Shaw 2014 Annual Report Download - page 94

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2014 and 2013
[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, 2014 and the recoverable amount of each of the cash generating units exceeded
their carrying value by a significant amount.
In August 2011 the Company discontinued construction of a traditional wireless network and
during fiscal 2013, granted an option to Rogers to acquire the AWS licenses for $350 (see note
3). As the price exceeds the carrying value of the AWS licenses and considering recent
spectrum transactions in North America, the carrying value of the licenses continues to be
appropriate.
A hypothetical decline of 10% and 20% in the recoverable amount of the broadcast rights and
licenses for each cash generating unit as at March 1, 2014 would not result in any impairment
loss. Further, any changes in economic conditions since the impairment testing conducted as at
March 1, 2014 do not represent events or changes in circumstance that would be indicative of
impairment at August 31, 2014.
Significant estimates inherent to this analysis include discount rates and the terminal value. At
March 1, 2014, the estimates that have been utilized in the impairment tests reflect any
changes in market conditions and are as follows:
Terminal value
Post-tax
discount rate Terminal growth rate
Terminal operating
income before
restructuring costs and
amortization multiple
Cable 8.0% 1.0% 6.00X
Satellite 9.5% 0.0% 4.50X
Media 8.5% 0.0% 6.50X
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
restructuring costs and
amortization multiple
Cable 9.0% 5.0% 3.0%
Satellite 7.0% n/a 3.0%
Media 8.0% n/a 2.0%
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