Warner Media (TWX) 8-K Other Events

Exhibit 99.1

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

     TW AOL Holdings Inc. (“TW AOL Holdings”), Historic TW Inc. (“Historic TW”), Time Warner Companies, Inc. (“TW Companies”) and Turner Broadcasting System, Inc. (“TBS” and, together with TW AOL Holdings, Historic TW and TW Companies, the “Guarantor Subsidiaries”) are wholly owned subsidiaries of Time Warner Inc. (“Time Warner”). It is anticipated that the Guarantor Subsidiaries will fully and unconditionally, jointly and severally, either directly or indirectly, guarantee outstanding publicly traded indebtedness of Time Warner issued subsequent to the filing of this Current Report on Form 8-K.

     The Securities and Exchange Commission’s (the “Commission”) rules require that condensed consolidating financial information be provided for wholly owned subsidiaries that have guaranteed debt of a registrant issued in a public offering, where each such guarantee is full and unconditional, and joint and several. Set forth below are condensed consolidating financial statements of Time Warner, including each of the Guarantor Subsidiaries. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of (i) the Guarantor Subsidiaries (in each case, reflecting investments in each Guarantor Subsidiary’s consolidated subsidiaries under the equity method of accounting), (ii) the direct and indirect non-guarantor subsidiaries of Time Warner and (iii) the eliminations necessary to arrive at the information for Time Warner on a consolidated basis. There are no restrictions on the Company’s ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances. These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements of Time Warner included in the Current Report on Form 8-K, dated November 3, 2006 and filed with the Commission on November 3, 2006, and in Time Warner’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, filed with the Commission on November 1, 2006.

Consolidating Statement of Operations
For The Nine Months Ended September 30, 2006

																							Time
		Time			TW AOL			Historic			TW						Non-Guarantor						Warner
		Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
	(millions)
Revenues		$	—		$	—		$	—		$	—		$	859		$	31,017		$	(118	)	$	31,758
Costs of revenues			—			—			—			—			(380	)		(17,614	)		114			(17,880	)
Selling, general and administrative			(70	)		(6	)		(30	)		(13	)		(171	)		(7,432	)		4			(7,718	)
Amortization of intangible assets			—			—			—			—			—			(434	)		—			(434	)
Amounts related to securities litigation and government investigations			(90	)		—			—			—			—			—			—			(90	)
Merger-related, restructuring, and shutdown costs			(5	)		—			—			—			—			(200	)		—			(205	)
Asset impairments			—			—			—			—			—			(200	)		—			(200	)
Gains (losses) on disposal of assets, net			20			—			—			—			(1	)		3			—			22
Operating income (loss)			(145	)		(6	)		(30	)		(13	)		307			5,140			—			5,253
Equity in pretax income of consolidated subsidiaries			5,539			948			4,681			4,198			1,063			—			(16,429	)		—
Interest income (expense), net			(469	)		(1	)		(85	)		(802	)		(29	)		271			—			(1,115	)
Other income (expense), net			22			34			(3	)		56			144			1,265			(444	)		1,074
Minority interest expense, net			—			—			—			—			—			(228	)		(37	)		(265	)
Income before income taxes, discontinued operations and cumulative effect of accounting change			4,947			975			4,563			3,439			1,485			6,448			(16,910	)		4,947
Income tax provision			(1,563	)		(377	)		(1,413	)		(977	)		(575	)		(2,139	)		5,481			(1,563	)
Income before discontinued operations and cumulative effect of accounting change			3,384			598			3,150			2,462			910			4,309			(11,429	)		3,384
Discontinued operations, net of tax			1,390			—			1,390			1,221			200			1,420			(4,231	)		1,390
Income before cumulative effect of accounting change			4,774			598			4,540			3,683			1,110			5,729			(15,660	)		4,774
Cumulative effect of accounting change, net of tax			25			—			2			2			—			2			(6	)		25
Net income		$	4,799		$	598		$	4,542		$	3,685		$	1,110		$	5,731		$	(15,666	)	$	4,799

1

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Operations
For The Nine Months Ended September 30, 2005

																							Time
		Time			TW AOL			Historic			TW						Non-Guarantor						Warner
		Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
	(millions)
Revenues		$	—		$	—		$	—		$	—		$	820		$	30,174		$	(116	)	$	30,878
Costs of revenues			—			—			—			—			(398	)		(17,515	)		111			(17,802	)
Selling, general and administrative			(40	)		(7	)		(35	)		(16	)		(157	)		(7,386	)		10			(7,631	)
Amortization of intangible assets			—			—			—			—			—			(438	)		—			(438	)
Amounts related to securities litigation and government investigations			(3,025	)		—			—			—			—			—			—			(3,025	)
Merger-related and restructuring costs			—			—			—			—			—			(28	)		—			(28	)
Asset impairments			—			—			—			—			—			(24	)		—			(24	)
Gains on disposal of assets, net			—			—			—			—			—			18			—			18
Operating income (loss)			(3,065	)		(7	)		(35	)		(16	)		265			4,801			5			1,948
Equity in pretax income of consolidated subsidiaries			5,295			885			3,525			3,135			878			—			(13,718	)		—
Interest income (expense), net			(336	)		—			(67	)		(560	)		(61	)		73			(1	)		(952	)
Other income, net			40			941			51			1			109			302			(335	)		1,109
Minority interest expense, net			—			—			—			—			—			(171	)		—			(171	)
Income before income taxes			1,934			1,819			3,474			2,560			1,191			5,005			(14,049	)		1,934
Income tax provision			(657	)		(645	)		(1,025	)		(683	)		(447	)		(1,559	)		4,359			(657	)
Income before discontinued operations			1,277			1,174			2,449			1,877			744			3,446			(9,690	)		1,277
Discontinued operations, net of tax			90			—			90			90			—			90			(270	)		90
Net income		$	1,367		$	1,174		$	2,539		$	1,967		$	744		$	3,536		$	(9,960	)	$	1,367

2

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Operations
For The Year Ended December 31, 2005

																							Time
		Time			TW AOL			Historic			TW						Non-Guarantor						Warner
		Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
	(millions)
Revenues		$	—		$	—		$	—		$	—		$	1,099		$	41,442		$	(140	)	$	42,401
Costs of revenues			—			—			—			—			(514	)		(24,026	)		132			(24,408	)
Selling, general and administrative			(91	)		(10	)		(48	)		(21	)		(221	)		(10,061	)		13			(10,439	)
Amortization of intangible assets			—			—			—			—			—			(587	)		—			(587	)
Amounts related to securities litigation and government investigations			(2,865	)		—			—			—			—			—			—			(2,865	)
Merger-related and restructuring costs			—			—			—			—			—			(117	)		—			(117	)
Asset impairments			—			—			—			—			—			(24	)		—			(24	)
Gains on disposal of assets, net			—			—			—			—			—			23			—			23
Operating income (loss)			(2,956	)		(10	)		(48	)		(21	)		364			6,650			5			3,984
Equity in pretax income of consolidated subsidiaries			6,951			1,024			5,079			4,620			1,106			—			(18,780	)		—
Interest income (expense), net			(446	)		—			(82	)		(778	)		(80	)		120			—			(1,266	)
Other income, net			50			935			52			1			160			380			(453	)		1,125
Minority interest expense, net			—			—			—			—			—			(244	)		—			(244	)
Income before income taxes			3,599			1,949			5,001			3,822			1,550			6,906			(19,228	)		3,599
Income tax provision			(1,051	)		(638	)		(1,424	)		(966	)		(601	)		(2,046	)		5,675			(1,051	)
Income before discontinued operations			2,548			1,311			3,577			2,856			949			4,860			(13,553	)		2,548
Discontinued operations, net of tax			123			—			123			123			(4	)		123			(365	)		123
Net income		$	2,671		$	1,311		$	3,700		$	2,979		$	945		$	4,983		$	(13,918	)	$	2,671

3

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Operations
For The Year Ended December 31, 2004

																							Time
		Time			TW AOL			Historic			TW						Non-Guarantor						Warner
		Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
	(millions)
Revenues		$	—		$	—		$	—		$	—		$	1,012		$	40,173		$	(192	)	$	40,993
Cost of revenues			—			—			—			—			(509	)		(23,528	)		181			(23,856	)
Selling, general and administrative			(139	)		(31	)		(55	)		(25	)		(222	)		(9,979	)		6			(10,445	)
Amortization of intangible assets			—			—			—			—			—			(615	)		—			(615	)
Amounts related to securities litigation and government investigations			(536	)		—			—			—			—			—			—			(536	)
Merger-related and restructuring costs			—			—			—			—			—			(50	)		—			(50	)
Asset impairments			—			—			—			—			—			(10	)		—			(10	)
Gains on disposal of assets, net			—			20			—			—			(7	)		8			—			21
Operating income (loss)			(675	)		(11	)		(55	)		(25	)		274			5,999			(5	)		5,502
Equity in pretax income of consolidated subsidiaries			5,539			695			4,708			3,993			1,258			—			(16,193	)		—
Interest expense, net			(611	)		—			(91	)		(558	)		(59	)		(214	)		—			(1,533	)
Other income (expense), net			37			245			47			(9	)		135			493			(426	)		522
Minority interest expense, net			—			—			—			—			—			(201	)		—			(201	)
Income before income taxes, discontinued operations and cumulative effect of accounting change			4,290			929			4,609			3,401			1,608			6,077			(16,624	)		4,290
Income tax provision			(1,450	)		(248	)		(1,680	)		(1,232	)		(598	)		(2,133	)		5,891			(1,450	)
Income before discontinued operations and cumulative effect of accounting change			2,840			681			2,929			2,169			1,010			3,944			(10,733	)		2,840
Discontinued operations, net of tax			234			—			239			238			1			239			(717	)		234
Income before cumulative effect of accounting change			3,074			681			3,168			2,407			1,011			4,183			(11,450	)		3,074
Cumulative effect of accounting change, net of tax			34			34			—			—			—			34			(68	)		34
Net income		$	3,108		$	715		$	3,168		$	2,407		$	1,011		$	4,217		$	(11,518	)	$	3,108

4

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Operations
For The Year Ended December 31, 2003

																						Time
	Time			TW AOL			Historic			TW						Non-Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
Revenues	$	—		$	—		$	—		$	—		$	898		$	37,768		$	(142	)	$	38,524
Cost of revenues		—			—			—			—			(506	)		(22,482	)		112			(22,876	)
Selling, general and administrative		(206	)		(9	)		(46	)		(21	)		(197	)		(9,785	)		30			(10,234	)
Amortization of intangible assets		—			—			—			—			—			(628	)		—			(628	)
Amounts related to securities litigation and government investigations		(56	)		—			—			—			—			—			—			(56	)
Merger-related and restructuring costs		—			—			—			—			(11	)		(98	)		—			(109	)
Asset impairments		—			—			—			—			—			(219	)		—			(219	)
Gains on disposal of assets, net		—			—			—			—			—			14			—			14
Operating income (loss)		(262	)		(9	)		(46	)		(21	)		184			4,570			—			4,416
Equity in pretax income (loss) of consolidated subsidiaries		4,663			883			3,752			3,578			582			—			(13,458	)		—
Interest expense, net		(674	)		—			(88	)		(437	)		(86	)		(449	)		—			(1,734	)
Other income (expense), net		—			178			(9	)		—			135			1,176			(280	)		1,200
Minority interest expense, net		—			—			—			—			—			(155	)		—			(155	)
Income before income taxes and discontinued operations and cumulative effect of accounting change		3,727			1,052			3,609			3,120			815			5,142			(13,738	)		3,727
Income tax benefit (provision)		(1,044	)		5			(1,408	)		(1,231	)		(298	)		(1,588	)		4,520			(1,044	)
Income before discontinued operations and cumulative effect of accounting change		2,683			1,057			2,201			1,889			517			3,554			(9,218	)		2,683
Discontinued operations, net of tax		(505	)		—			(505	)		(501	)		(4	)		(505	)		1,515			(505	)
Income before cumulative effect of accounting change		2,178			1,057			1,696			1,388			513			3,049			(7,703	)		2,178
Cumulative effect of accounting change, net of tax		(12	)		—			(12	)		(7	)		(5	)		(11	)		35			(12	)
Net income	$	2,166		$	1,057		$	1,684		$	1,381		$	508		$	3,038		$	(7,668	)	$	2,166

5

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Balance Sheet
September 30, 2006

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
ASSETS
Current assets
Cash and equivalents	$	214		$	—		$	1		$	4		$	10		$	949		$	—		$	1,178
Restricted cash		—			—			—			—			—			55			—			55
Receivables, net		80			—			—			—			1			5,681			—			5,762
Inventories		—			—			—			—			11			1,758			—			1,769
Prepaid expenses and other current assets		25			—			23			—			10			1,286			—			1,344
Current assets of discontinued operations		—			—			—			—			—			41			—			41
Total current assets		319			—			24			4			32			9,770			—			10,149
Noncurrent inventories and film costs		—			—			—			—			—			4,920			—			4,920
Investments in amounts due to and from consolidated subsidiaries		86,346			3,489			82,287			69,719			17,976			—			(259,817	)		—
Investments, including available-for-sale securities		30			138			290			—			606			4,557			(2,067	)		3,554
Property, plant and equipment, net		491			—			—			—			216			15,309			—			16,016
Intangible assets subject to amortization, net		—			—			—			—			—			5,247			—			5,247
Intangible assets not subject to amortization		—			—			—			—			634			45,909			—			46,543
Goodwill		—			—			—			—			2,586			38,670			—			41,256
Other assets		102			—			600			—			22			2,172			—			2,896
Noncurrent assets of discontinued operations		—			—			—			—			—			—			—			—
Total assets	$	87,288		$	3,627		$	83,201		$	69,723		$	22,072		$	126,554		$	(261,884	)	$	130,581
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5		$	—		$	—		$	—		$	11		$	1,056		$	—		$	1,072
Participations payable		—			—			—			—			—			2,058			—			2,058
Royalties and programming costs payable		—			—			—			—			6			1,085			—			1,091
Deferred revenue		—			—			—			—			—			1,571			—			1,571
Debt due within one year		—			—			—			—			4			97			—			101
Other current liabilities		1,051			—			89			139			(7	)		4,478			(77	)		5,673
Current liabilities of discontinued operations		—			—			—			—			2			61			—			63
Total current liabilities		1,056			—			89			139			16			10,406			(77	)		11,629
Long-term debt		12,331			—			1,494			4,170			329			14,931			—			33,255
Debt due (from) to affiliates		(1,773	)		—			—			—			735			1,038			—			—
Deferred income taxes		13,424			145			13,279			11,756			1,603			13,359			(40,142	)		13,424
Deferred revenue		—			—			—			—			—			607			—			607
Mandatorily redeemable preferred membership units issued by a subsidiary		—			—			—			—			—			300			—			300
Other liabilities		470			9			1,304			407			289			4,672			(1,558	)		5,593
Noncurrent liabilities of discontinued operations		—			—			—			—			—			17			—			17
Minority interests		—			—			—			—			—			3,761			215			3,976
Shareholders’ equity
Due to (from) Time Warner and subsidiaries		—			(2,188	)		(8,306	)		(8,319	)		(4,898	)		(17,138	)		40,849			—
Other shareholders’ equity		61,780			5,661			75,341			61,570			23,998			94,601			(261,171	)		61,780
Total shareholders’ equity		61,780			3,473			67,035			53,251			19,100			77,463			(220,322	)		61,780
Total liabilities and shareholders’ equity	$	87,288		$	3,627		$	83,201		$	69,723		$	22,072		$	126,554		$	(261,884	)	$	130,581

6

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Balance Sheet
December 31, 2005

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
ASSETS
Current assets
Cash and equivalents	$	3,798		$	—		$	—		$	59		$	36		$	327		$	—		$	4,220
Receivables, net		291			—			—			—			1			6,231			—			6,523
Inventories		—			—			—			—			1			2,040			—			2,041
Prepaid expenses and other current assets		121			—			22			—			13			727			7			890
Current assets of discontinued operations		—			—			—			—			—			376			—			376
Total current assets		4,210			—			22			59			51			9,701			7			14,050
Noncurrent inventories and film costs		—			—			—			—			—			4,597			—			4,597
Investments in amounts due to and from consolidated subsidiaries		83,284			4,344			79,454			66,984			17,566			—			(251,632	)		—
Investments, including available-for-sale securities		27			156			284			—			473			4,316			(1,761	)		3,495
Property, plant and equipment, net		513			—			—			—			175			12,208			—			12,896
Intangible assets subject to amortization, net		—			—			—			—			—			3,476			—			3,476
Intangible assets not subject to amortization		—			—			—			—			641			36,726			—			37,367
Goodwill		—			—			—			—			2,625			37,514			—			40,139
Other assets		88			—			659			—			22			2,350			—			3,119
Noncurrent assets of discontinued operations		—			—			—			—			—			3,605			—			3,605
Total assets	$	88,122		$	4,500		$	80,419		$	67,043		$	21,553		$	114,493		$	(253,386	)	$	122,744
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4		$	—		$	—		$	—		$	18		$	1,172		$	—		$	1,194
Participations payable		—			—			—			—			—			2,401			—			2,401
Royalties and programming costs payable		—			—			—			—			4			933			—			937
Deferred revenue		—			—			—			—			—			1,463			—			1,463
Debt due within one year		—			—			—			4			3			85			—			92
Other current liabilities		1,244			—			59			150			7			4,736			(83	)		6,113
Current liabilities of discontinued operations		—			—			—			—			—			328			—			328
Total current liabilities		1,248			—			59			154			32			11,118			(83	)		12,528
Long-term debt		8,971			—			1,489			4,729			333			4,716			—			20,238
Debt due (from) to affiliates		(942	)		—			—			—			—			942			—			—
Deferred income taxes		13,260			451			14,740			13,348			1,472			13,707			(44,832	)		12,146
Deferred revenue		—			—			—			—			—			681			—			681
Other liabilities		756			9			1,252			370			271			4,248			(1,452	)		5,454
Noncurrent liabilities of discontinued operations		—			—			—			—			—			863			—			863
Minority interests		(276	)		—			—			—			—			7,343			(1,338	)		5,729
Shareholders’ equity
Due to (from) Time Warner and subsidiaries		—			(1,755	)		(4,296	)		(6,137	)		(3,227	)		(14,742	)		30,157			—
Other shareholders’ equity		65,105			5,795			67,175			54,579			22,672			85,617			(235,838	)		65,105
Total shareholders’ equity		65,105			4,040			62,879			48,442			19,445			70,875			(205,681	)		65,105
Total liabilities and shareholders’ equity	$	88,122		$	4,500		$	80,419		$	67,043		$	21,553		$	114,493		$	(253,386	)	$	122,744

7

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Balance Sheet
December 31, 2004

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
ASSETS
Current assets
Cash and equivalents	$	5,568		$	—		$	(1	)	$	84		$	(15	)	$	503		$	—		$	6,139
Restricted cash		—			—			—			—			—			150			—			150
Receivables, net		30			—			—			(2	)		(7	)		5,331			—			5,352
Inventories		—			—			—			—			5			2,040			—			2,045
Prepaid expenses and other current assets		50			—			—			—			4			716			—			770
Current assets of discontinued operations		—			—			—			—			—			360			—			360
Total current assets		5,648			—			(1	)		82			(13	)		9,100			—			14,816
Noncurrent inventories and film costs		—			—			—			—			—			4,360			—			4,360
Investments in amounts due to and from consolidated subsidiaries		79,461			2,617			85,431			72,774			17,760			—			(258,043	)		—
Investments, including available-for-sale securities		19			1,178			381			—			420			4,143			(1,464	)		4,677
Property, plant and equipment, net		538			—			—			—			107			11,711			—			12,356
Intangible assets subject to amortization, net		—			—			—			—			—			3,843			—			3,843
Intangible assets not subject to amortization		—			—			—			—			641			36,691			—			37,332
Goodwill		1,795			—			—			—			2,795			34,799			—			39,389
Other assets		109			—			653			—			22			2,463			—			3,247
Noncurrent assets of discontinued operations		—			—			—			—			—			3,433			—			3,433
Total assets	$	87,570		$	3,795		$	86,464		$	72,856		$	21,732		$	110,543		$	(259,507	)	$	123,453
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	8		$	—		$	—		$	—		$	2		$	1,273		$	—		$	1,283
Participations payable		—			—			—			—			—			2,452			—			2,452
Royalties and programming costs payable		—			—			—			—			2			928			—			930
Deferred revenue		—			—			—			—			—			1,643			—			1,643
Debt due within one year		1,000			—			—			502			2			168			—			1,672
Other current liabilities		909			—			17			184			129			5,138			(9	)		6,368
Current liabilities of discontinued operations		—			—			—			—			—			325			—			325
Total current liabilities		1,917			—			17			686			135			11,927			(9	)		14,673
Long-term debt		8,967			—			1,484			4,752			320			5,180			—			20,703
Debt due (from) to affiliates		(1,056	)		—			—			—			1,647			1,056			(1,647	)		—
Deferred income taxes		12,901			(175	)		15,166			13,397			1,848			14,136			(45,482	)		11,791
Deferred revenue		—			—			—			—			—			749			—			749
Mandatorily convertible preferred stock		1,500			—			—			—			—			—			—			1,500
Other liabilities		319			—			689			—			13			3,363			—			4,384
Noncurrent liabilities of discontinued operations		—			—			20			—			—			872			—			892
Minority interests		(276	)		—			—			—			—			7,206			(1,467	)		5,463
Shareholders’ equity
Due to (from) Time Warner and subsidiaries		—			(808	)		(1,544	)		(4,700	)		(3,963	)		(20,844	)		31,859			—
Other shareholders’ equity		63,298			4,778			70,632			58,721			21,732			86,898			(242,761	)		63,298
Total shareholders’ equity		63,298			3,970			69,088			54,021			17,769			66,054			(210,902	)		63,298
Total liabilities and shareholders’ equity	$	87,570		$	3,795		$	86,464		$	72,856		$	21,732		$	110,543		$	(259,507	)	$	123,453

8

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Cash Flows
For The Nine Months Ended September 30, 2006

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
OPERATIONS
Net income	$	4,799		$	598		$	4,542		$	3,685		$	1,110		$	5,731		$	(15,666	)	$	4,799
Adjustments for noncash and nonoperating items:
Cumulative effect of accounting change, net of tax		(25	)		—			(2	)		(2	)		—			(2	)		6			(25	)
Depreciation and amortization		34			—			—			—			40			2,454			—			2,528
Amortization of film costs		—			—			—			—			—			2,301			—			2,301
Asset impairments		—			—			—			—			—			200			—			200
Gain on investments and other assets, net		(5	)		(30	)		—			(57	)		(3	)		(952	)		—			(1,047	)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries		(5,539	)		(948	)		(4,681	)		(4,198	)		(1,063	)		—			16,429			—
Equity in (income) losses of investee companies, net of cash distributions		—			—			—			—			—			(34	)		—			(34	)
Equity-based compensation		39			—			—			—			18			155			—			212
Change in due to/due from parent		—			885			—			—			—			3,440			(4,325	)		—
Amounts related to securities litigation and government investigations		(177	)		—			—			—			—			—			—			(177	)
Changes in operating assets and liabilities, net of acquisitions		5,089			201			4,144			3,189			1,312			(3,725	)		(11,142	)		(932	)
Adjustments relating to discontinued operations		—			—			—			—			—			(1,255	)		—			(1,255	)
Cash provided (used) by operations		4,215			706			4,003			2,617			1,414			8,313			(14,698	)		6,570
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired		(8	)		(1	)		(13	)		—			(53	)		(12,107	)		—			(12,182	)
Investment in Wireless Spectrum Joint Venture		—			—			—			—			—			(182	)		—			(182	)
Advances to parents and consolidated subsidiaries		—			—			—			—			—			—			—			—
Capital expenditures and product development costs		(25	)		—			—			—			(98	)		(2,554	)		—			(2,677	)
Capital expenditures from discontinued operations		—			—			—			—			—			(56	)		—			(56	)
Investment proceeds from available-for-sale securities		1			38			—			—			—			3			—			42
Other investment proceeds		11			—			20			57			396			2,590			—			3,074
Change in investment segment		(1,073	)		—			—			—			—			—			1,073			—
Cash provided (used) by investing activities		(1,094	)		37			7			57			245			(12,306	)		1,073			(11,981	)
FINANCING ACTIVITIES
Borrowings		4,843			—			—			—			—			10,737			—			15,580
Debt repayments		(1,500	)		—			—			(546	)		—			(505	)		—			(2,551	)
Change due to/from parent		830			(743	)		(4,009	)		(2,183	)		(1,683	)		(5,837	)		13,625			—
Proceeds from exercise of stock options		378			—			—			—			—			—			—			378
Excess tax benefit on stock options		61			—			—			—			—			—			—			61
Principal payments on capital leases		—			—			—			—			(2	)		(62	)		—			(64	)
Repurchases of common stock		(10,659	)		—			—			—			—			—			—			(10,659	)
Issuance mandatorily redeemable preferred membership units by subsidiary		—			—			—			—			—			300			—			300
Dividends paid		(658	)		—			—			—			—			—			—			(658	)
Other		—			—			—			—			—			(18	)		—			(18	)
Cash provided (used) by financing activities		(6,705	)		(743	)		(4,009	)		(2,729	)		(1,685	)		4,615			13,625			2,369
INCREASE (DECREASE) IN CASH AND EQUIVALENTS		(3,584	)		—			1			(55	)		(26	)		622			—			(3,042	)
					aa
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		3,798			—			—			59			36			327			—			4,220
CASH AND EQUIVALENTS AT END OF PERIOD	$	214		$	—		$	1		$	4		$	10		$	949		$	—		$	1,178
					~~~ ~

9

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Cash Flows
For The Nine Months Ended September 30, 2005

																	Non-						Time
		Time			TW AOL			Historic			TW						Guarantor						Warner
		Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
	(millions)
OPERATIONS
Net income		$	1,367		$	1,174		$	2,539		$	1,967		$	744		$	3,536		$	(9,960	)	$	1,367
Adjustments for noncash and nonoperating items:
Depreciation and amortization			32			—			—			—			27			2,273			—			2,332
Amortization of film costs			—			—			—			—			—			2,395			—			2,395
Asset impairments			—			—			—			—			—			24			—			24
Loss (gain) on sale of investments and other assets, net			—			(941	)		(53	)		—			13			(100	)		—			(1,081	)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries			(5,295	)		(885	)		(3,525	)		(3,136	)		(879	)		—			13,720			—
Equity in (income) losses of investee companies, net of cash distributions			—			—			—			—			2			(26	)		—			(24	)
Equity-based compensation			30			—			—			—			30			226			—			286
Amounts related to securities litigation and government investigations			2,700			—			—			—			—			—			—			2,700
Changes in operating assets and liabilities, net of acquisitions			4,567			(994	)		2,791			2,162			1,026			(185	)		(11,944	)		(2,577	)
Adjustments relating to discontinued operations			—			—			—			—			—			95			—			95
Cash provided (used) by operations			3,401			(1,646	)		1,752			993			963			8,238			(8,184	)		5,517
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired			—			(1	)		(20	)		—			(65	)		(405	)		—			(491	)
Advances to parents and consolidated subsidiaries			(65	)		—			—			(4	)		—			—			69			—
Capital expenditures and product development costs			(21	)		—			—			—			(72	)		(2,058	)		—			(2,151	)
Capital expenditures from discontinued operations			—			—			—			—			—			(108	)		—			(108	)
Investment proceeds from available-for-sale securities			—			965			—			—			—			26			—			991
Other investment proceeds			—			14			138			—			—			262			—			414
Cash provided (used) by investing activities			(86	)		978			118			(4	)		(137	)		(2,283	)		69			(1,345	)
FINANCING ACTIVITIES
Borrowings			—			—			—			—			—			7			—			7
Debt repayments			(1,000	)		—			—			(500	)		—			(408	)		—			(1,908	)
Change due to/from parent			(66	)		668			(1,872	)		(512	)		(790	)		(5,794	)		8,366			—
Redemption of redeemable preferred securities of subsidiaries			—			—			—			—			—			251			(251	)		—
Proceeds from exercise of stock options			275			—			—			—			—			—			—			275
Excess tax benefit on stock options			80			—			—			—			—			—			—			80
Principal payments on capital leases			—			—			—			—			(2	)		(92	)		—			(94	)
Repurchases of common stock			(485	)		—			—			—			—			—			—			(485	)
Dividends paid			(235	)		—			—			—			—			—			—			(235	)
Other			8			—			—			—			—			—			—			8
Cash provided (used) by financing activities			(1,423	)		668			(1,872	)		(1,012	)		(792	)		(6,036	)		8,115			(2,352	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS			1,892			—			(2	)		(23	)		34			(81	)		—			1,820
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD			5,568			—			(1	)		84			(15	)		503			—			6,139
CASH AND EQUIVALENTS AT END OF PERIOD		$	7,460		$	—		$	(3	)	$	61		$	19		$	422		$	—		$	7,959

10

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Cash Flows
For The Year Ended December 31, 2005

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
OPERATIONS
Net income	$	2,671		$	1,311		$	3,700		$	2,979		$	945		$	4,983		$	(13,918	)	$	2,671
Adjustments for noncash and nonoperating items:
Depreciation and amortization		43			—			—			—			40			3,045			—			3,128
Amortization of film costs		—			—			—			—			—			3,505			—			3,505
Asset impairments		—			—			—			—			—			24			—			24
Loss (gain)  on sale of investments and other assets, net		—			(935	)		(53	)		—			17			(115	)		—			(1,086	)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries		(6,951	)		(1,024	)		(5,079	)		(4,620	)		(1,106	)		—			18,780			—
Equity in (income) losses of investee companies, net of cash distributions		—			—			—			—			3			(18	)		—			(15	)
Equity-based compensation		44			—			—			—			36			276			—			356
Amounts related to securities litigation and government investigations		111			—			—			—			—			—			—			111
Changes in operating assets and liabilities, net of acquisitions		5,756			(994	)		3,159			3,552			1,225			(1,280	)		(15,402	)		(3,984	)
Adjustments relating to discontinued operations		—			—			—			—			—			167			—			167
Cash provided (used) by operations		1,674			(1,642	)		1,727			1,911			1,160			10,587			(10,540	)		4,877
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired		—			(2	)		(22	)		—			(74	)		(533	)		—			(631	)
Investments and acquisitions of discontinued operations		—			—			—			—			—			(49	)		—			(49	)
Advances to parents and consolidated subsidiaries		(114	)		—			915			(3	)		—			—			(798	)		—
Capital expenditures and product development costs		(23	)		—			—			—			(121	)		(2,958	)		—			(3,102	)
Capital expenditures from discontinued operations		—			—			—			—			—			(144	)		—			(144	)
Investment proceeds from available-for-sale securities		—			965			—			—			—			26			—			991
Other investment proceeds		—			14			138			—			—			287			—			439
Cash provided (used) by investing activities		(137	)		977			1,031			(3	)		(195	)		(3,371	)		(798	)		(2,496	)
FINANCING ACTIVITIES
Borrowings		—			—			—			—			—			6			—			6
Debt repayments		(1,000	)		—			—			(500	)		—			(450	)		—			(1,950	)
Debt repayments from discontinued operations		—			—			—			—			—			(45	)		—			(45	)
Change due to/from parent		(114	)		665			(2,757	)		(1,433	)		(912	)		(6,787	)		11,338			—
Proceeds from exercise of stock options		307			—			—			—			—			—			—			307
Excess tax benefit on stock options		88			—			—			—			—			—			—			88
Principal payments on capital leases		—			—			—			—			(2	)		(116	)		—			(118	)
Repurchases of common stock		(2,141	)		—			—			—			—			—			—			(2,141	)
Dividends paid		(466	)		—			—			—			—			—			—			(466	)
Other		19			—			—			—			—			—			—			19
Cash provided (used) by financing activities		(3,307	)		665			(2,757	)		(1,933	)		(914	)		(7,392	)		11,338			(4,300	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS		(1,770	)		—			1			(25	)		51			(176	)		—			(1,919	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		5,568			—			(1	)		84			(15	)		503			—			6,139
CASH AND EQUIVALENTS AT END OF PERIOD	$	3,798		$	—		$	—		$	59		$	36		$	327		$	—		$	4,220

11

TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS — (Continued)

Consolidating Statement of Cash Flows
For The Year Ended December 31, 2004

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
OPERATIONS
Net income	$	3,108		$	715		$	3,168		$	2,407		$	1,011		$	4,217		$	(11,518	)	$	3,108
Adjustments for noncash and nonoperating items:
Cumulative effect of accounting change, net of tax		(34	)		(34	)		—			—			—			(34	)		68			(34	)
Depreciation and amortization		42			—			—			—			25			3,004			—			3,071
Amortization of film costs		—			—			—			—			—			3,610			—			3,610
Asset impairments		—			—			—			—			—			10			—			10
Loss (gain)  on investments and other assets, net		—			(245	)		—			—			(120	)		(67	)		—			(432	)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries		(5,539	)		(695	)		(4,709	)		(3,992	)		(1,261	)		—			16,196			—
Equity in (income) losses of investee companies and cash distributions		—			—			—			—			(7	)		26			—			19
Equity-based compensation		110			—			—			—			48			416			—			574
Amounts related to securities litigation and government investigations		—			—			—			—			—			300			—			300
Changes in operating assets and liabilities, net of acquisitions		6,376			(607	)		7,631			6,841			2,118			648			(26,846	)		(3,839	)
Adjustments relating to discontinued operations		—			—			—			—			—			167			—			167
Cash provided (used) by operations		4,063			(866	)		6,090			5,256			1,814			12,297			(22,100	)		6,554
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired		—			(28	)		—			—			2			(847	)		—			(873	)
Investments and acquisitions from discontinued operations		—			—			—			—			—			(4	)		—			(4	)
Advances to parents and consolidated subsidiaries		(1,053	)		—			(357	)		—			(42	)		—			1,452			—
Capital expenditures and product development costs		(165	)		—			—			—			(119	)		(2,584	)		—			(2,868	)
Capital expenditures from discontinued operations		—			—			—			—			—			(156	)		—			(156	)
Investment proceeds from available-for-sale securities		—			366			—			—			—			166			—			532
Other investment proceeds		—			223			—			—			146			2,497			—			2,866
Cash provided (used) by investing activities		(1,218	)		561			(357	)		—			(13	)		(928	)		1,452			(503	)
FINANCING ACTIVITIES
Borrowings		—			—			—			—			—			1,320			—			1,320
Debt repayments		—			—			—			(302	)		(450	)		(3,771	)		—			(4,523	)
Change due to/from parent		74			305			(5,733	)		(4,959	)		(1,418	)		(8,917	)		20,648			—
Proceeds from exercise of stock options		353			—			—			—			—			—			—			353
Excess tax benefit on stock options		63			—			—			—			—						—			63
Principal payments on capital leases		—			—			—			—			—			(190	)		—			(190	)
Other		25			—			—			—			—			—			—			25
Cash provided (used) by financing activities		515			305			(5,733	)		(5,261	)		(1,868	)		(11,558	)		20,648			(2,952	)
INCREASE (DECREASE) IN  CASH AND EQUIVALENTS		3,360			—			—			(5	)		(67	)		(189	)		—			3,099
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		2,208			—			(1	)		89			52			692			—			3,040
CASH AND EQUIVALENTS AT END OF PERIOD	$	5,568		$	—		$	(1	)	$	84		$	(15	)	$	503		$	—		$	6,139

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TIME WARNER INC.
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Statement of Cash Flows
For The Year Ended December 31, 2003

																Non-						Time
	Time			TW AOL			Historic			TW						Guarantor						Warner
	Warner			Holdings			TW			Companies			TBS			Subsidiaries			Eliminations			Consolidated
										(millions)
OPERATIONS
Net income	$	2,166		$	1,057		$	1,684		$	1,381		$	508		$	3,038		$	(7,668	)	$	2,166
Adjustments for noncash and nonoperating items:
Cumulative effect of accounting change, net of tax		12			—			12			7			5			12			(36	)		12
Depreciation and amortization		25			—			1			—			26			2,949			—			3,001
Amortization of film costs		—			—			—			—			—			2,959			—			2,959
Asset impairments		—			—			—			—			—			219			—			219
Loss (gain) on investments and other assets, net		12			(186	)		—			—			—			(413	)		—			(587	)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries		(4,665	)		(882	)		(3,752	)		(3,578	)		(583	)		—			13,460			—
Equity in losses of investee companies and cash distributions		—			7			—			—			1			144			—			152
Equity-based compensation		216			—			—			—			66			653			—			935
Changes in operating assets and liabilities, net of acquisitions		7,711			(1,173	)		6,615			4,218			547			2,089			(23,483	)		(3,476	)
Adjustments relating to discontinued operations		—			—			—			—			—			1,129			—			1,129
Cash provided (used) by operations		5,477			(1,177	)		4,560			2,028			570			12,779			(17,727	)		6,510
INVESTING ACTIVITIES
Investments and acquisitions, net of cash acquired		—			(4	)		—			—			(103	)		(463	)		—			(570	)
Investment and acquisitions from discontinued operations		—			—			—			—			—			(52	)		—			(52	)
Advances to parents and consolidated subsidiaries		(99	)		—			(12	)		(104	)		—			(480	)		695			—
Capital expenditures and product development costs		—			—			—			—			(116	)		(2,528	)		—			(2,644	)
Capital expenditures from discontinued operations		—			—			—			—			—			(243	)		—			(243	)
Investment proceeds from available-for-sale securities		—			1,065			—			—			1			(5	)		—			1,061
Investment proceeds from discontinued operations		—			—			—			—			—			1,074			—			1,074
Other investment proceeds		—			3			—			—			—			1,448			—			1,451
Cash provided (used) by investing activities		(99	)		1,064			(12	)		(104	)		(218	)		(1,249	)		695			77
FINANCING ACTIVITIES
Borrowings		1,163			—			—			—			—			1,208			—			2,371
Debt repayments		(4,314	)		—			—			(370	)		—			(4,509	)		2,084			(7,109	)
Change due to/from parent		—			113			(4,549	)		(3,657	)		(329	)		(8,609	)		17,031			—
Redemption of redeemable preferred securities of subsidiary		(813	)		—			—			—			—			—			—			(813	)
Proceeds from exercise of stock options		372			—			—			—			—			—			—			372
Excess tax benefit on stock options		84			—			—			—			—			—			—			84
Principal payments on capital leases		—			—			—			—			—			(171	)		—			(171	)
Other		(11	)		—			—			—			—			—			—			(11	)
Cash provided (used) by financing activities		(3,519	)		113			(4,549	)		(4,027	)		(329	)		(12,081	)		19,115			(5,277	)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS		1,859			—			(1	)		(2,103	)		23			(551	)		2,083			1,310
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		349			—			—			2,192			29			1,243			(2,083	)		1,730
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,208		$	—		$	(1	)	$	89		$	52		$	692		$	—		$	3,040

13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
Time Warner Inc.

We have previously audited the consolidated balance sheets of Time Warner Inc. (“Time Warner”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2005 (the “Time Warner Financial Statements”) included in Time Warner’s Current Report on Form 8-K dated November 3, 2006 and filed with the Securities and Exchange Commission on November 3, 2006 (the “Form 8-K”). Our audits also included the Financial Statement Schedule II included in the Form 8-K listed in the index at Item 15(a) and the condensed consolidating financial statements of Time Warner as of December 31, 2005 and 2004 and for each of the three years in the period ended December 31, 2005 (the “Time Warner Parent Financial Statements”). The Time Warner Financial Statements and Schedule are not included herein. The Time Warner Financial Statements, schedule and the Time Warner Parent Financial Statements are the responsibility of Time Warner’s management. Our responsibility is to express an opinion on the Time Warner Financial Statements, schedule and Time Warner Parent Financial Statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the Time Warner Financial Statements referred to above present fairly, in all material respects, the consolidated financial position of Time Warner at December 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion the related financial statement schedule and Time Warner Parent Financial Statements, when considered in relation to the Time Warner Financial Statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 1 to the Time Warner Financial Statements, as of January 1, 2006 Time Warner adopted Financial Accounting Standards Board Statement No. FAS 123R,Share Based Payment, and changed its method of accounting for certain programming inventory, both using a retrospective application method. Additionally in 2004 and 2003, Time Warner changed its method of accounting for certain variable interest entities.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Time Warner’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2006 expressed an unqualified opinion thereon.

New York, New York
November 2, 2006

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