ACTION: Time Warner Inc. (“TWX”) has announced a distribution of Time Warner Cable Inc. (“TWC”) Common Shares. The distribution ratio is 0.083670TWC Shares per TWX Common Share. The record date is March 12, 2009; the mail date is March 27, 2009. The distribution is expected to become effective after the close of business on March 27, 2009.
This corporate event will be coordinated with the Options Clearing Corporation.
EQUITY SYMBOL: Time Warner Inc. (“TWX”)
ONECHICAGO SYMBOL: TWX1C changes to TWX2C; a new TWX1C will be re-listed on March 31, 2009.
CME FUTURES SYMBOL: TW9 for the TWX2C; TW for the re-listed PNX1C
EFFECTIVE DATE: Monday, March 30, 2009
MULTIPLIER: 100 (e.g., 1.00 equals $100.00)
NEW DELIVERABLE PER CONTRACT: For the TWX2C:
1) 33 (New) Time Warner Inc. (“TWX”) Common Shares
2) 8 Time Warner Cable Inc. (“TWC”) Common Shares
3) Cash in lieu of .3333 fractional TWX Shares*
4) Cash in lieu of .3670 fractional TWC Shares*
For the re-listed TWX1C:
100 Time Warner Inc. (“TWX”) Common Shares
* The cash portion of the deliverable remains permanently fixed as part of the option deliverable, and does not vary with price changes of securities also included in the deliverable
APPLICABLE CONTRACT MONTHS: April, May, June, September 2009
SETTLEMENT PRICES AND POSITIONS: The underlying price for the TWX2C Futures contract deliverable, expressed in term of current market value, would be calculated as follows:
TWX2C = .33 (TWX) + .08 (TWC) + cash in lieu of .3333 TWX + cash in lieu of .3670TWC shares
Please note that the valuation would apply only to the PNX2C deliverable in terms of current market value of the deliverable securities. The resulting price would not be equivalent to the daily settlement price of a futures contract month, whose determination would include cost of money carrying charges, adjustment for dividends, and other factors.
NOTES: The forecasted effect of the upcoming corporate event on each clearing firm’s positions can be viewed in infopac in the Corporate Event Initial Forecast Report (ONE712), the Corporate Event Final Forecast Report (ONE713), and the Corporate Event Forecast Audit Report (CPDBU710).
The details after the corporate event has been applied can be viewed in the Corporate Event Activity Report (ONE711).
If you have any questions regarding the information provided in the document, please call CME Clearing Risk Management hotline at (312) 648-3888.