Non-GAAP
Financial
Measures
-
Definitions
A-16
Adjusted Operating Income (Loss)
is defined as Operating Income (Loss) excluding the impact of noncash impairments of goodwill,
intangible and fixed assets; gains and losses on operating assets (other than deferred gains on
sale-leasebacks); gains and losses recognized in connection with pension and other
postretirement benefit plan curtailments or settlements; external costs related to mergers, acquisitions or
dispositions, as well as contingent consideration related to such transactions, to the extent such
costs are expensed; amounts related to securities litigation and government investigations; and
the foreign currency loss during 2014, related to the translation of net monetary assets
denominated in Venezuelan currency resulting from the Companys change to begin using the SICAD 2
exchange rate. Adjusted
Divisional
Pre-Tax
Income
is
defined
as
Adjusted
Operating
Income
plus
Income
(loss)
from
equity
method
investments.
Adjusted EPS
is defined as Diluted Income per Common Share from Continuing Operations attributable to Time Warner
Inc. common shareholders with the following items excluded from Income from Continuing
Operations attributable to Time Warner Inc. common shareholders: noncash
impairments
of
goodwill,
intangible
and
fixed
assets
and
investments;
gains
and
losses
on
operating
assets
(other
than
deferred
gains
on sale-leasebacks), liabilities and investments; gains and losses recognized in connection with
pension and other postretirement benefit plan curtailments
or
settlements;
external
costs
related
to
mergers,
acquisitions,
investments
or
dispositions,
as
well
as
contingent
consideration
related to such transactions, to the extent such costs are expensed; amounts related to securities
litigation and government investigations; the foreign
currency
loss
during
2014,
related
to
the
translation
of
net
monetary
assets
denominated
in
Venezuelan
currency
resulting
from
the
Companys
change
to
begin
using
the
SICAD
2
exchange
rate;
and
amounts
attributable
to
businesses
classified
as
discontinued
operations;
as
well as the impact of taxes and noncontrolling interests on the above items and the Companys
share of the above items with respect to equity method investments.
For
periods
ending
on
or
after
July
1,
2012,
Free
Cash
Flow
is
defined
as
Cash
Provided
by
Operations
from
Continuing
Operations
plus
payments related to securities litigation and government investigations (net of any insurance
recoveries), external costs related to mergers, acquisitions, investments or dispositions, to
the extent such costs are expensed, contingent consideration payments made in connection with
acquisitions, and excess tax benefits from equity instruments, less capital expenditures, principal
payments on capital leases and partnership distributions,
if
any.
For
periods
ending
prior
to
that
date,
Free
Cash
Flow
is
defined
as
Cash
Provided
by
Operations
from
Continuing
Operations plus payments related to securities litigation and government investigations (net of any
insurance recoveries), external costs related to mergers, acquisitions, investments or
dispositions, to the extent such costs are expensed, and excess tax benefits from equity instruments, less
capital expenditures, principal payments on capital leases and partnership distributions, if any. A
change to the definition of Free Cash Flow for periods prior to July 1, 2012 to adjust for
contingent consideration payments made in connection with acquisitions would have had no impact on
the reported Free Cash Flow for such periods.
On June 6, 2014, the Company completed the legal and structural separation of Time Inc. from the
Company. Accordingly, the 2009, 2010, 2011, 2012 and 2013 financial information presented
in this Appendix has been recast to present the financial position and results of operations of the
Companys former Time Inc. segment as discontinued operations.
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