Shaw 2011 Annual Report Download - page 121

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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]
Irrevocable standby letters of credit and commercial surety bonds
The Company and certain of its subsidiaries have granted irrevocable standby letters of credit
and commercial surety bonds, issued by high rated financial institutions, to third parties to
indemnify them in the event the Company does not perform its contractual obligations. As of
August 31, 2011, the guarantee instruments amounted to $2,274 (2010 – $1,110). The
Company has not recorded any additional liability with respect to these guarantees, as the
Company does not expect to make any payments in excess of what is recorded on the
Company’s consolidated financial statements. The guarantee instruments mature at various
dates during fiscal 2012 and 2013.
18. EMPLOYEE BENEFIT PLANS
Defined contribution pension plans
The Company has defined contribution pension plans for the majority of its non-union and
certain union employees and, for the majority of these employees, contributes 5% of eligible
earnings to the maximum amount deductible under the Income Tax Act. Total pension costs in
respect of these plans for the year were $29,161 (2010 – $23,550; 2009 – $21,148) of
which $18,080 (2010 – $13,755; 2009 – $12,281) was expensed and the remainder
capitalized. During 2011, in addition to the impact of salary escalation and growth of eligible
employees, pension expense was also impacted by the Media business acquisition.
Defined benefit pension plans
The Company provides a non-contributory defined benefit pension plan for certain of its senior
executives. Benefits under this plan are based on the employees’ length of service and their
highest three-year average rate of pay during their years of service. Employees are not required
to contribute to this plan and the plan is unfunded. There are no minimum required
contributions and no discretionary contributions are currently planned.
The table below shows the change in benefit obligation for this plan.
2011
$
2010
$
Accrued benefit obligation and plan deficit, beginning of year 274,594 195,659
Current service cost 6,288 5,448
Past service cost –12,057
Interest cost 16,109 13,557
Actuarial losses 42,847 49,321
Payment of benefits (5,910) (1,448)
Accrued benefit obligation and plan deficit, end of year 333,928 274,594
117