10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended March 31, 2012 or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from                                                                            to                                                                           

Commission file number 001-15062

TIME WARNER INC.

(Exact name of Registrant as specified in its charter)

Delaware	13-4099534
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Time Warner Center

New York, NY 10019-8016

(Address of Principal Executive Offices) (Zip Code)

(212) 484-8000

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨    No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Description of Class	Shares Outstanding as of April 24, 2012
Common Stock – $.01 par value		959,915,926

TIME WARNER INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND OTHER FINANCIAL INFORMATION

	Page
PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Results of Operations and Financial Condition	1
Item 4. Controls and Procedures	16
Consolidated Balance Sheet at March 31, 2012 and December 31, 2011	17
Consolidated Statement of Operations for the Three Months Ended March 31, 2012 and 2011	18
Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2012 and 2011	19
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2012 and 2011	20
Consolidated Statement of Equity for the Three Months Ended March 31, 2012 and 2011	21
Notes to Consolidated Financial Statements	22
Supplementary Information	36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 6. Exhibits	44

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

INTRODUCTION

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying consolidated financial statements and provides additional information on Time Warner Inc.’s (“Time Warner” or the “Company”) businesses, current developments, financial condition, cash flows and results of operations. MD&A is organized as follows:

• Overview.    This section provides a general description of Time Warner’s business segments, as well as recent developments the Company believes are important in understanding the results of operations and financial condition or in understanding anticipated future trends.

• Results of operations.  This section provides an analysis of the Company’s results of operations for the three months ended March 31, 2012. This analysis is presented on both a consolidated and a business segment basis. In addition, a brief description of transactions and other items that affect the comparability of the results being analyzed is included.

• Financial condition and liquidity.  This section provides an analysis of the Company’s financial condition as of March 31, 2012 and cash flows for the three months ended March 31, 2012.

• Caution concerning forward-looking statements.  This section provides a description of the use of forward-looking information appearing in this report, including in MD&A and the consolidated financial statements.

1

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

OVERVIEW

Time Warner is a leading media and entertainment company whose major businesses encompass an array of the most respected and successful media brands. Among the Company’s brands are TNT, TBS, CNN, HBO, Cinemax, Warner Bros., New Line Cinema, People, Sports Illustrated and Time. During the three months ended March 31, 2012, the Company generated Revenues of $6.979 billion (up 4% from $6.683 billion in 2011), Operating Income of $1.247 billion (down 2% from $1.270 billion in 2011), Net Income attributable to Time Warner shareholders of $583 million (down 11% from $653 million in 2011) and Cash Provided by Operations of $416 million (down 50% from $825 million in 2011).

Time Warner Businesses

Time Warner classifies its operations into three reportable segments: Networks, Film and TV Entertainment and Publishing. For additional information regarding Time Warner’s segments, refer to Note 11, “Segment Information,” in the accompanying consolidated financial statements. Effective for the first quarter of 2012, the Company changed the name of its Filmed Entertainment reportable segment to Film and TV Entertainment. This change did not affect the composition of the segment; accordingly, all prior period financial information related to this reportable segment was unaffected.

Networks.  Time Warner’s Networks segment consists of Turner Broadcasting System, Inc. (“Turner”) and Home Box Office, Inc. (“Home Box Office”). During the three months ended March 31, 2012, the Networks segment generated Revenues of $3.602 billion (51% of the Company’s total Revenues) and $1.143 billion in Operating Income.

Turner operates domestic and international networks, including such recognized brands as TNT, TBS, truTV, CNN and Cartoon Network, which are among the leaders in advertising-supported television networks. The Turner networks generate revenues principally from providing programming to affiliates that have contracted to receive and distribute this programming and from the sale of advertising. Turner also operates various websites, including CNN.com, NCAA.com, NASCAR.com and CartoonNetwork.com, that generate revenues principally from the sale of advertising. Turner also provides online and mobile offerings for on demand viewing of programs on its networks and live streaming of its CNN and HLN networks to authenticated subscribers. As of March 31, 2012, Turner’s online and mobile offerings were available to approximately 77 million subscribers.

Home Box Office operates the HBO and Cinemax multi-channel premium pay television services, with the HBO service ranking as the most widely distributed domestic multi-channel premium pay television service. Home Box Office generates revenues principally from providing programming to affiliates that have contracted to receive and distribute such programming to their customers who subscribe to the HBO or Cinemax services. As of March 31, 2012, HBO GO and MAX GO, Home Box Office’s authenticated online services were available to essentially all of HBO’s and Cinemax’s respective domestic subscribers. An additional source of revenues for Home Box Office is the sale and licensing of its original programming, including Game of Thrones, Boardwalk Empire and True Blood.

The Company’s Networks segment has been pursuing international expansion in select areas for the past several years, and the Company anticipates that international expansion will continue to be an area of focus at the Networks segment for the foreseeable future.

Film and TV Entertainment.  Time Warner’s Film and TV Entertainment segment consists of businesses managed by the Warner Bros. Entertainment Group (“Warner Bros.”) that principally produce and distribute theatrical motion pictures, television shows and videogames. During the three months ended March 31, 2012, the Film and TV Entertainment segment generated Revenues of $2.784 billion (38% of the Company’s total Revenues) and $214 million in Operating Income.

The Film and TV Entertainment segment’s theatrical product revenues are generated principally through rentals from theatrical exhibition of films, including the following recently released films: Journey 2: The Mysterious Island, Sherlock Holmes: A Game of Shadows, Wrath of the Titans and Project X, and subsequently through licensing fees received for the distribution of films on television networks and pay television programming services. Television product revenues are generated principally from the licensing of programs to television networks and pay television programming services. The segment also generates revenues for both its theatrical and television product through home video distribution on DVD and Blu-ray Discs and in various digital formats (e.g., electronic sell through and video-on-demand). In addition, the segment

2

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

generates revenues through the distribution of videogames.

Warner Bros. continues to be an industry leader in the television content business. For the 2011-2012 broadcast season, Warner Bros. produced more than 30 scripted primetime series, with at least three series for each of the five broadcast networks (including The Big Bang Theory, 2 Broke Girls, Fringe, The Mentalist, The Middle, Mike & Molly, Person of Interest, Suburgatory, Two and a Half Men and Vampire Diaries) and original series for cable television networks (including The Closer, Pretty Little Liars, Rizzoli & Isles and Southland). Internationally, Warner Bros. operates a group of local television production companies in the U.K. and the Netherlands that focus on developing non-scripted programs and formats that can be sold internationally and adapted for sale in the U.S. Warner Bros. has also begun to create locally produced versions of programs owned by the studio and to develop original local television programming.

The distribution of DVDs has been one of the largest drivers of the segment’s revenues and profits over the last several years. However, in recent years, home video revenues have declined as a result of several factors, including consumers shifting to subscription rental services and discount rental kiosks, which generate significantly less revenue per transaction for the Company than DVD sales; the general economic downturn in the U.S. and many regions around the world; increasing competition for consumer discretionary time and spending; piracy; and the maturation of the standard definition DVD format. Reduced consumer spending on DVDs is being partially offset by growing sales of high definition Blu-ray Discs and increased sales through electronic delivery (particularly video-on-demand), which have higher incremental gross margins than standard definition DVDs. The decline in consumer spending on DVDs is also being partially offset by the licensing of theatrical and television content to subscription video-on-demand providers.

Publishing.  Time Warner’s Publishing segment consists principally of Time Inc.’s magazine publishing and related websites, book publishing businesses and marketing services businesses. During the three months ended March 31, 2012, the Publishing segment generated Revenues of $773 million (11% of the Company’s total Revenues) and $4 million in Operating Loss.

As of March 31, 2012, Time Inc. published 21 magazines in the U.S., including People, Sports Illustrated and Time, and over 70 magazines outside the U.S. All 21 of Time Inc.’s U.S. magazines are available as tablet editions. The Publishing segment generates revenues primarily from the sale of advertising, magazine subscriptions and newsstand sales.

Since the fourth quarter of 2010, Turner has managed the SI.com and Golf.com websites, including selling all advertising for the websites, and in exchange Time Inc. has received a license fee from Turner. Beginning in the second quarter of 2012, Time Inc. will assume management of these websites, sell all advertising and no longer receive a license fee from Turner. This change will not impact the Company’s consolidated results of operations.

3

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

RESULTS OF OPERATIONS

Transactions and Other Items Affecting Comparability

As more fully described herein and in the related notes to the accompanying consolidated financial statements, the comparability of Time Warner’s results has been affected by transactions and certain other items in each period as follows (millions):

		88888888888888		88888888888888
	Three Months Ended March 31,
	2012		2011
Asset impairments	$	(52)	$	-
Gain (loss) on operating assets		(42)		3
Other		(10)		(8)
Impact on Operating Income		(104)		(5)
Investment gains (losses), net		(9)		4
Amounts related to the separation of Time Warner Cable Inc.		(1)		4
Pretax impact		(114)		3
Income tax impact of above items		36		3
Impact of items on net income attributable to Time Warner Inc. shareholders	$	(78)	$	6

In addition to the items affecting comparability described above, the Company incurred Restructuring and severance costs of $26 million and $30 million for the three months ended March 31, 2012 and 2011, respectively. For further discussion of Restructuring and severance costs, refer to “Consolidated Results” and “Business Segment Results.”

Asset Impairments

For the three months ended March 31, 2012, the Company recognized $52 million of noncash charges at the Networks segment primarily related to certain receivables, inventories and long-lived assets in connection with Turner’s decision in the first quarter of 2012 to shut down its general entertainment network in India.

Gain (Loss) on Operating Assets

For the three months ended March 31, 2012, the Company recognized a loss on operating assets of $42 million at the Publishing segment in connection with the sale in the first quarter of 2012 of the school fundraising business, QSP (the “QSP Business”).

For the three months ended March 31, 2011, the Company recognized a $3 million gain at the Film and TV Entertainment segment related to contingent consideration for certain prior acquisitions.

Other

Other reflects legal and other professional fees related to the defense of securities litigation matters for former employees totaling $2 million for each of the three months ended March 31, 2012 and 2011. Other also reflects external costs related to mergers, acquisitions or dispositions of $8 million and $6 million for the three months ended March 31, 2012 and 2011, respectively.

Investment Gains (Losses), Net

For the three months ended March 31, 2012 and 2011, the Company recognized $9 million of miscellaneous investment losses and $4 million of miscellaneous investment gains, net, respectively.

4

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Amounts Related to the Separation of Time Warner Cable Inc.

For the three months ended March 31, 2012 and 2011, the Company recognized $1 million of other loss and $4 million of other income, respectively, related to the expiration, exercise and net change in the estimated fair value of Time Warner equity awards held by Time Warner Cable Inc. (“TWC”) employees, which has been reflected in Other loss, net in the accompanying Consolidated Statement of Operations.

Income Tax Impact

The income tax impact reflects the estimated tax provision or tax benefit associated with each item affecting comparability. Such estimated tax provisions or tax benefits vary based on certain factors, including the taxability or deductibility of the items and foreign tax on certain transactions.

Consolidated Results

The following discussion provides an analysis of the Company’s results of operations and should be read in conjunction with the accompanying Consolidated Statement of Operations.

Revenues.  The components of Revenues are as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Subscription	$	2,471	$	2,368	4%
Advertising		1,472		1,431	3%
Content		2,861		2,733	5%
Other		175		151	16%
Total revenues	$	6,979	$	6,683	4%

The increase in Subscription revenues primarily related to an increase at the Networks segment. The increase in Advertising revenues was primarily due to an increase at the Networks segment, partially offset by a decrease at the Publishing segment. The increase in Content revenues was due primarily to an increase at the Film and TV Entertainment segment, partially offset by a decrease at the Networks segment. Each of the revenue categories is discussed in greater detail by segment in “Business Segment Results.”

Costs of Revenues.  For the three months ended March 31, 2012, Costs of revenues increased to $3.976 billion from $3.727 billion for the three months ended March 31, 2011 driven primarily by increases at the Film and TV Entertainment and Networks segments. The segment variations are discussed in “Business Segment Results.”

Selling, General and Administrative Expenses.    For three months ended March 31, 2012, Selling, general and administrative expenses decreased 1% to $1.575 billion from $1.591 billion for the three months ended March 31, 2011, primarily related to a decrease at the Networks segment. The segment variations are discussed in “Business Segment Results.”

Included in Costs of revenues and Selling, general and administrative expenses is depreciation expense of $154 million and $163 million for the three months ended March 31, 2012 and 2011, respectively.

Amortization Expense.    Amortization expense decreased to $61 million for the three months ended March 31, 2012 from $68 million for the three months ended March 31, 2011.

Restructuring and Severance Costs.  For the three months ended March 31, 2012, the Company incurred Restructuring and severance costs of $26 million, primarily related to employee terminations and other exit activities, consisting of $14 million at the Networks segment, $6 million at the Film and TV Entertainment segment and $6 million at the Publishing segment.

5

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

For the three months ended March 31, 2011, the Company incurred Restructuring and severance costs of $30 million, primarily related to employee terminations and other exit activities, consisting of $12 million at the Networks segment, $6 million at the Film and TV Entertainment segment and $12 million at the Publishing segment.

Operating Income.  Operating Income decreased to $1.247 billion for the three months ended March 31, 2012 from $1.270 billion for the three months ended March 31, 2011. Excluding the items noted under “Transactions and Other Items Affecting Comparability” totaling $104 million and $5 million of expense for the three months ended March 31, 2012 and 2011, respectively, Operating Income increased $76 million, reflecting increases at the Film and TV Entertainment and Networks segments. The segment variations are discussed under “Business Segment Results.”

Interest Expense, Net.  For the three months ended March 31, 2012, Interest expense, net, increased to $320 million from $274 million for the three months ended March 31, 2011 due to higher average debt in 2012 reflecting the issuance of $3 billion of debt securities in April and November 2011.

Other Loss, Net.  Other loss, net detail is shown in the table below (millions):

		88888888888		88888888888
	Three Months Ended March 31,
	2012		2011
Investment gains (losses), net	$	(9)	$	4
Amounts related to the separation of TWC		(1)		4
Loss from equity method investees		(8)		(18)
Other		18		(4)
Other loss, net	$	-	$	(14)

Investment gains (losses), net and amounts related to the separation of TWC are discussed under “Transactions and Other Items Affecting Comparability.” The remaining changes in Other loss, net for the three months ended March 31, 2012 were due to an adjustment to reduce liability for deferred compensation and lower losses from equity method investees.

Income Tax Provision.  Income tax provision increased to $346 million for the three months ended March 31, 2012 from $331 million for the three months ended March 31, 2011. The Company’s effective tax rate was 37% and 34% for the three months ended March 31, 2012 and 2011, respectively. This change was primarily due to an increase in tax reserves.

Net Income.  Net income decreased to $581 million for the three months ended March 31, 2012 from $651 million for the three months ended March 31, 2011. Excluding the items noted under “Transactions and Other Items Affecting Comparability” totaling $78 million of expense and $6 million of income for the three months ended March 31, 2012 and 2011, respectively, Net income increased $14 million, primarily reflecting higher Operating Income, partially offset by higher interest expense.

Net Loss Attributable to Noncontrolling Interests.  For each of the three months ended March 31, 2012 and 2011, Net loss attributable to noncontrolling interests was $2 million.

Net Income Attributable to Time Warner Inc. Shareholders.    Net income attributable to Time Warner Inc. shareholders was $583 million and $653 million for the three months ended March 31, 2012 and 2011, respectively. Basic and Diluted net income per common share attributable to Time Warner Inc. common shareholders were $0.60 and $0.59, respectively, for the three months ended March 31, 2012 and were $0.59 and $0.59, respectively, for the three months ended March 31, 2011.

6

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Business Segment Results

Networks.  Revenues and Operating Income of the Networks segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

		88888888888,		88888888888,	88888888888,
	Three Months Ended March 31,
	2012		2011		% Change
Revenues:
Subscription	$	2,154	$	2,055	5%
Advertising		1,096		1,032	6%
Content		306		372	(18%)
Other		46		37	24%
Total revenues		3,602		3,496	3%
Costs of revenues(a)		(1,739)		(1,647)	6%
Selling, general and administrative(a)		(567)		(582)	(3%)
Asset impairments		(52)		-	NM
Restructuring and severance costs		(14)		(12)	17%
Depreciation		(79)		(83)	(5%)
Amortization		(8)		(10)	(20%)
Operating Income	$	1,143	$	1,162	(2%)

^(a)  Costs of revenues and Selling, general and administrative expenses exclude depreciation.

Subscription revenues increased primarily due to a $93 million increase in domestic subscription revenues reflecting higher domestic subscription rates.

The increase in Advertising revenues reflected domestic growth of $58 million driven by strong pricing and The National Collegiate Athletic Association Division I Men’s Basketball Championship (the “NCAA Tournament”) events, due in part to the timing of games.

The decrease in Content revenues was due primarily to lower licensing revenues from original programming.

The components of Costs of revenues for the Networks segment are as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Programming costs:
Originals and sports	$	939	$	828	13%
Acquired films and syndicated series		426		454	(6%)
Total programming costs		1,365		1,282	6%
Other direct operating costs		374		365	2%
Costs of revenues(a)	$	1,739	$	1,647	6%

^(a)  Costs of revenues exclude depreciation.

The increase in Costs of revenues was driven by higher programming costs. The increase in programming costs reflected higher costs for originals and sports programming, which included a $35 million impairment related to the cancellation of an original series, as well as higher NCAA Tournament programming costs due in part to the timing of games. This increase was partially offset by lower programming costs for acquired programming.

7

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

As previously noted under “Transactions and Other Items Affecting Comparability,” the results for the three months ended March 31, 2012 included a $58 million charge related to Turner’s decision in the first quarter of 2012 to shut down its general entertainment network in India. This charge consisted of $52 million of noncash charges primarily related to certain receivables, inventories and long-lived assets and a $6 million charge related to exit costs. The Networks segment expects to incur an additional noncash charge of approximately $70 million to $80 million in the second quarter of 2012 following the completion of the shutdown.

Operating Income decreased primarily due to higher Costs of revenues and the $58 million charge related to the shutdown of Turner’s general entertainment network in India, partially offset by higher Revenues.

Film and TV Entertainment.  Revenues and Operating Income of the Film and TV Entertainment segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

		88888888888.		88888888888.	88888888888.
	Three Months Ended March 31,
	2012		2011		% Change
Revenues:
Subscription	$	28	$	18	56%
Advertising		13		11	18%
Content		2,685		2,535	6%
Other		58		40	45%
Total revenues		2,784		2,604	7%
Costs of revenues(a)		(2,008)		(1,880)	7%
Selling, general and administrative(a)		(466)		(468)	-
Gain on operating assets		-		3	(100%)
Restructuring and severance costs		(6)		(6)	-
Depreciation		(46)		(48)	(4%)
Amortization		(44)		(47)	(6%)
Operating Income	$	214	$	158	35%

^(a)  Costs of revenues and Selling, general and administrative expenses exclude depreciation.

Content revenues primarily relate to theatrical product (which is content made available for initial exhibition in theaters) and television product (which is content made available for initial airing on television). The components of Content revenues for the three months ended March 31, 2012 and 2011 are as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Theatrical product:
Theatrical film	$	414	$	335	24%
Home video and electronic delivery		462		541	(15%)
Television licensing		405		394	3%
Consumer products and other		39		31	26%
Total theatrical product		1,320		1,301	1%
Television product:
Television licensing		961		878	9%
Home video and electronic delivery		180		135	33%
Consumer products and other		89		58	53%
Total television product		1,230		1,071	15%
Other		135		163	(17%)
Total Content revenues	$	2,685	$	2,535	6%

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TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

For the three months ended March 31, 2012, theatrical product revenues from theatrical film increased due to higher revenues from theatrical films released in the current quarter of $50 million and higher carryover revenues from theatrical films released in prior periods of $29 million. There were four theatrical films released in the first quarter of 2012 as compared to five in the first quarter of 2011.

Theatrical product revenues from home video and electronic delivery decreased due to lower revenues of $48 million from prior period releases, including catalog, and lower revenues from releases in the current quarter of $31 million. There were five home video and electronic delivery releases in the first quarter of both 2012 and 2011.

The increase in television product revenues from licensing was primarily due to higher revenues from initial telecasts of $79 million mainly as a result of higher fees and the timing of deliveries.

Television product revenues from home video and electronic delivery increased due to higher electronic delivery revenues reflecting the subscription video-on-demand availability of a television series.

Television product revenues from consumer products and other increased primarily due to retransmission royalties received during the period.

The components of Costs of revenues for the Film and TV Entertainment segment are as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Film and TV production costs	$	1,338	$	1,147	17%
Print and advertising costs		476		494	(4%)
Other costs, including merchandise and related costs		194		239	(19%)
Costs of revenues(a)	$	2,008	$	1,880	7%

^(a)  Costs of revenues exclude depreciation.

The increase in Costs of revenues reflects higher film and TV production costs, partially offset by lower other costs. Film and TV production costs increased mainly due to the mix and performance of product released. Included in film and TV production costs are theatrical film valuation adjustments as a result of revisions to estimates of ultimate revenue for certain theatrical films. For the three months ended March 31, 2012 and 2011, theatrical film valuation adjustments were not material. Other costs decreased primarily due to lower merchandise costs mainly associated with the decrease in theatrical home video sales.

The increase in Operating Income was primarily due to higher Revenues, partially offset by higher Costs of revenues.

9

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Publishing.  Revenues and Operating Income (Loss) of the Publishing segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

		88888888888,		88888888888,	88888888888,
	Three Months Ended March 31,
	2012		2011		% Change
Revenues:
Subscription	$	289	$	295	(2%)
Advertising		383		402	(5%)
Content		19		16	19%
Other		82		85	(4%)
Total revenues		773		798	(3%)
Costs of revenues(a)		(324)		(312)	4%
Selling, general and administrative(a)		(373)		(375)	(1%)
Loss on operating assets		(42)		-	NM
Restructuring and severance costs		(6)		(12)	(50%)
Depreciation		(23)		(25)	(8%)
Amortization		(9)		(11)	(18%)
Operating Income (Loss)	$	(4)	$	63	(106%)

^(a)  Costs of revenues and Selling, general and administrative expenses exclude depreciation.

Subscription revenues decreased primarily due to lower worldwide newsstand sales of $14 million, particularly in the domestic celebrity category, partially offset by higher domestic subscription sales of $9 million.

Advertising revenues decreased primarily due to lower domestic magazine advertising revenues mainly as a result of fewer pages sold due to soft market conditions, which are expected to continue through at least the second quarter of 2012.

The components of Costs of revenues for the Publishing segment are as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Production costs	$	184	$	182	1%
Editorial costs		124		115	8%
Other		16		15	7%
Costs of revenues(a)	$	324	$	312	4%

^(a)  Costs of revenues exclude depreciation.

The increase in Costs of revenues was due primarily to higher editorial costs. Approximately half of the increase in editorial costs was associated with investments in websites and tablet editions of magazines, and the balance of the increase was primarily related to merit-based compensation increases.

The decrease in Selling, general and administrative expenses was primarily due to lower costs of $10 million as a result of the sale of the QSP Business, partially offset by merit-based compensation increases and the timing of promotional spending.

As previously noted under “Transactions and Other Items Affecting Comparability,” the results for the three months ended March 31, 2012 included a $42 million loss on operating assets in connection with the sale of the QSP Business.

Operating Income (Loss) changed primarily due to the $42 million loss on operating assets in connection with the sale

10

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

of the QSP Business, as well as lower Revenues and higher Costs of revenues.

Corporate.  Operating Loss of the Corporate segment for the three months ended March 31, 2012 and 2011 was as follows (millions):

		888888888888		888888888888	888888888888
	Three Months Ended March 31,
	2012		2011		% Change
Selling, general and administrative(a)	$	(96)	$	(86)	12%
Depreciation		(6)		(7)	(14%)
Operating Loss	$	(102)	$	(93)	10%

^(a)  Selling, general and administrative expenses exclude depreciation.

Operating Loss increased due primarily to higher costs related to enterprise efficiency initiatives. For the three months ended March 31, 2012 and 2011, Selling, general and administrative expenses included $10 million and $2 million, respectively, of costs related to such initiatives.

FINANCIAL CONDITION AND LIQUIDITY

Management believes that cash generated by or available to the Company should be sufficient to fund its capital and liquidity needs for the foreseeable future, including quarterly dividend payments, the purchase of common stock under the Company’s repurchase program and scheduled debt repayments. Time Warner’s sources of cash include Cash provided by operations, Cash and equivalents on hand, available borrowing capacity under its committed credit facilities and commercial paper program and access to capital markets. Time Warner’s unused committed capacity at March 31, 2012 was $7.939 billion, which included $2.877 billion of Cash and equivalents.

Current Financial Condition

At March 31, 2012, Time Warner had $19.520 billion of debt, $2.877 billion of Cash and equivalents (net debt, defined as total debt less Cash and equivalents, of $16.643 billion) and $29.780 billion of Shareholders’ equity, compared to $19.524 billion of debt, $3.476 billion of Cash and equivalents (net debt of $16.048 billion) and $29.957 billion of Shareholders’ equity at December 31, 2011.

The following table shows the significant items contributing to the increase in net debt from December 31, 2011 to March 31, 2012 (millions):

Balance at December 31, 2011	$	16,048
Cash provided by operations		(416)
Capital expenditures		133
Dividends paid to common stockholders		257
Investments and acquisitions, net		76
Repurchases of common stock		725
All other, net		(180)
Balance at March 31, 2012	$	16,643

On January 31, 2012, the Company’s Board of Directors authorized a $4.0 billion stock repurchase program that commenced after the completion of the Company’s $5.0 billion stock repurchase program in February 2012. Purchases under the stock repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including price and business and market conditions. From January 1, 2012 through April 27, 2012, the Company repurchased 24 million shares of common stock for $889 million pursuant to trading programs under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

11

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Cash Flows

Cash and equivalents decreased by $599 million for the three months ended March 31, 2012 and $634 million for the three months ended March 31, 2011. Components of these changes are discussed below in more detail.

Operating Activities

Details of Cash provided by operations are as follows (millions):

		8888888888,		8888888888,
	Three Months Ended March 31,
	2012		2011
Operating Income	$	1,247	$	1,270
Depreciation and amortization		215		231
Net interest payments(a)		(280)		(213)
Net income taxes paid(b)		(303)		(137)
All other, net, including working capital changes		(463)		(326)
Cash provided by operations	$	416	$	825

^(a)  Includes cash interest received of $11 million and $5 million for the three months ended March 31, 2012 and 2011, respectively.

^(b)  Includes income tax refunds received of $30 million and $4 million for the three months ended March 31, 2012 and 2011, respectively.

Cash provided by operations for the three months ended March 31, 2012 decreased as compared with the prior year period primarily due to higher net income taxes paid, attributable to the timing of estimated tax payments, higher cash used by working capital, primarily reflecting higher programming spending, and higher net interest payments, related to higher average debt in 2012.

Investing Activities

Details of Cash used by investing activities are as follows (millions):

		8888888888,		8888888888,
	Three Months Ended March 31,
	2012		2011
Investments in available-for-sale securities	$	(17)	$	-
Investments and acquisitions, net of cash acquired		(59)		(160)
Capital expenditures		(133)		(152)
All other investment and sale proceeds		22		5
Cash used by investing activities	$	(187)	$	(307)

Cash used by investing activities for the three months ended March 31, 2012 decreased as compared with the prior year period primarily due to fewer investments and acquisitions and a decrease in capital expenditures.

12

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Financing Activities

Details of Cash used by financing activities are as follows (millions):

		8888888888		8888888888
	Three Months Ended March 31,
	2012		2011
Borrowings	$	11	$	22
Debt repayments		(13)		(21)
Proceeds from the exercise of stock options		185		118
Excess tax benefit on stock options		34		14
Principal payments on capital leases		(3)		(2)
Repurchases of common stock		(725)		(959)
Dividends paid		(257)		(261)
Other financing activities		(60)		(63)
Cash used by financing activities	$	(828)	$	(1,152)

Cash used by financing activities for the three months ended March 31, 2012 decreased as compared to the prior year period primarily due to a decrease in repurchases of common stock made in connection with the Company’s common stock repurchase program and higher proceeds from the exercise of stock options.

Time Warner’s $638 million aggregate principal amount of 6.875% Notes matured on May 1, 2012, and the Company paid such aggregate principal amount and the accrued interest in cash on the maturity date.

Outstanding Debt and Other Financing Arrangements

Outstanding Debt and Committed Financial Capacity

At March 31, 2012, Time Warner had total committed capacity, defined as maximum available borrowings under various existing debt arrangements and cash and short-term investments, of $27.525 billion. Of this committed capacity, $7.939 billion was unused and $19.520 billion was outstanding as debt. At March 31, 2012, total committed capacity, outstanding letters of credit, outstanding debt and total unused committed capacity were as follows (millions):

		8888888888,		8888888888,		8888888888,		8888888888,
	Committed Capacity  (a)		Letters of Credit (b)		Outstanding Debt (c)		Unused Committed Capacity
Cash and equivalents	$	2,877	$	-	$	-	$	2,877
Revolving credit facilities and commercial
paper program(d)		5,000		2				4,998
Fixed-rate public debt		19,254		-		19,254		-
Other obligations(e)		394		64		266		64
Total	$	27,525	$	66	$	19,520	$	7,939

^(a)  The revolving credit facilities, commercial paper program and public debt of the Company rank pari passu with the senior debt of the respective obligors thereon. The weighted average maturity of the Company’s outstanding debt and other financing arrangements was 14.4 years as of March 31, 2012.

^(b)  Represents the portion of committed capacity, including from bilateral letter of credit facilities, reserved for outstanding and undrawn letters of credit.

^(c)  Represents principal amounts adjusted for premiums and discounts. At March 31, 2012, the Company’s public debt matures as follows: $638 million in 2012, $732 million in 2013, $0 in 2014, $1.000 billion in 2015, $1.150 billion in 2016 and $15.881 billion thereafter. In the period after 2016, no more than $2.0 billion will mature in any given year. As of March 31, 2012, $1.074 billion of the Company’s public debt is classified as current on the Company’s Consolidated Balance Sheet.

^(d)  The revolving credit facilities consist of a $2.5 billion four-year revolving credit facility that matures on September 27, 2015 and a $2.5 billion five-year revolving credit facility that matures on September 27, 2016. The Company may issue unsecured commercial paper notes up to the amount of the unused committed capacity under the credit facilities.

^(e)  Unused committed capacity includes committed financings of subsidiaries under local bank credit agreements. Other debt obligations totaling $21 million are due within the next twelve months.

13

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

Programming Licensing Backlog

Programming licensing backlog represents the amount of future revenues not yet recorded from cash contracts for the worldwide licensing of theatrical and television product for pay cable, basic cable, network and syndicated television exhibition. Backlog was approximately $5.3 billion and $5.6 billion at March 31, 2012 and December 31, 2011, respectively. Included in these amounts is licensing of film product from the Film and TV Entertainment segment to the Networks segment in the amount of $1.4 billion at both March 31, 2012 and December 31, 2011.

Investment in CME

On April 30, 2012, the Company and Central European Media Enterprises Ltd. (“CME”) entered into an arrangement in which the Company agreed to purchase shares of CME’s Class A common stock in an amount that will result in the Company holding a 40% economic interest in CME on a diluted basis (the “TW Subscription”). At March 31, 2012, the Company held an approximate 34% economic interest in CME. The Company also agreed to provide CME with a term loan credit facility of up to $300 million for the sole purpose of repurchasing certain of CME’s outstanding public indebtedness in concurrent tender offers announced by CME on April 30, 2012. Amounts raised in the TW Subscription and from certain equity offerings by CME will reduce the amount of the credit facility. Loans drawn under the credit facility will bear interest at rates ranging from EURIBOR plus 1.625% to 20% depending on the indebtedness CME repurchases with a particular loan, the length of time the loans are outstanding and other factors. The loans under the credit facility will mature at various dates ranging from 2013 to 2016 and can be prepaid by CME. In addition, if any of the loans remain outstanding after 180 days, CME has the option to sell to the Company and the Company has the option to acquire from CME additional shares of Class A common stock of CME that may increase the Company’s economic interest in CME up to an aggregate of 49.9%. The purchase price for such shares will be paid through the reduction of the amount of the loans outstanding.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. Examples of forward-looking statements in this report include, but are not limited to, statements regarding (i) the adequacy of the Company’s liquidity to meet its needs for the foreseeable future, (ii) the Company’s international expansion plans, (iii) the transfer of the management of the SI.com and Golf.com websites from Turner to Time Inc. in the second quarter of 2012, (iv) the expectation that soft magazine advertising market conditions will continue through at least the second quarter of 2012, and (v) the expected incurrence of an additional noncash charge of approximately $70 million to $80 million in the second quarter of 2012 following the completion of the shutdown of Turner’s general entertainment network in India.

The Company’s forward-looking statements are based on management’s current expectations and assumptions regarding the Company’s business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Company’s actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors:

• recent and future changes in technology, services and standards, including, but not limited to, alternative methods for the delivery, storage and consumption of digital media and evolving home entertainment formats;

• changes in consumer behavior, including changes in spending behavior and changes in when, where digital content is consumed;

• the popularity of the Company’s content;

• changes in the Company’s plans, initiatives and strategies, and consumer acceptance thereof;

• competitive pressures, including as a result of audience fragmentation and changes in technology;

• the Company’s ability to deal effectively with economic slowdowns or other economic or market difficulties;

• changes in advertising market conditions or advertising expenditures due to, among other things, economic conditions, changes in consumer behavior, pressure from public interest groups, changes in laws and regulations and other societal or political developments;

• piracy and the Company’s ability to exploit and protect its intellectual property rights in and to its content and other products;

• lower than expected valuations associated with the cash flows and revenues at Time Warner’s segments, which could result in Time Warner’s inability to realize the value of recorded intangible assets and goodwill at those segments;

• increased volatility or decreased liquidity in the capital markets, including any limitation on the Company’s ability to access the capital markets for debt securities, refinance its outstanding indebtedness or obtain bank financings on acceptable terms;

• the effects of any significant acquisitions, dispositions and other similar transactions by the Company;

• the failure to meet earnings expectations;

• the adequacy of the Company’s risk management framework;

• changes in U.S. GAAP or other applicable accounting policies;

• the impact of terrorist acts, hostilities, natural disasters (including extreme weather) and pandemic viruses;

14

TIME WARNER INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)

• a disruption or failure of network and information systems or other technology on which the Company’s businesses rely;

• the effect of union or labor disputes or player lockouts affecting the professional sports leagues whose programming is shown on the Company’s networks;

• changes in tax, federal communication and other laws and regulations;

• changes in foreign exchange rates and in the stability and existence of the Euro; and

• the other risks and uncertainties detailed in Part I, Item 1A. “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Any forward-looking statements made by the Company in this report speak only as of the date on which they are made. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.

15

TIME WARNER INC.

Item 4. CONTROLS AND PROCEDURES

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by the Company is accumulated and communicated to the Company’s management to allow timely decisions regarding the required disclosure.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

16

TIME WARNER INC.

CONSOLIDATED BALANCE SHEET

(Unaudited; millions, except share amounts)

	March 31,          2012		December 31,       2011
ASSETS
Current assets
Cash and equivalents	$	2,877	$	3,476
Receivables, less allowances of $1,599 and $1,957		6,312		6,922
Inventories		1,909		1,890
Deferred income taxes		649		663
Prepaid expenses and other current assets		544		481
Total current assets		12,291		13,432
Noncurrent inventories and film and TV production costs		6,684		6,594
Investments, including available-for-sale securities		1,894		1,820
Property, plant and equipment, net		3,937		3,963
Intangible assets subject to amortization, net		2,117		2,232
Intangible assets not subject to amortization		7,807		7,805
Goodwill		30,048		30,029
Other assets		1,966		1,926
Total assets	$	66,744	$	67,801
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	7,031	$	7,815
Deferred revenue		1,023		1,084
Debt due within one year		1,095		23
Total current liabilities		9,149		8,922
Long-term debt		18,425		19,501
Deferred income taxes		2,536		2,541
Deferred revenue		533		549
Other noncurrent liabilities		6,320		6,334
Commitments and Contingencies (Note 12)
Equity
Common stock, $0.01 par value, 1.652 billion and 1.652 billion shares issued and 963 million and 974 million shares outstanding		17		17
Paid-in-capital		155,578		156,114
Treasury stock, at cost (689 million and 678 million shares)		(33,934)		(33,651)
Accumulated other comprehensive loss, net		(793)		(852)
Accumulated deficit		(91,088)		(91,671)
Total Time Warner Inc. shareholders’ equity		29,780		29,957
Noncontrolling interests		1		(3)
Total equity		29,781		29,954
Total liabilities and equity	$	66,744	$	67,801

    See accompanying notes.

17

TIME WARNER INC.

CONSOLIDATED STATEMENT OF OPERATIONS

Three Months Ended March 31,

(Unaudited; millions, except per share amounts)

	2012		2011
Revenues	$	6,979	$	6,683
Costs of revenues		(3,976)		(3,727)
Selling, general and administrative		(1,575)		(1,591)
Amortization of intangible assets		(61)		(68)
Restructuring and severance costs		(26)		(30)
Asset impairments		(52)		-
Gain (loss) on operating assets		(42)		3
Operating income		1,247		1,270
Interest expense, net		(320)		(274)
Other loss, net		-		(14)
Income before income taxes		927		982
Income tax provision		(346)		(331)
Net income		581		651
Less Net loss attributable to noncontrolling interests		2		2
Net income attributable to Time Warner Inc. shareholders	$	583	$	653
Per share information attributable to Time Warner Inc. common shareholders:
Basic net income per common share	$	0.60	$	0.59
Average basic common shares outstanding		968.3		1,090.8
Diluted net income per common share	$	0.59	$	0.59
Average diluted common shares outstanding		990.1		1,110.1
Cash dividends declared per share of common stock	$	0.260	$	0.235

See accompanying notes.

18

TIME WARNER INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31,

(Unaudited; millions)

	2012		2011
Net income	$	581	$	651
Other comprehensive income, net of tax:
Foreign currency translation adjustments		62		90
Unrealized gains on securities occurring during the period		3		-
Benefit obligations:
Unrealized losses occurring during the period		(7)		(4)
Less Reclassification adjustment for losses realized in net income		4		3
Net benefit obligations		(3)		(1)
Derivative financial instruments:
Unrealized losses occurring during the period		(12)		(1)
Less Reclassification adjustment for losses realized in net income		9		5
Net gains (losses) on derivative financial instruments		(3)		4
Other comprehensive income		59		93
Comprehensive income		640		744
Less Comprehensive loss attributable to noncontrolling interest		2		2
Comprehensive income attributable to Time Warner Inc. shareholders	$	642	$	746

See accompanying notes.

19

TIME WARNER INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended March 31,

(Unaudited; millions)

	2012		2011
OPERATIONS
Net income	$	581	$	651
Adjustments for noncash and nonoperating items:
Depreciation and amortization		215		231
Amortization of film and television costs		1,948		1,664
Asset impairments		52		-
(Gain) loss on investments and other assets, net		51		(4)
Equity in losses of investee companies, net of cash distributions		15		32
Equity-based compensation		101		102
Deferred income taxes		(92)		51
Changes in operating assets and liabilities, net of acquisitions		(2,455)		(1,902)
Cash provided by operations		416		825
INVESTING ACTIVITIES
Investments in available-for-sale securities		(17)		-
Investments and acquisitions, net of cash acquired		(59)		(160)
Capital expenditures		(133)		(152)
Other investment proceeds		22		5
Cash used by investing activities		(187)		(307)
FINANCING ACTIVITIES
Borrowings		11		22
Debt repayments		(13)		(21)
Proceeds from exercise of stock options		185		118
Excess tax benefit on stock options		34		14
Principal payments on capital leases		(3)		(2)
Repurchases of common stock		(725)		(959)
Dividends paid		(257)		(261)
Other financing activities		(60)		(63)
Cash used by financing activities		(828)		(1,152)
DECREASE IN CASH AND EQUIVALENTS		(599)		(634)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		3,476		3,663
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,877	$	3,029

See accompanying notes.

20

TIME WARNER INC.

CONSOLIDATED STATEMENT OF EQUITY

Three Months Ended March 31,

(Unaudited; millions)

	2012			2011
	Time Warner Shareholders	Noncontrolling Interests	Total Equity	Time Warner Shareholders	Noncontrolling Interests	Total Equity
BALANCE AT BEGINNING OF PERIOD	$       29,957	$               (3)	$      29,954	$       32,940	$                 5	$      32,945
Net income	583	(2)	581	653	(2)	651
Other comprehensive income	59	-	59	93	-	93
Cash dividends	(257)	-	(257)	(261)	-	(261)
Common stock repurchases	(731)	-	(731)	(1,000)	-	(1,000)
Other(a)	169	6	175	(188)	1	(187)
BALANCE AT END OF PERIOD	$       29,780	$                 1	$      29,781	$       32,237	$                 4	$      32,241

^(a)      2011 reflects a decline in additional paid-in capital related to the expiration of certain equity-based compensation awards.

See accompanying notes.

21

TIME WARNER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Time Warner Inc. (“Time Warner” or the “Company”) is a leading media and entertainment company, whose businesses include television networks, film and TV entertainment and publishing. Time Warner classifies its operations into three reportable segments: Networks: consisting principally of cable television networks, premium pay and basic tier television services and digital media properties; Film and TV Entertainment: consisting principally of feature film, television, home video and videogame production and distribution; and Publishing: consisting principally of magazine publishing and related websites as well as book publishing, marketing services and other marketing businesses. Financial information for Time Warner’s various reportable segments is presented in Note 11.

Basis of Presentation

Interim Financial Statements

The consolidated financial statements are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”) applicable to interim periods. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Time Warner included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

Basis of Consolidation

The consolidated financial statements include all of the assets, liabilities, revenues, expenses and cash flows of entities in which Time Warner has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation.

The financial position and operating results of most of the Company’s foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the March 31, 2012 presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates.

Significant estimates and judgments inherent in the preparation of the consolidated financial statements include accounting for asset impairments, multiple-element transactions, allowances for doubtful accounts, depreciation and amortization, the determination of ultimate revenues as it relates to amortization of capitalized film and programming costs and participations and residuals, home video and videogames product and magazine returns, business combinations, pension and other postretirement benefits, equity-based compensation, income taxes, contingencies, litigation matters, reporting revenue for certain transactions on a gross versus net basis, and the determination of whether the Company is the primary beneficiary of entities in which it holds variable interests.

22

TIME WARNER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2. ASSET DISPOSITIONS

QSP

On January 13, 2012, the Publishing segment sold, solely in exchange for contingent consideration, assets primarily comprising the school fundraising business, QSP. The results of the Publishing segment for the three months ended March 31, 2012 included a $42 million loss recognized in connection with the sale.

Imagine

For the three months ended March 31, 2012, the Company recognized $58 million of charges at the Networks segment related to Turner’s decision in the first quarter of 2012 to shut down its general entertainment network in India, Imagine. These charges consisted of $52 million of noncash charges primarily related to certain receivables, inventories and long-lived assets as well as a $6 million charge related to exit costs.

3. FAIR VALUE MEASUREMENTS

A fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively (millions):

	Fair Value Measurements
	March 31, 2012												December 31, 2011
Description		Level 1			Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
Assets:
Trading securities:
Diversified equity securities(a)	$		279	$		5	$		-	$		284	$		265	$		5	$		-	$		270
Available-for-sale securities:
Equity securities			30			-			-			30			14			-			-			14
Debt securities			-			78			-			78			-			72			-			72
Derivatives:
Foreign exchange contracts			-			22			-			22			-			28			-			28
Other			3			-			17			20			4			-			20			24
Liabilities:
Derivatives:
Foreign exchange contracts			-			(25)			-			(25)			-			-			-			-
Other			-			-			(17)			(17)			-			-			(17)			(17)
Total	$		312	$		80	$		-	$		392	$		283	$		105	$		3	$		391

^(a)     Consists of investments related to deferred compensation.

The Company primarily applies the market approach for valuing recurring fair value measurements. Assets and liabilities valued using significant unobservable inputs (Level 3) primarily consist of an asset related to equity instruments held by employees of a former subsidiary of the Company, liabilities for contingent consideration and options to redeem securities.

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The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 and identifies the total gains (losses) the Company recognized during the three months ended March 31, 2012 and 2011, respectively, on such assets and liabilities that were included in the Consolidated Balance Sheet as of March 31, 2012 and 2011, respectively (millions):

	Derivatives
	March 31, 2012		March 31, 2011
Balance as of the beginning of the period	$	3	$	(9)
Total gains (losses):
Included in operating income		-		3
Included in other loss, net		(1)		4
Settlements		(2)		2
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance as of the end of the period	$	-	$	-
Net gain (loss) for the period included in net income related to assets and liabilities still held as of the end of the period	$	(1)	$	7

Other Financial Instruments

The Company’s other financial instruments, including debt, are not required to be carried at fair value. Based on the interest rates prevailing at March 31, 2012, the fair value of Time Warner’s debt exceeded its carrying value by approximately $3.538 billion and, based on interest rates prevailing at December 31, 2011, the fair value of Time Warner’s debt exceeded its carrying value by approximately $3.549 billion. The fair value of Time Warner’s debt was considered a Level 2 measurement as it was based on observable market inputs such as current interest rates and, where available, actual sales transactions. Unrealized gains or losses on debt do not result in the realization or expenditure of cash and generally are not recognized in the consolidated financial statements unless the debt is retired prior to its maturity. In addition, as of March 31, 2012, $638 million aggregate principal amount of 6.875% Notes of Time Warner Inc. due May 1, 2012 was classified as current on the Company’s Consolidated Balance Sheet because it would not be refinanced prior to its maturity. The carrying value for the majority of the Company’s other financial instruments approximates fair value due to the short-term nature of the financial instruments or because the financial instruments are of a longer-term nature and are recorded on a discounted basis. For the remainder of the Company’s other financial instruments, differences between the carrying value and fair value are not significant at March 31, 2012. The fair value of financial instruments is generally determined by reference to the market value of the instrument as quoted on a national securities exchange or an over-the-counter market. In cases where a quoted market value is not available, fair value is based on an estimate using present value or other valuation techniques.

Non-Financial Instruments

The majority of the Company’s non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill and indefinite-lived intangible assets) such that a non-financial instrument is required to be evaluated for impairment, a resulting asset impairment would require that the non-financial instrument be recorded at the lower of cost or its fair value.

Because of a change in the expected use of certain long-lived assets, primarily intangible assets at Imagine, an international subsidiary in the Networks segment (i.e., Turner’s general entertainment network in India), during the first quarter of 2012, such assets were tested for impairment by comparing their carrying values with their estimated fair values. As the carrying values of such assets exceeded their estimated fair values, the Company recorded a noncash impairment of $19 million to write down the value of such assets to zero. The resulting fair value measurements of the assets were considered to be Level 3 measurements and were determined using a discounted cash flow (“DCF”) methodology with assumptions for cash flows associated with the use and eventual disposition of the assets.

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In determining the fair value of its films, the Company employs a DCF methodology with assumptions for cash flows for periods not exceeding 10 years. Key inputs employed in the DCF methodology include estimates of a film’s ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the weighted average cost of capital of the respective business (e.g., Warner Bros. Entertainment Group) plus a risk premium representing the risk associated with producing a particular film. The fair value of any film and TV production costs associated with a film that management plans to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement. During the three months ended March 31, 2012, certain film and TV production costs, which were recorded as inventory in the Consolidated Balance Sheet, were written down to $39 million from their carrying value of $87 million. During the three months ended March 31, 2011, certain film and TV production costs, which were recorded as inventory in the Consolidated Balance Sheet, were completely written off from their carrying value of $5 million.

4.   INVENTORIES AND FILM AND TV PRODUCTION COSTS

Inventories and film and TV production costs consist of (millions):

	March 31, 2012		December 31,     2011
Inventories:
Programming costs, less amortization	$	3,377	$	3,321
DVDs, books, paper and other merchandise		345		340
Total inventories		3,722		3,661
Less: current portion of inventory		(1,909)		(1,890)
Total noncurrent inventories		1,813		1,771
Film and TV production costs — Theatrical:(a)
Released, less amortization		733		844
Completed and not released		278		295
In production		1,852		1,592
Development and pre-production		92		87
Film and TV production costs — Television:(a)
Released, less amortization		1,096		1,141
Completed and not released		416		360
In production		392		499
Development and pre-production		12		5
Total film and TV production costs		4,871		4,823
Total noncurrent inventories and film and TV production costs	$	6,684	$	6,594

^(a)  Does not include $1.284 billion and $1.320 billion of net film library costs as of March 31, 2012 and December 31, 2011, respectively, which are included in Intangible assets subject to amortization in the Consolidated Balance Sheet.

5.   DERIVATIVE INSTRUMENTS

Time Warner uses derivative instruments, principally forward contracts, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies and changes in fair value resulting from changes in foreign currency exchange rates. The principal currencies being hedged include the British Pound, Euro, Australian Dollar and Canadian Dollar. Time Warner uses foreign exchange contracts that generally have maturities of three to 18 months to hedge various foreign exchange exposures, including the following: (i) variability in foreign-currency-denominated cash flows, such as the hedges of unremitted or forecasted royalty and license fees owed to Time Warner domestic companies for the sale or anticipated sale of U.S. copyrighted products abroad or cash flows for certain film production costs denominated in a foreign currency (i.e., cash flow hedges) and (ii) currency risk associated with foreign-currency-denominated operating assets and liabilities (i.e., fair value hedges). For these qualifying hedge relationships, the Company excludes the impact of forward points from its assessment of hedge effectiveness. As a result, changes in the fair value of forward points are recorded in Other loss, net in the Consolidated Statement of Operations each quarter.

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The Company also enters into derivative contracts that economically hedge certain of its foreign currency risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. These economic hedges are used primarily to offset the change in certain foreign currency denominated long-term receivables and certain foreign-currency-denominated debt due to changes in the underlying foreign exchange rates.

Gains and losses from hedging activities recognized in the Consolidated Statement of Operations, including hedge ineffectiveness, were not material for the three months ended March 31, 2012 and 2011. In addition, such gains and losses were largely offset by corresponding economic gains or losses from the respective transactions that were hedged.

The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to Time Warner’s use of foreign currency derivatives at March 31, 2012 and December 31, 2011 (millions):

	March 31, 2012		December 31,     2011
Qualifying Hedges
Assets	$	103	$	105
Liabilities		(106)		(91)
Economic Hedges
Assets	$	15	$	30
Liabilities		(15)		(16)

The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions. Additionally, netting provisions are included in existing agreements in situations where the Company executes multiple contracts with the same counterparty. As a result, net assets or liabilities resulting from foreign exchange derivatives subject to these netting agreements are classified within Prepaid expenses and other current assets or Accounts payable and accrued liabilities in the Company’s Consolidated Balance Sheet. At March 31, 2012 and December 31, 2011, $15 million and $19 million of gains, respectively, related to cash flow hedges are recorded in Accumulated other comprehensive loss, net and are expected to be recognized in earnings at the same time the hedged items affect earnings. Included in Accumulated other comprehensive loss, net are deferred net gains of $12 million and less than $1 million at March 31, 2012 and December 31, 2011, respectively, related to hedges of cash flows associated with films that are not expected to be released within the next twelve months.

6. SHAREHOLDERS’ EQUITY

Common Stock Repurchase Program

On January 25, 2011, Time Warner’s Board of Directors authorized an increase in the amount remaining on the Company’s stock repurchase program to $5.0 billion for share repurchases beginning January 1, 2011. This program was completed in February 2012.

On January 31, 2012, Time Warner’s Board of Directors authorized a $4.0 billion stock repurchase program. Purchases under the stock repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including price and business and market conditions.

From January 1, 2012 through March 31, 2012, the Company repurchased approximately 20 million shares of common stock for approximately $731 million pursuant to trading programs under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. As of March 31, 2012, $3.651 billion was remaining under the stock repurchase program.

Comprehensive Income

Comprehensive income is reported in the Consolidated Statement of Comprehensive Income and consists of Net income and other gains and losses affecting shareholders’ equity that, under GAAP, are excluded from Net income. For Time

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Warner, such items consist primarily of foreign currency translation gains (losses), unrealized gains and losses on marketable equity securities, unrealized gains and losses on certain derivative financial instruments and changes in unfunded and underfunded benefit plan obligations.

The following summary sets forth the activity within Other comprehensive income (millions):

	Three Months Ended March 31, 2012						Three Months Ended March 31, 2011
	Pretax		Tax     (provision)     benefit		Net of tax		Pretax		Tax     (provision)     benefit		Net of tax
Foreign currency translation adjustments	$	71	$	(9)	$	62	$	90	$	-	$	90
Unrealized gains on securities		5		(2)		3		-		-		-
Unrealized losses on benefit obligation		(11)		4		(7)		(6)		2		(4)
Reclassification adjustment for losses on benefit obligation realized in net income		7		(3)		4		5		(2)		3
Unrealized derivative financial instruments losses		(17)		5		(12)		(1)		-		(1)
Reclassification adjustment for derivative financial instruments losses realized in net income		14		(5)		9		8		(3)		5
Other comprehensive income	$	69	$	(10)	$	59	$	96	$	(3)	$	93

7.   NET INCOME PER COMMON SHARE

Set forth below is a reconciliation of Basic and Diluted net income per common share attributable to Time Warner Inc. common shareholders (millions, except per share amounts):

	Three Months Ended March 31,
	2012		2011
Net income attributable to Time Warner Inc. shareholders	$	583	$	653
Net income allocated to participating securities		(4)		(4)
Net income attributable to Time Warner Inc. common shareholders — basic	$	579	$	649
Average number of common shares outstanding — basic		968.3		1,090.8
Dilutive effect of equity awards		21.8		19.3
Average number of common shares outstanding — diluted		990.1		1,110.1
Net income per common share attributable to Time Warner Inc. common shareholders:
Basic	$	0.60	$	0.59
Diluted	$	0.59	$	0.59

Diluted net income per common share for the three months ended March 31, 2012 and 2011 excludes approximately 34 million and 80 million common shares, respectively, that may be issued under the Company’s stock compensation plans because they do not have a dilutive effect.

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8.  EQUITY-BASED COMPENSATION

Compensation expense recognized for equity-based plans is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Restricted stock units and performance stock units	$	75	$	69
Stock options		26		33
Total impact on operating income	$	101	$	102
Tax benefit recognized	$	36	$	38

For the three months ended March 31, 2012 and 2011, the Company granted approximately 5.2 million and 4.8 million restricted stock units (“RSUs”), respectively, at a weighted-average grant date fair value per RSU of $37.46 and $36.10, respectively. For the three months ended March 31, 2012 and 2011, the Company granted approximately 0.2 million and 0.1 million target performance stock units (“PSUs”), respectively, at a weighted-average grant date fair value per target PSU of $39.51 and $45.89, respectively. Total unrecognized compensation cost related to unvested RSUs and target PSUs as of March 31, 2012, without taking into account expected forfeitures, is $306 million and is expected to be recognized over a weighted-average period between one and two years.

For the three months ended March 31, 2012 and 2011, the Company granted approximately 4.7 million and 8.2 million stock options, respectively, at a weighted-average grant date fair value per option of $8.69 and $9.03, respectively. Total unrecognized compensation cost related to unvested stock options as of March 31, 2012, without taking into account expected forfeitures, is $79 million and is expected to be recognized over a weighted-average period between one and two years. The table below presents the weighted-average values of the assumptions used to value the stock options at their grant date.

	Three Months Ended March 31,
	2012		2011
Expected volatility		31.2%		29.5%
Expected term to exercise from grant date		6.50 years		6.31 years
Risk-free rate		1.3%		2.8%
Expected dividend yield		2.8%		2.6%

9. BENEFIT PLANS

A summary of the components of the net periodic benefit costs recognized for substantially all of Time Warner’s defined benefit pension plans for the three months ended March 31, 2012 and 2011 is as follows (millions):

Components of Net Periodic Benefit Costs

	Three Months Ended March 31,
	2012		2011
Service cost	$	1	$	6
Interest cost		44		47
Expected return on plan assets		(47)		(49)
Amortization of net loss		7		5
Net periodic benefit costs	$	5	$	9
Contributions	$	6	$	12

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10. RESTRUCTURING AND SEVERANCE COSTS

The Company’s Restructuring and severance costs primarily related to employee termination costs, ranging from senior executives to line personnel, and other exit costs, including lease terminations. Restructuring and severance costs expensed as incurred by segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

	Three Months Ended March 31,
	2012		2011
Networks	$	14	$	12
Film and TV Entertainment		6		6
Publishing		6		12
Total restructuring and severance costs	$	26	$	30

	Three Months Ended March 31,
	2012		2011
2012 activity	$	22	$	-
2011 and prior activity		4		30
Total restructuring and severance costs	$	26	$	30

Selected information relating to accrued restructuring and severance costs is as follows (millions):

	Employee     Terminations		Other Exit Costs		Total
Remaining liability as of December 31, 2011	$	116	$	60	$	176
Net accruals		23		3		26
Cash paid		(38)		(7)		(45)
Remaining liability as of March 31, 2012	$	101	$	56	$	157

As of March 31, 2012, of the remaining liability of $157 million, $93 million was classified as a current liability in the Consolidated Balance Sheet, with the remaining $64 million classified as a long-term liability. Amounts classified as long-term are expected to be paid through 2017.

11. SEGMENT INFORMATION

Time Warner classifies its operations into three reportable segments: Networks: consisting principally of cable television networks, premium pay and basic tier television services and digital media properties; Film and TV Entertainment: consisting principally of feature film, television, home video and videogame production and distribution; and Publishing: consisting principally of magazine publishing and related websites as well as book publishing, marketing services and other marketing businesses. Effective for the first quarter of 2012, the Company changed the name of its Filmed Entertainment reportable segment to Film and TV Entertainment. This change did not affect the composition of the segment; accordingly, all prior period financial information related to this reportable segment was unaffected.

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Information as to the Revenues, intersegment revenues, Operating Income (Loss), and Assets of Time Warner in each of its reportable segments is set forth below (millions):

	Three Months Ended March 31,
	2012		2011
Revenues
Networks	$	3,602	$	3,496
Film and TV Entertainment		2,784		2,604
Publishing		773		798
Intersegment eliminations		(180)		(215)
Total revenues	$	6,979	$	6,683

	Three Months Ended March 31,
	2012		2011
Intersegment Revenues
Networks	$	27	$	21
Film and TV Entertainment		140		183
Publishing		13		11
Total intersegment revenues	$	180	$	215

	Three Months Ended March 31,
	2012		2011
Operating Income (Loss)
Networks	$	1,143	$	1,162
Film and TV Entertainment		214		158
Publishing		(4)		63
Corporate		(102)		(93)
Intersegment eliminations		(4)		(20)
Total operating income (loss)	$	1,247	$	1,270

	March 31, 2012		December 31,     2011
Assets
Networks	$	38,474	$	38,166
Film and TV Entertainment		18,651		19,257
Publishing		5,876		6,055
Corporate		3,743		4,323
Total assets	$	66,744	$	67,801

12. COMMITMENTS AND CONTINGENCIES

Commitments

Six Flags

In connection with the Company’s former investment in the Six Flags theme parks located in Georgia and Texas (collectively, the “Parks”), in 1997, certain subsidiaries of the Company (including Historic TW and, in connection with the separation of Time Warner Cable Inc. in 2009, Warner Bros. Entertainment Inc.) agreed to guarantee (the “Six Flags Guarantee”) certain obligations of the partnerships that hold the Parks (the “Partnerships”) for the benefit of the limited partners in such Partnerships, including: annual payments made at the Parks or to the limited partners and additional obligations at the end of the respective terms for the Partnerships in 2027 and 2028 (the “Guaranteed Obligations”). The aggregate undiscounted estimated future cash flow requirements covered by the Six Flags Guarantee over the remaining term (through 2028) are approximately $1.0 billion (for a net present value of approximately $410 million). To date, no

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payments have been made by the Company pursuant to the Six Flags Guarantee.

Six Flags Entertainment Corporation (formerly known as Six Flags, Inc. and Premier Parks Inc.) (“Six Flags”), which has the controlling interest in the Parks, has agreed, pursuant to a subordinated indemnity agreement (the “Subordinated Indemnity Agreement”), to guarantee the performance of the Guaranteed Obligations when due and to indemnify Historic TW, among others, if the Six Flags Guarantee is called upon. If Six Flags defaults in its indemnification obligations, Historic TW has the right to acquire control of the managing partner of the Parks. Six Flags’ obligations to Historic TW are further secured by its interest in all limited partnership units held by Six Flags.

Because the Six Flags Guarantee existed prior to December 31, 2002 and no modifications to the arrangements have been made since the date the guarantee came into existence, the Company is required to continue to account for the Guaranteed Obligations as a contingent liability. Based on its evaluation of the current facts and circumstances surrounding the Guaranteed Obligations and the Subordinated Indemnity Agreement, the Company is unable to predict the loss, if any, that may be incurred under these Guaranteed Obligations and no liability for the arrangements has been recognized at March 31, 2012. Because of the specific circumstances surrounding the arrangements and the fact that no active or observable market exists for this type of financial guarantee, the Company is unable to determine a current fair value for the Guaranteed Obligations and related Subordinated Indemnity Agreement.

Contingencies

In the ordinary course of business, the Company and its subsidiaries are defendants in or parties to various legal claims, actions and proceedings. These claims, actions and proceedings are at varying stages of investigation, arbitration or adjudication, and involve a variety of areas of law.

On October 8, 2004, certain heirs of Jerome Siegel, one of the creators of the “Superman” character, filed suit against the Company, DC Comics and Warner Bros. Entertainment Inc. in the U.S. District Court for the Central District of California. Plaintiffs’ complaint seeks an accounting and demands up to one-half of the profits made on Superman since the alleged April 16, 1999 termination by plaintiffs of Siegel’s grants of one-half of the rights to the Superman character to DC Comics’ predecessor-in-interest. Plaintiffs have also asserted various Lanham Act and unfair competition claims, alleging “wasting” of the Superman property by DC Comics, and the Company has filed counterclaims. On March 26, 2008, the court entered an order of summary judgment finding, among other things, that plaintiffs’ notices of termination were valid and that plaintiffs had thereby recaptured, as of April 16, 1999, their rights to a one-half interest in the Superman story material, as first published, but that the accounting for profits would not include profits attributable to foreign exploitation, republication of pre-termination works and trademark exploitation. On October 6, 2008, the court dismissed plaintiffs’ Lanham Act and “wasting” claims with prejudice, and subsequently determined that the remaining claims in the case will be subject to phased non-jury trials. On July 8, 2009, the court issued a decision in the first phase trial in favor of the defendants on the issue of whether the terms of various license agreements between DC Comics and Warner Bros. Entertainment Inc. were at fair market value or constituted “sweetheart deals.” On May 17, 2011, the court certified certain liability issues for interlocutory appeal and stayed proceedings pending that appeal. The parties are pursuing their interlocutory appeals with respect to the certified liability issues.

On October 22, 2004, the same Siegel heirs filed a related lawsuit against the same defendants, as well as Warner Communications Inc. and Warner Bros. Television Production Inc. in the U.S. District Court for the Central District of California. Plaintiffs claim that Siegel was the sole creator of the character Superboy and, as such, DC Comics has had no right to create new Superboy works since the alleged October 17, 2004 termination by plaintiffs of Siegel’s grants of rights to the Superboy character to DC Comics’ predecessor-in-interest. This lawsuit seeks a declaration regarding the validity of the alleged termination and an injunction against future use of the Superboy character. On March 23, 2006, the court granted plaintiffs’ motion for partial summary judgment on termination, denied the Company’s motion for summary judgment and held that further proceedings are necessary to determine whether the Company’s Smallville television series may infringe on plaintiffs’ rights to the Superboy character. On July 27, 2007, upon the Company’s motion for reconsideration, the court reversed the bulk of its March 23, 2006 ruling, and requested additional briefing on certain issues, on which a decision remains pending.

On May 14, 2010, DC Comics filed a related lawsuit in the U.S. District Court for the Central District of California against the heirs of Superman co-creator Joseph Shuster, the Siegel heirs, their attorney Marc Toberoff and certain companies that Mr. Toberoff controls. The lawsuit asserts a claim for declaratory relief concerning the validity and scope of

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the copyright termination notice served by the Shuster heirs, which, together with the termination notices served by the Siegel heirs described above, purports to preclude DC Comics from creating new Superman and/or Superboy works for distribution and sale in the United States after October 26, 2013. The lawsuit also seeks declaratory relief with respect to, inter alia, the validity of various agreements between Mr. Toberoff, his companies and the Shuster and Siegel heirs, and asserts claims for intentional interference by Mr. Toberoff with DC Comics’ contracts and prospective economic advantage with the Shuster and Siegel heirs, for which DC Comics seeks monetary damages. On September 3, 2010, DC Comics filed an amended complaint and on September 20, 2010, defendants filed motions to strike certain causes of action and dismiss the amended complaint under California and federal laws. Defendants’ motion to strike certain causes of action was denied on October 25, 2011, and defendants withdrew their motion to dismiss on November 3, 2011.

On April 4, 2007, the National Labor Relations Board (“NLRB”) issued a complaint against CNN America Inc. (“CNN America”) and Team Video Services, LLC (“Team Video”). This administrative proceeding relates to CNN America’s December 2003 and January 2004 terminations of its contractual relationships with Team Video, under which Team Video had provided electronic newsgathering services in Washington, DC and New York, NY. The National Association of Broadcast Employees and Technicians, under which Team Video’s employees were unionized, initially filed charges of unfair labor practices with the NLRB in February 2004, alleging that CNN America and Team Video were joint employers, that CNN America was a successor employer to Team Video, and/or that CNN America discriminated in its hiring practices to avoid becoming a successor employer or due to specific individuals’ union affiliation or activities. The NLRB complaint seeks, among other things, the reinstatement of certain union members and monetary damages. On November 19, 2008, the presiding NLRB Administrative Law Judge issued a non-binding recommended decision, finding CNN America liable. On February 17, 2009, CNN America filed exceptions to this decision with the NLRB.

On September 20, 2007, Brantley, et al. v. NBC Universal, Inc., et al. was filed in the U.S. District Court for the Central District of California against the Company and several other programming content providers (collectively, the “programmer defendants”) as well as cable and satellite providers (collectively, the “distributor defendants”), alleging violations of the federal antitrust laws. Among other things, the complaint alleged coordination between and among the programmer defendants to sell and/or license programming on a “bundled” basis to the distributor defendants, who in turn purportedly offer that programming to subscribers in packaged tiers, rather than on a per channel (or “à la carte”) basis. In an order dated October 15, 2009, the court dismissed the third amended complaint with prejudice. On October 30, 2009, plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit. On March 30, 2012, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the lawsuit and, on April 10, 2012, plaintiffs filed a petition for a rehearing en banc.

On March 10, 2009, Anderson News L.L.C. and Anderson Services L.L.C. (collectively, “Anderson News”) filed an antitrust lawsuit in the U.S. District Court for the Southern District of New York against several magazine publishers, distributors and wholesalers, including Time Inc. and one of its subsidiaries, Time/Warner Retail Sales & Marketing, Inc. Plaintiffs allege that defendants violated Section 1 of the Sherman Antitrust Act by engaging in an antitrust conspiracy against Anderson News, as well as other related state law claims. Plaintiffs are seeking unspecified monetary damages. On August 2, 2010, the court granted defendants’ motions to dismiss the complaint with prejudice and, on October 25, 2010, the court denied Anderson News’ motion for reconsideration of that dismissal. On November 8, 2010, Anderson News filed a notice of appeal with the U.S. Court of Appeals for the Second Circuit. On April 3, 2012, the U.S. Court of Appeals for the Second Circuit vacated the district court’s dismissal of plaintiffs’ complaint and remanded the case to the district court for further proceedings.

The Company intends to vigorously defend against or prosecute, as applicable, the matters described above.

The Company establishes an accrued liability for legal claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters.

For matters disclosed above for which a loss is probable or reasonably possible, whether in excess of an accrued liability or where there is no accrued liability, the Company has estimated a range of possible loss. The Company believes the estimate of the aggregate range of possible loss in excess of accrued liabilities for such matters is between $0 and $80 million at March 31, 2012. The estimated aggregate range of possible loss is subject to significant judgment and a variety of

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assumptions. The matters represented in the estimated aggregate range of possible loss will change from time to time and actual results may vary significantly from the current estimate.

In view of the inherent difficulty of predicting the outcome of litigation and claims, the Company often cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. An adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period.

Income Tax Uncertainties

During the three months ended March 31, 2012, the Company recorded net incremental income tax reserves of approximately $41 million. Of the $41 million net incremental income tax reserves, approximately $33 million would affect the Company’s effective tax rate if reversed. During the three months ended March 31, 2012, the Company recorded interest reserves related to the income tax reserves of approximately $17 million.

13. RELATED PARTY TRANSACTIONS

The Company has entered into certain transactions in the ordinary course of business with unconsolidated investees accounted for under the equity method of accounting. These transactions have been executed on terms comparable to the terms of transactions with unrelated third parties and primarily include the licensing of broadcast rights to The CW broadcast network for film and television product by the Film and TV Entertainment segment and the licensing of rights to carry cable television programming provided by the Networks segment. Revenues from transactions with related parties were $145 million and $107 million for the three months ended March 31, 2012 and 2011, respectively, and expenses from transactions with related parties were $18 million and $14 million for the three months ended March 31, 2012 and 2011, respectively.

14. ADDITIONAL FINANCIAL INFORMATION

Cash Flows

Additional financial information with respect to cash payments and receipts is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Cash payments made for interest	$	(291)	$	(218)
Interest income received		11		5
Cash interest payments, net	$	(280)	$	(213)
Cash payments made for income taxes	$	(333)	$	(141)
Income tax refunds received		30		4
Cash tax payments, net	$	(303)	$	(137)

Interest Expense, Net

Interest expense, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Interest income	$	28	$	37
Interest expense		(348)		(311)
Total interest expense, net	$	(320)	$	(274)

33

TIME WARNER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other Loss, Net

Other loss, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Investment gains (losses), net	$	(9)	$	4
Loss on equity method investees		(8)		(18)
Other		17		-
Total other loss, net	$	-	$	(14)

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of (millions):

	March 31, 2012		December 31,     2011
Accounts payable	$	700	$	961
Accrued expenses		1,750		2,037
Participations payable		2,343		2,337
Programming costs payable		889		742
Accrued compensation		623		1,049
Accrued interest		366		342
Accrued income taxes		360		347
Total accounts payable and accrued liabilities	$	7,031	$	7,815

Other Noncurrent Liabilities

Other noncurrent liabilities consist of (millions):

	March 31, 2012		December 31,     2011
Noncurrent tax and interest reserves	$	2,483	$	2,430
Participations payable		928		927
Programming costs payable		989		1,029
Noncurrent pension and post retirement liabilities		807		809
Deferred compensation		581		574
Other noncurrent liabilities		532		565
Total other noncurrent liabilities	$	6,320	$	6,334

Accounting for Collaborative Arrangements

The Company’s collaborative arrangements primarily relate to arrangements entered into with third parties to jointly finance and distribute theatrical productions (“co-financing arrangements”) and the arrangement entered into with CBS Broadcasting, Inc. (“CBS”) and The National Collegiate Athletic Association (the “NCAA”) that provides Turner and CBS with exclusive television, Internet and wireless rights to the NCAA Division I Men’s Basketball Championship events (the “NCAA Tournament”) in the United States and its territories and possessions from 2011 through 2024.

For the Company’s collaborative arrangements entered into with third parties to jointly finance and distribute theatrical productions, net participation costs of $77 million and $87 million were recorded in Costs of revenues for the three months ended March 31, 2012 and 2011, respectively.

34

TIME WARNER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Turner and CBS jointly produce and distribute the NCAA Tournament and related programming. The aggregate programming rights fee, production costs, advertising revenues and sponsorship revenues are shared equally by Turner and CBS. However, if the amount paid for the programming rights fee and production costs, in any given year, exceeds advertising and sponsorship revenues for that year, CBS’ share of such shortfall is limited to specified annual amounts (the “loss cap”), ranging from approximately $90 million to $30 million. The amount incurred by the Company pursuant to the loss cap during the three months ended March 31, 2012 and 2011 was not significant.

35

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Overview

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations and cash flows of (i) Time Warner Inc. (the “Parent Company”), (ii) Historic TW Inc. (in its own capacity and as successor by merger to Time Warner Companies, Inc.), Home Box Office, Inc., and Turner Broadcasting System, Inc., each a wholly owned subsidiary of the Parent Company (collectively, the “Guarantor Subsidiaries”), on a combined basis, (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the “Non-Guarantor Subsidiaries”), on a combined basis and (iv) the eliminations necessary to arrive at the information for Time Warner Inc. on a consolidated basis. The Guarantor Subsidiaries, fully and unconditionally, jointly and severally, guarantee securities issued under certain of the Company’s indentures on an unsecured basis.

There are no legal or regulatory restrictions on the Parent Company’s ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances.

Basis of Presentation

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company’s interests in the Guarantor Subsidiaries and (ii) the Guarantor Subsidiaries’ interests in the Non-Guarantor Subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. generally accepted accounting principles. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column “Eliminations.”

The Parent Company’s accounting bases in all subsidiaries, including goodwill and identified intangible assets, have been “pushed down” to the applicable subsidiaries. Corporate overhead expenses have been reflected as expenses of the Parent Company and have not been allocated to the Guarantor Subsidiaries or the Non-Guarantor Subsidiaries. Interest income (expense) is determined based on third-party debt and the relevant intercompany amounts within the respective legal entity.

All direct and indirect domestic subsidiaries are included in Time Warner Inc.’s consolidated U.S. tax return. In the condensed consolidating financial statements, tax expense has been allocated based on each such subsidiary’s relative pretax income to the consolidated pretax income. With respect to the use of certain consolidated tax attributes (principally operating and capital loss carryforwards), such benefits have been allocated to the respective subsidiary that generated the taxable income permitting such use (i.e., pro-rata based on where the income was generated). For example, to the extent a Non-Guarantor Subsidiary generated a gain on the sale of a business for which the Parent Company utilized tax attributes to offset such gain, the tax attribute benefit would be allocated to that Non-Guarantor Subsidiary. Deferred taxes of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been allocated based upon the temporary differences between the carrying amounts of the respective assets and liabilities of the applicable entities.

Certain transfers of cash between subsidiaries and their parent companies and intercompany dividends are reflected as cash flows from investing and financing activities in the accompanying condensed consolidating statements of cash flows. All other intercompany activity is reflected in cash flows from operations.

Management believes that the allocations and adjustments noted above are reasonable. However, such allocations and adjustments may not be indicative of the actual amounts that would have been incurred had the Parent, Guarantor and Non-Guarantor entities operated independently.

36

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Balance Sheet

March 31, 2012

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
ASSETS
Current assets
Cash and equivalents	$	2,097	$	157	$	623	$	-	$	2,877
Receivables, net		43		743		5,526		-		6,312
Inventories		-		408		1,501		-		1,909
Deferred income taxes		649		510		412		(922)		649
Prepaid expenses and other current assets		90		73		381		-		544
Total current assets		2,879		1,891		8,443		(922)		12,291
Noncurrent inventories and film and TV production costs		-		1,675		5,100		(91)		6,684
Investments in amounts due to and from consolidated subsidiaries		45,976		21,808		12,111		(79,895)		-
Investments, including available-for-sale securities		84		436		1,374		-		1,894
Property, plant and equipment, net		343		446		3,148		-		3,937
Intangible assets subject to amortization, net		-		-		2,117		-		2,117
Intangible assets not subject to amortization		-		2,007		5,800		-		7,807
Goodwill		-		9,879		20,169		-		30,048
Other assets		290		173		1,503		-		1,966
Total assets	$	49,572	$	38,315	$	59,765	$	(80,908)	$	66,744
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	856	$	764	$	5,461	$	(50)	$	7,031
Deferred revenue		-		11		1,027		(15)		1,023
Debt due within one year		637		448		10		-		1,095
Total current liabilities		1,493		1,223		6,498		(65)		9,149
Long-term debt		14,093		4,297		35		-		18,425
Due (to) from affiliates		(873)		-		873		-		-
Deferred income taxes		2,536		3,193		2,782		(5,975)		2,536
Deferred revenue		-		2		580		(49)		533
Other noncurrent liabilities		2,543		2,223		3,401		(1,847)		6,320
Equity
Due (to) from Time Warner and subsidiaries		-		(25,968)		(3,479)		29,447		-
Other shareholders’ equity		29,780		53,345		49,074		(102,419)		29,780
Total Time Warner Inc. shareholders’ equity		29,780		27,377		45,595		(72,972)		29,780
Noncontrolling interests		-		-		1		-		1
Total equity		29,780		27,377		45,596		(72,972)		29,781
Total liabilities and equity	$	49,572	$	38,315	$	59,765	$	(80,908)	$	66,744

37

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Balance Sheet

December 31, 2011

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
ASSETS
Current assets
Cash and equivalents	$	2,578	$	164	$	734	$	-	$	3,476
Receivables, net		52		705		6,165		-		6,922
Inventories		-		429		1,461		-		1,890
Deferred income taxes		663		525		437		(962)		663
Prepaid expenses and other current assets		106		61		314		-		481
Total current assets		3,399		1,884		9,111		(962)		13,432
Noncurrent inventories and film and TV production costs		-		1,698		4,984		(88)		6,594
Investments in amounts due to and from consolidated subsidiaries		45,566		21,845		12,022		(79,433)		-
Investments, including available-for-sale securities		76		410		1,334		-		1,820
Property, plant and equipment, net		369		462		3,132		-		3,963
Intangible assets subject to amortization, net		-		-		2,232		-		2,232
Intangible assets not subject to amortization		-		2,007		5,798		-		7,805
Goodwill		-		9,879		20,150		-		30,029
Other assets		288		193		1,445		-		1,926
Total assets	$	49,698	$	38,378	$	60,208	$	(80,483)	$	67,801
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	837	$	890	$	6,123	$	(35)	$	7,815
Deferred revenue		-		13		1,081		(10)		1,084
Debt due within one year		-		11		12		-		23
Total current liabilities		837		914		7,216		(45)		8,922
Long-term debt		14,730		4,735		36		-		19,501
Due (to) from affiliates		(850)		-		850		-		-
Deferred income taxes		2,541		3,296		2,882		(6,178)		2,541
Deferred revenue		-		15		589		(55)		549
Other noncurrent liabilities		2,483		2,232		3,461		(1,842)		6,334
Equity
Due (to) from Time Warner and subsidiaries		-		(25,217)		(3,083)		28,300		-
Other shareholders’ equity		29,957		52,403		48,260		(100,663)		29,957
Total Time Warner Inc. shareholders’ equity		29,957		27,186		45,177		(72,363)		29,957
Noncontrolling interests		-		-		(3)		-		(3)
Total equity		29,957		27,186		45,174		(72,363)		29,954
Total liabilities and equity	$	49,698	$	38,378	$	60,208	$	(80,483)	$	67,801

38

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Statement of Operations

For The Three Months Ended March 31, 2012

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
Revenues	$	-	$	1,562	$	5,518	$	(101)	$	6,979
Costs of revenues		-		(786)		(3,271)		81		(3,976)
Selling, general and administrative		(100)		(241)		(1,252)		18		(1,575)
Amortization of intangible assets		-		-		(61)		-		(61)
Restructuring and severance costs		-		(6)		(20)		-		(26)
Asset impairments		-		-		(52)		-		(52)
Gain (loss) on operating assets		-		-		(42)		-		(42)
Operating income		(100)		529		820		(2)		1,247
Equity in pretax income (loss) of consolidated subsidiaries		1,249		807		347		(2,403)		-
Interest expense, net		(220)		(92)		(11)		3		(320)
Other loss, net		(2)		11		(8)		(1)		-
Income before income taxes		927		1,255		1,148		(2,403)		927
Income tax provision		(346)		(422)		(386)		808		(346)
Net income		581		833		762		(1,595)		581
Less Net loss attributable to noncontrolling interest		2		2		2		(4)		2
Net income attributable to Time Warner Inc. shareholders	$	583	$	835	$	764	$	(1,599)	$	583
Comprehensive income		640		866		797		(1,663)		640
Less Comprehensive loss attributable to noncontrolling interest		2		2		2		(4)		2
Comprehensive income attributable to Time Warner Inc. shareholders	$	642	$	868	$	799	$	(1,667)	$	642

39

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Statement of Operations

For The Three Months Ended March 31, 2011

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
Revenues	$	-	$	1,548	$	5,309	$	(174)	$	6,683
Costs of revenues		-		(782)		(3,091)		146		(3,727)
Selling, general and administrative		(88)		(235)		(1,293)		25		(1,591)
Amortization of intangible assets		-		-		(68)		-		(68)
Restructuring and severance costs		1		(3)		(28)		-		(30)
Gain on operating assets		-		-		3		-		3
Operating income		(87)		528		832		(3)		1,270
Equity in pretax income (loss) of consolidated subsidiaries		1,243		811		396		(2,450)		-
Interest expense, net		(187)		(92)		3		2		(274)
Other loss, net		13		(4)		-		(23)		(14)
Income before income taxes		982		1,243		1,231		(2,474)		982
Income tax provision		(331)		(417)		(414)		831		(331)
Net income		651		826		817		(1,643)		651
Less Net loss attributable to noncontrolling interests		2		2		2		(4)		2
Net income attributable to Time Warner Inc. shareholders	$	653	$	828	$	819	$	(1,647)	$	653
Comprehensive income		744		891		882		(1,773)		744
Less Comprehensive loss attributable to noncontrolling interest		2		2		2		(4)		2
Comprehensive income attributable to Time Warner Inc. shareholders	$	746	$	893	$	884	$	(1,777)	$	746

40

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Statement of Cash Flows

For The Three Months Ended March 31, 2012

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
OPERATIONS
Net income	$	581	$	833	$	762	$	(1,595)	$	581
Adjustments for noncash and nonoperating items:
Depreciation and amortization		6		35		174		-		215
Amortization of film and television costs		-		659		1,287		2		1,948
Asset impairments		-		-		52		-		52
(Gain) loss on investments and other assets, net		2		-		49		-		51
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions		(1,249)		(807)		(347)		2,403		-
Equity in losses of investee companies, net of cash distributions		1		-		14		-		15
Equity-based compensation		21		25		55		-		101
Deferred income taxes		(92)		(110)		(93)		203		(92)
Changes in operating assets and liabilities, net of acquisitions		135		(255)		(1,325)		(1,010)		(2,455)
Intercompany		-		136		(136)		-		-
Cash provided by operations		(595)		516		492		3		416
INVESTING ACTIVITIES
Investments in available-for-sale securities		(6)		(11)		-		-		(17)
Investments and acquisitions, net of cash acquired		(7)		(2)		(50)		-		(59)
Capital expenditures		(12)		(16)		(105)		-		(133)
Advances to (from) parent and consolidated subsidiaries		854		262		-		(1,116)		-
Other investment proceeds		-		8		19		(5)		22
Cash used by investing activities		829		241		(136)		(1,121)		(187)
FINANCING ACTIVITIES
Borrowings		-		-		11		-		11
Debt repayments		-		-		(13)		-		(13)
Proceeds from exercise of stock options		185		-		-		-		185
Excess tax benefit on stock options		34		-		-		-		34
Principal payments on capital leases		-		(3)		-		-		(3)
Repurchases of common stock		(725)		-		-		-		(725)
Dividends paid		(257)		-		-		-		(257)
Other financing activities		48		(10)		(98)		-		(60)
Change in due to/from parent and investment in segment		-		(751)		(367)		1,118		-
Cash used by financing activities		(715)		(764)		(467)		1,118		(828)
DECREASE IN CASH AND EQUIVALENTS		(481)		(7)		(111)		-		(599)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		2,578		164		734		-		3,476
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,097	$	157	$	623	$	-	$	2,877

41

TIME WARNER INC.

SUPPLEMENTARY INFORMATION

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS – (Continued)

Consolidating Statement of Cash Flows

For The Three Months Ended March 31, 2011

(Unaudited; millions)

		000,000,000		000,000,000		000,000,000		000,000,000		000,000,000
	Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Time Warner Consolidated
OPERATIONS
Net income	$	651	$	826	$	817	$	(1,643)	$	651
Adjustments for noncash and nonoperating items:
Depreciation and amortization		7		34		190		-		231
Amortization of film and television costs		-		624		1,039		1		1,664
(Gain) loss on investments and other assets, net		(4)		(1)		1		-		(4)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions		(1,243)		(811)		(396)		2,450		-
Equity in losses of investee companies, net of cash distributions		(2)		3		31		-		32
Equity-based compensation		16		24		62		-		102
Deferred income taxes		51		32		30		(62)		51
Changes in operating assets and liabilities, net of acquisitions		161		(182)		(1,141)		(740)		(1,902)
Intercompany		-		268		(268)		-		-
Cash provided by operations		(363)		817		365		6		825
INVESTING ACTIVITIES
Investments in available-for-sale securities		-		-		-		-		-
Investments and acquisitions, net of cash acquired		-		(3)		(157)		-		(160)
Capital expenditures		(23)		(23)		(106)		-		(152)
Advances to (from) parent and consolidated subsidiaries		642		(147)		-		(495)		-
Other investment proceeds		(1)		2		4		-		5
Cash used by investing activities		618		(171)		(259)		(495)		(307)
FINANCING ACTIVITIES
Borrowings		-		-		22		-		22
Debt repayments		-		-		(21)		-		(21)
Proceeds from exercise of stock options		118		-		-		-		118
Excess tax benefit on stock options		14		-		-		-		14
Principal payments on capital leases		-		(2)		-		-		(2)
Repurchases of common stock		(959)		-		-		-		(959)
Dividends paid		(261)		-		-		-		(261)
Other financing activities		27		(10)		(80)		-		(63)
Change in due to/from parent and investment in segment		-		(600)		111		489		-
Cash used by financing activities		(1,061)		(612)		32		489		(1,152)
DECREASE IN CASH AND EQUIVALENTS		(806)		34		138		-		(634)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		2,815		256		592		-		3,663
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,009	$	290	$	730	$	-	$	3,029

42

Part II. Other Information

Item 1. Legal Proceedings.

The following information supplements and amends the disclosure set forth in Part I, Item 3. Legal Proceedings, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

Reference is made to the lawsuit filed by certain heirs of Jerome Siegel regarding the character Superman described on page 32 of the 2011 Form 10-K. The parties are pursuing their interlocutory appeals with respect to the certified liability issues.

Reference is made to the lawsuit filed against the Company and several other programming content providers, as well as cable and satellite providers, described on page 33 of the 2011 Form 10-K. On March 30, 2012, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the lawsuit and, on April 10, 2012, plaintiffs filed a petition for a rehearing en banc.

Reference is made to the lawsuit filed by Anderson News L.L.C. and Anderson Services L.L.C. described on page 33 of the 2011 Form 10-K. On April 3, 2012, the U.S. Court of Appeals for the Second Circuit vacated the district court’s dismissal of plaintiffs’ complaint and remanded the case to the district court for further proceedings.

Item 1A. Risk Factors.

There have been no material changes in the Company’s risk factors as previously disclosed in Part I, Item 1A. Risk Factors, of the 2011 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Company Purchases of Equity Securities

The following table provides information about the Company’s purchases of equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended March 31, 2012.

Issuer Purchases of Equity Securities

Period	Total Number of Shares  Purchased	Average Price Paid  Per Share(1)		Total Number of Shares Purchased  as Part of Publicly Announced Plans  or Programs(2)	Approximate Dollar Value  of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2012 – January 31, 2012	8,520,043		$        37.25	8,520,043		$         66,761,281(3	)
February 1, 2012 – February 29, 2012	3,877,430		$        37.63	3,877,430		$    3,918,649,828(4	)
March 1, 2012 – March 31, 2012	7,322,485		$        36.52	7,322,485		$    3,651,245,970(4	)
Total	19,719,958		$        37.05	19,719,958		$    3,651,245,970(4	)

⁽¹⁾  The calculation of the average price paid per share does not give effect to any fees, commissions or other costs associated with the share repurchases.

⁽²⁾  On February 2, 2011, the Company announced that its Board of Directors had authorized an increase to $5.0 billion in share repurchases beginning January 1, 2011, from the approximately $1.0 billion remaining at December 31, 2010 under the prior $3.0 billion authorization. This program was completed in February 2012. On February 8, 2012, the Company announced that its Board of Directors had authorized a new $4.0 billion share repurchase program. Purchases under the stock repurchase program may be made, from time to time, on the open market and in privately negotiated transactions. The size and timing of these purchases will be based on a number of factors, including price and business and market conditions. In the past, the Company has repurchased shares of its common stock pursuant to trading programs under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended, and it may repurchase shares of its common stock under such trading programs in the future.

⁽³⁾  This amount does not reflect the fees, commissions and other costs associated with the share repurchases or the new $4.0 billion share repurchase program announced in February 2012.

⁽⁴⁾  This amount does not reflect the fees, commissions and other costs associated with the share repurchases under the new $4.0 billion share repurchase program.

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Item 6. Exhibits.

The exhibits listed on the accompanying Exhibit Index are submitted with or incorporated by reference as a part of this report, and such Exhibit Index is incorporated herein by reference.

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TIME WARNER INC.

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.

	TIME WARNER INC.
	(Registrant)
Date: May 2, 2012	/s/ John K. Martin, Jr.
	John K. Martin, Jr.
	Chief Financial and Administrative Officer

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EXHIBIT INDEX

Pursuant to Item 601 of Regulation S-K

Exhibit No.	Description of Exhibit
10.1	Form of Restricted Stock Units Agreement, RSU Director Agreement, Version 2 (for awards of restricted stock units to non-employee directors under the 2010 Stock Incentive Plan). +
10.2	Form of Notice of Grant of Restricted Stock Units to Non-Employee Director (for awards of restricted stock units to non-employee directors under the 2010 Stock Incentive Plan). +
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. †
101	The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheet at March 31, 2012 and December 31, 2011, (ii) Consolidated Statement of Operations for the three months ended March 31, 2012 and 2011, (iii) Consolidated Statement of Comprehensive Income for the three months ended March 31, 2012 and 2011, (iv) Consolidated Statement of Cash Flows for the three months ended March 31, 2012 and 2011, (v) Consolidated Statement of Equity for the three months ended March 31, 2012 and 2011, (vi) Notes to Consolidated Financial Statements and (vii) Supplementary Information – Condensed Consolidating Financial Statements.

+ This exhibit is a management contract or compensation plan or arrangement.

† This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

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EX-10.1

EXHIBIT 10.1

Time Warner Inc. 2010 Stock Incentive Plan

RSU Director Agreement, Version 2 (10RUDIR2)

For Use from April 2012

Restricted Stock Units Agreement

General Terms and Conditions

WHEREAS, the Company has adopted the Plan (as defined below), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the restricted stock units (the “RSUs”) provided for herein to the Non-Employee Director pursuant to the Plan and the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1. Definitions. Whenever the following terms are used in this Agreement, they shall have the meanings set forth below. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.

a) “Disability” means medical or health reasons that render the Non-Employee Director unable to continue to serve as a member of the Board.

b) “Notice” means (i) the Notice of Grant of Restricted Stock Units that accompanies this Agreement, if this Agreement is delivered to the Non-Employee Director in “hard copy,” and (ii) the screen of the website for the stock plan administration with the heading “Vesting Schedule and Details,” which contains the details of the grant governed by this Agreement, if this Agreement is delivered electronically to the Non-Employee Director.

c) “Non-Employee Director” means an individual who is a member of the Board of Directors of the Company who, as of the close of business on the date of the annual meeting of stockholders of the Company, is not an employee of the Company or any subsidiary of the Company, and shall have the same meaning as may be assigned to the terms “Holder” or “Participant” in the Plan. For the purposes hereof, a “subsidiary” of the Company shall mean any corporation, partnership or other entity in which the Company owns, directly or indirectly, an equity interest of 50% or more.

d) “Plan” means the equity plan maintained by the Company that is specified in the Notice, which equity plan has been provided to the Non-Employee Director separately and forms a part of this Agreement, as such plan may be amended, supplemented or modified from time to time.

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e) “Retirement” means (i) ceasing to be a director of the Company by reason of mandatory retirement pursuant to any policy or plan of the Company applicable to Non-Employee Directors or (ii) ceasing to be a director of the Company following either (x) completion of at least five years of service as a director, in the aggregate or (y) having served as a director of the Company for at least five consecutive annual meetings of stockholders of the Company.

f) “Shares” means shares of Common Stock of the Company.

g) “Termination of Service due to Election Results” means ceasing to serve as a director of the Company because either (i) having been nominated for reelection, the Non-Employee Director is not re-elected by the stockholders of the Company to serve as a member of the Board or (ii) having been re-elected by fewer than a majority “for” votes of the votes cast by the stockholders at a stockholders’ meeting in an uncontested election of director, the Non-Employee Director’s offer to resign is accepted by the Board.

h) “Vesting Date” means the vesting date set forth in the Notice.

2. Grant of Restricted Stock Units. The Company hereby grants to the Non-Employee Director (the “Award”), on the terms and conditions hereinafter set forth, the number of RSUs set forth on the Notice. Each RSU represents the unfunded, unsecured right of the Non-Employee Director to receive a Share on the date(s) specified herein. RSUs do not constitute issued and outstanding shares of Common Stock for any corporate purposes and do not confer on the Non-Employee Director any right to vote on matters that are submitted to a vote of holders of Shares.

3. Dividend Equivalents and Retained Distributions. If on any date while RSUs are outstanding hereunder the Company shall pay any regular cash dividend on the Shares, the Non-Employee Director shall be paid, for each RSU held by the Non-Employee Director on the record date, an amount of cash equal to the dividend paid on a Share (the “Dividend Equivalents”) at the time that such dividends are paid to holders of Shares. If on any date while RSUs are outstanding hereunder the Company shall pay any dividend other than a regular cash dividend or make any other distribution on the Shares, the Non-Employee Director shall be credited with a bookkeeping entry equivalent to such dividend or distribution for each RSU held by the Non-Employee Director on the record date for such dividend or distribution, but the Company shall retain custody of all such dividends and distributions unless the Board has in its sole discretion determined that an amount equivalent to such dividend or distribution shall be paid currently to the Non-Employee Director (the “Retained Distributions”); provided, however, that if the Retained Distribution relates to a dividend paid in Shares, the Non-Employee Director shall receive an additional amount of RSUs equal to the product of (I) the aggregate number of RSUs held by the Non-Employee Director pursuant to this Agreement through the related dividend record date, multiplied by (II) the number of Shares (including any fraction thereof) payable as a dividend on a Share. Retained Distributions will not bear interest and will be subject to the same restrictions as the RSUs to which they relate. Notwithstanding anything else contained in this paragraph 3, no payment of Dividend Equivalents or Retained Distributions shall occur before the first date on which a payment could be made without subjecting the Non-Employee Director to tax under the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

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4. Vesting and Delivery of Vested Securities.

a) Subject to the terms and provisions of the Plan and this Agreement, no later than 60 days after the Vesting Date with respect to the Award, the Company shall issue or transfer to the Non-Employee Director the number of Shares corresponding to such Vesting Date and the Retained Distributions, if any, covered by the Award. Except as otherwise provided in paragraphs 5, 6 and 7, the vesting of such RSUs and any Retained Distributions relating thereto shall occur only if the Non-Employee Director has continued to serve as a director of the Company on the Vesting Date and has continuously so served since the Date of Grant (as defined in the Notice).

b) RSUs Extinguished. Upon each issuance or transfer of Shares in accordance with this Agreement, a number of RSUs equal to the number of Shares issued or transferred to the Non-Employee Director shall be extinguished and such number of RSUs will not be considered to be held by the Non-Employee Director for any purpose.

c) Final Issuance. Upon the final issuance or transfer of Shares and Retained Distributions, if any, to the Non-Employee Director pursuant to this Agreement, in lieu of any fractional Share, the Non-Employee Director shall receive a cash payment equal to the Fair Market Value of such fractional Share.

d) Section 409A. Notwithstanding anything else contained in this Agreement, no Shares shall be issued or transferred to a Non-Employee Director before the first date on which a payment could be made without subjecting the Non-Employee Director to tax under the provisions of Section 409A of the Code.

5. Termination of Service as a Director.

a)         If the Non-Employee Director’s service as a director of the Company is terminated by the Non-Employee Director for any reason other than those described in clauses (b) and (c) below prior to the Vesting Date, then the RSUs covered by the Award and all Retained Distributions relating thereto shall be completely forfeited on the date of any such termination of service.

b)         If the Non-Employee Director’s service as a director of the Company terminates prior to the Vesting Date (i) as a result of his or her death or Disability, (ii) as a result of his or her Retirement or (iii) as a result of a Termination of Service Due to Election Results, then the RSUs and all Retained Distributions relating thereto shall fully vest on the date of any such termination and Shares subject to the RSUs shall be issued or transferred to the Non-Employee Director as soon as practicable, but no later than 90 days, following such termination of service as a director.

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c)         The RSUs and all Retained Distributions relating thereto shall vest in the event a Non-Employee Director (a “withdrawing Non-Employee Director”) terminates his or her service as a member of the Board (i) for reasons of personal or financial hardship; (ii) to serve in any governmental, diplomatic or any other public service position or capacity; (iii) to avoid or protect against a conflict of interest of any kind; (iv) on the advice of legal counsel; or (v) on a case by case basis in the discretion of the Board, for any other extraordinary circumstance that the Board determines to be comparable to the foregoing; provided that the payment of the Shares shall not occur before the first date on which a payment could be made without subjecting the Non-Employee Director to tax under the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The withdrawing Non-Employee Director shall abstain from participating in any determination made by the Board with respect to any matter relating to the foregoing.

d)         In the event the Non-Employee Director ceases to serve as a director of the Company, the Non-Employee Director shall have no claim against the Company with respect to the RSUs and related Retained Distributions, if any, other than as set forth in this paragraph 5, the provisions of this paragraph 5 being the sole remedy of the Non-Employee Director with respect thereto.

6. Acceleration of Vesting Date. In the event a Change in Control, subject to paragraph 7, has occurred, to the extent that any such occurrence also constitutes a change in ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code (a “409A Change of Control Event”), (A) the Award will vest in full upon the occurrence of a Change in Control and (B) Shares subject to the RSUs shall be issued or transferred to the Non-Employee Director, as soon as practicable, but in no event later than 60 days following such Change in Control, along with any Retained Distributions related thereto; provided, however, that notwithstanding the foregoing, to the extent that any such occurrence does not constitute a 409A Change of Control Event, the RSUs shall vest as described under this paragraph 6, but the issuance of Shares shall be made at the times otherwise provided hereunder as if no Change of Control had occurred.

7. Limitation on Acceleration. Notwithstanding any provision to the contrary in the Plan or this Agreement, if the Payment (as hereinafter defined) due to the Non-Employee Director hereunder as a result of the acceleration of vesting of the RSUs pursuant to paragraph 6 of this Agreement, either alone or together with all other Payments received or to be received by the Non-Employee Director from the Company or any of its Affiliates (collectively, the “Aggregate Payments”), or any portion thereof, would be subject to the excise tax imposed by Section 4999 of the Code (or any successor thereto), the following provisions shall apply:

a) If the net amount that would be retained by the Non-Employee Director after all taxes on the Aggregate Payments are paid would be greater than the net amount that would be retained by the Non-Employee Director after all taxes are paid if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax, the Non-Employee Director shall be entitled to receive the Aggregate Payments.

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b) If, however, the net amount that would be retained by the Non-Employee Director after all taxes were paid would be greater if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax, the Aggregate Payments to which the Non-Employee Director is entitled shall be reduced to such largest amount.

The term “Payment” shall mean any transfer of property within the meaning of Section 280G of the Code.

The determination of whether any reduction of Aggregate Payments is required and the timing and method of any such required reduction in Payments under this Agreement or in any such other Payments otherwise payable by the Company or any of its Affiliates consistent with any such required reduction, shall be made by the Non-Employee Director, including whether any portion of such reduction shall be applied against any cash or any shares of stock of the Company or any other securities or property to which the Non-Employee Director would otherwise have been entitled under this Agreement or under any such other Payments, and whether to waive the right to the acceleration of the Payment due under this Agreement or any portion thereof or under any such other Payments or portions thereof, and all such determinations shall be conclusive and binding on the Company and its Affiliates. To the extent that Payments hereunder or any such other Payments are not paid as a consequence of the limitation contained in this paragraph 7, then the RSUs and Retained Distributions related thereto (to the extent not so accelerated) and such other Payments (to the extent not vested) shall be deemed to remain outstanding and shall be subject to the provisions hereof and of the Plan as if no acceleration or vesting had occurred.

The Company shall promptly pay, upon demand by the Non-Employee Director, all legal fees, court costs, fees of experts and other costs and expenses which the Non-Employee Director incurred in any actual, threatened or contemplated contest of the Non-Employee Director’s interpretation of, or determination under, the provisions of this paragraph 7.

8. Withholding Taxes.

a) Obligation to Pay Withholding Taxes. The Non-Employee Director acknowledges and agrees that, regardless of any action the Company takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (the “Tax-Related Items”), the ultimate liability for all Tax-Related Items legally due by the Non-Employee Director (i) is and remains the Non-Employee Director’s responsibility and (ii) may exceed the amount actually withheld by the Company. The Non-Employee Director further agrees and acknowledges that the

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Company (x) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant of the Award, the vesting of the RSUs or the subsequent sale of any Shares acquired from vesting of the RSUs, and the receipt of any Dividend Equivalents or Retained Distributions; and (y) do not commit to and are under no obligation to structure the terms of the Award to reduce or eliminate the Non-Employee Director’s liability for Tax-Related Items or achieve any particular tax result. Further, the Non-Employee Director understands and acknowledges that if the Non-Employee Director has become subject to tax in more than one jurisdiction between the Date of Grant and the date of any relevant taxable event, the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Company’s obligation to deliver the Shares subject to the RSUs or to pay any Dividend Equivalents or Retained Distributions shall be subject to payment of all Tax-Related Items by the Non-Employee Director.

b) Satisfaction of Company’s Withholding Obligations. At the time any portion of an Award of RSUs, Dividend Equivalent or Retained Distribution relating thereto, becomes taxable to the Non-Employee Director, he or she will be required to pay to the Company any Tax-Related Items due as a result of such taxable event. The Company shall have the right to withhold from any payment in respect of RSUs, transfer of Shares acquired at vesting, or payment made to the Non-Employee Director or to any person hereunder, whether such payment is to be made in cash or in Shares, all Tax-Related Items as shall be required, in the determination of the Company, pursuant to any statute or governmental regulation or ruling. The Non-Employee Director acknowledges and agrees that the Company, in its sole discretion, may satisfy such withholding obligation by any one or a combination of the following methods:

(i) by requiring the Non-Employee Director to deliver a properly executed notice together with irrevocable instructions to a broker approved by the Company to sell a sufficient number of Shares to generate net proceeds (after commission and fees) equal to the amount required to be withheld and promptly deliver such amount to the Company;

(ii) by requiring or allowing the Non-Employee Director to pay the amount required to be withheld in cash or by check;

(iii) by deducting the amount required to be withheld from the Non-Employee Director’s current compensation or other amounts payable to the Non-Employee Director;

(iv) by allowing the Non-Employee Director to surrender other Shares that (A) in the case of Shares initially acquired from the Company (upon exercise of a stock option or otherwise), have been owned by the Non-Employee Director for such period (if any) as may be required to avoid a charge to the Company’s earnings, and (B) have a fair market value on the date of surrender equal to the amount required to be withheld;

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(v) by withholding a number of Shares to be issued upon delivery of Shares that have a fair market value equal to the minimum statutory amount required to be withheld;

(vi) by selling any Shares to the extent required to pay the amount required to be withheld; or

(vii) by such other means or method as the Committee in its sole discretion and without notice to the Non-Employee Director deems appropriate.

The Company may satisfy its obligation to withhold the Tax-Related Items on Dividend Equivalents and Retained Distributions payable in cash by withholding a sufficient amount from the payment or by such other means as the Committee in its sole discretion and without notice to the Non-Employee Director deems appropriate, including withholding from compensation or other amounts payable to the Non-Employee Director, Shares or cash having a value sufficient to satisfy the withholding obligation for Tax-Related Items.

The Company will not issue any Shares to the Non-Employee Director until the Non-Employee Director satisfies any withholding obligation for Tax-Related Items. If the withholding obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Non-Employee Director shall be deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Non-Employee Director’s participation in the Plan.

c) Compliance with Applicable Laws. The Committee may also require the Non-Employee Director to acknowledge that he or she shall not sell or transfer Shares except in compliance with all applicable laws, and may apply such other restrictions on the sale or transfer of the Shares as it deems appropriate.

9. Changes in Capitalization and Government and Other Regulations. The Award shall be subject to all of the terms and provisions as provided in this Agreement and in the Plan, which are incorporated by reference herein and made a part hereof, including, without limitation, the provisions of Section 10 of the Plan (generally relating to adjustments to the number of Shares subject to the Award, upon certain changes in capitalization and certain reorganizations and other transactions).

10. Forfeiture. A breach of any of the foregoing restrictions or a breach of any of the other restrictions, terms and conditions of the Plan or this Agreement, with respect to any of the RSUs or any Dividend Equivalents and Retained Distributions relating thereto, except as waived by the Board or the Committee, will cause a forfeiture of such RSUs and any Dividend Equivalents or Retained Distributions relating thereto.

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11. No Right of Non-Employee Director to Continue to Serve. Nothing contained in the Plan or this Agreement shall confer on any Non-Employee Director any right to continue to serve as a director of the Company.

12. Notices. Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to Time Warner Inc., at One Time Warner Center, New York, NY 10019, attention Director, Global Stock Plans Administration, and to the Non-Employee Director at his or her address, as it is shown on the records of the Company, or in either case to such other address as the Company or the Non-Employee Director, as the case may be, by notice to the other may designate in writing from time to time.

13. Interpretation and Amendments. The Board and the Committee (to the extent delegated by the Board) have plenary authority to interpret this Agreement and the Plan, to prescribe, amend and rescind rules relating thereto and to make all other determinations in connection with the administration of the Plan. The Board or the Committee may from time to time modify or amend this Agreement in accordance with the provisions of the Plan, provided that no such amendment shall adversely affect the rights of the Non-Employee Director under this Agreement without his or her consent.

14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and shall be binding upon and inure to the benefit of the Non-Employee Director and his or her legatees, distributees and personal representatives.

15. Copy of the Plan. By entering into the Agreement, the Non-Employee Director agrees and acknowledges that he or she has received and read a copy of the Plan.

16. Governing Law. The Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to any choice of law rules thereof which might apply the laws of any other jurisdiction.

17. Waiver of Jury Trial. To the extent not prohibited by applicable law which cannot be waived, each party hereto hereby waives, and covenants that it will not assert (whether as plaintiff, defendant or otherwise), any right to trial by jury in any forum in respect of any suit, action, or other proceeding arising out of or based upon this Agreement.

18. Submission to Jurisdiction; Service of Process. Each of the parties hereto hereby irrevocably submits to the jurisdiction of the state courts of the County of New York, State of New York and the jurisdiction of the United States District Court for the Southern District of New York for the purposes of any suit, action or other proceeding arising out of or based upon this Agreement. Each of the parties hereto to the extent permitted by applicable law hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding brought in such courts, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that such suit, action or proceeding in the above-referenced courts is brought in an inconvenient forum, that the venue of such suit, action or proceedings, is improper or that this Agreement may not be enforced in or by such court. Each of the parties hereto hereby consents to service of process by mail at its address to which notices are to be given pursuant to paragraph 12 hereof.

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19. Personal Data. The Company may hold, collect, use, process and transfer, in electronic or other form, certain personal information about the Non-Employee Director for the exclusive purpose of implementing, administering and managing the Non-Employee Director’s participation in the Plan. The Non-Employee Director understands that the following personal information is required for the above named purposes: his/her name, home address and telephone number, office address and telephone number, e-mail address, date of birth, citizenship, country of residence at the time of grant, work location country, Company unique ID, title, compensation paid, termination date and reason, tax payer’s identification number, tax equalization code, US Green Card holder status, any shares of stock held in the Company, details of all grants of RSUs (including number of grants, grant dates, vesting type, vesting dates, and any other information regarding RSUs that have been granted, canceled, vested, or forfeited) with respect to the Non-Employee Director, estimated tax withholding rate (if applicable), brokerage account number (if applicable), and brokerage fees (the “Data”). The Non-Employee Director understands that Data may be transferred to third parties assisting the Company in the implementation, administration and management of the Plan, including the brokers approved by the Company, the broker selected by the Non-Employee Director from among such Company-approved brokers (if applicable), tax consultants and the Company’s software providers (the “Data Recipients”). The Non-Employee Director understands that some of these Data Recipients may be located outside the Non-Employee Director’s country of residence, and that the Data Recipient’s country may have different data privacy laws and protections than the Non-Employee Director’s country of residence. The Non-Employee Director understands that the Data Recipients will receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Non-Employee Director’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on the Non-Employee Director’s behalf by a broker or other third party with whom the Non-Employee Director may elect to deposit any Shares acquired pursuant to the Plan. The Non-Employee Director understands that Data will be held only as long as necessary to implement, administer and manage the Non-Employee Director’s participation in the Plan. The Non-Employee Director understands that Data may also be made available to public authorities as required by law, e.g., to the U.S. government. Non-Employee Director understands that the Non-Employee Director may, at any time, review Data and may provide updated Data or corrections to the Data by written notice to the Company. Except to the extent the collection, use, processing or transfer of Data is required by law, the Non-Employee Director may object to the collection, use, processing or transfer of Data by contacting the Company in writing. The Non-Employee Director understands that such objection may affect his/her ability to participate in the Plan. The Non- Employee Director understands that he/she may contact the Company’s Stock Plan Administration to obtain more information on the consequences of such objection.

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EX-10.2

EXHIBIT 10.2

Time Warner Inc.

Notice of Grant of Restricted Stock Units to Non-Employee Director

TIME WARNER INC. (the “Company”), pursuant to the Company’s 2010 Stock Incentive Plan (the “Plan”), hereby grants (the “Award”) to the undersigned Participant the following restricted stock units (the “RSUs”), subject to the terms and conditions of this Notice, the Restricted Stock Units Agreement, Directors Version 2 (10RUDIR2), and the Plan. Each RSU represents the unfunded, unsecured right of the Participant to receive a Share on the date(s) specified herein. The Plan and the Restricted Stock Units Agreement, both of which are incorporated into and made a part of this Notice, can be accessed and printed through Fidelity’s Netbenefits.com website (Plan Information & Documents).

       1.     Name: ID:

2. Grant Information for this Award:

Restricted Stock Unit Grant Number:

Date of Grant:

Total Number of Restricted Stock Units Granted:

3. The vesting date shall be:

The Vesting Date shall be in the first year following the Date of Grant on the first day of the month in which the Date of Grant occurred. 100% of the number of the Total Number of Restricted Stock Units Granted will vest on the Vesting Date.

The Restricted Stock Units will vest earlier than the Vesting Date in connection with certain terminations of service as a director of the Company, as provided in the Restricted Stock Units Agreement and Plan; and the Restricted Stock Units will be canceled and forfeited upon certain terminations of service as a director of the Company, as provided in the Restricted Stock Units Agreement and Plan.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey L. Bewkes, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Time Warner Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2012	By:	/s/ Jeffrey L. Bewkes
		Name:	Jeffrey L. Bewkes
		Title:	Chief Executive Officer
			Time Warner Inc.

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John K. Martin, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Time Warner Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2012	By:	/s/ John K. Martin, Jr.
		Name:	John K. Martin, Jr.
		Title:	Chief Financial and Administrative Officer
			Time Warner Inc.

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Time Warner Inc., a Delaware corporation (the “Company”), for the quarter ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his respective knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2012	/s/ Jeffrey L. Bewkes
	Jeffrey L. Bewkes
	Chief Executive Officer
	Time Warner Inc.
Date: May 2, 2012	/s/ John K. Martin, Jr.
	John K. Martin, Jr.
	Chief Financial and Administrative Officer
	Time Warner Inc.

XML

Net Income Per Common Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Earnings Per Share [Abstract]
Net income attributable to Time Warner Inc. shareholders	$ 583	$ 653
Net income allocated to participating securities	(4)	(4)
Net income attributable to Time Warner Inc. common shareholders - basic	$ 579	$ 649
Average number of common shares outstanding - basic	968.3	1,090.8
Dilutive effect of equity awards	21.8	19.3
Average number of common shares outstanding - diluted	990.1	1,110.1
Net income per common share attributable to Time Warner Inc common shareholders - basic	$ 0.60	$ 0.59
Net income per common share attributable to Time Warner Inc common shareholders - diluted	$ 0.59	$ 0.59
Earnings Per Share, Diluted, Other Disclosures [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount	34	80

XML

Additional Financial Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Cash Flows [Abstract]
Cash payments made for interest	$ (291)	$ (218)
Interest income received	11	5
Cash interest payments, net	(280)	(213)
Cash payments made for income taxes	(333)	(141)
Income tax refunds received	30	4
Cash tax payments, net	(303)	(137)
Interest Expense, Net [Abstract]
Interest income	28	37
Interest expense	(348)	(311)
Total interest expense, net	(320)	(274)
Other Loss, Net [Abstract]
Investment gains (losses), net	(9)	4
Loss on equity method investees	(8)	(18)
Other	17	0
Total other loss, net	0	(14)
Accounts Payable and Accrued Liabilities [Abstract]
Accounts payable	700		961
Accrued expenses	1,750		2,037
Participations payable	2,343		2,337
Programming costs payable	889		742
Accrued compensation	623		1,049
Accrued interest	366		342
Accrued income taxes	360		347
Total accounts payable and accrued liabilities	7,031		7,815
Other Noncurrent Liabilities [Abstract]
Noncurrent tax and interest reserves	2,483		2,430
Participations payable	928		927
Programming costs payable	989		1,029
Noncurrent pension and post retirement liabilities	807		809
Deferred compensation	581		574
Other noncurrent liabilities	532		565
Total other noncurrent liabilities	6,320		6,334
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative Arrangement, Income Statement Classifications and Amounts COR	77	87
Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative Arrangement, Shortfall	90
Minimum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative Arrangement, Shortfall	$ 30

XML

Description of Business and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2012 segments
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	3

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign Currency Derivatives Asset Liability

The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to Time Warner's use of foreign currency derivatives at March 31, 2012 and December 31, 2011 (millions):

	March 31, 2012		December 31, 2011
Qualifying Hedges
Assets	$	103	$	105
Liabilities		(106)		(91)
Economic Hedges
Assets	$	15	$	30
Liabilities		(15)		(16)

XML

Restructuring and Severance Costs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	$ 26	$ 30
Restructuring Reserve [Roll Forward]
Remaining liability, beginning balance	176
Net accruals	26	30
Cash paid	(45)
Remaining liability, ending balance	157
Restructuring Reserve [Abstract]
Restructuring reserve, current	93
Restructuring reserve, noncurrent	64
2012 activity [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	22	0
Restructuring Reserve [Roll Forward]
Net accruals	22	0
2011 and prior activity [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	4	30
Restructuring Reserve [Roll Forward]
Net accruals	4	30
Employee Terminations [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	23
Restructuring Reserve [Roll Forward]
Remaining liability, beginning balance	116
Net accruals	23
Cash paid	(38)
Remaining liability, ending balance	101
Other Exit Costs [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	3
Restructuring Reserve [Roll Forward]
Remaining liability, beginning balance	60
Net accruals	3
Cash paid	(7)
Remaining liability, ending balance	56
Networks [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	14	12
Restructuring Reserve [Roll Forward]
Net accruals	14	12
Film and TV Entertainment [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	6	6
Restructuring Reserve [Roll Forward]
Net accruals	6	6
Publishing [Member]
Restructuring Costs by Segment [Abstract]
Total restructuring and severance costs	6	12
Restructuring Reserve [Roll Forward]
Net accruals	$ 6	$ 12

XML

Derivative Instruments (Details) (USD $) In Millions, unless otherwise specified				3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Dec. 31, 2011 Maximum [Member]	Mar. 31, 2012 Foreign Currency Derivatives [Member] Maximum [Member]	Mar. 31, 2012 Foreign Currency Derivatives [Member] Minimum [Member]	Mar. 31, 2012 Qualifying Hedges [Member] Foreign Currency Derivatives [Member]	Dec. 31, 2011 Qualifying Hedges [Member] Foreign Currency Derivatives [Member]	Mar. 31, 2012 Economic Hedges [Member] Foreign Currency Derivatives [Member]	Dec. 31, 2011 Economic Hedges [Member] Foreign Currency Derivatives [Member]
Derivatives, Fair Value [Line Items]
Assets						$ 103	$ 105	$ 15	$ 30
Liabilities						(106)	(91)	(15)	(16)
Foreign exchange contract maturity (in months).				18 months	3 months
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Cash flow hedge gains (losses) recorded in accumulated OCI	15	19
Cash flow hedge gains (losses) recorded in accumulated OCI deferred gains (losses)	$ 12		$ 1

XML

Supplementary Information - Condensed Consolidating Financial Statements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Dec. 31, 2010
Current assets
Cash and equivalents	$ 2,877	$ 3,029
Receivables, net	6,312		6,922
Inventories	1,909		1,890
Deferred income taxes	649		663
Prepaid expenses and other current assets	544		481
Total current assets	12,291		13,432
Noncurrent inventories and film and TV production costs	6,684		6,594
Investments in amounts due to and from consolidated subsidiaries	0		0
Investments, including available-for-sale securities	1,894		1,820
Property, plant and equipment, net	3,937		3,963
Intangible assets subject to amortization, net	2,117		2,232
Intangible assets not subject to amortization	7,807		7,805
Goodwill	30,048		30,029
Other assets	1,966		1,926
Total assets	66,744		67,801
Current liabilities
Accounts payable and accrued liabilities	7,031		7,815
Deferred revenue	1,023		1,084
Debt due within one year	1,095		23
Total current liabilities	9,149		8,922
Long-term debt	18,425		19,501
Due (to) from affiliates	0		0
Deferred income taxes	2,536		2,541
Deferred revenue	533		549
Other noncurrent liabilities	6,320		6,334
Equity
Due (to) from Time Warner and subsidiaries	0		0
Other shareholders' equity	29,780		29,957
Total Time Warner Inc. shareholders' equity	29,780		29,957
Noncontrolling interests	1		(3)
Total equity	29,781	32,241	29,954	32,945
Total liabilities and equity	66,744		67,801
Consolidated Statement of Operations
Revenues	6,979	6,683
Costs of revenues	(3,976)	(3,727)
Selling, general and administrative	(1,575)	(1,591)
Amortization of intangible assets	(61)	(68)
Restructuring and severance costs	(26)	(30)
Asset impairments	(52)	0
Gain (loss) on operating assets	(42)	3
Operating income	1,247	1,270
Equity in pretax income (loss) of consolidated subsidiaries	0	0
Interest expense, net	(320)	(274)
Other loss, net	0	(14)
Income before income taxes	927	982
Income tax provision	(346)	(331)
Net income	581	651
Less Net loss attributable to noncontrolling interests	2	2
Net income attributable to Time Warner Inc. shareholders	583	653
Comprehensive income	640	744
Less Comprehensive loss attributable to noncontrolling interest	2	2
Comprehensive income attributable to Time Warner Inc. shareholders	642	746
OPERATIONS
Net income	581	651
Adjustments for noncash and nonoperating items:
Depreciation and amortization	215	231
Amortization of film and television costs	1,948	1,664
Asset impairments	52	0
(Gain) loss on investments and other assets, net	51	(4)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions	0	0
Equity in losses of investee companies, net of cash distributions	15	32
Equity-based compensation	101	102
Deferred income taxes	(92)	51
Changes in operating assets and liabilities, net of acquisitions	(2,455)	(1,902)
Intercompany	0	0
Cash provided by operations	416	825
INVESTING ACTIVITIES
Investments in available-for-sale securities	(17)	0
Investments and acquisitions, net of cash acquired	(59)	(160)
Capital expenditures	(133)	(152)
Advances to (from) parent and consolidated subsidiaries	0	0
Other investment proceeds	22	5
Cash used by investing activities	(187)	(307)
FINANCING ACTIVITIES
Borrowings	11	22
Debt repayments	(13)	(21)
Proceeds from exercise of stock options	185	118
Excess tax benefit on stock options	34	14
Principal payments on capital leases	(3)	(2)
Repurchases of common stock	(725)	(959)
Dividends paid	(257)	(261)
Other financing activities	(60)	(63)
Change in due to/from parent and investment in segment	0	0
Cash used by financing activities	(828)	(1,152)
DECREASE IN CASH AND EQUIVALENTS	(599)	(634)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	3,476	3,663
CASH AND EQUIVALENTS AT END OF PERIOD	2,877	3,029
Parent Company [Member]
Current assets
Cash and equivalents	2,097	2,009
Receivables, net	43		52
Inventories	0		0
Deferred income taxes	649		663
Prepaid expenses and other current assets	90		106
Total current assets	2,879		3,399
Noncurrent inventories and film and TV production costs	0		0
Investments in amounts due to and from consolidated subsidiaries	45,976		45,566
Investments, including available-for-sale securities	84		76
Property, plant and equipment, net	343		369
Intangible assets subject to amortization, net	0		0
Intangible assets not subject to amortization	0		0
Goodwill	0		0
Other assets	290		288
Total assets	49,572		49,698
Current liabilities
Accounts payable and accrued liabilities	856		837
Deferred revenue	0		0
Debt due within one year	637		0
Total current liabilities	1,493		837
Long-term debt	14,093		14,730
Due (to) from affiliates	(873)		(850)
Deferred income taxes	2,536		2,541
Deferred revenue	0		0
Other noncurrent liabilities	2,543		2,483
Equity
Due (to) from Time Warner and subsidiaries	0		0
Other shareholders' equity	29,780		29,957
Total Time Warner Inc. shareholders' equity	29,780		29,957
Noncontrolling interests	0		0
Total equity	29,780		29,957
Total liabilities and equity	49,572		49,698
Consolidated Statement of Operations
Revenues	0	0
Costs of revenues	0	0
Selling, general and administrative	(100)	(88)
Amortization of intangible assets	0	0
Restructuring and severance costs	0	1
Asset impairments	0	0
Gain (loss) on operating assets	0	0
Operating income	(100)	(87)
Equity in pretax income (loss) of consolidated subsidiaries	1,249	1,243
Interest expense, net	(220)	(187)
Other loss, net	(2)	13
Income before income taxes	927	982
Income tax provision	(346)	(331)
Net income	581	651
Less Net loss attributable to noncontrolling interests	2	2
Net income attributable to Time Warner Inc. shareholders	583	653
Comprehensive income	640	744
Less Comprehensive loss attributable to noncontrolling interest	2	2
Comprehensive income attributable to Time Warner Inc. shareholders	642	746
OPERATIONS
Net income	581	651
Adjustments for noncash and nonoperating items:
Depreciation and amortization	6	7
Amortization of film and television costs	0	0
Asset impairments	0	0
(Gain) loss on investments and other assets, net	2	(4)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions	(1,249)	(1,243)
Equity in losses of investee companies, net of cash distributions	1	(2)
Equity-based compensation	21	16
Deferred income taxes	(92)	51
Changes in operating assets and liabilities, net of acquisitions	135	161
Intercompany	0	0
Cash provided by operations	(595)	(363)
INVESTING ACTIVITIES
Investments in available-for-sale securities	(6)	0
Investments and acquisitions, net of cash acquired	(7)	0
Capital expenditures	(12)	(23)
Advances to (from) parent and consolidated subsidiaries	854	642
Other investment proceeds	0	(1)
Cash used by investing activities	829	618
FINANCING ACTIVITIES
Borrowings	0	0
Debt repayments	0	0
Proceeds from exercise of stock options	185	118
Excess tax benefit on stock options	34	14
Principal payments on capital leases	0	0
Repurchases of common stock	(725)	(959)
Dividends paid	(257)	(261)
Other financing activities	48	27
Change in due to/from parent and investment in segment	0	0
Cash used by financing activities	(715)	(1,061)
DECREASE IN CASH AND EQUIVALENTS	(481)	(806)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	2,578	2,815
CASH AND EQUIVALENTS AT END OF PERIOD	2,097	2,009
Guarantor Subsidiaries [Member]
Current assets
Cash and equivalents	157	290
Receivables, net	743		705
Inventories	408		429
Deferred income taxes	510		525
Prepaid expenses and other current assets	73		61
Total current assets	1,891		1,884
Noncurrent inventories and film and TV production costs	1,675		1,698
Investments in amounts due to and from consolidated subsidiaries	21,808		21,845
Investments, including available-for-sale securities	436		410
Property, plant and equipment, net	446		462
Intangible assets subject to amortization, net	0		0
Intangible assets not subject to amortization	2,007		2,007
Goodwill	9,879		9,879
Other assets	173		193
Total assets	38,315		38,378
Current liabilities
Accounts payable and accrued liabilities	764		890
Deferred revenue	11		13
Debt due within one year	448		11
Total current liabilities	1,223		914
Long-term debt	4,297		4,735
Due (to) from affiliates	0		0
Deferred income taxes	3,193		3,296
Deferred revenue	2		15
Other noncurrent liabilities	2,223		2,232
Equity
Due (to) from Time Warner and subsidiaries	(25,968)		(25,217)
Other shareholders' equity	53,345		52,403
Total Time Warner Inc. shareholders' equity	27,377		27,186
Noncontrolling interests	0		0
Total equity	27,377		27,186
Total liabilities and equity	38,315		38,378
Consolidated Statement of Operations
Revenues	1,562	1,548
Costs of revenues	(786)	(782)
Selling, general and administrative	(241)	(235)
Amortization of intangible assets	0	0
Restructuring and severance costs	(6)	(3)
Asset impairments	0	0
Gain (loss) on operating assets	0	0
Operating income	529	528
Equity in pretax income (loss) of consolidated subsidiaries	807	811
Interest expense, net	(92)	(92)
Other loss, net	11	(4)
Income before income taxes	1,255	1,243
Income tax provision	(422)	(417)
Net income	833	826
Less Net loss attributable to noncontrolling interests	2	2
Net income attributable to Time Warner Inc. shareholders	835	828
Comprehensive income	866	891
Less Comprehensive loss attributable to noncontrolling interest	2	2
Comprehensive income attributable to Time Warner Inc. shareholders	868	893
OPERATIONS
Net income	833	826
Adjustments for noncash and nonoperating items:
Depreciation and amortization	35	34
Amortization of film and television costs	659	624
Asset impairments	0	0
(Gain) loss on investments and other assets, net	0	(1)
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions	(807)	(811)
Equity in losses of investee companies, net of cash distributions	0	3
Equity-based compensation	25	24
Deferred income taxes	(110)	32
Changes in operating assets and liabilities, net of acquisitions	(255)	(182)
Intercompany	136	268
Cash provided by operations	516	817
INVESTING ACTIVITIES
Investments in available-for-sale securities	(11)	0
Investments and acquisitions, net of cash acquired	(2)	(3)
Capital expenditures	(16)	(23)
Advances to (from) parent and consolidated subsidiaries	262	(147)
Other investment proceeds	8	2
Cash used by investing activities	241	(171)
FINANCING ACTIVITIES
Borrowings	0	0
Debt repayments	0	0
Proceeds from exercise of stock options	0	0
Excess tax benefit on stock options	0	0
Principal payments on capital leases	(3)	(2)
Repurchases of common stock	0	0
Dividends paid	0	0
Other financing activities	(10)	(10)
Change in due to/from parent and investment in segment	(751)	(600)
Cash used by financing activities	(764)	(612)
DECREASE IN CASH AND EQUIVALENTS	(7)	34
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	164	256
CASH AND EQUIVALENTS AT END OF PERIOD	157	290
Non-Guarantor Subsidiaries [Member]
Current assets
Cash and equivalents	623	730
Receivables, net	5,526		6,165
Inventories	1,501		1,461
Deferred income taxes	412		437
Prepaid expenses and other current assets	381		314
Total current assets	8,443		9,111
Noncurrent inventories and film and TV production costs	5,100		4,984
Investments in amounts due to and from consolidated subsidiaries	12,111		12,022
Investments, including available-for-sale securities	1,374		1,334
Property, plant and equipment, net	3,148		3,132
Intangible assets subject to amortization, net	2,117		2,232
Intangible assets not subject to amortization	5,800		5,798
Goodwill	20,169		20,150
Other assets	1,503		1,445
Total assets	59,765		60,208
Current liabilities
Accounts payable and accrued liabilities	5,461		6,123
Deferred revenue	1,027		1,081
Debt due within one year	10		12
Total current liabilities	6,498		7,216
Long-term debt	35		36
Due (to) from affiliates	873		850
Deferred income taxes	2,782		2,882
Deferred revenue	580		589
Other noncurrent liabilities	3,401		3,461
Equity
Due (to) from Time Warner and subsidiaries	(3,479)		(3,083)
Other shareholders' equity	49,074		48,260
Total Time Warner Inc. shareholders' equity	45,595		45,177
Noncontrolling interests	1		(3)
Total equity	45,596		45,174
Total liabilities and equity	59,765		60,208
Consolidated Statement of Operations
Revenues	5,518	5,309
Costs of revenues	(3,271)	(3,091)
Selling, general and administrative	(1,252)	(1,293)
Amortization of intangible assets	(61)	(68)
Restructuring and severance costs	(20)	(28)
Asset impairments	(52)	0
Gain (loss) on operating assets	(42)	3
Operating income	820	832
Equity in pretax income (loss) of consolidated subsidiaries	347	396
Interest expense, net	(11)	3
Other loss, net	(8)	0
Income before income taxes	1,148	1,231
Income tax provision	(386)	(414)
Net income	762	817
Less Net loss attributable to noncontrolling interests	2	2
Net income attributable to Time Warner Inc. shareholders	764	819
Comprehensive income	797	882
Less Comprehensive loss attributable to noncontrolling interest	2	2
Comprehensive income attributable to Time Warner Inc. shareholders	799	884
OPERATIONS
Net income	762	817
Adjustments for noncash and nonoperating items:
Depreciation and amortization	174	190
Amortization of film and television costs	1,287	1,039
Asset impairments	52	0
(Gain) loss on investments and other assets, net	49	1
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions	(347)	(396)
Equity in losses of investee companies, net of cash distributions	14	31
Equity-based compensation	55	62
Deferred income taxes	(93)	30
Changes in operating assets and liabilities, net of acquisitions	(1,325)	(1,141)
Intercompany	(136)	(268)
Cash provided by operations	492	365
INVESTING ACTIVITIES
Investments in available-for-sale securities	0	0
Investments and acquisitions, net of cash acquired	(50)	(157)
Capital expenditures	(105)	(106)
Advances to (from) parent and consolidated subsidiaries	0	0
Other investment proceeds	19	4
Cash used by investing activities	(136)	(259)
FINANCING ACTIVITIES
Borrowings	11	22
Debt repayments	(13)	(21)
Proceeds from exercise of stock options	0	0
Excess tax benefit on stock options	0	0
Principal payments on capital leases	0	0
Repurchases of common stock	0	0
Dividends paid	0	0
Other financing activities	(98)	(80)
Change in due to/from parent and investment in segment	(367)	111
Cash used by financing activities	(467)	32
DECREASE IN CASH AND EQUIVALENTS	(111)	138
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	734	592
CASH AND EQUIVALENTS AT END OF PERIOD	623	730
Eliminations [Member]
Current assets
Cash and equivalents	0	0
Receivables, net	0		0
Inventories	0		0
Deferred income taxes	(922)		(962)
Prepaid expenses and other current assets	0		0
Total current assets	(922)		(962)
Noncurrent inventories and film and TV production costs	(91)		(88)
Investments in amounts due to and from consolidated subsidiaries	(79,895)		(79,433)
Investments, including available-for-sale securities	0		0
Property, plant and equipment, net	0		0
Intangible assets subject to amortization, net	0		0
Intangible assets not subject to amortization	0		0
Goodwill	0		0
Other assets	0		0
Total assets	(80,908)		(80,483)
Current liabilities
Accounts payable and accrued liabilities	(50)		(35)
Deferred revenue	(15)		(10)
Debt due within one year	0		0
Total current liabilities	(65)		(45)
Long-term debt	0		0
Due (to) from affiliates	0		0
Deferred income taxes	(5,975)		(6,178)
Deferred revenue	(49)		(55)
Other noncurrent liabilities	(1,847)		(1,842)
Equity
Due (to) from Time Warner and subsidiaries	29,447		28,300
Other shareholders' equity	(102,419)		(100,663)
Total Time Warner Inc. shareholders' equity	(72,972)		(72,363)
Noncontrolling interests	0		0
Total equity	(72,972)		(72,363)
Total liabilities and equity	(80,908)		(80,483)
Consolidated Statement of Operations
Revenues	(101)	(174)
Costs of revenues	81	146
Selling, general and administrative	18	25
Amortization of intangible assets	0	0
Restructuring and severance costs	0	0
Asset impairments	0	0
Gain (loss) on operating assets	0	0
Operating income	(2)	(3)
Equity in pretax income (loss) of consolidated subsidiaries	(2,403)	(2,450)
Interest expense, net	3	2
Other loss, net	(1)	(23)
Income before income taxes	(2,403)	(2,474)
Income tax provision	808	831
Net income	(1,595)	(1,643)
Less Net loss attributable to noncontrolling interests	(4)	(4)
Net income attributable to Time Warner Inc. shareholders	(1,599)	(1,647)
Comprehensive income	(1,663)	(1,773)
Less Comprehensive loss attributable to noncontrolling interest	(4)	(4)
Comprehensive income attributable to Time Warner Inc. shareholders	(1,667)	(1,777)
OPERATIONS
Net income	(1,595)	(1,643)
Adjustments for noncash and nonoperating items:
Depreciation and amortization	0	0
Amortization of film and television costs	2	1
Asset impairments	0	0
(Gain) loss on investments and other assets, net	0	0
Excess (deficiency) of distributions over equity in pretax income of consolidated subsidiaries, net of cash distributions	2,403	2,450
Equity in losses of investee companies, net of cash distributions	0	0
Equity-based compensation	0	0
Deferred income taxes	203	(62)
Changes in operating assets and liabilities, net of acquisitions	(1,010)	(740)
Intercompany	0	0
Cash provided by operations	3	6
INVESTING ACTIVITIES
Investments in available-for-sale securities	0	0
Investments and acquisitions, net of cash acquired	0	0
Capital expenditures	0	0
Advances to (from) parent and consolidated subsidiaries	(1,116)	(495)
Other investment proceeds	(5)	0
Cash used by investing activities	(1,121)	(495)
FINANCING ACTIVITIES
Borrowings	0	0
Debt repayments	0	0
Proceeds from exercise of stock options	0	0
Excess tax benefit on stock options	0	0
Principal payments on capital leases	0	0
Repurchases of common stock	0	0
Dividends paid	0	0
Other financing activities	0	0
Change in due to/from parent and investment in segment	1,118	489
Cash used by financing activities	1,118	489
DECREASE IN CASH AND EQUIVALENTS	0	0
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	0	0
CASH AND EQUIVALENTS AT END OF PERIOD	$ 0	$ 0

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Asset Dispositions

3 Months Ended

Mar. 31, 2012

Asset Dispositions [Abstract]

ASSET DISPOSITIONS

2.       ASSET DISPOSITIONS

QSP

On January 13, 2012, the Publishing segment sold, solely in exchange for contingent consideration, assets primarily comprising the school fundraising business, QSP.The results of the Publishing segment for the three months ended March 31, 2012included a $42 million loss recognized in connection with the sale.

Imagine

For the three months ended March 31, 2012, the Company recognized $58 million of chargesat the Networks segment related to Turner's decision in the first quarter of 2012 to shut down its general entertainment network in India, Imagine. These charges consisted of $52 million of noncash charges primarily related to certain receivables, inventories and long-lived assets as well as a$6million charge related to exit costs.

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Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 segments	Mar. 31, 2011	Dec. 31, 2011
Segment Reporting Information [Line Items]
Total revenues	$ 6,979	$ 6,683
Total intersegment revenues	180	215
Total operating income (loss)	1,247	1,270
Total assets	66,744		67,801
Number of reportable segments	3
Networks [Member]
Segment Reporting Information [Line Items]
Segment reporting information, revenue	3,602	3,496
Total intersegment revenues	27	21
Total operating income (loss)	1,143	1,162
Total assets	38,474		38,166
Film and TV Entertainment [Member]
Segment Reporting Information [Line Items]
Segment reporting information, revenue	2,784	2,604
Total intersegment revenues	140	183
Total operating income (loss)	214	158
Total assets	18,651		19,257
Publishing [Member]
Segment Reporting Information [Line Items]
Segment reporting information, revenue	773	798
Total intersegment revenues	13	11
Total operating income (loss)	(4)	63
Total assets	5,876		6,055
Corporate [Member]
Segment Reporting Information [Line Items]
Total operating income (loss)	(102)	(93)
Total assets	3,743		4,323
Intersegment eliminations [Member]
Segment Reporting Information [Line Items]
Segment reporting information, revenue	(180)	(215)
Total operating income (loss)	$ (4)	$ (20)

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Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

A summary of the components of the net periodic benefit costs recognized for substantially all of Time Warner's defined benefit pension plans for the three months ended March 31, 2012 and 2011 is as follows (millions):

Components of Net Periodic Benefit Costs

	Three Months Ended March 31,
	2012		2011
Service cost	$	1	$	6
Interest cost		44		47
Expected return on plan assets		(47)		(49)
Amortization of net loss		7		5
Net periodic benefit costs	$	5	$	9
Contributions	$	6	$	12

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Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Compensation expense recognized for equity-based plans is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Restricted stock units and performance stock units	$	75	$	69
Stock options		26		33
Total impact on operating income	$	101	$	102
Tax benefit recognized	$	36	$	38

Assumptions Used to Value Option Grants

The table below presents the weighted-average values of the assumptions used to value the stock options at their grant date.

	Three Months Ended March 31,
	2012	2011
Expected volatility	31.2%	29.5%
Expected term to exercise from grant date	6.50 years	6.31 years
Risk-free rate	1.3%	2.8%
Expected dividend yield	2.8%	2.6%

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Commitments and Contingencies (Details) (USD $)	3 Months Ended
	Mar. 31, 2012
Income Tax Uncertainties [Abstract]
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions	$ 41,000,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	33,000,000
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	17,000,000
Maximum [Member]
Loss Contingencies [Line Items]
Loss Contingency Range Of Possible Loss Portion Not Accrued	80,000,000
Minimum [Member]
Loss Contingencies [Line Items]
Loss Contingency Range Of Possible Loss Portion Not Accrued	0
Six Flags [Member]
Commitments [Line Items]
Undiscounted estimate future cash flow	1,000,000,000
Net present value	410,000,000
Guarantee payments made	0
Guarantor Obligations, Current Carrying Value	$ 0

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Restructuring and Severance Costs (Tables)

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Severance Costs

Restructuring and severance costs expensed as incurred by segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

	Three Months Ended March 31,
	2012		2011
Networks	$	14	$	12
Film and TV Entertainment		6		6
Publishing		6		12
Total restructuring and severance costs	$	26	$	30

	Three Months Ended March 31,
	2012		2011
2012 activity	$	22	$	-
2011 and prior activity		4		30
Total restructuring and severance costs	$	26	$	30

Selected Information

Selected information relating to accruedrestructuring and severance costs is as follows (millions):

	Employee Terminations		Other Exit Costs			Total
Remaining liability as of December 31, 2011	$	116	$	60	$	176
Net accruals		23		3		26
Cash paid		(38)		(7)		(45)
Remaining liability as of March 31, 2012	$	101	$	56	$	157

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Revenues

Information as to the Revenues, intersegment revenues, Operating Income (Loss), and Assetsof Time Warner in each of its reportable segments is set forth below (millions):

	Three Months Ended March 31,
	2012		2011
Revenues
Networks	$	3,602	$	3,496
Film and TV Entertainment		2,784		2,604
Publishing		773		798
Intersegment eliminations		(180)		(215)
Total revenues	$	6,979	$	6,683

Intersegment Revenues

	Three Months Ended March 31,
	2012		2011
Intersegment Revenues
Networks	$	27	$	21
Film and TV Entertainment		140		183
Publishing		13		11
Total intersegment revenues	$	180	$	215

Operating Income (Loss)

	Three Months Ended March 31,
	2012		2011
Operating Income (Loss)
Networks	$	1,143	$	1,162
Film and TV Entertainment		214		158
Publishing		(4)		63
Corporate		(102)		(93)
Intersegment eliminations		(4)		(20)
Total operating income (loss)	$	1,247	$	1,270

Assets

	March 31, 2012		December 31, 2011
Assets
Networks	$	38,474	$	38,166
Film and TV Entertainment		18,651		19,257
Publishing		5,876		6,055
Corporate		3,743		4,323
Total assets	$	66,744	$	67,801

XML

Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

1.       DESCRIPTION OF BUSINESSANDBASIS OF PRESENTATION

Description of Business

Time Warner Inc. (“Time Warner” or the “Company”) is a leading media and entertainment company, whose businesses include television networks, film and TV entertainment and publishing. Time Warner classifies its operations into three reportable segments: Networks:consisting principally of cable television networks, premium pay and basic tier television services and digital media properties; Film and TV Entertainment: consisting principally of feature film, television, home video and videogame production and distribution; andPublishing:consisting principally of magazine publishing and related websites as well as book publishing, marketing services and other marketing businesses.Financial information for Time Warner's various reportable segments is presented in Note11.

Basis of Presentation

Interim Financial Statements

The consolidated financial statements are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”) applicable to interim periods. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Time Warner included in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2011 (the “2011 Form 10-K”).

Basis of Consolidation

The consolidated financial statements include all of the assets, liabilities, revenues, expenses and cash flows of entities in which Time Warner has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation.

The financial position and operating results of most of the Company's foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the March 31, 2012 presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates.

Significant estimates and judgmentsinherent in the preparation of the consolidated financial statements include accounting for asset impairments, multiple-element transactions, allowances for doubtful accounts, depreciation and amortization, the determination of ultimate revenues as it relates to amortization ofcapitalized film and programming costs and participations and residuals, home video andvideogames product and magazine returns, business combinations, pension and other postretirement benefits, equity-based compensation, income taxes, contingencies, litigation matters, reporting revenue for certain transactions on a gross versus net basis, and the determination of whether the Company is the primary beneficiary of entities in which it holds variable interests.

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Additional Financial Information (Tables)

3 Months Ended

Mar. 31, 2012

Disclosure Text Block Supplement [Abstract]

Cash Flows

Additional financial information with respect to cash payments and receipts is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Cash payments made for interest	$	(291)	$	(218)
Interest income received		11		5
Cash interest payments, net	$	(280)	$	(213)
Cash payments made for income taxes	$	(333)	$	(141)
Income tax refunds received		30		4
Cash tax payments, net	$	(303)	$	(137)

Interest Expense, Net

Interest expense, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Interest income	$	28	$	37
Interest expense		(348)		(311)
Total interest expense, net	$	(320)	$	(274)

Other Loss, Net

Otherloss, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Investment gains (losses), net	$	(9)	$	4
Loss on equity method investees		(8)		(18)
Other		17		-
Total other loss, net	$	-	$	(14)

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of (millions):

	March 31, 2012		December 31, 2011
Accounts payable	$	700	$	961
Accrued expenses		1,750		2,037
Participations payable		2,343		2,337
Programming costs payable		889		742
Accrued compensation		623		1,049
Accrued interest		366		342
Accrued income taxes		360		347
Total accounts payable and accrued liabilities	$	7,031	$	7,815

Other Noncurrent Liabilities

Other noncurrent liabilities consist of (millions):

	March 31, 2012		December 31, 2011
Noncurrent tax and interest reserves	$	2,483	$	2,430
Participations payable		928		927
Programming costs payable		989		1,029
Noncurrent pension and post retirement liabilities		807		809
Deferred compensation		581		574
Other noncurrent liabilities		532		565
Total other noncurrent liabilities	$	6,320	$	6,334

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Equity-Based Compensation (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Equity Based Compensation, Compensation Expense [Abstract]
Total impact on operating income	$ 101	$ 102
Tax benefit recognized	36	38
Restricted Stock Unit [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Number of Shares/Units Granted	5.2	4.8
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 37.46	$ 36.10
Performance Stock Unit [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Number of Shares/Units Granted	0.2	0.1
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 39.51	$ 45.89
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected volatility	31.20%	29.50%
Expected term to exercise from grant date, in years	6.50	6.31
Risk-free rate	1.30%	2.80%
Expected dividend yield	2.80%	2.60%
Equity Based Compensation, Compensation Expense [Abstract]
Total impact on operating income	26	33
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	79
Number of Options Granted	4.7	8.2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 8.69	$ 9.03
Stock Option [Member] | Maximum [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	2
Stock Option [Member] | Minimum [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	1
Restricted stock units and performance stock units [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Total impact on operating income	75	69
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 306
Restricted stock units and performance stock units [Member] | Maximum [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	2
Restricted stock units and performance stock units [Member] | Minimum [Member]
Equity Based Compensation, Compensation Expense [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	1

XML

Consolidated Balance Sheet (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets
Cash and equivalents	$ 2,877	$ 3,476
Receivables, less allowances of $1,599 and $1,957	6,312	6,922
Inventories	1,909	1,890
Deferred income taxes	649	663
Prepaid expenses and other current assets	544	481
Total current assets	12,291	13,432
Noncurrent inventories and film and TV production costs	6,684	6,594
Investments, including available-for-sale securities	1,894	1,820
Property, plant and equipment, net	3,937	3,963
Intangible assets subject to amortization, net	2,117	2,232
Intangible assets not subject to amortization	7,807	7,805
Goodwill	30,048	30,029
Other assets	1,966	1,926
Total assets	66,744	67,801
Current liabilities
Accounts payable and accrued liabilities	7,031	7,815
Deferred revenue	1,023	1,084
Debt due within one year	1,095	23
Total current liabilities	9,149	8,922
Long-term debt	18,425	19,501
Deferred income taxes	2,536	2,541
Deferred revenue	533	549
Other noncurrent liabilities	6,320	6,334
Commitments and Contingencies (Note 12)
Equity
Common stock, $0.01 par value, 1.652 billion and 1.652 billion shares issued and 963 million and 974 million shares outstanding	17	17
Paid-in-capital	155,578	156,114
Treasury stock, at cost (689 million and 678 million shares)	(33,934)	(33,651)
Accumulated other comprehensive loss, net	(793)	(852)
Accumulated deficit	(91,088)	(91,671)
Total Time Warner Inc. shareholders' equity	29,780	29,957
Noncontrolling interests	1	(3)
Total equity	29,781	29,954
Total liabilities and equity	$ 66,744	$ 67,801

XML

Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Related Party Transactions [Abstract]
Revenues	$ 145	$ 107
Expenses	$ 18	$ 14

XML

Consolidated Statement Of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
OPERATIONS
Net income	$ 581	$ 651
Adjustments for noncash and nonoperating items:
Depreciation and amortization	215	231
Amortization of film and television costs	1,948	1,664
Asset impairments	52	0
(Gain) loss on investments and other assets, net	51	(4)
Equity in losses of investee companies, net of cash distributions	15	32
Equity-based compensation	101	102
Deferred income taxes	(92)	51
Changes in operating assets and liabilities, net of acquisitions	(2,455)	(1,902)
Cash provided by operations	416	825
INVESTING ACTIVITIES
Investments in available-for-sale securities	(17)	0
Investments and acquisitions, net of cash acquired	(59)	(160)
Capital expenditures	(133)	(152)
Other investment proceeds	22	5
Cash used by investing activities	(187)	(307)
FINANCING ACTIVITIES
Borrowings	11	22
Debt repayments	(13)	(21)
Proceeds from exercise of stock options	185	118
Excess tax benefit on stock options	34	14
Principal payments on capital leases	(3)	(2)
Repurchases of common stock	(725)	(959)
Dividends paid	(257)	(261)
Other financing activities	(60)	(63)
Cash used by financing activities	(828)	(1,152)
DECREASE IN CASH AND EQUIVALENTS	(599)	(634)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	3,476	3,663
CASH AND EQUIVALENTS AT END OF PERIOD	$ 2,877	$ 3,029

XML

Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Balance as of the beginning of the period	$ 3	$ (9)
Total gains (losses) [Abstract]
Included in operating income	0	3
Included in other loss, net	(1)	4
Settlements	(2)	2
Issuances	0	0
Transfers in and/or out of Level 3	0	0
Balance as of the end of the period	0	0
Net gain (loss) for the period included in net income related to assets and liabilities still held as of the end of the period	(1)	7
Debt Instrument [Line Items]
Debt due within one year	1,095		23
Difference between carrying value and fair value of debt	3,538		3,549
Long-Lived Assets to be Abandoned [Line Items]
Fair value of film costs discounted cash flow assumption time period	10 years
Fair value of film costs to be abandoned	0
Film production costs, carrying value in inventory subsequent to write down	39	0
Film production costs, carrying value in inventory prior to write down	87	5
Networks [Member]
Long-Lived Assets to be Abandoned [Line Items]
Impairment of Long-Lived Assets to be Disposed of	19
Long-Lived Assets to be Abandoned, Carrying Value of Asset	0
6.875% Notes due May 1, 2012 [Member]
Debt Instrument [Line Items]
Debt due within one year	638
Debt instrument, interest rate, stated percentage	6.875%
Fair Value, Measurements, Recurring [Member]
Trading securities [Abstract]
Diversified equity securities	284		270
Available-for-sale securities [Abstract]
Equity securities	30		14
Debt securities	78		72
Derivatives [Abstract]
Foreign exchange contracts	22		28
Other	20		24
Derivatives [Abstract]
Foreign exchange contracts	(25)		0
Other	(17)		(17)
Total	392		391
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Trading securities [Abstract]
Diversified equity securities	279		265
Available-for-sale securities [Abstract]
Equity securities	30		14
Debt securities	0		0
Derivatives [Abstract]
Foreign exchange contracts	0		0
Other	3		4
Derivatives [Abstract]
Foreign exchange contracts	0		0
Other	0		0
Total	312		283
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Trading securities [Abstract]
Diversified equity securities	5		5
Available-for-sale securities [Abstract]
Equity securities	0		0
Debt securities	78		72
Derivatives [Abstract]
Foreign exchange contracts	22		28
Other	0		0
Derivatives [Abstract]
Foreign exchange contracts	(25)		0
Other	0		0
Total	80		105
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Trading securities [Abstract]
Diversified equity securities	0		0
Available-for-sale securities [Abstract]
Equity securities	0		0
Debt securities	0		0
Derivatives [Abstract]
Foreign exchange contracts	0		0
Other	17		20
Derivatives [Abstract]
Foreign exchange contracts	0		0
Other	(17)		(17)
Total	$ 0		$ 3

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Supplementary Information - Condensed Consolidating Financial Statements

3 Months Ended

Mar. 31, 2012

Supplementary Information - Condensed Consolidating Financial Statements Disclosure [Abstract]

SUPPLEMENTARY INFORMATION - CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Overview

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations and cash flows of (i) Time Warner Inc. (the “Parent Company”), (ii) Historic TW Inc. (in its own capacity and as successor by merger to Time Warner Companies, Inc.), Home Box Office, Inc., and Turner Broadcasting System, Inc., each a wholly owned subsidiary of the Parent Company(collectively, the “Guarantor Subsidiaries”), on a combined basis, (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the “Non-Guarantor Subsidiaries”), on a combined basis and (iv) the eliminations necessary to arrive at the information for Time Warner Inc. on a consolidated basis. The Guarantor Subsidiaries, fully and unconditionally, jointly and severally, guarantee securities issued under certain of the Company's indentures on an unsecured basis.

There are no legal or regulatory restrictions on the Parent Company's ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances.

Basis of Presentation

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company's interests in the Guarantor Subsidiaries and (ii) the Guarantor Subsidiaries' interests in the Non-Guarantor Subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. generally accepted accounting principles. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column “Eliminations.”

The Parent Company's accounting bases in all subsidiaries, including goodwill and identified intangible assets, have been “pushed down” to the applicable subsidiaries. Corporate overhead expenses have been reflected as expenses of the Parent Company and have not been allocated to the Guarantor Subsidiaries or the Non-Guarantor Subsidiaries. Interest income (expense) is determined based on third-party debt and the relevant intercompany amounts within the respective legal entity.

All direct and indirect domestic subsidiaries are included in Time Warner Inc.'s consolidated U.S. tax return. In the condensed consolidating financial statements, tax expense has been allocated based on each such subsidiary's relative pretax income to the consolidated pretax income. With respect to the use of certain consolidated tax attributes (principally operating and capital loss carryforwards), such benefits have been allocated to the respective subsidiary that generated the taxable income permitting such use (i.e., pro-rata based on where the income was generated). For example, to the extent a Non-Guarantor Subsidiary generated a gain on the sale of a business for which the Parent Company utilized tax attributes to offset such gain, the tax attribute benefit would be allocated to that Non-Guarantor Subsidiary. Deferred taxes of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been allocated based upon the temporary differences between the carrying amounts of the respective assets and liabilities of the applicable entities.

Certain transfers of cash between subsidiaries and their parent companies and intercompany dividends are reflected as cash flows from investing and financing activities in the accompanying condensed consolidating statements of cash flows. All other intercompany activity is reflected in cash flows from operations.

Management believes that the allocations and adjustments noted above are reasonable.  However, such allocations and adjustments may not be indicative of the actual amounts that would have been incurred had the Parent, Guarantor and Non-Guarantor entities operated independently.

Consolidating Balance Sheet

March 31, 2012

(Unaudited;millions)

									Time
	Parent		Guarantor		Non-Guarantor				Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets
Cash and equivalents	$	2,097	$	157	$	623	$	-	$	2,877
Receivables, net		43		743		5,526		-		6,312
Inventories		-		408		1,501		-		1,909
Deferred income taxes		649		510		412		(922)		649
Prepaid expenses and other current assets		90		73		381		-		544
Total current assets		2,879		1,891		8,443		(922)		12,291
Noncurrent inventories and film and TV production costs		-		1,675		5,100		(91)		6,684
Investments in amounts due to and from consolidated
subsidiaries		45,976		21,808		12,111		(79,895)		-
Investments, including available-for-sale securities		84		436		1,374		-		1,894
Property, plant and equipment, net		343		446		3,148		-		3,937
Intangible assets subject to amortization, net		-		-		2,117		-		2,117
Intangible assets not subject to amortization		-		2,007		5,800		-		7,807
Goodwill		-		9,879		20,169		-		30,048
Other assets		290		173		1,503		-		1,966
Total assets	$	49,572	$	38,315	$	59,765	$	(80,908)	$	66,744
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	856	$	764	$	5,461	$	(50)	$	7,031
Deferred revenue		-		11		1,027		(15)		1,023
Debt due within one year		637		448		10		-		1,095
Total current liabilities		1,493		1,223		6,498		(65)		9,149
Long-term debt		14,093		4,297		35		-		18,425
Due (to) from affiliates		(873)		-		873		-		-
Deferred income taxes		2,536		3,193		2,782		(5,975)		2,536
Deferred revenue		-		2		580		(49)		533
Other noncurrent liabilities		2,543		2,223		3,401		(1,847)		6,320
Equity
Due (to) from Time Warner and subsidiaries		-		(25,968)		(3,479)		29,447		-
Other shareholders’ equity		29,780		53,345		49,074		(102,419)		29,780
Total Time Warner Inc. shareholders’ equity		29,780		27,377		45,595		(72,972)		29,780
Noncontrolling interests		-		-		1		-		1
Total equity		29,780		27,377		45,596		(72,972)		29,781
Total liabilities and equity	$	49,572	$	38,315	$	59,765	$	(80,908)	$	66,744

Consolidating Balance Sheet

December 31, 2011

(Unaudited;millions)

									Time
	Parent		Guarantor		Non-Guarantor				Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets
Cash and equivalents	$	2,578	$	164	$	734	$	-	$	3,476
Receivables, net		52		705		6,165		-		6,922
Inventories		-		429		1,461		-		1,890
Deferred income taxes		663		525		437		(962)		663
Prepaid expenses and other current assets		106		61		314		-		481
Total current assets		3,399		1,884		9,111		(962)		13,432
Noncurrent inventories and film and TV production costs		-		1,698		4,984		(88)		6,594
Investments in amounts due to and from consolidated
subsidiaries		45,566		21,845		12,022		(79,433)		-
Investments, including available-for-sale securities		76		410		1,334		-		1,820
Property, plant and equipment, net		369		462		3,132		-		3,963
Intangible assets subject to amortization, net		-		-		2,232		-		2,232
Intangible assets not subject to amortization		-		2,007		5,798		-		7,805
Goodwill		-		9,879		20,150		-		30,029
Other assets		288		193		1,445		-		1,926
Total assets	$	49,698	$	38,378	$	60,208	$	(80,483)	$	67,801
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	837	$	890	$	6,123	$	(35)	$	7,815
Deferred revenue		-		13		1,081		(10)		1,084
Debt due within one year		-		11		12		-		23
Total current liabilities		837		914		7,216		(45)		8,922
Long-term debt		14,730		4,735		36		-		19,501
Due (to) from affiliates		(850)		-		850		-		-
Deferred income taxes		2,541		3,296		2,882		(6,178)		2,541
Deferred revenue		-		15		589		(55)		549
Other noncurrent liabilities		2,483		2,232		3,461		(1,842)		6,334
Equity
Due (to) from Time Warner and subsidiaries		-		(25,217)		(3,083)		28,300		-
Other shareholders’ equity		29,957		52,403		48,260		(100,663)		29,957
Total Time Warner Inc. shareholders’ equity		29,957		27,186		45,177		(72,363)		29,957
Noncontrolling interests		-		-		(3)		-		(3)
Total equity		29,957		27,186		45,174		(72,363)		29,954
Total liabilities and equity	$	49,698	$	38,378	$	60,208	$	(80,483)	$	67,801

Consolidating Statement of Operations

For The Three Months Ended March 31, 2012

(Unaudited;millions)

									Time
	Parent		Guarantor		Non-Guarantor				Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	1,562	$	5,518	$	(101)	$	6,979
Costs of revenues		-		(786)		(3,271)		81		(3,976)
Selling, general and administrative		(100)		(241)		(1,252)		18		(1,575)
Amortization of intangible assets		-		-		(61)		-		(61)
Restructuring and severance costs		-		(6)		(20)		-		(26)
Asset impairments		-		-		(52)		-		(52)
Gain (loss) on operating assets		-		-		(42)		-		(42)
Operating income		(100)		529		820		(2)		1,247
Equity in pretax income (loss) of consolidated subsidiaries		1,249		807		347		(2,403)		-
Interest expense, net		(220)		(92)		(11)		3		(320)
Other loss, net		(2)		11		(8)		(1)		-
Income before income taxes		927		1,255		1,148		(2,403)		927
Income tax provision		(346)		(422)		(386)		808		(346)
Net income		581		833		762		(1,595)		581
Less Net loss attributable to noncontrolling interest		2		2		2		(4)		2
Net income attributable to Time Warner Inc.
shareholders	$	583	$	835	$	764	$	(1,599)	$	583
Comprehensive income		640		866		797		(1,663)		640
Less Comprehensive loss attributable to
noncontrolling interest		2		2		2		(4)		2
Comprehensive income attributable to
Time Warner Inc. shareholders	$	642	$	868	$	799	$	(1,667)	$	642

Consolidating Statement of Operations

For The Three Months Ended March 31, 2011

(Unaudited;millions)

									Time
	Parent		Guarantor		Non-Guarantor				Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	1,548	$	5,309	$	(174)	$	6,683
Costs of revenues		-		(782)		(3,091)		146		(3,727)
Selling, general and administrative		(88)		(235)		(1,293)		25		(1,591)
Amortization of intangible assets		-		-		(68)		-		(68)
Restructuring and severance costs		1		(3)		(28)		-		(30)
Gain on operating assets		-		-		3		-		3
Operating income		(87)		528		832		(3)		1,270
Equity in pretax income (loss) of consolidated subsidiaries		1,243		811		396		(2,450)		-
Interest expense, net		(187)		(92)		3		2		(274)
Other loss, net		13		(4)		-		(23)		(14)
Income before income taxes		982		1,243		1,231		(2,474)		982
Income tax provision		(331)		(417)		(414)		831		(331)
Net income		651		826		817		(1,643)		651
Less Net loss attributable to noncontrolling interests		2		2		2		(4)		2
Net income attributable to Time Warner Inc.
shareholders	$	653	$	828	$	819	$	(1,647)	$	653
Comprehensive income		744		891		882		(1,773)		744
Less Comprehensive loss attributable to
noncontrolling interest		2		2		2		(4)		2
Comprehensive income attributable to
Time Warner Inc. shareholders	$	746	$	893	$	884	$	(1,777)	$	746

Consolidating Statement of Cash Flows

For The Three Months Ended March 31, 2012

(Unaudited;millions)

	Parent		Guarantor		Non-Guarantor				Time Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
OPERATIONS
Net income	$	581	$	833	$	762	$	(1,595)	$	581
Adjustments for noncash and nonoperating items:
Depreciation and amortization		6		35		174		-		215
Amortization of film and television costs		-		659		1,287		2		1,948
Asset impairments		-		-		52		-		52
(Gain) loss on investments and other assets, net		2		-		49		-		51
Excess (deficiency) of distributions over equity in pretax
income of consolidated subsidiaries, net of cash
distributions		(1,249)		(807)		(347)		2,403		-
Equity in losses of investee companies, net
of cash distributions		1		-		14		-		15
Equity-based compensation		21		25		55		-		101
Deferred income taxes		(92)		(110)		(93)		203		(92)
Changes in operating assets and liabilities, net of acquisitions		135		(255)		(1,325)		(1,010)		(2,455)
Intercompany		-		136		(136)		-		-
Cash provided by operations		(595)		516		492		3		416
INVESTING ACTIVITIES
Investments in available-for-sale securities		(6)		(11)		-		-		(17)
Investments and acquisitions, net of cash acquired		(7)		(2)		(50)		-		(59)
Capital expenditures		(12)		(16)		(105)		-		(133)
Advances to (from) parent and consolidated subsidiaries		854		262		-		(1,116)		-
Other investment proceeds		-		8		19		(5)		22
Cash used by investing activities		829		241		(136)		(1,121)		(187)
FINANCING ACTIVITIES
Borrowings		-		-		11		-		11
Debt repayments		-		-		(13)		-		(13)
Proceeds from exercise of stock options		185		-		-		-		185
Excess tax benefit on stock options		34		-		-		-		34
Principal payments on capital leases		-		(3)		-		-		(3)
Repurchases of common stock		(725)		-		-		-		(725)
Dividends paid		(257)		-		-		-		(257)
Other financing activities		48		(10)		(98)		-		(60)
Change in due to/from parent and investment in segment		-		(751)		(367)		1,118		-
Cash used by financing activities		(715)		(764)		(467)		1,118		(828)
DECREASE IN CASH AND EQUIVALENTS		(481)		(7)		(111)		-		(599)
CASH AND EQUIVALENTS AT BEGINNING
OF PERIOD		2,578		164		734		-		3,476
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,097	$	157	$	623	$	-	$	2,877

Consolidating Statement of Cash Flows

For The Three Months Ended March 31, 2011

(Unaudited;millions)

	Parent		Guarantor		Non-Guarantor				Time Warner
	Company		Subsidiaries		Subsidiaries		Eliminations		Consolidated
OPERATIONS
Net income	$	651	$	826	$	817	$	(1,643)	$	651
Adjustments for noncash and nonoperating items:
Depreciation and amortization		7		34		190		-		231
Amortization of film and television costs		-		624		1,039		1		1,664
(Gain) loss on investments and other assets, net		(4)		(1)		1		-		(4)
Excess (deficiency) of distributions over equity in pretax
income of consolidated subsidiaries, net of cash
distributions		(1,243)		(811)		(396)		2,450		-
Equity in losses of investee companies, net
of cash distributions		(2)		3		31		-		32
Equity-based compensation		16		24		62		-		102
Deferred income taxes		51		32		30		(62)		51
Changes in operating assets and liabilities, net of acquisitions		161		(182)		(1,141)		(740)		(1,902)
Intercompany		-		268		(268)		-		-
Cash provided by operations		(363)		817		365		6		825
INVESTING ACTIVITIES
Investments in available-for-sale securities		-		-		-		-		-
Investments and acquisitions, net of cash acquired		-		(3)		(157)		-		(160)
Capital expenditures		(23)		(23)		(106)		-		(152)
Advances to (from) parent and consolidated subsidiaries		642		(147)		-		(495)		-
Other investment proceeds		(1)		2		4		-		5
Cash used by investing activities		618		(171)		(259)		(495)		(307)
FINANCING ACTIVITIES
Borrowings		-		-		22		-		22
Debt repayments		-		-		(21)		-		(21)
Proceeds from exercise of stock options		118		-		-		-		118
Excess tax benefit on stock options		14		-		-		-		14
Principal payments on capital leases		-		(2)		-		-		(2)
Repurchases of common stock		(959)		-		-		-		(959)
Dividends paid		(261)		-		-		-		(261)
Other financing activities		27		(10)		(80)		-		(63)
Change in due to/from parent and investment in segment		-		(600)		111		489		-
Cash used by financing activities		(1,061)		(612)		32		489		(1,152)
DECREASE IN CASH AND EQUIVALENTS		(806)		34		138		-		(634)
CASH AND EQUIVALENTS AT BEGINNING
OF PERIOD		2,815		256		592		-		3,663
CASH AND EQUIVALENTS AT END OF PERIOD	$	2,009	$	290	$	730	$	-	$	3,029

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Inventories and Film and TV Production Costs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Inventories [Abstract]
Programming costs, less amortization	$ 3,377	$ 3,321
DVDs, books, paper and other merchandise	345	340
Total inventories	3,722	3,661
Less: current portion of inventory	(1,909)	(1,890)
Total noncurrent inventories	1,813	1,771
Film and TV production costs - Theatrical [Abstract]
Released, less amortization	733	844
Completed and not released	278	295
In production	1,852	1,592
Development and pre-production	92	87
Film and TV production costs - Television [Abstract]
Released, less amortization	1,096	1,141
Completed and not released	416	360
In production	392	499
Development and pre-production	12	5
Total film and TV production costs	4,871	4,823
Total noncurrent inventories and film and TV production costs	6,684	6,594
Film Library Numeric [Abstract]
Film library	$ 1,284	$ 1,320

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Inventories and Film and TV Production Costs (Tables)

3 Months Ended

Mar. 31, 2012

Inventory Disclosure [Abstract]

Inventories and Film and TV Production Costs

Inventories and film and TV production costs consist of (millions):

	March 31, 2012		December 31, 2011
Inventories:
Programming costs, less amortization	$	3,377	$	3,321
DVDs, books, paper and other merchandise		345		340
Total inventories		3,722		3,661
Less: current portion of inventory		(1,909)		(1,890)
Total noncurrent inventories		1,813		1,771
Film and TV production costs — Theatrical:(a)
Released, less amortization		733		844
Completed and not released		278		295
In production		1,852		1,592
Development and pre-production		92		87
Film and TV production costs — Television:(a)
Released, less amortization		1,096		1,141
Completed and not released		416		360
In production		392		499
Development and pre-production		12		5
Total film and TV production costs		4,871		4,823
Total noncurrent inventories and film and TV production costs	$	6,684	$	6,594
_____________

(a)Does not include $1.284 billion and $1.320 billion of net film library costs as of March 31, 2012 and December 31, 2011, respectively, which areincluded in Intangible assets subject to amortization in the Consolidated Balance Sheet.

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Consolidated Statement Of Equity (USD $) In Millions		Total	Time Warner Shareholders	Noncontrolling Interests
BALANCE AT BEGINNING OF PERIOD at Dec. 31, 2010		$ 32,945	$ 32,940	$ 5
Net income		651	653	(2)
Other comprehensive income		93	93	0
Cash dividends		(261)	(261)	0
Common stock repurchases		(1,000)	(1,000)	0
Other	[1]	(187)	(188)	1
BALANCE AT END OF PERIOD at Mar. 31, 2011		32,241	32,237	4
BALANCE AT BEGINNING OF PERIOD at Dec. 31, 2011		29,954	29,957	(3)
Net income		581	583	(2)
Other comprehensive income		59	59	0
Cash dividends		(257)	(257)	0
Common stock repurchases		(731)	(731)	0
Other		175	169	6
BALANCE AT END OF PERIOD at Mar. 31, 2012		$ 29,781	$ 29,780	$ 1

[1] 2011 reflects a decline in additional paid-in capital related to the expiration of certain equity-based compensation awards.

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Consolidated Balance Sheet (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets
Allowances	$ 1,599	$ 1,957
Equity
Time Warner common stock, par value	$ 0.01	$ 0.01
Time Warner common stock, shares issued	1,652	1,652
Time Warner common stock, shares outstanding	963	974
Treasury stock, shares	689	678

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Restructuring and Severance Costs

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND SEVERANCE COSTS

10.       RESTRUCTURING AND SEVERANCE COSTS

The Company's Restructuring and severance costs primarily related to employee termination costs, ranging from senior executives to line personnel, and other exit costs, including lease terminations. Restructuring and severance costs expensed as incurred by segment for the three months ended March 31, 2012 and 2011 are as follows (millions):

	Three Months Ended March 31,
	2012		2011
Networks	$	14	$	12
Film and TV Entertainment		6		6
Publishing		6		12
Total restructuring and severance costs	$	26	$	30

	Three Months Ended March 31,
	2012		2011
2012 activity	$	22	$	-
2011 and prior activity		4		30
Total restructuring and severance costs	$	26	$	30

Selected information relating to accruedrestructuring and severance costs is as follows (millions):

	Employee Terminations		Other Exit Costs			Total
Remaining liability as of December 31, 2011	$	116	$	60	$	176
Net accruals		23		3		26
Cash paid		(38)		(7)		(45)
Remaining liability as of March 31, 2012	$	101	$	56	$	157

As of March 31, 2012, of the remaining liability of $158million, $93 million was classified as a current liabilityin the Consolidated Balance Sheet, with the remaining $65 million classified as a long-term liability. Amounts classified as long-term are expected to be paid through 2017.

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Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Apr. 24, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Entity Registrant Name	TIME WARNER INC.
Entity Central Index Key	0001105705
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 35.24
Entity Common Stock, Shares Outstanding		959,915,926

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Segment Information

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

SEGMENT INFORMATION

11. SEGMENT INFORMATION

Time Warner classifies its operations into three reportable segments: Networks:consisting principally of cable television networks, premium pay and basic tier television services and digital media properties; Film and TV Entertainment:consisting principally of feature film, television, home video and videogame production and distribution; and Publishing:consisting principally of magazine publishing and related websites as well as book publishing, marketing services and other marketing businesses.Effective for the first quarter of 2012, the Company changed the name of its Filmed Entertainment reportable segment to Film and TV Entertainment. This change did not affect the composition of the segment; accordingly, all prior period financial information related to this reportable segment was unaffected.

Information as to the Revenues, intersegment revenues, Operating Income (Loss), and Assetsof Time Warner in each of its reportable segments is set forth below (millions):

	Three Months Ended March 31,
	2012		2011
Revenues
Networks	$	3,602	$	3,496
Film and TV Entertainment		2,784		2,604
Publishing		773		798
Intersegment eliminations		(180)		(215)
Total revenues	$	6,979	$	6,683

	Three Months Ended March 31,
	2012		2011
Intersegment Revenues
Networks	$	27	$	21
Film and TV Entertainment		140		183
Publishing		13		11
Total intersegment revenues	$	180	$	215

	Three Months Ended March 31,
	2012		2011
Operating Income (Loss)
Networks	$	1,143	$	1,162
Film and TV Entertainment		214		158
Publishing		(4)		63
Corporate		(102)		(93)
Intersegment eliminations		(4)		(20)
Total operating income (loss)	$	1,247	$	1,270

	March 31, 2012		December 31, 2011
Assets
Networks	$	38,474	$	38,166
Film and TV Entertainment		18,651		19,257
Publishing		5,876		6,055
Corporate		3,743		4,323
Total assets	$	66,744	$	67,801

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Consolidated Statement Of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Statement of Operations
Revenues	$ 6,979	$ 6,683
Costs of revenues	(3,976)	(3,727)
Selling, general and administrative	(1,575)	(1,591)
Amortization of intangible assets	(61)	(68)
Restructuring and severance costs	(26)	(30)
Asset impairments	(52)	0
Gain (loss) on operating assets	(42)	3
Operating income	1,247	1,270
Interest expense, net	(320)	(274)
Other loss, net	0	(14)
Income before income taxes	927	982
Income tax provision	(346)	(331)
Net income	581	651
Less Net loss attributable to noncontrolling interests	2	2
Net income attributable to Time Warner Inc. shareholders	$ 583	$ 653
Per share information attributable to Time Warner Inc. common shareholders:
Basic net income per common share	$ 0.60	$ 0.59
Average basic common shares outstanding	968.3	1,090.8
Diluted net income per common share	$ 0.59	$ 0.59
Average diluted common shares outstanding	990.1	1,110.1
Cash dividends declared per share of common stock	$ 0.260	$ 0.235

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Derivative Instruments

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

5.       DERIVATIVE INSTRUMENTS

Time Warner uses derivative instruments, principally forward contracts, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies and changes in fair value resulting from changes in foreign currency exchange rates. The principal currencies being hedged include the British Pound, Euro, Australian Dollar and Canadian Dollar. Time Warner uses foreign exchange contracts that generally have maturities of three to 18months to hedge various foreign exchange exposures, including the following: (i) variability in foreign-currency-denominated cash flows, such as the hedges of unremitted or forecasted royalty and license fees owed to Time Warner domestic companies for the sale or anticipated sale of U.S. copyrighted products abroad or cash flows for certain film production costs denominated in a foreign currency (i.e., cash flow hedges) and (ii) currency risk associated with foreign-currency-denominated operating assets and liabilities (i.e., fair value hedges). For these qualifying hedge relationships, the Company excludes the impact of forward points from its assessment of hedge effectiveness. As a result, changes in the fair value of forward points are recorded in Other loss, net in the Consolidated Statement of Operations each quarter.

The Company also enters into derivative contracts that economically hedge certain of its foreign currency risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. These economic hedges are used primarily to offset the change in certain foreign currency denominated long-term receivables and certain foreign-currency-denominated debt due to changes in the underlying foreign exchange rates.

Gains and losses from hedging activities recognized in the Consolidated Statement of Operations, including hedge ineffectiveness, were not material for the three months ended March 31, 2012 and 2011. In addition, such gains and losses were largely offset by corresponding economic gains or losses from the respective transactions that were hedged.

The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to Time Warner's use of foreign currency derivatives at March 31, 2012 and December 31, 2011 (millions):

	March 31, 2012		December 31, 2011
Qualifying Hedges
Assets	$	103	$	105
Liabilities		(106)		(91)
Economic Hedges
Assets	$	15	$	30
Liabilities		(15)		(16)

The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions. Additionally, netting provisions are included in existing agreements in situations where the Company executes multiple contracts with the same counterparty. As a result, net assets or liabilities resulting from foreign exchange derivatives subject to these netting agreements are classified within Prepaid expenses and other current assets or Accounts payable and accrued liabilities in the Company's Consolidated Balance Sheet. At March 31, 2012 and December 31, 2011, $15 million and $19 million of gains, respectively, related to cash flow hedges are recorded in Accumulated other comprehensive loss, net and are expected to be recognized in earnings at the same time the hedged items affect earnings. Included in Accumulated other comprehensive loss, netare deferred net gains of $12million and less than $1 million at March 31, 2012 and December 31, 2011, respectively, related to hedges of cash flows associated with films that are not expected to be released within the next twelve months.

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Inventories and Film and TV Production Costs

3 Months Ended

Mar. 31, 2012

Inventory Disclosure [Abstract]

INVENTORIES AND FILM AND TV PRODUCTION COSTS

4.        INVENTORIES AND FILM AND TV PRODUCTION COSTS

Inventories and film and TV production costs consist of (millions):

	March 31, 2012		December 31, 2011
Inventories:
Programming costs, less amortization	$	3,377	$	3,321
DVDs, books, paper and other merchandise		345		340
Total inventories		3,722		3,661
Less: current portion of inventory		(1,909)		(1,890)
Total noncurrent inventories		1,813		1,771
Film and TV production costs — Theatrical:(a)
Released, less amortization		733		844
Completed and not released		278		295
In production		1,852		1,592
Development and pre-production		92		87
Film and TV production costs — Television:(a)
Released, less amortization		1,096		1,141
Completed and not released		416		360
In production		392		499
Development and pre-production		12		5
Total film and TV production costs		4,871		4,823
Total noncurrent inventories and film and TV production costs	$	6,684	$	6,594
_____________

(a)Does not include $1.284 billion and $1.320 billion of net film library costs as of March 31, 2012 and December 31, 2011, respectively, which areincluded in Intangible assets subject to amortization in the Consolidated Balance Sheet.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurement Inputs

The following table presentsinformation about assets and liabilities required to be carried at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively (millions):

	Fair Value Measurements
	March 31, 2012								December 31, 2011
Description		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Trading securities:
Diversified equity securities(a)	$	279	$	5	$	-	$	284	$	265	$	5	$	-	$	270
Available-for-sale securities:
Equity securities		30		-		-		30		14		-		-		14
Debt securities		-		78		-		78		-		72		-		72
Derivatives:
Foreign exchange contracts		-		22		-		22		-		28		-		28
Other		3		-		17		20		4		-		20		24
Liabilities:
Derivatives:
Foreign exchange contracts		-		(25)		-		(25)		-		-		-		-
Other		-		-		(17)		(17)		-		-		(17)		(17)
Total	$	312	$	80	$	-	$	392	$	283	$	105	$	3	$	391
__________

(a)       Consists of investments related to deferred compensation.

Level 3 Asset and Liability Reconciliation

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 and identifies the total gains (losses) the Company recognized during thethree months ended March 31, 2012 and2011, respectively,on such assets and liabilities that were included in the Consolidated Balance Sheet as of March 31, 2012 and 2011,respectively(millions):

	Derivatives
	March 31, 2012		March 31, 2011
Balance as of the beginning of the period	$	3	$	(9)
Total gains (losses):
Included in operating income		-		3
Included in other loss, net		(1)		4
Settlements		(2)		2
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance as of the end of the period	$	-	$	-
Net gain (loss) for the period included in
net income related to assets and liabilities still held as of the end of the period	$	(1)	$	7

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

12.       COMMITMENTS AND CONTINGENCIES

Commitments

Six Flags

In connection with the Company's former investment in the Six Flags theme parks located in Georgia and Texas (collectively, the “Parks”), in 1997, certain subsidiaries of the Company (including Historic TW and, in connection with the separation of Time Warner Cable Inc. in 2009, Warner Bros. Entertainment Inc.) agreed to guarantee (the “Six Flags Guarantee”) certain obligations of the partnerships that hold the Parks (the “Partnerships”) for the benefit of the limited partners in such Partnerships, including: annual payments made at the Parks or to the limited partners and additional obligations at the end of the respective terms for the Partnerships in 2027 and 2028 (the “Guaranteed Obligations”). The aggregate undiscounted estimated future cash flow requirements covered by the Six Flags Guarantee over the remaining term (through 2028) are approximately $1.0 billion (for a net present value of approximately $410 million). To date, no payments have been made by the Company pursuant to the Six Flags Guarantee.

Six Flags Entertainment Corporation (formerly known as Six Flags, Inc. and Premier Parks Inc.) (“Six Flags”), which hasthe controlling interest in the Parks, has agreed, pursuant to a subordinated indemnity agreement (the “Subordinated Indemnity Agreement”), to guarantee the performance of the Guaranteed Obligations when due and to indemnify Historic TW, among others, if the Six Flags Guarantee is called upon. If Six Flags defaults in its indemnification obligations, Historic TW has the right to acquire control of the managing partner of the Parks. Six Flags' obligations to Historic TW are further secured by its interest in all limited partnership units held by Six Flags.

Because the Six Flags Guarantee existed prior to December 31, 2002 and no modifications to the arrangements have been made since the date the guarantee came into existence, the Company is required to continue to account for the Guaranteed Obligations as a contingent liability. Based on its evaluation of the current facts and circumstances surrounding the Guaranteed Obligations and the Subordinated Indemnity Agreement, the Company is unable to predict the loss, if any, that may be incurred under these Guaranteed Obligations and no liability for the arrangements has been recognized at March 31, 2012. Because of the specific circumstances surrounding the arrangements and the fact that no active or observable market exists for this type of financial guarantee, the Company is unable to determine a current fair value for the Guaranteed Obligations and related Subordinated Indemnity Agreement.

Contingencies

In the ordinary course of business, the Company and its subsidiaries are defendants in or parties to various legal claims, actions and proceedings. These claims, actions and proceedings are at varying stages of investigation, arbitration or adjudication, and involve a variety of areas of law.

On October 8, 2004, certain heirs of Jerome Siegel, one of the creators of the “Superman” character, filed suit against the Company, DC Comics and Warner Bros. Entertainment Inc. in the U.S. District Court for the Central District of California. Plaintiffs' complaint seeks an accounting and demands up to one-half of the profits made on Superman since the alleged April 16, 1999 termination by plaintiffs of Siegel's grants of one-half of the rights to the Superman character to DC Comics' predecessor-in-interest. Plaintiffs have also asserted various Lanham Act and unfair competition claims, alleging “wasting” of the Superman property by DC Comics, and the Company has filed counterclaims. On March 26, 2008, the court entered an order of summary judgment finding, among other things, that plaintiffs' notices of termination were valid and that plaintiffs had thereby recaptured, as of April 16, 1999, their rights to a one-half interest in the Superman story material, as first published, but that the accounting for profits would not include profits attributable to foreign exploitation, republication of pre-termination works and trademark exploitation. On October 6, 2008, the court dismissed plaintiffs' Lanham Act and “wasting” claims with prejudice, and subsequently determined that the remaining claims in the case will be subject to phased non-jury trials. On July 8, 2009, the court issued a decision in the first phase trial in favor of the defendants on the issue of whether the terms of various license agreements between DC Comics and Warner Bros. Entertainment Inc. were at fair market value or constituted “sweetheart deals.” On May 17, 2011, the court certified certain liability issues for interlocutory appeal and stayed proceedings pending that appeal. The parties are pursuing their interlocutory appeals with respect to the certified liability issues.

On October 22, 2004, the same Siegel heirs filed a related lawsuit against the same defendants, as well as Warner Communications Inc. and Warner Bros. Television Production Inc. in the U.S. District Court for the Central District of California. Plaintiffs claim that Siegel was the sole creator of the character Superboy and, as such, DC Comics has had no right to create new Superboy works since the alleged October 17, 2004 termination by plaintiffs of Siegel's grants of rights to the Superboy character to DC Comics' predecessor-in-interest. This lawsuit seeks a declaration regarding the validity of the alleged termination and an injunction against future use of the Superboy character. On March 23, 2006, the court granted plaintiffs' motion for partial summary judgment on termination, denied the Company's motion for summary judgment and held that further proceedings are necessary to determine whether the Company's Smallville television series may infringe on plaintiffs' rights to the Superboy character. On July 27, 2007, upon the Company's motion for reconsideration, the court reversed the bulk of its March 23, 2006 ruling, and requested additional briefing on certain issues, on which a decision remains pending.

On May 14, 2010, DC Comics filed a related lawsuit in the U.S. District Court for the Central District of California against the heirs of Superman co-creator Joseph Shuster, the Siegel heirs, their attorney Marc Toberoff and certain companies that Mr. Toberoff controls. The lawsuit asserts a claim for declaratory relief concerning the validity and scope of the copyright termination notice served by the Shuster heirs, which, together with the termination notices served by the Siegel heirs described above, purports to preclude DC Comics from creating new Superman and/or Superboy works for distribution and sale in the United States after October 26, 2013. The lawsuit also seeks declaratory relief with respect to, inter alia, the validity of various agreements between Mr. Toberoff, his companies and the Shuster and Siegel heirs, and asserts claims for intentional interference by Mr. Toberoff with DC Comics' contracts and prospective economic advantage with the Shuster and Siegel heirs, for which DC Comics seeks monetary damages. On September 3, 2010, DC Comics filed an amended complaint and on September 20, 2010, defendants filed motions to strike certain causes of action and dismiss the amended complaint under California and federal laws.Defendants' motion to strike certain causes of action was denied on October 25, 2011, and defendants withdrew their motion to dismiss on November 3, 2011.

On April 4, 2007, the National Labor Relations Board (“NLRB”) issued a complaint against CNN America Inc. (“CNN America”) and Team Video Services, LLC (“Team Video”). This administrative proceeding relates to CNN America's December 2003 and January 2004 terminations of its contractual relationships with Team Video, under which Team Video had provided electronic newsgathering services in Washington, DC and New York, NY. The National Association of Broadcast Employees and Technicians, under which Team Video's employees were unionized, initially filed charges of unfair labor practices with the NLRB in February 2004, alleging that CNN America and Team Video were joint employers, that CNN America was a successor employer to Team Video, and/or that CNN America discriminated in its hiring practices to avoid becoming a successor employer or due to specific individuals' union affiliation or activities. The NLRB complaint seeks, among other things, the reinstatement of certain union members and monetary damages. On November 19, 2008, the presiding NLRB Administrative Law Judge issued a non-binding recommended decision, finding CNN America liable. On February 17, 2009, CNN America filed exceptions to this decision with the NLRB.

On September 20, 2007, Brantley, et al. v. NBC Universal, Inc., et al. was filed in the U.S. District Court for the Central District of California against the Company and several other programming content providers (collectively, the “programmer defendants”) as well as cable and satellite providers (collectively, the “distributor defendants”), alleging violations of the federal antitrust laws. Among other things, the complaint alleged coordination between and among the programmer defendants to sell and/or license programming on a “bundled” basis to the distributor defendants, who in turn purportedly offer that programming to subscribers in packaged tiers, rather than on a per channel (or “à la carte”) basis. In an order dated October 15, 2009, the court dismissed the third amended complaint with prejudice. On October 30, 2009, plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit. On March 30, 2012, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court's dismissal of the lawsuit and, on April 10, 2012, plaintiffs filed a petition for a rehearing en banc.

On March 10, 2009, Anderson News L.L.C. and Anderson Services L.L.C. (collectively, “Anderson News”) filed an antitrust lawsuit in the U.S. District Court for the Southern District of New York against several magazine publishers, distributors and wholesalers, including Time Inc. and one of its subsidiaries, Time/Warner Retail Sales & Marketing, Inc. Plaintiffs allege that defendants violated Section 1 of the Sherman Antitrust Act by engaging in an antitrust conspiracy against Anderson News, as well as other related state law claims. Plaintiffs are seeking unspecified monetary damages. On August 2, 2010, the court granted defendants' motions to dismiss the complaint with prejudice and, on October 25, 2010, the court denied Anderson News' motion for reconsideration of that dismissal. On November 8, 2010, Anderson News filed a notice of appeal with the U.S. Court of Appeals for the Second Circuit. On April 3, 2012, the U.S. Court of Appeals for the Second Circuit vacated the district court's dismissal of plaintiffs' complaint and remanded the case to the district court for further proceedings.

The Company intends to vigorously defend against or prosecute, as applicable, the matters described above.

The Company establishes an accrued liability for legal claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters.

For matters disclosed above for which a loss is probable or reasonably possible, whether in excess of an accrued liability or where there is no accrued liability, the Company has estimated a range of possible loss. The Company believes the estimate of the aggregate range of possible loss in excess of accrued liabilities for such matters is between $0and $80 million at March 31, 2012. The estimated aggregate range of possible loss is subject to significant judgment and a variety of assumptions. The matters represented in the estimated aggregate range of possible loss will change from time to time and actual results may vary significantly from the current estimate.

In view of the inherent difficulty of predicting the outcome of litigation and claims, the Company often cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. An adverse outcome in one or more of these matters could be material to the Company's results of operations or cash flows for any particular reporting period.

Income Tax Uncertainties

During the three months ended March 31, 2012, the Company recorded net incremental income tax reserves of approximately $41 million. Of the $41 million net incremental income tax reserves, approximately $33 million would affect the Company's effective tax rate if reversed. During the three months ended March 31, 2012, the Company recorded interest reserves related to the income tax reserves of approximately $17million.

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Equity-Based Compensation

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

EQUITY-BASED COMPENSATION

8.  EQUITY-BASED COMPENSATION

Compensation expense recognized for equity-based plans is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Restricted stock units and performance stock units	$	75	$	69
Stock options		26		33
Total impact on operating income	$	101	$	102
Tax benefit recognized	$	36	$	38

Forthe three months ended March 31, 2012 and 2011, the Company granted approximately 5.2 million and 4.8 million restricted stock units (“RSUs”), respectively,at a weighted-average grant date fair value per RSU of $37.46 and $36.10, respectively. For the three months ended March 31, 2012 and 2011, the Company granted approximately 0.2million and 0.1 million target performance stock units (“PSUs”), respectively, at a weighted-average grant date fair value per target PSU of $39.51 and $45.89, respectively. Total unrecognized compensation cost related to unvested RSUs and target PSUs as of March 31, 2012, without taking into account expected forfeitures, is $306 million and is expected to be recognized over a weighted-average period between one and two years.

For the three months ended March 31, 2012 and 2011, the Company granted approximately 4.7 million and 8.2 millionstock options, respectively, at a weighted-average grant date fair value per option of $8.69 and $9.03, respectively. Total unrecognized compensation cost related to unvested stock options as of March 31, 2012, without taking into account expected forfeitures, is $79 million and is expected to be recognized over a weighted-average period between one and two years. The table below presents the weighted-average values of the assumptions used to value the stock options at their grant date.

	Three Months Ended March 31,
	2012	2011
Expected volatility	31.2%	29.5%
Expected term to exercise from grant date	6.50 years	6.31 years
Risk-free rate	1.3%	2.8%
Expected dividend yield	2.8%	2.6%

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Shareholders' Equity

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

SHAREHOLDERS' EQUITY

6. SHAREHOLDERS' EQUITY

Common Stock Repurchase Program

On January 25, 2011, Time Warner's Board of Directors authorized an increase in the amount remaining on the Company's stock repurchase program to $5.0 billion for share repurchases beginning January 1, 2011. This program was completed in February 2012.

On January 31, 2012, Time Warner's Board of Directors authorized a $4.0 billion stock repurchase program. Purchases under the stock repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including price and business and market conditions.

From January 1, 2012 through March 31, 2012, the Company repurchased approximately 20 million shares of common stock for approximately $731 million pursuant to trading programs under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. As of March 31, 2012,$3.651 billion was remaining under the stock repurchase program.

Comprehensive Income

Comprehensive income is reported in the Consolidated Statement ofComprehensive Income and consists of Net income and other gains and losses affecting shareholders' equity that, under GAAP, are excluded from Net income. For Time Warner, such items consist primarily of foreign currency translation gains (losses),unrealized gains and losses on marketable equity securities, unrealized gains and losses on certain derivative financial instruments and changes in unfunded and underfunded benefit plan obligations.

The following summary sets forth the activity within Other comprehensive income(millions):

	Three Months Ended March 31, 2012						Three Months Ended March 31, 2011
	Pretax		Tax (provision) benefit		Net of tax		Pretax		Tax (provision) benefit		Net of tax
Foreign currency translation adjustments	$	71	$	(9)	$	62	$	90	$	-	$	90
Unrealized gains on securities		5		(2)		3		-		-		-
Unrealized losses on benefit obligation		(11)		4		(7)		(6)		2		(4)
Reclassification adjustment for losses
on benefit obligation realized in net income		7		(3)		4		5		(2)		3
Unrealized derivative financial instruments
losses		(17)		5		(12)		(1)		-		(1)
Reclassification adjustment for derivative
financial instruments losses realized
in net income		14		(5)		9		8		(3)		5
Other comprehensive income	$	69	$	(10)	$	59	$	96	$	(3)	$	93

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

NET INCOME PER COMMON SHARE

7. NET INCOME PER COMMON SHARE

Set forth below is a reconciliation of Basic and Diluted net incomeper common share attributable to Time Warner Inc. common shareholders (millions, except per share amounts):

		Three Months Ended March 31,
	2012		2011
Net income attributable to Time Warner Inc. shareholders	$	583	$	653
Net income allocated to participating securities		(4)		(4)
Net income attributable to Time Warner Inc. common
shareholders — basic	$	579	$	649
Average number of common shares outstanding — basic		968.3		1,090.8
Dilutive effect of equity awards		21.8		19.3
Average number of common shares outstanding — diluted		990.1		1,110.1
Net income per common share attributable to Time Warner Inc.
common shareholders:
Basic	$	0.60	$	0.59
Diluted	$	0.59	$	0.59

Diluted net income per common share for the three months ended March 31, 2012 and 2011 excludes approximately 34 million and 80million common shares, respectively, that may be issued under the Company's stock compensation plans because they do not have a dilutive effect.

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Benefit Plans

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

BENEFIT PLANS

9.BENEFIT PLANS

A summary of the components of the net periodic benefit costs recognized for substantially all of Time Warner's defined benefit pension plans for the three months ended March 31, 2012 and 2011 is as follows (millions):

Components of Net Periodic Benefit Costs

	Three Months Ended March 31,
	2012		2011
Service cost	$	1	$	6
Interest cost		44		47
Expected return on plan assets		(47)		(49)
Amortization of net loss		7		5
Net periodic benefit costs	$	5	$	9
Contributions	$	6	$	12

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Asset Dispositions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Schedule of Asset Dispositions [Line Items]
Loss on disposition of assets	$ 42	$ (3)
Long-Lived Assets to be Abandoned [Line Items]
Asset impairments	52	0
Imagine [Member]
Long-Lived Assets to be Abandoned [Line Items]
Impairment and exit costs	58
Asset impairments	52
Exit costs	6
Publishing [Member]
Schedule of Asset Dispositions [Line Items]
Loss on disposition of assets	$ 42

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Additional Financial Information

3 Months Ended

Mar. 31, 2012

Disclosure Text Block Supplement [Abstract]

ADDITIONAL FINANCIAL INFORMATION

14.       ADDITIONAL FINANCIAL INFORMATION

Cash Flows

Additional financial information with respect to cash payments and receipts is as follows (millions):

	Three Months Ended March 31,
	2012		2011
Cash payments made for interest	$	(291)	$	(218)
Interest income received		11		5
Cash interest payments, net	$	(280)	$	(213)
Cash payments made for income taxes	$	(333)	$	(141)
Income tax refunds received		30		4
Cash tax payments, net	$	(303)	$	(137)

Interest Expense, Net

Interest expense, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Interest income	$	28	$	37
Interest expense		(348)		(311)
Total interest expense, net	$	(320)	$	(274)

Other Loss, Net

Otherloss, net, consists of (millions):

	Three Months Ended March 31,
	2012		2011
Investment gains (losses), net	$	(9)	$	4
Loss on equity method investees		(8)		(18)
Other		17		-
Total other loss, net	$	-	$	(14)

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of (millions):

	March 31, 2012		December 31, 2011
Accounts payable	$	700	$	961
Accrued expenses		1,750		2,037
Participations payable		2,343		2,337
Programming costs payable		889		742
Accrued compensation		623		1,049
Accrued interest		366		342
Accrued income taxes		360		347
Total accounts payable and accrued liabilities	$	7,031	$	7,815

Other Noncurrent Liabilities

Other noncurrent liabilities consist of (millions):

	March 31, 2012		December 31, 2011
Noncurrent tax and interest reserves	$	2,483	$	2,430
Participations payable		928		927
Programming costs payable		989		1,029
Noncurrent pension and post retirement liabilities		807		809
Deferred compensation		581		574
Other noncurrent liabilities		532		565
Total other noncurrent liabilities	$	6,320	$	6,334

Accounting for Collaborative Arrangements

The Company's collaborative arrangements primarily relate to arrangements entered into with third parties to jointly finance and distribute theatrical productions (“co-financing arrangements”) and the arrangement entered into with CBS Broadcasting, Inc. (“CBS”) and The National Collegiate Athletic Association (the “NCAA”) that provides Turner and CBS with exclusive television, Internet and wireless rights to the NCAA Division I Men's Basketball Championship events (the “NCAA Tournament”) in the United States and its territories and possessions from 2011 through 2024.

For the Company's collaborative arrangements entered into with third parties to jointly finance and distribute theatrical productions, net participation costs of $77 million and $87 million were recorded in Costs of revenues for the three months ended March 31, 2012 and 2011, respectively.

Turner and CBS jointly produce and distribute the NCAA Tournament and related programming. The aggregate programming rights fee, production costs, advertising revenues and sponsorship revenues are shared equally by Turner and CBS.However, if the amount paid for the programming rights fee and production costs, in any given year, exceeds advertisingand sponsorship revenues for that year, CBS' share ofsuch shortfall is limited to specified annual amounts(the “loss cap”), ranging from approximately $90 million to $30 million.The amount incurredby the Company pursuant to the loss cap during the three months ended March 31, 2012 and 2011was not significant.

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

Schedule of Comprehensive Income (Loss)

The following summary sets forth the activity within Other comprehensive income(millions):

	Three Months Ended March 31, 2012						Three Months Ended March 31, 2011
	Pretax		Tax (provision) benefit		Net of tax		Pretax		Tax (provision) benefit		Net of tax
Foreign currency translation adjustments	$	71	$	(9)	$	62	$	90	$	-	$	90
Unrealized gains on securities		5		(2)		3		-		-		-
Unrealized losses on benefit obligation		(11)		4		(7)		(6)		2		(4)
Reclassification adjustment for losses
on benefit obligation realized in net income		7		(3)		4		5		(2)		3
Unrealized derivative financial instruments
losses		(17)		5		(12)		(1)		-		(1)
Reclassification adjustment for derivative
financial instruments losses realized
in net income		14		(5)		9		8		(3)		5
Other comprehensive income	$	69	$	(10)	$	59	$	96	$	(3)	$	93

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Benefit Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Components of Net Periodic Benefit Costs [Abstract]
Service cost	$ 1	$ 6
Interest cost	44	47
Expected return on plan assets	(47)	(49)
Amortization of net loss	7	5
Net periodic benefit costs	5	9
Contributions	$ 6	$ 12

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Consolidated Statement Of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 581	$ 651
Other comprehensive income, net of tax:
Foreign currency translation adjustments	62	90
Unrealized gains on securities occurring during the period	3	0
Benefit obligations:
Unrealized losses occurring during the period	(7)	(4)
Less Reclassification adjustment for losses realized in net income	4	3
Net benefit obligations	(3)	(1)
Derivative financial instruments:
Unrealized losses occurring during the period	(12)	(1)
Less Reclassification adjustment for losses realized in net income	9	5
Net gains (losses) on derivative financial instruments	(3)	4
Other comprehensive income	59	93
Comprehensive income	640	744
Less Comprehensive loss attributable to noncontrolling interest	2	2
Comprehensive income attributable to Time Warner Inc. shareholders	$ 642	$ 746

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Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

3.        FAIR VALUE MEASUREMENTS

A fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table presentsinformation about assets and liabilities required to be carried at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively (millions):

	Fair Value Measurements
	March 31, 2012								December 31, 2011
Description		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Trading securities:
Diversified equity securities(a)	$	279	$	5	$	-	$	284	$	265	$	5	$	-	$	270
Available-for-sale securities:
Equity securities		30		-		-		30		14		-		-		14
Debt securities		-		78		-		78		-		72		-		72
Derivatives:
Foreign exchange contracts		-		22		-		22		-		28		-		28
Other		3		-		17		20		4		-		20		24
Liabilities:
Derivatives:
Foreign exchange contracts		-		(25)		-		(25)		-		-		-		-
Other		-		-		(17)		(17)		-		-		(17)		(17)
Total	$	312	$	80	$	-	$	392	$	283	$	105	$	3	$	391
__________

(a)       Consists of investments related to deferred compensation.

The Company primarily applies the market approach for valuing recurring fair value measurements. Assets and liabilities valued using significant unobservable inputs (Level 3) primarily consist of an asset related to equity instruments held by employees of a former subsidiary of the Company, liabilities for contingent consideration and options to redeem securities.

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 and identifies the total gains (losses) the Company recognized during thethree months ended March 31, 2012 and2011, respectively,on such assets and liabilities that were included in the Consolidated Balance Sheet as of March 31, 2012 and 2011,respectively(millions):

	Derivatives
	March 31, 2012		March 31, 2011
Balance as of the beginning of the period	$	3	$	(9)
Total gains (losses):
Included in operating income		-		3
Included in other loss, net		(1)		4
Settlements		(2)		2
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance as of the end of the period	$	-	$	-
Net gain (loss) for the period included in
net income related to assets and liabilities still held as of the end of the period	$	(1)	$	7

Other Financial Instruments

The Company's other financial instruments, including debt, are not required to be carried at fair value. Based on the interest rates prevailing at March 31, 2012,the fair value of Time Warner's debt exceeded its carrying value by approximately $3.538 billion and, based on interest rates prevailing atDecember 31, 2011, the fair value of Time Warner's debt exceeded its carrying value by approximately $3.549 billion. The fair value of Time Warner's debt was considered a Level 2 measurement as it was based on observable market inputs such as current interest rates and, where available, actual sales transactions.Unrealized gains or losses on debt do not result in the realization or expenditure of cash and generally are not recognized in the consolidated financial statements unless the debt is retired prior to its maturity. In addition, as of March 31, 2012, $638 million aggregate principal amount of 6.875% Notes of Time Warner Inc. due May 1, 2012 was classified as current on the Company's Consolidated Balance Sheet because it would not be refinanced prior to its maturity.The carrying value for the majority of the Company's other financial instruments approximates fair value due to the short-term nature of the financial instruments or because the financial instruments are of a longer-term nature and are recorded on a discounted basis. For the remainder of the Company's other financial instruments,differences between the carrying value and fair valueare not significant at March 31, 2012. The fair value of financial instruments is generally determined by reference to the market valueof the instrument as quoted on a national securities exchange or an over-the-counter market. In cases where a quoted market value is not available, fair value is based on an estimate using present value or other valuation techniques.

Non-Financial Instruments

The majority of the Company's non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill and indefinite-lived intangible assets) such that a non-financial instrument is required to be evaluated for impairment, a resulting asset impairment would require that the non-financial instrument be recorded at the lower of cost or its fair value.

Because of a change in the expected use of certain long-lived assets, primarily intangible assets at Imagine, an international subsidiary in the Networks segment (i.e., Turner's general entertainment network in India), during the first quarter of 2012, such assets were tested for impairment by comparing their carrying values with their estimated fair values. As the carrying values of such assets exceeded their estimated fair values, the Company recorded a noncash impairment of $19 million to write down the value of such assets to zero. The resulting fair value measurements of the assets were considered to be Level 3 measurements and were determined using a discounted cash flow (“DCF”) methodology with assumptions for cash flows associated with the use and eventual disposition of the assets.

In determining the fair value of its films, the Company employs a DCF methodology with assumptions for cash flows for periods not exceeding 10 years. Key inputs employed in the DCF methodology include estimates of a film's ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the weighted average cost of capital of the respective business (e.g., Warner Bros. Entertainment Group) plus a risk premium representing the risk associated with producing a particular film. The fair value of any film and TV production costs associated with a film that management plans to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement.During the three months ended March 31, 2012,certain film and TV production costs, which were recorded as inventory in the Consolidated Balance Sheet, were written down to $39 millionfrom their carrying value of $87million. During the three months ended March 31, 2011,certain film and TV production costs, which were recorded as inventory in the Consolidated Balance Sheet, were completely written off from their carrying value of $5 million.

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Net Income Per Common Share

Set forth below is a reconciliation of Basic and Diluted net incomeper common share attributable to Time Warner Inc. common shareholders (millions, except per share amounts):

		Three Months Ended March 31,
	2012		2011
Net income attributable to Time Warner Inc. shareholders	$	583	$	653
Net income allocated to participating securities		(4)		(4)
Net income attributable to Time Warner Inc. common
shareholders — basic	$	579	$	649
Average number of common shares outstanding — basic		968.3		1,090.8
Dilutive effect of equity awards		21.8		19.3
Average number of common shares outstanding — diluted		990.1		1,110.1
Net income per common share attributable to Time Warner Inc.
common shareholders:
Basic	$	0.60	$	0.59
Diluted	$	0.59	$	0.59

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Shareholders' Equity (Details) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Share Repurchase Program [Line Items]
Treasury stock, shares, acquired	20
Common stock repurchases	$ 731,000,000	$ 1,000,000,000
Foreign currency translation adjustments, Pretax	71,000,000	90,000,000
Foreign currency translation adjustments, Tax (provision) benefit	(9,000,000)	0
Foreign currency translation adjustments, Net of tax	62,000,000	90,000,000
Unrealized gains on securities, Pretax	5,000,000	0
Unrealized gains on securities, Tax (provision) benefit	(2,000,000)	0
Unrealized gains on securities, Net of tax	3,000,000	0
Unrealized losses on benefit obligation, Pretax	(11,000,000)	(6,000,000)
Unrealized losses on benefit obligation, Tax (provision) benefit	4,000,000	2,000,000
Unrealized losses on benefit obligation, Net of tax	(7,000,000)	(4,000,000)
Reclassification adjustment for losses on benefit obligation realized in net income, Pretax	7,000,000	5,000,000
Reclassification adjustment for losses on benefit obligation realized in net income, Tax (provision) benefit	(3,000,000)	(2,000,000)
Reclassification adjustment for losses on benefit obligation realized in net income, Net of tax	4,000,000	3,000,000
Unrealized derivative financial instruments losses, Pretax	(17,000,000)	(1,000,000)
Unrealized derivative financial instruments losses, Tax (provision) benefit	5,000,000	0
Unrealized derivative financial instruments losses, Net of tax	(12,000,000)	(1,000,000)
Reclassification adjustment for derivative financial instruments losses realized in net income, Pretax	14,000,000	8,000,000
Reclassification adjustment for derivative financial instruments losses realized in net income, Tax (provision) benefit	(5,000,000)	(3,000,000)
Reclassification adjustment for derivative financial instruments losses realized in net income, Net of tax	9,000,000	5,000,000
Other comprehensive income, Pretax	69,000,000	96,000,000
Other comprehensive income, Tax (provision) benefit	(10,000,000)	(3,000,000)
Other comprehensive income	59,000,000	93,000,000
2012 Common Stock Repurchase Program [Member]
Share Repurchase Program [Line Items]
Stock Repurchase Program, Authorized Amount	4,000,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	3,651,000,000
2011 Common Stock Repurchase Program [Member]
Share Repurchase Program [Line Items]
Stock Repurchase Program, Authorized Amount	$ 5,000,000,000

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Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

13.       RELATED PARTY TRANSACTIONS

The Company has entered into certain transactions in the ordinary course of business with unconsolidated investees accounted for under the equity method of accounting. These transactions have been executed on terms comparable to the terms of transactions with unrelated third parties and primarily include the licensing of broadcast rights to The CW broadcast network for film and television product by the Film and TV Entertainment segment and the licensing of rights to carry cable television programming provided by the Networks segment.Revenues from transactions with related parties were $145 million and $107million for the three months ended March 31, 2012 and 2011, respectively,and expenses from transactions with related parties were $18 million and $14million for the three months ended March 31, 2012 and 2011, respectively.