Time Warner Inc. (NYSE:TWX)

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Time Warner Inc., adjusted total assets

US$ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Total assets	69,209)	65,966)	63,848)	63,259)	67,994)
Adjustments
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	976)	1,016)	1,083)	1,262)	1,600)
Add: Allowance for doubtful accounts	162)	193)	180)	152)	261)
Less: Current deferred tax assets²	—)	—)	—)	184)	447)
Less: Noncurrent deferred tax assets³	111)	125)	134)	—)	—)
After Adjustment
Adjusted total assets	70,236)	67,050)	64,977)	64,489)	69,408)

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).

¹ Operating lease right-of-use asset (before adoption of FASB Topic 842). See details »

² Current deferred tax assets. See details »

³ Noncurrent deferred tax assets. See details »

Between 2013 and 2017, the asset base exhibited a period of initial contraction followed by a sustained recovery. Both total assets and adjusted total assets experienced a notable decline in 2014, reaching their lowest points in the five-year period before trending upward through 2017.

Asset Trajectory and Growth: Total assets decreased from US$ 67,994 million in 2013 to US$ 63,259 million in 2014. Following this contraction, a consistent growth pattern was observed, with total assets increasing annually to reach US$ 69,209 million by December 31, 2017. Adjusted total assets followed a nearly identical trajectory, falling to US$ 64,489 million in 2014 and subsequently rising to US$ 70,236 million by the end of the period.
Analysis of Asset Adjustments: Adjusted total assets remained consistently higher than reported total assets throughout the entire observation period. However, the variance between the two metrics narrowed over time. The positive adjustment was US$ 1,414 million in 2013 and gradually decreased to US$ 1,027 million by 2017, indicating a steady reduction in the magnitude of the adjustments applied to the total asset figure.

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Time Warner Inc., adjusted current liabilities

US$ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Current liabilities	14,077)	9,703)	8,002)	9,204)	8,383)
Adjustments
Less: Current deferred revenue	711)	564)	616)	579)	995)
Less: Current accrued restructuring and severance costs	119)	114)	213)	392)	144)
After Adjustment
Adjusted current liabilities	13,247)	9,025)	7,173)	8,233)	7,244)

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).

The trajectory of current liabilities from 2013 through 2017 is characterized by moderate volatility followed by a substantial escalation in the final period. While figures fluctuated between 2013 and 2016, a marked increase occurred in 2017, where current liabilities rose to 14,077 million US$, representing the peak for the analyzed timeframe.

Trend Analysis of Obligations: Current liabilities experienced a growth phase between 2013 and 2014, followed by a contraction in 2015. A subsequent upward trend began in 2016 and accelerated sharply in 2017, indicating a significant expansion of short-term financial obligations.
Adjusted Liability Variance: Adjusted current liabilities mirrored the movements of the gross current liabilities throughout the five-year period. Notably, the gap between current and adjusted liabilities remained relatively stable in absolute terms, though it decreased as a percentage of total current liabilities over time. The adjustment was 1,139 million US$ in 2013 and 830 million US$ in 2017.
Growth Acceleration: The most significant increase is observed between December 31, 2016, and December 31, 2017. During this interval, current liabilities increased by approximately 45%, and adjusted current liabilities grew by approximately 47%, signaling a rapid accumulation of short-term debt or accrued expenses in the final year.

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Time Warner Inc., adjusted total liabilities

US$ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Total liabilities	40,798)	41,600)	40,200)	38,783)	38,090)
Adjustments
Add: Operating lease liability (before adoption of FASB Topic 842)¹	976)	1,016)	1,083)	1,262)	1,600)
Less: Noncurrent deferred tax liabilities²	1,584)	2,678)	2,454)	2,204)	2,642)
Less: Deferred revenue	1,179)	1,050)	968)	894)	1,477)
Less: Accrued restructuring and severance costs	197)	171)	253)	534)	244)
After Adjustment
Adjusted total liabilities	38,814)	38,717)	37,608)	36,413)	35,327)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Noncurrent deferred tax liabilities. See details »

An analysis of the liability trends between 2013 and 2017 reveals a general upward trajectory in both reported and adjusted figures, although the growth patterns diverged during the final year of the observation period.

Total Liabilities Trajectory: Total liabilities grew steadily from US$ 38,090 million in 2013 to a peak of US$ 41,600 million in 2016. Following this peak, a reduction was observed in 2017, with liabilities decreasing to US$ 40,798 million, representing a decline of approximately 1.9% from the previous year.
Adjusted Total Liabilities Trajectory: Adjusted total liabilities exhibited more consistent growth throughout the entire period. These figures rose from US$ 35,327 million in 2013 to US$ 38,814 million in 2017. While the growth rate slowed significantly between 2016 and 2017, the adjusted total continued to increase even as the unadjusted total declined.
Variance Analysis: The gap between total and adjusted liabilities fluctuated over the five-year span. The largest discrepancy occurred in 2016, with a difference of US$ 2,883 million. By 2017, this variance narrowed to US$ 1,984 million, indicating that the adjustments applied to the total liabilities decreased in magnitude relative to the overall balance.

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Time Warner Inc., adjusted total Time Warner Inc. shareholders’ equity

US$ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Total Time Warner Inc. shareholders’ equity	28,375)	24,335)	23,619)	24,476)	29,904)
Adjustments
Less: Net deferred tax asset (liability)¹	(1,473)	(2,553)	(2,320)	(2,020)	(2,195)
Add: Allowance for doubtful accounts	162)	193)	180)	152)	261)
Add: Deferred revenue	1,179)	1,050)	968)	894)	1,477)
Add: Accrued restructuring and severance costs	197)	171)	253)	534)	244)
Add: Redeemable noncontrolling interest	35)	29)	29)	—)	—)
Add: Noncontrolling interest	1)	2)	—)	—)	—)
After Adjustment
Adjusted total equity	31,422)	28,333)	27,369)	28,076)	34,081)

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).

¹ Net deferred tax asset (liability). See details »

A fluctuating trend is observed in both the total shareholders' equity and the adjusted total equity between 2013 and 2017. Both metrics experienced a period of contraction from 2013 to 2015 before entering a recovery phase in the subsequent two years.

Total Shareholders' Equity Trend: Total shareholders' equity declined from US$ 29,904 million in 2013 to a period low of US$ 23,619 million in 2015. A reversal of this trend occurred in 2016, with equity increasing to US$ 24,335 million, followed by a more significant rise to US$ 28,375 million by the end of 2017.
Adjusted Total Equity Trend: The adjusted total equity followed a trajectory closely aligned with the total shareholders' equity. It decreased from US$ 34,081 million in 2013 to US$ 27,369 million in 2015, before trending upward to reach US$ 31,422 million by December 31, 2017.
Equity Adjustment Analysis: A consistent positive variance is maintained between the adjusted total equity and the total shareholders' equity throughout the entire period. The magnitude of this adjustment was highest in 2013 at US$ 4,177 million and reached its lowest point in 2017 at US$ 3,047 million, indicating a gradual narrowing of the gap between reported and adjusted equity over time.

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Time Warner Inc., adjusted capitalization table

US$ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Debt due within one year	5,450)	1,947)	198)	1,118)	66)
Long-term debt, excluding due within one year	18,294)	22,392)	23,594)	21,376)	20,099)
Total reported debt	23,744)	24,339)	23,792)	22,494)	20,165)
Total Time Warner Inc. shareholders’ equity	28,375)	24,335)	23,619)	24,476)	29,904)
Total reported capital	52,119)	48,674)	47,411)	46,970)	50,069)
Adjustments to Debt
Add: Operating lease liability (before adoption of FASB Topic 842)¹	976)	1,016)	1,083)	1,262)	1,600)
Adjusted total debt	24,720)	25,355)	24,875)	23,756)	21,765)
Adjustments to Equity
Less: Net deferred tax asset (liability)²	(1,473)	(2,553)	(2,320)	(2,020)	(2,195)
Add: Allowance for doubtful accounts	162)	193)	180)	152)	261)
Add: Deferred revenue	1,179)	1,050)	968)	894)	1,477)
Add: Accrued restructuring and severance costs	197)	171)	253)	534)	244)
Add: Redeemable noncontrolling interest	35)	29)	29)	—)	—)
Add: Noncontrolling interest	1)	2)	—)	—)	—)
Adjusted total equity	31,422)	28,333)	27,369)	28,076)	34,081)
After Adjustment
Adjusted total capital	56,142)	53,688)	52,244)	51,832)	55,846)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Net deferred tax asset (liability). See details »

The financial trajectory from 2013 to 2017 reveals a period of initial capital contraction followed by a steady recovery and expansion. Total reported capital decreased from 50,069 million US$ in 2013 to a low of 46,970 million US$ in 2014, before climbing to 52,119 million US$ by the end of 2017. This trend is mirrored in the adjusted total capital, which similarly bottomed out in 2014 at 51,832 million US$ and reached 56,142 million US$ by 2017.

Debt Obligations and Trends: A consistent upward trend in total reported debt was observed between 2013 and 2016, rising from 20,165 million US$ to a peak of 24,339 million US$. A slight reduction occurred in 2017, with debt settling at 23,744 million US$. The adjusted total debt followed a near-identical pattern, peaking in 2016 at 25,355 million US$, indicating that the adjustments applied to the debt figures remained relatively proportional to the reported values throughout the five-year period.
Shareholders' Equity Dynamics: Shareholders' equity exhibited significant volatility. Total reported equity declined sharply from 29,904 million US$ in 2013 to 23,619 million US$ in 2015. Following this trough, a recovery phase began, with equity rising to 28,375 million US$ by December 31, 2017. Adjusted total equity maintained a similar trajectory, starting at 34,081 million US$ in 2013, dipping to 27,369 million US$ in 2015, and recovering to 31,422 million US$ by 2017.
Capitalization Adjustments Analysis: A consistent positive variance exists between reported and adjusted figures across all categories. Adjusted total debt was consistently higher than reported debt, typically by a margin of approximately 1,000 to 1,600 million US$. More pronounced were the adjustments to equity, where adjusted total equity remained several billion US$ higher than reported equity in every period. These systemic adjustments result in a higher overall capital base, with adjusted total capital consistently exceeding reported total capital by approximately 5,800 million US$.

In summary, the capital structure shifted from an equity-heavy position in 2013 toward a more balanced distribution by 2015, as debt increased and equity decreased. By 2017, the organization strengthened its equity position while stabilizing its debt levels, resulting in a total capital base that exceeded 2013 levels on both a reported and adjusted basis.

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Time Warner Inc., adjusted revenues

US$ in millions

12 months ended:	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Revenues	31,271)	29,318)	28,118)	27,359)	29,795)
Adjustment
Add: Increase (decrease) in deferred revenue	129)	82)	74)	1)	(57)
After Adjustment
Adjusted revenues	31,400)	29,400)	28,192)	27,360)	29,738)

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).

Revenue performance over the five-year period indicates an initial contraction followed by a sustained recovery. Reported revenues decreased between 2013 and 2014, falling from US$ 29,795 million to US$ 27,359 million, before entering a consistent growth phase that resulted in a peak of US$ 31,271 million by the end of 2017.

Revenue Variance Trends: A shifting relationship between reported and adjusted revenues is evident throughout the period. In 2013, adjusted revenues were lower than reported revenues by US$ 57 million. By 2014, this variance narrowed to a negligible increase of US$ 1 million, indicating a convergence of the two metrics.
Expansion of Positive Adjustments: Beginning in 2015, a pattern of positive adjustments emerged and expanded annually. Adjusted revenues consistently exceeded reported revenues, with the positive delta increasing from US$ 74 million in 2015 to US$ 82 million in 2016, and reaching US$ 129 million in 2017. This suggests an increasing reliance on adjustments to reconcile reported figures with adjusted performance metrics.
Comparative Growth Trajectories: Both reported and adjusted revenue streams followed an identical directional trend, characterized by a dip in 2014 and subsequent growth. However, the magnitude of the adjusted figures grew at a slightly faster pace from 2015 onward, resulting in a widening gap between the statutory revenue and the adjusted revenue totals.

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Time Warner Inc., adjusted net income attributable to Time Warner Inc. shareholders

US$ in millions

12 months ended:	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Net income attributable to Time Warner Inc. shareholders	5,247)	3,926)	3,833)	3,827)	3,691)
Adjustments
Add: Deferred income tax expense (benefit)¹	(1,010)	236)	328)	166)	759)
Add: Increase (decrease) in allowance for doubtful accounts	(31)	13)	28)	(39)	(23)
Add: Increase (decrease) in deferred revenue	129)	82)	74)	1)	(57)
Add: Increase (decrease) in accrued restructuring and severance costs	26)	(82)	(281)	348)	78)
Less: Discontinued operations, net of tax	—)	11)	37)	(67)	137)
Add: Other comprehensive income (loss)	73)	(64)	(282)	(416)	137)
Add: Comprehensive income (loss), net of tax, attributable to noncontrolling interest	(3)	(1)	(1)	—)	—)
After Adjustment
Adjusted net income	4,431)	4,099)	3,662)	3,954)	4,448)

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).

¹ Deferred income tax expense (benefit). See details »

An analysis of the financial results from 2013 to 2017 reveals a divergent relationship between reported net income attributable to shareholders and adjusted net income. While reported net income followed a consistent growth trajectory, adjusted net income experienced a period of contraction followed by a recovery, suggesting that non-recurring items had a significant impact on the reported figures over this five-year period.

Reported Net Income Trends: Reported net income exhibited steady year-over-year growth between 2013 and 2016, rising from 3,691 million to 3,926 million. A substantial acceleration occurred in 2017, with net income increasing to 5,247 million, representing a significant spike compared to the prior four years.
Adjusted Net Income Trends: Adjusted net income demonstrated greater volatility, beginning at 4,448 million in 2013 and declining for two consecutive years to a low of 3,662 million in 2015. A recovery phase followed, with figures rising to 4,099 million in 2016 and 4,431 million in 2017, though the final value remained slightly below the 2013 peak.
Variance Analysis between Reported and Adjusted Income: The relationship between reported and adjusted figures shifted notably over the period. In 2013 and 2014, adjusted net income was higher than reported net income, indicating that reported earnings were suppressed by non-recurring expenses or write-downs. Conversely, by 2017, reported net income exceeded adjusted net income by 816 million, suggesting the presence of significant one-time gains or positive non-operational adjustments that inflated the bottom line relative to core adjusted performance.

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