Telus 2011 Annual Report Download - page 127

TELUS 2011 ANNUAL REPORT . 123
FINANCIAL STATEMENTS & NOTES: 4
Non-derivative Derivative
Non-interest
Long-term debt Other financial liabilities
As at bearing All except Currency swaps amounts Currency swaps amounts
December 31, 2010 financial Short-term finance Finance to be exchanged(2) to be exchanged
(millions) liabilities borrowings(1) leases(1)(2) leases (Receive) Pay Other (Receive) Pay Total
(adjusted –
Note 25(d))
2 011
First quarter $ß1,173 $ß 1 $ 161 $ß 3 $ß – $ – $ß13 $ß(116) $ß118 $ß 1,353
Balance of year 229 5 1,012 5 (766) 1,183 – (190) 191 1,669
2012 1 403 597 – – – – – – 1,001
2013 – – 583 – – – – – – 583
2014 – – 958 – – – – – – 958
2015 – – 851 – – – – – – 851
Thereafter 1 – 4,266 – – – – – – 4,267
Total $ß1,404 $ß409 $ß8,428 $ß 8 $ (766) $ß1,183 $ß13 $ß(306) $ß309 $ß10,682
Total $ß8,853
(1) Interest payment cash outflows in respect of short-term borrowings, commercial paper and amounts drawn under the Company’s credit facilities (if any) have been calculated based
upon the rates in effect as at December 31, 2010.
(2) The amounts included in undiscounted non-derivative long-term debt in respect of the U.S. dollar denominated long-term debt, and the corresponding amounts included in the long-term
debt currency swaps receive column, have been determined based upon the rates in effect as at December 31, 2010. The U.S. dollar denominated long-term debt contractual maturity
amounts, in effect, are reflected in the long-term debt currency swaps pay column as gross cash flows are exchanged pursuant to the cross currency interest rate swap agreements.
Non-derivative Derivative
Non-interest
Long-term debt Other financial liabilities
As at bearing All except Currency swaps amounts Currency swaps amounts
January 1, 2010 financial Short-term finance Finance to be exchanged(2) to be exchanged
(millions) liabilities borrowings(1) leases(1)(2) leases (Receive) Pay Other (Receive) Pay Total
(Note 25(d))
2010
First quarter $ß1,023 $ß 1 $ 502 $ß 1 $ß – $ – $ß51 $ß (75) $ß 77 $ß 1,580
Balance of year 309 3 418 1 (113) 175 9 (95) 95 802
2011 – 4 1,726 1 (1,473) 2,152 – – – 2,410
2012 – 502 546 – – – – – – 1,048
2013 – – 532 – – – – – – 532
2014 – – 907 – – – – – – 907
Thereafter 1 – 3,813 – – – – – – 3,814
Total $ß1,333 $ß510 $ß8,444 $ß 3 $ß(1,586) $ß2,327 $ß60 $ß(170) $ß172 $ß11,093
Total $ß9,188
(1) Interest payment cash outflows in respect of short-term borrowings, commercial paper and amounts drawn under the Company’s credit facilities (if any) have been calculated based
upon the rates in effect as at January 1, 2010.
(2)
The amounts included in undiscounted non-derivative long-term debt in respect of the U.S. dollar denominated long-term debt, and the corresponding amounts included in the long-term
debt currency swaps receive column, have been determined based upon the rates in effect as at January 1, 2010. The U.S. dollar denominated long-term debt contractual maturity
amounts, in effect, are reflected in the long-term debt currency swaps pay column as gross cash flows are exchanged pursuant to the cross currency interest rate swap agreements.
(d) Currency risk
The Company’s functional currency is the Canadian dollar, but it regularly
transacts in U.S. dollars due to certain routine revenues and operating
costs being denominated in U.S. dollars, as well as sourcing some
inventory purchases and capital asset acquisitions internationally. The
U.S. dollar is the only foreign currency to which the Company has a
significant exposure.
The Company’s foreign exchange risk management includes the
use of foreign currency forward contracts and currency options to fix the
exchange rates on short-term U.S. dollar denominated transactions and
commitments. Hedge accounting is applied to these short-term foreign
currency forward contracts and currency options only on a limited basis.
As discussed further in Note 20(b), the Company was also exposed
to currency risks in that the fair value or future cash flows of its U.S.
dollar denominated long-term debt would fluctuate because of changes
in foreign exchange rates. Currency hedging relationships were
established for the related semi-annual interest payments and principal
payment at maturity.
Net income and other comprehensive income for the years ended
December 31, 2011 and 2010, could have varied if Canadian dollar:
U.S. dollar exchange rates varied from the actual transaction date rates.
The following Canadian dollar: U.S. dollar exchange rate sensitivity
analysis is based upon a hypothetical change having occurred through-
out the reporting period (other than no change is reflected as at the
statement of financial position date – see (g)) and having been applied to
all relevant Consolidated Statement of Income and Other Comprehensive
Income transactions. The income tax expenses, which are reflected
net in the sensitivity analysis, reflect the applicable weighted average
statutory income tax rates for the reporting periods.