Time Warner Cable 2012 Annual Report Download - page 102

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
events of default. In connection with the internal reorganization discussed further in Note 20, on, and effective as of,
September 30, 2012, the Company, TWCE, TW NY, TWC Internet Holdings II and The Bank of New York Mellon, as
trustee, entered into the Twelfth Supplemental Indenture to the TWCE Indenture, dated as of April 30, 1992, as amended,
providing for (i) TWCE’s succession to, and assumption of, all of the rights and obligations of TWE as issuer under the
TWCE Indenture and the securities issued thereunder and (ii) the addition of TWC Internet Holdings II as a guarantor under
the TWCE Indenture and the securities issued thereunder.
The TWCE Notes and Debentures are unsecured senior obligations of TWCE and rank equally with its other unsecured
and unsubordinated obligations. Interest on each series of TWCE Notes and Debentures is payable semi-annually in arrears.
The guarantees of the TWCE Notes and Debentures are unsecured senior obligations of the TWCE Debt Guarantors and rank
equally in right of payment with all other unsecured and unsubordinated obligations of the TWCE Debt Guarantors. The
TWCE Notes and Debentures are not redeemable before maturity.
Revolving Credit Facility and Commercial Paper Program
On April 27, 2012, the Company entered into a credit agreement for a $3.5 billion senior unsecured five-year revolving
credit facility maturing in April 2017 (the “Revolving Credit Facility”). In connection with the entry into the Revolving
Credit Facility, the Company’s $4.0 billion senior unsecured three-year revolving credit facility, scheduled to mature in
November 2013, was terminated.
The Company’s obligations under the Revolving Credit Facility were initially guaranteed by TWE and TW NY but, in
connection with the internal reorganization discussed further in Note 20, as of September 30, 2012, the obligations are
guaranteed by TW NY, TWCE and TWC Internet Holdings II. Borrowings under the Revolving Credit Facility bear interest
at a rate based on the credit rating of TWC, which interest rate was LIBOR plus 1.10% per annum as of December 31, 2012.
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 0.15% per annum as of December 31, 2012. 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,
2012, 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 or
any ongoing covenants or representations specifically relating to a material adverse change in TWC’s financial condition or
results of operations. Borrowings under the Revolving Credit Facility may be used for general corporate purposes, and
unused credit is available to support borrowings under the Commercial Paper Program (as defined below).
In addition to the Revolving Credit Facility, the Company maintains a $2.5 billion unsecured commercial paper program
(the “Commercial Paper Program”), which was reduced from $4.0 billion to $2.5 billion in connection with the entry into the
Revolving Credit Facility. The Commercial Paper Program is also guaranteed by TW NY, TWCE and TWC Internet
Holdings II. Commercial paper issued under the Commercial Paper Program is supported by unused committed capacity
under the Revolving Credit Facility and ranks equally with other unsecured senior indebtedness of TWC, TWCE and
TW NY.
As of December 31, 2012, the Company had no outstanding borrowings under the Revolving Credit Facility or
Commercial Paper Program. TWC’s unused committed financial capacity was $6.889 billion as of December 31, 2012,
reflecting $3.304 billion of cash and equivalents, $150 million of short-term investments in U.S. Treasury securities and
$3.435 billion of available borrowing capacity under the Revolving Credit Facility (which reflects a reduction of $65 million
for outstanding letters of credit backed by the Revolving Credit Facility).
Debt Issuance Costs
For the years ended December 31, 2012, 2011 and 2010, the Company capitalized debt issuance costs of $26 million,
$25 million and $25 million, respectively, in connection with the Company’s public debt issuances. These capitalized costs
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