Time Warner Cable 2010 Annual Report Download - page 123

on September 13, 2006, Rembrandt filed a complaint in the U.S. District Court for the Eastern District of Texas alleging
that the Company infringes several patents purportedly related to “high-speed cable modem internet products and
services.” On June 18, 2007, these cases, along with other lawsuits filed by Rembrandt, were made subject to an MDL
Order transferring the case for pretrial proceedings to the U.S. District Court for the District of Delaware. In November
2008, the district court issued its claims construction orders. In response to these orders, the plaintiff has indicated it will
dismiss its claims relating to the alleged infringement of eight patents purportedly relating to high-speed data and
IP-based telephony services. The plaintiff has not indicated that it will dismiss its claim relating to one remaining patent
alleged to relate to digital video decoder technology. Summary judgment motions are pending relating to the remaining
claim. The Company intends to defend against the remaining claim vigorously.
From time to time, the Company receives notices from third parties claiming that it infringes their intellectual
property rights. Claims of intellectual property infringement could require TWC to enter into royalty or licensing
agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from
further use of the intellectual property in question. In addition, certain agreements entered may require the Company to
indemnify the other party for certain third-party intellectual property infringement claims, which could increase the
Company’s damages and its costs of defending against such claims. Even if the claims are without merit, defending
against the claims can be time consuming and costly.
As part of the restructuring of TWE in 2003, Time Warner agreed to indemnify the Company from and against any
and all liabilities relating to, arising out of or resulting from specified litigation matters brought against the TWE non-
cable businesses. Although Time Warner has agreed to indemnify the Company against such liabilities, TWE remains a
named party in certain litigation matters.
The costs and other effects of future litigation, governmental investigations, legal and administrative cases and
proceedings (whether civil or criminal), settlements, judgments and investigations, claims and changes in pending matters
(including those matters described above), and developments or assertions by or against the Company relating to
intellectual property rights and intellectual property licenses, could have a material adverse effect on the Company’s
business, financial condition and operating results.
20. ADDITIONAL FINANCIAL INFORMATION
Other Cash Flow Information
Additional financial information with respect to cash (payments) and receipts for the years ended December 31,
2010, 2009 and 2008 is as follows (in millions):
2010 2009 2008
Year Ended December 31,
Cash paid for interest ...................................... $ (1,458) $ (1,234) $ (745)
Interest income received
(a)
.................................. 99 13 38
Cash paid for interest, net .................................. $ (1,359) $ (1,221) $ (707)
Cash paid for income taxes ................................. $ (481) $ (90) $ (40)
Cash refunds of income taxes ................................ 93 53 4
Cash paid for income taxes, net .............................. $ (388) $ (37) $ (36)
(a)
Interest income received includes amounts received under interest rate swap contracts.
The consolidated statement of cash flows for the year ended December 31, 2010 does not reflect $43 million of
common stock repurchases that were included in other current liabilities as of December 31, 2010 for which payment was
made in January 2011.
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)