Time Warner Cable 2012 Annual Report Download - page 101

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
providing for (i) TWCE’s succession to, and assumption of, all of the rights and obligations of TWE as a guarantor under the
TWC Indenture and the securities issued thereunder and (ii) the addition of TWC Internet Holdings II as a guarantor under
the TWC Indenture and the securities issued thereunder.
The TWC Notes and Debentures are unsecured senior obligations of the Company and rank equally with its other
unsecured and unsubordinated obligations. Interest on each series of TWC Notes and Debentures is payable semi-annually
(with the exception of the British pound sterling denominated notes (the “Sterling Notes”), which is payable annually) in
arrears. The guarantees of the TWC Notes and Debentures are unsecured senior obligations of the TWC Debt Guarantors and
rank equally in right of payment with all other unsecured and unsubordinated obligations of the TWC Debt Guarantors.
The TWC Notes and Debentures may be redeemed in whole or in part at any time at the Company’s option at a
redemption price equal to the greater of (i) all of the applicable principal amount being redeemed and (ii) the sum of the
present values of the remaining scheduled payments on the applicable TWC Notes and Debentures discounted to the
redemption date on a semi-annual basis (with the exception of the Sterling Notes, which are on an annual basis), at a
comparable government bond rate plus a designated number of basis points as further described in the TWC Indenture and
the applicable note or debenture, plus, in each case, accrued but unpaid interest to, but not including, the redemption date.
The Company may offer to redeem all, but not less than all, of the Sterling Notes in the event of certain changes in the
tax laws of the U.S. (or any taxing authority in the U.S.). This redemption would be at a redemption price equal to 100% of
the principal amount, together with accrued and unpaid interest on the Sterling Notes to, but not including, the redemption
date.
TWCE Notes and Debentures
Notes and debentures issued by TWCE as of December 31, 2012 and 2011 were as follows (in millions):
Date of Outstanding Balance
as of December 31,
Issuance Maturity
Interest
Payment Principal 2012 2011
10.150% notes .................. Apr1992 May 2012 May/Nov $ 250 $ — $ 252
8.875% notes ................... Oct1992 Oct 2012 Apr/Oct 350 — 356
8.375% debentures .............. Mar1993 Mar 2023 Mar/Sept 1,000 1,027 1,030
8.375% debentures .............. July 1993 July 2033 Jan/July 1,000 1,043 1,045
Total(a) ........................ $ 2,070 $ 2,683
(a) Outstanding balance amounts as of December 31, 2012 and 2011, include an unamortized fair value adjustment of $70 million and $79 million, respectively,
which includes the fair value adjustment recognized as a result of the 2001 merger of America Online, Inc. (now known as AOL Inc.) and Time Warner Inc.
(now known as Historic TW). The fair value adjustment is amortized over the term of the related debt instrument as a reduction to interest expense. In addition,
outstanding balance amount as of December 31, 2011, include the estimated fair value of interest rate swap assets of $4 million.
During 1992 and 1993, TWE issued notes and debentures publicly in a number of offerings. In connection with the
internal reorganization discussed further in Note 20, TWE merged with and into TWCE, with TWCE as the surviving entity,
on September 30, 2012. Accordingly, TWCE assumed all of the rights and obligations of TWE, including TWE’s previously
issued notes and debentures (the “TWCE Notes and Debentures”). Prior to September 30, 2012, TWE’s obligations under the
TWCE Notes and Debentures were guaranteed by TWC and TW NY. In connection with the internal reorganization, as of
September 30, 2012, TWCE’s obligations under the TWCE Notes and Debentures are guaranteed by TWC, TW NY and
TWC Internet Holdings II (collectively the “TWCE Debt Guarantors”). TWCE has no obligation to file separate reports with
the SEC under the Securities Exchange Act of 1934, as amended.
The TWCE Notes and Debentures were issued pursuant to an indenture, dated as of April 30, 1992, as it has been and
may be amended from time to time (the “TWCE Indenture”) by and among TWCE, the TWCE Debt Guarantors and The
Bank of New York Mellon, as trustee. The TWCE Indenture contains customary covenants relating to restrictions on the
ability of TWCE or any material subsidiary to create liens and on the ability of TWCE and the TWCE Debt Guarantors to
consolidate, merge or convey or transfer substantially all of their assets. The TWCE Indenture also contains customary
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