Company Profile for Time Warner Inc (TWX)

Address: One Time Warner Center, New York, NY, US

Telephone: (212) 484-8000 Website: www.timewarner.com

Facsimile: (212) 489-6183 Email: [email protected]

A media and entertainment company, whose businesses include interactive services, Business Description: cable systems, filmed entertainment, television networks and publishing.

Details

CEO: Jeffrey L. Bewkes

Employees: 86400

Issue Type: CS

Market Cap: 31,318,318,489

Auditor: Ernst & Young LLP

Last Audit: UQ

Industry Classifications

Sector: SERVICES NAICS: 512110

Industry: Entertainment - Diversified CIK: 0001105705

Motion Picture & Videotape Production(7812), Books Publishing, Or Publishing & SIC: Printing(2731), Periodicals Publishing, Or Publishing & Printing(2721), Cable & Other Pay Television Services(4841)

Profitability Management Effectiveness

Gross Margin: 61.7 Return on Equity: NE

EBIT Margin: 18.5 Return on Capital: -13.7

Profit Margin: 13.3 Return on Assets: -9.8

Share Statistics

Outstanding: 3,587,436,253 Float: 3,583,026,234

39,794,787 as of Short Interest: (2009/01/27)

Short Int Ratio: 1.7 % of Float: 1.1%

Non-Corp. Insider 0.1% as of (2009/01) Holdings: Bought Prev 3 Mo: 530,925 Sold Prev 3 Mo: 530,925

Institution Holdings: 83.5% as of (2009/01)

Total Held: 2,994,890,422 Institutions: 1,123

Bought Prev Mo: 225,900,756 Sold Prev Mo: 206,485,168

Time Warner

Time Warner Inc.

Type Public (NYSE: TWX)

Merger between Time Inc. and Warner Founded Communications (1990); subsequently purchased by AOL (2001)

Headquarters New York City, New York, USA

Area served Worldwide

Jeffrey L. Bewkes Key people (Chairman) & (CEO)

Broadcasting, publishing, Internet, Industry telecommunications

Products See list of assets owned by Time Warner.

Market cap US$ 34.86 Billion (2008)[1]

Revenue ▲ US$ 46.482 Billion (2008)

Operating ▲ US$ 8.949 Billion (2008) income

Net income ▲ US$ 4.387 Billion (2008)

Total assets ▲ US$ 133.830 Billion (2008)

Total equity ▲ US$ 58.536 Billion (2008)

Employees 86,400 (2008) Website TimeWarner.com

Time Warner Inc. (NYSE: TWX) is the world's second largest media and entertainment conglomerates by market capitalization (behind News Corporation), headquartered in the Time Warner Center in New York City. (TimeWarner.com Fact Sheet Page) Formerly three separate companies (and owns the assets of a fourth, Turner Broadcasting System, Inc., acquired by a pre-AOL merger TW in 1996): Warner Communications, Inc. and Time Inc. before the Time- Warner merger in 1990 and America Online, Inc. before its purchase of Time Warner in 2001 has created the current Time Warner , with major operations in film, television, publishing, Internet service and telecommunications. Among its subsidiaries are AOL, New Line Cinema, Time Inc., Time Warner Cable, HBO, Turner Broadcasting System, The CW Television Network, TheWB.com, UBU Productions, Warner Bros. Entertainment, Kids' WB, The CW4Kids, Cartoon Network, CNN, DC Comics, and Mohawk Productions.

Contents

• 1970s • 1980s • 1990s • 2000s • Transactions made since the AOL-Time Warner merger • The CW Television Network • Time Inc. • Financials • Commercial properties • Board of directors • Senior Executives • Time Warner Inc. • Subsidiaries • Competition • Past names • References

1970s

In 1972, Kinney National Company spun off its non-entertainment assets due to a financial scandal over its parking operations and renamed itself Warner Communications Inc.

It was the parent company for Warner Bros. Pictures and Warner Music Group during the 1970s and 1980s. It also owned DC Comics and Mad, as well as a majority stake in Garden State National Bank (an investment it was ultimately required to sell pursuant to requirements under the Bank Holding Company Act). Warner's initial divestiture efforts led by Garden State CEO Charles A. Agemian were blocked by Garden State board member William A. Conway in 1978; a revised transaction was later completed in 1980.

In 1976, Nolan Bushnell sold his Atari company to Warner Communications for an estimated $28–32 million. Warner made considerable profits (and later losses) with Atari, which it owned from 1976 to 1984. While part of Warner, Atari achieved its greatest success, selling millions of Atari 2600s and computers. At its peak, Atari accounted for a third of Warner's annual income and was the fastest-growing company in the history of the United States at the time.

In 1975, Warner expanded under the guidance of CEO Steve Ross and formed a joint venture with American Express, named Warner-Amex Satellite Entertainment, which held cable channels including MTV (launched 1981), Nickelodeon (launched 1979) and The Movie Channel. Warner bought out American Express's half in 1984, and sold the venture a year later to Viacom, which renamed it MTV Networks.

1980s

In 1980, Warner purchased The Franklin Mint for about $225 million. The combination was short lived: Warner sold The Franklin Mint in 1985 to American Protection Industries Inc. (API) for $167.5 million. However, Warner retained Franklin Mint’s Eastern Mountain Sports as well as The Franklin Mint Center, which it leased back to API.[3] In February 1983, Warner expanded their interests to baseball. Under the direction of Ceasar P. Kimmel, executive vice president, bought 48 percent of the Pittsburgh Pirates for $10 million. The company then put up its share for sale in November 1984 following losses of $6 million. The team's elderly majority owner, John W. Galbreath, soon followed suit after learning of Warner's actions.[4]

Turner Broadcasting logo

In 1984, due to the video game crash of 1983, Warner sold the consumer division of Atari to Jack Tramiel. It kept the arcade division and renamed it Atari Games. They sold Atari Games to Namco in 1985, and repurchased it in 1994, renaming it Time-Warner Interactive, until it was sold to Midway Games in 1996. In a long-expected deal, Warner Communications announced on May 11, 1988 they were acquiring Lorimar-Telepictures; the acquisition was finalized on January 12, 1989. The merger of Time Inc. and Warner Communications was announced on March 4, 1989. During the summer of that same year, Paramount Communications launched a $12.2 billion hostile bid to acquire Time, Inc. in an attempt to end a stock-swap merger deal between Time and Warner Communications. This caused Time to raise its bid for Warner to $14.9 Billion in cash and stock. Paramount responded by filing a lawsuit in a Delaware court to block the Time/Warner merger. The court ruled twice in favor of Time, forcing Paramount to drop both the Time acquisition and the lawsuit, and allowing the formation of Time Warner which was completed on January 10, 1990.

1990s

In early 1990,own all the gurls and the combined companies were named Time Warner. This company subsequently acquired Ted Turner's Turner Broadcasting System in October 1996. Not only did this result in the company (in a way) re-entering the basic cable television industry (in regards to nationally available channels), but Warner Bros. also regained the rights to their pre- 1950[5][6] film library, which by then had been owned by Turner (the films are still technically held by Turner, but WB is responsible for sales and distribution).

Time Warner had also been owner of the Six Flags Theme Parks chain during the 1990s after near bankruptcy. It sold all Six Flags parks and properties to Oklahoma based Premier Parks on April 1, 1998.

2000s

In 2000, a new company called AOL Time Warner, with Steve Case as chairman, was created when AOL purchased Time Warner for US$164bn.[7] The deal, announced on 10 January 2000 [8] and officially filed on 11 February 2000,[9] employed a merger structure in which each original company merged into a newly created entity. The Federal Trade Commission cleared the deal on December 14, 2000,[10] and gave final approval on January 11, 2001;[citation needed] the company completed the merger later that day.[11] The deal was approved on the same day by the Federal Communications Commission,[9] and had already been cleared the European Commission on 11 October 2000.[12] The shareholders of AOL owned 55% of the new company while Time Warner shareholders owned only 45%,[8] meaning that the smaller AOL had in fact bought out the far larger Time Warner.

After the merger, the profitability of the ISP division (America Online) decreased.[citation needed] Meanwhile, the market valuation of similar independent internet companies drastically fell. As a result, the value of the America Online division dropped significantly. This forced a goodwill write-off, causing AOL Time Warner to report a loss of $99 billion in 2002 — at the time, the largest loss ever reported by a company. In 2003, the company dropped the "AOL" from its name, and removed Steve Case as executive chairman in favor of Richard Parsons, with AOL remaining a part of the company. That same year, Time Warner spun off Time-Life's ownership under the legal name Direct Holdings Americas, Inc. Case resigned from the Time Warner board on October 31, 2005.[13]

In 2005, Time Warner was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[14][15][16] On December 27, 2007 newly installed Time Warner CEO Jeffrey Bewkes discussed possible plans to spin-off Time Warner Cable and sell-off AOL and Time Inc. This would leave a smaller company made up of Turner Broadcasting, Warner Bros and HBO.[17] On February 28, 2008 co-chairmen and co-CEOs of New Line Cinema Bob Shaye and Michael Lynne announced their resignations from the 40- year-old movie studio in response to Jeffrey Bewkes's demand for cost-cutting measures at the studio, which he intended to dissolve into Warner Bros.

Transactions made since the AOL-Time Warner merger

Since the merger, a number of transactions have taken place: • The professional wrestling company WCW was sold to their competitor and investing creditor the World Wrestling Federation for $7 million in 2001. • The Atlanta Hawks, Atlanta Thrashers, and operating rights to Philips Arena were sold in mid-2003. • The fifty percent share in the cable channel Comedy Central was sold to Viacom. • Warner Music Group was sold to a group of investors led by Edgar Bronfman Jr. in March 2004. • AOL/Netscape's longrunning litigation against Microsoft was settled out of court. • Time Warner announced that it was shutting down its CNNfn financial information channel and disposing of its share in Google (2004). • On March 31, 2006 Time Warner sold the Time Warner Book Group to French publisher Hachette Livre, of the Lagardere group. • On February 7, 2006, a group led by corporate raider Carl Icahn and Lazard Frères CEO Bruce Wasserstein unveiled a 343-page proposal calling for the breakup of Time Warner into four companies and stock buybacks totaling approximately $20 billion. On February 17, 2006, the Icahn-lead group agreed with Time Warner to not contest the re-election of TW's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn group's cooperation, Time Warner will buy back up to $20 billion of stock, nominate more independent members to the board of directors, cut $1 billion of costs by 2007, and continue discussions with the Icahn group over their proposal, particularly on the future of Time Warner Cable. • On February 23, 2006, Turner South, a regional sports and entertainment network in the south, was sold to News Corp's Fox Cable Networks group. The network later became SportSouth. • On September 12, 2006, Time Inc. announced that Time4 Media, a group of men's interest magazines including Popular Science and Outdoor Life was to be put up for sale. The sale will include 18 publications (including three parenting-related titles). • In the fall of 2006, the Atlanta Braves were sold to Liberty Media in a deal that returned vast amounts of Liberty-owned Time Warner stock back into the company's folds. This sale was made official on May 17, 2007. • In the summer of 2008, the Reader's Digest Association sold QSP to Time Warner subsidiary Time Inc. for $110 million.[18]

The CW Television Network

See also: The CW Television Network On January 24, 2006, CBS Corporation and Time Warner announced that they were to create a new broadcast network, The CW Television Network. The network officially debuted on September 18, 2006. The network formally debuted on September 20 with the 2 hour premiere of America's Next Top Model.

The network is the result of a merger of The WB Television Network (a Time Warner holding) and UPN (a CBS Corporation holding). CBS Corporation and Time Warner each own 50% of the network. Tribune Broadcasting (previously owned a 25% stake on The WB) and CBS Corporation contributed its stations as new network affiliates. Time Inc.

The Time Inc. division publishes approximately 150 titles worldwide. It is the leading magazine publisher in the U.S. and UK, and is understood to be profitable at US$5 billion in annual revenues.[19] As of January 2007, the unit is experiencing downsizing.[20] In January 2007, the Bonnier Magazine Group agreed to acquire 18 magazines that Time Inc. was divesting. The magazines in the package employed 550 people and included Field & Stream, Outdoor Life, Ski, Yachting, and TransWorld Snowboarding, as well as 11 other titles that were part of Time Inc.'s Time4Media Group. Also included were Parenting, and Baby Talk, which were part of the Parenting Group.[21] Financials

In 2004, Time Warner's market capitalization was $84 billion. When the AOL-Time Warner merger was announced in January 2000, the combined market capitalization was $280 billion.

For fiscal year 2002 the company reported a $99 billion loss on its income statement [22] because of $100 billion in non-recurring charges, almost all from a writedown of the goodwill (intangible asset) from the merger in 2000. The value of the AOL portion of the company had dropped sharply with the collapse of the Internet boom, in the early 2000s.

On 4 February 2009, Time Warner posted a $16.03 billion loss for the final quarter of 2008, compared with a $1.03 billion profit for the same three months of 2007. [23] Commercial properties

Time Warner Inc. owns several large properties in New York City; certain buildings in the Rockefeller Center complex and adjacent office towers house its main offices; one of which houses a CNN news studio. In late 2003, Time Warner finished construction of a new twin-tower complex, designed to serve as additional office space, facing Columbus Circle on the southwestern edge of Central Park. Originally called the AOL Time Warner Center, the 755-foot (230 m), 55-floor mixed-use property was renamed Time Warner Center when the company itself was renamed. Board of directors

As of July 31, 2008.

• Herbert M. Allison Jr. - President and Chief Executive Officer, Fannie Mae • Jim Barksdale - Chairman and President, Barksdale Management • Jeffrey L. Bewkes - President and Chief Executive Officer, Time Warner Inc. • Stephen F. Bollenbach - Hilton Hotels Corporation • Frank J. Caufield - Co-Founder and Partner, Kleiner Perkins Caufield & Byers • Robert C. Clark - Distinguished Service Professor, Harvard University • Mathias Döpfner - CEO of Germany's Axel Springer AG • Jessica P. Einhorn - Dean, Paul H. Nitze School of Advanced International Studies (SAIS), Johns Hopkins University • Reuben Mark - Chairman, Colgate-Palmolive Company • Michael A. Miles - Special Limited Partner, Forstmann Little & Company • Ken Novack - Senior Counsel, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC • Richard D. Parsons - Chairman of the Board, Time Warner Inc. • Deborah C. Wright - Chairman, President and Chief Executive Officer, Carver Bancorp, Inc. and Carver Federal Savings Bank

Senior Executives

Time Warner Inc. *Jeff Bewkes, Chairman,President and CEO of Time Warner Inc.

Subsidiaries

• Randy Falco , Chairman and Chief Executive Officer of AOL LLC. • Glenn A. Britt , President and CEO of Time Warner Cable • Barry Meyer , Chairman and CEO of Warner Bros. Entertainment Inc. • Bill Nelson, Chairman and CEO of Home Box Office • Jonathan Clavin , Chairman and President of Intercontinental Operations of Turner Broadcasting System • Peyton Bateman , President of Publishing Corporation of Turner Broadcasting System • Philip I. Kent , Chairman and CEO of Turner Broadcasting System • Ann S. Moore , Chairman and CEO of Time Inc.

Competition

Time Warner faces industry competition from traditional media companies such as CBS Corporation, The Walt Disney Company, News Corporation, and Viacom, as well as online search portals such as Yahoo!, and Google for competition of viewer attention which translates to ad sales. According to the recent 10Q, in order to remain competitive, Time Warner and AOL must keep pace with rapid technological changes on the internet. Time Warner's business may be severely impacted by the increasing "piracy" of feature films, television programming and other content which decreases company revenues.[24]

AOL's subscriber base is declining, and declines are expected to continue, adversely affecting subscription and advertising revenue. As more individuals are using non-PC devices to access the Internet, AOL is under pressure to secure placement of its services and applications on mobile devices.

Box office receipts and the growth rate of DVD sales have recently been declining, which adversely affects Warner Brothers' growth prospects and revenues.[25]

Past names

• National Cleaning Company • Kinney Parking Company • Kinney National Company (1966-1972) • Warner Communications (1972-1990) • Time Warner (1990-2001, 2003-present) • AOL Time Warner Inc. (2001-2003)