Time Warner Cable 2010 Annual Report Download - page 120

18. RELATED PARTY TRANSACTIONS
In the normal course of conducting its business, the Company has various transactions with equity-method
investments, Time Warner and affiliates and subsidiaries of Time Warner. Effective March 12, 2009, upon
completion of the Separation, Time Warner and its affiliates are no longer related parties. A summary of these
transactions for the years ended December 31, 2010, 2009 and 2008 is as follows (in millions):
2010 2009 2008
Year Ended December 31,
Revenues ............................................... $ 17 $ 16 $ 29
Costs of revenues:
Programming services provided by equity-method investees ......... $ (238) (231) (176)
Programming services provided by subsidiaries of Time Warner and
affiliates .............................................. — (168) (857)
Other costs charged by equity-method investees .................. (19) (16) (20)
Other costs charged by subsidiaries of Time Warner and affiliates ..... — — (1)
Total . . . ............................................... $ (257) $ (415) $ (1,054)
Selling, general and administrative expenses ..................... $ — $ (3) $ (22)
19. COMMITMENTS AND CONTINGENCIES
Prior to the restructuring of TWE, which was completed in March 2003 (the “TWE Restructuring”), TWE had
various contingent commitments, including guarantees, related to the TWE non-cable businesses. In connection with the
TWE Restructuring, some of these commitments were not transferred with their applicable non-cable business and they
remain contingent commitments of TWE. Time Warner and its subsidiary, WCI, have agreed, on a joint and several basis,
to indemnify TWE from and against any and all of these contingent liabilities, but TWE remains a party to these
commitments.
TWC has cable franchise agreements containing provisions requiring the construction of cable plant and the
provision of services to customers within the franchise areas. In connection with these obligations under existing
franchise agreements, TWC obtains surety bonds or letters of credit guaranteeing performance to municipalities and
public utilities and payment of insurance premiums. Such surety bonds and letters of credit as of December 31, 2010 and
2009 totaled $322 million and $313 million, respectively. Payments under these arrangements are required only in the
event of nonperformance. TWC does not expect that these contingent commitments will result in any amounts being paid
in the foreseeable future.
Contractual Obligations
The Company has obligations to make future payments for goods and services under certain contractual
arrangements. These contractual obligations secure the future rights to various assets and services to be used in the
normal course of the Company’s 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 consolidated balance sheet.
The Company’s total rent expense, which primarily includes facility rental expense and pole attachment rental fees,
amounted to $212 million in 2010, $212 million in 2009 and $190 million in 2008. The Company has lease obligations
under various operating leases including minimum lease obligations for real estate and operating equipment.
The minimum rental commitments under long-term operating leases during the next five years are $117 million in
2011, $107 million in 2012, $99 million in 2013, $90 million in 2014, $82 million in 2015 and $348 million thereafter.
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)