Time Warner Cable 2012 Annual Report Download - page 124

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the Company’s aggregate contractual obligations outstanding as of December 31, 2012
under certain programming and content, voice and high-speed data connectivity and other agreements and the estimated
timing and effect that such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in
millions):
2013......................................................................................$ 5,099
2014 - 2015 ................................................................................ 7,620
2016 - 2017 ................................................................................ 5,303
Thereafter ................................................................................. 6,510
Total .....................................................................................$ 24,532
Programming purchases represent contracts that the Company has with cable television networks and broadcast stations
to provide programming services to its subscribers. The amounts included above represent estimates of the future
programming costs for these contract requirements and commitments based on subscriber numbers and tier placement as of
December 31, 2012 applied to the per-subscriber rates contained in these contracts. Actual amounts due under such contracts
may differ from the amounts above based on the actual subscriber numbers and tier placements. These amounts also include
programming rights negotiated directly with content owners for distribution on TWC-owned channels or networks.
Voice connectivity obligations relate to transport, switching and interconnection services, primarily provided by Sprint,
that allow for the origination and termination of local and long-distance telephony traffic. These expenses also include
related technical support services. The Company is in an ongoing process of replacing Sprint as the provider of transport,
switching and interconnection services and, as of December 31, 2012, TWC had replaced Sprint with respect to nearly half of
TWC’s voice lines. There is generally no obligation to purchase these services if the Company is not providing voice service.
The amounts included above are estimated based on the number of voice subscribers as of December 31, 2012 and the per-
subscriber contractual rates contained in the contracts that were in effect as of December 31, 2012 and also reflect the
replacement of Sprint between the fourth quarter 2010 and the first quarter of 2014.
High-speed data connectivity obligations are based on the contractual terms for bandwidth circuits that were in use as of
December 31, 2012.
Minimum pension funding requirements have not been presented in the table above as such amounts have not been
determined beyond 2012. The Company was not required to make any cash contributions to its qualified pension plans in
2012; however, the Company made discretionary cash contributions of $285 million to the qualified pension plans in 2012
and the Company may make discretionary cash contributions to these plans in 2013. For the nonqualified pension plan, the
Company contributed $4 million during 2012 and will continue to make contributions in 2013 to the extent benefits are paid.
Legal Proceedings
The Company is the defendant in In re: Set-Top Cable Television Box Antitrust Litigation, ten purported class actions
filed in federal district courts throughout the U.S. These actions are subject to a Multidistrict Litigation (“MDL”) Order
transferring the cases for pretrial proceedings to the U.S. District Court for the Southern District of New York. On July 26,
2010, the plaintiffs filed a third amended consolidated class action complaint (the “Third Amended Complaint”), alleging
that the Company violated Section 1 of the Sherman Antitrust Act, various state antitrust laws and state unfair/deceptive
trade practices statutes by tying the sales of premium cable television services to the leasing of set-top converter boxes. The
plaintiffs are seeking, among other things, unspecified treble monetary damages and an injunction to cease such alleged
practices. On September 30, 2010, the Company filed a motion to dismiss the Third Amended Complaint, which the court
granted on April 8, 2011. On June 17, 2011, the plaintiffs appealed this decision to the U.S. Court of Appeals for the Second
Circuit. The Company intends to defend against this lawsuit vigorously, but is unable to predict the outcome of this lawsuit
or reasonably estimate a range of possible loss.
On August 9, 2010, the plaintiffs in Michelle Downs and Laurie Jarrett, et al. v. Insight Communications Company,
L.P. filed a second amended complaint in the U.S. District Court for the Western District of Kentucky, as a purported class
action, alleging that Insight Communications Company, L.P. violated Section 1 of the Sherman Antitrust Act by tying the
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