Shaw 2015 Annual Report Download - page 26

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Shaw Communications Inc.
Management’s Discussion and Analysis
August 31, 2015
Accelerated capital fund
During 2013, the Company established a notional fund, the accelerated capital fund, of up to $500 million with proceeds
received, and to be received, from several strategic transactions. The accelerated capital initiatives were funded through this
fund and not cash generated from operations. Key investments included the Calgary data centres, further digitization of the
network and additional bandwidth upgrades, development of IP delivery of video, expansion of the Shaw Go WiFi network, and
additional innovative product offerings related to Shaw Go and other applications to provide an enhanced customer experience.
Approximately $110 million was invested in fiscal 2013, $240 million was invested in fiscal 2014 and $150 million invested
in fiscal 2015.
Statistical Measures
Subscriber counts (or Revenue Generating Units (“RGUs”)), including penetration and bundled customers
The Company measures the count of its customers in its Consumer and Business Network Services divisions. Cable video
subscribers include residential customers, multiple dwelling units (“MDUs”) and commercial customers. A residential
subscriber who receives at a minimum, basic cable service, is counted as one subscriber. In the case of MDUs, such as
apartment buildings, each tenant with a minimum of basic cable service is counted as one subscriber, regardless of whether
invoiced individually or having services included in his or her rent. Each building site of a commercial customer (e.g., hospitals,
hotels or retail franchises) that is receiving at a minimum, basic cable service, is counted as one subscriber. Satellite video
subscribers are counted in the same manner as cable video customers except that they also include seasonal customers who
have indicated their intention to reconnect within 180 days of disconnection. Internet customers include all modems on billing
and Phone lines includes all phone lines on billing. All subscriber counts exclude complimentary accounts but include
promotional accounts.
RGUs represent the number of products sold to customers and includes Video (cable and satellite subscribers), Internet
customers, and Phone lines. As at August 31, 2015 the Company had approximately 5.9 million RGUs.
Subscriber counts, or RGUs, and penetration statistics measure market share and also indicate the success of bundling and
pricing strategies.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company prepared its Consolidated Financial Statements in accordance with IFRS as issued by the International
Accounting Standards Board (“IASB”). An understanding of the Company’s accounting policies is necessary for a complete
analysis of results, financial position, liquidity and trends. Refer to Note 2 to the Consolidated Financial Statements for
additional information on accounting policies. The following section discusses key estimates and assumptions that management
has made under IFRS and how they affect the amounts reported in the Consolidated Financial Statements and notes. Following
is a discussion of the Company’s critical accounting policies:
Revenue and expense recognition
Revenue is considered earned as services are performed, provided that at the time of performance, ultimate collection is
reasonably assured. Such performance is regarded as having been achieved when reasonable assurance exists regarding the
measurement of the consideration that will be derived from rendering the service. Revenue from cable, Internet, Digital Phone
and DTH customers includes subscriber service revenue when earned. The revenue is considered earned as the period of service
relating to the customer billing elapses.
The Company has multiple deliverable arrangements comprised of upfront fees (subscriber connection fee revenue and/or
customer premise equipment revenue) and related subscription revenue. The Company determined that the upfront fees
charged to customers do not constitute separate units of accounting; therefore, these revenue streams are assessed as an
integrated package.
24 Shaw Communications Inc. 2015 Annual Report