Shaw 2012 Annual Report Download - page 86

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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]
combine programming content with the Company’s cable and satellite distribution network to
create a vertically integrated entertainment and communications company.
The transaction has been accounted for using the acquisition method and results of operations
have been included commencing October 27, 2010. These broadcasting businesses have
contributed $891 of revenue and $252 of operating income before amortization for the period
from October 27 to August 31, 2011. If the acquisition had closed on September 1, 2010,
the Media revenue and operating income before amortization for the year would have been
approximately $1,075 and $325, respectively. Net income is not determinable due to
emergence of certain portions of the business from bankruptcy protection.
In 2011, acquisition related costs of $61 were expensed and include amounts incurred to
effect the transaction, such as professional fees paid to lawyers and consultants, as well
as restructuring costs to integrate the new businesses and increase organizational
effectiveness for future growth as well as senior leadership reorganization.
As part of the CRTC decision approving the transaction, the Company is required to
contribute approximately $180 in new benefits to the Canadian broadcasting system over
the next seven years. Most of this contribution will be used to create new programming on
Canwest services, construct digital transmission towers and provide a satellite solution for
over-the-air viewers whose local television stations do not convert to digital. 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 which
was a remaining commitment of approximately $95 on acquisition.
A summary of net assets acquired and allocation of consideration is as follows:
$
Net assets acquired at assigned fair values
Cash 83
Receivables 297
Other current assets(1) 147
Deferred income tax assets 27
Derivative instrument 16
Investments and other assets 16
Property and equipment 141
Intangibles(2) 1,651
Goodwill, not deductible for tax(3) 538
2,916
Current liabilities(1) 307
Current debt(4) 399
Derivative instruments(4) 82
Non-current liabilities 105
Deferred income tax liabilities 124
Long-term debt(5) 412
Non-controlling interests(6) 277
1,210
82