Comcast Corporation's 2017 income statement and partial balance sheet (liabilities and equity, only) are presented below. In addition, footnote IO pertaining to Comcast's long-term debt obligations is provided. All$ amounts are presented in millions.

(a) The December 31, 2017 and 2016, amounts primarily consist of ¥435 billion and ¥382 billion, respectively, of Universal Studios Japan term loans translated using the exchange rates as of these dates. In May 2017, Universal Studios Japan entered into ¥450 billion of new term loans with a final maturity of March 2022. We used the proceeds from these borrowings to repay in full Universal Studios Japan's existing yen-denominated term loans and a portion of amounts outstanding under our commercial paper program.

(b) The December 31, 2017 and 2016, amounts include £625 million of 5.50% notes due 2029, which translated to $845 million and $771 million, respectively, using the exchange rates as of these dates.

(c) The December 31, 2017, amount includes the difference between the principal amount of the new senior notes and the carrying amount of the exchanged senior notes at the time of the senior notes exchange. See below under the heading "Senior Notes Exchange" for additional information on this transaction.

(d) Includes the effects of our derivative financial instruments. As of December 31, 2017 and 2016, our debt had an estimated fair value of $71.7 billion and $66.3 billion, respectively. The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market values for the debt. The estimated fair value of debt for which there are no quoted market prices was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities. See Note 19 for additional information on our cross-guarantee structure.

REQUIRED:

a. Comcast provided cash flow information revealing that the company paid interest equal to $2,820 million in 2017. Explain why this amount is different from the amount of interest expense reported in its 2017 income statement.

b. Comcast reports its debt using historical cost. What would be the impact on the financial statements if the company elected to report all of its debt at fair value? (Assume no changes to fair values due to changes in instrument-specific credit risk.) Be specific.

c. The financial ratios specified in Comcast's loan agreements include the solvency measures described in this chapter. Calculate Comcast's debt-to-equity ratio and times interest earned for 2017. Explain why creditors might include these ratios in the restrictive covenants of loan agreements.

d. Violation of debt covenants can be a serious event that can impose substantial costs on a company. What actions might management take to a void violating debt covenants if the company's ratios are near the covenant limits?

e. Explain what type of dislosures are likely present in Note 16-"Commitment and Contingencies," which is repressented as a line item on the balance sheet with no amounts.

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Summarized Consolidated Statement of Income Year ended December 31 (in milliona) 2017 2016 Revenue... $84,526 $80,403 Costs and expenses: Programming and production.. Other operating and administrative. 25,384 25,013 6,317 7,914 24,463 23,416 6,107 7,464 Advertising, marketing and promotion. Depreciation... Amortization .. Other operating gains... 2,353 2,094 (442) 66,539 63,544 Operating income... Other income (expense) 17,987 16,859 (2,942) Interest expense. Other.... (3,086) 421 436 (2,665) (2,506) Income before income taxes 15,322 7,578 14,353 Income tax benefit (expense).. (5,308) Net income. $22,900 $ 9,045