Shaw 2013 Annual Report Download - page 48

S
haw
C
ommunications Inc
.
MANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
August
31
,
2013
D
ur
i
n
g
the current
y
ear, the
C
om
p
an
y
closed the sale o
f
Mounta
i
n
C
able
i
n Ham
i
lton,
O
ntar
i
ot
o
R
ogers. The Company received proceeds, after working capital adjustments, of
$
398 million
and recorded a gain of
$
50 million
.
The Company incurred
$
8 million of costs in respect of the acquisition of Envision and the
t
ransact
i
ons w
i
th Ro
g
ers related to the sale o
f
Mounta
i
n
C
able,
g
rant o
f
an o
p
t
i
on to ac
q
u
i
re th
e
wireless spectrum licenses and purchase from Rogers of its interest in TVtropolis.
D
uring the current year, the Company recorded a gain of
$
7 million on the sale of its interest i
n
ABC Spark to Corus
.
As part of the CRTC decisions approving the acquisition of Mystery and The Cave during 2012
,
t
he Com
p
an
y
is re
q
uired to contribute a
pp
roximatel
y
$2 million in new benefits to the Canadian
broadcasting system over seven years. Most of this contribution will be used to create new
p
ro
g
rammin
g
on Shaw Media services. The fair value of the obli
g
ation of
$
2 million wa
s
d
eterm
i
ned b
y
d
i
scount
i
n
gf
uture net cash
f
lows us
i
n
g
a
pp
ro
p
r
i
ate d
i
scount rates and has been
r
eco
r
ded
in
t
h
e
in
co
m
e state
m
e
n
t.
The Company recorded a
$
6 million gain in respect of a remeasurement to fair value of th
e
Company’s 50% interest in Mystery and 49% interest in The Cave which were held prior to th
e
ac
q
u
i
s
i
t
i
on on Ma
y31
,
2012
. The
f
a
i
r value o
f
the
C
om
p
an
y
’s e
q
u
i
t
yi
nterest
i
n these s
p
ec
i
alt
y
channels held prior to the acquisition was
$
19 million compared to a carrying value of
$
13
m
illion
.
F
or derivative instruments where hedge accounting is not permissible or derivatives are not
d
es
ig
nated
i
n a hed
gi
n
g
relat
i
onsh
ip
, the
C
om
p
an
y
records chan
g
es
i
n the
f
a
i
r value o
f
de
r
i
v
ati
v
ei
n
st
r
u
m
e
n
ts i
n
t
h
ei
n
co
m
e state
m
e
n
t.
The Company records accretion expense in respect of the discounting of certain long-ter
m
liabilities and
p
rovisions which are accreted to their estimated value over their res
p
ective terms
.
The ex
p
ense
i
s
p
r
i
mar
i
l
yi
n res
p
ect o
fC
RT
C
bene
fi
t obl
ig
at
i
ons
.
O
ther losses
g
enerall
yi
ncludes real
i
zed and unreal
i
zed
f
ore
ig
n exchan
g
e
g
a
i
ns and losses on U
S
d
ollar denominated current assets and liabilities, gains and losses on disposal of property, plan
t
and equipment and minor investments, and the Company’s share of the operations of Burrar
d
L
and
i
n
g
Lot
2
Hold
i
n
g
s Partnersh
ip
. Dur
i
n
g
the
p
r
i
or
y
ear, the cate
g
or
y
also
i
ncluded a
p
ens
i
on
recovery of
$
25 million which arose due to a plan amendment to freeze base salary levels, and
a loss of
$
26 million related to an electrical fire and resulting water damage to Shaw Court. The
loss of $26 million included $6 million of costs in res
p
ect of restoration and recover
y
activities
,
including amounts incurred in the relocation of employees, and an asset write-down of
$
2
0
m
illion related to the damages sustained to the building and its contents. During the curren
t
y
ear, the Com
p
an
y
received insurance advances of $5 million related to its claim for costs tha
t
were incurred in 2012 and incurred additional costs of
$
13 million in respect of ongoin
g
recovery activities. In addition, during the current year the Company decided to discontinu
e
f
urther construction on a real estate
p
ro
j
ect which resulted in a write-down of $14 million.
Income tax expens
e
The income tax expense was calculated using current statutory income tax rates of 25.9% for
2013
and
26
.
3% f
or
2012
and was ad
j
usted
f
or the reconc
i
l
i
n
gi
tems
i
dent
ifi
ed
i
n Note
23
t
o
t
h
eCo
n
so
li
dated
Fin
a
n
c
i
a
l
State
m
e
n
ts.
44