Time Warner on Icahn/Lazard Proposal: 'We Are on the Right Path. The Company is Delivering.'

"Our board and management regularly review all of the strategicoptions for managing this company to create the greatest value for ourshareholders. We are on the right path. The company is delivering.Nevertheless, we will study the Icahn/Lazard proposal carefully andthoroughly, as is consistent with our existing practice and with ourfiduciary duty to shareholders. We will have more to say on thespecifics of the proposal in due course."

Time Warner also issued today the below letter to its shareholdersreviewing the company's progress in building value and stating itsintention to communicate with shareholders regarding the Icahn/Lazardproposal.

Further information on Time Warner's ongoing initiatives to buildvalue for its shareholders is available on a special section of thecompany's Web site at http://www.timewarner.com/buildingvalue.

About Time Warner Inc.

Time Warner Inc. is a leading media and entertainment company,whose businesses include interactive services, cable systems, filmedentertainment, television networks and publishing.

Important Information

Time Warner Inc. ("Time Warner") plans to file with the Securitiesand Exchange Commission (the "SEC") and mail to its stockholders aProxy Statement in connection with its 2006 Annual Meeting, andadvises its security holders to read the Proxy Statement relating tothe 2006 Annual Meeting when it becomes available, because it willcontain important information. Security holders may obtain a free copyof the Proxy Statement and other documents (when available) that TimeWarner files with the SEC at the SEC's Web site at www.sec.gov. TheProxy Statement and these other documents may also be obtained freefrom Time Warner by directing a request to Time Warner Inc., ATTN:Investor Relations, One Time Warner Center, New York, NY 10019-8016,or to D.F. King & Co., Inc. by toll-free telephone at 1-800-431-9643,by e-mail at TimeWarnerInfo@dfking.com, or by mail at 48 Wall Street,New York, NY 10005.

Certain Information Regarding Participants

Time Warner, its directors and named executive officers may bedeemed to be participants in the solicitation of Time Warner'ssecurity holders in connection with its 2006 Annual Meeting. Securityholders may obtain information regarding the names, affiliations andinterests of such individuals in Time Warner's Annual Report on Form10-K for the year ended December 31, 2004 and its proxy statementdated April 4, 2005, each of which is filed with the SEC.

To the extent holdings of Time Warner securities have changedsince the amounts printed in the proxy statement, dated April 4, 2005,such changes have been reflected on Statements of Change in Ownershipon Form 4 filed with the SEC, except in regard to the followingchanges, which will be reported on Annual Statements of Changes inOwnership on Form 5: Mr. Turner, who made gifts in 2005 of anaggregate 3,263,296 shares of common stock, and Mr. Barksdale, who in2005 inherited 236,892 shares of common stock. Such changes inownership were not required to be reported earlier and will bereported on Annual Statements of Changes in Ownership on Form 5, to befiled with the SEC no later than February 14, 2006.
Letter to Shareholders
Time Warner
One Time Warner Center -- New York, NY 10019-8016

February 7, 2006

Dear Fellow Shareholders,

Time Warner's Board of Directors and senior management arecommitted to moving your company forward with one clear priority:delivering value for you, our shareholders. We took yet another steplast week in delivering on our commitment with the strong financialand operational results we reported for the fourth quarter and fullyear 2005.

You may have recently heard something about Carl Icahn, who isleading a handful of hedge funds, and his proposal to break up TimeWarner. You also may know that Mr. Icahn is paying an investmentbanking firm, Lazard Ltd., led by Bruce Wasserstein, and a one-timemedia company executive, Frank Biondi, to promote his proposal foryour company.

As we would do with respect to any shareholder, we will study theIcahn/Lazard proposal carefully and thoroughly, and then report backto you our findings, conclusions and recommendations. But rest assuredthat, during this process, we will continue to be focused on runningthe company and delivering the best possible results for you - just aswe did during 2005.

2005: A Year of Very Solid Performance

We delivered a very solid financial performance in 2005, led bydouble-digit earnings growth at Time Warner Cable and our networksbusinesses. The across-the-board strength in our businesses enabled usto meet all of our full-year objectives.

Our businesses also made significant operational progress in 2005to extend their industry leadership and lay the groundwork for futuregrowth. For example:

-- Time Warner Cable set the industry standard with its record-breaking subscriber growth across every one of its product lines - ending 2005 with over 1 million subscribers for its Digital Phone service, its newest product offering.

-- Time Warner was once again the leading producer of filmed entertainment in the world. Led by Warner Bros., our studios topped the industry in domestic and international box office, domestic home video sales and television programming.

-- The Turner entertainment networks TNT and TBS each once again ranked #1 in their respective key audiences among advertising-supported cable networks.

-- HBO remained the preeminent premium television network with the best original television programming in the world.

-- Time Inc. continued to lead all magazine publishers in readership and advertising share in the U.S.

-- And AOL improved its competitiveness by launching AOL.com and expanding its strategic alliance with Google.

2006: Continuing to Grow

As a result of our confidence in our management teams, businessoperations and their competitive positions, the 2006 outlook for ourbusinesses calls for us to continue to grow our earnings, whilekeeping our balance sheet strong and costs in tight control. Among ourinitiatives for the company in the coming year are:

First, we will continue to advance the leading competitivepositions of all of our businesses in an increasingly digitallandscape.

Each of our businesses is a leader today because it hascontinually anticipated change and adapted accordingly. Withconvergence in the media business finally underway, we are ready forit. In 2006, I expect all of our media businesses to allocate moreresources and focus toward making our great content and brands evenmore relevant in a digital environment. With effective execution, wewill turn what may seem like challenges to some into realopportunities for us.

Second, we will enhance AOL's competitive profile and take evengreater advantage of continuing strong trends toward online media.

During the past three years, AOL stabilized its finances andoperations. And now we are working to create value at AOL through bothits subscription and advertising business initiatives. AOL's recentlyannounced broadband deals are significant steps in moving the AOLbroadband subscription business forward. And AOL's enhanced Googlerelationship will both drive more traffic to AOL's online propertiesand increase the capabilities of AOL's advertising sales force.

Third, we will stay focused on completing the acquisition andintegration of the new cable systems from Adelphia and Comcast -enhancing Time Warner Cable's prospects for value creation.

As I mentioned above, we had outstanding operating results at TimeWarner Cable in 2005. The subscriber trends continue to be verypowerful - reinforcing our confidence in the strategy behind ourpending Adelphia and Comcast transactions, which we expect to closeduring the second quarter of this year.

Our cable business is exceptionally well-positioned over the nextthree to five years, and we have every expectation that it will be afar more resilient business than the investment community seems toexpect, given current trading valuations. Going forward, we willinvest in this business to capitalize fully on technological andconsumer trends that we believe are constantly improving the cableindustry's competitive position and increasing its value.

Finally, we will drive incremental returns to shareholders throughthe efficient allocation of our capital.

Last summer, we announced a $5 billion share repurchase program.Then, in early November, we increased our share repurchase program to$12.5 billion - one of the largest buybacks ever. To date, in total,we have purchased approximately $3 billion worth of our stock.

Given the current price of Time Warner stock, we have decided torepurchase our stock even more aggressively. At current price levels,we expect to roughly double the pace of our repurchases over the nextthree months. We see our stock at these prices as a very attractiveinvestment for our capital; however, we will maintain our previouslystated comfort level of leverage of around 3x debt to earnings.

The Right Plan for Shareholders

Our 2005 strategy delivered excellent results, with one glaringexception - our current stock price. As you know, media companies, ingeneral, as well as the cable industry, have traded down over the pastyear, largely because of questions about their future growthprospects.

I can't speak for the entire industry, but I can tell you that,from Time Warner's perspective, we are very confident about the healthof our Company over the short and longer terms. We have a strongmanagement team - as demonstrated by its track record over the pastthree years. We have a unique combination of assets, which provides uswith competitive advantages in an evolving landscape. Over time, wethink the benefits of this structure will be reflected in the marketvalue of our shares.

Our Board of Directors and senior management are confident thatwe're on the right course to provide a highly attractive return, whilebuilding enduring value for all of our shareholders. We believe that -by continuing to manage and grow our businesses as effectively as anyof our competitors, and by allocating our capital prudently with aview to maximizing returns to shareholders - we will be rewarded inthe marketplace.

As always, we will keep you informed of our progress. For moreinformation and updates, please go to the new "Building Value" area onour Web site: http://www.timewarner.com/buildingvalue.
Sincerely,

Richard D. Parsons
Chairman of the Board
and Chief Executive Officer

IMPORTANT INFORMATION

Time Warner Inc. ("Time Warner") plans to file with the Securitiesand Exchange Commission (the "SEC") and mail to its stockholders aProxy Statement in connection with its 2006 Annual Meeting, andadvises its security holders to read the Proxy Statement relating tothe 2006 Annual Meeting when it becomes available, because it willcontain important information. Security holders may obtain a free copyof the Proxy Statement and other documents (when available) that TimeWarner files with the SEC at the SEC's Web site at www.sec.gov. TheProxy Statement and these other documents may also be obtained freefrom Time Warner by directing a request to Time Warner Inc., ATTN:Investor Relations, One Time Warner Center, New York, NY 10019-8016,or to D.F. King & Co., Inc. by toll-free telephone at 1-800-431-9643,by e-mail at TimeWarnerInfo@dfking.com, or by mail at 48 Wall Street,New York, NY 10005.

CERTAIN INFORMATION REGARDING PARTICIPANTS

Time Warner, its directors and named executive officers may bedeemed to be participants in the solicitation of Time Warner'ssecurity holders in connection with its 2006 Annual Meeting. Securityholders may obtain information regarding the names, affiliations andinterests of such individuals in Time Warner's Annual Report on Form10-K for the year ended December 31, 2004 and its proxy statementdated April 4, 2005, each of which is filed with the SEC.

To the extent holdings of Time Warner securities have changedsince the amounts printed in the proxy statement, dated April 4, 2005,such changes have been reflected on Statements of Change in Ownershipon Form 4 filed with the SEC, except in regard to the followingchanges, which will be reported on Annual Statements of Changes inOwnership on Form 5: Mr. Turner, who made gifts in 2005 of anaggregate 3,263,296 shares of common stock, and Mr. Barksdale, who in2005 inherited 236,892 shares of common stock. Such changes inownership were not required to be reported earlier and will bereported on Annual Statements of Changes in Ownership on Form 5, to befiled with the SEC no later than February 14, 2006.