Time Warner Cable 2009 Annual Report Download - page 108

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18. ADDITIONAL FINANCIAL INFORMATION
Other Cash Flow Information
Additional financial information with respect to cash (payments) and receipts is as follows (in millions):
2009 2008 2007
Year Ended December 31,
Cash paid for interest ................................................. $ (1,234) $ (745) $ (855)
Interest income received............................................... 13 38 10
Cash paid for interest, net ............................................. $ (1,221) $ (707) $ (845)
Cash paid for income taxes ............................................ $ (90) $ (40) $ (298)
Cash refunds of income taxes ........................................... 53 4 6
Cash paid for income taxes, net ......................................... $ (37) $ (36) $ (292)
Noncash financing activities for the year ended December 31, 2009 included the TW NY Exchange, in which Historic TW
transferred its 12.43% non-voting common stock interest in TW NY to TWC in exchange for 80 million newly issued shares
(approximately 27 million shares after giving effect to the 1-for-3 TWC Reverse Stock Split) of TWC’s Class A common stock.
Noncash financing activities for the year ended December 31, 2007 included TWC’s 50% equity interest in the Houston Pool of
TKCCP, valued at $880 million, delivered as the purchase price for Comcast’s 50% equity interest in the Kansas City Pool of TKCCP.
Interest Expense, Net
Interest expense, net consists of (in millions):
2009 2008 2007
Year Ended December 31,
Interest income ..................................................... $ 5 $ 38 $ 13
Interest expense ..................................................... (1,324) (961) (907)
Total interest expense, net ............................................. $ (1,319) $ (923) $ (894)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of (in millions):
2009 2008
December 31,
Prepaid income taxes ............................................................ $ 103 $ —
Investment in The Reserve Fund .................................................... 34 103
Other prepaid expenses and other current assets ......................................... 115 98
Total prepaid expenses and other current assets ......................................... $ 252 $ 201
The Company invests its cash and equivalents in a combination of money market, government and treasury funds, as well as bank
certificates of deposit, in accordance with the Company’s investment policy of diversifying its investments and limiting the amount of its
investments in a single entity or fund. Consistent with the foregoing, the Company invested $490 million in June 2008 in The Reserve
Fund’s Primary Fund (“The Reserve Fund”). On the morning of September 15, 2008, the Company requested a full redemption of its
investment in The Reserve Fund, but the redemption request was not honored. On September 22, 2008, The Reserve Fund announced that
redemptions of shares were suspended pursuant to an SEC order requested by The Reserve Fund so that an orderly liquidation could be
effected. Through December 31, 2009, the Company received $451 million from The Reserve Fund representing its pro rata share of
partial distributions made by The Reserve Fund. The Company believes that it is legally entitled to a return of its entire investment in The
Reserve Fund. However, during the first quarter of 2009, The Reserve Fund announced that it was establishing a $3.5 billion special
reserve for legal and other costs that would not be distributed to investors until all claims are resolved. As a result, the Company recorded
a $10 million reserve. By Order dated November 25, 2009 and clarified in an Order dated December 11, 2009, the U.S. District Court for
the Southern District of New York directed the pro rata distribution of the remaining $3.4 billion held by The Reserve Fund in a manner to
be directed by the Court. As a result of these actions, in the fourth quarter of 2009, the Company reversed $5 million of the original
reserve. The resulting $5 million net impairment of its investment in The Reserve Fund during 2009 is included in other income
96
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)