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Time Warner to Sell Cable Division

May 6, 2008

Time Warner, the second largest cable provider in the U.S., recently announced plans to spin off its cable services division in an effort to restructure the company as a whole. The restructuring move is seen by experts as a response to Wall Street demands to operate as a media content company to increase the value of its stock.

In a company press release, Time Warner chief executive officer Jeff Bewkes said: “Our results this quarter, particularly the underlying operating strength of our cable, networks, and filmed entertainment businesses, gave us the confidence to reaffirm our full-year business outlook. We’ve also made substantial progress on our key structural initiatives. We’ve decided that a complete structural separation of Time Warner Cable, under the right circumstances, is in the best interest of both companies’ shareholders. We’re working hard on an agreement with Time Warner Cable, which we expect to finalize soon. At the same time, we’ll continue to pursue the rest of our aggressive agenda that we believe will deliver increasing value to our shareholders.”

Time Warner First Quarter Profits Down from One Year Ago

Time Warner’s first-quarter net profit fell 36 percent to $771 million, or 21 cents per share, from $1.2 billion, or 30 cents per share, a year earlier, when it booked a big gain from the sale of AOL's Internet access business in Germany and the unwinding of its cable partnership with Comcast Corp.

Time Warner currently owns Time Warner Cable stock (the company rolled off part of its cable unit into Bright House Networks in 2003).