Rule 424(b)(3)
File No.: 333-36446
PROSPECTUS
4,000,000 Shares
Time Warner Inc.
Common Stock, Par Value $0.01 per Share
This prospectus relates to 4,000,000 shares of common stock, par
value $0.01 per share, of Time Warner Inc. that Merrill Lynch, Pierce, Fenner
& Smith, Inc. received upon exercise of a call option granted to Merrill Lynch
by R.E. Turner, the Vice Chairman of Time Warner, on May 12, 1997. Merrill
Lynch may resell the shares or deliver them to persons from whom it borrowed
shares of Time Warner common stock for the purpose of making short sales for
its account. To the extent that these shares of Time Warner common stock are
offered for sale by Merrill Lynch, they will be offered for sale from time to
time pursuant to this prospectus for the account of Merrill Lynch. Time Warner
will not receive any of the proceeds from such sales.
The Time Warner common stock covered by this prospectus is listed on
the New York Stock Exchange ("NYSE") under the symbol "TWX". On May 23, 2000,
the last sale price for one share of Time Warner common stock was $74.25 as
reported on the NYSE Composite Transactions Tape.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
The date of this prospectus is May 24, 2000
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Table of Contents
Page
Where you can find more information............................... 2
Incorporation of certain documents by reference................... 3
The Company....................................................... 4
Use of Proceeds................................................... 6
Plan of Distribution.............................................. 6
Legal Opinions.................................................... 6
Experts........................................................... 6
WHERE YOU CAN FIND MORE INFORMATION
Time Warner files reports, proxy statements and other information
with the Securities and Exchange Commission pursuant to public reporting
requirements of the Securities Exchange Act of 1934. These documents may be
inspected and copied at the public reference facilities maintained by the
Securities and Exchange Commission at:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, NY 10048 (Suite 1400)
Chicago, Illinois 60661
Information on the operation of the Public Reference Room may be
obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330.
These Securities and Exchange Commission filings are also available to the
public from commercial document retrieval services and at the internet world
wide web site maintained by the Securities and Exchange Commission at
"http://www.sec.gov".
Time Warner's common stock is traded on the New York Stock Exchange.
Reports, proxy statements and other information concerning Time Warner may be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York.
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3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows Time Warner to
"incorporate by reference" information into this prospectus, which means that
Time Warner can disclose important information to you by referring you to
other documents filed separately with the Securities and Exchange Commission.
The information incorporated by reference is considered part of this
prospectus, except for any information superseded by information contained
directly in this prospectus or in later filed documents incorporated by
reference in this prospectus.
This prospectus incorporates by reference the documents set forth
below that Time Warner has previously filed with the Securities and Exchange
Commission. These documents contain important business and financial
information about Time Warner that is not included in or delivered with this
prospectus.
Time Warner Inc. (File No. 1-12259) Period or Date
- ---------------------------------- --------------
1. Annual Report on Form 10-K Year ended December 31, 1999.
2. Quarterly Report on Form 10-Q Quarter ended March 31, 2000
3. Current Reports on Form 8-K January 10, 2000 (filed January 14, 2000);
January 23, 2000 (filed January 28, 2000);
February 2, 2000 (filed February 10, 2000);
January 10, 2000 (filed February 11, 2000);
March 13, 2000 (filed March 13, 2000);
March 31, 2000 (filed March 31, 2000);
April 12, 2000 (filed April 19, 2000);
April 19, 2000 (filed April 25, 2000); and
May 22, 2000 (filed May 22, 2000).
4. The description of Time Warner Inc. common
stock, par value $0.01 per share, set forth
in Item 4 in the registration statement on
Form 8-B as filed with the Securities and
Exchange Commission on October 2, 1996
pursuant to Section 12(b) of the Securities
Exchange Act of 1934, as amended by a Form
8-A/A filed with the Securities and Exchange
Commission on January 31, 2000.
Time Warner also incorporates by reference additional documents that
may be filed with the Securities and Exchange Commission under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act after the date of this
prospectus and prior to the time all of the securities offered by this
prospectus are sold. These include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
If you are a stockholder, Time Warner may have sent you some of the
documents incorporated by reference, but you can obtain any of them through
Time Warner, the Securities and Exchange Commission or the Securities and
Exchange Commission's Internet web site as described above. Documents
incorporated by reference are available from Time Warner without charge,
excluding all exhibits, except that if Time Warner has specifically
incorporated by reference an exhibit in this prospectus, the exhibit will also
be provided without charge. You may obtain documents incorporated by reference
in this prospectus by requesting them in writing or by telephone from Time
Warner at the following address:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Telephone: (212) 484-6971
Attn: Investor Relations
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4
THE COMPANY
Because the following is a summary of the business of Time Warner,
it does not contain all the information that may be important to investors.
You should read it together with the detailed information and financial
statements referred to or incorporated by reference herein.
Description of Business
Time Warner is the world's leading media and entertainment company.
Time Warner's principal business objective is to create and distribute branded
information and entertainment copyrights throughout the world. Time Warner
classifies its business interests into six fundamental areas:
o Cable Networks, consisting principally of interests in cable
television programming;
o Publishing, consisting principally of interests in magazine
publishing, book publishing and direct marketing;
o Music, consisting principally of interests in recorded music
and music publishing;
o Filmed Entertainment, consisting principally of interests in
filmed entertainment, television production and television
broadcasting;
o Cable, consisting principally of interests in cable television
systems; and
o Digital Media, consisting principally of interests in
Internet-related and digital media businesses.
Investment in TWE
Time Warner is a holding company that derives its operating income
and cash flow from its investments in its subsidiaries, including Time Warner
Entertainment Company, L.P., or "TWE", a limited partnership that owns a
majority of Time Warner's interests in filmed entertainment, television
production, television broadcasting and cable television systems, and a
portion of its interests in cable television programming. Time Warner owns
general and limited partnership interests in TWE consisting of 74.49% of the
pro rata priority capital and residual equity capital, and 100% of the junior
priority capital. The remaining 25.51% limited partnership interests in the
pro rata priority capital and residual equity capital of TWE are held by a
subsidiary of MediaOne Group, Inc. A significant portion of TWE's cable
television systems is held by the Time Warner Entertainment --
Advance/Newhouse Partnership, of which TWE is the managing partner and owns a
64.8% interest.
Agreement to Merge with AOL
On January 10, 2000, Time Warner announced that it had entered into
an Agreement and Plan of Merger dated as of January 10, 2000, between America
Online, Inc. ("AOL") and Time Warner. Under the terms of the merger agreement,
Time Warner and AOL have formed a new holding company, named AOL Time Warner
Inc., which wholly owns two subsidiaries. At the closing of the transaction,
one of these subsidiaries will merge with and into AOL, and the other
subsidiary will merge with and into Time Warner. As a result of the mergers,
Time Warner and AOL will each become a wholly owned subsidiary of AOL Time
Warner Inc.
Under the terms of the merger agreement, Time Warner and AOL stock
will be converted to AOL Time Warner stock at fixed exchange ratios. Each
share of Time Warner common stock will be exchanged for 1.5 shares of AOL Time
Warner common stock, and each share of AOL common stock will be exchanged for
1.0 share of AOL Time Warner common stock. Each share of each series of Time
Warner Preferred Stock will be converted into one share of a substantially
identical series of AOL Time Warner Preferred Stock.
The mergers are subject to various conditions set forth in the
merger agreement, including the adoption of the merger agreement by the
stockholders of each of Time Warner and AOL, certain U.S. and foreign
regulatory approvals and other customary conditions. It is anticipated that
the mergers will be completed during the fall of 2000. Additional information
concerning the mergers is contained in Time Warner's Current Report on Form
8-K dated May 22, 2000.
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Combination Agreement with EMI
On January 24, 2000, Time Warner and EMI Group plc announced that
they had signed definitive agreements to combine their recorded music and
music publishing businesses into a global joint venture. The new company,
Warner EMI Music, will be one of the world's leading music companies, with
broad domestic and international holdings. The global joint venture will be
owned equally by Time Warner and EMI Group. The eleven-member Warner EMI Music
board of directors, controlled by Time Warner, will consist of six Time Warner
designees and five EMI designees.
The transaction is subject to certain conditions, including
regulatory consents and EMI Group shareholder approval, and is expected to be
completed by the end of 2000. Additional information concerning the
transaction is contained in Time Warner's Current Report on Form 8-K dated
January 23, 2000.
General
Time Warner's principal executive offices are located at 75
Rockefeller Plaza, New York, New York 10019 and its telephone number is (212)
484-8000.
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USE OF PROCEEDS
Time Warner will not receive any of the proceeds from the sale from
time to time of the Time Warner common stock offered hereby. All proceeds from
the sale of the common stock offered hereby will be for the account of Merrill
Lynch, as described below. See "Plan of Distribution" described below.
PLAN OF DISTRIBUTION
Merrill Lynch may resell the shares of Time Warner common stock
covered by this prospectus or deliver them to persons from whom it borrowed
shares of common stock of Time Warner for the purpose of making short sales
for its account.
Merrill Lynch may resell the shares of Time Warner common stock
covered by this prospectus from time to time on markets where the common stock
of Time Warner is traded or on an exchange in accordance with rules of the
exchange at prices related to market prices prevailing at the time of sale. In
addition, any of the shares covered by this prospectus that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
Any broker-dealers or agents who participate in the distribution of
the shares may be deemed to be an "under writer" within the meaning of the
Securities Act of 1933, and any profit on the sale of the shares by such
broker- dealer or agent may be deemed to be underwriting commissions under the
Securities Act.
Mr. Turner will pay the registration fee in connection with the
registration of the Time Warner common stock covered by this prospectus. Time
Warner will pay all other expenses and fees related to such registration. Time
Warner has agreed to indemnify Mr. Turner, Merrill Lynch, each officer and
director of Merrill Lynch and any person who controls Mr. Turner or Merrill
Lynch against certain liabilities and expenses arising out of or based upon
the information set forth or incorporated by reference in this prospectus and
the registration statement of which this prospectus forms a part, including
liabilities under the Securities Act. Each of Mr. Turner and Merrill Lynch has
agreed to indemnify Time Warner and each other and, in each case, each of its
respective officers and directors and any person who controls such person
against certain liabilities and expenses arising out of or based upon
information specifically provided by such selling stockholder for inclusion in
this prospectus and the registration statement of which this prospectus forms
a part, including liabilities under the Securities Act.
Time Warner may, under specified circumstances, determine at any
time to suspend the availability of this prospectus for use by Merrill Lynch.
LEGAL OPINIONS
Certain legal matters in connection with the Time Warner common
stock offered hereby were passed upon for Time Warner by Cravath, Swaine &
Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the
consolidated financial statements, schedule and supplementary information of
Time Warner and the consolidated financial statements and schedule of TWE
included in Time Warner's Annual Report on Form 10-K for the year ended
December 31, 1999, as set forth in their reports, which are incorporated by
reference in this prospectus and elsewhere in this registration statement.
These consolidated financial statements, schedules and supplementary
information are incorporated by reference in reliance on Ernst & Young LLP's
reports, given on their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the
consolidated financial statements of America Online, Inc. for the three years
ended June 30, 1999 incorporated by reference as Exhibit 99 to its Form 10Q/A
for the quarterly period ended March 31, 2000, as set forth in their report,
which is incorporated by reference in Time Warner's Current Reports on Form
8-K dated January 10, 2000, March 31, 2000 and May 22, 2000, which are
incorporated by reference in this prospectus and elsewhere in the registration
statement. These consolidated financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
