Name: Time Warner Inc. (NYSE:TWX) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Time Warner Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Revenues	31,271)	29,318)	28,118)	27,359)	29,795)
Costs of revenues	(17,647)	(16,376)	(16,154)	(15,875)	(16,230)
Gross profit	13,624)	12,942)	11,964)	11,484)	13,565)
Selling, general and administrative	(5,438)	(5,123)	(4,824)	(5,190)	(6,465)
Amortization of intangible assets	(197)	(190)	(189)	(202)	(251)
Restructuring and severance costs	(120)	(117)	(60)	(512)	(246)
Asset impairments	(16)	(43)	(25)	(69)	(140)
Gain (loss) on operating assets, net	67)	78)	(1)	464)	142)
Operating income	7,920)	7,547)	6,865)	5,975)	6,605)
Interest income	209)	227)	219)	184)	93)
Interest expense	(1,214)	(1,388)	(1,382)	(1,353)	(1,283)
Interest expense, net	(1,005)	(1,161)	(1,163)	(1,169)	(1,190)
Investment gains (losses), net	300)	148)	(31)	30)	61)
Loss on equity method investees	(153)	(283)	(123)	(153)	(152)
Premiums paid and costs incurred on debt redemption	(1,087)	(1,008)	(72)	—)	—)
Other	(30)	(48)	(30)	(4)	(21)
Other loss, net	(970)	(1,191)	(256)	(127)	(112)
Income from continuing operations before income taxes	5,945)	5,195)	5,446)	4,679)	5,303)
Income tax provision	(701)	(1,281)	(1,651)	(785)	(1,749)
Income from continuing operations	5,244)	3,914)	3,795)	3,894)	3,554)
Discontinued operations, net of tax	—)	11)	37)	(67)	137)
Net income	5,244)	3,925)	3,832)	3,827)	3,691)
Net loss attributable to noncontrolling interests	3)	1)	1)	—)	—)
Net income attributable to Time Warner Inc. shareholders	5,247)	3,926)	3,833)	3,827)	3,691)

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 financial trajectory between 2013 and 2017 is characterized by an initial contraction in revenue and profitability followed by a steady recovery and an eventual acceleration in net income. While revenues experienced a dip in 2014, the subsequent years showed consistent growth, reaching a five-year peak in 2017. This recovery was accompanied by improved operational efficiency and a significant increase in the bottom line during the final period.

Revenue and Gross Profit Trends: Revenues declined by approximately 8.3% between 2013 and 2014, falling from 29,795 million to 27,359 million. However, a consistent upward trend followed, with revenues increasing annually to reach 31,271 million by 2017. Gross profit followed a similar pattern, hitting a low of 11,484 million in 2014 before recovering to 13,624 million in 2017. The cost of revenues remained relatively stable relative to the growth in top-line earnings, suggesting a consistent gross margin profile.
Operating Efficiency and Income: Operating income demonstrated a strong growth trend from 2014 onward, rising from 5,975 million to 7,920 million by 2017. This expansion was supported by disciplined management of selling, general, and administrative expenses, which were reduced from 6,465 million in 2013 to a low of 4,824 million in 2015. Despite a slight increase in SG&A expenses toward 2017, they remained below 2013 levels, contributing to an expansion of the operating margin over the period.
Non-Operating Expenses and Debt Management: Net interest expenses remained relatively stable, fluctuating between 1,005 million and 1,190 million. A notable shift occurred starting in 2015 regarding debt redemption, with premiums paid and costs incurred on debt redemption increasing sharply from 72 million in 2015 to 1,087 million by 2017. Additionally, "Other loss, net" saw a significant spike in 2016, reaching 1,191 million, which offset some of the gains in operating performance.
Net Income and Tax Impact: Net income attributable to shareholders grew steadily from 3,691 million in 2013 to 3,926 million in 2016, before jumping significantly to 5,247 million in 2017. This surge in the final year is partially attributable to a substantial decrease in the income tax provision, which dropped to 701 million in 2017 from 1,281 million in 2016, effectively boosting the net result despite the costs associated with debt redemption.

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