Time Warner Inc. Reports Second-Quarter 2011 Results

Second-Quarter Highlights

• Revenues rise 10% to $7.0 billion, highest growth rate since third quarter of 2007
• Advertising Revenues grow 8%, driven by 11% increase at Turner
• Adjusted EPS increases 20% to $0.60
• Company posts Adjusted Operating Income of $1.3 billion
• Company repurchases 65 million shares for $2.3 billion year-to-date through July 29, 2011

NEW YORK, August 3, 2011 - Time Warner Inc. (NYSE:TWX) today reported financial results for its second quarter ended June 30, 2011.

Chairman and Chief Executive Officer Jeff Bewkes said: "We had another successful quarter and remain on track to meet our financial goals for the year. Our continued investment in our content and brands is paying off. This quarter included such hits as the premiere of TNT's Falling Skies, HBO's breakout series Game of Thrones, People magazine's and CNN's royal wedding coverage and Warner Bros.' The Hangover Part II. More recently, the final Harry Potter film has been a tremendous box office and critical success.

In the 2011-2012 upfront, advertisers recognized the outstanding reach and appeal of Turner's cable networks by making significantly higher commitments across its portfolio. And HBO, which has the strongest programming lineup in its history, just received the most Primetime Emmy nominations of any network for the 11th year in a row."

Mr. Bewkes continued: "We're also making progress shaping the business models that will benefit us as the digital transition continues. HBO GO debuted on mobile devices in May to a great response. Last month, CNN and HLN added live streaming functionality to their mobile apps, which have now been downloaded more than 10 million times. And the acquisition in May of Flixster, Inc. underscores our commitment to accelerate the digital transition of home entertainment and make it much more compelling for consumers to own digital movies. We also have bought back $2.3 billion of our shares so far this year, reflecting our confidence in our competitive position and growth prospects and our dedication to providing attractive shareholder returns."

Company Results

In the quarter, Revenues rose 10% from the same period in 2010 to $7.0 billion, reflecting growth at all the Company's segments. Adjusted Operating Income and Operating Income each grew 6% to $1.3 billion, due to increases at the Networks and Publishing segments. Adjusted Operating Income and Operating Income margins were both 18% versus 19% in the 2010 quarter.

The Company posted Adjusted Diluted Income per Common Share from Continuing Operations ("Adjusted EPS") of $0.60 versus $0.50 in last year's second quarter. Diluted Income per Common Share was $0.59 for the three months ended June 30, 2011, compared to $0.49 in the prior-year quarter.

For the first six months of 2011, Cash Provided by Operations from Continuing Operations reached $868 million, and Free Cash Flow totaled $555 million. As of June 30, 2011, Net Debt was $15.0 billion, up from $12.9 billion at the end of 2010, due to share repurchases and dividends, as well as investment and acquisition spending, offset by the generation of Free Cash Flow.

Refer to "Use of Non-GAAP Financial Measures" in this release for a discussion of the non-GAAP financial measures used in this release and the reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Stock Repurchase Program Update

In January, the Company's Board of Directors increased the amount remaining on the Company's common stock repurchase program to $5.0 billion for purchases beginning January 1, 2011.

From January 1 through July 29, 2011, the Company repurchased 65 million shares of its common stock for $2.3 billion. These amounts reflect the purchase of 28 million shares of common stock for $1.0 billion since the amounts reported in the Company's first quarter earnings release issued on May 4, 2011.

Download the complete earnings release (PDF)