Cogeco 2010 Annual Report Download - page 70

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Consolidated Financial Statements COGECO CABLE INC. 2010 69
believes that its allowance for doubtful accounts is sufficient to cover the related credit risk. The Corporation has credit policies in place and has
established various credit controls, including credit checks, deposits on accounts and advance billing, and has also established procedures to
suspend the availability of services when customers have fully utilized approved credit limits or have violated existing payment terms. Since the
Corporation has a large and diversified clientele dispersed throughout its market area in Canada and Portugal, there is no significant
concentration of credit risk. The following table provides further details on the Corporation’s accounts receivable balances:
2010 2009
(in thousands of dollars) $ $
Trade accounts receivable 67,189 67,848
A
llowance for doubtful accounts (7,478) (16,399)
59,711 51,449
Other accounts receivable 7,353 8,602
67,064 60,051
The following table provides further details on trade accounts receivable, net of allowance for doubtful accounts. Trade accounts receivable
past due is defined as amount outstanding beyond normal credit terms and conditions for the respective customers. A large portion of the
Corporation’s customers are billed in advance and are required to pay before their services are rendered. The Corporation considers amount
outstanding at the due date as trade accounts receivable past due.
2010 2009
(in thousands of dollars) $ $
Net trade accounts receivable not past due 42,817 39,892
Net trade accounts receivable past due 16,894 11,557
59,711 51,449
Liquidity risk
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The Corporation manages
liquidity risk through the management of its capital structure and access to different capital markets. It also manages liquidity risk by
continuously monitoring actual and projected cash flows to ensure sufficient liquidity to meet its obligations when due. At August 31, 2010, the
available amount of the Corporation’s Term Revolving Facility was $620.4 million. Management believes that the committed Term Revolving
Facility will, until its maturity in July 2014, provide sufficient liquidity to manage its long-term debt maturities and support working capital
requirements.
The following table summarizes the contractual maturities of the financial liabilities and related capital amounts:
2011 2012 2013 2014 2015 Thereafte
r
Total
$ $ $ $ $ $ $
A
ccounts payable and accrued liabilities 235,087 – – – – – 235,087
Long-term debt(1) – 175,000 – 421,635 – 357,635 954,270
Derivative financial instruments
Cash outflows (Canadian dollar) – – – – – 201,875 201,875
Cash inflows (Canadian dollar
equivalent of US dollar) – – – – – (202,635) (202,635)
Obligations under capital leases(2) 2,883 2,183 847 35 – – 5,948
237,970 177,183 847 421,670 – 356,875 1,194,545
(1) Principal excluding obligations under capital leases.
(2) Including interest.