Time Warner Cable 2008 Annual Report Download - page 119

Company and Time Warner (the “Supplemental Credit Agreement”) under which the Company can borrow only to
repay amounts outstanding at the final maturity of the 2008 Bridge Facility, if any. The Company’s obligations
under each of these facilities are guaranteed by TWE and TW NY.
Revolving Credit Facility, Term Facility and Commercial Paper Program
Borrowings under the Revolving Credit Facility bear interest at a rate based on the credit rating of TWC, which
rate was LIBOR plus 0.27% per annum at December 31, 2008. In addition, TWC is required to pay a facility fee on
the aggregate commitments under the Revolving Credit Facility at a rate determined by the credit rating of TWC,
which rate was 0.08% per annum at December 31, 2008. TWC may also incur an additional usage fee of 0.10% per
annum on the outstanding loans and other extensions of credit under the Revolving Credit Facility if and when such
amounts exceed 50% of the aggregate commitments thereunder. Borrowings under the Term Facility bear interest at
a rate based on the credit rating of TWC, which rate was LIBOR plus 0.40% per annum at December 31, 2008. In
April 2007, TWC used a portion of the net proceeds of the 2007 Bond Offering (defined below) to repay a portion of
the outstanding indebtedness under the Term Facility, which reduced such facility from $4.0 billion to
$3.045 billion.
The Revolving Credit Facility provides same-day funding 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 Facilities contain a maximum
leverage ratio covenant of 5.0 times the consolidated EBITDA of TWC (as defined in the Facilities). The terms and
related financial metrics associated with the leverage ratio are defined in the applicable agreements. At
December 31, 2008, TWC was in compliance with the leverage covenant, with a leverage ratio, calculated in
accordance with the agreements, of approximately 2.0 times. The Facilities do not contain any credit ratings-based
defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse change
in the financial condition or results of operations of Time Warner or TWC. Borrowings under the Revolving Credit
Facility may be used for general corporate purposes, and unused credit is available to support borrowings under
TWC’s commercial paper program.
In addition to the Facilities, TWC maintains a $6.0 billion unsecured commercial paper program (the “CP
Program”) that is also guaranteed by TW NY and TWE. Commercial paper issued under the CP Program is
supported by unused committed capacity under the Revolving Credit Facility and ranks pari passu with other
unsecured senior indebtedness of TWC, TWE and TW NY.
As of December 31, 2008, there were borrowings of $3.045 billion outstanding under the Term Facility, no
borrowings and letters of credit totaling $126 million outstanding under the Revolving Credit Facility, and no
commercial paper outstanding under the CP Program. TWC’s available committed capacity under the Revolving
Credit Facility as of December 31, 2008 was $5.749 billion, and TWC had $5.449 billion of cash and equivalents on
hand.
2008 Bridge Facility
On June 30, 2008, the Company entered into the 2008 Bridge Facility with a geographically diverse group of
major financial institutions for a senior unsecured term loan facility originally in an aggregate principal amount of
$9.0 billion with an initial maturity date that is 364 days after the borrowing date in order to finance, in part, the
Special Dividend. The Company may elect to extend the maturity date of the loans outstanding under the 2008
Bridge Facility for an additional year. Subject to certain limited exceptions pursuant to the terms of the 2008 Bridge
Facility, to the extent the Company incurs debt (other than an incurrence of debt under the Revolving Credit Facility
and its existing commercial paper program), issues equity securities or completes asset sales prior to drawing on the
2008 Bridge Facility, the commitments of the lenders under the 2008 Bridge Facility will be reduced by an amount
equal to the net cash proceeds from any such incurrence, issuance or sale. As a result of the 2008 Bond Offerings (as
defined below), the amount of the commitments of the lenders under the 2008 Bridge Facility was reduced to
$2.070 billion. As discussed below, the Company does not expect that LBCB (as defined below) will fund its
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)