AOL Time Warner Announces New Operating Structure and Senior Leadership Appointments; Robert Pittman To Leave COO Post.

Business & Technology Editors

NEW YORK--(BUSINESS WIRE)--July 18, 2002

Don Logan To Become Chairman of Media & Communications Group;

Jeff Bewkes To Become Chairman of Entertainment & Networks Group

Ann Moore To Lead Time Inc.; Chris Albrecht To Lead HBO 

AOL Time Warner has adopted a new operating structure and made senior leadership appointments, Richard D. Parsons, Chief Executive Officer, announced today.

Mr. Parsons also announced that Chief Operating Officer Robert W. Pittman has decided to step down as COO and as a director of AOL Time Warner and depart the Company after completing the transition to a new CEO at its America Online division.

Under the new structure, Don Logan, formerly Chairman and Chief Executive Officer of Time Inc., becomes Chairman of the new Media & Communications Group, comprising America Online, Time Inc. and Time Warner Cable, as well as the AOL Time Warner Book Group and Interactive Video unit. Jeff Bewkes, formerly Chairman and CEO of HBO, becomes Chairman of the new Entertainment & Networks Group, comprising HBO, New Line Cinema, The WB, Turner Networks, Warner Bros. and Warner Music. The Group Chairmen will report directly to Mr. Parsons.

Mr. Parsons said: "We have the best media, entertainment and communications businesses in the world, but our challenge--and our goal in making these changes--is to take the lessons we've learned over the past two years and use them to make the parts work together to create greater value for our shareholders. With Don, Jeff and our business heads on board, we will have a united team focused on driving new growth and developing innovative new products and services.

"Don and Jeff have each proven that they can generate consistent, solid growth over changing economic cycles in businesses such as those they will now oversee. Steve Case and I have great confidence in their ability to get the job done, and we are pleased to have a great team in place as we move forward," Mr. Parsons added.

Steve Case, Chairman of AOL Time Warner, said: "I look forward to working closely with Dick Parsons, Don Logan and Jeff Bewkes, as we revitalize AOL, enhance collaboration and innovation throughout AOL Time Warner and deliver fully on the promise of this unique Company. I also want to wish the best to Bob Pittman as he moves on. He was a critical part of AOL's growth and success over the past six years."

New Leadership Team Focused on Growth

Mr. Logan was named CEO of Time Inc. in 1994 and Chairman in 1997, after first becoming Time Inc.'s President and COO in 1992. Under his leadership, Time Inc. has delivered 41 consecutive quarters of year-over-year earnings growth--averaging about 14% in compound annual EBITDA increases. In addition, Time Inc. has expanded the number of magazines it publishes from about two dozen in 1994 to today's 140 regular titles with numerous special issues. Time Inc. now commands nearly a 25% share of domestic magazine advertising, its highest mark since 1989.

Mr. Bewkes first joined HBO nearly a quarter century ago, becoming its CFO in 1986, President and COO in 1991 and CEO in 1995. During his seven-year tenure as CEO, HBO delivered compound annual EBITDA growth of 16% and increased its subscriber base from nearly 30 million to 38.5 million worldwide today. Under his leadership, HBO has become the world's most profitable TV network, while securing its reputation for critically acclaimed original programming, movies, documentaries, concerts and sports, as well as leadership in new technologies such as HBO-on-Demand.

Mr. Logan said: "I am excited by the possibilities of pursuing cross-divisional growth among AOL, Time Inc. and Time Warner Cable. They all have direct subscriber relationships with consumers, and supplement those subscription revenues with advertising and other revenues. Together with the whole team, Jeff and I look forward to operating all of the Company's businesses more efficiently and more effectively."

Mr. Bewkes said: "Don and I are committed to maximizing the value of each of our businesses by looking for innovative ways to generate new growth through divisional cooperation and exciting new technologies. Our entertainment and networks businesses are among the world leaders in their industries. And, as always, we will give our customers the best creative product in our respective businesses."

Pittman And Logan To Lead Smooth Transition at America Online

Mr. Pittman said: "I've decided that after a new CEO is in place at AOL, I won't return to AOL Time Warner as Chief Operating Officer. Having worked so hard to build the AOL service and brand, and after then going through the merger and the last 18 months, it's time to take a break. I'm proud of what we built at AOL and believe that it has a great future. Likewise, I have confidence in AOL Time Warner's prospects. Most of all, AOL Time Warner has great employees--the best I have ever worked with. I want to thank Steve and Dick, who have both taught me a great deal, and I look forward to working through this transition with them along with Don and Jeff."

Mr. Parsons said: "Bob Pittman is a brand builder and visionary, and a great manager and operating executive. In these few months as interim leader of America Online, he's re-energized its operations and taken steps to stabilize and refocus the business he played so important a role in building. He deserves to take a break, and has a very bright future at whatever point he decides to get back into the fray."

Ann Moore to Become Chairman and CEO at Time Inc.;

Chris Albrecht to Become HBO's Chairman and CEO

Ann Moore, formerly Executive Vice President of Time Inc., is replacing Don Logan as Chairman and CEO of Time Inc. Ms. Moore has overseen all business and development operations for several of the most popular consumer magazines in publishing today--Time, People, In Style, Teen People, People en Espanol, Real Simple and the Parenting group. In addition, she has managed the Consumer Marketing Division of Time Inc. After joining People as Publisher in 1991, she led the magazine to 11 straight years as #1 in advertising revenue. Ms. Moore also was the founding Publisher of Sports Illustrated for Kids.

"Ann Moore is an exceptionally talented executive and a great leader," said Mr. Logan. "She has proven her ability to conceive of new opportunities and capitalize on them. I am very excited about what she will achieve at Time Inc. and I know Ann will be a great contributor as we work toward greater cooperation among our media businesses."

Chris Albrecht, formerly President of HBO Original Programming, is succeeding Jeff Bewkes as HBO's Chairman and CEO. Bill Nelson, formerly HBO's Executive Vice President in charge of Finance, Information and Operations Technology and Business Affairs, has been promoted to COO.

"Chris's stewardship of our Original Programming has been extraordinary," Mr. Bewkes said. "It's no accident that under his leadership we have produced the kind of breakthrough entertainment that has set the standard for the television industry. Chris is also a superb executive, widely respected in the creative community and throughout our business."

On Mr. Nelson's appointment, Mr. Bewkes said: "There's simply no better business executive than Bill Nelson. During my tenure as CEO, Bill has overseen many aspects of our business and has been instrumental in our success."

About AOL Time Warner

AOL Time Warner (NYSE:AOL) is the world's leading media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks, music and publishing.

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and factors affecting the integration of the businesses of AOL Time Warner Inc. More detailed information about these factors may be found in filings by AOL Time Warner with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. AOL Time Warner 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.