<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 3, 1996
Date of Report (Date of earliest event reported)
TURNER BROADCASTING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Georgia 0-9334 58-0950695
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
<TABLE>
<S> <C>
One CNN Center, Atlanta, Georgia 30303
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (404) 827-1700
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
As previously reported, Turner Broadcasting System, Inc., a Georgia
corporation ("TBS"), has entered into an Amended and Restated Agreement and
Plan of Merger dated as of September 22, 1995 (the "Merger Agreement") among
TBS, Time Warner Inc. ("Time Warner"), TW Inc., a Delaware corporation and
currently a wholly owned subsidiary of Time Warner ("New Time Warner"), Time
Warner Acquisition Corp., a Delaware corporation ("Delaware Sub") and TW
Acquisition Corp., a Georgia corporation ("Georgia Sub") which provides for a
transaction (the "Transaction") in which TBS and Time Warner will each become a
wholly owned subsidiary of a new holding company. Pursuant to the Merger
Agreement, (a) Georgia Sub will be merged into TBS (the "TBS Merger"), (b) each
outstanding share of Class A Common Stock, par value $0.0625 per share, of TBS
and each share of Class B Common Stock, par value $0.0625 per share, of TBS
(other than shares held directly or indirectly by Time Warner or New Time
Warner or in the treasury of TBS and other than shares with respect to which
dissenters' rights are properly exercised) will be converted into 0.75 of a
share of common stock, par value $.01 per share, of New Time Warner ("New Time
Warner Common Stock"), (c) each share of Class C Convertible Preferred Stock,
par value $.125 per share, of TBS (other than shares held directly or
indirectly by Time Warner or New Time Warner or in the treasury of TBS and
other than shares with respect to which dissenters' rights are properly
exercised) will be converted into 4.80 shares of New Time Warner Common Stock,
(d) Delaware Sub will be merged into Time Warner, (e) each outstanding share of
common stock, par value $1.00 per share, of Time Warner, other than shares held
directly or indirectly by Time Warner, will be converted into one share of New
Time Warner Common Stock, (f) each outstanding share of each series of
preferred stock of Time Warner, other than shares held directly or indirectly
by Time Warner and shares with respect to which appraisal rights are properly
exercised, will be converted into one share of a substantially identical series
of preferred stock of New Time Warner having the same designation as the shares
of preferred stock of Time Warner so converted, (g) each of Time Warner and TBS
will become a wholly owned subsidiary of New Time Warner and (h) New Time
Warner will be renamed "Time Warner Inc."
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following pro forma consolidated condensed financial information of
New Time Warner gives effect to the consummation of the Transaction and a
number of transactions that Time Warner and Time Warner Entertainment Company,
L.P. ("TWE") have completed, or have entered into agreements with respect to,
during the periods presented below (the "TW Transactions"). The pro forma
effect on Time Warner's historical financial statements resulting from the TW
Transactions is set forth under the heading "Time Warner Adjusted." The TW
Transactions for which adjustments have been made, as more fully described in
Time Warner's Current Report on Form 8-K, dated November 14, 1995, and Time
Warner's Quarterly Report on Form 10-Q for the quarter ended September 30,
1995, are as follows:
(i) on October 2, 1995 and September 5, 1995, Toshiba Corporation
("Toshiba") and ITOCHU Corporation ("ITOCHU"), respectively,
exchanged (a) their 5.61% pro rata equity interests in TWE, (b) their
6.25% residual equity interests in TW Service Holding I, L.P. and TW
Service Holding II, L.P., each of which owns certain assets related to
the TWE businesses and (c) their options to increase their interests
in TWE under certain circumstances for, in the case of ITOCHU, 6.2
million shares of Time Warner Series G Convertible Preferred Stock and
1.8 million shares of Time Warner Series H Convertible Preferred Stock
and, in the case of Toshiba, 7.0 million shares of Time Warner Series
I Convertible Preferred Stock and $10 million in cash (the
"ITOCHU/Toshiba Transaction"). As a result of the ITOCHU/Toshiba
Transaction, Time Warner and certain of its wholly owned subsidiaries,
collectively, now own 74.49% of the pro rata priority capital and
residual equity interests in TWE and certain additional senior and
junior priority capital interests. A subsidiary of U S WEST, Inc. owns
the remaining 25.51% of the pro rata priority capital and residual
equity limited partnership interests in TWE;
(ii) on September 18, 1995, Time Warner redeemed approximately $1
billion principal amount of the Time Warner 8.75% convertible
subordinated debentures due 2015 for an aggregate redemption price of
$1.06 billion, including redemption premiums and accrued interest
thereon. The redemption was financed with approximately $500 million
of proceeds from the issuance of 7.75% ten-year notes in June 1995,
$363 million of net proceeds from the issuance of the PERCS (as
defined below) in August 1995 and available cash and equivalents (the
"Market Refinancings");
(iii) on August 15, 1995, a subsidiary of Time Warner issued
approximately 12.1 million $1.24 Preferred Exchangeable Redemption
Cumulative Securities ("PERCS") for aggregate gross proceeds of $374
million. The sole assets of the subsidiary that is the obligor on the
PERCS are $385 million principal amount of 4% subordinated notes of
Time Warner due December 23, 1997. Cumulative cash distributions are
payable on the PERCS at an annual rate of 4%, or $1.24 per PERCS. The
PERCS are mandatorily redeemable on December 23, 1997, for an amount
per PERCS equal to the lesser of $54.41, and the market value of a
share of the common stock of Hasbro, Inc. ("Hasbro") on December 17,
1997, payable in cash or, at Time Warner's option, Hasbro common
stock. Time Warner has the right to redeem the PERCS at any time
prior to December 23, 1997, at an amount per PERCS equal to $54.41 (or
in certain limited circumstances the lesser of such amount and the
market value of a share of Hasbro common stock at the time of
redemption) plus accrued and unpaid distributions thereon and a
declining premium, payable in cash or, at Time Warner's option, Hasbro
common stock. Time Warner owns approximately 12.1 million shares of
Hasbro common stock, which can be used by Time Warner, at its
election, to satisfy its obligations under the PERCS or its
obligations under Time Warner's Liquid Yield Option Notes due 2012
(the "Hasbro LYONs"). The Hasbro LYONs are exchangeable and
redeemable into an aggregate of 12.1 million shares of Hasbro common
stock. Time Warner has certain obligations relating to the PERCS
which amount to a full and unconditional guaranty of such subsidiary's
obligations with respect thereto;
(iv) on August 15, 1995, Time Warner redeemed all of its $1.8
billion principal amount of outstanding Redeemable Reset Notes due
August 15, 2002 in exchange for new securities (the "Reset Notes
Refinancing"), consisting of approximately $454 million aggregate
principal amount of Floating Rate Notes due August 15, 2000,
approximately $272 million aggregate principal amount of 7.975% Notes
due August 15, 2004, approximately $545 million aggregate principal
amount of 8.11% Debentures due August 15, 2006, and approximately $545
million aggregate principal amount of 8.18% Debentures due August 15,
2007;
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(v) on July 6, 1995, Time Warner acquired KBLCOM Incorporated (the
"KBLCOM Acquisition") which owns cable television systems serving
approximately 700,000 subscribers and a 50% interest in Paragon
Communications ("Paragon"), which owns cable television systems serving an
additional 972,000 subscribers. The other 50% interest in Paragon was
already owned by TWE;
(vi) on June 30, 1995, a wholly owned subsidiary of Time Warner, TWE
and the TWE-Advance/Newhouse Partnership (as defined below) executed a
five-year revolving credit facility (the "New Credit Agreement"). The New
Credit Agreement enables such entities to refinance certain indebtedness
assumed in connection with the Cable Acquisitions (as defined below), to
refinance TWE's indebtedness under a pre-existing bank credit agreement and
to finance the ongoing working capital, capital expenditures and other
corporate needs of each borrower (the "Bank Refinancing" and, together with
the Market Refinancings and the Reset Notes Refinancing, the "1995 Debt
Refinancings");
(vii) on June 23, 1995, (a) Six Flags Entertainment Corporation ("Six
Flags") was recapitalized, (b) TWE sold a 51% interest in Six Flags to an
investment group led by Boston Ventures and (c) TWE granted certain
licenses to Six Flags (collectively, the "Six Flags Transaction");
(viii) on May 18, 1995, Time Warner announced the planned sale by TWE
of 15 of its unclustered cable television systems serving an aggregate of
approximately 144,000 subscribers, of which certain of the transactions
closed during the second and third quarters of 1995 (the "Unclustered Cable
Disposition");
(ix) on May 2, 1995, Time Warner acquired Summit Communications Group,
Inc., which owns cable television systems serving approximately 162,000
subscribers (the "Summit Acquisition");
(x) on April 1, 1995, TWE and the Advance/Newhouse Partnership
("Advance/Newhouse") formed the Time Warner Entertainment-Advance/Newhouse
Partnership, a New York general partnership (the "TWE-Advance/Newhouse
Partnership"), in which TWE owns a two-thirds equity interest and is the
managing partner and Advance/Newhouse owns a one-third equity interest (the
"TWE-A/N Transaction"). The TWE-Advance/Newhouse Partnership owns cable
television systems (or interests therein), serving approximately 4.5
million subscribers, as well as certain foreign cable investments and
programming investments; and
(xi) on February 6, 1995, Time Warner entered into certain agreements
with Cablevision Industries Corporation ("CVI"), certain affiliated
entities of CVI (the "Gerry Companies"), the direct holders of certain
interests in the Gerry Companies and Alan Gerry, the principal stockholder
of CVI and the Gerry Companies (the "CVI Acquisition" and, together with
the KBLCOM Acquisition and the Summit Acquisition, the "Cable
Acquisitions"), pursuant to which Time Warner will acquire CVI and each of
the Gerry Companies. CVI and the Gerry Companies own cable television
systems serving approximately 1.3 million subscribers.
The pro forma consolidated condensed balance sheet of New Time Warner at
September 30, 1995 gives effect to the Transaction and certain of the TW
Transactions which had not been completed as of such date, as if consummated on
such date. The pro forma consolidated statements of operations of New Time
Warner for the nine months ended September 30, 1995 and the year ended December
31, 1994 give effect to the Transaction and the TW Transactions, as if such
transactions had occurred at the beginning of the respective period. The pro
forma consolidated condensed financial statements should be read in conjunction
with (i) the historical financial statements of Time Warner and TWE, including
the notes thereto, which are contained in Time Warner's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 and Time Warner's Annual Report on
Form 10-K for the year ended December 31, 1994, as amended, (ii) the historical
financial statements of TBS, including the notes thereto, which are contained in
TBS's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 and
TBS's Annual Report on Form 10-K for the year ended December 31, 1994, as
amended, and (iii) the historical financial statements and pro forma
consolidated condensed financial statements included or incorporated by
reference in Time Warner's Current Report on Form 8-K dated November 14, 1995.
Time Warner is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission and at the offices of the New
York Stock Exchange, Inc. and the Pacific Stock Exchange, Inc.
The pro forma consolidated condensed financial statements are presented for
informational purposes only and are not necessarily indicative of the financial
position or operating results that would have occurred if the transactions had
been consummated as of the dates indicated, nor are they necessarily indicative
of future financial condition or operating results.
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Pro forma adjustments for the Transaction reflect (i) the issuance by New
Time Warner of approximately 171.3 million shares of New Time Warner common
stock pursuant to the TBS Merger, including 50.8 million shares of Series LMC
Common Stock of New Time Warner ("LMC Voting Common Stock") to be issued to
Liberty Media Corporation ("LMC"), (ii) the issuance by New Time Warner of an
additional five million shares of LMC Voting Common Stock in consideration for
an option (the "SSSI Option"), exercisable for six years, to purchase a
subsidiary of LMC that currently uplinks and distributes the signal of TBS's
television station, WTBS, (iii) the issuance by New Time Warner of options to
purchase approximately 13 million shares of New Time Warner Common Stock upon
the assumption of all outstanding TBS stock options and (iv) the assumption or
incurrence of approximately $2.4 billion of indebtedness, including $259 million
of the outstanding TBS zero coupon subordinated convertible notes due 2007 (the
"TBS LYONs"). The TBS LYONs currently may be converted at the option of the
holders into an additional 7.4 million shares of Class B Common Stock of TBS. If
all TBS LYONs were so converted prior to the consummation of the Transaction,
(a) New Time Warner's pro forma shareholders' equity at September 30, 1995
would be increased by approximately $250 million to reflect the issuance of
approximately 5.6 million additional shares of New Time Warner Common Stock, (b)
New Time Warner's pro forma indebtedness at September 30, 1995 would be reduced
by $259 million and (c) New Time Warner's pro forma loss before extraordinary
item and loss before extraordinary item per common share for the nine months
ended September 30, 1995 and the year ended December 31, 1994 would be reduced
by $8 million ($.02 per common share) and $11 million ($.04 per common share),
respectively.
The Transaction will be accounted for by the purchase method of accounting
for business combinations and, accordingly, the estimated cost to acquire such
assets will be allocated to the underlying net assets in proportion to their
respective fair values. The valuations and other studies which will provide the
basis for such an allocation have not been completed. As more fully described in
the notes to the pro forma consolidated condensed financial statements, the
allocation of the excess of cost over the book value of the net assets to be
acquired has been made preliminarily for pro forma purposes to goodwill.
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NEW TIME WARNER
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1995
(MILLIONS, UNAUDITED)
<TABLE>
<CAPTION>
TBS TRANSACTION NEW TIME
------------------------------ WARNER
TIME WARNER TIME WARNER TBS PRO FORMA PRO
HISTORICAL ADJUSTED(A) HISTORICAL(B) ADJUSTMENTS(C) FORMA
---------- ----------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and equivalents......................... $ 378 $ 451 $ 85 $ -- $ 536
Other current assets......................... 2,755 2,779 1,148 (143) 3,784
------- ------- ------ ------ -------
Total current assets......................... 3,133 3,230 1,233 (143) 4,320
Investments in and amounts due to and from
Entertainment Group........................ 6,022 6,082 -- -- 6,082
Other investments............................ 2,499 2,526 -- (531) 1,995
Noncurrent inventories....................... -- -- 1,868 -- 1,868
Property, plant and equipment................ 1,088 1,464 331 -- 1,795
Goodwill..................................... 5,263 6,114 262 8,062 14,438
Cable television franchises.................. 1,716 4,121 -- -- 4,121
Other assets................................. 1,701 1,728 445 -- 2,173
------- ------- ------ ------ -------
Total assets................................. $21,422 $25,265 $4,139 $7,388 $36,792
======= ======= ====== ====== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities.................... $ 2,837 $ 3,016 $ 744 $ -- $ 3,760
Long-term debt............................... 9,931 11,912 2,336 100 14,348
Deferred income taxes........................ 3,469 4,336 395 -- 4,731
Other long-term liabilities.................. 1,119 1,119 242 -- 1,361
Time Warner-obligated mandatorily
redeemable preferred securities of
subsidiary holding solely Time Warner
subordinated notes......................... 374 374 -- -- 374
Shareholders' equity:
Preferred stock............................ 30 37 -- (33) 4
Common stock............................... 387 389 -- (383) 6
Paid-in capital............................ 5,410 6,150 -- 8,126 14,276
Unrealized gains on certain marketable
securities............................... 134 134 -- -- 134
TBS shareholders' equity................... -- -- 422 (422) --
Accumulated deficit........................ (2,269) (2,202) -- -- (2,202)
------- ------- ------ ------ -------
Total shareholders' equity................... 3,692 4,508 422 7,288 12,218
------- ------- ------ ------ -------
Total liabilities and shareholders' equity... $21,422 $25,265 $4,139 $7,388 $36,792
======= ======= ====== ====== =======
</TABLE>
- ----------------------
See accompanying notes.
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NEW TIME WARNER
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
(MILLIONS, UNAUDITED)
<TABLE>
<CAPTION>
TBS TRANSACTION NEW TIME
------------------------------ WARNER
TIME WARNER TIME WARNER TBS PRO FORMA PRO
HISTORICAL ADJUSTED(D) HISTORICAL(E) ADJUSTMENTS(F) FORMA
---------- ----------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Revenues..................................... $5,705 $6,249 $2,515 $ -- $8,764
Cost of revenues* ........................... 3,396 3,813 1,600 184 5,597
Selling, general and administrative* ........ 1,966 2,097 635 -- 2,732
------ ------ ------ ----- ------
Operating expenses........................... 5,362 5,910 2,235 184 8,329
------ ------ ------ ----- ------
Business segment operating income (loss)..... 343 339 280 (184) 435
Equity in pretax income of Entertainment
Group...................................... 235 259 -- -- 259
Interest and other, net...................... (615) (770) (141) (10) (921)
Corporate expenses........................... (57) (57) -- -- (57)
------ ------ ------ ----- ------
Income (loss) before income taxes............ (94) (229) 139 (194) (284)
Income tax (provision) benefit............... (63) (25) (56) 18 (63)
------ ------ ------ ----- ------
Income (loss) before extraordinary item...... $ (157) $ (254) $ 83 $(176) $ (347)
Preferred dividend requirements.............. (24) (109) -- -- (109)
------ ------ ------ ----- ------
Income (loss) before extraordinary item
applicable to common shares................ $ (181) $ (363) $ 83 $(176) $ (456)
====== ====== ====== ===== ======
Loss before extraordinary item per common
share...................................... $ (.47) $ (.94) $ (.81)
====== ====== ======
Average common shares........................ 382.5 386.4 562.7
====== ====== ======
__________
* Includes depreciation and amortization
expense of: ............................. $ 398 $ 699 $ 149 $ 150 $ 998
====== ====== ====== ===== ======
</TABLE>
_______________________
See accompanying notes.
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NEW TIME WARNER
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(MILLIONS, UNAUDITED)
<TABLE>
<CAPTION>
TBS TRANSACTION NEW TIME
------------------------------ WARNER
TIME WARNER TIME WARNER TBS PRO FORMA PRO
HISTORICAL ADJUSTED(D) HISTORICAL(E) ADJUSTMENTS(F) FORMA
---------- ----------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Revenues..................................... $7,396 $8,217 $2,809 $ -- $11,026
Cost of revenues* ........................... 4,307 4,975 1,815 236 7,026
Selling, general and administrative* ........ 2,376 2,590 706 -- 3,296
------ ------ ------ ----- -------
Operating expenses........................... 6,683 7,565 2,521 236 10,322
------ ------ ------ ----- -------
Business segment operating income (loss)..... 713 652 288 (236) 704
Equity in pretax income of Entertainment
Group...................................... 176 208 -- -- 208
Interest and other, net...................... (724) (940) (209) 6 (1,143)
Corporate expenses........................... (76) (76) -- -- (76)
------ ------ ------ ----- -------
Income (loss) before income taxes............ 89 (156) 79 (230) (307)
Income tax (provision) benefit............... (180) (110) (33) 13 (130)
------ ------ ------ ----- -------
Net income (loss)............................ (91) (266) 46 (217) (437)
Preferred dividend requirements.............. (13) (146) -- -- (146)
------ ------ ------ ----- -------
Net income (loss) applicable to
common shares.............................. $ (104) $ (412) $ 46 $(217) $ (583)
====== ====== ====== ===== =======
Net loss per common share.................... $ (.27) $(1.07) $ (1.04)
====== ====== =======
Average common shares........................ 378.9 384.0 560.3
====== ====== =======
__________
* Includes depreciation and amortization
expense of: ............................. $ 437 $ 912 $ 153 $ 198 $ 1,263
====== ====== ====== ===== =======
</TABLE>
____________________
See accompanying notes.
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NOTES TO THE NEW TIME WARNER PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(A) Reflects the Time Warner pro forma consolidated condensed balance sheet
at September 30, 1995 as previously reported in Time Warner's Current Report on
Form 8-K dated November 14, 1995, which gives effect to the CVI Acquisition and
the Unclustered Cable Disposition, as if such transactions occurred on such
date. The Summit Acquisition, the KBLCOM Acquisition, the 1995 Debt
Refinancings, the Six Flags Transaction, the TWE-A/N Transaction and the
ITOCHU/Toshiba Transaction are already reflected in the historical balance sheet
of Time Warner as of September 30, 1995.
(B) Reflects the historical financial position of TBS at September 30,
1995, including $2.336 billion of long-term indebtedness that will be assumed
pursuant to the Transaction.
(C) Pro forma adjustments to record the Transaction reflect (i) a
reclassification in shareholders' equity from each of common stock and preferred
stock to paid-in capital to reflect the reduction in the par value of common
stock from $1.00 per share to $.01 per share and preferred stock from $1.00 per
share to $.10 per share, (ii) the issuance by New Time Warner of (A) 171.3
million shares of New Time Warner common stock pursuant to the TBS Merger,
including 50.8 million shares of LMC Voting Common Stock to be issued to LMC,
(B) an additional five million shares of LMC Voting Common Stock to be issued to
LMC in consideration for the SSSI Option and (C) options to purchase
approximately 13 million shares of New Time Warner Common Stock upon the
assumption of all outstanding TBS stock options, valued at an aggregate of
$7.710 billion for pro forma purposes based on a New Time Warner Common Stock
price of $42.375 per share, (iii) the writeoff of approximately $262 million of
pre-existing goodwill of TBS and approximately $143 million of TBS inventory to
conform TBS's accounting policy with respect to the capitalization and
amortization of film exploitation costs to Time Warner's accounting policy, (iv)
the incurrence of approximately $100 million of additional indebtedness for the
payment of transaction costs and other related liabilities, (v) the allocation
of the excess of the purchase price over the book value of the net assets
acquired of $8.324 billion to goodwill and (vi) the elimination of (x) Time
Warner's historical investment in TBS in the amount of $531 million and (y)
TBS's historical shareholders' equity in the amount of $422 million.
(D) Reflects Time Warner's pro forma consolidated condensed statements of
operations for the nine months ended September 30, 1995 and the year ended
December 31, 1994 as previously reported in Time Warner's Current Report on Form
8-K dated November 14, 1995, which gives effect to the Cable Acquisitions, the
Six Flags Transaction, the Unclustered Cable Disposition, the TWE-A/N
Transaction, the 1995 Debt Refinancings and the ITOCHU/Toshiba Transaction, as
if each applicable transaction had occurred at the beginning of such periods.
(E) Reflects the historical operating results of TBS for the nine months
ended September 30, 1995 and the year ended December 31, 1994, excluding an
extraordinary loss on the retirement of debt of $25 million in 1994.
(F) Pro forma adjustments to record the Transaction for the nine months
ended September 30, 1995 and the year ended December 31, 1994 reflect (i) an
increase of $184 million and $236 million, respectively, in cost of revenues
consisting of (A) a $6 million and $10 million reduction, respectively, of TBS's
historical amortization of pre-existing goodwill, (B) a $156 million and $208
million increase, respectively, in amortization with respect to the excess cost
to acquire TBS that has been allocated to goodwill and amortized on a
straight-line basis over a forty-year period and (C) a $34 million and $38
million increase, respectively, in the amortization of capitalized film
exploitation costs to conform TBS's accounting policy to Time Warner's
accounting policy, (ii) an increase of $5 million and $6 million, respectively,
in interest expense on the approximately $100 million of additional indebtedness
for the payment of transaction costs and other related liabilities, (iii) an
increase of $5 million and a decrease of $12 million, respectively, in interest
and other, net, due to the elimination of Time Warner's historical equity
accounting for its investment in TBS and (iv) a decrease of $18 million and $13
million, respectively, in income tax expense as a result of income tax benefits
provided at a 41% tax rate.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
<TABLE>
<S> <C>
TURNER BROADCASTING SYSTEM, INC.
(Registrant)
Date: January 3, 1996 By: /s/ William S. Ghegan
--------------------------------
Name: William S. Ghegan
Title: Vice President and Controller
and Chief Accounting Officer
</TABLE>
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