Shaw 2010 Annual Report Download - page 91

of which $3,972 (2009 – $3,984; 2008 – $3,627) was recorded as amortization of financing costs and
$1,340 (2009 – $482; 2008 – $195) was recorded as interest expense.
(2) Foreign denominated long-term debt was translated at the year-end foreign exchange rate of 1.095 Cdn. If the rate of
translation had been adjusted to reflect the hedged rates of the Company’s cross-currency interest rate agreements
(which fixed the liability for interest and principal), long-term debt would have increased by $418,633. The US senior
notes were redeemed in October 2009.
Interest on long-term debt included in interest expense amounted to $250,679 (2009 –
$237,546; 2008 – $231,599). Interest expense is net of $4,008 (2009 – $981; 2008 –
$1,950) of interest income. Excess proceeds from the senior notes issuances were held in cash
and cash equivalents and short term securities or invested pending use by the Company to finance
operations, fund business acquisitions and repay maturing debt.
Corporate
Bank loans
The Company has a $50,000 revolving operating loan facility, of which $718 has been drawn as
committed letters of credit. Interest rates and borrowing options are principally the same as those
contained in the credit facility described below. The effective interest rate on the facility was 2.34%
for the year (2009 – 3.09%; 2008 – 5.49%).
A syndicate of banks has provided the Company with an unsecured $1 billion credit facility due in
May 2012. No amounts were drawn under the credit facility during the current year. Funds are
available to the Company in both Canadian and US dollars. Interest rates fluctuate with Canadian
bankers’ acceptance rates, US bank base rates and LIBOR rates. The effective interest rate on
actual borrowings during 2009 and 2008 was 3.06% and 4.81%, respectively.
Subsequent to year end, the Company put in place a new unsecured $500,000 revolving credit
facility to provide additional liquidity. This new facility has been provided by certain parties of the
above noted banking syndicate and is subject to substantially similar terms and conditions as the
$1 billion credit facility.
Senior notes
The senior notes are unsecured obligations and rank equally and ratably with all existing and future
senior indebtedness. The notes are redeemable at the Company’s option at any time, in whole or in
part, prior to maturity at 100% of the principal amount plus a make-whole premium.
On October 1, 2009 the Company issued $1,250,000 of senior notes at a rate of 5.65%. The
effective rate is 5.69% due to the discount on issuance. On November 9, 2009, the Company
issued $650,000 of senior notes at a rate of 6.75%. The effective rate is 6.80% due to the discount
on issuance.
Other subsidiaries and entities
Burrard Landing Lot 2 Holdings Partnership
The Company has a 33.33% interest in the Partnership which built the Shaw Tower project with
office/retail space and living/working space in Vancouver, BC. In the fall of 2004, the commercial
construction of the building was completed and at that time, the Partnership issued 10 year secured
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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2010, 2009 and 2008
[all amounts in thousands of Canadian dollars except share and per share amounts]