TIME WARNER INC, T-3/A, 1995-08-01

TIME WARNER INC
T-3/A, 1995-08-01
PERIODICALS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE>

File No. 22-22213
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------------

AMENDMENT NO. 1 TO
FORM T-3

FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939

----------------------

TIME WARNER INC.
(Name of Applicant)

75 Rockefeller Plaza
New York, NY 10019
(Address of Principal Executive Offices)

SECURITIES TO BE ISSUED UNDER THE
INDENTURE TO BE QUALIFIED

Title of Class Amount
-------------- ------
Debt Securities, issuable up to $1,827,948,000 (representing
in series the maximum aggregate principal
amount of securities to be received
upon redemption)

Approximate Date of Proposed Public Offering:
As soon as practicable after this
application for qualification becomes effective

Peter R. Haje, Esq.
Executive Vice President,
Secretary and General Counsel
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
(212) 484-8000
(Name and Address of Agent for Service)

Copies to:

William P. Rogers, Jr., Esq. Faith D. Grossnickle, Esq.
Cravath, Swaine & Moore Shearman & Sterling
Worldwide Plaza 599 Lexington Avenue
825 Eighth Avenue New York, NY 10022
New York, NY 10019-7475 (212) 848-8015
(212) 474-1270

================================================================================

The obligor hereby amends this application for qualification on such date or
dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Commission, acting pursuant
to section 307(c) of the Act, may determine upon the written request of the
obligor.

<PAGE>
2
GENERAL

Item 1. General Information

Time Warner Inc. (the "Applicant") is a corporation organized under
the General Corporation Law of the State of Delaware.

Item 2. Securities Act Exemption Applicable

The issuance by the Applicant in the transaction described below of
one or more series of securities (the "Redemption Securities") under the
indenture to be qualified, dated as of January 15, 1993 (the "Indenture"),
between the Applicant and Chemical Bank, a New York banking corporation, would
be exempt from the registration requirements of Section 5 of the Securities Act
of 1933, as amended (the "1933 Act"), under Section 3(a)(9) of the 1933 Act
because such Redemption Securities will be "exchanged by the issuer with its
existing security holders exclusively where no commission or other remuneration
is paid or given directly or indirectly for soliciting such exchange."

The Redemption Securities will be issued under the Indenture to
holders of Redeemable Reset Notes Due August 15, 2002 (the "Reset Notes"),
pursuant to a redemption being effected in accordance with the terms of the
Reset Notes. Holders of the Reset Notes neither have made nor will be required
to make any cash payments to the Applicant in connection with the redemption of
the Reset Notes.

There have not been nor will there be any sales of securities of the
same class as the Redemption Securities by the Applicant or by or through an
underwriter at or about the same time as the transaction for which the exemption
described above is claimed. The Applicant will not pay, directly or indirectly,
any commission or other remuneration to any person in connection with the
redemption of the Reset Notes and the issuance of the Redemption Securities,
except for the following: (i) certain investment banking firms will receive
reasonable compensation and reimbursement of reasonable expenses from and will
be indemnified against certain liabilities or expenses by the Applicant in
connection with their services as valuation agents under the terms of the Reset
Notes; and (ii) a shareholder relations firm that acts as exchange agent will
receive reasonable

<PAGE>
3

compensation and reimbursement of reasonable expenses in connection with its
services as information agent and will be indemnified against certain
liabilities or expenses by the Applicant in connection with its services as
exchange agent.

AFFILIATIONS

Item 3. Affiliates

The following is a list of direct and indirect subsidiaries of the
Applicant, indicating the percentage of voting securities owned by the Applicant
in each such subsidiary. Indirect subsidiaries are indented and listed under
their direct parent corporations and the share of ownership indicated thereof
refers to the share ownership of the direct parent corporation. The names of
certain subsidiaries, which if considered in the aggregate as a single
subsidiary would not constitute a significant subsidiary, are omitted.
Investments in certain partially owned companies representing investments of 50%
or less are not included for the reason that such companies, considered in the
aggregate, would not constitute a significant subsidiary. Also listed below are
affiliates of Time Warner Entertainment Company, L.P., a Delaware limited
partnership ("TWE"), in which certain wholly owned subsidiaries of the Applicant
collectively own 63.27% of the pro rata priority capital and residual equity
interests.

Subsidiaries of Time Warner Inc.
<TABLE>
<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------

<S> <C>
Asiaweek Limited.............................................. 80
Summit Communications Group, Inc. ............................ 100
Sunset Publishing Corporation ................................ 100
Time International Inc. ...................................... 100
Time Inc.(1) ................................................. 100
American Family Publishers (partnership) ................... 50
Book-of-the-Month Club, Inc. ............................... 100
Entertainment Weekly, Inc. ................................. 100
Little, Brown and Company (Inc.) ........................... 100
Time Distribution Services Inc. ............................ 100
Time Customer Service, Inc. ................................ 100
Time Publishing Ventures, Inc. ............................. 100
Southern Progress Corporation(2) ......................... 100
Time Inc. Ventures ......................................... 100
</TABLE>

<PAGE>
4

<TABLE>
<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------
<S> <C>
Health Publications, Inc. ................................ 100
Hippocrates Partners (partnership) ..................... 50
TWC Ventures Inc. .......................................... 100
Time Life Inc. ............................................. 100
Time-Life Customer Service, Inc. ......................... 100
Warner Books, Inc. ......................................... 100
Warner Publisher Services Inc. ............................. 100
Time TBS Holdings, Inc. ...................................... 100
TWI Cable Inc. ............................................... 100
Paragon Communications (partnership) ....................... 50(12)
TW Service Holding I, L.P. (partnership) .................... (3)
TW Service Holding II, L.P. (partnership) .................... (3)
TW Programming Co. (partnership) .................. (4)
TW Transmission Co. (partnership) .......................... (4)
TW Cable Service Co. (partnership) ......................... (4)
E/Court Holding Co. (partnership) .......................... (4)
TW/BET Holding Co. (partnership) ........................... (4)
TW/Three D Holding Co. (partnership) ....................... (4)
TWQ II Co. (partnership) ................................... (4)
TWQ I Co., L.P. (partnership)............................... (5)
WCI Record Club Inc. ......................................... 100(6)
The Columbia House Company (partnership) ................... 50
Warner Communications Inc. ................................... 100
Atari Games Corporation .................................... 100
DC Comics (partnership) .................................... 50(7)
Warner Bros. Publications U.S. Inc. ........................ 100
Warner Bros. Music International Inc. ...................... 100
Warner-Tamerlane Publishing Corp. .......................... 100
WB Music Corp. ............................................. 100
W Cinemas Holding Inc. ..................................... 100
W. Cinemas Inc. .......................................... 100
Alpha Theatres Inc. ...................................... 100
NPP Music Corp. ............................................ 100
Warner/Chappell Music, Inc. ................................ 100
New Chappell Inc.(8) ..................................... 100
Super Hype Publishing, Inc. .............................. 100
Cotillion Music, Inc. .................................... 100
Walden Music, Inc. ....................................... 100
Summy-Birchard, Inc. ..................................... 100
Lorimar Motion Picture Management, Inc. .................... 100
E.C. Publications, Inc. .................................... 100
WCI/Am Law Inc. ............................................ 100
American Lawyer Media, L.P ............................... 83.25
Warner Music Group Inc. .................................... 100
Warner Bros. Records Inc. .................................. 100
Atlantic Recording Corporation ........................... 100
</TABLE>

<PAGE>
5

<TABLE>
<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------
<S> <C>
Warner-Elektra-Atlantic Corporation ............................ 100
WEA International Inc.(9) ........................................ 100
Warner Music Canada Ltd ........................................ 100
The Columbia House Company
(Canada)(partnership) ........................................ 50
Warner Special Products Inc. ..................................... 100
Warner Custom Music Corp. ...................................... 100
WEA Manufacturing Inc. ........................................... 100
Allied Record Company .......................................... 100
Time Warner Limited .............................................. 100
Warner Music International Services Ltd ........................ 100
Time Warner UK Limited ....................................... 100
Warner Chappell Music Group (UK) Ltd ......................... 100
Warner Chappell Music Limited ............................. 100
Magnet Music Ltd ........................................ 100
Warner Music (U.K.) Limited .................................. 100
Ivy Hill Corporation ............................................. 100
Warner Cable Communications Inc.(10) ............................. 100
TWI Ventures Ltd ................................................. 100
American Television and Communications Corporation ................. 100(11)
American Communications Corporation .............................. 100
American Digital Communications, Inc. ............................ 100
ATC Cablevision of San Merino, Inc. .............................. 100
ATC Cablevision of South Pasadena, Inc. .......................... 100
ATC Holdings II, Inc. ............................................ 100
ARP 113, Inc. .................................................. 100
Paragon Communications (partnership) ........................... 50(12)
ATC/PPV, Inc. .................................................... 100
Carolina Network Corporation ..................................... 100
Philadelphia Community Antenna Television Company ................ 100
Lower Bucks Cablevision, Inc. ................................. 100
Tri-County Cable Television Company ........................... 100
Public Cable Company ............................................. 100
Public Cable Company (partnership). ........................... 77
Shows, Inc. ...................................................... 100
Time Warner Operations Inc. ........................................ 100(13)
HBO Film Management, Inc. ........................................ 100
Kremlin Productions, Inc. ........................................ 100
Simba Productions, Inc. .......................................... 100
WAC Productions, Inc. ............................................ 100
Running Mates, Inc. .............................................. 100
</TABLE>

6
<PAGE>

Subsidiaries of Time Warner Entertainment Company, L.P.

<TABLE>
<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------
<S> <C>
Century Venture Corporation .......................................... 50
Erie Telecommunications, Inc. ........................................ 54.19
Kansas City Cable Partners (partnership) ............................. 50
Time Warner Cable New Zealand Holdings Ltd. .......................... 100(14)
Queens Inner Unity Cable System ...................................... 50
Comedy Partners, L.P. (partnership) .................................. 50
HBO Ole, (partnership) ............................................... 50
HBO Ole, Distribution 1 A.V.V. ..................................... 100
HBO Ole, International/Sales Company Ltd. .......................... 100
HBO Ole, Services S.A. ........................................... 100
HBO Ole, Producciones S.A. ........................................... 50
HBO Direct, Inc. ..................................................... 100
HBO Turkey Holdings I Inc. ......................................... 100
HBO Turkey Holdings II Inc. ........................................ 100
Warner Cable of New Jersey Inc. .................................... 100
Warner Cable of Vermont Inc. ....................................... 100
TW Buffer Inc. ..................................................... 100
Warner Bros. (F.E.) Inc. ......................................... 100
Warner Bros. (Japan) Inc. ........................................ 100
Warner Bros. (South) Inc. ........................................ 100
Warner Bros. (Transatlantic) Inc. ................................ 100
Bethel Productions Inc. ........................................ 100
Warner Films Consolidated Inc. ................................... 100
Exeter Distributing Inc. ....................................... 100
Riverside Avenue Distributing Inc. ............................. 100
HBO Asia Holdings, L.P. (partnership) ................................ 99
HBO Pacific Partners, C.V .......................................... 83.33
Home Box Office (Singapore) Pty. Ltd. ............................ 100
Turner/HBO Ltd. Purpose Joint Venture (partnership) .................. 50
Acapulco 37 S.A. de C.V. ............................................. 100
Warner Bros. Beteiligungs Gesellschaft mbH ........................... 100
Time Warner-Advance/Newhouse Partnership ............................. 66.67
CV of Viera Joint Venture (partnership) ............................ 50
Time Warner Entertainment Limited .................................... 100
The Bountiful Company Limited ...................................... 50
Time Warner Entertainment (UK) Limited ............................. 100
Warner Bros. Consumer Products (UK) Ltd. ......................... 100
TWE Finance Limited .............................................. 100
Warner Bros. Theatres Ltd. ....................................... 100
Warner Bros. Distributors Ltd. ................................... 100
Lorimar Telepictures International Ltd. ........................ 100
Warner Bros. International Television
Distribution Italia S.p.A. ................................... 100
</TABLE>

<PAGE>
7

<TABLE>
<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------
<S> <C>
Terremodo Ltd. .............................................. 100
Victory Film Production, Ltd. ............................... 100
Warner Bros. Theatres (U.K.) Limited ............................ 100
Warner Bros. Investments (Pilsworth) Ltd. ..................... 100
Warner Bros. Theatres Advertising Agency Limited .............. 100
Warner Bros. Productions Limited ................................ 100
Warner Home Video (U.K.) Limited ................................ 100
Metro Color Laboratories (U.K.) Ltd. ................................ 100
Kay Holdings Ltd. ................................................. 100
Metrocolor (London) Limited ..................................... 100
Geffen Pictures (partnership) ....................................... 50
Lorimar Distribution International (Canada) Corp. ................... 100
Lorimar Canada Inc. ................................................. 100
Productions et Editions Cinematographiques Francaises SARL (PECF) ... 100
Warner Home Video France S.A ...................................... 100
Time Warner Entertainment Australia Pty. Ltd. ....................... 100
Lorimar Telepictures Pty. Limited ................................. 100
Warner Bros. (Australia) Pty. Ltd. ................................ 100
Warner Holdings Australia Pty. Limited ............................ 100
Warner Bros. Properties (Australia) Pty. Ltd. ................... 100
Warner Bros. Theatres (Australia) Pty. Limited .................. 100
Warner World Australia Pty. Limited ............................. 100
Movie World Enterprises Partnership (partnership) ............. 50
Warner Home Video Pty. Limited .................................... 100
Warner Bros. Video Pty. Ltd. .................................... 100
Warner Sea World Aviation Pty. Ltd. ............................... 100
Sea World Aviation Partnership (partnership) .................... 50
Warner Sea World Investments Pty. Limited ......................... 100
Sari Lodge Pty. Limited ......................................... 50
Sea World Management Pty. Ltd. ................................ 100
Warner Sea World Operations Pty. Ltd. ............................. 100
Sea World Enterprises Partnership (partnership) ................. 50
Warner Sea World Units Pty. Ltd. .................................. 100
Time Warner Entertainment GmbH ...................................... 100
Warner Bros. Deutschland Pay TV GmbH .............................. 100
Warner Home Video GmbH ............................................ 100
Warner Home Video Spol SRO ...................................... 100
Warner Bros. Film GmbH ............................................ 100
Warner Bros. Film GmbH Kinobertriebe ............................ 100
Warner Bros. Film GmbH Multiplex Cinemas Mulheim ................ 100
Time Warner Merchandising Canada Inc. ............................... 100
Warner Bros. Canada Inc. ............................................ 100
Warner Bros. Distributing (Canada) Limited. ......................... 100
Warner Home Video (Canada) Ltd. ..................................... 100
Warner Bros. (Africa) (Pty) Ltd. .................................... 100
Warner Bros. Belgium SA/NV .......................................... 100
Warner Bros. (D) A/S ................................................ 100
</TABLE>

<CAPTION>
Percentage of
Voting Securities
Affiliates Held by Applicant
---------- -----------------
<S> <C>
Warner & Metronome Films A/S ........................................ 50
Warner Bros. Theatres Denmark A/S ................................... 100
Scala Biografome I/S (partnership) ................................ 50
Dagmar Teatret I/S (partnership) .................................. 50
Warner Bros. Film Ve Video Sanayi Ve Ticaret A.S ...................... 100
Warner Bros. Finland OY ............................................... 100
Warner Bros. (Holland) B.V. ........................................... 100
Warner Home Video (Nederland) B.V. .................................. 100
Warner Bros. Theatres (Holland) B.V. ................................ 100
Warner Bros. Holdings Sweden AB ....................................... 100
Warner Bros. (Sweden) AB ............................................ 100
Warner Home Video (Sweden) AB ....................................... 100
Warner Bros. Italia S.p.A. ............................................ 100
Cinema Data Service S.r.L ........................................... 100
Warner Entertainment Italia S.r.L. .................................. 100
Warner Bros. (Korea) Inc. ............................................. 100
Warner Bros. (Mexico) S.A. ............................................ 100
Warner Bros. (N.Z.) Limited ........................................... 100
Warner Home Video (N.Z). Limited .................................... 100
Warner Bros. Norway A/S ............................................... 100
Warner Bros. Singapore Pte. Ltd. ...................................... 100
Warner Home Video (Ireland) Ltd. ...................................... 100
Warner Home Video Portugal Lda. ....................................... 100
Warner-Lusomundo Sociedade Iberica de Cinemas Lda. .................... 50
Warner Home Video Espanola S.A. ....................................... 100
Warner Bros. Licensing Espanola S.A. ................................ 100
Warner Mycal Corporation .............................................. 50
Kabelkom Management Co. (partnership)(15).............................. 50
Kabelkom Holding Co. (partnership)(15) ................................ 50
Quincy Jones Entertainment Company L.P. (partnership) ................. 50
Six Flags Entertainment Corporation ................................... 100
SF Holdings Inc. .................................................... 100
Six Flags Theme Parks Inc. ........................................ 49
DC Comics (partnership) ............................................... 50(7)
</TABLE>

-------------------

(1) The names of five subsidiaries of Time Inc. carrying on the magazine
publishing business are omitted.

(2) The names of nine subsidiaries of Southern Progress Corporation carrying on
the magazine or book publishing businesses are omitted.

(3) The General partners of TWE own 77.78%, Toshiba America Entertainment, Inc.
owns 11.11% and Itochu Entertainment Inc. owns 11.11%.

<PAGE>
9
(4) TW Service Holding I, L.P. owns 99% and TW Service Holding II, L.P. owns
1%.

(5) American Television and Communications Corporation, Warner Cable
Communications Inc. and Warner Communications Inc. are the General Partners
and TW Service Holding I, L.P. and TW Service Holding II, L.P. are the
Limited Partners.

(6) Time Warner Inc. owns 80% and Warner Communications Inc. owns 20%.

(7) Warner Communications Inc. owns 50% and TWE owns 50%.

(8) The names of 16 subsidiaries of New Chappell Inc. carrying on substantially
the same music publishing operations in foreign countries are omitted.

(9) The names of 34 subsidiaries of WEA International Inc. carrying on
substantially the same record, tape and video cassette distribution
operations in foreign countries are omitted.

(10) The names of seven other subsidiaries of Warner Cable Communications Inc.
carrying on the cable television business are omitted.

(11) Time Warner Inc. own 86.34%, Warner Communications Inc. owns 7.8% and Time
TBS Holdings, Inc. owns 5.86%.

(12) American Television and Communications Corporation owns 50% of Paragon
Communications through two indirectly owned subsidiaries--31.09% through
ATC Holding II, Inc. and 18.91% through ARP 113, Inc. The other 50% of
Paragon Communications Corporation is owned by TWI CAble Inc.

(13) Time Warner Inc. owns 87.21% and Warner Communications Inc. owns 12.79%.

(14) TWE owns 99% and Time Warner Inc. owns 1%.

(15) The names of 13 subsidiaries of Kabelkom Management Co. and Kabelkom
Holding Co. carrying on substantially the same cable television operations
in Hungary are omitted.

<PAGE>
10

MANAGEMENT AND CONTROL

Item 4. Directors and Executive Officers

Unless otherwise indicated, the mailing address of each person listed
below is Time Warner Inc., 75 Rockefeller Plaza, New York, NY 10019.
<TABLE>
<CAPTION>
Name Address Office
---- ------- ------
<S> <C> <C>

Gerald M. Levin Chairman, Chief
Executive
Officer and
Director

Richard D. Parsons President and
Director

Peter R. Haje Executive Vice
President,
General Counsel
and Secretary

Richard J. Bressler Senior Vice
President and
Chief Financial
Officer

Tod R. Hullin Senior Vice
President

Philip R.
Lochner, Jr. Senior Vice
President

Timothy A. Boggs Senior Vice
President

Merv Adelson Director

Lawrence B.
Buttenwieser Director

Edward S.
Finkelstein Director
</TABLE>

<PAGE>
11

Name Address Office
---- ------- ------
<S> <C> <C>
Beverly Sills
Greenough Director

Carla A. Hills Director

David T. Kearns Director

Henry Luce III Director

Reuben Mark Director

Michael A. Miles Director

J. Richard Munro Director

Donald S. Perkins Director

Raymond S. Troubh Director

Francis T.
Vincent, Jr. Director

</TABLE>

Item 5. Principal Owners of Voting Securities

As of June 30, 1995, the person listed below is believed to be the
beneficial owner of 10% or more of the voting securities of the Applicant:
<TABLE>
<CAPTION>
Percentage
of Voting
Name and Complete Title of Amount Securities
Mailing Address Class Owned Owned Owned
--------------- ----------- ----- ------
<S> <C> <C> <C>
The Seagram Co. Ltd. Common 56,763,349(1) 14.8%(1)
375 Park Avenue Stock, par
New York, NY 10152 value $1.00
per share
</TABLE>
-----------------
(1) The number of shares of Time Warner Inc. Common Stock, par value $1.00
per share, owned by The Seagram Co. Ltd. is as reported in Amendment No. 8
to the Schedule 13D dated as of April 9, 1995, filed by The Seagram Co.
Ltd. The percentage of such Common Stock owned by The Seagram Co. Ltd. is
based on the number of shares of such Common Stock outstanding as of June 30,
1995.

<PAGE>

12
UNDERWRITERS
Item 6. Underwriters

Within three years prior to the date of filing of this Application, no
person has acted as an underwriter of any securities of the Applicant which are
outstanding on the date of filing this Application except as listed below.

<TABLE>
<CAPTION>
Title of Each Class of
Securities Underwritten Underwriters
----------------------- ------------
<S> <C>
12,057,561 Preferred Morgan Stanley & Co.
Exchangeable Redemption Incorporated
Cumulative Securities (PERCS)(1) 1251 Avenue of the Americas
New York, NY 10020

7.75% Notes due June 15, 2005 Morgan Stanley & Co.
Incorporated

Merrill Lynch, Pierce,
Fenner & Smith Incorporated
("Merrill Lynch")
250 Vesey Street
World Financial Center,
North Tower
New York, NY 10281

Salomon Brothers Inc
7 World Trade Center
New York, NY 10048

Liquid Yield Option Notes due 2013 Merrill Lynch

9.15% Debentures due 2023 Merrill Lynch

Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167

Wertheim Schroder & Co. Inc.
The Equitable Center
787 7th Avenue
New York, NY 10019

</TABLE>

--------------------
(1) A registration statement (File No. 33-60203 and 33-60203-01) covering the
sale of these securities has been filed but is not yet effective.

<PAGE>
13
<TABLE>
<S> <C>
7.45% Notes due 1998 and Salomon Brothers Inc

7.95% Notes due 2000 Merrill Lynch

Lazard Freres & Co.
1 Rockefeller Plaza
New York, NY 10020

9.125% Debentures due 2013 Merrill Lynch

BT Securities Corporation
1 Bankers Trust Plaza
New York, NY 10260

J. P. Morgan Securities Inc.
60 Wall Street, 39th Floor
New York, NY 10260

Liquid Yield Option Notes due 2012 Merrill Lynch

</TABLE>

<PAGE>
14

CAPITAL SECURITIES

Item 7. Capitalization

As of June 30, 1995, the following classes of securities of the
Applicant were authorized and outstanding, to the extent indicated:

EQUITY CAPITALIZATION
<TABLE>
<CAPTION>

Amount Amount
Title of Class Authorized (Shares) Outstanding (Shares)
-------------- ------------------ -------------------
<S> <C> <C>
Preferred Stock, par value
$1.00 per share 250,000,000
Series A Participating
Preferred Stock -- --
Series B Preferred
Stock 1,000,000 464,638
Series C Convertible
Preferred Stock 3,350,000 3,264,508
Series D Convertible
Preferred Stock 11,000,000 (1)
Series E Convertible
Preferred Stock 3,250,000 --
Series F Convertible
Preferred Stock 3,250,000 --
Common Stock, par value
$1.00 per share 750,000,000 384,199,555(1)(2)

</TABLE>

----------------------

(1) On July 6, 1995, the Applicant issued 11,000,000 shares of Series D
Convertible Preferred Stock and 1,000,000 shares of Common Stock, par value
$1.00 per share.

(2) As of June 30, 1995, the Applicant also had approixmately 152 million
shares of Common Stock, par value $1.00 per share, reserved for issuance
upon the exercise of outstanding stock options and warrants and the
conversion of outstanding convertible securities.

<PAGE>

DEBT CAPITALIZATION
<TABLE>
<CAPTION>
Amount
Title of Class Authorized Amount Outstanding
-------------- ---------- ------------------
<S> <C> <C>

7.45% Notes due 1998 $ 500,000,000 $ 500,000,000

7.95% Notes due 2000 500,000,000 500,000,000

Redeemable Reset Notes due 2002 1,828,000,000 1,828,000,000

7.75% Notes due June 15, 2005 500,000,000 500,000,000

Liquid Yield Option Notes due
2012 1,500,000,000 555,000,000(1)

Liquid Yield Option Notes due
2013 2,100,000,000 982,000,000(1)

9.125% Debentures due 2013 1,000,000,000 1,000,000,000

8.75% Convertible Subordinated
Debentures due 2015 2,226,000,000 2,226,000,000

8.75% Debentures due 2017 248,000,000 248,000,000

9.15% Debentures due 2023 1,000,000,000 1,000,000,000

</TABLE>
(1) Represents accreted value as of March 31, 1995.

INDENTURE SECURITIES

Item 8. Analysis of Indenture Provisions

The following is a description of certain provisions of the Indenture
required under Section 305(a)(2) of the Trust Indenture Act of 1939 and is
qualified in its entirety by reference to the terms of the Indenture, which is
incorporated herein by reference as Exhibit T3C hereto. References in this Item
8 to section numbers are to specific sections in the Indenture. Certain
capitalized terms used in this Item 8 are used as defined in the Indenture.

(a) Events of Default, Notice and Waiver

Unless otherwise provided in the terms of the relevant Securities or a
supplemental indenture relating thereto, the Indenture provides that, if an
Event of Default specified therein with respect to any series of Securities
issued thereunder shall have happened and be continuing, either the Trustee
thereunder or the holders of 25% in aggregate principal amount of the
outstanding Securities of such series (or 25% in aggregate principal amount of
all outstanding Securities under the Indenture, in the case of certain Events of
Default affecting all series of Securities under the Indenture) may declare the
principal of

<PAGE>
16

all the Securities of such series to be due and payable. (Section 502)

Unless otherwise provided in the terms of the Relevant Securities or a
supplemental indenture relating thereto, Events of Default in respect of any
series are defined in the Indenture as being: (i) default for 30 days in payment
of any interest installment with respect to such series; (ii) default in payment
of principal of, or premium, if any, on, or any sinking fund or analogous
payment with respect to, Securities of such series when due at their Stated
Maturity, by declaration or acceleration, when called for redemption or
otherwise; (iii) default for 90 days after notice to the Company by the Trustee
thereunder or by holders of 25% in aggregate principal amount of the outstanding
Securities of such series in the performance of any covenant in such Indenture
with respect to Securities of such series; (iv) failure to pay when due, upon
final maturity or upon acceleration, the principal amount of any indebtedness
for money borrowed of the Company in excess of $50 million, if such indebtedness
is not discharged, or such acceleration annulled, within 60 days after written
notice; and (v) certain events of bankruptcy, insolvency and reorganization with
respect to the Company or any subsidiary which is organized under the laws of
the United States or any political subdivision thereof in which the Company's
loans, advances or other investments in such subsidiary exceed 10% of the
Company's consolidated net worth. (Section 501)

Any additions, deletions or other changes to the Events of Default
which will be applicable to a series of Securities will be set forth in the form
of security for such series or in a supplemental indenture relating to such
series of Securities.

The Indenture provides that the Trustee thereunder will, within 90
days after the occurrence of a default with respect to the Securities of any
series, give to the holders of the Securities of such series notice of all
uncured and unwaived defaults known to it; provided that, except in the case of
default in the payment of principal of, premium, if any, or interest, if any, on
any of the Securities of such series, the Trustee thereunder will be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of the holders of the Securities of such
series. The term "default" for the purpose of this provision means the happening
of any of the Events of Default specified

<PAGE>
17

above, except that any grace period or notice requirement is eliminated.
(Section 602)

The Indenture contains provisions entitling the Trustee, subject to
the duty of the Trustee during an Event of Default to act with the required
standard of care, to be indemnified by the holders of the Securities before
proceeding to exercise any right or power under the Indenture at the request of
holders of the Securities. (Section 603)

The Indenture provides that the holders of a majority in aggregate
principal amount of the outstanding Securities of any series may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee or exercising any trust or power conferred on the Trustee in respect of
such series. (Section 512)

In certain cases, the holders of a majority in principal amount of the
outstanding Securities of any series may on behalf of the holders of all
Securities of such series waive any past default or Event of Default with
respect to the Securities of such series or compliance with certain provisions
of the Indenture, except, among other things, a default not theretofore cured in
payment of the principal of, or premium, if any, or interest, if any, on any of
the Securities of such series. (Sections 513 and 1009)

(b) Authentication and Delivery of Securities and
Application of Proceeds

The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents or its
Treasurer under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. (Section 303)

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee

<PAGE>
18

for authentication; and the Trustee shall, upon Company Order, authenticate and
deliver such Securities as provided in the Indenture. (Section 303)

The Redemption Securities are being offered in exchange for the Reset
Notes. No cash proceeds will be received by the Applicant in connection with the
transaction.

The Indenture contains no provisions for release or release and
substitution of property subject to the lien of the Indenture.

(d) Satisfaction and Discharge of Indenture

The Indenture provides that the Indenture shall cease to be of further
effect with respect to any series of the Securities (except as to any surviving
rights of conversion or transfer or exchange of the Securities of such series
expressly provided for herein or in the form of Security for such series), and
the Trustee, on receipt of a Company Request and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture as to such series, when (1) either (A) all Securities of that
series theretofore authenticated and delivered (other than (i) Securities of
such series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306, and (ii) Securities of such series
for whose payment money in the Required Currency has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 1003) have
been cancelled or delivered to the Trustee for cancellation; or (B) all such
Securities of that series not theretofore cancelled or delivered to the Trustee
for cancellation (i) have become due and payable, or (ii) will become due and
payable at their Stated Maturity within one year, or (iii) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company, in the case of (i), (ii) or (iii)
above, has deposited with the Trustee funds sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore cancelled or delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest
to the date of such deposit (in the case

<PAGE>
19

of Securities which have become due and payable), or to the Stated Maturity or
Redemption Date, as the case may be; (2) the Company has paid or caused to be
paid all other sums payable under the Indenture by the Company with respect to
the Securities of such series; and (3) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel each stating that all
conditions required for satisfaction and discharge of the Indenture have been
complied with. (Section 401)

(e) Evidence of Compliance with Conditions

The Applicant will deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company stating that (1) a review of the activities of the Company during such
year and of performance under the Indenture and under the terms of the
Securities has been made under his supervision; and (2) to the best of his
knowledge, based on such review, the Company has fulfilled all its obligations
under the Indenture and has complied with all conditions and covenants on its
part contained in the Indenture through such year, or, if there has been a
default in the fulfillment of any such obligation, covenant or condition,
specifying each such default known to him and the nature and status thereof.
(Section 1004)

Item 9. Other Obligors

The Applicant is the only obligor of the Securities.

Contents of Application for Qualification

This application for qualification comprises:

(a) Pages numbered 1 to 22, consecutively;

(b) The statement of eligibility and
qualification of the Trustee under the Indenture
on Form T-1; and

<PAGE>
20

(c) The following exhibits, in addition to those filed as part of
the statement of eligibility and qualification of each trustee:

Exhibit T3A-1 Restated Certificate of
Incorporation of the Applicant
as filed with the Secretary of
State of the State of Delaware
on May 26, 1993 (which is
incorporated herein by
reference to Exhibit 3 to the
Applicant's Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1993).

Exhibit T3A-2 Certificate of Ownership and
Merger merging TWE Holdings
Inc. into Time Warner Inc. as
filed with the Secretary of
State of the State of Delaware
on September 24, 1993 (which
is incorporated herein by
reference to Exhibit 3.(i)(b)
to the Applicant's Annual
Report on Form 10-K for the
year ended December 31, 1993).

Exhibit T3A-3 Certificate of the Voting
Powers, Designations,
Preferences and Relative
Participating, Optional and
Other Rights and
Qualifications of Series A
Participating Cumulative
Preferred Stock of the
Applicant as filed with the
Secretary of State of the
State of Delaware on
January 26, 1994 (which is
incorporated herein by
reference to Exhibit 3.(i)(c)
to the Applicant's Annual
Report on Form 10-K for the
year ended December 31, 1993).

<PAGE>
21

Exhibit T3A-4* Certificate of the Voting
Powers, Designations,
Preferences and Relative,
Participating, Optional
or Other Special Rights,
and Qualifications,
Limitations or
Restrictions Thereof, of
Series C Convertible
Preferred Stock of the
Applicant as filed with
the Secretary of State of
the State of Delaware on
May 1, 1995.

Exhibit T3A-5* Certificate of the Voting
Powers, Designations,
Preferences and Relative,
Participating, Optional or
Other Special Rights, and
Qualifications, Limitations or
Restrictions Thereof, of
Series D Convertible Preferred
Stock of the Applicant as
filed with the Secretary of
State of the State of Delaware
on July 6, 1995.

Exhibit T3B By-laws of the Applicant, as
amended through March 18, 1993
(which is incorporated herein
by reference to Exhibit 3.3 to
the Applicant's Annual Report
on Form 10-K for the year
ended December 31, 1992).

Exhibit T3C Indenture dated as of
January 15, 1993, between the
Registrant and Chemical Bank,
as Trustee (which is
incorporated herein by
reference to Exhibit 4.11 to
the Applicant's Annual Report
on Form 10-K for the year
ended December 31, 1992).

Exhibit T3D Not applicable.

------------
* Previously filed.
<PAGE>
22

Exhibit T3E-1** Notice of Redemption of the
Reset Notes.

Exhibit T3E-2** Letter of Transmittal for
Reset Notes.

Exhibit T3E-3** Notice to Holders of
Unexchanged Shares of Class A
Common Stock of American
Television and Communications
Corporation.

Exhibit T3E-4** Letter of Transmittal for
Unexchanged Shares of Class A
Common Stock of American
Television and Communications
Corporation.

Exhibit T3E-5** Guidelines for Certification
of Taxpayer Identification
Number on Substitute Form W-9.

Exhibit T3E-6** Press Release of the Applicant
regarding the redemption of the
Reset Notes dated July 31, 1995.

Exhibit T3F Cross-Reference Sheet showing
the location in the Indenture
of provisions inserted therein
pursuant to Sections 310
through 318(a) inclusive, of
the Trust Indenture Act of
1939 (which is incorporated
herein by reference to
Exhibit 4.11 to the
Applicant's Annual Report on
Form 10-K for the year ended
December 31, 1992).

------------
** Filed herewith.
<PAGE>
23

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the
Applicant, TIME WARNER INC., a corporation organized and existing under the laws
of the State of Delaware, has duly caused this amendment to its application to
be signed on its behalf by the undersigned, thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of New York, and State
of New York, on the 1st day of August, 1995.

TIME WARNER INC.

By /s/ Peter R. Haje
-----------------

Name: Peter R. Haje
Title: Executive Vice
President

[SEAL]

Attest:

By /s/ Eli T. Bruno
----------------

Name: Eli T. Bruno
Title: Assistant Secretary

<PAGE>

--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

-------------------

EXHIBITS

Amendment No. 1 To
Form T-3

APPLICATION FOR QUALIFICATION OF INDENTURE

UNDER

THE TRUST INDENTURE ACT OF 1939

-------------------

Time Warner Inc.
(Name of Applicant)

--------------------------------------------------------------------------------

<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page
------ ----------------------- ----
<S> <C>
T3A-1 Restated Certificate of Incorporation of the Applicant as
filed with the Secretary of State of the State of Delaware on
May 26, 1993 (which is incorporated herein by reference to
Exhibit 3 to the Applicant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993).........................

T3A-2 Certificate of Ownership and Merger merging TWE Holdings Inc.
into Time Warner Inc. as filed with the Secretary of State of
the State of Delaware on September 24, 1993 (which is
incorporated herein by reference to Exhibit 3.(i)(b) to the
Applicant's Annual Report on Form 10-K for the year ended
December 31, 1993)...........................................

T3A-3 Certificate of the Voting Powers, Designations, Preferences
and Relative Participating, Optional and Other Rights and
Qualifications of Series A Participating Cumulative Preferred
Stock of the Applicant as filed with the Secretary of State
of the State of Delaware on January 26, 1994 (which is
incorporated herein by reference to Exhibit 3.(i)(c) to the
Applicant's Annual Report on Form 10-K for the year ended
December 31, 1993)...........................................

T3A-4* Certificate of the Voting Powers, Designations, Preferences
and Relative, Participating, Optional or Other Special
Rights, and Qualifications, Limitations or Restrictions
Thereof, of Series C Convertible Preferred Stock of the
Applicant as filed with the Secretary of State of the State
of Delaware on May 1,1995....................................

T3A-5* Certificate of the Voting Powers, Designations, Preferences
and Relative, Participating, Optional or Other Special
Rights, and Qualifications, Limitations or Restrictions
Thereof, of Series D Convertible Preferred Stock of the
Applicant as filed with the Secretary of State of the State
of Delaware on July 6, 1995..................................

T3B By-laws of the Applicant, as amended through March 18, 1993
(which is incorporated herein by reference to Exhibit 3.3 to
the Applicant's Annual Report on Form 10-K for the year ended
December 31, 1992)...........................................

T3C Indenture dated as of January 15, 1993, between the Applicant
and Chemical Bank, as Trustee (which is incorporated herein
by reference to Exhibit 4.11 to the Applicant's Annual Report
on Form 10-K for the year ended December 31, 1992)...........

T3D Not applicable...............................................

T3E-1** Notice of Redemption of the Reset Notes......................

T3E-2** Letter of Transmittal for Reset Notes........................

T3E-3** Notice to Holders of Unexchanged Shares of Class A Common
Stock of American Television and Communications
Corporation..................................................

T3E-4** Letter of Transmittal for Unexchanged Shares of Class A
Common Stock of American Television and Communications
Corporation..................................................

</TABLE>

--------
* Previously filed.
** Filed herewith.

<S> <C>

T3E-5** Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9................................

Exhibit T3E-6** Press Release of the Applicant regarding the redemption of the
Reset Notes dated July 31, 1995...........

T3F Cross-Reference Sheet showing the location in the Indenture
of provisions inserted therein pursuant to Sections 310
through 318(a) inclusive, of the Trust Indenture Act of 1939
(which is incorporated herein by reference to Exhibit 4.11 to
the Applicant's Annual Report on Form 10-K for the year ended
December 31, 1992)...........................................

--------
** Filed herewith.

</TABLE>

<PAGE>
July 31, 1995

TIME WARNER INC.
NOTICE OF REDEMPTION
OF
REDEEMABLE RESET NOTES DUE AUGUST 15, 2002
FOR
FLOATING RATE NOTES DUE AUGUST 15, 2000
7.975% NOTES DUE AUGUST 15, 2004
8.11% DEBENTURES DUE AUGUST 15, 2006
8.18% DEBENTURES DUE AUGUST 15, 2007

To Holders of Redeemable Reset Notes
Due August 15, 2002:

NOTICE IS HEREBY GIVEN THAT, pursuant to Section 4 of the Redeemable Reset
Notes Due August 15, 2002 (the 'Reset Notes') of Time Warner Inc. (the
'Company'), the Company will redeem all Reset Notes pursuant to Section 4 of the
Reset Notes (the 'Redemption') on August 15, 1995 (such date, the 'Redemption
Date'), in exchange for the following consideration (collectively, the
'Redemption Consideration') per $1,000.00 principal amount of Reset Notes:

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PER
$1,000.00 OF RESET NOTES TITLE OF SECURITIES
------------------------ -----------------------------------------------------------------------
<S> <C>
$250.00 Floating Rate Notes Due August 15, 2000 of the Company (the 'Floating
Rate Notes')
$150.00 7.975% Notes Due August 15, 2004 of the Company (the '7.975% Notes')
$300.00 8.11% Debentures Due August 15, 2006 of the Company (the '8.11%
Debentures')
$300.00 8.18% Debentures Due August 15, 2007 of the Company (the '8.18%
Debentures' and collectively with the Floating Rate Notes, the 7.975%
Notes and the 8.11% Debentures, the 'Exchange Securities')
---------
$1,000.00
---------
---------
</TABLE>

From and after August 15, 1995, unless the Company defaults in the payment
of the Redemption Consideration, the Reset Notes shall no longer be deemed to be
outstanding and all rights of holders thereof (including any right to receive
interest on any interest payment date occurring thereafter) shall cease, except
the right of holders to receive from the Company the Redemption Consideration
specified above.

In order to receive the Redemption Consideration, holders of Reset Notes
must surrender their certificate or certificates representing the Reset Notes to
the Company's exchange agent, Chemical Mellon Shareholder Services (the
'Exchange Agent'), in accordance with the procedures set forth below. No
Exchange Securities other than in authorized principal amounts of $1,000.00 will
be issued. Instead, the Exchange Agent will aggregate and sell in the
over-the-counter market the fractional principal amounts otherwise issuable and
pay to surrendering holders their proportionate share in the proceeds (net of
all transaction costs and without interest) from the aggregation and sale of
such principal amounts.

In order to receive the Redemption Consideration, holders of unexchanged
shares of Class A Common Stock, par value $0.01 per share (the 'ATC Shares'), of
American Television and

<PAGE>
Communications ('ATC'), who became entitled to receive per ATC Share $82.50
principal amount of Reset Notes pursuant to the merger on June 26, 1992 of TAS
Acquisition Inc., formerly a wholly-owned subsidiary of the Company, with and
into ATC (the 'Merger'), must surrender their certificate or certificates
formerly representing ATC Shares to the Exchange Agent in accordance with the
procedures set forth below and the notice (the 'ATC Notice') and special Letter
of Transmittal (the 'ATC Letter of Transmittal') being separately mailed to such
holders.

PLEASE CAREFULLY READ THIS NOTICE OF REDEMPTION, TOGETHER WITH THE ENCLOSED
LETTER OF TRANSMITTAL AND THE INSTRUCTIONS CONTAINED THEREIN, BEFORE FILLING OUT
THE LETTER OF TRANSMITTAL.

PROCEDURE FOR EXCHANGE

In order to obtain Redemption Consideration, the certificate or
certificates representing Reset Notes or formerly representing ATC Shares, as
applicable, must be surrendered by the holder thereof (the 'Holder') to the
Exchange Agent as follows:

<TABLE>
<CAPTION>
If By Mail: If By Hand: If By Overnight Delivery:
<S> <C> <C>
Chemical Mellon Shareholder Chemical Mellon Shareholder Chemical Mellon Shareholder
Services Services Services
Reorganization Department Reorganization Department Reorganization Department
PO Box 837 120 Broadway 85 Challenger Road
Midtown Station 13th Floor Ridgefield Park, NJ 07660
New York, NY 10018 New York, NY 10271
</TABLE>

Upon surrender (in accordance with this notice and the enclosed Letter of
Transmittal) of the certificate or certificates representing Reset Notes, such
Reset Notes shall be redeemed by the Company and exchanged for Redemption
Consideration as set forth above. Upon surrender (in accordance with the ATC
Notice and the ATC Letter of Transmittal) of the certificate or certificates
formerly representing ATC Shares, such ATC Shares shall be exchanged for
Redemption Consideration and such other cash consideration (if any) to which the
surrendering Holder may be entitled pursuant to the ATC Notice and the ATC
Letter of Transmittal.

In order to avoid 'backup withholding' of Federal income tax on Redemption
Consideration received upon the surrender of certificate(s) representing Reset
Notes or formerly representing ATC Shares, a Holder thereof must, unless an
exemption applies, provide the Exchange Agent with his or her correct taxpayer
identification number ('TIN') on Substitute Form W-9 on the Letter of
Transmittal or ATC Letter of Transmittal, as applicable, and certify, under
penalties of perjury, that such number is correct and that such Holder is not
otherwise subject to backup withholding. If the correct TIN and certifications
are not provided, a $50 penalty may be imposed by the Internal Revenue Service
and payments made for the surrender of certificate(s) may be subject to backup
withholding of 31%. Please see Instruction 6 in the Letter of Transmittal or
Instruction 9 to the ATC Letter of Transmittal, as applicable.

If any certificates representing Reset Notes or formerly representing ATC
Shares have been either lost or destroyed, promptly notify the Exchange Agent,
which will give instructions as to the steps that must be taken in order to
redeem such Reset Notes or exchange such ATC Shares.

DETERMINATION OF THE REDEMPTION CONSIDERATION

The terms of each Exchange Security were determined by the Company in
accordance with the applicable provisions of the Reset Notes. In accordance with
these provisions, the Company specified all of the terms of a number of Other
Securities (as defined in the Reset Notes) other than the interest rate or
applicable spread over or under LIBOR (as defined below) and, for any such Other
Security issuable with original issue discount, the principal amount at maturity
(in each case, the 'Pricing Term'). Each Pricing Term was determined on the
basis of certain opinions of nationally recognized investment banking firms
(each, a 'Valuation Agent') in accordance with the procedures described below.
The Company then selected the Exchange Securities from among such Other
Securities. In addition, the maturity specified by the Company with respect to
each such Other Security with a maturity longer than

<PAGE>
10 years was confirmed or established on the basis of certain opinions of
certain Valuation Agents in accordance with the procedures described below.

On June 29, 1995, the Company designated, pursuant to Section 7 of the
Reset Notes, Lehman Brothers Inc. ('Lehman') as a Valuation Agent for the
purpose of rendering an opinion as to each of the following matters: (i) the
determination of the Pricing Term with respect to each Other Security (as
defined in the Reset Notes) which the Company might include in its Designation
Notice (as defined in the Reset Notes) (a 'Valuation Opinion') and (ii) the
determination of the maximum maturity with respect to each Other Security with a
maturity longer than 10 years which the Company might include in its Designation
Notice (a 'Maximum Maturity Opinion'). The Company also designated on June 29,
1995, pursuant to Section 7 of the Reset Notes, CS First Boston Corporation
('First Boston') as the Valuation Agent representing the interests of the
Holders to render a Valuation Opinion and a Maximum Maturity Opinion. On July 6,
1995, Lehman and First Boston designated, pursuant to Section 7 of the Reset
Notes, Salomon Brothers Inc as the third Valuation Agent for purposes of
rendering any third Valuation Opinion or Maximum Maturity Opinion required
pursuant to Section 7 of the Reset Notes.

On July 16, 1995, the Company delivered a Designation Notice dated as of
July 14, 1995 to the Valuation Agents in which it designated the form and
material terms (other than the Pricing Terms) of the Other Securities that the
Company might include in the Redemption Consideration (each, a 'Designated
Security').

On July 24, 1995, pursuant to Section 7 of the Reset Notes, each of Lehman
and First Boston delivered Maximum Maturity Opinions, with respect to each
Designated Security with a maturity longer than 10 years. Such opinions
confirmed that, with respect to such Designated Securities that were
subsequently selected by the Company as Exchange Securities, the Specified
Maturity (as defined in the Reset Notes) of each such Designated Security was
not longer than the maximum maturity of debt securities with comparable credit
ratings that were then being issued in the public markets.

On July 28, 1995, each of the Valuation Agents delivered a Valuation
Opinion, with respect to each Designated Security, as to what the Pricing Term
for such Designated Security should be in order for such Designated Security to
trade at the Designated Value (as defined in the Reset Notes) in respect of such
Designated Security (which, in the case of each Exchange Security, is par) as of
the close of business, New York time, on July 28, 1995, assuming that such
Designated Security were fully distributed on such date. The Pricing Term
applicable to each Exchange Security represents the average of the amounts or
rates specified in the Valuation Opinions of Lehman and First Boston, or in
cases where such Valuation Opinions differed by more than two percent of the
smaller thereof, the average of the two closest amounts or rates specified in
the Valuation Opinions of the three Valuation Agents. No assurance can be given
that any Exchange Security will, in fact, trade at par at any time.

On July 31, 1995, the Company elected to effect the Redemption and selected
the Exchange Securities from among the Designated Securities for inclusion in
the Redemption Consideration. In order to give notice of the redemption to
Holders in accordance with the terms of the Reset Notes, the Company issued on
the same date the Company Notice (as defined in the Reset Notes) to the Dow
Jones News Wire Service. A copy of the Company Notice is being mailed with this
Notice of Redemption to each Holder.

The Company paid each Valuation Agent a fee of $500,000 upon delivery of
their Valuation Opinions and agreed to indemnify each Valuation Agent from
certain liabilities arising in connection with their engagement as Valuation
Agents. Each of the Valuation Agents has from time to time in the past provided
investment banking services to the Company for which they have received
customary compensation. In addition, First Boston acted as financial advisor to
the Special Committee of the Board of Directors of ATC in connection with the
Merger and received a fee for such services.

<PAGE>
DESCRIPTION OF THE EXCHANGE SECURITIES

GENERAL

The Exchange Securities will be issued under an Indenture dated as of
January 15, 1993 (the 'Indenture'), between the Company and Chemical Bank (the
'Trustee'), as Trustee. The Indenture provides for the issuance of Securities
(as defined in the Indenture) from time to time in series. The Indenture does
not limit the amount of Securities which may be issued thereunder and Securities
may be issued thereunder up to the aggregate principal amount which may be
authorized from time to time by the Company. The statements set forth below are
brief summaries of certain provisions contained in the Indenture and the forms
of Exchange Securities, which summaries do not purport to be complete and are
qualified in their entirety by reference to the Indenture and such forms of
Exchange Securities. Numerical references in parentheses below are to articles
or sections of the Indenture. Wherever defined terms are used but not defined
herein, such terms shall have the meanings assigned to them in the Indenture, it
being intended that such referenced articles and sections of the Indenture and
such defined terms shall be incorporated herein by reference.

All series of Securities, including the Exchange Securities, will be senior
indebtedness of the Company and will be direct, unsecured obligations of the
Company, ranking on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The Company is a holding company and, like the
Reset Notes, the Exchange Securities will thus be effectively subordinated to
all existing and future liabilities, including indebtedness, of the Company's
subsidiaries.

DESCRIPTION OF FLOATING RATE NOTES DUE AUGUST 15, 2000

Principal Amount; Maturity; Denominations; Transfer. The Floating Rate
Notes will be limited to $456,987,000 in principal amount (with respect to the
Floating Rate Notes, the 'Principal Amount'), will bear interest as specified
below and will mature on August 15, 2000. The Floating Rate Notes will be issued
only in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000 (with respect to the Floating Rate Notes, 'Authorized
Denominations'). The Floating Rate Notes may be exchanged for a like aggregate
principal amount of the Floating Rate Notes of other Authorized Denominations at
the office or agency of the Company in the Borough of Manhattan, the City of New
York, and in the manner and subject to the limitations provided in the
Indenture. The Company has appointed the Trustee to be Security registrar, but
has reserved the right to change the registrar or to itself act as registrar
(the Trustee or such other registrar with respect to the Floating Rate Notes,
the 'Registrar'). Upon due presentment for registration of transfer of any
Floating Rate Notes at the office of the Registrar in the Borough of Manhattan,
the City of New York, a new Floating Rate Note or Floating Rate Notes of
Authorized Denominations for a like aggregate principal amount will be issued to
the transferee in exchange therefor, subject to the limitations provided in the
Indenture. No service charge shall be made for any such transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection therewith. The
Registrar shall not be required to exchange or register the transfer of any
Floating Rate Notes that have been selected for redemption (except, in the case
of a Note to be redeemed in part, the portion of the Floating Rate Note not to
be redeemed).

Interest. The Floating Rate Notes shall bear interest on the Principal
Amount at the Specified Rate (as defined below) from time to time in effect. The
Company will pay interest quarterly in arrears on each Interest Payment Date (as
defined below) commencing with the Interest Payment Date that occurs on or about
November 15, 1995. Interest on the Floating Rate Notes shall accrue from August
15, 1995 or from the most recent date to which interest has been paid.

The term 'Interest Payment Date' shall mean, with respect to the Floating
Rate Notes, February 15, May 15, August 15 and November 15 of each year,
commencing with November 15, 1995; provided, however, that if any Interest
Payment Date would otherwise fall on a day which is not a London Business Day
(as defined below), such Interest Payment Date shall be postponed to the next
day which is a London Business Day. The period beginning on and including August
15, 1995 and ending on but excluding the first Interest Payment Date, and each
successive period beginning on and including an Interest Payment Date and ending
on but excluding the next succeeding Interest Payment Date, is

<PAGE>
herein called an 'Interest Period'. The interest payment at the Stated Maturity
of the Principal Amount will include interest accrued to but excluding the date
of such Stated Maturity and will be payable to the person to whom principal is
payable.

A 'London Business Day' means any day (i) that is not a Saturday or Sunday
and is not a day on which banking institutions in New York City are authorized
or obligated by law or executive order to close and (ii) on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.

Determination of LIBOR. The Floating Rate Notes shall bear interest for
each Interest Period at a rate per annum equal to the London interbank offered
rate ('LIBOR'), plus 0.96% (with respect to the Floating Rate Notes, the
'Specified Rate'). LIBOR will be determined by the Person appointed by the
Company as the Calculation Agent (in such capacity, the 'Calculation Agent') in
accordance with the provisions set forth below. The Company has initially
appointed Chemical Bank as the Calculation Agent.

(i) For each Interest Period, LIBOR will be the rate for deposits of
U.S. dollars having a maturity of three months (the 'Designated Maturity')
commencing on the second London Business Day immediately following the
applicable Interest Determination Date (as defined below), which appears on
Telerate Page 3750 (as defined below) as of 11:00 A.M., London time, on
such Interest Determination Date. If such rate does not appear on Telerate
Page 3750, LIBOR in respect of such Interest Determination Date will be
determined as described in (ii) below.

(ii) On any Interest Determination Date on which the rate for deposits
of U.S. dollars having the Designated Maturity does not appear on Telerate
Page 3750 as specified in (i) above, LIBOR will be determined on the basis
of the rates at which deposits in U.S. dollars having the Designated
Maturity commencing on the second London Business Day immediately following
such Interest Determination Date and in a principal amount that is
representative for a single transaction in such market at such time (and in
no event less than U.S. $1,000,000) are offered by four major banks in the
London interbank market selected by the Calculation Agent at approximately
11:00 A.M., London time, on such Interest Determination Date, to prime
banks in the London interbank market. The Calculation Agent will request
the principal London office of each of such banks to provide a quotation of
its rate. If at least two such quotations are provided, LIBOR in respect of
such Interest Determination Date will be the arithmetic mean (rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a
percent rounded upwards) of such quotations. If fewer than two quotations
are provided, LIBOR in respect of such Interest Determination Date will be
the arithmetic mean (rounded to the nearest one-hundredth of a percent,
with five one-thousandths of a percent rounded upwards) of the rates quoted
by three major banks in New York City selected by the Calculation Agent at
approximately 11:00 A.M., New York City time, on such Interest
Determination Date for loans in U.S. dollars to leading European banks
having the Designated Maturity commencing on the second London Business Day
immediately following such Interest Determination Date and in a principal
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if fewer
than three banks selected as aforesaid by the Calculation Agent are quoting
as mentioned in this sentence, LIBOR will be LIBOR in effect on such
Interest Determination Date.

For the purpose of calculation of LIBOR, the following terms shall have the
following meanings:

'Interest Determination Date' for any Interest Period shall mean the second
London Business Day preceding the Interest Payment Date commencing such Interest
Period or, in the case of the first Interest Period, the second London Business
Day preceding August 15, 1995.

'Telerate Page 3750' shall mean the display page currently so designated on
the Dow Jones Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying London interbank offered rates of
major banks).

Each payment of interest on the Floating Rate Notes will include interest
accrued to but excluding the applicable Interest Payment Date. Accrued interest
from August 15, 1995 or from the last date to which interest has been paid will
be calculated by multiplying the Principal Amount of the Floating

<PAGE>
Rate Notes by an accrued interest factor computed by multiplying the per annum
rate of interest for the applicable Interest Period by a fraction, the numerator
of which is the actual number of days elapsed in such Interest Period and the
denominator of which is 360. The accrued interest factor will be expressed as a
decimal rounded to the nearest ten-thousandth, with five hundred-thousandths
rounded upward. The interest rate on the Floating Rate Notes will in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States laws of general application.

Interest on Overdue Amounts. If the Principal Amount of, and any accrued
interest on, the Floating Rate Notes is declared due and payable as provided in
the Indenture, the Company shall pay interest on the overdue Principal Amount,
with respect to each Interest Period, at a rate per annum equal to the Specified
Rate with respect to such Interest Period as determined by the Calculation
Agent, and it shall pay interest on overdue installments of interest, with
respect to each Interest Period, at the same rate (to the extent that payment of
such interest shall be legally enforceable). Such interest shall accrue from the
date such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for.

Method of Payment. The Company shall pay interest on the Floating Rate
Notes (except defaulted interest) to the Persons in whose names the Floating
Rate Notes are registered at the close of business on the February 1, May 1,
August 1 or November 1 next preceding the Interest Payment Date on the register
kept by or on behalf of the Company for that purpose, even if Floating Rate
Notes are canceled after such record date and on or before the Interest Payment
Date. Holders must surrender Floating Rate Notes to the Trustee (or as otherwise
specified in the applicable Additional Notice (as defined below)) to collect
principal payments. The Company shall pay interest (including upon any
redemption), defaulted interest, defaulted principal and principal at the Stated
Maturity of such principal in cash. The Company shall pay cash amounts in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may make such cash payments by
check payable in such money. It may mail an interest check to Holders at their
last addresses as the same appear on the Security Register (as defined in the
Indenture). The Company shall also have the right, at its sole option, to make
all interest payments by wire transfer in accordance with the wire transfer
instructions furnished to the Registrar at least 30 days prior to the applicable
Interest Payment Date by each Holder that wishes to receive payment by wire
transfer. The Company shall not be liable for any delay in payment or transfer
with respect to interest payments made by the Company by way of wire transfer.
The election by the Company to make any particular interest payment by wire
transfer shall not create any implication that any future interest payment shall
be made by wire transfer.

Redemption at the Option of the Company. No sinking fund is provided for
the Floating Rate Notes. The Floating Rate Notes are redeemable, at the sole
option of the Company, in whole at any time or from time to time in part, on any
day (a 'Redemption Date') on and after August 15, 1995 at the redemption prices
(expressed as percentages of Principal Amount set forth below) plus accrued and
unpaid interest from the most recent date to which interest has been paid to but
excluding the applicable Redemption Date (the 'Redemption Price').

<TABLE>
<CAPTION>
REDEMPTION DATE PERCENTAGE
------------------------------------------------ ----------

<S> <C>
If redeemed during the twelve months beginning:
August 15, 1995............................ 101.00%
August 15, 1996............................ 100.50%
August 15, 1997 and thereafter............. 100.00%
</TABLE>

Effect of Redemption. If the Company exercises its right to redeem the
Floating Rate Notes, interest on the Floating Rate Notes (or portions thereof)
called for redemption shall cease to accrue, such Floating Rate Notes (or
portions thereof) shall no longer be deemed to be outstanding, and all rights of
the Holders thereof (including any right to receive interest otherwise payable
on any Interest Payment Date that would have occurred after the applicable
Redemption Date, but excluding the right to receive from the Company the
Redemption Price without interest) shall cease from and after the applicable
Redemption Date (unless the Company defaults in the payment of the Redemption
Price). Upon surrender of the Floating Rate Notes to be so redeemed (properly
endorsed or assigned for

<PAGE>
transfer, if the Company or the Registrar so requires), such Floating Rate Notes
shall be redeemed by the Company at the Redemption Price. If fewer than all the
Floating Rate Notes are to be redeemed, the Company shall give the Trustee
notice as to the portion of the Principal Amount of the Floating Rate Notes to
be redeemed and the Trustee shall select the Floating Rate Notes (or portions
thereof) to be redeemed, at its sole option, pro rata, by lot or by any other
method that complies with any applicable legal and securities exchange
requirements. In case less than the entire Principal Amount of the Floating Rate
Notes is to be redeemed, upon surrender of the Floating Rate Notes a new
Floating Rate Note or Floating Rate Notes of Authorized Denominations in
principal sum equal to the unredeemed portion thereof will be issued without
cost to the Holder hereof. The principal sum of Floating Rate Notes which the
Company is obligated to issue, but which is not equal to an Authorized
Denomination shall be paid by the Company in cash in an amount equal to such
excess principal sum (calculated to the nearest cent). Subject to applicable
escheat laws, any moneys or other consideration set aside by the Company and
unclaimed at the end of one year from the applicable Redemption Date shall
revert to the general funds of the Company, after which reversion the Holders of
the Floating Rate Notes called for redemption shall look only to the general
funds of the Company for the payment of the Redemption Price without interest.

Redemption Procedure. If the Company wishes to redeem the Floating Rate
Notes in whole or in part, then on any Trading Day (the 'Announcement Date')
that is not less than 15 nor more than 45 days prior to the Redemption Date the
Company may make a public announcement (by issuing a release to the Dow Jones
News Service, Reuters Information Service or any successor news wire service)
(the 'Company Notice') including the following information: (i) that the Company
intends to redeem the Floating Rate Notes in whole or in part on the applicable
Redemption Date and, if in part, the aggregate principal sum of the Floating
Rate Notes to be so redeemed; (ii) the amount of interest to be included in the
Redemption Price; and (iii) such other information as the Company may elect, at
its sole option, to include in such announcement. The Company will mail copies
of the Company Notice together with a notice (the 'Additional Notice') setting
forth (i) the place or places where Floating Rate Notes to be redeemed by the
Company are to be surrendered and (ii) if the Company intends to redeem the
Floating Rate Notes in part, the Floating Rate Notes (or portions thereof) to be
so redeemed as promptly as reasonably practicable after the Announcement Date to
the Persons who are Holders on the Announcement Date. The Company Notice and the
Additional Notice, if given in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not any Holder receives actual
notice. In lieu of the foregoing, the Company may elect to redeem the Floating
Rate Notes in accordance with the procedures specified in the Indenture. If the
Company elects to redeem the Floating Rate Notes in accordance with such
procedures, notice of any redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Floating Rate Notes to be redeemed, at the address
appearing for the same in the Security Register and such redemption notice shall
contain information substantially similar to the information required to be
included by the Company in the Company Notice and the Additional Notice.

'Trading Day' shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in New York City are authorized or obligated by law
or executive order to close.

DESCRIPTION OF 7.975% NOTES DUE AUGUST 15, 2004

Principal Amount; Maturity; Denominations; Transfer. The 7.975% Notes will
be limited to $274,192,200 in principal amount (with respect to the 7.975%
Notes, the 'Principal Amount'), will bear interest as specified below and will
mature on August 15, 2004. The 7.975% Notes will be issued only in registered
form without coupons in denominations of $1,000 and integral multiples of $1,000
(with respect to the 7.975% Notes, 'Authorized Denominations'). The 7.975% Notes
may be exchanged for a like aggregate principal amount of the 7.975% Notes of
other Authorized Denominations at the office or agency of the Company in the
Borough of Manhattan, the City of New York, and in the manner and subject to the
limitations provided in the Indenture. The Company has appointed the Trustee to
be Security registrar, but has reserved the right to change the registrar or to
itself act as registrar (the Trustee or such other registrar with respect to the
7.975% Notes, the 'Registrar'). Upon due

<PAGE>
presentment for registration of transfer of any 7.975% Notes at the office of
the Registrar in the Borough of Manhattan, the City of New York, a new 7.975%
Note or 7.975% Notes of Authorized Denominations for a like aggregate principal
amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture. No service charge shall be made for any
such transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge payable in
connection therewith.

Interest. The 7.975% Notes shall bear interest on the Principal Amount at
the rate of 7.975% per annum (with respect to the 7.975% Notes, the 'Specified
Rate'). The Company will pay interest semiannually in arrears on February 15 and
August 15 of each year (each, with respect to the 7.975% Notes, an 'Interest
Payment Date') commencing on February 15, 1996. Interest on the 7.975% Notes
shall accrue from August 15, 1995 or the most recent date to which interest has
been paid. Interest shall be computed on the basis of a 360-day year of twelve
30-day months. The interest payment at the Stated Maturity of the Principal
Amount will include interest accrued to but excluding the date of such Stated
Maturity and will be payable to the person to whom principal is payable.

Interest on Overdue Amounts. If the Principal Amount of, and any accrued
interest on, the 7.975% Notes is declared due and payable as provided in the
Indenture, the Company shall pay interest on the overdue Principal Amount at a
rate per annum equal to the Specified Rate, and it shall pay interest on overdue
installments of interest at the same rate (to the extent that payment of such
interest shall be legally enforceable). Such interest shall accrue from the date
such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for.

Method of Payment. The Company shall pay interest on the 7.975% Notes
(except defaulted interest) to the Persons in whose names the 7.975% Notes are
registered at the close of business on the February 1 or August 1 next preceding
the Interest Payment Date on the register kept by or on behalf of the Company
for that purpose, even if 7.975% Notes are canceled after such record date and
on or before the Interest Payment Date. Holders must surrender 7.975% Notes to
the Trustee to collect principal payments. The Company shall pay interest,
defaulted interest, defaulted principal and principal at the Stated Maturity of
such principal in cash. The Company shall pay cash amounts in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may make such cash payments by check
payable in such money. It may mail an interest check to Holders at their last
addresses as the same appear on the Security Register (as defined in the
Indenture). The Company shall also have the right, at its sole option, to make
all interest payments by wire transfer in accordance with the wire transfer
instructions furnished to the Registrar at least 30 days prior to the applicable
Interest Payment Date by each Holder that wishes to receive payment by wire
transfer. The Company shall not be liable for any delay in payment or transfer
with respect to interest payments made by the Company by way of wire transfer.
The election by the Company to make any particular interest payment by wire
transfer shall not create any implication that any future interest payment shall
be made by wire transfer.

No Redemption. The 7.975% Notes are not redeemable prior to their maturity
(August 15, 2004) and will not be subject to any sinking fund.

DESCRIPTION OF 8.11% DEBENTURES DUE AUGUST 15, 2006

Principal Amount; Maturity; Denominations; Transfer. The 8.11% Debentures
will be limited to $548,384,400 in principal amount (with respect to the 8.11%
Debentures, the 'Principal Amount'), will bear interest as specified below and
will mature on August 15, 2006. The 8.11% Debentures will be issued only in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000 (with respect to the 8.11% Debentures, 'Authorized
Denominations'). The 8.11% Debentures may be exchanged for a like aggregate
principal amount of the 8.11% Debentures of other Authorized Denominations at
the office or agency of the Company in the Borough of Manhattan, the City of New
York, and in the manner and subject to the limitations provided in the
Indenture. The Company has appointed the Trustee to be Security registrar, but
has reserved the right to change the registrar or to itself act as registrar
(the Trustee or such other registrar with respect to the 8.11% Debentures, the
'Registrar'). Upon due presentment for registration of transfer of any 8.11%
Debentures at the office of the Registrar in the Borough of Manhattan, the City
of New York, a new 8.11% Debenture or 8.11%

<PAGE>
Debentures of Authorized Denominations for a like aggregate principal amount
will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture. No service charge shall be made for any
such transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge payable in
connection therewith.

Interest. The 8.11% Debentures shall bear interest on the Principal Amount
at the rate of 8.11% per annum (with respect to the 8.11% Debentures, the
'Specified Rate'). The Company will pay interest semiannually in arrears on
February 15 and August 15 of each year (each, with respect to the 8.11%
Debentures, an 'Interest Payment Date') commencing on February 15, 1996.
Interest on the 8.11% Debentures shall accrue from August 15, 1995 or the most
recent date to which interest has been paid. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. The interest payment at the
Stated Maturity of the Principal Amount will include interest accrued to but
excluding the date of such Stated Maturity and will be payable to the person to
whom principal is payable.

Interest on Overdue Amounts. If the Principal Amount of, and any accrued
interest on, the 8.11% Debentures is declared due and payable as provided in the
Indenture, the Company shall pay interest on the overdue Principal Amount at a
rate per annum equal to the Specified Rate, and it shall pay interest on overdue
installments of interest at the same rate (to the extent that payment of such
interest shall be legally enforceable). Such interest shall accrue from the date
such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for.

Method of Payment. The Company shall pay interest on the 8.11% Debentures
(except defaulted interest) to the Persons in whose names the 8.11% Debentures
are registered at the close of business on the February 1 or August 1 next
preceding the Interest Payment Date on the register kept by or on behalf of the
Company for that purpose, even if 8.11% Debentures are canceled after such
record date and on or before the Interest Payment Date. Holders must surrender
8.11% Debentures to the Trustee to collect principal payments. The Company shall
pay interest, defaulted interest, defaulted principal and principal at the
Stated Maturity of such principal in cash. The Company shall pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may make such cash
payments by check payable in such money. It may mail an interest check to
Holders at their last addresses as the same appear on the Security Register (as
defined in the Indenture). The Company shall also have the right, at its sole
option, to make all interest payments by wire transfer in accordance with the
wire transfer instructions furnished to the Registrar at least 30 days prior to
the applicable Interest Payment Date by each Holder that wishes to receive
payment by wire transfer. The Company shall not be liable for any delay in
payment or transfer with respect to interest payments made by the Company by way
of wire transfer. The election by the Company to make any particular interest
payment by wire transfer shall not create any implication that any future
interest payment shall be made by wire transfer.

No Redemption. The 8.11% Debentures are not redeemable prior to their
maturity (August 15, 2006) and will not be subject to any sinking fund.

DESCRIPTION OF 8.18% DEBENTURES DUE AUGUST 15, 2007

Principal Amount; Maturity; Denominations; Transfer. The 8.18% Debentures
will be limited to $548,384,400 in principal amount (with respect to the 8.18%
Debentures, the 'Principal Amount'), will bear interest as specified below and
will mature on August 15, 2007. The 8.18% Debentures will be issued only in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000 (with respect to the 8.18% Debentures, 'Authorized
Denominations'). The 8.18% Debentures may be exchanged for a like aggregate
principal amount of the 8.18% Debentures of other Authorized Denominations at
the office or agency of the Company in the Borough of Manhattan, the City of New
York, and in the manner and subject to the limitations provided in the
Indenture. The Company has appointed the Trustee to be Security registrar, but
has reserved the right to change the registrar or to itself act as registrar
(the Trustee or such other registrar, with respect to the 8.18% Debentures, the
'Registrar'). Upon due presentment for registration of transfer of any 8.18%
Debentures at the office of the Registrar in the Borough of Manhattan, the City
of New York, a new 8.18% Debenture or 8.18% Debentures of Authorized
Denominations for a like aggregate principal amount will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Indenture. No service charge

<PAGE>
shall be made for any such transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax, assessment or other governmental
charge payable in connection therewith.

Interest. The 8.18% Debentures shall bear interest on the Principal Amount
at the rate of 8.18% per annum (with respect to the 8.18% Debentures, the
'Specified Rate'). The Company will pay interest semiannually in arrears on
February 15 and August 15 of each year (each, with respect to the 8.18%
Debentures, an 'Interest Payment Date') commencing on February 15, 1996.
Interest on the 8.18% Debentures shall accrue from August 15, 1995 or the most
recent date to which interest has been paid. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. The interest payment at the
Stated Maturity of the Principal Amount will include interest accrued to but
excluding the date of such Stated Maturity and will be payable to the person to
whom principal is payable.

Interest on Overdue Amounts. If the Principal Amount of, and any accrued
interest on, the 8.18% Debentures is declared due and payable as provided in the
Indenture, the Company shall pay interest on the overdue Principal Amount at a
rate per annum equal to the Specified Rate, and it shall pay interest on overdue
installments of interest at the same rate (to the extent that payment of such
interest shall be legally enforceable). Such interest shall accrue from the date
such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for.

Method of Payment. The Company shall pay interest on the 8.18% Debentures
(except defaulted interest) to the Persons in whose names the 8.18% Debentures
are registered at the close of business on the February 1 or August 1 next
preceding the Interest Payment Date on the register kept by or on behalf of the
Company for that purpose, even if 8.18% Debentures are canceled after such
record date and on or before the Interest Payment Date. Holders must surrender
8.18% Debentures to the Trustee to collect principal payments. The Company
shall pay interest, defaulted interest, defaulted principal and principal at
the Stated Maturity of such principal in cash. The Company shall pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may make
such cash payments by check payable in such money. It may mail an interest check
to Holders at their last addresses as the same appear on the Security Register
(as defined in the Indenture). The Company shall also have the right, at its
sole option, to make all interest payments by wire transfer in accordance with
the wire transfer instructions furnished to the Registrar at least 30 days
prior to the applicable Interest Payment Date by each Holder that wishes to
receive payment by wire transfer. The Company shall not be liable for any delay
in payment or transfer with respect to interest payments made by the Company by
way of wire transfer. The election by the Company to make any particular
interest payment by wire transfer shall not create any implication that any
future interest payment shall be made by wire transfer.

No Redemption. The 8.18% Debentures are not redeemable prior to their
maturity (August 15, 2007) and will not be subject to any sinking fund.

COVENANTS OF THE COMPANY

The following covenants will apply to each Exchange Security and to each
other series of Securities issued under the Indenture (unless, in the case of
such other series, the terms of the relevant Securities or supplemental
indenture relating thereto provide otherwise).

Limitation on Merger, Consolidation and Certain Sales of Assets. The
Indenture provides that the Company will not merge or consolidate with or into,
or convey or transfer its property substantially as an entirety to, any Person
unless (a) the successor is organized and existing under the laws of the United
States or of any State or the District of Columbia, (b) the successor assumes
the Company's obligations under the Indenture and the Securities on the same
terms and conditions and (c) immediately after giving effect to such
transaction, there is no default under the Indenture. (Section 801)

Limitation on Liens. The Indenture provides that neither the Company nor
any Material Subsidiary of the Company shall incur, create, issue, assume,
guarantee or otherwise become liable for any indebtedness for money borrowed
that is secured by a lien on any asset now owned or hereafter acquired by it
unless the Company makes or causes to be made effective provision whereby the
Securities, including the Exchange Securities, will be secured by such lien
equally and ratably with (or

<PAGE>
prior to) all other indebtedness thereby secured so long as any such
indebtedness shall be secured. The foregoing restriction does not apply to the
following:

(i) liens existing as of the date of the Indenture;

(ii) liens created by Subsidiaries of the Company to secure
indebtedness of such Subsidiaries to the Company or to one or more other
Subsidiaries of the Company;

(iii) liens affecting property of a Person existing at the time it
becomes a Subsidiary of the Company or at the time it merges into or
consolidates with the Company or a Subsidiary of the Company or at the time
of a sale, lease or other disposition of all or substantially all of the
properties of such Person to the Company or its Subsidiaries;

(iv) liens on property existing at the time of the acquisition thereof
or incurred to secure payment of all or a part of the purchase price
thereof or to secure indebtedness incurred prior to, at the time of, or
within one year after, the acquisition thereof for the purpose of financing
all or part of the purchase price thereof;

(v) liens on any property to secure all or part of the cost of
improvements or construction thereon or indebtedness incurred to provide
funds for such purpose in a principal amount not exceeding the cost of such
improvements or construction;

(vi) liens consisting of or relating to the sale, transfer or
financing of motion pictures, video and television programs, sound
recordings, books or rights with respect thereto to or with so-called tax
shelter groups or other third-party investors in connection with the
financing of such motion pictures, video and television programming, sound
recordings or books in the ordinary course of business and the granting to
the Company or any of its Subsidiaries of rights to distribute such motion
pictures, video and television programming, sound recordings or books;
provided, however, that no such lien shall attach to any asset or right of
the Company or its Subsidiaries (other than the motion pictures, video and
television programming, sound recordings, books or rights which were sold,
transferred to or financed by the tax shelter group or third-party
investors in question or the proceeds arising therefrom);

(vii) liens on shares of stock, indebtedness or other securities of a
Person that is not a Subsidiary;

(viii) other liens arising in connection with indebtedness of the
Company and its Subsidiaries in an aggregate principal amount for the
Company and its Subsidiaries not exceeding at the time such lien is issued,
created or assumed the greater of (A) 10% of the Consolidated Net Worth of
the Company and (B) $500 million; and

(ix) any extensions, renewal or replacement of any lien referred to in
the foregoing clauses (i) through (viii) inclusive, or of any indebtedness
secured thereby; provided that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, or at the time the lien
was issued, created or assumed or otherwise permitted, and that such
extension, renewal or replacement lien shall be limited to all or part of
substantially the same property which secured the lien extended, renewed or
replaced (plus improvements on such property). (Section 1006)

Limitation on Senior Debt. The Indenture provides that the Company will
not, and will not permit any of its Subsidiaries to, incur, create, issue,
assume, guarantee or otherwise become directly or indirectly liable for
(collectively, 'incur') any Senior Debt, if after giving effect to such
incurrence of Senior Debt, determined on a pro forma basis as if such incurrence
had occurred on the first day of the Test Period, the Consolidated Cash Flow
Coverage Ratio for the Company and its Subsidiaries for the Test Period would be
less than 1.5 to 1; provided, however, that the foregoing restrictions will not
apply to Time Warner Entertainment Company, L.P. ('TWE') or any of its
Subsidiaries to the extent that the application of such restrictions would be
prohibited under, or cause a violation of, TWE's bank credit agreement as in
effect from time to time or any successor or replacement credit agreement.
(Section 1007)

Other than the restrictions in the Indenture on mergers, liens and
incurrence of Senior Debt described above, the Indenture and the Exchange
Securities do not contain any covenants or other

<PAGE>
provisions designed to afford holders of the Exchange Securities protection in
the event of a recapitalization or highly leveraged transaction involving the
Company.

Certain Definitions. The following are certain of the terms defined in the
Indenture:

'Consolidated Cash Flow' means, for any period, the net income of the
Company and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP consistently applied, plus the sum of depreciation,
amortization, other noncash charges which reduce net income, income tax
expense and interest expense, in each case to the extent deducted in
determining such net income, and excluding extraordinary gains or losses.
Notwithstanding the foregoing, for purposes of determining the Consolidated
Cash Flow of the Company, there shall be included, in respect of each other
Person that is accounted for by the Company on the equity method (as
determined in accordance with GAAP), the Company's proportionate amount of
such other Person's and its Subsidiaries' consolidated net income,
depreciation, amortization, other noncash charges which reduce net income,
income tax expense and interest expense, in each case to the extent
deducted in determining such other Person's net income, excluding
extraordinary gains and losses.

'Consolidated Cash Flow Coverage Ratio' means, for any period, the
ratio for such period of Consolidated Cash Flow to Consolidated Interest
Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect
shall be given to the application of the proceeds of Senior Debt whose
incurrence is being tested to the extent such proceeds are used to repay or
refinance other Senior Debt.

'Consolidated Interest Expense' means, for any period, cash interest
expense of the Company and its Subsidiaries on Senior Debt for such period
other than the amount amortized during such period in respect of all fees
paid in connection with the incurrence of such Senior Debt, such expense to
be determined on a consolidated basis in accordance with GAAP consistently
applied. Notwithstanding the foregoing, for purposes of determining the
Consolidated Interest Expense of the Company, there shall be included, in
respect of each other Person that is accounted for by the Company on the
equity method (as determined in accordance with GAAP), the Company's
proportionate amount of the cash interest expense of such other Person and
its Subsidiaries on Senior Debt for the relevant period other than the
amount amortized during such period in respect of all fees paid in
connection with the incurrence of such Senior Debt, such expense to be
determined on a consolidated basis in accordance with GAAP consistently
applied.

'Consolidated Net Worth' means, at the date of any determination, the
consolidated stockholders' equity of the Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP consistently
applied; provided that the Company's 8 3/4% Convertible Subordinated
Debentures due January 10, 2015 that are then outstanding shall be
considered equity for the purposes of the computation of the Company's
Consolidated Net Worth.

'GAAP' means generally accepted accounting principles as such
principles are in effect as of the date of the Indenture.

'Material Subsidiary' means any Person that is a Subsidiary if at the
end of the most recent fiscal quarter of the Company, the aggregate amount,
determined in accordance with GAAP consistently applied, of securities of,
loans and advances to, and other investments in, such Person held by the
Company and its other Subsidiaries exceeded 10% of the Company's
Consolidated Net Worth.

'Person' means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

'Senior Debt' means, with respect to any Person, all indebtedness of
such Person, in respect of money borrowed, determined in accordance with
GAAP consistently applied, other than indebtedness as to which the
instrument governing such indebtedness provides that such indebtedness is,
or which is in effect, subordinated or junior in right of payment to any
other indebtedness of such Person.

<PAGE>
'Subsidiary' means, with respect to any Person, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by
such Person, and any partnership, association, joint venture or other
entity in which such Person owns more than 50% of the equity interests or
has the power to elect a majority of the board of directors or other
governing body.

'Test Period' means, with respect to any date, the period consisting
of the most recent four full fiscal quarters for which financial
information is generally available.

DEFEASANCE

The Indenture provides that the Company, at its option, (a) will be
Discharged from any and all obligations in respect of any series of Securities,
including the Exchange Securities, (except in each case for certain obligations
to register the transfer or exchange of Securities, replace stolen, lost or
mutilated Securities, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with the covenants described above under
'Covenants of the Company' and any other restrictive covenant set forth in such
series of Securities, and certain Events of Default (other than those arising
out of the failure to pay interest or principal on the Securities of a
particular series and certain events of bankruptcy, insolvency and
reorganization) will no longer constitute Events of Default with respect to such
series of Securities, in each case if the Company deposits with the Trustee, in
trust, money or the equivalent in United States Treasury securities or other
securities of the government which issued the currency in which the Securities
are denominated or government agencies backed by the full faith and credit of
such government, or a combination thereof, which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay all the principal (including any mandatory
sinking fund payments) of, and interest on, such series on the dates such
payments are due in accordance with the terms of such series. To exercise any
such option, the Company is required, among other things, to deliver to the
Trustee an opinion of counsel to the effect that (i) the deposit and related
defeasance would not cause the Holders of such series to recognize income, gain
or loss for Federal income tax purposes and, in the case of a Discharge pursuant
to clause (a), accompanied by a ruling to such effect received from or published
by the United States Internal Revenue Service and (ii) the creation of the
defeasance trust will not violate the Investment Company Act of 1940. In
addition, the Company is required to deliver to the Trustee an Officers'
Certificate stating that such deposit was not made by the Company with the
intent of preferring the Holders over other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others. (Article 4)

EVENTS OF DEFAULT, NOTICE AND WAIVER

The following provisions are applicable to each Exchange Security and each
other series of Securities issued under the Indenture (unless, in the case of
such other series, the terms of the series or supplemental indenture relating
thereto provide otherwise).

The Indenture provides that, if an Event of Default specified therein with
respect to any series of Securities issued thereunder, including the Exchange
Securities, shall have happened and be continuing, either the Trustee or the
holders of 25% in aggregate principal amount of the outstanding Securities of
such series (or 25% in aggregate principal amount of all outstanding Securities
under the Indenture, in the case of certain Events of Default affecting all
series of Securities under the Indenture) may declare the principal of all the
Securities of such series to be due and payable. (Section 502)

Events of Default in respect of the Exchange Securities and each other
series of Securities issued under the Indenture (unless otherwise provided with
respect to a particular series) are defined as being: (i) default for 30 days in
payment of any interest installment with respect to such series; (ii) default in
payment of principal of, or premium, if any, on, or any sinking fund or
analogous payment with respect to, Securities of such series when due at their
stated maturity, by declaration or acceleration, when called for redemption or
otherwise; (iii) default for 90 days after notice to the Company by the Trustee
thereunder or by Holders of 25% in aggregate principal amount of the outstanding
Securities of such series in the performance of any covenant in such Indenture
with respect to Securities of such series; (iv) failure to pay when due, upon
final maturity or upon acceleration, the principal amount of any

<PAGE>
indebtedness for money borrowed of the Company in excess of $50 million, if such
indebtedness is not discharged, or such acceleration annulled, within 60 days
after written notice; and (v) certain events of bankruptcy, insolvency and
reorganization with respect to the Company or any subsidiary which is organized
under the laws of the United States or any political subdivision thereof in
which the Company's loans, advances or other investments in such subsidiary
exceed 10% of the Company's Consolidated Net Worth. (Section 501)

The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to the Securities of any series, give to
the holders of the Securities of such series notice of all uncured and unwaived
defaults known to it; provided that, except in the case of default in the
payment of principal of, premium, if any, or interest, if any, on any of the
Securities of such series, the Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of the Securities of such series. The term
'default' for the purpose of this provision means the happening of any of the
Events of Default specified above, except that any grace period or notice
requirement is eliminated. (Section 602)

The Indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default to act with the required standard
of care, to be indemnified by the holders of the Securities before proceeding to
exercise any right or power under the Indenture at the request of holders of the
Securities. (Section 603)

The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default or specifying any default that exists.
(Section 1004)

MODIFICATION OF THE INDENTURE

The Company and the Trustee may, without the consent of the holders of any
series of Securities, enter into indentures supplemental to the Indenture for,
among others, one or more of the following purposes: (i) to evidence the
succession of another Person to the Company, and the assumption by such
successor of the Company's obligations under the Indenture and the Securities of
any series; (ii) to add covenants of the Company, or surrender any rights of the
Company, for the benefit of the holders of Securities of any or all series;
(iii) to cure any ambiguity, or correct any inconsistency in the Indenture; (iv)
to evidence and provide for the acceptance of any successor Trustee with respect
to one or more series of Securities or to facilitate the administration of the
trusts thereunder by one or more trustees in accordance with the Indenture; (v)
to establish the form or terms of any series of Securities; and (vi) to provide
any additional Events of Default. (Section 901)

The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in principal amount of the
outstanding Securities of each series to be affected, to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the Indenture or modifying the rights of the holders of the
Securities of such series to be affected, except that no such supplemental
indenture may, without the consent of the holder of each affected Security,
among other things, change the fixed maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce the number of shares of Common Stock to be delivered
by the Company in respect of a conversion of Securities convertible into Common
Stock by their terms or reduce the aforesaid percentage of Securities of any
series the consent of the holders of which is required for any such supplemental
indenture. (Section 902)

<PAGE>
THE TRUSTEE

Chemical Bank is the Trustee under the Indenture. The Trustee is a
depository for funds and performs other services for, and transacts other
banking business with, the Company and its subsidiaries in the normal course of
business.

GOVERNING LAW

The Indenture is governed by, and will be construed in accordance with, the
laws of the State of New York.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following discussion is a summary of certain United States Federal
income tax consequences of the Redemption and the ownership and disposition of
Exchange Securities received in the Redemption. It is intended only as a summary
and does not purport to be a complete analysis or listing of all potential tax
effects. To the extent that this summary discusses matters of law, it is based
on the advice of Cravath, Swaine & Moore. The discussion is applicable only to
persons who hold the Reset Notes or ATC Shares as capital assets and who will
hold the Exchange Securities as capital assets. The discussion addresses neither
the tax consequences that may be relevant to particular categories of investors
subject to special treatment under certain Federal income tax laws, such as
dealers in securities, banks and insurance companies, nor any tax consequences
arising under the laws of any state, locality or foreign jurisdiction. Except to
the extent discussed below under 'Treatment of Non-U.S. Holders', the discussion
is not applicable to Holders other than (i) citizens or residents of the United
States, (ii) corporations created or organized under the laws of the United
States or any State thereof (including the District of Columbia) or (iii)
persons otherwise subject to United States Federal income taxation on their
worldwide income (each such excluded Holder, a 'Non-U.S. Holder'). The
discussion is based on currently existing provisions of the Internal Revenue
Code of 1986, as amended (the 'Code'), currently existing and proposed Treasury
regulations thereunder and current administrative decisions and court decisions.
All of the foregoing are subject to change and any such change could affect the
continuing validity of this discussion and could be applied retroactively. EACH
HOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE FEDERAL, STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES OF THE REDEMPTION AND THE OWNERSHIP AND DISPOSITION
OF EXCHANGE SECURITIES RECEIVED IN THE REDEMPTION.

THE REDEMPTION OF RESET NOTES FOR EXCHANGE SECURITIES

A Holder of Reset Notes or ATC Shares (which represent the right to receive
Reset Notes) will realize gain or loss on the Redemption in an amount equal to
the difference between (i) the 'issue price' of the Exchange Securities (as
defined below) and (ii) such Holder's tax basis in the Reset Notes or ATC
Shares, as the case may be. The Redemption will constitute a recapitalization
within the meaning of Section 368(a)(1)(E) of the Code. As a result, a Holder of
Reset Notes or ATC Shares will recognize gain (but not loss) on the Redemption
only (i) to the extent that the 'principal amount' (within the meaning of
Section 354 of the Code) of the Exchange Securities received exceeds the
'principal amount' of the Reset Notes (or, in the case of a Holder of ATC
Shares, the 'principal amount' of the Reset Notes that the Holder had the right
to receive) exchanged or (ii) if such Holder receives cash in lieu of Exchange
Securities in a principal amount other than $1,000 ('Fractional Exchange
Securities'). A Holder of Reset Notes or ATC Shares that receives cash in lieu
of Fractional Exchange Securities will recognize gain or loss equal to the
difference between such cash and the tax basis allocated to their Fractional
Exchange Securities. Any gain or loss recognized by a Holder will be capital
gain or loss and will be long-term capital gain or loss if such Holder held the
Reset Notes or ATC Shares for more than one year.

The 'issue price' of the Exchange Securities will be their fair market
value on their date of issuance if a substantial amount of the Exchange
Securities are 'traded on an established market'. Exchange Securities will be
considered to be traded on an established market if, at any time during the
60-day period ending 30 days after the issue date of the Exchange Securities (i)
the Exchange Securities

<PAGE>
appear on a system of general circulation (including computer listings
disseminated to subscribing brokers, dealers or traders) that provides a
reasonable basis to determine fair market value by disseminating either recent
price quotations or actual prices of recent sales transactions or (ii) price
quotations for the Exchange Securities are readily available from dealers,
brokers or traders. The Company expects that the Exchange Securities will be so
traded.

A Holder's tax basis in the Exchange Securities (including Fractional
Exchange Securities) will be the same as such Holder's tax basis in the Reset
Notes or ATC Shares, increased by the amount of gain recognized by the Holder in
respect of the Redemption, allocated among the Exchange Securities pro rata in
accordance with the fair market value of the Exchange Securities. A Holder's
holding period for the Exchange Securities received pursuant to the Redemption
will include its holding period for the Reset Notes or ATC Shares exchanged
therefor.

INTEREST, ORIGINAL ISSUE DISCOUNT, ACQUISITION PREMIUM AND BOND PREMIUM WITH
RESPECT TO THE EXCHANGE SECURITIES

In general, payments of 'qualified stated interest' on the Exchange
Securities will be taxable as ordinary income at the time it is received or
accrued, depending on the Holder's method of accounting for tax purposes. A
'qualified stated interest' payment includes any stated interest payment on the
Exchange Securities that is unconditionally payable at least annually at a
single fixed rate (or at certain floating rates, including the Specified Rate
with respect to the Floating Rate Notes) that appropriately takes into account
the length of the interval between stated interest payments.

Depending of the circumstances at the time of issuance, the Exchange
Securities may be treated as having been issued with original issue discount
('OID'). The amount of OID on an Exchange Security is the excess, if any, of its
'stated redemption price at maturity' over its 'issue price', subject to a
statutory de minimis exception. If the Exchange Securities are issued with OID,
a Holder (whether a cash- or accrual-method taxpayer) will be required to
include such OID in income as it accrues (based on the yield to maturity of the
Exchange Security determined using a constant yield method), and the Holder's
tax basis for the Exchange Securities will be increased by the amount of the
accrued OID. The 'stated redemption price at maturity' of the Exchange
Securities will equal the sum of all payments provided by the Exchange
Securities that are not payments of qualified stated interest. The yield to
maturity of the Floating Rate Notes will be determined by presuming that the
Company will not exercise its option to redeem the Floating Rate Notes prior to
maturity.

If a Holder's adjusted basis in the Exchange Securities immediately after
the Redemption exceeds the issue price of the Exchange Securities but is less
than the stated redemption price at maturity of the Exchange Securities, such
excess will constitute acquisition premium which the Holder may apply as an
offset to OID on the Exchange Securities. A Holder may reduce OID on an Exchange
Security by a fraction the numerator of which is the amount of acquisition
premium with respect to the Exchange Security and the denominator of which is
the amount of OID with respect to the Exchange Security. Alternatively, a Holder
may elect to compute OID accruals under the general rules, treating the Holder's
adjusted basis in the Exchange Security as the issue price of the Exchange
Security.

If a Holder's adjusted basis in the Exchange Securities immediately after
the Redemption exceeds the stated redemption price at maturity of the Exchange
Securities, such excess will constitute amortizable bond premium which the
Holder may elect to amortize under a constant yield method under Section 171 of
the Code. A Holder that elects to amortize bond premium must reduce his or her
adjusted basis in the Exchange Securities by the amount so amortized. The
amortizable bond premium will be treated as an offset to interest income rather
than as a separate deduction item. An election to amortize bond premium under
Section 171 of the Code by a Holder will apply to all obligations owned or
acquired by the Holder in the current and all subsequent taxable years and may
not be revoked without the permission of the Internal Revenue Service.

To the extent that a Holder acquired Reset Notes at a 'market discount'
(within the meaning of Section 1278(a)(2) of the Code), such Holder will be
treated as acquiring the Exchange Securities received in the Redemption at a
market discount (in an amount equal to the market discount with

<PAGE>
respect to the Reset Notes as of the date of the Redemption) and, accordingly,
such Exchange Securities will be subject to the market discount rules set forth
in Sections 1276 through 1278 of the Code.

DISPOSITION OF EXCHANGE SECURITIES AFTER THE REDEMPTION

In general, a Holder will recognize gain or loss upon the sale, exchange,
redemption, retirement or other disposition of Exchange Securities measured by
the difference between (i) the amount of cash and the fair market value of any
other property received and (ii) the Holder's adjusted tax basis in the Exchange
Security disposed of. Except to the extent attributable to accrued but unpaid
qualified stated interest, gain or loss recognized on the sale, exchange,
redemption, retirement or other disposition of Exchange Securities will be
capital gain or loss, and will be long-term capital gain or loss if the Holder's
holding period for the Exchange Securities exceeds one year.

TREATMENT OF NON-U.S. HOLDERS

Subject to the discussion of backup withholding below, a Holder of Reset
Notes or ATC Shares that is a Non-U.S. Holder will not be subject to U.S.
Federal income or withholding taxes with respect to any gain recognized by such
Holder upon receipt of the Redemption Consideration if (i) such gain is not
effectively connected with a U.S. trade or business of the Non-U.S. Holder and
(ii) in the case of an individual, such Non-U.S. Holder (A) is not present in
the United States for 183 days or more in the taxable year of the sale,
exchange, retirement or other disposition or (B) does not have a tax home (as
defined in Section 911(d)(3) of the Code) in the United States in the taxable
year of the sale, exchange, retirement or other disposition and the gain is not
attributable to an office or other fixed place of business maintained by such
individual in the United States.

Subject to the discussion of backup withholding below, payments of
principal (and premium, if any) and interest (including OID) by the Company or
any agent of the Company (acting in its capacity as such) to any Holder of
Exchange Securities that is a Non-U.S. Holder will not be subject to U.S.
Federal withholding tax, provided, in the case of interest (including OID), that
(i) the Non-U.S. Holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation for
U.S. tax purposes that is related to the Company (directly or indirectly)
through stock ownership and (iii) either (A) the Non-U.S. Holder certifies to
the Company or its agent under penalties of perjury that it is not a United
States person and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a 'financial
institution') and holds the Exchange Securities certifies to the Company or its
agent under penalties of perjury that such statement has been received from the
Non-U.S. Holder by it or by another financial institution and furnishes the
payor with a copy thereof.

If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Exchange Securities is effectively connected
with the conduct of such trade or business, the Non-U.S. Holder, although exempt
from the withholding tax discussed in the preceding paragraph (provided that
such Non-U.S. Holder furnishes a properly executed IRS Form 4224 on or before
any payment date to claim such exemption), may be subject to U.S. Federal income
tax on such interest (or OID) in the same manner as if it were a U.S. Holder. In
addition, if the Non-U.S. Holder is a foreign corporation, it may be subject to
a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to certain adjustments. For purposes of
the branch profits tax, interest (including OID) on an Exchange Security will be
included in the earnings and profits of such Non-U.S. Holder if such interest
(or OID) is effectively connected with the conduct by such Non-U.S. Holder of a
trade or business in the United States.

Any capital gain realized on the sale, exchange, retirement or other
disposition of an Exchange Security by a Non-U.S. Holder will not be subject to
U.S. Federal income or withholding taxes if (i) such gain is not effectively
connected with a U.S. trade or business of the Non-U.S. Holder and (ii) in the
case of an individual, such Non-U.S. Holder (A) is not present in the United
States for 183 days or more in the taxable year of the sale, exchange,
retirement or other disposition or (B) does not have a

<PAGE>
tax home in the United States in the taxable year of the sale, exchange,
retirement or other disposition and the gain is not attributable to an office or
other fixed place of business maintained by such individual in the United
States.

NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING AND OTHER TAXES UPON INCOME
REALIZED IN RESPECT OF THE REDEMPTION AND THE EXCHANGE SECURITIES.

INFORMATION REPORTING AND BACKUP WITHHOLDING

For each calendar year in which the Exchange Securities are outstanding,
the Company is required to provide the IRS with certain information, including
the Holder's name, address and taxpayer identification number (either the
Holder's Social Security number or its employer identification number, as the
case may be), the aggregate amount of principal and interest paid (including
OID, if any) to that Holder during the calendar year and the amount of tax
withheld, if any. This obligation, however, does not apply with respect to
certain Holders, including corporations, tax-exempt organizations, qualified
pension and profit sharing trusts and individual retirement accounts.

In the event that a Holder subject to the reporting requirements described
above fails to supply its correct taxpayer identification number in the manner
required by applicable law or underreports its tax liability, the Company, its
agents or paying agents or a broker may be required to 'backup' withhold a tax
equal to 31% of the Redemption Consideration and 31% of each payment of interest
(including OID) and principal (and premium, if any) on the Exchange Securities.
This backup withholding is not an additional tax and may be credited against the
Holder's U.S. Federal income tax liability, provided that the required
information is furnished to the IRS.

Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-U.S. Holder if such Holder has provided the
required certification that it is not a United States person as set forth in
clause (iii) in the second paragraph under 'Treatment of Non-U.S. Holders'
above, or has otherwise established an exemption (provided that neither the
Company nor its agent has actual knowledge that the Holder is a United States
person or that the conditions of any exemption are not in fact satisfied).

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street (Suite
1400), Chicago, Illinois 60661; and copies of such material may be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information may also
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York, and the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California, on which one or more of the Company's securities are
listed. Statements contained herein concerning the provisions of any document,
including the Indenture (as defined below), are not necessarily complete and, in
each instance, reference is made to the copy of such document filed with the
Commission. Each such statement is qualified in its entirety by such reference.

INFORMATION INCORPORATED BY REFERENCE

The Company incorporates herein by reference the following documents filed
with the Commission (File No. 1-8637) pursuant to the Exchange Act:

<PAGE>
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended;

(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; and

(c) The Company's Current Reports on Form 8-K dated January 26, 1995,
February 6, 1995, April 1, 1995, May 30, 1995, June 15, 1995 and July 6,
1995.

All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Notice of Redemption and prior to the Redemption Date shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.

Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Notice of Redemption to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Notice of
Redemption.

The Company will furnish without charge to each person, including any
beneficial owner, to whom this Notice of Redemption is delivered, upon the
written or oral request of such person, a copy of any or all the documents
incorporated herein by reference, other than exhibits to such documents unless
such exhibits are specifically identified herein as incorporated by reference
herein or into such other documents. Requests should be addressed to:
Shareholder Relations, Time Warner Inc., 75 Rockefeller Plaza, New York, New
York 10019; telephone: (212) 484-6971.

------------------------
Questions and requests for assistance or for additional copies of the
Letter of Transmittal should be directed to Chemical Mellon Shareholder Services
at the address set forth above or by telephone at (800) 684-8824.

TIME WARNER INC.

<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATES OF REDEEMABLE RESET NOTES DUE AUGUST 15, 2002
OF
TIME WARNER INC.

Exchange Agent:
CHEMICAL MELLON SHAREHOLDER SERVICES

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Chemical Mellon Chemical Mellon Chemical Mellon
Shareholder Services Shareholder Services Shareholder Services
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 837 85 Challenger Road 120 Broadway
Midtown Station Ridgefield, N.J. 07660 13th Floor
New York, N.Y. 10018 New York, N.Y. 10271

Telephone:
(800) 684-8824
</TABLE>

------------------------

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.

<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
CERTIFICATE AMOUNT
NUMBER(S) REPRESENTED
NAME AND ADDRESS OF REGISTERED HOLDER(S) (ATTACH SIGNED LIST IF BY
(AS THEY APPEAR ON THE CERTIFICATE(S) AND THE RESET NOTE REGISTER) NECESSARY) CERTIFICATE(S)
------------------------------------------------------------------ ---------------------- --------------------
<S> <C> <C>

TOTAL AGGREGATE
PRINCIPAL AMOUNT:
</TABLE>

In accordance with the Notice of Redemption dated July 31, 1995 to holders
('Holders') of Redeemable Reset Notes Due August 15, 2002 (the 'Reset Notes') of
TIME WARNER INC. (the 'Company'), the certificate(s) for the Reset Notes listed
above are herewith surrendered for redemption to Chemical Mellon Shareholder
Services, as exchange agent for the redemption (the 'Exchange Agent'). Each
$1,000.00 principal amount of Reset Notes will be exchanged for the following
consideration (collectively, the 'Redemption Consideration'): $250.00 in
principal amount of Floating Rate Notes Due August 15, 2000 of the Company,
$150.00 in principal amount of 7.975% Notes Due August 15, 2004 of the Company,
$300.00 in principal amount of 8.11% Debentures Due August 15, 2006 of the
Company and $300.00 in principal amount of 8.18% Debentures Due August 15, 2007
of the Company (collectively, the 'Exchange Securities'). No Exchange Securities
other than in authorized principal amounts of $1,000.00 will be issued. Instead,
the Exchange Agent will aggregate and sell in the over-the-counter market the
fractional principal amounts otherwise issuable and pay to surrendering Holders
their proportionate share (the 'Cash Remainder Payment') in the proceeds (net of
all transaction costs and without interest) from the aggregation and sale of
such principal amounts.

The undersigned hereby represents and warrants that the undersigned has
full power and authority to surrender the certificate(s) submitted in connection
herewith and that upon the issuance of the certificate(s) representing the
Exchange Securities as directed below and payment of the Cash Remainder Payment
(if any), the Company will not be subject to any adverse claim in respect of
such certificate(s) or the Reset Notes represented by such certificate(s). The
undersigned will, upon request, execute and deliver any additional documents
reasonably deemed appropriate or necessary by the Exchange Agent or the Company
in connection with the surrender of the certificate(s) surrendered hereby.

<PAGE>

The undersigned understands that surrender is not made in acceptable form
until receipt by the Exchange Agent of this Letter of Transmittal, or a
facsimile hereof, duly completed and signed, together, in the circumstances in
which evidences of authority are required hereby, with all accompanying
evidences of authority in the form satisfactory to the Company (which may
delegate power in whole or in part to the Exchange Agent). All questions as to
validity, form and eligibility of any surrender of certificate(s) hereunder and
Reset Notes represented thereby will be determined by the Company (which may
delegate power in whole or in part to the Exchange Agent) and such determination
shall be final and binding.

The undersigned understands that the delivery of the certificate(s) for
Exchange Securities and the check for the Cash Remainder Payment, if any, will
be made as promptly as practicable after the surrender of certificate(s)
representing Reset Notes is made in acceptable form, but that such delivery may
occur in separate mailings from the Exchange Agent.

All authority conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned.

SPECIAL DELIVERY AND ISSUANCE INSTRUCTIONS
(PLEASE SEE INSTRUCTIONS 3, 4 AND 5 ON THE REVERSE HEREOF)

SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the Exchange Securities or check for the Cash
Remainder Payment (if any) are to be issued to the registered holder(s)
but delivered to persons other than the registered holder(s).

Mail to:

Name ....................................................................
(PLEASE PRINT)

Address .................................................................

.........................................................................
(INCLUDE ZIP CODE)

SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if the Exchange Securities or check for the Cash
Remainder Payment (if any) are to be issued and delivered to persons other
than the registered holder(s).

Issue and mail to:

Name ....................................................................
(PLEASE PRINT)

Address .................................................................

.........................................................................
TAXPAYER IDENTIFICATION NO.
(REGISTERED HOLDER(S) MUST COMPLETE SUBSTITUTE
FORM W-9 BELOW)
<PAGE>
<TABLE>
<S> <C>
SIGNATURE OF OWNER(S) GUARANTEED (ONLY IF REQUIRED AS SET ..............................................................
FORTH IN INSTRUCTION 3 ON THE REVERSE HEREOF) (SIGNATURE OF OWNER)

By: ......................................................... ..............................................................
(SIGNATURE OF OWNER)
</TABLE>

PAYER'S NAME: CHEMICAL MELLON SHAREHOLDER SERVICES

<TABLE>
<S> <C> <C> <C>
NAME(S) AS SHOWN ABOVE ON CERTIFICATE(S) FOR RESET NOTES (IF JOINT OWNERSHIP, LIST FIRST AND CIRCLE THE NAME OF THE PERSON
OR ENTITY WHOSE NUMBER YOU ENTER IN PART I BELOW).

---------------------------------------------------------------------------------------------------------------------------
ADDRESS (IF HOLDER DOES NOT COMPLETE, SIGNATURE IN PART I BELOW WILL CONSTITUTE A CERTIFICATION THAT THE ADDRESS SHOWN
ABOVE IS CORRECT).

---------------------------------------------------------------------------------------------------------------------------
CITY, STATE, AND ZIP CODE

SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN Social Security Number
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY OR .......................................
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW Employer Identification Number
INTERNAL REVENUE SERVICE

PART II -- Awaiting TIN [ ]
For Payees exempt from backup withholding, see the enclosed Guidelines for
PAYER'S REQUEST FOR TAXPAYER Certification of Taxpayer Identification Number on substitute Form W-9 and Instruction
IDENTIFICATION NUMBER (TIN) 6 on the reverse hereof.

CERTIFICATION. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued
to me), and
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been
notified by the Internal Revenue Service (the 'IRS') that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding.

CERTIFICATION INSTRUCTION. You must cross out item (2) above if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.)

SIGNATURE ................................................. DATE .................................................
</TABLE>

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, notwithstanding that I have checked the box in Part II (and have completed
this Certificate of Awaiting Taxpayer Identification Number), thirty-one (31)
percent of all reportable payments made to me will be withheld until I provide a
properly-certified taxpayer identification number to the Exchange Agent.

<TABLE>
<S> <C>
.......................................................... ...........................................................
SIGNATURE DATE
</TABLE>

<PAGE>
INSTRUCTIONS
(FORMING A PART OF THE TERMS AND CONDITIONS OF THE NOTICE OF REDEMPTION)

1. DO NOT ENDORSE your certificate(s) or accompany them with any bond power
other than this Letter of Transmittal if your Reset Note certificate(s) are
registered in the name(s) of the person(s) executing the Letter of Transmittal
and no special issuance instructions are provided.

2. If you wish your Exchange Securities and check for the Cash Remainder
Payment (if any) to be issued in the name of the registered holder(s) but
delivered to someone other than the registered holder(s), complete the box
marked 'Special Delivery Instructions.' If you wish your Exchange Securities and
check for the Cash Remainder Payment (if any) to be issued and delivered to
someone other than the registered holder(s), complete the box marked 'Special
Issuance Instructions.' If both of these boxes are left blank, any Exchange
Securities and check for the Cash Remainder Payment (if any) will be issued in
the name of, and delivered to, the registered holder(s).

NOTE: IF YOU HAVE GIVEN SPECIAL ISSUANCE INSTRUCTIONS, PLEASE READ
INSTRUCTION 3 BELOW.

3. If (i) your Reset Notes are not registered in the name of the person(s)
executing this Letter of Transmittal or other written instructions or (ii)
Exchange Securities and check for the Cash Remainder Payment (if any) are to be
issued to a person(s) other than the registered owner(s) of the Reset Notes, the
Reset Notes must be accompanied by a bond power or other appropriate instruments
of transfer and payment for, or evidence of payment of, any applicable transfer
taxes, with the signature(s) thereon or on this Letter of Transmittal guaranteed
by a commercial bank or trust company having an office or correspondent in the
United States, or by a firm having a membership on a registered national
securities exchange or the National Association of Security Dealers, Inc. The
signature(s) on the Letter of Transmittal must conform exactly with the name(s)
on the instruction of transfer.

4. The signature(s) required on the Letter of Transmittal must be the
signature(s) of the Holder or Holders exactly as his or her name or their names
appear on the Reset Note certificate or certificates or, if the certificate(s)
have been assigned, the signature(s) must be the signature(s) of the
assignee(s), exactly as such assignee's name appears on the instrument of
assignment. If any signature is made by a corporation or a person acting as
executor, administrator, guardian, trustee or attorney-in-fact or in any other
fiduciary or representative capacity, appropriate evidence of the authority of
such person to assign, sell or transfer such Reset Notes must be forwarded with
the surrendered certificate(s).

5. When the Letter of Transmittal has been properly filled in, dated and
signed, return it to the Exchange Agent, together with the certificate(s) for
your Reset Notes listed on the reverse hereof (i) by mail to Chemical Mellon
Shareholder Services, Reorganization Department, P.O. Box. 837, Midtown Station,
New York, New York 10018, (ii) by hand to Chemical Mellon Shareholder Services,
Reorganization Department, 120 Broadway, 13th Floor, New York, New York, 10271
or (iii) by overnight courier to Chemical Mellon Shareholder Services,
Reorganization Department, 85 Challenger Road, Ridgefield Park, New Jersey
07660. A return envelope for mailing is enclosed. The method of delivery of the
Letter of Transmittal and the certificate(s) is at the option and risk of the
owner thereof. If sent by mail, registered mail, properly insured, is
recommended.

6. IN ORDER TO AVOID 'BACKUP WITHHOLDING' OF FEDERAL INCOME TAX ON THE
REDEMPTION CONSIDERATION RECEIVED UPON THE SURRENDER OF CERTIFICATE(S), A HOLDER
THEREOF MUST, UNLESS AN EXEMPTION APPLIES, PROVIDE THE EXCHANGE AGENT WITH HIS
CORRECT TAXPAYER IDENTIFICATION NUMBER ('TIN') ON SUBSTITUTE FORM W-9 ON THIS
LETTER OF TRANSMITTAL AND CERTIFY, UNDER PENALTIES OF PERJURY, THAT SUCH NUMBER
IS CORRECT AND THAT SUCH HOLDER IS NOT OTHERWISE SUBJECT TO BACKUP WITHHOLDING.
IF THE CORRECT TIN AND CERTIFICATIONS ARE NOT PROVIDED, A $50 PENALTY MAY BE
IMPOSED BY THE INTERNAL REVENUE SERVICE AND PAYMENTS MADE FOR THE SURRENDER OF
CERTIFICATE(S) MAY BE SUBJECT TO BACKUP WITHHOLDING OF 31%.

Backup withholding is not an additional Federal income tax. Rather, the
Federal income tax liability of a person subject to backup withholding will be
reduced by the amount of such tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.

The TIN that must be provided on the Substitute Form W-9 is that of the
registered Holder(s) of certificate(s) representing Reset Notes. The TIN for an
individual is his social security number. The box in Part II of the Substitute
Form W-9 may be checked if the person surrendering the certificates has not been
issued a TIN and has applied for a TIN or intends to apply for a TIN in the near
future. If the box in Part II has been checked, the person surrendering the
certificate(s) must also complete the Certificate of Awaiting Taxpayer
Identification Number above in order to avoid backup withholding.
Notwithstanding that the box in Part II is checked (and the Certificate of
Awaiting Taxpayer Identification Number is completed), the Exchange Agent will
withhold 31% on all

<PAGE>
payments with respect to surrendered certificate(s) made prior to the time
it is provided with a properly-certified TIN.

Exempt persons (including, among others, corporations) are not subject to
backup withholding. A foreign individual may qualify as an exempt person by
submitting a statement, signed under penalties of perjury, certifying such
person's foreign status. Such statements can be obtained from the Exchange
Agent. Each registered Holder should consult with his tax advisor as to his, her
or its qualification for an exemption from backup withholding and the procedure
for obtaining such exemption.

For additional guidance, see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9.

------------------------
All questions with respect to this Letter of Transmittal will be determined
by the Company, which determinations shall be conclusive and binding. Questions
should be directed to the Exchange Agent at the address set forth above or by
telephone at (800) 684-8824.

Additional copies of this Letter of Transmittal may be obtained from the
Exchange Agent.

<PAGE>
July 31, 1995

IMPORTANT NOTICE

To the Holders of Unexchanged Shares of
Class A Common Stock, par value $0.01 per share
(the 'ATC Common Stock') of AMERICAN TELEVISION
AND COMMUNICATIONS CORPORATION ('ATC'):

On June 26, 1992, TAS Acquisition Inc., formerly a wholly owned subsidiary
of Time Warner Inc. (the 'Company'), merged with and into ATC (the 'Merger').
Pursuant to the Merger, holders of ATC Common Stock became entitled to receive
per share of ATC Common Stock $82.50 principal amount of the Company's
Redeemable Reset Notes Due August 15, 2002 (the 'Reset Notes').

The records of Marine Midland Bank, N.A., the exchange agent for the
Merger, indicate that you have not exchanged your certificates formerly
representing shares of ATC Common Stock. Accordingly, Marine Midland Bank, N.A.
has been unable to send you your certificates representing the Reset Notes to
which you are entitled.

YOUR HOLDINGS OF RESET NOTES HAVE BEEN CALLED FOR REDEMPTION. As described
in the enclosed Notice of Redemption, a redemption in whole of the Reset Notes
has been commenced by the Company. Accordingly, you are currently entitled to
receive upon your surrender of certificates formerly representing shares of ATC
Common Stock the following consideration (the 'Redemption Consideration'): (i)
$250.00 in principal amount of Floating Rate Notes Due August 15, 2000 of the
Company, $150.00 in principal amount of 7.975% Notes Due August 15, 2004 of the
Company, $300.00 in principal amount of 8.11% Debentures Due August 15, 2006 of
the Company and $300.00 in principal amount of 8.18% Debentures Due August 15,
2007 of the Company (collectively, the 'Exchange Securities') per $1,000.00
principal amount of Reset Notes to which you would otherwise have been entitled
pursuant to the Merger and (ii) a cash amount equal to the sum of (A) your
proportionate share in the proceeds (net of all transaction costs and without
interest) from the aggregation and open-market sale of all principal amounts of
Reset Notes to which you would otherwise have been entitled pursuant to the
Merger equal to a denomination other than $1,000.00 or an integral multiple
thereof and (B) your proportionate share in the proceeds (net of all transaction
costs and without interest) from the aggregation and sale in the
over-the-counter market of all principal amounts of Exchange Securities equal to
a denomination other than $1,000.00 or an integral multiple thereof.

In order to receive the Redemption Consideration with respect to such Reset
Notes, YOU MUST SURRENDER ALL CERTIFICATES FORMERLY REPRESENTING YOUR SHARES OF
ATC COMMON STOCK to Chemical Mellon Shareholder Services (the 'Exchange Agent')
at the address set forth in the enclosed Letter of Transmittal.

Please note that the total number of shares of ATC Common Stock held in
your account appears in the upper right-hand portion of your mailing label on
the enclosed letter of transmittal.

Please also note the following:

If you are already a holder of Reset Notes through purchases in the
open market or otherwise, you will receive a separate mailing
regarding those Reset Notes you now hold. THIS IS NOT A DUPLICATE
MAILING and you are urged to read carefully the instructions
contained in the separate Letter of Transmittal, and to submit to the
Exchange Agent ONLY THE CERTIFICATES REQUESTED in such letter.

<PAGE>
You must surrender all certificates formerly representing shares of
ATC Common Stock held in your account in order to receive the
Redemption Consideration. If such certificates have been either lost
or destroyed, promptly notify the Exchange Agent and instructions as
to the steps that must be taken will be sent to you.

Questions and requests for assistance or for additional copies of the
Letter of Transmittal should be directed to the Exchange Agent at the address
indicated on the enclosed Letter of Transmittal or by telephone at
1-800-684-8824, Monday through Friday, during the hours of 8:00 a.m. and 8:00
p.m.

TIME WARNER INC.

<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATES FORMERLY REPRESENTING SHARES OF CLASS A COMMON STOCK
OF
AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION

PURSUANT TO THE MERGER OF
TAS ACQUISITION INC., FORMERLY A WHOLLY OWNED SUBSIDIARY OF TIME WARNER INC.,
WITH AND INTO AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION

Exchange Agent:

CHEMICAL MELLON SHAREHOLDER SERVICES

Telephone:
(800) 684-8824
------------------------

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.

<TABLE>
<CAPTION>
DESCRIPTION OF SHARES SURRENDERED
(SEE INSTRUCTIONS)

SHARES SURRENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL LIST,
(PLEASE FILL IN, IF BLANK) IF NECESSARY)
----------------------------------------------- ------------------------
<S> <C> <C>
TOTAL NUMBER
OF SHARES
CERTIFICATE REPRESENTED BY
NUMBER(S) CERTIFICATE(S)

TOTAL NUMBER OF SHARES
NOTE: SIGNATURES MUST BE PROVIDED BELOW
</TABLE>

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Dear Sirs:

The undersigned surrenders the certificate(s) formerly representing one or
more shares of the Class A Common Stock, par value $.01 per share (the 'ATC
Shares'), of American Television and Communications Corporation ('ATC'), for the
purposes of exchanging such ATC Shares for the following consideration (the
'Exchange Consideration'): (i) $250.00 in principal amount of Floating Rate
Notes Due August 15, 2000 of Time Warner Inc. ('Time Warner'), $150.00 in
principal amount of 7.975% Notes Due August 15, 2004 of Time Warner, $300.00 in
principal amount of 8.11% Debentures Due August 15, 2006 of Time Warner and
$300.00 in principal amount of 8.18% Debentures Due August 15, 2007 of Time
Warner (collectively, the 'Exchange Securities') per $1,000.00 principal amount
of Redeemable Reset Notes Due August 15, 2002 (the 'Reset Notes') of Time Warner
to which the undersigned would otherwise have been entitled pursuant to the
Agreement and Plan of Merger dated February 2, 1992, among ATC, Time Warner and
TAS Acquisition Inc., formerly a wholly owned subsidiary of Time Warner, (the
'Merger Agreement') and (ii) a cash amount (the 'Total Cash Amount') equal to
the sum

<PAGE>
of (A) the undersigned's proportionate share in the proceeds (net of all
transaction costs and without interest) from the aggregation and open-market
sale of all principal amounts of Reset Notes to which the undersigned would
otherwise have been entitled pursuant to the Merger Agreement equal to a
denomination other than $1,000.00 or an integral multiple thereof and (B) the
undersigned's proportionate share (the 'Cash Remainder Payment') in the proceeds
(net of all transaction costs and without interest) from the aggregation and
sale in the over-the-counter market of all principal amounts of Exchange
Securities equal to a denomination other than $1,000.00 or an integral multiple
thereof.

Unless the undersigned instructs you otherwise, the certificate(s)
representing the Exchange Securities issued in exchange for the ATC Shares
specified above will be registered in, and the check for the Total Cash Amount,
if any, will be payable to, the name or names, and will be mailed to the
address, indicated above on the label in the box entitled 'Description of Shares
Surrendered'. Any special instructions for issuance or delivery of any such
certificate(s) and/or any check must be indicated in the appropriate boxes that
appear below.

The undersigned hereby represents and warrants that the undersigned has
full power and authority to surrender the certificate(s) submitted in connection
herewith and that upon the issuance of the certificate(s) representing the
Exchange Securities as directed below and payment of the Total Cash Amount (if
any), Time Warner will not be subject to any adverse claim in respect of such
certificate(s) or the ATC Shares formerly represented by such certificate(s).
The undersigned will, upon request, execute and deliver any additional documents
reasonably deemed appropriate or necessary by the Exchange Agent or Time Warner
in connection with the surrender of the certificate(s) surrendered hereby.

The undersigned understands that surrender is not made in acceptable form
until receipt by the Exchange Agent of this Letter of Transmittal, or a
facsimile hereof, duly completed and signed, together, in the circumstances in
which evidences of authority are required hereby, with all accompanying
evidences of authority in form satisfactory to Time Warner (which may delegate
power in whole or in part to the Exchange Agent). All questions as to validity,
form and eligibility of any surrender of certificate(s) hereunder and ATC Shares
represented thereby will be determined by Time Warner (which may delegate power
in whole or in part to the Exchange Agent) and such determination shall be final
and binding.

The undersigned understands that the delivery of the certificate(s) for
Exchange Securities and the check for the Total Cash Amount, if any, will be
made as promptly as practicable after the surrender of certificate(s)
representing ATC Shares is made in acceptable form, but that such delivery may
occur in separate mailings from the Exchange Agent.

SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTION 4)

To be completed ONLY if the certificate(s) for Exchange Securities and
the check for the Total Cash Amount (if any) are to be issued in the name
of someone other than the registered holder(s) of ATC Shares.

Issue to:

Name: ...................................................................
(PLEASE PRINT)

Address .................................................................

.........................................................................
(INCLUDE ZIP CODE)

.........................................................................
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
THE HOLDER(S) OF ATC SHARES MUST COMPLETE THE
SUBSTITUTE FORM W-9 ON THE REVERSE.
SEE INSTRUCTION 9.
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 4)

To be completed ONLY if the certificate(s) for Exchange Securities and
the check for the Total Cash Amount (if any) are to be sent to someone
other than the registered holder(s) of ATC Shares or to such registered
holder(s) at an address other than that shown above.

Mail to:

Name ....................................................................
(PLEASE PRINT)

Address .................................................................

.........................................................................

(INCLUDE ZIP CODE)

<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
...............................................................................

...............................................................................
SIGNATURE(S) OF STOCKHOLDER(S)

Dated: ........................................................................

(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for the ATC Shares or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardian, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please set forth the following
information and see Instruction 3.)

Name(s): ......................................................................
(PLEASE PRINT)

...............................................................................

Capacity (full title): ........................................................

Address: ......................................................................

.....................................................................
(INCLUDE ZIP CODE)

Area Code and Telephone No.: ..................................................

...............................................................................
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
THE HOLDER(S) OF ATC SHARES MUST COMPLETE THE
SUBSTITUTE FORM W-9 ON THE REVERSE. SEE INSTRUCTION 9.

GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTION 3)

Authorized Signature: .........................................................

Name: .........................................................................
(PLEASE PRINT)

Name of Firm: .................................................................

Address: ......................................................................

.....................................................................
(INCLUDE ZIP CODE)

Area Code and Telephone No.: ..................................................

Dated: ........................................................................

<PAGE>
INSTRUCTIONS

1. EXECUTION AND DELIVERY. This Letter of Transmittal or a facsimile hereof
must be properly filled in, dated and signed, and must be mailed in the
enclosed, pre-addressed envelope, or otherwise delivered, together with your
stock certificate(s) for ATC Shares, to the Exchange Agent at the address set
forth on the face hereof. PLEASE DO NOT SEND CERTIFICATES DIRECTLY TO TIME
WARNER.

THE METHOD OF DELIVERY OF ALL DOCUMENTS IS AT YOUR OPTION AND YOUR RISK,
BUT IT IS RECOMMENDED THAT DOCUMENTS BE DELIVERED EITHER THROUGH YOUR BROKER OR
BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED.

2. INSUFFICIENT SPACE. If there is insufficient space to list all of your
certificates being submitted, please attach and sign a separate list.

3. SIGNATURES. If this Letter of Transmittal is signed by the registered
holder(s) of the certificate(s) surrendered herewith, the signature(s) must
correspond exactly with the name(s) of such registered holder(s) on the face of
the certificate(s).

If this Letter of Transmittal is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or in any
other fiduciary or representative capacity, the person signing must give such
person's full title in such capacity, and appropriate evidence of authority to
act in such capacity must be forwarded with this Letter of Transmittal.

Certificate(s) delivered for exchange by an assignee of the registered
holder thereof must be endorsed or accompanied by a properly executed assignment
with the signature(s) guaranteed by a commercial bank or trust company having an
office or correspondent in the United States or a firm that is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc. ('Eligible Institutions'). Certificate(s) delivered by
the registered holder thereof should not be endorsed or assigned for transfer.

No signature guarantee is required on this Letter of Transmittal if it is
signed by, and the certificate(s) for the Exchange Securities and the check for
the Total Cash Amount (if any) are to be issued in the name of, the registered
holder of the certificate(s) surrendered, or if such certificate(s) are
delivered for the account of an Eligible Institution. In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution.

4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the certificate(s) for
the Exchange Securities and the check for the Total Cash Amount (if any) are to
be issued in the name of a person other than the registered holder(s) of the
certificate(s) representing ATC Shares surrendered in connection with this
Letter of Transmittal or the last transferee(s) appearing on the transfers
attached to, or endorsed on, such certificate(s) pursuant to a transfer effected
prior to the effective time of the merger of TAS Acquisition Inc., formerly a
wholly owned subsidiary of Time Warner, with and into ATC on June 26, 1992, the
'Special Issuance Instructions' box on this Letter of Transmittal should be
completed. If such certificate(s) and check for the Total Cash Amount (if any)
are to be sent to someone other than such registered holder(s) or transferee(s)
or to an address other than that shown above, the 'Special Delivery
Instructions' box on this Letter of Transmittal should be completed.

5. STOCK TRANSFER TAXES. Time Warner will bear the liability for any state
stock transfer or other governmental charges applicable to the stock
certificates for ATC Shares, the delivery of certificate(s) for the Exchange
Securities and the payment of the Total Cash Amount (if any), in connection with
the redemption, except for 'backup withholding' as described under '31% Backup
Withholding' below; provided, however, that if any such certificate(s) are to be
issued, or any such payment is to be made, pursuant to any special instructions
received by the Exchange Agent, to any person other than the registered holder
of the certificate(s) surrendered, it shall be a condition of the issuance and
delivery of such certificate(s) for the Exchange Securities and the payment of
the Total Cash Amount (if any) that the amount of any stock transfer taxes or
other governmental charges (whether imposed on the registered holder or such
person) payable on account of the transfer to such person shall be delivered to
the Exchange Agent or satisfactory evidence of payment of such taxes or charges,
or exemption therefrom, shall be submitted before such certificate(s) will be
issued or such payment will be made.

6. LOST CERTIFICATES. If any certificate formerly representing ATC Shares
has been lost, stolen or destroyed, notify the Exchange Agent at the address
specified on the face hereof.

7. MULTIPLE CERTIFICATE INSTRUCTIONS. A single certificate for each type of
Exchange Securities and a single check representing any payment of the Total
Cash Amount will be issued for each separate Letter of Transmittal submitted,
unless special instructions to the contrary are given.

8. FRACTIONAL EXCHANGE SECURITIES. No Exchange Securities other than in
authorized principal amounts of $1,000.00 will be issued. Instead, the Exchange
Agent will pay each holder of ATC Shares who would otherwise be entitled to
receive Exchange Securities other than in authorized principal amounts of
$1,000.00 and who surrenders certificate(s), an amount in cash (rounded to the
nearest whole cent) equal to the Cash Remainder Payment.

<PAGE>
9. 31% BACKUP WITHHOLDING. In order to avoid 'backup withholding' of
Federal income tax on the Exchange Consideration received upon the surrender of
certificate(s), a holder thereof must, unless an exemption applies, provide the
Exchange Agent with his correct taxpayer identification number ('TIN') on
Substitute Form W-9 on this Letter of Transmittal and certify, under penalties
of perjury, that such number is correct and that such holder is not otherwise
subject to backup withholding. If the correct TIN and certifications are not
provided, a $50 penalty may be imposed by the Internal Revenue Service and
payments made for the surrender of certificate(s) may be subject to backup
withholding of 31%.

The TIN that must be provided on the Substitute Form W-9 is that of the
registered holder(s) of certificate(s) representing ATC Shares or of the last
transferee(s) appearing on the transfers attached to, or endorsed on, such
certificate(s) pursuant to a transfer effected prior to the effective time of
the Merger on June 26, 1992. The TIN for an individual is his social security
number. The box in Part II of the Substitute Form W-9 may be checked if the
person surrendering the certificates has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If the box in Part
II has been checked, the person surrendering the certificate(s) must also
complete the Certificate of Awaiting Taxpayer Identification Number below in
order to avoid backup withholding. Notwithstanding that the box in Part II is
checked (and the Certificate of Awaiting Taxpayer Identification Number is
completed), the Exchange Agent will withhold 31% on the Exchange Consideration
with respect to surrendered certificate(s) made prior to the time it is provided
with a properly certified TIN.

Exempt persons (including, among others, corporations) are not subject to
backup withholding. A foreign individual may qualify as an exempt person by
submitting a statement, signed under penalties of perjury, certifying such
person's foreign status. Such statements can be obtained from the Exchange
Agent. A certificate holder should consult his tax advisor as to his
qualification for an exemption from backup withholding and the procedure for
obtaining such exemption.

For additional guidance, see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9.

PAYER'S NAME: CHEMICAL MELLON SHAREHOLDER SERVICES

<TABLE>
<S> <C> <C> <C>
NAME(S) AS SHOWN ABOVE ON CERTIFICATE(S) FOR ATC SHARES (IF JOINT OWNERSHIP, LIST FIRST AND CIRCLE THE NAME OF THE PERSON
OR ENTITY WHOSE NUMBER YOU ENTER IN PART I BELOW).

---------------------------------------------------------------------------------------------------------------------------
ADDRESS (IF STOCKHOLDER DOES NOT COMPLETE, SIGNATURE IN PART I BELOW WILL CONSTITUTE A CERTIFICATION THAT THE ABOVE ADDRESS
IS CORRECT).

---------------------------------------------------------------------------------------------------------------------------
CITY, STATE, AND ZIP CODE

PART II -- Awaiting TIN [ ]
For Payees exempt from backup withholding, see the enclosed Guidelines for
PAYER'S REQUEST FOR TAXPAYER Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
IDENTIFICATION NUMBER (TIN) instructed under '31% Backup Withholding' above.

CERTIFICATION. Under penalty of perjury, I certify that:

(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued
to me), and
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been
notified by the Internal Revenue Service (the 'IRS') that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS. You must cross out item (2) above if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.)

SIGNATURE ................................................. DATE .................................................
</TABLE>
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART II OF SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, notwithstanding that I have checked the box in Part II (and have completed
this Certificate of Awaiting Taxpayer Identification Number), thirty-one (31)
percent of all reportable payments made to me will be withheld until I provide a
properly certified taxpayer identification number to the Exchange Agent.

<TABLE>
<S> <C>
.......................................................... ...........................................................
SIGNATURE DATE
</TABLE>

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF THE EXCHANGE CONSIDERATION. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

------------------------
All questions with respect to this Letter of Transmittal will be determined
by Time Warner, which determinations shall be conclusive and binding. Questions
should be directed to the Exchange Agent at the address specified on the face
hereof or by telephone at (800) 684-8824.

Additional copies of this Letter of Transmittal may be obtained from the
Exchange Agent.

<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

INSTRUCTIONS

(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.)

PURPOSE OF FORM. -- A person who is required to file an information return with
the Internal Revenue Service (the 'IRS') must obtain your correct taxpayer
identification number ('TIN') to report income paid to you, real-estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an individual retirement account
('IRA'). Use Form W-9 to furnish your correct TIN to the requester (the person
asking you to furnish your TIN), and, when applicable, (1) to certify that the
TIN you are furnishing is correct (or that you are waiting for a number to be
issued), (2) to certify that you are not subject to backup withholding, and (3)
to claim exemption from backup withholding if you are an exempt payee.
Furnishing your correct TIN and making the appropriate certifications will
prevent certain payments from being subject to backup withholding.

Note: IF A REQUESTER GIVES YOU A FORM OTHER THAN A W-9 TO REQUEST YOUR TIN, YOU
MUST USE THE REQUESTER'S FORM.

HOW TO OBTAIN A TIN. -- If you do not have a TIN, apply for one immediately. To
apply, get FORM SS-5, Application for a Social Security Card ('SSN') (for
individuals), from your local office of the Social Security Administration, or
FORM SS-4, Application for Employer Identification Number ('EIN') (for
businesses and all other entities), from your local IRS office.

To complete the Substitute Form W-9, if you do not have a TIN, check the box in
Part II of the Substitute Form W-9, sign and date the form, and give it to the
requester. Generally, you will then have 60 days to obtain a TIN and furnish it
to the requester. If the requester does not receive your TIN within 60 days,
backup withholding, if applicable, will begin and continue until you furnish
your TIN to the requester. For reportable interest or dividend payments, the
payer must exercise one of the following options concerning backup withholding
during this 60-day period. Under option (1), a payer must backup withhold on any
withdrawals you make from your account after 7 business days after the requester
receives this form back from you. Under option (2), the payer must backup
withhold on any reportable interest or dividend payments made to your account,
regardless of whether you make any withdrawals. The backup withholding under
option (2) must begin no later than 7 business days after the requester receives
this form back. Under option (2), the payer is required to refund the amounts
withheld if your certified TIN is received within the 60-day period and you were
not subject to backup withholding during the period.

Note: CHECKING THE BOX IN PART II ON THE SUBSTITUTE FORM W-9 MEANS THAT YOU HAVE
ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE IN THE NEAR
FUTURE.

As soon as you receive your TIN, complete another Form W-9, include your TIN,
sign and date this form, and give it to the requester.

WHAT IS BACKUP WITHHOLDING? -- Persons making certain payments to you after 1992
are required to withhold and pay to the IRS 31% of such payments under certain
conditions. This is called 'backup withholding.' Payments that could be subject
to backup withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee compensation, and certain payments
from fishing boat operators, but do not include real estate transactions.

If you give the requester your correct TIN, make the appropriate certifications,
and report all your taxable interest and dividends on your tax return, your
payments will not be subject to backup withholding. Payments you receive will be
subject to backup withholding if:

(1) You do not furnish your TIN to the requester, or

(2) The IRS notifies the requester that you furnished an incorrect TIN, or

(3) You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax
return (for reportable interest and dividends only), or

(4) You fail to certify to the requester that you are not subject to backup
withholding under (3) above (for reportable interest and dividend accounts
opened after 1983 only), or

(5) You fail to certify your TIN. This applies only to reportable interest,
dividend, broker, or barter exchange accounts opened after 1983, or broker
accounts considered inactive in 1983.

Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies. Certain payees and payments
are exempt from backup withholding and information reporting. See 'PAYEES AND
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING,' below, and 'EXEMPT PAYEES AND
PAYMENTS' under 'SPECIFIC INSTRUCTIONS,' on page 2, if you are an exempt payee.

PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING. -- The following is a list
of payees exempt from backup withholding and for which no information reporting
is required. For interest and dividends, all listed payees are exempt except
item (9). For broker transactions, payees listed in (1) through (13) and a
person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except that a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting. Only
payees described in items (2) through (6) are exempt from backup withholding for
barter exchange transactions, patronage dividends, and payments by certain
fishing boat operators.

(1) A corporation.

(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).

(3) The United States or any of its agencies or instrumentalities.

(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.

(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.

(6) An international organization or any of its agencies or instrumentalities.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.

(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.

(10) A real estate investment trust.

(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.

(12) A common trust fund operated by a bank under section 584(a).

(13) A financial institution.

(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporation Secretaries,
Inc., Nominee List.

(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to
backup withholding also include the following:

-- Payments to nonresident aliens subject to withholding under section 1441.

-- Payments to partnerships not engaged in trade or business in the U.S. and
that have at least one nonresident partner.

-- Payments of patronage dividends not paid in money.

-- Payments made by certain foreign organizations.

Payments of interest generally not subject to backup withholding include the
following:

-- Payments of interest on obligations issued by individuals.

Note: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $800 OR MORE
AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE NOT
PROVIDED YOUR CORRECT TIN TO THE PAYER.

-- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).

-- Payments described in section 6049(b)(5) to nonresident aliens.

-- Payments on tax-free covenant bonds under section 1451.

-- Payments made by certain foreign organizations.

-- Mortgage interest paid by you.

Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.

PENALTIES

FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.

CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.

CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

<PAGE>
SPECIFIC INSTRUCTIONS
NAME. -- If you are an individual, you must generally provide the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card and your new last name.

If you are a sole proprietor, you must furnish your individual name and either
your SSN or EIN. You may also enter your business name. Enter your name(s) as
shown on your social security card and/or as it was used to apply for your EIN
on Form SS-4.

SIGNING THE CERTIFICATION. --

(1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. -- You are required to furnish
your correct TIN, but you are not required to sign the certification.

(2) INTEREST, DIVIDEND, BROKER AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983
AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. -- You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item (2) in the certification before signing the form.

(3) REAL ESTATE TRANSACTIONS. -- You must sign the certification. You may cross
out item (2) of the certification.

(4) OTHER PAYMENTS. -- You are required to furnish your correct TIN, but you are
not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees), and payments to certain
fishing boat crew members.

(5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, OR IRA CONTRIBUTIONS. -- You are required to furnish your correct TIN,
but you are not required to sign the certification.

(6) EXEMPT PAYEES AND PAYMENTS. -- If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part I, write EXEMPT in the block in Part II, sign and
date the form. If you are a nonresident alien or foreign entity not subject to
backup withholding, give the requester a completed FORM W-8, Certificate of
Foreign Status.

(7) AWAITING TIN. -- Follow the instructions under HOW TO OBTAIN A TIN, on page
1, check the box in Part II of the Substitute Form W-9 and sign and date the
form.

SIGNATURE. -- For a joint account, only the person whose TIN is shown in Part I
should sign the form.

PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payer. Certain penalties may also apply.

WHAT NAME AND NUMBER TO GIVE THE REQUESTER

<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME AND SOCIAL
SECURITY NUMBER OF:
<S> <C> <C>
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first individual
on the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust (grantor is
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under state law
5. Sole proprietorship The owner(3)

<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME AND EMPLOYER
IDENTIFICATION NUMBER OF:
<S> <C> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or Legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
account
10. Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Show the individual's name. You may also enter your business name. You may
use your SSN or EIN.

(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title).

Note: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.

<PAGE>
[TIME WARNER logo]

News Release
For Immediate Release Contact: Jeanette Lerman
(212) 484-6602

TIME WARNER ANNOUNCES REDEMPTION OF RESET NOTES

NEW YORK, July 31, 1995 -- Time Warner Inc. announced today that it will redeem
on August 15, 1995 all of its outstanding Redeemable Reset Notes in exchange for
new securities. The Reset Notes, due August 15, 2002, represent an aggregate
principal amount of $1,827,948,000.

In making the announcement, Time Warner Senior Vice President and CFO Richard J.
Bressler said: 'Today's redemption is part of our continuing debt management
program. The debt we are exchanging takes advantage of favorable market
conditions allowing us to lock in both longer-term and lower-cost financing. Our
actions will also diversify the maturities of Time Warner's debt.'

The Reset Notes are being redeemed in exchange for the following Time Warner
Inc. securities per $1,000.00 principal amount of Reset Notes: $250.00 of
Floating Rate Notes due August 15, 2000; $150.00 of 7.975% Notes due August 15,
2004; $300.00 of 8.11% Debentures due August 15, 2006; and $300.00 of 8.18%
Debentures due August 15, 2007. These exchange securities will be issued under
Time Warner's existing senior indenture dated January 15, 1993 and will rank
pari passu with all other senior indebtedness of Time Warner. Summary terms of
the exchange securities are attached to this press release.

In order to receive the exchange securities, holders of Reset Notes must
surrender their certificates representing Reset Notes to the Company's exchange
agent, Chemical Mellon Shareholder Services, in accordance with the procedures
set forth in the Notice of Redemption and Letter of Transmittal which are being
mailed to registered holders of the Reset Notes. The address of the exchange
agent is also attached to this press release.

No exchange securities other than in authorized principal amounts of $1,000 will
be issued. Instead, the exchange agent will aggregate and sell in the
over-the-counter market the fractional principal amounts otherwise issuable and
pay to surrendering holders their proportionate share of the proceeds (net of
all transaction costs and without interest) from the aggregation and sale of
such fractional principal amounts.

Time Warner Inc. is the world's leading media and entertainment company, with
interests in magazine and book publishing, recorded music and music publishing,
filmed entertainment, broadcasting and theme parks and cable television and
cable television programming.

Corporate Communications Time Warner Inc. 75 Rockefeller Plaza New York, NY
10019 Tel 212 484 6638

<PAGE>

SUMMARY OF TERMS OF TIME WARNER INC.
EXCHANGE SECURITIES
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------------------------------

Security: Floating Rate Notes Due August 15, 2000.

Aggregate Principal Amount: $456,987,000

Denomination: The Notes will be in registered form without coupons in denominations of $1,000
and whole multiples thereof.

Interest: The Notes will bear interest at 3-month LIBOR (as determined on a quarterly
basis) plus 96 basis points per annum. Interest will be paid quarterly in
arrears on February 15, May 15, August 15 and November 15 of each year.

Maturity: The Notes will mature and be payable in cash on August 15, 2000.

Redemption: The Notes are redeemable for cash at the option of Time Warner, in whole or in
part, at any time at the following percentages of the principal amount of the
Notes: during the 12 months beginning August 15, 1995, 101%; during the 12
months beginning August 15, 1996, 100.5%; and during the 12 months beginning
August 15, 1997 and thereafter, 100%; plus in each case, all accrued and unpaid
interest.

Covenants and Events of Default: As provided in the senior indenture dated as of January 15, 1993.

---------------------------------------------------------------------------------------------------------------------

Security: 7.975% Notes Due August 15, 2004.

Aggregate Principal Amount: $274,192,200

Denomination: The Notes will be in registered form without coupons in denominations of $1,000
and whole multiples thereof.

Interest: The Notes will bear interest at a rate of 7.975% per annum. Interest will be
paid semiannually in arrears on February 15 and August 15 of each year.

Maturity: The Notes will mature and be payable in cash on August 15, 2004.

Redemption: The Notes are not callable by Time Warner prior to their maturity.

Covenants and Events of Default: As provided in the senior indenture dated as of January 15, 1993.
</TABLE>

<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------------------------------

Security: 8.11% Debentures Due August 15, 2006.

Aggregate Principal Amount: $548,384,400

Denomination: The Debentures will be in registered form without coupons in denominations of
$1,000 and whole multiples thereof.

Interest: The Debentures will bear interest at a rate of 8.11 % per annum. Interest will
be paid semiannually in arrears on February 15 and August 15 of each year.

Maturity: The Debentures will mature and be payable in cash on August 15, 2006.

Redemption: The Debentures are not callable by Time Warner prior to their maturity.

Covenants and Events of Default: As provided in the senior indenture dated as of January 15, 1993.
---------------------------------------------------------------------------------------------------------------------
Security: 8.18% Debentures Due August 15, 2007

Aggregate Principal Amount: $548,384,400

Denomination: The Debentures will be in registered form without coupons in denominations of
$1,000 and whole multiples thereof.

Interest: The Debentures will bear interest at a rate of 8.18% per annum. Interest will be
paid semiannually in arrears on February 15 and August 15 of each year.

Maturity: The Debentures will mature and be payable in cash on August 15,
2007

Redemption: The Debentures are not callable by Time Warner prior to their maturity.

Covenants and Events of Default: As provided in the senior indenture dated as of January 15, 1993.

---------------------------------------------------------------------------------------------------------------------
</TABLE>

Certificates should be surrendered to the exchange agent at the following
addresses: if by mail, to Chemical Mellon Shareholder Services, Reorganization
Department, P.O. Box 837, Midtown Station, New York, NY 10018; if by hand,
Chemical Mellon Shareholder Services, Reorganization Department, 120 Broadway,
13th Floor, New York, NY 10271 and if by overnight delivery, to Chemical Mellon
Shareholder Services, Reorganization Department, 85 Challenger Road, Ridgefield
Park, NJ 07660.

No certificates should be sent directly to Time Warner Inc. No certificates
should be sent to the exchange agent without a Letter of Transmittal. Letters of
Transmittal are being mailed together with the Notice of Redemption to
registered holders of the Reset Notes.