time code

Many quantities in After Effects are either points in time or spans of time, including the current time, layer In and Out points, and durations of layers, footage items, and compositions.
By default, After Effects displays time in Society of Motion Picture and Television Engineers (SMPTE) timecode: hours, minutes, seconds, and frames. You can change to another system of time display, such as frames, or feet and frames of 16mm or 35mm film.
Video-editing workstations often use SMPTE timecode that is recorded onto videotape for reference. If you are creating video that will be synchronized with video that uses SMPTE timecode, use the default timecode display style.
You may want to see time values in feet plus frames format, for example, if you are preparing a movie for eventual output to film; or in simple frame numbers if you plan to use your movie in an animation program such as Flash. The format you choose applies to the current project only.

Important: Changing the time display format does not alter the frame rate of your assets or output—it changes only how frames are numbered for display in After Effects.

Change time-display units

• To cycle through Timecode Base, Frames, and Feet + Frames, Ctrl-click (Windows) or Command-click (Mac OS) the current-time display. The current-time display is in the upper-left corner of the Timeline panel and at the bottom of the Layer, Composition, and Footage panels. (See Timeline panel.)
• To change time display units, choose File > Project Settings, and choose from the options in the Display Style section.

Options for time-display units

Timecode Base

Displays time as timecode, using the frame rate that you specify as the timecode base. Auto uses the rounded frame rate of the footage item or composition. If an item doesn’t have timecode (such as an audio file), After Effects uses a default value (30 fps for English, Japanese, and Korean versions of After Effects, or 25 fps for French, German, Spanish, and Italian versions) or the last non-auto value you specified in the Project Settings dialog box. You can also specify that After Effects use a specific frame rate.

Note: You can specify specific frame rates for display in the Timecode Base menu; however, in most cases, you should leave the timecode base set to Auto.

Drop Frame versus Non-Drop Frame

Two of the more commonly used combinations of time display settings are 30 fps drop-frame timecode and 30 fps non-drop-frame timecode. When the frame rate is a non-integer number—as is the case with the NTSC frame rate of 29.97 frames per second—a compromise of one sort or another must be made in displaying time. Either the time display can accurately show clock time (after one hour, the time display shows 1:00:00:00) or the time display can be continuously numbered (frame n is always followed by frame n + 1, modulo the number of frames per second). Drop-frame timecode does the former; non-drop-frame timecode does the latter. In the case of NTSC 30 fps drop-frame timecode, two frame numbers are skipped for each minute, except for every tenth minute. Drop-frame timecode is conventionally indicated by separating the time units with semicolons. The most common case for which drop-frame versus non-drop-frame timecode is relevant is 29.97 fps NTSC, but it also applies to 23.976 fps (which After Effects treats as non-drop-frame timecode) and 59.94 fps. Timecode for 59.94 fps compositions and footage items matches that in Adobe Premiere Pro: When the timecode base is 30 fps, each timecode value repeats twice. When the timecode base is 60 fps drop-frame, frame numbers 0, 1, 2, and 3 are dropped in the same places as where 0 and 1 are dropped for drop-frame timecode with a timecode base of 30 fps.

Feet + Frames

Displays number of feet of film, plus frames for fractional feet, for 16mm or 35mm film. Numbering starts at the frame number that you specify with the Start Numbering Frames At value.

Frames

Displays frame number instead of time. Use this setting for convenience when doing work that you are integrating with a frame-based application or format, like Flash or SWF.

Online resources about timecode

Trish and Chris Meyer provide an article on the ProVideo Coalition website that describes the difference between drop-frame and non-drop-frame timecode.
Chris Pirazzi provides technical details about timecode on his Lurker's Guide to Video website.