Shaw 2012 Annual Report Download - page 111

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2012 and 2011
[all amounts in millions of Canadian dollars except share and per share amounts]
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, program related agreements, lease of
transmission facilities, and lease of premises as follows:
$
2013 683
2014-2017 892
Thereafter 442
2,017
Program agreements generally commit the Company to acquire specific programs or films or
certain levels of future productions. The acquisition of these program rights is contingent on
actual production or airing of the programs or films. At August 31, 2012, there is
approximately $503 included above in respect of such program rights commitments.
Included in operating, general and administrative expenses are transponder maintenance
expenses of $58 (2011 – $58) and rental expenses of $95 (2011 – $90).
(iii) At August 31, 2012, the Company had capital expenditure commitments in the normal
course of business including $22 for transponders on the new Anik G1 satellite which is
expected to be available in fiscal 2013.
(iv) As part of the CRTC decisions approving the acquisition of the broadcasting businesses in
2012 and 2011, the Company is required to contribute approximately $182 in new
benefits to the Canadian broadcasting system over seven years. The obligations have been
recorded in the income statement at fair value, being the sum of the discounted future
net cash flows using appropriate discount rates. In addition, the Company assumed the
CRTC benefit obligation from Canwest’s acquisition of Specialty services in 2007. At
August 31, 2012, the remaining expenditure commitments in respect of these obligations
is $198 which will be funded over future years through fiscal 2019.
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 commercial surety bonds with and to third
parties.
107