of 8.5% . In November 2015, CME entered into unsecured interest rate hedge arrangements to protect against changes in the interest rate on the term loan during its term. Time Warner has guaranteed CME’s obligations under the hedge arrangements. On February 19, 2016, CME Media Enterprises B.V. (“CME BV”), a subsidiary of CME, entered into a credit agreement (the “2016 Credit Agreement”) with third-party financial institutions for a €469 million senior unsecured term loan (the “2016 Term Loan”) that was funded in April 2016 and matures on February 19, 2021. Time Warner has guaranteed CME BV’s obligations under the 2016 Credit Agreement for a fee to be paid to Time Warner semi-annually. In April 2016, CME used cash on hand and the proceeds of the 2016 Term Loan to repay in their entirety both its Senior Secured Notes and the TW Term Loan. Time Warner received approximately $485 million in connection with CME’s repayment of the Senior Secured Notes and the TW Term Loan. As consideration for assisting CME in refinancing its debt due in 2017, Time Warner earned a fee equal to 1% of the aggregate principal amount of the 2016 Term Loan borrowed at funding. Prior to the funding, CME BV entered into unsecured interest rate hedge arrangements to protect against changes in the interest rate on the 2016 Term Loan during its term, and Time Warner has guaranteed CME BV’s obligations under such arrangements. In connection with the transactions entered into on February 19, 2016, the Company recorded a pretax gain of $95 million in Investment gains (losses), net in the Consolidated Statement of Operations in the second quarter of 2016. Additionally, when recognizing CME’s results in the second quarter of 2016 under the equity method of accounting, the Company recorded a pretax charge of $150 million in Other loss, net in the Consolidated Statement of Operations related to the transactions entered into on February 19, 2016. On March 2, 2017, Time Warner, CME and CME Media Enterprises B.V. (“CME BV”), a wholly owned subsidiary of CME, entered into an amendment (the “2017 Amendment”) to the Amended and Restated Reimbursement Agreement, dated as of November 14, 2014, and as amended and restated as of February 19, 2016. Effective March 1, 2017, the 2017 Amendment reduced the guarantee fees payable by CME and CME BV to Time Warner for Time Warner’s guarantees of CME’s obligations under the 2014 Credit Agreement and the 2015 Credit Agreement as well as CME BV’s obligation under the 2016 Credit Agreement. The reduced fee to be paid to Time Warner for each of these guarantees is equal to a rate (the “all-in” rate) ranging between 5% and 8.5% , measured quarterly based on CME’s consolidated net leverage ratio, less the interest rate on the term loans. A portion of the fee equal to 5.0% less the interest rate on the term loans is payable in cash by CME and CME BV and the remainder may be payable in cash or in kind, at CME’s option. The 2017 Amendment also provides that if CME’s consolidated debt level is less than €815 million by September 30, 2018, the all-in rate will be decreased further by 50 basis points. In addition, if there is a change in control of CME, the all-in rate will increase to the lower of (i) the then applicable guarantee fee payable to Time Warner plus 3.5% and (ii) 10.0% on the date that is 180 days following such change of control. The 2017 Amendment did not affect the terms of the guarantees the Company provided to CME’s and CME BV’s lenders under the term loans. Equity-Method Investments At December 31, 2017 , investments accounted for using the equity method included the Company’s investments in the Class A common stock and Series A convertible preferred stock of CME, HBO LAG ( 88% owned), Hulu, HYNTH and certain other ventures that are generally 20% to 50% owned. Cost-Method Investments The Company’s cost-method investments include its investment in the Series B convertible redeemable preferred shares of CME as well as its investments in other early- to mid-stage non-public entities that are of strategic relevance to Time Warner’s businesses. The Company uses available qualitative and quantitative information to evaluate all cost-method investments for impairment at least quarterly. Gain on Investments, Net For the year ended December 31, 2017 , the Company recognized net gains of $116 million , reflecting $99 million related to the sale of its interest in the Omni Atlanta hotel joint venture and $17 million related to miscellaneous investments. For the years ended December 31, 2016 and 2015 , the Company recognized net gains of $86 million and $59 million , respectively, related to miscellaneous investments. These gains have been reflected in Other loss, net in the Consolidated Statement of Operations. Investment Writedowns For the years ended December 31, 2017 , 2016 and 2015 , the Company incurred writedowns to reduce the carrying value of certain investments that experienced other-than-temporary impairments, as set forth below (millions): December 31, 2017 2016 2015 Equity-method investments $ — $ 2 $ 2 Cost-method investments 22 11 6 Available-for-sale securities 3 — 19 Total $ 25 $ 13 $ 27 These amounts have been reflected in Other loss, net in the Consolidated Statement of Operations. While Time Warner has recognized all declines that are believed to be other-than-temporary as of December 31, 2017 , it is reasonably possible that individual investments in the Company’s portfolio may experience other-than-temporary declines in value in the future if the underlying investees experience adverse changes in their financial condition or poor operating results or if there is a significant decline in the market value of a debt or equity security held by the Company in relation to its cost basis. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT A fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis as of December 31, 2017 and December 31, 2016 , respectively (millions): December 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Trading securities: Diversified equity securities (a) $ 168 $ — $ — $ 168 $ 163 $ — $ — $ 163 Available-for-sale securities: Equity securities 18 — — 18 17 — — 17 Debt securities — 31 — 31 — 37 — 37 Derivatives: Foreign exchange contracts — 4 — 4 — 153 — 153 Other — — 369 369 — — 161 161 Liabilities: Derivatives: Foreign exchange contracts — (50 ) — (50 ) — (9 ) — (9 ) Other — — (1 ) (1 ) — — — — Total $ 186 $ (15 ) $ 368 $ 539 $ 180 $ 181 $ 161 $ 522 _________________________ (a) Consists of investments related to deferred compensation. The Company primarily applies the market approach for valuing recurring fair value measurements. As of December 31, 2017 and 2016 , assets valued using significant unobservable inputs (Level 3) primarily related to warrants to purchase shares of Class A common stock of CME valued at $368 million and $159 million , respectively. The Company estimates the fair value of these warrants using a Monte Carlo Simulation model. Significant unobservable inputs used in the fair value measurement at December 31, 2017 are an expected term of 0.20 years and an expected volatility of approximately 42% . As of December 31, 2017 and 2016 , the other Level 3 assets consisted of equity instruments held by employees of a former subsidiary of the Company. As of December 31, 2017 , Level 3 liabilities consisted of a liability related to contingent consideration. The following table reconciles the beginning and ending balances of net derivative assets and liabilities classified as Level 3 and identifies the total gains (losses) the Company recognized during the years ended December 31, 2017 and 2016 on such assets and liabilities that were included in the Consolidated Balance Sheet as of December 31, 2017 and 2016 (millions): December 31, 2017 2016 Balance as of the beginning of the period $ 161 $ 173 Total gains (losses), net: Included in operating income — 2 Included in other loss, net 209 (19 ) Included in other comprehensive income (loss) — — Purchases — — Settlements (1 ) 5 Issuances (1 ) — Transfers in and/or out of Level 3 — — Balance as of the end of the period $ 368 $ 161 Net income (loss) for the period included in net income related to assets and liabilities still held as of the end of the period $ 209 $ (19 ) Other Financial Instruments The Company’s other financial instruments, including debt, are not required to be carried at fair value. Based on the interest rates prevailing at December 31, 2017 , the fair value of Time Warner’s public debt exceeded its carrying value by approximately $1.583 billion and, based on interest rates prevailing at December 31, 2016 , the fair value of Time Warner’s public debt exceeded its carrying value by approximately $2.238 billion . The fair value of Time Warner’s public debt is considered a Level 2 measurement as it is based on observable market inputs such as current interest rates and, where available, actual sales transactions. Unrealized gains or losses on debt do not result in the realization or expenditure of cash and generally are not recognized in the consolidated financial statements unless the debt is retired prior to its maturity. See Note 9 for a discussion of the Company’s debt tender offers. Information as of December 31, 2017 about the Company’s investments in CME that are not required to be carried at fair value on a recurring basis is as follows (millions): Carrying Value Fair Value Fair Value Hierarchy Class A common stock (a) $ — $ 338 Level 1 Series B convertible redeemable preferred shares — 508 Level 2 _________________________ (a) Includes 1 share of Series A convertible preferred stock. The fair values of the Company’s investments in CME’s Class A common stock (including Series A convertible preferred stock) and Series B convertible redeemable preferred shares are primarily determined by reference to the December 31, 2017 closing price of CME’s common stock. The carrying value for the majority of the Company’s other financial instruments approximates fair value due to the short-term nature of the financial instruments or because the financial instruments are of a longer-term nature and are recorded on a discounted basis. Non-Financial Instruments The majority of the Company’s non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill and indefinite-lived intangible assets), a non-financial instrument is required to be evaluated for impairment. If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value. During the years ended December 31, 2017 and December 31, 2016 , the Company performed fair value measurements related to certain theatrical films and television programs. In determining the fair value of its theatrical films, the Company employs a DCF methodology that includes cash flow estimates of a film’s ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the weighted average cost of capital of the respective business (e.g., Warner Bros.) plus a risk premium representing the risk associated with producing a particular theatrical film. The fair value of any theatrical films and television programs that management plans to abandon is zero . Because the primary determination of fair value is made using a DCF model, the resulting fair value is considered a Level 3 measurement. The following table presents certain theatrical film and television production costs, which were recorded as inventory in the Consolidated Balance Sheet, that were written down to fair value (millions): Carrying value before write down Carrying value after write down Fair value measurements made during the year ended December 31,: 2017 $ 165 $ 67 2016 285 128 During the year ended December 31, 2016 , the Company also performed an impairment review of a broadcast license at an international subsidiary of Turner. As a result, the Company recorded a noncash impairment of $25 million to write down the value of the asset to $10 million . The resulting fair value measurements were considered to be Level 3 measurements and were determined using a DCF methodology with assumptions for cash flows associated with the use and eventual disposition of the assets. |
Inventories and Theatrical Film
Inventories and Theatrical Film and Television Production Costs | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES AND THEATRICAL FILM AND TELEVISION PRODUCTION COSTS | INVENTORIES AND THEATRICAL FILM AND TELEVISION PRODUCTION COSTS Inventories and theatrical film and television production costs consist of (millions): December 31, 2017 2016 Inventories: Programming costs, less amortization (a) $ 3,859 $ 3,625 Other inventory, primarily DVDs and Blu-ray Discs 186 184 Total inventories 4,045 3,809 Less current portion of inventory (2,401 ) (2,062 ) Total noncurrent inventories 1,644 1,747 Theatrical film production costs: (b) Released, less amortization 709 818 Completed and not released 502 460 In production 1,219 1,286 Development and pre-production 152 133 Television production costs: (b) Released, less amortization 1,844 1,618 Completed and not released 835 841 In production 1,357 995 Development and pre-production 13 18 Total theatrical film and television production costs 6,631 6,169 Total noncurrent inventories and theatrical film and television production costs $ 8,275 $ 7,916 _________________________ (a) Includes the costs of certain programming rights, primarily sports, for which payments have been made prior to the related rights being received. (b) Does not include $368 million and $518 million of acquired film library intangible assets as of December 31, 2017 and December 31, 2016 , respectively, which are included in Intangible assets subject to amortization, net in the Consolidated Balance Sheet. Approximately 90% of unamortized film costs for released theatrical and television content are expected to be amortized within three years from December 31, 2017 . In addition, approximately $2.6 billion of the film costs of released and completed and not released theatrical and television product are expected to be amortized during the twelve-month period ending December 31, 2018 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Time Warner uses derivative instruments, primarily forward contracts, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies and changes in fair value resulting from changes in foreign currency exchange rates. The principal currencies being hedged include the British Pound, Euro, Australian Dollar and Canadian Dollar. Time Warner uses foreign exchange contracts that generally have maturities of three to 18 months to hedge various foreign exchange exposures, including the following: (i) variability in foreign-currency-denominated cash flows, such as the hedges of unremitted or forecasted royalty and license fees owed to Time Warner’s domestic companies for the sale or anticipated sale of U.S. copyrighted products abroad or cash flows for certain film production costs denominated in a foreign currency (i.e., cash flow hedges), and (ii) currency risk associated with foreign-currency-denominated operating assets and liabilities (i.e., fair value hedges). The Company also enters into derivative contracts that economically hedge certain of its foreign currency risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. These economic hedges are used primarily to offset the change in certain foreign-currency-denominated intercompany debt due to changes in the underlying foreign exchange rates. The translation of revenues and expenses denominated in the functional currency of a foreign subsidiary may result in fluctuations in the U.S. Dollar-equivalent value of such revenues and expenses as compared to prior periods. Such transactions are not eligible for qualifying hedge accounting treatment, and the Company does not economically hedge this exposure. Net gains and losses from hedging activities recognized in the Consolidated Statement of Operations were as follows (millions): Year Ended December 31, 2017 2016 2015 Gains (losses) recognized in: Cost of revenues $ (84 ) $ 81 $ 127 Selling, general and administrative (17 ) 14 21 Other income (loss), net 27 (34 ) (26 ) Amounts included in Other income (loss), net include the impact of forward points and option premiums, which are excluded from the assessment of hedge effectiveness. Other amounts included in Other income (loss), net relate to hedge of foreign-currency-denominated debt and hedge ineffectiveness, which are not material. The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions and has entered into collateral agreements with these counterparties to further protect the Company in the event of deterioration of the credit quality of such counterparties on outstanding transactions. Additionally, netting provisions are included in agreements in situations where the Company executes multiple contracts with the same counterparty. For such foreign exchange contracts, the Company offsets the fair values of the amounts owed to or due from the same counterparty and classifies the net amount as a net asset or net liability within Prepaid expenses and other current assets or Accounts payable and accrued liabilities, respectively, in the Consolidated Balance Sheet. The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to Time Warner’s use of foreign currency derivatives at December 31, 2017 and December 31, 2016 (millions): December 31, 2017 (a) 2016 (b) Prepaid expenses and other current assets $ 4 $ 153 Accounts payable and accrued liabilities (50 ) (9 ) _________________________ (a) Includes $77 million of qualifying hedges and $9 million of economic hedges of foreign exchange derivative contracts in asset positions and $132 million of qualifying hedges of foreign exchange derivative contracts in liability positions. (b) Includes $297 million ( $272 million of qualifying hedges and $25 million of economic hedges) and $153 million ( $141 million of qualifying hedges and $12 million of economic hedges) of foreign exchange derivative contracts in asset and liability positions, respectively. At December 31, 2017 and December 31, 2016 , $9 million of losses and $46 million of gains, respectively, related to cash flow hedges are recorded in Accumulated other comprehensive loss, net and are expected to be recognized in earnings at the same time the hedged items affect earnings. Included in Accumulated other comprehensive loss, net at December 31, 2017 and December 31, 2016 are net losses of $1 million and $3 million , respectively, related to hedges of cash flows associated with films that are not expected to be released within the next twelve months. At December 31, 2017 , the carrying amount of the Company’s €700 million aggregate principal amount of debt due 2023 is designated as a hedge of the variability in the Company’s Euro-denominated net investments. The gain or loss on the debt that is designated as, and is effective as, an economic hedge of the net investment in a foreign operation is recorded as a currency translation adjustment within Accumulated other comprehensive loss, net in the Consolidated Balance Sheet. For the years ended December 31, 2017 and 2016 , such amounts totaled $95 million of losses and $39 million of gains , respectively. |
Long Term Debt and Other Financ
Long Term Debt and Other Financing Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG TERM DEBT AND OTHER FINANCING ARRANGEMENTS | LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS The Company’s long-term debt and other financing arrangements consist of bank credit facilities, a commercial paper program, fixed-rate public debt and other obligations. The principal amounts of long-term debt adjusted for premiums, discounts and issuance costs consist of (millions): December 31, 2017 2016 Fixed-rate public debt $ 18,859 $ 22,715 Bank credit facilities and commercial paper program 4,668 1,394 Other obligations 217 230 Subtotal 23,744 24,339 Debt due within one year (5,450 ) (1,947 ) Total long-term debt $ 18,294 $ 22,392 The Company’s unused committed capacity as of December 31, 2017 was $4.968 billion , including $2.621 billion of Cash and equivalents. At December 31, 2017 , $2.0 billion was outstanding under the Term Loan Facility, as defined below, there were no borrowings outstanding under the Revolving Credit Facilities, as defined below, and $2.668 billion of commercial paper was outstanding under the commercial paper program. The Term Loan Facility, Revolving Credit Facilities, commercial paper program and public debt of the Company rank pari passu with the senior debt of the respective obligors thereon. The weighted-average interest rate on Time Warner’s total debt was 4.32% and 4.97% at December 31, 2017 and 2016 , respectively. Bank Credit Facilities and Commercial Paper Program Term Loan Facility On December 4, 2017, Time Warner entered into a $2.0 billion senior unsecured delayed draw term loan facility (the “Term Loan Facility”) with a maturity date of August 18, 2018, with the right to extend the maturity for an additional four months at Time Warner’s election. On December 18, 2017, Time Warner borrowed $2.0 billion under the Term Loan Facility. The interest rate on the loan is based on the credit rating for Time Warner’s senior unsecured long-term debt, and as of December 31, 2017 was LIBOR plus 1.25% per annum, which equaled 2.75% . The covenants in the Term Loan Facility include a maximum consolidated leverage ratio covenant of 4.5 times the consolidated EBITDA, as defined in the Term Loan Facility, of Time Warner, but exclude any credit ratings-based defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse change in Time Warner’s financial condition or results of operations. The terms and related financial metrics associated with the leverage ratio are defined in the Term Loan Facility. At December 31, 2017 , the Company was in compliance with the leverage covenant, with a consolidated leverage ratio of approximately 2.55 times . Time Warner’s obligations under the Term Loan Facility are directly or indirectly guaranteed, on an unsecured basis, by Historic TW Inc. (“Historic TW”), Home Box Office and Turner. Revolving Credit Facilities Time Warner has $5.0 billion of senior unsecured credit facilities (the “Revolving Credit Facilities”), which consist of two $2.5 billion revolving credit facilities, that mature on December 18, 2021. At December 31, 2017 , there were no borrowings outstanding under the Revolving Credit Facilities. As described below, $2.668 billion of commercial paper outstanding as of December 31, 2017 is supported by the Revolving Credit Facilities. The permitted borrowers under the Revolving Credit Facilities are Time Warner and Time Warner International Finance Limited (“TWIFL” and, together with Time Warner, the “Borrowers”). The interest rate on borrowings and facility fees under the Revolving Credit Facilities are the same for both revolving credit facilities and are based on the credit rating for Time Warner’s senior unsecured long-term debt. Based on the credit rating as of December 31, 2017 , the interest rate on borrowings under the Revolving Credit Facilities would be LIBOR plus 1.10% per annum and the facility fee was 0.15% per annum. The Revolving Credit Facilities provide same-day funding and multi-currency capability, and a portion of the commitment, not to exceed $500 million at any time, may be used for the issuance of letters of credit. The covenants in the Revolving Credit Facilities include a maximum consolidated leverage ratio covenant of 4.5 times the consolidated EBITDA, as defined in the Revolving Credit Facilities, of Time Warner, but exclude any credit ratings-based defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse change in Time Warner’s financial condition or results of operations. The terms and related financial metrics associated with the leverage ratio are defined in the Revolving Credit Facilities. At December 31, 2017 , the Company was in compliance with the leverage covenant, with a consolidated leverage ratio of approximately 2.55 times . Borrowings under the Revolving Credit Facilities may be used for general corporate purposes, and unused credit is available to support borrowings by Time Warner under its commercial paper program. The Revolving Credit Facilities also contain certain events of default customary for credit facilities of this type (with customary grace periods, as applicable). The Borrowers may from time to time, so long as no default or event of default has occurred and is continuing, increase the commitments under either or both of the Revolving Credit Facilities by up to $500 million per facility by adding new commitments or increasing the commitments of willing lenders. The obligations of each of the Borrowers under the Revolving Credit Facilities are directly or indirectly guaranteed, on an unsecured basis, by Historic TW, Home Box Office and Turner. The obligations of TWIFL under the Revolving Credit Facilities are also guaranteed by Time Warner. Commercial Paper Program The Company has a commercial paper program, which was established on February 16, 2011 on a private placement basis, under which Time Warner may issue unsecured commercial paper notes up to a maximum aggregate amount not to exceed the unused committed capacity under the $5.0 billion Revolving Credit Facilities, which support the commercial paper program. Unsecured commercial paper notes issued by the Company typically mature in less than 90 days. Proceeds from the commercial paper program may be used for general corporate purposes. The obligations of the Company under the commercial paper program are directly or indirectly guaranteed, on an unsecured basis, by Historic TW, Home Box Office and Turner. As of December 31, 2017, the Company had $2.668 billion of commercial paper outstanding, which is supported by the Revolving Credit Facilities. Public Debt Time Warner and one of its subsidiaries have various public debt issuances outstanding. At issuance, the maturities of these outstanding series of debt ranged from five to 40 years and the interest rates on debt with fixed interest rates ranged from 1.95% to 9.15% . At December 31, 2017 and 2016 , the weighted average interest rate on the Company’s outstanding fixed-rate public debt was 4.86% and 5.23% , respectively. At December 31, 2017 , the Company’s fixed-rate public debt had maturities ranging from 2018 to 2045. Debt Tender Offers On December 22, 2017, Time Warner purchased through cash tender offers $3.5 billion aggregate principal amount of its outstanding debt from the following series (the “Debentures”): 9.150% Debentures due 2023, 7.570% Debentures due 2024, 6.850% Debentures due 2026, 6.950% Debentures due 2028, 6.625% Debentures due 2029, 7.625% Debentures due 2031, 7.700% Debentures due 2032, 8.300% Discount Debentures due 2036, 6.500% Debentures due 2036, 6.200% Debentures due 2040, 6.100% Debentures due 2040 and 6.250% Debentures due 2041, each of which continues to have amounts outstanding. The premiums paid and costs incurred in connection with this purchase were $1.087 billion for the year ended December 31, 2017 and were recorded in Other loss, net in the accompanying Consolidated Statement of Operations. The Company funded the purchase price through a combination of cash on hand and borrowings under the Company’s bank credit facilities and commercial paper program. The Company also solicited consents from the holders of certain series of Debentures to amend certain provisions of the indentures governing the Debentures. The requisite consents were received to effect the proposed amendments with respect to three series of Debentures, and, accordingly, on December 22, 2017, the Company entered into the Twelfth Supplemental Indenture (the “Twelfth Supplemental Indenture”) to the Indenture, dated as of January 15, 1993 (the “1993 Indenture”). The Twelfth Supplemental Indenture amended the 1993 Indenture with respect to the 9.150% Debentures due 2023, the 7.570% Debentures due 2024 and the 6.950% Debentures due 2028 to, among other things, eliminate substantially all the restrictive covenants and certain events of default, modify notice requirements for redemption and related provisions in the indenture and provide that any and all guarantees of these series of Debentures may be released. Maturities of Public Debt The Company’s public debt matures as follows (millions): 2018 2019 2020 2021 2022 Thereafter Debt $ 600 $ 650 $ 1,400 $ 2,000 $ 1,000 $ 13,356 Covenants and Credit Rating Triggers Each of the credit agreements for the Term Loan Facility and the Revolving Credit Facilities (the “Credit Agreements”) and the Company’s public debt indentures contain customary covenants. A breach of the covenants in the Credit Agreements that continues beyond any grace period constitutes a default, which can limit the Company’s ability to borrow and can give rise to a right of the lenders to terminate the Term Loan Facility and the Revolving Credit Facilities and/or require immediate payment of any outstanding debt. A breach of the covenants in the public debt indentures beyond any grace period constitutes a default, which can require immediate payment of the outstanding debt. There are no credit ratings-based defaults or covenants in the Credit Agreements or public debt indentures. The interest rate on borrowings under the Term Loan Facility and the Revolving Credit Facilities and the facility fees are based in part on the Company’s credit ratings. Therefore, if the Company’s credit ratings are lowered, the cost of maintaining the Term Loan Facility and the Revolving Credit Facilities and the cost of borrowing increase and, conversely, if the ratings improve, such costs decrease. As of December 31, 2017 , the Company’s investment grade debt ratings were as follows: Fitch BBB+, Moody’s Baa2, and S&P BBB. As of December 31, 2017 , the Company was in compliance with all covenants in the Credit Agreements and its public debt indentures. The Company does not anticipate that it will have any difficulty in the foreseeable future complying with the covenants in its Credit Agreements or public debt indentures. Other Obligations Other long-term debt obligations consist of capital lease and other obligations, including committed financings by subsidiaries under local bank credit agreements. At December 31, 2017 and 2016 , the weighted average interest rate for other long-term debt obligations was 3.12% and 3.18% , respectively. Other long-term debt obligations of $183 million mature in 2018. Capital Leases The Company has entered into various leases primarily related to network equipment that qualify as capital lease obligations. As a result, the present value of the remaining future minimum lease payments is recorded as a capitalized lease asset and related capital lease obligation in the Consolidated Balance Sheet. Assets recorded under capital lease obligations totaled $144 million and $118 million as of December 31, 2017 and 2016 , respectively. Related accumulated amortization totaled $80 million and $64 million as of December 31, 2017 and 2016 , respectively. Future minimum capital lease payments at December 31, 2017 are as follows (millions): 2018 $ 16 2019 15 2020 11 2021 5 2022 1 Thereafter 4 Total 52 Amount representing interest (5 ) Present value of minimum lease payments 47 Current portion (14 ) Total long-term portion $ 33 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Domestic and foreign income before income taxes and discontinued operations are as follows (millions): Year Ended December 31, 2017 2016 2015 Domestic $ 4,645 $ 4,356 $ 4,733 Foreign 1,300 839 713 Total $ 5,945 $ 5,195 $ 5,446 Current and Deferred income taxes (tax benefits) provided on Income from continuing operations are as follows (millions): Year Ended December 31, 2017 2016 2015 Federal: Current $ 1,257 $ 693 $ 844 Deferred (a) (1,040 ) 216 349 Foreign: Current (b) 369 342 337 Deferred 31 (2 ) (29 ) State and Local: Current 85 10 142 Deferred (1 ) 22 8 Total (c) $ 701 $ 1,281 $ 1,651 _________________________ (a) Includes a tax rate change benefit of $885 million in 2017 attributable to U.S. tax reform legislation enacted at the end of the year. (b) Includes foreign withholding taxes of $285 million in 2017 , $264 million in 2016 and $236 million in 2015 . (c) Excludes excess tax benefits from equity awards allocated directly to contributed capital of $88 million in 2016 and $151 million in 2015 . The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below (millions): Year Ended December 31, 2017 2016 2015 Taxes on income at U.S. federal statutory rate $ 2,081 $ 1,818 $ 1,906 State and local taxes, net of federal tax effects 60 56 68 Domestic production activities deduction (146 ) (141 ) (101 ) Foreign rate differential (204 ) (176 ) (129 ) Impact of U.S. federal tax reform (843 ) — — Excess tax benefits on share-based compensation (149 ) — — Change in tax method of accounting for film and TV cost amortization — (224 ) — Other (98 ) (52 ) (93 ) Total $ 701 $ 1,281 $ 1,651 Significant components of Time Warner’s net deferred tax liabilities are as follows (millions): December 31, 2017 2016 Deferred tax assets: Tax attribute carryforwards (a) $ 292 $ 435 Royalties, participations and residuals 257 344 Other 1,343 1,825 Valuation allowances (a) (287 ) (463 ) Total deferred tax assets $ 1,605 $ 2,141 Deferred tax liabilities: Assets acquired in business combinations $ 1,688 $ 2,752 Unbilled television receivables 794 1,086 Other 596 856 Total deferred tax liabilities 3,078 4,694 Net deferred tax liability $ 1,473 $ 2,553 _________________________ (a) The Company has recorded valuation allowances for certain tax attribute carryforwards and other deferred tax assets due to uncertainty that exists regarding future realizability. The tax attribute carryforwards consist of $18 million of tax credits, $2 million of capital losses and $272 million of net operating losses that expire in varying amounts from 2018 through 2037. If, in the future, the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reversed and recognized in the Consolidated Statement of Operations. The Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted on December 22, 2017. The Tax Reform Act made significant changes to the Federal tax code, including a reduction in the Federal corporate statutory tax rate from 35% to 21% . The Tax Reform Act also made changes to the Federal taxation of foreign earnings and to the timing of recognition of certain revenue and expenses and the deductibility of certain business expenses. The Company has not completed its accounting for the income tax effects of the Tax Reform Act. However, as described below, the Company is able to make a reasonable estimate of the impact of certain changes and has recognized a provisional tax benefit of $843 million in the Consolidated Statement of Operations for the year ended December 31, 2017. This benefit was derived primarily from a reduction of the value of the Company’s net deferred tax liabilities as a result of the decrease in the Federal tax rate. In addition, the provisional tax benefit includes an estimate of the effects of a one-time transition tax on most of the Company’s post-1986 unremitted foreign earnings, partially offset by the reversal of existing deferred tax liabilities related to such earnings that were not previously deferred from U.S. income taxes. Provisional estimates were also made with regard to the Company’s deductions under the Tax Reform Act’s new expensing provisions, the Company’s deferred tax assets related to executive compensation deductions and foreign tax credits, and foreign withholding taxes and state and local income taxes related to foreign earnings subject to the one-time transition tax. During 2018, the Company plans to complete its analysis and recognize any adjustments to the provisional tax benefit. Accordingly, the ultimate impact of the Tax Reform Act may differ from the provisional amount recognized due to, among other things, changes in estimates resulting from the receipt or calculation of final data, changes in interpretations of the Tax Reform Act, and additional regulatory guidance that may be issued. The accounting for the impact of the Tax Reform Act is expected to be completed during the quarter ended September 30, 2018 when the Company’s 2017 U.S. Federal corporate income tax return is expected to be filed. The Company considers post-1986 unremitted foreign earnings subjected to the one-time transition tax not to be indefinitely reinvested as such earnings can be repatriated without any significant incremental tax costs. U.S. income and foreign withholding taxes have not been recorded on temporary differences related to investments in certain foreign subsidiaries as such differences are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability with respect to such investments is not practicable. On February 9, 2018, the Federal Bipartisan Budget Act of 2018 was enacted. The Act included a retroactive extension for the 2017 tax year of a previously expired tax provision that allows for the immediate expensing of certain film production costs. The Company anticipates that this provision of the Act will result in a tax benefit to continuing operations of approximately $125 million for the three months ending March 31, 2018. For accounting purposes, the Company records share-based compensation expense and a related deferred tax asset for the future tax deductions it may receive. For income tax purposes, the Company receives a tax deduction equal to the stock price on the date that an RSU (or PSU) vests or the excess of the stock price over the exercise price of an option upon exercise. The deferred tax asset consists of amounts relating to individual unvested and/or unexercised share-based compensation awards; accordingly, deferred tax assets related to certain equity awards may currently be in excess of the tax benefit ultimately received. The applicable accounting rules require that the deferred tax asset related to a share-based compensation award be reduced only at the time the award vests (in the case of an RSU or PSU), is exercised (in the case of a stock option) or otherwise expires or is canceled. On January 1, 2017, the Company adopted, on a prospective basis, new accounting guidance that changes the reporting for certain aspects of share-based payments. One aspect of the guidance requires that the income tax effects of share-based payments be recognized in the Income tax provision in the Consolidated Statement of Operations when the awards vest or are settled. Under the previous guidance, excess tax benefits and deficiencies were generally recognized in Additional paid-in capital in the Consolidated Balance Sheet. Accounting for Uncertainty in Income Taxes The Company recognizes income tax benefits for tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the positions. Changes in the Company’s uncertain income tax positions, excluding the related accrual for interest and penalties, from January 1 through December 31 are set forth below (millions): Year Ended December 31, 2017 2016 2015 Beginning balance $ 1,325 $ 1,330 $ 1,327 Additions for prior year tax positions 96 154 61 Additions for current year tax positions 66 81 62 Reductions for prior year tax positions (110 ) (203 ) (75 ) Settlements (5 ) (29 ) (40 ) Lapses in statute of limitations (12 ) (8 ) (5 ) Ending balance $ 1,360 $ 1,325 $ 1,330 Should the Company’s position with respect to these uncertain tax positions be upheld, the significant majority of the effect would be recorded in the Consolidated Statement of Operations as part of the Income tax provision. During the year ended December 31, 2017 , the Company recorded an increase to interest reserves in the Consolidated Statement of Operations of approximately $53 million and made interest payments of approximately $2 million in connection with settlements reached during 2017 . During the year ended December 31, 2016 , the Company recorded an increase to interest reserves in the Consolidated Statement of Operations of approximately $58 million and made interest payments of approximately $17 million in connection with settlements reached during 2016 . The amount accrued for interest and penalties as of December 31, 2017 and 2016 was $474 million and $423 million , respectively. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as part of income tax expense. In the Company’s judgment, uncertainties related to certain tax matters are reasonably possible of being resolved during the next twelve months. The effect of the resolutions of these matters, a portion of which could vary based on the final terms and timing of actual settlements with taxing authorities, is estimated to be a reduction of recorded unrecognized tax benefits ranging from $0 to $260 million , the majority of which would lower the Company’s effective tax rate. The Company does not otherwise currently anticipate that its reserves related to uncertain income tax positions as of December 31, 2017 will significantly increase or decrease during the twelve-month period ended December 31, 2018 ; however, various events could cause the Company’s current expectations to change in the future. During the year ended December 31, 2014, the Company recognized a tax benefit of $687 million primarily related to the reversal of certain tax reserves, including related interest accruals, in connection with a Federal tax settlement on the examination of the Company’s 2005–2007 tax returns. Certain matters involving the Company’s capital loss carryforward and research and development tax credits were not resolved as part of the settlement and, accordingly, the Company is pursuing resolution of such matters through the Internal Revenue Service’s (“IRS”) administrative appeals process. A final settlement of these matters is expected from the IRS appeals office in 2018. The Company and its subsidiaries file income tax returns in the U.S. and various state and local and foreign jurisdictions. The IRS is currently conducting an examination of the Company’s U.S. income tax returns for the 2008 through 2014 period. As of December 31, 2017 , the tax years that remain subject to examination by significant jurisdiction are as follows: U.S. federal 2005 through 2017 California 2013 through 2017 New York State 2012 through 2017 New York City 2012 through 2017 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Common Stock Repurchase Program For the years ended December 31, 2016 and 2015 , the number of shares repurchased pursuant to trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, were 31 million and 45 million , respectively, and their costs were $2.307 billion and $3.600 billion , respectively. There were no shares repurchased in the year ended December 31, 2017 . In January 2016, Time Warner’s Board of Directors authorized up to $5.0 billion of share repurchases beginning January 1, 2016, including amounts available under the Company’s prior stock repurchase program at December 31, 2015. Purchases under the stock repurchase program may be made on the open market or in privately negotiated transactions, with the size and timing of these purchases based on a number of factors, including price and business and market conditions. In connection with entering into the Merger Agreement, the Company discontinued share repurchases under the stock repurchase program. Shares Authorized and Outstanding At December 31, 2017 , shareholders’ equity of Time Warner included 780 million shares of common stock (net of 872 million shares of common stock held in treasury). As of December 31, 2017 , Time Warner is authorized to issue up to 750 million shares of preferred stock, up to 8.33 billion shares of common stock and up to 600 million shares of additional series of common stock. At December 31, 2016 , shareholders’ equity of Time Warner included 772 million shares of common stock (net of 880 million shares of common stock held in treasury). Comprehensive Income (Loss) Comprehensive income (loss) is reported in the Consolidated Statement of Comprehensive Income and consists of Net income and other gains and losses affecting shareholders’ equity that, under GAAP, are excluded from Net income. For Time Warner, such items consist primarily of foreign currency translation gains (losses), unrealized gains and losses on certain derivative financial instruments and equity securities, and changes in benefit plan obligations. The following summary sets forth the activity within Other comprehensive income (loss) (millions): Pretax Tax (provision) benefit Net of tax Year ended December 31, 2015 Unrealized losses on foreign currency translation $ (319 ) $ 30 $ (289 ) Reclassification adjustment for losses on foreign currency translation realized in net income (a) 5 — 5 Unrealized gains on securities 1 — 1 Unrealized losses on benefit obligation (37 ) 11 (26 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 33 (11 ) 22 Unrealized gains on derivative financial instruments 137 (49 ) 88 Reclassification adjustment for derivative financial instrument gains realized in net income (d) (130 ) 47 (83 ) Other comprehensive loss $ (310 ) $ 28 $ (282 ) Year ended December 31, 2016 Unrealized losses on foreign currency translation $ (122 ) $ 1 $ (121 ) Unrealized losses on benefit obligation (39 ) 18 (21 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 104 (37 ) 67 Unrealized gains on derivative financial instruments 91 (33 ) 58 Reclassification adjustment for derivative financial instrument gains realized in net income (d) (74 ) 27 (47 ) Other comprehensive loss $ (40 ) $ (24 ) $ (64 ) Year ended December 31, 2017 Unrealized gains on foreign currency translation $ 149 $ 29 $ 178 Unrealized gains on securities 1 — 1 Reclassification adjustment for losses on securities realized in net income (c) 1 — 1 Unrealized losses on benefit obligation (130 ) 32 (98 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 37 (8 ) 29 Unrealized losses on derivative financial instruments (126 ) 32 (94 ) Reclassification adjustment for derivative financial instrument losses realized in net income (d) 72 (16 ) 56 Other comprehensive income $ 4 $ 69 $ 73 _________________________ (a) Pretax (gains) losses are included in Gain (loss) on operating assets, net. (b) Pretax (gains) losses are included in Selling, general and administrative expenses, with the exception of a $46 million loss that is included in Discontinued operations, net of tax for the year ended December 31, 2016. (c) Pretax (gains) losses are included in Other loss, net. (d) Pretax (gains) losses are included in Selling, general and administrative expenses, Costs of revenues and Other loss, net are as follows (millions): Year Ended December 31, 2017 2016 2015 Selling, general and administrative expenses $ 1 $ 2 $ (21 ) Costs of revenues 72 (64 ) (104 ) Other loss, net (1 ) (12 ) (5 ) The following summary sets forth the components of Accumulated other comprehensive loss, net of tax (millions): December 31, 2017 2016 Foreign currency translation losses $ (526 ) $ (704 ) Net unrealized gains on securities 15 13 Net derivative financial instruments gains (losses) (10 ) 28 Net unfunded/underfunded benefit obligation (916 ) (847 ) Accumulated other comprehensive loss, net $ (1,437 ) $ (1,510 ) |
Income Per Common Share
Income Per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | INCOME PER COMMON SHARE Set forth below is a reconciliation of Basic and Diluted income per common share from continuing operations attributable to Time Warner Inc. common shareholders (millions, except per share amounts): Year Ended December 31, 2017 2016 2015 Income from continuing operations attributable to Time Warner Inc. shareholders $ 5,247 $ 3,915 $ 3,796 Income allocated to participating securities (18 ) (11 ) (11 ) Income from continuing operations attributable to Time Warner Inc. common shareholders — basic $ 5,229 $ 3,904 $ 3,785 Average basic common shares outstanding 776.6 780.8 814.9 Dilutive effect of equity awards 14.1 11.5 14.6 Average diluted common shares outstanding 790.7 792.3 829.5 Antidilutive common share equivalents excluded from computation — 5.0 5.0 Income per common share from continuing operations attributable to Time Warner Inc. common shareholders: Basic $ 6.73 $ 5.00 $ 4.64 Diluted $ 6.64 $ 4.94 $ 4.58 |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Equity Plans The Time Warner Inc. 2013 Stock Incentive Plan expired in August 2017, and, as a result, the Company currently has no active equity plans under which it is authorized to grant equity awards to employees or non-employee directors. Stock options and RSUs have been granted to employees and non-employee directors of the Company. Generally, stock options have exercise prices equal to the fair market value on the date of grant, vest in four equal annual installments, and expire ten years from the date of grant. RSUs generally vest in four equal annual installments. The Company has also granted executive officers a target number of PSUs, which represent the contingent (unfunded) right to receive shares of Company common stock at the end of a three -year performance period based on the performance level achieved by the Company. Stock options and RSUs generally provide for accelerated vesting upon an election to retire after reaching a specified age and years of service, as well as in certain additional circumstances for non-employee directors. In connection with entering into the Merger Agreement, the Company granted special retention restricted stock units (“Special Retention RSUs”) to certain employees of Time Warner and its divisions, including all executive officers of Time Warner. Half of the Special Retention RSUs will vest 25% per year on each of the first four anniversaries of February 15, 2017, and the remaining half will vest 25% per year on each of the first four anniversaries of February 15, 2018. Pursuant to the Special Retention RSU agreements, vesting as a result of retirement is not permitted unless the employee retires after the merger has closed. In addition, the awards do not accelerate automatically following the closing of the merger. Instead, the employee must remain employed following the closing, and the awards will vest only on the scheduled vesting date or upon termination of employment under certain circumstances, such as termination without cause, for good reason or due to retirement. Holders of RSUs are generally entitled to receive cash dividend equivalents based on the regular quarterly cash dividends declared and paid by the Company during the period that the RSUs are outstanding. The dividend equivalent payment for holders of RSUs subject to a performance condition is made in cash following the satisfaction of the performance condition. Holders of PSUs also are entitled to receive dividend equivalents based on the regular quarterly cash dividends declared and paid by the Company during the period that the PSUs are outstanding. The dividend equivalent payment is made in cash following the vesting of the PSUs (generally following the end of the applicable performance period) and is based on the number of shares that vest and are paid out. Holders of stock options do not receive dividends or dividend equivalent payments. Upon the (i) exercise of a stock option, (ii) vesting of an RSU or (iii) vesting of a PSU, shares of Time Warner common stock may be issued either from authorized but unissued shares or from treasury stock. Other information pertaining to each category of equity-based compensation appears below. Stock Options The Company did no t grant any stock options during the year ended December 31, 2017 . The table below summarizes the weighted-average assumptions used to value stock options at their grant date and the weighted-average grant date fair value per share for the years ended December 31, 2016 and 2015 : Year Ended December 31, 2016 2015 Expected volatility 26.0 % 25.0 % Expected term to exercise from grant date 6.20 years 5.80 years Risk-free rate 1.5 % 1.8 % Expected dividend yield 2.6 % 1.7 % Weighted average grant date fair value per option $ 12.26 $ 18.16 The following table summarizes information about stock options outstanding as of December 31, 2017 : Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) (in years) (thousands) Outstanding as of December 31, 2016 24,567 $ 47.07 Exercised (5,913 ) 34.75 Forfeited or expired (104 ) 65.40 Outstanding as of December 31, 2017 18,550 50.89 4.62 $ 755,314 Exercisable as of December 31, 2017 14,524 44.69 3.84 $ 681,366 As of December 31, 2017 , the number, weighted-average exercise price, aggregate intrinsic value and weighted-average remaining contractual term of the aggregate Time Warner stock options that either had vested or are expected to vest approximate the corresponding amounts for stock options outstanding. The following table summarizes information about stock options exercised (millions): Year Ended December 31, 2017 2016 2015 Total intrinsic value $ 374 $ 237 $ 270 Cash received 206 172 165 Tax benefits realized 133 83 96 Restricted Stock Units and Target Performance Stock Units The following table sets forth the weighted-average grant date fair value of RSUs and target PSUs. The Company did no t grant any target PSUs during the year ended December 31, 2017 . For PSUs, the service inception date precedes the grant date and requires the Company to apply mark-to-market accounting that is reflected in the grant date fair values presented: Year Ended December 31, 2017 2016 2015 RSUs $ 96.75 $ 78.63 $ 83.52 PSUs — 98.24 91.47 The following table summarizes information about unvested RSUs and target PSUs as of December 31, 2017 : Number of Shares/Units Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value (thousands) (thousands) Unvested as of December 31, 2016 12,049 $ 76.56 Granted (a) 663 96.58 Vested (3,234 ) 65.77 Forfeited (268 ) 80.50 Unvested as of December 31, 2017 9,210 81.15 $ 842,439 _________________________ (a) Includes 0.5 million RSUs granted during the year ended December 31, 2017 and a payout adjustment of 0.2 million PSUs due to the actual performance level achieved for PSUs that vested during 2017 . The following table sets forth the total intrinsic value of RSUs and target PSUs that vested during the following years (millions): Year Ended December 31, 2017 2016 2015 RSUs $ 280 $ 247 $ 384 PSUs 33 28 30 Equity-Based Compensation Expense The impact on Operating income from equity-based compensation awards is as follows (millions): Year Ended December 31, 2017 2016 2015 Stock options $ 26 $ 42 $ 39 RSUs and PSUs 201 235 143 Total impact on operating income $ 227 $ 277 $ 182 Tax benefit recognized $ 78 $ 97 $ 64 Total unrecognized compensation cost related to unvested Time Warner stock option awards as of December 31, 2017 , without taking into account expected forfeitures, is $27 million and is expected to be recognized over a weighted-average period of approximately 1 year. Total unrecognized compensation cost related to unvested RSUs and target PSUs as of December 31, 2017 , without taking into account expected forfeitures, is $469 million and is expected to be recognized over a weighted-average period between 1 and 2 years. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS Time Warner Pension Plan Amendment On August 1, 2016, the Time Warner Pension Plan was amended to provide a window for a one-time lump sum payment for eligible vested participants who (i) had terminated employment as of May 31, 2016, (ii) had not yet commenced payment of their benefits as of May 31, 2016, (iii) are not otherwise eligible for an immediate lump sum payment of their benefits and (iv) have benefits with a present value of less than $50,000 . Eligible participants had the opportunity to elect, during the period beginning on August 16, 2016 and ending on October 7, 2016, to receive their benefits in the form of an immediate lump sum payment. Certain annuity options were also available. Payments to those eligible participants who elected to receive their benefit under the window program were made or commenced in December 2016. Defined Benefit Pension Plans A summary of activity for substantially all of Time Warner’s domestic and international defined benefit pension plans is as follows: Benefit Obligation (millions) December 31, 2017 2016 Change in benefit obligation: Projected benefit obligation, beginning of year $ 3,465 $ 3,439 Service cost 4 4 Interest cost 136 145 Actuarial loss (gain) 290 (169 ) Benefits paid (162 ) (274 ) Curtailments (1 ) — Settlements (13 ) — Remeasurement — 407 Foreign currency exchange rates 44 (87 ) Projected benefit obligation, end of year $ 3,763 $ 3,465 Accumulated benefit obligation, end of year $ 3,732 $ 3,433 Plan Assets (millions) December 31, 2017 2016 Change in plan assets: Fair value of plan assets, beginning of year $ 2,738 $ 2,698 Actual return on plan assets 296 345 Employer contributions 51 74 Benefits paid (162 ) (274 ) Foreign currency exchange rates 50 (105 ) Settlements (13 ) — Fair value of plan assets, end of year $ 2,960 $ 2,738 As of December 31, 2017 and December 31, 2016 , the funded status for substantially all of Time Warner’s domestic and international defined benefit pension plans recognized in the Consolidated Balance Sheet reflected a net liability position of $803 million and $727 million , respectively, primarily consisting of noncurrent liabilities of $958 million and $837 million , respectively. As of December 31, 2017 and December 31, 2016 , amounts included in Accumulated other comprehensive loss, net were $1.435 billion and $1.335 billion , respectively, primarily consisting of net actuarial losses. Certain defined benefit pension plans have projected benefit obligations and accumulated benefit obligations in excess of their plan assets. These plans are primarily unfunded. As of December 31, 2017 and December 31, 2016 , the projected benefit obligations for unfunded plans were $426 million and $414 million , respectively, and the accumulated benefit obligations for unfunded plans were $420 million and $407 million , respectively. In addition, as of December 31, 2017 , the projected benefit obligation and accumulated benefit obligation for certain funded plans both exceeded the fair value of their assets by $565 million . Components of Net Periodic Benefit Costs from Continuing Operations (millions) December 31, 2017 2016 2015 Service cost (a) $ 4 $ 4 $ 4 Interest cost 63 66 83 Expected return on plan assets (60 ) (64 ) (90 ) Amortization of prior service cost 1 1 1 Amortization of net loss 14 14 17 Curtailments (1 ) — — Settlements — 24 — Net periodic benefit costs (b) $ 21 $ 45 $ 15 _________________________ (a) Amounts relate to various international benefit plans. (b) Excludes net periodic benefit costs related to discontinued operations of $13 million , $12 million and $5 million during the years ended December 31, 2017 , 2016 and 2015 , respectively, primarily related to employees and former employees of Time Inc. These amounts have been reflected in Other loss, net in the Consolidated Statement of Operations. In addition, net periodic benefit costs for the year ended December 31, 2016 also excludes $46 million of pension settlement charges related to businesses the Company previously disposed of. These amounts have been reflected in Discontinued Operations, net of tax, in the Consolidated Statement of Operations. Assumptions Weighted-average assumptions used to determine benefit obligations and net periodic benefit costs for the years ended December 31: Benefit Obligations Net Periodic Benefit Costs 2017 2016 2015 2017 2016 2015 Discount rate 3.52 % 3.96 % 4.59 % 3.96 % 4.30 % 4.10 % Rate of compensation increase 5.62 % 5.62 % 5.45 % 5.62 % 5.45 % 5.35 % Expected long-term return on plan assets n/a n/a n/a 5.40 % 5.91 % 5.84 % The discount rates were primarily determined by matching the plans’ liability cash flows to rates derived from high-quality corporate bonds available at the measurement date. In developing the expected long-term rate of return on plan assets, the Company considered long-term historical rates of return, the Company’s plan asset allocations as well as the opinions and outlooks of investment professionals and consulting firms. Fair Value of Plan Assets The following table sets forth by level, within the fair value hierarchy described in Note 6, the assets and liabilities held by the Company’s defined benefit pension plans, including those assets related to The CW sub-plan, which were approximately $22 million and $20 million , respectively, as of December 31, 2017 and December 31, 2016 (millions). As of December 31, 2017 and 2016 , there were no assets or liabilities classified as level 3. December 31, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash and cash equivalents (a) $ 116 $ — $ 116 $ 142 $ — $ 142 Insurance contracts — 3 3 — 15 15 Common stocks 147 — 147 165 — 165 Fixed income securities: U.S. government and agency securities (a) 273 109 382 209 53 262 Non-U.S. government and agency securities 327 — 327 250 — 250 Other fixed income securities (b) — 1,003 1,003 — 952 952 Other investments (c) 96 79 175 156 68 224 Liabilities: Derivatives — (19 ) (19 ) — (19 ) (19 ) Total (d) $ 959 $ 1,175 $ 2,134 $ 922 $ 1,069 $ 1,991 _________________________ (a) As of December 31, 2017 , cash and cash equivalents include $6 million of cash collateral for securities on loan, and U.S. government and agency securities include $109 million of securities collateral for securities on loan. As of December 31, 2016, cash and cash equivalents include $17 million of cash collateral for securities on loan, and U.S. government and agency securities include $66 million of securities collateral for securities on loan. (b) Other fixed income securities primarily include investment grade corporate bonds. (c) Other investments primarily include derivative contracts, exchange-traded funds, and mutual funds. (d) At December 31, 2017 and December 31, 2016 , total assets include $113 million and $81 million , respectively, of securities on loan. Certain investments that are measured at fair value using the net asset value ("NAV") per share as a practical expedient have not been categorized in the fair value table above and are as follows (millions): December 31, Asset Category 2017 2016 Pooled investments (e) $ 228 $ 231 Commingled trust funds 661 610 Other investments (f) 70 56 Total $ 959 $ 897 (e) Pooled investments primarily consist of interests in unitized investment pools which consist of equity and fixed income securities and investments in hedge funds. (f) Other investments include limited partnerships, 103-12 investments and hedge funds. The Company primarily utilizes the market approach for determining recurring fair value measurements. The Company’s defined benefit pension plans’ investment policy is to minimize the volatility of the plans’ funded status and to achieve and maintain fully funded status in order to pay current and future participant benefits from plan assets. The Company periodically reviews asset allocation policies consistent with its investment policy. In addition, the Company continuously monitors the performance of its pension assets, the performance of its investment advisers, sub-advisers and asset managers thereof, and makes adjustments and changes as required. The Company does not manage any pension assets internally. The investment guidelines set by the Company for the investment advisers, sub-advisers and asset managers permit the use of index funds, derivative contracts and other hedging strategies as components of portfolio management strategies. Under the Company’s investment policy, the asset allocation target for the funded domestic defined benefit pension plan is approximately 40% growth assets comprised primarily of equity investments and 60% fixed income investments. If the funding level declines over time, the Company intends to move 5% of the plan’s assets from fixed income investments to growth assets for each 5% decline in the funding level until the fixed income investment allocation reaches a minimum of 50% of the plan’s assets. In addition, if the funding level increases over time, the Company intends to move 5% of the plan’s assets from growth assets to fixed income investments for every 5% increase in funding level to move to a target of approximately 20% growth assets and 80% fixed income investments to further minimize funded status volatility. The plan’s growth assets will be further diversified over time to include real estate funds that invest in high quality properties with a small degree of leverage. Target asset allocations for the international defined benefit pension plans as of December 31, 2017 are approximately 40% growth assets comprised primarily of equity investments and 60% fixed income investments. At both December 31, 2017 and December 31, 2016 , the defined benefit pension plans’ assets did not include any securities issued by Time Warner. Expected cash flows After considering the funded status of the Company’s defined benefit pension plans, movements in the discount rate, investment performance and related tax consequences, the Company may choose to make contributions to its pension plans in any given year. The Company made discretionary cash contributions totaling approximately $20 million to one of its funded international defined benefit pension plans during the year ended December 31, 2017 . For the Company’s unfunded plans, contributions will continue to be made to the extent benefits are paid. Information about the expected benefit payments for the Company’s defined benefit plans is as follows (millions): 2018 2019 2020 2021 2022 2023-2027 Expected benefit payments $ 176 $ 177 $ 188 $ 188 $ 205 $ 1,027 Defined Contribution Plans Time Warner has certain domestic and international defined contribution plans, including savings and profit sharing plans, for which the expense amounted to $169 million in 2017 , $149 million in 2016 and $153 million in 2015 . The Company’s contributions to the savings plans are primarily based on a percentage of the employees’ elected contributions and are subject to plan provisions. Other Postretirement Benefit Plans Time Warner also sponsors several unfunded domestic postretirement benefit plans covering certain retirees and their dependents. For substantially all of Time Warner’s domestic postretirement benefit plans, the unfunded benefit obligation as of December 31, 2017 and December 31, 2016 was $78 million and $88 million , respectively, and the amount recognized in Accumulated other comprehensive income, net was a gain of $24 million and $19 million , respectively. For the years ended December 31, 2017 , 2016 and 2015 , the net periodic benefit costs were $1 million , $1 million and $2 million , respectively. Multiemployer Benefit Plans The Company contributes to various multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees, primarily at the Warner Bros. segment. The risks of participating in these multiemployer pension plans are different from single-employer pension plans in that (i) contributions made by the Company to the multiemployer pension plans may be used to provide benefits to employees of other participating employers; (ii) if the Company chooses to stop participating in certain of these multiemployer pension plans, it may be required to pay those plans an amount based on the underfunded status of the plan, which is referred to as a withdrawal liability; and (iii) actions taken by a participating employer that lead to a deterioration of the financial health of a multiemployer pension plan may result in the unfunded obligations of the multiemployer pension plan being borne by its remaining participating employers. As of December 31, 2017, five of the six largest multiemployer pension plans to which the Company contributes were, in accordance with the Pension Protection Act of 2006, determined to be in the green zone status, funded at a level of 80 percent or greater. The other plan, the Motion Picture Industry Pension Plan, is funded at 76.8% , but is not considered endangered as the plan’s actuary has certified, in accordance with the conditions set forth in the Multiemployer Pension Reform Act of 2014, that (1) the plan was projected to no longer be in endangered status as of the end of the tenth plan year ending after the 2016 plan year, and (2) the plan was not in critical or endangered status for the immediately preceding plan year. Total contributions made by the Company to multiemployer pension plans for the years ended December 31, 2017 , 2016 and 2015 were $152 million , $128 million and $139 million , respectively. The Company’s share of contributions to plans whose zone status is below green (i.e., yellow or red) is not material. The Company also contributes to various other multiemployer benefit plans that provide health and welfare benefits to active and retired participants, primarily at the Warner Bros. segment. Total contributions made by the Company to these other multiemployer benefit plans for the years ended December 31, 2017 , 2016 and 2015 were $218 million , $194 million and $220 million , respectively. |
Restructuring and Severance Cos
Restructuring and Severance Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND SEVERANCE COSTS | RESTRUCTURING AND SEVERANCE COSTS The Company’s Restructuring and severance costs primarily related to employee termination costs, ranging from senior executives to line personnel, and other exit costs, including lease terminations and real estate consolidations. Restructuring and severance costs expensed as incurred for the years ended December 31, 2017 , 2016 and 2015 are as follows (millions): Year Ended December 31, 2017 2016 2015 Turner $ 59 $ 61 $ 58 Home Box Office 13 49 — Warner Bros. 46 4 1 Corporate 2 3 1 Total restructuring and severance costs $ 120 $ 117 $ 60 Year Ended December 31, 2017 2016 2015 2017 initiatives $ 133 $ — $ — 2016 initiatives (9 ) 114 — 2015 and prior initiatives (4 ) 3 60 Total restructuring and severance costs $ 120 $ 117 $ 60 For the year ended December 31, 2017 , the Company incurred costs in connection with the 2017 initiatives of $65 million at the Turner segment, $17 million at the Home Box Office segment, $48 million at the Warner Bros. segment and $3 million at Corporate. In addition, in connection with the 2016 initiatives, the Company reversed $5 million at the Turner segment, $3 million at the Home Box Office segment and $1 million at Corporate. For the year ended December 31, 2017 , the Company also reversed $1 million at the Turner segment, $1 million at the Home Box Office segment and $2 million at the Warner Bros. segment related to 2015 and prior initiatives. The amount recorded by the Company in 2017 for both the 2016 initiatives and the 2015 and prior initiatives primarily consisted of changes to estimates of previously established accruals. For the year ended December 31, 2016 , the Company incurred costs in connection with the 2016 initiatives of $61 million at the Turner segment, $47 million at the Home Box Office segment, $2 million at the Warner Bros. segment and $4 million at Corporate. In addition, in connection with the 2015 and prior initiatives, the Company incurred costs of $2 million at the Home Box Office segment and $2 million at the Warner Bros. segment and reversed $1 million at Corporate. Selected Information Selected information relating to accrued restructuring and severance costs is as follows (millions): Employee Terminations Other Exit Costs Total Remaining liability as of December 31, 2014 $ 525 $ 9 $ 534 Net accruals 43 17 60 Foreign currency translation adjustment (3 ) — (3 ) Noncash reductions (a) (1 ) — (1 ) Cash paid (325 ) (12 ) (337 ) Remaining liability as of December 31, 2015 239 14 253 Net accruals 114 3 117 Cash paid (191 ) (8 ) (199 ) Remaining liability as of December 31, 2016 162 9 171 Net accruals 121 (1 ) 120 Noncash reductions (a) (2 ) — (2 ) Cash paid (87 ) (5 ) (92 ) Remaining liability as of December 31, 2017 $ 194 $ 3 $ 197 _________________________ (a) Noncash reductions relate to the settlement of certain liabilities relating to employee compensation with equity instruments. As of December 31, 2017 , of the remaining $197 million liability, $119 million was classified as a current liability in the Consolidated Balance Sheet, with the remaining $78 million classified as a long-term liability. Amounts classified as long-term are expected to be paid through 2021. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Time Warner classifies its operations into three reportable segments: Turner : consisting principally of cable networks and digital media properties; Home Box Office : consisting principally of premium pay television and OTT services domestically and premium pay, basic tier television and OTT services internationally; and Warner Bros. : consisting principally of television, feature film, home video and game production and distribution. Time Warner’s reportable segments have been determined in accordance with its internal management structure and the financial information that is evaluated regularly by the Company’s chief operating decision maker. In the ordinary course of business, Time Warner’s reportable segments enter into transactions with one another. The most common types of intersegment transactions include the Warner Bros. segment generating revenues by licensing television and theatrical programming to the Turner and Home Box Office segments. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses or assets recognized by the segment that is the counterparty to the transaction) are eliminated in consolidation and, therefore, do not affect consolidated results. Information as to the Revenues, intersegment revenues, depreciation of property, plant, and equipment, Amortization of intangible assets, Operating Income (Loss), Assets and Capital expenditures for each of Time Warner’s reportable segments is set forth below (millions): Year Ended December 31, 2017 2016 2015 Revenues Turner $ 12,081 $ 11,364 $ 10,596 Home Box Office 6,329 5,890 5,615 Warner Bros. 13,866 13,037 12,992 Intersegment eliminations (1,005 ) (973 ) (1,085 ) Total revenues $ 31,271 $ 29,318 $ 28,118 Year Ended December 31, 2017 2016 2015 Intersegment Revenues Turner $ 88 $ 108 $ 105 Home Box Office 17 (9 ) 40 Warner Bros. 900 874 940 Total intersegment revenues $ 1,005 $ 973 $ 1,085 Year Ended December 31, 2017 2016 2015 Supplemental Revenue Data Subscription $ 12,308 $ 11,014 $ 10,153 Advertising 4,655 4,696 4,569 Content 13,595 12,935 12,771 Other 713 673 625 Total revenues $ 31,271 $ 29,318 $ 28,118 Year Ended December 31, 2017 2016 2015 Depreciation of Property, Plant and Equipment Turner $ (202 ) $ (191 ) $ (193 ) Home Box Office (87 ) (74 ) (81 ) Warner Bros. (179 ) (188 ) (197 ) Corporate (29 ) (26 ) (21 ) Total depreciation of property, plant and equipment $ (497 ) $ (479 ) $ (492 ) Year Ended December 31, 2017 2016 2015 Amortization of Intangible Assets Turner $ (17 ) $ (17 ) $ (16 ) Home Box Office (14 ) (14 ) (14 ) Warner Bros. (166 ) (159 ) (159 ) Total amortization of intangible assets $ (197 ) $ (190 ) $ (189 ) Year Ended December 31, 2017 2016 2015 Operating Income (Loss) Turner $ 4,489 $ 4,372 $ 4,087 Home Box Office 2,152 1,917 1,878 Warner Bros. 1,761 1,734 1,416 Corporate (430 ) (498 ) (367 ) Intersegment eliminations (52 ) 22 (149 ) Total operating income $ 7,920 $ 7,547 $ 6,865 December 31, 2017 2016 Assets Turner $ 27,111 $ 26,317 Home Box Office 14,777 14,636 Warner Bros. 22,193 21,550 Corporate 5,128 3,463 Total assets $ 69,209 $ 65,966 Year Ended December 31, 2017 2016 2015 Capital Expenditures Turner $ 225 $ 196 $ 157 Home Box Office 111 98 68 Warner Bros. 137 86 122 Corporate 183 52 76 Total capital expenditures $ 656 $ 432 $ 423 Long-lived hard assets located outside the United States, which represent less than 2% of total assets at December 31, 2017 , are not material. Revenues in different geographical areas are as follows (millions): Year Ended December 31, 2017 2016 2015 Revenues (a) United States and Canada $ 22,635 $ 20,970 $ 20,426 Europe (b) 4,739 4,557 4,485 Asia/Pacific Rim 1,977 1,992 1,619 Latin America 1,524 1,413 1,284 All Other 396 386 304 Total revenues $ 31,271 $ 29,318 $ 28,118 _________________________ (a) Revenues are attributed to region based on location of customer. (b) Revenues in EuroZone countries comprise approximately 52% , 51% and 49% of Revenues in Europe for the years ended 2017 , 2016 and 2015 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments Time Warner has commitments under certain network programming, film licensing, creative talent, employment and other agreements aggregating $37.964 billion at December 31, 2017 . The Company also has commitments for office space, studio facilities and operating equipment. Time Warner’s net rent expense was $340 million in 2017 , $324 million in 2016 and $333 million in 2015 . Included in such amounts was sublease income of $8 million for 2017 , $10 million for 2016 and $15 million for 2015 . The commitments under certain programming, film licensing, talent and other agreements (“Programming and Other”) and minimum rental commitments under noncancelable long-term operating leases (“Operating Leases”) payable during the next five years and thereafter are as follows (millions): Programming and Other Operating Leases 2018 $ 7,008 $ 323 2019 4,911 184 2020 4,275 123 2021 3,770 94 2022 3,192 85 Thereafter 14,808 319 Total $ 37,964 $ 1,128 Contingent Commitments The Company also has certain contractual arrangements that would require it to make payments or provide funding if certain circumstances occur (“contingent commitments”). Contingent commitments principally include amounts that could be paid in connection with guarantees provided by the Company and post-production term advance obligations on certain co-financing arrangements. The following table summarizes the Company’s contingent commitments at December 31, 2017 . For post-production term advances where payment obligations are outside the Company’s control, the timing of amounts presented in the table represents the earliest period in which the payment could be requested. For other contingent commitments, the timing of amounts presented in the table represents when the maximum contingent commitment will expire, but does not mean that the Company expects to incur an obligation to make any payments within that time period. In addition, amounts presented do not reflect the effects of any indemnification rights the Company might possess (millions). Nature of Contingent Commitments Total 2018 2019-2020 2021-2022 Thereafter Guarantees $ 2,057 $ 283 $ 370 $ 707 $ 697 Post-production term advance obligations and other contingent commitments 1,008 364 169 475 — Total contingent commitments $ 3,065 $ 647 $ 539 $ 1,182 $ 697 The following is a description of the Company’s contingent commitments at December 31, 2017 : • Guarantees consist of the guarantee of certain debt of CME, an equity method investee, the Six Flags arrangement described below, and guarantees the Company has provided on operating lease commitments. Six Flags In connection with the Company’s former investment in the Six Flags theme parks located in Georgia and Texas (collectively, the “Parks”), in 1997, certain subsidiaries of the Company (including Historic TW and, in connection with the separation of Time Warner Cable Inc. in 2009, Warner Bros. Entertainment Inc.) agreed to guarantee (the “Six Flags Guarantee”) certain obligations of the partnerships that hold the Parks (the “Partnerships”) for the benefit of the limited partners in such Partnerships, including: annual payments made at the Parks or to the limited partners and additional obligations at the end of the respective terms for the Partnerships in 2027 and 2028 (the “Guaranteed Obligations”). The aggregate undiscounted estimated future cash flow requirements covered by the Six Flags Guarantee over the remaining term (through 2028) are $887 million . To date, no payments have been made by the Company pursuant to the Six Flags Guarantee. Six Flags Entertainment Corporation (formerly known as Six Flags, Inc. and Premier Parks Inc.) (“Six Flags”), which has the controlling interest in the Parks, has agreed, pursuant to a subordinated indemnity agreement (the “Subordinated Indemnity Agreement”), to guarantee the performance of the Guaranteed Obligations when due and to indemnify Historic TW, among others, if the Six Flags Guarantee is called upon. If Six Flags defaults in its indemnification obligations, Historic TW has the right to acquire control of the managing partner of the Parks. Six Flags’ obligations to Historic TW are further secured by its interest in all limited partnership units held by Six Flags. Because the Six Flags Guarantee existed prior to December 31, 2002 and no modifications to the arrangements have been made since the date the guarantee came into existence, the Company is required to continue to account for the Guaranteed Obligations as a contingent liability. Based on its evaluation of the current facts and circumstances surrounding the Guaranteed Obligations and the Subordinated Indemnity Agreement, the Company is unable to predict the loss, if any, that may be incurred under the Guaranteed Obligations, and no liability for the arrangements has been recognized at December 31, 2017 . Because of the specific circumstances surrounding the arrangements and the fact that no active or observable market exists for this type of financial guarantee, the Company is unable to determine a current fair value for the Guaranteed Obligations and related Subordinated Indemnity Agreement. • Post-production term advance obligations and other contingent commitments primarily include contingent payments for post-production term advance obligations on certain co-financing arrangements, as well as letters of credit, bank guarantees and surety bonds, which generally support performance and payments for a wide range of global contingent and firm obligations, including insurance, litigation appeals, real estate leases and other operational needs. Programming Licensing Backlog Programming licensing backlog represents the amount of future revenues not yet recorded from cash contracts for the licensing of theatrical and television product for pay cable, basic cable, network and syndicated television and OTT exhibition. Because backlog generally relates to contracts for the licensing of theatrical and television product that have already been produced, the recognition of revenue for such completed product is principally dependent on the commencement of the availability period for telecast under the terms of the related licensing agreement. Cash licensing fees are collected periodically over the term of the related licensing agreements. Backlog was approximately $6.4 billion and $6.8 billion at December 31, 2017 and 2016 , respectively. Included in these amounts is licensing of film product from the Warner Bros. segment to the Turner segment in the amount of $902 million and $942 million at December 31, 2017 and 2016 , respectively, and to the Home Box Office segment in the amount of $633 million and $689 million at December 31, 2017 and 2016 , respectively. Certain filmed entertainment licensing contracts provide for additional revenues to be earned, and cash collected, based on the delivery of advertising spots to third parties. Backlog excludes estimates of such amounts. Contingencies In the ordinary course of business, the Company and its subsidiaries are defendants in or parties to various legal claims, actions and proceedings. These claims, actions and proceedings are at varying stages of investigation, arbitration or adjudication, and involve a variety of areas of law. On November 20, 2017, the U.S. Department of Justice (the “DOJ”) filed a lawsuit in the United States District Court for the District of Columbia (the “Court”) against the Company and AT&T Inc. to enjoin the companies’ merger under a federal antitrust statute. The Court has set March 19, 2018 as the start date for the trial. Time Warner intends to vigorously contest the DOJ’s allegations. The Company believes its case is strong under the law and that the Court, after hearing the evidence presented by both sides and considering the law, will reject the DOJ’s challenge. However, there can be no assurance that the Company and AT&T will prevail in the action. On April 4, 2007, the National Labor Relations Board (“NLRB”) issued a complaint against CNN America Inc. (“CNN America”) and Team Video Services, LLC (“Team Video”) related to CNN America’s December 2003 and January 2004 terminations of its contractual relationships with Team Video, under which Team Video had provided electronic news gathering services in Washington, D.C. and New York, NY. The National Association of Broadcast Employees and Technicians, under which Team Video’s employees were unionized, initially filed charges of unfair labor practices with the NLRB in February 2004, alleging that CNN America and Team Video were joint employers, that CNN America was a successor employer to Team Video, and/or that CNN America discriminated in its hiring practices to avoid becoming a successor employer or due to specific individuals’ union affiliation or activities. In the complaint, the NLRB sought, among other things, the reinstatement of certain union members and monetary damages. On November 19, 2008, the presiding NLRB Administrative Law Judge (“ALJ”) issued a non-binding recommended decision and order finding CNN America liable. On September 15, 2014, a three-member panel of the NLRB affirmed the ALJ’s decision and adopted the ALJ’s order with certain modifications. Following the NLRB’s decision on motions for reconsideration, on July 9, 2015, CNN America filed a notice of appeal with the U.S. Court of Appeals for the D.C. Circuit regarding the panel’s decision. During 2017, the U.S. Court of Appeals for the D.C. Circuit granted CNN America’s appeal in part and denied it in part and remanded the case to the NLRB for further proceedings. The Company establishes an accrued liability for legal claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. The Company has estimated a range of possible loss for legal claims for which the Company has determined a loss is probable or reasonably possible, including the matter disclosed above. The Company believes the estimate of the aggregate range of possible loss for such matters in excess of accrued liabilities is between $0 and $100 million at December 31, 2017 . The estimated aggregate range of possible loss is subject to significant judgment and a variety of assumptions. The matters represented in the estimated aggregate range of possible loss will change from time to time and actual results may vary significantly from the current estimate. In view of the inherent difficulty of predicting the outcome of litigation and claims, the Company often cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. An adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into certain transactions in the ordinary course of business with unconsolidated investees accounted for under the equity method of accounting. The transactions that generate revenue and expenses primarily relate to the licensing by the Warner Bros. segment of content to The CW broadcast network, Hulu and certain international networks, including networks owned by CME. Transactions that generate interest income and other income primarily relate to financing transactions with CME. Receivables due from related parties were $617 million and $383 million at December 31, 2017 and 2016 , respectively. Payables due to related parties were immaterial at December 31, 2017 and 2016 . Amounts included in the Consolidated Statement of Operations resulting from transactions with related parties consist of (millions): Year Ended December 31, 2017 2016 2015 Revenues $ 820 $ 595 $ 390 Expenses (6 ) (3 ) (5 ) Interest income 81 120 126 Other income 10 14 17 |
Additional Financial Informatio
Additional Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
ADDITIONAL FINANCIAL INFORMATION | ADDITIONAL FINANCIAL INFORMATION Additional financial information with respect to cash payments and receipts, Interest expense, net, Other loss, net, Accounts payable and accrued liabilities and Other noncurrent liabilities is as follows (millions): Year Ended December 31, 2017 2016 2015 Cash Flows Cash payments made for interest $ (1,202 ) $ (1,391 ) $ (1,262 ) Interest income received 84 141 35 Cash interest payments, net $ (1,118 ) $ (1,250 ) $ (1,227 ) Cash payments made for income taxes $ (1,722 ) $ (935 ) $ (1,135 ) Income tax refunds received 172 136 142 TWC tax sharing payments (a) — — (4 ) Cash tax payments, net $ (1,550 ) $ (799 ) $ (997 ) _________________________ (a) Represents net amounts paid to TWC in accordance with a tax sharing agreement with TWC. Year Ended December 31, 2017 2016 2015 Interest Expense, Net Interest income $ 209 $ 227 $ 219 Interest expense (1,214 ) (1,388 ) (1,382 ) Total interest expense, net $ (1,005 ) $ (1,161 ) $ (1,163 ) Year Ended December 31, 2017 2016 2015 Other Loss, Net Investment gains (losses), net $ 300 $ 148 $ (31 ) Loss on equity method investees (153 ) (283 ) (123 ) Premiums paid and costs incurred on debt redemption (1,087 ) (1,008 ) (72 ) Other (30 ) (48 ) (30 ) Total other loss, net $ (970 ) $ (1,191 ) $ (256 ) December 31, 2017 2016 Accounts Payable and Accrued Liabilities Accounts payable $ 777 $ 527 Other accrued expenses 1,778 1,878 Participations payable 2,737 2,525 Programming costs payable 728 776 Accrued compensation 1,192 1,004 Accrued interest 251 320 Accrued dividends 319 — Accrued income taxes 134 162 Total accounts payable and accrued liabilities $ 7,916 $ 7,192 December 31, 2017 2016 Other Noncurrent Liabilities Noncurrent tax and interest reserves $ 1,703 $ 1,567 Participations payable 1,748 1,780 Programming costs payable 728 827 Noncurrent pension and post-retirement liabilities 1,058 954 Deferred compensation 548 491 Other noncurrent liabilities 590 722 Total other noncurrent liabilities $ 6,375 $ 6,341 |
Supplementary Information - Con
Supplementary Information - Condensed Consolidating Financial Statements | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
SUPPLEMENTARY INFORMATION - CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | Overview 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. 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. Basis of Presentation 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.” 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. 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 provision 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. 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. 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. Consolidating Balance Sheet December 31, 2017 (millions) . Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Time Warner Consolidated ASSETS Current assets Cash and equivalents $ 798 $ 243 $ 1,580 $ — $ 2,621 Receivables, net 463 1,208 7,762 (32 ) 9,401 Inventories — 581 1,860 (40 ) 2,401 Prepaid expenses and other current assets 286 78 432 — 796 Total current assets 1,547 2,110 11,634 (72 ) 15,219 Noncurrent inventories and theatrical film and television production costs — 1,924 6,423 (72 ) 8,275 Investments in amounts due to and from consolidated subsidiaries 52,541 10,872 13,330 (76,743 ) — Investments, including available-for-sale securities 307 474 3,148 (5 ) 3,924 Property, plant and equipment, net 46 460 2,201 — 2,707 Intangible assets subject to amortization, net — — 585 — 585 Intangible assets not subject to amortization — 2,007 4,999 — 7,006 Goodwill — 9,880 17,896 — 27,776 Other assets 604 496 2,841 (224 ) 3,717 Total assets $ 55,045 $ 28,223 $ 63,057 $ (77,116 ) $ 69,209 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities $ 947 $ 1,069 $ 5,957 $ (57 ) $ 7,916 Deferred revenue — 117 644 (50 ) 711 Debt due within one year 4,837 611 2 — 5,450 Total current liabilities 5,784 1,797 6,603 (107 ) 14,077 Long-term debt 17,101 1,185 8 — 18,294 Deferred income taxes 1,584 1,650 1,226 (2,876 ) 1,584 Deferred revenue — 27 441 — 468 Other noncurrent liabilities 2,201 2,019 3,558 (1,403 ) 6,375 Redeemable noncontrolling interest — — 35 — 35 Equity Due to (from) Time Warner Inc. and subsidiaries — (1,551 ) 27,891 (26,340 ) — Other shareholders’ equity 28,375 23,096 23,294 (46,390 ) 28,375 Total Time Warner Inc. shareholders’ equity 28,375 21,545 51,185 (72,730 ) 28,375 Noncontrolling interest — — 1 — 1 Total equity 28,375 21,545 51,186 (72,730 ) 28,376 Total liabilities and equity $ 55,045 $ 28,223 $ 63,057 $ (77,116 ) $ 69,209 Consolidating Balance Sheet December 31, 2016 (millions) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Time Warner Consolidated ASSETS Current assets Cash and equivalents $ 617 $ 91 $ 831 $ — $ 1,539 Receivables, net 118 1,294 7,329 (42 ) 8,699 Inventories — 528 1,564 (30 ) 2,062 Prepaid expenses and other current assets 639 91 455 — 1,185 Total current assets 1,374 2,004 10,179 (72 ) 13,485 Noncurrent inventories and theatrical film and television production costs — 1,929 6,028 (41 ) 7,916 Investments in amounts due to and from consolidated subsidiaries 48,212 11,319 13,155 (72,686 ) — Investments, including available-for-sale securities 274 441 2,628 (6 ) 3,337 Property, plant and equipment, net 48 423 2,039 — 2,510 Intangible assets subject to amortization, net — — 783 — 783 Intangible assets not subject to amortization — 2,007 4,998 — 7,005 Goodwill — 9,880 17,872 — 27,752 Other assets 520 385 2,522 (249 ) 3,178 Total assets $ 50,428 $ 28,388 $ 60,204 $ (73,054 ) $ 65,966 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities $ 687 $ 854 $ 5,760 $ (109 ) $ 7,192 Deferred revenue — 67 511 (14 ) 564 Debt due within one year 1,434 511 2 — 1,947 Total current liabilities 2,121 1,432 6,273 (123 ) 9,703 Long-term debt 19,318 3,065 9 — 22,392 Deferred income taxes 2,678 3,011 2,133 (5,144 ) 2,678 Deferred revenue — 26 460 — 486 Other noncurrent liabilities 1,976 1,886 3,815 (1,336 ) 6,341 Redeemable noncontrolling interest — — 29 — 29 Equity Due to (from) Time Warner Inc. and subsidiaries — (52,869 ) (366 ) 53,235 — Other shareholders’ equity 24,335 71,837 47,849 (119,686 ) 24,335 Total Time Warner Inc. shareholders’ equity 24,335 18,968 47,483 (66,451 ) 24,335 Noncontrolling interest — — 2 — 2 Total equity 24,335 18,968 47,485 (66,451 ) 24,337 Total liabilities and equity $ 50,428 $ 28,388 $ 60,204 $ (73,054 ) $ 65,966 Consolidating Statement of Operations For The Year Ended December 31, 2017 (millions) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Time Warner Consolidated Revenues $ — $ 7,853 $ 24,439 $ (1,021 ) $ 31,271 Costs of revenues — (3,772 ) (14,731 ) 856 (17,647 ) Selling, general and administrative (408 ) (1,319 ) (3,865 ) 154 (5,438 ) Amortization of intangible assets — — (197 ) — (197 ) Restructuring and severance costs (2 ) (40 ) (78 ) — (120 ) Asset impairments — (1 ) (15 ) — (16 ) Gain (loss) on operating assets, net — 49 18 — 67 Operating income (410 ) 2,770 5,571 (11 ) 7,920 Equity in pretax income (loss) of consolidated subsidiaries 7,920 5,557 2,041 (15,518 ) — Interest expense, net (832 ) (265 ) 86 6 (1,005 ) Other loss, net (733 ) (358 ) 120 1 (970 ) Income from continuing operations before income taxes 5,945 7,704 7,818 (15,522 ) 5,945 Income tax provision (701 ) (1,366 ) (1,665 ) 3,031 (701 ) Income from continuing operations 5,244 6,338 6,153 (12,491 ) 5,244 Discontinued operations, net of tax — — — — — Net income 5,244 6,338 6,153 (12,491 ) 5,244 Less Net loss attributable to noncontrolling interests 3 3 3 (6 ) 3 Net income attributable to Time Warner Inc. shareholders $ 5,247 $ 6,341 $ 6,156 $ (12,497 ) $ 5,247 Comprehensive income 5,317 6,439 6,348 (12,787 ) 5,317 Less Comprehensive loss attributable to noncontrolling interests 3 3 3 (6 ) 3 Comprehensive income attributable to Time Warner Inc. shareholders $ 5,320 $ 6,442 $ 6,351 $ (12,793 ) $ 5,320 Consolidating Statement of Operations For The Year Ended December 31, 2016 (millions) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Time Warner Consolidated Revenues $ — $ 7,527 $ 22,803 $ (1,012 ) $ 29,318 Costs of revenues — (3,658 ) (13,541 ) 823 (16,376 ) Selling, general and administrative (416 ) (1,178 ) (3,688 ) 159 (5,123 ) Amortization of intangible assets — — (190 ) — (190 ) Restructuring and severance costs (1 ) (80 ) (36 ) — (117 ) Asset impairments (6 ) (2 ) (35 ) — (43 ) Gain (loss) on operating assets, net — — 78 — 78 Operating income (423 ) 2,609 5,391 (30 ) 7,547 Equity in pretax income (loss) of consolidated subsidiaries 7,633 5,392 1,873 (14,898 ) — Interest expense, net (959 ) (302 ) 93 7 (1,161 ) Other loss, net (1,056 ) (90 ) (43 ) (2 ) (1,191 ) Income from continuing operations before income taxes 5,195 7,609 7,314 (14,923 ) 5,195 Income tax provision (1,281 ) (2,142 ) (2,119 ) 4,261 (1,281 ) Income from continuing operations 3,914 5,467 5,195 (10,662 ) 3,914 Discontinued operations, net of tax 11 34 34 (68 ) 11 Net income 3,925 5,501 5,229 (10,730 ) 3,925 Less Net loss attributable to noncontrolling interests 1 1 1 (2 ) 1 Net income attributable to Time Warner Inc. shareholders $ 3,926 $ 5,502 $ 5,230 $ (10,732 ) $ 3,926 Comprehensive income $ 3,861 $ 5,410 $ 5,109 $ (10,519 ) $ 3,861 Less Comprehensive loss attributable to noncontrolling interests 1 1 1 (2 ) 1 Comprehensive income attributable to Time Warner Inc. shareholders $ 3,862 $ 5,411 $ 5,110 $ (10,521 ) $ 3,862 Consolidating Statement of Operations For The Year Ended December 31, 2015 (millions) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Time Warner Consolidated Revenues $ — $ 7,188 $ 21,805 $ (875 ) $ 28,118 Costs of revenues — (3,488 ) (13,309 ) 643 (16,154 ) Selling, general and administrative (321 ) (1,100 ) (3,626 ) 223 (4,824 ) Amortization of intangible assets — — (189 ) — (189 ) Restructuring and severance costs (4 ) (40 ) (16 ) — (60 ) Asset impairments (15 ) (1 ) (9 ) — (25 ) Gain (loss) on operating assets, net — 2 (3 ) — (1 ) Operating income (340 ) 2,561 4,653 (9 ) 6,865 Equity in pretax income (loss) of consolidated subsidiaries 6,894 4,687 1,912 (13,493 ) — Interest expense, net (990 ) (312 ) 132 7 (1,163 ) Other loss, net (118 ) 20 (156 ) (2 ) (256 ) Income from continuing operations before income taxes 5,446 6,956 6,541 (13,497 ) 5,446 Income tax provision (1,651 ) (2,121 ) (2,046 ) 4,167 (1,651 ) Income from continuing operations 3,795 4,835 4,495 (9,330 ) 3,795 Discontinued operations, net of tax 37 37 37 (74 ) 37 Net income 3,832 4,872 4,532 (9,404 ) 3,832 Less Net loss attributable to noncontrolling interests 1 1 1 (2 ) 1 Net income attributable to Time Warner Inc. shareholders $ 3,833 $ 4,873 $ 4,533 $ (9,406 ) $ 3,833 Comprehensive income $ 3,550 $ 4,685 $ 4,251 $ (8,936 ) $ 3,550 Less Comprehensive loss attributable to noncontrolling interests 1 1 1 (2 ) 1 Comprehensive income attributable to Time Warner Inc. shareholders $ 3,551 $ 4,686 $ 4,252 $ (8,938 ) $ 3,551 Consolidating Statement of Cash Flows For The Year Ended December 31, 2017 (millions) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Time Warner Consolidated OPERATIONS Net income $ 5,244 $ 6,338 $ 6,153 $ (12,491 ) $ 5,244 Less Discontinued operations, net of tax — — — — — Net income from continuing operations 5,244 6,338 6,153 (12,491 ) 5,244 Adjustments for noncash and nonoperating items: Depreciation and amortization 10 116 568 — 694 Amortization of film and television costs — 3,016 6,193 (47 ) 9,162 Asset impairments — 1 15 — 16 (Gain) loss on investments and other assets, net (43 ) (40 ) (284 ) — (367 ) Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions (7,920 ) (5,557 ) (2,041 ) 15,518 — Equity in losses of investee companies, net of cash distributions 10 1 181 (1 ) 191 Equity-based compensation 49 87 91 — 227 Deferred income taxes (1,010 ) (1,306 ) (879 ) 2,185 (1,010 ) Premiums paid and costs incurred on debt redemption 723 364 — — 1,087 Changes in operating assets and liabilities, net of acquisitions (1,310 ) 3,527 (7,204 ) (5,163 ) (10,150 ) Intercompany — 572 (572 ) — — Cash provided by operations from continuing operations (4,247 ) 7,119 2,221 1 5,094 Cash used by operations from discontinued operations (2 ) — (13 ) — (15 ) Cash provided by operations (4,249 ) 7,119 2,208 1 5,079 INVESTING ACTIVITIES Investments in available-for-sale securities (1 ) — — — (1 ) Investments and acquisitions, net of cash acquired (50 ) (28 ) (628 ) — (706 ) Capital expenditures (1 ) (131 ) (524 ) — (656 ) Advances to (from) parent and consolidated subsidiaries 5,092 963 — (6,055 ) — Other investment proceeds 49 72 246 — 367 Cash used by investing activities 5,089 876 (906 ) (6,055 ) (996 ) FINANCING ACTIVITIES Borrowings 4,270 — — — 4,270 Debt repayments (3,220 ) (1,780 ) (1 ) — (5,001 ) Proceeds from exercise of stock options 206 — — — 206 Principal payments on capital leases — (24 ) (15 ) — (39 ) Dividends paid (1,265 ) — — — (1,265 ) Other financing activities (650 ) (378 ) (141 ) (3 ) (1,172 ) Change in due to/from parent and investment in segment — (5,661 ) (396 ) 6,057 — Cash used by financing activities (659 ) (7,843 ) (553 ) 6,054 (3,001 ) INCREASE (DECREASE) IN CASH AND EQUIVALENTS 181 152 749 — 1,082 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 617 91 831 — 1,539 CASH AND EQUIVALENTS AT END OF PERIOD $ 798 $ 243 $ 1,580 $ — $ 2,621 Consolidating Statement of Cash Flows For The Year Ended December 31, 2016 (millions) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Time Warner OPERATIONS Net income $ 3,925 $ 5,501 $ 5,229 $ (10,730 ) $ 3,925 Less Discontinued operations, net of tax (11 ) (34 ) (34 ) 68 (11 ) Net income from continuing operations 3,914 5,467 5,195 (10,662 ) 3,914 Adjustments for noncash and nonoperating items: Depreciation and amortization 10 104 555 — 669 Amortization of film and television costs — 2,906 5,455 (37 ) 8,324 Asset impairments 6 2 35 — 43 (Gain) loss on investments and other assets, net (30 ) 1 (101 ) (1 ) (131 ) Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions (7,633 ) (5,392 ) (1,873 ) 14,898 — Equity in losses of investee companies, net of cash distributions 2 — 320 2 324 Equity-based compensation 103 81 93 — 277 Deferred income taxes 236 315 306 (621 ) 236 Premiums paid and costs incurred on debt redemption 917 91 — — 1,008 Changes in operating assets and liabilities, net of acquisitions 58 (1,649 ) (4,811 ) (3,579 ) (9,981 ) Intercompany — 3,001 (3,001 ) — — Cash provided by operations from continuing operations (2,417 ) 4,927 2,173 — 4,683 Cash used by operations from discontinued operations (4 ) — (13 ) — (17 ) Cash provided by operations (2,421 ) 4,927 2,160 — 4,666 INVESTING ACTIVITIES Investments in available-for-sale securities (3 ) — (6 ) — (9 ) Investments and acquisitions, net of cash acquired (34 ) (54 ) (1,140 ) — (1,228 ) Capital expenditures (9 ) (104 ) (319 ) — (432 ) Advances to (from) parent and consolidated subsidiaries 5,157 348 1 (5,506 ) — Other investment proceeds 71 19 219 — 309 Cash used by investing activities 5,182 209 (1,245 ) (5,506 ) (1,360 ) FINANCING ACTIVITIES Borrowings 3,828 — 2 — 3,830 Debt repayments (2,820 ) (480 ) (4 ) — (3,304 ) Proceeds from exercise of stock options 172 — — — 172 Excess tax benefit from equity instruments 88 — — — 88 Principal payments on capital leases — (12 ) (2 ) — (14 ) Repurchases of common stock (2,322 ) — — — (2,322 ) Dividends paid (1,269 ) — — — (1,269 ) Other financing activities (797 ) (113 ) (196 ) 3 (1,103 ) Change in due to/from parent and investment in segment — (4,728 ) (775 ) 5,503 — Cash used by financing activities (3,120 ) (5,333 ) (975 ) 5,506 (3,922 ) INCREASE (DECREASE) IN CASH AND EQUIVALENTS (359 ) (197 ) (60 ) — (616 ) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 976 288 891 — 2,155 CASH AND EQUIVALENTS AT END OF PERIOD $ 617 $ 91 $ 831 $ — $ 1,539 Consolidating Statement of Cash Flows For The Year Ended December 31, 2015 (millions) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Time Warner OPERATIONS Net income $ 3,832 $ 4,872 $ 4,532 $ (9,404 ) $ 3,832 Less Discontinued operations, net of tax (37 ) (37 ) (37 ) 74 (37 ) Net income from continuing operations 3,795 4,835 4,495 (9,330 ) 3,795 Adjustments for noncash and nonoperating items: Depreciation and amortization 12 111 558 — 681 Amortization of film and television costs — 2,779 5,280 (29 ) 8,030 Asset impairments 15 1 9 — 25 (Gain) loss on investments and other assets, net 12 (20 ) 39 — 31 Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions (6,894 ) (4,687 ) (1,912 ) 13,493 — Equity in losses of investee companies, net of cash distributions (2 ) — 158 5 161 Equity-based compensation 35 65 82 — 182 Deferred income taxes 328 330 143 (473 ) 328 Premiums paid and costs incurred on debt redemption 72 — — — 72 Changes in operating assets and liabilities, net of acquisitions 144 (1,111 ) (4,823 ) (3,664 ) (9,454 ) Intercompany — 2,335 (2,335 ) — — Cash provided by operations from continuing operations (2,483 ) 4,638 1,694 2 3,851 Cash used by operations from discontinued operations 6 — (14 ) — (8 ) Cash provided by operations (2,477 ) 4,638 1,680 2 3,843 INVESTING ACTIVITIES Investments in available-for-sale securities (22 ) — (19 ) — (41 ) Investments and acquisitions, net of cash acquired (43 ) (3 ) (626 ) — (672 ) Capital expenditures (47 ) (78 ) (298 ) — (423 ) Advances to (from) parent and consolidated subsidiaries 4,788 515 (1 ) (5,302 ) — Other investment proceeds 43 73 27 — 143 Cash used by investing activities 4,719 507 (917 ) (5,302 ) (993 ) FINANCING ACTIVITIES Borrowings 3,755 — 13 — 3,768 Debt repayments (2,100 ) — (244 ) — (2,344 ) Proceeds from exercise of stock options 165 — — — 165 Excess tax benefit from equity instruments 151 — — — 151 Principal payments on capital leases — (9 ) (2 ) — (11 ) Repurchases of common stock (3,632 ) — — — (3,632 ) Dividends paid (1,150 ) — — — (1,150 ) Other financing activities (78 ) (22 ) (160 ) — (260 ) Change in due to/from parent and investment in segment — (5,116 ) (184 ) 5,300 — Cash used by financing activities (2,889 ) (5,147 ) (577 ) 5,300 (3,313 ) INCREASE (DECREASE) IN CASH AND EQUIVALENTS (647 ) (2 ) 186 — (463 ) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 1,623 290 705 — 2,618 CASH AND EQUIVALENTS AT END OF PERIOD $ 976 $ 288 $ 891 $ — $ 2,155 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2017 , 2016 and 2015 (millions) Description Balance at Beginning of Period Additions Charged (Credited) to Costs and Expenses Deductions Balance at End of Period 2017 Reserves deducted from accounts receivable: Allowance for doubtful accounts $ 193 $ 11 $ (42 ) $ 162 Reserves for sales returns and allowances 788 1,126 (1,180 ) 734 Total $ 981 $ 1,137 $ (1,222 ) $ 896 2016 Reserves deducted from accounts receivable: Allowance for doubtful accounts $ 180 $ 38 $ (25 ) $ 193 Reserves for sales returns and allowances 875 1,329 (1,416 ) 788 Total $ 1,055 $ 1,367 $ (1,441 ) $ 981 2015 Reserves deducted from accounts receivable: Allowance for doubtful accounts $ 152 $ 63 $ (35 ) $ 180 Reserves for sales returns and allowances 1,000 1,671 (1,796 ) 875 Total $ 1,152 $ 1,734 $ (1,831 ) $ 1,055 |
Description of Business, Basi30
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of entities in which Time Warner has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include accounting for asset impairments, multiple-element transactions, allowances for doubtful accounts, depreciation and amortization, the determination of ultimate revenues as it relates to amortization or impairment of capitalized film and programming costs and participations and residuals, home video and game product returns, business combinations, pension and other postretirement benefits, equity-based compensation, income taxes, contingencies, litigation matters, reporting revenue for certain transactions on a gross versus net basis, and the determination of whether the Company should consolidate certain entities. |
New Accounting Guidance | Accounting Guidance Adopted in 2017 Share-Based Payments On January 1, 2017, the Company adopted, on a prospective basis, new accounting guidance that changes the reporting for certain aspects of share-based payments. The guidance requires that the income tax effects of share-based awards be recognized in the Income tax provision in the Consolidated Statement of Operations when the awards vest or are settled. Under the previous guidance, excess tax benefits and deficiencies were recognized in Additional paid-in capital in the Consolidated Balance Sheet. For the years ended December 31, 2017 and 2016 , the amount of excess tax benefits, net of deficiencies, recognized in Income tax provision and Additional paid-in capital, respectively, was $149 million and $82 million , respectively. In addition, because excess tax benefits are no longer recognized in Additional paid-in capital, such amounts are no longer included in the determination of assumed proceeds in applying the treasury stock method when computing earnings per share. Another aspect of the new guidance also requires that excess tax benefits be classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows. Under the previous guidance, excess tax benefits were classified as a cash flow from financing activities. Excess tax benefits presented as a cash flow from operating activities was $150 million for the year ended December 31, 2017 . Excess tax benefits presented as a cash flow from financing activities were $88 million and $151 million for the years ended December 31, 2016 and 2015 , respectively. The other aspects of this new guidance did not have a material effect on the Company’s consolidated financial statements. Accounting Guidance Not Yet Adopted Derivatives and Hedging In August 2017, guidance was issued related to hedge accounting. The guidance principally: (i) expands hedge accounting for both financial and non-financial risk components, (ii) eliminates the separate measurement and presentation of hedge ineffectiveness, (iii) changes the presentation of hedge results to require that changes in the value of hedging instruments be presented in the same income statement line item as the earnings effect of the hedged item, and (iv) simplifies the method to assess hedge effectiveness. This guidance will become effective for all existing hedge relationships on January 1, 2019. The Company is evaluating the impact this guidance will have on its consolidated financial statements. Modification of Share-Based Payments In May 2017, guidance was issued that clarifies when changes to the terms and conditions of share-based awards must be accounted for as modifications. The guidance does not change the accounting treatment for modifications. The guidance became effective for the Company on January 1, 2018 and will be adopted on a prospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Net Periodic Benefit Costs In March 2017, guidance was issued that requires that an employer disaggregate the service cost component from the other components of net periodic benefit costs relating to defined benefit pension and other postretirement benefit plans. While the service cost component of net periodic benefit costs will continue to be presented as an operating expense, the other components will be recorded outside of operating income in the Consolidated Statement of Operations. For the years ended December 31, 2017 and 2016 , net periodic benefit costs relating to defined benefit pension and other postretirement benefit plans were $22 million and $46 million , respectively. Included in each of these amounts for both years was $4 million related to the service cost component. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. Simplifying the Accounting for Goodwill Impairment In January 2017, guidance was issued to simplify the accounting for goodwill impairment. The guidance removes the second step of the goodwill impairment test, which requires that a hypothetical purchase price allocation be performed to determine the amount of impairment, if any. Under this new guidance, a goodwill impairment charge will be based on the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will become effective on a prospective basis for the Company on January 1, 2020 and is not expected to have a material impact on the Company’s consolidated financial statements. Definition of a Business In January 2017, guidance was issued that changes the definition of a business for accounting purposes. Under the new guidance, an entity first determines whether substantially all of the fair value of a set of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of assets is not deemed to be a business. If the threshold is not met, the entity then evaluates whether the set of assets meets the requirement to be deemed a business, which at a minimum, requires there to be an input and a substantive process that together significantly contribute to the ability to create outputs. The guidance became effective on a prospective basis for the Company on January 1, 2018 and is not expected to have a material impact on the Company’s consolidated financial statements. Restricted Cash In November 2016, guidance was issued that requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown on the statement of cash flows. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Intra-Entity Transfers of Assets Other than Inventory In October 2016, guidance was issued that requires entities to recognize the income tax consequences of an intercompany transfer of an asset other than inventory when the transfer occurs, rather than deferring the income tax consequences of the intercompany transfer of assets until the asset has been sold to a third party. The guidance became effective for the Company on January 1, 2018 and will be adopted on a modified retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, guidance was issued that clarifies the presentation of certain cash receipts and payments in a company’s statement of cash flows. The guidance primarily relates to the classification of cash flows associated with certain (i) debt transactions, (ii) contingent consideration arrangements related to business combinations, (iii) insurance claims and policies, (iv) distributions received from equity method investees and (v) securitization transactions. The guidance became effective for the Company on January 1, 2018 and will be adopted on a retrospective basis. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Accounting for Leases In February 2016, guidance was issued regarding accounting for leases. The main difference between the current guidance and the new guidance is the recognition by the lessee of lease assets and liabilities for those leases it classified as operating leases under the current guidance. Under the new guidance, the recognition, measurement and presentation of expenses and cash flows arising from a lease as well as the lessor accounting model have not significantly changed from current guidance. This guidance also requires qualitative and quantitative disclosures of key information about leasing arrangements. The new guidance will become effective on a modified retrospective basis for the Company on January 1, 2019. The Company is still evaluating the impact of the new guidance on its consolidated financial statements. Because the Company is a party to approximately 2,000 operating leases with future minimum rental commitments at December 31, 2017 of $1.128 billion , it expects that the impact of recognizing lease assets and liabilities for these operating leases will be significant to the Consolidated Balance Sheet. Recognition and Measurement of Financial Assets and Liabilities In January 2016, guidance was issued that makes limited changes to the accounting for financial instruments. The changes primarily relate to (i) the requirement to measure equity investments in unconsolidated subsidiaries, other than those accounted for under the equity method of accounting, at fair value, with changes in the fair value recognized in earnings, (ii) an alternative approach for the measurement of equity investments that do not have a readily determinable fair value, (iii) the elimination of the other-than-temporary impairment model and its replacement with a requirement to perform a qualitative assessment to identify the impairment of equity investments, and a requirement to recognize impairment losses in earnings based on the difference between the fair value and the carrying value of the equity investment, (iv) the elimination of the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost, (v) the addition of a requirement to use the exit price concept when measuring the fair value of financial instruments for disclosure purposes and (vi) the addition of a requirement to present financial assets and financial liabilities separately in the notes to the financial statements, grouped by measurement category (e.g., fair value, amortized cost, lower of cost or market) and by form of financial asset (e.g., loans, securities). The guidance became effective for the Company on January 1, 2018 and will be adopted by means of a cumulative effect adjustment to the Consolidated Balance Sheet and will be applied prospectively to equity securities without readily determinable fair values that exist as of that date. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. Revenue Recognition In May 2014, guidance was issued that establishes a new revenue recognition framework in GAAP for all companies and industries. The core principle of the new guidance is that an entity should recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive for those goods or services. The guidance includes a five-step framework to determine the timing and amount of revenue to recognize related to contracts with customers. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework. The new guidance became effective on January 1, 2018 and can be adopted using either a full or modified retrospective basis. The Company has completed its assessment of the impact of adopting this new guidance and does not expect that the adoption will have a material impact on the Company’s reported operating results. The Company’s assessment is based on the conclusion that there will not be significant changes in the way it will record subscription revenue, advertising revenue, and a significant portion of its content revenue. Although the Company does not expect the impact of adopting the new guidance to be material, there are several areas where the Company’s revenue recognition is expected to change as compared with historical GAAP. The more significant of these areas are as follows: i. Renewals of Licenses of Intellectual Property - Under the prior guidance, when the term of an existing license agreement is extended, without any other changes to the provisions of the license, revenue for the renewal period is recognized on the date the renewal is agreed to contractually. Under the new guidance, revenue for the renewed license term cannot be recognized until the date the renewal term begins. This change will result in delayed revenue recognition as compared with current revenue recognition guidance. The Company expects that this change will primarily impact the Warner Bros. segment, but it will also, to a lesser degree, impact the Home Box Office and Turner segments. ii. License of Content Library - Under the prior guidance, when a company licenses a completed library of content and agrees to refresh the library with new content as it becomes available, and the licensee is not entitled to a refund if no further library titles are delivered, revenue is recognized once access to the library is granted to the licensee. Pursuant to the new guidance, because there is an implicit obligation for the company to refresh the library with additional content in the future, the company will need to estimate the additional content it will deliver in the future and allocate a portion of the transaction price to that content. As compared with the prior guidance, this will result in a deferral of a portion of the transaction price until delivery of future library content. The Company expects this change will primarily impact the Home Box Office segment. iii. Licenses of Symbolic Intellectual Property - Certain intellectual property, such as brands, tradenames and logos, is categorized in the new guidance as “symbolic” intellectual property. An assumption inherent in the new guidance is that a licensee’s ability to derive benefit from a license of symbolic intellectual property depends on the licensor continuing to support or maintain the intellectual property throughout the license term. Accordingly, under the new guidance, revenue from licenses of symbolic intellectual property is recognized over the corresponding license term. In certain arrangements where the Company has no remaining performance obligations, under the prior guidance, revenue from licenses of symbolic intellectual property is recognized at the inception of the license term. Therefore, the new guidance will result in a deferral of revenue recognition as compared to prior guidance. This change will primarily impact the Warner Bros. segment. iv. Minimum Fees in Multi-Year Affiliate Distribution Arrangements - In several international affiliate arrangements, and more recently in certain multi-year virtual multichannel video programming distributor (“virtual MVPD”) arrangements, the Company is paid an annual minimum guarantee that can vary from year to year. Under the prior guidance, the Company generally recognized the annual minimum guarantee fee ratably within each discrete annual period. In accordance with the new guidance, the Company is required to recognize the cumulative minimum guaranteed fees ratably over the contract term as it continuously delivers the content. Depending on how the minimum guaranteed fees vary in each contract year, this could result in an acceleration of revenue into earlier contractual years or a deferral of revenue into later contractual years as compared with the prior guidance. This change will primarily impact the Home Box Office and Turner segments. Also, under the new guidance, the Company will present certain sales incentives, such as sales returns and price protection reserves, as liabilities instead of as contra-asset allowances within Receivables. The Company adopted the guidance on January 1, 2018 and will use the modified retrospective method of adoption. |
Cash And Cash Equivalents | Cash and Equivalents Cash equivalents consist of investments that are readily convertible into cash and have original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. The Company monitors concentrations of credit risk with respect to Cash and equivalents by placing such balances with higher quality financial institutions or investing such amounts in liquid, short-term, highly-rated instruments or investment funds holding similar instruments. As of December 31, 2017 , the majority of the Company’s Cash and equivalents were invested with banks with a credit rating of at least A and in Rule 2a-7 money market mutual funds. At December 31, 2017 , the Company did not have more than $500 million invested in any single bank or money market mutual fund. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company monitors customer credit risk related to accounts receivable, including unbilled trade receivables primarily related to the distribution of television product. Significant judgments and estimates are involved in evaluating if such amounts will ultimately be fully collected. Each of the Company’s businesses maintains a comprehensive approval process prior to issuing credit to third-party customers. Counterparties that are determined to be of a higher risk are evaluated to assess whether the credit terms previously granted to them should be modified. The Company monitors customers’ accounts receivable aging, and a provision for estimated uncollectible amounts is maintained based on customer payment levels, historical experience and management’s views on trends in the overall receivable agings. In addition, for larger accounts, the Company performs analyses of risks on a customer-specific basis. At December 31, 2017 and 2016 , total reserves for doubtful accounts were approximately $162 million and $193 million , respectively. For the years ended December 31, 2017 , 2016 and 2015 , the Company recognized $11 million , $38 million and $63 million of bad debt expense, respectively. |
Consolidation | Consolidation Time Warner consolidates all entities in which it has a controlling voting interest and all variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary. Entities determined to be VIEs primarily consist of HBO Latin America Group (“HBO LAG”) and Hudson Yards North Tower Holdings LLC (“HYNTH”), the limited liability company involved in the construction and development of the Company’s new headquarters building at Hudson Yards. |
Investments | Investments The Company’s investments consist of (i) investments carried at fair value, including available-for-sale securities and certain deferred compensation-related investments, (ii) investments accounted for using the cost method of accounting and (iii) investments accounted for using the equity method of accounting. The Company regularly reviews its investments for impairment, including when the carrying value of an investment exceeds its market value. If the Company determines that an investment has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings that is included in Other loss, net. Factors that are considered by the Company in determining whether an other-than-temporary decline in value has occurred include (i) the market value of the security in relation to its cost basis, (ii) the financial condition of the investee and (iii) the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. In evaluating the factors described above for available-for-sale securities, the Company presumes a decline in value to be other-than-temporary if the quoted market price of the security is 20% or more below the investment’s cost basis for a period of six months or more (the “20% criterion”) or the quoted market price of the security is 50% or more below the security’s cost basis at any quarter end (the “50% criterion”). However, the presumption of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., the investee’s operating performance is strong, the market price of the investee’s security is historically volatile, etc.). Additionally, there may be instances in which impairment losses are recognized even if the 20% and 50% criteria are not satisfied (e.g., if there is a plan to sell the security in the near term and the fair value is below the Company’s cost basis). For investments accounted for using the cost or equity method of accounting, the Company evaluates information available (e.g., budgets, business plans, financial statements, etc.) in addition to quoted market prices, if any, in determining whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financing at an amount below the cost basis of the Company’s investment. For more information, see Note 5. Investments Investments in common stock in companies in which Time Warner has significant influence, but less than a controlling voting interest, are accounted for using the equity method. Significant influence is generally presumed to exist when Time Warner owns between 20% and 50% of the voting interests in the investee, holds substantial management rights or holds an interest greater than 3% in an investee that is a limited liability partnership or limited liability corporation that is treated as a flow-through entity. Under the equity method of accounting, only Time Warner’s investment in and amounts due to and from the equity investee are included in the Consolidated Balance Sheet; only Time Warner’s share of the investee’s earnings (losses) is included in the Consolidated Statement of Operations; and only the dividends, cash distributions, loans or other cash received from the investee, additional cash investments, loan repayments or other cash paid to the investee are included in the Consolidated Statement of Cash Flows. If previous equity method losses have reduced the carrying value of the Company’s equity method investment to zero, the Company continues to record its share of equity method losses to the extent it has (i) other investments in the investee, (ii) guaranteed obligations of the investee or (iii) committed to provide further financial support for the investee. Investments in companies in which Time Warner does not have a controlling voting interest or over which it is unable to exert significant influence are generally accounted for at fair value if the investments are publicly traded. If the investment or security is not publicly traded, the investment is accounted for at cost. Unrealized gains and losses on investments accounted for at fair value are reported, net of tax, in Accumulated other comprehensive loss, net. Dividends and other distributions of earnings from investments in companies in which Time Warner does not have a controlling voting interest or over which it is unable to exert significant influence are included in Other loss, net, when declared. For more information, see Notes 4 and 5. The company regularly reviews its investments for impairment. See “Asset Impairments” below for additional information. Available-for-sale securities are recorded at fair value in the Consolidated Balance Sheet, and the realized gains and losses are included as a component of Other loss, net in the Consolidated Statement of Operations. |
Foreign Currency Translation | Foreign Currency Translation Financial statements of subsidiaries whose functional currency is not the U.S. Dollar are translated at the rates of exchange on the balance sheet date for assets and liabilities and at average rates of exchange for revenues and expenses during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net. |
Derivative Instruments | Derivative Instruments The Company uses derivative instruments principally to manage the risk associated with movements in foreign currency exchange rates, and recognizes all derivative instruments on the Consolidated Balance Sheet at fair value. Changes in fair value of derivative instruments that qualify for hedge accounting will either be offset against the change in fair value of the hedged assets or liabilities through earnings or recognized in shareholders’ equity as a component of Accumulated other comprehensive loss, net, until the hedged item is recognized in earnings, depending on whether the derivative instrument is being used to hedge changes in fair value or cash flows. For qualifying hedge relationships, the Company excludes the impact of forward points or option premiums from its assessment of hedge effectiveness and recognizes changes in the fair value of a derivative instrument due to forward points or option premiums in Other income (loss), net each quarter. The ineffective portion of a derivative instrument’s change in fair value is immediately recognized in earnings. For those derivative instruments that do not qualify for hedge accounting, changes in fair value are recognized immediately in earnings. See Note 8 for additional information regarding derivative instruments held by the Company and risk management strategies. |
Property, Plant and Equipment | Land is not depreciated. Property, Plant and Equipment Property, plant and equipment are stated at cost. Additions to property, plant and equipment generally include material, labor and overhead. Time Warner also capitalizes certain costs associated with coding, software configuration, upgrades and enhancements incurred for the development of internal use software. Depreciation is recorded on a straight-line basis over estimated useful lives. Leasehold improvements are depreciated over the lesser of the estimated useful life of the improvement or the term of the applicable lease. Time Warner periodically evaluates the depreciation periods of property, plant and equipment to determine whether a revision to its estimates of useful lives is warranted. |
Goodwill and Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets, primarily tradenames, are tested annually for impairment as of December 31 or earlier upon the occurrence of certain events or substantive changes in circumstances. Goodwill is tested for impairment at the reporting unit level. A reporting unit is either the “operating segment level,” such as Warner Bros. Entertainment Inc. (“Warner Bros.”), Home Box Office, Inc. (“Home Box Office”) and Turner Broadcasting System, Inc. (“Turner”), or one level below, which is referred to as a “component” (e.g., Warner Bros. Theatrical, Warner Bros. Television). The level at which the impairment test is performed requires judgment as to whether the components constitute a self-sustaining business and, if so, whether their operations are similar such that they should be aggregated for purposes of the impairment test. For purposes of the goodwill impairment test, management has concluded that the operations below the operating segment level met the criteria to be aggregated and therefore has determined its reporting units are the same as its operating segments. In assessing Goodwill for impairment, the Company has the option to first perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is not required to perform any additional tests in assessing Goodwill for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform the first step of a two-step impairment review process. The first step of the two-step process involves a comparison of the estimated fair value of a reporting unit to its carrying amount. In performing the first step, the Company generally determines the fair value of a reporting unit using a discounted cash flow (“DCF”) analysis and, in certain cases, a combination of a DCF analysis and a market-based approach. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable public company earnings multiples. The cash flows employed in the DCF analyses are based on the Company’s most recent budgets and long range plans and perpetual growth rates are assumed for years beyond the current long range plan period. Discount rate assumptions are based on an assessment of market rates, capital structures and the risk inherent in the future cash flows included in the budgets and long range plans. For 2017 , the Company elected to perform a qualitative assessment of impairment of Goodwill and concluded that it was more likely than not that the fair value of each reporting unit was in excess of its respective carrying value. Accordingly, the 2017 assessment did not result in any impairments of the Company’s Goodwill. In reaching this conclusion, the Company considered the results of prior quantitative assessments and underlying trends and assumptions used in determining fair value, including the value proposed by AT&T in connection with the pending AT&T merger. In assessing other intangible assets not subject to amortization for impairment, the Company also has the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then the Company is not required to perform any additional tests for assessing those intangible assets for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. When performing the quantitative impairment test on other intangible assets not subject to amortization, the Company determines fair value using a DCF valuation analysis, which is based on the “relief from royalty” methodology. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash flows generated by the respective intangible assets. Also subject to judgment are assumptions about royalty rates, which are based on the estimated rates at which similar tradenames are being licensed in the marketplace. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. In 2017 , the Company elected to perform a qualitative assessment for its intangible assets not subject to amortization and concluded that it was more likely than not the fair value of each of the Company’s intangible assets not subject to amortization was in excess of its respective carrying value. Intangible Assets Time Warner has a significant number of intangible assets, including acquired film and television libraries and other copyrighted products and tradenames. Time Warner does not recognize the fair value of internally generated intangible assets. Intangible assets acquired in business combinations are recorded at the acquisition date fair value in the Consolidated Balance Sheet. Acquired film libraries are amortized using the film forecast computation model. For more information, see “Film and Television Production Cost Recognition, Participations and Residuals and Impairments” below and Note 3. Certain intangible assets are deemed to have finite lives and, accordingly, are amortized over their estimated useful lives, while others are deemed to be indefinite-lived and therefore are not amortized. Goodwill and indefinite-lived intangible assets, primarily certain tradenames, are tested annually for impairment during the fourth quarter, or earlier upon the occurrence of certain events or substantive changes in circumstances. |
Long-Lived Assets | Long-Lived Assets Long-lived assets such as property, plant and equipment and finite-lived intangible assets (e.g., tradenames, customer lists and film libraries), do not require that an annual impairment test be performed; instead, long-lived assets are tested for impairment upon the occurrence of a triggering event. Triggering events include the more likely than not disposal of a portion of such assets or the occurrence of an adverse change in the market involving the business employing the related assets. Once a triggering event has occurred, the impairment test is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. The impairment test for assets held for continued use requires a comparison of cash flows expected to be generated over the useful life of an asset or group of assets (“asset group”) against the carrying value of the asset group. An asset group is established by identifying the lowest level of cash flows generated by the asset or group of assets that are largely independent of the cash flows of other assets. If the intent is to hold the asset group for continued use, the impairment test first requires a comparison of estimated undiscounted future cash flows generated by the asset group against its carrying value. If the carrying value exceeds the estimated undiscounted future cash flows, an impairment would be measured as the difference between the estimated fair value of the asset group and its carrying value. Fair value is generally determined by discounting the future cash flows associated with that asset group. If the intent is to hold the asset group for sale and certain other criteria are met (e.g., the asset can be disposed of currently, appropriate levels of authority have approved the sale, and there is an active program to locate a buyer), the impairment test involves comparing the asset group’s carrying value to its estimated fair value. To the extent the carrying value is greater than the estimated fair value, an impairment loss is recognized for the difference. Significant judgments in this area involve determining the appropriate asset group level at which to test, determining whether a triggering event has occurred, determining the future cash flows for the assets involved and selecting the appropriate discount rate to be applied in determining estimated fair value. For more information, see Note 3. The majority of the Company’s non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill and indefinite-lived intangible assets), a non-financial instrument is required to be evaluated for impairment. If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value. |
Accounting for Pension Plans | Accounting for Pension Plans The Company and certain of its subsidiaries have both funded and unfunded defined benefit pension plans, the substantial majority of which are noncontributory, covering certain domestic employees and, to a lesser extent, have various defined benefit plans, primarily noncontributory, covering certain international employees. Pension benefits are based on formulas that reflect the participating employees’ qualifying years of service and compensation. Time Warner’s largest defined benefit pension plan is closed for new employees and frozen to future benefit accruals. Time Warner uses a December 31 measurement date for its plans. The pension expense recognized by the Company is determined using certain assumptions, including the expected long-term rate of return on plan assets, the interest factor implied by the discount rate and the rate of compensation increases. For more information, see Note 14. |
Equity-Based Compensation | Equity-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in Costs of revenues or Selling, general and administrative expenses depending on the job function of the grantee on a straight-line basis (net of estimated forfeitures) over the period during which an employee is required to provide services in exchange for the award. Except for special retention restricted stock units (“RSUs”) granted in connection with entering into the Merger Agreement (see Note 13), the total grant-date fair value of an equity award granted to an employee who has reached a specified age and years of service as of the grant date is recognized as compensation expense immediately upon grant as there is no required service period. The grant-date fair value of a RSU is determined based on the closing sale price of the Company’s common stock on the NYSE Composite Tape on the date of grant. Performance stock units (“PSUs”) are subject to a performance condition such that the number of PSUs that ultimately vest generally depends on the adjusted earnings per share (“Adjusted EPS”) achieved by the Company during a three -year performance period compared to targets established at the beginning of the period. The PSUs are also subject to a market condition and the number of PSUs that vest can be increased or decreased based on the Company’s cumulative total shareholder return (“TSR”) relative to the TSR of the other companies in the S&P 500 Index for the performance period. Because the terms of the PSUs provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes compensation expense beginning on the service inception date and remeasures the fair value of the PSU until a grant date occurs, which is typically after the completion of the required service period. PSUs, as well as RSUs granted to certain senior executives, also were subject to a performance condition based on an adjusted net income target for a one -year period that, if not achieved, would result in the forfeiture of the awards. The grant-date fair value of a stock option is estimated using the Black-Scholes option-pricing model . Because the Black-Scholes option-pricing model requires the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the stock options. The Company determines the volatility assumption for these stock options using implied volatilities data from its traded options. The expected term, which represents the period of time that stock options granted are expected to be outstanding, is estimated based on the historical exercise behavior of Time Warner employees. Groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Time Warner common stock at the date of grant. For more information, see Note 13. For accounting purposes, the Company records share-based compensation expense and a related deferred tax asset for the future tax deductions it may receive. For income tax purposes, the Company receives a tax deduction equal to the stock price on the date that an RSU (or PSU) vests or the excess of the stock price over the exercise price of an option upon exercise. The deferred tax asset consists of amounts relating to individual unvested and/or unexercised share-based compensation awards; accordingly, deferred tax assets related to certain equity awards may currently be in excess of the tax benefit ultimately received. The applicable accounting rules require that the deferred tax asset related to a share-based compensation award be reduced only at the time the award vests (in the case of an RSU or PSU), is exercised (in the case of a stock option) or otherwise expires or is canceled. On January 1, 2017, the Company adopted, on a prospective basis, new accounting guidance that changes the reporting for certain aspects of share-based payments. One aspect of the guidance requires that the income tax effects of share-based payments be recognized in the Income tax provision in the Consolidated Statement of Operations when the awards vest or are settled. Under the previous guidance, excess tax benefits and deficiencies were generally recognized in Additional paid-in capital in the Consolidated Balance Sheet. |
Revenue Recognition | Multiple-Element Transactions In the normal course of business, the Company enters into multiple-element transactions that involve making judgments about allocating the consideration to the various elements of the transactions. While the more common type of multiple-element transactions encountered by the Company involve the sale or purchase of multiple products or services (e.g., licensing multiple film titles in a single arrangement), multiple-element transactions can also involve contemporaneous purchase and sales transactions, the settlement of an outstanding dispute contemporaneous with the purchase of a product or service, as well as investing in an investee while at the same time entering into an operating agreement. In accounting for multiple-element transactions, judgment must be exercised in identifying the separate elements in a bundled transaction as well as determining the values of these elements. These judgments can impact the amount of revenues, expenses and net income recognized over the term of the contract, as well as the period in which they are recognized. In determining the value of the respective elements, the Company refers to quoted market prices (where available), independent appraisals (where available), historical and comparable cash transactions or its best estimate of selling price. Other indicators of value include the existence of price protection in the form of “most-favored-nation” clauses or similar contractual provisions and individual elements whose values are dependent on future performance (and based on independent factors). Further, in such transactions, evidence of value for one element of a transaction may provide support that value was not transferred from one element in a transaction to another element in a transaction. Revenue The Company generates revenue primarily from content production and distribution (i.e., Content Revenue), providing programming to cable system operators, satellite service distributors, telephone companies and virtual multichannel video programming distributors (collectively, “affiliates”) and digital distributors that have contracted to receive and distribute this programming to their subscribers (i.e., Subscription Revenue) and the sale of advertising on the Company’s television networks and digital properties and the digital properties it manages and/or operates for others (i.e., Advertising Revenue). Content Revenue Feature films typically are produced or acquired for initial exhibition in theaters, followed by distribution, generally commencing within three years of such initial exhibition, through sales of feature films in physical format, electronic sell-through, video-on-demand, OTT services, premium cable, basic cable and broadcast networks. Revenues from film rentals by theaters are recognized as the films are exhibited. Revenues from sales of feature films in physical format are recognized at the later of the delivery date or the date that the DVDs or Blu-ray Discs are made widely available for sale or rental by retailers based on gross sales less a provision for estimated returns, rebates and pricing allowances. Revenues from the licensing of feature films for electronic sell-through or video-on-demand are recognized when the product has been purchased by and made available to the consumer to either download or stream. Revenues from the distribution of feature films through OTT services, premium cable, basic cable and broadcast networks are recognized when the films are available to the licensee. Television programs and series are initially produced for broadcast networks, cable networks, first-run television syndication or OTT services and may be subsequently licensed for international or domestic cable, syndicated television and OTT services, as well as sold in physical format and via electronic delivery. Revenues from the distribution of television programming through broadcast networks, cable networks, first-run syndication and OTT services are recognized when the programs or series are available to the licensee, except for consideration to be received from the exhibition of advertising, where the revenue is valued and recognized when the related advertisements are exhibited. In certain circumstances, pursuant to the terms of the applicable contractual arrangements, the availability dates granted to customers may precede the date the Company may bill the customers for these sales. Unbilled accounts receivable, which primarily relate to the distribution of television programming at Warner Bros., totaled $5.136 billion and $4.573 billion at December 31, 2017 and December 31, 2016 , respectively. Included in the unbilled accounts receivable at December 31, 2017 was $2.856 billion that is to be billed in the next twelve months. Revenues from sales of television programming in physical format are recognized at the later of the delivery date or the date that the DVDs or Blu-ray Discs are made widely available for sale or rental by retailers based on gross sales less a provision for estimated returns, rebates and pricing allowances. Revenues from the licensing of television programs and series for electronic sell-through or video-on-demand are recognized when the product has been purchased by and made available to the consumer to either download or stream. Revenues from the distribution of television programming through OTT services are recognized when the television programs or series are available to the licensee. Upfront or guaranteed payments for the licensing of intellectual property are recognized as revenue when (i) an arrangement has been signed with a customer, (ii) the customer’s right to use or otherwise exploit the intellectual property has commenced and there is no requirement for significant continued performance by the Company, (iii) licensing fees are either fixed or determinable and (iv) collectability of the fees is reasonably assured. In the event any significant continued performance is required in these arrangements, revenue is allocated to each applicable element and recognized when the related services are performed. Revenues from the sales of console games are recognized at the later of the delivery date or the date that the product is made widely available for sale or rental by retailers based on gross sales less a provision for estimated returns, rebates and pricing allowances. Subscription Revenue Subscription revenues from the Company’s cable networks and premium pay and basic tier television services are recognized over the license period as programming is provided to affiliates or digital distributors based on negotiated contractual programming rates. When a distribution contract with an affiliate has expired and a new distribution contract has not been executed, revenues are based on estimated rates, giving consideration to factors including the previous contractual rates, inflation, current payments by the affiliate and the status of the negotiations on a new contract. When the new distribution contract terms are finalized, an adjustment to Subscription revenues is recorded, if necessary, to reflect the new terms. Such adjustments historically have not been significant. Subscription revenues from OTT services (e.g., HBO NOW) are recognized as programming services are provided to customers. Advertising Revenue Advertising revenues are recognized, net of agency commissions, in the period that the advertisements are aired. If there is a targeted audience guarantee, revenues are recognized for the actual audience delivery and revenues are deferred for any shortfall until the guaranteed audience delivery is met, typically by providing additional advertisements. Advertising revenues from digital properties are recognized as impressions are delivered or the services are performed. Sales Returns and Pricing Rebates Management’s estimate of product sales that will be returned and pricing rebates to grant is an area of judgment affecting Revenues and Net income. In estimating product sales that will be returned, management analyzes vendor sales of the Company’s product, historical return trends, current economic conditions, and changes in customer demand. Based on this information, management reserves a percentage of any product sales that provide the customer with the right of return. The provision for such sales returns is reflected as a reduction in the revenues from the related sale. In estimating the reserve for pricing rebates, management considers the terms of the Company’s agreements with its customers that contain targets which, if met, would entitle the customer to a rebate. In those instances, management evaluates the customer’s actual and forecasted purchases to determine the appropriate reserve. At December 31, 2017 and 2016 , total reserves for sales returns (which also reflects reserves for certain pricing allowances provided to customers) primarily related to home entertainment products (e.g., DVDs, Blu-ray Discs and games) and were $734 million and $788 million , respectively. An incremental change of 1% in the Company’s estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) would have resulted in an approximate $28 million impact on the Company’s total Revenues for the year ended December 31, 2017 . This revenue impact would have been partially offset by a corresponding impact on related expenses depending on the margin associated with a specific film or game and other factors. Gross versus Net Revenue Recognition In the normal course of business, the Company may act as an intermediary or an agent with respect to the sale of third-party products or services (e.g., arrangements where Warner Bros. distributes a film owned by a third party). In addition, the Company may use an intermediary to sell its products or services (e.g., arrangements involving the distribution of HBO NOW). In connection with these arrangements, the Company must determine whether to report revenue based on the gross amount billed to the ultimate customer or on the net amount received from the customer after commissions and other payments to third parties. To the extent revenues are recorded on a gross basis, any commissions or other payments to third parties are recorded as expense so that the net amount (gross revenues less expense) is reflected in Operating Income. Accordingly, the impact on Operating Income is the same whether the Company records revenue on a gross or net basis. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as a principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. The determination of whether the Company is acting as a principal or an agent in a transaction involves judgment and is based on an evaluation of the terms of an arrangement. The Company serves as the principal in transactions in which it has substantial risks and rewards of ownership. For example, Warner Bros. acts as an intermediary when it provides distribution services for independent third-party companies for the worldwide distribution of theatrical films, home video, television programs and/or games. The independent third-party company may retain final approval over the distribution, marketing, advertising and publicity for each film or game in all media, including the timing and extent of the releases, the pricing and packaging of packaged goods units and approval of all television licenses. Warner Bros. records revenue generated in these distribution arrangements on a gross basis when it (i) is the merchant of record for the licensing arrangements, (ii) is the licensor/contracting party, (iii) provides the materials to licensees, (iv) handles the billing and collection of all amounts due under such arrangements and (v) bears the risk of loss related to distribution advances and/or the packaged goods inventory. If Warner Bros. does not bear the risk of loss as described in the previous sentence, the arrangements are accounted for on a net basis. |
Cost of Sales | Film and Television Production Cost Recognition, Participations and Residuals and Impairments Film and television production costs include the unamortized cost of completed theatrical films and television episodes, theatrical films and television series in production and undeveloped film and television rights. Film and television production costs are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized film and television production costs recognized as Costs of revenues for a given period is determined using the film forecast computation method. Under this method, the amortization of capitalized costs and the accrual of participations and residuals is based on the proportion of the film’s revenues recognized for such period to the film’s estimated remaining ultimate revenues (i.e., the total revenue to be received throughout a film’s life cycle). The process of estimating a film’s ultimate revenues requires the Company to make a series of significant judgments relating to future revenue generating activities associated with a particular film and is important for two reasons. First, while a film or television series is being produced and the related costs are being capitalized, as well as at the time the film or television series is released, it is necessary for management to estimate the ultimate revenues, less additional costs to be incurred (including exploitation and participation costs), in order to determine whether the value of a film or television series is impaired and requires an immediate write-off of unrecoverable film and television production costs down to fair value. Second, it is necessary for management to determine, using the film forecast computation method, the amount of capitalized film and television production costs and the amount of participations and residuals to be recognized as Costs of revenues for a given film or television series in a particular period. To the extent that the ultimate revenues are adjusted, the resulting gross margin reported on the exploitation of that film or television series in a period is also adjusted. Prior to the theatrical release of a film, management bases its estimates of ultimate revenues for each film on factors such as the historical performance of similar films, the star power of the lead actors, the rating and genre of the film, pre-release market research (including test market screenings), international distribution plans and the expected number of theaters in which the film will be released. In the absence of revenues directly related to the exhibition of a film or television program that is owned by the Company on the Company’s television networks or premium pay television or OTT services, management estimates a portion of the unamortized costs that are representative of the utilization of that film or television program in that exhibition and expenses such costs as the film or television program is exhibited. The period over which ultimate revenues are estimated is generally not to exceed ten years from the initial release of a motion picture or from the date of delivery of the first episode of an episodic television series. Management updates such estimates based on information available during the film’s production and, upon release, the actual results of each film. Changes in estimates of ultimate revenues from period to period affect the amount of production costs amortized in a given period and, therefore, could have an impact on the segment’s financial results for that period. For example, prior to a film’s release, the Company often will test market the film to the film’s targeted demographic. If the film is not received favorably, the Company may (i) reduce the film’s estimated ultimate revenues, (ii) revise the film, which could cause the production costs to increase, or (iii) perform a combination of both. Similarly, a film that generates lower-than-expected theatrical revenues in its initial weeks of release would have its theatrical, home video and television distribution ultimate revenues adjusted downward. The Company recorded production cost amortization of $5.110 billion , $4.745 billion and $4.384 billion in 2017 , 2016 and 2015 , respectively. Included in production cost amortization are theatrical film impairments, primarily related to pre-release films, of $22 million , $69 million and $80 million in 2017 , 2016 and 2015 , respectively. Licensed Programming Inventory Cost Recognition and Impairment In the normal course of business, the Company’s Turner and Home Box Office segments enter into agreements to license programming exhibition rights from licensors. A programming inventory asset related to these rights and a corresponding liability payable to the licensor are recorded (on a discounted basis if the license agreements are long-term) when (i) the cost of the programming is reasonably determined, (ii) the programming material has been accepted in accordance with the terms of the agreement, (iii) the programming is available for its first showing or telecast, and (iv) the license period has commenced. There are variations in the amortization methods of these rights, depending on whether the network is advertising-supported (e.g., TNT and TBS) or not advertising-supported (e.g., HBO and Turner Classic Movies). For the Company’s advertising-supported networks, the Company’s general policy is to amortize each program’s costs on a straight-line basis (or per-play basis, if greater) over its license period. However, for certain types of programming, the initial airing has more value than subsequent airings. In these circumstances, the Company uses an accelerated method of amortization. For example, if the Company is licensing the right to air a movie multiple times over a certain period, the movie is being shown for the first time on a Company network (a “Network Movie Premiere”) and the Network Movie Premiere advertising is sold at a premium rate, a larger portion of the movie’s programming inventory cost is amortized upon the initial airing of the movie, with the remaining cost amortized on a straight-line basis (or per-play basis, if greater) over the remaining license period. The accelerated amortization upon the first airing versus subsequent airings is determined based on a study of historical and estimated future advertising sales for similar programming. For rights fees paid for sports programming arrangements (e.g., National Basketball Association, The National Collegiate Athletic Association (“NCAA”) Men’s Division I Basketball championship events (the “NCAA Tournament”) and Major League Baseball), such rights fees are amortized using a revenue-forecast model, in which the rights fees are amortized using the ratio of current period advertising revenue to total estimated remaining advertising revenue over the term of the arrangement. For premium pay television and OTT services that are not advertising-supported, each licensed program’s costs are amortized on a straight-line basis over its license period or estimated period of use, beginning with the month of initial exhibition. When the Company has the right to exhibit feature theatrical programming in multiple windows over a number of years, the Company uses historical audience viewership as its basis for determining the amount of programming amortization attributable to each window. For programming licensed in exchange, in part, for advertising services, the Company recognizes programming inventory and deferred advertising revenue at the estimated fair value when the programming is available for telecast. Such programming inventory is amortized in the same manner as the non-advertising component of the licensed programming. The Company carries its licensed programming inventory at the lower of unamortized cost or estimated net realizable value. For networks that generate both Advertising and Subscription revenues (e.g., TBS and TNT), the Company generally evaluates the net realizable value of unamortized programming costs based on the network’s programming taken as a whole. In assessing whether the programming inventory for a particular advertising-supported network is impaired, the Company determines the net realizable value for all of the network’s programming inventory based on a projection of the network’s profitability. Similarly, for premium pay television and OTT services that are not advertising-supported, the Company performs its evaluation of the net realizable value of unamortized programming costs based on the premium pay television and OTT services’ licensed programming taken as a whole. Specifically, the Company determines the net realizable value for all of its premium pay television and OTT service licensed programming based on projections of estimated Subscription revenues less certain costs of delivering and distributing the licensed programming. However, changes in management’s intended usage of a specific program, such as a decision to no longer exhibit that program and forego the use of the rights associated with the program license, would result in a reassessment of that program’s net realizable value, which could result in an impairment. In determining the fair value of its theatrical films, the Company employs a DCF methodology that includes cash flow estimates of a film’s ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the weighted average cost of capital of the respective business (e.g., Warner Bros.) plus a risk premium representing the risk associated with producing a particular theatrical film. The fair value of any theatrical films and television programs that management plans to abandon is zero . Because the primary determination of fair value is made using a DCF model, the resulting fair value is considered a Level 3 measurement. |
Inventory | Other Inventory Inventories other than film and television production costs and licensed programming inventory consist primarily of DVDs, Blu-ray Discs and game development costs and are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Returned goods included in Inventory are valued at estimated realizable value, but not in excess of cost. For more information, see Note 7. Game development costs are expensed as incurred before the applicable games reach technological feasibility. Upon release, the capitalized game development costs are amortized based on the greater of the amount computed using (i) the proportion of the game’s revenues recognized for such period to the game’s total current and anticipated revenues or (ii) the straight-line method over the remaining economic life of the game. Unamortized capitalized game production and development costs are stated at the lower of cost, less accumulated amortization, or net realizable value and reported in Other assets on the Consolidated Balance Sheet. At December 31, 2017 and 2016 , there were $266 million and $247 million , respectively, of unamortized computer software costs related to games. Amortization of such costs was $156 million , $101 million and $214 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Included in such amortization are writedowns to net realizable value of certain game production costs of $5 million , $20 million and $17 million in 2017 , 2016 and 2015 , respectively. |
Accounting for Collaborative Arrangements | Accounting for Collaborative Arrangements The Company’s collaborative arrangements primarily relate to co-financing arrangements to jointly finance and distribute theatrical productions and an arrangement entered into with CBS Broadcasting, Inc. (“CBS”) and the NCAA that provides Turner and CBS with exclusive television, Internet and wireless rights to the NCAA Tournament in the U.S. and its territories and possessions from 2011 through 2032. In most cases, the form of the co-financing arrangement is the sale of an interest in a film to an investor. Warner Bros. generally records the amounts received for the sale of an interest as a reduction of the costs of the film, as the investor assumes full control and risk for that share of the film asset acquired in these transactions. The substance of these arrangements is that the third-party investors own an interest in the film and, therefore, in each period the Company reflects in the Consolidated Statement of Operations either a charge or benefit to Costs of revenues to reflect the estimate of the third-party investor’s interest in the profits or losses incurred on the film. The estimate of the third-party investor’s interest in profits or losses incurred on the film is determined using the film forecast computation method. For the years ended December 31, 2017 , 2016 and 2015 , net participation costs related to third party investors of $262 million , $249 million and $406 million , respectively, were recorded in Costs of revenues. The aggregate programming rights fee, production costs, advertising revenues and sponsorship revenues related to the NCAA Tournament and related programming are shared equally by Turner and CBS. However, if the amount paid for the programming rights fee and production costs in any given year exceeds advertising and sponsorship revenues for that year, CBS’ share of such shortfall is limited to specified annual amounts (the “loss cap”), ranging from approximately $30 million to $45 million . The amounts incurred by the Company pursuant to the loss cap during the years ended December 31, 2017 and 2016 were not significant. In accounting for this arrangement, the Company records Advertising revenues for the advertisements aired on Turner’s networks and amortizes Turner’s share of the programming rights fee based on the ratio of current period advertising revenues to its estimate of total advertising revenues over the term of the arrangement. |
Advertising Costs | Advertising Costs Time Warner expenses advertising costs as they are incurred, which generally is when the advertising is exhibited or aired. Advertising expense to third parties was $2.528 billion in 2017 , $2.386 billion in 2016 and $2.586 billion in 2015 . |
Income Taxes | Income Taxes Income taxes are provided using the asset and liability method, such that income taxes (i.e., deferred tax assets, deferred tax liabilities, taxes currently payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year and include the results of any difference between GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating losses, capital losses and tax credit carryforwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under tax laws and rates. Valuation allowances are established when management determines that it is more likely than not that some portion or all of the deferred tax asset will not be realized. The financial effect of changes in tax laws or rates is accounted for in the period of enactment. The subsequent realization of net operating loss and general business credit carryforwards acquired in acquisitions accounted for using the purchase method of accounting is recognized in the Consolidated Statement of Operations. Tax credits received for the production of film or television programming are offset against the cost of inventory capitalized. Deferred tax assets are included in Other assets in the Consolidated Balance Sheet. From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax free, and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. The Company prepares and files tax returns based on its interpretation of tax laws and regulations. In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. In determining the Company’s tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be more likely than not of being sustained upon examination based on their technical merits. There is considerable judgment involved in determining whether positions taken on the Company’s tax returns are more likely than not of being sustained. The Company adjusts its tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The Company’s policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense. For further information, see Note 10. |
Discontinued Operations | Discontinued Operations In determining whether a group of assets disposed (or to be disposed) of should be presented as a discontinued operation, the Company assesses whether the disposal (or planned disposal) represents a strategic shift that has had or will have a major effect on the Company’s operations and financial results. |
Derivatives, Offsetting Fair Value Amounts | For such foreign exchange contracts, the Company offsets the fair values of the amounts owed to or due from the same counterparty and classifies the net amount as a net asset or net liability within Prepaid expenses and other current assets or Accounts payable and accrued liabilities, respectively, in the Consolidated Balance Sheet. |
Income Tax Uncertainties | The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as part of income tax expense. The Company recognizes income tax benefits for tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the positions. |
Description of Business, Basi31
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment, including capital leases, consist of (millions): December 31, Estimated Useful Lives 2017 2016 Land (a) $ 269 $ 268 n/a Buildings and improvements 1,757 1,641 7 to 30 years Capitalized software costs 2,045 2,029 3 to 7 years Furniture, fixtures and other equipment (b) 3,226 3,017 3 to 10 years 7,297 6,955 Accumulated depreciation (4,590 ) (4,445 ) Total $ 2,707 $ 2,510 _________________________ (a) Land is not depreciated. (b) Includes $380 million and $183 million of construction in progress as of December 31, 2017 and 2016 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following summary of changes in the Company’s Goodwill during the years ended December 31, 2017 and 2016 , by reportable segment and in total, is as follows (millions): Turner Home Box Office Warner Bros. Total Balance at December 31, 2015 $ 14,108 $ 7,433 $ 6,148 $ 27,689 Acquisitions, dispositions and adjustments, net 16 — 85 101 Translation adjustments 1 — (39 ) (38 ) Balance at December 31, 2016 $ 14,125 $ 7,433 $ 6,194 $ 27,752 Acquisitions, dispositions and adjustments, net (19 ) — 2 (17 ) Translation adjustments 7 — 34 41 Balance at December 31, 2017 $ 14,113 $ 7,433 $ 6,230 $ 27,776 |
Schedule of Finite-Lived Intangible Assets | The Company’s intangible assets subject to amortization and related accumulated amortization consist of the following (millions): December 31, 2017 December 31, 2016 Gross Accumulated Amortization(a) Net Gross Accumulated Amortization(a) Net Film library $ 3,430 $ (3,062 ) $ 368 $ 3,432 $ (2,914 ) $ 518 Brands, tradenames and other intangible assets 707 (490 ) 217 702 (437 ) 265 Total $ 4,137 $ (3,552 ) $ 585 $ 4,134 $ (3,351 ) $ 783 _________________________ (a) The film library has a weighted-average remaining life of approximately 3 years and is amortized using a film forecast computation methodology. Amortization of brands, tradenames and other intangible assets subject to amortization is provided generally on a straight-line basis over their respective useful lives. |
Schedule of Expected Amortization Expense | The Company’s estimated amortization expense for the succeeding five years ended December 31 is as follows (millions): 2018 2019 2020 2021 2022 Estimated amortization expense $ 167 $ 155 $ 139 $ 39 $ 35 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Investments by Category | Time Warner’s investments, by category, consist of (millions): December 31, 2017 2016 Equity-method investments $ 2,669 $ 2,347 Fair-value and other investments: Deferred compensation investments, recorded at fair value 156 150 Deferred compensation insurance-related investments, recorded at cash surrender value 453 410 Available-for-sale securities 49 54 Equity warrants 368 159 Total fair-value and other investments 1,026 773 Cost-method investments 229 217 Total $ 3,924 $ 3,337 |
Available-for-sale Securities | The cost basis, unrealized gains, unrealized losses and fair market value of available-for-sale securities are set forth below (millions): December 31, 2017 2016 Cost basis $ 24 $ 32 Gross unrealized gains 25 23 Gross unrealized losses — (1 ) Fair value $ 49 $ 54 |
Investment Writedowns | For the years ended December 31, 2017 , 2016 and 2015 , the Company incurred writedowns to reduce the carrying value of certain investments that experienced other-than-temporary impairments, as set forth below (millions): December 31, 2017 2016 2015 Equity-method investments $ — $ 2 $ 2 Cost-method investments 22 11 6 Available-for-sale securities 3 — 19 Total $ 25 $ 13 $ 27 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs | The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis as of December 31, 2017 and December 31, 2016 , respectively (millions): December 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Trading securities: Diversified equity securities (a) $ 168 $ — $ — $ 168 $ 163 $ — $ — $ 163 Available-for-sale securities: Equity securities 18 — — 18 17 — — 17 Debt securities — 31 — 31 — 37 — 37 Derivatives: Foreign exchange contracts — 4 — 4 — 153 — 153 Other — — 369 369 — — 161 161 Liabilities: Derivatives: Foreign exchange contracts — (50 ) — (50 ) — (9 ) — (9 ) Other — — (1 ) (1 ) — — — — Total $ 186 $ (15 ) $ 368 $ 539 $ 180 $ 181 $ 161 $ 522 _________________________ (a) Consists of investments related to deferred compensation. |
Level 3 Asset and Liability Reconciliation | The following table reconciles the beginning and ending balances of net derivative assets and liabilities classified as Level 3 and identifies the total gains (losses) the Company recognized during the years ended December 31, 2017 and 2016 on such assets and liabilities that were included in the Consolidated Balance Sheet as of December 31, 2017 and 2016 (millions): December 31, 2017 2016 Balance as of the beginning of the period $ 161 $ 173 Total gains (losses), net: Included in operating income — 2 Included in other loss, net 209 (19 ) Included in other comprehensive income (loss) — — Purchases — — Settlements (1 ) 5 Issuances (1 ) — Transfers in and/or out of Level 3 — — Balance as of the end of the period $ 368 $ 161 Net income (loss) for the period included in net income related to assets and liabilities still held as of the end of the period $ 209 $ (19 ) |
Carrying Value Fair Value, by investment | Information as of December 31, 2017 about the Company’s investments in CME that are not required to be carried at fair value on a recurring basis is as follows (millions): Carrying Value Fair Value Fair Value Hierarchy Class A common stock (a) $ — $ 338 Level 1 Series B convertible redeemable preferred shares — 508 Level 2 _________________________ (a) Includes 1 share of Series A convertible preferred stock. |
Fair Value Measurements, Nonrecurring | The following table presents certain theatrical film and television production costs, which were recorded as inventory in the Consolidated Balance Sheet, that were written down to fair value (millions): Carrying value before write down Carrying value after write down Fair value measurements made during the year ended December 31,: 2017 $ 165 $ 67 2016 285 128 |
Inventories and Theatrical Fi35
Inventories and Theatrical Film and Television Production Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories and Theatrical Film and Television Production Costs | Inventories and theatrical film and television production costs consist of (millions): December 31, 2017 2016 Inventories: Programming costs, less amortization (a) $ 3,859 $ 3,625 Other inventory, primarily DVDs and Blu-ray Discs 186 184 Total inventories 4,045 3,809 Less current portion of inventory (2,401 ) (2,062 ) Total noncurrent inventories 1,644 1,747 Theatrical film production costs: (b) Released, less amortization 709 818 Completed and not released 502 460 In production 1,219 1,286 Development and pre-production 152 133 Television production costs: (b) Released, less amortization 1,844 1,618 Completed and not released 835 841 In production 1,357 995 Development and pre-production 13 18 Total theatrical film and television production costs 6,631 6,169 Total noncurrent inventories and theatrical film and television production costs $ 8,275 $ 7,916 _________________________ (a) Includes the costs of certain programming rights, primarily sports, for which payments have been made prior to the related rights being received. (b) Does not include $368 million and $518 million of acquired film library intangible assets as of December 31, 2017 and December 31, 2016 , respectively, which are included in Intangible assets subject to amortization, net in the Consolidated Balance Sheet. |
Derivative Instruments and He36
Derivative Instruments and Hedging Activities(Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Hedging Activities Net Gains and Losses Recognized | Net gains and losses from hedging activities recognized in the Consolidated Statement of Operations were as follows (millions): Year Ended December 31, 2017 2016 2015 Gains (losses) recognized in: Cost of revenues $ (84 ) $ 81 $ 127 Selling, general and administrative (17 ) 14 21 Other income (loss), net 27 (34 ) (26 ) |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to Time Warner’s use of foreign currency derivatives at December 31, 2017 and December 31, 2016 (millions): December 31, 2017 (a) 2016 (b) Prepaid expenses and other current assets $ 4 $ 153 Accounts payable and accrued liabilities (50 ) (9 ) _________________________ (a) Includes $77 million of qualifying hedges and $9 million of economic hedges of foreign exchange derivative contracts in asset positions and $132 million of qualifying hedges of foreign exchange derivative contracts in liability positions. (b) Includes $297 million ( $272 million of qualifying hedges and $25 million of economic hedges) and $153 million ( $141 million of qualifying hedges and $12 million of economic hedges) of foreign exchange derivative contracts in asset and liability positions, respectively. |
Long Term Debt and Other Fina37
Long Term Debt and Other Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The principal amounts of long-term debt adjusted for premiums, discounts and issuance costs consist of (millions): December 31, 2017 2016 Fixed-rate public debt $ 18,859 $ 22,715 Bank credit facilities and commercial paper program 4,668 1,394 Other obligations 217 230 Subtotal 23,744 24,339 Debt due within one year (5,450 ) (1,947 ) Total long-term debt $ 18,294 $ 22,392 |
Schedule of Maturities of Long-term Debt | The Company’s public debt matures as follows (millions): 2018 2019 2020 2021 2022 Thereafter Debt $ 600 $ 650 $ 1,400 $ 2,000 $ 1,000 $ 13,356 |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum capital lease payments at December 31, 2017 are as follows (millions): 2018 $ 16 2019 15 2020 11 2021 5 2022 1 Thereafter 4 Total 52 Amount representing interest (5 ) Present value of minimum lease payments 47 Current portion (14 ) Total long-term portion $ 33 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Domestic and foreign income before income taxes and discontinued operations are as follows (millions): Year Ended December 31, 2017 2016 2015 Domestic $ 4,645 $ 4,356 $ 4,733 Foreign 1,300 839 713 Total $ 5,945 $ 5,195 $ 5,446 |
Schedule of Components of Income Tax Expense (Benefit) | Current and Deferred income taxes (tax benefits) provided on Income from continuing operations are as follows (millions): Year Ended December 31, 2017 2016 2015 Federal: Current $ 1,257 $ 693 $ 844 Deferred (a) (1,040 ) 216 349 Foreign: Current (b) 369 342 337 Deferred 31 (2 ) (29 ) State and Local: Current 85 10 142 Deferred (1 ) 22 8 Total (c) $ 701 $ 1,281 $ 1,651 _________________________ (a) Includes a tax rate change benefit of $885 million in 2017 attributable to U.S. tax reform legislation enacted at the end of the year. (b) Includes foreign withholding taxes of $285 million in 2017 , $264 million in 2016 and $236 million in 2015 . (c) Excludes excess tax benefits from equity awards allocated directly to contributed capital of $88 million in 2016 and $151 million in 2015 . |
Schedule of Effective Income Tax Rate Reconciliation | The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below (millions): Year Ended December 31, 2017 2016 2015 Taxes on income at U.S. federal statutory rate $ 2,081 $ 1,818 $ 1,906 State and local taxes, net of federal tax effects 60 56 68 Domestic production activities deduction (146 ) (141 ) (101 ) Foreign rate differential (204 ) (176 ) (129 ) Impact of U.S. federal tax reform (843 ) — — Excess tax benefits on share-based compensation (149 ) — — Change in tax method of accounting for film and TV cost amortization — (224 ) — Other (98 ) (52 ) (93 ) Total $ 701 $ 1,281 $ 1,651 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of Time Warner’s net deferred tax liabilities are as follows (millions): December 31, 2017 2016 Deferred tax assets: Tax attribute carryforwards (a) $ 292 $ 435 Royalties, participations and residuals 257 344 Other 1,343 1,825 Valuation allowances (a) (287 ) (463 ) Total deferred tax assets $ 1,605 $ 2,141 Deferred tax liabilities: Assets acquired in business combinations $ 1,688 $ 2,752 Unbilled television receivables 794 1,086 Other 596 856 Total deferred tax liabilities 3,078 4,694 Net deferred tax liability $ 1,473 $ 2,553 _________________________ (a) The Company has recorded valuation allowances for certain tax attribute carryforwards and other deferred tax assets due to uncertainty that exists regarding future realizability. The tax attribute carryforwards consist of $18 million of tax credits, $2 million of capital losses and $272 million of net operating losses that expire in varying amounts from 2018 through 2037. If, in the future, the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reversed and recognized in the Consolidated Statement of Operations. |
Summary of Income Tax Contingencies | Changes in the Company’s uncertain income tax positions, excluding the related accrual for interest and penalties, from January 1 through December 31 are set forth below (millions): Year Ended December 31, 2017 2016 2015 Beginning balance $ 1,325 $ 1,330 $ 1,327 Additions for prior year tax positions 96 154 61 Additions for current year tax positions 66 81 62 Reductions for prior year tax positions (110 ) (203 ) (75 ) Settlements (5 ) (29 ) (40 ) Lapses in statute of limitations (12 ) (8 ) (5 ) Ending balance $ 1,360 $ 1,325 $ 1,330 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) | The following summary sets forth the activity within Other comprehensive income (loss) (millions): Pretax Tax (provision) benefit Net of tax Year ended December 31, 2015 Unrealized losses on foreign currency translation $ (319 ) $ 30 $ (289 ) Reclassification adjustment for losses on foreign currency translation realized in net income (a) 5 — 5 Unrealized gains on securities 1 — 1 Unrealized losses on benefit obligation (37 ) 11 (26 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 33 (11 ) 22 Unrealized gains on derivative financial instruments 137 (49 ) 88 Reclassification adjustment for derivative financial instrument gains realized in net income (d) (130 ) 47 (83 ) Other comprehensive loss $ (310 ) $ 28 $ (282 ) Year ended December 31, 2016 Unrealized losses on foreign currency translation $ (122 ) $ 1 $ (121 ) Unrealized losses on benefit obligation (39 ) 18 (21 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 104 (37 ) 67 Unrealized gains on derivative financial instruments 91 (33 ) 58 Reclassification adjustment for derivative financial instrument gains realized in net income (d) (74 ) 27 (47 ) Other comprehensive loss $ (40 ) $ (24 ) $ (64 ) Year ended December 31, 2017 Unrealized gains on foreign currency translation $ 149 $ 29 $ 178 Unrealized gains on securities 1 — 1 Reclassification adjustment for losses on securities realized in net income (c) 1 — 1 Unrealized losses on benefit obligation (130 ) 32 (98 ) Reclassification adjustment for losses on benefit obligation realized in net income (b) 37 (8 ) 29 Unrealized losses on derivative financial instruments (126 ) 32 (94 ) Reclassification adjustment for derivative financial instrument losses realized in net income (d) 72 (16 ) 56 Other comprehensive income $ 4 $ 69 $ 73 _________________________ (a) Pretax (gains) losses are included in Gain (loss) on operating assets, net. (b) Pretax (gains) losses are included in Selling, general and administrative expenses, with the exception of a $46 million loss that is included in Discontinued operations, net of tax for the year ended December 31, 2016. (c) Pretax (gains) losses are included in Other loss, net. (d) Pretax (gains) losses are included in Selling, general and administrative expenses, Costs of revenues and Other loss, net are as follows (millions): Year Ended December 31, 2017 2016 2015 Selling, general and administrative expenses $ 1 $ 2 $ (21 ) Costs of revenues 72 (64 ) (104 ) Other loss, net (1 ) (12 ) (5 ) |
Reclassification out of Accumulated Other Comprehensive Income | Pretax (gains) losses are included in Selling, general and administrative expenses, Costs of revenues and Other loss, net are as follows (millions): Year Ended December 31, 2017 2016 2015 Selling, general and administrative expenses $ 1 $ 2 $ (21 ) Costs of revenues 72 (64 ) (104 ) Other loss, net (1 ) (12 ) (5 ) |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following summary sets forth the components of Accumulated other comprehensive loss, net of tax (millions): December 31, 2017 2016 Foreign currency translation losses $ (526 ) $ (704 ) Net unrealized gains on securities 15 13 Net derivative financial instruments gains (losses) (10 ) 28 Net unfunded/underfunded benefit obligation (916 ) (847 ) Accumulated other comprehensive loss, net $ (1,437 ) $ (1,510 ) |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Income Per Common Share | Set forth below is a reconciliation of Basic and Diluted income per common share from continuing operations attributable to Time Warner Inc. common shareholders (millions, except per share amounts): Year Ended December 31, 2017 2016 2015 Income from continuing operations attributable to Time Warner Inc. shareholders $ 5,247 $ 3,915 $ 3,796 Income allocated to participating securities (18 ) (11 ) (11 ) Income from continuing operations attributable to Time Warner Inc. common shareholders — basic $ 5,229 $ 3,904 $ 3,785 Average basic common shares outstanding 776.6 780.8 814.9 Dilutive effect of equity awards 14.1 11.5 14.6 Average diluted common shares outstanding 790.7 792.3 829.5 Antidilutive common share equivalents excluded from computation — 5.0 5.0 Income per common share from continuing operations attributable to Time Warner Inc. common shareholders: Basic $ 6.73 $ 5.00 $ 4.64 Diluted $ 6.64 $ 4.94 $ 4.58 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions Used to Value Option Grants | The table below summarizes the weighted-average assumptions used to value stock options at their grant date and the weighted-average grant date fair value per share for the years ended December 31, 2016 and 2015 : Year Ended December 31, 2016 2015 Expected volatility 26.0 % 25.0 % Expected term to exercise from grant date 6.20 years 5.80 years Risk-free rate 1.5 % 1.8 % Expected dividend yield 2.6 % 1.7 % Weighted average grant date fair value per option $ 12.26 $ 18.16 |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes information about stock options outstanding as of December 31, 2017 : Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) (in years) (thousands) Outstanding as of December 31, 2016 24,567 $ 47.07 Exercised (5,913 ) 34.75 Forfeited or expired (104 ) 65.40 Outstanding as of December 31, 2017 18,550 50.89 4.62 $ 755,314 Exercisable as of December 31, 2017 14,524 44.69 3.84 $ 681,366 |
Schedule of Cash Proceeds Received from Share-based Payment Awards | The following table summarizes information about stock options exercised (millions): Year Ended December 31, 2017 2016 2015 Total intrinsic value $ 374 $ 237 $ 270 Cash received 206 172 165 Tax benefits realized 133 83 96 |
Share-based Compensation Arrangement by Share-based Payment Award, RSUs and Target PSUs, Grants in Period, Weighted Average Grant Date Fair Value | The following table sets forth the weighted-average grant date fair value of RSUs and target PSUs. The Company did no t grant any target PSUs during the year ended December 31, 2017 . For PSUs, the service inception date precedes the grant date and requires the Company to apply mark-to-market accounting that is reflected in the grant date fair values presented: Year Ended December 31, 2017 2016 2015 RSUs $ 96.75 $ 78.63 $ 83.52 PSUs — 98.24 91.47 |
Schedule of Share-based Compensation, Restricted Stock Units Performance Stock Units Award Activity | The following table summarizes information about unvested RSUs and target PSUs as of December 31, 2017 : Number of Shares/Units Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value (thousands) (thousands) Unvested as of December 31, 2016 12,049 $ 76.56 Granted (a) 663 96.58 Vested (3,234 ) 65.77 Forfeited (268 ) 80.50 Unvested as of December 31, 2017 9,210 81.15 $ 842,439 _________________________ (a) Includes 0.5 million RSUs granted during the year ended December 31, 2017 and a payout adjustment of 0.2 million PSUs due to the actual performance level achieved for PSUs that vested during 2017 . |
Schedule of Share-based Compensation Arrangement by Share Based Payment Award, Performance Based Units and Restricted Stock Units, Vested | The following table sets forth the total intrinsic value of RSUs and target PSUs that vested during the following years (millions): Year Ended December 31, 2017 2016 2015 RSUs $ 280 $ 247 $ 384 PSUs 33 28 30 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The impact on Operating income from equity-based compensation awards is as follows (millions): Year Ended December 31, 2017 2016 2015 Stock options $ 26 $ 42 $ 39 RSUs and PSUs 201 235 143 Total impact on operating income $ 227 $ 277 $ 182 Tax benefit recognized $ 78 $ 97 $ 64 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Accumulated and Projected Benefit Obligations | A summary of activity for substantially all of Time Warner’s domestic and international defined benefit pension plans is as follows: Benefit Obligation (millions) December 31, 2017 2016 Change in benefit obligation: Projected benefit obligation, beginning of year $ 3,465 $ 3,439 Service cost 4 4 Interest cost 136 145 Actuarial loss (gain) 290 (169 ) Benefits paid (162 ) (274 ) Curtailments (1 ) — Settlements (13 ) — Remeasurement — 407 Foreign currency exchange rates 44 (87 ) Projected benefit obligation, end of year $ 3,763 $ 3,465 Accumulated benefit obligation, end of year $ 3,732 $ 3,433 |
Schedule of Changes in Fair Value of Plan Assets | Plan Assets (millions) December 31, 2017 2016 Change in plan assets: Fair value of plan assets, beginning of year $ 2,738 $ 2,698 Actual return on plan assets 296 345 Employer contributions 51 74 Benefits paid (162 ) (274 ) Foreign currency exchange rates 50 (105 ) Settlements (13 ) — Fair value of plan assets, end of year $ 2,960 $ 2,738 |
Schedule of Net Benefit Costs | Components of Net Periodic Benefit Costs from Continuing Operations (millions) December 31, 2017 2016 2015 Service cost (a) $ 4 $ 4 $ 4 Interest cost 63 66 83 Expected return on plan assets (60 ) (64 ) (90 ) Amortization of prior service cost 1 1 1 Amortization of net loss 14 14 17 Curtailments (1 ) — — Settlements — 24 — Net periodic benefit costs (b) $ 21 $ 45 $ 15 _________________________ (a) Amounts relate to various international benefit plans. (b) Excludes net periodic benefit costs related to discontinued operations of $13 million , $12 million and $5 million during the years ended December 31, 2017 , 2016 and 2015 , respectively, primarily related to employees and former employees of Time Inc. These amounts have been reflected in Other loss, net in the Consolidated Statement of Operations. In addition, net periodic benefit costs for the year ended December 31, 2016 also excludes $46 million of pension settlement charges related to businesses the Company previously disposed of. These amounts have been reflected in Discontinued Operations, net of tax, in the Consolidated Statement of Operations. |
Schedule of Assumptions Used | Assumptions Weighted-average assumptions used to determine benefit obligations and net periodic benefit costs for the years ended December 31: Benefit Obligations Net Periodic Benefit Costs 2017 2016 2015 2017 2016 2015 Discount rate 3.52 % 3.96 % 4.59 % 3.96 % 4.30 % 4.10 % Rate of compensation increase 5.62 % 5.62 % 5.45 % 5.62 % 5.45 % 5.35 % Expected long-term return on plan assets n/a n/a n/a 5.40 % 5.91 % 5.84 % |
Schedule of Allocation of Plan Assets | Fair Value of Plan Assets The following table sets forth by level, within the fair value hierarchy described in Note 6, the assets and liabilities held by the Company’s defined benefit pension plans, including those assets related to The CW sub-plan, which were approximately $22 million and $20 million , respectively, as of December 31, 2017 and December 31, 2016 (millions). As of December 31, 2017 and 2016 , there were no assets or liabilities classified as level 3. December 31, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cash and cash equivalents (a) $ 116 $ — $ 116 $ 142 $ — $ 142 Insurance contracts — 3 3 — 15 15 Common stocks 147 — 147 165 — 165 Fixed income securities: U.S. government and agency securities (a) 273 109 382 209 53 262 Non-U.S. government and agency securities 327 — 327 250 — 250 Other fixed income securities (b) — 1,003 1,003 — 952 952 Other investments (c) 96 79 175 156 68 224 Liabilities: Derivatives — (19 ) (19 ) — (19 ) (19 ) Total (d) $ 959 $ 1,175 $ 2,134 $ 922 $ 1,069 $ 1,991 _________________________ (a) As of December 31, 2017 , cash and cash equivalents include $6 million of cash collateral for securities on loan, and U.S. government and agency securities include $109 million of securities collateral for securities on loan. As of December 31, 2016, cash and cash equivalents include $17 million of cash collateral for securities on loan, and U.S. government and agency securities include $66 million of securities collateral for securities on loan. (b) Other fixed income securities primarily include investment grade corporate bonds. (c) Other investments primarily include derivative contracts, exchange-traded funds, and mutual funds. (d) At December 31, 2017 and December 31, 2016 , total assets include $113 million and $81 million , respectively, of securities on loan. Certain investments that are measured at fair value using the net asset value ("NAV") per share as a practical expedient have not been categorized in the fair value table above and are as follows (millions): December 31, Asset Category 2017 2016 Pooled investments (e) $ 228 $ 231 Commingled trust funds 661 610 Other investments (f) 70 56 Total $ 959 $ 897 (e) Pooled investments primarily consist of interests in unitized investment pools which consist of equity and fixed income securities and investments in hedge funds. (f) Other investments include limited partnerships, 103-12 investments and hedge funds. |
Schedule of Expected Benefit Payments | Information about the expected benefit payments for the Company’s defined benefit plans is as follows (millions): 2018 2019 2020 2021 2022 2023-2027 Expected benefit payments $ 176 $ 177 $ 188 $ 188 $ 205 $ 1,027 |
Restructuring and Severance C43
Restructuring and Severance Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Severance Costs | Restructuring and severance costs expensed as incurred for the years ended December 31, 2017 , 2016 and 2015 are as follows (millions): Year Ended December 31, 2017 2016 2015 Turner $ 59 $ 61 $ 58 Home Box Office 13 49 — Warner Bros. 46 4 1 Corporate 2 3 1 Total restructuring and severance costs $ 120 $ 117 $ 60 Year Ended December 31, 2017 2016 2015 2017 initiatives $ 133 $ — $ — 2016 initiatives (9 ) 114 — 2015 and prior initiatives (4 ) 3 60 Total restructuring and severance costs $ 120 $ 117 $ 60 |
Selected Information | Selected information relating to accrued restructuring and severance costs is as follows (millions): Employee Terminations Other Exit Costs Total Remaining liability as of December 31, 2014 $ 525 $ 9 $ 534 Net accruals 43 17 60 Foreign currency translation adjustment (3 ) — (3 ) Noncash reductions (a) (1 ) — (1 ) Cash paid (325 ) (12 ) (337 ) Remaining liability as of December 31, 2015 239 14 253 Net accruals 114 3 117 Cash paid (191 ) (8 ) (199 ) Remaining liability as of December 31, 2016 162 9 171 Net accruals 121 (1 ) 120 Noncash reductions (a) (2 ) — (2 ) Cash paid (87 ) (5 ) (92 ) Remaining liability as of December 31, 2017 $ 194 $ 3 $ 197 _________________________ (a) Noncash reductions relate to the settlement of certain liabilities relating to employee compensation with equity instruments. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information as to the Revenues, intersegment revenues, depreciation of property, plant, and equipment, Amortization of intangible assets, Operating Income (Loss), Assets and Capital expenditures for each of Time Warner’s reportable segments is set forth below (millions): Year Ended December 31, 2017 2016 2015 Revenues Turner $ 12,081 $ 11,364 $ 10,596 Home Box Office 6,329 5,890 5,615 Warner Bros. 13,866 13,037 12,992 Intersegment eliminations (1,005 ) (973 ) (1,085 ) Total revenues $ 31,271 $ 29,318 $ 28,118 Year Ended December 31, 2017 2016 2015 Intersegment Revenues Turner $ 88 $ 108 $ 105 Home Box Office 17 (9 ) 40 Warner Bros. 900 874 940 Total intersegment revenues $ 1,005 $ 973 $ 1,085 Year Ended December 31, 2017 2016 2015 Supplemental Revenue Data Subscription $ 12,308 $ 11,014 $ 10,153 Advertising 4,655 4,696 4,569 Content 13,595 12,935 12,771 Other 713 673 625 Total revenues $ 31,271 $ 29,318 $ 28,118 Year Ended December 31, 2017 2016 2015 Depreciation of Property, Plant and Equipment Turner $ (202 ) $ (191 ) $ (193 ) Home Box Office (87 ) (74 ) (81 ) Warner Bros. (179 ) (188 ) (197 ) Corporate (29 ) (26 ) (21 ) Total depreciation of property, plant and equipment $ (497 ) $ (479 ) $ (492 ) Year Ended December 31, 2017 2016 2015 Amortization of Intangible Assets Turner $ (17 ) $ (17 ) $ (16 ) Home Box Office (14 ) (14 ) (14 ) Warner Bros. (166 ) (159 ) (159 ) Total amortization of intangible assets $ (197 ) $ (190 ) $ (189 ) Year Ended December 31, 2017 2016 2015 Operating Income (Loss) Turner $ 4,489 $ 4,372 $ 4,087 Home Box Office 2,152 1,917 1,878 Warner Bros. 1,761 1,734 1,416 Corporate (430 ) (498 ) (367 ) Intersegment eliminations (52 ) 22 (149 ) Total operating income $ 7,920 $ 7,547 $ 6,865 December 31, 2017 2016 Assets Turner $ 27,111 $ 26,317 Home Box Office 14,777 14,636 Warner Bros. 22,193 21,550 Corporate 5,128 3,463 Total assets $ 69,209 $ 65,966 Year Ended December 31, 2017 2016 2015 Capital Expenditures Turner $ 225 $ 196 $ 157 Home Box Office 111 98 68 Warner Bros. 137 86 122 Corporate 183 52 76 Total capital expenditures $ 656 $ 432 $ 423 |
Revenues by Geographic Area | Revenues in different geographical areas are as follows (millions): Year Ended December 31, 2017 2016 2015 Revenues (a) United States and Canada $ 22,635 $ 20,970 $ 20,426 Europe (b) 4,739 4,557 4,485 Asia/Pacific Rim 1,977 1,992 1,619 Latin America 1,524 1,413 1,284 All Other 396 386 304 Total revenues $ 31,271 $ 29,318 $ 28,118 _________________________ (a) Revenues are attributed to region based on location of customer. (b) Revenues in EuroZone countries comprise approximately 52% , 51% and 49% of Revenues in Europe for the years ended 2017 , 2016 and 2015 , respectively. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | The commitments under certain programming, film licensing, talent and other agreements (“Programming and Other”) and minimum rental commitments under noncancelable long-term operating leases (“Operating Leases”) payable during the next five years and thereafter are as follows (millions): Programming and Other Operating Leases 2018 $ 7,008 $ 323 2019 4,911 184 2020 4,275 123 2021 3,770 94 2022 3,192 85 Thereafter 14,808 319 Total $ 37,964 $ 1,128 |
Contingent Commitments | The following table summarizes the Company’s contingent commitments at December 31, 2017 . For post-production term advances where payment obligations are outside the Company’s control, the timing of amounts presented in the table represents the earliest period in which the payment could be requested. For other contingent commitments, the timing of amounts presented in the table represents when the maximum contingent commitment will expire, but does not mean that the Company expects to incur an obligation to make any payments within that time period. In addition, amounts presented do not reflect the effects of any indemnification rights the Company might possess (millions). Nature of Contingent Commitments Total 2018 2019-2020 2021-2022 Thereafter Guarantees $ 2,057 $ 283 $ 370 $ 707 $ 697 Post-production term advance obligations and other contingent commitments 1,008 364 169 475 — Total contingent commitments $ 3,065 $ 647 $ 539 $ 1,182 $ 697 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Amounts included in the Consolidated Statement of Operations resulting from transactions with related parties consist of (millions): Year Ended December 31, 2017 2016 2015 Revenues $ 820 $ 595 $ 390 Expenses (6 ) (3 ) (5 ) Interest income 81 120 126 Other income 10 14 17 |
Additional Financial Informat47
Additional Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Cash Flows | Additional financial information with respect to cash payments and receipts, Interest expense, net, Other loss, net, Accounts payable and accrued liabilities and Other noncurrent liabilities is as follows (millions): Year Ended December 31, 2017 2016 2015 Cash Flows Cash payments made for interest $ (1,202 ) $ (1,391 ) $ (1,262 ) Interest income received 84 141 35 Cash interest payments, net $ (1,118 ) $ (1,250 ) $ (1,227 ) Cash payments made for income taxes $ (1,722 ) $ (935 ) $ (1,135 ) Income tax refunds received 172 136 142 TWC tax sharing payments (a) — — (4 ) Cash tax payments, net $ (1,550 ) $ (799 ) $ (997 ) _________________________ (a) Represents net amounts paid to TWC in accordance with a tax sharing agreement with TWC. |
Interest Expense, Net | Year Ended December 31, 2017 2016 2015 Interest Expense, Net Interest income $ 209 $ 227 $ 219 Interest expense (1,214 ) (1,388 ) (1,382 ) Total interest expense, net $ (1,005 ) $ (1,161 ) $ (1,163 ) |
Other Income (Loss), Net | Year Ended December 31, 2017 2016 2015 Other Loss, Net Investment gains (losses), net $ 300 $ 148 $ (31 ) Loss on equity method investees (153 ) (283 ) (123 ) Premiums paid and costs incurred on debt redemption (1,087 ) (1,008 ) (72 ) Other (30 ) (48 ) (30 ) Total other loss, net $ (970 ) $ (1,191 ) $ (256 ) |
Accounts Payable and Accrued Liabilities | December 31, 2017 2016 Accounts Payable and Accrued Liabilities Accounts payable $ 777 $ 527 Other accrued expenses 1,778 1,878 Participations payable 2,737 2,525 Programming costs payable 728 776 Accrued compensation 1,192 1,004 Accrued interest 251 320 Accrued dividends 319 — Accrued income taxes 134 162 Total accounts payable and accrued liabilities $ 7,916 $ 7,192 |
Other Noncurrent Liabilities | December 31, 2017 2016 Other Noncurrent Liabilities Noncurrent tax and interest reserves $ 1,703 $ 1,567 Participations payable 1,748 1,780 Programming costs payable 728 827 Noncurrent pension and post-retirement liabilities 1,058 954 Deferred compensation 548 491 Other noncurrent liabilities 590 722 Total other noncurrent liabilities $ 6,375 $ 6,341 |
Description of Business, Basi48
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Adjustment to additional paid in capital, income tax effect from share-based compensation, net | $ 82,000,000 | |||
Excess tax benefit from share based compensation, operating activities | $ 150,000,000 | |||
Excess tax benefit from equity instruments, financing activities | 0 | 88,000,000 | $ 151,000,000 | |
Operating leases, future minimum payments due | 1,128,000,000 | |||
Cash and equivalent investment in single money market mutual fund bank threshold (not more than) | $ 500,000,000 | |||
AFS Impairment, Six Month Criterion (percent) | 20.00% | |||
AFS Impairment, Quarter End Criterion (percent) | 50.00% | |||
Sales return rate change (percent) | 1.00% | |||
Sales return rate change, impact of revenue | $ 28,000,000 | |||
Goodwill, impairment loss | 0 | 0 | 0 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Valuation allowances and reserves, balance | 896,000,000 | 981,000,000 | 1,055,000,000 | $ 1,152,000,000 |
Additions charged (credited) to costs and expense | $ 1,137,000,000 | 1,367,000,000 | 1,734,000,000 | |
Schedule of Equity Method Investments [Line Items] | ||||
Significant influence percent of flow through entity (percent) | 3.00% | |||
Equity method investment, expected investment | $ 706,000,000 | 1,228,000,000 | 672,000,000 | |
Property, Plant and Equipment [Line Items] | ||||
Land | 269,000,000 | 268,000,000 | ||
Buildings and improvements | 1,757,000,000 | 1,641,000,000 | ||
Capitalized software costs | 2,045,000,000 | 2,029,000,000 | ||
Furniture, fixtures and other equipment | 3,226,000,000 | 3,017,000,000 | ||
Property, plant and equipment, gross | 7,297,000,000 | 6,955,000,000 | ||
Accumulated depreciation | (4,590,000,000) | (4,445,000,000) | ||
Total | $ 2,707,000,000 | 2,510,000,000 | ||
General time frame between feature film initial exhibition and distribution through other channels (years) | 3 years | |||
Contracts Receivable [Abstract] | ||||
Unbilled contracts receivable | $ 5,136,000,000 | 4,573,000,000 | ||
Unbilled receivables, not billable, amount expected to be collected in next twelve months | $ 2,856,000,000 | |||
Film Cost Disclosures [Abstract] | ||||
Estimated period of ultimate revenues, from initial release or from delivery of first episode (years) | 10 years | |||
Film and TV production costs amortization | $ 5,110,000,000 | 4,745,000,000 | 4,384,000,000 | |
Pre-release theatrical film cost impairment | 22,000,000 | 69,000,000 | 80,000,000 | |
Unamortized computer software costs related to games | 266,000,000 | 247,000,000 | ||
Amortization of computer software costs related to games | 156,000,000 | 101,000,000 | 214,000,000 | |
Writedowns to net realizable value of certain games production costs | 5,000,000 | 20,000,000 | 17,000,000 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement income statement classifications and amounts cost of revenue | 262,000,000 | 249,000,000 | 406,000,000 | |
Marketing and Advertising Expense [Abstract] | ||||
Advertising expense | 2,528,000,000 | 2,386,000,000 | 2,586,000,000 | |
Minimum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement shortfall | 30,000,000 | |||
Maximum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement shortfall | $ 45,000,000 | |||
HBO LAG | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 88.00% | |||
Variable interest entity, voting interest | 50.00% | |||
Variable interest entity, nonconsolidated, carrying amount, assets | $ 535,000,000 | 535,000,000 | ||
Hudson Yards | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Variable interest entity, nonconsolidated, carrying amount, assets | 1,086,000,000 | 729,000,000 | ||
Allowance for Doubtful Accounts | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Valuation allowances and reserves, balance | 162,000,000 | 193,000,000 | 180,000,000 | 152,000,000 |
Additions charged (credited) to costs and expense | 11,000,000 | 38,000,000 | 63,000,000 | |
Reserves for sales returns and allowances | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Valuation allowances and reserves, balance | 734,000,000 | 788,000,000 | 875,000,000 | $ 1,000,000,000 |
Additions charged (credited) to costs and expense | 1,126,000,000 | 1,329,000,000 | $ 1,671,000,000 | |
Scenario, Plan | Hudson Yards | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, expected investment | $ 900,000,000 | |||
Buildings and improvements | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 7 years | |||
Buildings and improvements | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 30 years | |||
Capitalized software costs | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 3 years | |||
Capitalized software costs | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 7 years | |||
Furniture, fixtures and other equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 3 years | |||
Furniture, fixtures and other equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives (years) | 10 years | |||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Furniture, fixtures and other equipment | $ 380,000,000 | $ 183,000,000 |
Description of Business, Basi49
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Net Periodic Benefit Costs (Details) - Pension plans defined benefit and other postretirement benefit - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Net periodic benefit costs | $ 22 | $ 46 |
Service cost | $ 4 | $ 4 |
Description of Business, Basi50
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Equity Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Performance Stock Unit | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation arrangement by share-based payment award, award requisite service period (years) | 3 years |
Restricted Stock Units Subject To Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Period for adjusted net income target condition (years) | 1 year |
Description of Business, Basi51
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Excess tax benefits on share-based compensation recognized in Income tax provision | $ 149 | $ 0 | $ 0 |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Excess tax benefits on share-based compensation recognized in Income tax provision | $ 149 |
Merger Agreement with AT&T Me52
Merger Agreement with AT&T Merger Agreement with AT&T (Details) $ / shares in Units, $ in Millions | Oct. 22, 2016USD ($)$ / shares |
Merger [Abstract] | |
Per share amount to be received in Cash from AT&T | $ 53.75 |
Average stock price of AT&T, lower threshold | 37.411 |
Average stock price of AT&T, upper threshold | $ 41.349 |
Exchange ratio if stock price is less than $37.411 | 1.437 |
Exchange ratio if stock price is greater than $41.349 | 1.300 |
Termination Fee | $ | $ 1,725 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impaired Intangible Assets [Line Items] | |||
Impairment of intangible assets (excluding goodwill) | $ 0 | ||
Goodwill [Roll Forward] | |||
Balance at Beginning of the Period | 27,752,000,000 | $ 27,689,000,000 | |
Acquisitions, dispositions and adjustments, net | (17,000,000) | 101,000,000 | |
Translation adjustments | 41,000,000 | (38,000,000) | |
Balance at End of the Period | 27,776,000,000 | 27,752,000,000 | $ 27,689,000,000 |
Goodwill impairments | 0 | 0 | 0 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 4,137,000,000 | 4,134,000,000 | |
Accumulated Amortization | (3,552,000,000) | (3,351,000,000) | |
Net | 585,000,000 | 783,000,000 | |
Amortization of Intangible Assets | 197,000,000 | 190,000,000 | 189,000,000 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Estimated amortization expense - 2018 | 167,000,000 | ||
Estimated amortization expense - 2019 | 155,000,000 | ||
Estimated amortization expense - 2020 | 139,000,000 | ||
Estimated amortization expense - 2021 | 39,000,000 | ||
Estimated amortization expense - 2022 | 35,000,000 | ||
Turner | |||
Impaired Intangible Assets [Line Items] | |||
Impairment of intangible assets (excluding goodwill) | 25,000,000 | 1,000,000 | |
Goodwill [Roll Forward] | |||
Balance at Beginning of the Period | 14,125,000,000 | 14,108,000,000 | |
Acquisitions, dispositions and adjustments, net | (19,000,000) | 16,000,000 | |
Translation adjustments | 7,000,000 | 1,000,000 | |
Balance at End of the Period | 14,113,000,000 | 14,125,000,000 | 14,108,000,000 |
Accumulated impairments | 13,338,000,000 | 13,338,000,000 | 13,338,000,000 |
Home Box Office | |||
Goodwill [Roll Forward] | |||
Balance at Beginning of the Period | 7,433,000,000 | 7,433,000,000 | |
Acquisitions, dispositions and adjustments, net | 0 | 0 | |
Translation adjustments | 0 | 0 | |
Balance at End of the Period | 7,433,000,000 | 7,433,000,000 | 7,433,000,000 |
Warner Bros. | |||
Goodwill [Roll Forward] | |||
Balance at Beginning of the Period | 6,194,000,000 | 6,148,000,000 | |
Acquisitions, dispositions and adjustments, net | 2,000,000 | 85,000,000 | |
Translation adjustments | 34,000,000 | (39,000,000) | |
Balance at End of the Period | 6,230,000,000 | 6,194,000,000 | 6,148,000,000 |
Accumulated impairments | 4,091,000,000 | 4,091,000,000 | $ 4,091,000,000 |
Film library | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 3,430,000,000 | 3,432,000,000 | |
Accumulated Amortization | (3,062,000,000) | (2,914,000,000) | |
Net | $ 368,000,000 | 518,000,000 | |
Finite-lived intangible asset, useful life (years) | 3 years | ||
Brands, tradenames and other intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 707,000,000 | 702,000,000 | |
Accumulated Amortization | (490,000,000) | (437,000,000) | |
Net | $ 217,000,000 | $ 265,000,000 |
Dispositions and Acquisitions -
Dispositions and Acquisitions - Dispositions (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | |||
Net income (loss) | $ 0 | $ 11 | $ 37 |
Per share information attributable to Time Warner Inc. common shareholders: | |||
Diluted net income (loss) per common share (dollars per share) | $ 0 | $ 0.02 | $ 0.04 |
Warner Music Group | |||
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | |||
Net income (loss) | $ 40 | $ 37 | |
Per share information attributable to Time Warner Inc. common shareholders: | |||
Diluted net income (loss) per common share (dollars per share) | $ 0.05 | $ 0.04 | |
Previously disposed of businesses | |||
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | |||
Net income (loss) | $ (29) | ||
Per share information attributable to Time Warner Inc. common shareholders: | |||
Diluted net income (loss) per common share (dollars per share) | $ (0.03) |
Dispositions and Acquisitions55
Dispositions and Acquisitions - Acquisitions (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Redeemable noncontrolling interest | $ 35 | $ 29 | ||
Turner | iStreamPlanet | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, net of cash acquired | $ 148 | |||
Business combination, step acquisition, equity interest in acquiree, remeasurement gain (loss), net | $ 3 | |||
Redeemable noncontrolling interest | $ 29 |
Dispositions and Acquisitions56
Dispositions and Acquisitions - Equity Method (Details) - USD ($) $ in Millions | Aug. 02, 2016 | Dec. 31, 2016 | Apr. 30, 2016 |
Hulu | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 10.00% | ||
Payments to acquire businesses, net of cash acquired | $ 590 | ||
Warner Bros. | Fandango | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 25.00% | ||
Deconsolidation, gain (loss), amount | $ 90 |
Investments 1 (Details)
Investments 1 (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investments [Abstract] | ||
Equity-method investments | $ 2,669 | $ 2,347 |
Fair-value and other investments: | ||
Deferred compensation investments, recorded at fair value | 156 | 150 |
Deferred compensation insurance-related investments, recorded at cash surrender value | 453 | 410 |
Available-for-sale securities | 49 | 54 |
Equity warrants | 368 | 159 |
Total fair-value and other investments | 1,026 | 773 |
Cost-method investments | 229 | 217 |
Total | $ 3,924 | $ 3,337 |
Investments 2 (Details)
Investments 2 (Details) $ / shares in Units, € in Millions, warrant in Millions | Mar. 02, 2017EUR (€) | May 31, 2016 | Nov. 15, 2015USD ($) | Sep. 30, 2015USD ($) | May 02, 2014USD ($)unit_warrantunitshares | Feb. 28, 2018EUR (€) | Apr. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2017USD ($)warrant$ / sharesshares | Dec. 31, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€)warrantshares | Feb. 19, 2016USD ($) | Feb. 19, 2016EUR (€) | Sep. 30, 2015EUR (€) | Nov. 14, 2014USD ($) | Nov. 14, 2014EUR (€) |
Available-for-sale securities: | ||||||||||||||||||
Cost basis | $ 24,000,000 | $ 32,000,000 | ||||||||||||||||
Gross unrealized gains | 25,000,000 | 23,000,000 | ||||||||||||||||
Gross unrealized losses | 0 | (1,000,000) | ||||||||||||||||
Fair value | 49,000,000 | 54,000,000 | ||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
Equity-method investments | 2,669,000,000 | 2,347,000,000 | ||||||||||||||||
Investment gains (losses), net | 300,000,000 | 148,000,000 | $ (31,000,000) | |||||||||||||||
Investments Writedowns [Abstract] | ||||||||||||||||||
Equity-method investments | 0 | 2,000,000 | 2,000,000 | |||||||||||||||
Cost-method investments | 22,000,000 | 11,000,000 | 6,000,000 | |||||||||||||||
Available-for-sale securities | 3,000,000 | 0 | 19,000,000 | |||||||||||||||
Total | 25,000,000 | 13,000,000 | $ 27,000,000 | |||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||
Equity warrants | 368,000,000 | $ 159,000,000 | ||||||||||||||||
Time Warner Inc Revolving Credit Facility with CME | Current Credit Facility | ||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 115,000,000 | |||||||||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |||||||||||||||||
Long-term line of credit | 0 | |||||||||||||||||
Time Warner Inc Revolving Credit Facility with CME | Future Credit Facility | ||||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |||||||||||||||||
CME Equity Method Investment | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
Equity-method investments | $ 0 | |||||||||||||||||
Equity method investment, ownership percentage | 46.00% | 46.00% | ||||||||||||||||
Class A common stock | shares | 61,400,000 | 61,400,000 | ||||||||||||||||
Series A convertible preferred stock, number of shares | shares | 1 | 1 | ||||||||||||||||
Convertible preferred stock, shares issued upon conversion (shares) | shares | 11,200,000 | 11,200,000 | ||||||||||||||||
CME senior unsecured term loan | € | € 905 | |||||||||||||||||
Equity method losses presented in other noncurrent liabilities | $ 29,000,000 | |||||||||||||||||
CME, guarantor obligations, current carrying value | $ 174,000,000 | |||||||||||||||||
CME refinancing of aggregate principal of senior convertible notes due 2015 | $ 261,000,000 | |||||||||||||||||
CME repayment of aggregate principal of senior convertible notes due 2015 | $ 261,000,000 | |||||||||||||||||
Equity affiliate term loan, commitment fee earned | $ 9,000,000 | |||||||||||||||||
Term loan, commitment fee interest rate (percent) | 8.50% | |||||||||||||||||
CME refinancing of aggregate principal of senior notes due 2017 | € | € 240 | |||||||||||||||||
Proceeds from CME’s repayment of senior secured notes and term loan | $ 485,000,000 | |||||||||||||||||
Investment gains (losses), net | $ 95,000,000 | |||||||||||||||||
Loss on CME financing transactions | $ 150,000,000 | |||||||||||||||||
CME senior unsecured term loan, amended fee payable in cash | 5.00% | |||||||||||||||||
CME senior unsecured term loan, amended debt level threshold | € | € 815 | |||||||||||||||||
CME senior unsecured term loan, debt level rate decrease | 0.50% | |||||||||||||||||
CME senior unsecured term loan, change in control rate increase, based on fee payable | 3.50% | |||||||||||||||||
CME senior unsecured term loan, change in control flat rate increase | 10.00% | |||||||||||||||||
CME senior unsecured term loan, change in control rate increase, time period | 180 days | |||||||||||||||||
CME Equity Method Investment | Minimum | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME senior unsecured term loan, amended fee | 5.00% | |||||||||||||||||
CME Equity Method Investment | Maximum | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME senior unsecured term loan, amended fee | 8.50% | |||||||||||||||||
CME Equity Method Investment | 2014 Loan | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME senior unsecured term loan | € | € 251 | |||||||||||||||||
CME repayment of term loan | € | € 50 | |||||||||||||||||
CME Equity Method Investment | 2015 Loan | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME senior unsecured term loan | € | € 235 | |||||||||||||||||
CME Equity Method Investment | 2016 Loan | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME senior unsecured term loan | € | € 469 | |||||||||||||||||
Fee earned for assisting CME in refinancing debt (percent) | 1.00% | 1.00% | ||||||||||||||||
Series B convertible redeemable preferred shares | ||||||||||||||||||
Schedule of Cost-method Investments [Line Items] | ||||||||||||||||||
Series B convertible redeemable preferred shares, conversion into Class A common stock Shares | shares | 109,200,000 | 109,200,000 | ||||||||||||||||
Annual rate at which convertible redeemable preferred stock accretes in value | 3.75% | 3.75% | ||||||||||||||||
HBO LAG | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
Equity method investment, ownership percentage | 88.00% | 88.00% | ||||||||||||||||
Subsequent Event | CME Equity Method Investment | 2014 Loan | ||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||
CME repayment of term loan | € | € 50 | |||||||||||||||||
CME Loans Receivable | ||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||||
Initial loans receivable with fixed rates of interest | $ 30,000,000 | |||||||||||||||||
Loans receivable with fixed rates of interest rate, rate (percent) | 15.00% | |||||||||||||||||
CME Rights Offering | ||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||
Ownership interest on a fully diluted basis, percentage | 75.00% | 75.00% | ||||||||||||||||
Class of warrant or right, number of securities called by each warrant or right (shares) | shares | 1 | 1 | ||||||||||||||||
Class of warrant or right, term (years) | 4 years | |||||||||||||||||
Class of warrant or right, exercise price of warrant or rights (in dollars per share) | $ / shares | $ 1 | |||||||||||||||||
Rights offering units purchased by company | unit | 2,800,000 | |||||||||||||||||
Rights offering unit warrant | unit_warrant | 21 | |||||||||||||||||
Private offering units purchased by company | unit | 581,533 | |||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (shares) | shares | 30,000,000 | |||||||||||||||||
CME Rights Offering | Warrant | ||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||
Warrants held | warrant | 101 | 101 | ||||||||||||||||
Equity warrants | $ 368,000,000 | |||||||||||||||||
CME Rights Offering | CME Senior Secured Notes | ||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||
Debt instrument, interest rate, stated percentage | 15.00% | |||||||||||||||||
Rights offering unit senior secured note principal | $ 100 |
Investments Investments 3 (Deta
Investments Investments 3 (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gain (Loss) on Investments [Line Items] | |||
Gain on investments, net | $ 116 | $ 86 | $ 59 |
Omni Atlanta Hotel Joint Venture | |||
Gain (Loss) on Investments [Line Items] | |||
Gain on investments, net | 99 | ||
Other Miscellaneous Investment | |||
Gain (Loss) on Investments [Line Items] | |||
Gain on investments, net | $ 17 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivatives: | |||
Equity warrants | $ 368,000,000 | $ 159,000,000 | |
Other Financial Instruments Numeric [Abstract] | |||
Class A common stock, carrying value | 2,669,000,000 | 2,347,000,000 | |
Series B convertible redeemable preferred shares, carrying value | 229,000,000 | 217,000,000 | |
Non Financial Instruments Numeric [Abstract] | |||
Impairment of intangible assets (excluding goodwill) | 0 | ||
Class A common stock | |||
Other Financial Instruments Numeric [Abstract] | |||
Class A common stock, carrying value | $ 0 | ||
Series A convertible preferred stock, number of shares | 1 | ||
Series B convertible redeemable preferred shares | |||
Other Financial Instruments Numeric [Abstract] | |||
Series B convertible redeemable preferred shares, carrying value | $ 0 | ||
Warrant | CME Rights Offering | |||
Derivatives: | |||
Equity warrants | 368,000,000 | ||
Turner | |||
Non Financial Instruments Numeric [Abstract] | |||
Impairment of intangible assets (excluding goodwill) | 25,000,000 | $ 1,000,000 | |
Fair Value, Measurements, Recurring | |||
Trading securities: | |||
Diversified equity securities | 168,000,000 | 163,000,000 | |
Available-for-sale securities: | |||
Equity securities | 18,000,000 | 17,000,000 | |
Debt securities | 31,000,000 | 37,000,000 | |
Derivatives: | |||
Foreign exchange contracts | 4,000,000 | 153,000,000 | |
Other | 369,000,000 | 161,000,000 | |
Derivatives: | |||
Foreign exchange contracts | (50,000,000) | (9,000,000) | |
Other | (1,000,000) | 0 | |
Total | 539,000,000 | 522,000,000 | |
Level 1 | Class A common stock | |||
Other Financial Instruments Numeric [Abstract] | |||
Class A common stock, fair value | 338,000,000 | ||
Level 1 | Fair Value, Measurements, Recurring | |||
Trading securities: | |||
Diversified equity securities | 168,000,000 | 163,000,000 | |
Available-for-sale securities: | |||
Equity securities | 18,000,000 | 17,000,000 | |
Debt securities | 0 | 0 | |
Derivatives: | |||
Foreign exchange contracts | 0 | 0 | |
Other | 0 | 0 | |
Derivatives: | |||
Foreign exchange contracts | 0 | 0 | |
Other | 0 | 0 | |
Total | 186,000,000 | 180,000,000 | |
Level 2 | |||
Other Financial Instruments Numeric [Abstract] | |||
Difference between carrying value and fair value of debt | 1,583,000,000 | 2,238,000,000 | |
Level 2 | Series B convertible redeemable preferred shares | |||
Other Financial Instruments Numeric [Abstract] | |||
Series B convertible redeemable preferred shares, fair value | 508,000,000 | ||
Level 2 | Fair Value, Measurements, Recurring | |||
Trading securities: | |||
Diversified equity securities | 0 | 0 | |
Available-for-sale securities: | |||
Equity securities | 0 | 0 | |
Debt securities | 31,000,000 | 37,000,000 | |
Derivatives: | |||
Foreign exchange contracts | 4,000,000 | 153,000,000 | |
Other | 0 | 0 | |
Derivatives: | |||
Foreign exchange contracts | (50,000,000) | (9,000,000) | |
Other | 0 | 0 | |
Total | (15,000,000) | 181,000,000 | |
Level 3 | Fair Value, Measurements, Recurring | |||
Trading securities: | |||
Diversified equity securities | 0 | 0 | |
Available-for-sale securities: | |||
Equity securities | 0 | 0 | |
Debt securities | 0 | 0 | |
Derivatives: | |||
Foreign exchange contracts | 0 | 0 | |
Other | 369,000,000 | 161,000,000 | |
Derivatives: | |||
Foreign exchange contracts | 0 | 0 | |
Other | (1,000,000) | 0 | |
Total | 368,000,000 | 161,000,000 | |
Level 3 | Fair Value, Measurements, Recurring | Warrant | CME Rights Offering | |||
Derivatives: | |||
Equity warrants | $ 368,000,000 | 159,000,000 | |
Fair value assumptions, expected term (years) | 2 months 12 days | ||
Fair value assumptions, expected volatility rate (percent) | 42.00% | ||
Level 3 | Fair Value, Measurements, Nonrecurring | |||
Non Financial Instruments Numeric [Abstract] | |||
Fair value of theatrical films and television programs to be abandoned | $ 0 | ||
Theatrical film and television production costs, carrying value in inventory prior to write down | 165,000,000 | 285,000,000 | |
Theatrical film and television production costs, carrying value in inventory subsequent to write down | 67,000,000 | 128,000,000 | |
Level 3 | Fair Value, Measurements, Nonrecurring | Turner | Broadcast license agreement | |||
Non Financial Instruments Numeric [Abstract] | |||
Impairment of intangible assets (excluding goodwill) | 25,000,000 | ||
Value of assets after impairment | 10,000,000 | ||
Derivatives | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Balance as of the beginning of the period | 161,000,000 | 173,000,000 | |
Total gains (losses), net: | |||
Included in other comprehensive income (loss) | 0 | 0 | |
Purchases | 0 | 0 | |
Settlements | (1,000,000) | 5,000,000 | |
Issuances | (1,000,000) | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance as of the end of the period | 368,000,000 | 161,000,000 | $ 173,000,000 |
Net income (loss) for the period included in net income related to assets and liabilities still held as of the end of the period | 209,000,000 | (19,000,000) | |
Derivatives | Operating Income (Loss) | |||
Total gains (losses), net: | |||
Included in earnings | 0 | 2,000,000 | |
Derivatives | Other Nonoperating Income (Expense) | |||
Total gains (losses), net: | |||
Included in earnings | $ 209,000,000 | $ (19,000,000) |
Inventories and Theatrical Fi61
Inventories and Theatrical Film and Television Production Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Inventories: | ||
Programming costs, less amortization | $ 3,859 | $ 3,625 |
Other inventory, primarily DVDs and Blu-ray Discs | 186 | 184 |
Total inventories | 4,045 | 3,809 |
Less current portion of inventory | (2,401) | (2,062) |
Total noncurrent inventories | 1,644 | 1,747 |
Theatrical film production costs: [Abstract] | ||
Released, less amortization | 709 | 818 |
Completed and not released | 502 | 460 |
In production | 1,219 | 1,286 |
Development and pre-production | 152 | 133 |
Television production costs: [Abstract] | ||
Released, less amortization | 1,844 | 1,618 |
Completed and not released | 835 | 841 |
In production | 1,357 | 995 |
Development and pre-production | 13 | 18 |
Total theatrical film and television production costs | 6,631 | 6,169 |
Total noncurrent inventories and theatrical film and television production costs | 8,275 | 7,916 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization | $ 585 | 783 |
Percentage of unamortized film costs | 90.00% | |
Film costs, amortized in next operating cycle | $ 2,600 | |
Film library | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization | $ 368 | $ 518 |
Derivative Instruments and He62
Derivative Instruments and Hedging Activities (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gains (losses) recognized in Costs of revenues | $ (84) | $ 81 | $ 127 | |
Gains (losses) recognized in Selling, general and administrative | (17) | 14 | 21 | |
Gains (losses) recognized in Other loss, net | 27 | (34) | $ (26) | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||
Cash flow hedge gains (losses) recorded in accumulated OCI | (9) | 46 | ||
Cash flow hedge gains (losses) recorded in accumulated OCI deferred gains (losses) | (1) | (3) | ||
Net Investment Hedging - Foreign Denominated Debt | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivatives used in net investment hedge, increase (decrease), gross of tax | (95) | 39 | ||
Net Investment Hedging - Foreign Denominated Debt | Debt Designated as a Hedge of Euro-denominated Net Investments | ||||
Derivatives, Fair Value [Line Items] | ||||
Debt instrument, face amount | € | € 700,000,000 | |||
Foreign Currency Derivatives | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset, fair value, gross asset | 297 | |||
Derivative liability, fair value, gross liability | 153 | |||
Foreign Currency Derivatives | Qualifying Hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset, fair value, gross asset | 77 | 272 | ||
Derivative liability, fair value, gross liability | 132 | 141 | ||
Foreign Currency Derivatives | Economic Hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset, fair value, gross asset | 9 | 25 | ||
Derivative liability, fair value, gross liability | 12 | |||
Prepaid expenses and other current assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Prepaid expenses and other current assets | 4 | 153 | ||
Accounts payable and accrued liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Accounts payable and accrued liabilities | $ (50) | $ (9) | ||
Maximum | Foreign Currency Derivatives | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, remaining maturity | 18 months | |||
Minimum | Foreign Currency Derivatives | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, remaining maturity | 3 months |
Long Term Debt and Other Fina63
Long Term Debt and Other Financing Arrangements (Details) | Dec. 22, 2017USD ($) | Dec. 31, 2017USD ($)credit_facility | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 16, 2016USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||||
Fixed-rate public debt | $ 18,859,000,000 | $ 22,715,000,000 | ||||
Bank credit facilities and commercial paper program | 4,668,000,000 | 1,394,000,000 | ||||
Other obligations | 217,000,000 | 230,000,000 | ||||
Subtotal | 23,744,000,000 | 24,339,000,000 | ||||
Debt due within one year | (5,450,000,000) | (1,947,000,000) | ||||
Total long-term debt | 18,294,000,000 | $ 22,392,000,000 | ||||
Commercial paper program | 2,668,000,000 | |||||
Unused committed capacity | $ 4,968,000,000 | |||||
Debt, weighted average interest rate (percent) | 4.32% | 4.97% | ||||
Cash and equivalents | $ 2,621,000,000 | $ 1,539,000,000 | $ 2,155,000,000 | $ 2,618,000,000 | ||
Premiums paid and costs incurred on debt redemption | 1,087,000,000 | 1,008,000,000 | $ 72,000,000 | |||
Capital Leases of Lessee [Abstract] | ||||||
Capital leased assets, gross | 144,000,000 | 118,000,000 | ||||
Capital leases, lessee balance sheet, assets by major class, accumulated depreciation | 80,000,000 | $ 64,000,000 | ||||
Capital Leases, Future Minimum Payments, Net Minimum Payments, Fiscal Year Maturity [Abstract] | ||||||
2,018 | 16,000,000 | |||||
2,019 | 15,000,000 | |||||
2,020 | 11,000,000 | |||||
2,021 | 5,000,000 | |||||
2,022 | 1,000,000 | |||||
Thereafter | 4,000,000 | |||||
Total | 52,000,000 | |||||
Amount representing interest | (5,000,000) | |||||
Present value of minimum lease payments | 47,000,000 | |||||
Current portion | (14,000,000) | |||||
Total long-term portion | 33,000,000 | |||||
Revolving Credit Facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, amount outstanding | 0 | |||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000,000 | $ 5,000,000,000 | ||||
Number of revolving credit facilities | credit_facility | 2 | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.15% | |||||
Line of credit facility, maximum letters of credit issuance (not to exceed) | $ 500,000,000 | |||||
Line of credit facility, maximum leverage ratio | 4.5 | |||||
Line of credit facility calculated leverage ratio | 2.55 | |||||
Line of credit facility, maximum borrowing capacity amount of potential increase (up to) | $ 500,000,000 | |||||
Revolving Credit Facility A | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 2,500,000,000 | |||||
Revolving Credit Facility B | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 2,500,000,000 | |||||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable interest rate on revolving credit facility (percent) | 1.10% | |||||
Fixed-rate public debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt, weighted average interest rate (percent) | 4.86% | 5.23% | ||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
2,018 | $ 600,000,000 | |||||
2,019 | 650,000,000 | |||||
2,020 | 1,400,000,000 | |||||
2,021 | 2,000,000,000 | |||||
2,022 | 1,000,000,000 | |||||
Thereafter | $ 13,356,000,000 | |||||
Fixed-rate public debt | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity (years) | 5 years | |||||
Debt instrument, interest rate, stated percentage | 1.95% | |||||
Fixed-rate public debt | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity (years) | 40 years | |||||
Debt instrument, interest rate, stated percentage | 9.15% | |||||
Fixed-rate public debt | 2017 Debt Tender Offers | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of debt, amount | $ 3,500,000,000 | |||||
Fixed-rate public debt | Debentures 9.15% due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 9.15% | |||||
Fixed-rate public debt | Debentures 7.57% due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 7.57% | |||||
Fixed-rate public debt | Debentures 6.85% due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.85% | |||||
Fixed-rate public debt | Debentures 6.95% due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.95% | |||||
Fixed-rate public debt | Debentures 6.625% due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.625% | |||||
Fixed-rate public debt | Debentures 7.625% due 2031 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 7.625% | |||||
Fixed-rate public debt | Debentures 7.700% due 2032 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 7.70% | |||||
Fixed-rate public debt | Discount Debentures 8.3% due 2036 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 8.30% | |||||
Fixed-rate public debt | Debentures 6.500% due 2036 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.50% | |||||
Fixed-rate public debt | Debentures 6.2% due 2040 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.20% | |||||
Fixed-rate public debt | Debentures 6.1% due 2040 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.10% | |||||
Fixed-rate public debt | Debentures 6.25% due 2041 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 6.25% | |||||
Other obligations | ||||||
Debt Instrument [Line Items] | ||||||
Debt, weighted average interest rate (percent) | 3.12% | 3.18% | ||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
2,018 | $ 183,000,000 |
Long Term Debt and Other Fina64
Long Term Debt and Other Financing Arrangements - Term Loan Facility (Details) - Term Loan Facility $ in Billions | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Short-term Debt [Line Items] | ||
Term loan facility, maximum leverage ratio | 4.5 | |
Term loan facility, calculated leverage ratio | 2.55 | |
Loans Payable | ||
Short-term Debt [Line Items] | ||
Short-term debt | $ 2 | $ 2 |
Debt instrument, interest rate, stated percentage | 2.75% | 2.75% |
Loans Payable | London Interbank Offered Rate (LIBOR) | ||
Short-term Debt [Line Items] | ||
Variable interest rate on term loan facility (percent) | 1.25% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||||
Domestic | $ 4,645 | $ 4,356 | $ 4,733 | ||
Foreign | 1,300 | 839 | 713 | ||
Income from continuing operations before income taxes | 5,945 | 5,195 | 5,446 | ||
Federal: | |||||
Current | 1,257 | 693 | 844 | ||
Deferred | (1,040) | 216 | 349 | ||
Foreign: | |||||
Current | 369 | 342 | 337 | ||
Deferred | 31 | (2) | (29) | ||
State and Local: | |||||
Current | 85 | 10 | 142 | ||
Deferred | (1) | 22 | 8 | ||
Total | 701 | 1,281 | 1,651 | ||
Income tax expense (benefit), continuing operations, adjustment of deferred tax (asset) liability | (885) | ||||
Foreign withholding taxes | 285 | 264 | 236 | ||
Excess tax benefit from equity instruments | $ 0 | $ 88 | $ 151 | ||
Subsequent Event [Line Items] | |||||
Effective tax rate reconciliation, at federal statutory income tax rate (percent) | 35.00% | 35.00% | 35.00% | ||
Deferred tax assets: | |||||
Tax attribute carryforwards | $ 292 | $ 435 | |||
Royalties, participations and residuals | 257 | 344 | |||
Other | 1,343 | 1,825 | |||
Valuation allowances | (287) | (463) | |||
Total deferred tax assets | 1,605 | 2,141 | |||
Deferred tax liabilities: | |||||
Assets acquired in business combinations | 1,688 | 2,752 | |||
Unbilled television receivables | 794 | 1,086 | |||
Other | 596 | 856 | |||
Total deferred tax liabilities | 3,078 | 4,694 | |||
Net deferred tax liability | 1,473 | 2,553 | |||
Tax credits | 18 | ||||
Capital losses | 2 | ||||
Net operating losses | 272 | ||||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||
Beginning balance | $ 1,360 | $ 1,360 | 1,325 | 1,330 | $ 1,327 |
Additions for prior year tax positions | 96 | 154 | 61 | ||
Additions for current year tax positions | 66 | 81 | 62 | ||
Reductions for prior year tax positions | (110) | (203) | (75) | ||
Settlements | (5) | (29) | (40) | ||
Lapses in statute of limitations | (12) | (8) | (5) | ||
Ending balance | 1,360 | 1,325 | $ 1,330 | ||
Interest reserves recorded through statement of operations | 53 | 58 | |||
Interest payments | 2 | 17 | |||
Interest and penalties accrued | $ 474 | $ 423 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Effective tax rate reconciliation, at federal statutory income tax rate (percent) | 21.00% | ||||
Tax benefit from expensing film production costs | $ 125 |
Income Taxes 2 (Details)
Income Taxes 2 (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||||
Taxes on income at U.S. federal statutory rate | $ 2,081 | $ 1,818 | $ 1,906 | |
State and local taxes, net of federal tax effects | 60 | 56 | 68 | |
Domestic production activities deduction | (146) | (141) | (101) | |
Foreign rate differential | (204) | (176) | (129) | |
Impact of U.S. federal tax reform | (843) | 0 | 0 | |
Excess tax benefits on share-based compensation | (149) | 0 | 0 | |
Change in tax method of accounting for film and TV cost amortization | 0 | (224) | 0 | |
Other | (98) | (52) | (93) | |
Total | $ 701 | $ 1,281 | $ 1,651 | |
U.S. federal | Domestic Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Settlement, tax benefit | $ 687 |
Income Taxes 3 (Details)
Income Taxes 3 (Details) | Dec. 31, 2017USD ($) |
Minimum | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |
Decrease in unrecognized tax benefits is reasonably possible | $ 0 |
Maximum | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |
Decrease in unrecognized tax benefits is reasonably possible | $ 260,000,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares Repurchased | 0 | 31,000,000 | 45,000,000 | |
Cost of Shares | $ 2,307,000,000 | $ 3,600,000,000 | ||
Time Warner common stock, shares outstanding (shares) | 780,000,000 | 772,000,000 | ||
Treasury stock, shares | 872,000,000 | 880,000,000 | ||
Preferred stock, shares authorized (up to) | 750,000,000 | |||
Common stock, shares authorized (up to) | 8,330,000,000 | |||
Additional series of common stock, shares authorized (up to) | 600,000,000 | |||
Statement of Income and Comprehensive Income [Abstract] | ||||
Unrealized gains (losses) on foreign currency translation, Pretax | $ 149,000,000 | $ (122,000,000) | (319,000,000) | |
Unrealized gains (losses) on foreign currency translation, Tax (provision) benefit | 29,000,000 | 1,000,000 | 30,000,000 | |
Unrealized gains (losses) on foreign currency translation, Net of tax | 178,000,000 | (121,000,000) | (289,000,000) | |
Reclassification adjustment for (gains) losses on foreign currency translation realized in net income, Pretax | 5,000,000 | |||
Reclassification adjustment for (gains) losses on foreign currency translation realized in net income, Tax (provision) benefit | 0 | |||
Reclassification adjustment for (gains) losses on foreign currency translation realized in net income, Net of tax | 0 | 0 | 5,000,000 | |
Unrealized gains (losses) on securities, Pretax | 1,000,000 | 1,000,000 | ||
Unrealized gains (losses) on securities, Tax (provision) benefit | 0 | 0 | ||
Unrealized gains (losses) on securities, Net of tax | 1,000,000 | 0 | 1,000,000 | |
Reclassification adjustment for (gains) losses on securities realized in net income, Pretax | 1,000,000 | |||
Reclassification adjustment for (gains) losses on securities realized in net income, Tax (provision) benefit | 0 | |||
Reclassification adjustment for (gains) losses on securities realized in net income, Net of tax | 1,000,000 | 0 | 0 | |
Unrealized gains (losses) on benefit obligations, Pretax | (130,000,000) | (39,000,000) | (37,000,000) | |
Unrealized gains (losses) on benefit obligations, Tax (provision) benefit | 32,000,000 | 18,000,000 | 11,000,000 | |
Unrealized gains (losses) on benefit obligations, Net of tax | (98,000,000) | (21,000,000) | (26,000,000) | |
Reclassification adjustment for (gains) losses on benefit obligations realized in net income, Pretax | 37,000,000 | 104,000,000 | 33,000,000 | |
Reclassification adjustment for (gains) losses on benefit obligations realized in net income, Tax (provision) benefit | (8,000,000) | (37,000,000) | (11,000,000) | |
Reclassification adjustment for (gains) losses on benefit obligations realized in net income, Net of tax | 29,000,000 | 67,000,000 | 22,000,000 | |
Unrealized gains (losses) on derivative financial instruments, Pretax | (126,000,000) | 91,000,000 | 137,000,000 | |
Unrealized gains (losses) on derivative financial instruments, Tax (provision) benefit | 32,000,000 | (33,000,000) | (49,000,000) | |
Unrealized gains (losses) on derivative financial instruments, Net of tax | (94,000,000) | 58,000,000 | 88,000,000 | |
Reclassification adjustment for derivative financial instruments (gains) losses realized in net income, Pretax | 72,000,000 | (74,000,000) | (130,000,000) | |
Reclassification adjustment for derivative financial instruments (gains) losses realized in net income, Tax (provision) benefit | (16,000,000) | 27,000,000 | 47,000,000 | |
Reclassification adjustment for derivative financial instruments (gains) losses realized in net income, Net of tax | 56,000,000 | (47,000,000) | (83,000,000) | |
Other comprehensive income (loss), Pretax | 4,000,000 | (40,000,000) | (310,000,000) | |
Other comprehensive income (loss), Tax (provision) benefit | 69,000,000 | (24,000,000) | 28,000,000 | |
Other comprehensive income (loss) | 73,000,000 | (64,000,000) | (282,000,000) | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Selling, general and administrative expenses | 5,438,000,000 | 5,123,000,000 | 4,824,000,000 | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Costs of revenues | 17,647,000,000 | 16,376,000,000 | 16,154,000,000 | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Other loss, net | 970,000,000 | 1,191,000,000 | 256,000,000 | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Gain (loss) on operating assets, net | (67,000,000) | (78,000,000) | 1,000,000 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Foreign currency translation losses | (526,000,000) | (704,000,000) | ||
Net unrealized gains on securities | 15,000,000 | 13,000,000 | ||
Net derivative financial instruments gains (losses) | (10,000,000) | 28,000,000 | ||
Net unfunded/underfunded benefit obligation | (916,000,000) | (847,000,000) | ||
Accumulated other comprehensive loss, net | (1,437,000,000) | (1,510,000,000) | ||
January 2016 Plan | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount (shares) (up to) | $ 5,000,000,000 | |||
Accumulated Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Gain (loss) on operating assets, net | 5,000,000 | |||
Accumulated Defined Benefit Plans Adjustment | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Selling, general and administrative expenses | 37,000,000 | 58,000,000 | 33,000,000 | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Discontinued operations | 46,000,000 | |||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Selling, general and administrative expenses | 1,000,000 | 2,000,000 | (21,000,000) | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Costs of revenues | 72,000,000 | (64,000,000) | (104,000,000) | |
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Other loss, net | (1,000,000) | $ (12,000,000) | $ (5,000,000) | |
Accumulated Net Unrealized Investment Gain (Loss) | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pretax (gains) losses reclassified out of Accumulated Other Comprehensive Income to Other loss, net | $ 1,000,000 |
Income Per Common Share (Detail
Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Income from continuing operations attributable to Time Warner Inc. shareholders | $ 5,247 | $ 3,915 | $ 3,796 |
Income allocated to participating securities | (18) | (11) | (11) |
Income from continuing operations attributable to Time Warner Inc. common shareholders — basic | $ 5,229 | $ 3,904 | $ 3,785 |
Average basic common shares outstanding (in shares) | 776.6 | 780.8 | 814.9 |
Dilutive effect of equity awards (in shares) | 14.1 | 11.5 | 14.6 |
Average common shares outstanding — diluted (in shares) | 790.7 | 792.3 | 829.5 |
Antidilutive common share equivalents excluded from computation (in shares) | 0 | 5 | 5 |
Income per common share from continuing operations attributable to Time Warner Inc common shareholders - basic (dollars per share) | $ 6.73 | $ 5 | $ 4.64 |
Income per common share from continuing operations attributable to Time Warner Inc common shareholders - diluted (dollars per share) | $ 6.64 | $ 4.94 | $ 4.58 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)equity_plan$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Cash received | $ 206,000 | $ 172,000 | $ 165,000 |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Total impact on operating income | 227,000 | 277,000 | 182,000 |
Tax benefit recognized | $ 78,000 | 97,000 | 64,000 |
Prior active plan - 2013 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of active equity plans | equity_plan | 0 | ||
Restricted Stock Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 280,000 | $ 247,000 | $ 384,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Number of Shares/Units, Granted (shares) | shares | 500 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | $ 96.75 | $ 78.63 | $ 83.52 |
Restricted Stock Unit | Prior active plan - 2013 Stock Incentive Plan | First Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Prior active plan - 2013 Stock Incentive Plan | Second Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Prior active plan - 2013 Stock Incentive Plan | Third Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Prior active plan - 2013 Stock Incentive Plan | Fourth Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan First Half | First Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan First Half | Second Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan First Half | Third Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan First Half | Fourth Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan Second Half | First Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan Second Half | Second Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan Second Half | Third Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted Stock Unit | Special Retention Plan Second Half | Fourth Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Performance Stock Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 33,000 | $ 28,000 | $ 30,000 |
Share-based compensation arrangement by share-based payment award, award requisite service period (years) | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | $ 0 | $ 98.24 | $ 91.47 |
Payout adjustment | shares | 200 | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, expiration period (years) | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility (percent) | 26.00% | 25.00% | |
Expected term to exercise from grant date (years) | 6 years 2 months 12 days | 5 years 9 months 18 days | |
Risk-free rate (percent) | 1.50% | 1.80% | |
Expected dividend yield (percent) | 2.60% | 1.70% | |
Weighted average grant date fair value per option (in dollars per share) | $ / shares | $ 12.26 | $ 18.16 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of options outstanding at beginning of period (shares) | shares | 24,567 | ||
Number of options, Granted (shares) | shares | 0 | ||
Number of options, Exercised (shares) | shares | (5,913) | ||
Number of options, Forfeited or expired (shares) | shares | (104) | ||
Number of options outstanding at end of period (shares) | shares | 18,550 | 24,567 | |
Exercisable at end of period (shares) | shares | 14,524 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted average exercise price outstanding at beginning of period (in dollars per share) | $ / shares | $ 47.07 | ||
Weighted-Average Exercise Price, Exercised (in dollars per share) | $ / shares | 34.75 | ||
Weighted-Average Exercise Price, Forfeited or expired (in dollars per share) | $ / shares | 65.40 | ||
Weighted average exercise price outstanding at end of period (in dollars per share) | $ / shares | 50.89 | $ 47.07 | |
Weighted average exercise price or exercisable (in dollars per share) | $ / shares | $ 44.69 | ||
Weighted- Average Remaining Contractual Life, outstanding (years) | 4 years 7 months 13 days | ||
Weighted- Average Remaining Contractual Life, exercisable (years) | 3 years 10 months 2 days | ||
Aggregate Intrinsic Value, outstanding | $ 755,314 | ||
Aggregate Intrinsic Value, exercisable | 681,366 | ||
Total intrinsic value | 374,000 | $ 237,000 | $ 270,000 |
Cash received | 206,000 | 172,000 | 165,000 |
Tax benefits realized | 133,000 | 83,000 | 96,000 |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Total impact on operating income | 26,000 | $ 42,000 | 39,000 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 27,000 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition (years) | 1 year | ||
Stock Option | First Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Stock Option | Second Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Stock Option | Third Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Stock Option | Fourth Year Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 25.00% | ||
Restricted stock units and performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Number of Shares/Units Unvested at beginning of period (shares) | shares | 12,049 | ||
Number of Shares/Units, Granted (shares) | shares | 663 | ||
Number of Shares/Units, Vested (shares) | shares | (3,234) | ||
Number of Shares/Units, Forfeited (shares) | shares | (268) | ||
Number of Shares/Units Unvested at end of period (shares) | shares | 9,210 | 12,049 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-Average Grant Date Fair Value of Unvested at beginning of period (in dollars per share) | $ / shares | $ 76.56 | ||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 96.58 | ||
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares | 65.77 | ||
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 80.50 | ||
Weighted-Average Grant Date Fair Value of Unvested at end of period (in dollars per share) | $ / shares | $ 81.15 | $ 76.56 | |
Aggregate Intrinsic Value Unvested at end of period | $ 842,439 | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Total impact on operating income | 201,000 | $ 235,000 | $ 143,000 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 469,000 | ||
Restricted stock units and performance stock units | Minimum | |||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition (years) | 1 year | ||
Restricted stock units and performance stock units | Maximum | |||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition (years) | 2 years |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2016 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Noncurrent liability | $ 1,058,000,000 | $ 954,000,000 | ||
Defined Contribution Plan [Abstract] | ||||
Defined contribution plan, cost recognized | 169,000,000 | 149,000,000 | $ 153,000,000 | |
Defined Benefit Pension Plans | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligation, beginning of year | 3,465,000,000 | 3,439,000,000 | ||
Service cost | 4,000,000 | 4,000,000 | ||
Interest cost | 136,000,000 | 145,000,000 | ||
Actuarial loss gain | 290,000,000 | (169,000,000) | ||
Benefits paid | (162,000,000) | (274,000,000) | ||
Curtailments | (1,000,000) | 0 | ||
Settlements | (13,000,000) | 0 | ||
Remeasurement | 0 | 407,000,000 | ||
Foreign currency exchange rates | 44,000,000 | (87,000,000) | ||
Projected benefit obligation, end of year | 3,763,000,000 | 3,465,000,000 | 3,439,000,000 | |
Accumulated benefit obligation, end of year | 3,732,000,000 | 3,433,000,000 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets, beginning of year | 2,738,000,000 | 2,698,000,000 | ||
Actual return on plan assets | 296,000,000 | 345,000,000 | ||
Employer contributions | 51,000,000 | 74,000,000 | ||
Benefits paid | (162,000,000) | (274,000,000) | ||
Foreign currency exchange rates | 50,000,000 | (105,000,000) | ||
Settlements | (13,000,000) | 0 | ||
Fair value of plan assets, end of year | 2,960,000,000 | 2,738,000,000 | 2,698,000,000 | |
Net asset (liability) | (803,000,000) | (727,000,000) | ||
Noncurrent liability | 958,000,000 | 837,000,000 | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | ||||
Net total in accumulated other comprehensive (income) loss | 1,435,000,000 | 1,335,000,000 | ||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Service cost | 4,000,000 | 4,000,000 | 4,000,000 | |
Interest cost | 63,000,000 | 66,000,000 | 83,000,000 | |
Expected return on plan assets | (60,000,000) | (64,000,000) | (90,000,000) | |
Amortization of prior service cost | 1,000,000 | 1,000,000 | 1,000,000 | |
Amortization of net loss | 14,000,000 | 14,000,000 | 17,000,000 | |
Curtailments | (1,000,000) | 0 | 0 | |
Settlements | 0 | 24,000,000 | 0 | |
Net periodic benefit costs | 21,000,000 | 45,000,000 | 15,000,000 | |
Net periodic benefit costs (income), related to discontinued operations included in Other loss, net | $ 13,000,000 | 12,000,000 | $ 5,000,000 | |
Net periodic benefit costs, related to discontinued operations included in Discontinued operations | $ 46,000,000 | |||
Weighted-average assumptions used to determine benefit obligations | ||||
Discount rate (percent) | 3.52% | 3.96% | 4.59% | |
Rate of compensation increase (percent) | 5.62% | 5.62% | 5.45% | |
Weighted-average assumptions used to determine net periodic benefit cost | ||||
Discount rate (percent) | 3.96% | 4.30% | 4.10% | |
Rate of compensation increase (percent) | 5.62% | 5.45% | 5.35% | |
Expected long-term return on plan assets (percent) | 5.40% | 5.91% | 5.84% | |
Fair Value of Plan Assets | ||||
Total | $ 2,134,000,000 | $ 1,991,000,000 | ||
Pooled investments | 228,000,000 | 231,000,000 | ||
Commingled Trust Funds Measured Using NAV | 661,000,000 | 610,000,000 | ||
Other Investments Measured Using NAV | 70,000,000 | 56,000,000 | ||
Total Investments Measured Using NAV | 959,000,000 | 897,000,000 | ||
Pension Plan Securities Loaned [Abstract] | ||||
Pension plan, securities loaned | 113,000,000 | 81,000,000 | ||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | ||||
2,018 | 176,000,000 | |||
2,019 | 177,000,000 | |||
2,020 | 188,000,000 | |||
2,021 | 188,000,000 | |||
2,022 | 205,000,000 | |||
2023-2027 | 1,027,000,000 | |||
Defined Benefit Pension Plans | Cash and cash equivalents | ||||
Fair Value of Plan Assets | ||||
Total | 116,000,000 | 142,000,000 | ||
Pension Plan Securities Loaned [Abstract] | ||||
Defined Benefit Plan Assets, cash collateral for securities on loan | 6,000,000 | 17,000,000 | ||
Defined Benefit Pension Plans | Insurance contracts | ||||
Fair Value of Plan Assets | ||||
Total | 3,000,000 | 15,000,000 | ||
Defined Benefit Pension Plans | Common stocks | ||||
Fair Value of Plan Assets | ||||
Total | 147,000,000 | 165,000,000 | ||
Defined Benefit Pension Plans | U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 382,000,000 | 262,000,000 | ||
Pension Plan Securities Loaned [Abstract] | ||||
Defined Benefit Plan Assets, securities collateral for securities on loan | 109,000,000 | 66,000,000 | ||
Defined Benefit Pension Plans | Non-U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 327,000,000 | 250,000,000 | ||
Defined Benefit Pension Plans | Other fixed income securities | ||||
Fair Value of Plan Assets | ||||
Total | 1,003,000,000 | 952,000,000 | ||
Defined Benefit Pension Plans | Other investments | ||||
Fair Value of Plan Assets | ||||
Total | 175,000,000 | 224,000,000 | ||
Defined Benefit Pension Plans | Derivatives | ||||
Fair Value of Plan Assets | ||||
Total | (19,000,000) | (19,000,000) | ||
Defined Benefit Pension Plans | Level 1 | ||||
Fair Value of Plan Assets | ||||
Total | 959,000,000 | 922,000,000 | ||
Defined Benefit Pension Plans | Level 1 | Cash and cash equivalents | ||||
Fair Value of Plan Assets | ||||
Total | 116,000,000 | 142,000,000 | ||
Defined Benefit Pension Plans | Level 1 | Insurance contracts | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 1 | Common stocks | ||||
Fair Value of Plan Assets | ||||
Total | 147,000,000 | 165,000,000 | ||
Defined Benefit Pension Plans | Level 1 | U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 273,000,000 | 209,000,000 | ||
Defined Benefit Pension Plans | Level 1 | Non-U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 327,000,000 | 250,000,000 | ||
Defined Benefit Pension Plans | Level 1 | Other fixed income securities | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 1 | Other investments | ||||
Fair Value of Plan Assets | ||||
Total | 96,000,000 | 156,000,000 | ||
Defined Benefit Pension Plans | Level 1 | Derivatives | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 2 | ||||
Fair Value of Plan Assets | ||||
Total | 1,175,000,000 | 1,069,000,000 | ||
Defined Benefit Pension Plans | Level 2 | Cash and cash equivalents | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 2 | Insurance contracts | ||||
Fair Value of Plan Assets | ||||
Total | 3,000,000 | 15,000,000 | ||
Defined Benefit Pension Plans | Level 2 | Common stocks | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 2 | U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 109,000,000 | 53,000,000 | ||
Defined Benefit Pension Plans | Level 2 | Non-U.S. government and agency securities | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Level 2 | Other fixed income securities | ||||
Fair Value of Plan Assets | ||||
Total | 1,003,000,000 | 952,000,000 | ||
Defined Benefit Pension Plans | Level 2 | Other investments | ||||
Fair Value of Plan Assets | ||||
Total | 79,000,000 | 68,000,000 | ||
Defined Benefit Pension Plans | Level 2 | Derivatives | ||||
Fair Value of Plan Assets | ||||
Total | (19,000,000) | (19,000,000) | ||
Defined Benefit Pension Plans | Level 3 | ||||
Fair Value of Plan Assets | ||||
Total | 0 | 0 | ||
Defined Benefit Pension Plans | Time Warner Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension plan amendment benefits present value threshold | $ 50,000 | |||
Defined Benefit Pension Plans | The CW sub-plan | ||||
Fair Value of Plan Assets | ||||
Total | 22,000,000 | 20,000,000 | ||
Defined Benefit Pension Plans | Funded | ||||
Defined Benefit Plan Plans With Benefit Obligations In Excess Of Plan Assets | ||||
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, projected benefit obligation | 565,000,000 | |||
Defined benefit plan, pension plans with accumulated benefit obligation in excess of plan assets, accumulated benefit obligation | 565,000,000 | |||
Defined Benefit Pension Plans | Unfunded | ||||
Defined Benefit Plan Plans With Benefit Obligations In Excess Of Plan Assets | ||||
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, projected benefit obligation | 426,000,000 | 414,000,000 | ||
Defined benefit plan, pension plans with accumulated benefit obligation in excess of plan assets, accumulated benefit obligation | $ 420,000,000 | 407,000,000 | ||
Defined Benefit Pension Plans | Domestic | Funded | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Percent decrease of plan fixed income securities with funding level decline | 5.00% | |||
Plan funding level decline threshold | 5.00% | |||
Plan minimum fixed income investment allocation | 50.00% | |||
Percent increase of plan fixed income securities with funding level increase | 5.00% | |||
Plan funding level increase threshold | 5.00% | |||
Defined Benefit Pension Plans | Domestic | Funded | Growth assets | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 40.00% | |||
Defined Benefit Pension Plans | Domestic | Funded | Growth assets | Scenario, Plan | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 20.00% | |||
Defined Benefit Pension Plans | Domestic | Funded | Fixed income investments | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 60.00% | |||
Defined Benefit Pension Plans | Domestic | Funded | Fixed income investments | Scenario, Plan | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 80.00% | |||
Defined Benefit Pension Plans | International | Funded | ||||
Payment for Pension and Other Postretirement Benefits [Abstract] | ||||
Contributions | $ 20,000,000 | |||
Defined Benefit Pension Plans | International | Funded | Growth assets | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 40.00% | |||
Defined Benefit Pension Plans | International | Funded | Fixed income investments | ||||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | ||||
Defined benefit plan, target plan asset allocations (percent) | 60.00% | |||
Other Postretirement Benefits Plans | Domestic | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligation, beginning of year | $ 88,000,000 | |||
Projected benefit obligation, end of year | 78,000,000 | 88,000,000 | ||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | ||||
Net total in accumulated other comprehensive (income) loss | (24,000,000) | (19,000,000) | ||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Net periodic benefit costs | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 |
Benefit Plans 2 (Details)
Benefit Plans 2 (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Multiemployer Plans, Pension | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan, period contributions | $ 152 | $ 128 | $ 139 |
Multiemployer Plans, Pension | Five of The Largest Six Multiemployer Pension Plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plans, funded status | At least 80 percent | ||
Multiemployer Plans, Pension | Motion Picture Industry Pension Plan | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plans, funded percentage | 76.80% | ||
Multiemployer Plans Health and Welfare Benefits | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan, period contributions | $ 218 | $ 194 | $ 220 |
Restructuring and Severance C73
Restructuring and Severance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | $ 120 | $ 117 | $ 60 |
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 2 | 3 | 1 |
2017 initiatives | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 133 | 0 | 0 |
2017 initiatives | Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 3 | ||
2016 initiatives | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (9) | 114 | 0 |
2016 initiatives | Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (1) | 4 | |
2015 and prior initiatives | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (4) | 3 | 60 |
2015 and prior initiatives | Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (1) | ||
Turner | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 59 | 61 | 58 |
Turner | 2017 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 65 | ||
Turner | 2016 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (5) | 61 | |
Turner | 2015 and prior initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (1) | ||
Home Box Office | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 13 | 49 | 0 |
Home Box Office | 2017 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 17 | ||
Home Box Office | 2016 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (3) | 47 | |
Home Box Office | 2015 and prior initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | (1) | 2 | |
Warner Bros. | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 46 | 4 | $ 1 |
Warner Bros. | 2017 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 48 | ||
Warner Bros. | 2016 initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | 2 | ||
Warner Bros. | 2015 and prior initiatives | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring and severance costs | $ (2) | $ 2 |
Accrued Restructuring and Sever
Accrued Restructuring and Severance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Remaining liability, beginning balance | $ 171 | $ 253 | $ 534 |
Net accruals | 120 | 117 | 60 |
Foreign currency translation adjustment | (3) | ||
Noncash reductions | (2) | (1) | |
Cash paid | (92) | (199) | (337) |
Remaining liability, ending balance | 197 | 171 | 253 |
Restructuring Reserve [Abstract] | |||
Restructuring reserve, current | 119 | ||
Restructuring reserve, noncurrent | 78 | ||
Employee Terminations | |||
Restructuring Reserve [Roll Forward] | |||
Remaining liability, beginning balance | 162 | 239 | 525 |
Net accruals | 121 | 114 | 43 |
Foreign currency translation adjustment | (3) | ||
Noncash reductions | (2) | (1) | |
Cash paid | (87) | (191) | (325) |
Remaining liability, ending balance | 194 | 162 | 239 |
Other Exit Costs | |||
Restructuring Reserve [Roll Forward] | |||
Remaining liability, beginning balance | 9 | 14 | 9 |
Net accruals | (1) | 3 | 17 |
Foreign currency translation adjustment | 0 | ||
Noncash reductions | 0 | 0 | |
Cash paid | (5) | (8) | (12) |
Remaining liability, ending balance | $ 3 | $ 9 | $ 14 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Revenues: | |||
Subscription | $ 12,308 | $ 11,014 | $ 10,153 |
Advertising | 4,655 | 4,696 | 4,569 |
Content | 13,595 | 12,935 | 12,771 |
Other | 713 | 673 | 625 |
Total revenues | 31,271 | 29,318 | 28,118 |
Total depreciation of property, plant and equipment | (497) | (479) | (492) |
Total amortization of intangible assets | (197) | (190) | (189) |
Total operating income | 7,920 | 7,547 | 6,865 |
Total assets | 69,209 | 65,966 | |
Total capital expenditures | $ 656 | $ 432 | $ 423 |
Segments, Geographical Areas [Abstract] | |||
Percent long-lived hard assets located in foreign countries (less than) | 2.00% | ||
Percent of Europe revenues in EuroZone | 52.00% | 51.00% | 49.00% |
Corporate | |||
Revenues: | |||
Total depreciation of property, plant and equipment | $ (29) | $ (26) | $ (21) |
Total operating income | (430) | (498) | (367) |
Total assets | 5,128 | 3,463 | |
Total capital expenditures | 183 | 52 | 76 |
Intersegment eliminations | |||
Revenues: | |||
Total revenues | (1,005) | (973) | (1,085) |
Total operating income | (52) | 22 | (149) |
United States and Canada | |||
Revenues: | |||
Total revenues | 22,635 | 20,970 | 20,426 |
Europe | |||
Revenues: | |||
Total revenues | 4,739 | 4,557 | 4,485 |
Asia/Pacific Rim | |||
Revenues: | |||
Total revenues | 1,977 | 1,992 | 1,619 |
Latin America | |||
Revenues: | |||
Total revenues | 1,524 | 1,413 | 1,284 |
All Other | |||
Revenues: | |||
Total revenues | 396 | 386 | 304 |
Turner | Operating Segments | |||
Revenues: | |||
Total revenues | 12,081 | 11,364 | 10,596 |
Total depreciation of property, plant and equipment | (202) | (191) | (193) |
Total amortization of intangible assets | (17) | (17) | (16) |
Total operating income | 4,489 | 4,372 | 4,087 |
Total assets | 27,111 | 26,317 | |
Total capital expenditures | 225 | 196 | 157 |
Turner | Intersegment eliminations | |||
Revenues: | |||
Total revenues | (88) | (108) | (105) |
Home Box Office | Operating Segments | |||
Revenues: | |||
Total revenues | 6,329 | 5,890 | 5,615 |
Total depreciation of property, plant and equipment | (87) | (74) | (81) |
Total amortization of intangible assets | (14) | (14) | (14) |
Total operating income | 2,152 | 1,917 | 1,878 |
Total assets | 14,777 | 14,636 | |
Total capital expenditures | 111 | 98 | 68 |
Home Box Office | Intersegment eliminations | |||
Revenues: | |||
Total revenues | (17) | 9 | (40) |
Warner Bros. | Operating Segments | |||
Revenues: | |||
Total revenues | 13,866 | 13,037 | 12,992 |
Total depreciation of property, plant and equipment | (179) | (188) | (197) |
Total amortization of intangible assets | (166) | (159) | (159) |
Total operating income | 1,761 | 1,734 | 1,416 |
Total assets | 22,193 | 21,550 | |
Total capital expenditures | 137 | 86 | 122 |
Warner Bros. | Intersegment eliminations | |||
Revenues: | |||
Total revenues | $ (900) | $ (874) | $ (940) |
Commitments and Contingencies76
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Commitments [Abstract] | |||
Operating leases, rent expense | $ 340,000,000 | $ 324,000,000 | $ 333,000,000 |
Operating leases, sublease revenue | 8,000,000 | 10,000,000 | $ 15,000,000 |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,018 | 7,008,000,000 | ||
2,019 | 4,911,000,000 | ||
2,020 | 4,275,000,000 | ||
2,021 | 3,770,000,000 | ||
2,022 | 3,192,000,000 | ||
Thereafter | 14,808,000,000 | ||
Total | 37,964,000,000 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | 323,000,000 | ||
2,019 | 184,000,000 | ||
2,020 | 123,000,000 | ||
2,021 | 94,000,000 | ||
2,022 | 85,000,000 | ||
Thereafter | 319,000,000 | ||
Total | 1,128,000,000 | ||
Other Commitments [Line Items] | |||
Total Contingent Commitment | 3,065,000,000 | ||
2,018 | 647,000,000 | ||
2019-2020 | 539,000,000 | ||
2021-2022 | 1,182,000,000 | ||
Thereafter | 697,000,000 | ||
Programming Licensing Backlog [Abstract] | |||
Backlog | 6,400,000,000 | 6,800,000,000 | |
Intercompany backlog - Warner Bros. segment to Home Box Office segment | 633,000,000 | 689,000,000 | |
Intercompany backlog - Warner Bros. segment to Turner segment | 902,000,000 | $ 942,000,000 | |
Guarantees | |||
Other Commitments [Line Items] | |||
Total Contingent Commitment | 2,057,000,000 | ||
2,018 | 283,000,000 | ||
2019-2020 | 370,000,000 | ||
2021-2022 | 707,000,000 | ||
Thereafter | 697,000,000 | ||
Minimum | |||
Loss Contingencies [Line Items] | |||
Loss contingency, range of possible loss, portion not accrued | 0 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Loss contingency, range of possible loss, portion not accrued | 100,000,000 | ||
Six Flags | |||
Other Commitments [Line Items] | |||
Six Flags, guarantee payments made | 0 | ||
Six Flags, guarantor obligations, current carrying value | 0 | ||
Six Flags | Guarantees | |||
Other Commitments [Line Items] | |||
Total Contingent Commitment | 887,000,000 | ||
Post-production term advance obligations and other contingent commitments | |||
Other Commitments [Line Items] | |||
Total Contingent Commitment | 1,008,000,000 | ||
2,018 | 364,000,000 | ||
2019-2020 | 169,000,000 | ||
2021-2022 | 475,000,000 | ||
Thereafter | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - Equity Method Investee - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Receivables due from related parties | $ 617 | $ 383 | |
Revenues | 820 | 595 | $ 390 |
Expenses | (6) | (3) | (5) |
Interest income | 81 | 120 | 126 |
Other income | $ 10 | $ 14 | $ 17 |
Additional Financial Informat78
Additional Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows [Abstract] | |||
Cash payments made for interest | $ (1,202) | $ (1,391) | $ (1,262) |
Interest income received | 84 | 141 | 35 |
Cash interest payments, net | (1,118) | (1,250) | (1,227) |
Cash payments made for income taxes | (1,722) | (935) | (1,135) |
Income tax refunds received | 172 | 136 | 142 |
TWC tax sharing payments | 0 | 0 | (4) |
Cash tax payments, net | (1,550) | (799) | (997) |
Interest Expense, Net [Abstract] | |||
Interest income | 209 | 227 | 219 |
Interest expense | (1,214) | (1,388) | (1,382) |
Total interest expense, net | (1,005) | (1,161) | (1,163) |
Other Income (Loss), Net [Abstract] | |||
Investment gains (losses), net | 300 | 148 | (31) |
Loss on equity method investees | (153) | (283) | (123) |
Premiums paid and costs incurred on debt redemption | (1,087) | (1,008) | (72) |
Other | (30) | (48) | (30) |
Total other loss, net | (970) | (1,191) | $ (256) |
Accounts Payable and Accrued Liabilities [Abstract] | |||
Accounts payable | 777 | 527 | |
Other accrued expenses | 1,778 | 1,878 | |
Participations payable | 2,737 | 2,525 | |
Programming costs payable | 728 | 776 | |
Accrued compensation | 1,192 | 1,004 | |
Accrued interest | 251 | 320 | |
Accrued dividends | 319 | 0 | |
Accrued income taxes | 134 | 162 | |
Total accounts payable and accrued liabilities | 7,916 | 7,192 | |
Other Noncurrent Liabilities [Abstract] | |||
Noncurrent tax and interest reserves | 1,703 | 1,567 | |
Participations payable | 1,748 | 1,780 | |
Programming costs payable | 728 | 827 | |
Noncurrent pension and post-retirement liabilities | 1,058 | 954 | |
Deferred compensation | 548 | 491 | |
Other noncurrent liabilities | 590 | 722 | |
Total other noncurrent liabilities | $ 6,375 | $ 6,341 |
Supplementary Information - C79
Supplementary Information - Condensed Consolidating Financial Statements - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||||
Cash and equivalents | $ 2,621 | $ 1,539 | $ 2,155 | $ 2,618 |
Receivables, net | 9,401 | 8,699 | ||
Inventories | 2,401 | 2,062 | ||
Prepaid expenses and other current assets | 796 | 1,185 | ||
Total current assets | 15,219 | 13,485 | ||
Noncurrent inventories and theatrical film and television production costs | 8,275 | 7,916 | ||
Investments in amounts due to and from consolidated subsidiaries | 0 | 0 | ||
Investments, including available-for-sale securities | 3,924 | 3,337 | ||
Property, plant and equipment, net | 2,707 | 2,510 | ||
Intangible assets subject to amortization, net | 585 | 783 | ||
Intangible assets not subject to amortization | 7,006 | 7,005 | ||
Goodwill | 27,776 | 27,752 | 27,689 | |
Other assets | 3,717 | 3,178 | ||
Total assets | 69,209 | 65,966 | ||
Current liabilities | ||||
Accounts payable and accrued liabilities | 7,916 | 7,192 | ||
Deferred revenue | 711 | 564 | ||
Debt due within one year | 5,450 | 1,947 | ||
Total current liabilities | 14,077 | 9,703 | ||
Long-term debt | 18,294 | 22,392 | ||
Deferred income taxes | 1,584 | 2,678 | ||
Deferred revenue | 468 | 486 | ||
Other noncurrent liabilities | 6,375 | 6,341 | ||
Redeemable noncontrolling interest | 35 | 29 | ||
Equity | ||||
Due to (from) Time Warner Inc. and subsidiaries | 0 | 0 | ||
Other shareholders’ equity | 28,375 | 24,335 | ||
Total Time Warner Inc. shareholders’ equity | 28,375 | 24,335 | ||
Noncontrolling interest | 1 | 2 | ||
Total equity | 28,376 | 24,337 | 23,619 | 24,476 |
Total liabilities and equity | 69,209 | 65,966 | ||
Eliminations | ||||
Current assets | ||||
Cash and equivalents | 0 | 0 | 0 | 0 |
Receivables, net | (32) | (42) | ||
Inventories | (40) | (30) | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (72) | (72) | ||
Noncurrent inventories and theatrical film and television production costs | (72) | (41) | ||
Investments in amounts due to and from consolidated subsidiaries | (76,743) | (72,686) | ||
Investments, including available-for-sale securities | (5) | (6) | ||
Property, plant and equipment, net | 0 | 0 | ||
Intangible assets subject to amortization, net | 0 | 0 | ||
Intangible assets not subject to amortization | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets | (224) | (249) | ||
Total assets | (77,116) | (73,054) | ||
Current liabilities | ||||
Accounts payable and accrued liabilities | (57) | (109) | ||
Deferred revenue | (50) | (14) | ||
Debt due within one year | 0 | 0 | ||
Total current liabilities | (107) | (123) | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | (2,876) | (5,144) | ||
Deferred revenue | 0 | 0 | ||
Other noncurrent liabilities | (1,403) | (1,336) | ||
Redeemable noncontrolling interest | 0 | 0 | ||
Equity | ||||
Due to (from) Time Warner Inc. and subsidiaries | (26,340) | 53,235 | ||
Other shareholders’ equity | (46,390) | (119,686) | ||
Total Time Warner Inc. shareholders’ equity | (72,730) | (66,451) | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | (72,730) | (66,451) | ||
Total liabilities and equity | (77,116) | (73,054) | ||
Parent Company | Reportable Legal Entities | ||||
Current assets | ||||
Cash and equivalents | 798 | 617 | 976 | 1,623 |
Receivables, net | 463 | 118 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 286 | 639 | ||
Total current assets | 1,547 | 1,374 | ||
Noncurrent inventories and theatrical film and television production costs | 0 | 0 | ||
Investments in amounts due to and from consolidated subsidiaries | 52,541 | 48,212 | ||
Investments, including available-for-sale securities | 307 | 274 | ||
Property, plant and equipment, net | 46 | 48 | ||
Intangible assets subject to amortization, net | 0 | 0 | ||
Intangible assets not subject to amortization | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets | 604 | 520 | ||
Total assets | 55,045 | 50,428 | ||
Current liabilities | ||||
Accounts payable and accrued liabilities | 947 | 687 | ||
Deferred revenue | 0 | 0 | ||
Debt due within one year | 4,837 | 1,434 | ||
Total current liabilities | 5,784 | 2,121 | ||
Long-term debt | 17,101 | 19,318 | ||
Deferred income taxes | 1,584 | 2,678 | ||
Deferred revenue | 0 | 0 | ||
Other noncurrent liabilities | 2,201 | 1,976 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
Equity | ||||
Due to (from) Time Warner Inc. and subsidiaries | 0 | 0 | ||
Other shareholders’ equity | 28,375 | 24,335 | ||
Total Time Warner Inc. shareholders’ equity | 28,375 | 24,335 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 28,375 | 24,335 | ||
Total liabilities and equity | 55,045 | 50,428 | ||
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets | ||||
Cash and equivalents | 243 | 91 | 288 | 290 |
Receivables, net | 1,208 | 1,294 | ||
Inventories | 581 | 528 | ||
Prepaid expenses and other current assets | 78 | 91 | ||
Total current assets | 2,110 | 2,004 | ||
Noncurrent inventories and theatrical film and television production costs | 1,924 | 1,929 | ||
Investments in amounts due to and from consolidated subsidiaries | 10,872 | 11,319 | ||
Investments, including available-for-sale securities | 474 | 441 | ||
Property, plant and equipment, net | 460 | 423 | ||
Intangible assets subject to amortization, net | 0 | 0 | ||
Intangible assets not subject to amortization | 2,007 | 2,007 | ||
Goodwill | 9,880 | 9,880 | ||
Other assets | 496 | 385 | ||
Total assets | 28,223 | 28,388 | ||
Current liabilities | ||||
Accounts payable and accrued liabilities | 1,069 | 854 | ||
Deferred revenue | 117 | 67 | ||
Debt due within one year | 611 | 511 | ||
Total current liabilities | 1,797 | 1,432 | ||
Long-term debt | 1,185 | 3,065 | ||
Deferred income taxes | 1,650 | 3,011 | ||
Deferred revenue | 27 | 26 | ||
Other noncurrent liabilities | 2,019 | 1,886 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
Equity | ||||
Due to (from) Time Warner Inc. and subsidiaries | (1,551) | (52,869) | ||
Other shareholders’ equity | 23,096 | 71,837 | ||
Total Time Warner Inc. shareholders’ equity | 21,545 | 18,968 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 21,545 | 18,968 | ||
Total liabilities and equity | 28,223 | 28,388 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets | ||||
Cash and equivalents | 1,580 | 831 | $ 891 | $ 705 |
Receivables, net | 7,762 | 7,329 | ||
Inventories | 1,860 | 1,564 | ||
Prepaid expenses and other current assets | 432 | 455 | ||
Total current assets | 11,634 | 10,179 | ||
Noncurrent inventories and theatrical film and television production costs | 6,423 | 6,028 | ||
Investments in amounts due to and from consolidated subsidiaries | 13,330 | 13,155 | ||
Investments, including available-for-sale securities | 3,148 | 2,628 | ||
Property, plant and equipment, net | 2,201 | 2,039 | ||
Intangible assets subject to amortization, net | 585 | 783 | ||
Intangible assets not subject to amortization | 4,999 | 4,998 | ||
Goodwill | 17,896 | 17,872 | ||
Other assets | 2,841 | 2,522 | ||
Total assets | 63,057 | 60,204 | ||
Current liabilities | ||||
Accounts payable and accrued liabilities | 5,957 | 5,760 | ||
Deferred revenue | 644 | 511 | ||
Debt due within one year | 2 | 2 | ||
Total current liabilities | 6,603 | 6,273 | ||
Long-term debt | 8 | 9 | ||
Deferred income taxes | 1,226 | 2,133 | ||
Deferred revenue | 441 | 460 | ||
Other noncurrent liabilities | 3,558 | 3,815 | ||
Redeemable noncontrolling interest | 35 | 29 | ||
Equity | ||||
Due to (from) Time Warner Inc. and subsidiaries | 27,891 | (366) | ||
Other shareholders’ equity | 23,294 | 47,849 | ||
Total Time Warner Inc. shareholders’ equity | 51,185 | 47,483 | ||
Noncontrolling interest | 1 | 2 | ||
Total equity | 51,186 | 47,485 | ||
Total liabilities and equity | $ 63,057 | $ 60,204 |
Supplementary Information - C80
Supplementary Information - Condensed Consolidating Financial Statements - Statement of Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statement of Operations | |||
Revenues | $ 31,271 | $ 29,318 | $ 28,118 |
Costs of revenues | (17,647) | (16,376) | (16,154) |
Selling, general and administrative | (5,438) | (5,123) | (4,824) |
Amortization of intangible assets | (197) | (190) | (189) |
Restructuring and severance costs | (120) | (117) | (60) |
Asset impairments | (16) | (43) | (25) |
Gain (loss) on operating assets, net | 67 | 78 | (1) |
Operating income | 7,920 | 7,547 | 6,865 |
Equity in pretax income (loss) of consolidated subsidiaries | 0 | 0 | 0 |
Interest expense, net | (1,005) | (1,161) | (1,163) |
Other loss, net | (970) | (1,191) | (256) |
Income from continuing operations before income taxes | 5,945 | 5,195 | 5,446 |
Income tax provision | (701) | (1,281) | (1,651) |
Income from continuing operations | 5,244 | 3,914 | 3,795 |
Discontinued operations, net of tax | 0 | 11 | 37 |
Net income | 5,244 | 3,925 | 3,832 |
Less Net loss attributable to noncontrolling interests | 3 | 1 | 1 |
Net income attributable to Time Warner Inc. shareholders | 5,247 | 3,926 | 3,833 |
Comprehensive income | 5,317 | 3,861 | 3,550 |
Less Comprehensive loss attributable to noncontrolling interests | 3 | 1 | 1 |
Comprehensive income attributable to Time Warner Inc. shareholders | 5,320 | 3,862 | 3,551 |
Eliminations | |||
Consolidated Statement of Operations | |||
Revenues | (1,021) | (1,012) | (875) |
Costs of revenues | 856 | 823 | 643 |
Selling, general and administrative | 154 | 159 | 223 |
Amortization of intangible assets | 0 | 0 | 0 |
Restructuring and severance costs | 0 | 0 | 0 |
Asset impairments | 0 | 0 | 0 |
Gain (loss) on operating assets, net | 0 | 0 | 0 |
Operating income | (11) | (30) | (9) |
Equity in pretax income (loss) of consolidated subsidiaries | (15,518) | (14,898) | (13,493) |
Interest expense, net | 6 | 7 | 7 |
Other loss, net | 1 | (2) | (2) |
Income from continuing operations before income taxes | (15,522) | (14,923) | (13,497) |
Income tax provision | 3,031 | 4,261 | 4,167 |
Income from continuing operations | (12,491) | (10,662) | (9,330) |
Discontinued operations, net of tax | 0 | (68) | (74) |
Net income | (12,491) | (10,730) | (9,404) |
Less Net loss attributable to noncontrolling interests | (6) | (2) | (2) |
Net income attributable to Time Warner Inc. shareholders | (12,497) | (10,732) | (9,406) |
Comprehensive income | (12,787) | (10,519) | (8,936) |
Less Comprehensive loss attributable to noncontrolling interests | (6) | (2) | (2) |
Comprehensive income attributable to Time Warner Inc. shareholders | (12,793) | (10,521) | (8,938) |
Parent Company | Reportable Legal Entities | |||
Consolidated Statement of Operations | |||
Revenues | 0 | 0 | 0 |
Costs of revenues | 0 | 0 | 0 |
Selling, general and administrative | (408) | (416) | (321) |
Amortization of intangible assets | 0 | 0 | 0 |
Restructuring and severance costs | (2) | (1) | (4) |
Asset impairments | 0 | (6) | (15) |
Gain (loss) on operating assets, net | 0 | 0 | 0 |
Operating income | (410) | (423) | (340) |
Equity in pretax income (loss) of consolidated subsidiaries | 7,920 | 7,633 | 6,894 |
Interest expense, net | (832) | (959) | (990) |
Other loss, net | (733) | (1,056) | (118) |
Income from continuing operations before income taxes | 5,945 | 5,195 | 5,446 |
Income tax provision | (701) | (1,281) | (1,651) |
Income from continuing operations | 5,244 | 3,914 | 3,795 |
Discontinued operations, net of tax | 0 | 11 | 37 |
Net income | 5,244 | 3,925 | 3,832 |
Less Net loss attributable to noncontrolling interests | 3 | 1 | 1 |
Net income attributable to Time Warner Inc. shareholders | 5,247 | 3,926 | 3,833 |
Comprehensive income | 5,317 | 3,861 | 3,550 |
Less Comprehensive loss attributable to noncontrolling interests | 3 | 1 | 1 |
Comprehensive income attributable to Time Warner Inc. shareholders | 5,320 | 3,862 | 3,551 |
Guarantor Subsidiaries | Reportable Legal Entities | |||
Consolidated Statement of Operations | |||
Revenues | 7,853 | 7,527 | 7,188 |
Costs of revenues | (3,772) | (3,658) | (3,488) |
Selling, general and administrative | (1,319) | (1,178) | (1,100) |
Amortization of intangible assets | 0 | 0 | 0 |
Restructuring and severance costs | (40) | (80) | (40) |
Asset impairments | (1) | (2) | (1) |
Gain (loss) on operating assets, net | 49 | 0 | 2 |
Operating income | 2,770 | 2,609 | 2,561 |
Equity in pretax income (loss) of consolidated subsidiaries | 5,557 | 5,392 | 4,687 |
Interest expense, net | (265) | (302) | (312) |
Other loss, net | (358) | (90) | 20 |
Income from continuing operations before income taxes | 7,704 | 7,609 | 6,956 |
Income tax provision | (1,366) | (2,142) | (2,121) |
Income from continuing operations | 6,338 | 5,467 | 4,835 |
Discontinued operations, net of tax | 0 | 34 | 37 |
Net income | 6,338 | 5,501 | 4,872 |
Less Net loss attributable to noncontrolling interests | 3 | 1 | 1 |
Net income attributable to Time Warner Inc. shareholders | 6,341 | 5,502 | 4,873 |
Comprehensive income | 6,439 | 5,410 | 4,685 |
Less Comprehensive loss attributable to noncontrolling interests | 3 | 1 | 1 |
Comprehensive income attributable to Time Warner Inc. shareholders | 6,442 | 5,411 | 4,686 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Consolidated Statement of Operations | |||
Revenues | 24,439 | 22,803 | 21,805 |
Costs of revenues | (14,731) | (13,541) | (13,309) |
Selling, general and administrative | (3,865) | (3,688) | (3,626) |
Amortization of intangible assets | (197) | (190) | (189) |
Restructuring and severance costs | (78) | (36) | (16) |
Asset impairments | (15) | (35) | (9) |
Gain (loss) on operating assets, net | 18 | 78 | (3) |
Operating income | 5,571 | 5,391 | 4,653 |
Equity in pretax income (loss) of consolidated subsidiaries | 2,041 | 1,873 | 1,912 |
Interest expense, net | 86 | 93 | 132 |
Other loss, net | 120 | (43) | (156) |
Income from continuing operations before income taxes | 7,818 | 7,314 | 6,541 |
Income tax provision | (1,665) | (2,119) | (2,046) |
Income from continuing operations | 6,153 | 5,195 | 4,495 |
Discontinued operations, net of tax | 0 | 34 | 37 |
Net income | 6,153 | 5,229 | 4,532 |
Less Net loss attributable to noncontrolling interests | 3 | 1 | 1 |
Net income attributable to Time Warner Inc. shareholders | 6,156 | 5,230 | 4,533 |
Comprehensive income | 6,348 | 5,109 | 4,251 |
Less Comprehensive loss attributable to noncontrolling interests | 3 | 1 | 1 |
Comprehensive income attributable to Time Warner Inc. shareholders | $ 6,351 | $ 5,110 | $ 4,252 |
Supplementary Information - C81
Supplementary Information - Condensed Consolidating Financial Statements - Statement of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATIONS | |||
Net income | $ 5,244 | $ 3,925 | $ 3,832 |
Less Discontinued operations, net of tax | 0 | (11) | (37) |
Net income from continuing operations | 5,244 | 3,914 | 3,795 |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 694 | 669 | 681 |
Amortization of film and television costs | 9,162 | 8,324 | 8,030 |
Asset impairments | 16 | 43 | 25 |
(Gain) loss on investments and other assets, net | (367) | (131) | 31 |
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions | 0 | 0 | 0 |
Equity in losses of investee companies, net of cash distributions | 191 | 324 | 161 |
Equity-based compensation | 227 | 277 | 182 |
Deferred income taxes | (1,010) | 236 | 328 |
Premiums paid and costs incurred on debt redemption | 1,087 | 1,008 | 72 |
Changes in operating assets and liabilities, net of acquisitions | (10,150) | (9,981) | (9,454) |
Intercompany | 0 | 0 | 0 |
Cash provided by operations from continuing operations | 5,094 | 4,683 | 3,851 |
Cash used by operations from discontinued operations | (15) | (17) | (8) |
Cash provided by operations | 5,079 | 4,666 | 3,843 |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | (1) | (9) | (41) |
Investments and acquisitions, net of cash acquired | (706) | (1,228) | (672) |
Capital expenditures | (656) | (432) | (423) |
Advances to (from) parent and consolidated subsidiaries | 0 | 0 | 0 |
Other investment proceeds | 367 | 309 | 143 |
Cash used by investing activities | (996) | (1,360) | (993) |
FINANCING ACTIVITIES | |||
Borrowings | 4,270 | 3,830 | 3,768 |
Debt repayments | (5,001) | (3,304) | (2,344) |
Proceeds from exercise of stock options | 206 | 172 | 165 |
Excess tax benefit from equity instruments | 0 | 88 | 151 |
Principal payments on capital leases | (39) | (14) | (11) |
Repurchases of common stock | 0 | (2,322) | (3,632) |
Dividends paid | (1,265) | (1,269) | (1,150) |
Other financing activities | (1,172) | (1,103) | (260) |
Change in due to/from parent and investment in segment | 0 | 0 | 0 |
Cash used by financing activities | (3,001) | (3,922) | (3,313) |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 1,082 | (616) | (463) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 1,539 | 2,155 | 2,618 |
CASH AND EQUIVALENTS AT END OF PERIOD | 2,621 | 1,539 | 2,155 |
Eliminations | |||
OPERATIONS | |||
Net income | (12,491) | (10,730) | (9,404) |
Less Discontinued operations, net of tax | 0 | 68 | 74 |
Net income from continuing operations | (12,491) | (10,662) | (9,330) |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 0 | 0 | 0 |
Amortization of film and television costs | (47) | (37) | (29) |
Asset impairments | 0 | 0 | 0 |
(Gain) loss on investments and other assets, net | 0 | (1) | 0 |
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions | 15,518 | 14,898 | 13,493 |
Equity in losses of investee companies, net of cash distributions | (1) | 2 | 5 |
Equity-based compensation | 0 | 0 | 0 |
Deferred income taxes | 2,185 | (621) | (473) |
Premiums paid and costs incurred on debt redemption | 0 | 0 | 0 |
Changes in operating assets and liabilities, net of acquisitions | (5,163) | (3,579) | (3,664) |
Intercompany | 0 | 0 | 0 |
Cash provided by operations from continuing operations | 1 | 0 | 2 |
Cash used by operations from discontinued operations | 0 | 0 | 0 |
Cash provided by operations | 1 | 0 | 2 |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | 0 | 0 | 0 |
Investments and acquisitions, net of cash acquired | 0 | 0 | 0 |
Capital expenditures | 0 | 0 | 0 |
Advances to (from) parent and consolidated subsidiaries | (6,055) | (5,506) | (5,302) |
Other investment proceeds | 0 | 0 | 0 |
Cash used by investing activities | (6,055) | (5,506) | (5,302) |
FINANCING ACTIVITIES | |||
Borrowings | 0 | 0 | 0 |
Debt repayments | 0 | 0 | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from equity instruments | 0 | 0 | |
Principal payments on capital leases | 0 | 0 | 0 |
Repurchases of common stock | 0 | 0 | |
Dividends paid | 0 | 0 | 0 |
Other financing activities | (3) | 3 | 0 |
Change in due to/from parent and investment in segment | 6,057 | 5,503 | 5,300 |
Cash used by financing activities | 6,054 | 5,506 | 5,300 |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 0 | 0 | 0 |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 0 | 0 | 0 |
CASH AND EQUIVALENTS AT END OF PERIOD | 0 | 0 | 0 |
Parent Company | Reportable Legal Entities | |||
OPERATIONS | |||
Net income | 5,244 | 3,925 | 3,832 |
Less Discontinued operations, net of tax | 0 | (11) | (37) |
Net income from continuing operations | 5,244 | 3,914 | 3,795 |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 10 | 10 | 12 |
Amortization of film and television costs | 0 | 0 | 0 |
Asset impairments | 0 | 6 | 15 |
(Gain) loss on investments and other assets, net | (43) | (30) | 12 |
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions | (7,920) | (7,633) | (6,894) |
Equity in losses of investee companies, net of cash distributions | 10 | 2 | (2) |
Equity-based compensation | 49 | 103 | 35 |
Deferred income taxes | (1,010) | 236 | 328 |
Premiums paid and costs incurred on debt redemption | 723 | 917 | 72 |
Changes in operating assets and liabilities, net of acquisitions | (1,310) | 58 | 144 |
Intercompany | 0 | 0 | 0 |
Cash provided by operations from continuing operations | (4,247) | (2,417) | (2,483) |
Cash used by operations from discontinued operations | (2) | (4) | 6 |
Cash provided by operations | (4,249) | (2,421) | (2,477) |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | (1) | (3) | (22) |
Investments and acquisitions, net of cash acquired | (50) | (34) | (43) |
Capital expenditures | (1) | (9) | (47) |
Advances to (from) parent and consolidated subsidiaries | 5,092 | 5,157 | 4,788 |
Other investment proceeds | 49 | 71 | 43 |
Cash used by investing activities | 5,089 | 5,182 | 4,719 |
FINANCING ACTIVITIES | |||
Borrowings | 4,270 | 3,828 | 3,755 |
Debt repayments | (3,220) | (2,820) | (2,100) |
Proceeds from exercise of stock options | 206 | 172 | 165 |
Excess tax benefit from equity instruments | 88 | 151 | |
Principal payments on capital leases | 0 | 0 | 0 |
Repurchases of common stock | (2,322) | (3,632) | |
Dividends paid | (1,265) | (1,269) | (1,150) |
Other financing activities | (650) | (797) | (78) |
Change in due to/from parent and investment in segment | 0 | 0 | 0 |
Cash used by financing activities | (659) | (3,120) | (2,889) |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 181 | (359) | (647) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 617 | 976 | 1,623 |
CASH AND EQUIVALENTS AT END OF PERIOD | 798 | 617 | 976 |
Guarantor Subsidiaries | Reportable Legal Entities | |||
OPERATIONS | |||
Net income | 6,338 | 5,501 | 4,872 |
Less Discontinued operations, net of tax | 0 | (34) | (37) |
Net income from continuing operations | 6,338 | 5,467 | 4,835 |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 116 | 104 | 111 |
Amortization of film and television costs | 3,016 | 2,906 | 2,779 |
Asset impairments | 1 | 2 | 1 |
(Gain) loss on investments and other assets, net | (40) | 1 | (20) |
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions | (5,557) | (5,392) | (4,687) |
Equity in losses of investee companies, net of cash distributions | 1 | 0 | 0 |
Equity-based compensation | 87 | 81 | 65 |
Deferred income taxes | (1,306) | 315 | 330 |
Premiums paid and costs incurred on debt redemption | 364 | 91 | 0 |
Changes in operating assets and liabilities, net of acquisitions | 3,527 | (1,649) | (1,111) |
Intercompany | 572 | 3,001 | 2,335 |
Cash provided by operations from continuing operations | 7,119 | 4,927 | 4,638 |
Cash used by operations from discontinued operations | 0 | 0 | 0 |
Cash provided by operations | 7,119 | 4,927 | 4,638 |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | 0 | 0 | 0 |
Investments and acquisitions, net of cash acquired | (28) | (54) | (3) |
Capital expenditures | (131) | (104) | (78) |
Advances to (from) parent and consolidated subsidiaries | 963 | 348 | 515 |
Other investment proceeds | 72 | 19 | 73 |
Cash used by investing activities | 876 | 209 | 507 |
FINANCING ACTIVITIES | |||
Borrowings | 0 | 0 | 0 |
Debt repayments | (1,780) | (480) | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from equity instruments | 0 | 0 | |
Principal payments on capital leases | (24) | (12) | (9) |
Repurchases of common stock | 0 | 0 | |
Dividends paid | 0 | 0 | 0 |
Other financing activities | (378) | (113) | (22) |
Change in due to/from parent and investment in segment | (5,661) | (4,728) | (5,116) |
Cash used by financing activities | (7,843) | (5,333) | (5,147) |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 152 | (197) | (2) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 91 | 288 | 290 |
CASH AND EQUIVALENTS AT END OF PERIOD | 243 | 91 | 288 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
OPERATIONS | |||
Net income | 6,153 | 5,229 | 4,532 |
Less Discontinued operations, net of tax | 0 | (34) | (37) |
Net income from continuing operations | 6,153 | 5,195 | 4,495 |
Adjustments for noncash and nonoperating items: | |||
Depreciation and amortization | 568 | 555 | 558 |
Amortization of film and television costs | 6,193 | 5,455 | 5,280 |
Asset impairments | 15 | 35 | 9 |
(Gain) loss on investments and other assets, net | (284) | (101) | 39 |
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions | (2,041) | (1,873) | (1,912) |
Equity in losses of investee companies, net of cash distributions | 181 | 320 | 158 |
Equity-based compensation | 91 | 93 | 82 |
Deferred income taxes | (879) | 306 | 143 |
Premiums paid and costs incurred on debt redemption | 0 | 0 | 0 |
Changes in operating assets and liabilities, net of acquisitions | (7,204) | (4,811) | (4,823) |
Intercompany | (572) | (3,001) | (2,335) |
Cash provided by operations from continuing operations | 2,221 | 2,173 | 1,694 |
Cash used by operations from discontinued operations | (13) | (13) | (14) |
Cash provided by operations | 2,208 | 2,160 | 1,680 |
INVESTING ACTIVITIES | |||
Investments in available-for-sale securities | 0 | (6) | (19) |
Investments and acquisitions, net of cash acquired | (628) | (1,140) | (626) |
Capital expenditures | (524) | (319) | (298) |
Advances to (from) parent and consolidated subsidiaries | 0 | 1 | (1) |
Other investment proceeds | 246 | 219 | 27 |
Cash used by investing activities | (906) | (1,245) | (917) |
FINANCING ACTIVITIES | |||
Borrowings | 0 | 2 | 13 |
Debt repayments | (1) | (4) | (244) |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from equity instruments | 0 | 0 | |
Principal payments on capital leases | (15) | (2) | (2) |
Repurchases of common stock | 0 | 0 | |
Dividends paid | 0 | 0 | 0 |
Other financing activities | (141) | (196) | (160) |
Change in due to/from parent and investment in segment | (396) | (775) | (184) |
Cash used by financing activities | (553) | (975) | (577) |
INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 749 | (60) | 186 |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 831 | 891 | 705 |
CASH AND EQUIVALENTS AT END OF PERIOD | $ 1,580 | $ 831 | $ 891 |
Schedule II - Valuation and Q82
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 981 | $ 1,055 | $ 1,152 |
Additions Charged (Credited) to Costs and Expenses | 1,137 | 1,367 | 1,734 |
Deductions | (1,222) | (1,441) | (1,831) |
Balance at End of Period | 896 | 981 | 1,055 |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 193 | 180 | 152 |
Additions Charged (Credited) to Costs and Expenses | 11 | 38 | 63 |
Deductions | (42) | (25) | (35) |
Balance at End of Period | 162 | 193 | 180 |
Reserves for sales returns and allowances | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 788 | 875 | 1,000 |
Additions Charged (Credited) to Costs and Expenses | 1,126 | 1,329 | 1,671 |
Deductions | (1,180) | (1,416) | (1,796) |
Balance at End of Period | $ 734 | $ 788 | $ 875 |