Time Magazine 2011 Annual Report Download - page 62

TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)
rates and facility fees and eliminated the reference to the percentage of commitments used under the Revolving
Credit Facilities for the purpose of calculating the interest rate on borrowings under the Revolving Credit
Facilities.
The interest rate on borrowings and the facility fees under the Revolving Credit Facilities are based on the
credit rating for Time Warner’s senior unsecured long-term debt. Based on the credit rating as of December 31,
2011, the interest rate on borrowings under the Four-Year Revolving Credit Facility would be LIBOR plus
1.10% per annum and the facility fee was 0.15% per annum, and the interest rate on borrowings under the Five-
Year Revolving Credit Facility would be LIBOR plus 1.075% per annum and the facility fee was 0.175% per
annum.
The funding commitments under the Revolving Credit Facilities are provided by a geographically diverse
group of 20 major financial institutions based in countries including Canada, France, Germany, Japan, Spain,
Switzerland, the United Kingdom and the U.S. In addition, 19 of these financial institutions were identified by
international regulators in November 2011 as among the 29 financial institutions that they deemed to be
systemically important. None of the financial institutions in the Revolving Credit Facilities accounts for more
than 7% of the aggregate undrawn loan commitments.
Commercial Paper Program
The Company has a commercial paper program, which was established on February 16, 2011 on a private
placement basis, under which Time Warner may issue unsecured commercial paper notes up to a maximum
aggregate amount not to exceed the unused committed capacity under the $5.0 billion Revolving Credit
Facilities, which support the commercial paper program.
Additional Information
The obligations of each of the borrowers under the Company’s Revolving Credit Facilities and the
obligations of Time Warner under the commercial paper program and the Company’s outstanding public debt are
directly or indirectly guaranteed on an unsecured basis by Historic TW, Home Box Office and Turner (other than
the $2 billion of public debt issued by Time Warner in 2006, which is not guaranteed by Home Box Office). 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 certain 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.
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