Time Magazine 2014 Annual Report Download - page 97

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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Revolving Credit Facilities and Commercial Paper Program
Revolving Credit Facilities
On December 18, 2014, 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 from
December 18, 2018 to December 18, 2019 pursuant to a First Amendment, dated as of December 18, 2014, to the amended
and restated credit agreement, dated as of January 19, 2011, as amended and restated as of December 18, 2013 (the “Credit
Agreement”).
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, 2014, 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, 2014, the Company was in compliance with the leverage covenant, with a
consolidated leverage ratio of approximately 3.1 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.
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 2.10% to 9.15%. At December 31, 2014 and 2013, the weighted average interest rate on the Company’s outstanding
fixed-rate public debt was 5.89% and 6.13%, respectively. At December 31, 2014, the Company’s fixed-rate public debt had
maturities ranging from 2015 to 2044.
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