TIME WARNER INC (TWX)
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Time Warner Inc. (TWX) is a media conglomerate with operations in film, television, publishing, Internet service and telecommunications. Among its subsidiaries are Time Inc., AOL, Warner Bros., and television networks CNN, HBO and The CW.
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Snapshot
Divisions and business units[1]
- AOL: AOL Instant Messenger | CompuServe | ICQ | MapQuest | Mirabilis | Netscape | Nullsoft | Singingfish | TMZ.com (with Telepictures) | Weblogs, Inc. | Winamp
- Time Inc.: Business 2.0 | Entertainment Weekly | Fortune | IPC Media Ltd. | LIFE | Money | NME | People | Sports Illustrated | SI.com | TIME | Wallpaper*
- Turner Broadcasting System: Various assets
- Warner Bros. Entertainment: Castle Rock Entertainment | DC Comics | The CW (co-owned with CBS) | Kids WB! | Monolith Productions | Telepictures Productions | Warner Bros. Family Entertainment | Warner Bros. Pictures | Warner Bros. Television Distribution | Warner Bros. Television | Warner Home Video | Warner Independent Pictures | Warner Horizon Television | Warner Premiere
- Time Warner Cable: Capital News 9 | Metro Sports | News 8 Austin | News 10 Now | News 14 Carolina | NY1 | R News | Road Runner | Time Warner Sports 26 | Sí TV (investment) | SportsNet New York (part ownership)
- Home Box Office Group: @Max | 5 StarMax | ActionMax | Cinemax | Cinemax HDTV | HBO | HBO 2 | HBO Comedy | HBO Family | HBO Films | HBO HD | HBO HiTS (Asia) | HBO Latino | HBO Plus | HBO Signature | HBO Zone | MoreMax | OuterMax | ThrillerMax | WMax
- New Line Cinema Group: New Line Cinema | New Line Television | Picturehouse (with HBO)
Company Analysis
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Icahn break-up attempt
On August 25, 2005, corporate activist Carl Icahn, after amassing 55 million shares, launched a bid for control of TMX, proposing that it break itself into four parts (Time Warner Cable being one) and pay a large special dividend, all to unleash shareholder value. Icahn also accused CEO Richard 'Dick' Parsons of not being a 'media guy.' The campaign for corporate control was unsucessful but TWX did pay a special dividend, although less that the amount that Icahn group had requested. On February 16, 2006, it was reported that Icahn had sold 35 million of his shares, for a total of US$ 880 million.[3]
News Feed
| 11/22/08 4:11 pm | UPDATE - Actors union to seek strike authorization (at Reuters) |
| 11/21/08 6:11 pm | Final Glance: Media companies (AP) |
| 11/21/08 5:11 pm | Maxim magazine publisher might go to creditors-WSJ (at Reuters) |
| 11/21/08 4:11 pm | "Twilight" From Summit Takes A Bite Out of Major Studios (at CNBC) |
| 11/21/08 1:11 pm | Midday Glance: Media companies (AP) |
| 11/21/08 10:11 am | Early Glance: Media companies (AP) |
| 11/21/08 9:11 am | Icahn Takes on CEOs, Makes Big Moves in Biotech (Indie Research) |
| 11/21/08 9:11 am | Dreamworks Looks Good Short Term (RealMoney by TheStreet.com) |
| 11/21/08 7:11 am | Cell Phones: The Next Advertising Frontier (at Minyanville.com) |
| 11/20/08 8:11 pm | Change Agent (at Forbes.com) |
Risks
Several of the Time Warner�s businesses are characterized by rapid technological change, and if Time Warner does not respond appropriately to technological changes, its competitive position may be harmed. Piracy of feature films, television programming and other content may decrease the revenues received from the exploitation of the entertainment content and adversely affect its business and profitability. Time Warner�s businesses may suffer if it cannot license or enforce the intellectual property rights on which its businesses depend. Weakening economic conditions or other factors could reduce its advertising or other revenues. Time Warner also faces risks relating to competition for the leisure and entertainment time of audiences, which has intensified in part due to advances in technology.[4]
AOL business
The Company�s AOL business faces significant competition. Declines in subscribers to the AOL service are expected to continue, and to continue to adversely affect its subscription and advertising revenue. If AOL is unsuccessful in increasing its advertising revenue, its results of operations and cash flows could be affected. AOL also may not be able to increase its revenue from the sale of premium digital services. If AOL is unable to acquire or offer compelling search functionality, content, features, services, applications and tools at reasonable costs, the size or value of its audience may not increase as anticipated. More individuals are using non-PC devices to access the Internet, and AOL must be able to secure placement of its services, applications and features on such devices, must ensure that they are compatible with the devices and must ensure that the AOL Network is accessible by users of non-PC devices. AOL may also not be able to continue to reduce costs.[4]
Cable business
With the acquisition of Adelphia, TWC Inc. will face challenges regarding the integration of the newly acquired systems into its existing managed systems and may not realize the anticipated benefits. Also, in introducing voice services over its cable systems, TWC Inc. faces risks inherent to entering into a new line of business. Increases in programming costs could adversely affect TWC Inc.�s operations, business or financial results. It faces a wide range of competition, which could affect the future results of operations. TWC Inc.�s business is subject to extensive governmental regulation, which could adversely affect its business in areas such as: Cable Franchising, Net Neutrality, � La Carte, Carriage Regulations, and Voice Communications.[4]
Networks and filmed entertainment
The Networks and Filmed Entertainment segments must respond to recent and future changes in technology, services and standards to remain competitive and continue to increase their revenue, as they operate in highly competitive industries. The popularity of the Time Warner�s television programs and films and other factors is difficult to predict and could lead to fluctuations in the revenue of the Networks and Filmed Entertainment segments. The Networks and Filmed Entertainment segments are also subject to potential labor interruption. Although piracy poses risks to several of Time Warner�s businesses, such risks are especially significant for the Networks and Filmed Entertainment segments due to the prevalence of piracy of feature films and television programming.[4]
Box office receipts and the growth rate of DVD sales have recently been declining, which may adversely affect the Filmed Entertainment segment�s growth prospects and results of operations. The Filmed Entertainment segment�s strategy includes the release of a limited number of �event� films each year, and the underperformance of one or more of these films could have an adverse effect on the results of operations and financial condition. The costs of producing and marketing feature films have increased and may increase in the future, which may make it more difficult for a film to generate a profit. Changes in estimates of future revenues from feature films could result in the write-off or the acceleration of the amortization of film production costs. A decrease in demand for television product could adversely affect Warner Bros.� revenues.[4]
The loss of affiliation agreements could cause the revenue of the Networks segment to decline in any given period, and further consolidation of multichannel video programming distributors could adversely affect the segment. The inability of the Networks segment to license rights to popular programming or create popular original programming could adversely affect the segment�s revenue. Increases in the costs of programming licenses and other significant costs may adversely affect the gross margins of the Networks segment. The continued decline in the growth rate of U.S. basic cable and DTH (direct-to-home) satellite households, together with rising retail rates, distributors� focus on selling alternative products and other factors, could adversely affect the future revenue growth of the this segment.[4]
Publishing business
The Publishing segment�s operating income could decrease as a result of increases in paper costs and postal rates. The introduction and increased popularity of alternative technologies for the distribution of news, entertainment and other information and the resulting shift in consumer habits and/or advertising expenditures from print to other media can adversely affect the segment�s results of operations. The Publishing segment faces risks relating to various regulatory and legislative matters, including changes in Audit Bureau of Circulations rules and possible changes in regulation of direct marketing. It also faces significant competition for advertising and circulation. The segment could also face increased costs and business disruption resulting from instability in the newsstand distribution channel.[4]
Competitors
Time Warner and AOL's competitors encompass both traditional media companies and online search portals, such as Yahoo! Inc., CBS Corporation (CBS) Google Inc. (GOOG), News Corporation (NWS), Microsoft Corporation (MSFT), VIACOM INC CL B (VIA), Comcast Corporation (CMCSA), and United Online, Inc. (UNTD).
Research Links
- TIME WARNER INC Snapshot
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- Officers and Directors at Reuters
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- Insider Trades at Money Central
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- Institutional Ownership at Money Central
- TIME WARNER INC Fundamentals
- Key Statistics Yahoo Finance
- Key Ratios at Reuters
- Dividends and Returns at Morningstar
- SEC Filings at Edgar Online
- Financial Statements Quickview at Morningstar
- Historical Prices at Yahoo Finance
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- TIME WARNER INC Technical Analysis
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