Time Warner Cable 2008 Annual Report Download - page 88

The following table summarizes the Company’s aggregate contractual obligations as of December 31, 2008,
and the estimated timing and effect that such obligations are expected to have on the Company’s liquidity and cash
flows in future periods.
2009
2010-
2011
2012-
2013
2014 and
thereafter Total
(in millions)
Programming purchases
(a)
................... $ 3,098 $ 5,076 $ 2,933 $ 527 $ 11,634
Outstanding debt obligations and TW NY Cable
Preferred Membership Units
(b)
............. 1 3,046 3,909 11,002 17,958
Interest and dividends
(c)
.................... 1,078 2,176 1,952 9,234 14,440
Facility leases
(d)
.......................... 110 199 159 385 853
Data processing services.................... 48 96 44 — 188
High-speed data connectivity
(e)
............... 40 21 7 35 103
Digital Phone connectivity
(f)
................. 453 704 280 1 1,438
Set-top box and modem purchases ............ 175 — — — 175
Other .................................. 146 22 14 81 263
Total .................................. $ 5,149 $ 11,340 $ 9,298 $ 21,265 $ 47,052
(a)
Programming purchases represent contracts that the Company has with cable television networks and broadcast stations to provide
programming services to its subscribers. Typically, these arrangements provide that the Company purchase cable television and broadcast
programming for a certain number of subscribers as long as the Company is providing video services to such number of subscribers. There
is generally no obligation to purchase these services if the Company is not providing video services. Programming fees represent a
significant portion of its costs of revenues. Future fees under such contracts are based on numerous variables, including number and type of
customers. The amounts included above represent estimates of future programming costs based on subscriber numbers as of December 31,
2008 applied to the per-subscriber contractual rates contained in the contracts that were in effect as of December 31, 2008, for which the
Company does not have the right to cancel the contract or for contracts with a guaranteed minimum commitment.
(b)
Outstanding debt obligations and TW NY Cable Preferred Membership Units represent principal amounts due on outstanding debt
obligations and the TW NY Cable Preferred Membership Units as of December 31, 2008. Amounts do not include any fair value
adjustments, bond premiums, discounts, interest payments or dividends.
(c)
Amounts are based on the outstanding debt or TW NY Cable Preferred Membership Units balances, respective interest or dividend rates
(interest rates on variable-rate debt were held constant through maturity at the December 31, 2008 rates) and maturity schedule of the
respective instruments as of December 31, 2008. Interest ultimately paid on these obligations may differ based on changes in interest rates
for variable-rate debt, as well as any potential future refinancings entered into by the Company. See Note 7 to the accompanying
consolidated financial statements for further details.
(d)
The Company has facility lease obligations under various operating leases including minimum lease obligations for real estate and
operating equipment.
(e)
High-speed data connectivity obligations are based on the contractual terms for bandwidth circuits that were in use as of December 31,
2008.
(f)
Digital Phone connectivity obligations relate to transport, switching and interconnection services that allow for the origination and
termination of local and long-distance telephony traffic. These expenses also include related technical support services. There is generally
no obligation to purchase these services if the Company is not providing Digital Phone service. The amounts included above are based on
the number of Digital Phone subscribers as of December 31, 2008 and the per-subscriber contractual rates contained in the contracts that
were in effect as of December 31, 2008.
The Company’s total rent expense, which primarily includes facility rental expense and pole attachment rental
fees, amounted to $190 million in 2008, $182 million in 2007 and $149 million in 2006.
Minimum pension funding requirements have not been presented, as such amounts have not been determined
beyond 2008. The Company did not have a required minimum pension contribution obligation for its funded
defined benefit pension plans in 2008; however, the Company made discretionary cash contributions of $400 million
to these plans and expects to contribute at least $150 million to these plans in 2009.
Contingent Commitments
The Six Flags Guarantee
Prior to the restructuring of TWE, which was completed in March 2003 (the “TWE Restructuring”), TWE had
various contingent commitments, including guarantees, related to TWE’s non-cable businesses, including Warner
Bros., Home Box Office, and TWE’s interests in The WB Television Network (which has subsequently ceased
78
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)