Shaw 2011 Annual Report Download - page 34

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
ix) Future income taxes
The Company has recognized future income tax assets in respect of its losses and losses of
certain of its subsidiaries. Realization of future income tax assets is dependent upon generating
sufficient taxable income during the period in which the temporary differences are deductible.
The Company has evaluated the likelihood of realization of future income tax assets based on
forecasts of taxable income of future years and based on the ability to reorganize its corporate
structure to accommodate use of tax losses in future years. Assumptions used in these taxable
income forecasts are consistent with internal forecasts and are compared for reasonability to
forecasts prepared by external analysts. Significant changes in assumptions with respect to
internal forecasts or the inability to implement tax planning strategies could result in future
impairment of these assets.
x) Commitments and contingencies
The Company is subject to various claims and contingencies related to lawsuits, taxes and
commitments under contractual and other commercial obligations. Contingent losses are
recognized by a charge to income when it is likely that a future event will confirm that an asset
has been impaired or a liability incurred at the date of the financial statements and the amount
can be reasonably estimated. Contractual and other commercial obligations primarily relate to
network fees, program rights and operating lease agreements for use of transmission facilities,
including maintenance of satellite transponders and lease of premises in the normal course of
business. Significant changes in assumptions as to the likelihood and estimates of the amount
of a loss could result in recognition of additional liabilities.
G. Related party transactions
Related party transactions are reviewed by Shaw’s Corporate Governance and Nominating
Committee, comprised of independent directors. The following sets forth certain transactions in
which the Company is involved.
Normal course transactions
The Company has entered into certain transactions and agreements in the normal course of
business with certain of its related parties.
Corus Entertainment Inc. (“Corus”)
The Company and Corus are subject to common voting control. During the year, network,
advertising and programming fees were paid to various Corus subsidiaries. The Company
provided cable system distribution access, administrative services, uplinking of television
signals and Internet services and lease of circuits to various Corus subsidiaries. In addition, the
Company provided Corus with television advertising spots in return for radio and television
advertising.
Burrard Landing Lot 2 Holdings Partnership
The Company has a 33.33% interest in the Partnership. During the current year, the Company
paid the Partnership for lease of office space in Shaw Tower. Shaw Tower, located in
Vancouver, BC, is the Company’s headquarters for its lower mainland operations.
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