Time Warner Inc. - Time Inc. Separation Information

Time Warner completed the separation of Time Inc. from Time Warner through a spin-off involving a pro rata dividend distribution of all of the Time Inc. common stock held by Time Warner to Time Warner shareholders. The distribution was made immediately after 11:59 p.m. EDT on June 6, 2014 to Time Warner shareholders of record at 5:00 p.m. EDT on May 23, 2014 (the record date for the distribution).

Time Warner shareholders received 1 share of Time Inc. common stock for every 8 shares of Time Warner common stock they held on the record date of May 23, 2014. The distribution of shares was made in book-entry form.

Time Warner shareholders did not receive fractional shares of Time Inc. common stock in the distribution. See Question 9 below regarding the treatment of fractional shares of Time Inc. common stock.

Time Warner’s board of directors determined that the separation is the right step for Time Warner and Time Inc. Time Warner’s board of directors considered the following potential benefits in deciding to pursue the separation transaction:

• Time Warner and Time Inc. will each have a more focused business and be better able to dedicate financial resources to pursue appropriate growth opportunities and execute strategic plans best suited to its respective business.
• Management of each of Time Warner and Time Inc. will be able to devote its time and attention to the development and implementation of corporate strategies and policies that are based primarily on the specific business characteristics of their respective companies.
• The separation will provide investors with greater choice in deciding whether to own shares of Time Warner or Time Inc. or both companies based on their separate portfolios of businesses and assets.

Shares of Time Warner common stock traded “regular way” (including the right to receive the Time Inc. common stock distribution) on the New York Stock Exchange through the distribution date of June 6, 2014.

If you sold Time Warner shares “regular way” on or before June 6, 2014, you also sold your right to receive shares of Time Inc. common stock that you would have otherwise received.

If you bought Time Warner shares “regular way” on or before June 6, 2014 and held them through June 6, 2014, you also bought the right to receive shares of Time Inc. common stock based on the Time Warner shares you purchased.

Investors are encouraged to consult with their financial advisors regarding the specific consequences of selling or buying Time Warner common stock on or before the distribution date.

Time Warner common stock traded “ex-distribution” from May 21, 2014 through June 6, 2014. Time Warner common stock trading in the “ex-distribution” market traded “ex-dividend” with no right to receive shares of Time Inc. in the spin-off distribution.

The record date was 5:00 p.m. EDT on May 23, 2014.

In general, if you held Time Warner common stock on the record date, no action was required to receive Time Inc. common stock and, if applicable, the cash payment in lieu of fractional shares of Time Inc. common stock. See Question 9 below regarding the treatment of fractional shares of Time Inc. common stock. If you held Time Warner common stock on the record date, you either were mailed a book-entry account statement reflecting your ownership of Time Inc. common stock or your brokerage account was credited with Time Inc. common stock.

Please note the following two exceptions:

• Time Warner distributed 1 share of Time Inc. common stock for every 8 shares of Time Warner common stock that Time Warner shareholders held on the record date.  If you held fewer than 8 shares of Time Warner common stock on the record date, you did not receive any shares of Time Inc. common stock.  Instead, you received a cash payment in lieu of any fractional Time Inc. share to which you would have otherwise been entitled.  No action by you was required to receive any such cash-in-lieu payment.   See Question 9 below regarding the treatment of fractional shares of Time Inc. common stock.
• If you hold unexchanged stock certificate(s) for (i) Time Warner common stock issued prior to the 1-for-3 reverse stock split of the common stock on March 27, 2009 or (ii) the common stock of America Online, Inc. or Time Warner Inc. issued prior to the merger of these companies on January 11, 2001, please contact Time Warner's transfer agent, Computershare, for instructions on how to exchange your stock certificate(s) for new Time Warner shares.  You can call Computershare at (800) 254-5193 or send an email message by clicking on the “Contact Us” link at www.computershare.com/investor. Shareholders from outside the U.S. and Canada may call (781) 575-2879.

If you continue to hold unexchanged stock certificate(s) after June 6, 2014, any Time Inc. shares or cash in lieu of a fractional Time Inc. share that you would otherwise be entitled to receive will be held and will not be distributed to you. You must exchange your stock certificate(s) in order to receive your Time Inc. shares, any cash in lieu of a fractional Time Inc. share, and any future dividends or distributions on your Time Warner or Time Inc. shares.

The distribution date for the Time Inc. shares was immediately after 11:59 p.m. EDT on June 6, 2014. See Question 7 above regarding two scenarios that could preclude the distribution of Time Inc. shares to you.

If you were entitled to receive shares of Time Inc., you did not receive any physical stock certificates for the Time Inc. shares. Instead:

• If you are a registered Time Warner shareholder: The book-entry account statement reflecting your ownership of Time Inc. common stock was mailed to you following the distribution date of June 6, 2014. If you were otherwise entitled to receive a fractional share, a cash payment in lieu of the fractional share was mailed together with the book-entry account statement.
• If you are a beneficial Time Warner shareholder (in other words, if you hold your shares through a broker, bank or other nominee): Your brokerage account should have been credited with the Time Inc. shares following the distribution date of June 6, 2014. If you were otherwise entitled to receive a fractional share, your brokerage account should have been credited with a cash payment in lieu of the fractional share. If you have any questions regarding the distribution or any cash payment in lieu of a fractional share, you should contact your broker, bank or other nominee for more information.

See Question 9 below regarding the treatment of fractional shares of Time Inc. common stock.

Time Warner shareholders did not receive fractional shares of Time Inc. common stock in the distribution. Instead, the fractional shares of Time Inc. common stock were aggregated and sold in the open market by Time Warner’s distribution agent, Computershare, with the net proceeds distributed pro rata in the form of cash payments to registered holders and DTC participants (i.e., banks, brokerage firms and similar institutions) who were otherwise entitled to receive Time Inc. fractional shares. If you are a registered Time Warner shareholder and were otherwise entitled to receive a fractional share of Time Inc. common stock, a cash payment in lieu of the fractional share was mailed to you. If you are a beneficial Time Warner shareholder and were otherwise entitled to receive a fractional share of Time Inc. common stock, your brokerage account should have been credited with a cash payment in lieu of the fractional share.

• If you are a registered Time Warner shareholder: If you would like additional information regarding the distribution of the Time Inc. shares, the cash payment in lieu of fractional shares, or how to exchange Time Warner stock certificates issued prior to March 27, 2009, please contact Time Warner's transfer agent, Computershare, at (800) 254-5193, or send an email message by clicking on the "Contact Us" link at www.computershare.com/investor. Shareholders from outside the U.S. and Canada may call (781) 575-2879. If you were otherwise entitled to receive a fractional share of Time Inc. common stock, a cash payment in lieu of the fractional share was mailed to you.
• If you are a beneficial Time Warner shareholder (in other words, if you hold your shares through a broker, bank or other nominee):Please direct any questions regarding the distribution or the cash payment in lieu of fractional shares to your broker, bank or other nominee.
• Time Warner shareholders may also contact Time Warner Investor Relations by email at ir@timewarner.com or by calling toll-free at (866) INFO-TWX.

See Question 9 above regarding the treatment of fractional shares of Time Inc. common stock.

The number of shares of Time Warner common stock that you own did not change as a result of the distribution of Time Inc. shares. However, the distribution likely caused the trading price of your Time Warner shares to be lower than the trading price prior to the distribution because the post-distribution price no longer reflects the value of the Time Inc. shares that were held by Time Warner.

Time Warner shareholders who held Time Warner common stock on the record date were mailed a copy of the Information Statement. A copy of the Information Statement is also posted on this webpage under the heading "Other Information."

Time Warner shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes, except with respect to cash received in lieu of fractional shares. The tax consequences of the distribution are explained more fully in the Information Statement, which is posted on this webpage under the heading "Other Information." See pages 35 to 38 of the Information Statement under the heading "Material U.S. Federal Income Tax Consequences of the Spin-Off."

You are urged to consult your own tax advisor regarding the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local, Canadian federal, provincial and territorial and other foreign tax laws.

Information regarding the determination of the tax basis in your Time Warner common stock and the Time Inc. common stock that you received in the distribution is explained more completely in the "Tax Basis Information" that is posted on this webpage.