SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

Shaw Communications Inc.

(Translation of registrant’s name into English)

Suite 900, 630 — 3^rd Avenue S.W., Calgary, Alberta T2P 4L4 (403) 750-4500
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F o Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “ Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Shaw Communications Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 23, 2009
Shaw Communications Inc.
By:		/s/ Steve Wilson
		Steve Wilson
		Sr. V.P., Chief Financial Officer
		Shaw Communications Inc.

NEWS RELEASE

Shaw announces fourth quarter and full year results
and preliminary fiscal 2010 guidance

Calgary, Alberta (October 23, 2009) — Shaw Communications Inc. announced results for the fourth quarter and fiscal year ended August 31, 2009. Consolidated service revenue for the three and twelve month periods of $873 million and $3.39 billion, respectively, was up 8% and 9% over the same periods last year. Service operating income before amortization¹ of $395 million and $1.54 billion, respectively, improved 7% and 9% over the comparable periods. Funds flow from operations² was $321 million and $1.32 billion for the quarter and year respectively, compared to $321 million and $1.22 billion in the same periods last year.

During the quarter Basic cable subscribers increased 6,374 to 2,289,900, Digital customers were up 110,501 to 1,297,684, and Internet and Digital Phone lines grew by 27,376 to 1,678,335 and 55,708 to 829,717, respectively. DTH customers increased 2,728 to 900,941.

Chief Executive Officer and Vice Chair Jim Shaw commented, “Throughout 2009 subscriber growth was solid. Our focus on Digital deployment, combined with the consumers increased demand for HDTV, drove record Digital growth during the year. We added over 388,000 new subscribers increasing our Digital penetration of Basic from 40% at August 31, 2008 to almost 57% at August 31, 2009.”

Free cash flow¹ for the quarter and year was $99 million and $504 million, respectively, compared to $143 million and $453 million for the same periods last year. The quarterly decline was due to increased capital investment and the impact of cash taxes offsetting higher service operating income before amortization. The annual improvement in free cash flow was achieved through higher service operating income before amortization after taking into account almost $50 million of increased capital investment and the impact of the Company becoming cash taxable during the current quarter.

Jim Shaw stated, “Our financial and operational results for the quarter and annual period demonstrate our ability to manage effectively in a challenging economic and highly competitive environment. Our prudent management approach enabled us to invest in the business and execute on our strategic initiatives providing customers with high quality innovative products, value pricing, and exceptional customer service. The foundation of our service delivery system includes our dedicated employee base and our technologically advanced broadband network. Our commitment to customer service is a strong competitive advantage, and in support of this our employee base grew rapidly from 6,500 in 2005 to over 10,000 today. During 2009 we invested over $775 million in our capital infrastructure in order to continue to meet customers’ demands. The investment was directed to the enhancement of our broadband network including capacity upgrades to accommodate the continued growth of HD services, subscriber growth with a focus on increasing our Digital base, expansion of our Digital Phone footprint, continued node segmentation, Internet speed increases of 50% and the launch of a 100 Mbps service with DOCSIS 3.0 deployment, back office and customer support systems, and facilities expansion. Our business is capital intensive: we must continue to reinvest a large portion of our operating profits to remain in step with technology advancements and provide consumers the choice and innovation they demand. From 2005 through 2009 we invested over $3.0 billion in capital.

For 2009 specifically we achieved solid growth across our key financial metrics: 9% improvement in both consolidated service revenue and service operating income before amortization, and an increase of over $50 million, or 11%, in free cash flow. Our continued financial success is directly related to our ability to deliver real value by anticipating and responding to the needs of our customers, offering variety and competitive rates. We do this while also making significant contributions to the enhancement of the Canadian broadcasting system. Our financial results include substantial investments, over $100 million in 2009, in support of Canadian television including Canadian content and local programming.”

Mr. Shaw continued, “We have added employees and invested to ensure our service delivery system is strong and our business has a sound future. While doing this we have maintained our profitability in a consistent manner. Also, while many other companies loaded up on debt overlooking that economic cycles occur, we have consistently lowered our debt each year and strengthened our business financially.”

Net income of $124 million or $0.29 per share for the quarter ended August 31, 2009 compared to $132 million or $0.31 per share for the same quarter last year. Net income for the annual period was $535 million or $1.25 per share compared to $672 million or $1.56 per share last year. All periods included non-operating items which are more fully detailed in Management’s Discussions and Analysis (MD&A). ³ The current and comparable annual periods each benefitted from tax recoveries primarily related to reductions in enacted income tax rates of $23 million and $199 million, respectively. The prior year also benefitted from a net duty recovery of approximately $22 million before income taxes related to the importation of satellite receivers. Excluding the non-operating items, net income for the current three and twelve month periods ended August 31, 2009 would have been $123 million and $504 million compared to $133 million and $460 million in the same periods last year.

Service revenue in the Cable division was up 10% and 11% for the three and twelve month periods, respectively, to $682 million and $2.63 billion. The improvement was primarily driven by customer growth and rate increases. Service operating income before amortization improved 9% and 10%, respectively, for the three and twelve month periods to $328 million and $1.27 billion.

Service revenue in the Satellite division was $190 million and $760 million for the three and twelve month periods respectively, up 3% and 4% over the comparable periods last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization for the quarter and annual period was $67 million and $269 million, respectively, compared to $67 million and $255 million for the same periods last year.

Mr. Shaw continued, “Looking forward we anticipate steady growth in fiscal 2010. Including the impact of a one-time CRTC Part II fee recovery, our preliminary view calls for consolidated service operating income before amortization to increase by 14% or more. We plan to continue our rate of capital investment driving business growth and improvements, including implementation of new technologies to provide our customers with unprecedented choice and leading edge products. Considering the full year impact of cash taxes, we expect free cash flow to be comparable to fiscal 2009. We caution that this preliminary guidance may change in light of competitive market dynamics and other risk factors.”

On October 1, 2009 the Company closed a $1.25 billion offering of 5.65% senior notes due October 1, 2019. The net proceeds are being used to repay near term maturing debt, potential acquisitions, working capital and general corporate purposes. Shaw subsequently redeemed its US$440 million Senior Notes and US$225 million Senior Notes on October 13, 2009 and its US$300 million Senior Notes on October 20, 2009.

The Company has received CRTC approval and will close the acquisition of Mountain Cablevision shortly. Mountain Cablevision, based in Hamilton, Ontario, was one of the larger remaining independent cable companies in Canada and represents a complementary growth opportunity for Shaw adding approximately 41,000 cable customers, 29,000 Internet subscribers, and 30,000 Digital Phone lines.

Mr. Shaw concluded “As we focus on the year ahead we plan to continue to invest in our high quality network and drive innovation in our products and services. These initiatives, combined with our focus on the delivery of a superior customer experience, strengthen our competitive position and build long-term value for our shareholders.”

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, High-Speed Internet, Digital Phone, telecommunications services (through Shaw Business Solutions) and satellite direct-to-home services (through Shaw Direct). The Company serves 3.4 million customers, including over 1.6 million Internet and 800,000 Digital Phone customers, through a reliable and extensive network, which comprises 625,000 kilometres of fibre. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX – SJR.B, NYSE – SJR).

The accompanying Management’s Discussion and Analysis forms part of this news release and the “Caution Concerning Forward Looking Statements” applies to all forward-looking statements made in this news release.

For more information, please contact:

Shaw Investor Relations
Investor.relations@sjrb.ca

Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2009

October 23, 2009

Certain statements in this report may constitute forward-looking statements. Included herein is a “Caution Concerning Forward-Looking Statements” section which should be read in conjunction with this report.

The following should also be read in conjunction with Management’s Discussion and Analysis included in the Company’s August 31, 2008 Annual Report including the Consolidated Financial Statements and the Notes thereto and the unaudited interim Consolidated Financial Statements and the Notes thereto of the current quarter.

CONSOLIDATED RESULTS OF OPERATIONS
FOURTH QUARTER ENDING AUGUST 31, 2009

Selected Financial Highlights

		Three months ended August 31												Year ended August 31
										Change												Change
($000’s Cdn except per share amounts)		2009				2008				%				2009				2008				%
Operations:
Service revenue			872,919				805,700				8.3				3,390,913				3,104,859				9.2
Service operating income before amortization (1)			394,528				369,527				6.8				1,538,950				1,408,236				9.3
Operating margin(1)			45.2	%			45.9	%							45.4	%			45.4	%
Funds flow from operations (2)			321,319				321,276				—				1,323,840				1,222,895				8.3
Net income			123,988				132,378				(6.3	)			535,239				671,562				(20.3	)
Per share data:
Earnings per share – basic		$	0.29			$	0.31							$	1.25			$	1.56
– diluted		$	0.29			$	0.31							$	1.24			$	1.55
Weighted average participating shares outstanding during period (000’s)			430,117				429,694								429,153				431,070

Subscriber Highlights

						Growth
		Total				Three months ended August 31,								Year ended August 31,
		August 31, 2009				2009				2008				2009				2008
Subscriber statistics:
Basic cable customers			2,289,900				6,374				4,122				29,467				21,279
Digital customers			1,297,684				110,501				23,020				388,517				143,180
Internet customers (including pending installs)			1,678,335				27,376				24,785				109,283				114,206
DTH customers			900,941				2,728				1,736				8,413				12,943
Digital phone lines (including pending installs)			829,717				55,708				61,999				217,786				226,574

Shaw Communications Inc.

Additional Highlights

•		Consolidated service revenue of $872.9 million and $3.39 billion for the quarter and year respectively, improved 8.3% and 9.2% over the comparable periods last year. Total service operating income before amortization of $394.5 million and $1.54 billion was up 6.8% and 9.3% over the same periods.
•		Consolidated free cash flow1 for the quarter was $98.8 million bringing the annual total to $504.4 million compared to $143.3 million and $452.6 million, respectively, for the same periods last year.
•		Dividends paid to shareholders in fiscal 2009 increased 15.8% to $351.9 million.
•		On October 1, 2009 the Company closed a $1.25 billion offering of 5.65% Senior Notes due October 1, 2019. The net proceeds are being used to repay near maturing debt, potential acquisitions, working capital and general corporate purposes.
•		Shaw redeemed its US$440 million Senior Notes and US$225 million Senior Notes on October 13, 2009 and its US$300 million Senior Notes on October 20, 2009.
•		Shaw has full availability under its $1.0 billion revolving bank credit facility and after the redemption of the US$ Senior Notes has no scheduled debt repayments until November 2012.

Consolidated Overview

Consolidated service revenue of $872.9 million and $3.39 billion for the quarter and year respectively, improved 8.3% and 9.2% over the same periods last year. The improvement was primarily due to customer growth and rate increases. Consolidated service operating income before amortization for the three month and twelve month periods improved 6.8% and 9.3% over the comparable periods to $394.5 million and $1.54 billion. The increase was driven by the revenue improvements partially offset by higher employee and other costs related to growth.

Shaw Communications Inc.

Net income was $124.0 million and $535.2 million for the quarter and year, respectively compared to $132.4 million and $671.6 million for the same periods last year. Non-operating items affected net income in all periods including tax recoveries primarily related to reductions in enacted income tax rates in the current and comparable annual period of $22.6 million and $199.1 million, respectively. The prior twelve month period also benefitted from a net duty recovery related to satellite importations of $22.3 million. Outlined below are further details on these and other operating and non-operating components of net income for each period.

		Year ended				Operating net				Non-				Year ended				Operating net				Non-
($000’s Cdn)		August 31, 2009				of interest				operating				August 31, 2008				of interest				operating
Operating income			955,754												903,103
Amortization of financing costs – long-term debt			(3,984	)											(3,627	)
Interest expense – debt			(237,047	)											(230,588	)
Operating income after interest			714,723				714,723				—				668,888				668,888				—
Debt retirement costs			(8,255	)			—				(8,255	)			(5,264	)			—				(5,264	)
Other gains			19,644				—				19,644				24,009				—				24,009
Income before income taxes			726,112				714,723				11,389				687,633				668,888				18,745
Current income tax expense			23,300				23,300				—				—				—				—
Future income tax expense (recovery)			167,474				186,962				(19,488	)			16,366				209,108				(192,742	)
Income before following			535,338				504,461				30,877				671,267				459,780				211,487
Equity income (loss) on investee			(99	)			—				(99	)			295				—				295
Net income			535,239				504,461				30,778				671,562				459,780				211,782

		Three months ended				Operating net				Non-				Three months ended				Operating net				Non-
($000’s Cdn)		August 31, 2009				of interest				operating				August 31, 2008				of interest				operating
Operating income			236,407												241,838
Amortization of financing costs – long-term debt			(1,066	)											(882	)
Interest expense – debt			(62,400	)											(56,563	)
Operating income after interest			172,941				172,941				—				184,393				184,393				—
Debt retirement costs			—				—				—								—				—
Other gains			828				—				828				(1,742	)							(1,742	)
Income before income taxes			173,769				172,941				828				182,651				184,393				(1,742	)
Current income tax expense			23,300				23,300				—				—				—				—
Future income tax expense (recovery)			26,481				26,365				116				50,574				51,149				(575	)
Income before following			123,988				123,276				712				132,077				133,244				(1,167	)
Equity income on investee			—				—				—				301				—				301
Net income			123,988				123,276				712				132,378				133,244				(866	)

Shaw Communications Inc.

The changes in net income are outlined in the table below.

		August 31, 2009 net income compared to:
		Three months ended								Year ended
(000’s Cdn)		May 31, 2009				August 31, 2008				August 31, 2008
Increased (decreased) service operating income before amortization			(742	)			25,001				130,714
Increased amortization			(11,322	)			(30,616	)			(78,420	)
Increased interest expense			(1,317	)			(5,837	)			(6,459	)
Change in net other costs and revenue (1)			(627	)			2,269				(7,750	)
Decreased (increased) income taxes			6,051				793				(174,408	)
			(7,957	)			(8,390	)			(136,323	)

Basic earnings per share were $0.29 and $1.25 for the quarter and twelve months, respectively, compared to $0.31 and $1.56 in the same periods last year. The current three month period benefitted from higher service operating income before amortization of $25.0 million which was more than offset by increased amortization of $30.6 million and interest of $5.8 million. On a year-to-date basis service operating income before amortization was up $130.7 million partially offset by increased amortization of $78.4 million. The improvement was more than offset due to lower income taxes in the prior year of $174.4 million that included a $199.1 million future tax recovery as compared to a current twelve month period tax recovery of $22.6 million. Both recoveries were primarily related to reductions in corporate income tax rates. The prior twelve month period also benefitted from improved net other costs and revenue of $7.8 million mainly due to a $22.3 million net duty recovery related to satellite receiver importations partially offset by a current period gain of $10.8 million realized on settlement of a bond forward contract.

Net income in the current quarter decreased $8.0 million compared to the third quarter of fiscal 2009 mainly due to increased amortization of $11.3 million partially offset by lower income taxes of $6.1 million.

Funds flow from operations was $321.3 million in both the current and comparable quarter last year. Improved service operating income before amortization in the current quarter was offset by current income taxes. On an annual basis funds flow from operations was $1.32 billion compared to $1.22 billion in 2008. The annual increase was principally due to higher service operating income before amortization partially reduced by current income taxes.

Consolidated free cash flow for the quarter of $98.8 million compared to $143.3 million in the same period last year. Improved service operating income in the current quarter of $25.0 million was more than offset by increased capital investment of $40.4 million and cash taxes of $23.3 million. For the year free cash flow was up $51.8 million over last year to $504.4 million. The annual growth was primarily due to increased service operating income before amortization of $130.7 million partially offset by increased capital investment of $49.1 million and cash taxes of $23.3 million. The Cable division generated $62.8 million of free cash flow for the quarter compared to $102.5 million in the comparable period. The Satellite division achieved free cash flow of $36.0 million for the quarter compared to $40.8 million in the same period last year.

Shaw Communications Inc.

On October 1, 2009 the Company closed a $1.25 billion offering of 5.65% senior notes due October 1, 2019. The net proceeds are being used to repay near maturing debt, potential acquisitions, working capital and general corporate purposes. Shaw redeemed its US$440 million Senior Notes and US$225 million Senior Notes on October 13, 2009 and its US$300 million Senior Notes on October 20, 2009. Shaw has full availability under its $1.0 billion revolving bank credit facility and after the redemption of the US Senior Notes has no scheduled debt repayments until November 2012 providing it significant liquidity and flexibility.

On October 7, 2009 the Government of Canada and members of the broadcasting industry that are required to pay Part II license fees announced they had entered into a settlement agreement on the Part II license fee issue.  The agreement has resulted in the government agreeing that it will not seek Part II license fees owing for the fiscal years 2007, 2008 and 2009 that were not collected due to the ongoing legal dispute.  In return, members of the broadcasting industry, including Shaw, discontinued their appeal before the Supreme Court of Canada challenging the validity of the fees.  Under the settlement, the government is also recommending that the CRTC develop a new forward-looking regime that would be capped at $100 million per year, indexed to inflation. In October 2009 the Company recorded a recovery of approximately $52 million after taxes for the Part II fees that had been accrued for the past three years and will not be collected pursuant to the agreement.

Key Performance Drivers

The Company’s continuous disclosure documents may provide discussion and analysis of non-GAAP financial measures. These financial measures do not have standard definitions prescribed by Canadian GAAP or US GAAP and therefore may not be comparable to similar measures disclosed by other companies. The Company utilizes these measures in making operating decisions and assessing its performance. Certain investors, analysts and others, utilize these measures in assessing the Company’s operational and financial performance and as an indicator of its ability to service debt and return cash to shareholders. These non-GAAP financial measures have not been presented as an alternative to net income or any other measure of performance required by Canadian or US GAAP.

The following contains a listing of non-GAAP financial measures used by the Company and provides a reconciliation to the nearest GAAP measurement or provides a reference to such reconciliation.

Service operating income before amortization and operating margin

Service operating income before amortization is calculated as service revenue less operating, general and administrative expenses and is presented as a sub-total line item in the Company’s unaudited interim Consolidated Statements of Income and Retained Earnings (Deficit). It is intended to indicate the Company’s ability to service and/or incur debt, and therefore it is calculated before amortization (a non-cash expense) and interest. Service operating income before amortization is also one of the measures used by the investing community to value the business. Operating margin is calculated by dividing service operating income before amortization by service revenue.

Shaw Communications Inc.

Free cash flow

The Company utilizes this measurement as it measures the Company’s ability to repay debt and return cash to shareholders.

Free cash flow for cable and satellite is calculated as service operating income before amortization, less interest, cash taxes paid or payable on net income, capital expenditures (on an accrual basis and net of proceeds on capital dispositions) and equipment costs (net).

Commencing in 2009, for the purpose of determining free cash flow, the Company revised its calculation of capital expenditures to net proceeds on capital dispositions. Historically, the proceeds received on the sale of property, plant and equipment were not included in the free cash flow calculation as they were generally nominal. The Company expects these will be more material on a prospective basis as it commences to consolidate its operating groups at its new campus style facility in Calgary, disposes of redundant assets, and replaces various operating assets as it continues to upgrade and improve competitiveness.

Commencing in 2010, for the purpose of determining free cash flow, the Company will exclude stock-based compensation expense, reflecting the fact that it is not a reduction in the Company’s cash flow. This practice is also more in line with our North American peers who report free cash flow.

The definition of free cash flow is more fully described in the Company’s August 31, 2008 Annual Report on page 10.

Consolidated free cash flow is calculated as follows:

		Three months ended August 31,								Year ended August 31,
($000’s Cdn)		2009				2008				2009				2008
Cable free cash flow (1)			62,813				102,525				342,798				305,338
Combined satellite free cash flow (1)			35,965				40,759				161,618				147,293
Consolidated free cash flow			98,778				143,284				504,416				452,631

Shaw Communications Inc.

CABLE
FINANCIAL HIGHLIGHTS

		Three months ended August 31,												Year ended August 31,
										Change												Change
($000’s Cdn)		2009				2008				%				2009				2008				%
Service revenue (third party)			682,463				620,410				10.0				2,630,982				2,375,586				10.8
Service operating income before amortization (1)			328,007				302,166				8.6				1,269,620				1,153,274				10.1
Less:
Interest expense			55,501				49,657				11.8				209,438				199,600				4.9
Cash taxes			23,300				—								23,300				—
Cash flow before the following:			249,206				252,509				(1.3	)			1,036,882				953,674				8.7
Capital expenditures and equipment costs (net):
New housing development			14,588				22,786				(36.0	)			73,676				93,547				(21.2	)
Success based			55,475				30,185				83.8				185,469				102,735				80.5
Upgrades and enhancement			77,556				67,198				15.4				297,651				271,242				9.7
Replacement			17,274				13,187				31.0				55,798				57,575				(3.1	)
Buildings/other			21,500				16,628				29.3				81,490				123,237				(33.9	)
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			186,393				149,984				24.3				694,084				648,336				7.1
Free cash flow (1)			62,813				102,525				(38.7	)			342,798				305,338				12.3
Operating margin			48.1	%			48.7	%			(0.6	)			48.3	%			48.5	%			(0.2	)

Operating Highlights

•

Cable service revenue for the quarter and year of $682.5 million and $2.63 billion, respectively, was up 10.0% and 10.8% over the same periods last year. Service operating income before amortization of $328.0 million and $1.27 billion, respectively, increased 8.6% and 10.1% over the comparable three and twelve month periods.

•

During the quarter Basic cable subscribers increased 6,374 to 2,289,900. On an annual basis Basic subscribers were up 29,467.

•

Digital customers increased 110,501 during the quarter to 1,297,684, and for the twelve month period 388,517 customers were added. Shaw’s Digital penetration of Basic has increased from 40.2% at August 31, 2008 to 56.7% at August 31, 2009.

•

Digital Phone lines increased 55,708 during the quarter to 829,717 lines and Internet was up 27,376 to total 1,678,335 as at August 31, 2009. Internet penetration of Basic continues to be one of the highest in North America and now stands at 73.3% up from 69.4% at August 31, 2008.

Cable service revenue for the quarter and year of $682.5 million and $2.63 billion, respectively, was up 10.0% and 10.8% over the same periods last year. Customer growth and rate increases accounted for the improvement. Service operating income before amortization of $328.0 million and $1.27 billion, respectively, increased 8.6% and 10.1% over the comparable three and twelve month periods. The improvement was driven by revenue related growth partially offset by higher employee costs and other expenses, including marketing, sales activities, and equipment maintenance and support.

Shaw Communications Inc.

Service revenue was up $12.9 million or 2.0% over the third quarter of fiscal 2009 primarily due to customer growth and rate increases. Service operating income before amortization improved $2.6 million over this same period due to the revenue related growth partially reduced by increased employee related costs and other costs related to growth.

Total capital investment of $186.4 million for the quarter increased $36.4 million compared to the same quarter last year. Capital investment of $694.1 million for the year increased $45.7 million over the comparable annual period.

Spending in new housing development for the three and twelve month periods declined $8.2 million and $19.9 million, respectively, over the same periods last year mainly due to reduced activity.

Success-based capital increased $25.3 million and $82.7 million over the comparable quarter and annual periods, respectively. Both current periods had higher Digital success-based capital primarily due to increased customer activations associated with the new rental strategy and lower customer pricing of certain equipment. Internet and Digital Phone success-based capital was also up as the current periods included higher investment mainly due to bulk purchases of equipment at the end of the year as well as increased activity.

Investment in the upgrades and enhancement category and replacement category combined was up $14.4 million for the quarter and $24.6 million on an annual basis compared to the same periods last year. The current quarterly period included higher spending on various network projects including mainline upgrades, node segmentation, Digital Phone related investment mainly related to softswitch expansion, and bulk vehicle purchases. The annual period included higher spending on Internet projects to enhance the speed of Shaw’s various Internet offerings partially offset by lower investment on Digital Phone related capital.

Investment in Buildings and other increased $4.9 million on a quarterly basis and declined $41.7 million on an annual basis compared to the same periods last year. The lower spend in the annual period was primarily due to higher investment last year in various facilities projects, including the purchase of a property in Calgary adjacent to existing Company owned facilities, partially offset by increased investment in the current year on IT projects to upgrade back office and customer support systems. The current annual period also benefitted from proceeds on the sale of redundant facilities.

Shaw Communications Inc.

Subscriber Statistics

										August 31, 2009
										Three months ended								Year ended
														Change								Change
		August 31, 2009				August 31, 2008(1)				Growth				%				Growth				%
CABLE:
Basic service:
Actual			2,289,900				2,260,433				6,374				0.3				29,467				1.3
Penetration as % of homes passed			62.8	%			63.5	%
Digital customers			1,297,684				909,167				110,501				9.3				388,517				42.7
INTERNET:
Connected and scheduled			1,678,335				1,569,052				27,376				1.7				109,283				7.0
Penetration as % of basic			73.3	%			69.4	%
Standalone Internet not included in basic cable			235,686				214,315				4,085				1.8				21,371				10.0
DIGITAL PHONE:
Number of lines (2)			829,717				611,931				55,708				7.2				217,786				35.6

Shaw is committed to capital investment driving business growth and improvements, including implementation of new technologies to provide our customers with choice and leading edge products. The Company continues to enhance its HD offerings, with the most recent addition of AMC to the HD channel line-up, and now carries 56 HD channels and offers over 500 HD titles through Shaw Video on Demand and HD PPV. It now has over 500,000 HD capable cable customers.

The Digital Phone footprint grew in the quarter with continued launches in various smaller centres in Southern Alberta and surrounding areas of Edmonton. The Digital Phone service is available to 94% of Basic customers and over 38% are taking the service at August 31, 2009.

Internet speed increases of 50 per cent or greater were implemented during the year as well as a new 100 Mbps service, High-Speed Nitro, using DOCSIS 3.0 technology. As at August 31, 2009, the new 100 Mbps service was available in Saskatoon, Victoria and Winnipeg and recently the service was launched in Vancouver, Calgary and Edmonton. Internet penetration of Basic continues to be one of the highest in North America and now stands at 73.3% up from 69.4% at August 31, 2008.

Late in fiscal 2008 the Company participated in the Canadian Advanced Wireless Spectrum (“AWS”) auction and was successful in acquiring 20 megahertz of spectrum across most of its cable footprint for a cost of $190.9 million. In early September 2009 the Company received its ownership compliance decision from Industry Canada and was granted its AWS licenses.

Shaw Communications Inc.

SATELLITE (DTH and Satellite Services)
FINANCIAL HIGHLIGHTS

		Three months ended August 31,												Year ended August 31,
										Change												Change
($000’s Cdn)		2009				2008				%				2009				2008				%
Service revenue (third party)
DTH (Shaw Direct)			169,319				162,879				4.0				673,226				640,061				5.2
Satellite Services			21,137				22,411				(5.7	)			86,705				89,212				(2.8	)
			190,456				185,290				2.8				759,931				729,273				4.2
Service operating income before amortization (1)
DTH (Shaw Direct)			55,686				55,538				0.3				223,499				206,541				8.2
Satellite Services			10,835				11,823				(8.4	)			45,831				48,421				(5.3	)
			66,521				67,361				(1.2	)			269,330				254,962				5.6
Less:
Interest expense (2)			6,563				6,562				—				26,251				29,599				(11.3	)
Cash flow before the following:			59,958				60,799				(1.4	)			243,079				225,363				7.9
Capital expenditures and equipment costs (net):
Success based (3)			20,750				18,524				12.0				73,453				72,512				1.3
Transponders and other			3,243				1,516				113.9				8,008				5,558				44.1
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			23,993				20,040				19.7				81,461				78,070				4.3
Free cash flow (1)			35,965				40,759				(11.8	)			161,618				147,293				9.7
Operating Margin			34.9	%			36.4	%			(1.5	)			35.4	%			35.0	%			0.4

Operating Highlights

•

Free cash flow of $36.0 million for the quarter compares to $40.8 million in the same period last year. On a annual basis free cash flow of $161.6 million increased $14.3 million over the prior year.

•

During the quarter Shaw Direct added 2,728 customers bringing the annual growth to 8,413 customers. As at August 31, 2009 DTH customers now total 900,941.

Service revenue of $190.5 million and $759.9 million for the three and twelve month periods, respectively, was up 2.8% and 4.2% over the same periods last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization for the quarter of $66.5 million compared to $67.4 million last year. The modest decline in the current period was due to lower contribution from the Satellite Services division resulting from the economic impact on Shaw Tracking. On an annual basis service operating income before amortization was up 5.6% to $269.3 million. The increase was mainly due to the revenue related improvement partially offset by costs to support customer service and other costs related to growth.

Service operating income before amortization decreased $3.4 million from the third quarter mainly due to timing of marketing and sales expenses.

Shaw Communications Inc.

Total capital investment of $24.0 million and $81.5 million for the quarter and year respectively, were comparable to the prior year spends of $20.0 million and $78.1 million, respectively. The increase in Transponder and other in both the current periods was mainly due to the relocation and expansion of the Montreal call centre.

During the quarter Shaw Direct added Canal D, a popular French specialty channel, to its HD line up and most recently added AMC HD. Shaw Direct now offers a total of 55 HD services to almost 325,000 HD customers.

Subscriber Statistics

										August 31, 2009
										Three months ended								Year ended
														Change								Change
		August 31, 2009				August 31, 2008				Growth				%				Growth				%
DTH customers (1)			900,941				892,528				2,728				0.3				8,413				0.9

OTHER INCOME AND EXPENSE ITEMS

Amortization

		Three months ended August 31,												Year ended August 31,
										Change												Change
($000’s Cdn)		2009				2008				%				2009				2008				%
Amortization revenue (expense) —
Deferred IRU revenue			3,137				3,137				—				12,547				12,547				—
Deferred equipment revenue			32,655				33,034				(1.1	)			132,974				126,601				5.0
Deferred equipment costs			(61,045	)			(58,975	)			3.5				(247,110	)			(228,524	)			8.1
Deferred charges			(257	)			(257	)			—				(1,025	)			(1,025	)			—
Property, plant and equipment			(132,611	)			(104,628	)			26.7				(480,582	)			(414,732	)			15.9

The increase in amortization of deferred equipment revenue and deferred equipment costs over the comparative year is primarily due to continued growth in sales of higher priced HD digital equipment up to February 2009. During the third quarter, the Company launched a new HD digital rental program as part of its focus on growing the HD customer base.

Amortization of property, plant and equipment increased over the comparable periods as the amortization of capital expenditures incurred in fiscal 2008 and 2009 exceeded the impact of assets that became fully depreciated.

Shaw Communications Inc.

Amortization of financing costs and Interest expense

		Three months ended August 31,												Year ended August 31,
										Change												Change
($000’s Cdn)		2009				2008				%				2009				2008				%
Amortization of financing costs – long-term debt			1,066				882				20.9				3,984				3,627				9.8
Interest expense – debt			62,400				56,563				10.3				237,047				230,588				2.8

Interest expense increased over the comparative periods as a result of a higher average debt level partially offset by a lower average cost of borrowing resulting from changes in various components of long-term debt.

Debt retirement costs

During the third quarter, the Company redeemed the Videon CableSystems Inc. Cdn $130 million Senior Debentures. In connection with the early redemption, the Company incurred costs of $9.2 million and wrote-off the remaining unamortized fair value adjustment of $0.9 million. The Company used part of the proceeds from its $600 million Senior notes issuance completed in March 2009 to fund the redemption.

The debt retirement costs in the prior year were in relation to the early redemption of the Cdn $100 million 8.54% COPrS in January 2008.

Other gains

This category generally includes realized and unrealized foreign exchange gains and losses on US dollar denominated current assets and liabilities, gains and losses on disposal of property, plant and equipment and the Company’s share of the operations of Burrard Landing Lot 2 Holdings Partnership (“the Partnership”). In addition, the current year includes a gain of $10.8 million on cancellation of a bond forward contract while the prior year includes a net customs duty recovery of $22.3 million related to satellite receiver importations in prior years.

Income taxes

Future income taxes fluctuated over the comparative periods due to income tax recoveries primarily in respect of reductions in the enacted corporate income tax rates.

Shaw Communications Inc.

RISKS AND UNCERTAINTIES

The significant risks and uncertainties affecting the Company and its business are discussed in the Company’s August 31, 2008 Annual Report under the Introduction to the Business – Known Events, Trends, Risks and Uncertainties in Management’s Discussion and Analysis. Developments of note since then are as follows:

Impact of Regulation – Potential for New or Increased Fees

On June 4, 2009 the CRTC released its decision in the New Media hearing and determined the new media exemption order would be maintained and no fees would be imposed on the revenues of Internet Service Providers at this time.

On July 6, 2009 the CRTC set the level of contribution by a BDU to fund the new Local Programming Improvement Fund (“LPIF”) at 1.5%. The approved level of contribution to the LPIF will increase Shaw’s costs.

On September 17, 2009 the Government issued an Order-in-Council (OIC) to the CRTC under section 15 of the Broadcasting Act that requires the CRTC to hold a hearing and report on fee for carriage from the perspective of the impacts that a fee-for-carriage regime would have on consumers and on the evolution of the broadcasting system. The CRTC issued a Public Notice on October 2, 2009 scheduling a Public Hearing on fee for carriage to be held December 7, 2009. It is possible that changes to the regulations respecting fee for carriage will result, including the potential for new or increased fees.

FINANCIAL POSITION

Total assets at August 31, 2009 were $8.9 billion compared to $8.4 billion at August 31, 2008. Following is a discussion of significant changes in the consolidated balance sheet since August 31, 2008.

Current assets increased $353.2 million due to increases in cash and short-term securities of $453.2 million, accounts receivable of $6.3 million and prepaids of $8.4 million partially offset by a decrease in future income taxes of $115.3 million. Cash and short-term securities were up due to excess funds from the $600 million Senior Note issuance. Prepaids increased due to timing of payments for certain expenditures while accounts receivable were up due to subscriber growth and rate increases. Future income taxes declined due to the use of non-capital loss carryforwards.

Property, plant and equipment increased $205.0 million as current year capital investment exceeded amortization.

Deferred charges decreased by $14.9 million due to a decrease in deferred equipment costs of $18.4 million.

Broadcast rights increased $40.1 million due to the acquisition of the Campbell River cable system in British Columbia.

Shaw Communications Inc.

Current liabilities (excluding current portion of long-term debt and derivative instruments) decreased $104.6 million due to decreases in bank indebtedness of $44.2 million and accounts payable of $92.6 million partially offset by increases in income taxes payable of $22.9 million and unearned revenue of $9.4 million. Accounts payable and accrued liabilities declined due to funding the remaining amount owing in respect of wireless spectrum licenses partially offset by increases in trade payables and other accruals including CRTC Part II fees. Income taxes payable increased due to the Company becoming cash taxable in the current year and unearned revenue increased due to customer growth and rate increases.

Total long-term debt increased $443.4 million as a result of $593.6 million in net proceeds on the Senior note issuance and an increase of $31.8 million relating to the translation of hedged US denominated debt partially offset by the early redemption of the Videon CableSystems Inc. Cdn $130 million Senior Debentures and repayment of bank borrowings of $55.0 million. The current portion of long-term debt increased due to the US $440 million Senior notes due in April 2010.

Other long-term liability was higher due to the current year defined benefit pension plan expense.

Derivative instruments (including current portion) decreased $54.6 million of which $31.8 million was in respect of the foreign exchange gain on the notional amounts of the derivatives relating to hedges on long-term debt. Current derivative instruments increased by $171.7 million primarily due to the cross-currency interest rate exchange agreement in respect of the aforementioned US $440 million Senior notes due in April 2010.

Deferred credits decreased $28.8 million due to a decrease in deferred equipment revenue of $14.4 million and amortization of deferred IRU revenue of $12.5 million.

Future income taxes increased $55.9 million due to the current year future income tax expense partially offset by an income tax recovery related to reductions in corporate income tax rates.

Share capital increased by $50.4 million primarily due to the issuance of 3,488,130 Class B Non-Voting Shares under the Company’s option plans for $59.0 million partially offset by the repurchase of 1,683,000 Class B Non-Voting Shares for $33.6 million of which $8.6 million reduced stated share capital and $25.0 million was charged against retained earnings. As of October 15, 2009, share capital is as reported at August 31, 2009 with the exception of the issuance of 267,290 Class B Non-Voting Shares upon exercise of options subsequent to the quarter end. Contributed surplus increased due to stock-based compensation expense recorded in the current year. Accumulated other comprehensive loss decreased primarily due to a decline in the unrealized losses on derivative instruments related to US denominated long-term debt.

LIQUIDITY AND CAPITAL RESOURCES

In the current year, the Company generated $504.4 million of consolidated free cash flow. Shaw used its free cash flow along with net proceeds of $593.6 million from its Senior notes offering, proceeds on cancellation of US dollar forward purchase contracts and a bond forward contract of $24.1 million, proceeds on issuance of Class B Non-Voting Shares of $57.0 million, working capital reduction of $70.6 million and other net items of $17 million to redeem the Videon CableSystems Inc. Cdn $130 million Senior Debentures, purchase $33.6 million of Class B Non-Voting Shares for cancellation, repay debt and bank indebtedness of $99.2 million, pay common share dividends of $351.9 million, fund the final cash payment of $152.5 million related to deposits on wireless spectrum licenses and purchase the Campbell River cable system for $46.3 million. The remaining $453.2 million was held in cash and short-term securities.

Shaw Communications Inc.

To allow for timely access to capital markets, Shaw filed a short form base shelf prospectus with securities regulators in Canada and the U.S. on March 11, 2009. The shelf prospectus allows for the issue of up to an aggregate $2.5 billion of debt and equity securities over a 25 month period. Pursuant to this shelf prospectus, on March 27, 2009, Shaw issued $600 million of Senior notes at a rate of 6.50% due June 2, 2014. Net proceeds (after issuance at a discount of $1.8 million and issue and underwriting expenses) of $593.6 million are being used for debt repayment, working capital and general corporate purposes. Excess funds are being held in cash and short-term securities.

Subsequent to year end, the Company redeemed all of its outstanding US $440 million 8.25% senior notes due April 11, 2010 and US $225 million 7.25% due April 6, 2011 on October 13, 2009, and its US $300 million 7.20% senior notes due December 15, 2011 on October 20, 2009. On October 1, 2009, the Company issued $1.25 billion of senior notes at a rate of 5.65% due 2019. Estimated net proceeds (after issuance at a discount of $4.0 million and issue and underwriting expenses) of $1.24 billion were used for the aforementioned notes redemptions.

On November 12, 2008, Shaw received the approval of the TSX to renew its normal course issuer bid to purchase its Class B Non-Voting Shares for a further one year period. The Company is authorized to acquire up to 35,000,000 Class B Non-Voting Shares during the period November 19, 2008 to November 18, 2009. During the first quarter, the Company repurchased 1,683,000 Class B Non-Voting Shares for $33.6 million. No shares were repurchased during the remainder of the year.

At August 31, 2009, Shaw held $453.2 million in cash and short-term securities and had access to $1 billion of available credit facilities. Based on cash balances, available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations and obligations during the upcoming fiscal year. On a longer-term basis, Shaw expects to generate free cash flow and have borrowing capacity sufficient to finance foreseeable future business plans and refinance maturing debt.

Shaw Communications Inc.

CASH FLOW

Operating Activities

		Three months ended August 31,												Year ended August 31,
										Change												Change
($000’s Cdn)		2009				2008				%				2009				2008				%
Funds flow from operations			321,319				321,276				—				1,323,840				1,222,895				8.3
Net decrease in non-cash working capital balances related to operations			30,924				25,793				19.9				59,090				19,304				206.1
			352,243				347,069				1.5				1,382,930				1,242,199				11.3

Funds flow from operations increased over comparative year primarily due to growth in service operating income before amortization partially offset by current income tax expense. The net change in non-cash working capital balances over the comparative periods is due to timing of collection of accounts receivable and payment of accounts payable and accrued liabilities in addition to the Company becoming cash taxable in the current quarter.

Investing Activities

		Three months ended August 31,												Year ended August 31,
($000’s Cdn)		2009				2008				Decrease				2009				2008				Increase
Cash flow used in investing activities			(177,789	)			(218,936	)			41,147				(966,716	)			(734,135	)			(232,581	)

The cash used in investing activities decreased over the comparable quarter due to the initial cash outlay in the fourth quarter of the prior year in respect of deposits for the wireless spectrum licenses. On an annual basis, the cash used in investing activities was up primarily due to the final cash outlay in respect of deposits for the wireless spectrum licenses, the acquisition of the Campbell River cable system and higher cash outlays for capital expenditures partially offset by increased proceeds on disposal of property, plant and equipment. In addition, the current year benefitted from proceeds on cancellation of certain US dollar forward purchase contracts while the prior year benefitted from a customs duty recovery on equipment costs.

Shaw Communications Inc.

Financing Activities

The changes in financing activities during the comparative periods were as follows:

		Three months ended August 31,								Year ended August 31,
(In $ millions Cdn)		2009				2008				2009				2008
Bank loans and bank indebtedness — net borrowings (repayments)			—				10.0				(99.2	)			99.2
Net proceeds on issuance of Cdn $600 million 6.50% Senior notes			—				—				593.6				—
Redemption of Videon CableSystems Inc. 8.15% Senior Debentures			—				—				(130.0	)			—
Repayment of senior unsecured notes			—				—				—				(296.8	)
Redemption of Cdn 8.54% Series B COPrS			—				—				—				(100.0	)
Dividends			(90.3	)			(77.3	)			(351.9	)			(303.8	)
Repayment of Partnership debt			(0.1	)			(0.2	)			(0.5	)			(0.4	)
Debt retirement costs			—				—				(9.2	)			(4.3	)
Issue of Class B Non-Voting Shares			4.1				7.0				57.0				32.5
Purchase of Class B Non-Voting Shares for cancellation			—				(67.7	)			(33.6	)			(99.8	)
Proceeds on cancellation of bond forward contract			—				—				10.8				—
			(86.3	)			(128.2	)			37.0				(673.4	)

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

						Service operating								Basic and				Funds flow
		Service				income before								diluted earnings				from
($000’s Cdn except per share amounts)		revenue				amortization (1)				Net income				per share				operations (2)
2009
Fourth			872,919				394,528				123,988				0.29				321,319
Third			861,382				395,270				131,945				0.31				356,046
Second			839,144				381,355				156,229				0.36				334,508
First			817,468				367,797				123,077				0.29				311,967
2008
Fourth			805,700				369,527				132,378				0.31				321,276
Third			792,149				356,089				128,113				0.30				310,984
Second			763,182				349,711				298,848				0.69				304,293
First			743,828				332,909				112,223				0.26				286,342

Generally, service revenue and service operating income before amortization have grown quarter-over-quarter mainly due to customer growth and rate increases. Net income has fluctuated quarter-over-quarter primarily as a result of the growth in service operating income before amortization described above, the impact of the net change in non-operating items such as other gains and debt retirement costs and the impact of corporate income tax rate reductions. Net income declined by $170.7 million in the third quarter of 2008 and by $24.3 million in the third quarter of 2009 due to income tax recoveries primarily related to reductions in corporate income tax rates which contributed $188.0 and $22.6 million to net income in the second quarters of 2008 and 2009, respectively. The decline in net income in the first and fourth quarters of 2009 of $9.3 million and $8.0 million, respectively is mainly due to an increase in amortization expense. As a result of the aforementioned changes in net income, basic and diluted earnings per share have trended accordingly.

Shaw Communications Inc.

ACCOUNTING STANDARDS

Update to critical accounting policies and estimates

The Management’s Discussion and Analysis (“MD&A”) included in the Company’s August 31, 2008 Annual Report outlined critical accounting policies including key estimates and assumptions that management has made under these policies and how they affect the amounts reported in the Consolidated Financial Statements. The MD&A also describes significant accounting policies where alternatives exist. Also described therein were several new accounting policies that the Company was required to adopt in fiscal 2009 as a result of changes in Canadian accounting pronouncements. The unaudited interim Consolidated Financial Statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements other than as set out below.

Inventories

Effective September 1, 2008, the Company adopted CICA Handbook Section 3031, “Inventories”, which provides more guidance on measurement and disclosure requirements. The application of this standard had no impact on the Company’s consolidated financial statements.

Capital disclosures

Effective September 1, 2008, the Company adopted CICA Handbook Section 1535 “Capital Disclosures”. This standard requires the Company to disclose information that enables financial statement users to evaluate the Company’s objectives, policies and processes for managing capital.

Financial instruments

Effective September 1, 2008, the Company adopted CICA Handbook Section 3862 “Financial Instruments — Disclosures” and Section 3863 “Financial Instruments — Presentation”. These standards require disclosure that enables financial statement users to evaluate and understand the significance of financial instruments for the Company’s financial position and performance, and the nature and extent of risks arising from financial instruments to which the Company is exposed during the period and at the balance sheet date, and how the Company manages those risks.

In January 2009, the CICA issued EIC-173 “Credit Risk and the Fair Value of Financial Assets and Liabilities”, which requires the Company take into account its own credit risk and the credit risk of the counterparty in determining the fair value of financial assets and liabilities, including derivative instruments. The adoption of EIC-173 during the second quarter had no impact on the Company’s consolidated financial statements as credit adjusted fair values had already been used.

Shaw Communications Inc.

Recent accounting pronouncements:

Goodwill and intangible assets

In 2010, the Company will adopt CICA Handbook Section 3064, “Goodwill and Intangible Assets”, which replaces Sections 3062, “Goodwill and Other Intangible Assets”, and 3450, “Research and Development Costs”. Section 3064 establishes standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. The Company does not expect this standard to have a significant impact on its consolidated financial statements upon adoption.

International Financial Reporting Standards (IFRS)

In February 2008, the CICA Accounting Standards Board (AScB) confirmed that Canadian publicly accountable enterprises will be required to adopt International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), for fiscal periods beginning on or after January 1, 2011. These standards would require the Company to begin reporting under IFRS in the first quarter of fiscal 2012 with comparative data for the prior year. The table below outlines the phases involved in a changeover to IFRS.

Phase		Description and status
Impact assessment and planning		This phase includes establishment of a project team and high-level review to determine potential significant differences under IFRS as compared to Canadian GAAP. This phase has been completed and as a result, the Company has developed a transition plan and a preliminary timeline to comply with the changeover date while recognizing that project activities and timelines may change as a result of unexpected developments.
Design and development — key elements		This phase includes (i) an in-depth review to identify and assess accounting and reporting differences, (ii) evaluation and selection of accounting policies, (iii) assessment of impact on information systems, internal controls, and business activities, and (iv) training and communication with key stakeholders. The Company has completed its preliminary identification and assessment of accounting and reporting differences and evaluation of accounting policies is in progress. In addition, training has been provided to certain key employees involved in or directly impacted by the conversion process.
Implementation		This phase includes integration of solutions into processes and financial systems that are required for the conversion to IFRS and parallel reporting during the year prior to transition including proforma financial statements and note disclosures.

Shaw Communications Inc.

2010 GUIDANCE

The Company’s preliminary view with respect to 2010 guidance calls for consolidated service operating income before amortization to increase by 14% or more including the impact of a one-time CRTC Part II fee recovery. Excluding the impact of the Part II fee recovery and the expected contribution from Mountain Cable this represents an organic growth rate of approximately 8%. Free cash flow is expected to be comparable to 2009 after considering the full year impact of cash taxes and continued capital investment.

Certain important assumptions for 2010 guidance purposes include: customer growth continuing generally in line with historical trends; stable pricing environment for Shaw’s products relative to today’s rates; no significant market disruption or other significant changes in competition or regulation that would have a material impact; cash income taxes to be paid or payable in 2010; a stable regulatory fee and rate environment; and the closing of the acquisition of Mountain Cable. While the Company does anticipate continued weaker economic conditions in Western Canada, it does not see any material changes to its business at this time.

See the section below entitled “Caution Concerning Forward-Looking Statements”.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements included and incorporated by reference herein may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used, the words “anticipate”, “believe”, “expect”, “plan”, “intend”, “target”, “guideline”, “goal”, and similar expressions generally identify forward-looking statements. These forward-looking statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), financial guidance for future performance, business strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of Shaw’s business and operations, plans and references to the future success of Shaw. These forward-looking statements are based on certain assumptions, some of which are noted above, and analyses made by Shaw in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances as of the current date. These assumptions include but are not limited to general economic and industry growth rates, currency exchange rates, technology deployment, content and equipment costs, and industry structure and stability.

Shaw Communications Inc.

Whether actual results and developments will conform with expectations and predictions of the Company is subject to a number of factors including, but not limited to, general economic, market or business conditions; the opportunities that may be available to Shaw; Shaw’s ability to execute its strategic plans; changes in the competitive environment in the markets in which Shaw operates and from the development of new markets for emerging technologies; changes in laws, regulations and decisions by regulators that affect Shaw or the markets in which it operates in both Canada and the United States; Shaw’s status as a holding company with separate operating subsidiaries; changing conditions in the entertainment, information and communications industries; risks associated with the economic, political and regulatory policies of local governments and laws and policies of Canada and the United States; and other factors, many of which are beyond the control of Shaw. The foregoing is not an exhaustive list of all possible factors. Should one or more of these risks materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those as described herein. Consequently, all of the forward-looking statements made in this report and the documents incorporated by reference herein are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Shaw will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company.

You should not place undue reliance on any such forward-looking statements. The Company utilizes forward-looking statements in assessing its performance. Certain investors, analysts and others, utilize the Company’s financial guidance and other forward-looking information in order to assess the Company’s expected operational and financial performance and as an indicator of its ability to service debt and return cash to shareholders. The Company’s financial guidance may not be appropriate for other purposes.

Any forward-looking statement (and such risks, uncertainties and other factors) speaks only as of the date on which it was originally made and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this document to reflect any change in expectations with regard to those statements or any other change in events, conditions or circumstances on which any such statement is based, except as required by law. New factors affecting the Company emerge from time to time, and it is not possible for the Company to predict what factors will arise or when. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any particular factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

Shaw Communications Inc.

CONSOLIDATED BALANCE SHEETS
(unaudited)

[thousands of Canadian dollars]		August 31, 2009				August 31, 2008
ASSETS
Current
Cash and cash equivalents			253,862				—
Short-term securities			199,375				—
Accounts receivable			194,483				188,145
Inventories			52,304				51,774
Prepaids and other			35,688				27,328
Future income taxes			21,957				137,220
			757,669				404,467
Investments and other assets			194,854				197,979
Property, plant and equipment			2,821,544				2,616,500
Deferred charges			259,738				274,666
Intangibles
Broadcast rights			4,816,153				4,776,078
Goodwill			88,111				88,111
			8,938,069				8,357,801
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Bank indebtedness [note 4]			—				44,201
Accounts payable and accrued liabilities			563,110				655,756
Income taxes payable			25,320				2,446
Unearned revenue			133,798				124,384
Current portion of long-term debt [note 4]			481,739				509
Derivative instruments			173,050				1,349
			1,377,017				828,645
Long-term debt [note 4]			2,668,749				2,706,534
Other long-term liability [note 9]			104,964				78,912
Derivative instruments			292,560				518,856
Deferred credits			659,073				687,836
Future income taxes			1,337,722				1,281,826
			6,440,085				6,102,609
Shareholders’ equity
Share capital [note 5]			2,113,849				2,063,431
Contributed surplus [note 5]			38,022				23,027
Retained earnings			384,747				226,408
Accumulated other comprehensive loss [note 7]			(38,634	)			(57,674	)
			2,497,984				2,255,192
			8,938,069				8,357,801

See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS (DEFICIT)
(unaudited)

		Three months ended August 31,								Year ended August 31,
[thousands of Canadian dollars except per share amounts]		2009				2008				2009				2008
Service revenue [note 2]			872,919				805,700				3,390,913				3,104,859
Operating, general and administrative expenses			478,391				436,173				1,851,963				1,696,623
Service operating income before amortization [note 2]			394,528				369,527				1,538,950				1,408,236
Amortization:
Deferred IRU revenue			3,137				3,137				12,547				12,547
Deferred equipment revenue			32,655				33,034				132,974				126,601
Deferred equipment costs			(61,045	)			(58,975	)			(247,110	)			(228,524	)
Deferred charges			(257	)			(257	)			(1,025	)			(1,025	)
Property, plant and equipment			(132,611	)			(104,628	)			(480,582	)			(414,732	)
Operating income			236,407				241,838				955,754				903,103
Amortization of financing costs — long-term debt			(1,066	)			(882	)			(3,984	)			(3,627	)
Interest expense — debt [note 2]			(62,400	)			(56,563	)			(237,047	)			(230,588	)
			172,941				184,393				714,723				668,888
Debt retirement costs			—				—				(8,255	)			(5,264	)
Other gains			828				(1,742	)			19,644				24,009
Income before income taxes			173,769				182,651				726,112				687,633
Income tax expense			49,781				50,574				190,774				16,366
Income before the following			123,988				132,077				535,338				671,267
Equity income (loss) on investee			—				301				(99	)			295
Net income			123,988				132,378				535,239				671,562
Retained earnings (deficit), beginning of period			351,069				222,948				226,408				(68,132	)
Adjustment for adoption of new accounting policy			—				—				—				1,754
Reduction on Class B Non-Voting Shares purchased for cancellation [note 5]			—				(51,627	)			(25,017	)			(74,963	)
Dividends — Class A Shares and Class B Non-Voting Shares			(90,310	)			(77,291	)			(351,883	)			(303,813	)
Retained earnings, end of period			384,747				226,408				384,747				226,408
Earnings per share [note 6]
Basic			0.29				0.31				1.25				1.56
Diluted			0.29				0.31				1.24				1.55
[thousands of shares]
Weighted average participating shares outstanding during period			430,117				429,694				429,153				431,070
Participating shares outstanding, end of period			430,238				428,433				430,238				428,433

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(unaudited)

		Three months ended August 31,								Year ended August 31,
[thousands of Canadian dollars]		2009				2008				2009				2008
Net income			123,988				132,378				535,239				671,562
Other comprehensive income (loss) [note 7]
Change in unrealized fair value of derivatives designated as cash flow hedges			2,555				58,703				22,588				(36,193	)
Realized gains on cancellation of forward purchase contracts			—								9,314				—
Adjustment for hedged items recognized in the period			5,460				6,171				14,443				40,223
Reclassification of foreign exchange gain on hedging derivatives to income to offset foreign exchange loss on US denominated debt			(2,733	)			(57,062	)			(27,336	)			(4,796	)
Unrealized foreign exchange gain on translation of a self- sustaining foreign operation			1				35				31				7
			5,283				7,847				19,040				(759	)
Comprehensive income			129,271				140,225				554,279				670,803
Accumulated other comprehensive income (loss), beginning of period			(43,917	)			(65,521	)			(57,674	)			312
Adjustment for adoption of new accounting policy			—				—				—				(57,227	)
Other comprehensive income (loss)			5,283				7,847				19,040				(759	)
Accumulated other comprehensive loss, end of period			(38,634	)			(57,674	)			(38,634	)			(57,674	)