Shaw Announces Second Quarter Financial and Operating Results and Updated 2013 Guidance

Shaw Announces Second Quarter Financial and Operating Results and Updated 2013 
Guidance 
- Second quarter and year-to-date consolidated revenues improved 2%
over the same periods last year and operating income before
amortization was up 9% for the quarter and 8% for the six months
ended February 28, 2013  
- Net income was $182 million for the quarter and $417 million for
the year-to-date period  
- 2013 financial guidance updated with significant increase in free
cash flow which is now expected to approximate $550 million 
CALGARY, ALBERTA -- (Marketwired) -- 04/12/13 -- Shaw Communications
Inc. (TSX:SJR.B) (NYSE:SJR) announced consolidated financial and
operating results for the three and six months ended February 28,
2013 and February 29, 2012. Consolidated revenue for the three and
six month periods of $1.25 billion and $2.57 billion, respectively,
was up 2% over each of the comparable periods last year. Total
operating income before amortization(1)of $538 million improved 9%
over the comparable quarterly period and the year-to-date amount of
$1.14 billion was up 8%. 
Free cash flow(1) for the three and six month periods was $161
million and $405 million, respectively, compared to $57 million and
$176 million for the comparable periods last year. Increased
operating income before amortization and lower capital investment
during the first half of 2013 were the main drivers of the
improvement.  
Chief Executive Officer Brad Shaw said, "Our second quarter financial
results were solid reflecting the underlying strength across our
businesses as we focus on sustainable and profitable growth. We
remain focused on providing an exceptional customer experience as we
continue to leverage our leading network infrastructure and high
quality content to enhance and expand innovative product offerings
for our customers."  
Mr. Shaw continued, "Over the past several months we announced
several strategic transactions with each of Rogers and Corus that
will provide estimated net proceeds to Shaw of approximately $800
million. We plan to invest up to $500 million of these net proceeds
back into our core business over fiscal 2013, 2014 and 2015
accelerating our investment in certain strategic capital initiatives.
Key investments to be accelerated incl
ude the completion of our
Calgary data centre, further digitization of our network and
additional bandwidth upgrades, development of IP delivery of video,
expansion of our WiFi network, and additional innovative product
offerings related to Shaw Go and other applications to provide an
enhanced customer experience. 
Most recently we announced entering into a transaction to acquire
ENMAX Envision Inc. ("Envision"), a company providing leading
telecommunication services to Calgary and surrounding area business
customers, for approximately $225 million. This acquisition
demonstrates our commitment to investing in and growing our Business
Services. We look forward to serving our new customers and adding the
Envision employees and management to our team." 
Net income of $182 million or $0.38 per share for the quarter ended
February 28, 2013 compared to $178 million or $0.38 per share for the
same period last year. Improved operating income was partially offset
by higher income taxes in the current quarter. Net income for the
first six months of the year was $417 million or $0.88 per share
compared to $380 million or $0.81 per share. Increased operating
income before amortization accounted for the improvement.  
Revenue in the Cable division of $814 million and $1.62 billion for
the current three and six month periods increased 1% and 2%,
respectively, over the comparable periods. Operating income before
a
mortization for the quarter of $393 million was up 12% compared to
the same quarter last year and the year-to-date period improved 8% to
$789 million.  
Satellite revenue of $209 million and $423 million for the three and
six month periods, respectively, compared to $211 million and $420
million in the same periods last year. Operating income before
amortization for the current quarter was $73 million compared to $71
million last year and the year-to-date amount was up 5% to $147
million.  
Revenue and operating income before amortization in the Media
division for the quarter of $249 million and $72 million,
respectively, each increased 3% over the same period last year. On a
year-to-date basis Media revenue improved 5% and operating income
before amortization was up 7%.  
Brad Shaw continued, "We announced preliminary guidance in October
2012 and are today updating our free cash flow guidance. With the
first half of the year behind us and modest positive variances across
service operating income before amortization, capital investment and
interest and cash taxes, we now expect free cash flow to approximate
$550 million. We expect our capital spend to ramp up during the last
half of the year with the annual spend still expected to decline
marginally from 2012 levels." (The accelerated capital investment
funded through the accelerated capital fund is not included in free
cash flow. See further discussion in Management's Discussion and
Analysis.) 
In January the Board of Directors approved a 5% increase in the
equivalent annual dividend rate to $1.02 on Shaw's Class B Non-Voting
Participating shares and $1.0175 on Shaw's Class A Participating
shares. This new rate was effective commencing with the monthly
dividends paid on March 27, 2013.  
Mr. Shaw concluded, "We are operating in a dynamic competitive
environment where driving performance through continuous improvement
and leveraging opportunities as they arise is necessary. Financial
performance for the first half of the year and the various strategic
transactions recently announced demonstrate the ability of our
leadership team to create value and sustainable long-term growth for
our shareholders." 
Shaw Communications Inc. is a diversified communications and media
company, providing consumers with broadband cable television,
High-Speed Internet, Home Phone, telecommunications services (through
Shaw Business), satellite direct-to-home services (through Shaw
Direct) and engaging programming content (through Shaw Media). Shaw
serves 3.3 million customers, through a reliable and extensive fibre
network. Shaw Media operates one of the largest conventional
television networks in Canada, Global Television, and 19 specialty
networks including HGTV Canada, Food Network Canada, History and
Showcase. Shaw is traded on the Toronto and New York stock exc
hanges
and is included in the S&P/TSX 60 Index (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.  
(1) See definitions and discussion under Key Performance Drivers in
MD&A. 
MANAGEMENT'S DISCUSSION AND ANALYSIS 
FEBRUARY 28, 2013 
April 11, 2013 
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 Management's Discussion and Analysis ("MD&A") should
also be read in conjunction with the unaudited interim Consolidated
Financial Statements and Notes thereto of the current quarter, the
2012 Annual MD&A included in the Company's August 31, 2012 Annual
Report including the Consolidated Financial Statements and the Notes
thereto. 
The financial information presented herein has been prepared on the
basis of International Financial Reporting Standards ("IFRS") for
interim financial statements and is expressed in Canadian dollars.  
CONSOLIDATED RESULTS OF OPERATIONS 
SECOND QUARTER ENDING FEBRUARY 28, 2013 
Selected Financial Highlights 


 
                            Three months ended             Six months ended 
                 -----------------------------------------------------------
                                                                            
($ millions Cdn                                                             
 except per share February  February           February  February           
 amounts)         28, 2013  29, 2012  Change % 28, 2013  29, 2012  Change % 
----------------------------------------------------------------------------
Operations:                                                                 
  Revenue            1,251     1,231       1.6    2,570     2,510       2.4 
  Operating                                                                 
   income before                                                            
   amortization                                                             
   (1)                 538       493       9.1    1,139     1,059       7.6 
  Operating                                                                 
   margin (1) (2)     43.0%     40.0%      3.0     44.3%     42.2%      2.1 
  Funds flow from                      greater                              
   operations (3)                         than                              
                       386       164     100.0      513       520      (1.3)
  Net income           182       178       2.2      417       380       9.7 
Per share data:                                                             
  Earnings per                                                              
   share                                                                    
  Basic               0.38      0.38               0.88      0.81           
  Diluted             0.38      0.38               0.87      0.80           
  Weighted                                                                  
   average                                                                  
   participating                                                            
   shares                                                                   
   outstanding                                                              
   during period                                                            
   (millions)          446       440                445       439           
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) See definitions and discussion under Key Performance Drivers in
MD&A.  
(2) Operating margin for the current year includes the impact of an
adjustment to align certain broadcast license fees with the CRTC
billing period of approximately $14 million. Excluding the
adjustment, operating margin would be 41.9% and 43.8% for the three
and six months ended February 28, 2013, respectively. 
(3) Funds flow from operations is before changes in non-cash working
capital balances related to operations as presented in the unaudited
interim Consolidated Statements of Cash Flows.  
Subscriber Highlights(1) 


 
                                                                     Growth 
                                    --------------------------------------- 
                               Total Three months ended    Six months ended 
                           -------------------------------------------------
                                     February  February  February  February 
                            February      28,       29,       28,       29, 
                            28, 2013     2013      2012      2013      2012 
----------------------------------------------------------------------------
Subscriber statistics:                                                      
Video
 customers            2,136,707  (29,829)   (9,946)  (53,741)  (32,714)
Internet customers         1,910,185    7,800    21,328    13,756    30,371 
Digital phone lines        1,375,707   13,090    51,359    30,435    69,956 
DTH customers                907,330    1,328     1,274    (2,693)    1,805 
----------------------------------------------------------------------------

 
(1) Subscriber numbers for the comparative period have been restated
to remove pending installs and have also been adjusted to reflect the
results of a pre-migration subscriber audit recently undertaken prior
to the planned migration of customers to Shaw's new billing system.
The audit adjustments relate primarily to periods prior to 2009 and
reflect a reduction of approximately 28,600 and 1,800 Video and
Internet customers, respectively, and an increase of 900 Digital
phone lines. Also, given the growth in Digital cable penetration, the
Company has now combined the reporting of Basic cable and Digital
cable as a Video customer.  
Consolidated Overview 
Consolidated revenue of $1.25 billion and $2.57 billion for the three
and six month periods, respectively, increased 1.6% and 2.4% over the
same periods last year. Consolidated operating income before
amortization for the three month period of $538 million was up 9.1%
and on a year-to-date basis improved 7.6% to $1.14 billion. The
revenue growth in the Cable and Satellite divisions, primarily driven
by rate increases, was partially reduced by various expense increases
including employee related amounts and higher programming. Media was
up due to improved advertising and subscriber revenues partially
reduced by increased programming costs. Within all segments, the
current quarter also benefited from a one-time adjustment to align
certain broadcast license fees with the CRTC billing period totaling
approximately $14 million.  
The Company's strategy is to balance financial results with
maintenance of overall revenue generating units ("RGUs"). The Cable
and Satellite divisions have over 6.3 million RGUs - which represents
the number of products sold to customers. During the quarter, overall
RGUs declined by 7,611. Video RGUs declined more than expected as
reduced promotions and tight discipline was maintained on customer
equipment offers. Going forward, the Company intends to focus more on
providing equipment to customers, while refraining from overly
promotional pricing. As part of this focus, the Company plans to
offer contracts, with equipment offers, as an alternative for
customers. In this regard, it is expected that success-based spending
will ramp up in the second half of the year.  
Net income was $182 million and $417 million for the three and six
months ended February 28, 2013, respectively, compared to $178
million and $380 million for the same periods last year.
Non-operating items affected net income in both periods. Outlined on
the following page are further details on these and other operating
and non-operating components of net income for each period. 


 
                                         Six months                         
($millions Cdn)                               ended                         
                                        ------------                        
                                           February                    Non- 
                                           28, 2013   Operating   operating 
----------------------------------------------------------------------------
Operating income                                720         720           - 
 Amortization of financing costs - long-                                    
  term debt                                      (2)         (2)          - 
 Interest expense                              (159)       (159)          - 
 Gain on derivative instruments                   -           -           - 
 Accretion of long-term liabilities and                                     
  provisions                                     (5)          -          (5)
 Equity income from associates                    -           -           - 
 Other losses                                    (6)          -          (6)
----------------------------------------------------------------------------
Income (loss) before income taxes               548         559         (11)
 Current income tax expense (recovery)           85         155         (70)
 Deferred income tax expense (recovery)          46          (9)         55 
----------------------------------------------------------------------------
Net income (loss)                               417         413           4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                                         Six months                         
($millions Cdn)                               ended                         
                                        ------------                        
                                           February                         
                                                29,                    Non- 
                                      
         2012   Operating   operating 
----------------------------------------------------------------------------
Operating income                                658         658           - 
 Amortization of financing costs - long-                                    
  term debt                                      (2)         (2)          - 
 Interest expense                              (165)       (165)          - 
 Gain on derivative instruments                   1           -           1 
 Accretion of long-term liabilities and                                     
  provisions                                     (7)          -          (7)
 Equity income from associates                    1           -           1 
 Other losses                                    (5)          -          (5)
----------------------------------------------------------------------------
Income (loss) before income taxes               481         491         (10)
 Current income tax expense (recovery)          146         148          (2)
 Deferred income tax expense (recovery)         (45)        (45)          - 
----------------------------------------------------------------------------
Net income (loss)                               380         388          (8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                  Three                     
                                                 months                     
($millions Cdn)                                   ended                     
                                              ----------                    
                                               February                Non- 
                                               28, 2013 Operating operating 
----------------------------------------------------------------------------
Operating income                                    327       327         - 
 Amortization of financing costs - long-term                                
  debt                                               (1)       (1)        - 
 Interest expense                                   (77)      (77)        - 
 Gain on derivative instruments                       -         -         - 
 Accretion of long-term liabilities and                                     
  provisions                                         (2)        -        (2)
 Equity income from associates                        -         -         - 
 Other gains (losses)                                (2)        -        (2)
----------------------------------------------------------------------------
Income (loss) before income taxes                   245       249        (4)
 Current income tax expense (recovery)               47        75       (28)
 Deferred income tax expense (recovery)              16       (10)       26 
----------------------------------------------------------------------------
Net income (loss)                                   182       184        (2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                                                  Three                     
                                                 months                     
($millions Cdn)                                   ended                     
                                              ----------                    
                                               February                     
                                                    29,                Non- 
                                                   2012 Operating operating 
----------------------------------------------------------------------------
Operating income                                    286       286         - 
 Amortization of financing costs - long-term                                
  debt                                               (1)       (1)        - 
 Interest expense                                   (83)      (83)        - 
 Gain on derivative instruments                       1         -         1 
 Accretion of long-term liabilities and                                     
  provisions                                         (3)        -        (3)
 Equity income from associates                        1         -         1 
 Other gains (losses)                                 1         -         1 
----------------------------------------------------------------------------
Income (loss) before income taxes                   202       202         - 
 Current income tax expense (recovery)               62        64        (2)
 Deferred income tax expense (recovery)             (38)      (40)        2 
----------------------------------------------------------------------------
Net income (loss)                                   178       178         - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


 
                                               February 28, 2013 net income 
                                                               compared to: 
                                              ----------------------------- 
                                                                        Six 
                                                                     months 
                                               Three months ended     ended 
                                              ------------------- ----------
                                               November  February  February 
($millions Cdn)                                30, 2012  29, 2012  29, 2012 
----------------------------------------------------------------------------
Increased (decreased) operating income before                               
 amortization                                       (63)       45        80 
Increased amortization                               (3)       (4)      (18)
Decreased interest expense                            5         6         6 
Change in net other costs and revenue (1)             3        (4)       (1)
Decreased (increased) income taxes                    5       (39)      (30)
----------------------------------------------------------------------------
                                                    (53)        4        37 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) Net other costs and revenue includes gain on derivative
instruments, accretion of long-term liabilities and provisions,
equity income from associates and other gains (losses) as detailed in
the unaudited interim Consolidated Statements of Income. 
Basic earnings per share were $0.38 and $0.88 for the current quarter
and year-to-date, respectively, compared to $0.38 and $0.81 in the
same periods last year. In the current quarter, improved operating
income before amortization of $45 million was partially offset by
higher income taxes of $39 million as the prior period benefited from
a tax recovery related to the resolution of certain tax matters. The
year-to-date increase was primarily due to improved operating income
before amortization of $80 million, partially reduced by increased
amortization of $18 million and higher income taxes of $30 million.  
Net income in the current quarter decreased $53 million compared to
the first quarter of fiscal 2013 driven by lower operating income
before amortization of $63 million primarily due to seasonality in
the Media business. 
Free cash flow for the quarter and year-to-date periods of $161
million and $405 million, respectively, compared to $57 million and
$176 million in the same periods last year. The improvement in both
periods was primarily due to lower capital investment and improved
operating income before amortization. 
During the current quarter, the Company entered into agreements with
Rogers Communications Inc. ("Rogers") to sell to Rogers its shares in
Mountain Cablevision Limited ("Mountain Cable"); and grant to Rogers
an option to acquire its wireless spectrum licenses; and, to purchase
from Rogers its 33.3% interest in TVtropolis General Partnership
("TVtropolis"). The transactions are subject to applicable regulatory
approvals. Regulatory approval was recently received for Mountain
Cable and it is expected to close at the end of April. The TVtropolis
transaction is expected to close later this year while the potential
option exercise for the sale of the wireless spectrum licenses is
expected to occur in fiscal 2015. Shaw expects to receive net
proceeds of approximately $700 million from these transactions. 
Recently, Shaw also announced it had entered into a number of
transactions with Corus Entertainment Inc. ("Corus"), a related party
subject to common voting control. In a series of agreements to
optimize its portfolio of specialty channels, Shaw has agreed to sell
to Corus its 49% interest in ABC Spark and 50% interest in its two
French-language channels, Historia and Series+. In addition, Corus
will sell to Shaw its 20% interest in Food Network Canada. Shaw
expects to receive net proceeds of approximately $95 million from
these transactions. The ABC Spark and Food Network Canada
transactions are expect to close at the end of April while Historia
and Series+ are expected to close later in the fourth quarter.  
These transactions with Rogers and Corus are strategic in nature
allowing the Company to use up to $500 million of the total expected
net proceeds of approximately $800 million to accelerate certain
capital investments to improve and strengthen its network advantage.
Key investments include the completion of the Calgary data centre,
further digitization of the network and additional bandwidth
upgrades, development of IP delivery of video, expansion of the WiFi
network, and additional innovative product offerings related to Shaw
Go and other applications to provide an enhanced customer experience. 
The Company has established an accelerated capital fund of up to $500
million and will track the accelerated spending against this as the
investments are made. The accelerated capital will be excluded from
the calculation of free cash flow as the initiatives are not being
funded through cash generated from operations but instead through the
net proceeds received on these transactions. Shaw plans to invest up
to $500 million in fiscal 2013, 2014 and 2015 spending up to $100
million, $250 million and $150 million in each of the respective
years. After this period of accelerated spending the Company expects
that the baseline capital intensity for the Cable business will
decline.  
Most recently Shaw announced it had entered into a transaction to
acquire ENMAX Envision Inc., a company providing leading
telecommunication services to Calgary and surrounding area business
customers, for approximately $225 million. The Company is committed
to investing in and growing its Business Services. The acquisition is
expected to close during the third quarter. 
Key Performance Drivers 
The Company's continuous disclosure documents may provide discussion
and analysis of non-IFRS financial measures. These financial measures
do not have standard definitions prescribed by IFRS and therefore may
not be comparable to similar measures disclosed by other companies.
The Company's continuous disclosure documents may also provide
discussion and analysis of additional GAAP measures. Additional GAAP
measures include line items, headings, and sub-totals included in the
financial statements. 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. The
non-IFRS financial measures and additional GAAP measures have not
been presented as an alternative to net income or any other measure
of performance required by IFRS. 
The following contains a listing of non-IFRS financial measures and
additional GAAP measures used by the Company and provides a
reconciliation to the nearest IFRS measure or provides a reference to
such reconciliation. 
Operating income before amortization and operating margin 
Operating income before amortization is calculated as 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. 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. 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 operating income before amortization by
revenue.  
Free cash flow 
The Company utilizes this measure to assess the Company's ability to
repay debt and return cash to shareholders.  
Free cash flow is calculated as operating income before amortization,
less interest, cash taxes paid or payable, capital expenditures (on
an accrual basis and net of proceeds on capital dispositions and
adjusted to exclude amounts funded through the accelerated capital
fund) and equipment costs (net), adjusted to exclude share-based
compensation expense, less cash amounts associated with funding the
new and assumed CRTC benefit obligations related to the acquisition
of Shaw Media as well as excluding non-controlling interest amounts
that are consolidated in the operating income before amortization,
capital expenditure and cash tax amounts. Free cash flow also
includes changes in receivable related balances with respect to
customer equipment financing transactions as a cash item, and is
adjusted for recurring cash funding of pension amounts net of pension
expense. Dividends paid on the Company's Cumulative Redeemable Rate
Reset Preferred Shares are also deducted. 
Free cash flow has not been reported on a segmented basis. Certain
components of free cash flow including operating income before
amortization, capital expenditures (on an accrual basis net of
proceeds on capital dispositions) and equipment costs (net), CRTC
benefit obligation funding, and non-controlling interest amounts
continue to be reported on a segmented basis. Other items, including
interest and cash taxes, are not generally directly attributable to a
segment, and are reported on a consolidated basis. 
For free cash flow purposes the Company considers the discretionary
pension funding to be a financing transaction and has not included
the amount funded or the related cash tax recovery in th
e free cash
flow calculation.  
Accelerated capital fund 
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 with each of Rogers and
Corus. The accelerated capital initiatives will be funded through
this fund and not cash generated from operations. Key investments
include the completion of the Calgary data centre, further
digitization of the network and additional bandwidth upgrades,
development of IP delivery of video, expansion of the WiFi network,
and additional innovative product offerings related to Shaw Go and
other applications to provide an enhanced customer experience. It is
expected up to $500 million will used in fiscal 2013, 2014 and 2015
spending up to $100 million, $250 million and $150 million in each of
the respective years.  
Free cash flow is calculated as follows: 


 
                           Three months ended              Six months ended 
                ------------------------------------------------------------
                 February  February            February  February           
                      28,       29,    Change       28,       29,    Change 
($millions Cdn)      2013      2012         %      2013      2012         % 
----------------------------------------------------------------------------
Revenue                                                                     
  Cable               814       804       1.2     1,623     1,596       1.7 
  Satellite           209       211      (0.9)      423       420       0.7 
  Media               249       242       2.9       568       541       5.0 
----------------------------------------------------------------------------
                    1,272     1,257       1.2     2,614     2,557       2.2 
  Intersegment                                                              
   eliminations       (21)      (26)    (19.2)      (44)      (47)     (6.4)
----------------------------------------------------------------------------
                    1,251     1,231       1.6     2,570     2,510       2.4 
----------------------------------------------------------------------------
Operating income                                                            
 before                                                                     
 amortization                                                               
 (1)                                                                        
  Cable               393       352      11.6       789       729       8.2 
  Satellite            73        71       2.8       147       140       5.0 
  Media                72        70       2.9       203       190       6.8 
----------------------------------------------------------------------------
                      538       493       9.1     1,139     1,059       7.6 
----------------------------------------------------------------------------
                                                                            
Capital                                                                     
 expenditures                                                               
 and equipment                                                              
 costs (net):                                                               
  Cable               176       234     (24.8)      316       457     (30.9)
  Accelerated                         greater                       greater 
   capital                               than                          than 
   investment         (10)        -     100.0       (10)        -     100.0 
----------------------------------------------------------------------------
  Adjusted Cable      166       234     (29.1)      306       457     (33.0)
----------------------------------------------------------------------------
  Satellite            21        25     (16.0)       46        50      (8.0)
  Media                 6         7     (14.3)       10        13     (23.1)
----------------------------------------------------------------------------
  Total as per                                                              
   Note 3 to the                                                            
   unaudited                                                                
   interim                                                                  
   Consolidated                                                             
   Financial                                                                
   Statements         193       266     (27.4)      362       520     (30.4)
----------------------------------------------------------------------------
Free cash flow                                                              
 before the                                                                 
 following            345       227      52.0       777       539      44.2 
Less:                                                                       
  Interest            (76)      (82)     (7.3)     (158)     (164)     (3.7)
  Cash taxes          (75)      (64)     17.2      (155)     (148)      4.7 
Other                                                                       
 adjustments:                                                               
  Non-cash                                                                  
   share-based                                                              
   compensation         2         1     100.0         3         3         - 
  CRTC benefit                                                              
   obligation                                                               
   funding            (15)      (11)     36.4       (24)      (21)     14.3 
  Non-                                                                      
   controlling                                                              
   interests          (10)       (9)     11.1       (22)      (20)     10.0 
  Pension                                                                   
   adjustment           3         4     (25.0)        5         8     (37.5)
  Customer                                                                  
   equipment                                                                
   financing           (9)       (5)     80.0       (14)      (13)      7.7 
  Preferred                                                                 
   share                                                                    
   dividends           (4)       (4)        -        (7)       (8)    (12.5)
----------------------------------------------------------------------------
                                      greater                       greater 
Free cash flow                           than                          than 
 (1)                  161        57     100.0       405       176     100.0 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating margin                                                            
 (1)                                                                        
  Cable              48.3%     43.8%      4.5      48.6%     45.7%      2.9 
  Satellite          34.9%     33.6%      1.3      34.8%     33.3%      1.5 
  Media              28.9%     28.9%        -      35.7%     35.1%      0.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) See definitions and discussion under Key Performance Drivers in
MD&A. 
Details on the accelerated capital fund and investment to date are as
follows: 


 
----------------------------------------------------------------------------
Estimated year of spend                       2013     2014    2015   Total 
-----------------------------------------------------
-----------------------
($millions Cdn)                                                             
----------------------------------------------------------------------------
Fund Opening Balance                           100      250     150     500 
Accelerated capital investment                 (10)       -       -     (10)
----------------------------------------------------------------------------
Fund Closing Balance, February 28, 2013         90      250     150     490 
----------------------------------------------------------------------------

 
CABLE 
Financial Highlights 


 
                           Three months ended              Six months ended 
                ------------------------------------------------------------
                 February  February            February                     
                      28,       29,    Change       28,  February    Change 
($millions Cdn)      2013      2012         %      2013  29, 2012         % 
----------------------------------------------------------------------------
Revenue               814       804       1.2     1,623     1,596       1.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income                                                            
 before                                                                     
 amortization                                                               
 (1)                  393       352      11.6       789       729       8.2 
                                                                            
Capital                                                                     
 expenditures                                                               
 and equipment                                                              
 costs (net):                                                               
  New housing                                                               
   development         17        27     (37.0)       45        49      (8.2)
  Success based        44        75     (41.3)       79       165     (52.1)
  Upgrades and                                                              
   enhancement         77        91     (15.4)      137       178     (23.0)
  Replacement          11        10      10.0        20        21      (4.8)
  Buildings and                                                             
   other               27        31     (12.9)       35        44     (20.5)
----------------------------------------------------------------------------
Total as per                                                                
 Note 3 to the                                                              
 unaudited                                                                  
 interim                                                                    
 Consolidated                                                               
 Financial                                                                  
 Statements(2)        176       234     (24.8)      316       457     (30.9)
----------------------------------------------------------------------------
                                                                            
Operating margin                                                            
 (1)                 48.3%     43.8%      4.5      48.6%     45.7%      2.9 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) See definitions and discussion under Key Performance Drivers in
MD&A.  
(2) Includes $10 million related to certain capital investments that
are being funded from the accelerated capital fund.  
Operating Highlights 


 
--  Digital Phone lines increased 13,090 during the three month period to
    1,375,707 and Internet customers were up 7,800 totaling 1,910,185 as at
    February 28, 2013. During the quarter Video subscribers decreased
    29,829. 

 
Cable revenue for the three and six month periods of $814 million and
$1.62 billion improved 1.2% and 1.7%, respectively, over the
comparable periods last year. Rate increases, lower promotions and
customer growth in Internet and Digital Phone, including Business
growth, were partially offset by lower Video subscribers and On
Demand due to the shortened NHL hockey schedule and fewer PPV events. 
Operating income before amortization of $393 million for the quarter
was up $41 million or 11.6% over the same period last year. Revenue
related improvements, lower marketing and sales expenses, and reduced
regulatory costs resulting from the CRTC mandated reduction in the
Local Programming Improvement Fund ("LPIF") contribution from 1.5% to
1% were partially offset by increased programming amounts, related to
new services and increased rates as contracts were renewed. The
current quarter also benefited from an adjustment to align certain
broadcast license fees with the CRTC billing period of approximately
$7 million. 
Operating income before amortization for the year-to-date period
increased $60 million over last year. Revenue related growth, reduced
marketing and sales expenses, lower LPIF, and the broadcast license
fee adjustment, were partially offset by higher employee related
amounts due to employee growth and annual merit increases, and higher
programming costs due to new services and annual rate increases.  
Revenue was comparable to the first quarter of fiscal 2013. Operating
income before amortization was marginally lower compared to the prior
quarter. Revenue related growth and the broadcast license fee
adjustment were offset by higher employee related costs, increased
marketing spend related to new brand initiatives, and higher various
other expenses. 
Total capital investment of $176 million in the current quarter
decreased $58 million over the same period last year. Capital
investment for the six month period of $316 million was $141 million
lower than the same period last year. Capital investment in the
current three and six month periods included $10 million funded
through the accelerated investment fund established with net proceeds
from the strategic transactions with each of Rogers and Corus.  
Success-based capital declined $31 million and $86 million over the
comparable three and six month periods, respectively, primarily due
to lower video equipment rentals, reduced subsidies from higher
pricing for video equipment sales, and lower internet modem
purchases. 
Investment in Upgrades and enhancement and Replacement categories
combined decreased $13 million and $42 million for the quarter and
year-to-date periods, respectively, compared to the same periods last
year. The decline was due to lower spend on the digital network
upgrade, residential telephony infrastructure and licensing,
partially offset by higher business infrastructure investment.  
Investment in Buildings and other declined $4 million and $9 million
over the comparable three and six month periods last year. The
decrease was primarily due to prior year investment in customer
solution centre projects and lower current year spend on back office
infrastructure replacement projects. The current year also benefited
from an increased scientific research and experimental development
tax credit.  
Spending in New housing development decreased $10 million and $4
million over the comparable three and six month periods mainly due to
lower activity. 
Total capital investment of $176 million in the current quarter
increased $36 million over the prior quarter. Success-based spend was
up due to higher HD/HDPVR rental activity, Upgrades and enhancements
increased on higher investment to reduce internet congestion and
enhance business plant infrastructure, and Building and other was up
due to increased activity on back office infrastructure replacement
projects.  
During the quarter Shaw continued with its digital network upgrade,
converting analog tier customers to digital. The Company now has in
excess of 90% digital penetration in its video customer base. As hubs
are upgraded Shaw will offer customers industry leading internet, and
enhanced video TV offerings with more On Demand and HD content. 
The Company also continued with its Shaw Go video offerings with the
launch of NBA League Pass app. The app is complimentary with an NBA
League Pass subscription and lets customers watch both live and
playback games on the go with their mobile device up to 48 hours
after the game. The league's schedule of games is also available to
browse. In addition, NBA League Pass is available as a complimentary
package for Shaw Friends. Shaw Friends is a customer loyalty program
for customers who subscribe to two or more Shaw services. 
Subscriber Statistics 


 
                                                          February 28, 2013 
                                    ----------------------------------------
                                     Three months ended    Six months ended 
                                    ----------------------------------------
                             August                                         
                 February       31,              Change              Change 
                 28, 2013   2012(1)    Growth         %    Growth         % 
----------------------------------------------------------------------------
VIDEO:                                                                      
Connected       2,136,707 2,190,448   (29,829)     (1.4)  (53,741)     (2.5)
Penetration as %                                                            
 of homes passed     53.1%     55.2%                                        
----------------------------------------------------------------------------
                                                                            
INTERNET:                                                                   
Connected and                                                               
 scheduled      1,910,185 1,896,429     7,800       0.4    13,756       0.7 
Penetration as %                                                            
 of basic            89.4%     86.6%                                        
Standalone                                                                  
 Internet not                                                               
 included in                                                                
 basic cable      286,556   255,549    16,657       6.2    31,007      12.1 
                                                                            
DIGITAL PHONE:                                                              
Number of lines                                                             
 (2)            1,375,707 1,345,272    13,090       1.0    30,435       2.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) Internet and Digital Phone subscriber statistics have been
restated to exclude scheduled and pending installations at August 31,
2012 and all categories have been adjusted to reflect the results of
a pre-migration subscriber audit undertaken prior to the migration of
customers to Shaw's new billing system.   
(2) Represents primary and secondary lines on billing 
SATELLITE 
Financial Highlights(1) 


 
                           Three months ended              Six months ended 
                ------------------------------------------------------------
                 February  February            February  February           
                      28,       29,    Change       28,       29,    Change 
($millions Cdn)      2013      2012         %      2013      2012         % 
----------------------------------------------------------------------------
Revenue               209       211      (0.9)      423       420       0.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income                                                            
 before                                                                     
 amortization                                                               
 (2)                   73        71       2.8       147       140       5.0 
                                                                            
Capital                                                                     
 expenditures                                                               
 and equipment                                                              
 costs (net):                                                               
Success based                                                               
 (3)                   18        22     (18.2)       40        45     (11.1)
Buildings and                                                               
 other                  3         3         -         6         5      20.0 
----------------------------------------------------------------------------
Total as per                                                                
 Note 3 to the                                                              
 unaudited                                                                  
 interim                                                                    
 Consolidated                                                               
 Financial                                                                  
 Statements            21        25     (16.0)       46        50      (8.0)
----------------------------------------------------------------------------
                                                                            
Operating                                                                   
 margin(2)           34.9%     33.6%      1.3      34.8%     33.3%      1.5 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) The Satellite segment was previously reported as DTH and
Satellite Services. These segments have been combined into a single
operating segment.  
(2) See definitions and discussion under Key Performance Drivers in
MD&A.  
(3) Net of the profit on the sale of satellite equipment as it is
viewed as a recovery of expenditures on customer premise equipment. 
Operating Highlights 


 
--  During the quarter Shaw Direct subscribers increased 1,328 and as at
    February 28, 2013 DTH customers totaled 907,330. 

 
Revenue of $209 million for the three month period decreased 0.9%
over the same period last year primarily due to lower customer growth
and increased promotional activity. Revenue for the six month period
of $423 million increased 0.7% over the same period last year
primarily due to rate increases partially offset by increased
promotional activity and lower customer growth.  
Operating income before amortization of $73 million and $147 million
for the three and six months, respectively, improved 2.8% and 5.0%
over the same periods last year. The current periods each benefited
from an adjustment of approximately $4 million to align certain
broadcast license fees with the CRTC billing period. Excluding the
adjustment, operating income before amortization for the quarter
declined marginally and the year-to-date period improved 2%.  
Revenue and operating income before amortization declined modestly
over the first quarter. Reduced revenues due to higher promotional
activity and customer package migration along with increased employee
related costs were partially offset by the one-time broadcast license
fee adjustment. 
Total capital investment of $21 million and $46 million for the three 
and six month period compared to $25 million and $50 million,
respectively, in the same periods last year. Success based capital
was lower in each of the current periods primarily due to lower
customer growth.  
The launch of Anik G1 is currently scheduled for mid April and the
satellite is expected to be in service shortly thereafter. With Anik
G1 in service, Shaw Direct will carry over 200 HD channels.  
Shaw Direct's Video-On-Demand service, which uses adaptive streaming
through the satellite receiver, now has over 7,000 TV and movie
viewing choices, and continues to add IP connected subscribers. 
Subscriber Statistics 


 
                                                          February 28, 2013 
                                      --------------------------------------
                                      Three months ended   Six months ended 
                                      --------------------------------------
                     February   August            Change             Change 
                     28, 2013 31, 2012   Growth        %   Growth         % 
----------------------------------------------------------------------------
                                                                            
DTH customers (1)     907,330  910,023    1,328      0.1   (2,693)     (0.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) Including seasonal customers who temporarily suspend their
service. 
MEDIA 
Financial Highlights 


 
                           Three months ended              Six months ended 
                ----------------------------- ------------------------------
                                               February                     
                 February  February    Change       28,  February   Change  
($millions Cdn)  28, 2013  29, 2012         %      2013  29, 2012         % 
----------------------------------------------------------------------------
Revenue               249       242       2.9       568       541       5.0 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income                                                            
 before                                                                     
 amortization                                                               
 (1)                   72        70       2.9       203       190       6.8 
                                                                            
Capital                                                                     
 expenditures:                                                              
  Broadcast and                                                             
   transmission         2         3     (33.3)        3         6     (50.0)
  Buildings and                                                             
   other                4         4         -         7         7         - 
----------------------------------------------------------------------------
Total as per                                                                
 Note 3 to the                                                              
 unaudited                                                                  
 interim                                                                    
 Consolidated                                                               
 Financial                                                                  
 Statements             6         7     (14.3)       10        13     (23.1)
----------------------------------------------------------------------------
                                                                            
Other                                                                       
 adjustments:                                                               
  CRTC benefit                                                              
   obligation                                                               
   funding            (15)      (11)     36.4       (24)      (21)     14.3 
  Non-                                                                      
   controlling                                                              
   interests          (10)       (9)     11.1       (22)      (20)     10.0 
                                                                            
Operating                                                                   
 margin(1)           28.9%     28.9%        -      35.7%     35.1%      0.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) See definitions and discussion under Key Performance Drivers in
MD&A. 
Operating Highlights 
Revenue and operating income before amortization for the quarter were
$249 million and $72 million, respectively, compared to $242 million
and $70 million last year. Revenue for the quarter was up 2.9% due to
higher conventional and specialty advertising revenues combined with
increased subscriber revenues. Operating income before amortization
improved 2.9% over the comparable period due an adjustment of
approximately $3 million to align certain broadcast license fees with
the CRTC billing period. Excluding the adjustment operating income
before amortization declined marginally as the revenue growth was
offset by higher programming, employee related and various other
expenses.  
For the six months ending February 28, 2013 revenue was $568 million
and operating income before amortization was $203 million compared to
$541 million and $190 million, respectively, for the same period last
year. Improved advertising and subscriber revenues were partially
reduced by higher programming and employee related costs. The current
period also benefited from an expense adjustment of $3 million to
align certain broadcast license fees with the CRTC billing period.  
Compared to the first quarter of fiscal 2013, revenue and operating
income before amortization decreased $70 million and $59 million,
respectively. The decline was primarily due to the cyclical nature of
the Media business, with higher advertising revenues in the first
quarter driven by the fall launch of season premieres and high
demand. 
During the quarter, Global delivered solid programming results
increasing the number of Top 10 and Top 20 positions nationally, with
key shows such as Survivor, NCIS, NCIS LA, Hawaii 5-0, Elementary,
Bones and Glee. The Grammy Awards and Bomb Girls have supported
audience delivery.  
Media's specialty portfolio continues to lead the channel rankings in
the Adult 25-54 category with 4 of the Top 10 analog channels,
including History maintaining the top entertainment position in
Canada and 4 of the Top 5 Digital services. National Geographic,
Action, MovieTime and Mystery hold four of the top five positions,
with National Geographic and Action's audience results ranking the
channels within the Top 20 analog services. In the quarter, Big
Brother Canada premiered to strong audience results along with the
launch of an interactive website which includes a 24/7 live feed with
interactive gaming and voting that will influence the outcome of the
show. 
Global News continues to maintain its number one position in the
Vancouver, Calgary and Edmonton markets. In the quarter, the Morning
News shows launched in Halifax and Montreal along with a national
half hour morning show. Most recently, on March 14, the BC all news
channel, Global News:BC-1, went to air.  
Capital investment continued on various projects in the quarter and
included upgrading production equipment, infrastructure and facility
investments.  
OTHER INCOME AND EXPENSE ITEMS 
Amortization 


 
                            Three months ended              Six months ended
                 -----------------------------------------------------------
                  February  February            February  February          
                       28,       29,    Change       28,       29,    Change
($millions Cdn)       2013      2012         %      2013      2012         %
----------------------------------------------------------------------------
Amortization                                                                
 revenue                                                                    
 (expense) -                                                                
  Deferred                                                                  
   equipment                                                                
   revenue              30        28       7.1        60        56       7.1
  Deferred                                                                  
   equipment                                                                
   costs               (64)      (57)     12.3      (127)     (110)     15.5
  Property, plant                                                           
   and equipment,                                                           
   intangibles                                                              
   and other          (177)     (178)     (0.6)     (352)     (347)      1.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Amortization of deferred equipment revenue and deferred equipment
costs increased over the comparable periods due to the sales mix of
equipment and changes in customer pricing on certain equipment. 
Amortization of property, plant and equipment, intangibles and other
increased over the comparative six-month period as the amortization
of new expenditures exceeded the impact of assets that became fully
depreciated.  
Amortization of financing costs and Interest expense 


 
                              Three months ended           Six months ended 
                      ------------------------------------------------------
                       February February          February February         
                            28,      29,  Change       28,     29,   Change 
($millions Cdn)            2013     2012       %      2013     2012       % 
----------------------------------------------------------------------------
Amortization of                                                             
 financing costs -                                                          
 long-term debt               1        1       -         2        2       - 
Interest expense             77       83    (7.2)      159      165    (3.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Interest expense decreased over the comparable periods due to lower
average debt levels. 
Accretion of long-term liabilities and provisions 
The Company records accretion expense in respect of the discounting
of certain long-term liabilities and provisions which are accreted to
their estimated value over their respective terms. The expense is
primarily in respect of CRTC benefit obligations.  
Other gains (losses) 
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 minor investments, and the Company's share of the
operations of Burrard Landing Lot 2 Holdings Partnership. The
category also includes amounts in respect of the electrical fire and
resulting water damage to Shaw Court that occurred during the fourth
quarter of fiscal 2012. During the first quarter, the Company
received insurance advances of $5 million related to its claim for
costs that were incurred in the fourth quarter of fiscal 2012 and
incurred additional costs of $10 million in respect of ongoing
recovery activities during the current year.  
Income taxes 
Income taxes were higher in each of the current periods mainly due to
a recovery in the prior periods related to the resolution of certain
tax matters.  
RISKS AND UNCERTAINTIES 
The significant risks and uncertainties affecting the Company and its
business are discussed in the Company's August 31, 2012 Annual Report
under the Introduction to the Business - Known Events, Trends, Risks
and Uncertainties in Management's Discussion and Analysis.  
FINANCIAL POSITION 
Total assets at February 28, 2013 were $12.6 billion compared to
$12.7 billion at August 31, 2012. Following is a discussion of
significant changes in the consolidated statement of financial
position since August 31, 2012.  
Current assets increased $165 million primarily due to the
classification of Mountain Cable's assets as held for sale of $397
million and increases in accounts receivable of $82 million and
inventories of $5 million partially offset by decreases in cash of
$311 million and other current assets of $10 million. Assets held for
sale is primarily comprised of property, plant and equipment,
broadcast license and goodwill. Accounts receivable increased due to
higher advertising revenue during the second quarter of the current
year compared to the fourth quarter of the prior year,
reclassification of advance bill payments to unearned revenue and
timing of collection of trade receivables while inventories were
higher due to timing of equipment purchases. Other current assets
declined primarily due to a reduction in a tax indemnity upon
resolution of the related income tax liabilities. Cash decreased as
the cash outlay for investing and financing activities exceeded the
funds provided by operations.  
Investments and other assets increased $65 million due to the $59
million deposit paid relating to the acquisition of the
non-controlling interest in the TVtropolis specialty channel and $7
million in respect of the purchase of a minor investment. 
Property, plant and equipment decreased $116 million as amortization
and the reclassification of Mountain Cable to assets held for sale
exceeded current period capital investment. 
Other long-term assets were up $9 million due to an increase in
customer equipment financing receivables. 
Intangibles decreased $187 million due to the reclassification of
$245 million in respect of Mountain Cable to assets held for sale
partially offset by higher program rights and advances. Additional
investment in acquired rights and advances exceeded the amortization
for the current year.  
Goodwill decreased $81 million due to the reclassification of the
amount in respect of Mountain Cable to assets held for sale.  
Current liabilities increased $210 million due to the deposit of $250
million received from Rogers on the sale of Mountain Cable and
classification of $78 million in respect of liabilities associated
with the Mountain Cable assets held for sale as well as increases in
accounts payable and accruals of $45 million and unearned revenue of
$9 million, all of which were partially offset by decreases in income
taxes payable of $72 million and current portion of long-term debt of
$101 million. The liabilities associated with the assets held for
sale is primarily comprised of deferred income taxes of $73 million.
Accounts payable and accrued liabilities were up due to fluctuations
in various accruals and other liabilities while unearned revenue
increased due to reclassification of advance bill payments from
accounts receivable. Income taxes payable declined due to tax
installment payments and resolution of certain income tax liabilities
which were partially offset by the current period provision. The
current portion of long-term debt decreased due to the repayment of
the 6.1% $450 million senior notes which were due in November 2012
partially offset by the reclassification of the 7.5% $350 mi
llion
senior notes which are due in November 2013.  
Long-term debt decreased $347 million due to the aforementioned
reclassification of the 7.5% $350 million senior notes. 
Other long-term liabilities decreased $310 million as the Company
contributed $300 million to a retirement compensation arrangement
trust ("the RCA") in order to partially fund its non-contributory
defined benefit pension plan.  
Deferred credits increased $52 million due to the $50 million
received from Rogers for the purchase price of the option to acquire
the wireless spectrum licenses. 
Deferred income tax liabilities, net of deferred income tax assets,
decreased $26 million due to the aforementioned reclassification of
amounts in respect of Mountain Cable partially offset by current
period expense. 
Shareholders' equity increased $275 million primarily due to
increases in share capital of $94 million, retained earnings of $167
million and non-controlling interests of $14 million. Share capital
increased due to the issuance of 4,336,190 Class B Non-Voting Shares
under the Company's option plan and Dividend Reinvestment Plan
("DRIP"). As of March 31, 2013, share capital is as reported at
February 28, 2013 with the exception of the issuance of a total of
1,110,986 Class B Non-Voting Shares under the DRIP and upon exercise
of options under the Company's option plan subsequent to the quarter
end. Retained earnings increased due to current year earnings of $396
million partially offset by dividends of $229 million while
non-controlling interests increased as their share of earnings
exceeded the distributions declared during the period.  
LIQUIDITY AND CAPITAL RESOURCES 
In the current year, the Company generated $405 million of free cash
flow. Shaw used its free cash flow along with cash of $311 million,
the net proceeds of $241 million from the transactions with Rogers
and proceeds on issuance of Class B Non-Voting Shares of $32 million
to repay the 6.1% $450 million senior notes, fund $300 million in
discretionary contributions to the RCA in respect of its
non-contributory defined benefit pension plan, pay common share
dividends of $159 million, invest an additional net $65 million in
program rights, fund $10 million of accelerated capital spend and
fund other net items of $5 million. Due to timing, the net proceeds
to date from the Rogers transactions have been temporarily used in
ongoing operations to the extent the cash was not required to fund
accelerated capital investments. 
On December 5, 2012 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 20,000,000 Class B Non-Voting Shares during the period
December 7, 2012 to December 6, 2013. No shares have been repurchased
during the current year. 
The Company issues Class B Non-Voting Shares from treasury under its
DRIP which resulted in cash savings and incremental Class B
Non-Voting Shares of $57 million during the six months ending
February 28, 2013. 
Based on available credit facilities and forecasted free cash flow,
the Company expects to have sufficient liquidity to fund operations
and obligations during the current 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.  
CASH FLOW 
Operating Activities 


 
                            Three months ended             Six months ended 
                   ---------------------------------------------------------
                    February February          February  February           
                         28,      29,   Change      28,       29,    Change 
($millions Cdn)         2013     2012        %     2013      2012         % 
----------------------------------------------------------------------------
                                       greater                              
Funds flow from                           than                              
 operations              386      164    100.0      513       520      (1.3)
Net decrease                                                                
 (increase) in non-                                                         
 cash working                                                               
 capital balances                                                   greater 
 related to                                                            than 
 operations               48       40     20.0      (50)       (7)    100.0 
----------------------------------------------------------------------------
                                       greater                              
                                          than                              
                         434      204    100.0      463       513      (9.7)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Funds flow from operations increased over the comparative three month
period due to higher operating income before amortization and lower
current income taxes in the current period and the settlement of the
amended cross-currency interest agreements in the prior year. Funds
flow from operations decreased over the comparative six month period
as impact of the aforementioned items were more than offset by the
$300 million in discretionary contributions to the RCA and higher
program rights purchases. The net change in non-cash working capital
balances related to operations fluctuated over the comparative
periods due to changes in other current assets and the timing of
payment of current income taxes payable and accounts payable and
accrued liabilities as well as fluctuations in accounts receivable.  
Investing Activities 


 
                             Three months ended             Six months ended
                   ---------------------------------------------------------
                    February February           February  February          
                         28,      29,                28,       29,          
($millions Cdn)         2013     2012  Decrease     2013      2012  Decrease
----------------------------------------------------------------------------
Cash flow provided                                                          
 by (used in)                                                               
 investing                                                                  
 activities               23     (320)      343     (183)     (625)      442
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The cash used in investing activities decreased over the comparable
three and six month periods due to the net receipt of $241 million in
respect of the transactions with Rogers and lower cash outlays for
capital expenditures and inventories. 
Financing Activities 
The changes in financing activities during the comparative periods
were as follows: 


 
                                     Three months ended    Six months ended 
                                    ----------------------------------------
                                     February  February            February 
                                          28,       29,  February       29, 
($millions Cdn)                          2013      2012  28, 2013      2012 
----------------------------------------------------------------------------
Bank loans and bank indebtedness -                                          
 net borrowings                          (280)        -         -         - 
Bank credit facility arrangement                                            
 costs                                      -        (4)        -        (4)
Repay 6.1% senior unsecured notes           -         -  
    (450)        - 
Dividends                                 (83)      (83)     (166)     (163)
Issuance of Class B Non-Voting                                              
 Shares                                    25         3        32        10 
Distributions paid to non-                                                  
 controlling interests                     (3)       (4)       (7)      (14)
----------------------------------------------------------------------------
                                         (341)      (88)     (591)     (171)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION 


 
                                                                  Net income
                                           Operating income  attributable to
                                                     before           equity
Quarter                            Revenue amortization (1)  shareholders(2)
----------------------------------------------------------------------------
($millions Cdn except per share amounts)                                    
                                                                            
2013                                                                        
Second                               1,251              538              172
First                                1,319              601              224
2012                                                                        
Fourth                               1,210              501              129
Third                                1,278              567              238
Second                               1,231              493              169
First                                1,279              566              192
2011                                                                        
Fourth                               1,181              481               81
Third                                1,285              586              195
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                                                                            
                                             Basic earnings Diluted earnings
Quarter                      Net income(3)        per share        per share
----------------------------------------------------------------------------
($millions Cdn except per                                                   
 share amounts)                                                             
                                                                            
2013                                                                        
Second                                 182             0.38             0.38
First                                  235             0.50             0.49
2012                                                                        
Fourth                                 133             0.28             0.28
Third                                  248             0.53             0.53
Second                                 178             0.38             0.38
First                                  202             0.43             0.43
2011                                                                        
Fourth                                  84             0.18             0.18
Third                                  201             0.45             0.45
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(1) See definition and discussion under Key Performance Drivers in
MD&A.  
(2) In fiscal 2011, the Company discontinued construction of a
traditional wireless network and results of operations were reported
as discontinued operations. Net income from continuing operations
attributable to equity shareholders is substantially the same as net
income attributable to equity shareholders except in the fourth
quarter where it is $164 or $83 higher due to the net of tax
writedown of assets.  
(3) Net income attributable to both equity shareholders and
non-controlling interests. 
Quarterly revenue and operating income before amortization are
primarily impacted by the seasonality of the Media division and
fluctuate throughout the year due to a number of factors including
seasonal advertising and viewing patterns. Typically, the Media
business has higher revenue in the first quarter driven by the fall
launch of season premieres and high demand while the third quarter is
impacted by season finales and mid season launches. Advertising
revenue typically declines in the summer months of the fourth quarter
when viewership is generally lower. Operating income before
amortization in fiscal 2012 was also impacted by higher operating
costs in the Cable division in the first and second quarters which
included higher employee related costs, mainly related to bringing
the new customer service centres on line, as well as higher
marketing, sales and programming costs. The third and fourth quarters
of 2012 benefited from improved operating income before amortization
in the Cable business. 
Net income has fluctuated quarter-over-quarter primarily as a result
of the changes in operating income before amortization described
above and the impact of the net change in non-operating items. In the
second quarter of 2013, net income decreased by $53 million primarily
due to lower operating income before amortization of $63 million
partially offset by lower income taxes of $5 million. In the first
quarter of 2013, net income increased $102 million primarily due to
higher operating income before amortization of $100 million. In the
fourth quarter of 2012, net income decreased $115 million, primarily
due to lower operating income before amortization of $66 million and
increased income tax expense of $31 million. The fourth quarter also
included a loss of $26 million in respect of the electrical fire at
the Company's head office offset by a pension curtailment gain of $25
million. In the third quarter of 2012, net income increased $70
million due to higher operating income before amortization of $74
million and lower amortization of $9 million partially offset by
increased income tax expense of $17 million. In the second quarter of
2012, net income decreased $24 million due to a decline in operating
income before amortization of $73 million partially offset by lower
income tax expense of $53 million. Net income increased $118 million
in the first quarter of 2012 due to the combined impact of higher
operating income before amortization of $85 million and income tax
expense of $18 million in the first quarter and the loss from
discontinued operations of $84 million and gain on redemption of debt
of $23 million recorded in the preceding quarter. In the fourth
quarter of 2011 net income declined $117 million due to lower
operating income before amortization of $105 million and the loss of
$83 million in respect of the wireless discontinued operations
partially offset by the gain on redemption of debt and the
restructuring activities in the previous quarter. As a result of the
aforementioned changes in net income, basic and diluted earnings per
share have trended accordingly.  
ACCOUNTING STANDARDS 
Update to critical accounting policies and estimates 
The MD&A included in the Company's August 31, 2012 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. The condensed 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. 
Adoption of recent accounting pronouncements 
The Company adopted the following standards and amendments effective
September 1, 2012: 
(i) Employee Benefits  
IAS 19, Employee Benefits (amended 2011), eliminates the existing
option to defer actuarial gains and losses and requires changes from
the remeasurement of defined benefit plan assets and liabilities to
be presented in the statement of other comprehensive income. The
significant amendments to IAS 19 which impact the Company are as
follows: 


 
--  Expected return on plan assets is replaced with interest income and
    calculated based on the discount rate used to measure the pension
    obligation; the difference between interest income and actual return on
    plan assets is recognized in other comprehensive income 
--  Immediate recognition of past service costs when plan amendments occur
    regardless of whether or not they are vested 
--  Plan administration costs, other than costs associated with managing
    plan assets, are required to be expensed 
--  Expanded disclosures including plan characteristics and risks arising
    from defined benefit plans 

 
The Company early adopted the amended standard with retrospective
restatement effective September 1, 2012 and the impact of adoption is
outlined in Note 2 of the consolidated financial statements.  
(ii) Presentation of Financial Statements  
IAS 1, Presentation of Financial Statements, was amended to require
presentation of items of other comprehensive income based on whether
they may be reclassified to the statement of income and has been
applied retrospectively.  
(iii) Income Taxes  
IAS 12, Income Taxes (amended 2011), introduces an exception to the
general measurement requirements of IAS 12 in respect of investment
properties measured at fair value. The amendment had no impact on the
Company's consolidated financial statements. 
2013 GUIDANCE 
The Company's preliminary view with respect to 2013 guidance was
provided coincident with the release of its fourth quarter results on
October 25, 2012. The Company is now updating its guidance. The
Company anticipates modest growth in consolidated revenue and
operating income before amortization. During fiscal 2013 the Company
plans to continue to enhance its network, provide innovative product
offerings, and launch the Anik G1 satellite and expects consolidated
capital investment, excluding the capital funded through the
accelerated capital fund, to decline marginally from 2012 levels. The
Company expects to deliver consolidated free cash flow of
approximately $550 million. 
Certain important assumptions for 2013 guidance purposes include:
continued overall customer growth; stable pricing environment for
Shaw's products relative to current rates; no significant market
disruption or other significant changes in economic conditions,
competition or regulation that would have a material impact; stable
advertising demand and rates; and a stable regulatory environment.  
See the following section entitled "Caution Concerning
Forward-Looking Statements". 
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS 
Statements included in this MD&A that are not historic constitute
"forward-looking statements" within the meaning of applicable
securities laws. Such statements include, but are not limited to,
statements about future capital expenditures, asset dispositions,
financial guidance for future performance, business strategies and
measures to implement strategies, competitive strengths, expansion
and growth of Shaw's business and operations and other goals and
plans. They can generally be identified by words such as
"anticipate", "believe", "expect", "plan", "intend", "target", "goal"
and similar expressions (although not all forward-looking statements
contain such words). All of the forward-looking statements made in
this report are qualified by these cautionary statements. 
Forward-looking statements are based on assumptions 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 conditions, interest and exchange rates,
technology deployment, content and equipment costs, industry
structure, conditions and stability, government regulation and the
integration of recent acquisitions. Many of these assumptions are
confidential. 
You should not place undue reliance on any forward-looking
statements. Many factors, including those not within Shaw's control,
may cause Shaw's actual results to be materially different from the
views expressed or implied by such forward-looking statements,
including, but not limited to, general economic, market and business
conditions; changes in the competitive environment in the markets in
which Shaw operates and from the development of new markets for
emerging technologies; industry trends and other changing conditions
in the entertainment, information and communications industries;
Shaw's ability to execute its strategic plans; opportunities that may
be presented to and pursued by Shaw; changes in laws, regulations and
decisions by regulators that affect Shaw or the markets in which it
operates; Shaw's status as a holding company with separate operating
subsidiaries; and other factors referenced in this report under the
heading "Risks and uncertainties". 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 described herein. 
The Company provides certain financial guidance for future
performance as the Company believes that certain investors, analysts
and others utilize this 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 this or other purposes.  
Any forward-looking statement speaks only as of the date on which it
was originally made and, except as required by law, Shaw expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement to reflect any change in
related assumptions, events, conditions or circumstances. 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
(unaudited) 


 
                                                                            
 (millions of Canadian dollars)           February 28, 2013  August 31, 2012
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current                                                                     
  Cash                                                  116              427
  Accounts receivable                                   515              433
  Inventories                                           107              102
  Other current assets                                   79               89
  Derivative instruments                                  2                -
  Assets held for sale (note 4)                         397                -
----------------------------------------------------------------------------
                                                      1,216            1,051
Investments and other assets (note 4)                    78               13
Property, plant and equipment                         3,126            3,242
Other long-term assets                                  340              331
Assets held for sale                                      -                1
Deferred income tax assets                                6               14
Intangibles                                           7,168            7,355
Goodwill                                                634              715
----------------------------------------------------------------------------
                                                     12,568           12,722
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current                                                                     
  Accounts payable and accrued liabilities              856              811
  Provisions                                             21               19
  Deposit on sale of cable assets (note 4)              250                -
  Income taxes payable                                   84              156
  Unearned revenue                                      166              157
  Current portion of long-term debt (note                                   
   6)                                                   350              451
  Derivative instruments                                  -                1
  Liabilities associated with assets held                                   
   for sale (note 4)                                     78                -
----------------------------------------------------------------------------
                                                      1,805            1,595
Long-term debt (note 6)                               4,465            4,812
Other long-term liabilities (notes 2 and                                    
 11)                                                    243              553
Provisions                                                8                8
Deferred credits (note 4)                               687              635
Deferred income tax liabilities                       1,051            1,085
----------------------------------------------------------------------------
                                                      8,259            8,688
Shareholders' equity (notes 2, 7 and 9)                                     
Common and preferred shareholders                     4,014            3,753
Non-controlling interests in subsidiaries               295              281
----------------------------------------------------------------------------
                                                      4,309            4,034
----------------------------------------------------------------------------
                                                     12,568           12,722
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 
CONSOLIDATED STATEMENTS OF INCOME 
(unaudited) 


 
                                     Three months ended    Six months ended 
                                    ------------------- ------------------- 
                                               February  February  February 
(millions of Canadian dollars except February       29,       28,       29, 
 per share amounts)                  28, 2013      2012      2013      2012 
----------------------------------------------------------------------------
Revenue (note 3)                        1,251     1,231     2,570     2,510 
Operating, general and                                                      
 administrative expenses (note 5)         713       738     1,431     1,451 
----------------------------------------------------------------------------
Operating income before amortization                                        
 (note 3)                                 538       493     1,139     1,059 
Amortization:                                                               
  Deferred equipment revenue               30        28        60        56 
  Deferred equipment costs                (64)      (57)     (127)     (110)
  Property, plant and equipment,                                            
   intangibles and other                 (177)     (178)     (352)     (347)
----------------------------------------------------------------------------
Operating income                          327       286       720       658 
  Amortization of financing costs -                                         
   long-term debt                          (1)       (1)       (2)       (2)
  Interest expense                        (77)      (83)     (159)     (165)
  Gain on derivative instruments            -         1         -         1 
  Accretion of long-term liabilities                                        
   and provisions                          (2)       (3)       (5)       (7)
  Equity income from associates             -         1         -         1 
  Other gains (losses) (note 12)           (2)        1        (6)       (5)
----------------------------------------------------------------------------
Income before income taxes                245       202       548       481 
  Current income tax expense (note                                          
   3)                                      47        62        85       146 
  Deferred income tax expense                                               
   (recovery)                              16       (38)       46       (45)
----------------------------------------------------------------------------
Net income                                182       178       417       380 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income attributable to:                                                 
Equity shareholders                       172       169       396       361 
Non-controlling interests in                                                
 subsidiaries                              10         9        21        19 
----------------------------------------------------------------------------
                                          182       178       417       380 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share (note 8)                                                 
Basic                                    0.38      0.38      0.88      0.81 
Diluted                                  0.38      0.38      0.87      0.80 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(unaudited) 


 
                                      Three months ended   Six months ended 
                                      ------------------ ------------------ 
                                       February February  February          
                                            28,     29,        28, February 
(millions of Canadian dollars)             2013     2012      2013 29, 2012 
----------------------------------------------------------------------------
Net income                                  182      178       417      380 
                                                                            
Other comprehensive income (note 9)                                         
Items that may subsequently be                                              
 reclassified to income:                                                    
  Change in unrealized fair value of                                        
   derivatives designated as cash flow                                      
   hedges                                     1       (2)        2        - 
  Adjustment for hedged items                                               
   recognized in the period                   -        -         -       (1)
----------------------------------------------------------------------------
                                              1       (2)        2       (1)
----------------------------------------------------------------------------
Comprehensive income                        183      176       419      379 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Comprehensive income attributable to:                                       
Equity shareholders                         173      167       398      360 
Non-controlling interests in                                                
 subsidiaries                                10        9        21       19 
----------------------------------------------------------------------------
                                            183      176       419      379 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 
(unaudited)  


 
Six months ended February 28, 2013                                          
                                         Attributable to equity shareholders
                        ----------------------------------------------------
                                                                Accumulated 
                                                                     other  
(millions of Canadian          Share Contributed     Retained comprehensive 
 dollars)                    capital     surplus     earnings          loss 
----------------------------------------------------------------------------
Balance as at September                                                     
 1, 2012                       2,750          77        1,019           (93)
Net income                         -           -          396             - 
Other comprehensive                                                         
 income                            -           -            -             2 
----------------------------------------------------------------------------
Comprehensive income               -           -          396             2 
Dividends                          -           -         (172)            - 
Dividend reinvestment                                                       
 plan                             57           -          (57)            - 
Shares issued under                                                         
 stock option plan                37          (5)           -             - 
Share-based compensation           -           3            -             - 
Distributions declared                                                      
 by subsidiaries to non-                                                    
 controlling interests             -           -            -             - 
----------------------------------------------------------------------------
Balance as at February                                                      
 28, 2013                      2,844          75        1,186           (91)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
Six months ended February 28, 2013                             
                        Attributable                           
                           to equity                           
                        shareholders                           
                        -------------                          
                                           Equity              
                                     attributable              
                                          to non-              
(millions of Canadian                 controlling              
 dollars)                      Total    interests Total equity 
---------------------------------------------------------------
Balance as at September                                        
 1, 2012                       3,753          281        4,034 
Net income                       396           21          417 
Other comprehensive                                            
 income                            2            -            2 
---------------------------------------------------------------
Comprehensive income             398           21          419 
Dividends                       (172)           -         (172)
Dividend reinvestment                                          
 plan                              -            -            - 
Shares issued under                                            
 stock option plan                32            -           32 
Share-based compensation           3            -            3 
Distributions declared                                         
 by subsidiaries to non-                                       
 controlling interests             -           (7)          (7)
---------------------------------------------------------------
Balance as at February                                         
 28, 2013                      4,014          295        4,309 
---------------------------------------------------------------
---------------------------------------------------------------
 

 
Six months ended February 29, 2012                                          
                                         Attributable to equity shareholders
                        ----------------------------------------------------
                                                                Accumulated 
                                                                      other 
(millions of Canadian          Share Contributed     Retained comprehensive 
 dollars)                    capital     surplus     earnings          loss 
----------------------------------------------------------------------------
Balance as at September                                                     
 1, 2011                       2,633          73          728           (29)
Net income                         -           -          361             - 
Other comprehensive                                                         
 income                            -           -            -            (1)
----------------------------------------------------------------------------
Comprehensive income               -           -          361            (1)
Dividends                          -           -         (168)            - 
Dividend reinvestment                                                       
 plan                             47           -          (47)            - 
Shares issued under                                                         
 stock option plan                11          (1)           -             - 
Share-based compensation           -           3            -             - 
Distributions declared                                                      
 by subsidiaries to non-                                                    
 controlling interests             -           -            -             - 
----------------------------------------------------------------------------
Balance as at February                                                      
 29, 2012                      2,691          75          874           (30)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
Six months ended February 29, 2012                             
                        Attributable                           
                           to equity                           
                        shareholders                           
                        -------------                          
                                           Equity              
                                     attributable              
                                          to non-              
(millions of Canadian                 controlling              
 dollars)                      Total    interests Total equity 
---------------------------------------------------------------
Balance as at September                                        
 1, 2011                       3,405          272        3,677 
Net income                       361           19          380 
Other comprehensive                                            
 income                           (1)           -           (1)
---------------------------------------------------------------
Comprehensive income             360           19          379 
Dividends                       (168)           -         (168)
Dividend reinvestment                                          
 plan                              -            -            - 
Shares issued under                                            
 stock option plan                10            -           10 
Share-based compensation           3            -            3 
Distributions declared                                         
 by subsidiaries to non-                                       
 controlling interests             -          (12)         (12)
---------------------------------------------------------------
Balance as at February                                         
 29, 2012                      3,610          279        3,889 
---------------------------------------------------------------
---------------------------------------------------------------

 
See accompanying notes 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(unaudited) 


 
                                 Three months ended        Six months ended 
                            ----------------------- ----------------------- 
(millions of Canadian          February    February    February    February 
 dollars)                      28, 2013    29, 2012    28, 2013    29, 2012 
----------------------------------------------------------------------------
                                                                            
OPERATING ACTIVITIES                                                        
Funds flow from operations                                                  
 (note 10)                          386         164         513         520 
Net decrease (increase) in                                                  
 non-cash working capital                                                   
 balances related to                                                        
 operations                          48          40         (50)         (7)
----------------------------------------------------------------------------
                                    434         204         463         513 
----------------------------------------------------------------------------
INVESTING ACTIVITIES                                                        
 Additions to property,                                                     
  plant and equipment (note                                                 
  3)                               (159)       (227)       (310)       (440)
 Additions to equipment                                                     
  costs (net) (note 3)              (36)        (47)        (76)       (105)
 Additions to other                                                         
  intangibles (note 3)               (7)        (17)        (28)        (36)
 Net addition to inventories         (9)        (20)         (6)        (43)
 Deposit on sale of                                                         
  cablesystem (note 4)              250           -         250           - 
 Proceeds on sale of                                                        
  wireless spectrum license                                                 
  option (note 4)                    50           -          50           - 
 Proceeds on disposal of                                                    
  property, plant and                                                       
  equipment (note 3)                  -           -           3           8 
 Additions to investments                                                   
  and other assets (note 4)         (66)         (9)        (66)         (9)
----------------------------------------------------------------------------
                                     23        (320)       (183)       (625)
----------------------------------------------------------------------------
FINANCING ACTIVITIES                                                        
 Decrease in bank                                                           
  indebtedness                      (30)          -           -           - 
 Increase in long-term debt          90           -         590           - 
 Debt repayments                   (340)          -      (1,040)          - 
 Bank credit facility                                                       
  arrangement costs                   -          (4)          -          (4)
 Issue of Class B Non-Voting                                                
  Shares (note 7)                    25           3          32          10 
 Dividends paid on Class A                                                  
  Shares and Class B Non-                                                   
  Voting Shares                     (79)        (79)       (159)       (155)
 Dividends paid on Preferred                                                
  Shares                             (4)         (4)         (7)         (8)
 Distributions paid to non-                                                 
  controlling interests in                                                  
  subsidiaries                       (3)         (4)         (7)        (14)
----------------------------------------------------------------------------
                                   (341)        (88)       (591)       (171)
----------------------------------------------------------------------------
Increase (decrease) in cash                                                 
 before discontinued                                                        
 operations                         116        (204)       (311)       (283)
Decrease in cash from                                                       
 discontinued operations              -          (2)          -          (3)
----------------------------------------------------------------------------
Increase (decrease) in cash         116        (206)       (311)       (286)
Cash, beginning of the                                                      
 period                               -         363         427         443 
----------------------------------------------------------------------------
Cash, end of the period             116         157         116         157 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Shaw Communications Inc. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited) 
February 28, 2013 and February 29, 2012 
(all amounts in millions of Canadian dollars, except share and per
share amounts) 
1. CORPORATE INFORMATION 
Shaw Communications Inc. (the "Company") is a diversified Canadian
communications company whose core operating business is providing
broadband cable television services, Internet, Digital Phone, and
telecommunications services ("Cable"); Direct-to-home satellite
services and satellite distribution services ("Satellite"); and
programming content (through Shaw Media). The Company's shares are
listed on the Toronto and New York Stock Exchanges.  
2. BASIS OF PRESENTATION AND ACCOUNTING POLICIES 
Statement of compliance 
These condensed interim consolidated financial statements of the
Company have been prepared in accordance with International Financial
Reporting Standards ("IFRS") and in compliance with International
Accounting Standard ("IAS") 34 Interim Financial Reporting as issued
by the International Accounting Standards Board ("IASB"). 
The condensed interim consolidated financial statements of the
Company for the three and six months ended February 28, 2013 were
authorized for issue by the Board of Directors on April 11, 2013.  
Basis of presentation 
These condensed interim consolidated financial statements have been
prepared primarily under the historical cost convention except as
detailed in the significant accounting policies disclosed in the
Company's consolidated financial statements for the year ended August
31, 2012 and are expressed in millions of Canadian dollars. The
condensed interim consolidated statements of income are presented
using the nature classification for expenses.  
The notes presented in these condensed interim consolidated financial
statements include only significant events and transactions occurring
since the Company's last fiscal year end and are not fully inclusive
of all matters required to be disclosed by IFRS in the Company's
annual consolidated financial statements. As a result, these
condensed interim consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements for
the year ended August 31, 2012. 
The condensed interim consolidated financial statements follow the
same accounting policies and methods of application as the most
recent annual consolidated financial statements except as noted
below. 
Adoption of recent accounting pronouncements 
The Company adopted the following standards and amendments effective
September 1, 2012. 
(i) Employee Benefits 
IAS 19, Employee Benefits (amended 2011), eliminates the existing
option to defer actuarial gains and losses and requires changes from
the remeasurement of defined benefit plan assets and liabilities to
be presented in the statement of other comprehensive income. The
significant amendments to IAS 19 which impact the Company are as
follows: 


 
--  Expected return on plan assets is replaced with interest income and
    calculated based on the discount rate used to measure the pension
    obligation; the difference between interest income and actual return on
    plan assets is recognized in other comprehensive income 
--  Immediate recognition of past service costs when plan amendments occur
    regardless of whether or not they are vested 
--  Plan administration costs, other than costs associated with managing
    plan assets, are required to be expensed 
--  Expanded disclosures including plan characteristics and risks arising
    from defined benefit plans 

 
The Company early adopted the amended standard with retrospective
restatement which resulted in an increase in other long-term
liabilities and decrease in retained earnings by $1 at August 31,
2012. There was no impact on the Company's consolidated statements of
income, comprehensive income or cash flows for 2012. 
(ii) Presentation of Financial Statements  
IAS 1, Presentation of Financial Statements, was amended to require
presentation of items of other comprehensive income based on whether
they may be reclassified to the statement of income and has been
applied retrospectively.  
(iii) Income Taxes 
IAS 12, Income Taxes (amended 2011), introduces an exception to the
general measurement requirements of IAS 12 in respect of investment
properties measured at fair value. The amendment had no impact on the
Company's consolidated financial statements. 
3. BUSINESS SEGMENT INFORMATION 
The Company's operating segments are Cable, Satellite and Media, all
of which are substantially located in Canada. Shaw Media's operating
results are affected by seasonality and fluctuate throughout the year
due to a number of factors including seasonal advertising and viewing
patterns. As such, operating results for an interim period should not
be considered indicative of full fiscal year performance. In general,
advertising revenues are higher during the first quarter and lower
during the fourth quarter and expenses are incurred more evenly
throughout the year. Information on operations by segment is as
follows: 
Operating information 


 
                            Three months ended          Six months ended    
                        ----------------------------------------------------
                        February 28, February 29,  February 28, February 29,
                                2013         2012          2013         2012
                                   $            $             $            $
----------------------------------------------------------------------------
Revenue                                                                     
  Cable                          814          804         1,623        1,596
  Satellite (1)                  209          211           423          420
  Media                          249          242           568          541
----------------------------------------------------------------------------
                               1,272        1,257         2,614        2,557
Intersegment                                                                
 eliminations                    (21)        (26)           (44)        (47)
----------------------------------------------------------------------------
                               1,251        1,231         2,570        2,510
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income before                                                     
 amortization (2)                                                           
  Cable                          393          352           789          729
  Satellite (1)                   73           71           147          140
  Media                           72           70           203          190
----------------------------------------------------------------------------
                                 538          493         1,139        1,059
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest                                                                    
  Operating                       76           82           158          164
  Burrard Landing Lot 2                                                     
   Holdings Partnership            1            1             1            1
----------------------------------------------------------------------------
                                  77           83           159          165
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current taxes                                                               
  Operating                       75           64           155          148
  Other/non-operating            (28)         (2)           (70)         (2)
----------------------------------------------------------------------------
                                  47           62            85          146
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) The Satellite segment was previously reported as DTH and Satellite      
    Services. These segments have been combined into a single operating     
    segment for reporting purposes which is consistent with the operating   
    segment reporting that is provided to the chief operating decision      
    makers.                                                                 
(2) The current three and six month periods include the impact of an        
    adjustment to align certain broadcast license fees with the CRTC billing
    period. The adjustment amounted to $7, $4 and $3 for Cable, Satellite   
    and Media, respectively.                                                
                                                                            
Capital expenditures                                                        
                                                                            
                             Three months ended         Six months ended    
                         ---------------------------------------------------
                         February 28, February 29, February 28, February 29,
                                 2013         2012         2013         2012
                                    $            $            $            $
----------------------------------------------------------------------------
Capital expenditures                                                        
 accrual basis                                                              
  Cable (including                                                          
   corporate) (1)                 165          215          291          410
  Satellite (net of                                                         
   equipment profit)                4            2            7            4
  Media                             6            7           10           13
----------------------------------------------------------------------------
                                  175          224          308          427
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equipment costs (net of                                                     
 revenue)                                                                   
  Cable                            11           19           25           47
  Satellite                        17           23           39           46
----------------------------------------------------------------------------
                                   28           42           64           93
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital expenditures and                                                    
 equipment costs (net)                                                      
  Cable                           176          234          316          457
  Satellite                        21           25           46           50
  Media                             6            7           10           13
----------------------------------------------------------------------------
                                  203          266          372          520
----------------------------------------------------------------------------
Reconciliation to                                                           
 Consolidated Statements                                                    
 of Cash Flows                                                              
  Additions to property,                                                    
   plant and equipment            159          227          310          440
  Additions to equipment                                                    
   costs (net)                     36           47           76          105
  Additions to other                                                        
   intangibles                      7           17           28           36
----------------------------------------------------------------------------
  Total of capital                                                          
   expenditures and                                                         
   equipment costs (net)                                                    
   per Consolidated                                                         
   Statements of Cash                                                       
   Flows                          202          291          414          581
  Increase (decrease) in                                                    
   working capital                                                          
   related to capital                                                       
   expenditures                     9          (20)         (26)        (40)
  Increase in customer                                                      
   equipment financing                                                      
   receivables                    (8)           (5)         (12)        (12)
  Less: Proceeds on                                                         
   disposal of property,                                                    
   plant and equipment              -            -           (3)         (8)
  Less: Satellite                                                           
   equipment profit (2)             -            -           (1)         (1)
----------------------------------------------------------------------------
  Total capital                                                             
   expenditures and                                                         
   equipment costs (net)                                                    
   reported by segments           203          266          372          520
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) Includes $10 related to certain capital investments which are being     
    funded from the accelerated capital fund.                               
(2) The profit from the sale of satellite equipment is subtracted from the  
    calculation of segmented capital expenditures and equipment costs (net) 
    as the Company views the profit on sale as a recovery of expenditures on
    customer premise equipment.                                             

 
4. PURCHASE AND SALE OF ASSETS 
During the current quarter, the Company entered into agreements with
Rogers Communications Inc. ("Rogers") to sell to Rogers its shares in
Mountain Cablevision Limited ("Mountain Cable") and grant to Rogers
an option to acquire its wireless spectrum licenses as well as to
purchase from Rogers its 33.3% interest in TVtropolis General
Partnership ("TVtropolis"). The transactions are subject to
applicable regulatory approvals. The Mountain Cable and TVtropolis
transactions are expected to close this year while the exercise of
the option and the sale of the wireless spectrum licenses is expected
to occur in fiscal 2015. The transactions are strategic in nature
allowing the Company to use a portion of the net proceeds to
accelerate various capital investments to improve and strengthen its
network advantage. 
The assets and liabilities associated with Mountain Cable and
classified as held for sale in the statement of financial position at
February 28, 2013 are as follows: 


 
                                                                       $    
----------------------------------------------------------------------------
Accounts receivable                                                    2    
Inventories                                                            1    
Property, plant and equipment                                         65    
Other long-term assets                                                 3    
Intangibles                                                          245    
Goodwill                                                              81    
----------------------------------------------------------------------------
                                                                     397    
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Accounts payable and accrued liabilities                               1    
Income tax payable                                                     1    
Unearned revenue                                                       2    
Deferred credits                                                       1    
Deferred income taxes                                                 73    
----------------------------------------------------------------------------
                                                                      78    
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Mountain Cable has approximately 40,000 video customers in its
operations based in Hamilton, Ontario. It represents a disposal group
within the cable operating segment and accordingly, is not presented
as discontinued operations in the statement of income. The Company
received $250 as a deposit in respect of the purchase price. 
The wireless spectrum licenses are not classified as assets held for
sale due to regulatory restrictions preventing the exercise of the
option and subsequent transfer of the licenses until fiscal 2015. The
$50 received for the purchase price of the option to acquire the
wireless spectrum licenses is included in deferred credits and will
be included as part of the proceeds received on exercise of the
option and sale of the wireless spectrum licenses, or alternatively
as a gain if the option is not exercised and expires. 
The $59 deposit paid to acquire the non-controlling interest in
TVtropolis is included in investments and other assets.  
5. OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES 


 
                          Three months ended           Six months ended     
                    --------------------------------------------------------
                      February 28, February 29,   February 28,  February 29,
                              2013          2012          2013          2012
                                 $             $             $             $
----------------------------------------------------------------------------
Employee salaries                                                           
 and benefits                  225           212           441           411
Purchases of goods                                                          
 and services                  488           526           990         1,040
----------------------------------------------------------------------------
                               713           738         1,431         1,451
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
6. LONG-TERM DEBT  


 
                                              February 28, 2013             
                               ---------------------------------------------
                                Long-term debt     Adjustment Long-term debt
                                  at amortized    for finance   repayable at
                                          cost          costs       maturity
                                             $              $              $
----------------------------------------------------------------------------
Corporate                                                                   
Cdn Senior notes-                                                           
 6.10% due November 16, 2012                 -              -              -
 7.50% due November 20, 2013               349              1            350
 6.50% due June 2, 2014                    598              2            600
 6.15% due May 9, 2016                     296              4            300
 5.70% due March 2, 2017                   397              3            400
 5.65% due October 1, 2019               1,243              7          1,250
 5.50% due December 7, 2020                496              4            500
 6.75% due November 9, 2039              1,416             34          1,450
----------------------------------------------------------------------------
                                         4,795             55          4,850
----------------------------------------------------------------------------
Other                                                                       
Burrard Landing Lot 2 Holdings                                              
 Partnership                                20              -             20
----------------------------------------------------------------------------
Total consolidated debt                  4,815             55          4,870
Less current portion (1)                   350              1            351
----------------------------------------------------------------------------
                                         4,465             54          4,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
 
                                               August 31, 2012              
                               ---------------------------------------------
                                Long-term debt                Long-term debt
                                  at amortized Adjustment for   repayable at
                                          cost  finance costs       maturity
                                             $              $              $
----------------------------------------------------------------------------
Corporate                                                                   
Cdn Senior notes-                                                           
 6.10% due November 16, 2012               450              -            450
 7.50% due November 20, 2013               349              1            350
 6.50% due June 2, 2014                    598              2            600
 6.15% due May 9, 2016                     295              5            300
 5.70% due March 2, 2017                   397              3            400
 5.65% due October 1, 2019               1,242              8          1,250
 5.50% due December 7, 2020                496              4            500
 6.75% due November 9, 2039              1,416             34          1,450
----------------------------------------------------------------------------
                                         5,243             57          5,300
----------------------------------------------------------------------------
Other                                                                       
Burrard Landing Lot 2 Holdings                                              
 Partnership                                20              -             20
----------------------------------------------------------------------------
Total consolidated debt                  5,263             57          5,320
Less current portion (1)                   451              -            451
----------------------------------------------------------------------------
                                         4,812             57          4,869
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) Current portion of long-term debt at February 28, 2013 includes the     
    7.50% senior notes due November 20, 2013 and the amount due within one  
    year on the Partnership's mortgage bonds.                               

 
7. SHARE CAPITAL 
Changes in share capital during the six months ended February 28,
2013 are as follows: 


 
                                         Class B Non-Voting                 
                          Class A Shares       Shares       Preferred Shares
                        ----------------------------------------------------
                           Number     $     Number      $     Number     $  
----------------------------------------------------------------------------
August 31, 2012           22,520,064    2 421,188,697 2,455  12,000,000  293
Issued upon stock option                                                    
 plan exercises                    -    -   1,689,155    37           -    -
Issued pursuant to                                                          
 dividend reinvestment                                                      
 plan                              -    -   2,647,035    57           -    -
----------------------------------------------------------------------------
February 28, 2013         22,520,064    2 425,524,887 2,549  12,000,000  293
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
8. EARNINGS PER SHARE 
Earnings per share calculations are as follows: 


 
                               Three months ended       Six months ended    
                            ------------------------------------------------
                               February    February    February    February 
                               28, 2013    29, 2012    28, 2013    29, 2012 
----------------------------------------------------------------------------
Numerator for basic and                                                     
 diluted earnings per share                                                 
 ($)                                                                        
Net income                          182         178         417         380 
Deduct: net income                                                          
 attributable to non-                                                       
 controlling interests              (10)         (9)        (21)        (19)
Deduct: dividends on                                                        
 Preferred Shares                    (2)         (3)         (6)         (7)
----------------------------------------------------------------------------
Net income attributable to                                                  
 common shareholders                170         166         390         354 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Denominator (millions of                                                    
 shares)                                                                    
Weighted average number of                                                  
 Class A Shares and Class B                                                 
 Non-Voting Shares for basic                                                
 earnings per share                 446         440         445         439 
Effect of dilutive                                                          
 securities (1)                       2           1           1           1 
----------------------------------------------------------------------------
Weighted average number of                                                  
 Class A Shares and Class B                                                 
 Non-Voting Shares for                                                      
 diluted earnings per share         448         441         446         440 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share ($)                                                      
Basic                              0.38        0.38        0.88        0.81 
Diluted                            0.38        0.38        0.87        0.80 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The earnings per share calculation does not take into consideration the 
    potential dilutive effect of certain stock options since their impact is
    anti-dilutive. For the three and six months ended February 28, 2013,    
    7,896,069 (2012 - 17,695,273) and 9,512,465 (2012 - 12,469,488) options 
    were excluded from the diluted earnings per share calculation,          
    respectively.                                                           

 
9. OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE
LOSS 
Components of other comprehensive income and the related income tax
effects for the six months ended February 28, 2013 are as follows: 


 
                                                         Income             
                                              Amount      taxes          Net
                                                   $          $            $
----------------------------------------------------------------------------
Items that may subsequently be                                              
 reclassified to income                                                     
  Change in unrealized fair value of                                        
   derivatives designated as cash flow                                      
   hedges                                          3         (1)           2
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive income and the related income tax
effects for the three months ended February 28, 2013 are as follows: 


 
                                                         Income             
                                              Amount      taxes          Net
                                                   $          $            $
----------------------------------------------------------------------------
Items that may subsequently be                                              
 reclassified to income                                                     
  Change in unrealized fair value of                                        
   derivatives designated as cash flow                                      
   hedges                                          2         (1)           1
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive income and the related income tax
effects for the six months ended February 29, 2012 are as follows: 


 
                                             Amount Income taxes        Net 
                                                  $            $          $ 
----------------------------------------------------------------------------
Items that may subsequently be                                              
 reclassified to income                                                     
  Adjustment for hedged items recognized                                    
   in the period                                 (1)           -         (1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive income and the related income tax
effects for the three months ended February 29, 2012 are as follows: 


 
                                             Amount Income taxes        Net 
                                                  $            $          $ 
----------------------------------------------------------------------------
Items that may subsequently be                                              
 reclassified to income                                                     
  Change in unrealized fair value of                                        
   derivatives designated as cash flow                                      
   hedges                                        (2)           -         (2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Accumulated other comprehensive loss is comprised of the following: 


 
                                                February 28,     August 31, 
                                                        2013           2012 
                                                           $              $ 
----------------------------------------------------------------------------
Items that may subsequently be reclassified                                 
 to income                                                                  
  Fair value of derivatives                                1             (1)
                                                                            
Items that will not be subsequently                                         
 reclassified to income                                                     
  Actuarial losses on employee benefit plans             (92)           (92)
----------------------------------------------------------------------------
                                                         (91)           (93)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
10. STATEMENTS OF CASH FLOWS 
Disclosures with respect to the Consolidated Statements of Cash Flows
are as follows: 
(i) Funds flow from operations  


 
                            Three months ended        Six months ended    
                         -------------------------------------------------
                            February February 29,    February February 29,
                            28, 2013         2012    28, 2013         2012
                                   $            $           $            $
--------------------------------------------------------------------------
Net income                       182          178         417          380
Adjustments to reconcile                                                  
 net income to funds flow                                                 
 from operations:                                                         
  Amortization                   212          208         421          403
  Program rights                 (15)        (12)         (65)        (49)
  Deferred income tax                                                     
   expense (recovery)             16         (38)          46         (45)
  Equity income from                                                      
   associates                      -          (1)           -          (1)
  CRTC benefit obligation                                                 
   funding                       (15)        (11)         (24)        (21)
  Share-based                                                             
   compensation                    1            1           2            3
  Defined benefit pension                                                 
   plans                           3            4        (295)           8
  Gain on derivative                                                      
   instruments                     -          (1)           -          (1)
  Realized loss on                                                        
   settlement of                                                          
   derivative instruments          -          (7)           -          (7)
  Accretion of long-term                                                  
   liabilities and                                                        
   provisions                      2            3           5            7
  Settlement of amended                                                   
   cross-currency                                                         
   interest rate                                                          
   agreements                      -        (162)           -        (162)
  Other                            -            2           6            5
--------------------------------------------------------------------------
Funds flow from                                                           
 operations                      386          164         513          520
--------------------------------------------------------------------------
--------------------------------------------------------------------------

 
(ii) Interest and income taxes paid and classified as operating
activities are as follows:  


 
                          Three months ended           Six months ended     
                    --------------------------------------------------------
                      February 28,  February 29,  February 28,  February 29,
                              2013          2012          2013          2012
                                 $             $             $             $
----------------------------------------------------------------------------
Interest                        35            33           166           164
Income taxes                    65            57           131           116
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(iii) Non-cash transaction:  
The Consolidated Statements of Cash Flows exclude the following
non-cash transaction: 


 
                             Three months ended         Six months ended    
                        ----------------------------------------------------
                         February 28, February 29, February 28, February 29,
                                 2013         2012         2013         2012
                                    $            $            $            $
----------------------------------------------------------------------------
Issuance of Class B Non-                                                    
 Voting Shares:                                                             
  Dividend reinvestment                                                     
   plan                            29           22           57           47
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
11. OTHER LONG-TERM LIABILITIES 
During the first quarter, the Company's non-contributory defined
pension plan became partially funded as the Company made
discretionary contributions of $300 to a Retirement Compensation
Arrangement Trust.  
12. OTHER GAINS (LOSSES) 
Other losses 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 minor investments, and the Company's share of the
operations of Burrard Landing Lot 2 Holdings Partnership. The
category also includes amounts in respect of the electrical fire and
resulting water damage to Shaw Court that occurred during the fourth
quarter of fiscal 2012. During the current year, the Company received
insurance advances of $5 related to its claim for costs that were
incurred in the fourth quarter of fiscal 2012 and incurred additional
costs of $10 in respect of ongoing recovery activities. 
13. SUBSEQUENT EVENTS 
On March 4, 2013, the Company announced a number of agreements with
Corus Entertainment Inc. ("Corus"), a related party subject to common
voting control. In a series of agreements to optimize its portfolio
of specialty channels, the Company has agreed to sell to Corus its
49% interest in ABC Spark and 50% interest in its two French-language
channels, Historia and Series+. In addition, Corus will sell to the
Company its 20% interest in Food Network Canada. The Company expects
to receive net proceeds of approximately $95 from these transactions. 
On April 8, 2013, the Company announced an agreement with Enmax
Corporation to acquire its wholly-owned subsidiary, ENMAX Envision
Inc. ("Envision") for approximately $225 in cash. Envision provides
telecommunication services to business customers in Calgary and the
surrounding area.
Contacts:
Shaw Communications Inc.
Investor Relations
Email: Investor.relations@sjrb.ca
Website: www.shaw.ca
 
 
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