Time Warner Cable 2010 Annual Report Download - page 121

The following table summarizes the Company’s aggregate contractual obligations as of December 31, 2010 under
certain programming, Digital Phone and high-speed data connectivity and other agreements and the estimated timing and
effect that such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in millions):
2011 ......................................................................... $ 4,339
2012 – 2013 .................................................................... 8,218
2014 – 2015 .................................................................... 6,011
Thereafter ..................................................................... 7,027
Total ......................................................................... $ 25,595
Programming purchases represent contracts that the Company has with cable television networks and broadcast
stations to provide programming services to its subscribers. The amounts included above represent estimates of the future
programming costs for these contract requirements and commitments based on subscriber numbers and tier placement as
of December 31, 2010 applied to the per-subscriber rates contained in these contracts. Actual amounts due under such
contracts may differ from the amounts above based on the actual subscriber numbers and tier placements.
Digital Phone connectivity obligations relate to transport, switching and interconnection services, primarily
provided by Sprint, that allow for the origination and termination of local and long-distance telephony traffic. These
expenses also include related technical support services. In the fourth quarter of 2010, the Company began replacing
Sprint as the provider of these services. There is generally no obligation to purchase these services if the Company is not
providing Digital Phone service. The amounts included above are estimated based on the number of Digital Phone
subscribers as of December 31, 2010 and the per-subscriber contractual rates contained in the contracts that were in effect
as of December 31, 2010 and also reflect the replacement of Sprint between the fourth quarter 2010 and the first quarter of
2014.
High-speed data connectivity obligations are based on the contractual terms for bandwidth circuits that were in use as
of December 31, 2010.
Minimum pension funding requirements have not been presented as such amounts have not been determined beyond
2010. The Company did not have a required minimum pension contribution obligation for its qualified pension plans in
2010; however, the Company made cash contributions of $104 million to the pension plans during 2010 and may make
discretionary cash contributions to these plans in 2011.
Legal Proceedings
The Company is the defendant in In re: Set-Top Cable Television Box Antitrust Litigation, ten purported class actions
filed in federal district courts throughout the United States. These actions are subject to a Multidistrict Litigation Order
transferring the cases for pre-trial purposes to the U.S. District Court for the Southern District of New York. On May 10,
2010, the plaintiffs filed a second amended consolidated class action complaint (the “Second Amended Complaint”),
alleging that the Company violated Section 1 of the Sherman Antitrust Act, various state antitrust laws and state unfair/
deceptive trade practices statutes by tying the sales of premium cable television services to the leasing of set-top
converters boxes. The plaintiffs are seeking, among other things, unspecified treble monetary damages and an injunction
to cease such alleged practices. On September 30, 2010, the Company filed a motion to dismiss the Second Amended
Complaint. The Company intends to defend against this lawsuit vigorously.
On November 14, 2008, the plaintiffs in Mark Swinegar, et al. v. Time Warner Cable Inc., filed a second amended
complaint in the Los Angeles County Superior Court, as a purported class action, alleging that the Company provided to
and charged plaintiffs for equipment that they had not affirmatively requested in violation of the proscription in the Cable
Consumer Protection and Competition Act of 1992 (the “Cable Act”) against “negative option billing” and that such
violation was an unlawful act or practice under California’s Unfair Competition Law (the “UCL”). Plaintiffs are seeking
restitution under the UCL and attorneys’ fees. On February 23, 2009, the court denied TWC’s motion to dismiss the
second amended complaint, and on July 29, 2010, the court denied the Company’s motion for summary judgment. On
October 7, 2010, the Company filed a petition for a declaratory ruling with the Federal Communications Commission (the
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)