Q. What are some of the strategic advantages that Time Warner expects to gain
from the merger with America Online?
A. The combination of Time Warner's world-class media brands, subscriber bases
and technologically advanced broadband delivery systems with America
Online's renowned consumer online brands, subscriber base and extensive
Internet infrastructure and expertise will provide AOL Time Warner with
strengths and synergies in all its businesses. AOL Time Warner's multiple
brands, vast array of content, extensive infrastructure and strong
distribution capabilities will provide it with a greater capacity to
capitalize on and propel the convergence of media, entertainment and
communications than Time Warner (or America Online) alone. There are also
strategic benefits of combining Time Warner's broadband infrastructure with
America Online's established success in managing consumer migration online.
The strategic combination will accelerate the digital transformation of
Time Warner by infusing all of Time Warner's businesses with a heightened
Q. What are some of the ways in which Time Warner expects the merger to
increase the potential for growth?
A. The combination of Time Warner and America Online is expected to strengthen
the ability of these companies to generate growth in revenue, earnings
before interest, taxes and amortization, or "EBITA," earnings before
interest, taxes, depreciation and amortization, or "EBITDA," and cash flow.
. America Online's extensive Internet infrastructure is expected to
provide a new and expanding distribution medium for Time Warner's
popular brands, thereby giving its content businesses increased access
to the consumer; and
. Time Warner's advanced broadband delivery systems are expected to
provide an important distribution platform for America Online's
interactive services, which is expected to result in incremental
. in the music business, AOL Time Warner will bring together Time
Warner's prestigious labels and roster of established and new artists
with America Online's established e-commerce capabilities; and