Time Warner Cable 2009 Annual Report Download - page 62

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Free Cash Flow increased from $1.739 billion in 2008 to $1.917 billion in 2009 primarily as a result of a decrease in capital
expenditures, partially offset by a decrease in cash provided by operating activities, as discussed above.
Free Cash Flow increased from $1.024 billion in 2007 to $1.739 billion in 2008 primarily as a result of an increase in cash provided
by continuing operating activities, partially offset by an increase in capital expenditures, as discussed above.
Outstanding Debt and Mandatorily Redeemable Preferred Equity and Available Financial Capacity
Debt and mandatorily redeemable preferred equity as of December 31, 2009 and 2008 were as follows:
Maturity
Interest
Rate 2009 2008
Outstanding Balance as of
December 31,
(in millions)
Credit facilities and commercial paper program
(a)(b)
...................... 2011 0.484%
(c)
$ 1,261 $ 3,045
TWE notes and debentures
(d)
...................................... 2012-2033 7.844%
(c)
2,702 2,714
TWC notes and debentures ........................................ 2012-2039 6.176%
(e)
18,357 11,956
Capital leases and other
(f)
......................................... 11 13
Total debt..................................................... 22,331 17,728
TW NY Cable Preferred Membership Units ........................... 2013 8.210% 300 300
Total debt and mandatorily redeemable preferred equity .................. $ 22,631 $ 18,028
(a)
TWC’s unused committed capacity was $5.512 billion as of December 31, 2009, reflecting $1.048 billion in cash and equivalents and $4.464 billion of available
borrowing capacity under the Revolving Credit Facility (which reflects a reduction of $149 million for outstanding letters of credit backed by the Revolving Credit
Facility).
(b)
Outstanding balance amount as of December 31, 2009 excludes an unamortized discount on commercial paper of $1 million (none as of December 31, 2008).
(c)
Rate represents a weighted-average effective interest rate as of December 31, 2009.
(d)
Outstanding balance amount as of December 31, 2009 and 2008 includes an unamortized fair value adjustment of $102 million and $114 million, respectively, which
includes the fair value adjustment recognized as a result of the 2001 merger of America Online, Inc. (now known as AOL Inc.) and Time Warner Inc. (now known as
Historic TW Inc.).
(e)
Rate represents a weighted-average effective interest rate as of December 31, 2009 and includes the effects of derivative financial instruments.
(f)
Amount includes $1 million of debt due within one year as of December 31, 2008 (none as of December 31, 2009), which primarily relates to capital lease obligations.
See “Overview—Recent Developments—2009 Bond Offerings and Termination of Lending Commitments” and Note 7 to the
accompanying consolidated financial statements for further details regarding the Company’s outstanding debt and mandatorily
redeemable preferred equity and other financing arrangements, including certain information about maturities, covenants, rating
triggers and bank credit agreement leverage ratios relating to such debt and financing arrangements.
Lending Commitments
Lehman Brothers Bank, FSB (“LBB”), a subsidiary of Lehman Brothers Holding Inc. (“Lehman”), was a lender under the
Revolving Credit Facility. On September 15, 2008, Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the
U.S. Bankruptcy Court for the Southern District of New York. On March 3, 2009, the Company entered into an amendment to the
Revolving Credit Facility to terminate LBB’s $125 million commitment under such facility. As a result of this termination, the borrowing
capacity under the Revolving Credit Facility was reduced from $6.000 billion to $5.875 billion.
Contractual and Other Obligations
Contractual Obligations
The Company has obligations under certain contractual arrangements to make future payments for goods and services. These
contractual obligations secure the future rights to various assets and services to be used in the normal course of operations. For example,
the Company is contractually committed to make certain minimum lease payments for the use of property under operating lease
agreements. In accordance with applicable accounting rules, the future rights and obligations pertaining to firm commitments, such as
operating lease obligations and certain purchase obligations under contracts, are not reflected as assets or liabilities in the accompanying
consolidated balance sheet.
50
TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)