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76 COGECO CABLE INC. 2012 Consolidated financial statements
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,
2012, the available amount of the Corporation’s Term Revolving Facility was $749.9 million. Management believes that the committed
Term Revolving Facility will, until its maturity in November 2016, 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:
Contractual cash flows
(In thousands of Canadian dollars)
Carrying amount
$
2013
$
2014
$
2015
$
2016
$
2017
$
Thereafte
r
$
Total
$
Trade and other payables(1) 202,208 202,208
 
202,208
Long-term debt(2) 1,036,195 300,000 187,283 555,000 1,042,283
Balance due on a business acquisition 11,400 11,400
 
11,400
Derivatives financial instruments 11,668
14,592 
14,592
Finance leases(3) 837 862 7  
869
1,262,308 214,470 300,007 201,875 555,000 1,271,352
(1) Excluding accrued interest.
(2) Principal excluding finance leases.
(3) Including interest.
The following table is a summary of interest payable on long-term debt (excluding interest on finance leases) that is due for each of the
next five years and thereafter, based on the principal amount and interest rate prevailing on the outstanding debt at August 31, 2012 and
their respective maturities:
2013 2014 2015 2016 2017 Thereafte
r
Total
(In thousands of Canadian dollars) $ $ $ $ $ $ $
Interest payments on long-term debt 61,226 61,226 43,376 36,821 30,266 92,581 325,496
Interest payments on derivative financial instruments 14,614 14,614 14,614 7,307 
51,149
Interest receipts on derivative financial instruments (13,110) (13,110) (13,110) (6,555) 
(45,885)
62,730 62,730 44,880 37,573 30,266 92,581 330,760
Interest rate risk
The Corporation is exposed to interest rate risks for both fixed interest rate and floating interest rate instruments. Fluctuations in interest
rates will have an effect on the valuation and collection or repayment of these instruments. At August 31, 2012, all of the Corporation’s
long-term debt was at fixed rate, except for the Corporation’s Term Revolving Facility. As no amounts were drawn on the Corporation’s
Term Revolving Facility at August 31, 2012, except for letters of credit issued, the Corporation was not exposed to interest risk.
Foreign exchange risk
The Corporation is exposed to foreign exchange risk related to its long-term debt denominated in US dollars. In order to mitigate this risk,
the Corporation has established guidelines whereby currency swap agreements can be used to fix the exchange rates applicable to its US
dollar denominated long-term debt. All such agreements are exclusively used for hedging purposes. Accordingly, on October 2, 2008, the
Corporation entered into cross-currency swap agreements to set the liability for interest and principal payments on its
US$190 million Senior Secured Notes Series A issued on October 1, 2008. These agreements have the effect of converting the US
interest coupon rate of 7.00% per annum to an average Canadian dollar interest rate of 7.24% per annum. The exchange rate applicable
to the principal portion of the debt has been fixed at $1.0625. The Corporation elected to apply cash flow hedge accounting on these
derivative financial instruments.