UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September 24, 2004
TIME WARNER INC.
(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
1-15062 13-4099534
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(Commission File Number) (IRS Employer Identification No.)
ONE TIME WARNER CENTER
NEW YORK, NY 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 484-8000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On September 27, 2004, Time Warner Inc. (the "Registrant")
announced that Time Warner Cable Inc. ("Time Warner Cable") and Cable Holdco,
Inc. ("Cable Holdco"), a newly formed subsidiary of Time Warner Cable, have
entered into a Tolling and Optional Redemption Agreement, dated as of September
24, 2004 (the "Agreement"), with Comcast Corporation ("Comcast"), Comcast Cable
Communications Holdings, Inc., MOC Holdco II, Inc., TWE Holdings I Trust and TWE
Holdings II Trust (the "Comcast Trust"). Pursuant to the Agreement, an affiliate
of Comcast has been granted the option (the "Option"), which can be exercised
between December 1, 2004, and subject to certain conditions, April 1, 2005, to
require Time Warner Cable to redeem a portion of the Time Warner Cable stock
held by the Comcast Trust in exchange for 100% of the common stock of Cable
Holdco. At the time of the exchange, Cable Holdco will own certain cable
television systems (the "Transferred Systems") currently owned directly or
indirectly by Time Warner Cable and Time Warner Entertainment Company, L.P.
("TWE"), a subsidiary of Time Warner Cable, serving about 90,000 basic
subscribers as of July 31, 2004, plus approximately $750 million in cash.
Comcast currently owns an effective interest of approximately
21% in Time Warner Cable's business - held through a 17.9% common stock interest
in Time Warner Cable and a 4.7% limited partnership interest in TWE. If the
Option is exercised, Comcast will reduce its effective interest in Time Warner
Cable's business to approximately 17% - consisting of a 13.7% common stock
interest in Time Warner Cable and a 4.7% limited partnership interest in TWE.
The Agreement also provides that the Comcast Trust will not
exercise or pursue registration rights with respect to the Time Warner Cable
stock owned by it until April 1, 2005 (or earlier if the Agreement is terminated
under certain limited circumstances).
In conjunction with the restructuring of TWE completed in
2003, the Comcast Trust received customary registration rights relating to its
shares of common stock of Time Warner Cable. In December 2003, the Comcast Trust
requested that Time Warner Cable register the common stock of Time Warner Cable
it owned for sale in a public offering. The Agreement supersedes the Comcast
Trust's previous request for registration.
If the Option is exercised, the Registrant would account for
the transaction as a sale of cable systems and a payment of $750 million in cash
for the acquisition of a portion of Comcast's interest in Time Warner Cable. A
gain or loss will be recognized based on the difference in the fair value of the
cable systems transferred to Comcast and the Registrant's book basis in the
Transferred Systems. In addition, the Registrant will apply purchase accounting
to the portion of the interest acquired from Comcast.
Closing of the transactions contemplated by the Agreement
is subject to exercise of the Option, required governmental and regulatory
approvals and other customary closing conditions.
A copy of the Agreement and the press release issued jointly
by the Registrant and Comcast are attached hereto as Exhibits 99.1 and 99.2,
respectively. The Agreement is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit 99.1: Tolling and Optional Redemption
Agreement, dated as of September 24, 2004.
Exhibit 99.2: Press Release, dated September 27,
2004, jointly issued by Time Warner Inc. and Comcast
Corporation.
SIGNATURES
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 hereunto duly authorized.
Dated: September 27, 2004
TIME WARNER INC.
By: /s/ Wayne H. Pace
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Name: Wayne H. Pace
Title: Executive Vice President
and Chief Financial Officer