Comcast 2012 Annual Report Download - page 73

Table of Contents
taxing authority that has full knowledge of all relevant information. A tax position that meets the more-likely-than-
not recognition
threshold is measured to determine the amount of benefit to be recognized in our financial statements. The tax position is measured
at the largest amount of benefit that has a greater than 50% likelihood of being realized when the position is ultimately resolved.
We adjust our estimates periodically to reflect changes in circumstances in ongoing examinations by and settlements with the
various taxing authorities, as well as changes in tax laws, regulations and precedent. We believe that adequate accruals have been
made for income taxes. When uncertain tax positions are ultimately resolved, either individually or in
the aggregate, differences
between our estimated amounts and the actual amounts are not expected to have a material adverse effect on our consolidated
financial position but could possibly be material to our consolidated results of operations or cash flow for any one period. As of
December 31, 2012, our uncertain tax positions and related accrued interest were $1.6 billion and $721 million, respectively.
Item 7A: Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk Management
We maintain a mix of fixed-rate and variable-
rate debt and we are exposed to the market risk of adverse changes in interest rates. In
order to manage the cost and volatility relating to the interest cost of our outstanding debt, we enter into various interest rate risk
management derivative transactions in accordance with our policies.
We monitor our exposure to the risk of adverse changes in interest rates through the use of techniques that include market value and
sensitivity analyses. We do not engage in any speculative or leveraged derivative transactions.
Our interest rate derivative financial instruments, which may include swaps, rate locks, caps and collars, represent an integral part of
our interest rate risk management program. Our interest rate derivative financial instruments reduced the portion of our total debt at
fixed rates to 89.5% from 99.9% as of December 31, 2012. In 2012, 2011 and 2010, the effect of our interest rate derivative financial
instruments was a decrease in our interest expense of $106 million, $136 million and $132 million, respectively. Interest rate
derivative financial instruments may have a significant effect on our interest expense in the future.
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, 2012.
(in millions)
2013
2014
2015
2016
2017
Thereafter
Total
Estimated
Fair Value as of
December 31,
2012
Debt
Fixed rate
$
2,376
$
1,969
$
3,386
$
2,813
$
2,554
$
27,318
$
40,416
$
47,690
Average interest rate
8.8
%
3.8
%
5.9
%
4.5
%
7.0
%
5.8
%
5.9
%
Variable rate
$
—
$
—
$
41
$
—
$
1
$
—
$
42
$
42
Average interest rate
2.4
%
2.6
%
3.1
%
3.5
%
4.1
%
0.0
%
3.1
%
Interest Rate Instruments
Fixed to variable swaps
$
1,550
$
1,100
$
150
$
800
$
—
$
600
$
4,200
$
244
Average pay rate
6.0
%
0.8
%
1.9
%
2.9
%
0.0
%
2.3
%
3.4
%
Average receive rate
8.0
%
4.4
%
3.7
%
4.8
%
0.0
%
5.7
%
6.0
%
Comcast 2012 Annual Report on Form 10-K
70