Shaw 2009 Annual Report Download - page 91

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(3) Prepayments on IRUs in amounts not exceeding the costs to build the fibre subject to the
IRUs are subtracted from the calculation of segmented capital expenditures and equipment
costs (net).
(4) The profit from the sale of satellite equipment is subtracted from the calculation of
segmented capital expenditures and equipment costs (net) as the Company views the profit
on sale as a recovery of expenditures on customer premise equipment.
16. COMMITMENTS AND CONTINGENCIES
Commitments
(i) During prior years, the Company, through its subsidiaries, purchased 28 Ku-band
transponders on the Anik F1 satellite and 18 Ku-band transponders on the Anik F2 satellite
from Telesat Canada. During 2006, the Company’s traffic on the Anik F1 was transferred to
the Anik F1R under a capacity services arrangement which has all of the same substantive
benefits and obligations as on Anik F1. In addition, the Company leases a number of C-band
and Ku-band transponders. Under the Ku-band F1 and F2 transponder purchase agreements,
the Company is committed to paying an annual transponder maintenance fee for each
transponder acquired from the time the satellite becomes operational for a period of 15 years.
(ii) The Company has various long-term commitments of which the majority are for the
maintenance and lease of satellite transponders, lease of transmission facilities, and lease
of premises as follows:
$
2010 119,529
2011 110,064
2012 106,054
2013 103,267
2014 97,046
Thereafter 296,241
832,201
Included in operating, general and administrative expenses are transponder maintenance expenses
of $58,343 (2008 – $58,280; 2007 – $59,009) and rental expenses of $67,663 (2008 –
$66,118; 2007 – $59,117).
Contingencies
The Company and its subsidiaries are involved in litigation matters arising in the ordinary course
and conduct of its business. Although resolution of such matters cannot be predicted with certainty,
management does not consider the Company’s exposure to litigation to be material to these
consolidated financial statements.
Guarantees
In the normal course of business the Company enters into indemnification agreements and has
issued irrevocable standby letters of credit and performance bonds with and to third parties.
87
Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2009, 2008 and 2007
[all amounts in thousands of Canadian dollars except share and per share amounts]