Today, with the spin-off of AOL completed, Time Warner is now a more content-focused company that’s ready to reach new heights as a global leader in media and entertainment. Please join me in thanking our AOL colleagues for their many contributions to our company and wishing them all the best in the future. 

By returning to our roots in content, we’re better positioned to achieve our best possible performance. With the economy starting to recover, we expect to see our businesses become more profitable. Even more importantly, our strengths in content are becoming more valuable, as the media industry and consumer usage evolve.

New technologies and business models have translated into much more access to content and choice for consumers. Today’s innovations in online, mobile and VOD services are changing how we live our lives. Despite all these choices, consumers are gravitating more than ever to blockbuster content. In addition to generating a bigger audience, big hits attract more consumer spending.

Our operating scale and industry-leading brands and franchises enable us to capitalize fully on these trends. They give us the resources to offer attractive economics to our creative partners. That brings in the best talent, who build on our know-how and experience to generate top-notch content. We then package and distribute this high-quality, branded content worldwide, which in turn reinforces our scale and brands. It’s this process – or virtuous circle – that fuels our growth.

For us to make the most of these advantages, we’re continuing to pursue the four operating objectives I’ve told you about before.

·      First, we need to keep leveraging our scale and brands to deliver compelling content – consistently. Even in hit-driven businesses like movies and TV, Warner Bros. is proof that a studio can reliably produce popular content. So far this year, six Warner Bros. films have grossed over $100 million, with Sherlock Holmes and Clint Eastwood’s Invictus still to come. We now top the 2009 domestic box office, as our studios have for eight of the last nine years. Worldwide, we’re responsible for more than half of the 15 highest-grossing films ever. On the television side, Warner Bros. was 2009’s #1 provider of broadcast network programming for the 18th time in the past 23 years.

Our other businesses are just as successful using their industry-leading brands to turn out powerful content. For example, more consumers read PEOPLE each week than watched last summer’s American Idol finale – demonstrating its huge reach and relevance. At Turner, CNN’s news and information draws more TV viewers than its peers, and it’s the most popular news site online and on mobile devices. This past Monday, TNT’s newest original show – Men of a Certain Age, created by Ray Romano – premiered to critical acclaim and this year’s highest ratings among key demos for a new series launch on ad-supported cable. Also underscoring our reputation for quality programming, HBO recently won 21 Primetime Emmy Awards, the most of any network for the seventh straight year, while True Blood, Hung, Big Love and Entourage are among the six highest-rated programs in HBO history.

·      Second, we must continue to make our businesses more efficient. To that end, we’ve carried out several restructurings and other cost-reduction initiatives across the company. Besides lowering expenses, we expect that these efforts will improve our performance – helping us to serve consumers better and stabilize the finances of some key brands. These measures are often difficult, especially when they involve jobs and benefits, but they’re sometimes necessary to keep the business strong.

·      Third, we’ll continue to expand our businesses internationally. With Time Warner Cable (NYSE: TWC) and AOL now spun off, nearly one-third of our revenues come from outside the U.S. Our industry is expanding faster internationally than in the U.S., so we’re looking for opportunities to grow overseas. For example, earlier this year we bought a stake in Central European Media Enterprises, a leading media company in Central and Eastern Europe. At the same time, we’re also doing more to reach multi-cultural audiences here in the U.S., with such programming as CNN’s in America franchise and TBS’s Lopez Tonight.

·      Finally, we’re driving the development of new business models to capitalize on new technologies and changes in the way people consume media. As you know, we’ve been helping to lead the TV Everywhere initiative. Its goal is to enable those who subscribe to television in their homes to watch their favorite programming at no extra charge on a wide range of other devices. We’re moving even faster than I expected – with planned launches of TV Everywhere (including our TBS and TNT networks) to millions of customers by the end of the year. Along similar lines, Time Inc. and several of its publishing peers are working together on a new digital delivery model for e-readers. Also, Sports Illustrated unveiled a prototype of the magazine – with interactivity, video and other exciting features – for tablet computers. Meanwhile, Warner Bros. is continuing to lead the industry by releasing theatrical films in more formats, such as putting movies on VOD simultaneously or even before their DVD releases.

As you can see, we’re making great progress on these priorities. Time Warner is focused on driving stockholder returns higher by generating steady, attractive results and using our capital as productively as possible. That includes paying a healthy dividend, buying back our stock and continuing to evaluate opportunities to make strategic acquisitions that meet our stringent standards. In addition, we’ll keep investing in developing the leadership and other skills of our people across the company and building strong relationships within our communities. We have much to do in the coming year, but I’m confident that we’ll succeed.

Many thanks for your hard work, and my best wishes for the holidays to you and your families.