Long-Term Debt Maturities

Entity Registrant Name TIME WARNER INC.
CIK 0001105705
Accession number 0001193125-14-069071
Link to XBRL instance http://www.sec.gov/Archives/edgar/data/1105705/000119312514069071/twx-20131231.xml
Fiscal year end --12-31
Fiscal year focus 2013
Fiscal period focus FY
Current balance sheet date 2013-12-31
Current year-to-date income statement start date 2013-01-01

Commentary Did not manually investigate.

Level 1 (Note level) Text Block concept us-gaap:DebtDisclosureTextBlock

8.        LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

 

The Company's long-term debt and other financing arrangements consist of revolving bank credit facilities, a commercial paper program, fixed-rate public debt and other obligations. Long-term debt consists of (millions)(a):

   December 31,
   2013 2012
       
 Fixed-rate public debt $ 19,905 $ 19,620
 Other obligations   260   251
 Subtotal   20,165   19,871
 Debt due within one year   (66)   (749)
 Total long-term debt $ 20,099 $ 19,122
 __________      

(a)        Represents principal amounts adjusted for premiums and discounts.

 

The Company's unused committed capacity as of December 31, 2013 was $6.883 billion, including $1.862 billion of Cash and equivalents. At December 31, 2013, there were no borrowings outstanding under the Revolving Credit Facilities, as defined below, and no commercial paper was outstanding under the commercial paper program. The Revolving Credit Facilities, commercial paper program and public debt of the Company rank pari passu with the senior debt of the respective obligors thereon. The weighted-average interest rate on Time Warner's total debt was 6.11% and 6.21% at December 31, 2013 and 2012, respectively.

 

Revolving Credit Facilities and Commercial Paper Program

 

Revolving Credit Facilities

 

On December 18, 2013, Time Warner amended its $5.0 billion of senior unsecured credit facilities (the “Revolving Credit Facilities”), which consist of two $2.5 billion revolving credit facilities, to extend the maturity dates of both to December 18, 2018 pursuant to an Amendment and Restatement Agreement, dated as of December 18, 2013, to the credit agreement, dated as of January 19, 2011, as amended and restated as of December 14, 2012 (as amended and restated on December 18, 2013, the “Credit Agreement”). Prior to the amendment, one facility had a maturity date of September 27, 2016 and the other had a maturity date of December 14, 2017.

 

The permitted borrowers under the Revolving Credit Facilities are Time Warner and Time Warner International Finance Limited (“TWIFL” and, together with Time Warner, the “Borrowers”). The interest rate on borrowings and facility fees under the Revolving Credit Facilities are the same for both revolving credit facilities and are based on the credit rating for Time Warner's senior unsecured long-term debt. Based on the credit rating as of December 31, 2013, the interest rate on borrowings under the Revolving Credit Facilities would be LIBOR plus 1.10% per annum and the facility fee was 0.15% per annum.

 

The Revolving Credit Facilities provide same-day funding and multi-currency capability, and a portion of the commitment, not to exceed $500 million at any time, may be used for the issuance of letters of credit. The covenants in the Revolving Credit Facilities include a maximum consolidated leverage ratio covenant of 4.5 times the consolidated EBITDA, as defined in the Revolving Credit Facilities, of Time Warner, but exclude any credit ratings-based defaults or covenants or any ongoing covenant or representations specifically relating to a material adverse change in Time Warner's financial condition or results of operations. The terms and related financial metrics associated with the leverage ratio are defined in the Revolving Credit Facilities. At December 31, 2013, the Company was in compliance with the leverage covenant, with a consolidated leverage ratio of approximately 2.4 times. Borrowings under the Revolving Credit Facilities may be used for general corporate purposes, and unused credit is available to support borrowings by Time Warner under its commercial paper program. The Revolving Credit Facilities also contain certain events of default customary for credit facilities of this type (with customary grace periods, as applicable). The Borrowers may from time to time, so long as no default or event of default has occurred and is continuing, increase the commitments under either or both of the Revolving Credit Facilities by up to $500 million per facility by adding new commitments or increasing the commitments of willing lenders. The obligations of each of the Borrowers under the Revolving Credit Facilities are directly or indirectly guaranteed, on an unsecured basis, by Historic TW Inc. (“Historic TW”), Home Box Office and Turner. The obligations of TWIFL under the Revolving Credit Facilities are also guaranteed by Time Warner.

 

Commercial Paper Program

 

The Company has a commercial paper program, which was established on February 16, 2011 on a private placement basis, under which Time Warner may issue unsecured commercial paper notes up to a maximum aggregate amount not to exceed the unused committed capacity under the $5.0 billion Revolving Credit Facilities, which support the commercial paper program. Proceeds from the commercial paper program may be used for general corporate purposes. The obligations of the Company under the commercial paper program are directly or indirectly guaranteed, on an unsecured basis, by Historic TW, Home Box Office and Turner.

Public Debt

 

Time Warner and one of its subsidiaries have various public debt issuances outstanding. At issuance, the maturities of these outstanding series of debt ranged from five to 40 years and the interest rates on debt with fixed interest rates ranged from 3.15% to 9.15%. At December 31, 2013 and 2012, the weighted average interest rate on the Company's outstanding fixed-rate public debt was 6.13% and 6.23%, respectively. At December 31, 2013, the Company's fixed-rate public debt had maturities ranging from 2015 to 2043.

Debt Offering

 

On December 16, 2013, Time Warner issued $500 million aggregate principal amount of 4.05% Notes due 2023 and $500 million aggregate principal amount of 5.35% Debentures due 2043 in a public offering. The securities issued pursuant to the offering are directly or indirectly guaranteed, on an unsecured basis, by Historic TW, Home Box Office and Turner.

Maturities of Public Debt

 

The Company's public debt matures as follows (millions):

 

   2014 2015 2016 2017 2018 Thereafter
 Debt  $0 $1,000 $1,150 $500 $600 $16,781

Covenants and Credit Rating Triggers

 

Each of the Company's Credit Agreement and public debt indentures contain customary covenants. A breach of such covenants in the Credit Agreement that continues beyond any grace period constitutes a default, which can limit the Company's ability to borrow and can give rise to a right of the lenders to terminate the Revolving Credit Facilities and/or require immediate payment of any outstanding debt. A breach of such covenants in the public debt indentures beyond any grace period constitutes a default, which can require immediate payment of the outstanding debt. There are no credit ratings-based defaults or covenants in the Credit Agreement or public debt indentures.

 

The interest rate on borrowings under the Revolving Credit Facilities and the facility fee are based in part on the Company's credit ratings. Therefore, if the Company's credit ratings are lowered, the cost of maintaining the Revolving Credit Facilities and the cost of borrowing increase and, conversely, if the ratings improve, such costs decrease. As of December 31, 2013, the Company's investment grade debt ratings were as follows: Fitch BBB+, Moody's Baa2, and S&P BBB.

 

As of December 31, 2013, the Company was in compliance with all covenants in the Credit Agreement and its public debt indentures. The Company does not anticipate that it will have any difficulty in the foreseeable future complying with the covenants in its Credit Agreement or public debt indentures.

 

Other Obligations

 

Other long-term debt obligations consist of capital lease and other obligations, including committed financings by subsidiaries under local bank credit agreements. At both December 31, 2013 and 2012, the weighted average interest rate for other long-term debt obligations was 4.41%.

Capital Leases

 

The Company has entered into various leases primarily related to network equipment that qualify as capital lease obligations. As a result, the present value of the remaining future minimum lease payments is recorded as a capitalized lease asset and related capital lease obligation in the Consolidated Balance Sheet. Assets recorded under capital lease obligations totaled $115 million and $101 million as of December 31, 2013 and 2012, respectively. Related accumulated amortization totaled $59 million and $49 million as of December 31, 2013 and 2012, respectively.

 

Future minimum capital lease payments at December 31, 2013 are as follows (millions):

     
 2014 $ 15
 2015   13
 2016   11
 2017   11
 2018   11
 Thereafter    20
 Total    81
 Amount representing interest    (15)
 Present value of minimum lease payments    66
 Current portion    (10)
 Total long-term portion  $ 56

Film Tax-Advantaged Arrangements

 

The Company's film and TV production businesses, on occasion, enter into tax-advantaged transactions with foreign investors that are thought to generate tax benefits for such investors. The Company believes that its tax profile is not affected by its participation in these arrangements in any jurisdiction. The foreign investors provide consideration to the Company for entering into these arrangements.

 

Although these transactions often differ in form, they generally involve circumstances in which the Company enters into a sale-leaseback arrangement involving its film product with third-party special purpose entities (“SPEs”) owned by the foreign investors. The Company maintains its rights and control over the use of its film product. The Company evaluates these SPEs for consolidation in accordance with its policy. Because the Company generally does not have a controlling interest in the SPEs, it generally does not consolidate them. In addition, the Company does not guarantee and is not otherwise responsible for the equity and debt in these SPEs and does not participate in the profits or losses of these SPEs. The Company accounts for these arrangements based on their substance, and the Company records the costs of producing the films as an asset and records the net benefit received from the investors as a reduction of film and television production costs resulting in lower film and television production cost amortization for the films involved in the arrangement. At December 31, 2013, such SPEs were capitalized with approximately $3.1 billion of debt and equity from the third-party investors. These transactions resulted in reductions of film and television production cost amortization totaling $1 million, $10 million and $34 million during the years ended December 31, 2013, 2012 and 2011, respectively.

 

Level 4 (Note level) Text Block concept - Maturities of Long Term Debt us-gaap:ScheduleOfMaturitiesOfLongTermDebtTableTextBlock

The Company's public debt matures as follows (millions):

 

   2014 2015 2016 2017 2018 Thereafter
 Debt  $0 $1,000 $1,150 $500 $600 $16,781
Level 4 (Note level) Text Block concept - Debt Instruments us-gaap:ScheduleOfDebtInstrumentsTextBlock

Long-term debt consists of (millions)(a):

   December 31,
   2013 2012
       
 Fixed-rate public debt $ 19,905 $ 19,620
 Other obligations   260   251
 Subtotal   20,165   19,871
 Debt due within one year   (66)   (749)
 Total long-term debt $ 20,099 $ 19,122
 __________      

(a)        Represents principal amounts adjusted for premiums and discounts.

 


Level 4 Details Key Concepts: Long-term Debt Maturities

Description Fact value US GAAP XBRL Concept
Year 1 (Current portion) 0 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths
Year 2 1,000,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo
Year 3 1,150,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree
Year 4 500,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour
Year 5 600,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFive
Thereafter 16,781,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalAfterYearFive
Total Long-term Debt 20,165,000,000 us-gaap:DebtAndCapitalLeaseObligations
CHECK 134,000,000

*


(Classified balance sheet) Deferred tax assets (liabilities), net components current/noncurrent asset/liability

Description Fact value US GAAP XBRL Concept
Current portion 66,000,000 us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent
Noncurrent portion 20,099,000,000 us-gaap:LongTermDebtAndCapitalLeaseObligations
Total Long-Term Debt 20,165,000,000 us-gaap:DebtAndCapitalLeaseObligations
CHECK 0

*


*

Creative Commons License
This work is licensed under a Creative Commons License.


Valid CSS!