Time Warner Cable 2006 Annual Report Download - page 135

obligations under the New Program are guaranteed by TW NY Holding and TWE, both subsidiaries of TWC, while
TWC’s obligations under the Prior Program were guaranteed by ATC, WCI (both subsidiaries of Time Warner but
not of TWC) and TWE. Commercial paper issued under the New Program is supported by the unused committed
capacity of the Cable Revolving Facility. The commercial paper issued under the New Program ranks pari passu
with TWC’s, TWE’s and TW NY Holding’s other unsecured senior indebtedness.
No new commercial paper was issued under the Prior Program after December 4, 2006, and the Prior Program
was terminated on February 14, 2007, upon the repayment of the last remaining notes issued thereunder. As of
December 31, 2006, there was approximately $1.500 billion of commercial paper outstanding under the New
Program and approximately $652 million of commercial paper outstanding under the Prior Program.
TWE Notes and Debentures
During 1992 and 1993, TWE issued the TWE notes and debentures (the “TWE Notes”) publicly in a number of
offerings. The maturities of these outstanding issuances ranged from 15 to 40 years and the fixed interest rates range
from 7.25% to 10.15%. The fixed-rate borrowings include an unamortized debt premium of $140 million and
$154 million as of December 31, 2006 and 2005, respectively. The debt premium is amortized over the term of each
debt issue as a reduction of interest expense. As discussed below, TWC and TW NY Holding have each guaranteed
TWE’s obligations under the TWE Notes. Prior to November 2, 2006, ATC and WCI each guaranteed pro rata
portions of the TWE Notes based on the relative fair value of the net assets that each contributed to TWE prior to the
restructuring of TWE, which was completed in March 2003 (the “TWE Restructuring”). On September 10, 2003,
TWE submitted an application with the SEC to withdraw its 7.25% Senior Debentures (due 2008) from listing and
registration on the NYSE. The application to withdraw was granted by the SEC effective on October 17, 2003. As a
result, TWE has no obligation to file reports with the SEC under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”).
Pursuant to the Ninth Supplemental Indenture to the indenture (the “TWE Indenture”) governing the TWE
Notes, TW NY, a subsidiary of TWC and a successor in interest to Time Warner NY Cable Inc., agreed to waive, for
so long as it remained a general partner of TWE, the benefit of certain provisions in the TWE Indenture which
provided that it would not have any liability for the TWE Notes as a general partner of TWE (the “TW NY Waiver”).
On October 18, 2006, TW NY contributed all of its general partnership interests in TWE to TWE GP Holdings LLC,
its wholly owned subsidiary (the “TWE GP Transfer”), and, as a result, the TW NY Waiver, by its terms, ceased to
be in effect. In addition, on October 18, 2006, TWC, together with TWE, TW NY Holding, ATC, WCI and The
Bank of New York, as Trustee, entered into the Tenth Supplemental Indenture to the TWE Indenture. Pursuant to the
Tenth Supplemental Indenture to the TWE Indenture, TW NY Holding fully, unconditionally and irrevocably
guaranteed the payment of principal and interest on the TWE Notes.
On October 19, 2006, TWE commenced a consent solicitation to amend the TWE Indenture to simplify the
guaranty structure of the TWE Notes and to amend TWE’s reporting obligations under the TWE Indenture. On
November 2, 2006, the consent solicitation was completed, and TWE, TWC, TW NY Holding and The Bank of
New York, as Trustee, entered into the Eleventh Supplemental Indenture to the TWE Indenture, which (i) amended
the guaranty of the TWE Notes previously provided by TWC to provide a direct guaranty of the TWE Notes by
TWC, rather than a guaranty of the TW Partner Guaranties (as defined below), (ii) terminated the guaranties (the
“TW Partner Guaranties”) previously provided by ATC and WCI, which entities are subsidiaries of Time Warner,
and (iii) amended TWE’s reporting obligations under the TWE Indenture to allow TWE to provide holders of the
TWE Notes with quarterly and annual reports that TWC (or any other ultimate parent guarantor, as described in the
Eleventh Supplemental Indenture) would be required to file with the SEC pursuant to Section 13 of the Exchange
Act, if it were required to file such reports with the SEC in respect of the TWE Notes pursuant to such section of the
Exchange Act, subject to certain exceptions as described in the Eleventh Supplemental Indenture.
130
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)