Time Magazine 2013 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2013 Time Magazine annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 146

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146

TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Public Debt
Time Warner and one 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, 2013 and 2012, the weighted average interest
rate on the Company’s outstanding fixed-rate public debt was 6.13% and 6.23%, respectively. At December 31,
2013, the Company’s fixed-rate public debt had maturities ranging from 2015 to 2043.
Debt Offering
On December 16, 2013, Time Warner issued $500 million aggregate principal amount of 4.05% Notes due
2023 and $500 million aggregate principal amount of 5.35% Debentures due 2043 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):
2014 2015 2016 2017 2018 Thereafter
Debt ............................ $ — $ 1,000 $ 1,150 $ 500 $ 600 $ 16,781
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.
The interest rate on borrowings under the Revolving Credit Facilities and the facility fee are based in part on
the Company’s credit ratings. Therefore, if the Company’s credit ratings are lowered, the cost of maintaining the
Revolving Credit Facilities and the cost of borrowing increase and, conversely, if the ratings improve, such costs
decrease. As of December 31, 2013, the Company’s investment grade debt ratings were as follows: Fitch BBB+,
Moody’s Baa2, and S&P BBB.
As of December 31, 2013, the Company was in compliance with all covenants in the Credit Agreement and
its public debt indentures. The Company does not anticipate that it will have any difficulty in the foreseeable
future complying with the covenants in its Credit Agreement or public debt indentures.
Other Obligations
Other long-term debt obligations consist of capital lease and other obligations, including committed
financings by subsidiaries under local bank credit agreements. At both December 31, 2013 and 2012, the
weighted average interest rate for other long-term debt obligations was 4.41%.
Capital Leases
The Company has entered into various leases primarily related to network equipment that qualify as capital
lease obligations. As a result, the present value of the remaining future minimum lease payments is recorded as a
capitalized lease asset and related capital lease obligation in the Consolidated Balance Sheet. Assets recorded
under capital lease obligations totaled $115 million and $101 million as of December 31, 2013 and 2012,
89