Cogeco 2008 Annual Report Download - page 59

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58 COGECO CABLE INC. 2008 Notes to the Consolidated Financial Statements
A) INTANGIBLE ASSETS
During fiscal 2008 and 2007, intangible asset variations were as follows:
2008 2007
(in thousands of dollars)
CUSTOMER
RELATIONSHIPS
$
CUSTOMER
BASE
$
TOTAL
$
CUSTOMER
RELATIONSHIPS
$
CUSTOMER
BASE
$
TOTAL
$
BALANCE, BEGINNING OF YEAR 68,858 989,552 1,058,410 – 989,552 989,552
BUSINESS ACQUISITIONS AND RELATED
ADJUSTMENTS (NOTE 2) 38,203 – 38,203 71,684 – 71,684
AMORTIZATION (10,932) – (10,932) (2,561) – (2,561)
FOREIGN CURRENCY TRANSLATION
ADJUSTMENT 5,361 – 5,361 (265) – (265)
BALANCE, END OF YEAR 101,490 989,552 1,091,042 68,858 989,552 1,058,410
At August 31, 2008 and 2007, the Corporation tested the value of customer base for impairment and concluded that no impairment
existed.
B) GOODWILL
During fiscal years 2008 and 2007, goodwill variation was as follows:
2008 2007
(in thousands of dollars) $ $
BALANCE, BEGINNING OF YEAR 342,584 422,108
BUSINESS ACQUISITIONS AND RELATED ADJUSTMENTS (NOTE 2) 116,890 –
ADJUSTMENT TO THE ALLOCATION OF THE PURCHASE PRICE OF A PRIOR YEAR ACQUISITION (NOTE 2) – (87,020)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT 28,331 7,496
BALANCE, END OF YEAR 487,805 342,584
On March 9, 2007, the Corporation and Cable Satisfaction International Inc. came to an agreement for a final adjustment to the
working capital of Cabovisão that was outstanding since the date of acquisition. According to the agreement, the final purchase
price was reduced by an amount of €2,194,000 ($3,371,000). Also, during 2007, the purchase price allocation related to the 2006
acquisition of Cabovisão was adjusted to reflect final valuations of tangible and intangible assets acquired and liabilities assumed on
acquisition. The impact of these adjustments reduced goodwill by $87,020,000 (see note 2).
At August 31, 2008 and 2007, the Corporation tested the value of goodwill for impairment and concluded that no impairment existed.
11. BANK INDEBTEDNESS
The Corporation has a swingline facility available for an amount of $25,000,000, of which $10,093,000 was used at August 31, 2008
(none at August 31, 2007). This facility requires commitment fees and bears interest at the bank prime rate. At August 31, 2008, the
interest rate on bank indebtedness is 4.75% (6.25% in 2007). This facility, which matures on July 28, 2011, is secured on the same
basis and is subject to the same restrictions as the Term Facility (note 12 a)).