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Time Warner Inc. (NYSE:TWX)

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

Common-Size Income Statement
Quarterly Data

Time Warner Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Costs of revenues -58.99 -60.17 -51.72 -57.37 -56.02 -59.03 -54.04 -55.24 -54.80 -61.48 -53.72 -57.00 -57.36 -58.71 -58.96 -57.82 -56.61 -55.76 -50.80 -56.77 -54.04
Gross profit 41.01% 39.83% 48.28% 42.63% 43.98% 40.97% 45.96% 44.76% 45.20% 38.52% 46.28% 43.00% 42.64% 41.29% 41.04% 42.18% 43.39% 44.24% 49.20% 43.23% 45.96%
Selling, general and administrative -17.53 -15.77 -18.14 -19.47 -16.48 -18.19 -16.45 -18.10 -17.12 -17.57 -17.41 -16.98 -16.68 -19.63 -19.64 -17.93 -18.67 -20.20 -22.13 -21.49 -23.35
Amortization of intangible assets -0.54 -0.71 -0.59 -0.63 -0.58 -0.60 -0.67 -0.68 -0.66 -0.72 -0.72 -0.59 -0.67 -0.66 -0.83 -0.74 -0.73 -0.82 -0.88 -0.82 -0.86
Restructuring and severance costs 0.00 -1.13 -0.04 -0.11 -0.16 -0.67 -0.15 -0.69 -0.07 -0.41 -0.14 -0.14 -0.17 -2.21 -4.85 -0.25 -0.38 -0.65 -0.88 -0.67 -1.15
Asset impairments 0.00 -0.06 -0.12 -0.01 -0.01 -0.10 -0.42 -0.03 -0.04 -0.24 -0.11 0.00 -0.01 -0.50 -0.08 -0.21 -0.18 -1.23 -0.07 -0.04 -0.39
Gain (loss) on operating assets, net -0.29 -0.02 0.17 0.67 0.09 0.01 -0.17 1.28 0.00 0.00 0.03 0.00 -0.04 0.17 -0.08 0.03 6.67 0.14 1.65 0.12 0.12
Operating income 22.65% 22.15% 29.56% 23.08% 26.84% 21.43% 28.10% 26.55% 27.31% 19.58% 27.94% 25.30% 25.06% 18.46% 15.55% 23.08% 30.10% 21.48% 26.90% 20.32% 20.32%
Interest expense, net -2.59 -2.82 -3.34 -3.40 -3.35 -3.64 -4.16 -4.20 -3.89 -4.08 -4.48 -3.89 -4.13 -4.00 -4.92 -4.36 -3.90 -3.50 -4.39 -4.02 -4.18
Other income (loss), net -1.18 -12.16 -0.92 0.97 0.98 -12.58 -0.38 -1.88 -0.55 0.57 -0.82 -1.70 -1.64 0.17 -2.16 0.09 -0.16 -0.57 -0.29 -0.79 0.23
Income from continuing operations before income taxes 18.88% 7.17% 25.29% 20.65% 24.47% 5.21% 23.57% 20.47% 22.88% 16.06% 22.64% 19.71% 19.29% 14.63% 8.47% 18.81% 26.05% 17.41% 22.21% 15.51% 16.37%
Income tax (provision) benefit 1.65 8.95 -7.24 -6.17 -6.08 -1.19 -3.03 -6.79 -6.81 -3.96 -6.89 -6.49 -6.20 -5.06 7.00 -6.39 -5.98 -5.93 -6.96 -5.14 -5.51
Income from continuing operations 20.54% 16.12% 18.05% 14.49% 18.40% 4.02% 20.54% 13.68% 16.06% 12.11% 15.75% 13.21% 13.09% 9.57% 15.47% 12.42% 20.06% 11.48% 15.26% 10.37% 10.87%
Discontinued operations, net of tax 0.00 0.00 0.00 0.00 0.00 -0.30 -0.07 0.00 0.55 0.00 0.00 0.00 0.52 -0.03 0.02 0.10 -1.07 0.00 2.00 0.00 0.00
Net income 20.54% 16.12% 18.05% 14.49% 18.40% 3.71% 20.47% 13.68% 16.61% 12.11% 15.75% 13.21% 13.61% 9.54% 15.49% 12.52% 18.99% 11.48% 17.25% 10.37% 10.87%
Net loss attributable to noncontrolling interests 0.01 0.01 0.01 0.00 0.01 0.00 0.00 0.01 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income attributable to Time Warner Inc. shareholders 20.55% 16.13% 18.06% 14.49% 18.41% 3.71% 20.47% 13.69% 16.61% 12.11% 15.77% 13.21% 13.61% 9.54% 15.49% 12.52% 18.99% 11.48% 17.25% 10.37% 10.87%

Based on: 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).

The common-size income statement analysis from March 2013 to March 2018 reveals a period of fluctuating gross margins coupled with a steady improvement in operational efficiency through the reduction of indirect costs. While operating profitability remained generally robust, the bottom line was periodically impacted by significant non-operating losses and volatile tax provisions.

Gross Margin and Cost of Revenue Trends
Costs of revenues exhibited cyclical volatility, ranging from a low of 50.80% in September 2013 to a peak of 61.48% in December 2015. This resulted in gross profit margins that fluctuated between 38.52% and 49.20%. A recurring pattern is observed where margins typically compress in the fourth quarter of the year, most notably in 2015 and 2017.
Operating Expense Management
A consistent downward trend in selling, general, and administrative (SG&A) expenses is evident. SG&A as a percentage of revenue decreased from 23.35% in March 2013 to 17.53% by March 2018. This suggests a successful long-term initiative to optimize overhead and scale operational costs more slowly than revenue growth.
Operating Income Performance
Operating income remained resilient, generally fluctuating between 15% and 30% of revenues. The highest operating margin was achieved in March 2014 at 30.10%. Despite the volatility in direct costs, the reduction in SG&A helped sustain operating margins, with a strong finish at 22.65% in March 2018.
Non-Operating Items and Financial Costs
Net interest expense showed a gradual and steady decline, moving from approximately 4.18% of revenues in early 2013 to 2.59% by March 2018, indicating improved debt serviceability or a reduction in total leverage. However, the "Other income (loss), net" line item introduced significant instability, specifically in December 2016 and December 2017, where losses reached 12.58% and 12.16% of revenues, respectively.
Net Profitability and Tax Impact
Net income attributable to shareholders displayed high variability, ranging from a low of 3.71% in December 2016 to a high of 20.55% in March 2018. This volatility was primarily driven by the aforementioned non-operating losses and irregular tax provisions, including significant tax benefits in September 2014, December 2017, and March 2018 that buoyed the final net margins.

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