UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 30, 2008
TIME WARNER INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-15062 13-4099534
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
One Time Warner Center, New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
212-484-8000
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, on May 20, 2008, Time Warner Inc., a Delaware
corporation (the "Company" or "Time Warner"), entered into a
separation agreement (the "Separation Agreement") with Time Warner Cable Inc.
("TWC"), Time Warner Entertainment Company, L.P., TW NY Cable Holding Inc.,
Warner Communications Inc., Historic TW Inc. and American Television and
Communications Corporation, the terms of which will govern TWC's separation from
Time Warner (the "Separation"). In connection with the Separation Agreement, on
June 30, 2008, TWC entered into an unsecured credit agreement (the "Bridge
Credit Agreement") among TWC, as borrower, the lenders from time to time party
thereto, Deutsche Bank AG New York Branch, as Administrative Agent, The Royal
Bank of Scotland plc and Fortis Bank SA/NV New York Branch, as Tranche I
Co-Syndication Agents, Mizuho Corporate Bank, Ltd. and Sumitomo Mitsui Banking
Corporation, as Tranche I Co-Documentation Agents, Deutsche Bank Securities Inc.
and RBS Greenwich Capital, as Tranche I Joint-Lead Arrangers and Joint
Bookrunners, BNP Paribas Securities Corp., The Bank of Tokyo-Mitsubishi UFJ,
Ltd. New York Branch and Citibank, N.A., as Tranche II Co-Syndication Agents,
Bank of America, N.A. and Wachovia Bank, National Association, as Tranche II
Co-Documentation Agents, and BNP Paribas Securities Corp. and The Bank of
Tokyo-Mitsubishi UFJ, Ltd. New York Branch, as Tranche II Joint-Lead Arrangers
and Joint Bookrunners, for a $9.0 billion term loan facility with an initial
maturity date that is 364 days after the borrowing date (the "Term Facility").
TWC may elect to extend the maturity date of the loans outstanding under the
Term Facility for an additional year.
TWC intends to use the net proceeds from the Term Facility to fund, in part, its
payment of a special cash dividend of approximately $10.9 billion to be
distributed pro rata to all holders of TWC Class A Common Stock and TWC Class B
Common Stock prior to the Separation.
Subject to certain limited exceptions, to the extent TWC incurs debt (other than
incurrence of debt under its existing $6.0 billion revolving credit facility and
existing commercial paper program), issues equity securities or completes asset
sales prior to drawing on the Term Facility, the commitments of the lenders
under the Term Facility are reduced by an amount equal to the net cash proceeds
from any such incurrence, issuance or sale. As previously reported, on June 19,
2008, TWC issued $5.0 billion in aggregate principal amount of senior unsecured
notes and debentures (the "Debt Offering"). As a result of the Debt Offering,
immediately after the Bridge Credit Agreement was executed, the amount of the
commitments under the Term Facility was reduced to $4.04 billion. In the event
TWC borrows any amounts under the Term Facility, subject to certain limited
exceptions, TWC is required to use the net cash proceeds from any subsequent
incurrence of debt (other than an incurrence under its existing $6.0 billion
revolving credit facility and existing commercial paper program), issuance of
equity securities and asset sale to prepay amounts outstanding under the Term
Facility.
TWC's obligations under the Term Facility are guaranteed by its subsidiaries,
Time Warner Entertainment Company, L.P. and TW NY Cable Holding Inc. Amounts
outstanding under the Term Facility will bear interest at a rate equal to LIBOR
plus an applicable margin based on TWC's credit rating, which margin, at the
time of the Separation, is expected to be 100 basis points. In addition, the
interest rate under the Term Facility will increase every six months until all
amounts outstanding under the Term Facility are repaid.
The Term Facility contains a maximum leverage ratio covenant of five times the
consolidated EBITDA (as defined in the Bridge Credit Agreement) of TWC. The Term
Facility also contains conditions, covenants, representations and warranties and
events of default (with customary grace periods, as applicable) substantially
identical to the conditions, covenants, representations and warranties and
events of default in TWC's existing $3.045 billion five-year term loan facility
due February 21, 2011. If any events of default occur and are not cured within
applicable grace periods or waived, the maturity of the outstanding borrowings
may be accelerated.
The lenders' commitments to fund borrowings under the Term Facility are subject
to satisfaction of certain conditions related to the completion of the
Separation and certain other customary conditions. The lenders' commitments will
expire on the earliest of (i) May 19, 2009, (ii) the date on which the
Separation Agreement is terminated in accordance with its terms or (iii) the
completion of the Separation.
The lenders under the Term Facility and their affiliates have performed and may,
from time to time in the future, engage in transactions with and perform
commercial and investment banking and advisory services for the
Company and its subsidiaries, including TWC, for which they have received and
will receive customary fees and expenses. Certain of the lenders or their
affiliates are acting as financial advisors to the Company or TWC on the
Separation, for which they will receive fees under agreements they have entered
into with the Company or TWC, as the case may be.
As previously reported, Time Warner (as the lender) agreed to loan TWC (as the
borrower) up to an aggregate principal amount of $3.5 billion in a senior
unsecured supplemental two-year term loan facility (the "Supplemental
Facility"). TWC may borrow under the Supplemental Facility at the final maturity
of the Term Facility to repay amounts then outstanding under the Term Facility.
As a result of the Debt Offering, the commitment from Time Warner was reduced to
approximately $2.52 billion. The Supplemental Facility will be documented under
a credit agreement substantially identical to the Bridge Credit Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Reference is made to Item 1.01 and the description of the Bridge Credit
Agreement and Term Facility contained therein, each of which is hereby
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
Exhibit Description
99.1 Credit Agreement, dated as of June 30, 2008, among Time Warner
Cable Inc. ("TWC"), as borrower, the lenders from time to time
party thereto, Deutsche Bank AG New York Branch, as
Administrative Agent, The Royal Bank of Scotland plc and Fortis
Bank SA/NV New York Branch, as Tranche I Co-Syndication Agents,
Mizuho Corporate Bank, Ltd. and Sumitomo Mitsui Banking
Corporation, as Tranche I Co-Documentation Agents, Deutsche Bank
Securities Inc. and RBS Greenwich Capital, as Tranche I
Joint-Lead Arrangers and Joint Bookrunners, BNP Paribas
Securities Corp., The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York
Branch and Citibank, N.A., as Tranche II Co-Syndication Agents,
Bank of America, N.A. and Wachovia Bank, National Association, as
Tranche II Co-Documentation Agents, and BNP Paribas Securities
Corp. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York Branch,
as Tranche II Joint-Lead Arrangers and Joint Bookrunners
(incorporated herein by reference to Exhibit 99.1 to the Current
Report on Form 8-K dated June 30, 2008 filed by TWC with the
Securities and Exchange Commission on July 1, 2008 (File No.
1-33335)).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TIME WARNER INC.
By: /s/ John K. Martin, Jr.
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Name: John K. Martin, Jr.
Title: Executive Vice President and
Chief Financial Officer
Date: July 1, 2008
EXHIBIT INDEX
Exhibit Description
99.1 Credit Agreement, dated as of June 30, 2008, among Time Warner
Cable Inc. ("TWC"), as borrower, the lenders from time to time
party thereto, Deutsche Bank AG New York Branch, as
Administrative Agent, The Royal Bank of Scotland plc and Fortis
Bank SA/NV New York Branch, as Tranche I Co-Syndication Agents,
Mizuho Corporate Bank, Ltd. and Sumitomo Mitsui Banking
Corporation, as Tranche I Co-Documentation Agents, Deutsche Bank
Securities Inc. and RBS Greenwich Capital, as Tranche I
Joint-Lead Arrangers and Joint Bookrunners, BNP Paribas
Securities Corp., The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York
Branch and Citibank, N.A., as Tranche II Co-Syndication Agents,
Bank of America, N.A. and Wachovia Bank, National Association, as
Tranche II Co-Documentation Agents, and BNP Paribas Securities
Corp. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York Branch,
as Tranche II Joint-Lead Arrangers and Joint Bookrunners
(incorporated herein by reference to Exhibit 99.1 to the Current
Report on Form 8-K dated June 30, 2008 filed by TWC with the
Securities and Exchange Commission on July 1, 2008 (File No.
1-33335)).