Time Magazine 2012 Annual Report Download - page 98

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
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, 2012, the Company was
in compliance with the leverage covenant, with a consolidated leverage ratio of approximately 2.4 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, 2012 and 2011, the weighted average interest
rate on the Company’s outstanding fixed-rate public debt was 6.23% and 6.37%, respectively. At December 31,
2012, the Company’s fixed-rate public debt had maturities ranging from 2013 to 2042.
Debt Offering
On June 13, 2012, Time Warner issued $500 million aggregate principal amount of 3.40% Notes due 2022
and $500 million aggregate principal amount of 4.90% Debentures due 2042 in a public offering. The securities
issued pursuant to the 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):
2013 2014 2015 2016 2017 Thereafter
Debt ............................ $ 732 $ — $ 1,000 $ 1,150 $ 500 $ 16,381
Covenants and Credit Rating Triggers
Each of the Company’s Credit Agreement and public debt indentures contain customary covenants. A breach
of such covenants in the Credit Agreement that continues beyond any grace period constitutes a default, which
can limit the Company’s ability to borrow and can give rise to a right of the lenders to terminate the Revolving
Credit Facilities and/or require immediate payment of any outstanding debt. A breach of such covenants in the
public debt indentures beyond any grace period constitutes a default, which can require immediate payment of
the outstanding debt. There are no credit ratings-based defaults or covenants in the Credit Agreement or public
debt indentures.
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