Rogers 2008 Annual Report Download - page 116

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112 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The current portion above represents net payments expected to be
made within one year on Cross-Currency Swaps, including upon
settlement for those Cross-Currency Swaps maturing within one year.
At December 31, 2008, all of the Company’s long-term debt was at
fixed interest rates, with the exception of advances under the bank
credit facility. Net income would have changed by $6 million in the
year ended December 31, 2008, net of income taxes of $2 million,
if there was a 1% change in the interest rates charged on advances
under the bank credit facility.
U.S. $750 million of the Company’s U.S. dollar-denominated long-
term debt instruments are not hedged for accounting purposes
and, therefore, a one cent change in the Canadian dollar relative
to the U.S. dollar would have resulted in a $8 million change in the
carrying value of long-term debt at December 31, 2008. In addition,
this would have resulted in a $6 million change in net income, net
of income taxes of $2 million.
A portion of the Company’s accounts receivable and accounts
payable and accrued liabilities is denominated in U.S. dollars;
however, due to their short-term nature, there is no significant
market risk arising from fluctuations in foreign exchange rates.
All of the Company’s Cross-Currency Swaps are unsecured
obligations of RCI. In addition, RCCI and RWP have provided
unsecured guarantees for all of the Company’s Cross-Currency
Swaps (note 15(b)).
(E) FINANCIAL INSTRUMENTS:
(i) Classification and fair values of financial instruments:
The Company has classified its financial instruments as follows:
2008 2007
Carrying Fair Carrying Fair
amount value amount value
Financial assets, available for sale, measured at fair value:
Investments $ 319 $ 319 $ 465 $ 465
Loans and receivables, measured at amortized cost:
Accounts receivable 1,403 1,403 1,245 1,245
$ 1,722 $ 1,722 $ 1,710 $ 1,710
2008 2007
Carrying Fair Carrying Fair
amount value amount value
Financial liabilities, measured at amortized cost:
Bank advances, arising from outstanding cheques $ 19 $ 19 $ 61 $ 61
Accounts payable and accrued liabilities 2,412 2,412 2,260 2,260
Long-term debt 8,507 8,700 6,033 6,357
Other long-term liabilities 184 184 214 214
Financial liabilities (assets), held-for-trading:
Cross-Currency Swaps not accounted for as hedges (69) (69) 6 6
Cross-Currency Swaps accounted for as cash flow hedges 223 223 1,798 1,798
$ 11,276 $ 11,469 $ 10,372 $ 10,696
The Company did not have any non-derivative held-for-trading
or held-to-maturity financial assets during the years ended
December 31, 2008 and 2007.
(ii) Guarantees:
In the normal course of business, the Company has entered
into agreements that contain features that meet the definition
of a guarantee under GAAP. A description of the major types
of such agreements is provided below:
(a) Business sale and business combination agreements:
As part of transactions involving business dispositions, sales
of assets or other business combinations, the Company
may be required to pay counterparties for costs and losses
incurred as a result of breaches of representations and
warranties, intellectual property right infringement, loss
or damages to property, environmental liabilities, changes
in laws and regulations (including tax legislation), litigation
against the counterparties, contingent liabilities of a
disposed business or reassessments of previous tax filings
of the corporation that carries on the business.
(b) Sales of services:
As part of transactions involving sales of services, the
Company may be required to pay counterparties for costs
and losses incurred as a result of breaches of representations
and warranties, changes in laws and regulations (including
tax legislation) or litigation against the counterparties.
(c) Purchases and development of assets:
As par t of transac tions involving purchases and
development of assets, the Company may be required
to pay counterparties for costs and losses incurred as a
result of breaches of representations and warranties, loss
or damages to property, changes in laws and regulations
(including tax legislation) or litigation against the
counterparties.