Time Magazine 2011 Annual Report Download - page 98

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
8. LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS
The Company’s long-term debt and other financing arrangements consist of revolving bank credit facilities, a
commercial paper program, fixed-rate public debt and other obligations.
Long-term debt consists of (millions)(a):
Outstanding Debt
December 31,
2011
December 31,
2010
Fixed-rate public debt ......................................... $ 19,251 $ 16,276
Other obligations ............................................. 273 273
Subtotal .................................................... 19,524 16,549
Debt due within one year ....................................... (23) (26)
Total long-term debt .......................................... $ 19,501 $ 16,523
(a) Represents principal amounts adjusted for premiums and discounts.
The Company’s unused committed capacity as of December 31, 2011 was $8.536 billion, including $3.476
billion of Cash and equivalents. At December 31, 2011, there were no borrowings outstanding under the
Revolving Credit Facilities, as defined below, and no commercial paper was outstanding under the commercial
paper program. The Revolving Credit Facilities, commercial paper program and public debt of the Company rank
pari passu with the senior debt of the respective obligors thereon. The weighted-average interest rate on Time
Warner’s total debt was 6.35% and 6.52% at December 31, 2011 and 2010, respectively.
Revolving Credit Facilities and Commercial Paper Program
Revolving Credit Facilities
On September 27, 2011, Time Warner amended its $5.0 billion senior unsecured credit facilities, which had
consisted of a $2.5 billion three-year revolving credit facility and a $2.5 billion five-year revolving credit facility
pursuant to the First Amendment, dated as of September 27, 2011, to the credit agreement, dated as of
January 19, 2011 (the “Credit Agreement”). The amendment changed the $2.5 billion three-year revolving credit
facility to a $2.5 billion four-year revolving credit facility with a maturity date of September 27, 2015 (the “Four-
Year Revolving Credit Facility”) and extended the maturity date of the $2.5 billion five-year revolving credit
facility from January 19, 2016 to September 27, 2016 (the “Five-Year Revolving Credit Facility” and collectively
with the Four-Year Revolving Credit Facility, the “Revolving Credit Facilities”). The amendment also reduced
interest 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 permitted borrowers under the Credit Agreement are Time Warner and Time Warner International
Finance Limited (“TWIFL” and together with Time Warner, the “Borrowers”). The interest rate on borrowings
and 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 Credit Agreement provides same-day funding and multi-currency capability, and a portion of the
commitment, not to exceed $500 million at any time, may be used for the issuance of letters of credit. The
covenants for the Credit Agreement include a maximum consolidated leverage ratio covenant of 4.5 times the
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