Time Magazine 2012 Annual Report Download - page 97

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
hedged items affect earnings. Included in Accumulated other comprehensive loss, net are deferred net gains of $8
million and less than $1 million at December 31, 2012 and 2011, respectively, related to hedges of cash flows
associated with films that are not expected to be released within the next twelve months.
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):
December 31,
2012 2011
Fixed-rate public debt ............................................. $ 19,620 $ 19,251
Other obligations ................................................. 251 273
Subtotal ........................................................ 19,871 19,524
Debt due within one year ........................................... (749) (23)
Total long-term debt .............................................. $ 19,122 $ 19,501
(a) Represents principal amounts adjusted for premiums and discounts.
The Company’s unused committed capacity as of December 31, 2012 was $7.863 billion, including
$2.841 billion of Cash and equivalents. At December 31, 2012, 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 6.21% and 6.35% at December 31, 2012 and 2011, respectively.
Revolving Credit Facilities and Commercial Paper Program
Revolving Credit Facilities
On December 14, 2012, Time Warner amended its $5.0 billion senior unsecured credit facilities, which
consist of two $2.5 billion revolving credit facilities, pursuant to an Amendment and Restatement Agreement,
dated as of December 14, 2012, to the credit agreement, dated as of January 19, 2011 and amended on
September 27, 2011 (as amended and restated, the “Credit Agreement”). The amendment extended the maturity
date of one of the revolving credit facilities from September 27, 2015 to December 14, 2017 (the “2017
Revolving Credit Facility”). The maturity date of the other $2.5 billion revolving credit facility (the “2016
Revolving Credit Facility” and, together with the 2017 Revolving Credit Facility, the “Revolving Credit
Facilities”) was not affected by the amendment and remains September 27, 2016.
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, 2012, the interest rate on borrowings
under the 2017 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 2016 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 in the Credit Agreement include a maximum consolidated leverage ratio covenant of 4.5 times the
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
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