Time Magazine 2010 Annual Report Download - page 59

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series of transactions to capitalize on the historically low interest rate environment and extend the maturities of its
public debt.
On March 11, 2010, Time Warner issued $2.0 billion aggregate principal amount of debt securities from the
shelf registration statement, consisting of $1.4 billion aggregate principal amount of 4.875% Notes due 2020 and
$600 million aggregate principal amount of 6.200% Debentures due 2040 (the “March 2010 Debt Offering”). On
July 14, 2010, Time Warner issued $3.0 billion aggregate principal amount of debt securities from the shelf
registration statement, consisting of $1.0 billion aggregate principal amount of 3.15% Notes due 2015, $1.0 billion
aggregate principal amount of 4.70% Notes due 2021 and $1.0 billion aggregate principal amount of
6.10% Debentures due 2040 (the “July 2010 Debt Offering” and, together with the March 2010 Debt Offering,
the “2010 Debt Offerings”). The net proceeds to the Company from the 2010 Debt Offerings were $4.963 billion,
after deducting underwriting discounts, and the net proceeds were used in connection with the 2010 Debt
Redemptions and the Securitization Repayment, as defined below.
During the year ended December 31, 2010, the Company repurchased and redeemed all $1.0 billion aggregate
principal amount of the 6.75% Notes due 2011 of Time Warner, all $1.0 billion aggregate principal amount of the
5.50% Notes due 2011 of Time Warner, $1.362 billion aggregate principal amount of the outstanding 6.875% Notes
due 2012 of Time Warner and $568 million aggregate principal amount of the outstanding 9.125% Debentures due
2013 of Historic TW (as successor by merger to Time Warner Companies, Inc.). The premiums paid and transaction
costs incurred in connection with the 2010 Debt Redemptions were $364 million for the year ended December 31,
2010. These amounts were reflected in other income (loss), net in the Company’s consolidated statement of
operations and were included in significant transactions and other items affecting comparability.
During the first quarter of 2010, the Company repaid the $805 million outstanding under the Company’s two
accounts receivable securitization facilities (the “Securitization Repayment”). The Company terminated the two
accounts receivable securitization facilities on March 19, 2010 and March 24, 2010, respectively.
Additional Information
The obligations of each of the borrowers under the Company’s revolving bank credit agreements and the
obligations of Time Warner under the commercial paper program and public debt issued in 2010 are directly or
indirectly guaranteed, on an unsecured basis by Historic TW Inc. (“Historic TW”), Home Box Office and Turner.
See Note 8, “Long-Term Debt and Other Financing Arrangements,” to the accompanying consolidated financial
statements for additional information regarding the Company’s outstanding debt and other financing arrangements,
including certain information about maturities, covenants, rating triggers and bank credit agreement leverage ratios
relating to such debt and financing arrangements.
Contractual and Other Obligations
Contractual Obligations
In addition to the previously discussed financing arrangements, the Company has obligations under certain
contractual arrangements to make future payments for goods and services. These contractual obligations secure the
future rights to various assets and services to be used in the normal course of operations. For example, the Company
is contractually committed to make certain minimum lease payments for the use of property under operating lease
agreements. In accordance with applicable accounting rules, the future rights and obligations pertaining to firm
commitments, such as operating lease obligations and certain purchase obligations under contracts, are not reflected
as assets or liabilities in the accompanying consolidated balance sheet.
47
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)