Telus 2010 Annual Report Download - page 155

TELUS 2010 annual report . 151
FINANCIAL STATEMENTS & NOTES: 14
(l) Defined contribution plans
The Company’s total defined contribution pension plan costs recognized
were as follows:
Years ended December 31 (millions) 2010 2009
Union pension plan and public service
pension plan contributions $ß27 $ß30
Other defined contribution pension plans 34 31
$ß61 $ß61
14 ACCOUNTS RECEIVABLE
Summary schedule and review of arm’s-length securitization trust transactions
and related disclosures
Cash flows from the securitization were as follows:
Years ended December 31 (millions) 2010 2009
Cumulative proceeds from securitization,
beginning of period $ 500 $ 300
Proceeds from new securitizations – 200
Securitization reduction payments (100) –
Cumulative proceeds from securitization,
end of period $ 400 $ 500
Proceeds from collections reinvested
in revolving-period securitizations $ß4,235 $ß4,060
Proceeds from collections pertaining
to retained interest $ 720 $ 780
The key economic assumptions used to determine the loss on sale
of receivables, the future cash flows and fair values attributed to the
retained interest were as follows:
Years ended December 31 2010 2009
Expected credit losses as a percentage
of accounts receivable sold 1.0% 1.2%
Weighted average life of the receivables
sold (days) 34 32
Effective annual discount rate 1.2% 0.8%
Servicing 1.0% 1.0%
Generally, the sold trade receivables do not experience prepayments.
On July 26, 2002, TELUS Communications Inc., a wholly owned
subsidiary of TELUS, entered into an agreement with an arm’s-length
securitization trust associated with a major Schedule I bank under
which TELUS Communications Inc. is able to sell an interest in certain
of its trade receivables up to a maximum of $500 million (2009 –
$500 million). This revolving-period securitization agreement had an
initial term ending July 18, 2007; a November 30, 2006, amendment
resulted in the term being extended to July 18, 2008; a March 31, 2008,
amendment resulted in the term being extended to July 17, 2009;
and a May 6, 2009, amendment resulted in the term being extended
to May 6, 2012.
As a result of selling the interest in certain of the trade receivables on
a fully serviced basis, a servicing liability is recognized on the date of sale
and is, in turn, amortized to earnings over the expected life of the trade
receivables.
TELUS Communications Inc. is required to maintain at least a BBB
(low) credit rating by Dominion Bond Rating Service or the securitization
trust may require the sale program to be wound down prior to the end
of the term.
As at December 31 (millions) 2010 2009
Total managed portfolio $ß1,322 $ß1,201
Securitized receivables (465) (598)
Retained interest in receivables sold 60 91
Receivables held $ 917 $ 694
For the year ended December 31, 2010, the Company recognized
composite losses of $8 million (2009 – $11 million) on the sale of
receivables arising from the securitization.