Time Warner Cable 2011 Annual Report Download - page 99

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
obligations. Interest on each series of TWE Debt Securities is payable semi-annually in arrears. The guarantees of the TWE
Debt Securities are unsecured senior obligations of the TWE Debt Guarantors and rank equally in right of payment with all
other unsecured and unsubordinated obligations of the TWE Debt Guarantors. The TWE Debt Securities are not redeemable
before maturity.
Revolving Credit Facility and Commercial Paper Program
As of December 31, 2011, the Company has a $4.0 billion senior unsecured three-year revolving credit facility maturing
in November 2013 (the “Revolving Credit Facility”). The Company’s obligations under the Revolving Credit Facility are
guaranteed by its subsidiaries, TWE and TW NY. Borrowings under the 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, 2011. In addition, TWC is
required to pay a facility fee on the aggregate commitments under the Revolving Credit Facility at a rate determined by the
credit rating of TWC, which rate was 0.25% per annum at December 31, 2011. TWC may also incur an additional usage fee
of 0.25% per annum on the outstanding loans and other extensions of credit under the Revolving Credit Facility if and when
such amounts exceed 25% of the aggregate commitments thereunder. The 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.
The Revolving Credit Facility contains a maximum leverage ratio covenant of 5.0 times TWC’s consolidated EBITDA.
The terms and related financial metrics associated with the leverage ratio are defined in the agreement. At December 31,
2011, TWC was in compliance with the leverage ratio covenant, calculated in accordance with the agreement, with a ratio of
approximately 2.9 times. The Revolving Credit Facility does not contain any: credit ratings-based defaults or covenants;
ongoing covenants or representations specifically relating to a material adverse change in TWC’s financial condition or
results of operations; or borrowing restrictions due to material adverse changes in the Company’s business or market
disruption. Borrowings under the Revolving Credit Facility may be used for general corporate purposes, and unused credit is
available to support borrowings under the CP Program (as defined below).
In addition to the Revolving Credit Facility, the Company maintains a $4.0 billion unsecured commercial paper program
(the “CP Program”) that is also guaranteed by TW NY and TWE. Commercial paper issued under the CP Program is
supported by unused committed capacity under the Revolving Credit Facility and ranks equally with other unsecured senior
indebtedness of TWC, TWE and TW NY.
As of December 31, 2011, TWC’s unused committed financial capacity was $9.033 billion, reflecting $5.177 billion of
cash and equivalents and $3.856 billion of available borrowing capacity under the Revolving Credit Facility (which reflects a
reduction of $144 million for outstanding letters of credit backed by the Revolving Credit Facility).
Debt Issuance Costs
For the years ended December 31, 2011, 2010 and 2009, the Company capitalized debt issuance costs of $25 million,
$25 million and $34 million, respectively, in connection with the Company’s public debt issuances. These capitalized costs
are amortized over the term of the related debt instrument and are included as a component of interest expense, net, in the
consolidated statement of operations.
For the year ended December 31, 2009, the Company recognized $13 million of Separation-related debt issuance costs
as expense, which are included as a component of interest expense, net, in the consolidated statement of operations. The
Separation-related debt issuance costs recognized as expense in 2009 primarily related to upfront loan fees on a 364-day
senior unsecured term loan facility entered into in 2008 in connection with the Separation, which were recognized as expense
when the facility was repaid and terminated following the Company’s public debt issuance in March 2009.
Maturities
Annual maturities of debt total $2.104 billion in 2012, $1.502 billion in 2013, $1.752 billion in 2014, $502 million in
2015, $2 million in 2016 and $20.415 billion thereafter.
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