Time Magazine 2011 Annual Report Download - page 99

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
consolidated EBITDA, as defined in the Credit Agreement, of Time Warner, but exclude any credit ratings-based
defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse
change in Time Warner’s financial condition or results of operations. The terms and related financial metrics
associated with the leverage ratio are defined in the Credit Agreement. At December 31, 2011, the Company was
in compliance with the leverage covenant, with a consolidated leverage ratio of approximately 2.33 times.
Borrowings under the Revolving Credit Facilities may be used for general corporate purposes, and unused credit
is available to support borrowings by Time Warner under its commercial paper program. The Credit Agreement
also contains certain events of default customary for credit facilities of this type (with customary grace periods,
as applicable). The Borrowers may from time to time, so long as no default or event of default has occurred and
is continuing, increase the commitments under either or both of the Revolving Credit Facilities by up to $500
million per facility by adding new commitments or increasing the commitments of willing lenders. The
obligations of each of the Borrowers under the Credit Agreement are directly or indirectly guaranteed, on an
unsecured basis by Historic TW Inc. (“Historic TW”), Home Box Office and Turner. The obligations of TWIFL
under the Credit Agreement are also guaranteed by Time Warner.
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. Proceeds from the commercial paper program may be
used for general corporate purposes. The obligations of the Company under the commercial paper program are
directly or indirectly guaranteed on an unsecured basis by Historic TW, Home Box Office and Turner.
Public Debt
Time Warner and certain of its subsidiaries have various public debt issuances outstanding. At issuance, the
maturities of these outstanding series of debt ranged from five to 40 years and the interest rates on debt with
fixed interest rates ranged from 3.15% to 9.15%. At December 31, 2011 and 2010, the weighted average interest
rate on the Company’s outstanding fixed-rate public debt was 6.37% and 6.55%, respectively. At December 31,
2011, the Company’s fixed-rate public debt had maturities ranging from 2012 to 2041.
2011 Debt Offerings
Time Warner has a shelf registration statement filed with the SEC that allows it to offer and sell from time to
time debt securities, preferred stock, common stock and warrants to purchase debt and equity securities.
On April 1, 2011, Time Warner issued $1.0 billion aggregate principal amount of 4.75% Notes due 2021 and
$1.0 billion aggregate principal amount of 6.25% Debentures due 2041 (the “April 2011 Debt Offering”) from its
shelf registration statement.
On October 17, 2011, Time Warner issued $500 million aggregate principal amount of 4.00% Notes due
2022 and $500 million aggregate principal amount of 5.375% Debentures due 2041 (the “October 2011 Debt
Offering”) from its shelf registration statement.
The securities issued pursuant to the April 2011 Debt Offering and October 2011 Debt Offering are directly
or indirectly guaranteed, on an unsecured basis, by Historic TW, Home Box Office and Turner.
Maturities of Public Debt
The Company’s public debt matures as follows (millions):
2012 2013 2014 2015 2016 Thereafter
Debt ................................ $ 638 732 — 1,000 1,150 15,881
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