Shaw 2015 Annual Report Download - page 51

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Shaw Communications Inc.
Management’s Discussion and Analysis
August 31, 2015
Debt structure and financial policy
Shaw structures its borrowings generally on a standalone basis. With the exception of ViaWest, the borrowings of Shaw are
unsecured. While certain non-wholly owned subsidiaries and ViaWest, its immediate parent and its subsidiaries are subject to
contractual restrictions which may prevent the transfer of funds to Shaw, there are no similar restrictions with respect to other
subsidiaries of the Company.
Shaw’s borrowings are subject to covenants which include maintaining minimum or maximum financial ratios. At August 31,
2015, Shaw is in compliance with these covenants and based on current business plans, the Company is not aware of any
condition or event that would give rise to non-compliance with the covenants over the life of the borrowings.
As at August 31, 2015, the ratio of debt to operating income before restructuring costs and amortization for the Company is
2.0 times. Having regard to prevailing competitive, operational and capital market conditions, the Board of Directors has
determined that having this ratio in the range of 2.0 to 2.5 times would be optimal leverage for the Company in the current
environment. Should the ratio fall below this, on an other than temporary basis, the Board may choose to recapitalize back into
this optimal range. The Board may also determine to increase the Company’s debt above these levels to finance specific
strategic opportunities such as a significant acquisition.
Off-balance sheet arrangement and guarantees
Guarantees
Generally it is not the Company’s policy to issue guarantees to non-controlled affiliates or third parties; however, it has entered
into certain agreements as more fully described in Note 25 to the Consolidated Financial Statements. As disclosed thereto,
Shaw believes it is remote that these agreements would require any cash payment.
Contractual obligations
The amounts of estimated future payments under the Company’s contractual obligations at August 31, 2015 are detailed in the
following table.
Payments due by period
(millions of Canadian dollars) Total
Within
1 year 2 –3 years 4 –5 years
More than
5 years
Long-term debt(1) 9,051 905 943 2,166 5,037
Operating obligations(2) 1,971 635 566 382 388
Purchase obligations(3) 49 49 – – –
Other obligations(4) 21 – 19 2 –
11,092 1,589 1,528 2,550 5,425
(1) Includes principal repayments and interest payments.
(2) Includes maintenance and lease of satellite transponders, program related agreements, lease of transmission facilities
and premises and exclusive rights to use intellectual property in Canada.
(3) Includes capital expenditure and inventory purchase commitments.
(4) Includes other non-current financial liabilities.
ADDITIONAL INFORMATION
Additional information relating to Shaw, including the Company’s 2015 Annual Information Form can be found on SEDAR at
www.sedar.com.
COMPLIANCE WITH NYSE CORPORATE GOVERNANCE LISTING STANDARDS
Disclosure of the Company’s corporate governance practices which differ from the New York Stock Exchange (“NYSE”)
corporate governance listing standards are posted on Shaw’s website, www.shaw.ca under Investors/Corporate Governance/
Compliance with NYSE Corporate Governance Listing Standards.
2015 Annual Report Shaw Communications Inc. 49