Time Warner Reaffirms 2005 Full-Year Business Outlook

The Company continues to expect that its 2005 full-year growthrate in Adjusted Operating Income before Depreciation and Amortizationwill be in the high-single digits, as compared to $9.9 billion in2004. This expectation reflects anticipated revenue gains and marginexpansion.

In addition, Time Warner reaffirmed its expectation that it willconvert between 30% to 40% of its 2005 Adjusted Operating Incomebefore Depreciation and Amortization into Free Cash Flow.

The outlook above does not include the impact of any future mergerand restructuring charges that have not been identified and sales andacquisitions of operating assets that may occur from time to time dueto management decisions and changing business circumstances, as wellas the impact of any future reserves or payments made in connectionwith the pending securities litigation. The Company is currentlyunable to forecast precisely the timing and magnitude of any suchevents.

Information on the Bewkes Presentation

Mr. Bewkes's presentation is expected to begin at approximately3:00 pm ET. An audio Webcast of the presentation will be availableonline at http://www.timewarner.com/investors.

To listen to the live Webcast, please go to the Web site 15minutes prior to the start of the presentation to register, downloadand install any necessary software. Also, an archive of the Webcastwill be posted on http://www.timewarner.com/investors.

Use of Operating Income before Depreciation and Amortization,Adjusted Operating Income before Depreciation and Amortization andFree Cash Flow

The Company utilizes Operating Income before Depreciation andAmortization, among other measures, to evaluate the performance of itsbusinesses. The Company also evaluates the performance of itsbusinesses using Operating Income before Depreciation and Amortizationexcluding the impact of noncash impairments of goodwill, intangibleand fixed assets, as well as gains and losses on asset sales, legalreserves related to the government investigations and legal reservesrelated to securities litigation (referred to herein as AdjustedOperating Income before Depreciation and Amortization). Both OperatingIncome before Depreciation and Amortization and Adjusted OperatingIncome before Depreciation and Amortization are considered importantindicators of the operational strength of the Company's businesses.Operating Income before Depreciation and Amortization eliminates theuneven effect across all business segments of considerable amounts ofnoncash depreciation of tangible assets and amortization of certainintangible assets that were recognized in business combinations. Alimitation of this measure, however, is that it does not reflect theperiodic costs of certain capitalized tangible and intangible assetsused in generating revenues in the Company's businesses. Moreover,Adjusted Operating Income before Depreciation and Amortization doesnot reflect the diminution in value of goodwill and intangible assetsor gains and losses on asset sales. Management evaluates the costs ofsuch tangible and intangible assets, the impact of relatedimpairments, as well as asset sales through other financial measures,such as capital expenditures, investment spending and return oncapital.

Free Cash Flow is Cash Provided by Operations (as defined by U.S.generally accepted accounting principles) plus payments related tosecurities litigation, less cash provided by discontinued operations,capital expenditures and product development costs, principal paymentson capital leases, and partnership distributions, if any. Free CashFlow is considered to be an important indicator of the Company'sliquidity, including its ability to reduce net debt, make strategicinvestments, pay dividends to common shareholders and repurchasestock. A limitation of this measure, however, is that it does notreflect securities litigation payments, which reduce liquidity. FreeCash Flow includes the impact of the settlement with the Department ofJustice ($210 million in 2004) and the settlement with the Securitiesand Exchange Commission ($300 million in 2005).

Operating Income before Depreciation and Amortization, AdjustedOperating Income before Depreciation and Amortization and Free CashFlow should be considered in addition to, not as a substitute for, theCompany's Operating Income, Net Income and various cash flow measures(e.g., Cash Provided by Operations), as well as other measures offinancial performance and liquidity reported in accordance with U.S.generally accepted accounting principles.

About Time Warner Inc.

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

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements withinthe meaning of the Private Securities Litigation Reform Act of 1995.These statements are based on management's current expectations orbeliefs, and are subject to uncertainty and changes in circumstances.Actual results may vary materially from those expressed or implied bythe statements herein due to changes in economic, business,competitive, technological and/or regulatory factors, sales ofbusiness assets, and the potential impact of future decisions bymanagement that may result in merger and restructuring charges, aswell as the potential impact of any future impairment charges togoodwill or other intangible assets. More detailed information aboutthese factors may be found in filings by Time Warner Inc. with theSecurities and Exchange Commission, including its most recent AnnualReport on Form 10-K and Quarterly Report on Form 10-Q. Time Warner isunder no obligation to, and expressly disclaims any such obligationto, update or alter its forward-looking statements, whether as aresult of new information, future events, or otherwise.

TIME WARNER INC.
RECONCILIATION OF GUIDANCE
($ in millions)
(Unaudited)


Year Ended
December 31, Reconciliation of 2005
2004 Guidance
------------ --------------------------


Reconciliation of Adjusted
Operating Income before
Depreciation and Amortization
to Operating Income: (1)

Time Warner Inc.
------------------------------
Adjusted Operating Income $ 9,871 High single digit growth
before Depreciation and
Amortization

Depreciation and Amortization (3,207) Low to high single digit
growth

Impairment of goodwill, (10) No further impairment
intangible and fixed assets expected (2)

Gains and losses from asset 21 No further gains/losses
sales expected (3)

Legal reserves related to the (510) No further reserves
government investigations (4) related to government
investigations
expected (4)

Legal reserves related to - Unable to estimate
securities litigation (5) further reserves for
----------- pending securities
litigation (5)

Operating Income $ 6,165 Decrease in absolute
=========== Dollar amount

Free Cash Flow (6) $ 3,280 Free Cash Flow conversion
between 30% to 40% of
Adjusted Operating Income
before Depreciation and
Amortization

Capital expenditures and 3,215 Increase in absolute
product development costs dollar amount
plus principal payments on
capital leases (all from
continuing operations)

Payments related to securities - Increase in absolute
litigation dollar amount
-----------

Cash provided by continuing 6,495 Cash provided by
operations continuing operations
exceeding 85% of
Operating Income

Cash provided by discontinued 123 Decrease in absolute
operations dollar amount
-----------

Cash Provided by Operations $ 6,618 Cash Provided by
Operations exceeding 85%
of Operating Income
===========


Notes:
------------------------------

(1) Adjusted Operating Income before Depreciation and Amortization
excludes the impact of noncash impairments of goodwill, intangible and
fixed assets, as well as gains and losses on asset sales, legal
reserves related to the government investigations, and legal reserves
related to securities litigation.
(2) Year-to-date June 30, 2005, the Company has recognized $24
million in noncash impairments of goodwill.
(3) Year-to-date June 30, 2005, the Company has recognized $18
million in gains from asset sales.
(4) In 2004, the Company established $510 million of legal
reserves related to the government investigations.
(5) Year-to-date June 30, 2005, the Company has established $3
billion of legal reserves related to securities litigation.
(6) Free Cash Flow is defined as Cash Provided by Operations (as
defined by U.S. generally accepted accounting principles) plus
payments related to securities litigation, less cash provided by
discontinued operations, capital expenditures and product development
costs, principal payments on capital leases and partnership
distributions, if any. Free Cash Flow includes the impact of
settlements with the Department of Justice ($210 million in 2004) and
the Securities and Exchange Commission ($300 million in 2005).