Time Warner Cable 2008 Annual Report Download - page 64

2008 Bond Offerings and Credit Facilities
On June 16, 2008, TWC filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with
the Securities and Exchange Commission (the “SEC”) that allows TWC to offer and sell from time to time senior and
subordinated debt securities and debt warrants. On June 19, 2008, TWC issued $5.0 billion in aggregate principal amount
of senior unsecured notes and debentures under the Shelf Registration Statement (the “June 2008 Bond Offering”),
consisting of $1.5 billion principal amount of 6.20% notes due 2013, $2.0 billion principal amount of 6.75% notes due
2018 and $1.5 billion principal amount of 7.30% debentures due 2038. On November 18, 2008, TWC issued $2.0 billion
in aggregate principal amount of senior unsecured notes under the Shelf Registration Statement (the “November 2008
Bond Offering” and, together with the June 2008 Bond Offering, the “2008 Bond Offerings”), consisting of $750 million
principal amount of 8.25% notes due 2014 and $1.250 billion principal amount of 8.75% notes due 2019. The Company
expects to use the net proceeds from the 2008 Bond Offerings to finance, in part, the Special Dividend. Pending the
payment of the Special Dividend, a portion of the net proceeds from the 2008 Bond Offerings was used to repay variable-
rate debt with lower interest rates than the interest rates on the debt securities issued in the 2008 Bond Offerings, and the
remainder was invested in accordance with the Company’s investment policy. If the Separation is not consummated and
the Special Dividend is not paid, the Company will use the remainder of the net proceeds from the 2008 Bond Offerings
for general corporate purposes, including repayment of indebtedness.
In addition to issuing the debt securities in the 2008 Bond Offerings described above, on June 30, 2008, the
Company entered into a credit agreement 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 (the “2008 Bridge Facility”) 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. As a result of the 2008 Bond Offerings, the amount of the commitments of the lenders under the 2008 Bridge
Facility was reduced to $2.070 billion. As discussed below in “Financial Condition and Liquidity—Outstanding Debt
and Mandatorily Redeemable Preferred Equity and Available Financial Capacity—Lending Commitments,” the
Company does not expect that Lehman Brothers Commercial Bank (“LBCB”) will fund its $138 million in commit-
ments under the 2008 Bridge Facility, and, therefore, the Company has included only $1.932 billion of commitments
under the 2008 Bridge Facility in its unused committed capacity as of December 31, 2008. TWC may not borrow any
amounts under the 2008 Bridge Facility unless and until the Special Dividend is declared.
On December 10, 2008, Time Warner (as lender) and TWC (as borrower) entered into a credit agreement for a
two-year $1.535 billion senior unsecured supplemental term loan facility (the “Supplemental Credit Agreement”).
TWC may borrow under the Supplemental Credit Agreement only to repay amounts outstanding at the final
maturity of the 2008 Bridge Facility, if any.
TWC’s obligations under the debt securities issued in the 2008 Bond Offerings and under the 2008 Bridge
Facility and the Supplemental Credit Agreement are guaranteed by TWE and TW NY.
See Note 7 to the accompanying consolidated financial statements for further details regarding the 2008 Bond
Offerings, the 2008 Bridge Facility and the Supplemental Credit Agreement.
Investment in Clearwire
In November 2008, TWC, Intel Corporation, Google Inc., Comcast Corporation (together with its subsidiaries,
“Comcast”) and Bright House Networks, LLC collectively invested $3.2 billion in Clearwire Corporation, a
wireless broadband communications company (“Clearwire Corp”), and one of its operating subsidiaries (“Clear-
wire LLC,” and, collectively with Clearwire Corp, “Clearwire”). TWC invested $550 million for membership
interests in Clearwire LLC and received voting and board of director nomination rights in Clearwire Corp.
Clearwire LLC was formed by the combination of Sprint Nextel Corporation’s (“Sprint”) and Clearwire Corp’s
respective wireless broadband businesses and is focused on deploying the first nationwide fourth-generation
wireless network to provide mobile broadband services to wholesale and retail customers. In connection with the
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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)