Shaw 2012 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2012 Shaw annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 134

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134

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]
Impairment testing of indefinite-life intangibles and goodwill
The Company conducted its annual impairment test on goodwill and indefinite-life intangibles
as at March 1, 2012 and the recoverable amount of each of the cash generating units exceeded
their carrying value by a significant amount.
The Company also conducted an impairment test on its wireless spectrum assets utilizing the
Greenfield Approach as at March 1, 2012. The recoverable amount of the assets exceeded their
carrying amount. During August 2011 the Company discontinued construction of a traditional
wireless network and considered if this would result in an impairment to the spectrum carrying
value. The Company concluded that the carrying value of the AWS licenses continues to be
appropriate and intends to hold these assets while it reviews all options. A hypothetical decline
of 10% and 20% in the fair value of the wireless spectrum as at March 1, 2012 would not
result in any impairment loss.
A hypothetical decline of 10% and 15% in the recoverable amount of the broadcast rights and
licenses for each cash generating unit as at March 1, 2012 would not result in any impairment
loss. Further, any changes in economic conditions since the impairment testing conducted as at
March 1, 2012 do not represent events or changes in circumstance that would be indicative of
impairment at August 31, 2012.
Significant estimates inherent to this analysis include discount rates and the terminal value. At
March 1, 2012, the estimates that have been utilized in the impairment tests reflect any
changes in market conditions and are as follows:
Terminal value
Pre-tax
discount rate Terminal growth rate
Terminal operating
income before
amortization
multiple
Cable systems 11.5% 1.50% 5.50x
DTH and satellite services 13.6% 1.00% 4.50x
Media 12.3% n/a 6.50x
Wireless 15.7% n/a 5.25x
A sensitivity analysis of significant estimates is conducted as part of every impairment
test. With respect to the impairment tests performed in the third quarter, the estimated decline
in recoverable amount for the sensitivity of significant estimates is as follows:
Estimated decline in recoverable amount
Terminal value
1% increase in
discount rate
1% decrease in
terminal growth rate
0.5 times decrease in
terminal operating
income before
amortization
multiple
Cable systems 6% 3% 3%
DTH and satellite services 6% 2% 3%
Media 4% n/a 4%
Wireless 30% n/a 37%
90