Cogeco 2003 Annual Report Download - page 39

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cogeco Cable Inc. 2003 37
13 Financial instruments (continued)
Long-term debt
a) Financial expense under the terms of the Corporation’s Term Facility is based upon bankers’ acceptance or bank prime rates.
Therefore, carrying value is considered to represent fair market value for the Term Facility.
b) The carrying values of obligations under capital leases and other items of the long-term debt approximate fair value of these
financial instruments due to their terms.
c) The fair value of the Senior Secured Debentures Series 1, Senior Secured Notes Series A and B, and Second Secured
Debentures Series A, is based upon current trading values for similar financial instruments.
d) The fair value of the derivative financial instruments is based upon available information about the financial instruments and
market conditions.
The estimated fair values of long-term debt instruments and derivative instruments are as follows:
Fair value estimates are made at a specific point in time, based on relevant market information and information about the
financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and,
therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Credit risks
The Corporation’s credit risk arises from the possibility that counterparts to the foreign exchange forward contracts and the
cross-currency swap agreements may default on their obligations. The Corporation reduces risk by completing transactions with
financial institutions that carry a credit rating equal or superior to A+. In addition, since the Corporation has a large and
diversified clientele, credit risk concentration from customers is minimal.
14 Statements of cash flow
a) Changes in non-cash working capital items
b) Fixed assets
During the year, fixed assets acquisitions amounted to $101,073,000 ($122,105,000 in 2002), $688,000 ($782,000 in 2002)
of which were acquired through capital leases. Disbursements for the purchase of fixed assets totalled $100,385,000
($121,323,000 in 2002).
c) Other information
2003 2002
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
Long-term debt $773,740 $ 762,414 $820,649 $ 786,226
Derivative financial instruments –
asset (liability) position (30,795) (33,210) (4,830) 539
2003 2002
Accounts receivable $(127) $1,996
Income tax receivable 7,025 (5,129)
Prepaid expenses 1,291 2,791
Accounts payable and accrued liabilities 11,727 17,062
Income tax liabilities 732 —
Deferred and prepaid income (1,861) (358)
$18,787 $16,362
2003 2002
Interest paid $58,862 $46,767
Income taxes paid (refunded) (4,287) 4,680