Shaw 2011 Annual Report Download - page 120

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2011, 2010 and 2009
[all amounts in thousands of Canadian dollars except share and per share amounts]
(iii) At August 31, 2011, the Company had capital expenditure commitments in the normal
course of business including $24,500 for transponders on the new Anik G1 satellite
which is expected to be available in fiscal 2013.
(iv) As part of the CRTC decision approving the acquisition of the broadcasting businesses in
the current year, the Company is required to contribute approximately $180,000 in new
benefits to the Canadian broadcasting system over the following seven years. The
obligation has been recorded in the income statement at fair value, being the sum of the
discounted future net cash flows using a 5.75% discount rate. In addition, the Company
assumed the CRTC benefit obligation from Canwest’s acquisition of Specialty services in
2007. At August 31, 2011, the remaining expenditure commitments in respect of both of
these obligations is approximately $244,000 which will be funded over future years
through fiscal 2017.
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.
Indemnities
Many agreements related to acquisitions and dispositions of business assets include
indemnification provisions where the Company may be required to make payment to a vendor or
purchaser for breach of contractual terms of the agreement with respect to matters such as
litigation, income taxes payable or refundable or other ongoing disputes. The indemnification
period usually covers a period of two to four years. Also, in the normal course of business, the
Company has provided indemnifications in various commercial agreements, customary for the
telecommunications industry, which may require payment by the Company for breach of
contractual terms of the agreement. Counterparties to these agreements provide the Company
with comparable indemnifications. The indemnification period generally covers, at maximum,
the period of the applicable agreement plus the applicable limitations period under law.
The maximum potential amount of future payments that the Company would be required to
make under these indemnification agreements is not reasonably quantifiable as certain
indemnifications are not subject to limitation. However, the Company enters into
indemnification agreements only when an assessment of the business circumstances would
indicate that the risk of loss is remote. At August 31, 2011, management believes it is remote
that the indemnification provisions would require any material cash payment.
The Company indemnifies its directors and officers against any and all claims or losses reasonably
incurred in the performance of their service to the Company to the extent permitted by law.
116