SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 19, 2000
TIME WARNER INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-12259 13-3527249
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
75 Rockefeller Plaza, New York, NY 10019
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(Address of principal executive offices) (zip code)
(212) 484-8000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
Time Warner classifies its business interests into six fundamental
areas: Cable Networks, consisting principally of interests in cable television
programming; Publishing, consisting principally of interests in magazine
publishing, book publishing and direct marketing; Music, consisting principally
of interests in recorded music and music publishing; Filmed Entertainment,
consisting principally of interests in filmed entertainment, television
production and television broadcasting; Cable, consisting principally of
interests in cable television systems; and Digital Media, consisting principally
of interests in Internet-related and digital media businesses.
In the first quarter of 2000, Time Warner reclassified its share of the
operating results of the Columbia House Company Partnerships ("Columbia House"),
a 50%-owned equity investee, from Time Warner's Music division to interest and
other, net. This reclassification was made to reflect a change in how management
classifies Time Warner's share of the operating results of Columbia House. This
reclassification resulted primarily from the planned restructuring of Columbia
House's traditional direct-marketing business and an increasing dependency on
the sale of video product.
As a result of this change, Time Warner's Music business segment no
longer includes Time Warner's share of the operating results of Columbia House.
Accordingly, the Music division's EBITA (as defined below), operating income and
amortization of intangible assets have been restated in order to conform to the
new presentation. There were no changes to previously reported revenues and
depreciation expense.
Years Ended December 31,
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1999 1998 1997
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(millions)
EBITA(a)
Cable Networks............................... $1,397 $1,160 $ 964
Publishing................................... 679 607 529
Music........................................ 449 464 418
Filmed Entertainment(b)...................... 997 695 604
Broadcasting-The WB Network.................. (92) (93) (88)
Cable(c)..................................... 3,927 1,694 1,611
Digital Media................................ (17) - -
Intersegment elimination..................... (10) (94) (54)
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Total business segment EBITA................. $7,330 $4,433 $3,984
Entertainment Group EBITA reported on
an unconsolidated basis(d)................ - (2,166) (1,850)
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Total consolidated EBITA..................... $7,330 $2,267 $2,134
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(a) EBITA represents business segment operating income before noncash
amortization of intangible assets.
(b) 1999 results include a net pretax gain of $215 million recognized in
connection with the early termination and settlement of a long-term, home
video distribution agreement and a pretax gain of $97 million relating to
the sale of an interest in CanalSatellite, offset in part by a one-time,
noncash pretax charge of $106 million relating to Warner Bros.'s retail
stores.
(c) Includes net pretax gains relating to the sale or exchange of certain cable
television systems and investments of approximately $2.247 billion in 1999,
$108 million in 1998 and $212 million in 1997.
(d) Represents amounts previously reported for the Entertainment Group,
adjusted by intercompany eliminations and other consolidating adjustments
necessary for Time Warner to reflect the Entertainment Group on a
consolidated basis.
Years Ended December 31,
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1999 1998 1997
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(millions)
Operating Income
Cable Networks................................ $1,192 $960 $ 765
Publishing.................................... 627 569 481
Music......................................... 195 203 136
Filmed Entertainment(a)....................... 796 479 389
Broadcasting-The WB Network................... (96) (96) (88)
Cable(b)...................................... 3,364 1,101 1,011
Digital Media................................. (17) - -
Intersegment elimination...................... (10) (94) (54)
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Total business segment operating income....... $6,051 $3,122 $2,640
Entertainment Group operating income
reported on an unconsolidated basis (c).... - (1,636) (1,399)
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Total consolidated operating income........... $6,051 $1,486 $1,241
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(a) 1999 results include a net pretax gain of $215 million recognized in
connection with the early termination and settlement of a long-term, home
video distribution agreement and a pretax gain of $97 million relating to
the sale of an interest in CanalSatellite, offset in part by a one-time,
noncash pretax charge of $106 million relating to Warner Bros.'s retail
stores.
(b) Includes net pretax gains relating to the sale or exchange of certain cable
television systems and investments of approximately $2.247 billion in 1999,
$108 million in 1998 and $212 million in 1997.
(c) Represents amounts previously reported for the Entertainment Group,
adjusted by intercompany eliminations and other consolidating adjustments
necessary for Time Warner to reflect the Entertainment Group on a
consolidated basis.
Years Ended December 31,
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1999 1998 1997
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(millions)
Amortization of Intangible Assets(a)
Cable Networks................................. $ 205 $ 200 $ 199
Publishing..................................... 52 38 48
Music.......................................... 254 261 282
Filmed Entertainment........................... 201 216 215
Broadcasting-The WB Network.................... 4 3 -
Cable.......................................... 563 593 600
Digital Media.................................. - - -
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Total business segment amortization............ $1,279 $1,311 $1,344
Entertainment Group amortization reported
on an unconsolidated basis (b)............. - (530) (451)
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Total consolidated amortization................ $1,279 $ 781 $ 893
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(a) Includes amortization relating to all business combinations accounted for
by the purchase method, including the $14 billion acquisition of Warner
Communications Inc. in 1989, the $6.2 billion acquisition of TBS in 1996
and the $2.3 billion of cable acquisitions in 1996 and 1995.
(b) Represents amounts previously reported for the Entertainment Group,
adjusted by intercompany eliminations and other consolidating adjustments
necessary for Time Warner to reflect the Entertainment Group on a
consolidated basis.
December 31,
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1999 1998 1997
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(millions)
Assets
Cable Networks................................. $ 9,940 $ 9,499 $ 9,441
Publishing..................................... 2,870 2,726 2,490
Music.......................................... 7,204 7,038 6,449
Filmed Entertainment........................... 10,393 10,841 10,658
Broadcasting-The WB Network.................... 284 244 113
Cable.......................................... 18,380 16,094 17,766
Digital Media.................................. 28 - -
Corporate(a)................................... 2,140 1,509 1,682
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Total business segment assets.................. $51,239 $47,951 $48,599
Entertainment Group assets reported
on an unconsolidated basis(b).............. - (16,311) (14,436)
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Total consolidated assets...................... $51,239 $31,640 $34,163
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(a) Consists principally of cash, cash equivalents and other investments.
(b) Represents amounts previously reported for the Entertainment Group,
adjusted by intercompany eliminations and other consolidating adjustments
necessary for Time Warner to reflect the Entertainment Group on a
consolidated basis.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 21, 2000.
TIME WARNER INC.
By: /s/ James W. Barge
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Name: James W. Barge
Title: Vice President and Controller