TimeWarner


                                                            NEWS
                                                            ....................

For Immediate Release:


         Time Warner Announces Settlement with Department of Justice and
           Proposed Settlement with Securities and Exchange Commission


NEW YORK,  December 15, 2004 - Time Warner Inc.  (NYSE:TWX) today announced that
it and its  subsidiary  America  Online,  Inc.  (AOL) have  reached a definitive
agreement  with  the  Department  of  Justice  (DOJ)  that  resolves  the  DOJ's
investigation of the Company.  Time Warner also announced that it has proposed a
settlement to the staff of the Securities and Exchange Commission (SEC) that the
staff  has  agreed,  subject  to  agreement  on  appropriate  documentation,  to
recommend to the SEC Commissioners.

DOJ Settlement

The  DOJ  has  been  investigating  the  Company's   accounting  and  disclosure
practices.   Under  the  terms  of  a  settlement   in   connection   with  that
investigation,  the DOJ  will  file a  criminal  complaint  against  AOL for the
conduct of certain  employees in connection with  securities  fraud committed by
PurchasePro.com  (PurchasePro),  but the DOJ will defer the  prosecution of AOL.
After two  years,  provided  the  Company  fulfills  its  obligations  under the
agreement, the DOJ will dismiss the criminal complaint filed against AOL.

In addition, DOJ will not prosecute Time Warner for the PurchasePro transactions
and will not prosecute Time Warner or AOL for conduct  relating to certain other
transactions  entered into from July 1, 1999,  including the  transactions  that
were the subject of the DOJ and SEC investigations.

The Company's obligations under the settlement are to:
o        Accept responsibility for the conduct of certain AOL employees with
         respect to the PurchasePro transactions;
o        Pay a penalty of $60 million and establish a $150 million fund, which
         the Company may use to settle any related shareholder or securities
         litigation;
o        Cooperate fully with the DOJ or any other federal criminal law
         enforcement agency regarding the transactions covered by the
         settlement; and
o        Retain and cooperate with an independent monitor, who will review the
         effectiveness of AOL's internal controls, including those related to
         the accounting for advertising and related transactions.





Proposed SEC Settlement

Under the settlement proposed to the SEC staff by the Company,  Time Warner will
agree,  without admitting or denying any wrongdoing,  to be enjoined from future
violations  of certain  provisions of the  securities  laws and to comply with a
prior SEC cease-and-desist order issued to AOL in May 2000.

The proposed settlement would also require the Company to:

o        Pay a $300 million penalty, which the SEC staff will request be used
         for a Fair Fund, as authorized under the Sarbanes-Oxley Act.
o        Adjust its accounting for the $400 million in advertising revenues
         recognized primarily in 2001 and 2002 in transactions with Bertelsmann,
         A.G. and for transactions with two other AOL customers that resulted in
         approximately $30 million of advertising revenue recognized in 2001;
o        Adjust its accounting for the Company's investment in and consolidation
         of AOL Europe, consistent with the Company's announcement in November
         2004; and
o        Agree to the appointment of an independent examiner, who - within 180
         days after starting work - will review the Company's historical
         accounting for a limited number of transactions entered into between
         1999 and 2002, principally involving online advertising revenue.
         Depending on the examiner's conclusions, a further restatement might be
         necessary.

Final  settlement  is  subject  to both  agreement  on final  documentation  and
approval by the SEC Commissioners.

Lastly, the Company's chief financial officer,  controller and deputy controller
have also  proposed  settlements  to the SEC staff  that the staff has agreed to
recommend  to the SEC  commissioners.  The  proposed  settlements  relate to the
Company's  accounting and disclosure of its transactions with Bertelsmann,  A.G.
Under these proposed settlements, the three officers would, without admitting or
denying the allegations, agree to the entry of an administrative order that they
cease and desist from any  violations  of certain  reporting  provisions  of the
securities laws. The proposed agreements would not result in any suspension, bar
or penalties being imposed on these  individuals,  who will continue to work for
the Company in their current capacities.

About Time Warner

Time Warner Inc. is a leading media and entertainment  company, whose businesses
include interactive services,  cable systems,  filmed entertainment,  television
networks and publishing.





Caution Concerning Forward-Looking Statements

This document includes certain forward-looking  statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on management's  current  expectations or beliefs, and assume and are subject to
final documentation  reflecting the proposed settlement with the SEC, as well as
approval by the SEC without  substantial  modification.  Time Warner is under no
obligation to, and expressly  disclaims any such  obligation to, update or alter
its forward-looking statements,  whether as a result of new information,  future
events, or otherwise.

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Contacts:

Corporate Communications                     Investor Relations
------------------------                     ----------------------
Edward Adler (212) 484-6630                  John Martin (212) 484-6579
Tricia Primrose Wallace (212) 484-7450       Jim Burtson (212) 484-8719
Mia Carbonell (212) 484-6684                 Kelli Turner (212) 484-8269