-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M+gdlc590KSWjUsp6cYWjZlI3Qfy45gStc06Zlx8SEx8ofOtMOhLZM/0nuR81cvM 9lHDGvRJm7S2VfLRdPjVQw== 0000950117-98-000223.txt : 19980212 0000950117-98-000223.hdr.sgml : 19980212 ACCESSION NUMBER: 0000950117-98-000223 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER COMPANIES INC CENTRAL INDEX KEY: 0000736157 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 131388520 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-45703 FILM NUMBER: 98532604 BUSINESS ADDRESS: STREET 1: TIME & LIFE BLDG ROCKFELLER CENTER STREET 2: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 FORMER COMPANY: FORMER CONFORMED NAME: TIME WARNER INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: TIME INC /DE/ DATE OF NAME CHANGE: 19890801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TURNER BROADCASTING SYSTEM INC CENTRAL INDEX KEY: 0000100240 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 580950695 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-45703-01 FILM NUMBER: 98532605 BUSINESS ADDRESS: STREET 1: ONE CNN CENTER STREET 2: 100 INTERNATIONAL BLVD CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 4048271000 MAIL ADDRESS: STREET 1: ONE CNN CENTER BOX 105366 CITY: ATLANTA STATE: GA ZIP: 30348-5366 FORMER COMPANY: FORMER CONFORMED NAME: TURNER COMMUNICATIONS CORP DATE OF NAME CHANGE: 19791016 FORMER COMPANY: FORMER CONFORMED NAME: RICE BROADCASTING CO INC DATE OF NAME CHANGE: 19700909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER INC/ CENTRAL INDEX KEY: 0001021387 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 133527249 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-45703-02 FILM NUMBER: 98532606 BUSINESS ADDRESS: STREET 1: TIME & LIFE BLDG ROCKFELLER CENTER STREET 2: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 MAIL ADDRESS: STREET 1: TW INC STREET 2: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: TW INC DATE OF NAME CHANGE: 19960822 S-4/A 1 TIME WARNER INC./TW COMPANIES/ TURNER BROADCASTING SYSTEM INC. S-4/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1998 REGISTRATION NOS. 333-45703 333-45703-02 333-45703-01 ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ TIME WARNER COMPANIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 75 ROCKEFELLER PLAZA 13-1388520 (STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) (212) 484-8000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TIME WARNER INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 75 ROCKEFELLER PLAZA 13-3527249 (STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) (212) 484-8000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TURNER BROADCASTING SYSTEM, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ GEORGIA ONE CNN CENTER 58-0950695 (STATE OR OTHER JURISDICTION ATLANTA, GEORGIA 30303 (I.R.S. EMPLOYER IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) (404) 827-1700 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------ PETER R. HAJE, ESQ. EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL TIME WARNER INC. 75 ROCKEFELLER PLAZA NEW YORK, NY 10019 (212) 484-8000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPIES TO: WILLIAM P. ROGERS, JR., ESQ. LOUISE S. SAMS, ESQ. CRAVATH, SWAINE & MOORE VICE PRESIDENT AND GENERAL COUNSEL 825 EIGHTH AVENUE TURNER BROADCASTING SYSTEM, INC. NEW YORK, NEW YORK 10019 ONE CNN CENTER (212) 474-1000 ATLANTA, GEORGIA 30303
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] . . . . . . . If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] . . . . . . . ------------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ________________________________________________________________________________ PROSPECTUS EXCHANGE OFFER FOR ALL OUTSTANDING 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC. FULLY AND UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC. ------------------------ THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME ON MARCH 30, 1998, UNLESS EXTENDED. ------------------------ Time Warner Companies, Inc., a Delaware corporation ('TWC'), hereby offers (the 'Exchange Offer'), upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (the 'Letter of Transmittal'), to exchange up to $500,000,000 aggregate principal amount of its 6.95% Debentures Due 2028 (the 'Exchange Debentures') that have been registered under the Securities Act of 1933, as amended (the 'Securities Act'), pursuant to a Registration Statement (as defined herein) of which this Prospectus constitutes a part, for a like principal amount of its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures' and, together with the Exchange Debentures, the 'Debentures') with the holders thereof. The terms of the Exchange Debentures are identical in all material respects to the Outstanding Debentures except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated the Exchange Offer or caused a Shelf Registration Statement (as defined herein) with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest (as defined herein) on the Outstanding Debentures will be payable until the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement. The Outstanding Debentures were issued on January 12, 1998, pursuant to an offering (the 'Original Offering') exempt from registration under the Securities Act. The initial price of the Outstanding Debentures was 98.918% of the principal amount. Interest on the Exchange Debentures is payable semi-annually on January 15 and July 15 of each year, commencing July 15, 1998, at a rate of 6.95% per annum. The Exchange Debentures are not redeemable prior to maturity and do not have the benefit of a sinking fund. The Exchange Debentures will be unconditionally guaranteed (the 'Guarantees') by Time Warner Inc. and Turner Broadcasting System, Inc. (collectively, the 'Guarantors'). The Exchange Debentures and the Guarantees will be general, unsecured senior obligations of TWC and the Guarantors, respectively, ranking pari passu in right of payment with all existing and future unsecured unsubordinated obligations, and senior in right of payment to all existing and future subordinated indebtedness of TWC and the Guarantors, respectively. TWC will accept for exchange any and all Outstanding Debentures that are validly tendered and not withdrawn on or prior to midnight, New York City time, on the date the Exchange Offer expires (the 'Expiration Date'), which will be March 30, 1998 (45 days after the commencement of the Exchange Offer), unless the Exchange Offer is extended. Tenders of Outstanding Debentures may be withdrawn at any time prior to midnight, New York City time, on the Expiration Date. The Exchange Offer is not conditioned upon any minimum principal amount of Outstanding Debentures being tendered for exchange. Outstanding Debentures may be tendered only in integral multiples of $1,000. See 'The Exchange Offer.' (cover continued on next page) - ---------------------------------------------------------- SEE 'CERTAIN FACTORS' BEGINNING ON PAGE 13 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR OUTSTANDING DEBENTURES IN THE EXCHANGE OFFER. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ THE DATE OF THIS PROSPECTUS IS FEBRUARY 13, 1998. (cover continued from previous page) For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Holders whose Outstanding Debentures are accepted for exchange will not receive accrued interest thereon on the date of exchange. Instead, interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor or, if no interest has been paid on the Outstanding Debentures, from January 12, 1998. See 'The Exchange Offer -- Interest on the Exchange Debentures.' The Exchange Debentures are being offered hereunder in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement (as defined herein). See 'The Exchange Offer -- Consequences of Exchanging Outstanding Debentures' for a discussion of TWC's belief, based on interpretations by the staff of the Securities and Exchange Commission (the 'Commission') as set forth in no-action letters issued to third parties, as to the transferability of the Exchange Debentures upon satisfaction of certain conditions. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC has agreed that for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any resale of Exchange Debentures. See 'Plan of Distribution.' Holders whose Outstanding Debentures are not tendered and accepted in the Exchange Offer will continue to hold such Outstanding Debentures and will be entitled to all the rights and preferences and will be subject to the limitations applicable thereto under the indenture governing the Outstanding Debentures and the Exchange Debentures. FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF OUTSTANDING DEBENTURES WILL CONTINUE TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND, EXCEPT AS PROVIDED HEREIN, TWC WILL HAVE NO FURTHER OBLIGATION TO SUCH HOLDERS TO PROVIDE FOR THE REGISTRATION UNDER THE SECURITIES ACT OF THE OUTSTANDING DEBENTURES HELD BY THEM. There is no established trading market for the Exchange Debentures. TWC does not currently intend to list the Exchange Debentures on any securities exchange or to seek approval for quotation through any automated quotation system. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Debentures, or the ability of holders of the Exchange Debentures to sell their Exchange Debentures or the price at which such holders may be able to sell their Exchange Debentures. Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. (collectively, the 'Placement Agents') have advised TWC that they currently intend to make a market in the Exchange Debentures. The Placement Agents are not obligated to do so, however, and any market-making with respect to the Exchange Debentures may be discontinued at any time without notice. TWC will pay all of the expenses incident to the Exchange Offer. In the event TWC terminates the Exchange Offer and does not accept for exchange any Outstanding Debentures, TWC will promptly return the Outstanding Debentures to the holders thereof. See 'The Exchange Offer.' ------------------------ CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH DEBENTURES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'. 2 AVAILABLE INFORMATION TWC and TBS are not required to file periodic reports and other information under the Securities Exchange Act of 1934 (the 'Exchange Act'). Instead, information with respect to TWC and TBS is provided, to the extent required by the Commission, in the required filings made by TWI. TWI is subject to the informational requirements of the Exchange Act and, in accordance therewith, files reports, proxy statements and other information with the Commission. Reports, proxy statements and other information filed by TWI with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's regional offices located at Seven World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661; and copies of such material may be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates, or through the World Wide Web (http://www.sec.gov). Such reports, proxy statements and other information may also be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York, on which one or more of TWI's securities are listed. This Prospectus constitutes a part of a Registration Statement filed by TWC, TWI and TBS with the Commission under the Securities Act. This Prospectus omits certain of the information contained in the Registration Statement in accordance with the rules and regulations of the Commission. Reference is hereby made to the Registration Statement and related exhibits for further information with respect to TWC, TWI and TBS and the Exchange Debentures. Statements contained herein concerning the provisions of any document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an Exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. 3 INFORMATION INCORPORATED BY REFERENCE The following documents filed with the Commission by TWI (File No. 001-12259) are incorporated by reference in this Prospectus: (a) TWI's Annual Report on Form 10-K for the year ended December 31, 1996, as amended by Forms 10K/A dated March 27, 1997 and June 26, 1997 (as amended, 'TWI's 1996 Form 10-K'); (b) TWI's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 (collectively, the 'TWI 10-Qs'); and (c) TWI's Current Reports on Form 8-K dated March 21, 1997, October 15, 1997, October 27, 1997 and November 13, 1997 (collectively, the 'TWI 8-Ks'). All documents and reports subsequently filed by TWI pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the Exchange Offer shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. TWC will furnish without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all the documents incorporated herein by reference, other than exhibits to such documents unless such exhibits are specifically incorporated by reference in such documents, and any other documents specifically identified herein as incorporated by reference into this Prospectus or into such other documents. Requests should be addressed to: Shareholder Relations Department, Time Warner Inc., 75 Rockefeller Plaza, New York, New York 10019; telephone: (212) 484-6971. ------------------------ Each of TWC and Turner Broadcasting System, Inc. ('TBS') is a wholly-owned subsidiary of Time Warner Inc. ('TWI'). The principal executive offices of TWC and TWI are located at 75 Rockefeller Plaza, New York, NY 10019, and the telephone number of each is (212) 484-8000. TBS's principal executive offices are located at One CNN Center, Atlanta, GA 30303 and its telephone number is (404) 827-1700. TWI's common stock is listed on the New York Stock Exchange under the symbol 'TWX.' 4 PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in this Prospectus. THE EXCHANGE OFFER The Exchange Offer relates to the exchange of up to $500 million aggregate principal amount of Outstanding Debentures for an equal aggregate principal amount of Exchange Debentures. The Exchange Debentures are obligations of TWC entitled to the benefits of the Indenture relating to the Outstanding Debentures. The form and terms of the Exchange Debentures are the same as the form of the Outstanding Debentures except that the Exchange Debentures have been registered under the Securities Act, and following the completion of the Exchange Offer, the Exchange Debentures generally will not be entitled to a contingent increase in the interest rate otherwise provided under certain circumstances. Securities Offered........................ Up to $500,000,000 aggregate principal amount of 6.95% Debentures Due 2028, which have been registered under the Securities Act. The terms of the Exchange Debentures are identical in all material respects to the Outstanding Debentures except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated the Exchange Offer or caused a Shelf Registration Statement with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest on the Outstanding Debentures will be payable until the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement. The Exchange Offer........................ $1,000 principal amount of Exchange Debentures will be issued in exchange for each $1,000 principal amount of Outstanding Debentures validly tendered pursuant to the Exchange Offer. As of the date hereof, $500 million in aggregate principal amount of Outstanding Debentures is outstanding. TWC will issue the Exchange Debentures to tendering holders of Outstanding Debentures on or promptly after the Expiration Date. Expiration of Exchange Offer.............. Midnight, New York City time, on the Expiration Date, unless the Exchange Offer is extended, in which case the term 'Expiration Date' means the latest date and time to which the Exchange Offer is extended. See 'The Exchange Offer -- Terms of the Exchange Offer; Period for Tendering Outstanding Debentures.' Conditions to the Exchange Offer.......... The Exchange Offer will not be subject to any conditions, other than that (i) the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the Commission and (ii) there is no injunction, order or decree issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair the ability of TWC to proceed with the Exchange Offer. There
5 can be no assurance that any such conditions will not occur. Holders of Outstanding Debentures will have certain rights against TWC, TWI and TBS under the Registration Rights Agreement should TWC, TWI and TBS fail to consummate the Exchange Offer. See 'The Exchange Offer -- Certain Conditions to the Exchange Offer.' Procedures for Tendering Outstanding Debentures.................. Each holder of Outstanding Debentures wishing to accept the Exchange Offer must complete, sign and date the Letter of Transmittal (or a facsimile thereof or an Agent's Message (as defined below) in lieu thereof), in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal (or such facsimile or such Agent's Message), together with any other required documentation, to The Chase Manhattan Bank in its capacity as the Exchange Agent at the address set forth herein and therein. See 'The Exchange Offer -- Procedures for Tendering.' By executing the Letter of Transmittal or by causing an Agent's message to be delivered, each holder will represent to TWC, TWI and TBS that, among other things, (i) the Exchange Debentures acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the holder, (ii) neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Debentures and (iii) neither the holder nor any such other person is an 'affiliate,' as defined in Rule 405 under the Securities Act, of TWC, TWI or TBS, or, if an 'affiliate,' such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. The term 'Agent's Message' means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a confirmation of the book-entry tender of their Outstanding Debentures into the Exchange Agent's Account at DTC, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that TWC may enforce the Letter of Transmittal against such participant. Special Procedures for Beneficial Holders................................. Any beneficial holder whose Outstanding Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender in the Exchange Offer should contact such registered holder promptly and instruct such registered holder to tender on its behalf. If such beneficial holder wishes to tender on its own behalf, such beneficial holder must, prior to completing and
6 executing the Letter of Transmittal and delivering its Outstanding Debentures, either make appropriate arrangements to register ownership of the Outstanding Debentures in such holder's name or obtain a properly completed bond power from the registered holder. See 'The Exchange Offer -- Procedures for Tendering.' Guaranteed Delivery Procedures............ Holders of Outstanding Debentures who wish to tender their Outstanding Debentures and whose Outstanding Debentures are not immediately available or who cannot deliver their Outstanding Debentures (or who cannot complete the procedure for book-entry transfer on a timely basis) and a properly completed Letter of Transmittal or any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date may tender their Outstanding Debentures according to the guaranteed delivery procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures.' Withdrawal Rights......................... Tenders of Outstanding Debentures may be withdrawn at any time prior to midnight, New York City time, on the Expiration Date. See 'The Exchange Offer -- Withdrawal of Tenders.' Acceptance of Outstanding Debentures and Delivery of Exchange Debentures......... Subject to certain conditions (as summarized above in 'Conditions to the Exchange Offer' and described more fully under 'The Exchange Offer -- Certain Conditions to the Exchange Offer'), TWC will accept for exchange any and all Outstanding Debentures which are properly tendered in the Exchange Offer and not validly withdrawn prior to midnight, New York City time, on the Expiration Date. The Exchange Debentures issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See 'The Exchange Offer -- Terms of the Exchange Offer; Period for Tendering Outstanding Debentures.' Certain Tax Considerations................ The exchange pursuant to the Exchange Offer should not be a taxable event for federal income tax purposes. See 'Certain United States Federal Income Tax Considerations.' Exchange Agent............................ The Chase Manhattan Bank, the Trustee under the Indenture (as defined herein), is serving as exchange agent (the 'Exchange Agent') in connection with the Exchange Offer. The address of the Exchange Agent is: 55 Water Street, Room 234, North Building, New York, NY 10041, Attention: Carlos Esteves. For information with respect to the Exchange Offer, the telephone number for the Exchange Agent is (212) 638-0828 and the facsimile number for the Exchange Agent is (212) 638-7375 or (212) 344-9367. Use of Proceeds........................... There will be no cash proceeds payable to TWC, TWI or TBS from the issuance of the Exchange Debentures pursuant to the Exchange Offer.
7 CONSEQUENCES OF EXCHANGING OUTSTANDING DEBENTURES Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Debentures. However, TWC does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange Debentures received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer such holder will have not engaged in, and does not intend to engage in, a distribution of Exchange Debentures and has no arrangement or understanding to participate in a distribution of Exchange Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirement of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures, where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC, TWI and TBS have agreed that, for a period of 90 days after the Expiration Date, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See 'Plan of Distribution.' However, to comply with state securities laws, the Exchange Debentures may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Debentures to 'qualified institutional buyers' (as such term is defined under Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. TWC, TWI and TBS currently do not intend to register or qualify the sale of the Exchange Debentures in any state where an exemption from registration or qualification is required and not available. See 'The Exchange Offer -- Consequences of Failure to Exchange and Requirements for Transfer for Exchange Debentures.' 8 SUMMARY DESCRIPTION OF THE EXCHANGE DEBENTURES The terms of the Exchange Debentures are identical in all material respects to the terms of the Outstanding Debentures, except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, with respect to the Outstanding Debentures, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated the Exchange Offer or caused a Shelf Registration Statement with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest on the Outstanding Debentures will be payable until the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement. See 'Registration Rights Agreement for Outstanding Debentures.' Holders whose Outstanding Debentures are accepted for exchange will not receive accrued interest thereon on the date of exchange. Instead, interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. See 'The Exchange Offer -- Interest on the Exchange Debentures.' Securities Offered........................ $500,000,000 aggregate principal amount of 6.95% Debentures Due 2028, which have been registered under the Securities Act, issued by TWC. Interest.................................. Interest on the Debentures is payable semiannually in cash on January 15 and July 15, commencing on July 15, 1998. Redemption................................ The Debentures are not redeemable prior to maturity and do not have the benefit of a sinking fund. Guarantees................................ All payments with respect to the Debentures (including principal and interest) are unconditionally guaranteed on an unsecured unsubordinated basis by each of the Guarantors. Ranking................................... The Debentures are senior indebtedness of TWC, ranking on a parity with all other unsecured and unsubordinated indebtedness of TWC, and each Guarantee is a senior obligation of the relevant Guarantor, ranking on a parity with all other unsecured and unsubordinated obligations of such Guarantor. See 'Description of the Debentures and the Guarantees -- Ranking.' Each of TWC and the Guarantors is a holding company and the Debentures and the Guarantees are effectively subordinated to all existing and future liabilities, including indebtedness, of the consolidated and unconsolidated subsidiaries of TWC and the Guarantors, respectively. As of September 30, 1997, such subsidiaries had an aggregate of approximately $20 billion of outstanding liabilities, including indebtedness. See 'Holding Company Structure.' Certain Covenants......................... The Indenture contains certain covenants with respect to TWC for the benefit of the holders of the Debentures, including, among other things, covenants limiting the incurrence of liens, senior indebtedness and merger, consolidation and certain sales of assets. See 'Description of the Debentures and the Guarantees -- Covenants.' Book-Entry; Delivery and Form............. The Exchange Debentures will be represented by one permanent global Exchange Debenture in definitive, fully registered form deposited with a custodian for, and
9 registered in the name of a nominee of, The Depository Trust Company ('DTC'). See 'Description of the Debentures and the Guarantees -- Book-Entry; Delivery and Form.' Absence of Public Market for the Exchange Debentures.............................. The Exchange Debentures will be new securities for which there currently is no market. Although the Placement Agents have informed TWC that they currently intend to make a market in the Exchange Debentures, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Debentures. TWC does not intend to apply for listing of the Exchange Debentures on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. Exchange Offer; Registration Rights.................................. Pursuant to the Registration Rights Agreement, TWC, TWI and TBS have agreed to file, at their cost, a registration statement with respect to the Exchange Offer. The Registration Statement of which this Prospectus is a part constitutes the registration statement for the Exchange Offer. See 'Registration Rights Agreement for Outstanding Debentures.'
USE OF PROCEEDS There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer. For a description of the use of proceeds from the Original Offering, see 'Use of Proceeds'. CERTAIN FACTORS For a description of certain factors that should be considered by holders who tender their Outstanding Debentures in the Exchange Offer, see 'Certain Factors'. 10 TWC AND THE GUARANTORS TWI, together with its consolidated subsidiaries, including TWC and TBS, and unconsolidated subsidiaries, is the world's leading media and entertainment company and has interests in four fundamental areas of business: Entertainment, consisting principally of interests in filmed entertainment, television production, television broadcasting, recorded music and music publishing; Cable Networks, consisting principally of interests in cable television programming; Publishing, consisting principally of interests in magazine publishing, book publishing and direct marketing; and Cable, consisting principally of interests in cable television systems. Each of TWC, TBS and TWI is a holding company that derives its operating income and cash flow from its subsidiaries and investments. The assets of TWI consist primarily of its investments in TWC and TBS. The assets of TWC consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including Time Warner Entertainment Company, L.P. ('TWE'). The assets of TBS consist primarily of investments in its consolidated and unconsolidated subsidiaries. The ability of TWC to service its indebtedness and other liabilities, including the Debentures, and the ability of TWI and TBS to service their respective indebtedness and other liabilities, including the Guarantees, are dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment to them of such earnings and cash flow. See 'Holding Company Structure.' TWI became the parent of TWC and TBS on October 10, 1996 upon the merger of TWC and TBS with separate subsidiaries of TWI (the 'TBS Transaction'), as more fully described below. In connection therewith, TWI changed its name to Time Warner Inc. from TW Inc. and TWC changed its name from Time Warner Inc. to Time Warner Companies, Inc. TWE was formed as a Delaware limited partnership in 1992 to own and operate substantially all of the business of Warner Bros., Home Box Office and the cable television businesses owned and operated by TWC prior to such date. TWC and certain of its wholly owned subsidiaries own general and limited partnership interests aggregating 74.49% of the pro rata priority capital ('Series A Capital') and residual equity capital ('Residual Capital') of TWE and 100% of the senior priority capital and junior priority capital of TWE. The remaining 25.51% limited partnership interests in the Series A Capital and Residual Capital of TWE are held by a subsidiary of U S West, Inc. TWC does not consolidate TWE and certain related companies (the 'Entertainment Group') for financial reporting purposes. TBS TRANSACTION On October 10, 1996, pursuant to an Amended and Restated Agreement and Plan of Merger dated as of September 22, 1995, as amended, among TWC, TWI, TBS and certain of their wholly owned subsidiaries, among other things: (a) each of TWC and TBS became a wholly owned subsidiary of TWI through a merger with a subsidiary of TWI, (b) each outstanding share of common stock of TWC, other than shares held directly or indirectly by TWC, was converted into one share of common stock of TWI, (c) each outstanding share of preferred stock of TWC was converted into one share of a substantially identical series of preferred stock of TWI, (d) each outstanding share of common stock of TBS, other than shares held directly or indirectly by TWC or TWI or in the treasury of TBS, was converted into the right to receive 0.75 shares of common stock of TWI and (e) each outstanding share of preferred stock of TBS, other than shares held directly or indirectly by TWC or TWI, was converted into the right to receive 4.8 shares of common stock of TWI. Additional information on the TBS Transaction is set forth in Note 2 to TWI's consolidated financial statements included in TWI's 1996 Form 10-K, which is incorporated by reference herein. RECIPROCAL GUARANTEES OF EXISTING INDEBTEDNESS In order to integrate TBS into TWI's operating structure and simplify the credit structure of TWI, TWC and TBS such that the financial risks associated with investing in the indebtedness of any one of the three companies are substantially equivalent to investing in the indebtedness of any of the other companies, TWI, TWC and TBS have entered into the following guarantees of outstanding publicly traded indebtedness ('Outstanding Securities') of TWC and TBS: 11 TWI, as primary obligor and not merely as surety, has irrevocably and unconditionally guaranteed (the 'Downstream Guarantees') (a) the full and punctual payment of principal of and interest on the Outstanding Securities of each of TWC and TBS when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of TWC and TBS under the Outstanding Securities of TWC and TBS and the indentures relating to the Outstanding Securities (including the obligations to the respective trustees) and (b) the full and punctual performance within applicable grace periods of all other obligations of TWC and TBS under the Outstanding Securities and the respective indentures. Each of TWC and TBS, as primary obligor and not merely as surety, has irrevocably and unconditionally guaranteed (the 'Cross Guarantees') (a) the full and punctual payment of principal of and interest on the Outstanding Securities of the other party when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the other party under the Outstanding Securities of such other party and the indentures relating to such Outstanding Securities (including the obligations to the respective trustees) and (b) the full and punctual performance within applicable grace periods of all other obligations of the other party under the Outstanding Securities and the respective indentures. The maximum aggregate amount of the Cross Guarantee by TBS shall not exceed the maximum amount that can be guaranteed by TBS without rendering such guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. In addition, it is expected that each of TWC and TBS will fully and unconditionally guarantee any publicly traded debt securities issued by TWI in the future (as of the date of this Registration Statement, TWI does not have any publicly traded indebtedness other than the Downstream Guarantees). 12 CERTAIN FACTORS Prospective holders of the Exchange Debentures should consider carefully the following factors as well as the other information and data included in this Prospectus before tendering their Outstanding Debentures in the Exchange Offer. LACK OF PUBLIC MARKET FOR THE EXCHANGE DEBENTURES The Outstanding Debentures are currently owned by a small number of beneficial owners. The Outstanding Debentures have not been registered under the Securities Act and are subject to significant restrictions on resale. To the extent that Outstanding Debentures are tendered and accepted in the Exchange Offer, the trading market for the remaining untendered Outstanding Debentures could be adversely affected. The Exchange Debentures will be a new issue of securities for which there is currently no trading market, and there can be no assurance regarding the future development of a market for the Exchange Debentures, or the ability of holders of the Exchange Debentures to sell their Exchange Debentures or the price at which such holders may be able to sell their Exchange Debentures. Although the Placement Agents have informed TWC that they currently intend to make a market in the Exchange Debentures, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Debentures. TWC does not intend to apply for listing of the Exchange Debentures on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. If the Exchange Debentures are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions and the financial condition and performance of, and prospects for, TWC, TWI and TBS. EXCHANGE OFFER PROCEDURES Issuance of the Exchange Debentures in exchange for Outstanding Debentures pursuant to the Exchange Offer will be made only after a timely receipt by TWC of Outstanding Debentures, a properly completed and duly executed Letter of Transmittal and all other required documents or an Agent's Message in lieu thereof. Therefore, holders of the Outstanding Debentures desiring to tender their Outstanding Debentures in exchange for Exchange Debentures should allow sufficient time to ensure timely delivery. TWC is under no duty to give notification of defects or irregularities with respect to the tenders of Outstanding Debentures for exchange. Outstanding Debentures that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the existing restrictions on transfer thereof. In addition, any holder of Outstanding Debentures who tenders in the Exchange Offer for the purpose of participating in a distribution of the Exchange Debentures may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account in exchange for Outstanding Debentures, where the Outstanding Debentures were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those Exchange Debentures. See 'Plan of Distribution.' CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE DEBENTURES Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable 13 state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Debentures. However, TWC does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange Debentures received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer, such holder will have not engaged in, and does not intend to engage in, a distribution of Exchange Debentures and has no arrangement or understanding to participate in a distribution of Exchange Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirement of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures, where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC has agreed that, for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See 'Plan of Distribution.' However, to comply with state securities laws, the Exchange Debentures may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Debentures to 'qualified institutional buyers' (as such term is defined under Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. TWC currently does not intend to register or qualify the sale of the Exchange Debentures in any state where an exemption from registration or qualification is required and not available. See 'The Exchange Offer -- Consequences of Failure to Exchange and Requirements for Transfer for Exchange Debentures.' 14 SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION TWI SELECTED FINANCIAL INFORMATION The selected historical and pro forma financial information of TWI set forth below has been derived from and should be read in conjunction with the consolidated financial statements and other financial information of TWI contained in (i) TWI's 1996 Form 10-K, (ii) the TWI 10-Qs and (iii) the TWI 8-Ks, each of which is incorporated by reference herein. Capitalized terms are as defined and described in such consolidated financial statements and in TWI's Current Report on Form 8-K dated November 13, 1997. The selected historical financial information for 1996 reflects (a) the acquisition of the remaining 80% interest in TBS that was not already owned by TWI (the 'TBS Transaction'), including the assumption of approximately $2.8 billion of indebtedness, (b) the use of approximately $1.55 billion of net proceeds from the issuance of 1.6 million shares of Series M exchangeable preferred stock, having an aggregate liquidation preference of $1.6 billion, to reduce outstanding indebtedness and (c) the acquisition of Cablevision Industries Corporation and related companies, including the assumption or incurrence of approximately $2 billion of indebtedness. The selected historical financial information for 1995 reflects (a) the acquisitions of KBLCOM Incorporated and Summit Communications Group, Inc., including the assumption or incurrence of approximately $1.3 billion of indebtedness and (b) the exchange by Toshiba Corporation and ITOCHU Corporation of their direct and indirect interests in TWE. The selected historical financial information for 1993 reflects the issuance of $6.1 billion of long-term debt and the use of $500 million of cash and equivalents for the exchange or redemption of preferred stock having an aggregate liquidation preference of $6.4 billion. The selected historical financial information for 1992 reflects the capitalization of TWE on June 30, 1992, using the purchase method of accounting for business combinations. Per common share amounts and average common shares have been restated to give effect to the four-for-one common stock split that occurred on September 10, 1992. 15 TIME WARNER INC. SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, -------------------------- ------------------------------------------------------ PRO PRO FORMA(a) HISTORICAL FORMA(a) HISTORICAL -------- --------------- -------- ------------------------------------------- 1997 1997 1996 1996 1996 1995 1994 1993 1992 -------- ------ ------ -------- ------- ------ ------ ------ ------ (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) OPERATING STATEMENT INFORMATION Revenues...................................... $9,412 $9,458 $6,364 $12,761 $10,064 $8,067 $7,396 $6,581 $13,070 Depreciation and amortization................. 890 935 677 1,187 988 559 437 424 1,172 Business segment operating income(b).......... 761 802 464 901 966 697 713 591 1,343 Equity in pretax income of Entertainment Group(c)...................... 517 522 270 268 290 256 176 281 -- Interest and other, net....................... 845 904 854 1,186 1,174 877 724 718 882 Income (loss) before extraordinary item....... 62 54 (215) (269) (156) (124) (91) (164) 86 Net income (loss)(d).......................... 38 30 (250) (304) (191) (166) (91) (221) 86 Net loss applicable to common shares (after preferred dividends)........................ (200) (208) (430) (612) (448) (218) (104) (339) (542) Per share of common stock: Net loss(d)............................... $(0.35) $(0.37) $(1.11) $ (1.08) $ (1.04) $(0.57) $(0.27) $(0.90) $ (1.46) Dividends................................. $ 0.27 $ 0.27 $ 0.27 $ 0.36 $ 0.36 $ 0.36 $ 0.35 $ 0.31 $ 0.265 Average common shares......................... 564.4 564.4 388.7 567.3 431.2 383.8 378.9 374.7 371.0
SEPTEMBER 30, DECEMBER 31, --------------------- ----------------------------------------------- PRO FORMA(a) HISTORICAL HISTORICAL -------- ---------- ----------------------------------------------- 1997 1997 1996 1995 1994 1993 1992 -------- ---------- ------- ------- ------- ------- ------- (IN MILLIONS) BALANCE SHEET INFORMATION Total assets............................................. $33,537 $ 34,538 $35,064 $22,132 $16,716 $16,892 $27,366 Debt due within one year................................. 8 8 11 34 355 120 171 Long-term debt........................................... 11,472 12,493 12,713 9,907 8,839 9,291 10,068 Borrowings against future stock option proceeds.......... 303 303 488 -- -- -- -- Company-obligated mandatorily redeemable preferred securities of subsidiaries holding solely subordinated notes and debentures of subsidiaries of TWI(e)......... 949 949 949 949 -- -- -- Series M exchangeable preferred stock.................... 1,809 1,809 1,672 -- -- -- -- Shareholders' equity: Preferred stock liquidation preference............... 3,559 3,559 3,559 2,994 140 140 6,532 Equity applicable to common stock.................... 5,971 5,971 5,943 673 1,008 1,230 1,635 Total shareholders' equity....................... 9,530 9,530 9,502 3,667 1,148 1,370 8,167 Total capitalization..................................... 24,071 25,092 25,335 14,557 10,342 10,781 18,406
- ------------ (a) The selected pro forma financial information as of and for the nine months ended September 30, 1997 and for the year ended December 31, 1996 gives effect to (i) the agreed-upon transfer by a wholly owned subsidiary of TWI of cable television systems serving an aggregate of approximately 667,000 subscribers to the Time Warner Entertainment-Advance/Newhouse Partnership ('TWE-A/N'), a partnership currently owned 66.7% by TWE and 33.3% by the Advance/Newhouse Partnership, subject to approximately $1 billion of debt, in exchange for common and preferred partnership interests therein, as well as certain related transactions (the 'TWE-A/N Transfers'), pursuant to an agreement entered into by such subsidiary on October 27, 1997 with TWE-A/N and each of its partners and (ii) with respect to 1996 only, (a) the TBS Transaction and (b) certain debt refinancings, as if such transactions had occurred at such date, with respect to balance sheet information, or at the beginning of such periods with respect to operating statement information. (b) Business segment operating income for the year ended December 31, 1995 includes $85 million in losses relating to certain businesses and joint ventures owned by the Music division which were restructured or closed. (footnotes continued on next page) 16 (footnotes continued from previous page) (c) TWI's equity in the pre-tax income of the Entertainment Group for the nine months ended September 30, 1997 includes a $250 million pre-tax gain relating to the sale of TWE's interest in E! Entertainment Television, Inc. (d) The net income for the nine months ended September 30, 1997 and 1996 includes extraordinary losses on the retirement of debt of $24 million ($.04 per common share) and $35 million ($.09 per common share). The net loss for the year ended December 31, 1996 includes an extraordinary loss on the retirement of debt of $35 million ($.09 per common share). The net loss for the year ended December 31, 1995 includes an extraordinary loss on the retirement of debt of $42 million ($.11 per common share). The net loss for the year ended December 31, 1993 includes an extraordinary loss on the retirement of debt of $57 million ($.15 per common share) and an unusual charge of $70 million ($.19 per common share) from the effect of the new income tax law on TWI's deferred income tax liability. (e) Includes $374 million of preferred securities that were redeemed in December 1997 for all of TWI's interest in Hasbro, Inc. ENTERTAINMENT GROUP SELECTED FINANCIAL INFORMATION. The selected historical and pro forma financial information of the Entertainment Group set forth below has been derived from and should be read in conjunction with (i) the consolidated financial statements and other financial information of TWI and TWE contained in the TWI's 1996 Form 10-K and the TWI 10-Qs and (ii) the consolidated financial statements and other financial information of TWI and the Entertainment Group contained in the TWI 8-Ks, which are incorporated herein by reference. Capitalized terms are as defined and described in such consolidated financial statements and in TWI's Current Report on Form 8-K dated November 13, 1997. The selected historical financial information for 1995 reflects the consolidation by TWE of TWE-A/N resulting from the formation of such partnership, effective as of April 1, 1995, and the consolidation of Paragon Communications effective as of July 6, 1995. The selected historical financial information gives effect to the consolidation of Six Flags Entertainment Corporation ('SFEC') effective as of January 1, 1993 as a result of an increase in TWE's ownership of SFEC from 50% to 100% in September 1993 and the subsequent deconsolidation of SFEC resulting from the disposition by TWE of a 51% interest in SFEC effective as of June 23, 1995. 17 ENTERTAINMENT GROUP SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, ---------------------------- ----------------------------------------------------------- PRO PRO FORMA(a) HISTORICAL FORMA(a) HISTORICAL -------- ---------------- -------- ----------------------------------------------- 1997 1997 1996 1996 1996 1995 1994 1993 1992 -------- ------ ------ -------- ------- ------ ------ ------ ------ (IN MILLIONS) OPERATING STATEMENT INFORMATION Revenues..................... $8,236 $8,190 $7,817 $10,899 $10,861 $9,629 $8,509 $7,963 $6,761 Depreciation and amortization............... 1,072 1,027 908 1,302 1,244 1,060 959 909 788 Business segment operating income..................... 1,031 990 845 1,128 1,090 992 852 905 814 Interest and other, net(b)... 211 157 369 603 524 539 616 564 531 Income before extraordinary item....................... 482 487 221 198 220 170 136 217 173 Net income(c)................ 482 487 221 198 220 146 136 207 173
SEPTEMBER 30, DECEMBER 31, ---------------------- --------------------------------------------------- PRO FORMA(a) HISTORICAL HISTORICAL -------- ---------- --------------------------------------------------- 1997 1997 1996 1995 1994 1993 1992 -------- ---------- ------- ------- ------- ------- ------- (IN MILLIONS) BALANCE SHEET INFORMATION Total assets.............................. $21,640 $ 20,388 20,027 $18,960 $18,992 $18,202 $15,886 Debt due within one year.................. 8 8 7 47 32 24 7 Long-term debt............................ 7,278 6,257 5,676 6,137 7,160 7,125 7,171 Preferred stock of a subsidiary holding solely a mortgage note of its parent.... 237 237 -- -- -- -- -- Time Warner General Partners' Senior Capital................................. 1,096 1,096 1,543 1,426 1,663 1,536 -- Partners' capital......................... 6,471 6,471 6,681 6,576 6,491 6,228 6,483
- ------------ (a) The selected pro forma financial information as of and for the nine months ended September 30, 1997 and for the year ended December 31, 1996 gives effect to the TWE-A/N Transfers as if such transactions occurred at such date, with respect to balance sheet information, and at the beginning of such periods, with respect to operating statement information. (b) Interest and other, net, for the nine months ended September 30, 1997 includes a $250 million gain relating to the sale of TWE's interest in E! Entertainment Television, Inc. (c) The net income for the years ended December 31, 1995 and 1993 include extraordinary loss on the retirement of debt of $24 million and $10 million, respectively. RATIO OF EARNINGS TO FIXED CHARGES The historical ratios of earnings to fixed charges for each of TWI, TWC and TBS and the pro forma ratios of earnings to fixed charges for each of TWI and TWC are set forth below for the periods indicated. For periods in which earnings before fixed charges were insufficient to cover fixed charges, the dollar amount of coverage deficiency (in millions), instead of the ratio, is disclosed. The ratios of earnings to fixed charges of TWI and TWC for all periods after 1992 reflect the deconsolidation of the Entertainment Group, principally TWE, effective January 1, 1993. The ratios of earnings to fixed charges of TBS for all post-merger periods have been adjusted to reflect TWI's basis of accounting. The ratios of earnings to fixed charges (or coverage deficiencies) of TBS for all pre-merger periods are reflected at TBS's historical cost basis of accounting. Certain reclassifications have been made to TBS's ratios of earnings to fixed charges for pre-merger periods to conform to the post-merger presentation. The historical ratio of earnings to fixed charges of each of TWI and TWC for 1996 reflects (a) the use of approximately $1.55 billion of net proceeds from the issuance of 1.6 million shares of Series M exchangeable preferred stock, having an aggregate liquidation preference of $1.6 billion to reduce 18 outstanding indebtedness (the 'Preferred Stock Refinancing'), (b) the acquisition of Cablevision Industries Corporation and related companies, including the assumption or incurrence of approximately $2 billion of indebtedness and, with respect to TWI only, (c) the TBS Transaction, including the assumption of approximately $2.8 billion of indebtedness. The historical ratio of earnings to fixed charges of each of TWI and TWC for 1995 reflects (a) the acquisition of KBLCOM Incorporated and Summit Communications Group, Inc., including the assumption or incurrence of approximately $1.3 billion of indebtedness and (b) the exchange by Toshiba Corporation and ITOCHU Corporation of their direct and indirect interests in TWE. The historical ratio of earnings to fixed charges of each of TWI and TWC for 1993 reflects the issuance of $6.1 billion of long-term debt and the use of $500 million of cash and equivalents for the exchange or redemption of preferred stock having an aggregate liquidation preference of $6.4 billion. The historical ratio of earnings to fixed charges for 1992 reflects the capitalization of TWE on June 30, 1992 and associated refinancings, and the acquisition of the 18.7% minority interest in American Television and Communications Corporation as of June 30, 1992, using the purchase method of accounting for business combinations. The pro forma ratios of earnings to fixed charges for each of TWI and TWC for the nine months ended September 30, 1997 and the year ended December 31, 1996 give effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996 only, (a) the Preferred Stock Refinancing and certain other debt refinancings and (b) with respect to TWI only, the TBS Transaction, as if such transactions had occurred at the beginning of such periods. The pro forma information presented below should be read in conjunction with the pro forma consolidated condensed financial statements contained in TWI's Current Report on Form 8-K dated November 13, 1997 and incorporated herein by reference. Such pro forma amounts are presented for informational purposes only and are not necessarily indicative of the actual ratios that would have occurred if such transactions had been consummated as of the dates indicated, nor are they necessarily indicative of future results.
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, ------------------------- ------------------------------------------------- PRO FORMA PRO FORMA 1997 1997 1996 1996 1996 1995 1994 1993 1992 --------- ---- ---- --------- ---- ---- ---- ---- ---- TWI..................................... 1.4x 1.4x 1.0x 1.1x 1.1x 1.1x 1.1x 1.1x 1.4x TWC..................................... 1.4x 1.4x 1.0x 1.2x 1.1x 1.1x 1.1x 1.1x 1.4x
NINE MONTHS THREE MONTHS NINE MONTHS YEARS ENDED DECEMBER 31, ENDED ENDED ENDED ---------------------------- SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996 1995 1994 1993 1992 ------------------ ----------------- ------------------ ---- ---- ---- ---- TBS...................... 1.8x 1.6x $(44) 1.7x 1.3x 1.6x 1.4x
For purposes of computing the ratio of earnings to fixed charges, earnings were calculated by adding (i) pretax income, (ii) interest expense, including previously capitalized interest amortized to expense and the portion of rents representative of an interest factor for TWI, TWC and TBS and their respective majority-owned subsidiaries, (iii) TWI's, TWC's and TBS's respective proportionate share of the items included in (ii) above for their 50%-owned companies, (iv) preferred stock dividend requirements of majority-owned subsidiaries, (v) minority interest in the income of majority-owned subsidiaries that have fixed charges and (vi) the amount of undistributed losses of each of TWI's, TWC's and TBS's less than 50%-owned companies. Fixed charges consist of (i) interest expense, including interest capitalized and the portion of rents representative of an interest factor for TWI, TWC and TBS and their respective majority-owned subsidiaries, (ii) TWI's, TWC's and TBS's respective proportionate share of such items for their 50%-owned companies and (iii) preferred stock dividend requirements of majority-owned subsidiaries. Earnings as defined include significant noncash charges for depreciation and amortization. Historical fixed charges of TWI and TWC for the nine months ended September 30, 1997 and 1996 and the years ended December 31, 1996, 1995 and 1994 include noncash interest expense of $73 million, $68 million, $91 million, $176 million and $219 million, respectively, principally relating to TWC's Liquid Yield Option Notes due 2012 and 2013 and, in 1995 and 1994 only, TWC's Redeemable Reset Notes due 2002. Historical fixed charges of TWI for the nine months ended September 30, 1997 19 and the year ended December 31, 1996 include an additional $2 million and $5 million, respectively, in noncash interest expense relating to TBS's zero coupon convertible notes due 2007. Pro forma fixed charges of TWI for the year ended December 31, 1996 similarly include an additional $14 million in noncash interest expense relating to TBS's zero coupon convertible notes due 2007 for the period prior to the consummation of the TBS Transaction. Historical fixed charges of TBS include noncash interest expense of $2 million, $5 million, $14 million, $18 million, $17 million, $29 million and $34 million for the nine months ended September 30, 1997, the three months ended December 31, 1996 and the nine months ended September 30, 1996 and the years ended December 31, 1995, 1994, 1993 and 1992, respectively. THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OUTSTANDING DEBENTURES Upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal, TWC will accept for exchange Outstanding Debentures which are properly tendered on or prior to the Expiration Date and not withdrawn as permitted below. As used herein, the term 'Expiration Date' means midnight, New York City time, on March 30, 1998; provided, however, that if TWC, in its sole discretion, has extended the period of time for which the Exchange Offer is open, the term 'Expiration Date' means the latest time and date to which the Exchange Offer is extended. As of the date of this Prospectus, $500 million aggregate principal amount of the Outstanding Debentures is outstanding. This Prospectus, together with the Letter of Transmittal, is first being sent on or about February 13, 1998, to all holders of Outstanding Debentures known to TWC. TWC's obligation to accept Outstanding Debentures for exchange pursuant to the Exchange Offer is subject to certain conditions as set forth below under 'Certain Conditions to the Exchange Offer.' TWC expressly reserves the right, at any time or from time to time, to extend the period of time during which the Exchange Offer remains open, and thereby delay acceptance for exchange of any Outstanding Debentures, by giving oral or written notice of such extension in the manner described below. During any such extension, all Outstanding Debentures previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by TWC. Any Outstanding Debentures not accepted for exchange for any reason will be returned without expense to the tendering holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. Outstanding Debentures tendered in the Exchange Offer must be in denominations of principal amounts of $1,000 and any integral multiples thereof. TWC expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Outstanding Debentures not theretofore accepted for exchange, upon the occurrence of any of the events specified below under ' -- Certain Conditions to the Exchange Offer.' TWC will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the Outstanding Debentures as promptly as practicable, such notice in the case of any extension to be issued by means of press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. INTEREST ON THE EXCHANGE DEBENTURES Interest on the Exchange Debentures will be payable semiannually on January 15 and July 15 of each year, commencing on July 15, 1998, at the rate of 6.95% per annum. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. PROCEDURES FOR TENDERING To tender in the Exchange Offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal, and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the 20 Outstanding Debentures and any other required documents, to the Exchange Agent prior to midnight, New York City time, on the Expiration Date (unless such tender is being effected pursuant to the procedure for book-entry transfer described below). Any financial institution that is a participant in DTC's Book-Entry Transfer Facility system may make book-entry delivery of the Outstanding Debentures by causing DTC to transfer such Outstanding Debentures into the Exchange Agent's account and to deliver an Agents Message on or prior to the Expiration Date in accordance with DTC's procedures for such transfer and delivery. If delivery of Outstanding Debentures is effected through book-entry transfer into the Exchange Agent's account at DTC and an Agent's Message is not delivered, the Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents must be transmitted to and received or confirmed by the Exchange Agent at its addresses set forth herein under ' -- Exchange Agent' prior to midnight, New York City time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The term 'Agents Message' means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a confirmation of the book-entry tender of their Outstanding Debentures into the Exchange Agent's Account at DTC, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that TWC may enforce the Letter of Transmittal against such participant. The tender (as set forth above) by a holder of Outstanding Debentures will constitute an agreement between such holder and TWC in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. Delivery of all documents must be made to the Exchange Agent at its address set forth herein. Holders may also request that their respective brokers, dealers, commercial banks, trust companies or nominees effect such tender for the holders. The method of delivery of Outstanding Debentures, the Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the holders. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. NO LETTER OF TRANSMITTAL OR OUTSTANDING DEBENTURES SHOULD BE SENT TO TWC. Only a holder of Outstanding Debentures may tender such Outstanding Debentures in the Exchange Offer. The term 'holder' with respect to the Exchange Offer means any person in whose name Outstanding Debentures are registered on the books of TWC or any other person who has obtained a properly completed bond power from the registered holder, or any person whose Outstanding Debentures are held of record by DTC who desires to deliver such Outstanding Debentures by book-entry transfer at DTC. Any beneficial holder whose Outstanding Debentures are registered in the name of his broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on his behalf. If such beneficial holder wishes to tender on his own behalf, such beneficial holder must, prior to completing and executing the Letter of Transmittal and delivering his Outstanding Debentures, either make appropriate arrangements to register ownership of the Outstanding Debentures in such holder's name or obtain a properly completed bond power from the registered holder. The transfer of record ownership may take considerable time. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an 'eligible guarantor institution' within the meaning of Rule 17Ad-15 under the Exchange Act (an 'Eligible Institution') unless the Outstanding Debentures tendered pursuant thereto are tendered (i) by a registered holder who has not completed the box entitled 'Special Issuance 21 Instructions' or 'Special Delivery Instructions' on the Letter of Transmittal or (ii) for the account of an Eligible Institution. If the Letter of Transmittal is signed by a person other than the registered holder of any Outstanding Debentures listed therein, such Outstanding Debentures must be endorsed or accompanied by appropriate bond powers which authorize such person to tender the Outstanding Debentures on behalf of the registered holder, in either case signed as the name of the registered holder or holders appears on the Outstanding Debentures. If the Letter of Transmittal or any Outstanding Debentures or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by TWC, evidence satisfactory to TWC of their authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of the tendered Outstanding Debentures will be determined by TWC in its sole discretion, which determination will be final and binding. TWC reserves the absolute right to reject any and all Outstanding Debentures not properly tendered or any Outstanding Debentures TWC's acceptance of which would, in the opinion of counsel for TWC, be unlawful. TWC also reserves the absolute right to waive any irregularities or conditions of tender as to particular Outstanding Debentures. TWC's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Debentures must be cured within such time as TWC shall determine. Neither TWC, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Outstanding Debentures nor shall any of them incur any liability for failure to give such notification. Tenders of Outstanding Debentures will not be deemed to have been made until such irregularities have been cured or waived. Any Outstanding Debentures received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering holder of such Outstanding Debentures unless otherwise provided in the Letter of Transmittal as soon as practicable following the Expiration Date. In addition, TWC reserves the right in its sole discretion to (a) purchase or make offers for any Outstanding Debentures that remain outstanding subsequent to the Expiration Date, or, as set forth under ' -- Certain Conditions to the Exchange Offer,' to terminate the Exchange Offer and (b) to the extent permitted by applicable law, purchase Outstanding Debentures in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the Exchange Offer. By tendering, each holder of Outstanding Debentures will represent to TWC that, among other things, the Exchange Debentures acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the holder, that neither the holder nor any other person has an arrangement or understanding with any person to participate in the distribution of the Exchange Debentures and that neither the holder nor any such other person is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act or, if an affiliate, such holder or such other person will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. ACCEPTANCE OF OUTSTANDING DEBENTURES FOR EXCHANGE; DELIVERY OF EXCHANGE DEBENTURES Upon satisfaction or waiver of all of the conditions to the Exchange Offer, TWC will accept, promptly after the Expiration Date, all Outstanding Debentures properly tendered and will issue the Exchange Debentures promptly, after acceptance of the Outstanding Debentures. See ' -- Certain Conditions to the Exchange Offer.' For purposes of the Exchange Offer, TWC shall be deemed to have accepted properly tendered Outstanding Debentures for exchange when, as and if TWC has given oral or written notice thereof to the Exchange Agent, with written confirmation of any oral notice to be given promptly thereafter. 22 For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Interest on the Exchange Debentures will be payable semiannually on January 15 and July 15 of each year, commencing on July 15, 1998, at the rate of 6.95% per annum. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. In all cases, issuance of Exchange Debentures for Outstanding Debentures that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for such Outstanding Debentures or a timely Book-Entry Confirmation of such Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal and all other required documents. If any tendered Outstanding Debentures are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Outstanding Debentures are submitted for a greater principal amount than the holder desired to exchange, such unaccepted or non-exchanged Outstanding Debentures will be returned without expense to the tendering holder thereof (or, in the case of Outstanding Debentures tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry procedures described below, such non-exchanged Outstanding Debentures will be credited to an account maintained with such Book-Entry Transfer Facility) as promptly as practicable after the expiration or termination of the Exchange Offer. BOOK-ENTRY TRANSFER The Exchange Agent will make a request to establish an account with respect to the Outstanding Debentures at the Book-Entry Transfer Facility for purposes of the Exchange Offer within two business days after the date of this Prospectus, and any financial institution that is a participant in the Book- Entry Transfer Facility's systems may make book-entry delivery of Outstanding Debentures by causing the Book-Entry Transfer Facility to transfer such Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. However, although delivery of Outstanding Debentures may be effected through book-entry transfer at the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at one of the addresses set forth below, under ' -- Exchange Agent' on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Outstanding Debentures and who cannot deliver their Outstanding Debentures, the Letter of Transmittal, or any other required documents to the Exchange Agent prior to the Expiration Date, or if such holder cannot complete the procedure for book-entry transfer on a timely basis, may effect a tender if: (a) The tender is made through an Eligible Institution; (b) Prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of the Outstanding Debentures, the certificate number or numbers of such Outstanding Debentures and the principal amount of Outstanding Debentures tendered, stating that the tender is being made thereby, and guaranteeing that, within five business days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing the Outstanding Debentures to be tendered in proper form for transfer and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (c) Such properly completed and executed Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing all tendered Outstanding Debentures in proper form for transfer (or confirmation of a book-entry transfer into the Exchange Agent's account at DTC of 23 Outstanding Debentures delivered electronically) and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five business days after the Expiration Date. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Outstanding Debentures may be withdrawn at any time prior to midnight, New York City time, on the Expiration Date. To withdraw a tender of Outstanding Debentures in the Exchange Offer, a facsimile transmission or letter notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to midnight, New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Outstanding Debentures to be withdrawn (the 'Depositor'), (ii) include a statement that the Depositor is withdrawing its election to have Outstanding Debentures exchanged, and identify the Outstanding Debentures to be withdrawn (including the certificate number or numbers and principal amount of such Outstanding Debentures), (iii) be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Outstanding Debentures were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to permit the Trustee with respect to the Outstanding Debentures to register the transfer of such Outstanding Debentures into the name of the Depositor withdrawing the tender and (iv) specify the name in which any such Outstanding Debentures are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) for such withdrawal notices will be determined by TWC, whose determination shall be final and binding on all parties. Any Outstanding Debentures so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Debentures will be issued with respect thereto unless the Outstanding Debentures so withdrawn are validly retendered. Any Outstanding Debentures which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Debentures may be re-tendered by following one of the procedures described above under ' -- Procedures for Tendering' at any time prior to the Expiration Date. CERTAIN CONDITIONS TO THE EXCHANGE OFFER The Exchange Offer is not subject to any conditions, other than that (i) the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the Commission and (ii) there is no injunction, order or decree issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair the ability of TWC to proceed with the Exchange Offer. There can be no assurance that any such condition will not occur. Holders of Outstanding Debentures will have certain rights against TWC under the Registration Rights Agreement should TWC fail to consummate the Exchange Offer. If TWC determines that it may terminate the Exchange Offer, as set forth above, TWC may (i) refuse to accept any Outstanding Debentures and return any Outstanding Debentures that have been tendered to the holders thereof, (ii) extend the Exchange Offer and retain all Outstanding Debentures tendered prior to the Expiration Date, subject to the rights of such holders of tendered Outstanding Debentures to withdraw their tendered Outstanding Debentures, or (iii) waive such termination event with respect to the Exchange Offer and accept all properly tendered Outstanding Debentures that have not been withdrawn. If such waiver constitutes a material change in the Exchange Offer, TWC will disclose such change by means of a supplement to this Prospectus that will be distributed to each registered holder of Outstanding Debentures, and TWC will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Outstanding Debentures, if the Exchange Offer would otherwise expire during such period. 24 EXCHANGE AGENT The Chase Manhattan Bank, the Trustee under the Indenture, has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance and inquiries for additional copies of this Prospectus or of the Letter of Transmittal should be directed to the Exchange Agent addressed as follows: By Mail, Hand or Overnight Courier Facsimile Transmission Number 55 Water Street (212) 638-7375 Room 234, North Building or (212) 344-9367 New York, NY 10041 (For Eligible Attention: Institutions Only) Carlos Esteves Confirm by Telephone (If by Mail, Registered or (212) 638-0828 Certified Mail Recommended)
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL. FEES AND EXPENSES TWC will not make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offer. The cash expenses to be incurred in connection with the Exchange Offer will be paid by TWC and are estimated to be $150,000. TRANSFER TAXES Holders who tender their Outstanding Debentures for exchange will not be obligated to pay any transfer taxes in connection therewith, except that holders who instruct TWC to register Exchange Debentures in the name of, or request that Outstanding Debentures not tendered or not accepted in the Exchange Offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon. CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE DEBENTURES Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Debentures. However, TWC does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can 25 be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange Debentures received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer such holder will have not engaged in, and does not intend to engage in, a distribution of Exchange Debentures and has no arrangement or understanding to participate in a distribution of Exchange Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirement of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures, where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC has agreed that, for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See 'Plan of Distribution.' However, to comply with state securities laws, the Exchange Debentures may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Debentures to 'qualified institutional buyers' (as such term is defined under Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. TWC currently does not intend to register or qualify the sale of the Exchange Debentures in any state where an exemption from registration or qualification is required and not available. USE OF PROCEEDS There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer. The Exchange Offer is intended to satisfy certain of TWC's, TWI's and TBS's obligations under the Placement Agreement and the Registration Rights Agreement. In consideration for issuing the Exchange Debentures contemplated in this Prospectus, TWC will receive Outstanding Debentures in like principal amount, the form and terms of which are the same as the form and terms of the Exchange Debentures (which they replace), except as otherwise described herein. The Outstanding Debentures surrendered in exchange for Exchange Debentures will be retired and canceled and cannot be reissued. Accordingly, issuance of the Exchange Debentures will not result in any increase or decrease in the indebtedness of TWC, TWI or TBS. The net proceeds of the Original Offering were approximately $490.2 million. The net proceeds from the Original Offering were used by TWC to redeem its 7.45% Notes due 1998, and prior to such use, to reduce short-term borrowings of TWC and its affiliates. 26 DESCRIPTION OF THE DEBENTURES AND THE GUARANTEES The Outstanding Debentures were, and the Exchange Debentures will be, issued under an Indenture, dated as of January 15, 1993, as supplemented from time to time (such Indenture, as so supplemented being called the 'Indenture') among TWC, TWI, TBS and The Chase Manhattan Bank (formerly known as Chemical Bank) (the 'Trustee'), as Trustee. The following summary of certain provisions of the Indenture and the Debentures does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended (the 'Trust Indenture Act'). Copies of the Indenture and the Debentures are available upon request from TWC. Whenever particular defined terms of the Indenture not otherwise defined herein are referred to, such defined terms are incorporated herein by reference. For definitions of certain capitalized terms used in the following summary, see ' -- Certain Definitions.' Section references are to the Indenture unless otherwise indicated. GENERAL The Debentures bear interest at an annual rate of 6.95%, payable semiannually on January 15 and July 15 of each year, commencing July 15, 1998 (each an 'Interest Payment Date'), to Holders of record at the close of business on the December 15 or June 15 next preceding each such Interest Payment Date. The Debentures are issuable only in registered form, without coupons, in denominations of $1,000 and integral multiples thereof. To the extent described under ' -- Book Entry; Delivery and Form' below, the principal of and interest on the Debentures will be payable and the transfer of the Debentures will be registrable through DTC. (Sections 305 and 202, Form of Debenture and the Fifth Supplemental Indenture, dated as of January 12, 1998 (the 'Fifth Supplemental Indenture'), among TWC, TWI, TBS and the Trustee) TWC will not charge a service charge for any registration of transfer or exchange of Debentures; however, TWC may require payment by a Holder of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection therewith. (Section 305) The Trustee shall authenticate and deliver Debentures in accordance with the Indenture and the procedures for dating, due execution by TWC and book-entry transfer set forth therein. (Section 303) For each Outstanding Debenture accepted for exchange, the Holder thereof will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. The terms of the Exchange Debentures are identical in all material respects to the terms of the Outstanding Debentures, except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, with respect to the Outstanding Debentures, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated a registered exchange offer for the Outstanding Debentures or caused a Shelf Registration Statement with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest on the Outstanding Debentures will be payable until the consummation of a registered exchange offer or the effectiveness of the Shelf Registration Statement. See 'Registration Rights Agreement for Outstanding Debentures.' All Outstanding Debentures and Exchange Debentures will be treated as a single class of securities for all purposes under the Indenture. TERMS OF THE DEBENTURES The Debentures are limited to $500,000,000 aggregate principal amount. The Debentures will mature on January 15, 2028, and are not redeemable prior to maturity and do not have the benefit of a sinking fund. GUARANTEES Each of the Guarantors, as primary obligor and not merely as surety, has guaranteed to each Holder of the Debentures, and to the Trustee and its successors and assigns, (i) the full and punctual 27 payment of principal of and interest on the Debentures when due, whether at maturity, by acceleration or otherwise, and all other monetary obligations of TWC under the Indenture (including obligations to the Trustee) and the Debentures and (ii) the full and punctual performance within applicable grace periods of all other obligations of TWC under the Indenture and the Debentures. The Guarantees constitute a guarantee of payment, performance and compliance and not merely of collection. The obligation of each to make any payments may be satisfied by causing TWC to make such payments. Further, each Guarantor has agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder of Debentures in enforcing any of their respective rights under the Guarantees. (Section 2 of the Second Supplemental Indenture dated as of October 10, 1996, among TWC, TWI and the Trustee, and Section 2 of the Fourth Supplemental Indenture dated as of December 17, 1997 (the 'Fourth Supplemental Indenture'), among TWC, TWI, TBS and the Trustee) The maximum aggregate amount of the Guarantee by TBS shall not exceed the maximum amount that can be guaranteed by TBS without rendering such Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. RANKING The Debentures are senior indebtedness of TWC, ranking on a parity with all other unsecured and unsubordinated indebtedness of TWC, and each Guarantee is a senior obligation of the relevant Guarantor, ranking on a parity with all other unsecured and unsubordinated obligations of such Guarantor. Each of TWC and the Guarantors is a holding company and the Debentures and the Guarantees will be effectively subordinated to all existing and future liabilities, including indebtedness, of the subsidiaries of TWC and the Guarantors, respectively. See 'Holding Company Structure.' COVENANTS Limitation on Liens. The Indenture provides that neither TWC nor any Material Subsidiary of TWC shall incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness for money borrowed that is secured by a lien on any asset now owned or hereafter acquired by it unless TWC makes or causes to be made effective provision whereby the Debentures will be secured by such lien equally and ratably with (or prior to) all other indebtedness thereby secured so long as any such indebtedness shall be secured. The foregoing restriction does not apply to the following: (i) liens existing as of the date of the Indenture; (ii) liens created by Subsidiaries of TWC to secure indebtedness of such Subsidiaries to TWC or to one or more other Subsidiaries of TWC; (iii) liens affecting property of a person existing at the time it becomes a Subsidiary of TWC or at the time it merges into or consolidates with TWC or a Subsidiary of TWC or at the time of a sale, lease or other disposition of all or substantially all of the properties of such person to TWC or its Subsidiaries; (iv) liens on property existing at the time of the acquisition thereof or incurred to secure payment of all or a part of the purchase price thereof or to secure indebtedness incurred prior to, at the time of, or within one year after the acquisition thereof for the purpose of financing all or part of the purchase price thereof; (v) liens on any property to secure all or part of the cost of improvements or construction thereon or indebtedness incurred to provide funds for such purpose in a principal amount not exceeding the cost of such improvements or construction; (vi) liens consisting of or relating to the sale, transfer or financing of motion pictures, video and television programs, sound recordings, books or rights with respect thereto or with so-called tax shelter groups or other third-party investors in connection with the financing of such motion pictures, video and television programming, sound recordings or books in the ordinary course of business and the granting to TWC or any of its Subsidiaries of rights to distribute such motion pictures, video and television programming, sound recordings or books; provided, however, that no 28 such lien shall attach to any asset or right of TWC or its Subsidiaries (other than the motion pictures, video and television programming, sound recordings, books or rights which were sold, transferred to or financed by the tax shelter group or third-party investors in question or the proceeds arising therefrom); (vii) liens on shares of stock, indebtedness or other securities of a Person that is not a Subsidiary; (viii) other liens arising in connection with indebtedness of TWC and its Subsidiaries in an aggregate principal amount for TWC and its Subsidiaries not exceeding at the time such lien is issued, created or assumed the greater of (A) 10% of the Consolidated Net Worth of TWC and (B) $500 million; and (ix) any extensions, renewal or replacement of any lien referred to in the foregoing clauses (i) through (viii) inclusive, or of any indebtedness secured thereby; provided that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement, or at the time the lien was issued, created or assumed or otherwise permitted, and that such extension, renewal or replacement lien shall be limited to all or part of substantially the same property which secured the lien extended, renewed or replaced (plus improvements on such property). (Section 1006) Limitation on Senior Debt. The Indenture provides that TWC will not, and will not permit any of its Subsidiaries to, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable for (collectively, 'incur') any Senior Debt, if after giving effect to such incurrence of Senior Debt, determined on a pro forma basis as if such incurrence had occurred on the first day of the Test Period, the Consolidated Cash Flow Coverage Ratio for TWC and its Subsidiaries for the Test Period would be less than 1.5 to 1; provided, however, that the foregoing restrictions will not apply to TWE or any of its Subsidiaries to the extent that the application of such restrictions would be prohibited under, or cause a violation of, TWE's bank credit agreement as in effect from time to time or any successor or replacement credit agreement. (Section 1007) Other than the restrictions in the Indenture on liens and incurrence of Senior Debt described above, the Indenture and the Debentures do not contain any covenants or other provisions designed to afford Holders of Debentures protection in the event of a recapitalization or highly leveraged transaction involving TWC. Limitation on Merger, Consolidation and Certain Sales of Assets. The Indenture provides that neither TWC nor the Guarantors will merge or consolidate with or into, or convey or transfer its property substantially as an entirety to, any Person unless (a) the successor is organized and existing under the laws of the United States or any State or the District of Columbia, (b) (i) in the case of TWC, the successor assumes TWC's obligations under the Indenture and the Debentures on the same terms and conditions and (ii) in the case of each Guarantor, the successor assumes such Guarantor's obligations under the Indenture and its Guarantee on the same terms and conditions and (c) immediately after giving effect to such transactions, there is no default under the Indenture. (Sections 801 and 802, as amended by the Third Supplemental Indenture dated as of December 31, 1996 (the 'Third Supplemental Indenture'), among TWC, TWI and the Trustee and the Fourth Supplemental Indenture) CERTAIN DEFINITIONS The following are certain of the terms defined in the Indenture: 'Consolidated Cash Flow' means, with respect to TWC, for any period, the net income of TWC and its Subsidiaries as determined on a consolidated basis in accordance with GAAP consistently applied, plus the sum of depreciation, amortization, other noncash charges which reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such net income, and excluding extraordinary gains or losses. Notwithstanding the foregoing, for purposes of determining the Consolidated Cash Flow of TWC, there shall be included, in respect of each other Person that is accounted for by TWC on the equity method (as determined in accordance with GAAP), TWC's proportionate amount of such other Person's and its Subsidiaries' consolidated net income, depreciation, amortization, other noncash charges which 29 reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such other Person's net income, excluding extraordinary gains and losses. 'Consolidated Cash Flow Coverage Ratio' means, for any period, the ratio for such period of Consolidated Cash Flow to Consolidated Interest Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect shall be given to the application of the proceeds of Senior Debt whose incurrence is being tested to the extent such proceeds are to be used to repay or refinance other Senior Debt. 'Consolidated Interest Expense' means, with respect to TWC, for any period, cash interest expense of TWC and its Subsidiaries on Senior Debt for such period other than the amount amortized during such period in respect of all fees paid in connection with the incurrence of such Senior Debt, such expense to be determined on a consolidated basis in accordance with GAAP consistently applied. Notwithstanding the foregoing, for purposes of determining the Consolidated Interest Expense of TWC, there shall be included, in respect of each other Person that is accounted for by TWC on the equity method (as determined in accordance with GAAP), TWC's proportionate amount of the cash interest expense of such other Person and its Subsidiaries on Senior Debt for the relevant period other than the amount amortized during such period in respect of all fees paid in connection with the incurrence of such Senior Debt, such expense to be determined on a consolidated basis in accordance with GAAP consistently applied. 'Consolidated Net Worth' means, with respect to TWC, at the date of any determination, the consolidated stockholders' equity of TWC and its Subsidiaries, determined on a consolidated basis in accordance with GAAP consistently applied. 'GAAP' means generally accepted accounting principles as such principles are in effect as of the date of the Indenture. 'Material Subsidiary' means, with respect to TWC, any Person that is a Subsidiary if at the end of the most recent fiscal quarter of TWC, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other investments in, such Person held by TWC and its other Subsidiaries exceeded 10% of TWC's Consolidated Net Worth. 'Person' means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 'Senior Debt' means, with respect to any Person, all indebtedness of such Person in respect of money borrowed, determined in accordance with GAAP consistently applied, other than indebtedness as to which the instrument governing such indebtedness provides that such indebtedness is, or which is in effect, subordinated or junior in right of payment to any other indebtedness of such Person. 'Subsidiary' means, with respect to any Person, any corporation more than 50% of the voting stock of which is owned directly or indirectly by such Person, and any partnership, association, joint venture or other entity in which such Person owns more than 50% of the equity interests or has the power to elect a majority of the board of directors or other governing body. 'Test Period' means, with respect to any date, the period consisting of the most recent four full fiscal quarters for which financial information is generally available. DEFEASANCE The Indenture provides that TWC (and to the extent applicable, the Guarantors), at its option, (a) will be Discharged from any and all obligations in respect of the Debentures (except in each case for certain obligations to register the transfer or exchange of the Debentures, replace stolen, lost or mutilated Debentures, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with the covenants described above under 'Covenants' and certain Events of Default (other than those arising out of the failure to pay interest or principal on the Debentures and certain events of bankruptcy, insolvency and reorganization) will no longer constitute Events of Default with respect to 30 such Debentures, in each case if TWC deposits with the applicable Trustee, in trust, money or the equivalent in securities of the government which issued the currency in which the Debentures are denominated or government agencies backed by the full faith and credit of such government, or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of, and interest on, such series on the dates such payments are due in accordance with the terms of such Debentures. To exercise any such option, TWC is required, among other things, to deliver to the Trustee an opinion of counsel to the effect that (i) the deposit and related defeasance would not cause the Holders of such Debentures to recognize income, gain or loss for Federal income tax purposes and, in the case of a Discharge pursuant to clause (a), accompanied by a ruling to such effect received from or published by the United States Internal Revenue Service and (ii) the creation of the defeasance trust will not violate the Investment Company Act of 1940, as amended. In addition, TWC is required to deliver to the Trustee an Officers' Certificate stating that such deposit was not made by TWC with the intent of preferring the Holders of the Debentures over other creditors of TWC or with the intent of defeating, hindering, delaying or defrauding creditors of TWC or others. (Article 4, as amended by the Third Supplemental Indenture and the Fourth Supplemental Indenture) EVENTS OF DEFAULT, NOTICE AND WAIVER The Indenture provides that, if an Event of Default specified therein with respect to the Debentures shall have happened and be continuing, either the Trustee or the Holders of 25% in aggregate principal amount of the Debentures (or 25% in aggregate principal amount of all outstanding Debt Securities under the Indenture, in the case of certain Events of Default affecting all series of Debt Securities under the Indenture) may declare the principal of all the Debentures to be due and payable. (Section 502) Events of Default in respect of the Debentures are defined in the Indenture as being: (i) default for 30 days in payment of any interest installment with respect to the Debentures; (ii) default in payment of principal of, or premium, if any, on, or any sinking fund or analogous payment with respect to, the Debentures when due at their stated maturity, by declaration or acceleration, when called for redemption or otherwise; (iii) default for 90 days after notice to TWC (or the Guarantors, if applicable) by the Trustee thereunder or by Holders of 25% in aggregate principal amount of the Debentures in the performance of any covenant pertaining to the Debentures; (iv) failure to pay when due, upon final maturity or upon acceleration, the principal amount of any indebtedness for money borrowed of TWC in excess of $50 million, if such indebtedness is not discharged, or such acceleration annulled, within 60 days after written notice; and (v) certain events of bankruptcy, insolvency and reorganization with respect to either Guarantor, TWC or any Material Subsidiary of TWC which is organized under the laws of the United States or any political sub-division thereof. (Section 501, as amended by the Third Supplemental Indenture and the Fourth Supplemental Indenture, and Form of Debenture) The Indenture provides that the Trustee thereunder will, within 90 days after the occurrence of a default with respect to the Debentures, give to the Holders of the Debentures notice of all uncured and unwaived defaults known to it; provided that, except in the case of default in the payment of principal of, premium, if any, or interest, if any, on any of the Debentures, the Trustee thereunder will be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interests of the Holders of the Debentures. The term 'default' for the purpose of this provision means the happening of any of the Events of Default specified above, except that any grace period or notice requirement is eliminated. (Section 602) The Indenture contains provisions entitling the Trustee, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, to be indemnified by the Holders of the Debentures before proceeding to exercise any right or power under the Indenture at the request of Holders of the Debentures. (Section 603) The Indenture provides that the Holders of a majority in aggregate principal amount of the outstanding Debentures may direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of such series, subject to certain conditions. (Section 512) 31 The Indenture includes a covenant that TWC will file annually with the Trustee a certificate of no default or specifying any default that exists. (Section 1004) In certain cases, the Holders of a majority in principal amount of the outstanding Debentures may on behalf of the Holders of all Debentures waive any past default or Event of Default with respect to the Debentures or compliance with certain provisions of the Indenture, except, among other things, a default not theretofore cured in payment of the principal of, or premium, if any, or interest, if any, on any of the Debentures. (Sections 513 and 1008) MODIFICATION OF THE INDENTURE TWC and the Trustee may, without the consent of the Holders of the Debentures or any other series of Debt Securities, enter into indentures supplemental to the Indenture for, among others, one or more of the following purposes: (i) to evidence the succession of another Person to TWC or either Guarantor, and the assumption by such successor of TWC or such Guarantor's obligations under the Indenture and the Debt Securities of any series or the Guarantees relating thereto; (ii) to add covenants of TWC and either Guarantor, or surrender any rights of TWC or either Guarantor, for the benefit of the Holders of Debt Securities of any or all series; (iii) to cure any ambiguity, or correct any inconsistency in the Indenture; (iv) to evidence and provide for the acceptance of any successor Trustee with respect to one or more series of Debt Securities or to facilitate the administration of the trusts thereunder by one or more trustees in accordance with the Indenture; (v) to establish the form or terms of any series of Debt Securities; and (vi) to provide any additional Events of Default. (Section 901, as amended by the Third Supplemental Indenture and the Fourth Supplemental Indenture) The Indenture contains provisions permitting TWC and the Trustee thereunder, with the consent of the Holders of a majority in principal amount of the outstanding Debt Securities of each series to be affected, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the Holders of the Debt Securities of such series to be affected, except that no such supplemental indenture may, without the consent of the Holders of affected Debt Securities, among other things, change the fixed maturity of any Debt Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce the number of shares of any common stock or other securities to be delivered by TWC in respect of a conversion of any convertible Debt Securities or reduce the aforesaid percentage of Debt Securities of any series the consent of the Holders of which is required for any such supplemental indenture. (Section 902) THE TRUSTEE The Chase Manhattan Bank, formerly known as Chemical Bank, is the Trustee under the Indenture. The Trustee is a depository for funds and performs other services for, and transacts other banking business with, the Company and the Guarantors in the normal course of business. Chase Securities Inc., one of the Placement Agents, is an affiliate of the Trustee. GOVERNING LAW The Indenture will be governed by, and construed in accordance with, the laws of the State of New York. BOOK-ENTRY; DELIVERY AND FORM The Exchange Debentures will be represented by one or more permanent global Exchange Debentures in definitive, fully registered form without interest coupons (collectively, the 'Global Exchange Debenture') and will be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. Ownership of beneficial interests in the Global Exchange Debenture will be limited to persons who have accounts with DTC ('participants') or persons who hold interests through participants. Ownership of beneficial interests in the Global Exchange Debenture will be shown on, and the transfer of that 32 ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). So long as DTC, or its nominee, is the registered owner or holder of the Global Exchange Debenture, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Exchange Debentures represented by the Global Exchange Debenture for all purposes under the Indenture and the Exchange Debentures. No beneficial owner of an interest in the Global Exchange Debenture will be able to transfer that interest except in accordance with DTC's applicable procedures, in addition to those provided for under the Indenture. Payments of the principal of, and interest on, the Global Exchange Debenture will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither TWC, the Trustee nor any Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Exchange Debenture or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. TWC expects that DTC or its nominee, upon receipt of any payment of principal or interest in respect of the Global Exchange Debenture, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Exchange Debenture as shown on the records of DTC or its nominee. TWC also expects that payments by participants to owners of beneficial interests in such Global Exchange Debenture held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. TWC expects that DTC will take any action permitted to be taken by a Holder of Exchange Debentures (including the presentation of Exchange Debentures for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the Global Exchange Debenture is credited and only in respect of such portion of the aggregate principal amount of Exchange Debentures as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Exchange Debentures, DTC will exchange the Global Exchange Debenture for definitive Exchange Debentures in certificated form, which it will distribute to its participants. TWC understands that: DTC is a limited purpose trust company organized under the laws of the State of New York, a 'banking organization' within the meaning of New York Banking Law, a member of the Federal Reserve System, a 'clearing corporation' within the meaning of the Uniform Commercial Code and a 'Clearing Agency' registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ('indirect participants'). Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in the Global Exchange Debenture among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither TWC nor the Trustee will have any responsibility for the performance by DTC or its respective participants or indirect participants of its respective obligations under the rules and procedures governing its operations. If DTC is at any time unwilling or unable to continue as a depositary for the Global Exchange Debenture and a successor depositary is not appointed by TWC within 90 days, TWC will issue definitive Exchange Debentures in certificated form in exchange for the Global Exchange Debenture. 33 SAME-DAY SETTLEMENT AND PAYMENT So long as DTC continues to make its Settlement System available to TWC, all payments of principal of and interest on the Debentures will be made by TWC in immediately available funds. REGISTRATION RIGHTS AGREEMENT FOR OUTSTANDING DEBENTURES Holders of Exchange Debentures are not entitled to any registration rights with respect to the Exchange Debentures. TWC, TWI and TBS have agreed, pursuant to the Registration Rights Agreement (the 'Registration Rights Agreement') with the Placement Agents, for the benefit of the holders of the Outstanding Debentures, that TWC, TWI and TBS will file with the Commission and use its reasonable best efforts to cause to become effective a registration statement (the 'Registration Statement') with respect to the Exchange Debentures identical in all material respects to the Outstanding Debentures and, upon becoming effective, to offer the Holders of the Outstanding Debentures the opportunity to exchange their Outstanding Debentures for the Exchange Debentures. The Registration Rights Agreement provides that in the event that TWC, TWI and TBS are not permitted to effect such Exchange Offer, TWC, TWI and TBS will instead file a registration statement covering resales by the Holders of Outstanding Debentures (a 'Shelf Registration Statement') and will use their reasonable best efforts to cause such Shelf Registration Statement to become effective and to keep such Shelf Registration Statement effective for two years from January 12, 1998 (the 'Closing Date'). TWC is required, in the event a Shelf Registration Statement is filed, to provide to each Holder of the Outstanding Debentures copies of the prospectus and notify each such Holder when the Shelf Registration Statement has become effective. A Holder that sells Outstanding Debentures pursuant to a Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a current prospectus to purchasers, and will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales. Under the Registration Rights Agreement, TWC, TWI and TBS have agreed to use their reasonable best efforts to: (i) file the Registration Statement or a Shelf Registration Statement with the Commission, (ii) have such Registration Statement or Shelf Registration Statement declared effective by the Commission within 180 days after the Closing Date and (iii) commence the Exchange Offer and issue the Exchange Debentures in exchange for all Outstanding Debentures validly tendered in accordance with the terms of the Exchange Offer prior to the close of the Exchange Offer, or, in the alternative, cause such Shelf Registration Statement to remain effective for two years from the Closing Date. If TWC, TWI and TBS fail to comply with the above provisions, additional interest (the 'Additional Interest') on the Outstanding Debentures would be assessed as follows: (i) If the Registration Statement or Shelf Registration Statement is not filed within 150 days following the Closing Date, then commencing on the 151st day after the Closing Date, Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum; or (ii) If a Registration Statement or Shelf Registration Statement is filed pursuant to (i) above and is not declared effective within 180 days following the Closing Date, then commencing on the 181st day after the Closing Date, Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum; or (iii) If either (A) TWC has not exchanged Exchange Debentures for all Outstanding Debentures validly tendered in accordance with the terms of the Exchange Offer on or prior to 45 days after the date on which the Registration Statement was declared effective, or (B) if applicable, the Shelf Registration Statement has been declared effective but such Shelf Registration Statement ceases to be effective at any time prior to two years from the Closing Date, then Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum immediately following the (x) 46th day after such effective date, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective in the case of (B) above; 34 provided, however, that the Additional Interest rate on the Outstanding Debentures may not exceed .50% per annum; and, provided, further, that (1) upon the filing of the Registration Statement or Shelf Registration Statement (in the case of (i) above), (2) upon the effectiveness of the Registration Statement or Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Exchange Debentures for all Outstanding Debentures tendered or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective prior to two years from the Closing Date (in the case of (iii) above), Additional Interest on the Outstanding Debentures as a result of such clause (i), (ii) or (iii) shall cease to accrue. Any amounts of Additional Interest due pursuant to clauses (i), (ii) or (iii) above will be payable in cash, on the same original payment dates of the Outstanding Debentures. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Outstanding Debentures, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360. If TWC, TWI and TBS effect the Exchange Offer, TWC, TWI and TBS will be entitled to close the Exchange Offer provided that TWC has accepted all Outstanding Debentures theretofore validly tendered in accordance with the terms of the Exchange Offer. The consummation of the Exchange Offer will satisfy the obligations of TWC, TWI and TBS under the Registration Rights Agreement. Outstanding Debentures not tendered in the Exchange Offer shall bear interest at the same rates in effect at the time of issuance of the Outstanding Debentures. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus constitutes a part. HOLDING COMPANY STRUCTURE Each of TWC, TWI and TBS is a holding company, the assets of which consist primarily of investments in its respective consolidated and unconsolidated subsidiaries. The assets of TWI consist primarily of its investment in TWC and TBS. The assets of TWC consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including TWE. Although the assets of TBS consist primarily of investments in its consolidated and unconsolidated subsidiaries, TBS also directly owns certain assets that are used in the operation of WTBS, a television station in Atlanta, Georgia and TBS, a copyright-paid cable programming service and certain retail stores that together represent less than 5% of the consolidated assets of TBS at December 31, 1996. A substantial portion of the consolidated liabilities of TWC, TWI and TBS have been incurred by subsidiaries. TWE, which is not consolidated with either the TWC or TWI for financial reporting purposes, also has substantial indebtedness and other liabilities. The rights of TWC and the Guarantors and the rights of their creditors, including Holders of Debentures, to participate in the distribution of assets of any person in which TWC or the Guarantors owns an equity interest (including any subsidiary and TWE) upon such person's liquidation or reorganization will be subject to prior claims of such person's creditors, including trade creditors, except to the extent that TWC or the Guarantors may be a creditor with recognized claims against such person (in which case the claims of TWC and the Guarantors would still be subject to the prior claims of any secured creditor of such person and of any holder of indebtedness of such person that is senior to that held by TWC or the Guarantors). Accordingly, the Holders of the Debentures may be deemed to be effectively subordinated to such claims. As of September 30, 1997, the consolidated and unconsolidated subsidiaries of TWC and Guarantors had an aggregate of approximately $20 billion of outstanding liabilities, including indebtedness. Each of TWC's and the Guarantors' ability to service its indebtedness and other obligations, including the Debentures and the Guarantees, respectively, and the ability of each of them to pay dividends on its common and/or preferred stock is dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment to them of such earnings and cash flow. The TWE Agreement of Limited Partnership and its bank credit facilities limit distributions and other transfers of funds to TWC and TWI. 35 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a general discussion of the principal United States Federal income tax consequences to holders of Outstanding Debentures who exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer. This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the 'Code'), existing, temporary and proposed Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect or proposed on the date hereof and all of which are subject to change, possibly with retroactive effect, or different interpretations. This discussion is limited to holders of Outstanding Debentures who hold the Debentures as capital assets, within the meaning of section 1221 of the Code. Moreover, this discussion is for general information only and does not address all of the tax consequences that may be relevant to holders of Outstanding Debentures and Exchange Debentures in light of their personal circumstances or to certain types of holders of Outstanding Debentures and Exchange Debentures (such as certain financial institutions, insurance companies, tax-exempt entities, dealers in securities or persons who have hedged the risk of owning a Debenture). In addition, this discussion does not address any tax consequences arising under the laws of any state, locality or foreign jurisdiction, or any estate or gift tax considerations. EXCHANGE OFFER The exchange of Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer should not be treated as an exchange or other taxable event for United States Federal income tax purposes. Accordingly, there should be no United States Federal income tax consequences to holders who exchange Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer and any such holder should have the same adjusted tax basis and holding period in the Exchange Debentures as it had in the Outstanding Debentures immediately before the exchange. PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures where such Outstanding Debentures were acquired as a result of market-making activities or other trading activities. TWC has agreed that for a period of 90 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resales. TWC will not receive any proceeds from any sale of Exchange Debentures by broker-dealers or any other holder of Exchange Debentures. Exchange Debentures received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Debentures or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Debentures. Any broker-dealer that resells Exchange Debentures that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Debentures may be deemed to be an 'underwriter' within the meaning of the Securities Act and any profit on any such resale of Exchange Debentures and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. For a period of 90 days after the Expiration Date, TWC will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests 36 such documents in the Letter of Transmittal. TWC has agreed to pay all expenses incident to the Exchange Offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Debentures (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. By acceptance of this Exchange Offer, each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer agrees that, in the case that TWC is required to file a Shelf Registration Statement, on receipt of notice from TWC (i) that TWC is suspending the availability of the Shelf Registration Statement or (ii) of the happening of any event which makes any statement in the Shelf Registration Statement or the related prospectus untrue in any material respect or which requires the making of any changes in the Shelf Registration Statement or the related prospectus in order to make the statements therein not misleading (which notice TWC agrees to deliver promptly to the broker-dealer), the broker-dealer will suspend use of such prospectus until TWC has amended or supplemented the prospectus to correct the misstatement or omission and has furnished copies of the amended or supplemental prospectus to the broker-dealer. If TWC shall give any such notice to suspend the use of the prospectus, it shall extend the 90-day period referred to above by the number of days during the period from and including the date of the giving of the notice to and including when broker-dealers shall have received copies of the supplemented or amended prospectus necessary to permit resales of the Exchange Debentures. LEGAL MATTERS Certain legal matters with respect to the issuance of the Exchange Debentures in connection with the Exchange Offer are being passed upon for TWC and the Guarantors by Cravath, Swaine & Moore, New York, New York. EXPERTS The consolidated financial statements and schedules of TWI and TWE appearing in TWI's 1996 Form 10-K and the combined financial statements of the Time Warner Service Partnerships incorporated by reference therein, have been audited by Ernst & Young LLP, Independent Auditors, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial statements and schedules are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Cablevision Industries Corporation at December 31, 1995, and for the year then ended, incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Ernst & Young LLP, Independent Auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Cablevision Industries Corporation as of December 31, 1994, and for each of the two years in the period ended December 31, 1994, incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Arthur Andersen LLP, Independent Public Accountants, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements have been incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. The financial statements of Paragon Communications as of December 31, 1993 and 1994, and for each of the three years in the period ended December 31, 1994, incorporated by reference in this Prospectus from TWI's 1996 Form 10-K, and the consolidated financial statements of TBS, as of December 31, 1994 and 1995, and for the three years in the period ended December 31, 1995, incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Price Waterhouse LLP, Independent Accountants, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial 37 statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. No person is authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offer made by this Prospectus, and, if given or made, such other information or representations must not be relied upon as having been authorized by TWC, TWI or TBS or by any underwriter, dealer or agent. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than those to which they relate. Neither the delivery of this Prospectus nor any sale of or offer to sell the Debentures offered hereby shall, under any circumstances, create an implication that there has been no change in the affairs of TWC, TWI or TBS or that the information herein is correct as of any time after the date hereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Debentures offered hereby in any State to any person to whom it is unlawful to make such offer or solicitation in such State. 38 _____________________________ _____________________________ NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER CONTAINED HEREIN OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TWC, TWI OR TBS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF TWC, TWI OR TBS SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information...................................................................................... 3 Information Incorporated by Reference...................................................................... 4 Prospectus Summary......................................................................................... 5 TWC and the Guarantors..................................................................................... 11 Certain Factors............................................................................................ 13 Selected Historical and Pro Forma Financial Information.................................................... 15 Ratio of Earnings to Fixed Charges......................................................................... 18 The Exchange Offer......................................................................................... 20 Use of Proceeds............................................................................................ 26 Description of the Debentures and the Guarantees........................................................... 27 Registration Rights Agreement for Outstanding Debentures................................................... 34 Holding Company Structure.................................................................................. 35 Certain United States Federal Income Tax Considerations.................................................... 36 Plan of Distribution....................................................................................... 36 Legal Matters.............................................................................................. 37 Experts.................................................................................................... 37
$500,000,000 TIME WARNER COMPANIES, INC. FULLY AND UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC. 6.95% DEBENTURES DUE 2028 --------------------- PROSPECTUS --------------------- FEBRUARY 13, 1998 _____________________________ _____________________________ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. TWI and TWC Section 145 of the Delaware General Corporation law (the 'DGCL') provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation -- a 'derivative action'), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's charter, by-laws, disinterested director vote, stockholder vote, agreement or otherwise. Each of TWI's and TWC's By-laws require indemnification to the fullest extent permitted under Delaware law of any person who is or was a director or officer of TWI who is or was involved or threatened to be made so involved in any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was serving as a director, officer or employee of TWI or TWC or any predecessor of TWI or TWC or was serving at the request of TWI or TWC as a director, officer or employee of any other enterprise. Section 102(b)(7) of the DGCL permits a provision in the certificate of incorporation of each corporation organized thereunder, such as TWI and TWC, eliminating or limiting, with certain exceptions, the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Section 1, Article X of TWI's and Article VIII of TWC's Restated Certificate of Incorporation eliminates the liability of directors to the extent permitted by Section 102(b)(7) of the DGCL. The foregoing statements are subject to the detailed provisions of Sections 145 and 102(b)(7) of the DGCL, TWI's and TWC's By-laws and Section 1, Article X of TWI's and Article VIII of TWC's Restated Certificate of Incorporation, as applicable. The Directors' and Officers' Liability and Reimbursement Insurance Policy of TWI is designed to reimburse each of the registrants for any payments made by each pursuant to the foregoing indemnification. The policy has coverage of $50,000,000. TBS TBS's By-laws provide for indemnification of directors and officers of TBS against expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually incurred in connection with any proceeding arising by reason of the fact that such person is or was an officer or director of TBS. TBS's By-laws provide for indemnification of directors and officers of TBS in connection with or resulting from any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which he or she may become involved by reason of his or her being or having been a director or officer, or by reason of any action taken or not taken in his or her capacity as such director or officer or as a member of any committee appointed by the Board of Directors of TBS to act for, in the interest of, or on behalf of TBS provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of TBS and, in addition, with respect to any criminal action or proceeding, did not have reasonable cause to believe that his or her conduct was unlawful. II-1 Indemnification is mandatory in the case of a director or officer who is wholly successful on the merits or otherwise with respect to any claim, action, suit or proceeding of the character described above. In other cases, the determination whether to indemnify a director or officer is made by a majority of disinterested directors, a majority of disinterested shareholders, or independent legal counsel selected by any Judge of the United States District Court for the Northern District of Georgia, Atlanta Division, at the request of either TBS or the person seeking indemnification. TBS's Articles of Incorporation provide that a director of TWI will not be personally liable to TBS or its shareholders for monetary damages for breach of duty of care or other duty as a director, except for liability (i) for any appropriation, in violation of the director's duties, of any business opportunity of TWI, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) for making a distribution in violation of Section 14-2-831 of the Georgia Business Corporation Code or (iv) for any transaction from which the director derived an improper personal benefit. TBS has insurance to indemnify its directors and officers, subject to the limits contained in those policies, from those liabilities in respect of which such indemnification insurance is permitted under the laws of the State of Georgia. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. 4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)* 4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996).* 4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year ended December 31, 1996).* 4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase Manhattan Bank, as Trustee. 4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase Manhattan Bank, as Trustee. 4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5). 4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. 4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. 5 -- Opinion of Cravath, Swaine & Moore. 12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI. 12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC. 12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS. 23.1 -- Consent of Ernst & Young LLP, Independent Auditors. 23.2 -- Consent of Counsel (included in Exhibit 5). 23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants. 23.4 -- Consent of Price Waterhouse LLP, Independent Accountants. 23.5 -- Consent of Price Waterhouse LLP, Independent Accountants. 24.1 -- Power of Attorney of TWI. 24.2 -- Power of Attorney of TWC. 24.3 -- Power of Attorney of TBS. 25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to TWC, TWI and TBS.
II-2 99.1 -- Form of Letter of Transmittal.** 99.2 -- Form of Notice of Guaranteed Delivery.** 99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.** 99.4 -- Form of Letter to Clients.**
- ------------ 'D' Unless otherwise indicated, the exhibits have been previously filed as part of this Registration Statement. * Incorporated by reference. ** Filed herewith. ITEM 22. UNDERTAKINGS. (a) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of any of the registrants' annual reports pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described in Item 20 above, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such officer, director or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (c) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (d) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused Amendment No. 1 to this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 11, 1998. TIME WARNER INC. By: /s/ PETER R. HAJE ................................. NAME: PETER R. HAJE TITLE: EXECUTIVE VICE PRESIDENT Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 11, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE - ------------------------------------------ --------------------------------------------------------------------- * (i) Director, Chairman of the Board and Chief Executive Officer ......................................... (GERALD M. LEVIN) * (ii) Senior Vice President and Chief Financial Officer ......................................... (RICHARD J. BRESSLER) * (iii) Senior Vice President and Controller ......................................... (JOHN A. LABARCA) * (iv) Directors ......................................... (MERV ADELSON) * ......................................... (J. CARTER BACOT) * ......................................... (STEPHEN F. BOLLENBACH) * ......................................... (BEVERLY SILLS GREENOUGH) * ......................................... (GERALD GREENWALD) * ......................................... (CARLA A. HILLS) * ......................................... (REUBEN MARK) * ......................................... (MICHAEL A. MILES)
II-4 * ......................................... (RICHARD D. PARSONS) * ......................................... (DONALD S. PERKINS) * ......................................... (RAYMOND S. TROUBH) * ......................................... (R. E. TURNER) * ......................................... (FRANCIS T. VINCENT, JR.) *By: /s/ PETER R. HAJE ................................ (ATTORNEY-IN-FACT)
II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused Amendment No. 1 to this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 11, 1998. TIME WARNER COMPANIES, INC. By: /s/ PETER R. HAJE ................................. NAME: PETER R. HAJE TITLE: EXECUTIVE VICE PRESIDENT Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 11, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE - ------------------------------------------ --------------------------------------------------------------------- * (i) Chairman and Chief Executive Officer ......................................... (GERALD M. LEVIN) * (ii) Director, Senior Vice President and Chief Financial Officer ......................................... (RICHARD J. BRESSLER) * (iii) Senior Vice President and Controller ......................................... (JOHN A. LABARCA) /S/ PETER R. HAJE (iv) Directors ......................................... (PETER R. HAJE) * ......................................... (RICHARD D. PARSONS) *By: /S/ PETER R. HAJE ................................. (ATTORNEY-IN-FACT)
II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused Amendment No. 1 to this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 11, 1998. TURNER BROADCASTING SYSTEM, INC. By: /s/ PETER R. HAJE ................................. NAME: PETER R. HAJE TITLE: VICE PRESIDENT Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 11, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE - ------------------------------------------ --------------------------------------------------------------------- * (i) President and Chief Executive Officer and Chairman of the Board ......................................... (TERENCE F. MCGUIRK) * (ii) Executive Vice President, Chief Financial and Administrative ......................................... Officer (WAYNE H. PACE) * (iii) Vice President, Controller and Chief Accounting Officer ......................................... (LANDEL C. HOBBS) * (iv) Directors ......................................... (R. E. TURNER) * ......................................... (W. THOMAS JOHNSON) * ......................................... (RICHARD D. PARSONS) * ......................................... (ROBERT SHAYE) * ......................................... (JEFFREY L. BEWKES) * ......................................... (GERALD M. LEVIN) *By: /s/ PETER R. HAJE ................................. (ATTORNEY-IN-FACT)
II-7 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT PAGE - ------ -------------------------------------------------------------------------------------------------- ---- 4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)* 4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996).* 4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year ended December 31, 1996).* 4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase Manhattan Bank, as Trustee. 4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase Manhattan Bank, as Trustee. 4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5). 4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. 4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. 5 -- Opinion of Cravath, Swaine & Moore. 12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI. 12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC. 12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS. 23.1 -- Consent of Ernst & Young LLP, Independent Auditors. 23.2 -- Consent of Counsel (included in Exhibit 5). 23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants. 23.4 -- Consent of Price Waterhouse LLP, Independent Accountants. 23.5 -- Consent of Price Waterhouse LLP, Independent Accountants. 24.1 -- Power of Attorney of TWI. 24.2 -- Power of Attorney of TWC. 24.3 -- Power of Attorney of TBS. 25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to TWC, TWI and TBS. 99.1 -- Form of Letter of Transmittal.** 99.2 -- Form of Notice of Guaranteed Delivery.** 99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.** 99.4 -- Form of Letter to Clients.**
- ------------ 'D' Unless otherwise indicated, the exhibits have been previously filed as part of this Registration Statement. * Incorporated by reference. ** Filed herewith. STATEMENT OF DIFFERENCES ------------------------ The dagger symbol shall be expressed as ................................. 'D' EX-99 2 EXHIBIT 99.1 LETTER OF TRANSMITTAL EXCHANGE OFFER FOR ALL OUTSTANDING 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC. FULLY AND UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC. PURSUANT TO THE PROSPECTUS DATED FEBRUARY 13, 1998 THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON MARCH 30, 1998, UNLESS EXTENDED (THE 'EXPIRATION DATE'). TENDERS MAY BE WITHDRAWN PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE. DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT By Mail, Hand or Overnight Courier Facsimile Transmission Number 55 Water Street (212) 638-7375 or Room 234, North Building (212) 344-9367 New York, NY 10041 (FOR ELIGIBLE Attention: Carlos Esteves INSTITUTIONS ONLY) (IF BY MAIL, REGISTERED OR Confirm by Telephone CERTIFIED MAIL RECOMMENDED) (212) 638-0828
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. The undersigned acknowledges that he or she has received and reviewed the Prospectus, dated February 13, 1998 (the 'Prospectus'), of Time Warner Companies, Inc., a Delaware corporation ('TWC'), and this Letter of Transmittal (the 'Letter'), which together constitute TWC's offer (the 'Exchange Offer') to exchange an aggregate principal amount of up to $500,000,000 of its 6.95% Debentures Due 2028 (the 'Exchange Debentures'), for a like principal amount of its issued and outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures') with the holders thereof. The Exchange Debentures will be unconditionally guaranteed by Time Warner Inc. and Turner Broadcasting System, Inc. For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. Holders of Outstanding Debentures whose Outstanding Debentures are accepted for exchange will not receive any payment in respect of interest on such Outstanding Debentures otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer. Consequently, holders who tender their Outstanding Debentures for Exchange Debentures will receive the same interest payment on July 15, 1998 (the first interest payment date with respect to the Outstanding Debentures and the Exchange Debentures) that they would have received had they not accepted the Exchange Offer. This Letter is to be completed by a holder of Outstanding Debentures either if certificates are to be forwarded herewith or if a tender of certificates for Outstanding Debentures, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the 'Book-Entry Transfer Facility') pursuant to the procedures set forth in 'The Exchange Offer -- Book-Entry Transfer' section of the Prospectus and an Agent's Message is NOT delivered. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter. The term 'Agent's Message' means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, this Letter and that TWC may enforce this Letter against such participant. Holders of Outstanding Debentures whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility (the 'Book-Entry Confirmation') and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Outstanding Debentures according to the guaranteed delivery procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. See Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent. The undersigned has completed the appropriate boxes below and signed this Letter to indicate the action the undersigned desires to take with respect to the Exchange Offer. List below the Outstanding Debentures to which this Letter relates. If the space provided below is inadequate, the certificate numbers and principal amount of Outstanding Debentures should be listed on a separate signed schedule affixed hereto.
- ------------------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF OUTSTANDING DEBENTURES - ------------------------------------------------------------------------------------------------------------------------------ 1 2 3 - ------------------------------------------------------------------------------------------------------------------------------ AGGREGATE PRINCIPAL AMOUNT OF PRINCIPAL NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE OUTSTANDING AMOUNT (PLEASE FILL IN, IF BLANK) NUMBER(S)* DEBENTURE(S) TENDERED - ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------- ------------------------------------------- ------------------------------------------- Total - ------------------------------------------------------------------------------------------------------------------------------ * Need not be completed if Outstanding Debentures are being tendered by book-entry transfer. ** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Outstanding Debentures represented by the Outstanding Debentures indicated in column 2. See Instruction 2. Outstanding Debentures tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1. - ------------------------------------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution ______________________________________________ Account Number ________________________ Transaction Code Name ______________ By crediting the Outstanding Debentures to the Exchange Agent's account at the Book-Entry Transfer Facility's Automated Tender Offer Program ('ATOP') and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting to the Exchange Agent a computer-generated message (an 'Agent's Message') in which the holder of the Outstanding Debentures acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter, the participant in the Book-Entry Transfer Facility confirms on behalf of itself and the beneficial owners of such Outstanding Debentures all provisions of this Letter (including all representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter to the Exchange Agent. 2 [ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s) ____________________________________________ Window Ticket Number (if any) ______________________________________________ Date of Execution of Notice of Guaranteed Delivery _________________________ Name of Institution which guaranteed delivery ______________________________ IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING: Account Number ___________________________ Transaction Code Name ___________ [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ______________________________________________________________________ Address: ___________________________________________________________________ ___________________________________________________________________ 3 SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Outstanding Debentures not exchanged and/or Exchange Debentures are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Outstanding Debentures delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above. Issue: Exchange Debentures and/or Outstanding Debentures to: Name(s) __________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address __________________________________________________________________ __________________________________________________________________________ (ZIP CODE) (COMPLETE SUBSTITUTE FORM W-9) [ ] Credit unexchanged Outstanding Debentures delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below. __________________________________________________________________________ (BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER, IF APPLICABLE) - ------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Outstanding Debentures not exchanged and/or Exchange Debentures are to be sent to someone other than the person or persons whose signature(s) appear(s) on this letter above or to such person or persons at an address other than shown in the box entitled 'Description of Outstanding Debentures' on this Letter above. Mail: Exchange Debentures and/or Outstanding Debentures to: Name(s) __________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address __________________________________________________________________ __________________________________________________________________________ (ZIP CODE) IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR OUTSTANDING DEBENTURES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE. 4 PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS) Dated: ___________________ , 1998 X _______________________________ _____________________________ , 1998 X _______________________________ _____________________________ , 1998 SIGNATURE(S) OF OWNER DATE
Area Code and Telephone Number _________________________________ If a holder is tendering any Outstanding Debentures, this Letter must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Outstanding Debentures or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3. Name(s): _______________________________________________________ _______________________________________________________ (PLEASE TYPE OR PRINT) Capacity: ______________________________________________________ Address: _______________________________________________________ _______________________________________________________ (INCLUDING ZIP CODE) SIGNATURE OF GUARANTEE (IF REQUIRED BY INSTRUCTION 3) Signature(s) Guaranteed by an Eligible Institution: _______________________________________ (AUTHORIZED SIGNATURE) ________________________________________________________________ (TITLE) ________________________________________________________________ (NAME AND FIRM) Dated: ___________________________________________________, 1998 5 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to TWC the aggregate principal amount of Outstanding Debentures indicated above. Subject to, and effective upon, the acceptance for exchange of the Outstanding Debentures tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, TWC all rights, title and interest in and to such Outstanding Debentures as are being tendered hereby. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Outstanding Debentures tendered hereby and that TWC will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by TWC. The undersigned hereby further represents that any Exchange Debentures acquired in exchange for Outstanding Debentures tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the undersigned, that neither the holder of such Outstanding Debentures nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Debentures and that neither the holder of such Outstanding Debentures nor any such other person is an 'affiliate,' as defined in Rule 405 under the Securities Act of 1933, as amended (the 'Securities Act'), of TWC, TWI or TBS. The undersigned also acknowledges that this Exchange Offer is being made in reliance on an interpretation by the staff of the Securities and Exchange Commission (the 'Commission') that the Exchange Debentures issued in exchange for the Outstanding Debentures pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an 'affiliate' of TWC within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangements with any person to participate in the distribution of such Exchange Debentures. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Debentures. If the undersigned is a broker-dealer that will receive Exchange Debentures for its own account in exchange for Outstanding Debentures, it represents that the Outstanding Debentures to be exchanged for the Exchange Debentures were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Debentures; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. The undersigned will, upon request, execute and deliver any additional documents deemed by TWC to be necessary or desirable to complete the sale, assignment and transfer of the Outstanding Debentures tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in 'The Exchange Offer -- Withdrawal of Tenders' section of the Prospectus. Unless otherwise indicated herein in the box entitled 'Special Issuance Instructions' above, please deliver the Exchange Debentures (and, if applicable, substitute certificates representing Outstanding Debentures for any Outstanding Debentures not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Outstanding Debentures, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled 'Special Delivery Instructions' above, please send the Exchange Debentures (and, if applicable, substitute certificates representing Outstanding Debentures for any Outstanding Debentures not exchanged) to the undersigned at the address shown above in the box entitled 'Description of Outstanding Debentures.' THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED 'DESCRIPTION OF OUTSTANDING DEBENTURES' ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING DEBENTURES AS SET FORTH IN SUCH BOX ABOVE. 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER FOR THE 6.95% DEBENTURES DUE 2028 IN EXCHANGE FOR THE 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC. 1. DELIVERY OF THIS LETTER AND DEBENTURES; TENDER BY BOOK-ENTRY TRANSFER IN LIEU OF THIS LETTER; GUARANTEED DELIVERY PROCEDURES. This letter is to be completed by debentureholders either if (1) certificates are to be forwarded herewith or (2) tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in 'The Exchange Offer -- Book-Entry Transfer' section of the Prospectus and an Agent's Message is NOT delivered. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term 'Agent's Message' means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that TWC may enforce the Letter of Transmittal against such participant. Certificates for all physically tendered Outstanding Debentures, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof or an Agent's Message in lieu thereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Outstanding Debentures tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. Debentureholders whose certificates for Outstanding Debentures are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Outstanding Debentures pursuant to the guaranteed delivery procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution, (ii) prior to Midnight, New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by TWC (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Outstanding Debentures, the certificate number of numbers of such Outstanding Debentures and the principal amount of Outstanding Debentures tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ('NYSE') trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Outstanding Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other documents required by the Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Outstanding Debentures, in proper form for transfer, or Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof) with any required signature guarantees and all other documents required by this Letter, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. The method of delivery of this Letter, the Outstanding Debentures and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Outstanding Debentures are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to midnight, New York City time, on the Expiration Date. See 'The Exchange Offer' section of the Prospectus. 2. PARTIAL TENDERS (NOT APPLICABLE TO DEBENTUREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If less than all of the Outstanding Debentures evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Outstanding Debentures to be tendered in the box above entitled 'Description of Outstanding Debentures -- Principal Amount Tendered.' A reissued certificate 7 representing the balance of nontendered Outstanding Debentures will be sent to such tendering holder, unless otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OUTSTANDING DEBENTURES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED. 3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter is signed by the registered holder of the Outstanding Debentures tendered hereby, the signature must correspond exactly with the name as written on the face of the certificate without any change whatsoever. If any tendered Outstanding Debentures are owned of record by two or more joint owners, all of such owners must sign this Letter. If any tendered Outstanding Debentures are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are different registrations of certificates. When this Letter is signed by the registered holder or holders of the Outstanding Debentures specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Debentures are to be issued, or any untendered Outstanding Debentures are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this Letter is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this Letter or any certificates or bond powers are signed by trustees, executors, administration, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by TWC, proper evidence satisfactory to TWC of their authority to so act must be submitted. ENDORSEMENTS ON CERTIFICATES FOR OUTSTANDING DEBENTURES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY HAVING AN OFFICER OR CORRESPONDENT IN THE UNITED STATES (AN 'ELIGIBLE INSTITUTION'). SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OUTSTANDING DEBENTURES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OUTSTANDING DEBENTURES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH OUTSTANDING DEBENTURES) WHO HAS NOT COMPLETED THE BOX ENTITLED 'SPECIAL ISSUANCE INSTRUCTIONS' OR 'SPECIAL DELIVERY INSTRUCTIONS' ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Outstanding Debentures should indicate in the applicable box the name and address to which Exchange Debentures issued pursuant to the Exchange Offer and/or substitute certificates evidencing Outstanding Debentures not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Debentureholders tendering Outstanding Debentures by book-entry transfer may request that Outstanding Debentures not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such noteholder may designate hereon. If no such instructions are given, such Outstanding Debentures not exchanged will be returned to the name or address of the person signing this Letter. 5. TRANSFER TAXES. TWC will pay all transfer taxes, if any, applicable to the transfer of Outstanding Debentures to it or its order pursuant to the Exchange Offer. If however, Exchange Debentures and/or substitute Outstanding Debentures not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the 8 registered holder of the Outstanding Debentures tendered hereby, or if tendered Outstanding Debentures are registered in the name of any person other than the person signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Outstanding Debentures to TWC or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. EXCEPT AS PROVIDED IN THIS INSTRUCTION 5, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING DEBENTURES SPECIFIED IN THIS LETTER. 6. WAIVER OF CONDITIONS. TWC reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 7. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Outstanding Debentures, by execution of this Letter or an Agent's Message in lieu thereof, shall waive any right to receive notice of the acceptance of their Outstanding Debentures for exchange. 8. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING DEBENTURES. Any holder whose Outstanding Debentures have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter, may be directed to the Exchange Agent, at the address and telephone number indicated above. 9 EX-99 3 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR TIME WARNER COMPANIES, INC. This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Time Warner Companies, Inc. ('TWC') made pursuant to the Prospectus, dated February 13, 1998 (the 'Prospectus'), if certificates for Outstanding Debentures of TWC are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach TWC prior to midnight, New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to The Chase Manhattan Bank (the 'Exchange Agent') as set forth below. Capitalized terms not defined herein are defined in the Prospectus. DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT By Mail, Hand or Overnight Courier Facsimile Transmission Number 55 Water Street (212) 638-7375 or Room 234, North Building (212) 344-9367 New York, NY 10041 (FOR ELIGIBLE Attention: Carlos Esteves INSTITUTIONS ONLY) (IF BY MAIL, REGISTERED OR Confirm by Telephone CERTIFIED MAIL RECOMMENDED) (212) 638-0828
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: Upon the terms and conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to TWC the principal amount of Outstanding Debentures set forth below, pursuant to the guaranteed delivery procedure described in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. Principal Amount of Outstanding Debentures Tendered:* $____________________________________________________ If Outstanding Debentures will be delivered by book-entry Certificate Nos. (if available): transfer to The Depository Trust Company provide account number. _____________________________________________________ Total Principal Amount Represented by Outstanding Debentures Certificate(s): Account Number__________________________________________ $____________________________________________________
- ------------ * Must be in denominations of principal amount of $1,000 and any integral multiple thereof. PLEASE SIGN HERE x__________________________________________________________________________ ________________ Signature(s) of Owner(s) or Authorized Signatory Date Area Code and Telephone Number: _______________________________________________________________________
Must be signed by the holder(s) of Outstanding Debentures as their name(s) appear(s) on certificates for Outstanding Debentures or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. PLEASE PRINT NAME(S) AND ADDRESS(ES) Name(s): ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Capacity: Address(es): _______________________________________________________________ ________________________________________________________________ ________________________________________________________________
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program, hereby guarantees that the certificates representing the principal amount of Outstanding Debentures tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Outstanding Debentures into the Exchange Agent's account at The Depository Trust Company pursuant to the procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus, together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) and any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three New York Stock Exchange trading days after the Expiration Date. ________________________________________________________ ________________________________________________________ NAME OF FIRM AUTHORIZED SIGNATURE ________________________________________________________ ________________________________________________________ ADDRESS TITLE ________________________________________________________ Name: __________________________________________________ ZIP CODE (PLEASE TYPE OR PRINT) Area Code and Tel. No. _________________________________ Dated:__________________________________________________
NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING DEBENTURES WITH THIS FORM. CERTIFICATES FOR OUTSTANDING DEBENTURES SHOULD BE SENT ONLY WITH A COPY OF YOUR EXECUTED LETTER OF TRANSMITTAL. 2 EX-99 4 EXHIBIT 99.3 EXCHANGE OFFER FOR ALL OUTSTANDING 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC. FULLY AND UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC. PURSUANT TO THE PROSPECTUS DATED FEBRUARY 13, 1998 TO: BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES: Time Warner Companies, Inc. ('TWC') is offering, upon and subject to the terms and conditions set forth in the Prospectus, dated February 13, 1998 (the 'Prospectus'), and the enclosed Letter of Transmittal (the 'Letter of Transmittal'), to exchange (the 'Exchange Offer') its 6.95% Debentures Due 2028, for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures'). The Exchange Offer is being made in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement dated January 12, 1998, by and among TWC and the other signatories thereto. We are requesting that you contact your clients for whom you hold Outstanding Debentures regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Outstanding Debentures registered in your name or in the name of your nominee, or who hold Outstanding Debentures registered in their own names, we are enclosing the following documents: 1. Prospectus dated February 13, 1998; 2. The Letter of Transmittal for your use and for the information of your clients; 3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if certificates for Outstanding Debentures are not immediately available or time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis; 4. A form of letter which may be sent to your clients for whose accounts you hold Outstanding Debentures registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; and 5. Return envelopes addressed to The Chase Manhattan Bank, the Exchange Agent for the Outstanding Debentures. YOUR PROMPT ACTION IS REQUESTED, THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON, MARCH 30, 1998 UNLESS EXTENDED BY TWC (THE 'EXPIRATION DATE'). OUTSTANDING DEBENTURES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Outstanding Debentures should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus. If holders of Outstanding Debentures wish to tender, but it is impracticable for them to forward their certificates for Outstanding Debentures prior to the expiration of the Exchange Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under 'The Exchange Offer -- Guaranteed Delivery Procedures'. TWC will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Outstanding Debentures held by them as nominee or in a fiduciary capacity. TWC will pay or cause to be paid all stock transfer taxes applicable to the exchange of Outstanding Debentures pursuant to the Exchange Offer, except as set forth in Instruction 5 of the Letter of Transmittal. Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to The Chase Manhattan Bank, the Exchange Agent for the Outstanding Debentures, at its address and telephone number set forth on the front of the Letter of Transmittal. Very truly yours, TIME WARNER COMPANIES, INC. NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF TWC OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL. Enclosures 2 EX-99 5 EXHIBIT 99.4 EXCHANGE OFFER FOR ALL OUTSTANDING 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC. FULLY AND UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC. PURSUANT TO THE PROSPECTUS DATED FEBRUARY 13, 1998 TO OUR CLIENTS: Enclosed for your consideration is a Prospectus, dated February 13, 1998 (the 'Prospectus'), and the related Letter of Transmittal (the 'Letter of Transmittal'), relating to the Offer (the 'Exchange Offer') of Time Warner Companies, Inc. ('TWC') to exchange its 6.95% Debentures Due 2028 (the 'Exchange Debentures') for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures'), upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement dated January 12, 1998, by and among TWC and the other signatories thereto. This material is being forwarded to you as the beneficial owner of the Outstanding Debentures carried by us in your account but not registered in your name. A TENDER OF SUCH OUTSTANDING DEBENTURES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. Accordingly, we request instructions as to whether you wish us to tender on your behalf the Outstanding Debentures held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Outstanding Debentures on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at midnight, New York City time, on March 30, 1998, unless extended by TWC. Any Outstanding Debentures tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date. Your attention is directed to the following: 1. The Exchange Offer is for any and all Outstanding Debentures. 2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned 'The Exchange Offer -- Certain Conditions to the Exchange Offer'. 3. Any transfer taxes incident to the transfer of Outstanding Debentures from the holder to TWC will be paid by TWC, except as otherwise provided in the Instructions in the Letter of Transmittal. 4. The Exchange Offer expires at midnight, New York City time, on March 30, 1998, unless extended by TWC. If you wish to have us tender your Outstanding Debentures, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OUTSTANDING DEBENTURES. INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Time Warner Companies, Inc. with respect to its Outstanding Debentures. This will instruct you to tender the Outstanding Debentures held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal. Please tender the Outstanding Debentures held by you for my account as indicated below:
AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING DEBENTURES ------------------------------------------------------ 6.95% Debentures due 2028 __________________________ ______________________________________________________ [ ] Please do not tender any Outstanding Debentures held by you for my account. Dated: ______________________________________ , 1998 ______________________________________________________ ______________________________________________________ SIGNATURE(S) ______________________________________________________ ______________________________________________________ ______________________________________________________ PLEASE PRINT NAME(S) HERE ______________________________________________________ ______________________________________________________ ADDRESS(ES) ______________________________________________________ AREA CODE AND TELEPHONE NUMBER ______________________________________________________ TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
None of the Outstanding Debentures held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Outstanding Debentures held by us for your account. 2 -----END PRIVACY-ENHANCED MESSAGE-----