NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2012
Carrying
amount
Contractual
cash flows
Less than
1 year
1t o3
years
4t o5
years
More than
5 years
Accounts payable and accrued liabilities $ 2,135 $ 2,135 $ 2,135 $ – $ – $ –
Long-term debt 10,789 10,858 348 1,920 1,500 7,090
Other long-term financial liabilities 33 33 – 17 10 6
Expenditure Derivative instruments:
Cash outflow (Canadian dollar) – 366 231 135 – –
Cash inflow (Canadian dollar equivalent of US dollar) – (378) (239) (139) – –
Debt Derivative instruments:
Cash outflow (Canadian dollar) – 4,797 460 2,338 – 1,999
Cash inflow (Canadian dollar equivalent of US dollar) – (4,208)2 (348) 2 (1,920) 2 – (1,940) 2
Net carrying amount of Derivatives 511
$ 13,468 $ 13,603 $ 2,587 $ 2,351 $ 1,510 $ 7,155
1 The terms of our accounts receivable securitization program are committed until it expires on December 31, 2015.
2 Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for Debt Derivatives.
The tables below shows net interest payments over the life of the long-term debt, including the impact of the associated Debt Derivatives as at
December 31, 2013 and 2012:
December 31, 2013
Less than
1 year
1t o3
years
4t o5
years
More than
5 years
Interest payments $ 743 $ 1,258 $ 1,093 $ 5,341
December 31, 2012
Less than
1 year
1t o3
years
4t o5
years
More than
5 years
Interest payments $ 686 $ 1,168 $ 901 $ 3,929
Market Risk
Market risk is the risk that changes in market prices, such as
fluctuations in the market prices of our publicly traded investments, our
share price, foreign exchange rates and interest rates, will affect our
income, cash flows or the value of our financial instruments. The
derivative instruments we use to manage this risk are described in
note 2.
Publicly Traded Investments
We manage risk related to fluctuations in the market prices of our
investments in publicly traded companies by regularly reviewing publicly
available information related to these investments to ensure that any
risks are within our established levels of risk tolerance. We do not
routinely engage in risk management practices such as hedging,
derivatives or short selling with respect to our publicly traded
investments.
At December 31, 2013, a $1 change in the market price per share of
our publicly traded investments would have resulted in a $14 million
change in our other comprehensive income, net of income taxes of
$2 million.
Stock-Based Compensation
Our liability related to stock-based compensation is marked-to-market
each period. Stock-based compensation expense is affected by the
change in the price of our Class B Non-Voting shares during the life of
an award, including SARs, RSUs and DSUs. We use Equity Derivatives
from time to time to manage our exposure in our stock-based
compensation expense.
At December 31, 2013, a $1 change in the market price of our Class B
Non-Voting shares would not have any impact on net income or other
comprehensive income, including the impact related to our Equity
Derivatives.
Foreign Exchange and Interest Rates
We use Debt Derivatives to manage risks from fluctuations in foreign
exchange and interest rates associated with our US dollar denominated
debt instruments, designating the derivatives as hedges of specific debt
instruments for economic and accounting purposes. We use
Expenditure Derivatives to manage the foreign exchange risk in our
operations, designating them as hedges for certain of our operational
and capital expenditures.
At December 31, 2013, all of our outstanding long-term debt was at
fixed interest rates and all of our US dollar-denominated long-term debt
was hedged against fluctuations in foreign exchange rates using Debt
Derivatives. As a result, with respect to the long-term debt and Debt
Derivatives, a one cent change in the Canadian dollar relative to the US
dollar would have no effect on net income.