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Slide 1: Time Warner, Inc. Time Warner (TWX) is a media and entertainment company, with it’s holdings separated into five businesses.      America Online, consisting principally of interactive services Cable, consisting principally of interests in cable systems providing video, high-speed data and Digital Phone services Filmed Entertainment, consisting principally of feature film, television and home video production and distribution Networks, consisting principally of cable television and broadcast networks Publishing, consisting principally of magazine and book publishing
Slide 2: Atlanta Braves     Through a wholly owned subsidiary, Turner Broadcasting System, Inc., a business of Time Warner, Inc., owns the Atlanta Braves of Major League Baseball. During 2005, Turner announced its intention to sell the team. The team is expected to fetch about $400 million. TBS and Turner South televise Atlanta Braves baseball games, for which rights fee payments are made to Major League Baseball's central fund for distribution to all Major League Baseball clubs. The Braves have been one of baseball's most successful teams on the field since the early 1990s, but in recent years have slashed player payroll in an effort to reduce losses.
Slide 3: Liberty Media Corporation Liberty Media Corporation (L) is a holding company, which through its ownership of interests in subsidiaries and other companies, is primarily engaged in the electronic retailing, media, communications and entertainment industries. Through its subsidiaries, the Company operates in the United States, Europe and Asia.
Slide 4: Liberty Media’s Principal Assets       QVC, Inc. Starz Entertainment Group LLC IAC/InterActiveCorp Expedia, Inc. News Corporation On July 21, 2005, the Company completed the spin off of Discovery Holding Company.
Slide 5: Proposed Transaction    Liberty approached Time Warner recently about exchanging some of its shares for company assets. Time Warner's talks with Liberty were still in the early stages. Liberty's 4% stake in Time Warner is valued at about $3.1 billion. Time Warner recently has been pruning its portfolio and is keen to sell the Braves. Liberty is "looking to tax-efficiently monetize" its position in Time Warner, and that exchanging stock for an asset could provide tax benefits.
Slide 6: Industry Background  In recent years, companies including Time Warner, Walt Disney Co. and News Corp. have shed pro sports teams, which, while appreciating over time, haven't meshed with broader entertainment operations or helped their bottom lines.
Slide 7: Brief Financial Comparison Market Cap $Mil Oper. Income $Mil Net Income $Mil TTM Sales $Mil Liberty Media 22,981 7,720 766 51 Time Warner 79,317 42,875 3,922 2,666 Morningstar as of March 9, 2006
Slide 8: Financial Position Liberty Media 1205 $Mil Cash Inventories Receivables Current Assets Fixed Assets Intangibles Total Assets Payables Short-Term Debt Current Liabilities Long-Term Debt Total Liabilities Total Equity 1946 719 1106 5160 1131 13366 41952 707 1379 5286 6371 22832 19120 Time Warner 12-05 $Mil 4220 1806 6411 13463 13676 83751 122475 4880 92 12588 20238 59760 62715
Slide 9: Valuations Liberty Media Current Price/Earnings Forward P/E Price/Cash Flow Price/Free Cash Flow Price/Book Price/Sales 74.6 20.7 26.2 1.2 2.9 5 Yr Avg 1.1 8.7 Market 21.5 17.8 15.0 25.2 4.2 2.8
Slide 10: Valuations Time Warner Current Price/Earnings Forward P/E Price/Cash Flow Price/Free Cash Flow Price/Book Price/Sales 27.2 19.6 16.0 46.3 1.2 1.8 5 Yr Avg 15.6 39.4 1.3 2.3 Market 21.5 17.8 15.0 25.2 4.2 2.8
Slide 11: Liberty Media Time Warner
Slide 12: Financials Time Warner
Slide 13: Financials Liberty Media
Slide 14: Transactions Time Warner Non Taxable Give up Braves (approx $450 million) & pay difference in cash. Taxable Buy 50% of Court TV from Liberty Taxable Sell 50% of Court TV to Time Warner Liberty Non Taxable Give up $1.7 billion in shares of Time Warner