-----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, TfdtmSe5Yvp7LjzV95zfWruSgSQs/uQMaHBDh1GJ0SVqPEMHZKipd+wBfijUbHkr OYDdDr9cXfMYXhVXKdYXxw== 0000950117-96-001535.txt : 19961204 0000950117-96-001535.hdr.sgml : 19961204 ACCESSION NUMBER: 0000950117-96-001535 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 REFERENCES 429: 033-50237 FILED AS OF DATE: 19961203 SROS: AMEX SROS: NYSE SROS: PSE 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-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-17171 FILM NUMBER: 96675077 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 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-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-17171-01 FILM NUMBER: 96675078 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 S-3 1 TIME WARNER INC. S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 3, 1996 REGISTRATION NO. 333- ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ TIME WARNER INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3527249 (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
------------------------ ALSO CONSTITUTES A POST-EFFECTIVE AMENDMENT TO FORM S-3 REGISTRATION STATEMENT OF TIME WARNER COMPANIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-1388520 (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
75 ROCKEFELLER PLAZA NEW YORK, N.Y. 10019 (212) 484-8000 (ADDRESS, INCLUDING EACH ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ PETER R. HAJE EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL TIME WARNER INC. 75 ROCKEFELLER PLAZA NEW YORK, N.Y. 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. FAITH D. GROSSNICKLE CRAVATH, SWAINE & MOORE SHEARMAN & STERLING WORLDWIDE PLAZA 599 LEXINGTON AVENUE 825 EIGHTH AVENUE NEW YORK, N.Y. 10022 NEW YORK, N.Y. 10019-7415 (212) 848-8015 (212) 474-1270
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement, as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box: [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES AGGREGATE AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED PRICE PER UNIT PRICE REGISTRATION FEE Guarantee of Debt Securities.............. $550,581,500(1)(2) N/A N/A $100(3)
(1) United States dollars or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (2) Time Warner Inc. (formerly known as 'TW Inc.') will irrevocably and unconditionally guarantee on an unsecured senior basis Debt Securities of Time Warner Companies, Inc. (formerly known as 'Time Warner Inc.') which were previously registered by Time Warner Companies, Inc. under Registration Statement No. 33-50237. (3) A registration fee was previously paid by Time Warner Companies, Inc. in respect of the Debt Securities. The registration fee paid herewith represents the minimum fee payable pursuant to Section 6(b) of the Securities Act of 1933. ------------------------ 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 THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO REGISTRATION STATEMENT NO. 33-50237, PREVIOUSLY FILED BY TIME WARNER COMPANIES, INC. ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NO. 33-50237, AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES ACT OF 1933. ________________________________________________________________________________ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE. SUBJECT TO COMPLETION, DATED DECEMBER 3, 1996 PROSPECTUS TIME WARNER COMPANIES, INC. DEBT SECURITIES UNCONDITIONALLY GUARANTEED BY TIME WARNER INC. Time Warner Companies, Inc. (the 'Issuer') may offer from time to time, together or separately, unsecured notes, debentures or other evidences of indebtedness ('Debt Securities'), having an aggregate initial public offering price not to exceed $550,581,500 (including the U.S. dollar equivalent of securities for which the initial public offering price is denominated in one or more foreign currencies or composite currencies). The Debt Securities may be offered in one or more series, in amounts, at prices and on terms determined at the time of sale and set forth in a supplement to this Prospectus (a 'Prospectus Supplement'). The Debt Securities will be irrevocably, fully and unconditionally guaranteed (the 'Guarantee') on an unsecured basis by Time Warner Inc. (the 'Guarantor'). The Issuer is a wholly owned subsidiary of the Guarantor. The Guarantor is a holding company that derives its operating income and cash flow from the Issuer and Turner Broadcasting System, Inc. ('TBS'), a wholly owned subsidiary of the Guarantor. The assets of the Guarantor consist primarily of its investments in the Issuer and TBS, and the assets of the Issuer consist primarily of its investments in its consolidated and unconsolidated subsidiaries. The Guarantor and its consolidated and unconsolidated subsidiaries are collectively referred to as the 'Company'. Unless otherwise specified in an accompanying Prospectus Supplement, the Debt Securities and the Guarantee will be senior securities of the Issuer and the Guarantor, respectively, ranking equally with all other unsubordinated and unsecured indebtedness and other obligations of the Issuer and the Guarantor, respectively. The specific terms of the Debt Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement, including, where applicable, the specific designation, aggregate principal amount, currency, denomination, maturity (which may be fixed or extendible), priority, interest rate (or manner of calculation thereof), if any, time of payment of interest, if any, terms for any redemption, terms for any repayment at the option of the holder, terms for any sinking fund payments, the initial public offering price, special provisions relating to Debt Securities in bearer form, provisions regarding original issue discount securities, additional covenants and any other specific terms of such Debt Securities. The Prospectus Supplement will also contain information, where applicable, about certain United States Federal income tax considerations relating to, and any listing on a securities exchange of, the Debt Securities covered by the Prospectus Supplement. The Debt Securities may be issued only in registered form, including in the form of one or more global securities ('Global Securities'), unless otherwise set forth in the Prospectus Supplement. ------------------------ 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 Debt Securities may be offered directly, through agents designated from time to time or through dealers or underwriters. If any agents of the Issuer or the Guarantor or any dealers or underwriters are involved in the offering of the Debt Securities in respect of which this Prospectus is being delivered, the names of such agents, dealers or underwriters and any applicable commissions or discounts will be set forth in the Prospectus Supplement. The net proceeds to the Issuer from such sale will also be set forth in the Prospectus Supplement. ------------------------ The date of this Prospectus is , 1996. IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBT SECURITIES OFFERED HEREBY OR OTHER SECURITIES OF THE ISSUER AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ------------------------ AVAILABLE INFORMATION The Guarantor is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the 'Commission'). Prior to the consummation of the acquisition of TBS by the Guarantor, the Issuer, currently a wholly owned subsidiary of the Guarantor formerly named 'Time Warner Inc.', and TBS were subject to the informational requirements of the Exchange Act, and in accordance therewith filed reports, proxy statements and other information with the Commission. Immediately thereafter, the Guarantor guaranteed unconditionally all the outstanding publicly traded indebtedness of the Issuer and TBS. Subsequently, each of the Issuer and TBS filed with the Commission a Form 10-Q for the quarterly period ended September 30, 1996. Each of the Issuer and TBS have ceased to be subject to the periodic reporting and other informational requirements of the Exchange Act. Instead, such information will be provided, to the extent required by the Commission, in the required filings made by the Guarantor. Reports, proxy statements and other information filed by the Guarantor, the Issuer and TBS 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, and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California, on which one or more of the Guarantor's securities are listed. This Prospectus constitutes a part of a Registration Statement filed by the Issuer and the Guarantor with the Commission under the Securities Act of 1933, as amended (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 the Issuer, the Guarantor and the Debt Securities. 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. INFORMATION INCORPORATED BY REFERENCE The following documents filed with the Commission by the Guarantor (File No. 001-12259) are incorporated by reference in this Prospectus: (a) the Current Reports on Form 8-K of the Guarantor dated October 10, 1996 and November 14, 1996; and (b) the Registration Statement (Registration No. 333-11471) on Form S-4 of the Guarantor, as amended, filed with the Commission on September 6, 1996 pursuant to the Securities Act (the 'Form S-4'). The following documents previously filed with the Commission by the Issuer (File No. 001-08637) under the Exchange Act are incorporated herein by reference: 2 (a) the Issuer's Annual Report on Form 10-K for the year ended December 31, 1995, as amended by the Issuer's Form 10-K/A dated June 27, 1996 (the 'Issuer's 10-K'); (b) the Issuer's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and (c) the Issuer's Current Reports on Form 8-K dated January 4, 1996, March 22, 1996, March 25, 1996, April 3, 1996, April 4, 1996, April 11, 1996, May 15, 1996, August 6, 1996, August 14, 1996, September 6, 1996 and September 12, 1996. The following documents previously filed with the Commission by TBS (File No. 001-08911) under the Exchange Act are incorporated herein by reference: (a) TBS's Annual Report on Form 10-K for the year ended December 31, 1995; (b) TBS's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and (c) TBS's Current Reports on Form 8-K dated January 3, 1996, June 26, 1996 and September 6, 1996. All documents and reports subsequently filed by the Guarantor 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 offering of the Debt Securities 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 or any Prospectus Supplement 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 or any Prospectus Supplement. The Issuer will furnish without charge to each person, including any beneficial owner, to whom this Prospectus and the accompanying Prospectus Supplement are 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 the Registration Statement to which this Prospectus relates 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. THE COMPANY The Company, the world's leading media and entertainment company, has interests in four fundamental areas of business: Entertainment, consisting principally of interests in recorded music and music publishing, filmed entertainment, broadcasting and theme parks; 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 the Issuer and the Guarantor is a holding company that derives its operating income and cash flow from its subsidiaries and investments. The assets of the Guarantor consist primarily of its investments in the Issuer and TBS, and the assets of the Issuer consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including Time Warner Entertainment Company, L.P. ('TWE'). The ability of the Issuer and the Guarantor to service their respective indebtedness and other liabilities, including the Debt Securities, is dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment of such earnings and cash flow to the Issuer and the Guarantor. See 'Holding Company Structure'. The Guarantor became the parent of the Issuer and TBS on October 10, 1996 upon the merger of the Issuer and TBS with separate subsidiaries of the Guarantor (the 'TBS Transaction'), as more fully 3 described below. In connection therewith, the Guarantor changed its name to Time Warner Inc. from TW Inc. and the Issuer 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 Filmed Entertainment, Cable Networks and Cable businesses owned and operated by the Issuer prior to such date. The Issuer and certain of its wholly owned subsidiaries own general and limited partnership interests in 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 ('Senior Capital') and junior priority capital ('Series B 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. The Guarantor does not consolidate TWE and certain related companies (the 'Entertainment Group') for financial reporting purposes. The subsidiaries of the Issuer that own general partnership interests in TWE are collectively referred to herein as the 'Time Warner General Partners'. 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 (the 'Merger Agreement'), between the Issuer, the Guarantor, TBS and certain of their wholly owned subsidiaries, among other things: (a) each of the Issuer and TBS became a wholly owned subsidiary of the Guarantor through a merger with a subsidiary of the Guarantor, (b) each outstanding share of common stock, par value $1.00 per share, of the Issuer, other than shares held directly or indirectly by the Issuer, was converted into one share of common stock of the Guarantor, (c) each outstanding share of preferred stock of the Issuer was converted into one share of a substantially identical series of preferred stock of the Guarantor, (d) each outstanding share of common stock of TBS, other than shares held directly or indirectly by the Issuer or the Guarantor or in the treasury of TBS, was converted into the right to receive 0.75 shares of common stock of the Guarantor and (e) each outstanding share of preferred stock of TBS, other than shares held directly or indirectly by the Issuer or the Guarantor, was converted into the right to receive 4.8 shares of common stock of the Guarantor. Additional information on the TBS Transaction is set forth in the Joint Proxy Statement/Prospectus included as part of the Form S-4, which is incorporated by reference herein. Immediately following the TBS Transaction, the Guarantor, as primary obligor and not merely as surety, irrevocably and unconditionally guaranteed (i) the full and punctual payment of principal of and interest on all outstanding publicly traded indebtedness ('Outstanding Securities') of each of the Issuer and TBS when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Issuer and TBS under the Outstanding Securities of the Issuer and TBS and the indentures relating to the Outstanding Securities (including the obligations to the respective trustees) and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer and TBS under the Outstanding Securities and the respective indentures. The guarantee of the Outstanding Securities constitutes a guarantee of payment, performance and compliance and not merely of collection. The obligation of the Guarantor to make any payment pursuant to the guarantee may be satisfied by causing the respective issuer to make such payment. Further, the Guarantor agreed to pay any and all costs and expenses (including reasonable attorney's fees) incurred by any trustee or holder of Outstanding Securities in enforcing any of their respective rights under the guarantee of the Outstanding Securities. RATIO OF EARNINGS TO FIXED CHARGES The historical and pro forma ratios of earnings to fixed charges for the Issuer and the Guarantor 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 (or coverage deficiencies) for all periods after 1992 reflect the deconsolidation of the Entertainment Group, principally TWE, effective January 1, 1993. The historical ratio of earnings to fixed charges for 1996 reflects (a) the issuance of 1.6 million shares of Series K exchangeable preferred stock of the Issuer, having an aggregate liquidation 4 preference of $1.6 billion (which were subsequently converted into Series M exchangeable preferred stock of the Guarantor in the TBS Transaction) and the use of approximately $1.55 billion of net proceeds therefrom to reduce outstanding indebtedness (the 'Preferred Stock Refinancing') and (b) (i) the issuance of 6.3 million shares of convertible preferred stock having an aggregate liquidation preference of $633 million and 2.9 million shares of common stock and (ii) the assumption or incurrence of approximately $2 billion of indebtedness in connection with the acquisition of Cablevision Industries Corporation and related companies (the 'CVI Acquisition'). The historical ratio of earnings to fixed charges (or coverage deficiency) for 1995 reflects (a) the issuance of 29.3 million shares of convertible preferred stock having an aggregate liquidation preference of $2.926 billion and 2.6 million shares of common stock and (b) the assumption or incurrence of approximately $1.3 billion of indebtedness in connection with (x) the acquisitions of KBLCOM Incorporated and Summit Communications Group, Inc. (the '1995 Cable Acquisitions' and when taken together with the CVI Acquisition, the 'Cable Acquisitions') and (y) the exchange by Toshiba Corporation and ITOCHU Corporation of their direct and indirect interests in TWE (the 'ITOCHU/Toshiba Transaction'). The Preferred Stock Refinancing, the Cable Acquisitions and the ITOCHU/Toshiba Transaction are referred to herein as the 'Issuer Transactions'. The historical ratio of earnings to fixed charges 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 (or coverage deficiencies) for each of the Issuer and the Guarantor for the nine months ended September 30, 1996 and the year ended December 31, 1995 give effect to (i) the Issuer Transactions, (ii) certain other transactions as defined and described in the pro forma consolidated condensed financial statements contained in the Guarantor's Current Report on Form 8-K dated November 14, 1996, including certain asset sales and debt refinancings and (iii) with respect to the Guarantor only, the TBS Transaction, as if such transactions had occurred at the beginning of 1995. The pro forma information presented below should be read in conjunction with the pro forma consolidated condensed financial statements contained in the Guarantor's Current Report on Form 8-K dated November 14, 1996 and incorporated herein by reference. Such pro forma amounts are presented for informational purposes only and are not necessarily indicative of the actual ratio or coverage deficiency 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 1996 1996 1995 1995 1995 1994 1993 1992 1991 ---------- -------- --------- --------- ---- ---- ---- ---- ---- Issuer.......................... 1.0x 1.0x $ (46) 1.0x 1.1x 1.1x 1.1x 1.4x 1.1x Guarantor....................... $ (171) * * $ (8) * * * * *
- ------------ *In connection with the TBS Transaction that occurred on October 10, 1996, the Guarantor, formerly a wholly owned subsidiary of the Issuer, acquired each outstanding share of capital stock of the Issuer (other than shares held directly or indirectly by the Issuer) and became the parent of the Issuer. Accordingly, the historical ratios of earnings to fixed charges (or coverage deficiencies) of the Issuer and the Guarantor are the same for all periods prior to such date because the Issuer is treated for financial reporting purposes as the predecessor of the Guarantor. 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 the Guarantor and the Issuer and their respective majority-owned subsidiaries, (iii) the Guarantor's and the Issuer'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 the Issuer's and the Guarantor's less than 50% owned companies. Fixed charges consist of (i) interest 5 expense, including interest capitalized and the portion of rents representative of an interest factor for the Guarantor and the Issuer and their respective majority-owned subsidiaries, (ii) the Guarantor's and the Issuer'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 for the nine months ended September 30, 1996 and 1995 and the years ended December 31, 1995 and December 31, 1994 include noncash interest expense of $69 million, $156 million, $176 million and $219 million, respectively, principally relating to the Issuer's Liquid Yield Option Notes due 2012 and 2013 and, in 1995 and 1994 only, the Issuer's Redeemable Reset Notes due 2002. Pro forma fixed charges of the Guarantor for the nine months ended September 30, 1996 and the year ended December 31, 1995 include an additional $14 million and $18 million, respectively, in noncash interest expense relating to TBS's zero coupon convertible notes due 2007. USE OF PROCEEDS Except as otherwise set forth in the Prospectus Supplement, the net proceeds to the Issuer from the sale of Debt Securities will be used to repurchase, redeem or otherwise repay indebtedness of the Issuer or TBS. Additional information on the use of net proceeds from the sale of any particular Debt Securities will be set forth in the Prospectus Supplement relating to such Debt Securities. DESCRIPTION OF THE DEBT SECURITIES AND THE GUARANTEE GENERAL The following description of the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of any Debt Securities and the extent, if any, to which such general provisions will not apply to such Debt Securities will be described in the Prospectus Supplement relating to such Debt Securities. The Debt Securities will be issued from time to time in series under an Indenture dated as of January 15, 1993, as supplemented from time to time (such Indenture, as so supplemented being called the 'Indenture'), between the Issuer and The Chase Manhattan Bank (formerly known as Chemical Bank) (the 'Trustee'), as Trustee. The statements set forth below are brief summaries of certain provisions contained in the Indenture, which summaries do not purport to be complete and are qualified in their entirety by reference to the Indenture, a copy of which is an exhibit to the Registration Statement of which this Prospectus is a part. Numerical references in parentheses below are to articles or sections of the Indenture, unless otherwise indicated. Wherever defined terms are used but not defined herein, such terms shall have the meanings assigned to them in the Indenture, it being intended that such referenced articles and sections of the Indenture and such defined terms shall be incorporated herein by reference. The Indenture does not limit the amount of Debt Securities which may be issued thereunder and Debt Securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Issuer. Any such limit applicable to a particular series will be specified in the Prospectus Supplement relating to that series. Reference is made to the Prospectus Supplement for the following terms of each series of Debt Securities in respect to which this Prospectus is being delivered: (i) the designation, date, aggregate principal amount, currency or currency unit of payment and authorized denominations of such Debt Securities; (ii) the date or dates on which such Debt Securities will mature (which may be fixed or extendible); (iii) the rate or rates (or manner of calculation thereof), if any, per annum at which such Debt Securities will bear interest; (iv) the dates, if any, on which such interest will be payable, (v) the terms of any mandatory or optional redemption (including any sinking, purchase or analogous fund) and any purchase at the option of holders (including whether any such purchase may be paid in cash, common stock or other securities or property); (vi) whether such Debt Securities are to be issued in the form of Global Securities and, if so, the identity of the Depository with respect to such Global Securities; and (vii) any other specific terms. 6 Unless otherwise set forth in the Prospectus Supplement, interest on outstanding Debt Securities will be paid to holders of record on the date which is 15 days prior to the date such interest is to be paid. Unless otherwise specified in the Prospectus Supplement, Debt Securities will be issued in fully registered form only and in denominations of $1,000 and integral multiples thereof. Unless otherwise specified in the Prospectus Supplement, the principal amount of the Debt Securities will be payable at the corporate trust office of the Trustee in New York, New York. The Debt Securities may be presented for transfer or exchange at such office unless otherwise specified in the Prospectus Supplement, subject to the limitations provided in the Indenture, without any service charge, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charges payable in connection therewith. (Section 305) GUARANTEE The Guarantor, as primary obligor and not merely as surety, will irrevocably and unconditionally guarantee (the 'Guarantee'), to each Holder of Debt Securities, and to the Trustee and its successors and assigns, (i) the full and punctual payment of principal of and interest on the Debt Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Issuer under the Indenture (including obligations to the Trustee) and the Debt Securities and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer under the Indenture and the Debt Securities. The Guarantee constitutes a guarantee of payment, performance and compliance and not merely of collection. The obligation of the Guarantor to make any payments may be satisfied by causing the Issuer to make such payments. Further, the Guarantor agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder of Debt Securities in enforcing any of their respective rights under the Guarantee. (Section 2 of the Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and the Trustee). RANKING Unless otherwise specified in a Prospectus Supplement for a particular series of Debt Securities, all series of Debt Securities will be senior indebtedness of the Issuer and will be direct, unsecured obligations of the Issuer, ranking on a parity with all other unsecured and unsubordinated indebtedness of the Issuer, and the Guarantee will be a senior obligation of the Guarantor and will be a direct unsecured obligation of the Guarantor, ranking on a parity with all other unsecured and unsubordinated obligations of the Guarantor. Each of the Issuer and the Guarantor is a holding company and the Debt Securities and the Guarantee will be effectively subordinated to all existing and future liabilities, including indebtedness, of the subsidiaries of the Issuer and the Guarantor, respectively. See 'Holding Company Structure'. CERTAIN COVENANTS Limitation on Liens. The Indenture provides that neither the Issuer nor any Material Subsidiary of the Issuer shall incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness for money borrowed that is secured by a lien on any asset now owned or hereafter acquired by it unless the Issuer makes or causes to be made effective provision whereby the Debt Securities 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 the Issuer to secure indebtedness of such Subsidiaries to the Issuer or to one or more other Subsidiaries of the Issuer; (iii) liens affecting property of a person existing at the time it becomes a Subsidiary of the Issuer or at the time it merges into or consolidates with the Issuer or a Subsidiary of the Issuer or at the time of a sale, lease or other disposition of all or substantially all of the properties of such person to the Issuer or its Subsidiaries; 7 (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 the Issuer or any of its Subsidiaries of rights to distribute such motion pictures, video and television programming, sound recordings or books; provided, however, that no such lien shall attach to any asset or right of the Issuer or its Subsidiaries (other than the motion pictures, video and television programming, sound recordings, books or rights which were sold, transferred to or financed by the tax shelter group or third-party investors in question or the proceeds arising therefrom); (vii) liens on shares of stock, indebtedness or other securities of a Person that is not a Subsidiary; (viii) other liens arising in connection with indebtedness of the Issuer and its Subsidiaries in an aggregate principal amount for the Issuer and its Subsidiaries not exceeding at the time such lien is issued, created or assumed the greater of (A) 10% of the Consolidated Net Worth of the Issuer and (B) $500 million; and (ix) any extensions, renewal or replacement of any lien referred to in the foregoing clauses (i) through (viii) inclusive, or of any indebtedness secured thereby; provided that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement, or at the time the lien was issued, created or assumed or otherwise permitted, and that such extension, renewal or replacement lien shall be limited to all or part of substantially the same property which secured the lien extended, renewed or replaced (plus improvements on such property). (Section 1006) Limitation on Senior Debt. The Indenture provides that the Issuer will not, and will not permit any of its Subsidiaries to, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable for (collectively, 'incur') any Senior Debt, if after giving effect to such incurrence of Senior Debt, determined on a pro forma basis as if such incurrence had occurred on the first day of the Test Period, the Consolidated Cash Flow Coverage Ratio for the Issuer 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 Debt Securities do not contain any covenants or other provisions designed to afford Holders of Debt Securities protection in the event of a recapitalization or highly leveraged transaction involving the Issuer. Limitation on Merger, Consolidation and Certain Sales of Assets. The Indenture provides that neither the Issuer nor the Guarantor 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 the Issuer, the successor assumes the Issuer's obligations under the Indenture and the Debt Securities on the same terms and conditions and (ii) in the case of the Guarantor, the successor assumes the Guarantor's obligations under the Indenture and the 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) 8 Any additional covenants of the Issuer or the Guarantor pertaining to a series of Debt Securities will be set forth in a Prospectus Supplement relating to such series of Debt Securities. CERTAIN DEFINITIONS The following are certain of the terms defined in the Indenture: 'Consolidated Cash Flow' means, with respect to the Issuer, for any period, the net income of the Issuer and its Subsidiaries as determined on a consolidated basis in accordance with GAAP consistently applied, plus the sum of depreciation, amortization, other noncash charges which reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such net income, and excluding extraordinary gains or losses. Notwithstanding the foregoing, for purposes of determining the Consolidated Cash Flow of the Issuer, there shall be included, in respect of each other Person that is accounted for by the Issuer on the equity method (as determined in accordance with GAAP), the Issuer's proportionate amount of such other Person's and its Subsidiaries' consolidated net income, depreciation, amortization, other noncash charges which reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such other Person's net income, excluding extraordinary gains and losses. 'Consolidated Cash Flow Coverage Ratio' means, for any period, the ratio for such period of Consolidated Cash Flow to Consolidated Interest Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect shall be given to the application of the proceeds of Senior Debt whose incurrence is being tested to the extent such proceeds are to be used to repay or refinance other Senior Debt. 'Consolidated Interest Expense' means, with respect to the Issuer, for any period, cash interest expense of the Issuer and its Subsidiaries on Senior Debt for such period other than the amount amortized during such period in respect of all fees paid in connection with the incurrence of such Senior Debt, such expense to be determined on a consolidated basis in accordance with GAAP consistently applied. Notwithstanding the foregoing, for purposes of determining the Consolidated Interest Expense of the Issuer, there shall be included, in respect of each other Person that is accounted for by the Issuer on the equity method (as determined in accordance with GAAP), the Issuer'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 the Issuer, at the date of any determination, the consolidated stockholders' equity of the Issuer 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 the Issuer, any Person that is a Subsidiary if at the end of the most recent fiscal quarter of the Issuer, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other investments in, such Person held by the Issuer and its other Subsidiaries exceeded 10% of the Issuer'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 9 venture or other entity in which such Person owns more than 50% of the equity interests or has the power to elect a majority of the board of directors or other governing body. 'Test Period' means, with respect to any date, the period consisting of the most recent four full fiscal quarters for which financial information is generally available. DEFEASANCE The Indenture provides that the Issuer (and to the extent applicable, the Guarantor), at its option, (a) will be Discharged from any and all obligations in respect of any series of Debt Securities (except in each case for certain obligations to register the transfer or exchange of Debt Securities, replace stolen, lost or mutilated Debt Securities, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with the covenants described above under 'Certain Covenants' and any other restrictive covenants described in a Prospectus Supplement relating to such series of Debt Securities, and certain Events of Default (other than those arising out of the failure to pay interest or principal on the Debt Securities of a particular series and certain events of bankruptcy, insolvency and reorganization) will no longer constitute Events of Default with respect to such series of Debt Securities, in each case if the Issuer deposits with the applicable Trustee, in trust, money or the equivalent in securities of the government which issued the currency in which the Debt Securities are denominated or government agencies backed by the full faith and credit of such government, or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of, and interest on, such series on the dates such payments are due in accordance with the terms of such series. To exercise any such option, the Issuer is required, among other things, to deliver to the Trustee an opinion of counsel to the effect that (i) the deposit and related defeasance would not cause the Holders of such series to recognize income, gain or loss for Federal income tax purposes and, in the case of a Discharge pursuant to clause (a), accompanied by a ruling to such effect received from or published by the United States Internal Revenue Service and (ii) the creation of the defeasance trust will not violate the Investment Company Act of 1940, as amended. In addition, the Issuer is required to deliver to the Trustee an Officers' Certificate stating that such deposit was not made by the Issuer with the intent of preferring the Holders over other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding creditors of the Issuer or others. (Article 4) EVENTS OF DEFAULT, NOTICE AND WAIVER The Indenture provides that, if an Event of Default specified therein with respect to any series of Debt Securities issued thereunder shall have happened and be continuing, either the Trustee thereunder or the Holders of 25% in aggregate principal amount of the outstanding Debt Securities of such series (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 Debt Securities of such series to be due and payable. (Section 502) Events of Default in respect of any series are defined in the Indenture as being: (i) default for 30 days in payment of any interest installment with respect to such series; (ii) default in payment of principal of, or premium, if any, on, or any sinking fund or analogous payment with respect to, Debt Securities of such series when due at their stated maturity, by declaration or acceleration, when called for redemption or otherwise; (iii) default for 90 days after notice to the Issuer (or the Guarantor, if applicable) by the Trustee thereunder or by Holders of 25% in aggregate principal amount of the outstanding Debt Securities of such series in the performance of any covenant pertaining to Debt Securities of such series; (iv) failure to pay when due, upon final maturity or upon acceleration, the principal amount of any indebtedness for money borrowed of the Issuer in excess of $50 million, if such indebtedness is not discharged, or such acceleration annulled, within 60 days after written notice; and (v) certain events of bankruptcy, insolvency and reorganization with respect to the Guarantor, the Issuer or any Material Subsidiary of the Issuer which is organized under the laws of the United States or any political sub-division thereof. (Section 501 and Form of Security) 10 Any additions, deletions or other changes to the Events of Default which will be applicable to a series of Debt Securities will be described in the Prospectus Supplement relating to such series of Debt Securities. The Indenture provides that the Trustee thereunder will, within 90 days after the occurrence of a default with respect to the Debt Securities of any series, give to the Holders of the Debt Securities of such series notice of all uncured and unwaived defaults known to it; provided that, except in the case of default in the payment of principal of, premium, if any, or interest, if any, on any of the Debt Securities of such series, the Trustee thereunder will be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interests of the Holders of the Debt Securities of such series. The term 'default' for the purpose of this provision means the happening of any of the Events of Default specified above, except that any grace period or notice requirement is eliminated. (Section 602) The Indenture contains provisions entitling the Trustee, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, to be indemnified by the Holders of the Debt Securities before proceeding to exercise any right or power under the Indenture at the request of Holders of the Debt Securities. (Section 603) The Indenture provides that the Holders of a majority in aggregate principal amount of the outstanding Debt Securities of any series may direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of such series, subject to certain conditions. (Section 512) The Indenture includes a covenant that the Issuer 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 Debt Securities of any series may on behalf of the Holders of all Debt Securities of such series waive any past default or Event of Default with respect to the Debt Securities of such series or compliance with certain provisions of the Indenture, except, among other things, a default not theretofore cured in payment of the principal of, or premium, if any, or interest, if any, on any of the Debt Securities of such series. (Sections 513 and 1008) MODIFICATION OF THE INDENTURE The Issuer and the Trustee may, without the consent of the Holders of the 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 the Issuer or the Guarantor, and the assumption by such successor of the Issuer's or the Guarantor's obligations under the Indenture and the Debt Securities of any series; (ii) to add covenants of the Issuer and the Guarantor, or surrender any rights of the Issuer or the 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) The Indenture contains provisions permitting the Issuer 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 the Issuer 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) 11 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 in the normal course of business. GOVERNING LAW The Indenture will be governed by, and construed in accordance with, the laws of the State of New York. GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more Global Securities that will be deposited with, or on behalf of, a depository (the 'Depository') identified in the Prospectus Supplement relating to such series. Global Securities may be issued only in fully registered form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, a Global Security may not be transferred except as a whole by the Depository for such Global Security to a nominee of such Depository or by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any nominee of such Depository to a successor Depository or any nominee of such successor. The specific terms of the depository arrangement with respect to a series of Debt Securities will be described in the Prospectus Supplement relating to such series. Unless otherwise specified in the Prospectus Supplement, the Issuer anticipates that the following provisions will apply to depository arrangements. Upon the issuance of a Global Security, the Depository for such Global Security or its nominee will credit on its book-entry registration and transfer system the respective principal amounts of the individual Debt Securities represented by such Global Security to the accounts of persons that have accounts with such Depository ('Participants'). Such accounts shall be designated by the underwriters, dealers or agents with respect to such Debt Securities or by the Issuer if such Debt Securities are offered and sold directly by the Issuer. Ownership of beneficial interests in a Global Security will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in such Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depository or its nominee (with respect to interests of Participants) and records of Participants (with respect to interests of persons who hold through Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, pledge or transfer beneficial interests in a Global Security. So long as the Depository for a Global Security or its nominee is the registered owner of such Global Security, such Depository or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such Global Security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Security will not be entitled to have any of the individual Debt Securities of the series represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of any such Debt Securities of such series in definitive form and will not be considered the owners or holders thereof under the Indenture. Accordingly, each person owning a beneficial interest in a Global Security must rely on the procedures of the Depository for such Global Security and, if such person is not a Participant, on the procedures of the Participant through which such person owns its interest, to exercise any rights of a holder under the Indenture. The Issuer understands that under existing industry practices, if the Issuer requests any action of holders or if an owner of a beneficial interest in a Global Security desires to give or take any action which a holder is entitled to give or take under the Indenture, the Depository for such Global Security would authorize the Participants holding the relevant beneficial interests to give or take such action, and such Participants would authorize beneficial owners owning through such Participants to give or take such action or would otherwise act upon the instructions of beneficial owners holding through them. Payments of principal of and any premium and any interest on individual Debt Securities represented by a Global Security registered in the name of a Depository or its nominee will be made to 12 the Depository or its nominee, as the case may be, as the registered owner of the Global Security representing such Debt Securities. None of the Issuer, the Trustee, any paying agent or the registrar for such Debt Securities 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 Security for such Debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Issuer expects that the Depository for a series of Debt Securities or its nominee, upon receipt of any payment of principal, premium or interest in respect of a permanent Global Security representing any of such Debt Securities, immediately will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security for such Debt Securities as shown on the records of such Depository or its nominee. The Issuer also expects that payments by Participants to owners of beneficial interests in such Global Security 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 in bearer form or registered in 'street name'. Such payments will be the responsibility of such Participants. If a Depository for a series of Debt Securities is at any time unwilling, unable or ineligible to continue as depository and a successor depository is not appointed by the Issuer within 90 days, the Issuer will issue individual Debt Securities of such series in exchange for the Global Security representing such series of Debt Securities. In addition, the Issuer may, at any time and in its sole discretion, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities, determine not to have any Debt Securities of such series represented by one or more Global Securities and, in such event, will issue individual Debt Securities of such series in exchange for the Global Security or Securities representing such series of Debt Securities. Individual Debt Securities of such series so issued will be issued in denominations, unless otherwise specified by the Issuer, of $1,000 and integral multiples thereof. Any Debt Securities issued in definitive form in exchange for a Global Security will be registered in such name or names as the Depository shall instruct the Trustee. It is expected that such instructions will be based upon directions received by the Depository from Participants with respect to ownership of beneficial interests in such Global Security. HOLDING COMPANY STRUCTURE Each of the Issuer and the Guarantor is a holding company, the assets of which consist primarily of investments in its consolidated and unconsolidated subsidiaries. The assets of the Guarantor consist primarily of its investment in the Issuer and TBS, and the assets of the Issuer consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including TWE. A substantial portion of the consolidated liabilities of the Issuer and the Guarantor have been incurred by subsidiaries. TWE, which is not consolidated with either the Issuer or the Guarantor for financial reporting purposes, also has substantial indebtedness and other liabilities. The Issuer's and the Guarantor's rights and the rights of their creditors, including Holders of Debt Securities, to participate in the distribution of assets of any person in which the Issuer or the Guarantor 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 the Issuer or the Guarantor may be a creditor with recognized claims against such person (in which case the claims of the Issuer and the Guarantor 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 the Issuer or the Guarantor). Accordingly, the Holders of Debt Securities may be deemed to be effectively subordinated to such claims. Each of the Issuer's and the Guarantor's ability to service its indebtedness and other obligations, including the Debt Securities and the Guarantee, and the ability of the Guarantor to pay dividends on its common and preferred stock is dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment of such earnings and cash flow to the Issuer and the Guarantor. The TWE Agreement of Limited Partnership and the respective bank credit facilities of TBS and TWI Cable Inc. ('TWI Cable') (a subsidiary of the Issuer) limit distributions and other transfers of funds to the Issuer and the Guarantor. Generally, distributions by TWE, other than tax distributions, are subject to restricted payments limitations and 13 availability under certain financial ratios applicable to TWE. As a result of the acquisitions by subsidiaries of the Issuer of certain cable systems, certain subsidiaries of the Issuer have outstanding indebtedness and bank credit facilities that contain limitations on the ability of such subsidiaries to make distributions or other payments to the Issuer. Generally, distributions by each of TBS and TWI Cable, other than tax distributions, are subject to restricted payments limitations and availability under certain financial ratios applicable to TBS and TWI Cable under the respective bank credit facilities of which each is a borrower and party thereto. Additional information concerning the indebtedness of the Issuer and the Guarantor and its subsidiaries will be set forth in the Prospectus Supplement. PLAN OF DISTRIBUTION The Issuer may sell the Debt Securities to one or more underwriters or dealers for public offering and sale by them or may sell the Debt Securities to investors directly or through agents. The Prospectus Supplement with respect to the Debt Securities offered thereby describes the terms of the offering of such Debt Securities and the method of distribution of the Debt Securities offered thereby and identifies any firms acting as underwriters, dealers or agents in connection therewith. The Debt Securities may be distributed from time to time in one or more transactions at a fixed price or prices (which may be changed) or at prices determined as specified in the Prospectus Supplement. In connection with the sale of the Debt Securities, underwriters, dealers or agents may be deemed to have received compensation from the Issuer in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the Debt Securities for whom they may act as agent. Underwriters may sell the Debt Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agent. Certain of the underwriters, dealers or agents who participate in the distribution of the Debt Securities may engage in other transactions with, and perform other services for, the Issuer and the Guarantor in the ordinary course of business. Any underwriting compensation paid by the Issuer to underwriters or agents in connection with the offering of the Debt Securities, and any discounts, concessions or commissions allowed by underwriters to dealers, are set forth in the Prospectus Supplement. Underwriters, dealers and agents participating in the distribution of the Debt Securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on the resale of the Debt Securities may be deemed to be underwriting discounts and commissions under the Securities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with the Issuer, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act. LEGAL OPINIONS Certain legal matters in connection with the Debt Securities will be passed upon for the Issuer and the Guarantor by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York and for the Underwriters, if any, named in a Prospectus Supplement, by Shearman & Sterling, 599 Lexington Avenue, New York, New York. EXPERTS The consolidated financial statements and schedules of the Issuer and TWE appearing in the Issuer's 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 the Guarantor's Current Report on Form 8-K dated November 14, 1996, 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. 14 The financial statements of Newhouse Broadcasting Cable Division of Newhouse Broadcasting Corporation and Subsidiaries as of July 31, 1993 and 1994, and for each of the three years in the period ended July 31, 1994, and the financial statements of Vision Cable Division of Vision Cable Communications, Inc. and Subsidiaries as of December 31, 1993 and 1994, and for the years then ended, incorporated by reference in this Prospectus from the Guarantor's Current Report on Form 8-K dated November 14, 1996, 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 are incorporated herein by reference in reliance upon such reports 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 TWE's Annual Report on Form 10-K for the year ended December 31, 1994, 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, 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 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 the Guarantor's Current Report on Form 8-K dated November 14, 1996, 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 consolidated financial statements of KBLCOM Incorporated as of December 31, 1994, and for each of the three years in the period ended December 31, 1994, incorporated by reference in this Prospectus from the Guarantor's Current Report on Form 8-K dated November 14, 1996, have been audited by Deloitte & Touche LLP, Independent Auditors, 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. ------------------------ No person is authorized to give any information or to make any representations other than those contained in this Prospectus or any accompanying Prospectus Supplement in connection with the offer made by this Prospectus or any Prospectus Supplement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer, the Guarantor or by any underwriter, dealer or agent. This Prospectus and any Prospectus Supplement do 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 and any accompanying Prospectus Supplement nor any sale of or offer to sell the Debt Securities offered hereby shall, under any circumstances, create an implication that there has been no change in the affairs of the Issuer or the Guarantor, or that the information herein is correct as of any time after the date hereof. This Prospectus and any accompanying Prospectus Supplement do not constitute an offer to sell or a solicitation of an offer to buy any of the Debt Securities offered hereby in any State to any person to whom it is unlawful to make such offer or solicitation in such State. 15 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following statement sets forth the estimated amounts of expenses, other than underwriting, discounts, to be borne by the registrants in connection with the distribution of the Debt Securities and the Guarantee. Securities and Exchange Commission registration fee........................................ $ 172,157* Trustees' fees............................................................................. 20,000 Printing and engraving expenses............................................................ 200,000 Rating agency fees......................................................................... 100,000 Accounting fees and expenses............................................................... 100,000 Legal fees and expenses.................................................................... 150,000 Miscellaneous expenses..................................................................... 57,843 ------------- Total expenses................................................................... $ 800,000 ------------- -------------
- ------------ * The registration fee for the Debt Securities was previously paid. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. 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 the Issuer's and the Guarantor's By-Laws requires indemnification to the fullest extent permitted under Delaware law of any person who is or was a director or officer of the Issuer or the Guarantor 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 the Issuer or the Guarantor or any predecessor of the Issuer or the Guarantor or was serving at the request of the Issuer or the Guarantor 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 the Issuer and the Guarantor, 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 each of the Issuer's and the Guarantor's 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, each of the Issuer's and the Guarantor's By-laws and Section 1, Article X of each of the Issuer's and the Guarantor's Certificate of Incorporation, as applicable. II-1 The Directors' and Officers' Liability and Reimbursement Insurance Policy of the Guarantor 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. ITEM 16. EXHIBITS (1) -- Proposed form of Underwriting Agreement (filed as Exhibit 1 to the Issuer's Registration Statement on Form S-3 (File No. 33-57812) filed with the Commission on February 3, 1993).* (4.1) -- Indenture dated as of June 15, 1993 between the Issuer and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to the Issuer's Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993).* (4.2) -- Form of Senior Security (filed as Exhibit 4.4 to the Issuer's Registration Statement on Form S-3 (File No. 33-53148) filed with the Commission on October 9, 1992).* (4.3) -- Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.1 to the Issuer's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996).* (4.4) -- Form of Third Supplemental Indenture among the Issuer, the Guarantor and The Chase Manhattan Bank, as Trustee.** (5) -- Opinion of Cravath, Swaine & Moore.** (12) -- Statement regarding the computation of the ratio of earnings to fixed charges.** (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 Deloitte & Touche LLP, Independent Auditors.** (23.5) -- Consent of Price Waterhouse LLP, Independent Accountants.** (23.6) -- Consent of Price Waterhouse LLP, Independent Accountants.** (24.1) -- Power of Attorney of the Issuer.** (24.2) -- Power of Attorney of the Guarantor.** (25) -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to the Issuer and the Guarantor (bound separately).**
- ------------ * Incorporated by reference. ** Filed herewith. ITEM 17. UNDERTAKINGS A. Undertakings Pursuant to Rule 415 The undersigned registrants hereby undertake: (a) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the 'Calculation of Registration Fee' table in the effective registration statement; and II-2 (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement; (b) that, for the purpose of determining any liability under the Securities Act, each post-effective amendment 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; and (c) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act Documents by Reference 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. C. Undertaking in Respect of Indemnification 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 15 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 its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 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-3 and has duly caused this Amendment to 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 December 2, 1996. TIME WARNER COMPANIES, INC. By: /s/ Peter R. Haje ................................... PETER R. HAJE EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on December 2, 1996 by the following persons in the capacities indicated.
SIGNATURES TITLE ---------- ----- (i) Principal Executive Officer * Chairman and Chief Executive Officer ......................................... GERALD M. LEVIN (ii) Principal Financial Officer * Director, Senior Vice President and ......................................... Chief Financial Officer RICHARD J. BRESSLER (iii) Principal Accounting Officer /s/ John A. LaBarca Vice President and Controller ......................................... JOHN A. LABARCA (iv) Directors /s/ Peter R. Haje ......................................... PETER R. HAJE * ......................................... RICHARD D. PARSONS *By: /s/ Peter R. Haje ..................................... (ATTORNEY-IN-FACT)
II-4 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-3 and has duly caused 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 December 2, 1996. TIME WARNER INC. By: /s/ Peter R. Haje ................................... PETER R. HAJE EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on December 2, 1996 by the following persons in the capacities indicated.
SIGNATURES TITLE ---------- ----- (i) Principal Executive Officer * Director, Chairman of the Board and .......................................... Chief Executive Officer (GERALD M. LEVIN) (ii) Principal Financial Officer * Senior Vice President and Chief Financial Officer .......................................... (RICHARD J. BRESSLER) (iii) Principal Accounting Officer /s/ John A. LaBarca Vice President and Controller .......................................... (JOHN A. LABARCA) (iv) Directors * ......................................... (MERV ADELSON) * ......................................... (J. CARTER BACOT) * ......................................... (LAWRENCE B. BUTTENWIESER) * ......................................... (BEVERLY SILLS GREENOUGH) * ......................................... (CARLA A. HILLS) * ......................................... (DAVID T. KEARNS) * ......................................... (REUBEN MARK)
II-5
SIGNATURES TITLE ---------- ----- * ......................................... (MICHAEL A. MILES) * ......................................... (J. RICHARD MUNRO) * ......................................... (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-6 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT PAGE - ------- ----------------------- ---- (1) -- Proposed form of Underwriting Agreement (filed as Exhibit 1 to the Issuer's Registration Statement on Form S-3 (File No. 33-57812) filed with the Commission on February 3, 1993)*......... (4.1) -- Indenture dated as of June 15, 1993 between the Issuer and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to the Issuer's Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)*................... (4.2) -- Form of Senior Security (filed as Exhibit 4.4 to the Issuer's Registration Statement on Form S-3 (File No. 33-53148) filed with the Commission on October 9, 1992)*................................ (4.3) -- Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.1 to the Issuer's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996).*............................................. (4.4) -- Form of Third Supplemental Indenture among the Issuer, the Guarantor and The Chase Manhattan Bank, as Trustee**................................................................................ (5) -- Opinion of Cravath, Swaine & Moore** (12) -- Statement regarding the computation of the ratio of earnings to fixed charges**.................. (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 Deloitte & Touche LLP, Independent Auditors**......................................... (23.5) -- Consent of Price Waterhouse LLP, Independent Accountants**....................................... (23.6) -- Consent of Price Waterhouse LLP, Independent Accountants**....................................... (24.1) -- Power of Attorney of the Issuer**................................................................ (24.2) -- Power of Attorney of the Guarantor**............................................................. (25) -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to the Issuer and the Guarantor (bound separately)**..............................................
- ------------ * Incorporated by reference. ** Filed herewith. EX-4 2 EXHIBIT 4.4 EXHIBIT 4.4 [Draft -- 12/2/96] THIRD SUPPLEMENTAL INDENTURE (this "Third Supplemental Indenture"), dated as of December , 1996, among TIME WARNER COMPANIES, INC. (formerly known as Time Warner Inc.), a Delaware corporation (the "Company"), TIME WARNER INC. (formerly known as TW Inc.), a Delaware corporation (the "Guarantor"), and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), a New York banking corporation, as trustee (the "Trustee"). WHEREAS the Company has executed and delivered to the Trustee an Indenture (the "Indenture"), dated as of January 15, 1993, providing for the issuance and sale by the Company from time to time of its senior debt securities (the "Securities"), which term shall include any Securities issued under the Senior Indenture after the date hereof; WHEREAS pursuant to an Amended and Restated Agreement and Plan of Merger, dated as of September 22, 1995, as amended, among the Guarantor, the Company, Turner Broadcasting System, Inc. ("TBS"), Time Warner Acquisition Corp. and TW Acquisition Corp., each of the Company and TBS became wholly owned subsidiaries of the Guarantor; WHEREAS the Company and Guarantor have executed and delivered to the Trustee a supplemental Indenture, dated October 10, 1996, among the Company, the Guarantor and the Trustee providing that the Guarantor will unconditionally and irrevocably guarantee the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under the Indenture (including obligations of the Trustee) and the Securities, and the full and punctual performance within applicable grace periods of all other obligations of the Company under the Indenture and the Securities; WHEREAS Section 901(5) of the Indenture permits the Company, when authorized by a resolution of the Board of Directors of the Company, and the Trustee, at any time and from time to time, to enter into one or more indentures supplemental to the Indenture, in form satisfactory to the Trustee, for the purpose of adding to the rights of the Holders of the Securities; 2 WHEREAS the Guarantor desires to extend to the Holders of Securities certain rights and privileges in connection with the guarantee of the Securities by the Guarantor; WHEREAS the Company and the Guarantor have requested that the Trustee execute and deliver this Third Supplemental Indenture and all requirements necessary to make this Third Supplemental Indenture a valid instrument in accordance with its terms and to make the amendments provided for herein the valid obligation of the Guarantor, and the execution and delivery of this Third Supplemental Indenture has been duly authorized in all respects. NOW THEREFORE, the Company, the Guarantor and the Trustee hereby agree that the following Sections of this Third Supplemental Indenture supplement the Indenture with respect to Securities issued thereunder: SECTION 1. Definitions. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture. SECTION 2. Amendment to Defeasance upon Deposit of Funds or Government Obligations. Section 403 of Article 4 of the Indenture is hereby supplemented and amended by adding the following sentence after clause (5) and before the definition of "Discharged" in Section 403 of Article 4 of the Indenture: "If the Company, at its option, with respect to a series of Securities, satisfies the applicable conditions pursuant to either clause (a) or (b) above, then (x), in the event the Company satisfies the conditions to clause (a) and elects clause (a) to be applicable, the Guarantor shall be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, its guarantee of the Securities of such series and to have satisfied all the obligations under this Indenture relating to the Securities of such series and (y) in either case, the Guarantor shall cease to be under any obligation to comply with any term, provision or condition set forth in Article Eight (and any other covenants applicable to such Securities that are determined pursuant to Section 301 to be subject to this provision), and clause (5)(ii) of Section 501 (and any other Events of 3 Default applicable to such series of Securities that are determined pursuant to Section 301 to be subject to this provision) shall be deemed not to be an Event of Default with respect to such series of Securities at any time thereafter." SECTION 3. Amendments to the Events of Default and Remedies. (a). Clause (5) of Section 501 of Article Five of the Indenture is hereby amended by redesignating clause (5) as clause (5)(i) and by adding thereto at the end thereof the following: "; or (ii) default in the performance, or breach, of any covenant or warranty of the Guarantor in this Indenture (as it may be supplemented from time to time) in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in the performance of which or the breach of which is elsewhere in this Section specifically dealt with), all of such covenants and warranties in the Indenture (as so supplemented) which are not expressly stated to be for the benefit of a particular series of Securities being deemed in respect of the Securities of all series for this purpose, and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Guarantor by the Trustee or to the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or". (b) Clause (6) of Section 501 of Article Five of the Indenture is hereby amended by redesignating clause (6) as clause (6)(i) and by adding thereto at the end thereof the following: "; or (ii) the entry of an order for relief against the Guarantor under Title 11, United States Code (the "Federal Bankruptcy Act") by a court having jurisdiction in the premises or a decree or order by a court having jurisdiction in the premises adjudging the Guarantor a bankrupt or insolvent under any other applicable Federal or State law, or the entry of a decree or order approving as properly filed a petition 4 seeking reorganization, arrangement, adjustment or composition of or in respect of the Guarantor under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Guarantor or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or". (c) Clause (7) of Section 501 of Article Five of the Indenture is hereby amended by redesignating clause (7) as clause (7)(i) and by adding thereto at the end thereof the following: "; or (ii) the consent by the Guarantor to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable Federal or State law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Guarantor or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Guarantor in furtherance of any such action; or". SECTION 4. Amendments to Article Eight. (a) The introductory clause and clause (1) of Section 801 of Article Eight of the Indenture is hereby supplemented and amended to read in its entirety as follows: "Section 801. Consolidation, Merger, Conveyance or Transfer on Certain Terms. Neither the Company nor the Guarantor shall consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless: (1)(a) In the case of the Company, the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or 5 transfer the properties and assets of the Company substantially as an entirety shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by any indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture (as supplemented from time to time) on the part of the Company to be performed or observed; (b) in the case of the Guarantor, the corporation formed by such consolidation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer the properties and assets of the Guarantor substantially as an entirety shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by any indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the performance of every covenant of this Indenture (as supplemented from time to time) on the part of the Guarantor to be performed or observed;". (b). Section 802 of Article Eight of the Indenture is supplemented and amended to read in its entirety as follows: "Section 802. Successor Person Substituted. Upon any consolidation or merger, or any conveyance or transfer of the properties and assets of the Company or the Guarantor substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company or the Guarantor is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor had been named as the Company or the Guarantor herein, as the case may be. In the event of any such conveyance or transfer, the predecessor as the Company or the Guarantor, as the case may be, shall be discharged from all obligations and covenants under this Indenture and the Securities and may be dissolved, wound up or liquidated at any time thereafter." 6 SECTION 5. Supplemental Indentures. Clauses (1) and (2) of Section 901 of Article Nine of the Indenture are supplemented and amended to read in their entirety as follows: "(1) to evidence the succession of another corporation or Person to the Company or the Guarantor, and the assumption by any such successor of the respective covenants of the Company or the Guarantor herein and in the Securities contained; or (2) to add to the covenants of the Company or the Guarantor, or to surrender any right or power herein conferred upon the Company or the Guarantor, for the benefit of the Holders of the Securities of any or all series (and if such covenants or the surrender of such right or power are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included or such surrenders are expressly being made solely for the benefit of one or more specified series); or". SECTION 6. This Third Supplemental Indenture. This Third Supplemental Indenture shall be construed as supplemental to the Indenture and shall form a part of it, and the Indenture is hereby incorporated by reference herein and each is hereby ratified, approved and confirmed. SECTION 7. Governing Law. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 8. Counterparts. This Third Supplemental Indenture may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. SECTION 9. Headings. The headings of this Third Supplemental Indenture are for reference only and shall not limit or otherwise affect the meaning hereof. 7 SECTION 10. Trustee Not Responsible for Recitals. The recitals herein contained are made by the Company and the Guarantor, and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee shall have no responsibility whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture. SECTION 11. Separability. In case any one or more of the provisions contained in this Third Supplemental Indenture or in the Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Third Supplemental Indenture or of the Securities, but this Third Supplemental Indenture and the Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed by their respective authorized officers as of the date first written above. TIME WARNER COMPANIES, INC., by ----------------------------------- Name: Thomas W. McEnerney Title: Vice President TIME WARNER INC., by ----------------------------------- Name: Thomas W. McEnerney Title: Vice President THE CHASE MANHATTAN BANK, as Trustee, by ----------------------------------- Name: Richard Lorenzen Title: Senior Trust Officer EX-5 3 EXHIBIT 5 EXHIBIT 5 [Letterhead of] CRAVATH, SWAINE & MOORE December 2, 1996 Time Warner Inc. Time Warner Companies, Inc. Ladies and Gentlemen: We have acted as counsel for Time Warner Companies, Inc., a Delaware corporation (the "Issuer"), and Time Warner Inc., a Delaware corporation (the "Guarantor"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") being filed by the Issuer and the Guarantor with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to (i) the debt securities of the Issuer (the "Debt Securities") and (ii) the guarantee of the Debt Securities by the Guarantor (the "Guarantee"). This Registration Statement also constitutes a Post-Effective Amendment to the Issuer's Registration Statement No. 33-50237 filed with the Commission on June 5, 1995. The Debt Securities will be issued under an Indenture dated as of January 15, 1993, as amended by one or more supplements thereto (such Indenture, as so supplemented being called the "Indenture"), between the Issuer and The Chase Manhattan Bank (formerly known as Chemical Bank) (the "Trustee"), as Trustee, filed as Exhibit 4.1 to the Issuer's Registration Statement No. 33-57030 with the Commission on January 14, 1993 and incorporated by reference in the Registration Statement. In connection with the foregoing, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including (a) the Restated 2 Certificate of Incorporation, as amended, of each of the Issuer and the Guarantor, (b) the By-laws, as amended, of each of the Issuer and the Guarantor, (c) the Indenture, (d) the Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and the Trustee (the "Second Supplemental Indenture"), filed as Exhibit 4.1 to the Issuer's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 and incorporated by reference in the Registration Statement, (e) the form of the Third Supplemental Indenture among the Issuer, the Guarantor and the Trustee, filed as Exhibit 4.4 to the Registration Statement, (f) the form of the Debt Securities, (g) the resolutions of the Board of Directors of each of the Issuer and the Guarantor authorizing the registration of the Debt Securities and the Guarantee, and (h) certain resolutions adopted by the Board of Directors of each of the Issuer and the Guarantor. Based upon the foregoing and subject to the qualifications hereinafter set forth, we are of opinion that: 1. The Issuer is a corporation validly existing and in good standing under the laws of the State of Delaware. 2. The Guarantor is a corporation validly existing and in good standing under the laws of the State of Delaware. 3. The Second Supplemental Indenture containing the Guarantee has been duly authorized, executed, authenticated or countersigned and delivered in accordance with the provisions of the Indenture and constitutes legal, valid and binding obligation of the Guarantor, entitled to the benefits of the Indenture and enforceable against the the Guarantor in accordance with its terms. The opinion set forth above in paragraph 3 is qualified to the extent we have assumed the due execution and delivery of the Indenture and the Second Supplemental Indenture by the Trustee and by the Issuer and the Guarantor (pursuant, in the case of the Trustee, to appropriate corporate authority). Our opinion set forth above in paragraph 3 is subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally, from time to time in effect. The enforceability of the Issuer's and the Guarantor's obligations is also subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). We are aware that we are referred to under the heading "Legal Opinions" in the prospectus forming a part of the Registration Statement, and we hereby consent to such use of our name therein and the filing of this opinion as 3 Exhibit 5 to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder. Very truly yours, /s/ Cravath, Swaine & Moore Time Warner Inc. Time Warner Companies, Inc. 75 Rockefeller Plaza New York, NY 10019 349A EX-12 4 EXHIBIT 12 EXHIBIT 12 TIME WARNER RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIOS)
PRO FORMA (a) --------------------------------------- NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, 1996 DECEMBER 31, 1995 ------------------ ------------------ ISSUER GUARANTOR ISSUER GUARANTOR ------ --------- ------ --------- Earnings: Net income (loss) before income taxes and extraordinary items..... $ (134) $ (322) $ (58) $ (100) Interest expense.......... 650 799 871 1,089 Amortization of capitalized interest.... 1 14 4 15 Portion of rents representative of an interest factor......... 43 66 60 91 Preferred stock dividend requirements of majority-owned subsidiaries............ 54 54 67 67 Adjustment for partially owned subsidiaries and 50% owned companies..... 594 594 649 649 Undistributed losses of less than 50% owned companies............... 24 6 117 104 ------ --------- ------ --------- Total earnings........ $1,232 $ 1,211 $1,710 $ 1,915 ------ --------- ------ --------- ------ --------- ------ --------- Fixed Charges: Interest expense.......... $ 650 $ 799 $ 871 $ 1,089 Capitalized interest...... 1 17 6 21 Portion of rents representative of an interest factor......... 43 66 60 91 Preferred stock dividend requirements of majority-owned subsidiaries............ 54 54 67 67 Adjustment for partially owned subsidiaries and 50% owned companies..... 446 446 655 655 ------ --------- ------ --------- Total fixed charges... $1,194 $ 1,382 $1,659 $ 1,923 ------ --------- ------ --------- ------ --------- ------ --------- Ratio of earnings to fixed charges (deficiency in the coverage of fixed charges by earnings before fixed charges).................... 1.0x $ (171) 1.0x $ (8) ------ --------- ------ --------- ------ --------- ------ --------- HISTORICAL (b) ----------------------------------------------------------- NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, -------------- ------------------------------------------ 1996 1995 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ ------ ------ Earnings: Net income (loss) before income taxes and extraordinary items.....$ (172) $ (94) $ 2 $ 89 $ 81 $ 320 $ 52 Interest expense.......... 688 663 877 769 698 729 912 Amortization of capitalized interest.... 1 1 2 2 -- 19 23 Portion of rents representative of an interest factor......... 43 39 57 52 54 85 78 Preferred stock dividend requirements of majority-owned subsidiaries............ 54 3 11 -- -- -- -- Adjustment for partially owned subsidiaries and 50% owned companies..... 594 530 691 665 663 97 73 Undistributed losses of less than 50% owned companies............... 24 51 117 82 47 56 56 ------ ------ ------ ------ ------ ------ ------ Total earnings........$1,232 $1,193 $1,757 $1,659 $1,543 $1,306 $1,194 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Fixed Charges: Interest expense..........$ 688 $ 663 $ 877 $ 769 $ 698 $ 729 $ 912 Capitalized interest...... 1 1 4 2 -- 15 17 Portion of rents representative of an interest factor......... 43 39 57 52 54 85 78 Preferred stock dividend requirements of majority-owned subsidiaries............ 54 3 11 -- -- -- -- Adjustment for partially owned subsidiaries and 50% owned companies..... 446 533 697 668 664 81 45 ------ ------ ------ ------ ------ ------ ------ Total fixed charges...$1,232 $1,239 $1,646 $1,491 $1,416 $ 910 $1,052 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of earnings to fixed charges (deficiency in the coverage of fixed charges by earnings before fixed charges).................... 1.0x $ (46) 1.1x 1.1x 1.1x 1.4x 1.1x ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
- ------------ (a) The pro forma ratio of earnings to fixed charges (or coverage deficiencies) for each of the Issuer and the Guarantor for the nine months ended September 30, 1996 and the year ended December 31, 1995 give effect to (i) the Issuer Transactions, as defined elsewhere herein, (ii) certain other transactions as defined and described in the pro forma consolidated condensed financial statements contained in the Guarantor's Current Report on Form 8-K dated November 14, 1996, including certain asset sales and debt refinancings and (iii) with respect to the Guarantor only, the TBS Transaction, as if such transactions had occurred at the beginning of 1995. (b) In connection with the TBS Transaction that occurred on October 10, 1996, the Guarantor, formerly a wholly owned subsidiary of the Issuer, acquired each outstanding share of capital stock of the Issuer (other than shares held directly or indirectly by the Issuer) and became the parent of the Issuer. Accordingly, the historical ratios of earnings to fixed charges (or coverage deficiencies) of the Issuer and the Guarantor are the same for all periods prior to such date because the Issuer is treated for financial reporting purposes as the predecessor of the Guarantor. EX-23 5 EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the references to our firm under the caption 'Experts' in the Registration Statement on Form S-3 and related prospectus of Time Warner Inc. ('New Time Warner') and Time Warner Companies, Inc. ('Old Time Warner') for the registration of $550,581,500 of Old Time Warner Debt Securities unconditionally guaranteed by New Time Warner, and to the incorporation by reference therein of (i) our reports dated February 6, 1996, with respect to the consolidated financial statements and schedules of Old Time Warner and Time Warner Entertainment Company, L.P., and our report dated March 3, 1995 with respect to the combined financial statements of the Time Warner Service Partnerships, incorporated by reference from Old Time Warner's Annual Report on Form 10-K for the year ended December 31, 1995, as amended by Old Time Warner's Form 10-K/A, dated June 27, 1996, and (ii) our report dated March 8, 1996, with respect to the consolidated financial statements and schedule of Cablevision Industries Corporation and Subsidiaries, and our reports dated July 28, 1995, with respect to the financial statements of Newhouse Broadcasting Cable Division of Newhouse Broadcasting Corporation and Subsidiaries and Vision Cable Division of Vision Cable Communications, Inc. and Subsidiaries, from New Time Warner's Current Report on Form 8-K dated November 14, 1996, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP New York, New York November 25, 1996 EX-23 6 EXHIBIT 23.3 EXHIBIT 23.3 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our reports and to all references to our Firm included in or made a part of this Registration Statement on Form S-3 for the registration under the Securities Act of 1933, as amended, of Debt Securities of Time Warner Companies, Inc. unconditionally guaranteed by Time Warner Inc. ARTHUR ANDERSEN LLP Stamford, Connecticut November 26, 1996 EX-23 7 EXHIBIT 23.4 EXHIBIT 23.4 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement on Form S-3 of Time Warner Inc. and Time Warner Companies, Inc. for the registration of Debt Securities of Time Warner Companies, Inc., unconditionally guaranteed by Time Warner Inc., of our report dated April 20, 1995, with respect to the consolidated financial statements of KBLCOM Incorporated appearing in the Form 8-K of Time Warner Inc. dated November 14, 1996, and to the reference to us under the heading 'Experts' in the Prospectus, which is part of such Registration Statement. DELOITTE & TOUCHE LLP Houston, Texas November 26, 1996 EX-23 8 EXHIBIT 23.5 EXHIBIT 23.5 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Time Warner Inc. and Time Warner Companies, Inc. related to the registration of Debt Securities of Time Warner Companies, Inc. unconditionally guaranteed by Time Warner Inc. of our report on the Paragon Communications financial statements and schedule dated January 19, 1995, except as to Note 6, which is as of January 27, 1995, which appears on page F-82 of the Annual Report on Form 10-K of Time Warner Entertainment Company, L.P. for the year ended December 31, 1994, which is incorporated by reference in the Time Warner Inc. Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the reference to us under the heading 'Experts' in such Registration Statement. PRICE WATERHOUSE LLP Denver, Colorado November 26, 1996 EX-23 9 EXHIBIT 23.6 EXHIBIT 23.6 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of Time Warner Inc. and Time Warner Companies, Inc. of our report dated February 5, 1996, which appears on page 53 of Turner Broadcasting System, Inc.'s Annual Report to Shareholders, which is incorporated by reference in Turner Broadcasting System, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995, which is incorporated by reference in the Prospectus. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 43 of such Annual Report on Form 10-K. We also consent to the reference to us under the heading 'Experts' in such Prospectus. PRICE WATERHOUSE LLP Atlanta, Georgia November 26, 1996 EX-24 10 EXHIBIT 24.1 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of TIME WARNER COMPANIES, INC., a Delaware corporation (the 'Corporation'), hereby constitutes and appoints RICHARD J. BRESSLER, PETER R. HAJE, JOHN A. LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D. PARSONS, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power to act without the others, for him or her and in his or her name, place and stead, in any and all capacities, (a) to sign one or more post-effective amendments to the Corporation's existing 'shelf' registration statement (File No. 33-50237) and (b) to sign an additional Registration Statement on Form S-3 or other appropriate form and any and all amendments to such Registration Statement (including post-effective amendments), to be filed with the Securities and Exchange Commission in connection with the 'shelf' registration pursuant to Rule 415 under the provisions of the Securities Act of 1933, as amended, of up to $450 million aggregate initial price to the public of one or more of the following (i) debt securities, (ii) rights or warrants to acquire any such debt securities and (iii) other securities of the Corporation, in any combination thereof, with power where appropriate to affix thereto the corporate seal of the Corporation and to attest said seal, and to file such Registration Statement, including a form of prospectus, and any and all amendments and post-effective amendments to such Registration Statement, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her name as of the 26th day of November, 1996. (i) Principal Executive Officer: /s/ Gerald M. Levin ................................................... Gerald M. Levin, Chairman of the Board and Chief Executive Officer (ii) Principal Financial Officer: /s/ Richard J. Bressler ................................................... Richard J. Bressler, Director, Senior Vice President and Chief Financial Officer (iii) Principal Accounting Officer: /s/ John A. LaBarca ................................................... John A. LaBarca, Vice President and Controller (iv) Directors: /s/ Peter R. Haje ................................................... Peter R. Haje, Director /s/ Richard D. Parsons ................................................... Richard D. Parsons, Director
2 EX-24 11 EXHIBIT 24.2 EXHIBIT 24.2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of TIME WARNER INC., a Delaware corporation (the 'Corporation'), hereby constitutes and appoints RICHARD J. BRESSLER, PETER R. HAJE, JOHN A. LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D. PARSONS, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power to act without the others, for him or her and in his or her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate form and any and all amendments to such Registration Statements (including post-effective amendments), to be filed with the Securities and Exchange Commission in connection with the 'shelf' registration pursuant to Rule 415 under the provisions of the Securities Act of 1933, as amended, of (a) up to $2 billion aggregate initial price to the public of one or more of the following (i) debt securities, (ii) the shares of Common Stock, par value $1.00 per share ('Common Stock'), of the Corporation into which such debt securities may be convertible, (iii) rights or warrants to acquire any such debt or Common Stock and (iv) other securities of the Corporation, in any combination thereof, and (b) guarantees of up to $1 billion aggregate initial price to the public of debt securities of Time Warner Companies, Inc., with power where appropriate to affix thereto the corporate seal of the Corporation and to attest said seal, and to file such Registration Statements, including in each case a form of prospectus, and any and all amendments and post-effective amendments to such Registration Statements, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her name as of the 21st day of November, 1996. (i) Principal Executive Officer: /s/ Gerald M. Levin ................................................... Gerald M. Levin, Director, Chairman of the Board and Chief Executive Officer (ii) Principal Financial Officer: /s/ Richard J. Bressler ................................................... Richard J. Bressler, Senior Vice President and Chief Financial Officer (iii) Principal Accounting Officer: /s/ John A. LaBarca ................................................... John A. LaBarca, Vice President and Controller (iv) Directors: /s/ Merv Adelson /s/ Lawrence B. Buttenwieser ................................................... ................................................... Merv Adelson, Lawrence B. Buttenwieser, Director Director /s/ J. Carter Bacot /s/ Beverly Sills Greenough ................................................... ................................................... J. Carter Bacot, Beverly Sills Greenough, Director Director
2 /s/ Carla A. Hills /s/ Richard D. Parsons ................................................... ................................................... Carla A. Hills, Richard D. Parsons, Director Director and President /s/ David T. Kearns /s/ Donald S. Perkins ................................................... ................................................... David T. Kearns, Donald S. Perkins, Director Director /s/ Reuben Mark /s/ Raymond S. Troubh ................................................... ................................................... Reuben Mark, Raymond S. Troubh, Director Director /s/ Michael A. Miles /s/ R.E. Turner ................................................... ................................................... Michael A. Miles, R.E. Turner, Director Director /s/ J. Richard Munro /s/ Francis T. Vincent, Jr. ................................................... ................................................... J. Richard Munro, Francis T. Vincent, Jr., Director Director
3 EX-25 12 EXHIBIT 25 ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------------ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____________ ------------------------ THE CHASE MANHATTAN BANK (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) ------------------------ NEW YORK 13-4994650 (STATE OF INCORPORATION (I.R.S. EMPLOYER IDENTIFICATION NO.) IF NOT A NATIONAL BANK) 270 PARK AVENUE 10017 NEW YORK, NEW YORK (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------ WILLIAM H. MCDAVID GENERAL COUNSEL 270 PARK AVENUE NEW YORK, NEW YORK 10017 TEL: (212) 270-2611 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ------------------------ TIME WARNER COMPANIES, INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 13-1388520 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 75 ROCKEFELLER PLAZA 10019 NEW YORK, NEW YORK (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------ TIME WARNER INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 13-3527249 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 75 ROCKEFELLER PLAZA 10019 NEW YORK, NEW YORK (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------ DEBT SECURITIES AND GUARANTEES OF DEBT SECURITIES (TITLE OF THE INDENTURE SECURITIES) ________________________________________________________________________________ GENERAL ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 2 ITEM 16. LIST OF EXHIBITS List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. (On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 22nd day of November, 1996. THE CHASE MANHATTAN BANK By /S/ R. LORENZEN ................................... R. LORENZEN SENIOR TRUST OFFICER 3 EXHIBIT 7 TO FORM T-1 BANK CALL NOTICE RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF THE CHASE MANHATTAN BANK OF 270 PARK AVENUE, NEW YORK, NEW YORK 10017 AND FOREIGN AND DOMESTIC SUBSIDIARIES, A MEMBER OF THE FEDERAL RESERVE SYSTEM, AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1996, IN ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS DISTRICT PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
DOLLAR AMOUNTS IN MILLIONS -------------- ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................ $ 11,095 Interest-bearing balances................................................................. 4,998 Securities: Held to maturity securities............................................................... 3,231 Available for sale securities............................................................. 38,078 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds sold........................................................................ 8,018 Securities purchased under agreements to resell........................................... 731 Loans and lease financing receivables: Loans and leases, net of unearned income....................................... $130,513 Less: Allowance for loan and lease losses...................................... 2,938 Less: Allocated transfer risk reserve.......................................... 27 -------- Loans and leases, net of unearned income, allowance, and reserve.......................... 127,548 Trading assets................................................................................. 48,576 Premises and fixed assets (including capitalized leases)....................................... 2,850 Other real estate owned........................................................................ 300 Investments in unconsolidated subsidiaries and associated companies............................ 92 Customer's liability to this bank on acceptances outstanding................................... 2,777 Intangible assets.............................................................................. 1,361 Other assets................................................................................... 12,204 -------------- Total assets......................................................................... $261,859 -------------- --------------
4
DOLLAR AMOUNTS IN MILLIONS -------------- LIABILITIES Deposits In domestic offices....................................................................... $ 80,163 Noninterest-bearing............................................................ $ 30,596 Interest-bearing............................................................... 49,567 -------- In foreign offices, Edge and Agreement subsidiaries, and IBF's............................ 65,173 Noninterest-bearing............................................................ $ 3,616 Interest-bearing............................................................... 61,557 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds purchased................................................................... 14,594 Securities sold under agreements to repurchase............................................ 14,110 Demand notes issued to the U.S. Treasury....................................................... 2,200 Trading liabilities............................................................................ 30,136 Other borrowed money: With a remaining maturity of one year or less............................................. 16,895 With a remaining maturity of more than one year........................................... 449 Mortgage indebtedness and obligations under capitalized leases................................. 49 Bank's liability on acceptances executed and outstanding....................................... 2,764 Subordinated notes and debentures.............................................................. 5,471 Other liabilities.............................................................................. 13,997 Total liabilities....................................................................... 246,001 -------------- Limited-life preferred stock and related surplus............................................... 550 EQUITY CAPITAL Common stock................................................................................... 1,209 Surplus........................................................................................ 10,176 Undivided profits and capital reserves......................................................... 4,385 Net unrealized holding gains (losses) on available-for-sale securities......................... (481) Cumulative foreign currency translation adjustments............................................ 19 Total equity capital.................................................................... 15,308 -------------- Total liabilities, limited-life preferred stock and equity capital................... $261,859 -------------- --------------
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY EDWARD D. MILLER } DIRECTORS THOMAS G. LABRECQUE 5 -----END PRIVACY-ENHANCED MESSAGE-----