Time Warner Inc. Reports Fourth-Quarter and Full-Year 2013 Results

  Time Warner Inc. Reports Fourth-Quarter and Full-Year 2013 Results

Fourth-Quarter and Full-Year Highlights

  *Company posted record quarterly revenues of $8.6 billion in the fourth
    quarter, up 5%
  *Adjusted Operating Income grew 8% in 2013 to $6.6 billion
  *Turner, Home Box Office & Warner Bros.^1 all posted record Adjusted
    Operating Income in 2013
  *Free Cash Flow increased 20% in 2013 to $3.5 billion
  *Adjusted EPS rose 16%^2 in 2013 to $3.77, the 5^th consecutive year of
    double-digit growth
  *Company repurchased 60.5 million shares for $3.7 billion in 2013
  *Board authorized a 10% increase in quarterly dividend and new $5 billion
    share repurchase program

Business Wire

NEW YORK -- February 5, 2014

Time Warner Inc. (NYSE:TWX) today reported financial results for its fourth
quarter and full year ended December 31, 2013.

Chairman and Chief Executive Officer Jeff Bewkes said: “We had another very
successful year in 2013, with Turner, Home Box Office and Warner Bros. all
posting record profits while also investing for future growth. We grew
Adjusted Operating Income by 8% and Adjusted EPS by 16% — our fifth
consecutive year of double-digit Adjusted EPS growth. Among Turner’s
highlights, TBS ranked as ad-supported cable’s #1 network in primetime among
adults 18-49 and TNT was the #2 network in total day among adults 25-54. Adult
Swim had the most-watched year in its history and ranked #1 on ad-supported
cable among adults 18-34 in total day for the ninth year in a row. HBO remains
in a league of its own, once again receiving the most Primetime Emmy Awards of
any network, while tying for the most Golden Globe Awards and recording its
biggest gain in domestic subscribers in 17 years. Warner Bros. delivered its
best year on record by any measure. Theatrically, it led both the domestic and
international box office, and its films received an industry-leading 21
Academy Award nominations — including Best Picture nominations for Gravity and
Her.  In television, Warner Bros. has over 60 programs airing on broadcast and
cable during the 2013-2014 television season, including, among adults 18-49,
the #1 comedy in The Big Bang Theory, the #1 unscripted show in The Voice and
the #3 drama in The Following.”

Mr. Bewkes continued: “We also remain on track for the separation of Time Inc.
into an independent publicly-traded company during the second quarter of 2014.
And our plans to consolidate our New York City area operations into a single
new location reflect our unrelenting focus on increased efficiency and
collaboration. Demonstrating our commitment to stockholder returns, in 2013,
we returned nearly $5 billion to our stockholders in the form of share
buybacks and dividends. Furthering this commitment, our Board of Directors has
authorized a new $5 billion share repurchase program and a double-digit
increase in our dividend for the fifth consecutive year.”

Full-Year Company Results

Full-year revenues increased 4% from 2012 to $29.8 billion and Adjusted
Operating Income rose 8% from 2012 to $6.6 billion as growth at Turner, Home
Box Office and Warner Bros. and a decrease in intercompany eliminations more
than offset a decline at Time Inc. Operating Income increased 12% from 2012 to
$6.6 billion. Adjusted Operating Income and Operating Income margins were 22%
in 2013 compared to 21% in 2012.

The Company posted 2013 Adjusted Diluted Income per Common Share from
Continuing Operations (“Adjusted EPS”) of $3.77, up 16% from $3.24^2 in the
prior year. Diluted Income per Common Share from Continuing Operations was
$3.77 compared to $3.00^2 in 2012.

On March 6, 2013, Time Warner announced that its Board of Directors has
authorized management to proceed with plans for the complete legal and
structural separation of Time Inc. from Time Warner. In 2013, excluding Time
Inc., Revenues increased 4%, Adjusted Operating Income grew 9% and Operating
Income rose 14%.

In 2013, Cash Provided by Operations from Continuing Operations reached $3.7
billion and Free Cash Flow totaled $3.5 billion. As of December 31, 2013, Net
Debt was $18.3 billion, up from $17.0 billion at the end of 2012, due to share
repurchases and dividends, partially offset by the generation of Free Cash
Flow and proceeds from the exercise of stock options.

Fourth-Quarter Company Results

Revenues increased 5% to $8.6 billion in the fourth quarter of 2013 due to
growth at Warner Bros., Turner and Home Box Office. Adjusted Operating Income
decreased 2% to $1.9 billion due to declines at Turner, Time Inc. and Home Box
Office, partially offset by an increase at Warner Bros. Operating Income
decreased 9% to $1.8 billion. Adjusted Operating Income and Operating Income
margins were 23% and 22% in the fourth quarter of 2013, respectively, compared
to 24% and 25% in the prior year quarter, respectively.

The Company posted Adjusted EPS of $1.17, up 1% from $1.16^2 for the year-ago
quarter. Diluted Income per Common Share from Continuing Operations was $1.06
compared to $1.15^2 in the prior year quarter.

In the fourth quarter of 2013, excluding Time Inc., Revenues increased 6%,
Adjusted Operating Income fell 1% and Operating Income decreased 5%.

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

From January 1, 2013 through January 31, 2014, the Company repurchased
approximately 64 million shares of common stock for approximately $3.9
billion. These amounts reflect the purchase of approximately  14 million
shares of common stock for approximately $927 million since the amounts
reported in the Company’s third quarter earnings release issued on November 6,
2013.

In January 2014, the Company’s Board of Directors authorized a total of $5
billion in share repurchases beginning January 1, 2014, which replaced the
amount remaining under the prior authorization.

Regular Quarterly Dividend

On February 4, 2014, the Company’s Board of Directors increased the Company’s
regular quarterly dividend by 10% to $0.3175 per share.

Segment Performance

Presentation of Financial Information

The schedule below reflects Time Warner’s financial performance for the three
months and year ended December 31, by line of business (millions).

                                                        
                             Three Months Ended Dec. 31,   Year Ended Dec. 31,
                             2013           2012          2013      2012
Revenues:
Turner                       $   2,548       $   2,475     $ 9,983    $ 9,527
Home Box Office                  1,260           1,191       4,890      4,686
Warner Bros.                     3,996           3,723       12,312     12,018
Intersegment eliminations        (200)           (187)       (724)      (906)
Total excluding Time Inc.        7,604           7,202       26,461     25,325
Time Inc.                        966             967         3,354      3,436
Intersegment eliminations        (5)             (5)         (20)       (32)
Total Revenues               $   8,565       $   8,164     $ 29,795   $ 28,729
                                                                        
Adjusted Operating Income
(Loss) ^(a):
Turner                       $   879         $   906       $ 3,536    $ 3,334
Home Box Office                  414             430         1,678      1,547
Warner Bros.                     576             555         1,327      1,237
Corporate                        (114)           (95)        (407)      (358)
Intersegment eliminations        14              (17)        61         (97)
Total excluding Time Inc.        1,769           1,779       6,195      5,663
Time Inc.                        173             201         404        463
Total Adjusted Operating     $   1,942       $   1,980     $ 6,599    $ 6,126
Income
                                                                        
Operating Income (Loss)
^(a):
Turner                       $   853         $   948       $ 3,486    $ 3,172
Home Box Office                  413             430         1,791      1,547
Warner Bros.                     573             552         1,324      1,228
Corporate                        (120)           (86)        (394)      (352)
Intersegment eliminations        14              (17)        61         (97)
Total excluding Time Inc.        1,733           1,827       6,268      5,498
Time Inc.                        107             200         337        420
Total Operating Income       $   1,840       $   2,027     $ 6,605    $ 5,918
                                                                        
Depreciation and
Amortization:
Turner                       $   63          $   67        $ 252      $ 263
Home Box Office                  29              23          100        92
Warner Bros.                     101             106         379        382
Corporate                        7               7           28         28
Total excluding Time Inc.        200             203         759        765
Time Inc.                        33              31          127        127
Total Depreciation and       $   233         $   234       $ 886      $ 892
Amortization
                                                                        

      Adjusted Operating Income (Loss) and Operating Income (Loss) for the
(a)  three months and year ended December 31, 2013 and 2012 included
      restructuring and severance costs of (millions):

                                                        
                             Three Months Ended Dec. 31,   Year Ended Dec. 31,
                             2013            2012         2013       2012
Turner                       $    (29)        $   (23)     $  (93)     $ (52)
Home Box Office                   (3)             (4)         (39)       (15)
Warner Bros.                      (16)            (4)         (49)       (23)
Corporate                         (3)             (1)         (2)        (2)
Total excluding Time Inc.         (51)            (32)        (183)      (92)
Time Inc.                         (5)             (3)         (63)       (27)
Total Restructuring and      $    (56)        $   (35)     $  (246)    $ (119)
Severance Costs
                                                                         

Presented below is a discussion of the performance of Time Warner’s segments
for the fourth quarter and full year of 2013. Unless otherwise noted, the
dollar amounts in parentheses represent year-over-year changes.

TURNER

Full-Year Results

Revenues rose 5% ($456 million) to $10.0 billion, benefiting from growth of 5%
($236 million) in Subscription revenues and 5% ($219 million) in Advertising
revenues, partially offset by a decline of 2% ($6 million) in Content
revenues. The increase in Subscription revenues was primarily due to higher
domestic rates and international growth, partially offset by the negative
effect of foreign currency exchange rates. Advertising revenues primarily
benefited from growth at Turner’s domestic entertainment networks, principally
due to higher pricing, as well as increased demand for Turner’s sports
programming. The growth in Advertising revenues was partially offset by
declines at Turner’s news networks mainly due to the comparison to the 2012
U.S. presidential election. The decline in Content revenues was primarily due
to the shutdown of TNT television operations in Turkey in the second quarter
of 2012.

Adjusted Operating Income increased 6% ($202 million) to $3.5 billion,
reflecting higher revenues, partly offset by higher programming costs and
increased restructuring and severance expenses. Programming costs grew 6%,
primarily reflecting an increase in original programming, including at
Turner’s domestic news networks, and higher programming impairments.

Operating Income increased 10% ($314 million) to $3.5 billion. The prior year
included $192 million in charges related to the shutdown of Turner’s general
entertainment network, Imagine, in India and its TNT television operations in
Turkey as well as a $34 million gain related to the 2007 sale of the Atlanta
Braves baseball franchise (the “Braves”).

TNT claimed four of the top fifteen ad-supported cable original series of
2013, more than any other network. In 2013, TBS ranked as ad-supported cable’s
#1 primetime network among adults 18-34 and adults 18-49. 2013 was Adult
Swim’s most-watched year in its history for adults 18-34 and adults 18-49 in
total day, and it ranked #1 in total day on ad-supported cable among adults
18-34 for the ninth year in a row. CNN once again reached more viewers than
any other cable news network in 2013 and reclaimed the #2 ranking in total day
for cable news networks among total viewers.

Fourth-Quarter Results

Revenues increased 3% ($73 million) to $2.5 billion, due to increases of 6%
($69 million) in Subscription revenues and 1% ($6 million) in Advertising
revenues. Similar to the full year results, the increase in Subscription
revenues mainly resulted from higher domestic rates and international growth,
partially offset by the negative effect of foreign currency exchange rates.
Advertising revenues benefited from growth at Turner’s domestic entertainment
networks, mainly due to increased pricing and demand. That growth was
partially offset by declines at the domestic news networks, primarily due to
the comparison to the 2012 U.S. presidential election in the prior year
quarter.

Adjusted Operating Income fell 3% ($27 million) to $879 million, due to
increased expenses, including higher programming costs and marketing expenses.
Programming costs grew 12% in the quarter primarily due to higher programming
impairments and increased investments in original programming, including at
Turner’s domestic news networks.

Operating Income decreased 10% ($95 million) to $853 million. The fourth
quarter of 2013 included an $18 million impairment related to a building in
South America. The prior year quarter included a $34 million gain related to
the 2007 sale of the Braves.

HOME BOX OFFICE

Full-Year Results

Revenues rose 4% ($204 million) to $4.9 billion, as Subscription revenue
growth of 6% ($221 million) was partially offset by a decline of 3% ($18
million) in Content revenues. The increase in Subscription revenues resulted
mainly from higher domestic rates and the consolidation of HBO Asia and HBO
South Asia (collectively, “HBO Asia”) and HBO Nordic. Content revenues
declined due to lower home video revenues, primarily due to lower library
sales.

Adjusted Operating Income increased 8% ($131 million) to $1.7 billion,
reflecting higher revenues, partly offset by increased expenses, including
higher marketing and restructuring and severance expenses. Programming costs
grew 1% due to the consolidation of HBO Asia and HBO Nordic and higher
original programming expenses, partly offset by lower programming impairments
and lower expenses for acquired theatrical product due to lower volume of
titles.

Operating Income increased 16% ($244 million) to $1.8 billion and included
$113 million in gains related to HBO’s acquisitions of its partners’ interests
in HBO Asia and HBO Nordic.

In 2013, HBO received the most Primetime Emmy Awards of any network for the
twelfth consecutive year. At the 71^st Annual Golden Globe Awards, HBO won two
awards, including Best TV Movie or Mini-Series for Behind the Candelabra.

Fourth-Quarter Results

Revenues increased 6% ($69 million) to $1.3 billion, due to Subscription
revenue growth of 8% ($84 million), which was partially offset by a decrease
of 9% ($16 million) in Content revenues. The increase in Subscription revenues
resulted mainly from higher domestic rates and the consolidation of HBO Asia
and HBO Nordic. Content revenues decreased largely due to lower home video
revenues, partly offset by higher international licensing revenues.

Adjusted Operating Income decreased 4% ($16 million) to $414 million, due to
higher expenses, including a 12% increase in programming costs. Programming
costs grew due to higher original programming expenses and the consolidation
of HBO Asia and HBO Nordic, partly offset by lower expenses for acquired
theatrical product.

Operating Income decreased 4% ($17 million) to $413 million.

WARNER BROS.

Full-Year Results

Revenues increased 2% ($294 million) to $12.3 billion, mainly due to stronger
theatrical and videogames slates, as well as growth in electronic
sell-through. The increase was partially offset by declines in television
licensing revenues due to fewer theatrical availabilities and the comparison
to last year’s initial off-network availability of The Mentalist, as well as
lower physical home video revenues.

Adjusted Operating Income rose 7% ($90 million) to $1.3 billion, mainly due to
higher revenues, partially offset by higher print and advertising expenses due
to an increased number of theatrical releases, as well as increased
restructuring and severance expenses.

Operating Income increased 8% ($96 million) to $1.3 billion.

In 2013, Warner Bros. ranked #1 at the domestic and international box offices,
with its films grossing over $5 billion globally for the first time ever, led
by The Hobbit: The Desolation of Smaug, Gravity and Man of Steel. It was also
the 5^th straight year that Warner Bros.’ films grossed over $4 billion at the
worldwide box office, setting an industry record. In 2013, Warner Bros.
remained #1 domestically in overall home entertainment. Warner Bros. has over
60 series airing on television for the 2013-2014 television season, including
32 series on broadcast networks, the most of any studio. At the 71^st Annual
Golden Globe Awards, Warner Bros. won awards for Best Director – Motion
Picture for Gravity and Best Screenplay – Motion Picture for Her. For the
86^th Academy Awards, Warner Bros. received an industry-leading 21
nominations, including Best Picture nominations for Gravity and Her.

Fourth-Quarter Results

Revenues increased 7% ($273 million) to $4.0 billion, mainly due to stronger
theatrical and videogames slates. The fourth quarter of 2013 included the
theatrical releases of Gravity and The Hobbit: The Desolation of Smaug and the
videogame release of Batman: Arkham Origins. The growth was partially offset
by a decline in home video revenues and lower television licensing revenues
from theatrical product.

Adjusted Operating Income increased 4% ($21 million) to $576 million mainly
due to the increase in revenues and lower theatrical valuation adjustments,
partially offset by increased television costs due to product mix.

Operating Income increased 4% ($21 million) to $573 million.

TIME INC.

Full-Year Results

Revenues declined 2% ($82 million) to $3.4 billion, reflecting decreases of 7%
($81 million) in Subscription revenues and 1% ($12 million) in Advertising
revenues, partially offset by an increase of 5% ($16 million) in Other
revenues. Subscription revenues declined due to lower worldwide newsstand
revenues and lower domestic subscription revenues, partially offset by the
acquisition of American Express Publishing Corporation (“AEP”) in October
2013. Advertising revenues decreased primarily due to declines in worldwide
magazine advertising, partially offset by the inclusion of AEP’s revenues.

Adjusted Operating Income decreased 13% ($59 million) to $404 million due to
the decline in revenues and increased restructuring and severance expenses.

Operating Income decreased 20% ($83 million) to $337 million. The current year
included $79 million of impairments primarily related to certain tradenames.
The prior year included a pre-tax loss of $36 million related to the sale of
Time Inc.’s school fundraising business, QSP.

In 2013, Time Inc. maintained its leading share of overall domestic magazine
advertising with 23.7%, up from 21.5% in 2012 (Publishers Information Bureau
data). The 2013 share reflects the inclusion of AEP and a title managed on
behalf of American Express Company for the full year.

Fourth-Quarter Results

Revenues were essentially flat at $966 million due to a decrease of 6% ($19
million) in Subscription revenues offset by increases of 2% ($13 million) in
Advertising revenues and 6% ($5 million) in Other revenues. Similar to the
full year results, Subscription revenues declined due to lower worldwide
newsstand revenues and lower domestic subscription revenues, partially offset
by the inclusion of AEP. Advertising revenues increased due to the acquisition
of AEP, partially offset by the impact of certain weekly titles having one
fewer issue in the fourth quarter of 2013. Excluding the impact of acquiring
AEP, Subscription, Advertising and Other revenues would have decreased 10%, 7%
and 4%, respectively, and Total revenues would have declined 8%.

Adjusted Operating Income decreased 14% ($28 million) to $173 million,
primarily due to revenue declines at certain non-AEP titles.

Operating Income decreased 47% ($93 million) to $107 million and included $79
million of impairments primarily related to certain tradenames.

CONSOLIDATED NET INCOME AND PER SHARE RESULTS

Full-Year Results

For the year ended December 31, 2013, Adjusted EPS was $3.77 compared to
$3.24^2 in 2012. The increase in Adjusted EPS primarily reflects higher
Adjusted Operating Income and fewer shares outstanding.

The Company reported Income from Continuing Operations attributable to Time
Warner common shareholders of $3.6  billion, or $3.77  per diluted common
share. This compares to Income from Continuing Operations attributable to Time
Warner common shareholders in 2012 of  $2.9  billion^2, or $3.00^2  per
diluted common share.

For the years ended December 31, 2013 and 2012, the Company reported Net
Income of $3.7 billion and $2.9 billion^2, respectively.

Fourth-Quarter Results

Adjusted EPS was $1.17  for the three months ended December 31, 2013, compared
to $1.16^2 in last year’s fourth quarter. The increase in Adjusted EPS
primarily reflects fewer shares outstanding.

For the three months ended December 31, 2013, the Company reported Income from
Continuing Operations attributable to Time Warner common shareholders of $1.0 
billion, or $1.06  per diluted common share. This compares to Income from
Continuing Operations attributable to Time Warner common shareholders in the
fourth quarter of 2012 of  $1.1 billion^2, or $1.15^2  per diluted common
share.

For the fourth quarter of 2013 and 2012, the Company reported Net Income of 
$1.0  billion and  $1.1 billion^2, respectively.

______________________________
^1 In the fourth quarter of 2013, the Company separated its former Networks
reportable segment into two reportable segments: Turner and Home Box Office.
In addition, during the fourth quarter of 2013, the Company changed the names
of its Film and TV Entertainment reportable segment to Warner Bros. and its
Publishing reportable segment to Time Inc. The new presentation had no impact
on the historical consolidated financial information previously reported by
the Company.

^2 The Company has recast its historical financial results to reflect the
presentation of its investment in Central European Media Enterprises Ltd.
(“CME”) under the equity method of accounting for all prior periods from the
date of the Company’s initial investment in CME in May 2009.

USE OF NON-GAAP FINANCIAL MEASURES

The Company utilizes Adjusted Operating Income (Loss) and Adjusted Operating
Income margin, among other measures, to evaluate the performance of its
businesses. In light of the pending legal and structural separation of Time
Inc. from Time Warner, the Company also uses Adjusted Operating Income (Loss)
excluding Time Inc. to further evaluate the non-publishing businesses.
Adjusted Operating Income (Loss) is Operating Income (Loss) excluding the
impact of noncash impairments of goodwill, intangible and fixed assets; gains
and losses on operating assets (other than deferred gains on sale-leasebacks);
gains and losses recognized in connection with pension and other
postretirement benefit plan curtailments or settlements; external costs
related to mergers, acquisitions or dispositions, as well as contingent
consideration related to such transactions, to the extent such costs are
expensed; and amounts related to securities litigation and government
investigations. Adjusted Operating Income margin is defined as Adjusted
Operating Income divided by Revenues. These measures are considered important
indicators of the operational strength of the Company’s businesses.

Adjusted Income from Continuing Operations attributable to Time Warner Inc.
common shareholders is Income from Continuing Operations attributable to Time
Warner Inc. common shareholders excluding noncash impairments of goodwill,
intangible and fixed assets and investments; gains and losses on operating
assets (other than deferred gains on sale-leasebacks), liabilities and
investments; gains and losses recognized in connection with pension and other
postretirement benefit plan curtailments or settlements; external costs
related to mergers, acquisitions, investments or dispositions, as well as
contingent consideration related to such transactions, to the extent such
costs are expensed; amounts related to securities litigation and government
investigations; and amounts attributable to businesses classified as
discontinued operations, as well as the impact of taxes and noncontrolling
interests on the above items. Similarly, Adjusted EPS is Diluted Income per
Common Share from Continuing Operations attributable to Time Warner Inc.
common shareholders excluding the above items.

Adjusted Income from Continuing Operations attributable to Time Warner Inc.
common shareholders and Adjusted EPS are considered important indicators of
the operational strength of the Company’s businesses as these measures
eliminate amounts that do not reflect the fundamental performance of the
Company’s businesses. The Company utilizes Adjusted EPS, among other measures,
to evaluate the performance of its businesses both on an absolute basis and
relative to its peers and the broader market. Many investors also use an
adjusted EPS measure as a common basis for comparing the performance of
different companies. Some limitations of Adjusted Operating Income (Loss),
Adjusted Operating Income (Loss) excluding Time Inc., Adjusted Operating
Income margin, Adjusted Income from Continuing Operations attributable to Time
Warner Inc. common shareholders and Adjusted EPS are that they do not reflect
certain charges that affect the operating results of the Company’s businesses
and they involve judgment as to whether items affect fundamental operating
performance.

For periods ending on or after July 1, 2012, Free Cash Flow is defined as Cash
Provided by Operations from Continuing Operations plus payments related to
securities litigation and government investigations (net of any insurance
recoveries), external costs related to mergers, acquisitions, investments or
dispositions, to the extent such costs are expensed, contingent consideration
payments made in connection with acquisitions, and excess tax benefits from
equity instruments, less capital expenditures, principal payments on capital
leases and partnership distributions, if any. For periods ending prior to that
date, Free Cash Flow is defined as Cash Provided by Operations from Continuing
Operations plus payments related to securities litigation and government
investigations (net of any insurance recoveries), external costs related to
mergers, acquisitions, investments or dispositions, to the extent such costs
are expensed, and excess tax benefits from equity instruments, less capital
expenditures, principal payments on capital leases and partnership
distributions, if any. A change to the definition of Free Cash Flow for
periods prior to July 1, 2012 to adjust for contingent consideration payments
made in connection with acquisitions would have had no impact on the Free Cash
Flow for such periods. The Company uses Free Cash Flow to evaluate its
businesses and this measure is considered an important indicator of the
Company’s liquidity, including its ability to reduce net debt, make strategic
investments, pay dividends to common shareholders and repurchase stock.

A general limitation of these measures is that they are not prepared in
accordance with U.S. generally accepted accounting principles and may not be
comparable to similarly titled measures of other companies due to differences
in methods of calculation and excluded items. Adjusted Operating Income
(Loss), Adjusted Operating Income (Loss) excluding Time Inc., Adjusted Income
from Continuing Operations attributable to Time Warner Inc. common
shareholders, Adjusted EPS and Free Cash Flow should be considered in addition
to, not as a substitute for, the Company’s Operating Income (Loss), Income
from Continuing Operations attributable to Time Warner Inc. common
shareholders, Diluted Income per Common Share from Continuing Operations and
various cash flow measures (e.g., Cash Provided by Operations from Continuing
Operations), as well as other measures of financial performance and liquidity
reported in accordance with U.S. generally accepted accounting principles.

ABOUT TIME WARNER INC.

Time Warner Inc., a global leader in media and entertainment with businesses
in television networks, film and TV entertainment and publishing, uses its
industry-leading operating scale and brands to create, package and deliver
high-quality content worldwide through multiple distribution outlets.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based
on management’s current expectations or beliefs, and are subject to
uncertainty and changes in circumstances. Actual results may vary materially
from those expressed or implied by the statements herein due to changes in
economic, business, competitive, technological, strategic and/or regulatory
factors and other factors affecting the operation of Time Warner’s businesses.
More detailed information about these factors may be found in filings by Time
Warner with the Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Time
Warner is under no obligation to, and expressly disclaims any such obligation
to, update or alter its forward-looking statements, whether as a result of new
information, future events, or otherwise.

INFORMATION ON BUSINESS OUTLOOK RELEASE & CONFERENCE CALL

Time Warner Inc. issued a separate release today regarding its 2014 full-year
business outlook.

The Company’s conference call can be heard live at 10:30 am ET on Wednesday,
February 5, 2014. To listen to the call, visit www.timewarner.com/investors.


TIME WARNER INC.
CONSOLIDATED BALANCE SHEET
(Unaudited; millions, except share amounts)

                                                December 31,    December 31,
                                                2013            2012
                                                                
ASSETS
Current assets
Cash and equivalents                           $ 1,862          $ 2,841
Receivables, less allowances of $1,666 and       7,868            7,385
$1,757
Inventories                                      2,028            2,036
Deferred income taxes                            447              474
Prepaid expenses and other current assets       639            528       
Total current assets                             12,844           13,264
                                                                  
Noncurrent inventories and theatrical film       6,699            6,675
and television production costs
Investments, including available-for-sale        2,024            1,966
securities
Property, plant and equipment, net               3,825            3,942
Intangible assets subject to amortization,       1,920            2,108
net
Intangible assets not subject to                 7,629            7,642
amortization
Goodwill                                         30,563           30,446
Other assets                                    2,490          2,046     
Total assets                                   $ 67,994        $ 68,089    
                                                                  
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities       $ 7,322          $ 8,039
Deferred revenue                                 995              1,011
Debt due within one year                        66             749       
Total current liabilities                        8,383            9,799
                                                                  
Long-term debt                                   20,099           19,122
Deferred income taxes                            2,642            2,127
Deferred revenue                                 482              523
Other noncurrent liabilities                     6,484            6,721
                                                                  
Equity
Common stock, $0.01 par value, 1.652 billion
and 1.652 billion shares
issued and 895 million and 932 million           17               17
shares outstanding
Paid-in-capital                                  153,410          154,577
Treasury stock, at cost (757 million and 720     (37,630   )      (35,077   )
million shares)
Accumulated other comprehensive loss, net        (852      )      (989      )
Accumulated deficit                             (85,041   )     (88,732   )
Total Time Warner Inc. shareholders’ equity      29,904           29,796
Noncontrolling interests                        -              1         
Total equity                                    29,904         29,797    
Total liabilities and equity                   $ 67,994        $ 68,089    
                                                                  


TIME WARNER INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited; millions, except per share amounts)

                          Three Months Ended       Year Ended
                           12/31/13    12/31/12     12/31/13     12/31/12
                                                                   
Revenues                   $ 8,565      $ 8,164      $ 29,795      $ 28,729
Costs of revenues            (4,776 )     (4,436 )     (16,230 )     (15,934 )
Selling, general and         (1,730 )     (1,641 )     (6,465  )     (6,333  )
administrative
Amortization of              (70    )     (70    )     (251    )     (248    )
intangible assets
Restructuring and            (56    )     (35    )     (246    )     (119    )
severance costs
Asset impairments            (105   )     (4     )     (140    )     (186    )
Gain on operating           12         49         142         9       
assets, net
Operating income             1,840        2,027        6,605         5,918
Interest expense, net        (300   )     (307   )     (1,190  )     (1,253  )
Other loss, net             (49    )    (125   )    (112    )    (217    )
                                                                     
Income from continuing
operations before
income taxes                 1,491        1,595        5,303         4,448
Income tax provision        (508   )    (483   )    (1,749  )    (1,526  )
Income from continuing       983          1,112        3,554         2,922
operations
Discontinued operations,    -          -          137         -       
net of tax
Net income                   983          1,112        3,691         2,922
Less Net loss
attributable to
noncontrolling interests    -          -          -           3       
Net income attributable
to Time Warner Inc.
shareholders               $ 983       $ 1,112     $ 3,691      $ 2,925   
                                                                     
Per share information
attributable to
Time Warner Inc. common
shareholders:
Basic income per common
share from
continuing operations      $ 1.09       $ 1.18       $ 3.85        $ 3.05
Discontinued operations     -          -          0.14        -       
Basic net income per       $ 1.09      $ 1.18      $ 3.99       $ 3.05    
common share
Average basic common        901.9      942.1      920.0       954.4   
shares outstanding
                                                                     
Diluted income per
common share from
continuing operations      $ 1.06       $ 1.15       $ 3.77        $ 3.00
Discontinued operations     -          -          0.15        -       
Diluted net income per     $ 1.06      $ 1.15      $ 3.92       $ 3.00    
common share
Average diluted common      924.3      966.9      942.6       976.3   
shares outstanding
                                                                     
Cash dividends declared
per share of common
stock                      $ 0.2875    $ 0.2600    $ 1.1500     $ 1.0400  
                                                                     


TIME WARNER INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31,
(Unaudited; millions)

                                                      2013        2012
                                                                    
OPERATIONS
Net income                                             $ 3,691      $ 2,922
Less Discontinued operations, net of tax                (137   )    -      
Net income from continuing operations                    3,554        2,922
Adjustments for noncash and nonoperating items:
Depreciation and amortization                            886          892
Amortization of film and television costs                7,262        7,210
Asset impairments                                        140          186
(Gain) loss on investments and other assets, net         (65    )     26
Equity in losses of investee companies, net of cash      218          225
distributions
Equity-based compensation                                256          234
Deferred income taxes                                    759          (150   )
Changes in operating assets and liabilities, net of     (9,294 )    (8,069 )
acquisitions
Cash provided by operations from continuing              3,716        3,476
operations
Cash used by operations from discontinued operations    (2     )    (34    )
Cash provided by operations                             3,714      3,442  
                                                                      
INVESTING ACTIVITIES
Investments in available-for-sale securities             (27    )     (37    )
Investments and acquisitions, net of cash acquired       (485   )     (668   )
Capital expenditures                                     (602   )     (643   )
Investment proceeds from available-for-sale              33           1
securities
Other investment proceeds                               171        101    
Cash used by investing activities                       (910   )    (1,246 )
                                                                      
FINANCING ACTIVITIES
Borrowings                                               1,028        1,039
Debt repayments                                          (762   )     (686   )
Proceeds from exercise of stock options                  674          1,107
Excess tax benefit from equity instruments               179          83
Principal payments on capital leases                     (9     )     (11    )
Repurchases of common stock                              (3,708 )     (3,272 )
Dividends paid                                           (1,074 )     (1,011 )
Other financing activities                              (111   )    (80    )
Cash used by financing activities                       (3,783 )    (2,831 )
                                                                      
DECREASE IN CASH AND EQUIVALENTS                         (979   )     (635   )
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD             2,841      3,476  
CASH AND EQUIVALENTS AT END OF PERIOD                  $ 1,862     $ 2,841  
                                                                      


TIME WARNER INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(Unaudited; dollars in millions)

Reconciliations of
Adjusted Operating Income (Loss) to Operating Income (Loss) and
Adjusted Operating Income Margin to Operating Income Margin

Three Months Ended December 31, 2013
                                                               
                Adjusted                     Gain
                Operating      Asset         (Loss) on               Operating
                Income         Impairments   Operating   Other       Income
                (Loss)                       Assets,                 (Loss)
                                             Net
Turner          $  879         $  (24   )    $  -        $ (2   )    $ 853
Home Box           414            -             (1   )     -           413
Office
Warner Bros.       576            (2    )       -          (1   )      573
Corporate          (114   )       -             -          (6   )      (120  )
Intersegment      14           -           -        -         14    
eliminations
Time Warner
excluding          1,769          (26   )       (1   )     (9   )      1,733
Time Inc.
Time Inc.         173          (79   )      13       -         107   
Time Warner     $  1,942      $  (105  )    $  12      $ (9   )    $ 1,840 
                                                                       
Margin^(a)         22.7   %       (1.2  %)      0.1  %     (0.1 %)     21.5  %
                                                                       
Three Months Ended December 31, 2012
                                                                       
                Adjusted                     Gain
                Operating      Asset         (Loss) on               Operating
                Income         Impairments   Operating   Other       Income
                (Loss)                       Assets,                 (Loss)
                                             Net
Turner          $  906         $  4          $  34       $ 4         $ 948
Home Box           430            -             -          -           430
Office
Warner Bros.       555            (2    )       -          (1   )      552
Corporate          (95    )       -             10         (1   )      (86   )
Intersegment      (17    )      -           -        -         (17   )
eliminations
Time Warner
excluding          1,779          2             44         2           1,827
Time Inc.
Time Inc.         201          (6    )      5        -         200   
Time Warner     $  1,980      $  (4    )    $  49      $ 2        $ 2,027 
                                                                       
Margin^(a)         24.3   %       (0.1  %)      0.6  %     -           24.8  %
                                                                       
Please see below for additional information on items affecting comparability.
                                                                       
Year Ended December 31, 2013
                                                                       
                Adjusted                     Gain
                Operating      Asset         (Loss) on               Operating
                Income         Impairments   Operating   Other       Income
                (Loss)                       Assets,                 (Loss)
                                             Net
Turner          $  3,536       $  (47   )    $  2        $ (5   )    $ 3,486
Home Box           1,678          -             113        -           1,791
Office
Warner Bros.       1,327          (7    )       6          (2   )      1,324
Corporate          (407   )       (7    )       8          12          (394  )
Intersegment      61           -           -        -         61    
eliminations
Time Warner
excluding          6,195          (61   )       129        5           6,268
Time Inc.
Time Inc.         404          (79   )      13       (1   )     337   
Time Warner     $  6,599      $  (140  )    $  142     $ 4        $ 6,605 
                                                                       
Margin^(a)         22.1   %       (0.5  %)      0.5  %     0.1  %      22.2  %
                                                                       
Year Ended December 31, 2012
                                                                       
                Adjusted                     Gain
                Operating      Asset         (Loss) on               Operating
                Income         Impairments   Operating   Other       Income
                (Loss)                       Assets,                 (Loss)
                                             Net
Turner          $  3,334       $  (176  )    $  34       $ (20  )    $ 3,172
Home Box           1,547          -             -          -           1,547
Office
Warner Bros.       1,237          (4    )       1          (6   )      1,228
Corporate          (358   )       -             10         (4   )      (352  )
Intersegment      (97    )      -           -        -         (97   )
eliminations
Time Warner
excluding          5,663          (180  )       45         (30  )      5,498
Time Inc.
Time Inc.         463          (6    )      (36  )    (1   )     420   
Time Warner     $  6,126      $  (186  )    $  9       $ (31  )    $ 5,918 
                                                                       
Margin^(a)         21.3   %       (0.6  %)      -          (0.1 %)     20.6  %

Please see below for additional information on items affecting comparability.


      ___________________
       Adjusted Operating Income Margin is defined as Time Warner Adjusted
^(a)   Operating Income divided by Revenues. Operating Income Margin is
       defined as Operating Income divided by Revenues.
       


TIME WARNER INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(Unaudited; millions, except per share amounts)

Reconciliations of
Adjusted Income from Continuing Operations attributable to Time Warner Inc.
common shareholders to
Income from Continuing Operations attributable to Time Warner Inc. common
shareholders and
Adjusted EPS to Diluted Income per Common Share from Continuing Operations
attributable to Time Warner
Inc. common shareholders

                              Three Months Ended       Year Ended
                               12/31/13     12/31/12    12/31/13   12/31/12
                                                                  
Asset impairments              $  (105   )   $ (4    )   $ (140  )   $ (186  )
Gain on operating assets,         12           49          142         9
net
Other                            (9     )    2         4         (31   )
Impact on Operating Income        (102   )     47          6           (208  )
                                                                       
Investment gains (losses),        (6     )     (1    )     61          (30   )
net
Amounts related to the
separation of Time
Warner Cable Inc.                 (6     )     (2    )     3           4
Amounts related to the
disposition of
Warner Music Group                (1     )     (2    )     (1    )     (7    )
Items affecting
comparability relating to
equity method investments        (18    )    (94   )    (30   )    (94   )
Pretax impact                     (133   )     (52   )     39          (335  )
Income tax impact of above       35         41        (34   )    100   
items
Impact of items affecting
comparability on
income from continuing
operations attributable
to Time Warner Inc.            $  (98    )   $ (11   )   $ 5        $ (235  )
shareholders
                                                                       
Amounts attributable to
Time Warner Inc.
shareholders:
Income from continuing         $  983        $ 1,112     $ 3,554     $ 2,925
operations
Less Impact of items
affecting comparability
on net income                    (98    )    (11   )    5         (235  )
Adjusted income from           $  1,081     $ 1,123    $ 3,549    $ 3,160 
continuing operations
                                                                       
Per share information
attributable to Time
Warner Inc. common
shareholders:
Diluted income per common
share from
continuing operations          $  1.06       $ 1.15      $ 3.77      $ 3.00
Less Impact of items
affecting comparability on
diluted net income per           (0.11  )    (0.01 )    -         (0.24 )
common share
Adjusted EPS                   $  1.17      $ 1.16     $ 3.77     $ 3.24  
Average diluted common           924.3      966.9     942.6     976.3 
shares outstanding
                                                                       

Asset Impairments

During the three months ended December 31, 2013, the Company recorded $105
million of noncash impairments, consisting of $24 million at the Turner
segment, of which $18 million related to a building, $4 million related to
Turner’s decision in the fourth quarter of 2013 to shut down an entertainment
network in Belgium and $2 million related to certain miscellaneous assets, $2
million at the Warner Bros. segment related to miscellaneous assets and $79
million at the Time Inc. segment primarily related to certain tradenames.

During the year ended December 31, 2013, the Company recorded noncash
impairments of $140 million, consisting of $47 million at the Turner segment
of which $18 million related to certain of Turner’s international intangible
assets, $18 million related to a building in South America, $10 million
related to programming assets resulting from Turner’s decision to shut down
certain of its entertainment networks in Spain and Belgium and $1 million
related to miscellaneous assets, $7 million at the Warner Bros. segment
related to miscellaneous assets, $79 million at the Time Inc. segment
primarily related to certain tradenames and $7 million at the Corporate
segment related to certain internally developed software.

During the three months and year ended December 31, 2012, the Company
recognized a $4 million reversal and $174 million of charges, respectively, at
the Turner segment in connection with the shutdown of Turner’s general
entertainment network, Imagine, in India and TNT television operations in
Turkey (the “Imagine and TNT Turkey Shutdowns”) primarily related to certain
receivables, including value added tax receivables, inventories and long-lived
assets, including Goodwill.

During the three months ended December 31, 2012, the Company also recognized
$8 million of other miscellaneous noncash asset impairments consisting of $2
million at the Warner Bros. segment and $6 million at the Time Inc. segment.
In addition, during the year ended December 31, 2012, the Company recognized
$4 million of other miscellaneous noncash asset impairments consisting of $2
million at the Turner segment and $2 million at the Warner Bros. segment.

Gain on Operating Assets, Net

For the three months and year ended December 31, 2013, the Company recognized
a $1 million reversal and $104 million of gains, respectively, at the Home Box
Office segment related to the Company’s acquisition of the controlling
interests in HBO Asia and HBO South Asia. For the three months and year ended
December 31, 2013, the Company also recognized a gain of $13 million at the
Time Inc. segment related to the settlement of a pre-existing contractual
arrangement with American Express Publishing Corporation (“AEP”) in connection
with Time Inc.’s acquisition of AEP. In addition, for the year ended December
31, 2013, the Company recognized net gains on operating assets of $25 million,
including a $2 million gain at the Turner segment on the sale of a building, a
$9 million gain at the Home Box Office segment upon the Company’s acquisition
of the controlling interest in HBO Nordic, a $6 million gain at the Warner
Bros. segment on miscellaneous operating assets and an $8 million gain at the
Corporate segment on the disposal of certain corporate assets.

During the three months and year ended December 31, 2012, the Company
recognized $5 million of income and a $36 million loss, respectively, at the
Time Inc. segment in connection with the sale in the first quarter of 2012 of
Time Inc.’s school fundraising business, QSP. During the three months and year
ended December 31, 2012, the Company also recognized a $34 million gain at the
Turner segment on the settlement of an indemnification obligation related to
the 2007 sale of the Atlanta Braves baseball franchise and a $10 million gain
at the Corporate segment on the disposal of certain corporate assets. In
addition, for the year ended December 31, 2012, the Company recognized $1
million of noncash income at the Warner Bros. segment associated with a fair
value adjustment on certain contingent consideration arrangements.

Other

For the three months and year ended December 31, 2013, Other reflects external
costs related to mergers, acquisitions or dispositions of $9 million and $34
million, respectively. External costs related to mergers, acquisitions or
dispositions for the three months and year ended December 31, 2013 were
primarily related to the pending separation of Time Inc. from Time Warner.
Other also includes a gain of $38 million for the year ended December 31, 2013
related to the curtailment of certain post-retirement benefits (the
“Curtailment”).

For the three months and year ended December 31, 2012, Other reflects external
costs related to mergers, acquisitions or dispositions, which included a
reversal of $2 million and costs of $28 million, respectively. The external
costs related to mergers, acquisitions or dispositions for the three months
and year ended December 31, 2012 included a reversal of $3 million and charges
of $18 million, respectively, related to the Imagine and TNT Turkey Shutdowns.
Other also includes legal and other professional fees related to the defense
of securities litigation matters for former employees totaling $3 million for
the year ended December 31, 2012.

External costs related to mergers, acquisitions or dispositions, the gain
related to the Curtailment and amounts related to securities litigation and
government investigations are included in Selling, general and administrative
expenses in the accompanying Consolidated Statement of Operations.

Investment Gains (Losses), Net

For the three months and year ended December 31, 2013, the Company recognized
$6 million of miscellaneous investment losses, net. For the year ended
December 31, 2013, the Company also recognized $67 million of net
miscellaneous investment gains consisting of a $65 million gain on the sale of
the Company’s investment in a theater venture in Japan, which included a $10
million gain related to a foreign currency contract and a $2 million net
noncash gain associated with an option to acquire securities that was
terminated during the third quarter of 2013.

For the three months and year ended December 31, 2012, the Company recognized
$5 million and $19 million, respectively, of miscellaneous investment losses,
net. The year ended December 31, 2012 also included a $16 million loss on an
investment in a network in Turkey recognized as part of the Imagine and TNT
Turkey Shutdowns. In addition, for the three months and year ended December
31, 2012, the Company recognized noncash income of $4 million and $5 million,
respectively, associated with a fair value adjustment on certain options to
acquire securities.

Amounts Related to the Separation of Time Warner Cable Inc.

For the three months and year ended December31, 2013, the Company recognized
losses of $6million and $7 million, respectively, related to changes in the
value of a Time Warner Cable Inc. (“TWC”) tax indemnification receivable,
which has been reflected in Other loss, net in the accompanying Consolidated
Statement of Operations. For the year ended December31, 2013, the Company
also recognized $10 million of income related to the expiration, exercise and
net change in the estimated fair value of Time Warner equity awards held by
TWC employees, which has also been reflected in Other loss, net in the
accompanying Consolidated Statement of Operations.

For the three months and year ended December 31, 2012, the Company recognized
$3 million and $9 million, respectively, of income related to the expiration,
exercise and net change in the estimated fair value of Time Warner equity
awards held by TWC employees. In addition, for both the three months and year
ended December 31, 2012, the Company recognized $5 million of losses
relatedto changes in the value of a TWC tax indemnification receivable.

Amounts Related to the Disposition of Warner Music Group

For the three months and year ended December 31, 2013, the Company recognized
$1 million of losses related to the disposition of Warner Music Group (“WMG”)
in 2004. For the three months and year ended December 31, 2012, the Company
recognized losses of $2 million and $7 million, respectively, associated with
the disposition of WMG. These losses are due primarily to a tax
indemnification obligation and have been reflected in Other loss, net in the
accompanying Consolidated Statement of Operations.

Items Affecting Comparability Relating to Equity Method Investments

For the three months ended December 31, 2013, the Company recognized $18
million as its share of noncash impairments recorded by an equity method
investee. In addition, for the year ended December 31, 2013, the Company
recognized $12 million as its share of a noncash loss on the extinguishment of
debt recorded by the equity method investee. For the three months and year
ended December 31, 2012, the Company recognized $94 million as its share of
noncash impairments recorded by the equity method investee. These amounts have
been reflected in Other loss, net in the accompanying Consolidated Statement
of Operations.

Income Tax Impact

The income tax impact reflects the estimated tax provision or tax benefit
associated with each item affecting comparability. The estimated tax provision
or tax benefit can vary based on certain factors, including the taxability or
deductibility of the items and foreign tax on certain items. For the year
ended December31, 2012, the income tax impact includes a $42 million benefit
reflecting the reversal of a valuation allowance related to the expected usage
of capital loss carryforwards in connection with the 2013 sale of the
Company’s investment in a theater venture in Japan.


TIME WARNER INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(Unaudited; millions)

Reconciliation of Cash Provided by Operations to Free Cash Flow
                                                                
                                  Three Months Ended     Year Ended
                                  12/31/13   12/31/12    12/31/13    12/31/12
                                                                     
Cash provided by operations
from continuing
operations                        $ 884      $ 1,179     $ 3,716     $ 3,476
Add payments related to
securities litigation and
government investigations           -          -           -           3
Add external costs related to
mergers,
acquisitions, investments or
dispositions
and contingent consideration        9          5           232         33
payments
Add excess tax benefits from        25         25          179         83
equity instruments
Less capital expenditures           (287 )     (217  )     (602  )     (643  )
Less principal payments on         (3   )    (2    )    (9    )    (11   )
capital leases
Free Cash Flow                    $ 628     $ 990      $ 3,516    $ 2,941 
                                                                       

                               TIME WARNER INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. DESCRIPTION OF BUSINESS

Time Warner Inc. (“Time Warner” or the “Company”) is a leading media and
entertainment company, whose businesses include television networks, film and
TV entertainment and publishing. Time Warner classifies its operations into
four reportable segments: Turner:  consisting principally of cable networks
and digital media properties; Home Box Office:  consisting principally of
premium pay television services domestically and premium pay and basic tier
television services internationally; Warner Bros.:  consisting principally of
feature film, television, home video and videogame production and
distribution; and Time Inc.:  consisting principally of magazine publishing
and related websites and operations. In the fourth quarter of 2013, the
Company separated its former Networks reportable segment into two reportable
segments: Turner and Home Box Office.In addition, during the fourth quarter
of 2013, the Company changed the names of its Film and TV Entertainment
reportable segment to Warner Bros. and its Publishing reportable segment to
Time Inc. The new presentation had no impact on the historical consolidated
financial information previously reported by the Company. On March 6, 2013,
Time Warner announced that its Board of Directors has authorized management to
proceed with plans for the complete legal and structural separation of the
Time Inc. segment from Time Warner.

Note 2. INTERSEGMENT TRANSACTIONS

Revenues recognized by Time Warner’s segments on intersegment transactions are
as follows (millions):

                                                 
                              Three Months Ended    Year Ended
                              12/31/13  12/31/12   12/31/13  12/31/12
                                                               
Intersegment Revenues
Turner                        $   24     $   26     $   95     $   91
Home Box Office                   9          1          14         14
Warner Bros.                      171        164        625        812
Time Inc.                        1         1         10        21
Total intersegment revenues   $   205    $   192    $   744    $   938
                                                                   

Note 3. WARNER BROS. HOME VIDEO AND ELECTRONIC DELIVERY REVENUES

Home video and electronic delivery of theatrical and television product
revenues are as follows (millions):

                                                        
                                     Three Months Ended    Year Ended
                                     12/31/13  12/31/12   12/31/13  12/31/12
                                                                      
Home video and electronic delivery
of theatrical
product revenues                     $   885    $   985    $  2,244   $  2,320
Home video and electronic delivery
of television
product revenues                         378        358       984        1,006
                                                                         

Note 4. DISCONTINUED OPERATIONS, NET OF TAX

For the year ended December 31, 2013, Discontinued operations, net of tax
reflected a net tax benefit due to the recognition of additional foreign tax
credits attributable to the sale of WMG in 2004.

Note 5. SALE AND LEASEBACK OF TIME WARNER CENTER

On January 16, 2014, Time Warner sold the office space it owned in Time Warner
Center for approximately $1.3 billion. Time Warner also agreed to lease office
space in Time Warner Center from the buyer until early 2019. In connection
with these transactions, the Company expects to recognize a pretax gain of
approximately $700 million to $800 million, of which approximately $400
million to $500 million will be recognized in the first quarter of 2014. The
balance of the gain will be recognized ratably over the lease period. Time
Warner also expects to recognize a tax benefit of approximately $50 million to
$70 million related to the sale.

Contact:

Time Warner Inc.
Corporate Communications
Keith Cocozza 212-484-7482
or
Investor Relations
Michael Kopelman 212-484-8920
 
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