Comcast 2010 Annual Report Download - page 59

Table of Contents
Comcast 2010 Annual Report on Form 10-K
52
Except as described above in “Investment Income (Loss),
Net,” the changes in the fair value of the investments that we
accounted for as trading or available-for-sale securities were
substantially offset by the changes in the fair values of the
equity derivative financial instruments. Refer to Note 2 to our
consolidated financial statements for a discussion of our
accounting policies for derivative financial instruments and to
Note 6 and Note 10 to our consolidated financial statements
for a discussion of our investments and derivative financial
instruments.
Foreign Currency Exchange Risk Management
We are exposed to the market risks associated with
fluctuations in foreign currency exchange rates as they relate
to our foreign currency denominated debt obligations. Cross-
currency swaps are used to effectively convert fixed rate
foreign currency denominated debt to fixed rate U.S. dollar
denominated debt, hedging the risk that the cash flows
related to annual interest payments and the payment of
principal at maturity may be adversely affected by
fluctuations in currency exchange rates. The gains and
losses on the cross-currency swaps offset changes in the
U.S. dollar equivalent value of the related exposures. As of
December 31, 2010, we had cross-currency swaps on all of
our outstanding £625 million of 5.50% senior notes due 2029.
Other foreign currency denominated balances were not
significant as of December 31, 2010 and
2009. The NBCUniversal transaction will increase our
exposure to foreign currency exchange risk. Refer to Note 2
to our consolidated financial statements for a discussion of
our accounting policies for derivative financial instruments
and to Note 10 to our consolidated financial statements for a
discussion of our derivative financial instruments.
Counterparty Credit Risk Management
We manage the credit risks associated with our derivative
financial instruments through diversification and the
evaluation and monitoring of the creditworthiness of the
counterparties. Although we may be exposed to losses in the
event of nonperformance by the counterparties, we do not
expect such losses, if any, to be significant. We have
agreements with certain counterparties that include collateral
provisions. These provisions require a party with an
aggregate unrealized loss position in excess of certain
thresholds to post cash collateral for the amount in excess of
the threshold. The threshold levels in our collateral
agreements are based on our and the counterparties’ credit
ratings. As of December 31, 2010, neither we nor any of the
counterparties were required to post collateral under the
terms of the agreements.