Comcast 2011 Annual Report Download - page 74

The table below summarizes the fair values and contract terms of financial instruments subject to interest rate
risk maintained by us as of December 31, 2011.
(in millions) 2012 2013 2014 2015 2016 Thereafter Total
Estimated
Fair Value
12/31/2011
Debt
Fixed rate $ 817 $ 2,390 $ 1,992 $ 3,660 $ 2,951 $ 26,928 $ 38,738 $ 44,490
Average interest rate 9.7% 8.7% 3.7% 6.1% 4.9% 6.3% 6.3%
Variable rate $ 550 $ 21 $ — $ — $ — $ — $ 571 $ 571
Average interest rate 1.2% 3.2% 3.8% 4.4% 4.9% 5.4% 1.2%
Interest rate
instruments
Fixed to variable swaps $ 300 $ 1,550 $ 1,100 $ 150 $ 800 $ 600 $ 4,500 $ 280
Average pay rate 9.0% 6.3% 1.2% 2.4% 3.4% 2.9% 4.1%
Average receive rate 9.8% 8.0% 4.4% 3.7% 4.8% 5.7% 6.2%
We use the notional amount of each instrument to calculate the interest to be paid or received. The notional
amounts do not represent our exposure to credit loss. The estimated fair value approximates the amount of
payments to be made or proceeds to be received to settle the outstanding contracts, including accrued inter-
est. We estimate interest rates on variable debt and swaps using the average implied forward London
Interbank Offered Rate (“LIBOR”) through the year of maturity based on the yield curve in effect on
December 31, 2011, plus the applicable borrowing margin on December 31, 2011.
Certain of our financial contracts include credit-ratings-based triggers that could affect our liquidity. In the
ordinary course of business, some of our swaps could be subject to termination provisions if we do not main-
tain investment grade credit ratings. As of December 31, 2011 and 2010, the estimated fair value of those
swaps was an asset of $19 million and $26 million, respectively. The amount to be paid or received upon
termination, if any, would be based on the fair value of the outstanding contracts at that time. See Note 2 to
our consolidated financial statements for additional information on our accounting policies for derivative finan-
cial instruments and Note 10 to our consolidated financial statements for additional information on our
derivative financial instruments.
Foreign Exchange Risk Management
NBCUniversal has significant operations in a number of countries outside the U.S., and certain of NBCUni-
versal’s operations are conducted in foreign currencies. The value of these currencies fluctuates relative to
the U.S. dollar. These changes could adversely affect the U.S. dollar value of our non-U.S. revenue and oper-
ating costs and expenses and reduce international demand for our content, all of which could negatively
affect our business, financial condition and results of operations in a given period or in specific territories.
As part of our overall strategy to manage the level of exposure to the risk of foreign exchange rate fluctua-
tions, we enter into derivative financial instruments related to a significant portion of our foreign currency
exposures. We enter into foreign currency forward contracts that change in value as foreign exchange rates
change to protect the U.S. dollar equivalent value of our foreign currency assets, liabilities, commitments, and
forecasted foreign currency revenue and expenses. In accordance with our policy, we hedge forecasted for-
eign currency transactions for periods generally not to exceed one year. In certain circumstances, we may
hedge a transaction not to exceed 18 months. As of December 31, 2011, we had foreign exchange contracts
on a total notional value of $767 million. As of December 31, 2011, these foreign exchange contracts had an
aggregate estimated fair value loss of $2 million.
Comcast 2011 Annual Report on Form 10-K 72