Time Warner Cable 2010 Annual Report Download - page 51

Consistent with the Company’s overall balance sheet management strategy, in March 2010, TWC began paying a
quarterly cash dividend of $0.40 per share of TWC common stock to TWC stockholders, which totaled $576 million
during 2010. On January 26, 2011, TWC’s Board of Directors declared an increased quarterly cash dividend of $0.48 per
share of TWC common stock. In addition to paying the quarterly dividend, on October 29, 2010, TWC’s Board of
Directors authorized a $4.0 billion common stock repurchase program (the “Stock Repurchase Program”). Purchases
under the Stock Repurchase Program may be made from time to time on the open market and in privately negotiated
transactions. The size and timing of the Company’s purchases under the Stock Repurchase Program are based on a number
of factors, including price and business and market conditions. From the program’s inception through December 31, 2010,
the Company repurchased 8.0 million shares of TWC common stock for $515 million, including 0.6 million shares
repurchased for $43 million that settled in January 2011. From the program’s inception through February 15, 2011, the
Company repurchased 13.9 million shares of TWC common stock for $916 million.
Recent Developments
NaviSite Acquisition
On February 1, 2011, TWC entered into an agreement to acquire NaviSite, Inc. (“NaviSite”) for $5.50 per share of
NaviSite common stock in cash, or a total equity value of approximately $230 million. As of February 1, 2011, NaviSite
had approximately $50 million of debt and approximately $35 million of preferred equity. NaviSite, which provides
enterprise-class hosting, managed application, messaging and cloud services, had revenues of $126 million for its fiscal
year ended July 31, 2010. NaviSite common stock is listed on the NASDAQ Capital Market. The transaction, which is
subject to NaviSite stockholder approval, certain regulatory approvals and customary closing conditions, is expected to
close in the second quarter of 2011. On February 8, 2011, a lawsuit was filed on behalf of a purported class of NaviSite
stockholders against NaviSite, certain of its officers and directors and TWC alleging breaches of fiduciary duty and that
the consideration to be paid in connection with the transaction is inadequate. The lawsuit seeks to enjoin the transaction
and monetary damages. The Company intends to defend against this lawsuit vigorously.
2010 Bond Offering and $4.0 Billion Revolving Credit Facility
On November 15, 2010, the Company issued $1.9 billion in aggregate principal amount of senior unsecured notes
and debentures under a shelf registration statement on Form S-3 in a public offering (the “2010 Bond Offering”). The 2010
Bond Offering consisted of $700 million principal amount of 4.125% notes due 2021 and $1.2 billion principal amount of
5.875% debentures due 2040. TWC’s obligations under the debt securities issued in the 2010 Bond Offering are
guaranteed by its subsidiaries, Time Warner Entertainment Company, L.P. (“TWE”) and TW NY Cable Holding Inc.
(“TW NY”). The Company used a portion of the net proceeds from the 2010 Bond Offering for general corporate
purposes, including the repurchase of its common stock under the Stock Repurchase Program. See Note 9 to the
accompanying consolidated financial statements for further details regarding the notes and debentures issued in the 2010
Bond Offering.
On November 3, 2010, the Company entered into a credit agreement for a $4.0 billion senior unsecured three-year
revolving credit facility maturing in November 2013 (the “$4.0 billion Revolving Credit Facility”), and the Company’s
$5.875 billion senior unsecured five-year revolving credit facility (the “$5.875 billion Revolving Credit Facility”),
scheduled to mature in February 2011, was terminated. The Company’s obligations under the $4.0 billion Revolving
Credit Facility are guaranteed by TWE and TW NY. Borrowings under the $4.0 billion Revolving Credit Facility bear
interest at a rate based on the credit rating of TWC, which rate was LIBOR plus 1.25% per annum at December 31, 2010.
In addition, TWC is required to pay a facility fee on the aggregate commitments under the $4.0 billion Revolving Credit
Facility at a rate determined by the credit rating of TWC, which rate was 0.25% per annum at December 31, 2010. TWC
may also incur an additional usage fee of 0.25% per annum on the outstanding loans and other extensions of credit under
the $4.0 billion Revolving Credit Facility if and when such amounts exceed 25% of the aggregate commitments
thereunder. The $4.0 billion Revolving Credit Facility provides same-day funding capability, and a portion of the
aggregate commitments, not to exceed $500 million at any time, may be used for the issuance of letters of credit.
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TIME WARNER CABLE INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION—(Continued)