Comcast 2008 Annual Report Download - page 61

Debt Issuances and Borrowings
Year ended December 31, 2008 (in millions)
Revolving bank credit facility due 2013 $ 1,510
5.70% notes due 2018 1,000
6.40% notes due 2038 1,000
Other, net 25
Total $ 3,535
We used the net proceeds of these issuances and borrowings for
the repayment of certain debt obligations, the repurchase of our
common stock, the purchase of investments, working capital and
general corporate purposes.
Debt Redemptions and Repayments
Year ended December 31, 2008 (in millions)
Commercial paper $ 300
Revolving bank credit facility due 2013 505
6.2% notes due 2008 800
7.625% notes due 2008 350
9.0% notes due 2008 300
ZONES due 2029 264
Other, net 91
Total $ 2,610
Debt Instruments
Commercial Paper Program
Our commercial paper program provides a lower cost borrowing
source of liquidity to fund our short-term working capital require-
ments. The program allows for a maximum of $2.25 billion of
commercial paper to be issued at any one time. Our revolving
bank credit facility supports this program. Amounts outstanding
under the program are classified as long term in our consolidated
balance sheet because we have both the ability and the intent to
refinance these obligations, if necessary, on a long-term basis
using funds available through our revolving bank credit facility.
Revolving Bank Credit Facility
In January 2008, we entered into an amended and restated revolv-
ing bank credit facility that may be used for general corporate
purposes. This amendment increased the size of our existing
revolving bank credit facility from $5.0 billion to $7.0 billion and
extended the maturity of the loan commitment from October 2010
to January 2013. The base rate, chosen at our option, is either the
London Interbank Offered Rate (“LIBOR”) or the greater of the
prime rate or the Federal Funds rate plus 0.5%. The borrowing
margin is based on our senior unsecured debt ratings. As of
December 31, 2008, the interest rate for borrowings under the
credit facility was LIBOR plus 0.35%. In December 2008, we
terminated a $200 million commitment to our credit facility by
Lehman Brothers Bank, FSB (“Lehman”) as a result of Lehman’s
default under a borrowing request. At a discounted value, we
repaid Lehman’s portion of our outstanding credit facility, along
with accrued interest and fees. Subsequent to this termination, the
size of the credit facility is $6.8 billion.
Lines and Letters of Credit
As of December 31, 2008, we and certain of our subsidiaries had
unused lines of credit totaling $5.501 billion under various credit
facilities and unused irrevocable standby letters of credit totaling
$337 million to cover potential fundings under various agreements.
ZONES
At maturity, holders of our 2.0% Exchangeable Subordinated
Debentures due 2029 (the “ZONES”) are entitled to receive in cash
an amount equal to the higher of the principal amount of the out-
standing ZONES of $1.060 billion or the market value of
approximately 14.1 million shares of Sprint Nextel common stock
and approximately 0.7 million shares of Embarq common stock.
Before maturity, each of the ZONES is exchangeable at the hold-
er’s option for an amount of cash equal to 95% of the aggregate
market value of one share of Sprint Nextel common stock and
0.05 shares of Embarq common stock.
We separate the accounting for the ZONES into derivative and
debt components. The following table presents the change in the
carrying value of the debt component and the change in the fair
valueofthederivativecomponent(seeNote6).
(in millions)
Debt
Component
Derivative
Component Total
Balance as of January 1,
2008 $ 625 $ 81 $ 706
Change in debt component
to interest expense 24 — 24
Change in derivative
component to investment
income (loss), net — (58) (58)
Repurchases and retirements (264) — (264)
Balance as of December 31,
2008 $ 385 $ 23 $ 408
59 Comcast 2008 Annual Report on Form 10-K