Stock Analysis on Net
Stock Analysis on Net

Time Warner Inc. (NYSE:TWX)

This company has been moved to the archive! The financial data has not been updated since April 26, 2018.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Time Warner Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Federal 1,257 693 844 128 617
Foreign 369 342 337 466 352
State and local 85 10 142 25 21
Current 1,711 1,045 1,323 619 990
Federal (1,040) 216 349 152 808
Foreign 31 (2) (29) — (27)
State and local (1) 22 8 14 (22)
Deferred (1,010) 236 328 166 759
Current and deferred income taxes provided on Income from continuing operations 701 1,281 1,651 785 1,749

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Time Warner Inc. current decreased from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Time Warner Inc. deferred decreased from 2015 to 2016 and from 2016 to 2017.
Current and deferred income taxes provided on Income from continuing operations Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Time Warner Inc. current and deferred income taxes provided on Income from continuing operations decreased from 2015 to 2016 and from 2016 to 2017.

Effective Income Tax Rate (EITR)

Time Warner Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
U.S. federal statutory income tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
Effective tax rate 11.79% 25.00% 30.00% 17.00% 33.00%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Time Warner Inc. effective tax rate decreased from 2015 to 2016 and from 2016 to 2017.

Components of Deferred Tax Assets and Liabilities

Time Warner Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Tax attribute carryforwards 292 435 299 305 1,074
Royalties, participations and residuals 257 344 457 429 453
Other 1,343 1,825 1,704 2,024 1,413
Deferred tax assets before valuation allowances 1,892 2,604 2,460 2,758 2,940
Valuation allowances (287) (463) (233) (275) (564)
Deferred tax assets 1,605 2,141 2,227 2,483 2,376
Assets acquired in business combinations (1,688) (2,752) (2,817) (2,874) (3,350)
Unbilled television receivables (794) (1,086) (1,117) (998) (941)
Other (596) (856) (613) (631) (280)
Deferred tax liabilities (3,078) (4,694) (4,547) (4,503) (4,571)
Net deferred tax asset (liability) (1,473) (2,553) (2,320) (2,020) (2,195)

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Item Description The company
Deferred tax assets before valuation allowances Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Time Warner Inc. deferred tax assets before valuation allowances increased from 2015 to 2016 but then decreased significantly from 2016 to 2017.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Time Warner Inc. deferred tax assets decreased from 2015 to 2016 and from 2016 to 2017.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Time Warner Inc. net deferred tax asset (liability) decreased from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Deferred Tax Assets and Liabilities, Classification

Time Warner Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Current deferred tax assets — — — 184 447
Noncurrent deferred tax assets 111 125 134 — —
Noncurrent deferred tax liabilities 1,584 2,678 2,454 2,204 2,642

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Time Warner Inc. noncurrent deferred tax assets decreased from 2015 to 2016 and from 2016 to 2017.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Time Warner Inc. noncurrent deferred tax liabilities increased from 2015 to 2016 but then decreased significantly from 2016 to 2017.

Adjustments to Financial Statements: Removal of Deferred Taxes

Time Warner Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Adjustment to Current Assets
Current assets (as reported) 15,219 13,485 12,513 13,180 12,844
Less: Current deferred tax assets, net — — — 184 447
Current assets (adjusted) 15,219 13,485 12,513 12,996 12,397
Adjustment to Total Assets
Total assets (as reported) 69,209 65,966 63,848 63,259 67,994
Less: Current deferred tax assets, net — — — 184 447
Less: Noncurrent deferred tax assets, net 111 125 134 — —
Total assets (adjusted) 69,098 65,841 63,714 63,075 67,547
Adjustment to Total Liabilities
Total liabilities (as reported) 40,798 41,600 40,200 38,783 38,090
Less: Noncurrent deferred tax liabilities, net 1,584 2,678 2,454 2,204 2,642
Total liabilities (adjusted) 39,214 38,922 37,746 36,579 35,448
Adjustment to Total Time Warner Inc. Shareholders’ Equity
Total Time Warner Inc. shareholders’ equity (as reported) 28,375 24,335 23,619 24,476 29,904
Less: Net deferred tax assets (liabilities) (1,473) (2,553) (2,320) (2,020) (2,195)
Total Time Warner Inc. shareholders’ equity (adjusted) 29,848 26,888 25,939 26,496 32,099
Adjustment to Net Income Attributable To Time Warner Inc. Shareholders
Net income attributable to Time Warner Inc. shareholders (as reported) 5,247 3,926 3,833 3,827 3,691
Add: Deferred income tax expense (benefit) (1,010) 236 328 166 759
Net income attributable to Time Warner Inc. shareholders (adjusted) 4,237 4,162 4,161 3,993 4,450

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Time Warner Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Time Warner Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Current Ratio
Reported current ratio 1.08 1.39 1.56 1.43 1.53
Adjusted current ratio 1.08 1.39 1.56 1.41 1.48
Net Profit Margin
Reported net profit margin 16.78% 13.39% 13.63% 13.99% 12.39%
Adjusted net profit margin 13.55% 14.20% 14.80% 14.59% 14.94%
Total Asset Turnover
Reported total asset turnover 0.45 0.44 0.44 0.43 0.44
Adjusted total asset turnover 0.45 0.45 0.44 0.43 0.44
Financial Leverage
Reported financial leverage 2.44 2.71 2.70 2.58 2.27
Adjusted financial leverage 2.31 2.45 2.46 2.38 2.10
Return on Equity (ROE)
Reported ROE 18.49% 16.13% 16.23% 15.64% 12.34%
Adjusted ROE 14.20% 15.48% 16.04% 15.07% 13.86%
Return on Assets (ROA)
Reported ROA 7.58% 5.95% 6.00% 6.05% 5.43%
Adjusted ROA 6.13% 6.32% 6.53% 6.33% 6.59%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Time Warner Inc. adjusted current ratio deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Time Warner Inc. adjusted net profit margin ratio deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Time Warner Inc. adjusted total asset turnover ratio improved from 2015 to 2016 and from 2016 to 2017.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Time Warner Inc. adjusted financial leverage ratio decreased from 2015 to 2016 and from 2016 to 2017.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Time Warner Inc. adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Time Warner Inc. adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017.

Time Warner Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Current assets 15,219 13,485 12,513 13,180 12,844
Current liabilities 14,077 9,703 8,002 9,204 8,383
Liquidity Ratio
Current ratio1 1.08 1.39 1.56 1.43 1.53
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 15,219 13,485 12,513 12,996 12,397
Current liabilities 14,077 9,703 8,002 9,204 8,383
Liquidity Ratio
Adjusted current ratio2 1.08 1.39 1.56 1.41 1.48

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 15,219 ÷ 14,077 = 1.08

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 15,219 ÷ 14,077 = 1.08

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Time Warner Inc. adjusted current ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Time Warner Inc. shareholders 5,247 3,926 3,833 3,827 3,691
Revenues 31,271 29,318 28,118 27,359 29,795
Profitability Ratio
Net profit margin1 16.78% 13.39% 13.63% 13.99% 12.39%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Time Warner Inc. shareholders 4,237 4,162 4,161 3,993 4,450
Revenues 31,271 29,318 28,118 27,359 29,795
Profitability Ratio
Adjusted net profit margin2 13.55% 14.20% 14.80% 14.59% 14.94%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Net profit margin = 100 × Net income attributable to Time Warner Inc. shareholders ÷ Revenues
= 100 × 5,247 ÷ 31,271 = 16.78%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Time Warner Inc. shareholders ÷ Revenues
= 100 × 4,237 ÷ 31,271 = 13.55%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Time Warner Inc. adjusted net profit margin ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Revenues 31,271 29,318 28,118 27,359 29,795
Total assets 69,209 65,966 63,848 63,259 67,994
Activity Ratio
Total asset turnover1 0.45 0.44 0.44 0.43 0.44
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 31,271 29,318 28,118 27,359 29,795
Adjusted total assets 69,098 65,841 63,714 63,075 67,547
Activity Ratio
Adjusted total asset turnover2 0.45 0.45 0.44 0.43 0.44

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 31,271 ÷ 69,209 = 0.45

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 31,271 ÷ 69,098 = 0.45

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Time Warner Inc. adjusted total asset turnover ratio improved from 2015 to 2016 and from 2016 to 2017.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Total assets 69,209 65,966 63,848 63,259 67,994
Total Time Warner Inc. shareholders’ equity 28,375 24,335 23,619 24,476 29,904
Solvency Ratio
Financial leverage1 2.44 2.71 2.70 2.58 2.27
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 69,098 65,841 63,714 63,075 67,547
Adjusted total Time Warner Inc. shareholders’ equity 29,848 26,888 25,939 26,496 32,099
Solvency Ratio
Adjusted financial leverage2 2.31 2.45 2.46 2.38 2.10

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Financial leverage = Total assets ÷ Total Time Warner Inc. shareholders’ equity
= 69,209 ÷ 28,375 = 2.44

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Time Warner Inc. shareholders’ equity
= 69,098 ÷ 29,848 = 2.31

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Time Warner Inc. adjusted financial leverage ratio decreased from 2015 to 2016 and from 2016 to 2017.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Time Warner Inc. shareholders 5,247 3,926 3,833 3,827 3,691
Total Time Warner Inc. shareholders’ equity 28,375 24,335 23,619 24,476 29,904
Profitability Ratio
ROE1 18.49% 16.13% 16.23% 15.64% 12.34%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Time Warner Inc. shareholders 4,237 4,162 4,161 3,993 4,450
Adjusted total Time Warner Inc. shareholders’ equity 29,848 26,888 25,939 26,496 32,099
Profitability Ratio
Adjusted ROE2 14.20% 15.48% 16.04% 15.07% 13.86%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 ROE = 100 × Net income attributable to Time Warner Inc. shareholders ÷ Total Time Warner Inc. shareholders’ equity
= 100 × 5,247 ÷ 28,375 = 18.49%

2 Adjusted ROE = 100 × Adjusted net income attributable to Time Warner Inc. shareholders ÷ Adjusted total Time Warner Inc. shareholders’ equity
= 100 × 4,237 ÷ 29,848 = 14.20%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Time Warner Inc. adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Time Warner Inc. shareholders 5,247 3,926 3,833 3,827 3,691
Total assets 69,209 65,966 63,848 63,259 67,994
Profitability Ratio
ROA1 7.58% 5.95% 6.00% 6.05% 5.43%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Time Warner Inc. shareholders 4,237 4,162 4,161 3,993 4,450
Adjusted total assets 69,098 65,841 63,714 63,075 67,547
Profitability Ratio
Adjusted ROA2 6.13% 6.32% 6.53% 6.33% 6.59%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 ROA = 100 × Net income attributable to Time Warner Inc. shareholders ÷ Total assets
= 100 × 5,247 ÷ 69,209 = 7.58%

2 Adjusted ROA = 100 × Adjusted net income attributable to Time Warner Inc. shareholders ÷ Adjusted total assets
= 100 × 4,237 ÷ 69,098 = 6.13%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Time Warner Inc. adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017.