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 reportable segments:

For more information about the Company’s reportable segments, see “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Overview.”

Over the last several years, Time Warner has transitioned its business to focus on the production and distribution of high-quality video content to take advantage of growing global demand. Time Warner’s businesses work together to leverage their strong brands, distinctive intellectual property and global scale to produce and distribute content that resonates deeply with consumers. As the television industry continues to evolve, with developments in technology, rapid growth of new video services and shifting consumer viewing habits, Time Warner is well-positioned to address and capitalize on these changes. Accordingly, the Company is focused on both strengthening its position within the traditional TV ecosystem and pursuing growth opportunities outside the ecosystem.

Within the traditional TV ecosystem, the Company is a leader in improving the value of traditional pay television subscriptions for consumers and affiliates. The Company is continuing to increase its investment in high-quality distinctive programming and sports programming, make more of its content available on-demand and on a growing variety of devices and invest in technology to enhance the consumer experience. The Company is also supporting the development of better user interfaces for on-demand viewing of programming offered through affiliates. To make television advertising on Turner’s networks more attractive and valuable to advertisers, Turner is developing new advertising offerings that use data and analytics designed to enable advertisers to better reach their target audiences and improve their ability to measure the effectiveness of their advertisements.

The Company is also capitalizing on new growth opportunities outside the traditional TV ecosystem by increasing its investments in new digital products and technologies, including launching and investing in SVOD and other over-the-top (“OTT”) services, including HBO NOW. Across its businesses, Time Warner is also investing in content that will appeal to consumers who view it outside the traditional TV ecosystem. The Company is also focused on increasing the digital sales and rentals of its film and television content and is a leader in various initiatives designed to make digital ownership of content more compelling for consumers.

At December 31, 2015, the Company had a total of approximately 24,800 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. In addition, the term “Home Box Office” is used to refer to Home Box Office, Inc., a subsidiary of Time Warner, the term “Turner” is used to refer to Turner Broadcasting System, Inc., a subsidiary of Time Warner, and the term “Warner Bros.” is used to refer to Warner Bros. Entertainment Inc., a subsidiary of Time Warner.

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,

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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 in this report 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 its website into this report.

TURNER

Turner owns and operates a leading portfolio of domestic and international cable television networks and related properties that offer entertainment, sports, kids and news programming on television and digital platforms for consumers around the world. Turner operates more than 180 channels globally. In the U.S., its networks and related properties include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Cartoon Network, Boomerang, CNN and HLN. Turner’s digital properties include bleacherreport.com and the CNN digital network. Outside the U.S., Turner’s portfolio of brands and digital businesses reaches consumers in more than 200 countries.

Turner’s programming is primarily distributed by cable system operators, satellite service distributors, telephone companies and other distributors (known as affiliates) and is available to subscribers of the affiliates for viewing (i) on television, (ii) via streaming online and on mobile devices through Turner’s digital properties and affiliates’ services and (iii) on demand on television through Turner’s digital properties and affiliates’ digital VOD services. In addition to distributing Turner’s programming as part of their traditional multichannel video service offerings, some affiliates are distributing some of Turner’s programming as part of their offerings of smaller bundles of networks and streaming services. Turner is also pursuing non-traditional distribution options for its programming and has made some of its programming available through SVOD and other OTT services, including DISH’s Sling TV and Sony PlayStation.

Turner continues to strengthen the programming on its cable television networks by increasing its investment in high-quality original programming, modifying the mix of programming on its networks to increase the amount of original programming and re-positioning or re-branding some of its networks. Over the past several years, Turner has broadened the scope of CNN’s programming to include compelling storytelling about important events, people and places through original programming and long-form documentaries and it has strengthened the programming at truTV, where it has rebranded the network to focus on light-hearted comedy aimed at adults. Turner plans to reposition TNT and TBS beginning in 2016 to focus on distinctive original programming that is aimed at younger audiences. Turner also is continuing to expand the amount of its programming available on demand to include complete current seasons of popular programming from Turner’s networks, and is continuing to support the development of better user interfaces for on-demand viewing of programming offered through affiliates. As part of its efforts to improve the consumer experience, Turner is also continuing to support industry efforts to improve the measurement of viewing and audience engagement across all platforms. To further enhance the viewing experience while delivering more value to advertisers, Turner plans to reduce the advertising load on primetime original programs on truTV beginning in late 2016 and on select programming on its other networks in 2016.

Turner is also increasing its investments in new digital products and technology. For example, in August 2015, Turner acquired a majority ownership interest in iStreamPlanet Co., LLC (“iStreamPlanet”), a provider of streaming and cloud-

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based video and technology services, which is expected to improve Turner’s digital streaming capabilities. In addition, Turner is focused on making its television advertising more attractive and valuable to advertisers by using data and analytics to develop new advertising offerings that enable advertisers to better reach their target audiences and improve their ability to measure the effectiveness of their advertisements. Turner is also developing content for distribution outside the traditional television ecosystem. In 2015, Turner launched Super Deluxe, its digital production studio to develop original short form digital content, and CNN launched Great Big Story, an independent news brand that distributes its content via digital properties for mobile devices and social networks.

Turner is continuing to increase its scale and strengthen its competitive position internationally through strategic regional channel launches, partnerships and acquisitions in key territories, and it is placing greater emphasis on creating local programming to strengthen its brands internationally.

Turner’s digital properties consist of its own websites and websites Turner manages and/or operates for sports leagues where Turner holds the related programming rights. Turner’s CNN digital network is a leading digital news destination, and Turner’s bleacherreport.com is the number two digital sports destination, in each case, based on the number of average monthly domestic multi-platform unique visitors for the year ended December 31, 2015. Turner’s other websites include tntdrama.com , TBS.com , adultswim.com and cartoonnetwork.com . Digital properties Turner manages and/or operates for sports leagues include NBA.com , NBA Mobile , NCAA.com and PGA.com . Turner’s digital properties collectively averaged approximately 115 million average monthly domestic multi-platform unique visitors (based on data sourced from comScore Media Metrix) during the year ended December 31, 2015.

Entertainment

Domestic Entertainment

Turner’s domestic entertainment networks collectively provide a blend of original series, acquired series and movies, sports and reality programming. For the year ended December 31, 2015, Turner’s TNT, TBS and Adult Swim were three of the top ten primetime advertising-supported cable networks among adults 18-49 in the U.S., and Adult Swim was the top total day advertising-supported cable network among adults 18-34 in the U.S. Turner has been increasing the amount of original programming on TNT and TBS, and it plans to continue to do so over the next several years. Ownership of a larger portion of its content will provide Turner the flexibility to take advantage of increasing licensing opportunities and provide consumers access to more of its content through increased on demand availability.

TNT

TNT focuses on drama and is home to syndicated series and a growing roster of original series, as well as sports and network premiere motion pictures. As of December 2015, TNT reached 93.2 million domestic television households as reported by Nielsen Media Research (“Nielsen”). For the 2015-2016 season, TNT’s returning original series include Cold Justice , The Last Ship , The Librarians , Major Crimes , Murder in the First and Rizzoli   & Isles , and its new original series include Animal Kingdom and Cold Justice: Sex Crimes . For the 2015-2016 season, TNT’s syndicated series include Bones , Castle , Charmed and Grimm . TNT and TBS are home to the Live Nation Music Awards and the Screen Actors Guild Awards , and TNT, TBS and truTV are home to the iHeartRadio Music Awards .

TBS

TBS focuses on contemporary comedies, as well as a growing roster of original series, sports and acquired television series and movies. As of December 2015, TBS reached 94.5 million domestic television households as reported by Nielsen. For the 2015-2016 season, TBS’ returning original series include American Dad! , and its new original series include America’s Next Weatherman , Angie Tribeca , The Detour , Separation Anxiety , Search Party and Wrecked . Syndicated series for the 2015-2016 season include 2 Broke Girls , The Big Bang Theory , Family Guy , Friends , New Girl and Seinfeld . TBS is also the home of the late night talk shows Conan and Full Frontal with Samantha Bee .

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Adult Swim

Adult Swim is an evening and overnight block of programming airing on Turner’s Cartoon Network. As of December 2015, Adult Swim reached 94.3 million domestic television households as reported by Nielsen. Adult Swim is aimed at young adult audiences and offers original and syndicated animated and live-action comedy programming. For the 2015-2016 season, Adult Swim’s original series include Black Jesus , Childrens Hospital , The Eric Andre Show , Infomercials , Mike Tyson Mysteries, Mr. Pickles , the mini-series Neon Joe, Werewolf Hunter , Rick   & Morty , Robot Chicken, Squidbillies , Your Pretty Face is Going to Hell and The Venture Brothers .

truTV

truTV focuses on entertainment programming aimed at adult audiences with the tag line “Way More Fun.” As of December 2015, truTV reached 89.8 million domestic television households as reported by Nielsen. For the 2015-2016 season, truTV’s returning original series include Billy on the Street , The Carbonaro Effect , Hack My Life and Impractical Jokers , and its new original series include 10 Things , Adam Ruins Everything , Almost Genius , Comedy Knockout , Fameless , Friends of the People , Road Spill , Santas in the Barn , Six Degrees of Everything , Super Into and Tru Inside . truTV plans to expand its programming to include scripted series, with its first scripted series ( Those Who Can’t ) scheduled to premiere in 2016. In October 2015, Turner announced that truTV plans to reduce its advertising load for primetime original programs beginning in late 2016 to improve the consumer viewing experience and increase the value of truTV’s remaining advertising inventory.

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, specials and regular programming events that include “The Essentials,” “31 Days of Oscar” and “Summer Under the Stars.”

International Entertainment

Outside the U.S., Turner owns and/or operates regional entertainment networks providing a variety of programming, such as motion pictures and series, documentaries, fashion and lifestyle content, music videos, sports and travel. In Latin America, Turner is the number one provider of multichannel television in the region, and it owns and operates regional entertainment networks, including Glitz*, HTV, I-Sat, Infinito, MuchMusic and Space. Turner also owns and operates Chilevisión, a free-to-air television broadcaster in Chile, and Esporte Interativo, a Brazilian linear television channel and streaming service that airs sports programming, including programming from South American and European soccer leagues. Turner also operates several regional entertainment networks in Europe and the Middle East, including TCM, TNT and TNT Glitz. In Asia, Turner operates several regional entertainment networks, including TCM, truTV, HBO South Asia, WarnerTV and WB in India, Oh!K in Singapore, and MondoTV and Tabi Channel in Japan.

Sports

Turner Sports produces award-winning sports programming and content for Turner’s TNT, TBS and truTV networks and related digital properties. Turner’s sports programming helps drive value across its networks in the form of higher affiliate fees, ratings and advertising rates as well as more promotional opportunities.

Turner’s sports programming features licensed programming from the National Basketball Association (“NBA”) through the 2024-2025 season, Major League Baseball (“MLB”) through 2021, The National Collegiate Athletic Association (the “NCAA”) for the Men’s Division I Basketball Tournament through 2024, and the Professional Golfers’ Association (“PGA”) through 2019. NBA games and PGA tournaments air on the TNT network, and MLB games air on the TBS network. TNT airs the studio program Inside the NBA and, during the 2015-2016 season, will air a new reality competition series, The Dunk King . Turner also operates NBA TV, an advertising-supported cable network owned by the NBA, featuring NBA exhibition, regular season and playoff games and related programming. The NCAA Men’s Division I Basketball Tournament games air on the TNT, TBS and truTV networks and on the CBS network under an agreement among Turner, CBS Broadcasting, Inc. and the NCAA. Turner’s networks carried the NCAA Final Four semifinal games in 2015 and, in 2016, Turner’s networks

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will carry the NCAA Final Four semifinal games and championship game. After 2016, Turner’s networks and CBS will carry the NCAA Final Four semifinal games and championship game in alternate years. In September 2015, Turner announced a partnership with WME|IMG to form a multiplayer competitive videogaming league called eLeague with live events scheduled to begin in 2016. The live events will air on TBS and will be available across multiple digital platforms.

Turner Sports operates Bleacher Report, a leading online and mobile sports property that provides team-specific sports content and real-time event coverage and provides Turner with cross platform programming and marketing opportunities. For the year ended December 31, 2015, bleacherreport.com reached approximately 37 million average monthly domestic multi-platform unique visitors. Turner also manages and operates NCAA.com , NCAA March Madness Live , which provides live and on-demand streaming video of games, NBA.com , which provides live streaming of games, and PGA.com .

Kids

Cartoon Network and Boomerang offer original, acquired and classic animated and live-action entertainment aimed at kids in the U.S. and in international territories. Turner has been focused on significantly expanding its global kids business, increasing its collaboration with Warner Bros. on television programming based on Warner Bros.’ and DC Entertainment’s brands and characters and growing its consumer products business. In June 2015, Turner and Warner Bros. announced a strategic partnership to produce and distribute worldwide close to 450 half-hour episodes of original animated programming across the Cartoon Network and Boomerang networks. This partnership is intended to drive the success of these networks and foster broader global exposure for Warner Bros.’ existing franchises while also helping launch new long-term franchises. In February 2016, Boomerang and Warner Bros. announced that Boomerang will be the exclusive broadcast partner for DC Super Hero Girls, a consumer product and digital content partnership with Mattel centered on iconic female DC Entertainment characters such as Supergirl and Wonder Woman. The premiere of the programming on Boomerang is expected to coincide with the launch of the DC Super Hero Girls consumer products. Turner is increasingly managing programming decisions for its kids business on a global basis, whereas, historically, it had managed programming decisions for its international and domestic kids businesses separately.

Cartoon Network

Cartoon Network offers original and syndicated animated and live-action series and motion pictures for youth and families. As of December 2015, Cartoon Network reached 94.3 million domestic television households as reported by Nielsen. For the 2015-2016 season, Cartoon Network’s original animated series include Warner Bros.’ Be Cool, Scooby Doo! and Teen Titans Go! , as well as Adventure Time , The Amazing World of Gumball , Clarence , Steven Universe, Uncle Grandpa and We Bare Bears .

Boomerang

Boomerang offers exclusive new original content from Warner Bros., as well as classic animated entertainment from the Warner Bros., Hanna-Barbera, MGM and Cartoon Network libraries, such as The Flintstones , The Jetsons , Pink Panther , Tom   and Jerry and Yogi Bear . For the 2015-2016 season, Boomerang is offering exclusive new original series, such as Bunnicula , The Tom and Jerry Show and Wabbit from Warner Bros., as well as Inspector Gadget and Mr.   Bean . In 2014, Boomerang began airing advertising for the first time in the U.S. and some international territories and began airing advertising in its other international territories in 2015.

Turner’s kids business is a key part of its international operations, and Cartoon Network is the number one kids network in several territories outside the U.S., including Argentina, Australia, Brazil, Italy, Mexico, South Africa, Spain and Thailand. Turner’s kids networks outside the U.S. include Cartoon Network, Boomerang and Tooncast in Latin America; BOING, Boomerang, Cartoon Network and Cartoonito in Europe and the Middle East; and Boomerang, Cartoon Network, POGO and Toonami in Asia.

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News

CNN

CNN is the original cable television news service. As of December 2015, CNN reached 94.3 million domestic television households as reported by Nielsen. As of December 31, 2015, CNN managed 41 news bureaus and editorial operations, 30 of which are located outside the U.S. Turner is focused on maintaining CNN’s leadership in worldwide breaking-news and political coverage while continuing to broaden the scope of its programming. CNN’s original programming for the 2015-2016 season includes Anthony Bourdain: Parts Unknown ; Death Row Stories ; Inside Man , hosted by documentary filmmaker Morgan Spurlock; This is Life with Lisa Ling and The Wonder List with Bill Weir . CNN plans to increase the amount of original programming on CNN over time. For the 2015-2016 season, CNN’s other programs include Anderson Cooper 360 ^o ,  New Day and  The Situation Room . CNN is also focused on expanding its digital presence by developing mobile products, increasing the amount of original short form video content it offers online and growing its online political news presence. In 2015, CNN launched Great Big Story and in 2014, CNN launched CNNGo, which allows subscribers to watch CNN’s news and original programming live and on demand.

Internationally, CNN reaches approximately 300 million households outside the U.S. as of December 31, 2015. CNN Worldwide is a portfolio of more than 20 news and information services across cable, satellite, radio, wireless devices and the Internet in more than 200 countries as of December 31, 2015. CNN Worldwide’s networks and businesses include CNN U.S., CNN International, CNN en Español, CNNj, CNN.com, CNN Airport Network, CNN Radio, CNN Newsource and HLN.

HLN

HLN is a CNN Worldwide network that focuses on news, information, videos and talk shows. For the 2015-2016 season, HLN’s programs include The Daily Share , Dr.   Drew , Morning Express with Robin Meade and Nancy Grace .

How Turner Generates Revenues

Turner generates revenues principally from providing programming to affiliates that have contracted to receive and distribute the programming to subscribers, the sale of advertising on its networks and the digital properties it owns or manages for other companies, and the license of its original programming to SVOD and other OTT services and its brands and characters for consumer products. Turner’s agreements with its affiliates are typically multi-year 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, the package of programming provided to the affiliate by each network and the competitive environment. Turner’s advertising revenues are generated from a wide variety of advertiser categories, and the advertising arrangements for its networks generally have terms of one year or less. In the U.S., the advertising revenues generated by Turner are a function of the size and demographics of the audience delivered, the number of units of time sold and the price per unit. Turner sells some 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. 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.

HOME BOX OFFICE

Home Box Office owns and operates leading multichannel premium pay television services, HBO and Cinemax. Its businesses consist principally of premium pay television services and the HBO NOW streaming service domestically and premium pay, basic tier television and streaming services internationally, as well as home entertainment and content licensing.

Home Box Office is a leader in offering high-quality programming, and it continues to invest in a diverse roster of programming to enhance the appeal of its products and services. Home Box Office is also expanding the scope of its programming to appeal to viewers who are watching programming on demand on non-traditional platforms and devices. Home Box Office is a leader in providing consumers with access to its programming when and where they choose

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and on a wide variety of devices and platforms through (i) Home Box Office’s on-demand products, HBO On Demand and Cinemax On Demand; (ii) its HBO GO and MAX GO streaming video-on-demand platforms; (iii) HBO NOW, Home Box Office’s domestic streaming service, which launched in April 2015; and (iv) its international streaming services. Home Box Office’s on demand products and platforms enhance the value of its premium pay television services to consumers and affiliates, and the launch of HBO NOW enables Home Box Office to reach households that do not subscribe to multichannel video service offerings. Home Box Office is continuing to invest in technology to enhance functionalities and the overall consumer experience on the HBO GO, MAX GO and HBO NOW streaming services.

In the U.S., Home Box Office’s premium pay television service is distributed by affiliates. HBO NOW is distributed by third parties, including digital distributors and some traditional affiliates. In addition, Home Box Office sells its original programming in both physical and digital formats and licenses some of its programming to the Amazon Prime SVOD service.

Internationally, Home Box Office tailors the distribution of its programming for each territory using one or more of the following distribution models: premium pay and basic tier television services distributed by affiliates, licensing and/or sale of programming, streaming services distributed by third parties and direct-to-consumer streaming services. HBO- and Cinemax-branded premium pay, basic tier television and streaming services are distributed in over 60 countries in Latin America, Asia and Europe. Home Box Office’s original programming is also available to consumers in over 150 countries, both via licenses to international television networks and SVOD and other OTT services and through sales of programming in physical and digital formats.

Home Box Office Programming

Domestic Original Programming

Home Box Office continues to invest in high quality original programming for HBO and Cinemax.

HBO’s original programming features award-winning and critically acclaimed dramatic and comedy series, such as Game of Thrones ,   Girls ,  The Leftovers , Last Week Tonight with John Oliver , Silicon Valley , True Detective and  Veep , as well as HBO films, such as Bessie and Nightingale , mini-series, such as Olive Kitteridge and Show Me a Hero , boxing matches and other sports programming, documentaries, such as Citizenfour , Going Clear: Scientology and the Prison of Belief and The Jinx: The Life and Death of Robert Durst and comedy and music specials. The quality and diversity of HBO’s original programming differentiates HBO from other premium pay television services, basic television networks and SVOD and other OTT services, while enhancing the value of the HBO brand both domestically and internationally. This programming also continues to build the value of Home Box Office’s content library while increasing the value of HBO across its businesses.

Home Box Office continues to expand HBO’s roster of original series. In 2015, Home Box Office premiered new series Ballers , The Brink and Togetherness . In 2016, Home Box Office plans to premiere four additional new series, including Vinyl (from Martin Scorsese and Mick Jagger), Divorce (starring Sarah Jessica Parker) and Westworld (produced by Warner Bros.). Home Box Office has also worked closely with Warner Bros. on original programming such as The Leftovers and The Casual Vacancy .

Home Box Office is also expanding the scope of the programming it offers to reach new audiences and support both its premium pay television services and HBO NOW. In 2016, Home Box Office will add new episodes and over 150 library episodes of Sesame Street to its kids programming, and will also begin airing a daily newscast from VICE and original programming from Bill Simmons and Jon Stewart.

In 2015, Home Box Office received a record 43 Primetime Emmy Awards, the most of any network for the 14th year in a row, with Game of Thrones winning 12 awards. In 2015, Home Box Office also won Academy Awards for Best Documentary Feature ( Citizenfour ) and Documentary Short Subject ( Crisis Hotline: Veterans Press 1 ), a Golden Globe Award ( The Normal Heart ), three George Foster Peabody Awards for documentaries and two Sports Emmy Awards.

Cinemax’s original primetime series in 2015 included Banshee, The Knick and Strike Back . In 2016, Cinemax plans to premiere the series Outcast and air a new season of Banshee .

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Domestic Licensed Programming

Domestically, a significant portion of the programming on HBO and Cinemax consists of uncut and uncensored feature films, including recently-released feature films. Home Box Office has long-term licensing agreements with major film studios and independent producers and distributors, including Warner Bros., Twentieth Century Fox (“Fox”), Universal Pictures (“Universal”) and Summit Entertainment. The agreements provide Home Box Office the exclusive right to exhibit and distribute on its premium pay television services and digital platforms the entire feature film slate theatrically released in the U.S. by these studios during specified release years (other than certain animated films and certain other specified films) during the applicable license period. A majority of these agreements cover theatrical film slates through release year 2021 or beyond. Half of the top 40 feature films theatrically released in 2015 (as determined based on domestic box office receipts) will be exhibited exclusively on the HBO and Cinemax premium pay television services and digital platforms during the applicable license periods. Home Box Office also has agreements to license older films with Fox, Universal, Warner Bros. and a number of other major studios and independent distributors.

International Programming

A substantial portion of the programming on Home Box Office’s international premium pay, basic tier television and streaming services consists of feature films licensed from major studios in the U.S. Home Box Office also has agreements to license older films from a number of major U.S. studios and other domestic and international independent distributors. In addition to films, Home Box Office’s international content offerings may feature licensed HBO- and Cinemax-branded television programming, local language original programming and/or U.S. television programming produced by other production studios.

Home Box Office’s Businesses and Revenues

Domestic Premium Pay Television and Streaming Services

Home Box Office generates revenues principally from providing its programming to domestic affiliates and other distributors that have contracted to receive and distribute the programming to their customers who subscribe to the HBO and Cinemax services. At December 31, 2015, Home Box Office had approximately 49 million domestic premium pay subscribers, including HBO NOW, and HBO was the most widely distributed domestic multi-channel premium pay television service.

The HBO and Cinemax services are distributed by Home Box Office’s domestic affiliates that have contracted to receive and distribute Home Box Office’s programming to their customers who subscribe to the HBO and Cinemax services. In addition to viewing HBO and Cinemax programming on an HBO or Cinemax multiplex television channel, subscribers can also view HBO and Cinemax programming through Home Box Office’s on-demand products, HBO On Demand and Cinemax On Demand, and its HBO GO and MAX GO streaming video-on-demand platforms. The programming on HBO GO and MAX GO includes most seasons of HBO’s and Cinemax’s original series, as well as feature films, HBO mini-series and films, sports programming, documentaries, comedy and music specials, bonus features and behind-the-scenes extras. Home Box Office’s agreements with its domestic affiliates are typically long-term arrangements that provide for annual service fee increases and marketing support. While fees to Home Box Office under affiliate agreements are generally based on the number of subscribers served by the affiliates, the relationship between subscriber totals and the amount of revenues earned depends on the specific terms of the applicable agreement, which may include basic and/or pay television subscriber thresholds, volume discounts and other performance-based discounts. Marketing and promotional activities intended to retain existing subscribers and acquire new subscribers may also impact revenue earned. In addition to offering HBO as part of their multichannel video subscription packages, some affiliates are offering their subscribers smaller bundles of networks that include broadcast and/or select basic cable networks and HBO.

HBO NOW is available across a wide variety of platforms and devices, including through digital distributors such as Amazon, Apple, Google and Roku as well as some of Home Box Office’s traditional affiliates. Home Box Office plans to continue to expand the number of distribution partners and supported platforms and devices for HBO NOW. HBO NOW is generally offered with a free trial period, and a user generates revenues for Home Box Office and is considered a subscriber after the end of the free trial period. Like HBO GO, HBO NOW offers most seasons of HBO’s original series as well as

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feature films, HBO mini-series and films, sports programming, documentaries, comedy and music specials, bonus features and behind-the-scenes extras.

International Premium Pay, Basic Tier Television and Streaming Services

Unique, country-specific HBO- and Cinemax-branded premium pay, basic tier television and streaming services are distributed in more than 60 countries in Latin America, Asia and Europe. In Asia and Europe (excluding the Netherlands), Home Box Office operates through consolidated, wholly-owned subsidiaries. In Latin America and the Netherlands, Home Box Office operates through unconsolidated joint ventures. Home Box Office had approximately 82 million international premium pay, basic tier television service and broadband-only subscribers at December 31, 2015, including subscribers through Home Box Office’s unconsolidated joint ventures. Home Box Office transferred the operation and certain contracts of an HBO-branded basic tier television service in India to Turner effective January 2015. The service, which had approximately 15.8 million subscribers at December 31, 2014, continues to use the HBO brand under Turner’s operation. As a result, the subscribers of this service are not included as Home Box Office subscribers effective January 2015. HBO GO was available to HBO premium pay television subscribers in over 30 countries and territories at December 31, 2015, and Home Box Office plans to make HBO GO available to HBO premium pay television subscribers in additional countries and territories in 2016. Home Box Office generates revenues primarily from providing its programming to international affiliates. The terms of Home Box Office’s agreements with its international affiliates vary from country to country, and the amount of revenues attributable to such agreements can be based on a number of factors such as basic and/or pay television subscriber thresholds, performance-based or volume discounts, negotiated minimum guarantees or flat-fee arrangements.

Home Box Office operates a direct-to-consumer streaming service in the Nordic region. In addition, in 2015, HBO Latin America (Home Box Office’s largest joint venture) launched streaming services distributed by third parties in Colombia and Mexico and announced plans to launch streaming services in other parts of Latin America and the Caribbean. In January 2016, Home Box Office also announced that it plans to launch in the fourth quarter of 2016 both a direct-to-consumer streaming service and a streaming service offered exclusively through a third-party distribution partner in Spain. Home Box Office expects to expand the distribution of streaming services to additional territories around the world.

Home Entertainment and Content Licensing

Home Box Office also generates revenues from the exploitation of its original programming through multiple other distribution outlets. Home Box Office sells its original programming in both physical and digital formats in the U.S. and various international regions through a wide variety of digital storefronts and traditional retailers. Significant home entertainment releases in 2015 included Game of Thrones: The Complete Fourth Season , Silicon Valley: The Complete First Season , Veep: The Complete Third Season and Boardwalk Empire: The Complete Fifth Season and The Complete Series . In addition, Home Box Office also licenses some of its programming to the Amazon Prime SVOD service. Finally, Home Box Office has also licensed certain of its original programming, such as Sex and the City , as well as Everybody Loves Raymond , which was produced by Home Box Office but aired on broadcast television, to domestic basic cable networks and local television stations.

Home Box Office licenses both individual programs and packages of programs to television networks and SVOD services in over 150 countries, including arrangements under which it licenses programming to television networks that are branded as the “Home of HBO” in countries such as the U.K., Australia, France, Germany and Israel and as “HBO Canada” in Canada. In 2016, Home Box Office expanded its agreement with Sky Television, which provides Sky Atlantic exclusive rights to air HBO programming in Austria, Germany, Ireland, Italy and the U.K. until 2020. In 2015, Home Box Office also entered into a long-term agreement with Bell Media to provide Bell Media the exclusive rights to distribute HBO programming across linear, on-demand and streaming platforms in Canadian territories in which Bell Media operates.

WARNER BROS.

Warner Bros. is the largest television and film studio in the world based on total studio revenues as of December 31, 2015. Its businesses consist principally of the production, distribution and licensing of television programming and feature films and the distribution of home entertainment product in both physical and digital formats, as well as the production and

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distribution of videogames and consumer product and brand licensing. Warner Bros.’ businesses benefit from a shared infrastructure, including shared production, distribution, marketing and administrative functions and resources.

Warner Bros. is the #1 producer of primetime television series for the U.S. broadcast networks for the 2015-2016 television season, producing over 30 series, a position it has held for 12 of the past 13 television seasons. Overall, Warner Bros. will produce over 60 television series in the U.S. for the 2015-2016 television season. In addition, Warner Bros. licenses its U.S. programming in over 190 countries at December 31, 2015. Warner Bros. is expanding and diversifying the genres and types of television programming it produces as well as the buyers of its programming domestically, and is also focused on expanding its international television production business through its global network of local production companies in 16 international territories.

Warner Bros. ranked as the #3 U.S. videogame publisher, with two titles, Mortal Kombat X and Batman: Arkham Knight , ranked in the top ten videogame releases in 2015. Warner Bros.’ films generated over $3.7 billion at the global box office, and Warner Bros. was the #4 film studio in global box office receipts in 2015. Warner Bros. has been the #1 or #2 film studio in domestic box office receipts for 9 of the past 12 years and the #1 or #2 film studio in global box office receipts for 10 of the past 12 years.

Warner Bros. is focusing on increasing the digital sales and rentals of its film and television content and is a leader in a variety of initiatives designed to make digital ownership more compelling for consumers. In addition, Warner Bros. has led the home entertainment industry in sales of home entertainment product in physical formats for 19 years. At December 31, 2015, Warner Bros.’ vast content library consists of more than 75,000 hours of programming, including over 7,000 feature films and 5,000 television programs comprised of tens of thousands of individual episodes.

Warner Bros.’ portfolio of leading brands includes DC Entertainment’s brands (DC Comics, Vertigo and MAD Magazine) as well as the Looney Tunes and Hanna-Barbera brands. DC Comics’ characters include such iconic characters as Batman, the Flash, Green Arrow, Superman and Wonder Woman, while Warner Bros.’ other characters include Harry Potter, Bugs Bunny, Scooby-Doo and Tom and Jerry, among many others. Warner Bros. is focused on expanding its brands and characters across all its businesses, from film to television programming and the videogames it produces.

Warner Bros. has developed strong global franchise properties from its brands and featuring its characters, including film franchises such as the Batman and Harry Potter series and The Hobbit and The Lord of the Rings trilogies, and it is focused on extending its existing global film franchises. Warner Bros. plans to release at least 10 films based on the DC Entertainment universe of characters from 2016 through 2020, including Batman v Superman: Dawn of Justice and Suicide Squad in 2016, three LEGO-branded films beginning in 2017, and three films in partnership with J.K. Rowling based on the world of Harry Potter from 2016 through 2020, beginning with Fantastic Beasts and Where to Find Them in 2016. Warner Bros. is also focused on creating new global film franchises and in 2015 announced plans to release three films centered on Godzilla and King Kong in partnership with Legendary Pictures and a new film franchise based on the role playing game Dungeons & Dragons in partnership with Hasbro.

In television, eight series based on DC Entertainment characters (including Arrow , DC’s Legends of Tomorrow , The Flash , Gotham and Supergirl ) are airing on broadcast and cable television during the 2015-2016 television season. In 2015, Warner Bros. announced the launch of DC Super Hero Girls, a consumer product and digital content partnership with Mattel centered on iconic female DC Entertainment characters such as Supergirl and Wonder Woman and in February 2016 announced that Turner’s Boomerang network will be the exclusive broadcast partner for DC Super Hero Girls. In addition, Warner Bros. continued its successful LEGO relationship in 2015 with the release of the toys-to-life videogame, LEGO: Dimensions .

Television

Warner Bros. is a leader in the global television production and distribution business. Warner Bros. is focused on maintaining its leadership position in producing primetime series for the U.S. broadcast networks (including The CW broadcast network (“The CW”)) while increasing production of high-quality original series for basic cable networks (including expanding its collaboration with Turner), premium pay television services (including HBO) and SVOD and other OTT services. Warner Bros. is also focused on expanding its international local television production business by using its global network of local production companies.

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Warner Bros. is actively collaborating with Turner to significantly expand their global kids businesses and maximize the related consumer product opportunities. In June 2015, Warner Bros. and Turner announced a strategic partnership to produce and distribute worldwide close to 450 half-hour episodes of original animated programming across the Cartoon Network and Boomerang networks. This partnership is intended to drive the success of these networks and foster broader global exposure for Warner Bros.’ existing franchises while also helping launch new long-term franchises. In February 2016, Warner Bros. and Boomerang announced that Boomerang will be the exclusive broadcast partner for DC Super Hero Girls. The premiere of the programming on Boomerang is expected to coincide with the launch of the DC Super Hero Girls consumer products.

Domestic Business

Warner Bros. produces and distributes its television programming for initial airing on broadcast and basic cable television networks, premium pay television and SVOD and other OTT services and local television stations in the U.S. Warner Bros. also produces and distributes short-form live-action series and animated programming for initial viewing on digital platforms. Warner Bros.’ programming includes the following:

After the initial domestic television airing, Warner Bros. licenses its television programming for subsequent airing on basic cable networks, local television stations and SVOD and other OTT services and through other off-network distribution channels in the U.S. These licenses enable Warner Bros. to generate significant revenues from hit television series for years beyond their initial airing on television.

Warner Bros. also licenses its feature films to broadcast and cable networks, SVOD and other OTT services and premium pay television services (including HBO) starting approximately eight to eleven months following their theatrical release. During 2015, Warner Bros. licensed more than 900 feature films and over 3,000 hours of feature film programming to television networks, premium pay television services and SVOD and other OTT services.

International Business

Warner Bros. licenses rights to exhibit feature films and original television series in international territories through agreements with television networks, premium pay television services, basic tier television services and SVOD services, free video on demand services (“FVOD”) and other digital services. In addition, Warner Bros. licenses rights to exhibit feature films to Hollywood VIP, a transactional VOD and SVOD service operated by Tencent in China in which Warner Bros. holds a minority interest, and feature films and original television series to HOOQ, an SVOD service operating in India, the

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Philippines and Thailand, which is owned by Warner Bros., Singtel Telecommunications Limited and Sony Pictures Television. During 2015, Warner Bros. licensed thousands of hours of programming, dubbed or subtitled in more than 90 languages, to international distributors in more than 190 countries.

As the worldwide demand for locally produced, local language programming increases, Warner Bros. is focused on expanding its international local production business. Warner Bros. is developing programming specifically tailored for local audiences through its global network of production companies. Warner Bros. is also focusing on adapting international local programming into formats that can be produced by its local production companies in additional territories, including the U.S. For example, The Bachelor (a format owned by Warner Bros. that originated in the U.S.) is being adapted and produced in multiple international territories, including Australia, Finland, Germany, New Zealand, Sweden and Switzerland.

Television Business Revenues

The revenues generated by Warner Bros.’ television business consist of (1) fees for the initial broadcast of Warner Bros.’ television programming on U.S. broadcast and cable television networks and premium pay television and SVOD and other OTT services, (2) fees for the airing or other distribution of its television programming after its initial broadcast in secondary U.S. distribution channels (such as basic cable networks, local television stations and SVOD and other OTT services), (3) fees for the international distribution of Warner Bros.’ television programming for free-to-air television, basic tier television services, premium pay television services and SVOD and other OTT services, including FVOD services, and (4) revenues from the sale of the television programming of Warner Bros. and other companies in physical and digital formats. Warner Bros.’ television programming also supports Warner Bros.’ key franchises, which helps generate consumer product revenues based on the programming for years beyond the initial airing of the programming on television.

Feature Films

Warner Bros. is a leader in the feature film business and produces feature films under its Warner Bros. and New Line Cinema banners. Warner Bros. also enters into arrangements with others to co-produce and co-finance feature films. Warner Bros. produces and distributes a wide-ranging slate of films, and it is focused on expanding its film slate, built around its strongest franchises with global appeal.

In January 2015, Warner Bros. widely released American Sniper . During 2015, Warner Bros. released 24 original feature films for distribution in the U.S., including Black Mass , Creed , Mad Max: Fury Road , Get Hard , Magic Mike XXL , Point Break and San Andreas . Of the films released during 2015, six were released in 3D format, including Point Break and San Andreas , and eight were formatted for viewing on IMAX screens, including Mad Max: Fury Road . In February 2016, Warner Bros. released How to Be Single . Warner Bros. plans to release an additional 19 films during 2016, including two films based on DC Entertainment’s universe of characters ( Batman v Superman: Dawn of Justice and Suicide Squad) and a film set in the world of Harry Potter ( Fantastic Beasts and Where to Find Them ).

Internationally, Warner Bros. produces and distributes both English language and local language films for theatrical exhibition in more than 125 territories outside the U.S. Warner Bros. uses both day and date and a staggered release schedule for its international releases. In 2015, Warner Bros. released internationally 22 English-language films and 24 local-language films that it either produced itself or acquired from other companies. In September 2015, Warner Bros. announced it had entered into a joint venture with China Media Capital to develop and produce a slate of Chinese-language films, including event films, for distribution in China and elsewhere around the world.

After the theatrical exhibition of its feature films, Warner Bros. releases them both domestically and internationally for distribution in various time periods through a variety of distribution channels, including retail stores, online and digital retailers; premium pay television services; broadcast and basic cable networks; SVOD and other OTT services and other exhibitors such as airlines and hotels. Feature films are released for sale through physical and digital formats and for rental via transactional VOD beginning approximately three to six months after their release in theaters. The date for that release is influenced by seasonality, competitive conditions, film attributes and expected performance. Feature films are typically released for rental in physical formats 28 days later. After that, Warner Bros. licenses the feature films for domestic and international distribution to premium pay television services (including HBO and Cinemax), broadcast and basic cable networks (including Turner’s cable networks), and SVOD and other OTT services and, in most cases, other exhibitors such as airlines and hotels.

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Warner Bros. produces most of the films it releases in the U.S. under co-financing arrangements, which give Warner Bros. a greater ability to manage the financial risks of its film slate and offset some of the significant costs involved in the production, marketing and distribution of feature films, particularly event films. In most cases, Warner Bros. maintains worldwide distribution rights for the films it co-finances with others. Warner Bros. has co-financing arrangements with Village Roadshow Pictures and RatPac Dune Entertainment. Warner Bros. also monetizes its distribution and marketing operations by distributing films that other companies wholly finance and produce, and it has an exclusive distribution arrangement with Alcon Entertainment.

Feature Film Business Revenues

The revenues generated by Warner Bros.’ feature film business primarily consist of (1) rental fees paid by theaters for the theatrical exhibition of feature films produced (or co-produced) and/or distributed by Warner Bros., (2) licensing fees paid by television networks, premium pay television services and SVOD and other OTT services for the exhibition of feature films produced or co-produced by Warner Bros. and (3) revenues from the distribution of Warner Bros.’ and other companies’ feature films in physical and digital formats.

Home Entertainment

Warner Bros. also generates revenues through the home entertainment distribution of its film and television content in physical and digital formats. Warner Bros. continues to be a leader in the home entertainment industry, and its significant home entertainment releases during 2015 include American Sniper , The Hobbit: The Battle of the Five Armies , Get Hard , Interstellar , Mad Max: Fury Road and San Andreas .

The home entertainment industry has been undergoing significant changes as it transitions from the distribution of film and television content via physical formats to digital formats. In recent years, consumer spending on home entertainment product in physical formats has declined as a result of several factors, including consumers shifting to SVOD and other OTT services, discount rental kiosks and digital purchases and rentals; increasing competition for consumer discretionary time and spending; and piracy. Consumer spending on film and television content in higher margin digital formats has been increasing in recent years, but that growth has not fully offset declines in consumer spending on home entertainment product in physical formats.

In response to these dynamics, Warner Bros. has been focusing on increasing the more profitable electronic sell-through (“EST”) sales and transactional VOD rentals of its film and television content and is an innovator in a variety of initiatives designed to make digital ownership more compelling for consumers, including UltraViolet. Warner Bros. licenses its newly released feature films as well as films from its library and its television content to EST and transactional VOD services for viewing online and on mobile platforms in the U.S. and internationally. In the U.S. and most major international markets, Warner Bros.’ recent theatrical releases are generally released for sale via EST at least two weeks before their release in physical formats and transactional VOD.

Although consumer spending on home entertainment product in physical formats has declined in recent years, the distribution of home entertainment product in physical formats still generates significant revenues for Warner Bros. The home entertainment product it distributes in physical formats includes its own feature films and television content, including library content, as well as content acquired from others. Warner Bros. also distributes content in physical formats for others, such as Home Box Office, Turner, the BBC and Sesame Street in the U.S., as well as several content producers outside the U.S.

Videogames

Warner Bros. develops, publishes and distributes videogames, including mobile and console games. Its videogames are based on intellectual property owned or licensed by Warner Bros. (including DC Entertainment properties, Harry Potter and Mortal Kombat ). Warner Bros. is focused on increasing its monetization of its franchises in its videogames business in the future. In 2015, Warner Bros. released 14 videogames, including Batman: Arkham Knight, Mortal Kombat X, LEGO Jurassic World and Mad Max and the toys-to-life videogame LEGO: Dimensions , which includes LEGO Batman and many other DC characters among its cast of characters. Warner Bros. plans to release 14 videogames in 2016. Warner Bros. also licenses

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Warner Bros. and DC Entertainment properties for videogames to other companies. Warner Bros.’ videogames revenues consist of revenues from the development and distribution of the videogames of Warner Bros. and other companies.

OTHER TELEVISION NETWORK ASSETS

The Company also holds interests in companies that operate broadcast networks.

Central European Media Enterprises Ltd.

As of December 31, 2015, Time Warner held an approximate 49.4% voting interest and an approximate 75.7% economic interest in the equity interests of Central European Media Enterprises Ltd. (“CME”), a publicly-traded broadcasting company that operates leading television networks in Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic and Slovenia. Time Warner’s investment consists of (i) common stock, (ii) convertible preferred stock that has voting rights, (iii) convertible redeemable preferred shares that do not have voting rights and (iv) warrants to purchase common stock of CME. Time Warner accounts for its investment in CME’s common stock and convertible preferred stock under the equity method of accounting, and it accounts for its investment in CME’s convertible redeemable preferred shares under the cost method of accounting. Time Warner also guarantees or holds a significant portion of CME’s outstanding indebtedness and provides financing to CME under a revolving credit facility and term loan. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Recent Developments” for additional information regarding Time Warner’s guarantees, the debt held by Time Warner and the credit facility and term loan provided by Time Warner.

The CW

The CW is a 50-50 joint venture between Warner Bros. and CBS Corporation. The CW’s 2015-2016 schedule includes a 5-night, 10-hour primetime lineup of advertising-supported original programming such as The 100 , America’s Next Top Model , Arrow , Beauty and the Beast , Crazy Ex-Girlfriend , Containment , DC’s Legends of Tomorrow , The Flash , iZombie , Jane the Virgin , The Originals , Reign , Supernatural and The Vampire Diaries , as well as a five-hour block of advertising-supported programming on Saturday mornings. For the 2015-2016 season, Warner Bros. produced twelve series for The CW, including four based on DC Entertainment characters. In 2015, The CW’s Jane the Virgin won a Golden Globe Award and, in 2016, The CW’s Crazy Ex-Girlfriend won a Golden Globe Award. Advertising-supported full episodes of The CW’s original series are also available on cwtv.com . Some of The CW’s programming is available for streaming through SVOD services. The CW also operates CW Seed, The CW’s digital-only platform for comedy. CW Seed is available for streaming online and on mobile devices. Programming on CW Seed includes acquired series, such as Almost Human , The Ben Stiller Show , The Flash (1990) , The O.C. and Terminator: The Sarah Connor Chronicles , as well as original series, such as I Ship It , The P.E.T. Squad Files , Saving the Human Race and Vixen . The Company accounts for its investment in The CW under the equity method of accounting.

COMPETITION

The Company’s businesses operate in highly competitive industries. Competition in these industries has intensified as leisure and entertainment options have proliferated and audience fragmentation has increased. The Company’s businesses compete for consumers’ entertainment and leisure time and spending with each other, as well as other forms of entertainment, including other television networks, premium pay television services, local over-the-air television stations, SVOD and other OTT services, motion pictures, home entertainment products and services, VOD services, videogames, websites and apps providing social networking and user-generated content, print media, live events, radio broadcasts and other forms of news, information and entertainment, as well as pirated content.

The Company’s competitive position is greatly affected by the quality of, and public response to, its content. The Company’s businesses compete with other production companies and studios for the services of producers, directors, writers, actors and others and for the acquisition of literary properties. The Company’s television networks and premium pay television services compete for programming with other television networks and premium pay television services, local television stations and SVOD and other OTT services, and competition for programming, particularly licensed and sports programming, is intense.

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The Company faces competition for the licensing and distribution of its programming. As a producer and distributor of programming, the Company competes with other studios and television production groups, and independent producers to produce and sell programming. Many television networks have affiliated production companies from which they are increasingly obtaining their programming, which has reduced the demand for programming from non-affiliated production companies. The Company also faces competition from other television networks and premium pay television services for distribution and marketing of its television networks and premium pay and basic tier television services by affiliates.

The Company’s businesses face significant competition in other areas as well. For example, Company’s television networks and websites compete for advertising with networks, websites, print, radio, outdoor display and other media, and the Company’s businesses compete in their character and brand merchandising and other licensing activities with other licensors of characters and brands.

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 developments should be read in conjunction with the texts of the respective laws and regulations 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 films, television programs, software, comic books and mobile apps; 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 its business activities.

To protect the Company’s assets, the Company relies on a combination of copyright, trademark, unfair competition, patent and trade secret laws and license agreements. The duration of the protection afforded to the Company’s intellectual property depends on the type of property, the laws and regulations of the relevant jurisdiction and the terms of its license agreements. With respect to the Company’s trademarks and trade names, trademark laws and rights are generally territorial in scope and limited to those countries where a mark has been registered or otherwise protected. While trademark registrations may generally be maintained in effect for as long as the mark is in use in the respective jurisdictions, there may be occasions where a mark or title is not registrable or protectable or cannot be used in a particular country. In addition, a trademark registration may be cancelled or invalidated if challenged by others based on certain use requirements or other limited grounds. In the U.S., the usual copyright term for authored works is the life of the author plus 70 years, and the copyright term for “works made for hire” is the shorter of 95 years from the first publication or 120 years from the date the work was created. 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 of digital content, continues to present a threat to the Company’s 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 piracy, promoting 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 and advocating for appropriate legislative and policy initiatives both in the U.S. and internationally. The Company vigorously pursues 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 unauthorized distribution of the Company’s content. 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.

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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 and continue to evolve. Judicial, legislative and administrative developments are taking place in certain jurisdictions that may limit the ability of rights holders to exploit and enforce certain of their exclusive intellectual property rights outside the U.S. For example, in October 2011, 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. As a result of that decision, in January 2014, the European Commission (the “EC”) began an antitrust investigation of the cross-border access to satellite and online services, and is examining certain provisions in licensing agreements between a number of U.S. film studios, including Warner Bros., and several large European satellite pay TV broadcasters. The EC has stated that its investigation is focusing on contractual restrictions that prevent broadcasters in one EU country from selling subscriptions in response to unsolicited requests from viewers in other EU countries. In July 2015, the EC sent a Statement of Objections to a number of U.S. film studios, including Warner Bros., reflecting its preliminary view that such contractual provisions may violate EU competition rules prohibiting anti-competitive agreements. In January 2016, the EC held a hearing on the matter. The Statement of Objections and hearing are steps in the process, but do not represent a finding of infringement or indicate the outcome of the EC’s investigation. Separately, in 2015, the EC published its Digital Single Market strategy, which includes a broad range of high-level proposals that are intended to reduce the barriers to access online services and entertainment content across national borders within the EU to foster the creation of a single digital market in the EU. For example, in December 2015, the EC announced a proposal for a regulation to provide content portability to subscribers to online content services in an EU Member State who travel temporarily to another EU Member State. It is not possible to predict the impact the EC’s investigation or potential regulations in the EU related to the Digital Single Market strategy could have on the Company’s businesses.

Regulation Relating to Data Privacy, Data Security and Cybersecurity

The Company’s businesses are subject to laws and regulations governing data privacy, data security and cybersecurity. In the U.S., the Company is subject to: (1) the Children’s Online Privacy Protection Act (“COPPA”), which applies to certain of the Company’s websites, mobile apps and other online business activities and restricts the collection, maintenance and use of personal information regarding children; (2) the Privacy and Security Rules under the Health Insurance Portability and Accountability Act, which imposes privacy and security requirements on the Company’s health plans for its employees and on service providers under those plans; (3) the Video Privacy Protection Act, which restricts disclosure of video viewing information; (4) state statutes requiring notice to individuals when a data breach results in the unauthorized release of personally identifiable information (“PII”); and (5) privacy and security rules imposed by the payment card industry, as well as regulations designed to protect against identity theft and fraud in connection with the collection of credit and debit card payments from consumers.

Moreover, new laws and regulations that could affect how the Company collects, uses and protects data have been adopted or are being considered in the U.S. and internationally. In the U.S., for example, the Federal Trade Commission (the “FTC”) issued a report on consumer privacy protection in March 2012 that sets forth best practices for businesses to build privacy protections into their products and provide consumers with greater control over the collection and use of their personal information. The FTC report also calls for the widespread adoption and strengthening of self-regulatory measures, such as a standard “Do Not Track” mechanism and a limitation on data tracking with respect to mobile devices. In addition, effective July 1, 2013, the FTC updated its regulations implementing COPPA by expanding the categories of data that are considered personal information, such as IP addresses, geolocation data and screen names. The FTC also updated the requirements for notice, parental consent, confidentiality and security in the regulations implementing COPPA.

Congress, the White House and federal agencies continue to examine and focus on data security and consumer privacy in light of several recent high-profile data security breaches. For example, in December 2015, President Obama signed into law the Cybersecurity Information Sharing Act of 2015 (“CISA”). The aim of CISA is to promote voluntary sharing of information regarding cybersecurity threats and defensive measures undertaken in response to those threats with the government and other businesses. Members of Congress also proposed a number of other bills regarding privacy, data security and cybersecurity in 2015, including a Consumer Privacy Bill of Rights Act. The adoption of new privacy, data security and cybersecurity laws or regulations may in some cases increase the Company’s compliance costs.

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Several state legislatures have also adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. For example, laws in numerous states require businesses to provide notice to customers whose PII has been disclosed as a result of a data breach. In addition, California’s “Do Not Track” legislation requires websites (including mobile apps) that collect personal information about a person’s online activities to disclose how the site responds to “do not track” signals or other mechanisms that enable consumers to opt out of the collection of such information. Furthermore, California law requires operators of commercial websites and providers of online services to post a privacy policy that meets designated requirements, including providing a list of categories of PII that the operator or provider collects and a list of third parties with whom the PII may be shared.

Foreign governments have also focused on data privacy and security concerns for many years. The EC adopted a data directive in 1995 to protect the privacy rights of individuals within the European Union and the transfer of personal information outside the EU (the “Directive”). In December 2015, the European Commission, the European Parliament and the EC agreed on the final text for the new General Data Protection Regulation (“GDPR”) that would replace the Directive following a data protection reform project begun in 2012. The GDPR is intended to support the Single Digital Market strategy within the EU by providing a single set of rules on data protection across the EU, while enabling individuals to better control their personal data. The final regulation is expected to be adopted by the European Parliament and the EC in early 2016, and the GDPR will become effective two years thereafter. It is not clear to what extent the GDPR, once adopted, will affect the Company’s operations and business.

In a development under the Directive, on October 6, 2015, the Court of Justice of the European Union (the “CJEU”) issued an opinion ruling that the U.S. – EU Safe Harbor framework (the “Safe Harbor framework”) is invalid. The Safe Harbor framework had been in place since 2000 and was a central mechanism relied on by U.S. organizations, including the Company, to transfer personal data from the EU to the U.S. The decision did not expressly invalidate any other legal mechanisms or bases that can be utilized or relied on to transfer personal data from the EU to the U.S. in compliance with the Directive in certain circumstances, such as model contracts, binding corporate rules or individual consent. On February 2, 2016, in response to the CJEU’s decision, representatives from the EC and the U.S. Department of Commerce (the “DOC”) announced that agreement had been reached on a data transfer framework, named the EU – U.S. Privacy Shield, that will replace the Safe Harbor framework. The new framework, which has not yet been finalized or formally approved by EU regulators, is expected to impose greater obligations on U.S. companies to protect personal data transferred from the EU to the U.S. and require the DOC and FTC to carry out stricter monitoring and enforcement. EU regulators are expected to release a decision on the new framework in April 2016. The Company will continue to evaluate the mechanisms available to comply with EU/U.S. data transfer requirements to be able to continue to operate its businesses. The CJEU’s decision, developments relating to the EU – U.S. Privacy Shield, and the Company’s reliance on alternative data transfer mechanisms could increase the Company’s compliance costs and constrain how the Company collects, uses, transfers and secures personal information from individuals in the EU.

Regulation of Television Networks, Internet/Broadband Services, Programming and Advertising

The Company’s businesses are also subject to a number of laws and regulations relating to the distribution and licensing of television programming, 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 (the “Communications Act”), and related regulations issued by the Federal Communications Commission (the “FCC”). These obligations and regulations, among other things, 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.

The FCC continues to examine policies for video programming and distribution, and in 2014 and 2015 it adopted and proposed regulations that could directly or indirectly restrict the Company’s ability to produce, distribute or fully monetize its content. For example, in March 2015, the FCC adopted “net neutrality” regulations that constrain how ISPs can offer broadband and related services that can be used to distribute the Company’s programming via the Internet. The net neutrality regulations subject ISPs to the requirements of Title II of the Communications Act, including imposing limitations on unreasonable practices, obligations regarding customer privacy and protections for people with disabilities and authorize the FCC to investigate and act on consumer complaints. The regulations prohibit ISPs from: (i) blocking access to legal content,

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applications or services or to devices that do not harm their network, (ii) impairing or degrading lawful Internet content and (iii) implementing paid prioritization or “fast lanes” for content or applications. ISPs generally are permitted to engage in reasonable network management (other than paid prioritization), but only if the purpose of their actions is related to managing their network. In 2015, a trade group, several broadband providers and others filed lawsuits in the U.S. Court of Appeals for the District of Columbia challenging the net neutrality regulations. The court is expected to rule on the lawsuits in 2016. It is not possible to predict how these lawsuits and net neutrality regulations will impact the Company.

In addition, in December 2014, the FCC proposed rules to expand its interpretation of “multichannel video programming distributor” under the Communications Act to include over-the-top providers of multiple streams of linear programming (i.e., television programming delivered via the Internet in a regularly scheduled, continuous manner, either live or on a delayed basis), which would give these over-the-top providers rights to distribute broadcast network television programming and cable-operator affiliated programming, while also subjecting them to various obligations such a retransmission fees. Depending on the scope and specific provisions of any final rules, they could affect the Company’s negotiations regarding, and provision of, online linear video.

In February 2016, the FCC proposed rules regarding the interoperability of set-top boxes provided by affiliates with other devices and services. Depending on the scope and provisions of any final rules, they could affect the way the Company’s programming is presented to consumers, including with respect to channel placement, branding and the type and placement of advertisements, and could have a negative impact on the value of the Company’s programming and make it more difficult for the Company to roll out new services.

From time to time, the FCC also conducts inquiries and rulemaking proceedings, which could lead to additional regulations that could have a material effect on the Company’s businesses. The FCC has also initiated the following proceedings:

Various other federal laws also contain provisions that place restrictions on violent and sexually explicit programming. Regulators, legislatures and policymakers have also become increasingly interested in laws and regulations intended to protect the interests of children by placing limitations on food and beverage marketing in media popular with children and teens.

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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 relating to closed captioning of programming for the hearing impaired, descriptive audio versions for the visually impaired and mandatory local language dubbed and/or subtitled versions of programming, 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 EC 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 or have already implemented food advertising restrictions similar to those in the U.K., including in Brazil, Colombia, Chile, Mexico, Norway, Peru, Singapore and Uruguay. Finally, several governments, including in Argentina, Brazil, India, Mexico and Uruguay, have recently proposed, enacted or more strictly enforced regulations that limit the amount of advertising content that can be aired on television networks.

Regulation of the Distribution and Licensing of Feature Films

In countries outside the U.S., there are a variety of laws and regulations relating to the distribution or licensing of feature films for exhibition in theaters and on broadcast and cable networks. These include copyright laws and regulations, television licensing requirements similar to those applicable to made-for-television programming, trade and customs regulations, laws providing for minimum percentages of local content in theaters and on broadcast television and maximum percentages of foreign content on television and laws that limit increases in prices paid by distributors to content providers. In certain countries, laws and regulations limit the number of foreign films exhibited in such countries in a calendar year. For example, China, which was the second-largest box office territory based on box office receipts in 2015, limits the number of foreign films that can be distributed annually using revenue-sharing arrangements as well as the percentage of revenue shared with the foreign film distributor.

Marketing Regulation

The Company’s marketing and advertising sales activities are subject to regulation by the FTC, the FCC, 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 COPPA and the Telephone Consumer Protection Act (the “TCPA”), which restricts telephone, fax or mobile text messages to consumers without their prior consent. Outside the U.S., laws restricting marketing and sales activities also continue to be adopted. For example, the Canadian Anti-Spam legislation (the “CASL”), which went into effect July 1, 2014, restricts commercial electronic messages to consumers without their prior permission. Both the TCPA and CASL provide for private rights of action, and violations of these laws can result in potential liability, including substantial administrative fines and class action lawsuits.

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, 2015 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 worldwide licensing of theatrical and television product for premium pay television services, basic cable and network and syndicated television exhibition, at December 31, 2015 and December 31, 2014, is set forth in Note 16 to the Company’s consolidated financial statements, “Commitments and Contingencies — Commitments — Programming Licensing Backlog.”

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