Time Magazine 2013 Annual Report Download - page 104

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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The Company’s unused committed capacity as of December 31, 2013 was $6.883 billion, including $1.862
billion of Cash and equivalents. At December 31, 2013, 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 6.11% and 6.21% at December 31, 2013 and 2012, respectively.
Revolving Credit Facilities and Commercial Paper Program
Revolving Credit Facilities
On December 18, 2013, Time Warner amended its $5.0 billion of senior unsecured credit facilities (the
“Revolving Credit Facilities”), which consist of two $2.5 billion revolving credit facilities, to extend the maturity
dates of both to December 18, 2018 pursuant to an Amendment and Restatement Agreement, dated as of
December 18, 2013, to the credit agreement, dated as of January 19, 2011, as amended and restated as of
December 14, 2012 (as amended and restated on December 18, 2013, the “Credit Agreement”). Prior to the
amendment, one facility had a maturity date of September 27, 2016 and the other had a maturity date of
December 14, 2017.
The permitted borrowers under the Revolving Credit Facilities 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 the same for both revolving credit facilities
and are based on the credit rating for Time Warner’s senior unsecured long-term debt. Based on the credit rating
as of December 31, 2013, the interest rate on borrowings under the Revolving Credit Facilities would be LIBOR
plus 1.10% per annum and the facility fee was 0.15% per annum.
The Revolving Credit Facilities provide 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 Revolving Credit Facilities include a maximum consolidated leverage ratio covenant of 4.5
times the consolidated EBITDA, as defined in the Revolving Credit Facilities, 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 Revolving Credit Facilities. At
December 31, 2013, 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 Revolving Credit Facilities also contain 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 Revolving
Credit Facilities 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 Revolving Credit Facilities 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.
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