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Delaware		13-4099534
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Name of each exchange on which registered
Common Stock, $.01 par value		New York Stock Exchange

	Large accelerated filer  þ	Accelerated filer  o	Non-accelerated filer  o

Description of document		Part of the Form 10-K
Portions of the definitive Proxy Statement to be used in connection with the registrant’s 2006 Annual Meeting of Stockholders		Part III (Item 10 through Item 14) (Portions of Items 10 and 12 are not incorporated by reference and are provided herein; portions of Item 11 are not incorporated by reference and are provided in the registrant’s definitive Proxy Statement)

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PART I
	Item 1. Business.
	Item 1A. Risk Factors.
	Item 1B. Unresolved Staff Comments.
	Item 2. Properties.
	Item 3. Legal Proceedings.
	Item 4. Submission of Matters to a Vote of Security Holders.
PART II
	Item 5. Market For Registrant’s Common Equity and Related Stockholder Matters.
	Item 6. Selected Financial Data.
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
	Item 8. Financial Statements and Supplementary Data.
	Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
	Item 9A. Controls and Procedures.
	Item 9B. Other Information.
PART III
	Items 10, 11, 12, 13 and 14.
PART IV
	Item 15. Exhibits and Financial Statements Schedules.
SIGNATURES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION
TIME WARNER INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
TIME WARNER INC. CONSOLIDATED BALANCE SHEET
TIME WARNER INC. CONSOLIDATED STATEMENT OF OPERATIONS
TIME WARNER INC. CONSOLIDATED STATEMENT OF CASH FLOWS
TIME WARNER INC. CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TIME WARNER INC. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TIME WARNER INC. SELECTED FINANCIAL INFORMATION
TIME WARNER INC. QUARTERLY FINANCIAL INFORMATION
TIME WARNER INC. SUPPLEMENTARY INFORMATION
TIME WARNER INC. SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
EX-4.5 FOURTH SUPPLEMENTAL INDENTURE DATED AS OF JANUARY 11, 2001
EX-10.35 AMENDMENT NO. 4 TO THE DEFERRED COMPENSATION PLAN
EX-10.50 $7.0 Billion Amended and Restated Five-Year Revolving Credit Agreement
EX-10.51 $6.0 Billion Amended and Restated Five-Year Revolving Credit Agreement
EX-10.52 $4.0 Billion Five-Year Term Loan Credit Agreement
EX-10.53 $4.0 Billion Three-Year Term Loan Credit Agreement
EX-21 SUBSIDIARIES OF THE REGISTRANT
EX-23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
EX-31.1 SECTION 302 CERTIFICATION OF THE PEO
EX-31.2 SECTION 302 CERTIFICATION OF THE PFO
EX-32 SECTION 906 CERTIFICATION OF THE PEO AND PFO

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Item 1.	Business.

	•	AOL, consisting principally of interactive services;
	•	Cable, consisting principally of interests in cable systems providing video, high-speed data and Digital Phone services;
	•	Filmed Entertainment, consisting principally of feature film, television and home video production and distribution;
	•	Networks, consisting principally of cable television and broadcast networks; and
	•	Publishing, consisting principally of magazine publishing and, subject to a pending sale, book publishing.

	Recent Developments

	Sale of Time Warner Book Group and Turner South

	New Broadcast Television Network

	AOL - Google Alliance

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	Adelphia Acquisition and Related Transactions

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	Video Services

	On-Demand Services and Pay-Per-View

	Digital Video Recorders (DVRs)

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	Programming

	High-Speed Data Services

	Voice Services

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	Wireless Venture

	Advertising

	Local News Channels

	Texas and Kansas City Cable Partners, L.P.

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	Warner Bros.

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	New Line

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	Domestic Networks

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	International Networks

	Internet Sites

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	Description of Magazines

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	Advertising

	Circulation

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	Paper and Printing

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	Communications Act and FCC Regulation

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	State and Local Regulation

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	Regulation of Telephony

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	Adelphia Acquisition Agreement and Comcast Redemption Agreements

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	Amendments to Existing Arrangements

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	•	any merger, consolidation or business combination of TWC Inc. in which the holders of TWC Class A Common Stock do not receive per share consideration identical to that received by the holders of the TWC Class B Common Stock (other than with respect to voting power) or which would adversely affect the TWC Class A Common Stock relative to the TWC Class B Common Stock;
	•	any change to the Certificate of Incorporation that would have a material adverse effect on the rights of the holders of the TWC Class A Common Stock in a manner different from the effect on the holders of the TWC Class B Common Stock;
	•	through and until the fifth anniversary of the completion of an initial public offering of TWC Inc. (or, if earlier, the date upon which shares of TWC Inc. common stock are issued in connection with the Adelphia Acquisition), any change to provisions of TWC Inc.’s by-laws concerning restrictions on transactions between TWC Inc. and Time Warner and its affiliates;
	•	any change to the provisions of the Certificate of Incorporation that would affect the right of the TWC Class A Common Stock to vote as a class in connection with any of the events discussed above; and
	•	any change to the Certificate of Incorporation that would alter the number of independent directors required on the TWC Inc. board of directors.

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	•	TWC Inc. is not obligated to effect more than one demand registration on behalf of the Comcast Trust in any 270-day period;
	•	TWC Inc. is not obligated to effect a demand registration on behalf of the Comcast Trust if the Comcast Trust has received proceeds in excess of $250 million (or 10% of TWC Inc.’s market capitalization) from private placements of and hedging transactions relating to TWC Inc.’s common stock in the preceding 270-day period; and
	•	any registered hedging transaction or other monetization with respect to TWC Inc. common stock by the Comcast Trust is deemed to constitute a demand registration.

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	•	file a shelf registration statement on June 1, 2006 registering the resale of all shares of TWC Class A Common Stock held by the Comcast Trust;
	•	cause such registration statement to be declared effective by the SEC not later than November 1, 2006; and
	•	maintain the continuous effectiveness of such registration statement until November 18, 2008 (or such earlier date on which the Comcast Trust and its affiliates no longer beneficially own any TWC Class A Common Stock) or, under certain circumstances, such later date on which the related public offering is completed or deemed completed under the terms of the TWC Redemption Agreement.

	•	first, securities to be offered for TWC Inc.’s account must be included until TWC Inc. has sold $2.1 billion worth of securities, whether through public offerings, private placements or hedging transactions;
	•	second, securities to be offered for the account of the Comcast Trust must be included until it has sold $3.0 billion worth of securities, whether through public offerings, private placements or hedging transactions; and
	•	third, TWC Inc. and the Comcast Trust have equal priority, and Time Warner has last priority until the earlier of (1) March 31, 2008 and (2) the date the Comcast Trust holds less than $250 million of TWC Inc. common stock. After such earlier date, TWC Inc., the Comcast Trust and Time Warner will have equal priority.

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	•	any merger, consolidation or disposition of all or substantially all of the assets of TWE-A/ N (excluding the A/ N Subsidiary) or the A/ N Subsidiary;
	•	any liquidation or dissolution of TWE-A/ N or the A/ N Subsidiary;
	•	specified incurrences of debt by TWE-A/ N or by the A/ N Subsidiary; and
	•	admission of a new partner or other issuances of equity interests in TWE-A/ N (with specified exceptions) or the A/ N Subsidiary.

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Item 1A.	Risk Factors.

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	•	import or export restrictions and changes in trade regulations;
	•	difficulties in developing, staffing and simultaneously managing a large number of foreign operations as a result of distance and language and cultural differences;
	•	increased costs resulting from competition for workforce in certain locations;
	•	stringent local labor laws and regulations;
	•	longer payment cycles;
	•	political or social unrest;
	•	economic instability;
	•	seasonal volatility in business activity;
	•	risks related to government regulation;
	•	currency exchange rate fluctuations; and
	•	potentially adverse tax consequences.

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	•	Cable Franchising. Different legislative proposals have been made at the federal level and in a number of states (and enacted in Texas) that would streamline cable franchising to facilitate entry by new competitors, particularly local telephone companies. To the extent that such legislation enables competitors to compete more easily and possibly on more favorable terms for video and other customers, TWC Inc.’s operations could be materially and adversely affected.
	•	Net Neutrality. Although the broadband Internet services industry has largely remained unregulated, there has been legislative and regulatory interest in adopting so-called “net neutrality” principles that could, among other things, prohibit service providers from slowing or blocking access to certain content, applications, or services available on the Internet and otherwise limit their ability to manage their networks efficiently and develop new products and services. The FCC last year adopted a non-binding policy statement expressing its view that consumers are entitled to access lawful Internet content and to run applications and use services of their choice, subject to the needs of law enforcement. If some form of net neutrality legislation or regulations were adopted, it could impair TWC Inc.’s ability to effectively manage its broadband network and explore enhanced service options for customers.
	•	À La Carte. There has been legislative interest in requiring cable operators to offer historically bundled programming services on an à la carte basis. It is also possible that the FCC could in the future seek to adopt rules regulating programming bundles that could materially and adversely affect TWC Inc.’s operations.
	•	Carriage Regulations. Cable operators face significant regulation of their channel carriage, including local broadcast signals; public, educational and government access programming; and unaffiliated commercial leased access programming. Additional government-mandated broadcast carriage obligations — such as the requirement to carry both the analog and digital versions of local broadcast signals (dual carriage) or to carry multiple program streams within a single digital broadcast transmission (multicast carriage) — could disrupt existing programming commitments, interfere with TWC Inc.’s preferred use of limited channel capacity, and limit its ability to offer services that would maximize customer appeal and revenue potential.
	•	Voice Communications. Traditional providers of voice services generally are subject to significant regulations. If such regulations are applied to cable operators offering voice services, their compliance with such regulations may be difficult or costly. For example, regulators could allow utility pole owners to charge cable operators offering voice services higher rates for pole rental than are allowed for cable and high-speed data services. Although the FCC has declared that certain Voice over Internet Protocol (or VoIP) services are not subject to certification or tariffing requirements by state public utility commissions, the full extent of this preemption is unclear. The FCC subsequently has determined that VoIP providers must comply with traditional 911 emergency service obligations and imposed a specific timeframe for VoIP providers to accommodate law enforcement wiretaps. To the extent that additional regulatory burdens are imposed on VoIP providers or services, TWC Inc.’s operations could be adversely affected.

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	•	The Networks and Filmed Entertainment segments compete with other television programming services for marketing and distribution by cable and other distribution systems.
	•	The Networks and Filmed Entertainment segments compete for viewers’ attention and audience share with other forms of programming provided to viewers, including broadcast networks, local over-the-air television stations, pay and basic cable television services, motion pictures, home video, pay-per-view and video-on-demand services, online activities and other forms of news, information and entertainment.
	•	The Networks segment faces competition for programming with commercial television networks, independent stations, and pay and basic cable television services, some of which have exclusive contracts with motion picture studios and independent motion picture distributors.
	•	The production divisions in the Networks and Filmed Entertainment segments compete with other producers and distributors of television programming for air time on broadcast networks, independent commercial television stations, and cable television and DTH satellite networks.

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	•	The production divisions in the Networks and Filmed Entertainment segments compete with other production companies for the services of producers, directors, writers, actors and others and for the acquisition of literary properties.
	•	The advertising-supported networks and Turner’s Internet sites in the Networks segment compete for advertising with numerous direct competitors and other media.
	•	The Networks and Filmed Entertainment segments compete in their character merchandising and other licensing activities with other licensors of character, brand and celebrity names.
	•	The Networks and Filmed Entertainment segments compete for viewers’ attention with other forms of entertainment and leisure time activities, including video games, the Internet and other computer-related activities.

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Item 1B.	Unresolved Staff Comments.

Item 2.	Properties.

Approximate

Square Feet

Type of Ownership

Location

Principal Use

Floor Space/Acres

Expiration Date of Lease

New York, NY One Time Warner Center

Executive and administrative offices, studio and technical space (Corporate HQ, Turner, CNN)

1,007,500

Owned and occupied by the Company.

New York, NY 75 Rockefeller Plaza Rockefeller Center

Business offices (AOL); Approx. 310,900 sq. ft. sublet to outside tenants.

582,400

Leased by the Company. Lease expires in 2014.

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Approximate

Square Feet

Type of Ownership

Location

Principal Use

Floor Space/Acres

Expiration Date of Lease

Dulles, VA 22000 AOL Way

Executive, administrative and business offices (AOL HQ)

1,573,000

Owned and occupied by the Company.

Mt. View, CA Middlefield Rd.

Executive, administrative and business offices (AOL)

433,000

Leased by the Company. (Leases expire from 2006- 2013). Approx. 246,300  sq. ft. is sublet to outside tenants.

Columbus, OH Arlington Centre Blvd.

Executive, administrative and business offices (AOL)

281,000

Owned and occupied by the Company.

Reston, VA Sunrise Valley

Reston Tech Center with executive and administrative offices (AOL)

278,000

Owned and occupied by the Company.

New York, NY Time & Life Bldg. Rockefeller Center

Business and editorial offices (Time Inc.)

1,600,000

Leased by the Company. Most leases expire in 2017. Approx. 6,400 sq.  ft. is sublet to outside tenants.

Birmingham, AL 2100 Lakeshore Dr.

Executive and administrative offices (Time Inc.)

398,000

Owned and occupied by the Company.

Atlanta, GA One CNN Center

Executive and administrative offices, studios, technical space and retail (Turner)

1,274,000

Owned by the Company. Approx. 47,000 sq. ft. is sublet to outside tenants.

Atlanta, GA 1050 Techwood Dr.

Offices and studios (Turner)

865,000

Owned and occupied by the Company.

London, England Kings Reach Tower

Executive and administrative offices (Time Inc.)

251,000

Leased by the Company. Lease expires in 2007. (a)

Lebanon, IN 121  N. Enterprise

Warehouse space (Time Inc.)

500,500

Leased by the Company. Lease expires in 2012.

Lebanon, IN Lebanon Business Park

Warehouse space (Time Inc.)

395,500

Leased by the Company. Lease expires in 2012.

New York, NY 1100 and 1114 Ave. of the Americas

Business offices (HBO)

611,500

Leased by the Company under two leases expiring in 2018. Approx. 24,200  sq. ft. is sublet to outside tenants.

Columbia, SC 3325 Platt Spring Rd.

Divisional HQ, call center, warehouse (Time Warner Cable)

318,500

Owned by the Company. Approx. 50% of space is subleased to a third party.

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Approximate

Square Feet

Type of Ownership

Location

Principal Use

Floor Space/Acres

Expiration Date of Lease

Burbank, CA The Warner Bros. Studio

Sound stages, administrative, technical and dressing room structures, screening theaters, machinery and equipment facilities, back lot and parking lot and other Burbank properties (Warner Bros.)

4,217,000 sq.  ft. of improved space on 158  acres(b)

Owned by the Company.

Burbank, CA 3400 Riverside Dr.

Executive and administrative offices (Warner Bros.)

421,000

Leased by the Company. Lease expires in 2019. Approx. 17,000 sq. ft. is sublet to outside tenants.

(a)	IPC Media is constructing a new 500,000 sq. ft. facility in London which is expected to be completed in 2006 and occupied in early 2007.

Item 3.	Legal Proceedings.

	Consolidated Securities Class Action

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	Other Related Securities Litigation Matters

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	•	Pay a $300 million penalty, which will be used for a Fair Fund, as authorized under the Sarbanes-Oxley Act;
	•	Adjust its historical accounting for Advertising revenues in certain transactions with Bertelsmann, A.G. that were improperly or prematurely recognized, primarily in the second half of 2000, during 2001 and during 2002; as well as adjust its historical accounting for transactions involving three other AOL customers where there were Advertising revenues recognized in the second half of 2000 and during 2001;
	•	Adjust its historical accounting for its investment in and consolidation of AOL Europe; and
	•	Agree to the appointment of an independent examiner, who will either be or hire a certified public accountant. The independent examiner will review whether the Company’s historical accounting for transactions with 17 counterparties identified by the SEC staff, principally involving online advertising revenues and including three cable programming affiliation agreements with related advertising elements, was in conformity with GAAP, and provide a report to the Company’s audit and finance committee of its conclusions, originally within 180 days of being engaged. The transactions that would be reviewed were entered into between June 1, 2000 and December 31, 2001, including subsequent amendments thereto, and involved online advertising and related transactions for which revenue was principally recognized before January 1, 2002.

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Item 4.	Submission of Matters to a Vote of Security Holders.

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Name		Age				Office
Richard D. Parsons			57			Chairman of the Board and Chief Executive Officer
Jeffrey L. Bewkes			53			President and Chief Operating Officer
Edward I. Adler			52			Executive Vice President, Corporate Communications
Paul T. Cappuccio			44			Executive Vice President and General Counsel
Patricia Fili-Krushel			52			Executive Vice President, Administration
Carol Melton			51			Executive Vice President, Global Public Policy
Olaf Olafsson			43			Executive Vice President
Wayne H. Pace			59			Executive Vice President and Chief Financial Officer

Mr. Parsons		Chairman of the Board and Chief Executive Officer since May 2003, having served as Chief Executive Officer from May 2002. Prior to May 2002, Mr. Parsons served as Co-Chief Operating Officer from the consummation of the Merger and was President of Historic TW pre-Merger from February 1995. He previously served as Chairman and Chief Executive Officer of The Dime Savings Bank of New York, FSB from January 1991.
Mr. Bewkes		President and Chief Operating Officer since January 1, 2006. Prior to that, Mr. Bewkes served as Chairman, Entertainment & Networks Group from July 2002 and, prior to that, Mr. Bewkes served as Chairman and Chief Executive Officer of the Home Box Office division of the Company from May 1995, having served as President and Chief Operating Officer for the preceding five years.
Mr. Adler		Executive Vice President, Corporate Communications since January 2004. Prior to that, Mr. Adler served as Senior Vice President, Corporate Communications from the consummation of the Merger, Senior Vice President, Corporate Communications of Historic TW pre-Merger from January 2000 and Vice President, Corporate Communications of Historic TW prior to that.
Mr. Cappuccio		Executive Vice President and General Counsel since the consummation of the Merger, and Secretary until January 2004. Prior to the Merger, he served as Senior Vice President and General Counsel of AOL from August 1999. Before joining AOL, from 1993 to 1999, Mr. Cappuccio was a partner at the Washington, D.C. office of the law firm of Kirkland & Ellis. Mr. Cappuccio was also an Associate Deputy Attorney General at the U.S. Department of Justice from 1991 to 1993.
Ms. Fili-Krushel		Executive Vice President, Administration since July 2001. Prior to that, she was Chief Executive Officer of the WebMD Health

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		division of WebMD Corporation, an Internet portal providing health information and service for the consumer, from April 2000 to July 2001, and President of ABC Television Network from July 1998 to April 2000. Prior to that, she was President, ABC Daytime from 1993 to 1998.
Ms. Melton		Executive Vice President, Global Public Policy since June 2005. Prior to that, she served for eight years at Viacom, most recently as Executive Vice President, Government Relations. She was previously Vice President in Historic TW’s Public Policy Office, having worked initially as Washington Counsel for Warner Communications in 1987. Ms. Melton also has served as Media Advisor to the Chairman of the FCC, as Assistant General Counsel for the National Cable & Telecommunications Association and worked for the law firm of Hogan & Hartson.
Mr. Olafsson		Executive Vice President since March 2003. During 2002, Mr. Olafsson pursued personal interests, including working on a novel that was published in the fall of 2003. Prior to that, he was Vice Chairman of Time Warner Digital Media from November 1999 through December 2001 and prior to that, Mr. Olafsson served as President of Advanta Corp., a financial services company, from March of 1998 until November 1999.
Mr. Pace		Executive Vice President and Chief Financial Officer since November 2001. Prior to that, he was Vice Chairman, Chief Financial and Administrative Officer of Turner from March 2001, having held other executive positions, including Chief Financial Officer, at Turner since July 1993. Prior to joining Turner, Mr. Pace was an audit partner with Price Waterhouse, now PricewaterhouseCoopers, an international accounting firm.

Item 5.	Market For Registrant’s Common Equity and Related Stockholder Matters.

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										Total Number of				Approximate Dollar
										Shares Purchased as				Value of Shares that
										Part of Publicly				May Yet Be
		Total Number of				Average Price				Announced Plans or				Purchased Under the
Period		Shares Purchased(1)				Paid Per Share(2)				Programs(3)				Plans or Programs(4)
October 1, 2005–October 31, 2005			15,985,094			$	17.78				15,969,000			$	11,691,143,214
November 1, 2005–November 30, 2005			37,855,158			$	17.88				37,854,415			$	11,014,433,639
December 1, 2005–December 31, 2005			42,764,459			$	17.85				42,728,000			$	10,251,682,994
Total			96,604,711			$	17.85				96,551,415

(1)	The total number of shares purchased includes (a) shares of Common Stock purchased by the Company under the publicly announced stock repurchase program described in footnote (3) below, and (b) shares of Common Stock that are tendered by employees to the Company to satisfy the employees’ tax withholding obligations in connection with the vesting of awards of restricted stock, which are repurchased by the Company based on their fair market value on the vesting date. The number of shares of Common Stock purchased by the Company in connection with the vesting of such awards totaled 16,094 shares, 743 shares and 36,459 shares, respectively, for the months of October, November and December.
(2)	The calculation of the average price paid per share does not give effect to any fees, commissions or other costs associated with the repurchase of such shares.
(3)	On August 3, 2005, the Company announced that its Board of Directors had authorized a Common Stock repurchase program that allows the Company to repurchase, from time to time, up to $5 billion of Common Stock over a two-year period. On November 2, 2005, the Company announced that its Board of Directors had authorized the increase of the amount that may be repurchased under the Company’s publicly announced stock repurchase program to an aggregate of up to $12.5 billion of Common Stock. In addition, on February 17, 2006, the Company announced that it will increase its stock repurchase program and extend the program’s ending date. Under the extended program, the Company has authority to repurchase up to an aggregate of $20 billion of Common Stock during the period from July 29, 2005 through December 31, 2007. Purchases under the stock repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases will be based on a number of factors including price and business and market conditions. In the past, the Company has repurchased shares of Common Stock pursuant to trading programs under Rule 10b5-1 promulgated under the Exchange Act, and it may repurchase shares of Common Stock under such trading programs in the future.
(4)	The approximate dollar value of shares that may yet be purchased under the stock repurchase program does not reflect the increase from $12.5 billion to $20 billion announced on February 17, 2006.

Item 6.	Selected Financial Data.

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.

Item 8.	Financial Statements and Supplementary Data.

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Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A.	Controls and Procedures.

Item 9B.	Other Information.

Items 10, 11, 12, 13 and 14.	Directors and Executive Officers of the Registrant; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions; Principal Accountant Fees and Services.

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Number of securities

remaining available for

future issuance under

Number of securities to be

equity compensation plans

issued upon exercise of

Weighted-average exercise

(excluding securities

outstanding options,

price of outstanding options,

reflected in

Plan Category

warrants and rights

warrants and rights

column (a))(4)

(a)

(b)

(c)

Equity compensation plans approved by security holders(1)

177,748,868

$

27.51

122,315,024

Equity compensation plans not approved by security holders(2)

304,120,257

$

31.69

0

Total(3)

481,869,125

$

30.14

122,315,024

(1)	Equity compensation plans approved by security holders are the (i) Time Warner Inc. 2003 Stock Incentive Plan, (ii) Time Warner Inc. 1999 Stock Plan, (iii) Time Warner Inc. 1999 Restricted Stock and Restricted Stock Unit Plan, (iv) Time Warner Inc. 1988 Restricted Stock and Restricted Stock Unit Plan for Non-Employee Directors, and (v) Time Warner Inc. Employee Stock Purchase Plan (column (c) includes 5,717,704 shares that were available for future issuance under this plan). The Time Warner Inc. 2003 Stock Incentive Plan was approved by the Company’s stockholders in May 2003. The other plans or amendments to such plans were approved by the stockholders of either AOL or Historic TW in either 1998 or 1999. These other plans were assumed by the Company in connection with the AOL-Historic TW Merger, which was approved by the stockholders of both AOL and Historic TW on June 23, 2000.
(2)	Equity compensation plans not approved by security holders consist of the AOL Time Warner Inc. 1994 Stock Option Plan, which expired in November 2003.
(3)	Does not include options to purchase an aggregate of 112,545,734 shares of Common Stock (104,366,287 of which were awarded under plans that were approved by the stockholders of either AOL or Historic TW prior to the AOL-Historic TW Merger), at a weighted average exercise price of $30.92, granted under plans assumed in connection with transactions and under which no additional options may be granted.
(4)	Includes securities available under the Time Warner Inc. 1988 Restricted Stock and Restricted Stock Unit Plan for Non-Employee Directors, which uses the formula of .003% of the shares of Common Stock outstanding on December 31 of the prior calendar year to determine the maximum amount of securities available for issuance each year under the plan (resulting in 137,547 shares available for issuance in 2006). Also includes securities available under the following plan that previously used a formula for determining the maximum amount of securities available for issuance based on the number of shares outstanding at December 31 of the prior year, but for which the maximum number of shares is not subject to further adjustment: (i) the Time Warner Inc. 1999 Restricted Stock and Restricted Stock Unit Plan, which previously provided for a maximum number of shares of Common Stock available for restricted stock awards of .08% of the shares of Common Stock outstanding on December 31 of the prior year. Of the shares available for future issuance under the Time Warner Inc. 1999 Stock Plan and the Time Warner Inc. 2003 Stock Incentive Plan, a maximum of 607,833 shares and 35,964,171 shares, respectively, may be awarded as restricted stock or restricted stock units as of December 31, 2005.

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Item 15.	Exhibits and Financial Statements Schedules.

	(i) The list of consolidated financial statements and schedules set forth in the accompanying Index to Consolidated Financial Statements and Other Financial Information at page 80 herein is incorporated herein by reference. Such consolidated financial statements and schedules are filed as part of this Annual Report.
	(ii) All other financial statement schedules are omitted because the required information is not applicable, or because the information required is included in the consolidated financial statements and notes thereto.

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	Time Warner Inc.

	By:	/s/ Wayne H. Pace

	Name: Wayne H. Pace
	Title: Executive Vice President and
	Chief Financial Officer

Signature				Title		Date
/s/ Richard D. Parsons (Richard D. Parsons)				Director, Chairman of the Board and Chief Executive Officer (principal executive officer)		February 27, 2006
/s/ Wayne H. Pace (Wayne H. Pace)				Executive Vice President and Chief Financial Officer (principal financial officer)		February 27, 2006
/s/ James W. Barge (James W. Barge)				Sr. Vice President and Controller (principal accounting officer)		February 27, 2006
/s/ James L. Barksdale (James L. Barksdale)				Director		February 27, 2006
/s/ Stephen F. Bollenbach (Stephen F. Bollenbach)				Director		February 27, 2006
/s/ Frank J. Caufield (Frank J. Caufield)				Director		February 27, 2006
/s/ Robert C. Clark (Robert C. Clark)				Director		February 27, 2006

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Signature				Title		Date
/s/ Jessica P. Einhorn (Jessica P. Einhorn)				Director		February 27, 2006
/s/ Miles R. Gilburne (Miles R. Gilburne)				Director		February 27, 2006
/s/ Carla A. Hills (Carla A. Hills)				Director		February 27, 2006
/s/ Reuben Mark (Reuben Mark)				Director		February 27, 2006
/s/ Michael A. Miles (Michael A. Miles)				Director		February 27, 2006
/s/ Kenneth J. Novack (Kenneth J. Novack)				Director		February 27, 2006
/s/ R.E. Turner (R.E. Turner)				Director		February 27, 2006
/s/ Francis T. Vincent, Jr. (Francis T. Vincent, Jr.)				Director		February 27, 2006
/s/ Deborah C. Wright (Deborah C. Wright)				Director		February 27, 2006

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			Page
Management’s Discussion and Analysis of Results of Operations and Financial Condition				81
Consolidated Financial Statements:
	Consolidated Balance Sheet			152
	Consolidated Statement of Operations			153
	Consolidated Statement of Cash Flows			154
	Consolidated Statement of Shareholders’ Equity			155
	Notes to Consolidated Financial Statements			156
Management’s Report on Internal Control Over Financial Reporting				231
Reports of Independent Registered Public Accounting Firm				232
Selected Financial Information				235
Quarterly Financial Information				237
Supplementary Information				239
Financial Statement Schedule II — Valuation and Qualifying Accounts				247

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	•	Overview. This section provides a general description of Time Warner’s business segments, as well as recent developments the Company believes are important in understanding the results of operations and financial condition or in understanding anticipated future trends.
	•	Results of operations. This section provides an analysis of the Company’s results of operations for the three years ended December 31, 2005. This analysis is presented on both a consolidated and a business segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.
	•	Financial condition and liquidity. This section provides an analysis of the Company’s cash flows for the three years ended December 31, 2005, as well as a discussion of the Company’s outstanding debt and commitments that existed as of December 31, 2005. Included in the analysis of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments, as well as a discussion of other financing arrangements.
	•	Critical accounting policies. This section discusses accounting policies that are considered important to the Company’s financial condition and results of operations, require significant judgment and require estimates on the part of management in application. The Company’s significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 1 to the accompanying consolidated financial statements.
	•	Market risk management. This section discusses how the Company manages exposure to potential loss arising from adverse changes in interest rates, foreign currency exchange rates and changes in the market value of financial instruments.

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	•	Pay a $300 million penalty, which will be used for a Fair Fund, as authorized under the Sarbanes-Oxley Act;
	•	Adjust its historical accounting for Advertising revenues in certain transactions with Bertelsmann, A.G. (“Bertelsmann”) that were improperly or prematurely recognized, primarily in the second half of 2000, during 2001 and during 2002; as well as adjust its historical accounting for transactions involving three other AOL customers where there were Advertising revenues recognized in the second half of 2000 and during 2001;
	•	Adjust its historical accounting for its investment in and consolidation of AOL Europe; and
	•	Agree to the appointment of an independent examiner, who will either be or hire a certified public accountant. The independent examiner will review whether the Company’s historical accounting for transactions with 17 counterparties identified by the SEC staff, principally involving online advertising revenues and including three cable programming affiliation agreements with related advertising elements, was in conformity with GAAP, and provide a report to the Company’s audit and finance committee of its conclusions, originally within 180 days of being engaged. The transactions that would be reviewed were entered into between June 1, 2000 and December 31, 2001, including subsequent amendments thereto, and involved online advertising and related transactions for which revenue was principally recognized before January 1, 2002.

	•	Creating an AOL Marketplace through white labeling of Google’s advertising technology, which enables AOL to sell search advertising directly to advertisers on AOL-owned properties;
	•	Expanding display advertising available for AOL to sell throughout the Google network;
	•	Making AOL content more accessible to Google Web crawlers;

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	•	Collaborating in video search and showcasing AOL’s premium video service within Google Video;
	•	Enabling Google Talk and AIM instant messaging users to communicate with each other, provided certain conditions are met; and
	•	Providing AOL marketing credits for promotion of AOL’s content on Google’s Internet properties.

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	New Accounting Principles To Be Adopted

	Stock-Based Compensation

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	Significant Transactions and Other Items Affecting Comparability

		Year Ended December 31,
		2005				2004				2003
		(millions)
Amounts related to securities litigation and government investigations		$	(2,865	)		$	(536	)		$	(56	)
Merger and restructuring costs			(117	)			(50	)			(109	)
Asset impairments			(24	)			(10	)			(318	)
Gain on disposal of assets, net			23				21				14
Impact on Operating Income			(2,983	)			(575	)			(469	)
Microsoft Settlement			—				—				760
Investment gains, net			1,011				424				593
Net gain on WMG option			53				50				—
Impact on Other income, net			1,064				474				1,353
Pretax impact			(1,919	)			(101	)			884
Income tax impact			518				(73	)			(372	)
After-tax impact		$	(1,401	)		$	(174	)		$	512

	Amounts Related to Securities Litigation and Government Investigations

	Merger and Restructuring Costs

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	Asset Impairments

	Gains on Disposal of Assets, Net

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	Microsoft Settlement

	Investment Gains, Net

	Net Gain on WMG Option

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	Consolidated Results

		Year Ended December 31,
		2005				2004				% Change
		(millions)
Subscription		$	22,222			$	21,605				3	%
Advertising			7,612				6,955				9	%
Content			12,615				12,350				2	%
Other			1,203				1,179				2	%
Total revenues		$	43,652			$	42,089				4	%

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	Reconciliation of Operating Income before Depreciation and Amortization to Operating Income and Net Income.

		Year Ended December 31,
		2005				2004				% Change
		(millions)
Operating Income before Depreciation and Amortization		$	7,796			$	9,372				(17	%)
Depreciation			(2,680	)			(2,581	)			4	%
Amortization			(597	)			(626	)			(5	%)
Operating Income			4,519				6,165				(27	%)
Interest expense, net			(1,266	)			(1,533	)			(17	%)
Other income, net			1,124				521				116	%
Minority interest expense, net			(285	)			(246	)			16	%
Income before income taxes, discontinued operations and cumulative effect of accounting change			4,092				4,907				(17	%)
Income tax provision			(1,187	)			(1,698	)			(30	%)
Income before discontinued operations and cumulative effect of accounting change			2,905				3,209				(9	%)
Discontinued operations, net of tax			—				121				NM
Cumulative effect of accounting change, net of tax			—				34				NM
Net income		$	2,905			$	3,364				(14	%)

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		Year Ended December 31,
		2005				2004
		(millions)
Investment gains, net		$	1,011			$	424
Net gain on WMG option			53				50
Income from equity investees			60				35
Other			—				12
Other income, net		$	1,124			$	521

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			Year Ended December 31,
			2005				2004				% Change
			(millions)
Revenues:
	Subscription		$	6,755			$	7,477				(10	%)
	Advertising			1,338				1,005				33	%
	Other			190				210				(10	%)
Total revenues				8,283				8,692				(5	%)
Costs of revenues(a)				(3,788	)			(4,186	)			(10	%)
Selling, general and administrative(a)				(2,572	)			(2,694	)			(5	%)
Gain on disposal of consolidated businesses				10				20				(50	%)
Asset impairments				(24	)			(10	)			140	%
Restructuring costs				(10	)			(50	)			(80	%)
Operating Income before Depreciation and Amortization				1,899				1,772				7	%
Depreciation				(557	)			(662	)			(16	%)
Amortization				(174	)			(176	)			(1	%)
Operating Income			$	1,168			$	934				25	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

				December 31,				September 30,				December 31,
				2005				2005				2004
Subscriber category:
AOL brand domestic(a)  $15 and over					13.7				14.7				17.5
	Under $15				5.8				5.4				4.7
		Total AOL brand domestic			19.5				20.1				22.2
AOL Europe					6.0				6.1				6.3

(a)	AOL includes in its subscriber count individuals, households or entities that have provided billing information and completed the registration process sufficiently to allow for an initial log-on to the AOL service.

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				Year Ended
				December 31,
				2005				2004
Subscriber category:
AOL brand domestic $15 and over				$	20.88			$	20.97
	Under $15				13.21				13.07
		Total AOL brand domestic			18.97				19.44
AOL Europe					22.01				21.48

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			Year Ended December 31,
			2005				2004				% Change
			(millions)
Revenues:
	Subscription		$	8,964			$	7,969				12	%
	Advertising			534				515				4	%
Total revenues				9,498				8,484				12	%
Costs of revenues(a)				(4,219	)			(3,723	)			13	%
Selling, general and administrative(a)				(1,585	)			(1,483	)			7	%
Merger-related and restructuring costs				(42	)			—				NM
Operating Income before Depreciation and Amortization				3,652				3,278				11	%
Depreciation				(1,588	)			(1,438	)			10	%
Amortization				(76	)			(76	)			—
Operating Income			$	1,988			$	1,764				13	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

			Year Ended December 31,
			2005				2004				% Change
			(millions)
Subscription revenues:
	Video services		$	6,537			$	6,180				6	%
	High-speed data			2,145				1,760				22	%
	Digital Phone			282				29				NM
Total Subscription revenues			$	8,964			$	7,969				12	%

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			Year Ended December 31,
			2005				2004				% Change
			(millions)
Revenues:
	Advertising		$	4			$	10				(60	%)
	Content			11,704				11,628				1	%
	Other			216				215				—
Total revenues				11,924				11,853				1	%
Costs of revenues(a)				(9,090	)			(8,941	)			2	%
Selling, general and administrative(a)				(1,517	)			(1,438	)			5	%
Gain on sale of assets				5				—				NM
Restructuring costs				(33	)			—				NM
Operating Income before Depreciation and Amortization				1,289				1,474				(13	%)
Depreciation				(121	)			(104	)			16	%
Amortization				(225	)			(213	)			6	%
Operating Income			$	943			$	1,157				(18	%)

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

			Year Ended December 31,
			2005				2004				% Change
			(millions)
Theatrical product:
	Theatrical film		$	2,049			$	2,254				(9	%)
	Television licensing			1,701				1,485				15	%
	Home video			3,619				3,594				1	%
Total theatrical product				7,369				7,333				—
Television product:
	Television licensing			2,658				3,033				(12	%)
	Home video			1,188				778				53	%
Total television product				3,846				3,811				1	%
Consumer product and other				489				484				1	%
Total Content revenues			$	11,704			$	11,628				1	%

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			Year Ended December 31,
			2005				2004				% Change
			(millions)
Revenues:
	Subscription		$	5,405			$	5,058				7%
	Advertising			3,086				2,895				7%
	Content			1,014				973				4%
	Other			106				128				(17%	)
Total revenues				9,611				9,054				6%
Costs of revenues(a)				(4,702	)			(4,600	)			2%
Selling, general and administrative(a)				(1,906	)			(1,753	)			9%
Loss on sale of assets				—				(7	)			NM
Restructuring costs				(4	)			—				NM
Operating Income before Depreciation and Amortization				2,999				2,694				11%
Depreciation				(238	)			(212	)			12%
Amortization				(23	)			(21	)			10%
Operating Income			$	2,738			$	2,461				11%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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			Year Ended December 31,
			2005				2004				% Change
			(millions)
Revenues:
	Subscription		$	1,633			$	1,615				1	%
	Advertising			2,826				2,692				5	%
	Content			643				544				18	%
	Other			744				714				4	%
Total revenues				5,846				5,565				5	%
Costs of revenues(a)				(2,427	)			(2,282	)			6	%
Selling, general and administrative(a)				(2,140	)			(2,095	)			2	%
Gain on sale of assets				8				8				—
Restructuring costs				(28	)			—				NM
Operating Income before Depreciation and Amortization				1,259				1,196				5	%
Depreciation				(132	)			(122	)			8	%
Amortization				(99	)			(140	)			(29	%)
Operating Income			$	1,028			$	934				10	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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		Year Ended December 31,
		2005				2004				% Change
		(millions)
Amounts related to securities litigation and government investigations		$	(2,865	)		$	(536	)			NM
Selling, general and administrative(a)			(430	)			(484	)			(11	%)
Operating Loss before Depreciation and Amortization			(3,295	)			(1,020	)			NM
Depreciation			(44	)			(43	)			2	%
Operating Loss		$	(3,339	)		$	(1,063	)			NM

(a)	Selling, general and administrative expenses exclude depreciation.

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		Year Ended December 31,
		2004				2003				% Change
		(millions)
Subscription		$	21,605			$	20,448				6%
Advertising			6,955				6,180				13%
Content			12,350				11,446				8%
Other			1,179				1,489				(21%	)
Total revenues		$	42,089			$	39,563				6%

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	Reconciliation of Operating Income before Depreciation and Amortization to Operating Income and Net Income.

		Year Ended December 31,
		2004				2003				% Change
		(millions)
Operating Income before Depreciation and Amortization		$	9,372			$	8,393				12	%
Depreciation			(2,581	)			(2,499	)			3	%
Amortization			(626	)			(640	)			(2	%)
Operating Income			6,165				5,254				17	%
Interest expense, net			(1,533	)			(1,734	)			(12	%)
Other income, net			521				1,210				(57	%)
Minority interest expense, net			(246	)			(214	)			15	%
Income before income taxes, discontinued operations and cumulative effect of accounting change			4,907				4,516				9	%
Income tax provision			(1,698	)			(1,370	)			24	%
Income before discontinued operations and cumulative effect of accounting change			3,209				3,146				2	%
Discontinued operations, net of tax			121				(495	)			NM
Cumulative effect of accounting change, net of tax			34				(12	)			NM
Net income		$	3,364			$	2,639				27	%

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		Year Ended December 31,
		2004				2003
		(millions)
Investment gains, net		$	424			$	593
Gain on WMG option			50				—
Microsoft Settlement			—				760
Income (losses) from equity investees			35				(97	)
Other			12				(46	)
Other income, net		$	521			$	1,210

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			Year Ended December 31,
			2004				2003				% Change
			(millions)
Revenues:
	Subscription		$	7,477			$	7,593				(2	%)
	Advertising			1,005				785				28	%
	Other			210				220				(5	%)
Total revenues				8,692				8,598				1	%
Costs of revenues(a)				(4,186	)			(4,499	)			(7	%)
Selling, general and administrative(a)				(2,694	)			(2,542	)			6	%
Gain on disposal of consolidated businesses				20				—				NM
Asset impairments				(10	)			—				NM
Restructuring charges				(50	)			(52	)			(4	%)
Operating Income before Depreciation and Amortization				1,772				1,505				18	%
Depreciation				(662	)			(668	)			(1	%)
Amortization				(176	)			(175	)			1	%
Operating Income			$	934			$	662				41	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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				December 31,				September 30,				December 31,
				2004				2004				2003
Subscriber category:
AOL brand domestic(a) $15 and over					17.5				18.1				19.9
	Under $15				4.7				4.6				4.4
		Total AOL brand domestic			22.2				22.7				24.3
AOL Europe					6.3				6.3				6.4

(a)	AOL includes in its subscriber count individuals, households or entities that have provided billing information and completed the registration process sufficiently to allow for an initial log-on to the AOL service.

				Year Ended
				December 31,
				2004				2003
Subscriber category:
AOL brand domestic $15 and over				$	20.97			$	20.25
	Under $15				13.07				12.11
		Total AOL brand domestic			19.44				18.98
AOL Europe					21.48				19.03

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			Year Ended December 31,
			2004				2003				% Change
			(millions)
Revenues:
	Subscription		$	7,969			$	7,233				10	%
	Advertising			515				466				11	%
Total revenues				8,484				7,699				10	%
Costs of revenues(a)				(3,723	)			(3,343	)			11	%
Selling, general and administrative(a)				(1,483	)			(1,349	)			10	%
Restructuring charges				—				(15	)			NM
Operating Income before Depreciation and Amortization				3,278				2,992				10	%
Depreciation				(1,438	)			(1,403	)			2	%
Amortization				(76	)			(58	)			31	%
Operating Income			$	1,764			$	1,531				15	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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			Year Ended December 31,
			2004				2003				% Change
			(millions)
Revenues:
	Advertising		$	10			$	6				67	%
	Content			11,628				10,800				8	%
	Other			215				161				34	%
Total revenues				11,853				10,967				8	%
Costs of revenues(a)				(8,941	)			(8,430	)			6	%
Selling, general and administrative(a)				(1,438	)			(1,225	)			17	%
Gain on disposal of consolidated businesses				—				43				NM
Operating Income before Depreciation and Amortization				1,474				1,355				9	%
Depreciation				(104	)			(86	)			21	%
Amortization				(213	)			(206	)			3	%
Operating Income			$	1,157			$	1,063				9	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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			Year Ended December 31,
			2004				2003				% Change
			(millions)
Revenues:
	Subscription		$	5,058			$	4,588				10	%
	Advertising			2,895				2,675				8	%
	Content			973				981				(1	%)
	Other			128				190				(33	%)
Total revenues				9,054				8,434				7	%
Costs of revenues(a)				(4,600	)			(4,499	)			2	%
Selling, general and administrative(a)				(1,753	)			(1,668	)			5	%
Impairment of intangible assets				—				(219	)			NM
Loss on sale of assets				(7	)			—				NM
Restructuring charges				—				(21	)			NM
Operating Income before Depreciation and Amortization				2,694				2,027				33	%
Depreciation				(212	)			(192	)			10	%
Amortization				(21	)			(26	)			(19	%)
Operating Income			$	2,461			$	1,809				36	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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			Year Ended December 31,
			2004				2003				% Change
			(millions)
Revenues:
	Subscription		$	1,615			$	1,533				5	%
	Advertising			2,692				2,459				9	%
	Content			544				522				4	%
	Other			714				1,019				(30	%)
Total revenues				5,565				5,533				1	%
Costs of revenues(a)				(2,282	)			(2,288	)			—
Selling, general and administrative(a)				(2,095	)			(2,141	)			(2	%)
Impairment of goodwill and intangible assets				—				(99	)			NM
Gain (loss) on sale of assets				8				(29	)			NM
Merger and restructuring charges				—				(21	)			NM
Operating Income before Depreciation and Amortization				1,196				955				25	%
Depreciation				(122	)			(116	)			5	%
Amortization				(140	)			(175	)			(20	%)
Operating Income			$	934			$	664				41	%

(a)	Costs of revenues and selling, general and administrative expenses exclude depreciation.

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		Year Ended December 31,
		2004				2003				% Change
		(millions)
Amounts related to the government investigations		$	(536	)		$	(56	)			NM
Selling, general and administrative(a)			(484	)			(368	)			32	%
Operating Loss before Depreciation and Amortization			(1,020	)			(424	)			NM
Depreciation			(43	)			(34	)			26	%
Operating Loss		$	(1,063	)		$	(458	)			NM

(a)	Selling, general and administrative expenses exclude depreciation.

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	Current Financial Condition

Net debt at December 31, 2004		$	16,236
Cash provided by operations(a)			(4,965	)
Capital expenditures and product development costs			3,246
Proceeds from sale of the Company’s interest in Google			(940	)
Proceeds from the sale of the WMG Option			(138	)
Dividends paid to common shareholders(b)			466
Common stock repurchases			2,141
All other, net			64
Net debt at December 31, 2005(c)		$	16,110

(a)	Cash provided by operations reflects $2.754 billion in payments related to the securities litigation and the government investigations.
(b)	The Company began paying a quarterly cash dividend of $0.05 per share on its common stock in the third quarter 2005.
(c)	Included in the net debt balance is approximately $258 million that represents the net unamortized fair value adjustment recognized as a result of the merger of AOL and Historic TW.

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	Operating Activities

			Year Ended December 31,
			2005				2004				2003
			(millions)
Operating Income before Depreciation and Amortization			$	7,796			$	9,372			$	8,393
Legal reserves related to securities litigation and government investigations, net of payments and recoveries (a)				111				300				—
Noncash asset impairments				24				10				318
Net interest payments(b)				(1,306	)			(1,578	)			(1,633	)
Net income taxes paid(c)				(411	)			(382	)			(489	)
Adjustments relating to discontinued operations(d)				(10	)			123				350
Merger and restructuring payments(e)				(112	)			(90	)			(293	)
Domestic pension plan contributions				(181	)			(358	)			(648	)
Microsoft Settlement				—				—				750
Cash paid for certain litigation settlements				—				—				(391	)
All other, net, including working capital changes				(946	)			(779	)			244
	Cash provided by operations		$	4,965			$	6,618			$	6,601

(a)	2005 includes approximately $600 million accrued for other securities litigation matters (which have not been paid), less an accrued insurance recovery of $185 million (which is expected to be received in the first quarter of 2006) and payment of the $300 million SEC settlement. 2004 included $300 million accrued related to the SEC settlement.
(b)	Includes interest income received of $230 million, $94 million and $61 million in 2005, 2004 and 2003, respectively.
(c)	Includes income tax refunds received of $83 million, $107 million and $15 million in 2005, 2004 and 2003, respectively.
(d)	Includes net income (loss) from discontinued operations of $121 million and $(495) million in 2004 and 2003, respectively. Amounts also include working capital-related adjustments associated with discontinued operations of $(10) million, $2 million and $845 million in 2005, 2004 and 2003, respectively.
(e)	Includes payments for restructuring and merger-related costs, as well as payments for certain other merger-related liabilities.

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	Investing Activities

			Year Ended December 31,
			2005				2004				2003
			(millions)
Investments and acquisitions, net of cash acquired:
	Essence		$	(129	)		$	—			$	—
	Consolidation of AOLA(a)			—				33				—
	Synapse(b)			—				(120	)			(40	)
	Advertising.com			—				(445	)			—
	The WB Network(c)			—				—				(128	)
	All other, principally funding of joint ventures			(551	)			(345	)			(402	)
Investments and acquisitions, net from discontinued operations				—				—				(52	)
Capital expenditures and product development costs from continuing operations				(3,246	)			(3,024	)			(2,761	)
Capital expenditures and product development costs from discontinued operations				—				—				(126	)
Proceeds from the sale of other available-for-sale securities				51				57				296
Proceeds from sale of the Company’s investment in Hughes				—				—				783
Proceeds from the sale of the Company’s interest in Google				940				195				—
Proceeds from the sale of the Company’s investment in Gateway				—				280				—
Net proceeds from the sale of WMG(d)				—				2,501				—
Proceeds from the sale of the WMG Option				138				—				—
Proceeds from the sale of investment in VIVA and VIVA Plus				—				134				—
Proceeds from sale of the Company’s investment in Comedy Central				—				—				1,225
Proceeds from sale of Warner Manufacturing				—				—				1,050
All other investment and asset sale proceeds				301				231				232
	Cash provided (used) by investing activities		$	(2,496	)		$	(503	)		$	77

(a)	Represents cash balance of AOLA upon consolidation.
(b)	Represents purchase of additional interest in Synapse Group Inc.
(c)	Represents purchase of additional interest in The WB Network.
(d)	Represents $2.6 billion of proceeds received from the sale of WMG, less certain working capital adjustments.

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			Year Ended December 31,
			2005				2004				2003
			(millions)
Borrowings			$	6			$	1,320			$	2,371
Debt repayments				(1,995	)			(4,523	)			(7,109	)
Redemption of mandatorily redeemable preferred securities of a subsidiary				—				—				(813	)
Proceeds from exercise of stock options				307				353				372
Principal payments on capital leases				(118	)			(191	)			(178	)
Repurchases of common stock				(2,141	)			—				—
Dividends paid				(466	)			—				—
Other financing activities				19				25				(11	)
	Cash used by financing activities		$	(4,388	)		$	(3,016	)		$	(5,368	)

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				Year Ended December 31,
				2005				2004				2003
				(millions)
Cable Segment Capital Expenditures
	Customer premise equipment			$	866			$	719			$	715
	Scaleable infrastructure				335				205				173
	Line extensions				258				239				214
	Upgrades/rebuilds				132				139				175
	Support capital				384				410				360
		Total capital expenditures		$	1,975			$	1,712			$	1,637

	Outstanding Debt and Available Committed Financial Capacity

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											Unamortized
											Discount on								Unused
			Committed				Letters of				Commercial				Outstanding				Committed
			Capacity				Credit(a)				Paper				Debt(b)				Capacity(c)
			(millions)
Cash and equivalents			$	4,220			$	—			$	—			$	—			$	4,220
Bank credit agreement and commercial paper programs				11,000				222				4				1,101				9,673
Fixed-rate public debt(c)				18,863				—				—				18,863				—
Other fixed-rate obligations(d)				366				—				—				366				—
	Total		$	34,449			$	222			$	4			$	20,330			$	13,893

(a)	Represents the portion of committed capacity reserved for outstanding and undrawn letters of credit.
(b)	Represents principal amounts adjusted for fair value adjustments, premiums and discounts.
(c)	The Company has classified $1.546 billion in debt due in 2006 as long-term in the accompanying consolidated balance sheet to reflect management’s ability and intent to refinance the obligation on a long-term basis. Such debt refinancing may be from unused committed capacity of the Company’s bank credit agreements.
(d)	Includes debt due within one year of $92 million, which primarily relates to capital lease obligations.

	Bank Credit Agreements and Commercial Paper Programs

	Time Warner Credit Agreement

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	TWC Inc. Credit Agreements

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	Commercial Paper Programs

	Other Financing Arrangements

			Committed				Unused				Outstanding
			Capacity(a)				Capacity				Utilization
			(millions)
Accounts receivable securitization facilities			$	805			$	—			$	805
Backlog securitization facility(b)				500				142				358
	Total other financing arrangements		$	1,305			$	142			$	1,163

(a)	Ability to use accounts receivable securitization facilities and backlog securitization facility depends on availability of qualified assets.
(b)	The outstanding utilization on the backlog securitization facility is classified as deferred revenue on the accompanying consolidated balance sheet.

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	Covenants and Rating Triggers

	Film Sale-Leaseback Arrangements

	Film Co-Financing Arrangements

	Contractual Obligations

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Contractual Obligations(a)		Total				2006				2007-2008				2009-2010				Thereafter
		(millions)
Outstanding debt obligations (Note 8)		$	20,087			$	1,557			$	2,427			$	1,121			$	14,982
Capital lease obligations (Note 8)			201				83				56				19				43
Operating lease obligations (Note 17)			4,553				549				1,010				839				2,155
Purchase obligations			11,081				4,378				3,531				1,439				1,733
Total contractual obligations and outstanding debt		$	35,922			$	6,567			$	7,024			$	3,418			$	18,913

(a)	The table does not include the effects of certain put/call or other buy-out arrangements involving certain of the Company’s investees that are optional in nature, which are discussed in more detail in the pages that follow.

	•	Outstanding debt obligations — represents the principal amounts due on outstanding debt obligations, current and long-term, as of December 31, 2005. Amounts do not include any fair value adjustments, bond premiums, discounts or interest payments.
	•	Capital lease obligations — represents the minimum capital lease payments under noncancelable leases, primarily for network equipment at the AOL segment financed under capital leases.
	•	Operating lease obligations — represents the minimum lease rental payments under noncancelable operating leases, primarily for the Company’s real estate and operating equipment in various locations around the world.
	•	Purchase obligations — As it is used herein, a purchase obligation “represents an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.” The Company expects to receive consideration (i.e., products or services) for these purchase obligations. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. Additionally, the Company also purchases products and services as needed, with no firm commitment. For this reason, the amounts presented in the table alone will not provide a reliable indicator of the Company’s expected future cash outflows. For purposes of identifying and accumulating purchase obligations, the Company has included all material contracts meeting the definition of a purchase obligation (e.g., legally binding for a fixed or minimum amount or quantity). For those contracts involving a fixed or minimum quantity, but variable pricing, the Company has estimated the contractual obligation based on its best estimate of pricing that will be in effect at the time the obligation is incurred. Additionally, the Company has included only the obligation represented by those contracts as they existed at December 31, 2005, and did not assume renewal or replacement of the contract at the end of its term. If a contract includes a penalty for non-renewal, the Company has included that penalty, assuming it will be paid in the period after the contract term expires. If Time Warner can unilaterally terminate an agreement simply by providing a

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		certain number of days notice or by paying a termination fee, the Company has included the amount of the termination fee or the amount that would be paid over the “notice period.” Contracts that can be unilaterally terminated without incurring a penalty have not been included. The following table summarizes the Company’s purchase obligations at December 31, 2005, and the estimated timing and effect that such obligations are expected to have on the Company’s liquidity and cash flow in future periods:

Purchase Obligations			Total				2006				2007-2008				2009-2010				Thereafter
			(millions)
Network programming obligations(a)			$	5,319			$	1,563			$	1,801			$	862			$	1,093
Narrowband and broadband network obligations(b)				453				347				88				3				15
Creative talent and employment agreements(c)				1,866				888				802				158				18
Obligations to purchase paper and to use certain printing facilities for the production of magazines and books				1,248				261				380				247				360
Obligations to certain investee companies(d)				118				118				—				—				—
Advertising, marketing and sponsorship obligations(e)				625				400				199				25				1
Obligations to purchase information technology licenses and services				311				109				77				64				61
Other, primarily general and administrative obligations(f)				1,141				692				184				80				185
	Total purchase obligations		$	11,081			$	4,378			$	3,531			$	1,439			$	1,733

(a)	The Networks segment enters into contracts to license sports programming to carry on its television networks. The amounts in the table above represent minimum payment obligations to sports leagues (e.g., NBA, NASCAR and MLB) to air the programming over the contract period. The Networks segment also enters into licensing agreements with certain movie studios to acquire the rights to air movies that the movie studios release theatrically (“Studio Movie Deals”). The pricing structures in these contracts differ in that certain agreements can require a fixed amount per movie while others will be based on a percentage of the movie’s box office receipts (with license fees generally capped at specified amounts), or a combination of both. The amounts included herein represent obligations for movies that have been released theatrically as of December 31, 2005 and are calculated using the actual or estimated box office performance or fixed amounts, as applicable.
(b)	Narrowband and broadband network obligations relate primarily to minimum purchase commitments that AOL has with various narrowband and broadband network providers.
(c)	The Company’s commitments under creative talent and employment agreements include obligations to executives, actors, producers, authors, sports personnel and other talent under contractual arrangements, including union contracts.
(d)	Obligations to certain investee companies represent obligations to purchase additional interests in a subsidiary of the Publishing segment and fund investees within the Filmed Entertainment segment.
(e)	Advertising, marketing and sponsorship obligations include minimum guaranteed royalty and marketing payments to vendors and content providers, primarily of the AOL, Networks and Filmed Entertainment segments.

(f)

Other includes obligations to purchase general and administrative items such as legal, security, janitorial, office equipment, support and maintenance services, office supplies, obligations related to the Company’s postretirement and unfunded defined benefit pension plans, purchase obligations for cable converter boxes at the Cable segment, as well as construction commitments primarily for the Publishing and Networks segments.

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	Other Contractual Obligations

Other Contractual Commitments		Total				2006				2007-2008				2009-2010				Thereafter
		(millions)
Cable and network programming, AOL network and DVD manufacturing obligations		$	16,520			$	3,897			$	6,656			$	3,478			$	2,489

	Contingent Commitments

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Nature of Contingent Commitments			Total				2006				2007-2008				2009-2010				Thereafter
			(millions)
Guarantees			$	2,071			$	81			$	169			$	174			$	1,647
Letters of credit and other contingent commitments				366				79				6				75				206
	Total contingent commitments		$	2,437			$	160			$	175			$	249			$	1,853

	•	Guarantees include guarantees the Company has provided on certain lease and operating commitments entered into by (a) entities formerly owned by the Company as described below, and (b) joint ventures in which the Company is or was a venture partner.

	In connection with the Company’s former investment in the Six Flags theme parks located in Georgia and Texas (“Six Flags Georgia” and “Six Flags Texas,” respectively, and, collectively, the “Parks”), the Company agreed to guarantee (the “Six Flags Guarantee”) certain obligations of the partnerships that hold the Parks (the “Partnerships”), including the following (the “Guaranteed Obligations”): (a) the obligation to make a minimum amount of annual distributions to the limited partners of the Partnerships; (b) the obligation to make a minimum amount of capital expenditures each year; (c) the requirement that an annual offer to purchase be made in respect of 5% of the limited partnership units of the Partnerships (plus any such units not purchased in any prior year) based on an aggregate price for all limited partnership units at the higher of (i) $250 million in the case of Six Flags Georgia or $374.8 million in the case of Six Flags Texas and (ii) a weighted average multiple of EBITDA for the respective Park over the previous four-year period; (d) ground lease payments; and (e) either (i) the purchase of all of the outstanding limited partnership units upon the earlier of the occurrence of certain specified events and the end of the term of each of the Partnerships in 2027 (Six Flags Georgia) and 2028 (Six Flags Texas) (the “End of Term Purchase”) or (ii) the obligation to cause each of the Partnerships to have no indebtedness and to meet certain other financial tests as of the end of the term of the Partnership. The aggregate purchase price for the limited partnership units pursuant to the End of Term Purchase is $250 million in the case of Six Flags Georgia and $374.8 million in the case of Six Flags Texas (in each case, subject to a consumer price index based adjustment calculated annually from 1998 in respect of Six Flags Georgia and 1999 in respect of Six Flags Texas). Such aggregate amount will be reduced ratably to reflect limited partnership units previously purchased.
	In connection with the 1998 sale of Six Flags Entertainment Corporation to Premier Parks Inc. (“Premier”), Premier and the Company, among others, entered into a Subordinated Indemnity Agreement pursuant to which Premier agreed to guarantee the performance of the Guaranteed Obligations when due and to indemnify the Company, among others, in the event that the Guaranteed Obligations are not performed and the Six Flags Guarantee is called upon. In the event of a default of Premier’s obligations under the Subordinated Indemnity Agreement, the Subordinated Indemnity Agreement and related agreements provide, among other things, that the Company has the right to acquire control of the managing partner of the Parks. Premier’s obligations to the Company are further secured by its interest in all limited partnership units that are purchased by Premier.

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	To date, no payments have been made by the Company pursuant to the Six Flags Guarantee.

	•	Generally, letters of credit and surety bonds support performance and payments for a wide range of global contingent and firm obligations including insurance, litigation appeals, import of finished goods, real estate leases, cable installations and other operational needs. The Cable segment has obtained letters of credit for several of its joint ventures. Should these joint ventures default on their obligations supported by the letters of credit, the Cable segment would be obligated to pay these costs to the extent of the letters of credit.

	Cable Joint Ventures

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	Court TV Joint Venture

	Bookspan Joint Venture

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	1. Contemporaneous purchases and sales. The Company sells a product or service (e.g., advertising services) to a customer and at the same time purchases goods or services and/or makes an investment in that customer.
	2. Sales of multiple products or services. The Company sells multiple products or services to a counterparty (e.g., Cable sells video, digital phone and high-speed Internet access services to a customer).
	3. Purchases of multiple products or services, or the settlement of an outstanding item contemporaneous with the purchase of a product or service. The Company purchases multiple products or services from a counterparty (e.g., the Networks segment licenses a group of films from a counterparty to show over a period of time).

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	•	APB Opinion No. 29, “Accounting for Nonmonetary Transactions” (“APB 29”);
	•	FASB Statement 153, “Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29” (“FAS 153”);
	•	Emerging Issues Task Force (“EITF”) Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer” (“EITF 01-09”); and
	•	EITF Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor” (“EITF 02-16”).

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	•	The Filmed Entertainment segment distributes films on behalf of independent film producers or together with another party. The Filmed Entertainment segment will typically provide motion picture distribution services for an independent production company in the worldwide theatrical, home video and television markets. The arrangement may cover multiple films produced by the independent film company for which it owns the underlying copyright. In addition, the independent film company will generally retain final approval over the distribution, marketing, advertising and publicity for each film in all media, including the timing and extent of the theatrical releases, the pricing and packaging of home video units and approval of all television licenses. The Filmed Entertainment segment has recorded the revenue generated in these distribution arrangements on a gross basis when it is the merchant of record for the licensing arrangements, is the licensor/contracting party, provides the film materials to licensees, handles the billing and collection of all amounts due under such arrangements and bears the risk of loss related to distribution advances for print and advertising costs and/or the video product inventory. If the Filmed Entertainment segment does not bear the risk of loss as described in the previous sentence, the arrangements are accounted for on a net basis.

In order to share the risks (and consequently the rewards) of distributing certain films, the Filmed Entertainment segment (and in some cases the Networks segment) sometimes enters into what are referred to as co-financing arrangements whereby certain parties to a contractual agreement would be responsible for a particular distribution channel. For example, Warner Bros. may produce a film along with a third party. In accordance with the terms of the contract, Warner Bros. might agree to control the domestic distribution of the film while the other party controls the international distribution of that film. While these arrangements do not occur regularly, Warner Bros., after considering the factors noted in the preceding paragraph, would record revenue on a gross basis for the channels for which it serves as principal (in this example, the domestic distribution).

	•	The Publishing segment utilizes subscription agents to generate magazine subscribers. As a way to generate magazine subscribers, the Publishing segment uses subscription agents whereby the agent secures subscribers and, in exchange, receives a percentage of the subscription revenue generated. The Publishing segment has recorded subscription revenue generated by the agent, net of the fees paid to the agent. This is primarily because the subscription agent has the primary contact with the customer, performs all of the billing and collection activities, and passes the proceeds from the subscription to the Publishing segment after deducting the agent’s commission.
	•	The AOL segment sells advertising on behalf of third parties. AOL often will sell advertising on a third-party website (outside of the AOL service). Generally, AOL records the revenue generated from such sales on a gross basis (records as revenue the proceeds received from the advertiser, with an expense equal to the amount paid to the third-party owner of the website). This is primarily because AOL was responsible for identifying and contracting with third-party advertisers, establishing the selling price of the inventory, serving the advertisements at AOL’s cost and expense, performing all billing and collection activities and bearing sole liability for fulfillment of the advertising. Similarly,

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		AOL records gross revenue from Advertising.com transactions where Advertising.com purchases advertising inventory from third parties at a fixed price and resells the inventory.
	•	The Cable segment bills for reimbursement of taxes paid to franchising authorities. In the monthly bill to customers, there is a line item identifying the reimbursement of taxes paid by the cable company to the franchising authorities. The Cable segment includes in its revenue amounts received from customers that are passed on to the franchising authorities by the Cable company. This is because the Cable segment is considered to be the primary obligor with respect to the customer purchasing the service and assumes the credit risk (i.e., it would still be required to remit the tax if the customer did not pay).

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	•	decreased liquidity in the capital markets, including any reduction in the ability to access either the capital markets for debt securities or bank financings;

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	•	the failure to meet earnings expectations;
	•	significant acquisitions such as the Adelphia Acquisition or other transactions such as the proposed redemption of Comcast’s interests in TWC Inc. and TWE;
	•	economic slowdowns;
	•	the impact of terrorist acts and hostilities; and
	•	changes in the Company’s plans, strategies and intentions.

	•	the ability to provide adequate server, network and system capacity;
	•	the risk of unanticipated increased costs for network services;
	•	the ability to maintain or enter into new content, electronic commerce or marketing arrangements and the risk that the cost of such arrangements may increase; and
	•	the risks from changes in U.S. and international regulatory environments affecting interactive services.

	•	increases in government regulation of video services, including regulation that limits cable operators’ ability to raise rates or that dictates set-top box or other equipment features, functionalities or specifications;
	•	government regulation that dictates the manner in which it operates its cable systems or determines what to offer, such as the imposition of “forced access” rules or common carrier type requirements;
	•	increased difficulty in obtaining franchise renewals;
	•	unanticipated funding obligations relating to its cable joint ventures;
	•	a future decision by the FCC or Congress to require cable operators to contribute to the federal “Universal Service Fund” based on the provision of cable modem service, which could raise the price of cable modem service and impair TWC Inc.’s competitive position; and
	•	the award of franchises or similar grants of rights through state or federal legislation that would allow competitors of cable providers to offer video service on terms substantially more favorable than those afforded existing cable operators (e.g., without the need to obtain local franchise approval or to comply with local franchising regulations as cable operators currently must).

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		2005				2004
ASSETS
Current assets
Cash and equivalents		$	4,220			$	6,139
Restricted cash			—				150
Receivables, less allowances of $2.225 and $2.109 billion			6,411				5,512
Inventories			1,806				1,737
Prepaid expenses and other current assets			1,026				920
Total current assets			13,463				14,458
Noncurrent inventories and film costs			4,916				4,415
Investments, including available-for-sale securities			3,518				4,703
Property, plant and equipment, net			13,676				13,094
Intangible assets subject to amortization, net			3,522				3,892
Intangible assets not subject to amortization			39,813				39,656
Goodwill			40,416				39,667
Other assets			3,151				3,273
Total assets		$	122,475			$	123,158
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,380			$	1,339
Participations payable			2,426				2,452
Royalties and programming costs payable			1,074				1,018
Deferred revenue			1,473				1,653
Debt due within one year			92				1,672
Other current liabilities			6,100				6,468
Current liabilities of discontinued operations			43				50
Total current liabilities			12,588				14,652
Long-term debt			20,238				20,703
Deferred income taxes			15,138				14,943
Deferred revenue			681				749
Mandatorily convertible preferred stock			—				1,500
Other liabilities			5,324				4,288
Noncurrent liabilities of discontinued operations			7				38
Minority interests			5,784				5,514
Commitments and contingencies (Note 17)
Shareholders’ equity
Series LMCN-V common stock, $0.01 par value, 87.2 and 105.7 million shares outstanding			1				1
Time Warner common stock, $0.01 par value, 4.498 and 4.483 billion shares outstanding			45				45
Paid-in-capital			155,927				156,252
Accumulated other comprehensive income (loss), net			(64	)			106
Accumulated deficit			(93,194	)			(95,633	)
Total shareholders’ equity			62,715				60,771
Total liabilities and shareholders’ equity		$	122,475			$	123,158

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			2005				2004				2003
Revenues:
	Subscription		$	22,222			$	21,605			$	20,448
	Advertising			7,612				6,955				6,180
	Content			12,615				12,350				11,446
	Other			1,203				1,179				1,489
Total revenues(a)				43,652				42,089				39,563
Costs of revenues(a)				(25,075	)			(24,449	)			(23,422	)
Selling, general and administrative(a)				(10,478	)			(10,274	)			(9,778	)
Amortization of intangible assets				(597	)			(626	)			(640	)
Amounts related to securities litigation and government investigations				(2,865	)			(536	)			(56	)
Merger-related and restructuring costs				(117	)			(50	)			(109	)
Asset impairments				(24	)			(10	)			(318	)
Gains on disposal of assets, net				23				21				14
Operating income				4,519				6,165				5,254
Interest expense, net(a)				(1,266	)			(1,533	)			(1,734	)
Other income, net				1,124				521				1,210
Minority interest expense, net				(285	)			(246	)			(214	)
Income before income taxes, discontinued operations and cumulative effect of accounting change				4,092				4,907				4,516
Income tax provision				(1,187	)			(1,698	)			(1,370	)
Income before discontinued operations and cumulative effect of accounting change				2,905				3,209				3,146
Discontinued operations, net of tax				—				121				(495	)
Income before cumulative effect of accounting change				2,905				3,330				2,651
Cumulative effect of accounting change, net of tax				—				34				(12	)
Net income			$	2,905			$	3,364			$	2,639
Basic income per common share before discontinued operations and cumulative effect of accounting change			$	0.62			$	0.70			$	0.70
Discontinued operations				—				0.03				(0.11	)
Cumulative effect of accounting change				—				0.01				—
Basic net income per common share			$	0.62			$	0.74			$	0.59
Average basic common shares				4,648.2				4,560.2				4,506.0
Diluted income per common share before discontinued operations and cumulative effect of accounting change			$	0.62			$	0.68			$	0.68
Discontinued operations				—				0.03				(0.11	)
Cumulative effect of accounting change				—				0.01				—
Diluted net income per common share			$	0.62			$	0.72			$	0.57
Average diluted common shares				4,710.0				4,694.7				4,623.7
Cash dividends declared per share of common stock			$	0.10			$	—			$	—

(a)	Includes the following income (expenses) resulting from transactions with related companies:

Revenues		$	283			$	282			$	415
Costs of revenues			(206	)			(158	)			(132	)
Selling, general and administrative			36				32				23
Interest income, net			35				25				19

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			2005				2004				2003
OPERATIONS
Net income(a)			$	2,905			$	3,364			$	2,639
Adjustments for noncash and nonoperating items:
	Cumulative effect of accounting change, net of tax			—				(34	)			12
	Depreciation and amortization			3,277				3,207				3,139
	Amortization of film costs			3,513				3,547				2,959
	Asset impairments			25				10				318
	Gain on investments and other assets, net			(1,086	)			(432	)			(598	)
	Equity in (income) losses of investee companies, net of cash distributions			(14	)			20				154
Amounts related to securities litigation and government investigations				111				300				—
Changes in operating assets and liabilities, net of acquisitions:
	Receivables			(552	)			(853	)			(310	)
	Inventories			(3,910	)			(3,841	)			(3,707	)
	Accounts payable and other liabilities			(598	)			(36	)			(120	)
	Other balance sheet changes			1,304				1,364				1,270
Adjustments relating to discontinued operations				(10	)			2				845
Cash provided by operations(b)(c)				4,965				6,618				6,601
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired				(680	)			(877	)			(570	)
Investments and acquisitions from discontinued operations				—				—				(52	)
Capital expenditures and product development costs from continuing operations				(3,246	)			(3,024	)			(2,761	)
Capital expenditures from discontinued operations				—				—				(126	)
Investment proceeds from available-for-sale securities				991				532				1,079
Investment proceeds from discontinued operations				—				—				1,056
Other investment proceeds				439				2,866				1,451
Cash provided (used) by investing activities				(2,496	)			(503	)			77
FINANCING ACTIVITIES
Borrowings				6				1,320				2,371
Debt repayments				(1,995	)			(4,523	)			(7,109	)
Redemption of redeemable preferred securities of subsidiary				—				—				(813	)
Proceeds from exercise of stock options				307				353				372
Principal payments on capital leases				(118	)			(191	)			(178	)
Repurchases of common stock				(2,141	)			—				—
Dividends paid				(466	)			—				—
Other				19				25				(11	)
Cash used by financing activities				(4,388	)			(3,016	)			(5,368	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS				(1,919	)			3,099				1,310
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD				6,139				3,040				1,730
CASH AND EQUIVALENTS AT END OF PERIOD			$	4,220			$	6,139			$	3,040

(a)	Includes net income (loss) from discontinued operations of $121 million in 2004 and $(495) million in 2003.

(b)	2005 reflects $2.754 billion in payments related to securities litigation and the government investigations. 2004 reflects $236 million in payments related to securities litigation and the government investigations.

(c)	2005 includes an approximate $36 million use of cash related to changing the fiscal year end of certain international operations from November 30 to December 31.

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										Retained
										Earnings
		Common				Paid-In				(Accumulated
		Stock				Capital				Deficit)				Total
BALANCE AT DECEMBER 31, 2002		$	45			$	155,134			$	(102,188	)		$	52,991
Net income			—				—				2,639				2,639
Foreign currency translation adjustments			—				—				(77	)			(77	)
Unrealized loss on securities, net of $34 million tax benefit(a)			—				—				(50	)			(50	)
Realized and unrealized losses on derivative financial instruments, net of $9 million tax benefit			—				—				(6	)			(6	)
Reversal of unfunded accumulated benefit obligation, net of $180 million income tax provision			—				—				270				270
Comprehensive income			—				—				2,776				2,776
Shares issued pursuant to stock options, restricted stock and benefit plans, including $23 million income tax benefit			1				445				—				446
BALANCE AT DECEMBER 31, 2003			46				155,579				(99,412	)			56,213
Net income			—				—				3,364				3,364
Foreign currency translation adjustments			—				—				(66	)			(66	)
Unrealized gain on securities, net of $388 million tax provision(b)			—				—				582				582
Realized and unrealized losses on derivative financial instruments, net of $0.6 million tax provision			—				—				1				1
Reversal of unfunded accumulated benefit obligation, net of $3 million income tax provision			—				—				4				4
Comprehensive income			—				—				3,885				3,885
Shares issued pursuant to stock options, restricted stock and benefit plans, including $244 million income tax benefit			—				673				—				673
BALANCE AT DECEMBER 31, 2004			46				156,252				(95,527	)			60,771
Net income			—				—				2,905				2,905
Foreign currency translation adjustments(c)			—				—				430				430
Change in unrealized gain on securities, net of $402 million tax benefit(d)			—				—				(603	)			(603	)
Realized and unrealized losses on derivative financial instruments, net of $14.8 million tax provision			—				—				22				22
Reversal of unfunded accumulated benefit obligation, net of $11 million income tax provision			—				—				(19	)			(19	)
Comprehensive income			—				—				2,735				2,735
Conversion of mandatorily convertible preferred stock			1				1,499				—				1,500
Cash dividends ($0.10 per common share)			—				—				(466	)			(466	)
Common stock repurchases			(1	)			(2,249	)			—				(2,250	)
Shares issued pursuant to stock options, restricted stock and benefit plans, including $37 million income tax benefit			—				425				—				425
BALANCE AT DECEMBER 31, 2005		$	46			$	155,927			$	(93,258	)		$	62,715

(a)	Includes a $218 million pretax reduction (tax effect of $87 million) related to realized gains on the sale of securities in 2003 and an increase of $11 million pretax (tax effect $4 million) related to impairment charges on investments that had experienced other-than-temporary declines. These changes are included in the 2003 net income.
(b)	Includes a $268 million pretax reduction (tax effect of $107 million) related to realized gains on the sale of securities in 2004 and an increase of $4 million pretax (tax effect $2 million) related to impairment charges on investments that had experienced other-than-temporary declines. These changes are included in the 2004 net income.
(c)	Includes an adjustment of $439 million for foreign currency translation related to goodwill and intangible assets, including amounts that relate to prior periods (Note 2).
(d)	Includes a $959 million pretax reduction (tax effect of $384 million) related to realized gains on the sale of securities in 2005, primarily Google, and an increase of $3 million pretax (tax effect $1 million) related to impairment charges on investments that had experienced other-than-temporary declines. These changes are included in the 2005 net income.

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1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	Pending Transactions

	Sale of Time Warner Book Group

	Sale of Canal Satellite Digital

	Sale of Turner South

	The WB Network

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	AOL-Google Alliance

	•	Creating an AOL Marketplace through white labeling of Google’s advertising technology, which enables AOL to sell search advertising directly to advertisers on AOL-owned properties;
	•	Expanding display advertising available for AOL to sell throughout the Google network;
	•	Making AOL content more accessible to Google Web crawlers;
	•	Collaborating in video search and showcasing AOL’s premium video service within Google Video;
	•	Enabling Google Talk and AIM instant messaging users to communicate with each other, provided certain conditions are met; and
	•	Providing AOL marketing credits for promotion of AOL’s content on Google’s Internet properties.

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	•	Pay a $300 million penalty, which will be used for a Fair Fund, as authorized under the Sarbanes-Oxley Act;
	•	Adjust its historical accounting for Advertising revenues in certain transactions with Bertelsmann, A.G. (“Bertelsmann”) that were improperly or prematurely recognized, primarily in the second half of 2000, during 2001 and during 2002; as well as adjust its historical accounting for transactions involving three other AOL customers where there were Advertising revenues recognized in the second half of 2000 and during 2001;
	•	Adjust its historical accounting for its investment in and consolidation of AOL Europe; and

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	•	Agree to the appointment of an independent examiner, who will either be or hire a certified public accountant. The independent examiner will review whether the Company’s historical accounting for transactions with 17 counterparties identified by the SEC staff, principally involving online advertising revenues and including three cable programming affiliation agreements with related advertising elements, was in conformity with GAAP, and provide a report to the Company’s audit and finance committee of its conclusions, originally within 180 days of being engaged. The transactions that would be reviewed were entered into between June 1, 2000 and December 31, 2001, including subsequent amendments thereto, and involved online advertising and related transactions for which revenue was principally recognized before January 1, 2002.

	Basis of Consolidation

	Discontinued Operations

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	Use of Estimates

	Recently Issued Accounting Guidance

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			December 31,
			2005				2004
			(millions)
Land and buildings			$	3,292			$	3,203
Cable television equipment				11,415				10,168
Furniture, fixtures and other equipment				7,527				6,696
				22,234				20,067
	Less accumulated depreciation			(8,558	)			(6,973	)
Total			$	13,676			$	13,094

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	Investments

	Long-Lived Assets

	Goodwill and Indefinite-Lived Intangible Assets

	AOL

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	Cable

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	Publishing

	Networks

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	Filmed Entertainment

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	Barter Transactions

	1.	Contemporaneous purchases and sales. The Company sells a product or service (e.g., advertising services) to a customer and at the same time purchases goods or services and/or makes an investment in that customer.
	2.	Sales of multiple products or services. The Company sells multiple products or services to a counterparty (e.g., Cable sells video, digital phone and high-speed Internet access services to a customer).

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	3.	Purchases of multiple products or services, or the settlement of an outstanding item contemporaneous with the purchase of a product or service. The Company purchases multiple products or services from a counterparty (e.g., the Networks segment licenses a group of films from a counterparty to show over a period of time).

	•	APB Opinion No. 29, “Accounting for Nonmonetary Transactions” (“APB 29”);
	•	FASB Statement 153, “Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29” (“FAS 153”);
	•	Emerging Issues Task Force (“EITF”) Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer” (“EITF 01-09”); and
	•	EITF Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor” (“EITF 02-16”).

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	Purchases of Multiple Products or Services

	Gross versus Net Revenue Recognition

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										Net
										Derivative				Net				Net
		Foreign				Net Unrealized				Financial				Unfunded				Accumulated
		Currency				Gains				Instrument				Accumulated				Other
		Translation				(Losses) on				Gains				Benefit				Comprehensive
		Gains (Losses)(a)				Securities				(Losses)				Obligation				Income (Loss)
Balance at December 31, 2002		$	(328	)		$	122			$	(27	)		$	(319	)		$	(552	)
2003 activity			(77	)			(50	)			(6	)			270				137
Balance at December 31, 2003			(405	)			72				(33	)			(49	)			(415	)
2004 activity			(66	)			582				1				4				521
Balance at December 31, 2004			(471	)			654				(32	)			(45	)			106
2005 activity			430				(603	)			22				(19	)			(170	)
Balance at December 31, 2005		$	(41	)		$	51			$	(10	)		$	(64	)		$	(64	)

(a)	2005 includes an adjustment of $439 million for foreign currency translation related to goodwill and intangible assets, including amounts that relate to prior periods (Note 2).

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			Years Ended December 31,
			2005				2004				2003
			(millions, except per share
			amounts)
Net income, as reported			$	2,905			$	3,364			$	2,639
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects				(184	)			(298	)			(548	)
Pro forma net income			$	2,721			$	3,066			$	2,091
Basic net income per share:
	As reported		$	0.62			$	0.74			$	0.59
	Pro forma		$	0.59			$	0.67			$	0.46
Diluted net income per share:
	As reported		$	0.62			$	0.72			$	0.57
	Pro forma		$	0.58			$	0.65			$	0.45

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			Years Ended December 31,
			2005				2004				2003
			(millions, except per share amounts)
Income before discontinued operations and cumulative effect of accounting change — basic and diluted			$	2,905			$	3,209			$	3,146
Average number of common shares outstanding — basic				4,648.2				4,560.2				4,506.0
	Dilutive effect of stock options and restricted stock			41.4				57.4				55.2
	Dilutive effect of mandatorily convertible preferred stock			20.4				77.1				62.5
Average number of common shares outstanding — diluted				4,710.0				4,694.7				4,623.7
Income per common share before discontinued operations and cumulative effect of accounting change:
	Basic		$	0.62			$	0.70			$	0.70
	Diluted		$	0.62			$	0.68			$	0.68

2.	GOODWILL AND INTANGIBLE ASSETS

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		December 31,				Acquisitions &								Translation				December 31,
		2004				Adjustments(a)				Impairment(b)				Adjustments(c)				2005
AOL		$	3,027			$	(14	)		$	(24	)		$	113			$	3,102
Cable			1,921				(15	)			—				—				1,906
Filmed Entertainment			5,218				38				—				—				5,256
Networks(d)			20,626				128				—				—				20,754
Publishing(e)			8,875				256				—				267				9,398
Total		$	39,667			$	393			$	(24	)		$	380			$	40,416

		December 31,				Acquisitions &				December 31,
		2003				Adjustments(a)				2004
AOL(f)		$	2,784			$	243			$	3,027
Cable			1,909				12				1,921
Filmed Entertainment			5,245				(27	)			5,218
Networks(d)			20,742				(116	)			20,626
Publishing(e)			8,779				96				8,875
Total		$	39,459			$	208			$	39,667

(a)	Includes changes in estimates in deferred tax assets and liabilities acquired in purchase business combinations, with the net impact of increasing goodwill by approximately $207 million in 2005 and decreasing goodwill by approximately $219 million in 2004. The adjustments affected multiple segments.
(b)	Relates to the $24 million impairment charge of AOLA goodwill in the first quarter of 2005.
(c)	Includes an adjustment related to periods prior to January 1, 2005. This adjustment had no impact on consolidated net income or cash flows in the current or any prior period. In addition, the adjustment is not considered material to the consolidated assets or equity of the current or any prior period.
(d)	2005 primarily includes $174 million related to changes in valuation of net deferred tax liabilities related to historical purchase business combinations offset by a $39 million reduction, net of tax, related to reversals of purchase accounting reserves as well as the adjustments discussed in (a) above. 2004 primarily includes $31 million related to the purchase of the remaining interest in Warner Channel Latin America and $29 million related to the consolidation of Cartoon Network Japan, offset by $25 million related to the sale of the winter sports teams assets as well as the adjustments discussed in (a) above.
(e)	2005 includes $111 million at the Publishing segment related to the preliminary purchase price allocation for the acquisition of the remaining ownership interest in Essence Communications Partners (“Essence”) and $75 million related to the preliminary purchase price allocation for the acquisition of Grupo Editorial Expansión as well as the adjustments discussed in (a) above. 2004 primarily includes $94 million related to the purchase of an additional interest in Synapse Group, Inc as well as the adjustments discussed in (a) above.

(f)	2004 primarily includes $269 million related to the purchase of Advertising.com and $24 million related to the consolidation of AOLA, which was subsequently impaired as discussed in (b) above, as well as the adjustments discussed in (a) above.

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		As of December 31, 2005												As of December 31, 2004
						Accumulated												Accumulated
		Gross				Amortization(a)				Net				Gross				Amortization(a)				Net
Intangible assets subject to amortization:
Film library		$	3,967			$	(1,064	)		$	2,903			$	3,967			$	(830	)		$	3,137
Customer lists and other intangible assets (b)			2,569				(1,950	)			619				2,316				(1,561	)			755
Total		$	6,536			$	(3,014	)		$	3,522			$	6,283			$	(2,391	)		$	3,892
Intangible assets not subject to amortization:
Cable television franchises		$	31,368			$	(1,489	)		$	29,879			$	31,241			$	(1,489	)		$	29,752
Sports franchises			282				(20	)			262				282				(20	)			262
Brands, trademarks and other intangible assets (c)			9,935				(263	)			9,672				9,905				(263	)			9,642
Total		$	41,585			$	(1,772	)		$	39,813			$	41,428			$	(1,772	)		$	39,656

(a)	Amortization of customer lists and other intangible assets subject to amortization is provided generally on the straight-line method over their respective useful lives. The weighted-average useful life for customer lists is 5 years. The film library is amortized using the film forecast method. The Company evaluates the useful lives of its finite-lived intangible assets each reporting period to determine whether events or circumstances warrant revised estimates of useful lives.
(b)	The change in 2005 includes $79 million related to the Truevo, Inc. acquisition for acquired technology, $34 million related to the preliminary allocation of Essence goodwill to tradename and subscriber lists, $31 million related to the Wildseed, Ltd. acquisition for acquired technology and $30 million related to foreign currency translation of intangibles at AOLE and IPC. The change in 2004 includes $206 million related to the purchase of Advertising.com for technology ($98 million), advertiser and publisher relationships ($50 million), tradename ($40 million) and non-compete agreements ($18 million).
(c)	The change in 2005 includes $29 million related to intangibles at IPC. As a result of increased competition in the publishing business related to certain magazine titles, indefinite-lived tradename intangibles totaling approximately $1.3 billion will be assigned a 25 year finite life and begin to be amortized starting January 2006. The impact of amortizing such tradenames in 2006 and beyond will be approximately $50 million annually.

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3.	SALE OF MUSIC SEGMENT

		For the Year
		Ended
		December 31,
		2004				2003
		(millions)
Total revenues		$	780			$	4,312
Pretax loss			(2	)			(567	)
Income tax benefit			123				72
Net income (loss)			121				(495	)

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4.	OTHER SIGNIFICANT BUSINESS ACQUISITIONS AND DISPOSITIONS

	2004 Transactions

	Acquisition of Advertising.com

	Sale of the Winter Sports Teams

	Consolidation of Warner Village Cinemas S.P.A.

	2003 Transactions

	Sale of Time Life

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	Sale of U.K. Cinemas

5.	TIME WARNER CABLE INC.

	Ownership

	Adelphia/Comcast

	Adelphia Acquisition Agreement

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	Amendments to Existing Arrangements

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	Cable Television System Joint Ventures

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6.	INVESTMENTS, INCLUDING AVAILABLE-FOR-SALE SECURITIES

			December 31,
			2005				2004
			(millions)
Equity-method investments			$	2,574			$	2,624
Fair-value investments, including available-for-sale investments(a)				820				1,958
Cost-method investments(a)				124				121
	Total		$	3,518			$	4,703

(a)	The fair value and cost basis of Time Warner’s fair-value and cost-method investments were approximately $944 million and $861 million, respectively, as of December 31, 2005, and $2.079 billion and $991 million, respectively, as of December 31, 2004.

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		December 31,
		2005				2004
		(millions)
Cost basis of available-for-sale investments		$	50			$	77
Gross unrealized gain(a)			85				1,089
Gross unrealized loss			(2	)			(1	)
Fair-value of available-for-sale investments		$	133			$	1,165
Deferred tax liability		$	33			$	435

(a)

2004 includes a gross unrealized gain of approximately $965 million related to Google. During 2005, the Company sold its remaining 5.1 million shares of Google’s Class B common stock. The Company received total cash consideration of approximately $940 million, resulting in a gain of approximately $925 million recognized in the second quarter of 2005, which is included as a component of Other income, net.

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7.	INVENTORIES AND FILM COSTS

			December 31,
			2005				2004
			(millions)
Programming costs, less amortization			$	2,922			$	2,599
Videocassettes, DVDs, books, paper and other merchandise				464				522
Film costs — Theatrical:
	Released, less amortization			747				893
	Completed and not released			157				60
	In production			1,046				843
	Development and pre-production			80				51
Film costs — Television:
	Released, less amortization			529				493
	Completed and not released			230				191
	In production			545				494
	Development and pre-production			2				6
Total inventories and film costs(a)				6,722				6,152
Less: current portion of inventory(b)				(1,806	)			(1,737	)
Total noncurrent inventories and film costs			$	4,916			$	4,415

(a)	Does not include $2.903 billion and $3.137 billion of net film library costs as of December 31, 2005 and December 31, 2004, respectively, which are included in intangible assets subject to amortization on the accompanying consolidated balance sheet (Note 2).
(b)	Current inventory as of December 31, 2005 and December 31, 2004 is comprised of programming inventory at the Networks segment ($1.340 billion and $1.215 billion, respectively), books, magazines, paper and other merchandise at the Publishing segment ($224 million and $199 million, respectively), DVDs and videocassettes at the Filmed Entertainment segment ($239 million and $318 million, respectively) and general merchandise at the AOL segment ($3 million and $5 million, respectively).

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8.	LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

		Weighted Average																Unamortized				2005				Outstanding Debt
		Interest Rate at								2005								Discount on				Unused				at December 31,
		December 31,								Committed				Letters of				Commercial				Committed
		2005				Maturities				Capacity				Credit(a)				Paper				Capacity				2005				2004
Cash and equivalents										$	4,220			$	—			$	—			$	4,220
Bank credit agreement debt and commercial paper programs(b)			4.36	%			2009				11,000				222				4				9,673			$	1,101			$	1,523
Fixed-rate public debt(b)(c)			7.29	%			2006-2036				18,863				—				—				—				18,863				20,393
Other fixed-rate obligations(d)			8.00	%			—				366				—				—				—				366				459
Total debt											34,449				222				4				13,893				20,330				22,375
Debt due within one year(e)											(92	)			—				—				—				(92	)			(1,672	)
Total long-term debt										$	34,357			$	222			$	4			$	13,893			$	20,238			$	20,703

(a)	Represents the portion of committed capacity reserved for outstanding and undrawn letters of credit.
(b)	The bank credit agreements, commercial paper programs and fixed-rate public debt of the Company rank pari passu with senior debt of the respective obligors thereon. The Company’s maturity profile of its outstanding debt and other financing arrangements is relatively long-term, with a weighted maturity of approximately 13 years.
(c)	The Company has reclassified $1.546 billion in debt due in 2006 to long-term in the accompanying consolidated balance sheet to reflect management’s ability and intent to refinance the obligations on a long-term basis.

(d)	Includes capital lease obligations.

(e)	Debt due within one year as of December 31, 2005 primarily relates to capital lease obligations.

	Time Warner Credit Agreement

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2006		$	83
2007			36
2008			20
2009			11
2010			8
Thereafter			43
Total			201
Amount representing interest			(28	)
Present value of minimum lease payments			173
Current portion			(77	)
Total long-term portion		$	96

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9.	INCOME TAXES

			Years Ended December 31,
			2005				2004				2003
			(millions)
Domestic			$	3,512			$	4,517			$	4,393
Foreign				580				390				123
	Total		$	4,092			$	4,907			$	4,516

			Years Ended December 31,
			2005				2004				2003
			(millions)
Federal:
	Current(a)		$	193			$	191			$	(6	)
	Deferred			966				1,030				824
Foreign:
	Current(b)			259				206				286
	Deferred			116				35				(4	)
State and Local:
	Current(a)			134				147				121
	Deferred			(481	)			89				149
	Total		$	1,187			$	1,698			$	1,370

(a)	Excludes federal, state and local tax benefits of $140 million in 2005, $222 million in 2004 and $162 million in 2003 resulting from the exercise of stock options and vesting of restricted stock awards, which were credited directly to paid-in-capital except for $25 million in 2004, which was credited to goodwill. In addition, excludes federal, state and local tax benefits of $10 million in 2005 related to changing the fiscal year-end of certain international operations from November 30 to December 31.
(b)	Includes foreign withholding taxes of $144 million in 2005, $149 million in 2004 and $150 million in 2003.

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		Years Ended December 31,
		2005				2004				2003
		(millions)
Taxes on income at U.S. federal statutory rate		$	1,432			$	1,718			$	1,581
State and local taxes, net of federal tax benefits			127				174				222
Nondeductible goodwill impairments			10				—				8
Legal reserves related to securities litigation and the government investigations			228				126				—
Foreign income taxed at different rates, net of U.S. foreign tax credits (including benefits associated with certain foreign source income, i.e., extraterritorial income exclusion)			(113	)			(156	)			(68	)
Capital loss utilization			(72	)			(110	)			(450	)
State & local tax law changes(a)			(305	)			—				—
State & local ownership restructuring and methodology changes(b)			(104	)			—				—
Research and Development tax credits			(48	)			—				—
Other			32				(54	)			77
Total		$	1,187			$	1,698			$	1,370

(a)	Represents changes to the method of taxation in Ohio and the method of apportionment in New York. In Ohio, the income tax is being phased-out and replaced with a gross receipts tax, while in New York the methodology for income apportionment is changing over time to a single receipts factor from a three factor formula.
(b)	Represents the restructuring of the Company’s partnership interests in Texas and certain other state methodology changes.

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			December 31,
			2005				2004
			(millions)
Deferred tax liabilities:
Assets acquired in business combinations			$	15,082			$	15,344
Depreciation and amortization				1,950				1,823
Unrealized appreciation of certain marketable securities				64				466
Unremitted earnings of foreign subsidiaries				64				47
Other				1,521				1,139
	Total deferred tax liabilities			18,681				18,819
Deferred tax assets:
Tax attribute carryforwards				3,888				4,510
Receivable allowances and return reserves				432				364
Investments				746				1,037
Other				1,230				851
Valuation allowance(a)				(2,753	)			(2,886	)
	Total deferred tax assets			3,543				3,876
Net deferred tax liability(b)			$	15,138			$	14,943

(a)	The Company has recorded valuation allowances for certain tax attributes and other deferred tax assets. At this time, sufficient uncertainty exists regarding the future realization of these deferred tax assets. Of the approximately $2.8 billion valuation allowance at December 31, 2005, $500 million were recorded through goodwill and $160 million were recorded through additional paid-in-capital. Therefore, if in the future the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reversed against goodwill and additional paid-in-capital, to the extent thereof, with the remaining balance recognized in income.
(b)	The deferred tax liability balance at December 31, 2005 increased during the year due primarily to deferred tax liabilities recorded as part of the current year tax expense net of a decrease in deferred tax liabilities associated with certain marketable securities holding substantial appreciation that was realized for tax purposes upon sale during the year.

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10.	PREFERRED SECURITIES

11.	SHAREHOLDERS’ EQUITY

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12.	STOCK-BASED COMPENSATION PLANS

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			Thousands of				Weighted-Average
			Shares				Exercise Price
Balance at December 31, 2002				657,440			$	31.91
2003 Activity:
	Granted			96,867				10.91
	Exercised			(53,697	)			6.96
	Cancelled			(50,008	)			36.67
Balance at December 31, 2003				650,602				30.48
2004 Activity:
	Granted			70,839				17.27
	Exercised			(49,414	)			7.14
	Cancelled			(53,029	)			35.45
Balance at December 31, 2004				618,998				30.41
2005 Activity:
	Granted			53,091				17.95
	Exercised			(36,972	)			8.32
	Cancelled			(44,430	)			32.88
Balance at December 31, 2005				590,687				30.48

		December 31,
		2005				2004				2003
		(thousands)
Exercisable			442,525				421,576				409,533
Available for future grants			116,232				159,921				220,611

		Options Outstanding												Options Exercisable
						Weighted-
						Average
						Remaining				Weighted-								Weighted-
		Number				Contractual				Average				Number				Average
		Outstanding				Life (in				Exercise				Exercisable as				Exercise
Range of Exercise Prices		as of 12/31/05				Years)				Price				of 12/31/05				Price
		(thousands)												(thousands)
Under $10.00			16,543				1.56			$	4.48				16,352			$	4.49
$10.01 to $15.00			112,177				4.77				11.40				79,366				11.76
$15.01 to $20.00			130,939				7.88				17.46				32,985				17.05
$20.01 to $30.00			87,226				5.18				25.79				72,700				25.63
$30.01 to $45.00			37,457				4.59				38.14				37,365				38.16
$45.01 to $50.00			137,838				4.65				48.03				136,008				48.03
$50.01 to $60.00			53,916				4.50				56.90				53,158				56.89
$60.01 to $90.00			14,515				4.62				68.39				14,515				68.39
$90.01 and above			76				3.96				96.72				76				96.72
Total			590,687				5.36				30.48				442,525				34.83

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13.	BENEFIT PLANS

	Benefit Obligations — Defined Benefit Plans

			Domestic								International
			December 31,								December 31,
			2005				2004				2005				2004
			(millions)								(millions)
Change in benefit obligations
Projected benefit obligation, beginning of year			$	2,689			$	2,355			$	654			$	517
	Service cost			135				119				18				22
	Interest cost			170				156				32				31
	Actuarial loss			205				205				84				51
	Benefits paid			(106	)			(146	)			(6	)			(6	)
	Settlements and curtailments			—				—				1				—
Foreign currency exchange rates				—				—				(66	)			39
Projected benefit obligation, end of year			$	3,093			$	2,689			$	717			$	654
Accumulated benefit obligation			$	2,685			$	2,356			$	654			$	600

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	Plan Assets — Defined Benefit Plans

			Domestic								International
			December 31,								December 31,
			2005				2004				2005				2004
			(millions)								(millions)
Change in plan assets
Fair value of plan assets, beginning of year			$	2,642			$	2,188			$	571			$	447
	Actual return on plan assets			153				242				107				52
	Employer contributions			181				358				103				45
	Benefits paid			(106	)			(146	)			(6	)			(6	)
Foreign currency exchange rates				—				—				(57	)			33
Fair value of plan assets, end of year			$	2,870			$	2,642			$	718			$	571

	Funded Status

			Domestic								International
			December 31,								December 31,
			2005				2004				2005				2004
			(millions)								(millions)
End of year
	Fair value of plan assets		$	2,870			$	2,642			$	718			$	571
	Projected benefit obligation			3,093				2,689				717				654
	Funded status			(223	)			(47	)			1				(83	)
	Unrecognized net actuarial loss			955				750				131				137
	Unrecognized prior service cost			26				30				—				—
	Net amount recognized		$	758			$	733			$	132			$	54

		Domestic								International
		December 31,								December 31,
		2005				2004				2005				2004
		(millions)								(millions)
Prepaid benefit cost		$	962			$	921			$	135			$	67
Accrued benefit cost			(323	)			(279	)			(6	)			(62	)
Intangible assets			16				18				—				—
Accumulated other comprehensive income			103				73				3				49
Net amount recognized		$	758			$	733			$	132			$	54

		Domestic
		December 31,
		2005				2004
		(millions)
Projected benefit obligation		$	305			$	263
Accumulated benefit obligation		$	323			$	279

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		Domestic												International
		December 31,												December 31,
		2005				2004				2003				2005				2004				2003
		(millions)												(millions)
Service cost		$	135			$	119			$	106			$	18			$	22			$	21
Interest cost			170				156				144				32				31				26
Expected return on plan assets			(207	)			(173	)			(122	)			(37	)			(36	)			(23	)
Amortization of prior service cost			4				4				4				—				—				—
Amortization of net loss			55				50				70				7				6				5
Net periodic benefit costs		$	157			$	156			$	202			$	20			$	23			$	29

	Assumptions

		Domestic												International
		2005				2004				2003				2005				2004				2003
Discount rate			5.75	%			6.00	%			6.25	%			4.90	%			5.35	%			5.50	%
Rate of compensation increase			4.50	%			4.50	%			4.50	%			4.60	%			3.90	%			3.80	%

		Domestic												International
		2005				2004				2003				2005				2004				2003
Discount rate			6.00	%			6.25	%			6.75	%			5.35	%			5.50	%			5.65	%
Expected long-term return on plan assets			8.00	%			8.00	%			8.00	%			7.10	%			7.25	%			7.55	%
Rate of compensation increase			4.50	%			4.50	%			4.50	%			3.90	%			3.80	%			3.70	%

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	Plan Assets

		Domestic								International
		December 31,								December 31,
		2005				2004				2005				2004
		(millions)								(millions)
Equity securities			75	%			75	%			70	%			72	%
Debt securities			25	%			25	%			30	%			28	%
Total			100	%			100	%			100	%			100	%

	Expected cash flows

		Domestic				International
Expected benefit payments:
2006		$	101			$	9
2007			111				10
2008			115				11
2009			120				12
2010			122				14
2011 — 2015			738				103

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	Defined contribution plans

14.	MERGER AND RESTRUCTURING COSTS

	Merger Costs

	Merger Costs Capitalized as a Cost of Acquisition

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		Employee				Other
		Termination				Exit Costs				Total
Initial accruals		$	619			$	412			$	1,031
Restructuring liability as of December 31, 2003		$	28			$	36			$	64
Cash paid — 2004			(14	)			(7	)			(21	)
Noncash reductions — 2004(a)			(2	)			(3	)			(5	)
Restructuring liability as of December 31, 2004			12				26				38
Cash paid — 2005			(5	)			(3	)			(8	)
Noncash reductions — 2005(a)			—				(3	)			(3	)
Adjustments — 2005(b)			—				5				5
Restructuring liability as December 31, 2005		$	7			$	25			$	32

(a)	Noncash reductions represent adjustments to the restructuring accrual, with a corresponding reduction in goodwill, as actual costs related to employee terminations and other exit costs were less than originally estimated.
(b)	Noncash adjustments represents primarily an adjustment to record interest imputed on certain liabilities that were initially recorded at the present value of the obligation.

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		Employee				Other
		Terminations				Exit Costs				Total
2005 accruals		$	109			$	7			$	116
Cash paid  — 2005			(23	)			(2	)			(25	)
Remaining liability as of December 31, 2005		$	86			$	5			$	91

	2004 Restructuring Costs

		Employee
		Terminations
2004 accruals		$	55
Cash paid — 2004			(5	)
Remaining liability as of December 31, 2004			50
Net additional accrual			1
Cash paid — 2005			(44	)
Remaining liability as of December 31, 2005		$	7

	2003 Restructuring Costs

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		Employee				Other
		Terminations				Exit Costs				Total
2003 accruals		$	64			$	45			$	109
Cash paid — 2003			(17	)			(1	)			(18	)
Remaining liability as of December 31, 2003			47				44				91
Cash paid — 2004			(42	)			(4	)			(46	)
Noncash reductions — 2004(a)			(2	)			(3	)			(5	)
Remaining liability as of December 31, 2004			3				37				40
Cash paid — 2005			(3	)			(16	)			(19	)
Noncash reductions — 2005(a)			—				(9	)			(9	)
Remaining liability as of December 31, 2005		$	—			$	12			$	12

(a)	Noncash reductions reflect changes in estimates of previously established restructuring accruals.

		Employee				Other
		Terminations				Exit Costs				Total
Initial accruals		$	92			$	235			$	327
Remaining liability as of December 31, 2003		$	52			$	10			$	62
Cash paid — 2004			(17	)			(6	)			(23	)
Noncash reductions — 2004(a)			(12	)			—				(12	)
Remaining liability as of December 31, 2004			23				4				27
Cash paid — 2005			(9	)			(3	)			(12	)
Remaining liability as of December 31, 2005		$	14			$	1			$	15

(a)	During the second quarter of 2004, a $12 million severance accrual, initially established in 2002, was reversed in connection with the settlement of that accrual with the issuance of options to purchase stock of the Company. The obligation related to the option issuance was valued at $10 million and was reflected in shareholders’ equity.

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15.	DERIVATIVE INSTRUMENTS

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	Cash Flow Hedges

	Fair Value Hedges and Other Derivative Contracts

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16.	SEGMENT INFORMATION

			Years Ended December 31,
			2005				2004				2003
			(millions)
Revenues
AOL			$	8,283			$	8,692			$	8,598
Cable				9,498				8,484				7,699
Filmed Entertainment				11,924				11,853				10,967
Networks				9,611				9,054				8,434
Publishing				5,846				5,565				5,533
Intersegment elimination				(1,510	)			(1,559	)			(1,668	)
	Total revenues		$	43,652			$	42,089			$	39,563

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	•	The Filmed Entertainment segment generating Content revenues by licensing television and theatrical programming to the Networks segment;
	•	The Networks segment generating Subscription revenues by selling cable network programming to the Cable segment;
	•	The AOL, Cable, Networks and Publishing segments generating Advertising revenues by cross-promoting the products and services of all Time Warner segments; and
	•	The AOL segment generating Other revenues by providing the Cable segment’s customers access to the AOL Transit Data Network for high-speed access to the Internet.

			Years Ended December 31,
			2005				2004				2003
			(millions)
Intersegment Revenues(a)
AOL			$	28			$	59			$	102
Cable				40				54				69
Filmed Entertainment				749				757				816
Networks				595				602				605
Publishing				98				87				76
	Total intersegment revenues		$	1,510			$	1,559			$	1,668

(a)	Intersegment revenues include intercompany Advertising revenues of $176 million, $162 million, and $211 million for the years ended December 31, 2005, 2004, and 2003, respectively.

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			Years Ended December 31,
			2005				2004				2003
			(millions)
Operating Income before Depreciation and Amortization
AOL(a)			$	1,899			$	1,772			$	1,505
Cable				3,652				3,278				2,992
Filmed Entertainment(b)				1,289				1,474				1,355
Networks(c)				2,999				2,694				2,027
Publishing(d)				1,259				1,196				955
Corporate(e)				(3,295	)			(1,020	)			(424	)
Intersegment elimination				(7	)			(22	)			(17	)
	Total Operating Income before Depreciation and Amortization		$	7,796			$	9,372			$	8,393

(a)	For the year ended December 31, 2005, includes a $24 million noncash impairment charge related to goodwill associated with AOLA, an approximate $5 million gain related to the sale of a building and a $5 million gain from the resolution of a previously contingent gain related to the 2004 sale of Netscape Security Solutions (“NSS”). For the year ended December 31, 2004, includes a $10 million impairment charge related to a building that was held for sale, a gain of $13 million related to the sale of AOL Japan and a $7 million gain related to the sale of NSS.
(b)	For the year ended December 31, 2005, includes a $5 million gain related to the sale of a property in California. For the year ended December 31, 2003, includes a $43 million gain related to the sale of consolidated cinemas in the UK.
(c)	For the year ended December 31, 2004, includes an approximate $7 million loss related to the sale of the winter sports teams. For the year ended December 31, 2003, includes a $219 million impairment of intangible assets related to the winter sports team.

(d)

For the year ended December 31, 2005, includes an $8 million gain related to the collection of a loan made in conjunction with the Company’s 2003 sale of Time Life, which was previously fully reserved due to concerns about recoverability. For the year ended December 31, 2004, includes an $8 million gain related to the sale of a building. For the year ended December 31, 2003, includes a $99 million impairment of goodwill and other intangible assets related to the TWBG, and a $29 million loss on the sale of Time Life.

(e)

For the year ended December 31, 2005, includes $3 billion in legal reserves related to securities litigation and $135 million in net recoveries related to securities litigation and the government investigations. For year ended December 31, 2004, includes $510 million in legal reserves related to the government investigations and $26 million in net expenses related to securities litigation and government investigations. For the year ended December 31, 2003, includes $56 million in net expenses related to securities litigation and the government investigations. For the year ended December 31, 2004, includes $53 million of costs associated with the relocation from the Company’s former corporate headquarters. For the year ended December 31, 2005, the Company reversed approximately $4 million of this charge, which was no longer required due to changes in estimates.

			Years Ended December 31,
			2005				2004				2003
			(millions)
Depreciation of Property, Plant and Equipment
AOL			$	557			$	662			$	668
Cable				1,588				1,438				1,403
Filmed Entertainment				121				104				86
Networks				238				212				192
Publishing				132				122				116
Corporate				44				43				34
	Total depreciation of property, plant and equipment		$	2,680			$	2,581			$	2,499

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			Years Ended
			December 31,
			2005				2004				2003
			(millions)
Amortization of Intangible Assets
AOL			$	174			$	176			$	175
Cable				76				76				58
Filmed Entertainment				225				213				206
Networks				23				21				26
Publishing				99				140				175
	Total amortization of intangible assets		$	597			$	626			$	640

			Years Ended December 31,
			2005				2004				2003
			(millions)
Operating Income
AOL(a)			$	1,168			$	934			$	662
Cable				1,988				1,764				1,531
Filmed Entertainment(b)				943				1,157				1,063
Networks(c)				2,738				2,461				1,809
Publishing(d)				1,028				934				664
Corporate(e)				(3,339	)			(1,063	)			(458	)
Intersegment elimination				(7	)			(22	)			(17	)
	Total operating income		$	4,519			$	6,165			$	5,254

(a)	For the year ended December 31, 2005, includes a $24 million noncash impairment charge related to goodwill associated with AOLA, an approximate $5 million gain related to the sale of a building and a $5 million gain from the resolution of a previously contingent gain related to the 2004 sale of NSS. For the year ended December 31, 2004, includes a $10 million impairment charge related to a building that was held for sale, a gain of $13 million related to the sale of AOL Japan and a $7 million gain related to the sale of NSS.
(b)	For the year ended December 31, 2005, includes a $5 million gain related to the sale of a property in California. For the year ended December 31, 2003, includes a $43 million gain related to the sale of consolidated cinemas in the UK.
(c)	For the year ended December 31, 2004, includes an approximate $7 million loss related to the sale of the winter sports teams. For the year ended December 31, 2003, includes a $219 million impairment of intangible assets related to the winter sports team.
(d)	For the year ended December 31, 2005, includes an $8 million gain related to the collection of a loan made in conjunction with the Company’s 2003 sale of Time Life, which was previously fully reserved due to concerns about recoverability. For the year ended December 31, 2004, includes an $8 million gain related to the sale of a building. For the year ended December 31, 2003, includes a $99 million impairment of goodwill and other intangible assets related to the TWBG, and a $29 million loss on the sale of Time Life.
(e)	For the year ended December 31, 2005, includes $3 billion in legal reserves related to securities litigation and $135 million in net recoveries related to securities litigation and the government investigations. For year ended December 31, 2004, includes $510 million in legal reserves related to the government investigations and $26 million in net expenses related to securities litigation and the government investigations. For the year ended December 31, 2003, includes $56 million in net expenses related to securities litigation and the government investigations. For the year ended December 31, 2004, includes $53 million of costs associated with the relocation from the Company’s former corporate headquarters. For the year ended December 31, 2005, the Company reversed approximately $4 million of this charge, which was no longer required due to changes in estimates.

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			Years Ended
			December 31,
			2005				2004
			(millions)
Assets
AOL			$	5,846			$	7,175
Cable				43,702				43,165
Filmed Entertainment				17,819				17,924
Networks				34,076				33,042
Publishing				14,682				14,012
Corporate				6,350				7,840
	Total assets		$	122,475			$	123,158

			Years Ended December 31,
			2005				2004				2003
			(millions)
Capital Expenditures and Product Development Costs
AOL			$	417			$	417			$	467
Cable				1,975				1,712				1,637
Filmed Entertainment				184				178				136
Networks				343				320				269
Publishing				304				232				148
Corporate				23				165				104
	Total capital expenditures and product development costs		$	3,246			$	3,024			$	2,761

			Years Ended December 31,
			2005				2004				2003
			(millions)
Revenues(a)
United States			$	34,469			$	33,572			$	32,123
United Kingdom				2,886				2,507				2,194
Germany				1,233				1,161				1,239
France				941				879				773
Canada				625				503				413
Japan				591				685				577
Other international				2,907				2,782				2,244
	Total revenues		$	43,652			$	42,089			$	39,563

(a)	Revenues are attributed to countries based on location of customer.

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17.	COMMITMENTS AND CONTINGENCIES

2006		$	549
2007			527
2008			483
2009			452
2010			387
Thereafter			2,155
Total		$	4,553

2006		$	8,275
2007-2008			10,187
2009-2010			4,917
Thereafter			4,222
Total		$	27,601

			Total
Nature of Contingent Commitments			Commitments				2006				2007-2008				2009-2010				Thereafter
			(millions)
Guarantees			$	2,071			$	81			$	169			$	174			$	1,647
Letters of credit and other contingent commitments				366				79				6				75				206
	Total contingent commitments		$	2,437			$	160			$	175			$	249			$	1,853

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	•	Guarantees include guarantees the Company has provided on certain lease and operating commitments entered into by (a) entities formerly owned by the Company as described below, and (b) joint ventures in which the Company is or was a venture partner.

	In connection with the Company’s former investment in the Six Flags theme parks located in Georgia and Texas (“Six Flags Georgia” and “Six Flags Texas,” respectively, and, collectively, the “Parks”), the Company agreed to guarantee (the “Six Flags Guarantee”) certain obligations of the partnerships that hold the Parks (the “Partnerships”), including the following (the “Guaranteed Obligations”): (a) the obligation to make a minimum amount of annual distributions to the limited partners of the Partnerships; (b) the obligation to make a minimum amount of capital expenditures each year; (c) the requirement that an annual offer to purchase be made in respect of 5% of the limited partnership units of the Partnerships (plus any such units not purchased in any prior year) based on an aggregate price for all limited partnership units at the higher of (i) $250 million in the case of Six Flags Georgia or $374.8 million in the case of Six Flags Texas and (ii) a weighted average multiple of EBITDA for the respective Park over the previous four-year period; (d) ground lease payments; and (e) either (i) the purchase of all of the outstanding limited partnership units upon the earlier of the occurrence of certain specified events and the end of the term of each of the Partnerships in 2027 (Six Flags Georgia) and 2028 (Six Flags Texas) (the “End of Term Purchase”) or (ii) the obligation to cause each of the Partnerships to have no indebtedness and to meet certain other financial tests as of the end of the term of the Partnership. The aggregate purchase price for the limited partnership units pursuant to the End of Term Purchase is $250 million in the case of Six Flags Georgia and $374.8 million in the case of Six Flags Texas (in each case, subject to a consumer price index based adjustment calculated annually from 1998 in respect of Six Flags Georgia and 1999 in respect of Six Flags Texas). Such aggregate amount will be reduced ratably to reflect limited partnership units previously purchased.
	In connection with the 1998 sale of Six Flags Entertainment Corporation to Premier Parks Inc. (“Premier”), Premier and the Company, among others, entered into a Subordinated Indemnity Agreement pursuant to which Premier agreed to guarantee the performance of the Guaranteed Obligations when due and to indemnify the Company, among others, in the event that the Guaranteed Obligations are not performed and the Six Flags Guarantee is called upon. In the event of a default of Premier’s obligations under the Subordinated Indemnity Agreement, the Subordinated Indemnity Agreement and related agreements provide, among other things, that the Company has the right to acquire control of the managing partner of the Parks. Premier’s obligations to the Company are further secured by its interest in all limited partnership units that are purchased by Premier.
	To date, no payments have been made by the Company pursuant to the Six Flags Guarantee.

	•	Generally, letters of credit and surety bonds support performance and payments for a wide range of global contingent and firm obligations including insurance, litigation appeals, import of finished goods, real estate leases, cable installations and other operational needs. The Cable segment has obtained letters of credit for several of its joint ventures. Should these joint ventures default on their obligations supported by the letters of credit, the Cable segment would be obligated to pay these costs to the extent of the letters of credit.

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	Other Related Securities Litigation Matters

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	•	Pay a $300 million penalty, which will be used for a Fair Fund, as authorized under the Sarbanes-Oxley Act;
	•	Adjust its historical accounting for Advertising revenues in certain transactions with Bertelsmann, A.G. that were improperly or prematurely recognized, primarily in the second half of 2000, during 2001 and during 2002; as well as adjust its historical accounting for transactions involving three other AOL customers where there were Advertising revenues recognized in the second half of 2000 and during 2001;
	•	Adjust its historical accounting for its investment in and consolidation of AOL Europe; and
	•	Agree to the appointment of an independent examiner, who will either be or hire a certified public accountant. The independent examiner will review whether the Company’s historical accounting for transactions with 17 counterparties identified by the SEC staff, principally involving online advertising revenues and including three cable programming affiliation agreements with related advertising elements, was in conformity with GAAP, and provide a report to the Company’s audit and finance committee of its conclusions, originally within 180 days of being engaged. The transactions that would be reviewed were entered into between June 1, 2000 and December 31, 2001, including subsequent amendments thereto, and involved online advertising and related transactions for which revenue was principally recognized before January 1, 2002.

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18.	RELATED PARTY TRANSACTIONS

19.	ADDITIONAL FINANCIAL INFORMATION

		Year Ended December 31,
		2005				2004				2003
		(millions)
Cash payments made for interest		$	(1,536	)		$	(1,672	)		$	(1,694	)
Interest income received			230				94				61
Cash interest payments, net		$	(1,306	)		$	(1,578	)		$	(1,633	)
Cash payments made for income taxes		$	(494	)		$	(489	)		$	(504	)
Income tax refunds received			83				107				15
Cash tax payments, net		$	(411	)		$	(382	)		$	(489	)

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			Year Ended December 31,
			2005				2004				2003
			(millions)
Interest income			$	356			$	221			$	192
Interest expense				(1,622	)			(1,754	)			(1,926	)
	Total interest expense, net		$	(1,266	)		$	(1,533	)		$	(1,734	)

			Year Ended December 31,
			2005				2004				2003
			(millions)
Investment gains, net(a)			$	1,011			$	424			$	593
Net gain on WMG option				53				50				—
Microsoft Settlement(b)				—				—				760
Income (Loss) on equity method investees				60				35				(97	)
Losses on accounts receivable securitization programs				(36	)			(15	)			(32	)
Other				36				27				(14	)
	Total other income, net		$	1,124			$	521			$	1,210

(a)	Includes a noncash pretax charge to reduce the carrying value of certain investments for other-than-temporary declines in value of $17 million for the year ended December 31, 2005, $29 million for the year ended December 31, 2004, and $204 million for the year ended December 31, 2003.
(b)	Reflects a $760 million gain on the settlement of litigation between Microsoft Corporation and Netscape Communications Corporation, a subsidiary of AOL.

			December 31,
			2005				2004
			(millions)
Accrued expenses			$	4,613			$	5,050
Accrued compensation				1,327				1,261
Accrued income taxes				160				157
	Total other current liabilities		$	6,100			$	6,468

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	ERNST & YOUNG LLP

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	ERNST & YOUNG LLP

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			Years Ended December 31,
			2005				2004				2003				2002				2001
																			(unaudited)
			(millions, except per share data)
Selected Operating Statement Information:
Revenues:
	Subscription		$	22,222			$	21,605			$	20,448			$	18,959			$	16,466
	Advertising			7,612				6,955				6,180				6,045				6,743
	Content			12,615				12,350				11,446				10,216				8,654
	Other			1,203				1,179				1,489				1,840				2,233
Total revenues				43,652				42,089				39,563				37,060				34,096
Operating income (loss)(a)				4,519				6,165				5,254				(37,414	)			(392	)
Interest expense, net				(1,266	)			(1,533	)			(1,734	)			(1,624	)			(1,164	)
Other income (expense), net(b)				1,124				521				1,210				(2,341	)			(3,490	)
Income (loss) before discontinued operations and cumulative effect of accounting change				2,905				3,209				3,146				(41,970	)			(5,147	)
Discontinued operations, net of tax				—				121				(495	)			(1,012	)			(713	)
Cumulative effect of accounting change(c)				—				34				(12	)			(54,235	)			—
Net income (loss)				2,905				3,364				2,639				(97,217	)			(5,860	)
Per share of common stock:
	Basic income (loss) per common share before discontinued operations and cumulative effect of accounting change		$	0.62			$	0.70			$	0.70			$	(9.42	)		$	(1.16	)
	Discontinued operations			—				0.03				(0.11	)			(0.23	)			(0.16	)
	Cumulative effect of accounting change			—				0.01				—				(12.17	)			—
	Basic net income (loss) per common share		$	0.62			$	0.74			$	0.59			$	(21.82	)		$	(1.32	)
	Diluted income (loss) per common share before discontinued operations and cumulative effect of accounting change		$	0.62			$	0.68			$	0.68			$	(9.42	)		$	(1.16	)
	Discontinued operations			—				0.03				(0.11	)			(0.23	)			(0.16	)
	Cumulative effect of accounting change			—				0.01				—				(12.17	)			—
	Diluted net income (loss) per common share		$	0.62			$	0.72			$	0.57			$	(21.82	)		$	(1.32	)
Average common shares:
	Basic			4,648.2				4,560.2				4,506.0				4,454.9				4,429.1
	Diluted			4,710.0				4,694.7				4,623.7				4,454.9				4,429.1

(a)	2005 includes a $24 million noncash impairment charge related to goodwill associated with AOLA, an approximate $5 million gain related to the sale of a building, a $5 million gain from the resolution of a previously contingent gain related to the 2004 sale of NSS, an $8 million gain related to the collection of a loan made in conjunction with the Company’s 2003 sale of Time Life, which was previously fully reserved due to concerns about recoverability, a $5 million gain related to the sale of a property in California and $3 billion in legal reserves related to securities litigation and $135 million in net recoveries related to securities litigation and the government investigations. 2004 includes a $10 million impairment charge related to a building that was held for sale, a gain of $13 million related to the sale of AOL Japan, a $7 million gain related to the sale of NSS, an approximate $7 million loss related to the sale of the winter sports team, an $8 million gain related to the sale of a building, $510 million legal reserves related to the government investigations and $26 million in net expenses related to securities litigation and the government investigations. 2003 includes a $43 million gain related to the sale of consolidated cinemas in the UK, a $29 million loss on the sale of Time Life and a noncash charge to reduce the carrying value of goodwill and other intangible assets of $318 million in 2003 and $42.511 billion in 2002. Also includes merger-related costs and restructurings of $117 million in 2005, $50 million in 2004, $109 million in 2003, $327 million in 2002 and $214 million in 2001. 2004 also includes $53 million of costs associated with the relocation from the Company’s former Corporate Headquarters. For the year ended December 31, 2005, the Company reversed approximately $4 million of this charge, which was no longer required due to changes in estimates.
(b)	Includes net gains of $1.011 billion in 2005, $424 million in 2004 and $593 million in 2003 primarily related to the sale of investments and net losses of $2.075 billion in 2002 and $2.528 billion in 2001 primarily related to noncash pretax charges to reduce the carrying value of certain investments that experienced other-than-temporary declines in market value. In addition, 2005 includes a $53 million net gain related to the sale of the Company’s option in WMG and 2004 includes a $50 million fair value adjustment related to the Company’s option in WMG (Note 6).
(c)	Includes a noncash benefit of $34 million in 2004 related to the cumulative effect of an accounting change in connection with the consolidation of AOLA in 2004 in accordance with FIN 46R, a noncash charge of $12 million in 2003 related to the cumulative effect of an accounting change in connection with the adoption of FIN 46 and a noncash charge of $54.235 billion in 2002 related to the cumulative effect of an accounting change in connection with the adoption of FAS 142 (Note 1).

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		As of December 31,
		2005				2004				2003				2002				2001
																		(unaudited)
		(millions, except per share data)
Selected Balance Sheet Information:
Cash and equivalents		$	4,220			$	6,139			$	3,040			$	1,730			$	771
Total assets			122,475				123,158				121,780				115,513				209,464
Debt due within one year			92				1,672				2,287				155				675
Mandatorily convertible preferred stock			—				1,500				1,500				—				—
Long-term debt			20,238				20,703				23,458				27,354				22,792
Shareholders’ equity			62,715				60,771				56,213				52,991				150,829
Total capitalization			83,045				84,646				83,458				80,500				174,296
Cash dividends declared per share of common stock			0.10				—				—				—				—

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			Quarter Ended
			March 31,				June 30,				September 30,				December 31,
			(millions, except per share data)
2005(a)(b)
Revenues:
	Subscription		$	5,492			$	5,618			$	5,535			$	5,577
	Advertising			1,647				2,020				1,776				2,169
	Content			3,083				2,816				2,938				3,778
	Other			261				290				289				363
Total revenues				10,483				10,744				10,538				11,887
Operating income (loss)				1,779				(1,231	)			1,771				2,200
Net income (loss)				963				(321	)			897				1,366
Net income (loss) per share — basic				0.21				(0.07	)			0.19				0.29
Net income (loss) per share — diluted				0.20				(0.07	)			0.19				0.29
Net cash provided (used) by operating activities				1,854				1,609				2,134				(632	)
Common stock — high				19.64				18.25				19.00				18.53
Common stock — low				16.86				16.54				16.10				16.74
Cash dividends declared per share of common stock				—				—				0.05				0.05
2004(b)(c)
Revenues:
	Subscription		$	5,314			$	5,486			$	5,368			$	5,437
	Advertising			1,447				1,846				1,646				2,016
	Content			3,117				3,237				2,648				3,348
	Other			307				291				273				308
Total revenues				10,185				10,860				9,935				11,109
Operating income				1,616				1,838				1,108				1,603
Income before discontinued operations and cumulative effect of accounting change				712				882				494				1,121
Discontinued operations, net of tax				215				(105	)			5				6
Income before cumulative effect of accounting change				927				777				499				1,127
Cumulative effect of accounting change				34				—				—				—
Net income				961				777				499				1,127
Basic income per common share before discontinued operations and cumulative effect of accounting change				0.16				0.19				0.11				0.24
Basic income per common share before cumulative effect of accounting change				0.20				0.17				0.11				0.25
Diluted income per common share before discontinued operations and cumulative effect of accounting change				0.15				0.19				0.10				0.24
Diluted income per common share before cumulative effect of accounting change				0.19				0.17				0.11				0.24
Net income per share — basic				0.21				0.17				0.11				0.25
Net income per share — diluted				0.20				0.17				0.11				0.24
Net cash provided by operating activities				1,819				1,487				2,082				1,230
Common stock — high				19.30				17.89				17.70				19.90
Common stock — low				16.13				16.10				15.41				15.82

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(a)		Time Warner’s net income (loss) per common share in 2005 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a $24 million noncash impairment charge related to goodwill associated with AOLA, (ii) the following restructuring and merger-related costs: $12 million in net restructuring costs during the first quarter, $11 million in net restructuring costs during the second quarter, $5 million in restructuring costs during the third quarter and $89 million in net restructuring costs in the fourth quarter (Note 14), (iii) net gains from the disposal of consolidated assets of $10 million in the first quarter, $8 million in the second quarter, and $5 million in the fourth quarter, (iv) pretax gains (losses) on the sale of investments of $23 million in the first quarter, $982 million in the second quarter, $10 million in the third quarter and ($4) million in the fourth quarter, thereby aggregating to $1.011 billion for the year, (v) a $80 million gain in the first quarter and a $27 million loss in the second quarter related to the fair value adjustment for the Company’s option in WMG (Note 3), (vi) and $6 million in net expenses related to securities litigation and the government investigations in the first quarter, $3 billion in legal reserves related to securities litigation and $3 million in net expenses related to securities litigation and the government investigations in the second quarter, $16 million in net expenses related to securities litigation and the government investigations in the third quarter, and $160 million in net recoveries related to securities litigation and the government investigations in the fourth quarter.
(b)		Per common share amounts for the quarters and full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.
(c)		Time Warner’s net income per common share in 2004 has been affected by certain significant transactions and other items affecting comparability. These items consisted of (i) a noncash gain of $34 million in the first quarter upon adoption of FIN 46R (Note 1), (ii) a noncash pretax charge of $10 million in the second quarter to reduce the carrying value of certain fixed assets held for sale, (iii) the following restructuring costs: $2 million reduction in restructuring costs in the second quarter of 2004; $52 million in net restructuring costs in the fourth quarter, (Note 14), (iv) net gains from the disposal of consolidated assets of $1 million in the first quarter, $13 million in the third quarter, and $7 million in the fourth quarter, (v) pretax gains (losses) on the sale of investments of $36 million in the first quarter, $10 million in the second quarter, $296 million in the third quarter and $82 million in the fourth quarter, thereby aggregating $424 million for the year, (vi) a $50 million fair value adjustment related to the Company’s option in WMG (Note 3) in the fourth quarter, (vii) discontinued operations, net of tax of $215 million in the first quarter, $(105) million in the second quarter, $5 million in the third quarter and $6 million in the fourth quarter, thereby aggregating $121 million for the year, to reflect the deconsolidation of the Music businesses (Note 1) and (viii) $8 million in net expenses related to securities litigation and the government investigations in the first quarter, $6 million in net expenses related to securities litigation and the government investigations in the second quarter, $500 million in legal reserves related to the government investigations and $9 million in net expenses related to securities litigation and the government investigations in the third quarter, and $10 million in legal reserves related to the government investigations and $3 million in net expenses related to securities litigation and the government investigations in the fourth quarter.

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																														Time
		Time								Historic				TW								Non-Guarantor								Warner
		Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																		(millions)
Revenues		$	—			$	5,523			$	—			$	—			$	1,099			$	37,198			$	(168	)		$	43,652
Costs of revenues			—				(2,534	)			—				—				(503	)			(22,192	)			154				(25,075	)
Selling, general and administrative			(47	)			(1,993	)			(48	)			(21	)			(196	)			(8,192	)			19				(10,478	)
Amortization of intangible assets			—				(30	)			—				—				—				(567	)			—				(597	)
Amounts related to securities litigation and government investigations			(2,865	)			—				—				—				—				—				—				(2,865	)
Merger-related and restructuring costs			—				(7	)			—				—				—				(110	)			—				(117	)
Asset impairments			—				—				—				—				—				(24	)			—				(24	)
Gains on disposal of assets, net			—				10				—				—				—				13				—				23
Operating income (loss)			(2,912	)			969				(48	)			(21	)			400				6,126				5				4,519
Equity in pretax income (loss) of consolidated subsidiaries			7,399				88				5,482				4,995				1,111				—				(19,075	)			—
Interest income (expense), net			(445	)			(12	)			(82	)			(779	)			(80	)			132				—				(1,266	)
Other income (expense), net			50				950				52				1				165				372				(466	)			1,124
Minority interest expense, net			—				—				—				—				—				(285	)			—				(285	)
Income (loss) before income taxes			4,092				1,995				5,404				4,196				1,596				6,345				(19,536	)			4,092
Income tax benefit (provision)			(1,187	)			(656	)			(1,580	)			(1,112	)			(619	)			(1,945	)			5,912				(1,187	)
Net income (loss)		$	2,905			$	1,339			$	3,824			$	3,084			$	977			$	4,400			$	(13,624	)		$	2,905

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																						Non-								Time
		Time								Historic				TW								Guarantor								Warner
		Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																		(millions)
Revenues		$	—			$	6,106			$	—			$	—			$	1,012			$	35,155			$	(184	)		$	42,089
Costs of revenues			—				(3,103	)			—				—				(492	)			(21,027	)			173				(24,449	)
Selling, general and administrative			(29	)			(2,158	)			(55	)			(25	)			(191	)			(7,822	)			6				(10,274	)
Amortization of intangible assets			—				(37	)			—				—				—				(589	)			—				(626	)
Amounts related to securities litigation and government investigations			(536	)			—				—				—				—				—				—				(536	)
Merger-related and restructuring costs			—				(44	)			—				—				—				(6	)			—				(50	)
Asset impairments			—				(10	)			—				—				—				—				—				(10	)
Gains (losses) on disposal of assets, net			—				20				—				—				(7	)			8				—				21
Operating income (loss)			(565	)			774				(55	)			(25	)			322				5,719				(5	)			6,165
Equity in pretax income (loss) of consolidated subsidiaries			6,046				46				5,102				4,334				1,275				—				(16,803	)			—
Interest expense, net			(611	)			(62	)			(91	)			(558	)			(59	)			(152	)			—				(1,533	)
Other income (expense), net			37				286				47				(9	)			139				465				(444	)			521
Minority interest expense, net			—				—				—				—				—				(246	)			—				(246	)
Income (loss) before income taxes, discontinued operations and cumulative effect of accounting change			4,907				1,044				5,003				3,742				1,677				5,786				(17,252	)			4,907
Income tax benefit (provision)			(1,698	)			(294	)			(1,837	)			(1,367	)			(626	)			(2,135	)			6,259				(1,698	)
Income (loss) before discontinued operations and cumulative effect of accounting change			3,209				750				3,166				2,375				1,051				3,651				(10,993	)			3,209
Discontinued operations, net of tax			121				—				121				121				—				121				(363	)			121
Income (loss) before cumulative effect of accounting change			3,330				750				3,287				2,496				1,051				3,772				(11,356	)			3,330
Cumulative effect of accounting change, net of tax			34				34				—				—				—				34				(68	)			34
Net income (loss)		$	3,364			$	784			$	3,287			$	2,496			$	1,051			$	3,806			$	(11,424	)		$	3,364

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																														Time
		Time								Historic				TW								Non-Guarantor								Warner
		Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																		(millions)
Revenues		$	—			$	6,426			$	—			$	—			$	898			$	32,317			$	(78	)		$	39,563
Costs of revenues			—				(3,552	)			—				—				(484	)			(19,450	)			64				(23,422	)
Selling, general and administrative			10				(2,062	)			(46	)			(21	)			(154	)			(7,519	)			14				(9,778	)
Amortization of intangible assets			—				(29	)			—				—				—				(611	)			—				(640	)
Amounts related to securities litigation and government investigations			(56	)			—				—				—				—				—				—				(56	)
Merger-related and restructuring costs			—				(52	)			—				—				(11	)			(46	)			—				(109	)
Asset impairments			—				—				—				—				—				(318	)			—				(318	)
Gains on disposal of assets, net			—				—				—				—				—				14				—				14
Operating income (loss)			(46	)			731				(46	)			(21	)			249				4,387				—				5,254
Equity in pretax income (loss) of consolidated subsidiaries			5,236				(213	)			4,053				3,789				601				—				(13,466	)			—
Interest expense, net			(674	)			(70	)			(88	)			(437	)			(86	)			(379	)			—				(1,734	)
Other income (expense), net			—				873				(9	)			—				139				508				(301	)			1,210
Minority interest expense, net			—				—				—				—				—				(214	)			—				(214	)
Income (loss) before income taxes, discontinued operations and cumulative effect of accounting change			4,516				1,321				3,910				3,331				903				4,302				(13,767	)			4,516
Income tax benefit (provision)			(1,370	)			(103	)			(1,540	)			(1,328	)			(333	)			(1,687	)			4,991				(1,370	)
Income (loss) before discontinued operations and cumulative effect of accounting change			3,146				1,218				2,370				2,003				570				2,615				(8,776	)			3,146
Discontinued operations, net of tax			(495	)			—				(495	)			(495	)			—				(495	)			1,485				(495	)
Income (loss) before cumulative effect of accounting change			2,651				1,218				1,875				1,508				570				2,120				(7,291	)			2,651
Cumulative effect of accounting change, net of tax			(12	)			—				(12	)			(7	)			(5	)			(12	)			36				(12	)
Net income (loss)		$	2,639			$	1,218			$	1,863			$	1,501			$	565			$	2,108			$	(7,255	)		$	2,639

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																						Non-								Time
		Time								Historic				TW								Guarantor								Warner
		Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																		(millions)
ASSETS
Current assets
Cash and equivalents		$	3,798			$	19			$	—			$	59			$	36			$	308			$	—			$	4,220
Receivables, net			291				221				—				—				1				5,898				—				6,411
Inventories			—				1				—				—				1				1,804				—				1,806
Prepaid expenses and other current assets			121				93				22				—				13				770				7				1,026
Total current assets			4,210				334				22				59				51				8,780				7				13,463
Noncurrent inventories and film costs			—				—				—				—				—				4,916				—				4,916
Investments in amounts due to and from consolidated subsidiaries			83,048				1,253				78,586				66,206				17,434				—				(246,527	)			—
Investments, including available-for-sale securities			27				161				284				—				448				4,308				(1,710	)			3,518
Property, plant and equipment, net			513				908				—				—				175				12,080				—				13,676
Intangible assets subject to amortization, net			—				13				—				—				—				3,509				—				3,522
Intangible assets not subject to amortization			—				—				—				—				641				39,172				—				39,813
Goodwill			—				1,492				—				—				2,625				36,299				—				40,416
Other assets			88				227				659				—				22				2,155				—				3,151
Total assets		$	87,886			$	4,388			$	79,551			$	66,265			$	21,396			$	111,219			$	(248,230	)		$	122,475
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	4			$	62			$	—			$	—			$	18			$	1,296			$	—			$	1,380
Participations payable			—				—				—				—				—				2,426				—				2,426
Royalties and programming costs payable			—				26				—				—				4				1,044				—				1,074
Deferred revenue			—				296				—				—				—				1,177				—				1,473
Debt due within one year			—				67				—				4				3				18				—				92
Other current liabilities			1,244				724				59				150				7				4,001				(85	)			6,100
Current liabilities of discontinued operations			—				—				—				—				—				43				—				43
Total current liabilities			1,248				1,175				59				154				32				10,005				(85	)			12,588
Long-term debt			8,971				110				1,489				4,729				333				4,606				—				20,238
Debt due (from) to affiliates			(942	)			—				—				—				—				942				—				—
Deferred income taxes			15,138				451				14,687				13,295				1,472				14,767				(44,672	)			15,138
Deferred revenue			—				—				—				—				—				681				—				681
Other liabilities			756				51				1,252				370				271				4,076				(1,452	)			5,324
Noncurrent liabilities of discontinued operations			—				—				—				—				—				7				—				7
Minority interests			—				—				—				—				—				7,122				(1,338	)			5,784
Shareholders’ equity
Due (to) from Time Warner and subsidiaries			—				(2,746	)			(4,296	)			(6,137	)			(3,227	)			(15,798	)			32,204				—
Other shareholders’ equity			62,715				5,347				66,360				53,854				22,515				84,811				(232,887	)			62,715
Total shareholders’ equity			62,715				2,601				62,064				47,717				19,288				69,013				(200,683	)			62,715
Total liabilities and shareholders’ equity		$	87,886			$	4,388			$	79,551			$	66,265			$	21,396			$	111,219			$	(248,230	)		$	122,475

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																						Non-								Time
		Time								Historic				TW								Guarantor								Warner
		Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																		(millions)
ASSETS
Current assets
Cash and equivalents		$	5,568			$	12			$	(1	)		$	84			$	(15	)		$	491			$	—			$	6,139
Restricted cash			—				150				—				—				—				—				—				150
Receivables, net			30				201				—				(2	)			(7	)			5,290				—				5,512
Inventories			—				3				—				—				5				1,729				—				1,737
Prepaid expenses and other current assets			50				113				—				—				4				753				—				920
Total current assets			5,648				479				(1	)			82				(13	)			8,263				—				14,458
Noncurrent inventories and film costs			—				—				—				—				—				4,415				—				4,415
Investments in amounts due to and from consolidated subsidiaries			79,253				860				84,668				72,077				17,645				—				(254,503	)			—
Investments, including available-for-sale securities			19				1,175				381				—				397				4,149				(1,418	)			4,703
Property, plant and equipment, net			538				1,085				—				—				107				11,364				—				13,094
Intangible assets subject to amortization, net			—				38				—				—				—				3,854				—				3,892
Intangible assets not subject to amortization			—				—				—				—				641				39,015				—				39,656
Goodwill			1,795				1,477				—				—				2,795				33,600				—				39,667
Other assets			109				331				653				—				24				2,156				—				3,273
Total assets		$	87,362			$	5,445			$	85,701			$	72,159			$	21,596			$	106,816			$	(255,921	)		$	123,158
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	8			$	96			$	—			$	—			$	2			$	1,233			$	—			$	1,339
Participations payable			—				—				—				—				—				2,452				—				2,452
Royalties and programming costs payable			—				21				—				—				2				995				—				1,018
Deferred revenue			—				371				—				—				—				1,282				—				1,653
Debt due within one year			1,000				112				—				502				2				56				—				1,672
Other current liabilities			909				897				17				184				129				4,341				(9	)			6,468
Current liabilities of discontinued operations			—				—				—				—				—				50				—				50
Total current liabilities			1,917				1,497				17				686				135				10,409				(9	)			14,652
Long-term debt			8,968				154				1,483				4,752				320				5,026				—				20,703
Debt due (from) to affiliates			(1,056	)			—				—				—				1,647				1,056				(1,647	)			—
Deferred income taxes			14,943				(175	)			15,118				13,349				1,849				15,198				(45,339	)			14,943
Deferred revenue			—				2				—				—				—				747				—				749
Mandatorily convertible preferred stock			1,500				—				—				—				—				—				—				1,500
Other liabilities			319				65				689				—				13				3,202				—				4,288
Noncurrent liabilities of discontinued operations			—				—				20				—				—				18				—				38
Minority interests			—				—				—				—				—				6,981				(1,467	)			5,514
Shareholders’ equity
Due (to) from Time Warner and subsidiaries			—				(454	)			(1,544	)			(4,700	)			(3,963	)			(23,018	)			33,679				—
Other shareholders’ equity			60,771				4,356				69,918				58,072				21,595				87,197				(241,138	)			60,771
Total shareholders’ equity			60,771				3,902				68,374				53,372				17,632				64,179				(207,459	)			60,771
Total liabilities and shareholders’ equity		$	87,362			$	5,445			$	85,701			$	72,159			$	21,596			$	106,816			$	(255,921	)		$	123,158

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																							Non-								Time
			Time								Historic				TW								Guarantor								Warner
			Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																			(millions)
OPERATIONS
Net income (loss)			$	2,905			$	1,339			$	3,824			$	3,084			$	977			$	4,400			$	(13,624	)		$	2,905
Adjustments for noncash and nonoperating items:
	Depreciation and amortization			43				498				—				—				40				2,696				—				3,277
	Amortization of film costs			—				—				—				—				—				3,513				—				3,513
	Asset impairments			—				—				—				—				—				25				—				25
	Loss (gain) on investments and other assets, net			—				(968	)			(53	)			—				17				(82	)			—				(1,086	)
	Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries			(7,399	)			(87	)			(5,482	)			(4,996	)			(1,111	)			—				19,075				—
	Equity in (income) losses of investee companies, net of cash distributions			—				(1	)			—				—				3				(16	)			—				(14	)
	Amounts related to securities litigation and government investigations			111				—				—				—				—				—				—				111
Changes in operating assets and liabilities, net of acquisitions				6,102				819				3,433				3,823				1,234				(2,917	)			(16,250	)			(3,756	)
Adjustments relating to discontinued operations				—				—				—				—				—				(10	)			—				(10	)
Cash provided (used) by operations				1,762				1,600				1,722				1,911				1,160				7,609				(10,799	)			4,965
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired				—				(205	)			(22	)			—				(74	)			(379	)			—				(680	)
Advances to parents and consolidated subsidiaries				(114	)			—				915				(3	)			—				—				(798	)			—
Capital expenditures and product development costs from continuing operations				(23	)			(320	)			—				—				(121	)			(2,782	)			—				(3,246	)
Investment proceeds from available-for-sale securities				—				965				—				—				—				26				—				991
Other investment proceeds				—				18				138				—				—				283				—				439
Cash provided (used) by investing activities				(137	)			458				1,031				(3	)			(195	)			(2,852	)			(798	)			(2,496	)
FINANCING ACTIVITIES
Borrowings				—				—				—				—				—				6				—				6
Debt repayments				(1,000	)			(2	)			—				(500	)			—				(493	)			—				(1,995	)
Change due to/from parent				(114	)			(1,939	)			(2,752	)			(1,433	)			(912	)			(4,447	)			11,597				—
Proceeds from exercise of stock options				307				—				—				—				—				—				—				307
Principal payments on capital leases				—				(110	)			—				—				(2	)			(6	)			—				(118	)
Repurchases of common stock				(2,141	)			—				—				—				—				—				—				(2,141	)
Dividends paid				(466	)			—				—				—				—				—				—				(466	)
Other				19				—				—				—				—				—				—				19
Cash provided (used) by financing activities				(3,395	)			(2,051	)			(2,752	)			(1,933	)			(914	)			(4,940	)			11,597				(4,388	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS				(1,770	)			7				1				(25	)			51				(183	)			—				(1,919	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD				5,568				12				(1	)			84				(15	)			491				—				6,139
CASH AND EQUIVALENTS AT END OF PERIOD			$	3,798			$	19			$	—			$	59			$	36			$	308			$	—			$	4,220

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																							Non-								Time
			Time								Historic				TW								Guarantor								Warner
			Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																			(millions)
OPERATIONS
Net income (loss)			$	3,364			$	784			$	3,287			$	2,496			$	1,051			$	3,806			$	(11,424	)		$	3,364
Adjustments for noncash and nonoperating items:
	Cumulative effect of accounting change, net of tax			(34	)			(34	)			—				—				—				(34	)			68				(34	)
	Depreciation and amortization			42				604				—				—				25				2,536				—				3,207
	Amortization of film costs			—				—				—				—				—				3,547				—				3,547
	Asset impairments			—				10				—				—				—				—				—				10
	Gain on investments and other assets, net			—				(288	)			—				—				(120	)			(24	)			—				(432	)
	Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries			(6,047	)			(46	)			(5,102	)			(4,334	)			(1,275	)			—				16,804				—
	Equity in (income) losses of investee companies and cash distributions			—				(6	)			—				—				(7	)			33				—				20
	Amounts related to securities litigation and government investigations			—				—				—				—				—				300				—				300
Changes in operating assets and liabilities, net of acquisitions				6,801				(179	)			7,903				7,094				2,140				626				(27,751	)			(3,366	)
Adjustments relating to discontinued operations				—				—				—				—				—				2				—				2
Cash provided (used) by operations				4,126				845				6,088				5,256				1,814				10,792				(22,303	)			6,618
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired				—				(14	)			—				—				2				(865	)			—				(877	)
Advances to parents and consolidated subsidiaries				(1,053	)			—				(357	)			—				(42	)			—				1,452				—
Capital expenditures and product development costs from continuing operations				(165	)			(329	)			—				—				(119	)			(2,411	)			—				(3,024	)
Investment proceeds from available-for-sale securities				—				525				—				—				—				7				—				532
Other investment proceeds				—				83				—				—				146				2,637				—				2,866
Cash provided (used) by investing activities				(1,218	)			265				(357	)			—				(13	)			(632	)			1,452				(503	)
FINANCING ACTIVITIES
Borrowings				—				—				—				—				—				1,320				—				1,320
Debt repayments				—				(1,285	)			—				(302	)			(450	)			(2,486	)			—				(4,523	)
Change due to/from parent				74				402				(5,731	)			(4,959	)			(1,418	)			(9,219	)			20,851				—
Proceeds from exercise of stock options				353				—				—				—				—				—				—				353
Principal payments on capital leases				—				(176	)			—				—				—				(15	)			—				(191	)
Other				25				—				—				—				—				—				—				25
Cash provided (used) by financing activities				452				(1,059	)			(5,731	)			(5,261	)			(1,868	)			(10,400	)			20,851				(3,016	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS				3,360				51				—				(5	)			(67	)			(240	)			—				3,099
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD				2,208				(39	)			(1	)			89				52				731				—				3,040
CASH AND EQUIVALENTS AT END OF PERIOD			$	5,568			$	12			$	(1	)		$	84			$	(15	)		$	491			$	—			$	6,139

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																							Non-								Time
			Time								Historic				TW								Guarantor								Warner
			Warner				AOL				TW				Companies				TBS				Subsidiaries				Eliminations				Consolidated
																			(millions)
OPERATIONS
Net income (loss)			$	2,639			$	1,218			$	1,863			$	1,501			$	565			$	2,108			$	(7,255	)		$	2,639
Adjustments for noncash and nonoperating items:
	Cumulative effect of accounting change, net of tax			12				—				12				7				5				12				(36	)			12
	Depreciation and amortization			25				638				1				—				26				2,449				—				3,139
	Amortization of film costs			—				—				—				—				—				2,959				—				2,959
	Asset impairments			—				—				—				—				—				318				—				318
	Loss (gain) on investments and other assets, net			12				(98	)			—				—				—				(512	)			—				(598	)
	Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries			(5,237	)			213				(4,053	)			(3,789	)			(600	)			—				13,466				—
	Equity in losses of investee companies and cash distributions			—				49				—				—				1				104				—				154
Changes in operating assets and liabilities, net of acquisitions				8,110				272				6,744				4,309				573				1,160				(24,035	)			(2,867	)
Adjustments relating to discontinued operations				—				—				—				—				—				845				—				845
Cash provided (used) by operations				5,561				2,292				4,567				2,028				570				9,443				(17,860	)			6,601
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired				—				1				—				—				(103	)			(468	)			—				(570	)
Investment and acquisitions from discontinued operations				—				—				—				—				—				(52	)			—				(52	)
Advances to parents and consolidated subsidiaries				(99	)			(583	)			(12	)			(104	)			—				103				695				—
Capital expenditures and product development costs from continuing operations				—				(411	)			—				—				(116	)			(2,234	)			—				(2,761	)
Capital expenditures from discontinued operations				—				—				—				—				—				(126	)			—				(126	)
Investment proceeds from available-for-sale securities				—				1,056				—				—				1				22				—				1,079
Investment proceeds from discontinued operations				—				—				—				—				—				1,056				—				1,056
Other investment proceeds				—				9				—				—				—				1,442				—				1,451
Cash provided (used) by investing activities				(99	)			72				(12	)			(104	)			(218	)			(257	)			695				77
FINANCING ACTIVITIES
Borrowings				1,163				—				—				—				—				1,208				—				2,371
Debt repayments				(4,314	)			(121	)			—				(370	)			—				(4,388	)			2,084				(7,109	)
Change due to/from parent				—				(2,096	)			(4,556	)			(3,657	)			(329	)			(6,526	)			17,164				—
Redemption of redeemable preferred securities of subsidiary				(813	)			—				—				—				—				—				—				(813	)
Proceeds from exercise of stock options				372				—				—				—				—				—				—				372
Principal payments on capital leases				—				(174	)			—				—				—				(4	)			—				(178	)
Other				(11	)			—				—				—				—				—				—				(11	)
Cash provided (used) by financing activities				(3,603	)			(2,391	)			(4,556	)			(4,027	)			(329	)			(9,710	)			19,248				(5,368	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS				1,859				(27	)			(1	)			(2,103	)			23				(524	)			2,083				1,310
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD				349				(12	)			—				2,192				29				1,255				(2,083	)			1,730
CASH AND EQUIVALENTS AT END OF PERIOD			$	2,208			$	(39	)		$	(1	)		$	89			$	52			$	731			$	—			$	3,040

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							Additions
			Balance at				Charged to								Balance
			Beginning				Costs and								at End
Description			of Period				Expenses				Deductions				of Period
2005:
Reserves deducted from accounts receivable:
	Allowance for doubtful accounts		$	622			$	385			$	(463	)		$	544
	Reserves for sales returns and allowances			1,487				2,038				(1,844	)			1,681
Total			$	2,109			$	2,423			$	(2,307	)		$	2,225
2004:
Reserves deducted from accounts receivable:
	Allowance for doubtful accounts		$	799			$	344			$	(521	)		$	622
	Reserves for sales returns and allowances			1,280				2,059				(1,852	)			1,487
Total			$	2,079			$	2,403			$	(2,373	)		$	2,109
2003:
Reserves deducted from accounts receivable:
	Allowance for doubtful accounts		$	879			$	411			$	(491	)		$	799
	Reserves for sales returns and allowances			1,206				1,712				(1,638	)			1,280
Total			$	2,085			$	2,123			$	(2,129	)		$	2,079

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Exhibit						Sequential
Number				Description		Page Number
	2.1			Restructuring Agreement dated as of August 20, 2002 by and among Time Warner Entertainment Company, L.P. (“TWE”), AT&T Corp., Comcast of Georgia, Inc., (formerly named MediaOne of Colorado, Inc., “Comcast of Georgia”), MOTH Holdings, Inc. (renamed Time Warner Cable Inc. (“Time Warner Cable”) at closing of the TWE Restructuring, and successor to MOTH Holdings, Inc., which was formerly named MediaOne TWE Holdings, Inc., “TWC Inc.”), Comcast Holdings Corporation (formerly named Comcast Corporation, “Comcast Holdings”), Comcast Corporation (“Comcast”), the Registrant, TWI Cable Inc. (“TWIC”), Warner Communications Inc. (“WCI”), and American Television and Communications Corporation (“ATC”) (the “Restructuring Agreement”) (incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated August 21, 2002).			*
	2.2			Amendment No. 1 to the Restructuring Agreement, dated as of March 31, 2003, by and among TWE, Comcast of Georgia, TWC Inc., Comcast Holdings, Comcast, the Registrant, TWIC, WCI, ATC, TWE Holdings I Trust, a Delaware statutory trust (“Trust I”), TWE Holdings II Trust, a Delaware statutory trust (“Trust II”), and TWE Holdings III Trust, a Delaware statutory trust (incorporated herein by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K dated March 28, 2003 (the “March 2003 Form 8-K”)).			*
	3.1(a	)		Restated Certificate of Incorporation of the Registrant as filed with the Secretary of State of the State of Delaware on January 11, 2001 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated January 11, 2001 (the “January 2001 Form 8-K”)).			*
	3.1(b	)		Certificate of the Voting Powers, Designations, Preferences and Relative, Participating, Optional or Other Special Rights and Qualifications, Limitations or Restrictions Thereof, of Series LMC Common Stock of the Registrant as filed with the Secretary of State of the State of Delaware on January 11, 2001 (incorporated herein by reference to Exhibit 3.2 to the Registrant’s January 2001 Form 8-K).			*
	3.1(c	)		Certificate of the Voting Powers, Designations, Preferences and Relative, Participating, Optional or Other Special Rights and Qualifications, Limitations or Restrictions Thereof, of Series LMCN-V Common Stock of the Registrant as filed with the Secretary of State of the State of Delaware on January 11, 2001 (incorporated herein by reference to Exhibit 3.3 to the Registrant’s January 2001 Form 8-K).			*
	3.1(d	)		Certificate of the Voting Powers, Designations, Preferences and Relative, Participating, Optional or Other Special Rights and Qualifications, Limitations or Restrictions Thereof, of Series A Mandatorily Convertible Preferred Stock (“Series A Preferred Stock”) of the Registrant as filed with the Secretary of State of the State of Delaware on March 31, 2003 (incorporated herein by reference to Exhibit 4.1 to the Registrant’s March 2003 Form 8-K).			*
	3.1(e	)		Certificate of Elimination relating to the Registrant’s Series A Preferred Stock as filed with the Secretary of State of the State of Delaware on May 2, 2005 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005).			*
	3.1(f	)		Certificate of Ownership and Merger merging a wholly owned subsidiary into the Registrant pursuant to Section 253 of the General Corporation Law of the State of Delaware as filed with the Secretary of State of the State of Delaware and as became effective on October 16, 2003 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated October 16, 2003).			*

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Exhibit						Sequential
Number				Description		Page Number
	3.2			By-laws of the Registrant as amended through February 23, 2006 (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated February 23, 2006).			*
	4.1			Indenture dated as of June 1, 1998 among Historic TW Inc. (“Historic TW”), Time Warner Companies, Inc. (“TWCI”), Turner Broadcasting System, Inc. (“TBS”) and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as Trustee (“JPMorgan Chase Bank”) (incorporated herein by reference to Exhibit 4 to Historic TW’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-12259)).			*
	4.2			First Supplemental Indenture dated as of January 11, 2001 among the Registrant, Historic TW, America Online, Inc. (“America Online”), TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Transition Report on Form 10-K for the period July 1, 2000 to December 31, 2000 (the “2000 Form 10-K”)).			*
	4.3			Indenture dated as of October 15, 1992, as amended by the First Supplemental Indenture dated as of December 15, 1992, as supplemented by the Second Supplemental Indenture dated as of January 15, 1993, between TWCI and JPMorgan Chase Bank, as Trustee (which is incorporated herein by reference to Exhibit 4.10 to TWCI’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-8637)).			*
	4.4			Third Supplemental Indenture dated as of October 10, 1996 among TWCI, Historic TW and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.2 to TWCI’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 (File No. 1-8637)).			*
	4.5			Fourth Supplemental Indenture dated as of January 11, 2001, among the Registrant, Historic TW, TWCI, America Online and TBS.
	4.6			Indenture dated as of April 30, 1992, as amended by the First Supplemental Indenture, dated as of June 30, 1992, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and The Bank of New York (“BONY”), as Trustee (incorporated herein by reference to Exhibits 10(g) and 10(h) to TWCI’s Current Report on Form 8-K dated July 14, 1992 (File No. 1-8637) (“TWCI’s July 1992 Form 8-K”)).			*
	4.7			Second Supplemental Indenture, dated as of December 9, 1992, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.2 to Amendment No. 1 to TWE’s Registration Statement on Form S-4 (Registration No.33-67688) filed with the Commission on October 25, 1993 (“TWE’s 1993 Form S-4”)).			*
	4.8			Third Supplemental Indenture, dated as of October 12, 1993, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.3 to TWE’s 1993 Form S-4).			*
	4.9			Fourth Supplemental Indenture, dated as of March 29, 1994, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.4 to TWE’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No.1-12878) (“TWE’s 1993 Form 10-K”)).			*
	4.10			Fifth Supplemental Indenture, dated as of December 28, 1994, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.5 to TWE’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-12878)).			*

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Exhibit						Sequential
Number				Description		Page Number
	4.11			Sixth Supplemental Indenture, dated as of September 29, 1997, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.7 to Historic TW’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-12259) (the “Historic TW 1997 Form 10-K”)).			*
	4.12			Seventh Supplemental Indenture, dated as of December 29, 1997, among TWE, TWCI, certain of TWCI’s subsidiaries that are parties thereto and BONY, as Trustee (incorporated herein by reference to Exhibit 4.8 to the Historic TW 1997 Form 10-K).			*
	4.13			Eighth Supplemental Indenture, dated as of December 9, 2003, among Historic TW, TWE, WCI, ATC, TWC Inc. and BONY, as Trustee (incorporated herein by reference to Exhibit 4.10 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (the “2003 Form 10-K”)).			*
	4.14			Ninth Supplemental Indenture, dated as of November 1, 2004, among Historic TW, TWE, Time Warner NY Cable Inc., WCI, ATC, TWC Inc. and BONY, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).			*
	4.15			Indenture dated as of January 15, 1993 between TWCI and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.11 to TWCI’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992 (File No. 1-8637)).			*
	4.16			First Supplemental Indenture dated as of June 15, 1993 between TWCI and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4 to TWCI’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 1-8637)).			*
	4.17			Second Supplemental Indenture dated as of October 10, 1996 among Historic TW, TWCI and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to TWCI’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 (File No. 1-8637)).			*
	4.18			Third Supplemental Indenture dated as of December 31, 1996 among Historic TW, TWCI and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.10 to Historic TW’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 1-12259) (the “Historic TW1996 Form 10-K”)).			*
	4.19			Fourth Supplemental Indenture dated as of December 17, 1997 among Historic TW, TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.4 to Historic TW’s, TWCI’s and TBS’s Registration Statement on Form S-4 (Registration Nos. 333-45703, 333-45703-02 and 333-45703-01) filed with the Commission on February 5, 1998 (the “1998 Form S-4”)).			*
	4.20			Fifth Supplemental Indenture dated as of January 12, 1998 among Historic TW, TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.5 to Historic TW’s, TWCI’s and TBS’s 1998 Form S-4).			*
	4.21			Sixth Supplemental Indenture dated as of March 17, 1998 among Historic TW, TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.15 to the Historic TW 1997 Form 10-K).			*
	4.22			Seventh Supplemental Indenture dated as of January 11, 2001 among the Registrant, Historic TW, America Online, TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.17 to the Registrant’s 2000 Form 10-K).			*

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Exhibit						Sequential
Number				Description		Page Number
	4.23			Trust Agreement dated as of April 1, 1998 (the “Historic TW Trust Agreement”) among Historic TW, as Grantor, and U.S. Trust Company of California, N.A., as Trustee (“US Trust Company”) (incorporated herein by reference to Exhibit 4.16 to the Historic TW 1997 Form 10-K). (WCI and Time Inc., as grantors, have entered into Trust Agreements dated March 31, 2003 and April 1, 1998, respectively, with U.S. Trust Company that are substantially identical in all material respects to the Historic TW Trust Agreement).			*
	4.24			Indenture dated as of April 19, 2001 among the Registrant, America Online, Historic TW, TWCI, TBS and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).			*
	10.1			Time Warner 1989 Stock Incentive Plan, as amended through March 16, 2000 (incorporated herein by reference to Exhibit 10.3 to the Historic TW Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 1-12259) (the “Historic TW 1999 Form 10-K”)).			*
	10.2			AOL Time Warner Inc. 1994 Stock Option Plan, as amended through January 16, 2003 (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “2002 Form 10-K”)).			*
	10.3			Time Warner Corporate Group Stock Incentive Plan, as amended through November 18, 1999 (incorporated herein by reference to Exhibit 10.4 to the Registrant’s 2002 Form 10-K).			*
	10.4			Time Warner Publishing Group Stock Incentive Plan, as amended through November 18, 1999 (incorporated herein by reference to Exhibit 10.5 to the Registrant’s 2002 Form 10-K).			*
	10.5			Time Warner Inc. 1997 Stock Option Plan, as amended through March 16, 2000 (incorporated herein by reference to Exhibit 10.7 to the Historic TW 1999 Form 10-K).			*
	10.6			America Online, Inc. 1992 Employee, Director and Consultant Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10.2 to the America Online Annual Report on Form 10-K for the fiscal year ended June 30, 1999 (File No. 1-12143)).			*
	10.7			Time Warner Inc. 1999 Stock Plan, as amended through January 21, 2005 (the “1999 Stock Plan”) (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K dated January 21, 2005 (the “January 2005 Form 8-K”)).			*
	10.8			Form of Non-Qualified Stock Option Agreement, Directors Version 4 (for awards of stock options to non-employee directors under the 1999 Stock Plan) (incorporated herein by reference to Exhibit 10.5 to the Registrant’s January 2005 Form 8-K).			*
	10.9			Form of Restricted Stock Purchase Agreement (for awards of restricted stock under the 1999 Stock Plan) (incorporated herein by reference to Exhibit 10.6 to the Registrant’s January 2005 Form 8-K).			*
	10.10			Form of Annex 1 to Restricted Stock Purchase Agreement, Version 3 (for awards of restricted stock under the 1999 Stock Plan) (incorporated herein by reference to Exhibit 10.7 to the Registrant’s January 2005 Form 8-K).			*
	10.11			Time Warner Inc. 1999 Restricted Stock and Restricted Stock Unit Plan, as amended through January 21, 2005 (the “1999 Restricted Stock Plan”) (incorporated herein by reference to Exhibit 10.8 to the Registrant’s January 2005 Form 8-K).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.12			Form of Restricted Shares Agreement (for awards of restricted stock under the 1999 Restricted Stock Plan) (incorporated herein by reference to Exhibit 10.9 to the Registrant’s January 2005 Form 8-K).			*
	10.13			Form of Annex A to the Restricted Shares Agreement, Version 3 (for awards of restricted stock under the 1999 Restricted Stock Plan) (incorporated herein by reference to Exhibit 10.10 to the Registrant’s January 2005 Form 8-K).			*
	10.14			Form of Restricted Stock Units Agreement, General RSU Agreement, Version 1 (for awards of restricted stock unit sunder the 1999 Stock Plan and the 1999 Restricted Stock Plan) (incorporated herein by reference to Exhibit 10.11 to the Registrant’s January 2005 Form 8-K).			*
	10.15			Time Warner Inc. 2003 Stock Incentive Plan, as amended through November 20, 2003 (the “2003 Stock Incentive Plan”) (incorporated herein by reference to Exhibit 10.9 to the Registrant’s 2003 Form 10-K).			*
	10.16			Form of Notice of Grant of Stock Options (for awards of stock options under the 2003 Stock Incentive Plan and the 1999 Stock Plan) (incorporated herein by reference to Exhibit 10.12 to the Registrant’s January 2005 Form 8-K).			*
	10.17			Form of Non-Qualified Stock Option Agreement, Share Retention, Version 2 (for awards of stock options to executive officers of the Registrant under the 2003 Stock Incentive Plan) (incorporated herein by reference to Exhibit 10.13 to the Registrant’s January 2005 Form 8-K).			*
	10.18			Form of Notice of Grant of Restricted Stock (for awards of restricted stock under the 2003 Stock Incentive Plan) (incorporated herein by reference to Exhibit 10.14 to the Registrant’s January 2005 Form 8-K).			*
	10.19			Form of Restricted Stock Agreement, Version 2 (for awards of restricted stock under the 2003 Stock Incentive Plan) (incorporated herein by reference to Exhibit 10.15 to the Registrant’s January 2005 Form 8-K).			*
	10.20			Form of Notice of Grant of Restricted Stock Units (for awards of restricted stock units under the 1999 Stock Plan, the 1999 Restricted Stock Plan and the 2003 Stock Incentive Plan) (incorporated herein by reference to Exhibit 10.16 to the Registrant’s January 2005 Form 8-K).			*
	10.21			Form of Restricted Stock Units Agreement (for awards of restricted stock units under the 2003 Stock Incentive Plan) (incorporated herein by reference to Exhibit 10.17 to the Registrant’s January 2005 Form 8-K).			*
	10.22			Time Warner Inc. 1988 Restricted Stock and Restricted Stock Unit Plan for Non-Employee Directors, as amended through January 21, 2005 (the “Directors’ Restricted Stock Plan”) (incorporated herein by reference to Exhibit 10.1 to the Registrant’s January 2005 Form 8-K).			*
	10.23			Form of Restricted Shares Agreement (for awards of restricted stock under the Directors’ Restricted Stock Plan) (incorporated herein by reference to Exhibit 10.2 to the Registrant’s January 2005 Form 8-K).			*
	10.24			Form of Restricted Stock Units Agreement (for awards of restricted stock units under the Directors’ Restricted Stock Plan) (incorporated herein by reference to Exhibit 10.3 to the Registrant’s January 2005 Form 8-K).			*
	10.25			Time Warner 1996 Stock Option Plan for Non-Employee Directors, as amended through January 18, 2001 (incorporated herein by reference to Exhibit 10.9 to the Registrant’s 2000 Form 10-K).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.26			Deferred Compensation Plan for Directors of Time Warner, as amended through November 18, 1993 (incorporated herein by reference to Exhibit 10.9 to TWCI’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 1-8637)).			*
	10.27			Time Warner Inc. Non-Employee Directors’ Deferred Compensation Plan, as amended through May 21, 2004 (incorporated herein by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Form 10-K”)).			*
	10.28			Description of Director Compensation (incorporated herein by reference to the section titled “Director Compensation” in the Registrant’s Proxy Statement for the 2005 Annual Meeting of Stockholders).			*
	10.29			Time Warner Retirement Plan for Outside Directors, as amended through May 16, 1996 (incorporated herein by reference to Exhibit 10.9 to the Historic TW 1996 Form 10-K).			*
	10.30			Amended and Restated Time Warner Annual Bonus Plan for Executive Officers, as amended through January 22, 2004 (incorporated herein by reference to Exhibit 10.15 to the Registrant’s 2003 Form 10-K).			*
	10.31			Time Warner Inc. Deferred Compensation Plan, as amended and restated as of August 1, 2001 (the “Deferred Compensation Plan”) (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).			*
	10.32			Amendment No. 1 to the Deferred Compensation Plan, effective October 15, 2001 (incorporated herein by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).			*
	10.33			Amendment No. 2 to the Deferred Compensation Plan, effective August 1, 2002 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (the “September 2002 Form 10-Q”)).			*
	10.34			Amendment No. 3 to the Deferred Compensation Plan, effective January 1, 2004 (incorporated herein by reference to Exhibit 10.19 to the Registrant’s 2003 Form 10-K).			*
	10.35			Amendment No. 4 to the Deferred Compensation Plan, effective January 1, 2005.
	10.36			Employment Agreement made December 18, 2003, effective as of December 17, 2003, between the Registrant and Richard D. Parsons (incorporated herein by reference to Exhibit 10.20 to the Registrant’s 2003 Form 10-K).			*
	10.37			Confidentiality, Non-Competition and Ownership of Work Product Agreement effective December 17, 2003, and as part of the Employment Agreement made December 18, 2003, between the Registrant and Richard D. Parsons (incorporated herein by reference to Exhibit 10.21 to the Registrant’s 2003 Form 10-K).			*
	10.38			Employment Agreement made December 22, 2003, effective as of December 22, 2003, between the Registrant and Jeffrey Bewkes (incorporated herein by reference to Exhibit 10.22 to the Registrant’s 2003 Form 10-K).			*
	10.39			Confidentiality, Non-Competition and Ownership of Work Product Agreement effective December 22, 2003, and as part of the Employment Agreement made December 22, 2003, between the Registrant and Jeffrey Bewkes (incorporated herein by reference to Exhibit 10.23 to the Registrant’s 2003 Form 10-K).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.40			Employment Agreement made March 20, 2001, effective as of March 1, 2001, between the Registrant and Paul T. Cappuccio (incorporated herein by reference to Exhibit 10.39 to the Registrant’s 2004 Form 10-K).			*
	10.41			Employment Agreement made February 27, 2003, effective as of November 1, 2001, between the Registrant and Wayne H. Pace (incorporated herein by reference to Exhibit 10.25 to the Registrant’s 2003 Form 10-K).			*
	10.42			Letter Amendment effective April 28, 2005, amending the Employment Agreement effective as of November 1, 2001, between the Registrant and Wayne H. Pace (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated April 28, 2005).			*
	10.43			Employment Agreement effective as of January 1, 2002 between Time Inc., a Delaware corporation, and Don Logan (incorporated herein by reference to Exhibit 10.28 to the Registrant’s 2002 Form 10-K).			*
	10.44			Letter Amendment effective October 28, 2004, amending the Employment Agreement effective as of January 1, 2002, between the Registrant and Don Logan (incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated October 28, 2004).			*
	10.45			Agreement Containing Consent Orders, including the Decision and Order, between the Registrant and the Federal Trade Commission signed December 13, 2000 (incorporated herein by reference to Exhibit 99.2 to the Registrant’s January 2001 Form 8-K).			*
	10.46			Public Notice issued by the Federal Communications Commission dated January 11, 2001 (incorporated herein by reference to Exhibit 99.4 to the Registrant’s January 2001 Form 8-K).			*
	10.47			Second Amended and Restated LMC Agreement dated as of September 22, 1995 among TWCI, Liberty Media Corporation (“LMC”), TCI Turner Preferred, Inc., Communication Capital Corp. and United Cable Turner Investment, Inc. (incorporated herein by reference to Exhibit 10(a) to TWCI’s Current Report on Form 8-K dated September 6, 1996 (File No. 1-8637) (“TWCI’s September 1996 Form 8-K”)).			*
	10.48			Agreement Containing Consent Order dated August 14, 1996 among TWCI, TBS, Tele-Communications, Inc., LMC and the Federal Trade Commission (incorporated herein by reference to Exhibit 2(b) to TWCI’s September 1996 Form 8-K).			*
	10.49			Investors Agreement (No. 1) dated as of October 10, 1996 among Historic TW, R.E. Turner, Turner Outdoor Inc. and Turner Partners, LP (incorporated herein by reference to Exhibit 10.23 to the Historic TW 1996 Form 10-K).			*
	10.50			$7.0 Billion Amended and Restated Five-Year Revolving Credit Agreement, dated as of July 8, 2002 and amended and restated as of February 17, 2006, among the Registrant and Time Warner International Finance Limited, as Borrowers, the Lenders from time to time party thereto, Citibank, N.A., as Administrative Agent, Bank of America, N.A. and BNP Paribas, as Co-Syndication Agents, and The Bank of Tokyo-Mitsubishi UFJ Ltd., New York Branch, and Deutsche Bank AG, New York Branch as Co-Documentation Agents, with associated Guarantees.
	10.51			$6.0 Billion Amended and Restated Five-Year Revolving Credit Agreement, dated as of December 9, 2003 and amended and restated as of February 15, 2006, among TWC Inc., as Borrower, the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Citibank, N.A. and Deutsche Bank AG, New York Branch, as Co-Syndication Agents, and BNP Paribas and Wachovia Bank, National Association, as Co-Documentation Agents, with associated Guarantees.

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Table of Contents

Exhibit						Sequential
Number				Description		Page Number
	10.52			$4.0 Billion Five-Year Term Loan Credit Agreement, dated as of February 21, 2006, among TWC Inc., as Borrower, the Lenders from time to time party thereto, The Bank of Tokyo- Mitsubishi UFJ Ltd., New York Branch, as Administrative Agent, The Royal Bank of Scotland plc and Sumitomo Mitsui Banking Corporation, as Co-Syndication Agents, and Calyon New York Branch, HSBC Bank USA, N.A. and Mizuho Corporate Bank, Ltd., as Co-Documentation Agents, with associated Guarantees.
	10.53			$4.0 Billion Three-Year Term Loan Credit Agreement, dated as of February 24, 2006, among TWC Inc., as Borrower, the Lenders from time to time party thereto, Wachovia Bank, National Association, as Administrative Agent, ABN Amro Bank N.V. and Barclays Capital, as Co-Syndication Agents, and Dresdner Bank AG New York and Grand Cayman Branches and The Bank of Nova Scotia, as Co-Documentation Agents, with associated Guarantees.
	10.54			Agreement of Limited Partnership, dated as of October 29, 1991, as amended by the Letter Agreement dated February 11, 1992, and the Letter Agreement dated June 23, 1992, among TWCI and certain of its subsidiaries, ITOCHU Corporation (“ITOCHU”) and Toshiba Corporation (“Toshiba”) (“TWE Partnership Agreement, as amended”) (incorporated herein by reference to Exhibit(A) to TWCI’s Current Report on Form 8-K dated October 29, 1991 (File No. 1-8637) and Exhibit 10(b) and 10(c) to TWCI’s July 1992 Form 8-K).			*
	10.55			Amendment Agreement, dated as of September 14, 1993, among ITOCHU, Toshiba, TWCI, US WEST, Inc., and certain of their respective subsidiaries, amending the TWE Partnership Agreement, as amended (incorporated herein by reference to Exhibit 3.2 to TWE’s 1993 Form 10-K).			*
	10.56			Amended and Restated Agreement of Limited Partnership of TWE, dated as of March 31, 2003, by and among TWC Inc., Trust I, ATC, Comcast and the Registrant (incorporated herein by reference to Exhibit 3.3 to the Registrant’s March 2003 Form 8-K).			*
	10.57			Registration Rights Agreement, dated as of August 20, 2002, by and between Comcast of Georgia and the Registrant (incorporated herein by reference to Exhibit 10.14 to the Registrant’s September 2002 Form 10-Q).			*
	10.58			Amendment No. 1 to the Registration Rights Agreement, dated as of March 31, 2003, by and between Trust II and the Registrant (incorporated herein by reference to Exhibit 4.3 to the Registrant’s March 2003 Form 8-K).			*
	10.59			Registration Rights Agreement, dated as of March 31, 2003, by and between the Registrant and TWC Inc. (incorporated herein by reference to Exhibit 4.4 to the Registrant’s March 2003 Form 8-K).			*
	10.60			Registration Rights Agreement, dated as of March 31, 2003, by and among Trust II, the Registrant and TWC Inc. (incorporated herein by reference to Exhibit 4.5 to the Registrant’s March 2003 Form 8-K).			*
	10.61			Tolling and Optional Redemption Agreement (“Tolling and Optional Redemption Agreement”), dated as of September 24, 2004, by and among Comcast Cable Communications Holdings, Inc. (“Comcast Holdings”), MOC Holdco II, Inc. (“MOCHoldco”), Trust I, Trust II, Comcast, Cable Holdco Inc. (“Holdco”) and TWC Inc. (incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated September 24, 2004).			*
	10.62			Amendment No. 1 to the Tolling and Optional Redemption Agreement, dated as of February 17, 2005, among Comcast Holdings, MOC Holdco, Trust I, Trust II, Comcast, Holdco and TWC Inc. (incorporated herein by reference to Exhibit 10.58 to the Registrant’s 2004 Form 10-K)).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.63			Amendment No. 2 to the Tolling and Optional Redemption Agreement, dated as of April 20, 2005, among Comcast Holdings, MOCHoldco, Trust I, Trust II, Comcast, Holdco, Time Warner Cable and the Registrant (incorporated herein by reference to Exhibit 99.5 to the Registrant’s Current Report on Form 8-K dated April 20, 2005 (the “April 2005 Form 8-K”)).			*
	10.64			TWC Redemption Agreement, dated as of April 20, 2005 (the “TWC Redemption Agreement”), by and among Comcast Holdings, MOCHoldco, Trust I, Trust II, Comcast, Cable Holdco II Inc. (“Holdco II”), Time Warner Cable, TWE Holding I LLC (“TWE Holding”) and the Registrant (incorporated herein by reference to Exhibit 99.2 to the Registrant’s April 2005 Form 8-K).			*
	10.65			TWE Redemption Agreement, dated as of April 20, 2005 (the “TWE Redemption Agreement”), by and among Comcast Holdings, MOC Holdco I, LLC (“MOCHoldco I”), Trust I, Comcast, Cable Holdco III LLC (“Holdco III”), TWE, Time Warner Cable and the Registrant (incorporated herein by reference to Exhibit 99.3 to the Registrant’s April 2005 Form 8-K).			*
	10.66			Exchange Agreement, dated as of April 20, 2005 (the “Exchange Agreement”), by and among Comcast, Comcast Holdings, Comcast of Georgia, TCI Holdings, Inc. (“TCI Holdings”), Time Warner Cable, Time Warner NY Cable LLC (“Time Warner NY Cable”) and Urban Cable Works of Philadelphia, L.P. (“Urban Cable”) (incorporated herein by reference to Exhibit 99.4 to the Registrant’s April 2005 Form 8-K).			*
	10.67			Letter Agreement, dated May 10, 2005, among Comcast, Time Warner Cable and Trust II, related to the extension of various deadlines set forth in the Tolling and Optional Redemption Agreement (incorporated herein by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (the “June 2005 Form 10-Q”)).			*
	10.68			Alternate Tolling and Optional Redemption Agreement, dated as of May 31, 2005, among Comcast Holdings, MOCHoldco, Trust II, Holdco, Time Warner Cable and the other parties named therein (incorporated herein by reference to Exhibit 10.12 to the Registrant’s June 2005 Form 10-Q).			*
	10.69			Letter Agreement, dated June 1, 2005, among Holdco, Holdco II, Holdco III, Comcast, Comcast Holdings, Comcast of Georgia, MOCHoldco I, MOCHoldco, TCI Holdings, the Registrant, Time Warner Cable, Time Warner NY Cable, TWE, TWE Holding, Trust I, Trust II and Urban Cable, related to the amendment of various provisions of the Tolling and Optional Redemption Agreement, the TWC Redemption Agreement, the TWE Redemption Agreement and the Exchange Agreement (incorporated herein by reference to Exhibit 10.11 to the Registrant’s June 2005 Form 10-Q).			*
	10.70			Parent Agreement, dated as of March 31, 2003, by and among TWC Inc., the Registrant and Trust II (incorporated herein by reference to Exhibit 10.5 to the Registrant’s March 2003 Form 8-K).			*
	10.71			Partnership Interest Sale Agreement, dated as of March 31, 2003, by and among TWC Inc., the Registrant, Comcast and Trust I (incorporated herein by reference to Exhibit 10.6 to the Registrant’s March 2003 Form 8-K).			*
	10.72			Reimbursement Agreement, dated as of March 31, 2003, by and among TWC Inc., the Registrant, WCI, ATC and TWE (incorporated herein by reference to Exhibit 10.7 to the Registrant’s March 2003 Form 8-K).			*
	10.73			Brand License Agreement, dated as of March 31, 2003, by and between Warner Bros. Entertainment Inc. and TWC Inc. (incorporated herein by reference to Exhibit 10.8 to the Registrant’s March 2003 Form 8-K).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.74			Tax Matters Agreement, dated as of March 31, 2003, between the Registrant and TWC Inc. (incorporated herein by reference to Exhibit 10.9 to the Registrant’s March 2003 Form 8-K).			*
	10.75			Brand and Trade Name License Agreement, dated as of March 31, 2003, by and among the Registrant and TWC Inc. (incorporated herein by reference to Exhibit 10.10 to the Registrant’s March 2003 Form 8-K).			*
	10.76			Intellectual Property Agreement dated as of August 20, 2002 by and between TWE and WCI, related to the Restructuring Agreement (incorporated herein by reference to Exhibit 10.16 to the Registrant’s September 2002 Form 10-Q).			*
	10.77			Amendment to the Intellectual Property Agreement, dated as of March 31, 2003, by and between TWE and WCI (incorporated herein by reference to Exhibit 10.2 to the Registrant’s March 2003 Form 8-K).			*
	10.78			Intellectual Property Agreement dated as of August 20, 2002 by and between TWC Inc. and WCI, related to the Restructuring Agreement (incorporated herein by reference to Exhibit 10.18 to the Registrant’s September 2002 Form 10-Q).			*
	10.79			Amendment to the Intellectual Property Agreement, dated as of March 31, 2003, by and between TWC Inc. and WCI (incorporated herein by reference to Exhibit 10.4 to the Registrant’s March 2003 Form 8-K).			*
	10.80			Contribution Agreement dated as of September 9, 1994 among TWE, Advance Publications, Inc. (“Advance Publications”), Newhouse Broadcasting Corporation (“Newhouse”), Advance/Newhouse Partnership (“Advance/Newhouse”), and Time Warner Entertainment-Advance/Newhouse Partnership (“TWE-A/N Partnership”) (incorporated herein by reference to Exhibit 10(a) to TWE’s Current Report on Form 8-K dated September 9, 1994 (File No. 1-2878)).			*
	10.81			Amended and Restated Partnership Agreement of TWE-A/N Partnership entered into as of February 1, 2001 by and between TWE, Advance/Newhouse and Paragon Communications (“Paragon”) (incorporated herein by reference to Exhibit 10.46 to the Registrant’s 2000 Form 10-K).			*
	10.82			First Amendment to the Amended and Restated Partnership Agreement of TWE-A/N Partnership dated as of March 1, 2001 among TWE, Advance/Newhouse and Paragon (incorporated herein by reference to Exhibit 10.47 to the Registrant’s 2000 Form 10-K).			*
	10.83			Seconded Amended and Restated Partnership Agreement, dated as of August 1, 2002, by and among TWE-A/N Partnership, TWE, Paragon and Advance/ Newhouse (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the “June 2002 Form 10-Q”)).			*
	10.84			Third Amended and Restated Partnership Agreement of TWE-A/N Partnership dated as of December 31, 2002 among TWE, Paragon and Advance/Newhouse (incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated December 31, 2002 (the “December 2002 Form 8-K”)).			*
	10.85			Amended and Restated Transaction Agreement, dated as of October 27, 1997, among Advance Publications, Advance/Newhouse, TWE, TW Holding Co. and TWE-A/N Partnership (incorporated herein by reference to Exhibit 99(c) to Historic TW’s Current Report on Form 8-K dated October 27, 1997 (File No. 1-12259)).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.86			Transaction Agreement No. 2, dated as of June 23, 1998, among Advance Publications, Newhouse, Advance/Newhouse, TWE, Paragon and TWE-A/N Partnership (incorporated herein by reference to Exhibit 10.38 to Historic TW’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (File No. 1-12259) (“Historic TW’s 1998 Form 10-K”)).			*
	10.87			Transaction Agreement No. 3, dated as of September 15, 1998, among Advance Publications, Newhouse, Advance/Newhouse, TWE, Paragon and TWE-A/N Partnership (incorporated herein by reference to Exhibit 10.39 to Historic TW’s 1998 Form 10-K).			*
	10.88			Amended and Restated Transaction Agreement No. 4, dated as of February 1, 2001, among Advance Publications, Newhouse, Advance/Newhouse, TWE, Paragon and TWE-A/N Partnership (incorporated herein by reference to Exhibit 10.53 to the Registrant’s 2000 Form 10-K).			*
	10.89			Master Transaction Agreement, dated as of August 1, 2002, by and among TWE-A/N Partnership, TWE, Paragon and Advance/Newhouse (incorporated herein by reference to Exhibit 10.1 to the Registrant’s June 2002 Form 10-Q).			*
	10.90			Consent and Agreement dated as of December 31, 2002 among TWE-A/N Partnership, TWE, Paragon, Advance/Newhouse, TWEAN Subsidiary LLC (“TWEAN Subsidiary”) and JPMorgan Chase Bank (incorporated herein by reference to Exhibit 99.2 to the Registrant’s December 2002 Form 8-K).			*
	10.91			Pledge Agreement dated as of December 31, 2002 among TWE-A/N Partnership, Advance/Newhouse, TWEAN Subsidiary and JPMorgan Chase Bank (incorporated herein by reference to Exhibit 99.3 to the Registrant’s December 2002 Form 8-K).			*
	10.92			Deferred Prosecution Agreement entered into December 15, 2004 between America Online, the United States Attorney’s Office for the Eastern District of Virginia (“EDVA”) and the United States Department of Justice, Criminal Division (“DOJ”) (incorporated herein by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K dated December 15, 2004) (the “December 2004 Form 8-K”).			*
	10.93			Letter Agreement dated December 15, 2004 between the Registrant, EDVA and DOJ (incorporated herein by reference to Exhibit 99.3 to the Registrant’s December 2004 Form 8-K).			*
	10.94			Asset Purchase Agreement, dated as of April 20, 2005 (the “Asset Purchase Agreement”), between Adelphia Communications Corporation (“Adelphia”) and Time Warner NY Cable (incorporated herein by reference to Exhibit 99.1 to the Registrant’s April 2005 Form 8-K).			*
	10.95			Letter Agreement, dated June 2, 2005, between Adelphia and Time Warner NY Cable, related to the extension of the deadline set forth in the Asset Purchase Agreement to file various documents with the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) (incorporated herein by reference to Exhibit 10.2 to the Registrant’s June 2005 Form 10-Q).			*
	10.96			Letter Agreement, dated June 17, 2005, between Adelphia and Time Warner NY Cable, related to the extension of the deadline set forth in the Asset Purchase Agreement to file various documents with the Bankruptcy Court (incorporated herein by reference to Exhibit 10.3 to the Registrant’s June 2005 Form 10-Q).			*
	10.97			Letter Agreement, dated June 24, 2005, between Adelphia and Time Warner NY Cable, related to, among other things, various conditions set forth in the Asset Purchase Agreement and the filing of the Second Amended Disclosure Statement with the Bankruptcy Court (incorporated herein by reference to Exhibit 10.4 to the Registrant’s June 2005 Form 10-Q).			*

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Exhibit						Sequential
Number				Description		Page Number
	10.98			Amendment No. 1 to the Asset Purchase Agreement, dated June 24, 2005, between Adelphia and Time Warner NY Cable (incorporated herein by reference to Exhibit 10.5 to the Registrant’s June 2005 Form 10-Q).			*
	10.99			TKCCP Agreement, dated as of April 20, 2005, by and between Time Warner Cable and Comcast (incorporated herein by reference to Exhibit 99.6 to the Registrant’s April 2005 Form 8-K).			*
	10.100			Contribution Agreement, dated as of April 20, 2005, between Time Warner NY Cable and ATC (incorporated herein by reference to Exhibit 99.7 to the Registrant’s April 2005 Form 8-K).			*
	10.101			Form of By-laws of Time Warner Cable, as proposed to be amended (incorporated herein by reference to Exhibit 99.8 to the Registrant’s April 2005 Form 8-K).			*
	10.102			Form of Amended and Restated Certificate of Incorporation of Time Warner Cable, as proposed to be amended (incorporated herein by reference to Exhibit 99.9 to the Registrant’s April 2005 Form 8-K).			*
	10.103			Parent Agreement, dated as of April 20, 2005, among Time Warner Cable, Time Warner NY Cable and Adelphia (incorporated herein by reference to Exhibit 99.10 to the Registrant’s April 2005 Form 8-K).			*
	10.104			Letter Agreement, dated April 20, 2005, among Time Warner NY Cable, Comcast and Adelphia, related to the requirements of Time Warner NY Cable, in certain circumstances, to acquire from Adelphia those systems that otherwise would have been acquired by Comcast (incorporated herein by reference to Exhibit 99.11 to the Registrant’s April 2005 Form 8-K).			*
	10.105			Shareholder Agreement, dated as of April 20, 2005, between the Registrant and Time Warner Cable (incorporated herein by reference to Exhibit 99.12 to the Registrant’s April 2005 Form 8-K).			*
	21			Subsidiaries of the Registrant.
	23			Consent of Ernst & Young LLP, Independent Auditors.
	31.1			Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
	31.2			Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
	32			Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005.			†

*	Incorporated by reference.

†	This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

	The Registrant hereby agrees to furnish to the Securities and Exchange Commission at its request copies of long-term debt instruments defining the rights of holders of outstanding long-term debt that are not required to be filed herewith.

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