SEC Filings

425
HISTORIC TW INC filed this Form 425 on 04/03/2000
Entire Document
 


                             Filed by Time Warner Inc.
                             Pursuant to Rule 425 under the
                             Securities Act of 1933
                             Subject Company:  AOL Time Warner Inc.
                             Commission File Number: 333-30184


        The   following   communication   includes   certain    "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995. These statements are based on management's current expectations and are
naturally  subject to uncertainty and changes in  circumstances.  Actual results
may vary materially from the expectations  contained herein. The forward-looking
statements herein include statements about the proposed Time Warner Inc./America
Online,  Inc. merger.  The following factors,  among others,  could cause actual
results to differ  materially from those described  herein:  failure of the Time
Warner or America Online  stockholders to approve the merger;  the risk that the
Time Warner and America Online  businesses will not be integrated  successfully;
the costs related to the merger; inability to obtain, or meet conditions imposed
for,  governmental  approvals  for the  merger;  and other  economic,  business,
competitive  and/or  regulatory  factors  affecting  America  Online's  and Time
Warner's businesses generally.  More detailed information about those factors is
set forth in filings by Time  Warner,  AOL Time Warner Inc.  and America  Online
with the Securities and Exchange Commission, including Time Warner's most recent
Annual Report on Form 10-K. Time Warner is under no obligation to (and expressly
disclaims any such obligation to) update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.

        Set forth below is the text of a letter to  stockholders  from Gerald M.
Levin,  Chairman of the Board and Chief  Executive  Officer of Time Warner Inc.,
that is included in Time Warner's 1999 Annual Report to Stockholders.





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                                       TIME WARNER 2000

                        The strength of Time Warner's information and
                entertainment brands continued to be reflected in its overall
                      operating performance, resulting in another record
                 year in 1999. Now, as Time Warner and America Online become
                        one company, we will have unique opportunities
                   to build on that strength and expand consumers' choices--
                               online and off--in exciting ways.

Dear Shareholders:

As the 2000 cover  date  indicates,  this is a  forward-looking  document.  Time
Warner's 1999 financials,  which can be found in an accompanying report, testify
to the continued strength of our operating  performance,  with normalized growth
of 15 percent.  As pleased as we are by this result, the focus of our company is
on the future--on  both continuing to invest in our businesses and realizing the
unprecedented  possibilities for accelerated growth that the planned merger with
AOL will give us.

        The agreement that AOL Chairman Steve Case and I reached is transforming
in every sense.  At the same time that Time Warner  instantly gains the Internet
expertise  to take its  brands  into the  networked  future,  AOL joins the most
creative,  content-rich media and entertainment company on the planet. Together,
AOL and Time  Warner  will have the  skill,  resources  and vision to enrich the
consumer's  experience  of  interactive  services  and  communications   through
multimedia  platforms,  and to evolve  business  models  adapted to a  radically
altered terrain.

        The logic behind a Time  Warner-AOL  merger is  self-evident.  Rooted in
some  of  the  world's  most  successful   subscription-based   businesses,  our
operations are strongly  complementary.  AOL and its CompuServe subsidiary reach
23 million  subscribers,  by far the largest such community in cyberspace.  Time
Inc., the most admired,  trusted and  profitable  publishing  enterprise,  has a
worldwide base of 39 million  magazine buyers (and a total  readership more than
five  times  that).   Home  Box  Office's  status  as  the  leader  in  original
award-winning   television   programming  is  underlined  by  its  35.7  million
subscriptions. Time Warner Cable's strategically clustered systems, the nation's
most  technologically  advanced,  pass 20.6 million homes and serve 12.6 million
subscribers.  Road Runner,  our high-speed  Internet  joint  venture,  is adding
subscribers at a rate of more than 10,000 per week.

        Beyond this core of over 100 million  subscribers  are the millions more
who use  services  like AOL Instant  Messenger  and ICQ and are  entertained  by
feature films from Warner Bros.  and New Line,  recorded music from Warner Music
Group (and soon from our joint venture Warner EMI Music),  and programming  from
TBS and TNT. The global  standard  bearer for  independence  and  excellence  in
electronic journalism, CNN alone reaches one billion of the earth's people.

        In  essence,  both  Time  Warner  and  AOL  have  created  much  of  the
communications  landscape  as it  now  exists.  From  Time's  invention  of  the
newsmagazine  to CNN's creation of the 24-hour cable news network to Warner Home
Video's  pivotal part in the  introduction  of the DVD to AOL's  development  of
online communities and instant messaging,  we are each a company of pioneers and
precedent setters.




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        The inventive genius that resides in our separate  companies has allowed
each to produce brands whose consistent  quality and value have forged priceless
bonds  of  trust  with  audiences,  advertisers  and  marketers.  The  array  of
world-renowned  brands that will be gathered in AOL Time Warner  encompasses new
digital destinations and vibrant franchises with solid customer relationships.

        The  breadth  of these  brands  and their  appeal to  practically  every
demographic group--a lineup that includes Time, AOL, CNN, HBO, The WB, Netscape,
People,  Sports  Illustrated,  Digital City,  Cinemax,  AOL  Moviefone,  Cartoon
Network,  Spinner,  AOL.COM,  Entertainment Weekly,  Winamp, Looney Tunes-- will
give us an unrivaled portfolio.

        Like the reach of our  audience  base,  the  advertising  platforms  and
direct-marketing  reach of Time  Warner  are  impressive.  More  than any  other
company, our diversity of brands offers advertisers the different audiences they
seek:   the  broad   audiences   provided  by  our  basic  cable   networks  and
mass-circulation magazines; the targeted demographics of ethnic and age-specific
segments  captured by our  specialized  publications  and  programming;  and the
individual customer reached through digital media.

        The substantial  presence Time Warner has built in the robust categories
of print and  cable-network  advertising and the major  advertising gains we are
making with local cable, barter syndication and The WB will be joined with AOL's
booming  Internet  advertising  business.  Our  ability  to  capitalize  on this
cross-media  advertising  reach and to deliver mass messages as well as pinpoint
the demographics  that marketers most desire will heighten the  across-the-board
momentum of AOL Time Warner's advertising and e-commerce growth.

        As the  competitive  arena of the Web  continues  to explode,  what will
count most in marketing  interactive  brands that sustain consumer  interest are
two equally  important  assets.  First,  in addition  to  plentiful  reserves of
content, is the skill to develop,  design and deliver new ideas, stories, music,
and lifestyle  information,  constantly refreshing what's available.  No company
has a stronger creative and journalistic infrastructure, with deeper reserves or
greater skill in replenishing them, than Time Warner.

        Second is the  know-how  to make  technology  that  propels  rather than
impedes the growth of online  communities,  affording an interactive  experience
readily  accessible,  easy to use and replete with  engaging  features for chat,
e-mail and e-commerce.

        Time Warner's content  businesses have never been better positioned than
they are today. In publishing,  for example,  we intend to launch five magazines
in 2000  alone,  including  Real  Simple,  our  latest  edition  to our  women's
category. In music, our agreement to combine Warner Music Group and EMI gives us
an  incomparable   roster  of  talent  and  blend  of  genres.   No  matter  the
venue--retail,  direct marketing,  e-commerce or digital  downloading--AOL  Time
Warner will have both the quality content and the  cross-promotional  prowess to
keep demand on a strong upward trajectory.

        The  Internet is rapidly  shedding the  confines of  narrowband  and the
migration to broadband  continues to grow. Short term,  thanks to the rebuild of
our cable systems,  which will be completed for existing systems this year, Time
Warner has been able to expand digital capacity and provide high-speed access to
the Internet.  Going forward,  whether providing e-mail,  digital  television or
information and entertainment on demand,  through whatever  medium--cable,  DSL,
DBS or wireless--AOL  Time Warner can dramatically  enrich consumers'  broadband
selections.  The  best  of all  possible  interactive  worlds  is  one in  which
consumers  have  the  greatest  number  of  choices  and  the  market,  not  the
government,  decides the  winners.  AOL Time Warner  will be  committed  to this
result.

        Although our merger may have come as a surprise to many,  the  intensity
and velocity of the digital  revolution  moving  across every area of the global
economy made our  strategic  combination a clear  imperative.  What we expect to
achieve with AOL Time Warner is what neither  company could have achieved on its
own: a media savvy, Internet-intelligent, customer-focused company with multiple
revenue  streams from  branded  subscriptions,  advertising  and  commerce,  and
content.

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        Building on a solid  investment-grade  balance sheet,  substantial  cash
flow and financial  capacity,  we are confident that the symmetry and synergy of
our  operations  will  deliver on the  promise  of the  Internet  and  produce a
sustained acceleration of our growth.

        As central as these  considerations  are, the  rationale  for our merger
goes beyond a shared business  strategy or a vision of where our networked world
is headed. We are both companies driven and defined by the energetic, inventive,
talented people who work at every level, in every  operation.  It is these women
and men whose  openness to change and passion for  innovation  have given us the
capacity  to shape the future.  We're  particularly  indebted  to Beverly  Sills
Greenough and Merv Adelson, who are retiring from our board this year.

        We are also  companies  that  put a high  value  on  social  commitment.
Throughout its history, Time Warner has had a distinguished  tradition of public
service  initiatives  and  educational  programs.  Time to  Read,  for  example,
continues  to be  the  country's  largest,  most  effective  corporate-sponsored
literacy program. AOL has been a model of responsible  corporate  citizenship on
the Internet.  As the premier media company of the 21st century, AOL Time Warner
intends to play a significant  role in helping bridge the "digital  divide" that
perpetuates age-old inequalities which undermine our society's future.

        The fact that our merger  will be the first of real  consequence  in the
21st century is  coincidental.  But the goal we've set for  ourselves--to be the
formative  leader in ensuring  that the central  medium of our age is a tool for
expanding   people's  freedom,   empowering  their  minds  and  enhancing  their
enjoyment--is unequivocal.

        Along with the whole AOL Time Warner  team,  I'm eager to get started on
building the most successful and respected company in the world.


Gerald M. Levin
Chairman and Chief Executive Officer


                      ***********************************

        AOL Time Warner Inc., together with Time Warner Inc. and America Online,
Inc.,  filed with the  Securities  and Exchange  Commission a preliminary  joint
proxy  statement/   prospectus   regarding  the  proposed  business  combination
transaction  referenced  in the  foregoing  information.  In addition,  AOL Time
Warner, Time Warner and America Online will prepare and file with the Commission
a definitive joint proxy  statement/prospectus and other documents regarding the
proposed  transaction.  Investors  and  security  holders  are urged to read the
definitive joint proxy statement/prospectus,  when it becomes available, because
it  will   contain   important   information.   The   definitive   joint   proxy
statement/prospectus will be sent to stockholders of Time Warner and

America Online seeking their approval of the proposed transaction. Investors and
security  holders  may  obtain  a  free  copy  of  the  definitive  joint  proxy
statement/prospectus  (when it is available) and other  documents filed with the
Commission  by AOL Time Warner Inc. and Time Warner (as well as America  Online)
at the  Commission's  web  site  at  www.sec.gov.  The  definitive  joint  proxy
statement/prospectus   and  other  documents  filed  by  Time  Warner  with  the
Commission may also be obtained for free from Time Warner by directing a request
to Time Warner Inc., 75 Rockefeller Plaza, New York, New York 10019,  Attention:
Shareholder Relations, telephone: (212) 484-6971, e-mail: investrequest@twi.com.


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