Charter 2011 Annual Report Download - page 74

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62
The table set forth below summarizes the fair values and contract terms of financial instruments subject to interest rate risk
maintained by us as of December 31, 2011 (dollars in millions):
Debt:
Fixed Rate
Average Interest
Rate
Variable Rate
Average Interest
Rate
Interest Rate
Instruments:
Variable to Fixed
Rate
Average Pay Rate
Average Receive
Rate
2012
$ 500
8.00%
$ 31
3.91%
$ —
—
—
2013
$ —
—
$ 243
2.74%
$ 900
5.21%
4.01%
2014
$ 312
10.88%
$ 479
3.65%
$ 800
5.65%
4.23%
2015
$ —
—
$ 490
4.63%
$ 300
5.99%
4.72%
2016
$ 1,480
13.50%
$ 2,861
5.39%
$ —
—
—
Thereafter
$ 6,250
7.22%
$ 175
4.86%
$ —
—
—
Total
$ 8,542
8.49%
$ 4,279
4.93%
$ 2,000
5.50%
4.20%
Fair Value at
December 31,
2011
$ 9,190
$ 4,193
$ 65
At December 31, 2011, we had $2.0 billion in notional amounts of interest rate swaps outstanding. The notional amounts of
interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of our exposure to credit
loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts. The
estimated fair value is determined using a present value calculation based on an implied forward LIBOR curve (adjusted for Charter
Operating’s or counterparties’ credit risk). Interest rates on variable debt are estimated using the average implied forward LIBOR for
the year of maturity based on the yield curve in effect at December 31, 2011 including applicable bank spread.
Item 8. Financial Statements and Supplementary Data.
Our consolidated financial statements, the related notes thereto, and the reports of independent accountants are included in this
annual report beginning on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
As of the end of the period covered by this report, under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures with respect to the information generated for use in this annual report. The evaluation was
based in part upon reports and certifications provided by a number of executives. Based upon, and as of the date of that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to
provide reasonable assurances that information required to be disclosed in the reports we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms.
In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible