UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

 

Filed by the Registrant   x Filed by a Party other than the Registrant   ¨

Check the appropriate box:

 

¨ Preliminary Proxy Statement

 

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨ Definitive Proxy Statement

 

x Definitive Additional Materials

 

¨ Soliciting Material Pursuant to § 240.14a-12

Time Warner Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

x No fee required.

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1) Title of each class of securities to which transaction applies:

 

 

  (2) Aggregate number of securities to which transaction applies:

 

 

  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

  (4) Proposed maximum aggregate value of transaction:

 

 

  (5) Total fee paid:

 

 

 

¨ Fee paid previously with preliminary materials.

 

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1) Amount Previously Paid:

 

 

  (2) Form, Schedule or Registration Statement No.:

 

 

  (3) Filing Party:

 

 

  (4) Date Filed:

 

 


Explanatory Note: As part of Time Warner Inc.’s regular, ongoing engagement with shareholders, Time Warner is planning to have a number of meetings with shareholders. The attached Proxy Statement Summary is intended to facilitate discussions at those meetings and presents information regarding Time Warner’s businesses, performance, executive compensation programs, and governance practices taken from Time Warner’s 2015 Proxy Statement.


2015 Proxy Statement Summary
May 2015


Overview 
Clear Strategy
Strong Governance
Practices
Use leading scale and brands to create the best content
Use technology to enhance consumer experience, drive usage and improve Company economics
Expand internationally in faster-growing territories
Focus on operating and capital efficiency
Compensation Program
Closely Aligned With
Performance
Substantial emphasis on variable performance-based compensation (93% of target compensation for
CEO)
Balanced mix of short-
and long-term performance measures that drive shareholder value
Challenging financial and strategic goals set at the beginning of each performance period
89.5% of votes cast at the 2014 Annual Meeting of Shareholders were in favor of named executive officer
compensation
Focused Business
Independent
Board
with
director
experience
in:
media,
technology,
consumer-facing
businesses;
creating
or managing large enterprises; and making complex strategic, financial and operational decisions
Policy on Board refreshment promotes good mix of Board tenure
Robust annual Board self-evaluation and ongoing director education
Long-standing
practice
of
ongoing
dialogue
with
shareholders;
engaged
with
shareholders
representing
almost 55% of shares in 2014
History of Strong
Financial Performance
Streamlined company and operations to focus on high quality branded video content
Completed
transition
in
senior
leadership,
with
new
CEOs
at
each
of
the
Company’s
three
operating
divisions and a new CFO
Adjusted
EPS
increased
18%,
the
6th
consecutive
year
of
at
least
high
teens
growth
Free Cash Flow of $3.5 billion in 2014, another year of strong growth
Total
Shareholder
Return
(“TSR”)
of
30%
(1-YR),162%
(3-YR)
and
244%
(5-YR)
at
or
near
the
top
of
Company’s entertainment and media peer group in each period
2


Our Operating Strategy: 2014 Highlights & Initiatives
Use technology to
enhance consumer
experience, drive
usage and improve
Company economics
Use leading
scale and
brands to create the
best content
Expand internationally
in faster-growing
territories
Turner Broadcasting System, Inc.
Expanded HBO GO to additional platforms, including Amazon Fire, PS3 and Xbox One
Launched CNNGo, connecting subscribers to CNN’s news and original programming live and on demand via a
variety of digital platforms
Bleacher Report ranked as the #2 digital sports destination in 2014, with approximately 40 million average
monthly domestic multi-platform unique users for the year
Announced HBO NOW, an over-the-top streaming service (launched in U.S. April 2015)
Acquired non-U.S. operations of Eyeworks Group; Warner Bros. now has local production companies in 16
international territories
Announced global kids initiative between Turner and Warner Bros.
3
Home Box Office, Inc.
Warner Bros. Entertainment Inc.
TBS, TNT & Adult Swim ranked among ad-supported cable’s top-10 networks in primetime among adults 18-49
Turner renewed long-term partnership with the NBA through the 2024-2025 season
Announced plans to double investment in original programming on TNT and TBS over next several years
HBO and Cinemax added a total of 2.8M domestic subscribers, the most in over 30 years
More Primetime Emmy awards than any other network for the 13th year in a row
Warner Bros. generated over $4 billion at the global box office for the 6th year in a row; announced expanded
slate of movies for 2016-2020
#1 producer of primetime series with over 60 series airing for the 2014-2015 television season


History of Strong Financial Performance*
Free Cash Flow ($B)
Return on Invested Capital
Adjusted Operating Income ($B)
Adjusted EPS
1-YR Growth:  18.2%
3-YR CAGR:   18.2%
4
*
On
June
6,
2014,
the
Company
completed
the
legal
and
structural
separation
of
Time
Inc.
from
the
Company
(the
“Time
Separation”).
Accordingly,
the
Company
has
recast
its
financial
information
to
present
the financial condition and results of operations of its former Time Inc. segment as discontinued operations for all periods presented.
See
Appendix
A
for
definitions
of
non-GAAP
financial
measures
and
reconciliations
to
the
most
directly
comparable
GAAP
financial
measures.
$4.3
$4.9
$5.3
$5.7
$6.2
$5.8
$0.9
2009
2010
2011
2012
2013
2014
Adjusted Operating Income
Q314/Q414 Programming charges at Turner and restructuring & severance charges
$1.69
$2.14
$2.51
$2.94
$3.51
$4.15
2009
2010
2011
2012
2013
2014
$2.6
$2.2
$2.2
$2.5
$3.1
$3.5
2009
2010
2011
2012
2013
2014
20%
21%
22%
2012
2013
2014


Commitment to Shareholder Value
5
Committed to providing direct returns to shareholders through repurchases and dividends ($B)
$26.3B
cumulative
returns
2009
2014
$2.1
$3.0
$5.6
$4.3
$4.8
1-YR
3-YR
5-YR
30%
14%
163%
75%
244%
105%
$6.6
$1.2
$2.0
$4.6
$3.3
$3.7
$5.5
$0.9
$1.0
$1.0
$1.0
$1.1
$1.1
2009
2010
2011
2012
2013
2014
Delivered 1-year, 3-year and 5-year TSR more than double the S&P 500’s TSR over the same time periods
Share Repurchases
Dividends
S&P 500
Time Warner


Compensation Mix that Links Pay to Performance
Chairman / CEO Pay*
Pay for Other NEOs*
93% Variable
80% Variable
6
* The percentages in the charts reflect the base salary, target annual bonus and target annual value of long-term incentive awards. The charts do not include health and welfare benefits, employer
matching contributions in retirement programs or personal benefits, which constitute less than 3% of each NEO’s 2014 direct target compensation.
Base
Salary
7%
Annual
Cash
Bonus
36%
PSUs &
Stock
Options
57%
Base
Salary
20%
Annual
Cash
Bonus
40%
PSUs &
Stock
Options
26%
RSUs
14%


Performance Metrics Align With Our Business Model
Incentive
Component
Time
Horizon
Performance
Measure
Performed
Delivered
2014 Outcome Linked to
Performance
Annual Cash
Bonus
1-year
Adj. Divisional Pre-Tax Income
(“ADPTI”)
70%
10% ADPTI growth in 2014
143% financial
performance rating
(maximum –
150%)
Free Cash Flow
$3.5B of Free Cash Flow
Individual progress on key long-
term strategic objectives
30%
Individual performance
achievements described on
pages 60-61 of the 2015
proxy statement
Individual performance
ratings ranged from
140% to 150%
(maximum –
150%)
PSUs with a
Performance
Period Ending in
2014
3-year
Cumulative Adj. EPS
Double-digit annual growth
193% Adj. EPS rating
TSR modifier at 120%
Payout capped at 200%
TSR relative to the S&P 500
171% TSR   at 91   percentile
Stock Options
4-year
vesting
period
TWX common stock price
2014 increase –
28%
3-year increase –
147%
5-year increase –
206%
Long-term stock price
performance determines
value realized
7
1
For
PSUs,
Company
and
S&P
500
TSR
is
calculated
using
the
average
closing
price
for
the
30
trading
days
ending
on
the
first
and
last
days
of
the
performance
period.
1
st


More Challenging Financial Goals in 2014
8
Financial goals set for 2014 bonuses were even more challenging than the 2013 goals
Higher growth required to achieve the same rating across entire range of outcomes 
1
2013 Goals adjusted to reflect Time Separation; see the 2015 proxy statement for additional information.
Adjusted Divisional Pre-Tax Income Growth
Required for 150% Growth Rating
Free Cash Flow ($B)
Required for 150% Growth Rating
9%
11%
2013
2014
$2.8
$3.4
2013
2014
1
1


Compensation Decisions in 2014 and Early 2015
Compensation Committee reviewed enterprise-wide incentive programs
Conducted to ensure incentive programs continue to meet the following key objectives:
o
Support long-term financial and strategic performance expectations
o
Appropriately reflect competitive peer practices
Compensation Program Review
Employment Agreement Renewals
Renewed
employment
agreements
with
all
NEOs
other
than
the
CEO
in
2014
and
early
2015
o
Secured benefit of executives’
continued service
o
Recognized their strong ongoing performance
o
Majority of compensation increase provided via long-term (equity) compensation to enhance shareholder
alignment
o
Continue to reflect best practices (e.g., no gross-ups)
9
o
Identified opportunities to increase alignment with shareholder interests and more effectively support
Company’s long-term goals via greater emphasis on equity compensation
Concluded
programs
are
generally
well-structured
and
aligned
with
peer
practices


Best Practices in Compensation Governance
Pay-for-Performance
Multiple Performance Metrics and Time
Horizons
Share Ownership and Retention
Requirements
Regular Engagement with Shareholders
Limited Personal Benefits
Policy Limiting Equity Dilution
Annual Compensation-Related Risk
Review
Clawback Policy
Independent Compensation Consultant
10
What We Do
What We Don’t Do
No Targeting Specific Percentiles
No Guaranteed Bonuses
No Excise Tax Gross-Ups
No Change in Control Agreements
No Tax Gross-Ups for Personal Benefits
No Repricing or Buyouts of Stock 
Options
No Hedging or Pledging by Executives
No Excessive Overhang
Limits on Pension Credits and 
Calculations


Strong Governance Practices
Board
Independence:
All
directors,
other
than
the
CEO,
are
independent
and
each
Board
committee
consists
solely
of
independent directors
Director
Qualifications:
Diverse
skills
and
broad,
relevant
experience;
annual
self-evaluation
process
and
robust
ongoing director education program
Board
Refreshment
Policy:
The
Board
believes
it
is
well-served
by
having
non-employee
directors
with
a
mix
of
tenures and expects that average tenure will generally not exceed 10 years; non-employee directors will not be eligible
for nomination for a term during which they will reach age 75
Board
Leadership
Policy
with
Lead
Independent
Director
Currently
in
Place:
Role
involves
significant
authority
and responsibilities, including authority over meeting agendas; Board Leadership Policy requires consideration of Board
leadership
at
least
annually,
with
disclosure
to
shareholders
on
factors
reviewed
(see
2015
report
posted
at
www.timewarner.com/leadership)
Strong Shareholder Rights in Place:
All directors elected annually; majority vote standard in uncontested director
elections; no supermajority vote provisions in charter or by-laws; right of shareholders holding 15% of shares to request
a special meeting
Long
History
of
Shareholder
Engagement:
Engaged
with
shareholders
representing
almost
55%
of
common
stock
in
2014
11


12
Highly Experienced and Diverse Board of Directors
Key Skills and Qualifications
Application of Key Skills and Qualifications
Leadership and Senior Management
Support development, implementation and oversight of execution of
business plans and strategies; ability to identify and develop leadership
qualities in others
Media, Communications or Technology
Business
Understanding of Company’s business, strategy and long-range plans;
insights regarding new technologies and business models
Finance, Investments, Banking or M&A
Understanding and evaluation of Company’s capital structure, financing /
investment activities and financial statements; provide relevant
perspectives and support for strategic decisions in an increasingly
complex business environment
Consumer-Focused Business
Insights regarding the marketing and distribution of content to consumers
worldwide
Legal, Regulatory and Government
Relations
Insight into working constructively with governments around the world and
addressing public policy matters
International Operations/Global Economic
Policy
Provide useful business and cultural perspectives regarding international
operations
The Board is comprised of directors who possess deep experience in all key areas
that are important to our business


13
First
major
U.S.-based
media
and
entertainment
company
to
publish
comprehensive
CSR
report
most
recent
report
available online (www.timewarner.com/citizenship)
Content creation and distribution guided by core values: journalistic integrity, freedom of expression, diversity of
viewpoints and responsible content
o
One of the first companies to adopt a policy regarding tobacco depictions in films
o
From
the
adoption
of
our
policy
in
2005
through
2014,
there
were
no
depictions
in
our
G-rated
films
and
a
95%
reduction of such depictions in our PG and PG-13-rated films
Commitment
to
conduct
business
in
an
environmentally
responsible
manner
while
reducing
environmental
footprint,
focusing
on
four
key
areas:
energy
and
greenhouse
gas
reduction;
green
production
of
feature
film
and
television;
waste reduction and recycling; green buildings
o
Reduced greenhouse gas emissions over the last several years
o
Report emissions and reductions annually
Existing practices and policies already address tobacco depictions in films and the reduction of greenhouse gas
emissions
Commitment to Social Responsibility
Time Warner has a clear commitment and robust disclosure on environmental and social matters
and
the
Board
recommends
a
vote
AGAINST
proposals
#5
and
#6


14
Written
Consent
is
Not
in
Shareholders’
Best
Interest
No Procedural Protections
o
The proposal does not require any information to be provided to shareholders prior to the consent becoming
effective, such as a description of the proposed action, the reasons for the proposed action and any potential
conflicts of interest of the shareholder(s) seeking the action
Meetings Better Protect Rights of All Shareholders
o
Shareholder meetings are a better method to present important matters for consideration by shareholders
Shareholders Have Rights and Protections that Reduce the Need for Written Consent Rights
o
Shareholders elect directors annually by majority vote in uncontested director elections, and any incumbent
director who does not receive a majority of the votes cast for his or her election is required to offer to resign from
the Board
o
Holders of 15% of the outstanding common stock may request a special meeting of shareholders
o
Shareholders may submit proposals for presentation at an annual meeting (including nominations of director
candidates)
o
Shareholders may communicate directly with any director (including the Lead Independent Director), any Board
committee or the full Board 
o
The
Board
consists
of
a
substantial
majority
of
independent
directors
all
directors
other
than
the
Company’s
CEO
The
Board
recommends
a
vote
AGAINST
proposal
#4


Appendix A: Non-GAAP Financial Measures
A-15


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 Company’s 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
Company’s
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 Company’s 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
Company’s former Time Inc. segment as discontinued operations.


Non-GAAP
Financial
Measures
-
Reconciliations
A-17
Reconciliation of Adjusted Operating Income to Operating Income
(In millions; Unaudited)
Reconciliation of Adjusted EPS to Diluted Income Per Common Share from Continuing Operations Attributable to Time Warner Inc.
Common Shareholders 
(Unaudited)
Year Ended December 31,
2014
2013
2012
2011
2010
2009
(recast)
(recast)
(recast)
(recast)
(recast)
Adjusted Operating Income
$
5,833
$
6,195
$
5,663
$
5,284
$
4,874
$
4,339
Asset impairments
(69)
(61)
(180)
(27)
(9)
(52)
Gain (loss) on operating assets, net
464
129
45
7
70
(33)
Venezuelan foreign currency loss
(1)
(173)
Other
(2)
(80)
5
(30)
(22)
(22)
(30)
Operating Income
$
5,975
$
6,268
$
5,498
$
5,242
$
4,913
$
4,224
Year Ended December 31,
2014
2013
2012
2011
2010
2009
(recast)
(recast)
(recast)
(recast)
(recast)
Diluted income per common share from continuing operations attributable
to Time Warner Inc. Common Shareholders
$
4.41
$
3.56
$
2.73
$
2.37
$
1.99
$
1.63
Less Impact of items affecting comparability on diluted income per
common share from continuing operations attributable to Time Warner
Inc. Common Shareholders
0.26
0.05
(0.21)
(0.14)
(0.15)
(0.06)
Adjusted EPS
$
4.15
$
3.51
$
2.94
$
2.51
$
2.14
$
1.69
(1)
Venezuelan foreign currency loss during the year ended December 31, 2014 related to the translation of net monetary assets denominated in Venezuelan currency resulting
from the Company’s change to begin using the SICAD 2 exchange rate.
(2)
For 2014, 2013 and 2012, the definition of Other includes gains and losses recognized in connection with pension and other postretirement benefit plan curtailments or
settlements; external costs related to mergers, acquisitions or dispositions; and amounts related to securities litigation and government investigations.  For 2011, the definition
of
Other
includes
external
costs
related
to
mergers,
acquisitions
or
dispositions;
and
amounts
related
to
securities
litigation
and
government
investigations.
There
were
no
pension
and
other
postretirement
benefit
plan
curtailments
or
settlements
in
2011.
For
2010
and
2009,
the
definition
of
Other
includes
only
amounts
related
to
securities
litigation
and government investigations.


Non-GAAP
Financial
Measures
-
Reconciliations
A-18
Reconciliation of Free Cash Flow to Cash Provided by Operations from Continuing Operations
(In millions; Unaudited)
Year Ended December 31,
2014
2013
2012
2011
2010
2009
(recast)
(recast)
(recast)
(recast)
(recast)
Cash provided by operations from continuing operations
$
3,681
$
3,258
$
2,987
$
2,939
$
2,778
$
3,033
Add payments related
to securities litigation and government investigations
3
8
22
30
Add
external
costs
related
to
mergers,
acquisitions,
investments
or
dispositions and contingent consideration payments
76
231
32
14
21
Add excess tax benefits from equity instruments
179
179
83
22
7
1
Less capital expenditures
(474)
(568)
(609)
(724)
(582)
(489)
Less principal payments on capital leases
(11)
(9)
(11)
(12)
(14)
(18)
Free Cash Flow
$
3,451
$
3,091
$
2,485
$
2,247
$
2,211
$
2,578


Non-GAAP
Financial
Measures
-
Reconciliations
A-19
Reconciliation of Return on Invested Capital (ROIC)
(In millions; Unaudited)
Reconciliation
of
Operating
Income
to
Net
Operating
Profit
After
Taxes
(“NOPAT”)
Year Ended December 31,
2014
2013
2012
(recast)
(recast)
Operating Income
$
5,975
$
6,268
$
5,498
Asset impairments
69
61
180
Gain on operating assets, net
(464
)
(129)
(45)
Venezuelan foreign currency loss
(1)
173
Other operating income items
80
(5)
30
Adjusted Operating Income
5,833
6,195
5,663
Add Amortization expense
202
209
212
Adjusted Operating Income before amortization expense
6,035
6,404
5,875
Less Income taxes
(2)
(1,267
)
(2,049
)
(1,998
)
Add equity loss, net of taxes
(153
)
(150
)
(180
)
Adjust for items affecting comparability relating to equity method investments
97
30
94
NOPAT
(3)
$
4,712
$
4,235
$
3,791


Non-GAAP
Financial
Measures
-
Reconciliations
A-20
Reconciliation of Total Assets to Capital Employed
Year Ended December 31,
2014
2013
2012
2011
(recast)
(recast)
(recast)
Total Assets
$
63,259
$
67,999
$
68,095
$
67,811
Less:
Deferred tax assets
(184)
(369)
(384)
(563)
Assets related to Discontinued Operations
(5,746)
(5,943)
(6,157)
Total current liabilities of continuing operations less debt due
within one year
(8,086)
(7,296)
(8,059)
(7,825)
Excess cash
(4)
(1,118)
(316)
(1,260)
(1,881)
Capital employed
53,871
54,272
52,449
51,385
Less Purchase Price Adjustments
(5)
(32,894)
(33,049)
(33,194)
(33,403)
Capital employed excluding PPA
$
20,977
$
21,223
$
19,255
$
17,982
Average Capital Employed
(6)
$
54,072
$
53,361
$
51,917
Average Capital Employed excluding PPA
(6)
$
21,100
$
20,239
$
18,619
ROIC
(7)
9%
8%
7%
ROIC excluding PPA
(7)
22%
21%
20%
2014
2013
2012
Actual
Adjustments
As
Adjusted
Actual
Adjustments
As
Adjusted
Actual
Adjustments
As
Adjusted
(recast)
(recast)
(recast)
(recast)
(recast)
(recast)
Income from continuing
operations before
income taxes
4,679
69
4,610
4,968
106
4,862
4,033
(292)
4,325
Income tax provision
(785)
165
(950)
(1,614)
(59)
(1,555)
(1,370)
86
(1,456)
Effective Tax rate
17%
-239%
21%
32%
56%
32%
34%
29%
34%
(1)
Venezuelan foreign currency loss during 2014 related to the translation of net monetary assets denominated in Venezuelan currency resulting from the Company’s change to
begin using the SICAD 2 exchange rate.
(2)
Calculated
using
the
Company’s
adjusted
effective
tax
rate
21%
for
2014,
32%
for
2013
and
34%
for
2012.
The
Company’s
adjusted
effective
tax
rate
reflects
the
impact
of
the
items
affecting
comparability
on
the
Company’s
Income
from
continuing
operations
as
set
forth
below.


Non-GAAP
Financial
Measures
-
Reconciliations
A-21
(3)
Net operating profit after taxes (“NOPAT”) represents the Adjusted Operating Income before amortization expense, net of tax at the Company’s adjusted effective tax rate
plus the equity income (loss), net of taxes from investments accounted for under the equity method adjusted for the Company’s share of items affecting comparability
relating to such equity method investments.
(4)
Excess cash represents the amount of cash in excess of $1.5 billion.
(5)
Purchase Price Adjustments (“PPA”) reflect the net outstanding goodwill and intangible assets recognized in connection with the merger of Time Warner Inc. (now known as
Historic TW Inc.) with America Online, Inc. (now known as Historic AOL LLC) in 2001 and the restructuring of Time Warner Entertainment Company, L.P. in 2003.
(6)
Average Capital Employed and Average Capital Employed excluding PPA are calculated using the respective amounts at December 31, 2014, 2013, 2012 and 2011 divided
by two.
Year Ended December 31,
2014
2013
2012
(recast)
(recast)
Items Affecting Comparability
Asset impairments
$
(69)
$
(61)
$
(180)
Gain on operating assets, net
464
129
45
Venezuelan
foreign
currency
loss
(a)
(173)
Other
operating
income
items
(b)
(80)
5
(30)
Gains (losses) on investments
30
61
(30)
Other
Amounts related to separation of Time Warner Cable Inc.
(11)
3
4
Amounts related to disposition of Warner Music Group
2
(1)
(7)
Amounts related to separation of Time Inc.
3
Items affecting comparability relating to equity method investments
(97)
(30)
(94)
Total other
(103)
(28)
(97)
Total of above items affecting comparability
69
106
(292)
Income
tax
impact
of
above
items
(c)
165
(59)
86
Impact of items affecting comparability on income from continuing operations
attributable to Time Warner Inc. shareholders
$
234
$
47
$
(206)
(a)
Venezuelan foreign currency loss during 2014 related to the translation of net monetary assets denominated in Venezuelan currency resulting from the
Company’s change to begin using the SICAD 2 exchange rate.
(b)
Other operating income items includes gains and losses recognized in connection with pension and other postretirement benefit plan curtailments or
settlements; external costs related to mergers, acquisitions or dispositions; and amounts related to securities litigation and government investigations.
(c)
For the year ended December 31, 2014, the gain on the sale and leaseback of Time Warner Center was offset by the utilization of tax attributes.
(7)
Return on Invested Capital (“ROIC”) is calculated as NOPAT divided by Average Capital Employed and ROIC excluding PPA is calculated as NOPAT divided by Average
Capital Employed excluding PPA.
Time Warner (NYSE:TWX)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Time Warner Charts.
Time Warner (NYSE:TWX)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Time Warner Charts.