Time Warner Cable 2008 Annual Report Download - page 124

The 2007 Debt Securities may be redeemed in whole or in part at any time at TWC’s option at a redemption
price equal to the greater of (i) 100% of the principal amount of the 2007 Debt Securities being redeemed and (ii) the
sum of the present values of the remaining scheduled payments on the 2007 Debt Securities discounted to the
redemption date on a semi-annual basis at a government treasury rate plus 20 basis points for the 2012 Notes,
30 basis points for the 2017 Notes and 35 basis points for the 2037 Debentures as further described in the Indenture
and the 2007 Debt Securities, plus, in each case, accrued but unpaid interest to the redemption date.
TWE Notes and Debentures
TWE notes and debentures as of December 31, 2008 and 2007 were as follows:
Face
Amount
Interest Rate at
December 31,
2008 Maturity
December 31,
2008
December 31,
2007
(in millions)(in millions)
Outstanding Balance as of
Senior debentures
(a)
.............. $ 600 7.250% 2008 $ — $ 601
Senior notes ................... 250 10.150% 2012 263 267
Senior notes ................... 350 8.875% 2012 362 365
Senior debentures ............... 1,000 8.375% 2023 1,038 1,040
Senior debentures ............... 1,000 8.375% 2033 1,051 1,053
Total
(b)
....................... $ 3,200 $ 2,714 $ 3,326
(a)
As of December 31, 2007, the Company classified $601 million of TWE 7.25% debentures due September 1, 2008 as long-term in the
consolidated balance sheet to reflect management’s intent and ability to refinance the obligation on a long-term basis through the utilization
of the Company’s unused committed capacity. TWE’s 7.25% debentures due September 1, 2008 (aggregate principal amount of
$600 million) matured and were retired.
(b)
Outstanding balance amount as of December 31, 2008 and 2007 includes an unamortized fair value adjustment of $114 million and
$126 million, respectively.
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 $114 million and
$126 million as of December 31, 2008 and 2007, 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 have each guaranteed TWE’s
obligations under the TWE Notes. Prior to November 2, 2006, ATC and WCI, which entities are subsidiaries of
Time Warner, 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”). TWE has no obligation to file reports with the SEC under the Exchange Act.
The indenture (the “TWE Indenture”) governing the TWE Notes was amended in several respects during 2006.
Pursuant to the Tenth Supplemental Indenture to the TWE Indenture, TW NY fully, unconditionally and irrevocably
guarantees the payment of principal and interest on the TWE Notes. As a result of a consent solicitation that was
completed on November 2, 2006, the Eleventh Supplemental Indenture to the TWE Indenture was entered into
pursuant to which (i) TWC provides a direct guaranty of the TWE Notes, rather than a guaranty of the TW Partner
Guaranties (as defined below), (ii) the guaranties (the “TW Partner Guaranties”) previously provided by ATC and
WCI were terminated and (iii) TWE is permitted 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.
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)