Item 1.     Business.

Time Warner Inc. (the “Company” or “Time Warner”), a Delaware corporation, is a leading media and entertainment company. The Company classifies its businesses into the following three reporting segments:

At December 31, 2012, the Company had a total of approximately 34,000 employees.

For convenience, the terms the “Company,” “Time Warner” and the “Registrant” are used in this report to refer to both the parent company alone and collectively to the parent company and the subsidiaries through which its various businesses are conducted, unless the context requires otherwise.

Caution Concerning Forward-Looking Statements and Risk Factors

This report contains “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 beliefs. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances, and the Company 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. Time Warner’s actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of Time Warner’s businesses. For more detailed information about these factors and risk factors with respect to the Company’s operations, see Item 1A, “Risk Factors,” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Caution Concerning Forward-Looking Statements.”

Available Information and Website

The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to such reports filed with or furnished to the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the Company’s website at www.timewarner.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The Company is providing the address to its website solely for the information of investors. The Company does not intend the address to be an active link or to incorporate any information included on or accessible through the website into this report.

NETWORKS

The Company’s Networks businesses consist principally of domestic and international cable networks, premium pay and basic tier television services and digital media properties, which primarily consist of brand-aligned websites. The networks owned by Turner Broadcasting System, Inc. (“Turner”), which are described below, are collectively referred to as the “Turner Networks.” Premium pay television services consist of the multi-channel HBO and Cinemax premium pay television services (collectively, the “Home Box Office Services”) operated by Home Box Office, Inc. (“Home Box Office”).

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Turner, a wholly-owned subsidiary of the Company, generates revenues principally from providing programming to cable system operators, satellite service distributors, telephone companies and other distributors (known as affiliates) that have contracted to receive and distribute this programming to subscribers and from the sale of advertising. Turner’s agreements with its affiliates are typically long-term arrangements that provide for annual service fee increases and have fee arrangements that are generally related to the number of subscribers served by the affiliate and the package of programming provided to the affiliate by each network. Expirations of affiliate agreements are staggered.

Turner’s advertising revenues consist of consumer advertising, which is sold primarily on a national basis in the U.S. and on a pan-regional or local-language feed basis outside the U.S. Advertising contracts generally have terms of one year or less. Advertising revenues are generated from a wide variety of advertising categories, including automotive, food and beverage, movie studios, restaurants, insurance, financial and business services, telecommunications, pharmaceutical, apparel and computer hardware and software. In the U.S., advertising revenues from the Turner Networks are a function of the size and demographics of the audience delivered; the “CPM,” which is the cost per thousand viewers delivered; and the number of units of time sold. Units sold and CPMs are influenced by the quantitative and qualitative characteristics of the audience of each network, the perceived quality of the network and of the particular programming, overall advertiser demand in the marketplace and general economic conditions. Turner sells a certain amount of its advertising inventory in the upfront market in advance each year and other inventory in the scatter market closer to the time a program airs. The volume of scatter advertising sold depends on market conditions and on the availability of advertising units. In turn, advertising unit availability depends on Turner’s upfront obligations, Turner’s ratings performance and the overall portion of its advertising inventory used to promote programs airing on the Turner Networks. Turner’s ratings performance can require Turner to use additional units to make good on contracted audience ratings if they were not satisfied on the initial airing of the programming. Outside the U.S., advertising is generally sold at a fixed rate for the unit of time sold, determined by the time of day and network. Turner’s websites, including CNN.com and cartoonnetwork.com , and the websites that Turner manages and/or operates for third parties, including NBA.com and related digital properties and NCAA.com , generate revenues principally from the sale of advertising and sponsorships.

Home Box Office, a wholly-owned subsidiary of the Company, generates revenues principally from providing programming to affiliates that have contracted to receive and distribute such programming to their customers who choose to subscribe to the Home Box Office Services (“Subscribers”). Home Box Office’s agreements with affiliates are typically long-term arrangements that provide for annual service fee increases and retail promotion activities and have fees that are generally based on the number of Subscribers served by the affiliates. Home Box Office and its affiliates engage in marketing and promotional activities to retain existing Subscribers and acquire new Subscribers. Home Box Office also derives revenues from the sale of its original programming via DVDs, Blu-ray Discs and electronic sell-through (“EST”), and the licensing of its original programming primarily to international television networks.

The Company’s Networks businesses have been pursuing international expansion in select areas, and the Company anticipates that international expansion will continue to be an area of focus at the Networks businesses for the foreseeable future.

Turner

Key contributors to Turner’s success are its strong brands and its continued investments in high-quality popular programming focused on sports, original and syndicated series, news, motion pictures and animation to drive audience delivery and revenue growth.

Domestic Networks and Related Digital Properties

Turner’s networks in the U.S. consist of entertainment and news networks. Turner’s entertainment networks include TBS, TNT, Cartoon Network, truTV, Turner Classic Movies and Boomerang. Programming for these entertainment networks is derived, in part, from the feature film, made-for-television and animation libraries to which Turner or other divisions of the Company own the copyrights, and also includes sports programming and

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other licensed programming, including syndicated television series and motion pictures. Turner’s news networks consist of CNN and HLN. The domestic television household numbers (“U.S. television households”) provided below are as reported by Nielsen Media Research as of December 2012, and Internet user data is according to comScore Media Metrix.

In 2012, Turner continued to expand its online and mobile offerings for on demand viewing of programs from its networks and live streaming from CNN, HLN and Cartoon Network. These offerings are made available to customers of affiliates who have chosen to subscribe to packages that include the applicable Turner network and who must authenticate their subscription in order to view the programming online or through a mobile application. Authenticated on demand viewing of programs from TNT, TBS, Cartoon Network, Adult Swim and truTV and live simulcast streaming from CNN and HLN was available to over 80 million U.S. households as of December 31, 2012.

Turner’s digital properties include brand-aligned websites as well as websites that Turner manages and/or operates for third parties. Turner’s digital properties collectively averaged approximately 84 million average monthly domestic unique visitors during the quarter ended December 31, 2012. Turner is focused on using the interactive features of its digital properties to broaden and deepen its relationships with its audiences.

TBS

TBS reached approximately 99.7 million U.S. television households as of December 2012. TBS is television’s “very funny” network that shows contemporary comedies, as well as a growing roster of original series, sports and acquired television series and motion pictures. For the 2012-2013 season, TBS’ returning original series include Are We There Yet? , Men at Work and Sullivan & Son , and its new original series include King of the Nerds and Wedding Band . Syndicated series for the 2012-2013 season include The Big Bang Theory , Family Guy and The Office . TBS is also airing new episodes of Cougar Town for the 2012-2013 season and episodes from prior seasons through syndication. TBS is also the home of the late night talk show Conan . In October 2012, Turner entered into an agreement to extend its relationship with Major League Baseball (“MLB”) through 2021, providing Turner with television rights and expanded digital rights to both postseason and regular season games. The new agreement with MLB includes digital rights to such MLB games across a wide variety of platforms, including mobile, Internet, tablets and other connected devices. TBS also has the right to produce and telecast certain NCAA Division I Men’s Basketball tournament games (the “NCAA Tournament Games”) through 2024.

Related digital properties include TBS.com and TeamCoco.com , which promote TBS’s programming and brands and provide entertainment content, including video clips, original video content, games, community forums, social networking features, episode guides and, for authenticated subscribers, full episodes of programs airing on TBS. TBS.com also features the TBS Shop, which offers DVDs, Blu-ray Discs, collectibles and other items for sale to consumers.

TNT

TNT reached approximately 98.7 million U.S. television households as of December 2012. TNT focuses on drama and is home to syndicated series such as Bones , Castle , Las Vegas , Law & Order , The Mentalist and Supernatural , as well as network premiere motion pictures. For the 2012-2013 season, TNT’s returning original series include Falling Skies , Franklin & Bash , Leverage , Rizzoli & Isles and Southland , and its new original series include Major Crimes , Monday Mornings, Perception and Dallas . TNT also has the right to produce and telecast a certain number of National Basketball Association (“NBA”) regular season and playoff games through the 2015-2016 season, certain NASCAR Sprint Cup Series races through 2014, certain Professional Golfers’ Association (“PGA”) events through 2019 and certain NCAA Tournament Games through 2024.

Tntdrama.com promotes TNT’s programming and brands and provides entertainment and sports content, including video clips, original video content, games, community forums, social networking features, episode guides and, for authenticated subscribers, full episodes of programs airing on TNT. The site also features the TNT Shop, which offers DVDs, Blu-ray Discs, collectibles and other items for sale to consumers. Turner also operates various applications that are extensions of some of the brands and programming on TNT.

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Turner Sports

Turner Sports produces award-winning sports programming and content for the Turner Networks and related digital properties. Turner Sports’ television line-up includes NBA and MLB games, the NCAA Tournament Games, NASCAR races and professional golf tournaments. Turner operates PGA.com and related digital properties of the PGA under agreements with the PGA. Turner and the NBA jointly manage a portfolio of the NBA’s digital businesses, including NBA TV , NBA.com, NBA LEAGUE PASS, NBA Mobile and the NBA GameTime app. In 2012, Turner acquired Bleacher Report , a leading online and mobile sports property.

The NCAA Tournament Games are being telecast on Turner’s TBS, TNT and truTV networks and on the CBS network through 2024 under an agreement among Turner, CBS Broadcasting, Inc. (“CBS”) and The National Collegiate Athletic Association (the “NCAA”). Turner and CBS work together to produce and distribute the NCAA Tournament Games and related programming. They sell advertising on a joint basis and share advertising and sponsorship revenues, the programming rights fee and production costs, subject to annual caps on CBS’ share of any resulting losses. Turner also manages and operates the NCAA’s digital portfolio, including NCAA.com and NCAA March Madness Live , which provides live and on demand streaming video and other related features across broadband and mobile devices.

Cartoon Network and Adult Swim

Cartoon Network (together with Adult Swim, its evening and overnight block of programming aimed at young adults) reached approximately 98.8 million U.S. television households as of December 2012. Celebrating its 20 ^th anniversary in 2012, Cartoon Network offers original and syndicated animated and live-action series and motion pictures for youth and families. For the 2012-2013 season, Cartoon Network’s original animated series include Adventure Time with Finn and Jake , The Amazing World of Gumball , Ben 10: Omniverse , Dragons: Riders of Berk , The Looney Tunes Show , Regular Show and Scooby-Doo! Mystery Incorporated , and its original live-action series include Incredible Crew and Level Up . Adult Swim offers original and syndicated animated and live-action comedy programming for young adults. For the 2012-2013 season, Adult Swim’s original series include Black Dynamite , Childrens Hospital , Delocated, Loiter Squad , Newsreaders , NTSF:SD:SUV:: , Robot Chicken , Super Jail and Squidbillies .

Cartoonnetwork.com and adultswim.com promote the Cartoon Network and Adult Swim programming and brands and provide entertainment content, including video clips, original video content, games, community forums, episode guides and, for authenticated subscribers, full episodes of programs airing on the networks. Cartoonnetwork.com also features the Cartoon Network Shop, which offers DVDs, Blu-ray Discs, collectibles and other items for sale to consumers. Live streaming of Cartoon Network programming is also available to authenticated subscribers online and via mobile devices.

truTV

truTV reached approximately 92.2 million U.S. television households as of December 2012. truTV tells real-life stories from a first-person perspective. During the daytime, truTV features expert trial coverage under the name In Session . For the 2012-2013 season, truTV’s returning original series include Black Gold , Conspiracy Theory with Jesse Ventura , Full Throttle Saloon, Hardcore Pawn , Impractical Jokers , Lizard Lick Towing , Operation Repo , South Beach Tow , Storage Hunters , Vegas Strip and World’s Dumbest , and its new original series include Caught Red-Handed , Container Wars , Guinness World Records Gone Wild , Killer Karaoke and Swamp Hunters . truTV is also producing and telecasting certain NCAA Tournament Games through 2024. truTV.com promotes truTV’s programming and brands and provides entertainment content, including video clips, original video content, games, community forums, social networking features, episode guides and, for authenticated subscribers, full episodes of programs airing on truTV.

Turner Classic Movies

Turner Classic Movies is a commercial-free network that presents classic films from some of the largest film libraries in the world. Turner Classic Movies also offers interviews, original documentaries and regular programming events that include “The Essentials,” “31 Days of Oscar” and “Summer Under the Stars.” Turner

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Classic Movies also stages special events and screenings, such as the TCM Classic Cruise (a themed cruise) and the TCM Classic Film Festival in Hollywood, California. TCM.com promotes Turner Classic Movies’ programming and brand and provides entertainment content, including film clips, games, the TCM Movie Database featuring rare studio production and publicity material, community forums, social networking features and schedule guides. The site also features the TCM Shop, which offers DVDs, Blu-ray Discs, collectibles and other items for sale to consumers.

Boomerang

Boomerang is a commercial-free network that offers classic animated entertainment such as The Flintstones, The Jetsons , Pink Panther , Tom and Jerry and Yogi Bear .

CNN

CNN, the original cable television news service, reached approximately 98.9 million U.S. television households as of December 2012. As of December 31, 2012, CNN managed 47 news bureaus and editorial operations, of which 14 are located in the U.S. For the 2012-2013 season, CNN’s programs include Anderson Cooper 360 ^o , Erin Burnett OutFront , Piers Morgan Tonight , The Situation Room with Wolf Blitzer and Starting Point with Soledad O’Brien . In 2012, CNN won two Emmy Awards for outstanding news discussion and analysis and outstanding live coverage of a current news story – long form; three George Foster Peabody Awards, including for CNN’s reporting of the Arab Spring; and three EPPY Awards from Editor & Publisher and Mediaweek .

Related digital properties include CNN.com and several localized, international editions that feature U.S. and international news articles and videos and related content such as blogs and news analysis. Viewers can submit their own stories through CNN iReport, which may then be featured on the CNN network or CNN.com . Live streaming from the network is also available to authenticated subscribers online and on mobile devices. In addition, CNN operates CNNMoney.com and related mobile websites and apps in partnership with Time Inc.’s Money and Fortune magazines and CNNMexico.com pursuant to a joint venture with Time Inc.’s Grupo Expansión, a leading Mexican consumer magazine publisher.

HLN

HLN, the “news and views” network, reached approximately 98.7 million U.S. television households as of December 2012. For the 2012-2013 season, HLN’s programs include Dr. Drew , Jane Velez-Mitchell , Morning Express with Robin Meade , Making It in America , Nancy Grace and Showbiz Tonight . HLNtv.com promotes HLN’s programming and brands and provides news and related content, including articles and video clips, community forums, social networking features, episode guides and, for authenticated subscribers, full episodes of programs airing on the network. Live streaming from the network is also available to authenticated subscribers online and via mobile devices.

International Networks

Turner provides entertainment and news programming to cable system operators, satellite distribution services, telephone companies, Internet Protocol Television (IPTV) system operators, mobile device operators, broadcasters and other distributors for delivery to households, hotels and other viewers in various countries around the world. As of December 31, 2012, Turner distributed its global entertainment and news brands (TNT, Cartoon Network, TBS very funny, Turner Classic Movies, Boomerang, truTV, CNN International, CNN en Español, CNN and HLN) and its regional entertainment brands in over 200 countries around the world. Turner has been pursuing international expansion in select areas and in recent years has expanded its presence in Southeast Asia, the Baltics, Germany, Japan, Korea, Latin America and Scandinavia.

In Latin America, Turner’s regional entertainment brands include Space, Infinito, I.Sat, Glitz*, HTV, MuchMusic and Tooncast. These brands air motion pictures and series, documentaries, fashion and lifestyle content, music videos and kids programming. Chilevisión, a leading free-to-air television broadcaster in Chile that is owned and operated by Turner, airs local news and entertainment. In addition, Turner provides the advertising sales and network operations services for the WB Channel in Latin America.

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In Europe, Turner’s regional entertainment brands include Cartoonito (a preschool network), as well as Star! (a Hollywood/celebrity/fashion network), Silver (an independent films network), Showtime (an action films network) and Glitz* (a lifestyle network). In addition, Turner distributes Boing (a kids entertainment network) in Italy, France and Spain on digital terrestrial television.

In India and certain other South Asian territories, Turner owns and operates POGO, Cartoonito and Toonami, which are entertainment networks for children. Turner also distributes and sells advertising for HBO in India. In Japan, Turner owns and operates MONDO TV, an entertainment network geared toward men, and TABI CHANNEL, an entertainment network focused on travel. Turner also distributes WB, an English language entertainment network in India that features movies and television programming that is primarily licensed from Warner Bros. Entertainment Inc. (“Warner Bros.”). In Korea, Turner operates through a joint venture Cartoon Network Korea and QTV, a documentary network.

CNN International, an English language news network, was distributed in more than 200 countries and territories as of December 31, 2012. CNN International has network feeds in five regions: Europe/Middle East/Africa, Asia Pacific, South Asia, Latin America and North America. CNN en Español, a separate Spanish language news network, is distributed in Latin America and the U.S. HLN is distributed in Canada, the Caribbean, parts of Latin America and the Asia Pacific region.

In a number of regions, Turner has launched local-language versions of CNN through joint ventures or contractual arrangements with local partners. These include CNN Turk, a Turkish language 24-hour news network available in Turkey; CNN Chile, a Spanish language 24-hour news network distributed in Chile; and CNNj, an English-with-Japanese-translation news service in Japan. In addition, CNN content is distributed through CNN-IBN, a co-branded, 24-hour, English language general news and current affairs network in India.

Home Box Office

HBO, operated by Home Box Office, is the most widely distributed domestic multi-channel premium pay television service. At December 31, 2012, Home Box Office had approximately 114 million worldwide subscribers, which consisted of approximately 41 million domestic premium pay subscribers and approximately 73 million international premium pay and basic tier television service subscribers through a wholly-owned subsidiary and unconsolidated international joint ventures. Both HBO and Cinemax are made available in high definition on a number of multiplex channels. Home Box Office also distributes HBO On Demand and Cinemax On Demand as well as the authenticated HBO GO and MAX GO streaming services, products that enable Subscribers to view programs at the time they choose. The domestic HBO GO and MAX GO streaming services are distributed on various online and mobile platforms, and an authenticated HBO GO streaming service is available to international premium pay television subscribers of HBO in a number of countries.

Domestically, a major portion of the programming on HBO and Cinemax consists of recently released, uncut and uncensored feature films. Home Box Office enters into licensing agreements of varying duration with major film studios and independent producers and distributors in order to ensure continued access to such feature films. Expirations of these agreements are staggered, and Home Box Office’s rights to some of the films licensed under these agreements may extend as far as into the next decade. These agreements typically grant to Home Box Office the exclusive right to exhibit and distribute recently released and certain older feature films owned by the particular studio, producer or distributor on a subscription basis (including via broadband) in exchange for negotiated fees, which may be a function of, among other things, the box office performances of the films.

HBO is also defined by its award-winning original dramatic and comedy series, such as Game of Thrones , True Blood , Boardwalk Empire , The Newsroom , Girls and VEEP , as well as motion pictures, mini-series, boxing matches and sports programs, comedy specials, family programming and documentaries. In 2011, Cinemax launched its first original primetime series, Strike Back , and has subsequently launched the original primetime series, Hunted and Banshee . HBO won five Golden Globe Awards in 2013 and 23 Primetime Emmy Awards, three George Foster Peabody Awards, three Sports Emmy Awards, two News and Documentary Emmy Awards and one Academy Award in 2012.

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Home Box Office also generates revenues from the exploitation of its original programming through multiple distribution outlets. HBO Home Entertainment markets a variety of HBO’s original programming on DVD and Blu-ray Discs. Home Box Office licenses its original programming to television networks in over 150 countries. In addition, Home Box Office content is distributed by means of EST in the U.S. and various international regions by Apple, Amazon, Microsoft, Sony, Walmart’s Vudu subsidiary, Best Buy and Barnes & Noble through their digital platforms. The Home Box Office-produced show Everybody Loves Raymond , which aired for nine seasons on broadcast television, is currently on basic cable and in syndication.

HBO- and Cinemax-branded premium pay and basic tier television services are distributed in more than 60 countries in Latin America, Asia and Europe. In many of these countries, Home Box Office operates through joint ventures and, in recent years, Home Box Office has acquired additional equity interests in these joint ventures. Home Box Office also continues to expand the distribution of its programming through new international joint ventures. Home Box Office launched HBO Nordic, a new multi-platform premium programming service (which consists of a premium pay television service and a direct-to-consumer streaming service), in Denmark, Finland, Norway and Sweden during the fourth quarter of 2012. During the first quarter of 2012, Home Box Office also launched a premium pay television service in the Netherlands.

The CW

The CW broadcast network (“The CW”) is a 50-50 joint venture between Warner Bros. and CBS Corporation. The CW’s 2012-2013 schedule includes, among other things, a 5-night, 10-hour primetime lineup and approximately 260 hours of original programming with advertising-supported programming such as 90210 , America’s Next Top Model , Arrow , Beauty and the Beast , The Carrie Diaries , Cult , Gossip Girl , Hart of Dixie , Nikita , Supernatural and The Vampire Diaries , as well as a five-hour block of advertising-supported, animated children’s programming on Saturday mornings. As of December 31, 2012, The CW was carried nationally by affiliated television stations covering 95% of U.S. television households, including 15 stations owned by Sinclair Broadcast Group, 13 stations owned by Tribune Broadcasting and 8 stations owned by CBS Corporation.

The CW is also expanding its digital distribution capabilities in an effort to grow its audience. For example, CWtv.com promotes The CW’s programming and provides video clips, episode guides, photos, music, social networking features and station lists, as well as full episodes with advertising. In addition, in 2012, The CW launched an app for iOS, tablet and Android mobile devices that allows users to view recently aired, in-season episodes of The CW shows on demand in a branded environment.

In 2011, Warner Bros. and CBS Corporation entered into an agreement with Netflix, Inc. that allows U.S. members of Netflix to stream previous seasons of the scripted series that aired on The CW beginning in fall 2011, as well as previous seasons of new scripted series produced by Warner Bros. or CBS Corporation that premiere on The CW through the 2014-2015 season. These rights extend for a period of four years after the end of each series’ broadcast run on The CW. Also in 2011, The CW entered into a five-year agreement with Hulu granting Hulu the right to stream in-season episodes of The CW’s programming on the Hulu Plus subscription service beginning the day after a program’s initial broadcast air date and the free, advertising-supported Hulu website beginning 8 days after a program’s initial broadcast air date.

Central Media Enterprises Ltd.

As of December 31, 2012, the Company holds an approximate 49.9% economic interest in Central Media Enterprises Ltd., a publicly-traded broadcasting company that operates leading networks in six Central and Eastern European countries.

Competition

The Networks businesses compete with other widely-distributed cable networks and the broadcast networks for distribution and marketing by affiliates. The Turner Networks and websites compete for advertising with other networks as well as media such as the Internet, print, radio and outdoor display. The Networks businesses

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also compete for viewers’ attention and audience share with all other forms of programming provided to viewers, including other television networks and premium pay television services, local over-the-air television stations, motion pictures, home video products and services (including subscription rental and Internet streaming services and rental kiosks), pay-per-view and VOD services, online activities (including Internet streaming and downloading), and other forms of news, information and entertainment. In addition, competition for programming, particularly licensed and sports programming, is intense, and the Networks businesses face competition for programming from television networks, premium pay television services, local television stations and subscription video on demand (“SVOD”) services. The production divisions in the Networks businesses compete with other production companies for the services of producers, directors, writers, actors and others and for the acquisition of literary properties.

FILM AND TV ENTERTAINMENT

The Company’s Film and TV Entertainment businesses produce and distribute feature films, television, videogames and other programming; distribute home video product; and license rights to the Company’s feature films, television programming and characters. All of these businesses are principally conducted by various subsidiaries and affiliates of Warner Bros., a wholly-owned subsidiary of the Company.

The Film and TV Entertainment segment’s theatrical product revenues are generated principally from the theatrical exhibition of feature films. In addition to the traditional 2D format, some of Warner Bros.’ theatrical releases are available in 3D and/or formatted for viewing on IMAX screens or high frame rate (“HFR”), tickets for which are generally sold at premium prices. The segment also generates theatrical product revenues from licensing fees received from the distribution of feature films on television networks and pay television programming services. The theatrical success of a feature film is a significant factor in determining the revenues it is likely to generate from the subsequent licensing of such film to television networks and programming services. The segment’s television product revenues are generated principally from the licensing of programs to domestic and international television networks, television station groups and pay television programming services.

The segment also generates revenues for both its theatrical and television product through home video distribution on DVD, Blu-ray Discs and various digital formats (e.g., EST and VOD). In recent years, home video revenues have declined as a result of several factors, including consumers shifting to subscription rental services and discount rental kiosks; the general economic downturn in the U.S. and in many regions around the world; increasing competition for consumer discretionary time and spending; piracy; and the maturation of the standard definition DVD format. In response to these declines, Warner Bros. is working to make digital ownership more compelling for consumers through support of initiatives such as UltraViolet, the home entertainment industry standard that allows consumers who have purchased film and television content to create a permanent record of their purchases, stored in the cloud. Consumers can then download or stream that content to devices supported by participating UltraViolet retailers. The segment also generates revenues for both its theatrical and television product through licenses of motion pictures and television programming to subscription and transactional on-demand services, including iTunes, Comcast’s Stream Pix service, Amazon, Hulu, Netflix and others. In addition, the segment generates revenues from the development and distribution of videogames in traditional console and digital formats.

The segment also generates licensee fees and royalties from the license to manufacturers, publishers, retailers, theme park operators and other licensees of the names, likenesses, images, logos and other representations of characters and copyrighted material from motion pictures and television series produced or distributed by Warner Bros. Licensing revenues are typically derived from royalties based on the licensee’s revenues.

Feature Films

Warner Bros. produces feature films both wholly on its own and under co-financing arrangements with others, and also distributes its films and films produced by third parties. Warner Bros.’ feature films are produced

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under the Warner Bros. Pictures and New Line Cinema banners. The terms of Warner Bros.’ agreements with independent producers and other entities are separately negotiated and vary depending on the production, the amount and type of financing by Warner Bros., the media and territories covered, the distribution term and other factors.

Warner Bros.’ feature film strategy focuses on offering a diverse slate of feature films with a mix of genres, talent and budgets that includes several “event” films each year and building and leveraging franchises, such as Batman , The Hangover , Harry Potter , The Lord of the Rings , Sherlock Holmes and Superman . During 2012, Warner Bros. released 17 original feature films for theatrical exhibition in the U.S., including The Dark Knight Rises , The Hobbit: An Unexpected Journey , Magic Mike , Journey 2: The Mysterious Island and Argo . Of the films released during 2012, four were released in 3D format, including The Hobbit: An Unexpected Journey and Journey 2: The Mysterious Island , and eight of the films released during 2012 were formatted for viewing on IMAX screens, including The Dark Knight Rises , Dark Shadows and The Hobbit: An Unexpected Journey . In addition, The Hobbit: An Unexpected Journey was released in HFR for viewing on a limited number of screens. Warner Bros. released Gangster Squad in January 2013, Bullet to the Head and Beautiful Creatures in February 2013 and plans to release 18 additional films in the U.S. throughout the year, including Gravity , The Great Gatsby , The Hangover Part III , The Hobbit: The Desolation of Smaug and Man of Steel . Of the original feature films expected to be released during 2013, Warner Bros. expects to release eight in 3D format, including Gravity , The Great Gatsby , The Hobbit: The Desolation of Smaug and Man of Steel , and seven formatted for viewing on IMAX screens, including Gravity , The Hobbit: The Desolation of Smaug and Man of Steel . In addition, The Hobbit: The Desolation of Smaug is expected to be released in HFR for viewing on a limited number of screens. Feature films released in 3D, HFR or formatted for IMAX viewing are generally sold at premium pricing. Release dates for Warner Bros.’ feature films are determined by a number of factors, including competition and the timing of vacation and holiday periods. Feature films released theatrically in the U.S. generally are released in international territories either day-and-date with the domestic release or according to a staggered release schedule.

Warner Bros. incurs significant production, marketing, advertising and distribution costs in connection with the theatrical release of a feature film. As a result, Warner Bros. typically incurs losses with respect to a particular film prior to and during a feature film’s theatrical exhibition, and a particular film may not produce a profit until well after the feature film’s theatrical release. In response to the high cost of producing feature films, Warner Bros. has entered into film co-financing arrangements for certain feature films with other companies, decreasing its financial risk while in most cases retaining substantially all worldwide distribution rights. Of Warner Bros.’ total 2012 releases, eight were wholly financed by Warner Bros. and nine were financed with or by others. Warner Bros. has co-financing arrangements with Village Roadshow Pictures through 2017 and Legendary Pictures, LLC through 2013. In addition, Warner Bros. has an exclusive distribution arrangement with Alcon Entertainment for distribution of all of Alcon’s feature films in the U.S. and certain international territories.

Warner Bros. distributes feature films for theatrical exhibition in more than 125 international territories. In 2012, Warner Bros. released internationally 18 English-language films and 23 local-language films that it either produced or acquired.

After their theatrical exhibition, Warner Bros. licenses its newly produced feature films, as well as films from its library, both domestically and internationally for distribution in various windows on broadcast and cable networks and premium pay television services, and also distributes its films on DVD and Blu-ray Discs and through digital retail services for ownership and rental. Newly produced feature films are released in the home entertainment window approximately four to six months following their release to theatrical exhibition, with the release date being influenced by seasonality, competitive conditions, film attributes and expected performance. In the U.S. and most major international markets, Warner Bros. has generally released all films simultaneously for sale on DVD, Blu-ray Disc (including, for new release titles, an UltraViolet digital copy), and via VOD and EST ( e.g. , download to own); however, in 2012, Warner Bros. began releasing some of its films in EST approximately two weeks in advance of their release on DVD, Blu-ray Discs and VOD. Warner Bros. generally releases newly produced films to brick and mortar retailers and by-mail and kiosk rental services 28 days following their release to other home entertainment channels. Following the release of newly produced films in the home entertainment

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window, Warner Bros. licenses its newly produced films, as well as films from its library, for distribution in various windows to broadcast and cable networks and premium pay television services both domestically and internationally, including the Company’s networks and premium pay and basic tier television services and, in most cases, other exhibitors such as airlines and hotels. Warner Bros. also selectively licenses feature films for exhibition online in the U.S. and internationally to SVOD services such as Amazon, Netflix, Hulu and LOVEFiLM.

Warner Bros. has an extensive film library consisting of rights to over 6,000 feature films previously released by Warner Bros. and other studios.

Television

Warner Bros. Television Group (“WBTVG”) continues to be a leader in the television production and distribution business in the U.S. and internationally. WBTVG’s production and development slate in the U.S. includes scripted television series, reality-based entertainment shows, first-run syndication series and animation programs. WBTVG licenses its television programming for initial exhibition on traditional broadcast and cable networks, including the Company’s networks. In most cases, these initial licenses to broadcast and cable networks also permit the networks to distribute WBTVG shows on various network-branded on-demand platforms during the current season. Subsequent to initial broadcast exhibition, WBTVG distributes its television series across numerous secondary windows, including through traditional off-network syndication and to SVOD services. Television series developed in the U.S. are also licensed to networks in international territories. Similar to the arrangements in the U.S., these initial licenses allow for both traditional network exhibition and various on-demand rights. In certain territories, WBTVG also licenses its U.S. content to SVOD services for on-demand exhibition.

WBTVG’s business relies on its production, development and distribution expertise and scale. Its programming is primarily produced and developed by Warner Bros. Television (“WBTV”), a division of WB Studio Enterprises Inc. WBTV produces scripted comedy and dramatic television series for initial primetime exhibition on broadcast and cable networks. For the 2012-2013 season, WBTV programs airing on The CW include returning series Gossip Girl , Hart Of Dixie , Nikita , Supernatural and The Vampire Diaries , and new series Arrow , The Carrie Diaries and Cult . For the 2012-2013 season, WBTV is producing returning series 2 Broke Girls , The Big Bang Theory , Fringe , The Mentalist , The Middle , Mike & Molly , Person of Interest , Suburgatory and Two and a Half Men for third party broadcast networks as well as new series, which include The Following and Revolution . WBTV also produces original series for cable networks, including Major Crimes and Southland for TNT.

Warner Horizon Television Inc. (“Warner Horizon”) specializes in non-scripted programming for broadcast and cable networks as well as scripted original programming for cable networks. For the 2012-2013 season, Warner Horizon is producing non-scripted series, including The Bachelor and The Voice airing on third party broadcast networks, and made-for-cable scripted original series, including Longmire , The Lying Game and Pretty Little Liars airing on third party networks, Sullivan & Son airing on TBS and Dallas and Rizzoli & Isles airing on TNT.

Telepictures Productions Inc. (“Telepictures”) specializes in reality-based and talk/variety series for the syndication and daytime markets. For the 2012-2013 season, Telepictures is producing first-run syndication franchises such as The Ellen DeGeneres Show , Extra and TMZ . Telepictures also tested TMZ Live on seven FOX stations in 2012, resulting in the sale of TMZ Live in 17 FOX markets for the 2013-2014 season. In addition, after a six-week test on six FOX stations in 2012, Bethenny will be carried by stations covering over 97% of the U.S. market for the 2013-2014 season.

Warner Bros. Animation Inc. (“WBAI”) creates, develops and produces contemporary animated television programming and original made-for-DVD releases, including Beware the Batman , The Looney Tunes Show , Mad , Teen Titans Go !, and The Tom & Jerry Show , all of which are airing on Cartoon Network in the 2012-2013 season. WBAI also oversees the creative use of, and production of animated programming based on, classic animated characters from Warner Bros., including Looney Tunes, and from the Hanna-Barbera and DC Comics libraries.

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In 2012, WBTVG acquired Alloy Entertainment, a leading producer of content, primarily books, aimed at teen girls and young women. For the 2012-2013 season, WBTVG is producing and distributing four series based on Alloy Entertainment’s properties, including Gossip Girl , Pretty Little Liars and The Vampire Diaries . WBTVG plans to leverage Alloy’s literary creativity to continue to develop new book franchises and exploit Alloy’s library of book titles to develop franchises that can be extended across Warner Bros.’ businesses.

Subsequent to primary broadcast and cable network exhibition in the U.S., WBTVG licenses its programming to numerous secondary off-network windows, including traditional syndication and SVOD services. For example, during 2012, WBTVG licensed the cable and local station off-network rights to The Middle , which will become available on ABC Family in the fall of 2013 and on Hallmark in the spring of 2014, and Mike & Molly , which will become available on FX in the fall of 2014. WBTVG has also created new licensing models with television networks that allow WBTVG to accelerate the timing of off-network windows for SVOD and traditional syndication after the initial exhibition of series on network television. For example, in December 2012, WBTVG entered into a licensing agreement with Netflix for the exclusive subscription streaming rights to five new programs produced by WBTVG for broadcast and cable networks for the 2012-2013 season ( 666 Park Avenue , The Following , Longmire , Political Animals and Revolution ), as well as potential future programs. Each season of each series will become available on the Netflix SVOD service following its initial broadcast or cable network window. As part of the transaction, Netflix also acquired the exclusive subscription streaming rights to all seasons of Chuck and the non-exclusive subscription streaming rights to all seasons of Fringe and The West Wing . Under the agreement, WBTVG has the right to sell the programs into traditional syndication windows as well as via EST services.

WBTVG also licenses its U.S. original television series for exhibition in international territories, primarily through long-term agreements with television networks, premium pay and basic tier television services and SVOD services. During 2012, Warner Bros. International Television Distribution Inc. entered into significant licensing agreements in a number of international territories, including Canada, Eastern Europe, France, Germany, Ireland, Latin America, Russia, Scandinavia and the U.K. Several of these licensing agreements were entered into with international SVOD services, including deals with Netflix in Canada, Ireland, Latin America, Scandinavia and the U.K. Warner Bros. International Television Production also continues to capitalize on growing demand for locally produced television programming in international territories by opportunistically expanding local production capabilities in key territories.

WBTVG also manages various online destinations, including TMZ.com (one of the leading entertainment news brands in the U.S. across online, TV and mobile platforms) and various websites for many of its syndicated television properties, including The Ellen DeGeneres Show and Extra .

Home Entertainment – DVDs and Blu-ray Discs

Warner Home Video (“WHV”), a division of Warner Bros. Home Entertainment Inc. (“WBHE”), distributes DVDs and Blu-ray Discs containing filmed entertainment product and television programming produced or otherwise acquired by the Company’s various content-producing subsidiaries and divisions, including Warner Bros. Pictures, Warner Bros. Television, New Line Cinema, Home Box Office and Turner. Significant WHV releases of filmed entertainment product during 2012 included The Dark Knight Rises, Dark Shadows , Journey 2: The Mysterious Island , Sherlock Holmes: A Game of Shadows and Wrath of the Titans . The DVDs and Blu-ray Discs for new titles in the U.S. include an UltraViolet digital copy. WHV also distributes DVDs and Blu-ray Discs containing films and television programs from Warner Bros.’ extensive library. In addition, WHV distributes third party content on DVDs and Blu-ray Discs for the BBC and Sesame Street in the U.S. and has similar distribution relationships with content producers outside the U.S.

In 2012, Warner Bros. entered into a three-year agreement with Paramount Home Media Distribution pursuant to which Warner Bros. was granted exclusive rights commencing on January 1, 2013 to distribute DVDs and Blu-ray Discs (including UltraViolet digital copies) for more than 600 catalog titles from the Paramount film library in the U.S. and Canada. Paramount retains the right to distribute these titles in SVOD, VOD and EST.

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WHV sells and licenses DVD and Blu-ray Disc product for resale in the U.S. and in major international territories to retailers and wholesalers through its own sales force, with warehousing and fulfillment handled by third parties. In some countries, WHV’s product is distributed through licensees.

DVD and Blu-ray Disc product is replicated by third parties under contract with WHV and/or its affiliates in applicable territories. The replication of DVD and Blu-ray Disc product for the U.S., Canada, Europe and Mexico is provided under long-term contracts with two manufacturers, and the replication of DVD and Blu-ray Disc product for Japan is provided under a long-term contract with one manufacturer.

Home Entertainment — Digital Media

Warner Bros. Digital Distribution (“WBDD”), a division of WBHE, enters into domestic and international licensing arrangements for the distribution of Warner Bros.’ film and television content as well as acquired third party content through VOD and EST transactions via cable system operators, satellite distribution services, telecommunications companies, broadband services and mobile platforms for delivery to consumers worldwide. WBDD also licenses catalog motion pictures to various domestic SVOD services, including Redbox Instant, Comcast’s Stream Pix service, Amazon and Netflix. WBDD distributes its motion pictures via VOD and/or EST in the U.S. and 106 international territories. WBDD also makes UltraViolet digital copies of motion pictures and television programs available to consumers who purchase Warner Bros.’ DVDs and Blu-ray Discs.

WBDD participated in several digital ownership initiatives in 2012, including (1) support of UltraViolet by licensing UltraViolet EST rights to digital retailers such as Walmart’s Vudu subsidiary, Best Buy’s CinemaNow service, Barnes & Noble’s Nook, and Flixster; (2) the expansion of Flixster, a social media discovery interface to allow consumers to purchase UltraViolet film and television content and manage their digital collections; and (3) the launch of Disc to Digital, which allows consumers to obtain digital copies of their physical DVD and Blu-ray collections.

WBDD also manages Warner Bros.’ direct-to-consumer retail website, wbshop.com , which includes the Warner Archive Collection, a DVD manufacture-on-demand service. As of December 31, 2012, the service had approximately 1,500 motion picture titles and television series available, many of which have not been released previously on DVD.

Interactive Entertainment

Warner Bros. Interactive Entertainment (“WBIE”), a division of WBHE, is a developer, publisher and distributor of interactive entertainment, including videogames for console and handheld platforms, social networking games and mobile games. In addition, WBIE develops, publishes and operates massively multiplayer online games through Turbine Inc. (“Turbine”), a subsidiary of WBHE. WBIE develops games for a variety of platforms, including Sony’s PlayStation 3, Nintendo’s Wii and WiiU, and Microsoft’s Xbox 360 and Kinect console systems; Sony’s PlayStation Portable and Nintendo’s Dual Screen, DSi and 3DS handheld devices; the PC; Apple’s iPhone and iPad; and various Android devices. WBIE also develops and publishes videogames (and additional downloadable content) for digital distribution on multiple online and mobile platforms. WBIE’s videogames are based on newly created intellectual property, as well as intellectual properties owned by Warner Bros., DC Comics and third party licensors.

In 2012, WBIE’s significant releases for traditional handheld, console and PC/Mac platforms included LEGO Batman 2: DC Super Heroes and LEGO The Lord of the Rings , and WBIE’s significant releases for mobile apps platforms in 2012 included The Hobbit: Kingdom of Middle Earth . In addition, in 2012 Turbine released the Riders of Rohan expansion pack to its massively multiplayer online role-playing game Lord of the Rings Online .

WBIE also licenses Warner Bros. and DC Comics properties for online, mobile and traditional videogames on various platforms to third parties, and WBIE publishes and distributes videogame titles owned by third parties.

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Other Entertainment Assets

Warner Bros. Consumer Products Inc. licenses rights to manufacturers, publishers, retailers, theme park operators and other licensees both domestically and internationally to the names, likenesses, images, logos and other representations of characters and copyrighted material from the motion pictures and television series produced or distributed by Warner Bros., including Harry Potter , the superhero characters of DC Comics, Hanna-Barbera characters and Looney Tunes . Also included are classic films such as The Wizard of Oz and Gone with the Wind .

DC Entertainment, which is wholly owned by the Company, is responsible for bringing the stories and characters from the DC Comics, Vertigo and MAD Magazine publishing portfolios into other Warner Bros. content and distribution businesses, including feature films, television programming, videogames, direct-to-consumer platforms and consumer products. The DC Comics imprint, home to such iconic characters as Batman , Superman , Wonder Woman and Green Lantern , has launched digital versions of its top comic book and graphic novel titles, making them available for download on digital platforms. DC Entertainment’s Vertigo imprint publishes comic books and graphic novels and is home to titles such as Sandman , Fables , 100 Bullets and American Vampire . MAD Magazine publishes bi-monthly issues of the magazine, as well as special-edition books and magazines. In 2012, DC Entertainment, the operating name of E.C. Publications, Inc., published on average more than 100 printed comic books, graphic novels and specialty books a month and nearly 350 digital comic books and graphic novels per month.

Competition

The production and distribution of feature films, television programming and videogames are highly competitive businesses. These businesses compete for consumers’ entertainment and leisure time and spending with each other, as well as with other forms of entertainment, including Internet streaming and downloading, websites providing social networking and user-generated content, videogames and other online activities, sports, print media, live events and radio broadcasts. Furthermore, there is intense competition in the television industry evidenced by the increasing number and variety of networks now available. There is active competition among all production companies in these industries for the services of producers, directors, writers, actors and others and for the acquisition of literary properties. With respect to the distribution of television programming, there is significant competition from independent distributors as well as major studios. The competitive position of a producer or distributor of feature films, television programming and videogames is also greatly affected by the quality of, and public response to, the entertainment content it makes available to consumers. Warner Bros. also competes in its character merchandising and other licensing activities with other licensors of characters, brands and celebrity names.

PUBLISHING

The Company’s publishing business is conducted primarily by Time Inc., a wholly owned subsidiary of the Company. Time Inc. is the largest magazine publisher in the U.S. based on advertising revenues, as measured by Publishers Information Bureau (“PIB”). In addition to publishing magazines, Time Inc. also operates a number of websites, as well as book publishing and marketing businesses.

Publishing

As of December 31, 2012, Time Inc. published 21 magazines in print in the U.S., including People , Sports Illustrated , InStyle , Time , Real Simple , Southern Living , Entertainment Weekly and Fortune , and over 70 magazines outside the U.S., primarily through IPC Media (“IPC”) in the U.K. and Grupo Expansión (“GEX”) in Mexico. In addition, as of December 31, 2012, Time Inc. operated over 45 websites, such as People.com , CNNMoney.com and SI.com , that collectively had average monthly unique visitors of over 49 million in the U.S., the U.K., Mexico and other countries during the fourth quarter of 2012.

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Time Inc. also publishes all of its U.S. magazines on multiple digital devices and platforms. Time Inc. offers an “All Access” model for its U.S. magazines that provides a print subscription plus cross-platform digital access to subscribers for no additional fee. On certain digital devices and platforms in the U.S. and in select international regions, Time Inc. offers digital-only monthly, semi-annual or annual subscriptions as well as single-copy issues to each of its magazines. Time Inc. also continues to extend its brands by developing and launching free and paid apps that are available for download across various digital devices and platforms, including SI Swimsuit Scanner, EW’s Must List, SI March Madness Viewer, Real Simple: No Time to Cook, MyRecipes: Daily Indulgence and People CelebWatch, and mobile versions of CNNMoney.com , SI.com and Time.com .

Time Inc.’s U.S. magazines and companion websites are organized into three business units: (1) Style and Entertainment, (2) Lifestyle and (3) News and Sports. This structure has enabled Time Inc. to better focus on the strengths of these products and reduce costs by bringing together under centralized management products that have a common appeal in the marketplace. Additionally, across Time Inc.’s three U.S. business units, magazine consumer marketing and production and distribution activities are generally centralized, and subscription fulfillment activities for Time Inc.’s U.S. magazines are primarily administered from a centralized facility in Tampa, Florida.

From the fourth quarter of 2010 through the first quarter of 2012, Turner managed the SI.com and Golf.com websites, including selling the advertising for the websites, and in exchange Time Inc. received a license fee from Turner. In the second quarter of 2012, Time Inc. assumed management of these websites from Turner and, with the transfer, Time Inc. now sells the advertising for these websites and no longer receives a license fee from Turner.

In 2009, Time Inc., together with four other leading publishers, formed an independent venture called Next Issue Media to develop a digital storefront and related technology to allow consumers to enjoy media content on portable digital devices. Next Issue Media opened its digital storefront in 2011. Time Inc. makes available single-copy issues and digital subscriptions of Time Inc.’s U.S. magazines for sale and download on certain digital devices through Next Issue Media’s digital storefront. In addition, for no additional fee, print subscribers of Time Inc.’s U.S. magazines are able to access through Next Issue Media the tablet edition of the print magazine to which they subscribe.

Style and Entertainment

People is a weekly magazine that reports on celebrities and other newsworthy individuals. People magazine generated approximately 19% of Time Inc.’s revenues in 2012. The People franchise also includes: People StyleWatch , a monthly fashion magazine aimed at U.S. style-conscious younger readers; People en Español , a monthly Spanish-language magazine aimed primarily at U.S. Hispanic readers; People.com , a leading website for celebrity news, photos and style coverage; and PeopleEnEspañol.com , a Spanish-language website aimed primarily at the U.S. Hispanic audience. In July 2012, People launched a website optimized for viewing on mobile devices with a new ad format and the same content as People.com .

InStyle , a monthly magazine, and InStyle.com , a related website, focus on celebrity, style, fashion and beauty. Time Inc. also publishes InStyle in the U.K. through IPC and in Mexico through GEX.

Entertainment Weekly , a weekly magazine, and EW.com , a related entertainment news website, feature pop culture news, commentary and reviews of feature films, TV, music, books, games and theater.

Essence Communications Inc. (“ECI”) publishes Essence , a leading lifestyle magazine for African-American women in the U.S., and Essence.com , a related website. ECI also produces the annual Essence Music Festival and its related television show, TV One Night Only: Live From the Essence Music Festival, the latter in partnership with tvOne network.

Lifestyle

Real Simple , a monthly magazine, and RealSimple.com , a related website, focus on life, home, body and soul and provide practical solutions to make women’s lives easier.

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Southern Living , a monthly regional magazine, and SouthernLiving.com , a related website, focus on lifestyles in the southern part of the U.S.

Cooking Light , a monthly epicurean magazine, and CookingLight.com , a related website, focus on cooking healthy and great tasting meals.

All You , a monthly magazine, and AllYou.com , a related website, focus on lifestyle and service for value conscious women.

Sunset , a monthly magazine, and Sunset.com , a related website, focus on western lifestyle in the U.S.

Health , a monthly magazine for women, and Health.com , a related website, focus on information about health and wellness.

This Old House , a monthly magazine, and ThisOldHouse.com , a related website, focus on home improvement. Time Inc. also produces two television series, Ask This Old House and This Old House , which focus on home improvement.

Coastal Living , a monthly shelter and lifestyle magazine, and CoastalLiving.com , a related website, focus on home design and lifestyles in coastal areas of the U.S.

MyRecipes.com , a recipes website, and MyHomeIdeas.com , a shelter website, both feature original content and content from other Time Inc. Lifestyle brands.

News and Sports

Time is a weekly newsmagazine that summarizes the news and interprets the week’s events, both national and international. Time also has three English-language weekly editions that circulate outside the U.S.  TIME.com , a related website, provides breaking news and analysis, giving its readers access to its 24-hour global newsgathering operation and its vast news archive. Time for Kids is a weekly current events newsmagazine for children ages five to 13.

Fortune is a magazine published 18 times per year that reports on worldwide economic and business developments and compiles the annual Fortune 500 list of the largest U.S. corporations. Fortune also has two English-language international editions that circulate outside the U.S. Time Inc. also publishes Money, a monthly magazine that reports primarily on personal finance. Fortune and Money combine their resources on the CNNMoney.com website, a leading financial news and personal finance website operated in partnership with CNN.

Sports Illustrated is a weekly magazine that covers sports. SI.com is a leading sports news website that provides news coverage and analysis 24/7 for domestic and international sports. Sports Illustrated for Kids is a monthly sports magazine with a related website intended primarily for pre-teenagers.

Golf is a leading monthly golf magazine. Golf.com is a related website that features user-friendly content designed to help readers play their best golf and maximize their golfing experience.

Other Publishing Operations

Time Inc. also has responsibility under a management contract for the American Express Publishing Corporation’s publishing operations, including its travel and epicurean magazines Departures , Food & Wine and Travel & Leisure and their related websites.

International

IPC, a leading U.K. consumer magazine publisher, publishes approximately 55 magazines as well as numerous special issues. During 2012, IPC made its brands available on Amazon’s Kindle Fire and Barnes & Noble’s Nook. In addition, as of December 31, 2012, all of IPC’s brands were available on Apple Newsstand for purchase and download to a variety of digital devices.

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IPC is organized into three operating divisions, Connect, Inspire and SouthBank, which are aligned with its three core audience groups of mass-market women, men and upscale women. This structure is intended to facilitate the delivery of highly targeted audiences to IPC’s advertisers and bring focus and efficiency to IPC’s operations. IPC’s magazines include (i) in the Connect division, television listing and entertainment magazines TVTimes and What’s On TV ; women’s lifestyle magazines Chat , Woman and Woman’s Weekly ; and a celebrity magazine Now ; (ii) in the Inspire division, Country Life and Horse & Hound magazines focused on leisure; and (iii) in the SouthBank division, Homes & Gardens , Ideal Home and woman&home magazines focused on homes and gardens. In addition, IPC publishes four magazines through three unconsolidated joint ventures with Groupe Marie Claire.

IPC websites include goodtoknow.co.uk , a website for women providing advice and tips on family and health, entertainment and recipes; housetohome.co.uk , a home inspiration and decorating resource; and NME.com , a contemporary music news and reviews website. As of December 31, 2012, IPC had over 35 mobile-optimized websites for its magazines, including Good to Know , Marie Claire and NME .

GEX, a leading Mexican consumer magazine publisher, publishes 11 magazines in Mexico, including Chilango , a Mexico City listing guide; Expansión , a business magazine; IDC , a tax and accounting bulletin; InStyle Mexico , a fashion and lifestyle magazine for women; and Quién , a celebrity and personality magazine. In addition, GEX publishes two magazines through an unconsolidated joint venture with Hearst Corporation. GEX also owns and operates CNNExpansión.com , a leading business website in Mexico, MedioTiempo.com , a leading sports website in Mexico, MetrosCúbicos.com , a leading website for classified real estate listings in Mexico, and Quien.com , a leading celebrity website in Mexico. In addition, through a joint venture, GEX and Turner operate CNNMexico.com , a Spanish-language news website that provides local, national and international news from a Mexican perspective.

Time Inc. licenses over 50 editions of its magazines for print publication outside the U.S. to publishers in over 25 countries. In addition, Time Inc. licenses digital content to digital and mobile platform operators and sells the rights to sell and serve advertisements on certain of its websites in connection with non-U.S. website traffic in over 50 countries outside the U.S.

Advertising and Circulation

Time Inc. derives approximately half of its revenues from the sale of advertising, primarily from its print magazines with a smaller amount of advertising revenues from its websites and the tablet editions of its magazines. Advertising carried in Time Inc.’s magazines, including on tablet editions and on its websites, is predominantly consumer advertising, including toiletries and cosmetics, food and beverages, drugs, travel and home, automobiles, apparel and accessories, retail and department stores, financial services and insurance, computers and telecommunications and media and feature films.

In 2012, Time Inc.’s U.S. magazines accounted for 21.5% (compared to 21.0% in 2011) of the total U.S. advertising revenues in consumer magazines, excluding newspaper supplements, as measured by PIB. People , Sports Illustrated and InStyle were ranked 1, 3 and 5, respectively, in terms of PIB-measured advertising revenues in 2012, and Time Inc. had 6 of the top 25 leading magazines based on the same measure.

Through the sale of magazines to consumers, circulation generates significant revenues for Time Inc. In addition, circulation is an important component in determining Time Inc.’s advertising revenues because advertising rates are based on circulation and audience. Most of Time Inc.’s U.S. magazines are sold primarily by subscription and delivered to subscribers through the mail. Most of Time Inc.’s international magazines are sold primarily at newsstands. Subscriptions in the U.S. are sold primarily through direct mail and online solicitation, subscription sales agents, marketing agreements with other companies and insert cards in Time Inc. magazines and other publications. Additionally, digital-only subscriptions and single-copy digital issues of Time Inc.’s U.S. magazines are sold through various app stores and other digital storefronts across multiple platforms.

Time Inc.’s Synapse Group, Inc. (“Synapse”) is a leading seller of domestic magazine subscriptions to Time Inc. magazines and magazines of other U.S. publishers. Synapse sells magazine subscriptions principally through marketing relationships with commercial airlines that have frequent flier programs, brick and mortar retailers, Internet sites and customer service and direct response call centers.

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Newsstand sales of magazines, which are reported as a component of Subscription revenues, are sold through traditional newsstands as well as other retail outlets such as Wal-Mart, supermarkets and convenience and drug stores, and may or may not result in repeat purchases. Time/Warner Retail Sales & Marketing Inc. distributes and markets copies of Time Inc. magazines and certain other publishers’ magazines through third-party wholesalers primarily in the U.S. and Canada. Wholesalers, in turn, sell Time Inc. magazines to retailers. A small number of wholesalers are responsible for a substantial portion of Time Inc.’s newsstand sales of magazines. IPC’s Marketforce (U.K.) Limited distributes and markets copies of all IPC magazines, some international editions of Time Inc.’s U.S. magazines and certain other publishers’ magazines outside of the U.S. through third-party wholesalers to retail outlets.

Time Inc. has been experiencing declines in its print advertising and newsstand sales as a result of market conditions in the magazine publishing industry as well as the current economic environment in the U.S. and internationally. Time Inc. is pursuing a number of initiatives to help mitigate these declines, including conducting additional brand marketing; developing innovative ways to sell branded magazine content outside of traditional channels, including websites, tablets and other mobile devices; developing integrated advertising solutions that will provide greater data insight and value to advertisers; developing a new cross-platform content management system; and improving its operating efficiency through management of its cost structure.

In January 2012, Time Inc. sold the school fundraising business, QSP, which offers fundraising programs that help schools and youth groups raise money through the sale of subscriptions to Time Inc.’s and other publishers’ magazines, among other products.

Marketing

Time Inc. operates marketing businesses. The marketing services provided include developing customer-relationship marketing programs, custom client publications and branded content programs on multiple platforms that enable clients to create and sustain profitable relationships with their customers. The marketing services also include geographic-targeted and demographic-targeted advertising solutions for marketers in magazines, online and on other digital platforms.

Books

Time Inc. conducts niche book publishing. Time Inc.’s book publishing business consists of Time Home Entertainment Inc. (“THEI”) and Oxmoor House Inc., which publish how-to, lifestyle and special commemorative books and books on other topics through retail and direct mail channels under Southern Living , Life , Time , Sunset and other Time Inc. brands. THEI also publishes a number of books under licensed third-party brands.

Competition

Time Inc. faces significant competition from several direct competitors and other media, including the Internet. Time Inc.’s magazine and website operations compete with numerous other magazine and website publishers and other media for circulation and audience and for advertising directed at the general public and at more focused demographic groups. The publishing business presents few barriers to entry and many new magazines and websites are launched annually. Time Inc. also creates tablet editions of its magazines. The use of these digital devices as distribution platforms for magazine products may lower the barriers to entry for launching digital magazine products that compete with Time Inc.’s businesses.

Competition for magazine and website advertising revenues is primarily based on advertising rates, the nature and size of the audience (including the circulation and readership of magazines and the number of unique visitors to and page views on websites), audience response to advertisers’ products and services and the effectiveness of sales teams. Other competitive factors in publishing include product positioning, editorial quality, price and customer service, which impact audience, circulation revenue and advertising revenue. New digital platforms for publishing may impact the way in which Time Inc. competes for consumers with other

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forms of media. In addition, competition for magazine advertising revenue has intensified in recent years due to challenging economic conditions and the increasing shift in advertising dollars from traditional print to digital media.

Time Inc.’s book publishing and marketing businesses compete with other book publishing and marketing businesses, respectively, through all media, including the Internet.

REGULATORY MATTERS

The Company’s businesses are subject to and affected by laws and regulations of U.S. federal, state and local governmental authorities as well as the laws and regulations of international countries and bodies such as the European Union (the “EU”), and these laws and regulations are subject to change. The following descriptions of significant U.S. federal, state, local and international laws, regulations, regulatory agency inquiries, rulemaking proceedings and other initiatives should be read in conjunction with the texts of the respective laws, regulations, inquiries, rulemaking proceedings and other related materials.

Intellectual Property Laws

Time Warner is one of the world’s leading creators, owners and distributors of intellectual property. The Company’s vast intellectual property assets include copyrights in motion pictures, television programs, magazines, software, books and mobile applications; trademarks in names, logos and characters; patents or patent applications for inventions related to products and services; and licenses of intellectual property rights of various kinds. The Company derives value from these assets through a range of business activities, including the theatrical release of feature films; the licensing of its feature films and television programming to multiple domestic and international television networks, premium pay television services, and SVOD services; the sale of products such as DVDs, Blu-ray Discs, magazines (including tablet editions of its magazines), videogames, mobile applications and digital copies of feature films and television programs; and the operation of websites. It also derives revenues related to its intellectual property through advertising in its magazines (including tablet editions of its magazines), networks, online properties and mobile applications and from various types of other licensing activities, including licensing of its trademarks and characters.

To protect these assets, the Company relies on a combination of copyright, trademark, unfair competition, patent and trade secret laws and contract provisions. The duration of the protection afforded to the Company’s intellectual property depends on the type of property in question and the laws and regulations of the relevant jurisdiction. In the U.S., the usual copyright term for authored works is the life of the author plus 70 years, and for “works made for hire,” the copyright term is the shorter of 95 years from the first publication or 120 years from creation. The Company also relies on laws that prohibit the circumvention of technological protection measures and trafficking in circumvention devices. The extent of copyright protection and benefit from laws prohibiting the circumvention of technological protection measures vary in different countries.

Piracy, particularly in the digital environment, continues to present a threat to revenues from products and services based on intellectual property. The Company seeks to limit that threat through a combination of approaches, including working with cross-industry groups, trade associations and strategic partners to develop and implement technological solutions to control digital piracy, offering legitimate market alternatives, applying technological protection measures, engaging in efforts to ensure effective and appropriately tailored legal remedies for infringement, enhancing public awareness of the meaning and value of intellectual property and promoting appropriate legislative and policy initiatives both in the U.S. and internationally. The Company vigorously pursues all appropriate avenues to protect its intellectual property, including sending takedown notices in appropriate circumstances and pursuing litigation and referrals to law enforcement against websites that distribute or facilitate the distribution of the Company’s content without authorization.

Content owners, such as the Company, are also increasingly working with network operators, such as Internet service providers (“ISPs”), to take action against users who distribute copyrighted content without authorization. In July 2011, the Motion Picture Association of America, the National Cable & Telecommunications Association and certain U.S.-based ISPs, among others, announced a new voluntary

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collaboration called the Copyright Alert System, which establishes a framework of best practices the ISPs will use to educate and notify Internet subscribers when their accounts may have been misused for copyright theft on peer-to-peer networks. The system consists of multiple alerts in electronic form, and also establishes a system of “mitigation measures” intended to deter copyright theft by those accounts that fail to respond to repeated alerts. Some ISPs are expected to begin rolling out their respective versions of the Copyright Alert System during the early part of 2013.

A variety of initiatives have been launched by government agencies and regulators to protect intellectual property. For example, in June 2010, the Department of Homeland Security’s Immigration and Customs Enforcement Office launched “Operation In Our Sites,” an initiative aimed at identifying websites that specialize in the online theft of copyrighted content and consumer products and curtailing the market for illegal content on the Internet. In addition, in October 2008, the Prioritizing Resources and Organization for Intellectual Property Act of 2007 (the “PRO-IP Act”) was signed into law in the U.S. The PRO-IP Act increased both civil and criminal penalties for counterfeiting and piracy of intellectual property associated with works of music and film, among other things; provided enhanced resources to law enforcement agencies for enforcing intellectual property rights; criminalized the export of counterfeit goods; and created the Intellectual Property Enforcement Coordinator, a position that is responsible for coordinating the efforts of various federal agencies to enhance the enforcement of intellectual property laws, such as through increased criminal prosecution of U.S. website operators engaged in copyright theft and counterfeiting.

Outside the U.S., laws and regulations relating to intellectual property protection and the effective enforcement of these laws and regulations vary greatly from country to country. However, the volume of actions against websites dedicated to copyright theft is increasing internationally, and certain countries have implemented or are considering implementing programs or remedies designed to address and deter widespread infringement. For example, certain countries have mandated systems of cooperation between rights holders and ISPs that require ISPs to notify account holders that their accounts have been used to commit infringing activity, such as illegal file sharing. If the illegal activity continues following additional notices, further steps may be taken to deter further infringement, which may range from educational measures to account suspension and termination. Furthermore, in several countries in the EU, rights holders have also pursued remedies based on the implementation of Article 8.3 of the European Copyright Directive, which obligates member states to ensure that rights holders are in a position to apply for an injunction against intermediaries whose services are being used by a third party to commit infringement. For example, successful actions have been brought by rights holders to require ISPs to block access to websites devoted to piracy in the U.K. and several EU countries, including Austria, Belgium, Denmark, Finland, Greece, Italy and the Netherlands. In October 2011, Australia, Canada, Japan, the Republic of Korea, Morocco, New Zealand, Singapore and the U.S. entered into The Anti-Counterfeiting Trade Agreement (“ACTA”), which will come into force after it has been ratified by at least six signatories. The ACTA would require border enforcement officials to be empowered to act against both imports and exports of counterfeit and pirated goods; include new rules on criminal seizure of equipment and materials used in counterfeiting offenses as well as the seizure of criminal proceeds from such offenses; clarify certain criminal penalties when content theft or counterfeiting is carried out for commercial advantage; and require the signing parties to address copyright piracy on digital networks, while aiming to preserve principles such as freedom of expression, fair process and privacy.

Judicial, legislative and administrative developments are taking place in certain jurisdictions that may have the impact of limiting the ability of rights holders to exploit and enforce certain of their exclusive intellectual property rights outside the U.S. For example, in the U.K., the Intellectual Property Office is examining certain aspects of U.K. copyright laws, which may result in proposals for additional copyright exceptions and limitations. In addition, in October 2011, a decision by the European Court of Justice held in the context of satellite broadcasts of live soccer matches that it was an unlawful restriction on competition for England’s Football Association Premier League to prohibit broadcasting licensees from distributing satellite decoder cards outside the territory for which the broadcasts were licensed for reception. The decision may affect the views of the European Commission with respect to certain territorially exclusive license arrangements. The European Commission will undertake a study of EU copyright law during 2013 with a view to identifying possible areas for revisions.

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Regulation Relating to Data Privacy, Data Security and Cybersecurity

The laws and regulations governing data privacy, data security and cybersecurity are complex and expanding in the U.S. and internationally. In the U.S., statutes such as the Children’s Online Privacy Act (“COPPA”), which affects the Company’s websites and online business activities; the privacy and security rule under the Health Insurance Portability and Accountability Act, which imposes privacy and security requirements on the Company’s health plans for employees and on service providers under those plans; and state statutes requiring notice to individuals when a data breach results in the release of personally identifiable information affect the Company’s business operations. In addition, the Company’s businesses that collect or make payments pursuant to credit and debit cards are subject to privacy and security rules imposed by the payment card industry as well as other regulations designed to protect against identity theft and fraud. Internationally, a number of countries have adopted comprehensive privacy regulations or legislation that affects the Company’s business operations, including the EU data protection directive that became effective in 1998. These laws and regulations are evolving and expanding, and the interest and actions by regulators and legislatures have been steadily increasing in recent years. New regulations that have been adopted or are being considered in the U.S. and internationally could affect how the Company collects, uses and protects data and operates its business, and could result in additional compliance costs.

For example, in December 2012, the Federal Trade Commission (the “FTC”) updated its regulations implementing COPPA, which prohibits website operators from collecting personal information online from children under the age of 13 without prior parental consent. Specifically, the FTC expanded certain definitions of “personal information” to include broader categories of data, such as IP addresses, geolocation data, screen names and mobile applications, and updated requirements for notice, parental consent, confidentiality and security. Website operators subject to COPPA are required to comply with the updated regulations by July 2013. The modifications could impose additional compliance costs and restrictions on the technical operations of children-targeted websites and digital services and on the types of permissible children-targeted marketing. In addition, in March 2012, the FTC issued a report on consumer privacy protection that called for more widespread adoption of self-regulatory measures such as website operators voluntarily agreeing not to monitor or record online behavior (i.e., “Do Not Track”). The FTC has also increased the number of enforcement actions against companies that fail to adhere to their privacy or data security commitments to consumers. Also in 2012, the Department of Commerce (“DOC”) issued a “green paper” on cybersecurity and the White House issued a white paper on consumer data privacy that includes a Consumer Privacy Bill of Rights. The National Telecommunications & Information Administration within the DOC plans to convene a multi-stakeholder process to implement the Consumer Privacy Bill of Rights through industry codes of conduct that would be enforceable by the FTC and State Attorneys General. The White House also has announced it would work with Congress to implement these rights through legislation.

In addition, a number of privacy and data security bills that address the collection, maintenance and use of personal information, web browsing and geolocation data, and establish data security and breach notification requirements have been adopted by or introduced in Congress. For example, in December 2012, Congress amended the Video Privacy Protection Act, which precludes disclosure of consumer video rental records by any person engaged in the business of rental, sale or delivery of pre-recorded video cassette tapes without explicit consent. The amendment clarifies that a consumer’s consent to share video information may be obtained on an ongoing basis, provided that the duration of the consent is limited to two years. Several Congressional hearings have examined privacy implications for online, offline and mobile data.

Several state legislatures have also adopted legislation that regulates how businesses operate on the Internet, including measures relating to privacy, data security and data breaches. For example, laws in numerous states require businesses to provide notice to customers whose personally identifiable information has been disclosed as a result of a data breach.

Foreign governments are also focusing on similar data privacy and security concerns. For example, in 2012, governments in China, Hong Kong, the Philippines and Singapore adopted new, or amended their existing, data privacy laws and, since 2011, governments in Australia and Brazil have proposed new regulations. In addition, in January 2012, the EU proposed a more stringent privacy regulation that would replace the existing EU Data

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Protection Directive, which sets baseline standards for the collection, use, disclosure, storage, security and transfer of personal data. The proposed regulation includes rules that broaden the definition of personal data, strengthen the rights of data subjects, enhance penalties for noncompliance and continue to restrict the transfer of personal data to countries outside the EU. Various policy options are also being considered at both the EU and member-state levels.

Regulation of Television Networks, Programming and Advertising

The businesses in the Networks and Film and TV Entertainment segments are subject to a number of laws and regulations relating to the distribution and licensing of television programming as well as the content of that programming and advertising and marketing. In the U.S., cable networks and premium pay television services, either directly or indirectly through their distribution partners, are subject to various obligations under the Communications Act of 1934, as amended, and related regulations issued by the Federal Communications Commission (the “FCC”). These obligations and regulations require closed captioning of programming for the hearing impaired, limit the amount and content of commercial matter that may be shown during programming aimed primarily at an audience of children aged 12 and under, and require the identification of (or the maintenance of lists of) sponsors of political advertising. Various other federal laws also contain provisions that place restrictions on violent and sexually explicit programming and provisions relating to the voluntary promulgation of ratings by the industry, and regulators, legislatures and policymakers have become increasingly interested in laws and regulations intended to protect the interests of children. For example, some U.S. policymakers have sought limitations on food and beverage marketing in media popular with children and teens. In December 2012, the FTC issued a follow-up report on food and beverage marketing to children and teens, which focused on marketing expenditures. Also, in January 2013, legislation was introduced by Congress directing the FTC, FCC and Department of Health and Human Services to work with the Academy of Science to study the impact on children of violence in video programming and videogames.

From time to time, the FCC conducts inquiries and rulemaking proceedings, which could lead to additional regulations that could have a material effect on the Company’s businesses. In the last several years, the FCC has initiated rulemaking proceedings regarding program carriage rules and bundling practices in carriage agreements and initiated an inquiry to broadly survey the state of children’s media and seek comment on existing ratings, advertising and media literacy efforts. It is unclear what, if any, action the FCC will take on these matters. More recently, the FCC has adopted “net neutrality” rules and initiated the following proceedings and inquiries:

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In addition, in international territories, there are various laws and regulations relating to the distribution or licensing of television programming and other products. These include television licensing requirements, laws providing for minimum percentages of local content and maximum percentages of foreign content on television, local language advertising requirements, laws and regulations imposing pricing, exclusivity and importing restrictions, editorial control, translation or local editing requirements and other nationality-based restrictions. There are also a number of laws and regulations in these international territories relating to the nature of content and advertising and marketing efforts, including content codes and laws requiring government approval of certain content prior to exhibition, consumer protection laws (particularly those relating to advertisements and programming aimed at children) and laws restricting the amount of advertising permitted on television networks. For example, the EU Audio Visual Media Services directive, which allows EU member states to adopt more restrictive regimes and applies to all programs produced after December 2009, obligates broadcasters to notify viewers if an audiovisual program contains paid product placement, bans any form of product placement in children’s and news programming and prohibits product placement of tobacco products and prescription medication. The directive also imposes an obligation on EU member states and the European Commission to encourage broadcasters and channel providers to develop codes of conduct regarding advertising for foods high in fat, salt and sugar in or around children’s programming. Accordingly, in the U.K., the Office of Communications has restricted such television advertising, and other EU jurisdictions have required that nutritional information be included in food advertisements. Outside the EU, other governments are considering food advertising restrictions similar to those in the U.K., including in Australia, Brazil, Chile, Ireland, Mexico, Norway, Peru and Singapore. Finally, several governments, including in Argentina, Brazil, India and Mexico, have recently proposed, enacted or more strictly enforced regulations that further limit the amount of advertising content that can be aired on television networks.

Regulation of the Distribution and Licensing of Motion Pictures

In countries outside the U.S., there are a variety of laws and regulations relating to the distribution or licensing of motion pictures for exhibition on broadcast and cable networks. These include copyright laws and regulations, television licensing requirements, trade regulations, laws providing for minimum percentages of local content on broadcast television and maximum percentages of foreign programming and laws that limit increases in prices paid by distributors to content providers. Other laws and regulations in certain countries provide for limits on the number of foreign films that may be exhibited in such countries in a calendar year.

Marketing Regulation

Time Inc.’s U.S. magazine subscription, direct marketing and advertising sales activities, as well as marketing and advertising sales activities by other divisions of the Company, are subject to regulation by the FTC and each of the states under general consumer protection statutes prohibiting unfair or deceptive acts or practices. Certain marketing activities are also subject to specific federal statutes and rules, such as the Telephone Consumer Protection Act, COPPA, the Gramm-Leach-Bliley Act (relating to financial privacy) and the FTC Mail or Telephone Order Merchandise Rule. Other statutes and rules also regulate conduct in areas such as privacy, data security, product safety and telemarketing. Time Inc. also regularly receives and resolves routine inquiries from state Attorneys General and is subject to agreements with state Attorneys General addressing some of Time Inc.’s marketing activities.

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In connection with their magazine subscription and marketing activities outside the U.S., Time Inc. and the Company’s other divisions are subject to many local laws and regulations relating to consumer protection, privacy, data security and electronic marketing, especially across Europe and the Asia Pacific region. In the EU, these laws and regulations include the European Data Protection Directive and the European Directive on Privacy and Electronic Communications. In addition, there are various international codes, directives, laws and regulations relating to the nature of content and advertising, including content restriction laws and consumer protection laws (such as laws restricting food and beverage advertisements aimed at children, laws relating to political advertisements, laws relating to electronic commerce and the marketing of pharmaceutical products and alcoholic beverages).

Postal Regulation

Time Inc.’s U.S. magazine subscription business and the Company’s direct marketing and book publishing businesses are subject to laws and regulations relating to the U.S. Postal Service. In March 2012, the House of Representatives Committee on Oversight and Government Reform introduced the Postal Reform Act of 2012. In April 2012, the U.S. Senate passed the 21 ^st Century Postal Service Act of 2012. Both bills provide for various structural reforms of the U.S. Postal Service to restore its financial solvency. If postal reform legislation is enacted, it could result in, among other things, increases in postal rates, local post office closures and the elimination of Saturday mail delivery. In January 2013, the U.S. Postal Service announced that it would suspend Saturday mail delivery beginning in August 2013. The suspension of Saturday mail delivery or other changes to the U.S. Postal Service as a result of the enactment of postal reform legislation could have an adverse effect on Time Inc.’s businesses.

FINANCIAL INFORMATION ABOUT SEGMENTS, GEOGRAPHIC AREAS AND BACKLOG

Financial and other information by segment and revenues by geographic area for each year in the three-year period ended December 31, 2012 are set forth in Note 15 to the Company’s consolidated financial statements, “Segment Information.” Information with respect to the Company’s backlog, representing future revenue not yet recorded from cash contracts for the licensing of theatrical and television product, at December 31, 2012 and December 31, 2011, is set forth in Note 16 to the Company’s consolidated financial statements, “Commitments and Contingencies — Commitments — Programming Licensing Backlog.”