2.2.0.25falsefalse100100 - Disclosure - Description of Business, Basis of Presentation and Summary of Significant Accounting Policiestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) USD ($) / shares $FROM_Jan01_2010_TO_Dec31_2010http://www.sec.gov/CIK0001105705duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDPerShareDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0USDUSD$2true0twx_DescriptionOfBusinessBasisOfPresentationAndSummaryOfSignificantAccountingPoliciesDisclosureAbstracttwxfalsenadurationDescription of business, basis of presentation and summary of significant accounting policies disclosure abstractfalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringDescription of business, basis of presentation and summary of significant accounting policies disclosure abstractfalsefalseDescription of Business, Basis of Presentation and Summary of Significant Accounting Policies Disclosure [Abstract]3false0twx_DescriptionOfBusinessBasisOfPresentationAndSummaryOfSignificantAccountingPoliciesTextBlocktwxfalsenadurationDescription containing the entire organization, consolidation, basis of presentation of financial statements and summary of...falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse001.       DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Time Warner Inc. (“Time Warner” or the “Company”) is a leading media and entertainment company, whose businesses include television networks, filmed entertainment and publishing. Time Warner classifies its operations into three reportable segments: Networks: consisting principally of cable television networks that provide programming; Filmed Entertainment: consisting principally of feature film, television, home video and interactive game production and distribution; and Publishing: consisting principally of magazine publishing. Financial information for Time Warner's various reportable segments is presented in Note 15.Basis of PresentationBasis of Consolidation The consolidated financial statements include all of the assets, liabilities, revenues, expenses and cash flows of entities in which Time Warner has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation.  The financial position and operating results of substantially all foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Translation gains or losses of assets and liabilities are included in the consolidated statement of shareholders' equity as a component of accumulated other comprehensive income, net.  Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include accounting for asset impairments, allowances for doubtful accounts, depreciation and amortization, the determination of ultimate revenues as it relates to amortized capitalized film costs and participations and residuals, home video and interactive games product and magazine returns, business combinations, pension and other postretirement benefits, equity-based compensation, income taxes, contingencies, litigation matters and the determination of whether the Company is the primary beneficiary of entities in which it holds variable interests.Accounting Guidance Adopted in 2010 Amendments to Accounting for Transfers of Financial Assets and VIEs On January 1, 2010, the Company adopted guidance on a retrospective basis that (i) eliminated the concept of a qualifying special-purpose entity (“SPE”), (ii) eliminated the exception from applying existing accounting guidance related to variable interest entities (“VIEs”) that were previously considered qualifying SPEs, (iii) changed the approach for determining the primary beneficiary of a VIE from a quantitative risk and reward model to a qualitative model based on control and (iv) requires the Company to assess each reporting period whether any of the Company's variable interests give it a controlling financial interest in the applicable VIE.  The Company's investments in entities determined to be VIEs principally consist of certain investments at its Networks segment, primarily HBO Asia, HBO South Asia and certain entities that comprise HBO Latin America Group (“HBO LAG”), which operate multi-channel pay and basic cable television services. As of December 31, 2010, the Company held an 80% economic interest in HBO Asia, a 75% economic interest in HBO South Asia and an approximate 80% economic interest in HBO LAG. The Company previously consolidated these entities; however, as a result of adopting this guidance, because voting control is shared with the other partners in each of the three entities, the Company determined that it is no longer the primary beneficiary of these entities and, effective January 1, 2010, accounts for these investments using the equity method. As of December 31, 2010 and December 31, 2009, the Company's aggregate investment in these three entities was $597 million and $362 million, respectively, and was recorded in investments, including available-for-sale securities, in the consolidated balance sheet. These investments are intended to enable the Company to more broadly leverage its programming and digital strategy in the territories served and to capitalize on the growing multi-channel television market in such territories. The Company provides programming as well as certain services, including distribution, licensing, technological and administrative support, to HBO Asia, HBO South Asia and HBO LAG. These entities are financed through cash flows from their operations, and the Company is not obligated to provide them with any additional financial support. In addition, the assets of these entities are not available to settle the Company's obligations. The adoption of this guidance with respect to these entities resulted in an increase (decrease) to revenues, operating income and net income attributable to Time Warner Inc. shareholders of $(397) million, $(75) million and $9 million, respectively, for the year ended December 31, 2009 and an increase (decrease) of $(82) million, $(16) million and $4 million, respectively, for the year ended December 31, 2008. The impact on the consolidated balance sheet as of December 31, 2009 and consolidated statement of cash flows for the years ended December 31, 2009 and 2008 was not material.  The Company also held variable interests in two wholly owned SPEs through which the activities of its accounts receivable securitization facilities were conducted. The Company determined it was the primary beneficiary of these entities because of its ability to direct the key activities of the SPEs that most significantly impact their economic performance. Accordingly, as a result of adopting this guidance, the Company consolidated these SPEs, which resulted in an increase to securitized receivables and non-recourse debt of $805 million as of December 31, 2009. In addition, for the year ended December 31, 2008, cash provided by operations increased by $231 million, with an offsetting decrease to cash used by financing activities. There was no change to cash provided by operations for the year ended December 31, 2009. The impact on the consolidated statement of operations for the years ended December 31, 2009 and 2008 was not material. During the first quarter of 2010, the Company repaid the $805 million that was outstanding under these facilities and terminated the two facilities on March 19, 2010 and March 24, 2010, respectively. Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses        On December 31, 2010, the Company adopted guidance that requires enhanced disclosures regarding the credit quality of financing receivables (e.g., long-term unbilled accounts receivable) and the allowances for credit losses. The adoption of this guidance did not affect the Company's historical consolidated financial statements.  Accounting Guidance Not Yet Effective Multiple-Deliverable Revenue Arrangements        In October 2009, guidance was issued related to the accounting for multiple-deliverable revenue arrangements, which amended the existing guidance for separating consideration in multiple-deliverable arrangements and established a selling price hierarchy for determining the selling price of a deliverable. This guidance became effective for the Company on January 1, 2011 and is being applied prospectively to multiple-deliverable arrangements entered into on or after January 1, 2011. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. Summary of Critical and Significant Accounting Policies The following is a discussion of each of the Company's critical accounting policies, including information and analysis of estimates and assumptions involved in their application, and other significant accounting policies. The Securities and Exchange Commission (“SEC”) considers an accounting policy to be critical if it is important to the Company's financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have been determined by Time Warner's management and the related disclosures have been reviewed with the Audit and Finance Committee of the Board of Directors of the Company. Due to the significant judgment involved in selecting certain of the assumptions used in these areas, it is possible that different parties could choose different assumptions and reach different conclusions. The Company considers the policies relating to the following matters to be critical accounting policies: <ul><li style="margin-left:28.8px;list-style:disc;">Impairment of Goodwill and Intangible Assets (see pages 82 to 83);</li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">Multiple-Element Transactions (see page 88);</li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">Income Taxes (see pages 89 to 90); </li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">Film Cost Recognition, Participations and Residuals and Impairments (see page 87);</li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">Gross versus Net Revenue Recognition (see pages 88 to 89); and</li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">Sales Returns, Pricing Rebates and Uncollectible Accounts (see pages 79 to 80).</li></ul> Cash and Equivalents Cash equivalents consist of investments that are readily convertible into cash and have original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. The Company monitors concentrations of credit risk with respect to cash and equivalents by placing such balances with higher quality financial institutions or investing such amounts in liquid, short-term, highly-rated instruments or investment funds holding similar instruments. As of December 31, 2010, the majority of the Company's cash and equivalents were invested in Rule 2a-7 money market mutual funds and with banks with a credit rating of at least A. At December 31, 2010, no single money market mutual fund or bank held more than $500 million. Sales Returns, Pricing Rebates and Uncollectible Accounts Management's estimate of product sales that will be returned, pricing rebates to grant and the amount of receivables that will ultimately be collected is an area of judgment affecting reported revenues and net income. In estimating product sales that will be returned, management analyzes vendor sales of product, historical return trends, current economic conditions, and changes in customer demand. Based on this information, management reserves a percentage of any product sales that provide the customer with the right of return. The provision for such sales returns is reflected as a reduction in the revenues from the related sale. The Company's products subject to return primarily include home entertainment product at the Filmed Entertainment and Networks segments and magazines and direct marketing sales at the Publishing segment. In estimating the reserve for pricing rebates, management considers the terms of the Company's agreements with its customers that contain purchasing targets which, if met, would entitle the customer to a rebate. In those instances, management evaluates the customer's actual and forecasted purchases to determine the appropriate reserve. At December 31, 2010, total reserves for sales returns (which also reflects reserves for certain pricing allowances provided to customers) were $1.432 billion at the Filmed Entertainment and Networks segments primarily related to film products (e.g., DVD sales) and $405 million at the Publishing segment for magazines and direct marketing sales. Similarly, the Company monitors customer credit risk related to accounts receivable, including non-current unbilled trade receivables primarily related to the international distribution of television product. Significant judgments and estimates are involved in evaluating if such amounts will ultimately be fully collected. Each division maintains a comprehensive approval process prior to issuing credit to third-party customers. On an ongoing basis, the Company tracks customer exposure based on news reports, ratings agency information and direct dialogue with customers. Counterparties that are determined to be of a higher risk are evaluated to assess whether the payment terms previously granted to them should be modified. The Company also monitors payment levels from customers, and a provision for estimated uncollectible amounts is maintained based on such payment levels, historical experience, management's views on trends in the overall receivable agings at the different divisions and, for larger accounts, analyses of specific risks on a customer specific basis. At December 31, 2010 and 2009, total reserves for uncollectible accounts were approximately $324 million and $367 million, respectively. Bad debt expense recognized during the years ended December 31, 2010, 2009 and 2008 totaled $42 million, $84 million and $117 million, respectively. In general, the Company does not require collateral with respect to its trade receivable arrangements. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on payment histories, current credit ratings and other factors.  Investments Investments in companies in which Time Warner has significant influence, but less than a controlling voting interest, are accounted for using the equity method. Significant influence is generally presumed to exist when Time Warner owns between 20% and 50% of the investee, holds substantial management rights or holds an interest of less than 20%, but the investee is a limited liability partnership or limited liability corporation that is treated as a flow-through entity.  Under the equity method of accounting, only Time Warner's investment in and amounts due to and from the equity investee are included in the consolidated balance sheet; only Time Warner's share of the investee's earnings (losses) is included in the consolidated statement of operations; and only the dividends, cash distributions, loans or other cash received from the investee, additional cash investments, loan repayments or other cash paid to the investee are included in the consolidated statement of cash flows. Additionally, the carrying value of investments accounted for using the equity method of accounting is adjusted downward to reflect any other-than-temporary declines in value (see “Asset Impairments” below). Investments in companies in which Time Warner does not have a controlling interest or over which it is unable to exert significant influence are accounted for at market value if the investments are publicly traded. If the investment is not publicly traded, the investment is accounted for at cost. Unrealized gains and losses on investments accounted for at market value are reported, net of tax, in the consolidated statement of shareholders' equity as a component of Accumulated other comprehensive income, net, until the investment is sold or considered impaired (see “Asset Impairments” below), at which time the realized gain or loss is included in Other income, net. Dividends and other distributions of earnings from both market-value investments and investments accounted for at cost are included in Other income, net, when declared. For more information, see Note 4. Consolidation Time Warner consolidates all entities in which it has a controlling voting interest and all VIEs in which the Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity's operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity's activities involve or are conducted on behalf of the investor with disproportionately few voting rights. Time Warner periodically makes judgments in determining whether entities in which it invests are VIEs and, each reporting period, the Company assesses whether it is the primary beneficiary in any of its VIEs.  Derivative Instruments The Company uses derivative instruments principally to manage the risk associated with movements in foreign currency exchange rates and recognizes all derivative instruments on the balance sheet at fair value. Changes in fair value of derivative instruments that qualify for hedge accounting will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in shareholders' equity as a component of Accumulated other comprehensive income, net, until the hedged item is recognized in earnings, depending on whether the derivative instrument is being used to hedge changes in fair value or cash flows. The ineffective portion of a derivative instrument's change in fair value is immediately recognized in earnings. For those derivative instruments that do not qualify for hedge accounting, changes in fair value are recognized immediately in earnings. See Note 7 for additional information regarding derivative instruments held by the Company and risk management strategies. Property, Plant and Equipment Property, plant and equipment are stated at cost. Additions to property, plant and equipment generally include material, labor and overhead. Time Warner also capitalizes certain costs associated with coding, software configuration, upgrades and enhancements incurred for the development of internal use software. Depreciation is recorded on a straight-line basis over estimated useful lives. Upon the occurrence of certain events or circumstances, Time Warner evaluates the depreciation periods of property, plant and equipment to determine whether a revision to its estimates of useful lives is warranted. Property, plant and equipment, including capital leases, consist of (millions):<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="5" style="width: 180px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:180px;">December 31,</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; text-align:center;border-color:#000000;min-width:85px;">Estimated</td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:85px;">2010</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:85px;">2009</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:85px;">Useful Lives</td></tr><tr style="height: 1px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; text-align:center;border-color:#000000;min-width:85px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Land(a)</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;">$</td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 499</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;">$</td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 476</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Buildings</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 2,610</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 2,512</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; text-align:left;border-color:#000000;min-width:85px;">7 to 30 years</td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Capitalized software costs</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 1,597</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:right;border-color:#000000;min-width:75px;"> 1,445</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; text-align:left;border-color:#000000;min-width:85px;">3 to 7 years</td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Furniture, fixtures and other equipment</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:75px;"> 3,337</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:75px;"> 3,221</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td colspan="2" style="width: 85px; text-align:left;border-color:#000000;min-width:85px;">3 to 10 years</td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:75px;"> 8,043</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:75px;"> 7,654</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Less accumulated depreciation</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:75px;"> (4,169)</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:75px;"> (3,732)</td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">Total</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:10px;">$</td><td style="width: 75px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:75px;"> 3,874</td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:10px;">$</td><td style="width: 75px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:75px;"> 3,922</td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 8px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;">____________</td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 8px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td><td style="width: 366px; text-align:left;border-color:#000000;min-width:366px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td><td style="width: 10px; text-align:right;border-color:#000000;min-width:10px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 75px; text-align:left;border-color:#000000;min-width:75px;"> </td></tr><tr style="height: 14px"><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;">(a) </td><td colspan="10" style="width: 651px; text-align:left;border-color:#000000;min-width:651px;">Land is not depreciated.</td></tr></table></div>Intangible Assets As a creator and distributor of branded content and copyrighted entertainment products, Time Warner has a significant number of intangible assets, including acquired film and television libraries and other copyrighted products and trademarks. Time Warner does not recognize the fair value of internally generated intangible assets. Costs incurred to create and produce copyrighted products, such as feature films and television series, generally are either expensed as incurred or capitalized. Intangible assets acquired in business combinations are recorded at the acquisition date fair value in the Company's consolidated balance sheet. For more information, see Note 2. Asset Impairments Investments The Company's investments consist of (i) fair-value investments, including available-for-sale securities and deferred compensation-related investments, (ii) investments accounted for using the cost method of accounting and (iii) investments accounted for using the equity method of accounting. The Company regularly reviews its investments for impairment, including when the carrying value of an investment exceeds its related market value. If it has been determined that an investment has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings. Factors that are considered by the Company in determining whether an other-than-temporary decline in value has occurred include the (i) market value of the security in relation to its cost basis, (ii) financial condition of the investee and (iii) the Company's intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. In evaluating the factors described above for available-for-sale securities, the Company presumes a decline in value to be other-than-temporary if the quoted market price of the security is 20% or more below the investment's cost basis for a period of six months or more (the “20% criterion”) or the quoted market price of the security is 50% or more below the security's cost basis at any quarter end (the “50% criterion”). However, the presumption of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., the investee's operating performance is strong, the market price of the investee's security is historically volatile, etc.). Additionally, there may be instances in which impairment losses are recognized even if the 20% and 50% criteria are not satisfied (e.g., there is a plan to sell the security in the near term and the fair value is below the Company's cost basis). For investments accounted for using the cost or equity method of accounting, the Company evaluates information (e.g., budgets, business plans, financial statements, etc.) in addition to quoted market prices, if any, in determining whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financing at an amount below the cost basis of the Company's investment. For more information, see Note 4. Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets, primarily tradenames, are tested annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. Goodwill is tested for impairment at a level referred to as a reporting unit. A reporting unit is either the “operating segment level,” such as Warner Bros. Entertainment Group (“Warner Bros.”), Home Box Office, Inc. (“Home Box Office”), Turner Broadcasting System, Inc. (“Turner”) and Time Inc., or one level below, which is referred to as a “component” (e.g., Sports Illustrated, People). The level at which the impairment test is performed requires judgment as to whether the operations below the operating segment constitute a self-sustaining business. If the operations below the operating segment level are determined to be a self-sustaining business, testing is generally required to be performed at this level; however, if multiple self-sustaining business units exist within an operating segment, an evaluation would be performed to determine if the multiple business units share resources that support the overall goodwill balance. For purposes of the goodwill impairment test, Time Warner has identified Warner Bros., Home Box Office, Turner and Time Inc. as its reporting units. Goodwill impairment is determined using a two-step process. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, the Company determines the fair value of a reporting unit using a discounted cash flow (“DCF”) analysis and, in certain cases, a combination of a DCF analysis and a market-based approach. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the DCF analyses are based on the Company's most recent budgets and business plans and, when applicable, various growth rates have been assumed for years beyond the current business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with its carrying amount to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination (i.e., the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that reporting unit including any unrecognized intangible assets as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid). If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the reporting unit's goodwill, an impairment loss is recognized in an amount equal to that excess. The performance of the Company's 2010 annual impairment analyses did not result in any impairments of the Company's goodwill. The discount rates utilized in the 2010 analysis ranged from 10.5% to 12.0% while the terminal growth rates used in the DCF analysis ranged from 2.5%-3.5%. To illustrate the magnitude of a potential impairment relative to future changes in estimated fair values, had the fair values of each of the Company's reporting units been hypothetically lower by 10% as of December 31, 2010, the Time Inc. reporting unit book value would have exceeded fair value by approximately $105 million. Had the fair values of each of the Company's reporting units been hypothetically lower by 20% as of December 31, 2010, the Time Inc. reporting unit book value would have exceeded fair value by approximately $600 million, the Warner Bros. reporting unit book value would have exceeded fair value by approximately $250 million and the Home Box Office reporting unit book value would have exceeded fair value by approximately $500 million. If this were to occur, the second step of the goodwill impairment test would be required to be performed to determine the ultimate amount of impairment loss to record. The impairment test for other intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The estimates of fair value of intangible assets not subject to amortization are determined using a DCF valuation analysis. Common among such approaches is the “relief from royalty” methodology, which is used in estimating the fair value of the Company's tradenames. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash flows generated by the respective intangible assets. Also subject to judgment are assumptions about royalty rates, which are based on the estimated rates at which similar tradenames are being licensed in the marketplace. The discount rates utilized in the 2010 analysis of other intangible assets ranged from 11.0% to 12.5% while the terminal growth rates used in the DCF analysis ranged from 2.5% to 3.5%. To illustrate the magnitude of potential impairment relative to future changes in estimated fair values, had the fair values of certain tradenames at Time Inc. with an aggregate carrying value of $809 million been hypothetically lower by 10%, the book values of certain of those tradenames would have exceeded fair values by $11 million. Had the fair values of those tradenames been hypothetically lower by 20% as of December 31, 2010, the book values of certain of those tradenames would have exceeded fair values by $74 million. Long-Lived Assets Long-lived assets, including finite-lived intangible assets (e.g., tradenames, customer lists, film libraries and property, plant and equipment), do not require that an annual impairment test be performed; instead, long-lived assets are tested for impairment upon the occurrence of a triggering event. Triggering events include the more likely than not disposal of a portion of such assets or the occurrence of an adverse change in the market involving the business employing the related assets. Once a triggering event has occurred, the impairment test is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. If the intent is to hold the asset for continued use, the impairment test first requires a comparison of estimated undiscounted future cash flows generated by the asset against the carrying value of the asset. If the carrying value of the asset exceeds the estimated undiscounted future cash flows, the asset is deemed to be impaired. Impairment would then be measured as the difference between the estimated fair value of the asset and its carrying value. Fair value is generally determined by discounting the future cash flows associated with that asset. If the intent is to hold the asset for sale and certain other criteria are met (e.g., the asset can be disposed of currently, appropriate levels of authority have approved the sale, and there is an active program to locate a buyer), the impairment test involves comparing the asset's carrying value to its estimated fair value. To the extent the carrying value is greater than the asset's estimated fair value, an impairment loss is recognized for the difference. Significant judgments in this area involve determining whether a triggering event has occurred, determining the future cash flows for the assets involved and selecting the appropriate discount rate to be applied in determining estimated fair value. For more information, see Note 2. Accounting for Pension Plans Time Warner and certain of its subsidiaries have both funded and unfunded defined benefit pension plans, the substantial majority of which are noncontributory, covering a majority of domestic employees and, to a lesser extent, have various defined benefit plans, primarily noncontributory, covering international employees. Pension benefits are based on formulas that reflect the participating employees' years of service and compensation during their employment period. Time Warner uses a December 31 measurement date for its plans. The pension expense recognized by the Company is determined using certain assumptions, including the expected long-term rate of return on plan assets, the interest factor implied by the discount rate and the rate of compensation increases. In March 2010, the Company's Board of Directors approved amendments to its domestic defined benefit plans relating to eligibility, service credit and future compensation increases. Additional information about the plan amendments and the determination of pension-related assumptions is discussed in more detail in Note 13. Equity-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in costs of revenues or selling, general and administrative expenses depending on the job function of the grantee on a straight-line basis (net of estimated forfeitures) over the period during which an employee is required to provide services in exchange for the award. Also, excess tax benefits realized are reported as a financing cash inflow. The grant-date fair value of a stock option is estimated using the Black-Scholes option-pricing model. Because the Black-Scholes option-pricing model requires the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company determines the volatility assumption for these stock options using implied volatilities data from its traded options. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on the historical exercise experience of Time Warner employees. Groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Time Warner common stock at the date of grant. For more information, see Note 12. Revenues and Costs Networks The Networks segment recognizes Subscription revenues as programming services are provided to cable system operators, satellite distribution services, telephone companies and other distributors (collectively, “affiliates”) based on negotiated contractual programming rates (or estimated programming rates if a new contract has not been negotiated) for each affiliate. Management considers factors such as the previous contractual rates, inflation, current payments by the affiliate and the status of the negotiations in determining any estimates. When the new distribution contract terms are finalized, an adjustment to Subscription revenue is recorded, if necessary, to reflect the new terms. Such adjustments historically have not been significant. Advertising revenues are recognized, net of agency commissions, in the period that the advertisements are aired. If there is a targeted audience guarantee, revenues are recognized for the actual audience delivery with revenue deferred for any shortfall until the guaranteed audience delivery is met, typically through the provision of additional air time. Advertising revenues from websites are recognized as impressions are delivered or the services are performed. In the normal course of business, the Networks segment enters into agreements to license programming exhibition rights from licensors. A programming inventory asset related to these rights and a corresponding liability to the distributor are recorded (on a discounted basis if the license agreements are long-term) when (i) the cost of the programming is reasonably determined, (ii) the programming material has been accepted in accordance with the terms of the agreement, (iii) the programming (or any program in a package of programming) is available for its first showing or telecast, and (iv) the license period has commenced. There are variations in the amortization methods of these rights, depending on whether the network is advertising-supported (e.g., TNT and TBS) or not advertising-supported (e.g., HBO). For advertising-supported networks, the Company's general policy is to amortize each program's costs on a straight-line basis (or per-play basis, if greater) over its license period. There are, however, exceptions to this general policy. For example, for rights fees paid for sports programming arrangements (e.g., National Basketball Association, NCAA Men's Division I Basketball Tournament and Major League Baseball), programming costs are amortized using a revenue-forecast model, in which the rights fees are amortized using the ratio of current period advertising revenue to total estimated remaining advertising revenue over the term of the arrangement. The revenue-forecast model approximates the pattern with which the network will use and benefit from providing the sports programming. In addition, for certain types of programming, the initial airing has more value than subsequent airings. In these circumstances, the Company will use an accelerated method of amortization. Specifically, if the Company is licensing the right to air a movie multiple times over a certain period, the movie is being shown to the public for the first time on a Company network (a “Network Movie Premiere”) and the Network Movie Premiere advertising is sold at a premium rate, a larger portion of the movie's programming inventory cost is amortized upon the initial airing of the movie, with the remaining cost amortized on a straight-line basis (or per-play basis, if greater) over the remaining license period. The amortization that accelerates upon the first airing versus subsequent airings is determined based on a study of historical and estimated future advertising sales for similar programming.  For a premium pay television service that is not advertising-supported (e.g., HBO), each program's costs are amortized on a straight-line basis over its license period or estimated period of use, beginning with the month of initial exhibition. When the Company has the right to exhibit feature theatrical programming in multiple windows over a number of years, the Company uses historical audience viewership as its basis for determining the amount of a film's programming amortization attributable to each window. The Company carries each of its network's programming inventory at the lower of unamortized cost or estimated net realizable value. For cable networks that earn both Advertising and Subscription revenues (e.g., TBS and TNT), the Company generally evaluates the net realizable value of unamortized programming costs based on the network's programming taken as a whole. In assessing whether the programming inventory for a particular advertising-supported network is impaired, the Company determines the net realizable value for all of the network's programming inventory based on a projection of the network's estimated combined subscription revenues and advertising revenues. Similarly, for a premium pay television service that is not advertising-supported (e.g., HBO), the Company performs its evaluation of the net realizable value of unamortized programming costs based on the the network's programming taken as a whole. Specifically, the Company determines the net realizable value for all of its premium pay television service programming based on projections of estimated Subscription revenues and, where applicable, home video and other licensing revenues. In addition, changes in management's intended usage of a program, such as a decision to no longer air a particular program and forego the rights associated with the program license, would result in a reassessment of that program's net realizable value, which could result in an impairment. Filmed Entertainment Feature films typically are produced or acquired for initial exhibition in theaters, followed by distribution in the home video, electronic sell-through, video-on-demand, pay cable, basic cable and broadcast network sectors. Generally, distribution to the home video, video-on-demand, pay cable, basic cable and broadcast network sectors each commence within three years of initial theatrical release. Theatrical revenues are recognized as the films are exhibited. Revenues from home video sales are recognized at the later of the delivery date or the date that video units are made widely available for sale or rental by retailers based on gross sales less a provision for estimated returns. Revenues from the distribution of theatrical product to television sectors are recognized when the films are available to telecast.  Television films and series are initially produced for broadcast networks, cable networks or first-run television syndication and may be subsequently licensed to foreign or domestic cable and syndicated television sectors, as well as sold on home video. Revenues from the distribution of television programming are recognized when the films or series are available to telecast, except for advertising barter agreements, where the revenue is valued and recognized when the related advertisements are exhibited. In certain circumstances, pursuant to the terms of the applicable contractual arrangements, the availability dates granted to customers may precede the date the Company may bill the customers for these sales. Unbilled accounts receivable, which primarily relate to the distribution of television product, totaled $2.339 billion and $2.105 billion at December 31, 2010 and December 31, 2009, respectively. Included in the unbilled accounts receivable at December 31, 2010 was $1.462 billion that is to be billed in the next twelve months. Similar to theatrical home video sales, revenue from home video sales of television films and series, less a provision for estimated returns, is recognized at the later of the delivery date or the date that video units are made widely available for sale or rental by retailers. Upfront or guaranteed payments for the licensing of intellectual property are recognized as revenue when (i) an arrangement has been signed with a customer, (ii) the customer's right to use or otherwise exploit the intellectual property has commenced and there is no requirement for significant continued performance by the Company, (iii) licensing fees are either fixed or determinable and (iv) collectability of the fees is reasonably assured. In the event any significant continued performance is required in these arrangements, revenue is recognized when the related services are performed. Film costs include the unamortized cost of completed theatrical films and television episodes, theatrical films and television series in production and film rights in preparation of development. Film costs are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized film costs recognized as cost of revenues for a given film as it is exhibited in various sectors, throughout its life cycle, is determined using the film forecast computation method. Under this method, the amortization of capitalized costs and the accrual of participations and residuals is based on the proportion of the film's revenues recognized for such period to the film's estimated remaining ultimate revenues. The process of estimating a film's ultimate revenues (i.e., the total revenue to be received throughout a film's life cycle) is discussed further under “Film Cost Recognition and Impairments.”  Inventories of theatrical and television product consist primarily of DVDs and are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Returned goods included in inventory are valued at estimated realizable value, but not in excess of cost. For more information, see Note 6. The Company enters into collaborative arrangements primarily related to arrangements with third parties to jointly finance and distribute many of its theatrical productions. See “Accounting for Collaborative Arrangements” for more information. Acquired film libraries (i.e., program rights and product that are acquired after a film has been exhibited at least once in all sectors) are amortized using the film forecast computation method. For more information, see Note 2. Publishing Magazine Subscription and Advertising revenues are recognized at the magazine cover date. The unearned portion of magazine subscriptions is deferred until the magazine cover date, at which time a proportionate share of the gross subscription price is included in revenues, net of any commissions paid to subscription agents. Also included in Subscription revenues are revenues generated from single-copy sales of magazines through retail outlets such as newsstands, supermarkets, convenience stores and drugstores, which may or may not result in future subscription sales. Advertising revenues from websites are recognized as the services are performed. Certain products, such as magazines sold at newsstands and other merchandise, are sold to customers with the right to return unsold items. Revenues from such sales are recognized when the products are shipped, based on gross sales less a provision for future estimated returns based on historical experience. Inventories of merchandise are stated at the lower of cost or estimated realizable value. Cost is determined using primarily the average cost method. Returned merchandise included in inventory is valued at estimated realizable value, but not in excess of cost. For more information, see Note 6. Film Cost Recognition, Participation and Residuals and Impairments One aspect of the accounting for film and television production costs, as well as related revenues, that impacts the Filmed Entertainment segment (and the Networks segment, to a lesser degree) and requires the exercise of judgment relates to the process of estimating a film's ultimate revenues and is important for two reasons. First, while a film is being produced and the related costs are being capitalized, as well as at the time the film is released, it is necessary for management to estimate the ultimate revenues, less additional costs to be incurred (including exploitation and participation costs), in order to determine whether the value of a film has been impaired and, thus, requires an immediate write-off of unrecoverable film costs. Second, it is necessary for management to determine, using the film forecast computation method, the amount of capitalized film costs and the amount of participations and residuals to be recognized as costs of revenues for a given film in a particular period. To the extent that the film's ultimate revenues are adjusted, the resulting gross margin reported on the exploitation of that film in a period is also adjusted. Prior to the theatrical release of a film, management bases its estimates of ultimate revenues for each film on factors such as the historical performance of similar films, the star power of the lead actors and actresses, the rating and genre of the film, pre-release market research (including test market screenings) and the expected number of theaters in which the film will be released. Management updates such estimates based on information available during the film's production and, upon release, the actual results of each film. Changes in estimates of ultimate revenues from period to period affect the amount of film costs amortized in a given period and, therefore, could have an impact on the segment's financial results for that period. For example, prior to a film's release, the Company often will test market the film to the film's targeted demographic. If the film is not received favorably, the Company may (i) reduce the film's estimated ultimate revenues, (ii) revise the film, which could cause the production costs to increase or (iii) perform a combination of both. Similarly, a film that generates lower-than-expected theatrical revenues in its initial weeks of release would have its theatrical, home video and television distribution ultimate revenues adjusted downward. A failure to adjust for a downward change in estimates of ultimate revenues could result in the understatement of film costs amortization for the period. The Company recorded film cost amortization of $3.407 billion, $3.180 billion and $2.796 billion in 2010, 2009 and 2008, respectively. Included in film cost amortization are film impairments primarily related to pre-release theatrical films of $78 million, $85 million and $84 million in 2010, 2009 and 2008, respectively. Barter Transactions Time Warner enters into transactions that involve the exchange of advertising, in part, for other products and services, such as a license for programming. Such transactions are recognized by the programming licensee (e.g., a television network) as programming inventory and deferred advertising revenue at the estimated fair value when the product is available for telecast. Barter programming inventory is amortized in the same manner as the non-barter component of the licensed programming, and advertising revenue is recognized when delivered. From the perspective of the programming licensor (e.g., a film studio), incremental licensing revenue is recognized when the barter advertising spots received are either used or sold to third parties.  Multiple-Element Transactions In the normal course of business, the Company enters into transactions, referred to as multiple-element transactions, that involve making judgments about allocating consideration to the various elements. While the more common type of multiple-element transactions encountered by the Company involve the sale or purchase of multiple products or services (e.g., licensing multiple film titles in a single arrangement), multiple element transactions can also involve contemporaneous purchase and sales transactions, the settlement of an outstanding dispute contemporaneous with the purchase of a product or service, as well as investing in an investee while at the same time entering into an operating agreement.  In accounting for multiple-element transactions, judgment must be exercised in determining the fair value of the different elements in a bundled transaction. The judgments made in determining fair value in such arrangements impact the amount of revenues, expenses and net income recognized over the term of the contract, as well as the period in which they are recognized. If the Company has evidence of fair value for each deliverable in a multiple-element transaction, then it accounts for each deliverable in the transaction separately, based on the relevant accounting policies.  However, if the Company is unable to determine fair value for one or more elements of the transaction, the transaction is accounted for as one unit of accounting and is recorded as revenue, a reduction of revenue, costs or a reduction of costs, as applicable.  The timing of the recognition of revenues for the unit of account will depend on the nature of the deliverables comprising the unit of accounting as well as the conditions for revenue recognition, to the extent applicable. In determining the fair value of the respective elements, the Company refers to quoted market prices (where available), independent appraisals (where available), historical transactions or comparable cash transactions. Other indicators of fair value include the existence of price protection in the form of “most-favored-nation” clauses or similar contractual provisions and individual elements whose values are dependent on future performance (and based on independent factors). Further, in such transactions, evidence of fair value for one element of a transaction may provide support that value was not transferred from one element in a transaction to another element in a transaction.  Gross versus Net Revenue Recognition In the normal course of business, the Company acts as or uses an intermediary or agent in executing transactions with third parties. In connection with these arrangements, the Company must determine whether to report revenue based on the gross amount billed to the ultimate customer or on the net amount received from the customer after commissions and other payments to third parties. To the extent revenues are recorded on a gross basis, any commissions or other payments to third parties are recorded as expense so that the net amount (gross revenues less expense) is reflected in Operating Income. Accordingly, the impact on Operating Income is the same whether the Company records revenue on a gross or net basis.  The determination of whether revenue should be reported gross or net is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as a principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. The determination of whether the Company is acting as a principal or an agent in a transaction involves judgment and is based on an evaluation of the terms of an arrangement. The Company serves as the principal in transactions in which it has substantial risks and rewards of ownership. The following are examples of arrangements where the Company is an intermediary or uses an intermediary: <ul><li style="margin-left:28.8px;list-style:disc;">The Filmed Entertainment segment provides distribution services to third-party companies.   The Filmed Entertainment segment may provide distribution services for an independent third-party company in the worldwide theatrical, home video, television and/or videogame sectors. The independent third-party company may retain final approval over the distribution, marketing, advertising and publicity for each film or videogame in all media, including the timing and extent of the releases, the pricing and packaging of packaged goods units and approval of all television licenses. The Filmed Entertainment segment records revenue generated in these distribution arrangements on a gross basis when it (i) is the merchant of record for the licensing arrangements, (ii) is the licensor/contracting party, (iii) provides the materials to licensees, (iv) handles the billing and collection of all amounts due under such arrangements and (v) bears the risk of loss related to distribution advances and/or the packaged goods inventory. If the Filmed Entertainment segment does not bear the risk of loss as described in the previous sentence, the arrangements are accounted for on a net basis.</li></ul> <ul><li style="margin-left:28.8px;list-style:disc;">The Publishing segment utilizes subscription agents to generate magazine subscribers.   As a way to generate magazine subscribers, the Publishing segment sometimes uses third-party subscription agents to secure subscribers and, in exchange, the agents receive a percentage of the Subscription revenues generated. The Publishing segment records revenues from subscriptions generated by the agent, net of the fees paid to the agent, primarily because the subscription agent (i) has the primary contact with the customer, (ii) performs all of the billing and collection activities, and (iii) passes the proceeds from the subscription to the Publishing segment after deducting the agent's commission.</li></ul>Accounting for Collaborative Arrangements The Company's collaborative arrangements primarily relate to arrangements entered into with third parties to jointly finance and distribute theatrical productions (“co-financing arrangements”) and an arrangement entered into with a third party television network to acquire the rights to broadcast certain sports programming in the United States from 2011 through 2024. This sports programming arrangement did not have a material impact to the Company's results of operations as of and for the year ended December 31, 2010. In most cases, the form of the co-financing arrangement is the sale of an economic interest in a film to an investor. The Filmed Entertainment segment generally records the amounts received for the sale of an economic interest as a reduction of the costs of the film, as the investor assumes full risk for that portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party investors own an interest in the film and, therefore, in each period the Company reflects in the consolidated statement of operations either a charge or benefit to costs of revenue to reflect the estimate of the third-party investor's interest in the profits or losses incurred on the film. The estimate of the third-party investor's interest in profits or losses incurred on the film is determined using the film forecast computation method. For the years ended December 31, 2010, 2009 and 2008, net participation costs of $508 million, $321 million and $584 million, respectively, were recorded in costs of revenues.Advertising Costs Time Warner expenses advertising costs as they are incurred, which generally is when the advertising is exhibited or aired. Advertising expense to third parties was $2.892 billion in 2010, $2.626 billion in 2009 and $2.905 billion in 2008.  Income Taxes Income taxes are provided using the asset and liability method, such that income taxes (i.e., deferred tax assets, deferred tax liabilities, taxes currently payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year and include the results of any difference between GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating losses, capital losses and general business credit carryforwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under tax laws and rates. Valuation allowances are established when management determines that it is more likely than not that some portion or all of the deferred tax asset will not be realized. The financial effect of changes in tax laws or rates is accounted for in the period of enactment. The subsequent realization of net operating loss and general business credit carryforwards acquired in acquisitions accounted for using the purchase method of accounting is recognized in the statement of operations. Research and development credits are recorded based on the amount of benefit the Company believes is “more likely than not” of being earned. The majority of such research and development benefits have been recorded to shareholders' equity as they resulted from stock option deductions for which such amounts are recorded as an increase to additional paid-in-capital. Tax credits received for the production of a film or program are offset against the cost of inventory capitalized.  From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax free, issues related to consideration paid or received, and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. The Company prepares and files tax returns based on its interpretation of tax laws and regulations. In the normal course of business, the Company's tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. In determining the Company's tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be “more likely than not” of being sustained upon examination based on their technical merits. There is considerable judgment involved in determining whether positions taken on the Company's tax returns are “more likely than not” of being sustained. The Company adjusts its tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The Company's policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense. For further information, see Note 9. Discontinued Operations In determining whether a group of assets disposed (or to be disposed) of should be presented as a discontinued operation, the Company makes a determination of whether the group of assets being disposed of comprises a component of the entity; that is, whether it has historic operations and cash flows that can be clearly distinguished (both operationally and for financial reporting purposes). The Company also determines whether the cash flows associated with the group of assets have been significantly (or will be significantly) eliminated from the ongoing operations of the Company as a result of the disposal transaction and whether the Company has no significant continuing involvement in the operations of the group of assets after the disposal transaction. If these determinations can be made affirmatively, the results of operations of the group of assets being disposed of (as well as any gain or loss on the disposal transaction) are aggregated for separate presentation apart from continuing operating results of the Company in the consolidated financial statements. See Note 3 for a summary of discontinued operations.1.       DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description offalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription containing the entire organization, consolidation, basis of presentation of financial statements and summary of significant accounting policies disclosure. Represents disclosure of any changes in an accounting principle, including a change from one generally accepted accounting principle to another generally accepted accounting principle when there are two or more generally accepted accounting principles that apply or when the accounting principle formerly used is no longer generally accepted. Also disclose any change in the method of applying an accounting principle, or any change in an accounting principle required by a new pronouncement in the unusual instance that a new pronouncement does not include specific transition provisions.No authoritative reference available.falsefalse1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES12Description of Business, Basis of Presentation and Summary of Significant Accounting PoliciesUnKnownUnKnownUnKnownUnKnownfalsetrue