Shaw Announces Third Quarter Financial and Operating Results and Improved 2013 Guidance

Shaw Announces Third Quarter Financial and Operating Results and Improved 2013 
Guidance 
- Third quarter and year-to-date consolidated revenues improved 4%
and 3%, respectively, over the same periods last year and operating
income before amortization was up 3% for the quarter and 6% for the
nine months ended May 31, 2013 
- Net income was $250 million for the quarter and $667 million for
the year-to-date period 
- 2013 financial guidance updated with free cash flow expected to
range from $590 to $600 million 
CALGARY, ALBERTA -- (Marketwired) -- 06/28/13 -- Shaw Communications
Inc. (TSX:SJR.B)(NYSE:SJR) announced consolidated financial and
operating results for the three and nine months ended May 31, 2013.
Consolidated revenue for the three and nine month periods of $1.33
billion and $3.90 billion, respectively, was up 4% and 3%,
respectively, over the comparable periods last year. Total operating
income before amortization(1) of $585 million improved 3% over the
comparable quarterly period and the year-to-date amount of $1.72
billion was up 6%. 
Free cash flow(1) for the three and nine month periods was $138
million and $543 million, respectively, compared to $203 million and
$379 million for the comparable periods last year. Increased
operating income before amortization and lower capital investment
were the main drivers of the improvement for the year-to-date period. 
Chief Executive Officer Brad Shaw said, "Our third quarter results
were solid as our executive team and our 14,000 employees continue to
deliver value for all our stakeholders through a focus on disciplined
growth and execution of our operating strategies. The quarter was
highlighted with the closing of a number of the strategic
transactions announced earlier in the year, including the
acquisitions of ENMAX Envision and Food Network Canada, and the
disposition of the Hamilton cable system and our interest in ABC
Spark." 
"During the quarter we continued to invest in our core business
including the acceleration of certain strategic capital initiatives
that reinforce our infrastructure advantage. The Anik G1 satellite
also successfully launched in April and in late May Shaw Direct added
over 140 channels to its offerings, primarily in HD. The investment
in Anik G1 brings our customers enhanced choice in programming,
including more local Canadian channels." 
Net income of $250 million or $0.52 per share for the quarter ended
May 31, 2013 compared to $248 million or $0.53 per share for the same
period last year. Net income for the first nine months of the year
was $667 million or $1.40 per share compared to $628 million or $1.34
per share. The net income improvement in both current periods was due
to increased operating income and a gain on the sale of the Hamilton
cable system partially offset by increased income taxes.  
Revenue in the Cable division of $825 million and $2.45 billion for
the current three and nine month periods increased 4% and 2%,
respectively, over the comparable periods. Operating income before
amortization for the quarter of $397 million was up 5% compared to
the same quarter last year and the year-to-date period improved 7% to
$1.19 billion.  
Satellite revenue of $218 million and $641 million for the three and
nine month periods, respectively, compared to $211 million and $631
million in the same periods last year. Operating income before
amortization for the current quarter was $72 million compared to $76
million last year and the year-to-date amount was up 1% from $216
million to $219 million.  
Revenue and operating income before amortization in the Media
division for the quarter of $307 million and $116 million,
respectively, increased 4% and 2% over the same period last year. On
a year-to-date basis Media revenue and operating income before
amortization each improved 5%.  
Severe floods in late June impacted Shaw services in various
locations across Southern Alberta. Technical, maintenance and
customer care teams took immediate action to repair services for
affected customers and proactive steps to maintain service and
prevent any significant damage to Shaw infrastructure. The strength
of the network redundancy and the tactical responsiveness ensured
service interruptions were kept to a minimal period of time. Global
News excelled in its extended special coverage of the crisis,
establishing itself as the authority of information for the
community. 
Brad Shaw continued "As we enter the final quarter of 2013 we are
seeing continued positive momentum across our divisions with ongoing
revenue growth and overall management of promotional activity and
costs. As a result, we are increasing our fiscal year 2013 guidance
and expect free cash flow to range from $590 to $600 million. Our
investments in brand, innovation and technology, and service
enhancements are driving sustainable growth and customer retention.
Given the improvement in free cash flow and continued favorable
market conditions, our Board plans to target dividend increases of 5%
to 10% over each of the next two years."  
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 exchanges
and is included in the S&P/TSX 60 Index (Symbol: TSX - SJR.B, NYSE -
SJR).  
The accompanying Management's Discussion and Analysis forms part of
this news release and the "Caution Concerning Forward Looking
Statements" applies to all forward-looking statements made in this
news release.  
(1) See definitions and discussion under Key Performance Drivers in
MD&A. 


 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS                    
                                MAY 31, 2013                                

 
June 27, 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 and 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                     
                      THIRD QUARTER ENDING MAY 31, 2013                     
                                                                            
Selected Financial Highlights                                               
                                                                            
                       Three months ended May 31,  Nine months ended May 31,
                      ---------------
------------ --------------------------
($ millions Cdn except                                                      
 per share amounts)       2013   2012    Change %    2013   2012    Change %
----------------------------------------------------------------------------
Operations:                                                                 
  Revenue                1,326  1,278         3.8   3,896  3,788         2.9
  Operating income                                                          
   before amortization                                                      
   (1)                     585    567         3.2   1,724  1,626         6.0
  Operating margin (1)                                                      
   (2)                   44.1%  44.4%       (0.3)   44.3%  42.9%         1.4
  Funds flow from                                                           
   operations (3)          438    424         3.3     951    944         0.7
  Net income               250    248         0.8     667    628         6.2
Per share data:                                                             
  Earnings per share                                                        
    Basic                 0.52   0.53                1.40   1.34            
    Diluted               0.52   0.53                1.39   1.33            
  Weighted average                                                          
   participating                                                            
   shares outstanding                                                       
   during period                                                            
   (millions)              449    441                 447    440            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  See definitions and discussion under Key Performance Drivers in MD&A.  
(2)  Operating margin for the nine months ended May 31, 2013 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 43.9%.                           
(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, 2) 


 
                                                     Growth                 
                                   -----------------------------------------
                                     Three months ended    Nine months ended
                             Total              May 31,              May 31,
                     ------------- -------------------- --------------------
                      May 31, 2013      2013       2012      2013       2012
---------------------------------- -----------------------------------------
Subscriber                                                                  
 statistics:                                                                
  Video customers        2,069,769  (26,578)   (21,277)  (79,980)   (53,819)
  Internet customers     1,879,942     4,157      2,230    17,469     31,790
  Digital phone lines    1,355,238    17,719     38,597    47,694    106,211
  DTH customers            904,400   (2,930)    (1,820)   (5,623)       (15)
----------------------------------------------------------------------------
(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.                                                               
                                                                            
(2) Subscriber numbers have been restated for comparative purposes to remove
    approximately 41,000 Video customers, 34,000 Internet customers and     
    38,000 Digital phone lines as a result of the sale of Mountain          
    Cablevision Limited.                                                    

 
Consolidated Overview 
Consolidated revenue of $1.33 billion and $3.90 billion for the three
and nine month periods, respectively, improved 3.8% and 2.9% over the
same periods last year. Consolidated operating income before
amortization for the three month period of $585 million was up 3.2%
and on a year-to-date basis increased 6.0% to $1.72 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 subscribe
r revenues partially
reduced by increased employee related amounts and higher programming
costs. Within all segments, the current year-to-date amount 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 6.2 million RGUs - which represents
the number of products sold to customers. During the quarter, overall
RGUs declined by 7,600. The Company continues to focus on refraining
from overly promotional pricing and instead on providing equipment to
customers. In the fourth quarter the Company plans to offer
contracts, with equipment offers, as an alternative for customers.  
Net income was $250 million and $667 million for the three and nine
months ended May 31, 2013, respectively, compared to $248 million and
$628 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. 


 
                       Nine                         Nine                    
                     months                       months                    
($millions Cdn)       ended                        ended                    
                  ---------                    ---------                    
                    May 31,                Non-  May 31,                Non-
                       2013 Operating operating     2012 Operating operating
----------------------------------------------------------------------------
Operating income      1,093     1,093         -    1,027     1,027         -
 Amortization of                                                            
  financing costs                                                           
  - long-term debt      (3)       (3)         -      (3)       (3)         -
 Interest expense     (234)     (234)         -    (247)     (247)         -
 Gain on sale of                                                            
  cablesystem            50         -        50        -         -         -
 Acquisition and                                                            
  divestment costs      (8)         -       (8)        -         -         -
 Gain on sale of                                                            
  associate               9         -         9        -         -         -
 Gain on                                                                    
  remeasurement of                                                          
  interests in                                                              
  equity                                                                    
  investments             -         -         -        6         -         6
 CRTC benefit                    
                                           
  obligation              -         -         -      (2)         -       (2)
 Gain on                                                                    
  derivative                                                                
  instruments             -         -         -        1         -         1
 Accretion of                                                               
  long-term                                                                 
  liabilities and                                                           
  provisions            (7)         -       (7)     (11)         -      (11)
 Equity income                                                              
  from associates         -         -         -        1         -         1
 Other losses           (9)         -       (9)      (2)         -       (2)
----------------------------------------------------------------------------
Income (loss)                                                               
 before income                                                              
 taxes                  891       856        35      770       777       (7)
 Current income                                                             
  tax expense                                                               
  (recovery)            147       240      (93)      197       218      (21)
 Deferred income                                                            
  tax expense                                                               
  (recovery)             77      (17)        94     (55)      (48)       (7)
----------------------------------------------------------------------------
Net income              667       633        34      628       607        21
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                      Three                        Three                    
                     months                       months                    
($millions Cdn)       ended                        ended                    
                  ---------                    ---------                    
                    May 31,                Non-  May 31,                Non-
                       2013 Operating operating     2012 Operating operating
----------------------------------------------------------------------------
Operating income        373       373         -      369       369         -
 Amortization of                                                            
  financing costs                                                           
  - long-term debt      (1)       (1)         -      (1)       (1)         -
 Interest expense      (75)      (75)         -     (82)      (82)         -
 Gain on sale of                                                            
  cablesystem            50         -        50        -         -         -
 Acquisition and                                                            
  divestment costs      (8)         -       (8)        -         -         -
 Gain on sale of                                                            
  associate               9         -         9        -         -         -
 Gain on                                                                    
  remeasurement of                                                          
  interests in                                                              
  equity                                                                    
  investments             -         -         -        6         -         6
 CRTC benefit                                                               
  obligation              -         -         -      (2)         -       (2)
 Accretion of                                                            
   
  long-term                                                                 
  liabilities and                                                           
  provisions            (2)         -       (2)      (4)         -       (4)
 Other gains                                                                
  (losses)              (3)         -       (3)        3         -         3
----------------------------------------------------------------------------
Income before                                                               
 income taxes           343       297        46      289       286         3
 Current income                                                             
  tax expense                                                               
  (recovery)             62        85      (23)       51        70      (19)
 Deferred income                                                            
  tax expense                                                               
  (recovery)             31       (8)        39     (10)       (3)       (7)
----------------------------------------------------------------------------
Net income              250       220        30      248       219        29
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


 
                                        May 31, 2013 net income             
                                             compared to:                   
                          --------------------------------------------------
                                       Three months ended  Nine months ended
                          ------------------------------- ------------------
($millions Cdn)           February 28, 2013  May 31, 2012       May 31, 2012
----------------------------------------------------------------------------
Increased operating income                                                  
 before amortization (1)                 47            18                 98
Increased amortization                  (1)          (14)               (32)
Decreased interest expense                2             7                 13
Change in net other costs                                                   
 and revenue (2)                         50            43                 42
Increased income taxes                 (30)          (52)               (82)
----------------------------------------------------------------------------
                                         68             2                 39
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  See definitions and discussion under Key Performance Drivers in MD&A.  
(2)  Net other costs and revenue includes gain on sale of cablesystem,      
     acquisition and divestment costs, gain on sale of associate, gain on   
     remeasurement on interests in equity investments, CRTC benefit         
     obligation, 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 $0.52 and $1.40 for the current quarter
and year-to-date period, respectively, compared to $0.53 and $1.34 in
the same periods last year. In the current quarter, increased
operating income before amortization of $18 million, lower interest
expense of $7 million, and improved net other costs and revenue of
$43 million were partially offset by higher amortization of $14
million and income taxes of $52 million as the prior period benefited
from a tax recovery related to the resolution of certain tax matters.
The improved net other costs and revenue included the gain on the
sale of Mountain Cablevision Limited ("Mountain Cable"). The
year-to-date increase was primarily due to higher operating income
before amortization of $98 million and improved net other costs and
revenue of $42 million, partially reduced by increased amortization
of $32 million and higher income taxes of $82 million.  
Net income in the current quarter was up $68 million compared to the
second quarter of fiscal 2013 driven by increased operating income
before amortization of $47 million, primarily due to seasonality in
the Media business, along with improved net other costs and revenue
of $50 million the total of which was partially reduced by higher
income taxes of $30 million.  
Free cash flow for the quarter and year-to-date periods of $138
million and $543 million, respectively, compared to $203 million and
$379 million in the same periods last year. The current quarter
decline was primarily due to increased capital investment. The
year-to-date im
provement was primarily due to improved operating
income before amortization and lower capital investment partially
reduced by higher cash taxes. 
During the second quarter, the Company entered into agreements with
Rogers Communications Inc. ("Rogers") to sell to Rogers its shares in
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"). Regulatory approval
was received for Mountain Cable and it closed at the end of April,
and regulatory approval was recently received for the TVtropolis
transaction and it is expected to close at the end of June. The
potential option exercise for the sale of the wireless spectrum
licenses is expected to occur in fiscal 2015. Overall, Shaw expects
to receive net proceeds of approximately $700 million from these
transactions. 
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 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 agreed to 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 closed at the end of
April while Historia and Series+ are expected to close in the fall of
2013.  
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 established an accelerated capital fund of up to $500
million and is tracking the accelerated spending against this as the
investments are made. Shaw plans to invest up to $500 million in
fiscal 2013, 2014 and 2015 spending approximately $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.  
On April 8, 2013 Shaw announced it had entered 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. The acquisition closed at
the end of April. 
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 mea
sures 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. 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.  


 
                                     Three months ended    Nine months ended
                                                May 31,              May 31,
                                   -------------------- --------------------
                                                                            
($ millions Cdn)                       2013        2012     2013        2012
----------------------------------------------------------------------------
Operating income                        373         369    1,093       1,027
Add back amortization:                                                      
  Deferred equipment revenue           (31)        (29)     (91)        (85)
  Deferred equipment costs               65          59      192         169
  Property, plant and equipment,                                            
   intangibles and other                178         168      530         515
----------------------------------------------------------------------------
Operating income before                                                     
 amortization                           585         567    1,724       1,626
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
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 the free cash
flow calculation. 
Accelerated capital fund 
The Company established a notional fund, the accelerated capital
fund, of up to $500 million with proceeds receiv
ed, 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 be used in fiscal 2013, 2014 and
2015 spending approximately $100 million, $250 million and $150
million in each of the respective years.  
Free cash flow is calculated as follows: 


 
                            Three months ended May                          
                                               31, Nine months ended May 31,
                          ------------------------ -------------------------
                                            Change                    Change
($millions Cdn)              2013  2012          %    2013   2012          %
----------------------------------------------------------------------------
Revenue                                                                     
  Cable                       825   794        3.9   2,448  2,390        2.4
  Satellite                   218   211        3.3     641    631        1.6
  Media                       307   295        4.1     875    836        4.7
----------------------------------------------------------------------------
                            1,350 1,300        3.8   3,964  3,857        2.8
  Intersegment                                                              
   eliminations              (24)  (22)        9.1    (68)   (69)      (1.4)
----------------------------------------------------------------------------
                            1,326 1,278        3.8   3,896  3,788        2.9
----------------------------------------------------------------------------
Operating income before                                                     
 amortization (1)                                                           
  Cable                       397   377        5.3   1,186  1,106        7.2
  Satellite                    72    76      (5.3)     219    216        1.4
  Media                       116   114        1.8     319    304        4.9
----------------------------------------------------------------------------
                              585   567        3.2   1,724  1,626        6.0
----------------------------------------------------------------------------
                                                                            
Capital expenditures and                                                    
 equipment costs (net):                                                     
 (2)                                                                        
  Cable                       255   169       50.9     571    626      (8.8)
  Accelerated capital fund                 greater                   greater
   investment (1)            (40)     - than 100.0    (50)      - than 100.0
----------------------------------------------------------------------------
  Adjusted Cable              215   169       27.2     521    626     (16.8)
----------------------------------------------------------------------------
                                           greater                          
  Satellite                    46    17 than 100.0      92     67       37.3
  Media                         6     5       20.0      16     18     (11.1)
----------------------------------------------------------------------------
                              267   191       39.8     629    711     (11.5)
----------------------------------------------------------------------------
Free cash flow before the                                                   
 following                    318   376   
  (15.4)   1,095    915       19.7
Less:                                                                       
  Interest                   (75)  (82)      (8.5)   (233)  (246)      (5.3)
  Cash taxes                 (85)  (70)       21.4   (240)  (218)       10.1
Other adjustments:                                                          
  Non-cash share-based                                                      
   compensation                 1     2     (50.0)       4      5     (20.0)
  CRTC benefit obligation                                                   
   funding                   (13)  (10)       30.0    (37)   (31)       19.4
  Non-controlling                                                           
   interests                 (11)  (10)       10.0    (33)   (30)       10.0
  Pension adjustment            3     3          -       8     11     (27.3)
  Customer equipment                       greater                          
   financing                    3   (3) than 100.0    (11)   (16)     (31.2)
  Preferred share                                                           
   dividends                  (3)   (3)          -    (10)   (11)      (9.1)
----------------------------------------------------------------------------
Free cash flow (1)            138   203     (32.0)     543    379       43.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating margin (1)                                                        
  Cable                     48.1% 47.5%        0.6   48.4%  46.3%        2.1
  Satellite                 33.0% 36.0%      (3.0)   34.2%  34.2%          -
  Media                     37.8% 38.6%      (0.8)   36.5%  36.4%        0.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  See definitions and discussion under Key Performance Drivers in MD&A.  
(2)  Per Note 3 to the unaudited interim Consolidated Financial Statements. 

 
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                  (50)       -       -    (50)
----------------------------------------------------------------------------
Fund Closing Balance, May 31, 2013                50     250     150     450
----------------------------------------------------------------------------
                                                                            
                                    CABLE                                   
                            Financial Highlights                            
                                                                            
                             Three months ended May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                             Change                   Change
($millions Cdn)               2013   2012         %    2013   2012         %
----------------------------------------------------------------------------
Revenue                        825    794       3.9   2,448  2,390       2.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income before                                        
             
 amortization (1)              397    377       5.3   1,186  1,106       7.2
                                                                            
Capital expenditures and                                                    
 equipment costs (net):                                                     
  New housing development       26     26         -      71     75     (5.3)
  Success based                 60     43      39.5     139    208    (33.2)
  Upgrades and enhancement     110     65      69.2     247    243       1.6
  Replacement                   13     11      18.2      33     32       3.1
  Buildings and other           46     24      91.7      81     68      19.1
----------------------------------------------------------------------------
Total as per Note 3 to the                                                  
 unaudited interim                                                          
 Consolidated Financial                                                     
 Statements (2)                255    169      50.9     571    626     (8.8)
----------------------------------------------------------------------------
                                                                            
Operating margin (1)         48.1%  47.5%       0.6   48.4%  46.3%       2.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  See definitions and discussion under Key Performance Drivers in MD&A.  
(2)  The three and nine months ended May 31, 2013 include $40 million and   
     $50 million respectively, related to certain capital investments that  
     are being funded from the accelerated capital fund.                    

 
Operating Highlights 


 
--  Digital Phone lines increased 17,719 during the three month period to
    1,355,238 and Internet customers were up 4,157 totaling 1,879,942 as at
    May 31, 2013. During the quarter Video subscribers decreased 26,578. 
--  During the quarter the Company closed the acquisition of Envision and
    the disposition of Mountain Cable. 

 
Cable revenue for the three and nine month periods of $825 million
and $2.45 billion improved 3.9% and 2.4%, respectively, over the
comparable periods last year. Rate increases, lower promotions and
customer growth in Internet and Digital Phone, including Business
growth and the recent Envision acquisition that closed at the end of
April, were partially offset by lower Video subscribers and the
divestiture of Mountain Cable, also closing at the end of April. On
Demand improved in the current quarter compared to the same period
last year due to more PPV events, but was lower on a year-to-date
basis compared to the prior year mainly due to the shortened NHL
hockey schedule.  
Operating income before amortization of $397 million for the quarter
was up 5.3% over the same period last year. Revenue related
improvements 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, higher marketing and various other costs, and
the net impact of divestment and acquisition activity.  
Operating income before amortization for the year-to-date period
improved 7.2% over last year to $1.19 billion. Revenue related
growth, reduced marketing and sales expenses, lower LPIF, and the
second quarter 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 up $11 million or 1.4% compared to the second quarter of
fiscal 2013. Operating income before amortization improved 1%.
Revenue related growth and lower marketing and employee related
costs, were partially offset by the
 prior quarter benefit related to
the broadcast license fee adjustment and higher various other
expenses. 
Total capital investment of $255 million in the current quarter
increased $86 million over the same period last year. Capital
investment for the nine month period of $571 million decreased from
$626 million last year. Capital investment in the current three and
nine month periods included $40 million and $50 million,
respectively, funded through the accelerated capital fund established
with net proceeds from the strategic transactions with each of Rogers
and Corus. The accelerated capital fund initiatives included next
generation video delivery systems, expediting WiFi infrastructure
build, continued investment in the new data centre, and increasing
network capacity. 
Success-based capital was up $17 million over the comparable three
month period due to higher HD/HDPVR equipment rentals. For the
comparable nine month period Success based spend was $69 million
lower due to reduced video equipment rentals, lower subsidies from
higher pricing for video equipment sales, decreased internet modem
purchases, and lower installation activity. 
Investment in Upgrades and enhancement and Replacement categories
combined increased $47 million in the current quarter compared to the
same period last year. The higher spend was due to core network
equipment and softswitch upgrades, and increased deployment of
business customer electronics. The year-to-date period investment was
comparable to last year.  
Investment in Buildings and other was up $22 million and $13 million,
respectively, over the comparable three and nine month periods last
year. The increase was primarily due to higher spend on other
corporate assets, back office infrastructure replacement projects,
and continued investment in the new data centre.  
Spending in New housing development was comparable to the three and
nine month periods last year. 
Total capital investment of $255 million in the current quarter
increased $79 million over the second quarter and included $40
million of spend on various accelerated capital fund initiatives. In
addition to the various accelerated capital invested, Success-based
spend was up due to higher HD/HDPVR rental activity and Buildings and
other increased due to spend on other corporate assets. Upgrades and
enhancements was higher due to current quarter digital network
upgrade ("DNU") activity and engineering lab replacement. The prior
quarter also benefitted from a SR&ED tax credit. New housing
development was also up due to higher seasonal construction activity. 
During the quarter Shaw continued with its WiFi build out. Most
recently the Company and the City of Edmonton announced that Edmonton
City Council has approved a proposed agreement that will see the Shaw
Go WiFi network expand to public areas across the city. The planned
WiFi network will grant wireless Internet access to Shaw customers,
Edmontonians and visitors throughout Edmonton areas popular for foot
traffic and gathering, as well as LRT stations, facilities and
libraries. The build will take place over the next two years.  
The Company also continued with its focus on expanding its reach into
the business market with the completion at the end of April of the
acquisition of Envision from ENMAX Corporation. This transaction
expands Shaw's Business initiatives in Calgary and significantly
enhances the profile of Shaw Business in the competitive Calgary
marketplace. 


 
                            Subscriber Statistics                           
                                                                            
                                                    May 31, 2013            
                                        ------------------------------------
                                        Three months ended Nine months ended
                                        ------------------ -----------------
                     May 31,  August 31,            Change            C
hange
                        2013  2012(1)(2)   Growth        %    Growth       %
----------------------------------------------------------------------------
VIDEO:                                                                      
Connected          2,069,769   2,149,749 (26,578)    (1.3)  (79,980)   (3.7)
Penetration as %                                                            
 of homes passed       51.9%       55.0%                                    
----------------------------------------------------------------------------
                                                                            
INTERNET:                                                                   
Connected and                                                               
 scheduled         1,879,942   1,862,473    4,157      0.2    17,469     0.9
Penetration as %                                                            
 of basic              90.8%       86.6%                                    
Standalone                                                                  
 Internet not                                                               
 included in basic                                                          
 cable               299,972     252,437   16,690      5.9    47,535    18.8
                                                                            
DIGITAL PHONE:                                                              
Number of lines                                                             
 (3)               1,355,238   1,307,544   17,719      1.3    47,694     3.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(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)  Subscriber numbers have been restated for comparative purposes to      
     remove approximately 41,000 Video customers, 34,000 Internet customers 
     and 38,000 Digital phone lines as a result of the sale of Mountain     
     Cable.                                                                 
(3)  Represents primary and secondary lines on billing.                     
                                                                            
                                  SATELLITE                                 
                           Financial Highlights(1)                          
                                                                            
                              Three months ended May   Nine months ended May
                                                 31,                     31,
                             ----------------------- -----------------------
                                              Change                  Change
($millions Cdn)                 2013   2012        %    2013   2012        %
----------------------------------------------------------------------------
Revenue                          218    211      3.3     641    631      1.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income before                                                     
 amortization (2)                 72     76    (5.3)     219    216      1.4
                                                                            
Capital expenditures and                                                    
 equipment costs (net):                                                     
  Success based (3)              
 21     16     31.2      61     61        -
                                             greater                 greater
                                                than                    than
  Transponders                    23      -    100.0      23      -    100.0
  Buildings and other              2      1    100.0       8      6     33.3
----------------------------------------------------------------------------
Total as per Note 3 to the                                                  
 unaudited interim                           greater                        
 Consolidated Financial                         than                        
 Statements                       46     17    100.0      92     67     37.3
----------------------------------------------------------------------------
                                                                            
Operating margin (2)           33.0%  36.0%    (3.0)   34.2%  34.2%        -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(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 decreased 2,930 and as at May
    31, 2013 DTH customers totaled 904,400. 
--  With the successful launch of Anik G1, Shaw Direct recently added over
    140 channels to its offerings, primarily in HD, and now delivers over
    210 HD signals to customers. 

 
Revenue of $218 million and $641 million for the three and nine month
periods, respectively, was up 3.3% and 1.6% over the same periods
last year primarily due to rate increases partially offset by
increased promotional activity and lower subscribers.  
Operating income before amortization of $72 million for the three
month period decreased 5.3% over the same period last year as the
revenue related growth was reduced by higher employee related
amounts, programming fees, as well as increased marketing expenses
and operating costs related to the new Anik G1 transponders.
Operating income before amortization for the nine month period of
$219 million increased modestly by 1.4% over the same period last
year.  
Revenue increased over the second quarter primarily due to a rate
increase effective April 1, 2013. Operating income before
amortization declined modestly as the impact of customer rate
increases was more than offset by increased employee related costs,
Anik G1 related expenses and the one-time broadcast license fee
adjustment recorded in the prior quarter. 
Total capital investment of $46 million and $92 million for the three
and nine month periods compared to $17 million and $67 million,
respectively, in the same periods last year. The increase in the
current quarter was mainly due to the final payment to purchase the
Anik G1 transponders.  
The Anik G1 satellite launched successfully in mid April with 16
extended Ku transponders leased to Shaw Direct. The satellite has
power levels above initial expectations resulting in an effective
capacity increase of up to 30%. In late May, Shaw Direct lit up the
satellite for its customers with the single largest launch of HD
channels in Canadian history adding over 120 new HD channels. In
total Shaw Direct now offers over 650 channels including more than
210 HD channels. 
Subscriber Statistics 


 
                                                   May 31, 2013             
                                     ---------------------------------------
                                       Three months ended  Nine months ended
                                     -------------------- ------------------
                           August 31,              Change             Change
             May 31, 2013        2012   Growth          %   Growth         %
----------------------------------------------------------------------------
                                                                            
DTH customers                                                               
 (1)              904,400     910,023  (2,930)      (0.3)  (5,623)     (0.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  Including seasonal customers who temporarily suspend their service.    
                                                                            
                                    MEDIA                                   
                            Financial Highlights                            
                                                                            
                             Three months ended May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                             Change                   Change
($millions Cdn)               2013   2012         %    2013   2012         %
----------------------------------------------------------------------------
Revenue                        307    295       4.1     875    836       4.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating income before                                                     
 amortization (1)              116    114       1.8     319    304       4.9
                                                                            
Capital expenditures:                                                       
  Broadcast and                                                             
   transmission                  2      1     100.0       5      7    (28.6)
  Buildings and other            4      4         -      11     11         -
----------------------------------------------------------------------------
Total as per Note 3 to the                                                  
 unaudited interim                                                          
 Consolidated Financial                                                     
 Statements                      6      5      20.0      16     18    (11.1)
----------------------------------------------------------------------------
                                                                            
Other adjustments:                                                          
  CRTC benefit obligation                                                   
   funding                    (13)   (10)      30.0    (37)   (31)      19.4
  Non-controlling interests   (11)   (10)      10.0    (33)   (30)      10.0
                                                                            
Operating margin (1)         37.8%  38.6%     (0.8)   36.5%  36.4%       0.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)  See definitions and discussion under Key Performance Drivers in MD&A.  

 
Operating Highlights 
Revenue and operating income before amortization for the quarter was
$307 million and $116 million, respectively, compared to $295 million
and $114 million last year. Revenue for the quarter was up 4.1% due
to higher advertising and subscriber revenues. Operating income
before amortization improved 1.8% over the comparable period due to
revenue growth partially reduced by high
er programming costs and
increased expenses including employee related and various other.  
For the nine months ending May 31, 2013 revenue of $875 million and
operating income before amortization of $319 million compared to $836
million and $304 million, respectively, for the same period last
year. Improved advertising and subscriber revenues were partially
reduced by higher programming costs, and increased expenses including
employee related amounts due to growth and merit increases, and
various other. 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 second quarter of fiscal 2013, revenue and operating
income before amortization increased $58 million and $44 million,
respectively. The increases were primarily due to the seasonality of
the Media business, with higher advertising revenues in the first and
third quarters driven by the launches of season premieres in the
first quarter and mid season launches along with season finales in
the third quarter resulting in higher advertiser demand. 
During the quarter, Global continued to deliver solid programming
results, increasing the number of Top 20 positions nationally with
key shows such as Survivor, NCIS, Bones and Hawaii 5-0. These shows
also delivered strong audiences on their season finales. In the
upcoming summer schedule, Global will see the return of Big Brother
US and Rookie Blue combined with new programs such as Stephen King's
Under the Dome. 
Media's specialty portfolio continues to lead in the channel rankings
in the Adult 25-54 category with 4 of the Top 10 analog channels,
including History as the top entertainment channel in Canada, and 5
of the Top 10 digital channels. National Geographic, Action and
MovieTime hold the top 3 positions and also rank in the Top 20 analog
channels. We recently announced the launch of a new lifestyle channel
DTOUR, which will add to an already strong portfolio of specialty
channels. 
Global News continues to maintain the number one position in the
Vancouver, Calgary and Edmonton markets and launched a BC All News
Channel, Global News:BC1 in March. Further, Global News was announced
as the 2013 winner of the prestigious Edward R Murrow Award for
overall News excellence in network television, the first Canadian
network to earn that recognition in the award's 42 year history. 
The Company leveraged its relationships with the US Studios at the
recent LA screenings to acquire additional programming that will
deliver a strong Fall Schedule. A total of 18 new programs have been
secured, including 11 dramas, 6 comedies and 1 unscripted series
resulting in 15.5 simulcast hours, up 1.5 from last year.  
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 May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                             Change                   Change
($millions Cdn)               2013   2012         %    2013   2012         %
----------------------------------------------------------------------------
Amortization revenue                                                        
 (expense) -                                                                
  Deferred equipment                                                        
   revenue                      31     29       6.9      91     85       7.1
  Deferred equipment costs    (65)   (59)      10.2   (192)  (169)      13.6
  Property, plant and                                                       
   equipment, intangibles                                                   
   and other                 (178)  (168)       6.0   (530)  (515)       2.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
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 periods 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 May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                             Change                   Change
($millions Cdn)              2013  2012           %   2013  2012           %
----------------------------------------------------------------------------
Amortization of financing                                                   
 costs - long-term debt         1     1           -      3     3           -
Interest expense               75    82       (8.5)    234   247       (5.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Interest expense decreased over the comparable periods due to lower
average debt levels. 
Gain on sale of cablesystem  
During the current quarter, the Company closed the sale of Mountain
Cable in Hamilton, Ontario to Rogers. The Company received proceeds,
after working capital adjustments, of $398 million and recorded a
gain of $50 million.  
Acquisition and divestment costs 
The Company incurred $8 million of costs in respect of the
acquisition of Envision and the transactions with Rogers related to
the sale of Mountain Cable, grant of an option to acquire the
wireless spectrum licenses and purchase from Rogers of its interest
in TVtropolis. 
Gain on sale of associate 
During the current quarter, the Company recorded a gain of $9 million
on the sale of its interest in ABC Spark to Corus. 
Gain on remeasurement of interests in equity investments and CRTC
benefit obligation 
During the comparative quarter, the company acquired the remaining
interests in two specialty channels. In connection with the
acquisition the Company recorded a gain of $6 million in respect of
remeasurement to fair value of the Company's interests which were
held prior to the acquisition. As part of the CRTC decision approving
the acquisition, the Company is required to contribute approximately
$2 million in new benefits to the Canadian broadcasting system over
the following seven years.  
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 $12 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 were $12.7 billion at both May 31, 2013 and August 31,
2012. Following is a discussion of significant changes in the
consolidated statement of financial position since August 31, 2012.  
Current assets increased $61 million primarily due to the
reclassification of the assets of Histor
ia and Series+ as held for
sale of $107 million, increases in accounts receivable of $90 million
and inventories of $8 million partially offset by decreases in cash
of $137 million and other current assets of $10 million. Assets held
for sale is primarily composed of intangibles. Accounts receivable
increased due to higher advertising revenue during the third quarter
of the current year compared to the fourth quarter of the prior year
and reclassification of advance bill payments to unearned revenue
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 $56 million due to the $59
million deposit paid relating to the acquisition of the
non-controlling interest in the TVtropolis specialty channel and $10
million in respect of the purchase of minor investments partially
offset by the sale of ABC Spark. 
Property, plant and equipment increased $50 million as current year
capital investment and the acquisition of Envision exceeded
amortization and the impact of the sale of Mountain Cable. 
Other long-term assets decreased $11 million primarily due to a
decline in deferred equipment costs. 
Intangibles decreased $189 million due to the sale of Mountain Cable
of $245 million and reclassification of $93 million in respect of
Historia and Series+ to assets held for sale partially offset by
higher program rights and advances of $60 million and the recognition
of $87 million in customer relationships on the acquisition of
Envision. Additional investment in acquired rights and advances
exceeded the amortization for the current year.  
Goodwill decreased $17 million primarily due to the sale of Mountain
Cable of $81 million partially offset by $68 million on the
acquisition of Envision.  
Current liabilities declined $46 million due to decreases in accounts
payable and accruals of $11 million, income taxes payable of $16
million and current portion of long-term debt of $101 million
partially offset by an increase in unearned revenue of $18 million, a
promissory note of $45 million arising on the closing of the
transactions with Corus and reclassification of $15 million in
respect of liabilities associated with the Historia and Series+
assets held for sale. Accounts payable and accruals were lower due to
fluctuations in various accruals and other liabilities. 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 million senior notes which are due
in November 2013. Unearned revenue increased due to reclassification
of advance bill payments from accounts receivable, timing of advance
bill payments and rate increases. The liabilities associated with
assets held for sale is primarily composed of deferred income taxes. 
Long-term debt decreased $346 million due to the aforementioned
reclassification of the 7.5% $350 million senior notes. 
Other long-term liabilities decreased $320 million primarily due to
the $300 million contribution to a retirement compensation
arrangement trust ("the RCA") in order to partially fund its
non-contributory defined benefit pension plan and a decrease in CRTC
benefit obligations partially offset by current year pension expense. 
Deferred credits increased $247 million due to the $250 million
received from Rogers in respect of the option to acquire the wireless
spectrum licenses. 
Deferred income tax liabilities, net of deferred income tax assets,
increased $26 million primarily due to current year expense partially
offset by the sale of Mountain Cable and the aforementioned
reclassification of amounts in respect of Historia and Series+. 
Shareholders' equity increased $387 million primarily due to
increases in share capital of $147 million and retained earnings of
$268 million partially offset by a decrease in non-controlling
interests of $27 million. Share capital increased due to the issuance
of 6,592,827 Class B Non-Voting Shares under the Company's option
plan and Dividend Reinvestment Plan ("DRIP"). As of June 15, 2013,
share capital is as reported at May 31, 2013 with the exception of
the issuance of a total of 14,920 Class B Non-Voting Shares upon
exercise of options under the Company's option plan subsequent to the
quarter end. Retained earnings increased due to current year earnings
of $635 million partially offset by dividends of $347 million and a
charge of $20 million representing the difference between the
consideration paid and the carrying value of the additional 20%
interest acquired in Food Network Canada. Non-controlling interests
decreased as their share of earnings was exceeded by the
distributions declared during the period and the impact of the
aforementioned change in ownership of Food Network Canada.  
LIQUIDITY AND CAPITAL RESOURCES 
In the current year, the Company generated $543 million of free cash
flow. Shaw used its free cash flow along with cash of $137 million,
the net proceeds of $589 million from the transactions with Rogers,
proceeds on issuance of Class B Non-Voting Shares of $48 million and
other net items of $7 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 $239 million, purchase Envision for $222
million, invest an additional net $63 million in program rights and
fund $50 million of accelerated capital spend. Due to timing, the net
proceeds 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. 
To allow for timely access to capital markets, the Company filed a
short form base shelf prospectus with securities regulators in Canada
and the U.S. on May 13, 2013. The shelf prospectus allows for the
issue up to an aggregate $4 billion of debt and equity securities
over a 25 month period. 
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 $91 million during the nine months ending May
31, 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 May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                             Change                   Change
($millions Cdn)               2013   2012         %    2013   2012         %
---------------------------------------------------------------------
-------
Funds flow from operations     438    424       3.3     951    944       0.7
Net increase in non-cash                                                    
 working capital balances                                                   
 related to operations        (27)   (74)    (63.5)    (77)   (81)     (4.9)
----------------------------------------------------------------------------
                               411    350      17.4     874    863       1.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Funds flow from operations increased over the comparative three month
period due to higher operating income before amortization adjusted
for non-cash program rights expense and lower interest expense
partially offset by higher current income taxes in the current
period. Funds flow from operations increased over the comparative
nine month period due to higher operating income before amortization
adjusted for non-cash program rights expense, lower interest and
current income tax expense and the settlement of the amended
cross-currency interest agreements in the prior year, all of which
were partially 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 May    Nine months ended May
                                                31,                      31,
                           ------------------------ ------------------------
                                                                            
($millions Cdn)               2013   2012  Decrease    2013   2012  Decrease
----------------------------------------------------------------------------
Cash flow used in investing                                                 
 activities                  (164)  (167)         3   (347)  (792)       445
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The cash used in investing activities in the current quarter was
comparable to the prior year as the amount received in the current
quarter with respect of the transactions with Rogers of $348 million
was offset by the acquisition of Envision for $222 million and higher
cash outlays for capital expenditures and inventory. The cash used in
investing activities decreased over the comparable nine month period
due to the net receipt of $589 million in respect of the transactions
with Rogers and lower cash outlays for capital expenditures partially
offset by the cash outlay for the acquisition of Envision.  
Financing Activities 
The changes in financing activities during the comparative periods
were as follows: 


 
                                       Three months ended  Nine months ended
                                                  May 31,            May 31,
                                       ------------------ ------------------
                                                                            
($millions Cdn)                           2013       2012    2013       2012
----------------------------------------------------------------------------
Bank credit facility arrangement costs       -          -       -        (4)
Repay 6.1% senior unsecured notes            -          -   (450)          -
Dividends                                 (83)       (86)   (249)      (249)
Issuance of Class B Non-Voting Shares       16          4      48         14
Distributions paid to non-controlling                                       
 interests                                 (5)        (5)    (12)       (19)
Repayment of Partnership debt              (1)        (1)     (1)        (1)
----------------------------------------------------------------------------
                                          (73)       (88)   (664)      (259)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION 


 
                   Operating    Net income                                  
                      income  attributable                                  
                      before     to equity                 Basic     Diluted
                      amort-        share-       Net    earnings    earnings
Quarter  Revenue ization (1)    holders(2) income(3)   per share   per share
----------------------------------------------------------------------------
($millions Cdn except per                                                   
 share amounts)                                                             
                                                                            
 2013                                                                       
 Third     1,326         585           239       250        0.52        0.52
 Second    1,251         538           172       182        0.38        0.38
 First     1,319         601           224       235        0.50        0.49
 2012                                                                       
 Fourth    1,210         501           129       133        0.28        0.28
 Third     1,278         567           238       248        0.53        0.53
 Second    1,231         493           169       178        0.38        0.38
 First     1,279         566           192       202        0.43        0.43
 2011                                                                       
 Fourth    1,181         481            
81        84        0.18        0.18
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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 for the fourth quarter of 2011 is  
     $164 or $83 higher than net income attributable to equity shareholders 
     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 am
ortization described
above and the impact of the net change in non-operating items. In the
third quarter of 2013, net income increased by $68 million due to
increased operating income before amortization of $47 million, the
gain on sale of the cablesystem in Hamilton, Ontario of $50 million
and the gain on sale of the specialty channel ABC Spark of $9 million
partially offset by higher income taxes of $30 million and
acquisition and divestment costs of $8 million in respect of the
transactions with Rogers and the acquisition of Envision. 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 the
wireless discontinued operations of $84 million and gain on
redemption of debt of $23 million recorded in the preceding 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 and subsequently updated with the release of its
second quarter results on April 12, 2013. With continued positive
momentum across all divisions and overall management of promotional
activity and costs the Company is now further 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 consolidated free cash flow to range from $590 to
$600 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)                  May 31, 2013 August 31, 2012
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current                                                                     
  Cash                                                   290             427
  Accounts receivable                                    523             433
  Inventories                                            110             102
  Other current assets                                    79              89
  Derivative instruments                                   3               -
  Assets held for sale (note 4)                          107               -
----------------------------------------------------------------------------
                                                       1,112           1,051
Investments and other assets (note 4)                     69              13
Property, plant and equipment                          3,292           3,242
Other long-term assets                                   320             331
Assets held for sale                                       -               1
Deferred income tax assets                                 1              14
Intangibles                                            7,166           7,355
Goodwill                                                 698             715
----------------------------------------------------------------------------
                                                      12,658          12,722
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current                                                                     
  Accounts payable and accrued liabilities               800             811
  Provisions                                              24              19
  Income taxes payable                                   140             156
  Unearned revenue                                       175             157
  Promissory note (note 4)                                45               -
  Current portion of long-term debt (note 6)             350             451
  Derivative instruments                                   -               1
  Liabilities associated with assets held for                               
   sale (note 4)                                          15               -
----------------------------------------------------------------------------
                                                       1,549           1,595
Long-term debt (note 6)                                4,466           4,812
Other long-term liabilities (notes 2 and 11)             233             553
Provisions                                                 9               8
Deferred credits (note 4)                                882             635
Deferred income tax liabilities                        1,098           1,085
----------------------------------------------------------------------------
                                                       8,237           8,688
Shareholders' equity (notes 2, 7 and 9)                                     
Common and preferred shareholders                      4,167           3,753
Non-controlling interests in subsidiaries                254             281
----------------------------------------------------------------------------
                                                       4,421           4,034
----------------------------------------------------------------------------
                                                      12,658          12,722
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 


 
                      CONSOLIDATED STATEMENTS OF INCOME                     
                                 (unaudited)                                
                                                                            
                                      Three months ended   Nine months ended
                                                 May 31,             May 31,
                                     ------------------- -------------------
(millions of Canadian dollars except                                        
 per share amounts)                      2013       2012     2013       2012
----------------------------------------------------------------------------
Revenue (note 3)                        1,326      1,278    3,896      3,788
Operating, general and administrative                                       
 expenses (note 5)                      (741)      (711)  (2,172)    (2,162)
Amortization:                                                               
  Deferred equipment revenue               31         29       91         85
  Deferred equipment costs               (65)       (59)    (192)      (169)
  Property, plant and equipment,                                            
   intangibles and other                (178)      (168)    (530)      (515)
----------------------------------------------------------------------------
Operating income                          373        369    1,093      1,027
    Amortization of financing costs -                                       
     long-term debt                       (1)        (1)      (3)        (3)
    Interest expense                     (75)       (82)    (234)      (247)
    Gain on sale of cablesystem (note                                       
     4)                                    50          -       50          -
    Acquisition and divestment costs                                        
     (note 4)                             (8)          -      (8)          -
    Gain on sale of associate (note                                         
     4)      
                               9          -        9          -
    Gain on remeasurement of                                                
     interests in equity investments        -          6        -          6
    CRTC benefit obligation                 -        (2)        -        (2)
    Gain on derivative instruments          -          -        -          1
    Accretion of long-term                                                  
     liabilities and provisions           (2)        (4)      (7)       (11)
    Equity income from associates           -          -        -          1
    Other gains (losses) (note 12)        (3)          3      (9)        (2)
----------------------------------------------------------------------------
Income before income taxes                343        289      891        770
    Current income tax expense (note                                        
     3)                                    62         51      147        197
    Deferred income tax expense                                             
     (recovery)                            31       (10)       77       (55)
----------------------------------------------------------------------------
Net income                                250        248      667        628
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income attributable to:                                                 
Equity shareholders                       239        238      635        599
Non-controlling interests in                                                
 subsidiaries                              11         10       32         29
----------------------------------------------------------------------------
                                          250        248      667        628
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share (note 8)                                                 
Basic                                    0.52       0.53     1.40       1.34
Diluted                                  0.52       0.53     1.39       1.33
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 


 
              CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME               
                                 (unaudited)                                
                                                                            
                                      Three months ended   Nine months ended
                                                 May 31,             May 31,
                                     ------------------- -------------------
(millions of Canadian dollars)           2013       2012     2013       2012
----------------------------------------------------------------------------
Net income                                250        248      667        628
                                                                            
Other comprehensive income (loss)                                           
 (note 9)                                                                   
Items that may subsequently be                                              
 reclassified to income:                                                    
  Change in unrealized fair value of                                        
   derivatives designated as cash                                           
   flow hedges                              1          1        3          1
  Adjustment for hedged items                                               
   recognized in the period                 -          -        -        (1)
  Unrealized gain on available-for-                                         
   sale investment                          -          3        -          3
  Reclassification of realized gain                                         
   on available-for-sale investment         -        (3)        -        (3)
----------------------------------------------------------------------------
                                            1          1        3          -
----------------------------------------------------------------------------
Items that will not be subsequently                                         
 reclassified to income:                                                    
  Actuarial losses on employee                                              
   benefit plans                            -       (57)        -       (57)
----------------------------------------------------------------------------
                                            1       (56)        3       (57)
----------------------------------------------------------------------------
Comprehensive income                      251        192      670        571
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Comprehensive income attributable to:                                       
Equity shareholders                       240        182      638        542
Non-controlling interests in                                                
 subsidiaries                              11         10       32         29
----------------------------------------------------------------------------
                                          251        192      670        571
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 


 
         CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY         
                                 (unaudited)                                
                                                                            
Nine months ended May 31, 2013                                              
                            Attributable to equity                          
                                 shareholders                               
               ----------------------------------------                     
                                          Accum-                            
                                          ulated        Equity attri-       
                                Retain-    other           butable to       
(millions of            Contri-      ed  compre-                 non-       
 Canadian         Share   buted   earn-  hensive          controlling  Total
 dollars)       capital surplus    ings     loss Total      interests equity
----------------------------------------------------------------------------
Balance as at                                                               
 September 1,                                                               
 2012             2,750      77   1,019     (93) 3,753            281  4,034
Net income            -       -     635        -   635             32    667
Other                                                                       
 comprehensive                                                              
 income               -       -       -        3     3              -      3
----------------------------------------------------------------------------
Comprehensive                                                               
 income               -       -     635        3   638             32    670
Dividends             -       -   (256)        - (256)              -  (256)
Dividend     
                                                               
 reinvestment                                                               
 plan                91       -    (91)        -     -              -      -
Shares issued                                                               
 under stock                                                                
 option plan         56     (8)       -        -    48              -     48
Share-based                                                                 
 compensation         -       4       -        -     4              -      4
Distributions                                                               
 declared by                                                                
 subsidiaries                                                               
 to non-                                                                    
 controlling                                                                
 interests            -       -       -        -     -           (12)   (12)
Acquisition of                                                              
 non-                                                                       
 controlling                                                                
 interest             -       -    (20)        -  (20)           (47)   (67)
----------------------------------------------------------------------------
Balance as at                                                               
 May 31, 2013     2,897      73   1,287     (90) 4,167            254  4,421
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Nine months ended May 31, 2012                                              
                            Attributable to equity                          
                                 shareholders                               
               ----------------------------------------                     
                                          Accum-             Equity         
                                          ulated             attri-         
                                           other         butable to         
(millions of           Contri-  Retain-  compre-               non-         
 Canadian        Share   buted       ed  hensive        controlling    Total
 dollars)      capital surplus earnings     loss  Total   interests   equity
----------------------------------------------------------------------------
Balance as at                                                               
 September 1,                                                               
 2011            2,633      73      728     (29)  3,405         272    3,677
Net income           -       -      599        -    599          29      628
Other                                                                       
 comprehensive                                                              
 loss                -       -        -     (57)   (57)           -     (57)
----------------------------------------------------------------------------
Comprehensive                                                               
 income              -       -      599     (57)    542          29      571
Dividends            -       -    (255)        -  (255)           -    (255)
Dividend                                                                    
 reinvestment                                                               
 plan               71       -     (71)        -      -           -        -
Shares issued                                                               
 under stock                                                                
 option plan        15     (1)        -        -     14           -       14
Share-based                                                                 
 compensation        -       5        -        -      5           -        5
Distributions                                                               
 declared by                                                                
 subsidiaries                                                               
 to non-                                                                    
 controlling                                                                
 interests           -       -        -        -      -        (17)     (17)
----------------------------------------------------------------------------
Balance as at                                                               
 May 31, 2012    2,719      77    1,001     (86)  3,711         284    3,995
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes 


 
                    CONSOLIDATED STATEMENTS OF CASH FLOWS                   
                                 (unaudited)                                
                                                                            
                                             Three months  Nine months ended
                                            ended May 31,            May 31,
                                        ----------------- ------------------
                                                                            
(millions of Canadian dollars)             2013      2012     2013      2012
----------------------------------------------------------------------------
                                                                            
OPERATING ACTIVITIES                                                        
Funds flow from operations (note 10)        438       424      951       944
Net increase in non-cash working                                            
 capital balances related to operations    (27)      (74)     (77)      (81)
----------------------------------------------------------------------------
                                            411       350      874       863
----------------------------------------------------------------------------
INVESTING ACTIVITIES                                                        
  Additions to property, plant and                                          
   equipment (note 3)                     (235)     (155)    (545)     (595)
  Additions to equipment costs (net)                                        
   (note 3)                                (26)      (32)    (102)     (137)
  Additions to other intangibles (note                                      
   3)                                      (19)      (14)     (47)      (50)
  Net addition to inventories               (2)        19      (8)      (24)
  Proceeds on sale of cablesystem (note                                     
   4)                                       148         -      398         -
  Divestment costs (note 4)                 (5)         -      (5)         -
  Business acquisitions, net of cash                                        
   acquired (note 4)                      (222)         3    (222)         3
  Proceeds on wireless spectrum license                                     
   option (note 4)                            -         -       50         -
  Refundable deposit on wireless                                            
   spectrum license (note 4)                200         -      200         -
  Proceeds on disposal of property,                                         
   plant and equipment (note 3)               -         -        3         8
  Proceeds from (additions to)                                              
   investments and other assets (note                                       
   4)                                       (3)        12     (69)         3
-----------------------------------------------------
-----------------------
                                          (164)     (167)    (347)     (792)
----------------------------------------------------------------------------
FINANCING ACTIVITIES                                                        
  Increase in long-term debt                  -         -      590         -
  Debt repayments                           (1)       (1)  (1,041)       (1)
  Bank credit facility arrangement                                          
   costs                                      -         -        -       (4)
  Issue of Class B Non-Voting Shares                                        
   (note 7)                                  16         4       48        14
  Dividends paid on Class A Shares and                                      
   Class B Non-Voting Shares               (80)      (83)    (239)     (238)
  Dividends paid on Preferred Shares        (3)       (3)     (10)      (11)
  Distributions paid to non-controlling                                     
   interests in subsidiaries                (5)       (5)     (12)      (19)
----------------------------------------------------------------------------
                                           (73)      (88)    (664)     (259)
----------------------------------------------------------------------------
Increase (decrease) in cash before                                          
 discontinued operations                    174        95    (137)     (188)
Decrease in cash from discontinued                                          
 operations                                   -         -        -       (3)
----------------------------------------------------------------------------
Increase (decrease) in cash                 174        95    (137)     (191)
Cash, beginning of the period               116       157      427       443
----------------------------------------------------------------------------
Cash, end of the period                     290       252      290       252
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
See accompanying notes  


 
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS            
                                 (unaudited)                                

 
May 31, 2013 and 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 nine months ended May 31, 2013 were
authorized for issue by the Board of Directors on June 27, 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 chief operating decision makers are the CEO and CFO and
they review the operating performance of the Company by segments
which comprise Cable, Satellite and Media. The chief operating
decision makers utilize operating income before amortization for each
segment as a key measure in making operating decisions and assessing
performance. 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. All of the Company's reportable segments are substantially
located in Canada. Information on operations by segment is as
follows: 
Operating information 


 
                                     Three months ended    Nine months ended
                                                May 31,              May 31,
                                   -------------------- --------------------
                                        2013       2012      2013       2012
                                           $          $         $          $
----------------------------------------------------------------------------
Revenue                                                                     
  Cable                                  825        794     2,448      2,390
  Satellite (1)                          218        211       641        631
  Media                                  307        295       875        836
----------------------------------------------------------------------------
                                       1,350      1,300     3,964      3,857
Intersegment eliminations               (24)       (22)      (68)       (69)
----------------------------------------------------------------------------
                                       1,326      1,278     3,896      3,788
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Operating income before                                                     
 amortization (2)                                                           
  Cable                                  397        377     1,186      1,106
  Satellite (1)                           72         76       219        216
  Media                                  116        114       319        304
----------------------------------------------------------------------------
                                         585        567     1,724      1,626
Amortization                           (212)      (198)     (631)      (599)
----------------------------------------------------------------------------
Operating income                         373        369     1,093      1,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Interest                                                                    
  Operating                               75         82       233        246
  Burrard Landing Lot 2 Holdings                                            
   Partnership                             -          -         1          1
----------------------------------------------------------------------------
                                          75         82       234        247
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Current taxes                                                               
  Operating                               85         70       240        218
  Other/non-operating                   (23)       (19)      (93)       (21)
----------------------------------------------------------------------------
                                          62         51       147        197
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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 nine month period includes 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  Nine months ended
                                                  May 31,            May 31,
                                       ------------------ ------------------
                                          2013       2012    2013       2012
                                             $          $       $          $
----------------------------------------------------------------------------
Capital expenditures accrual basis                                          
  Cable (including corporate) (1)          245        155     536        565
  Satellite (net of equipment profit)       28          -      35          4
  Media                                      6          5      16         18
----------------------------------------------------------------------------
                                           279        160     587        587
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Equipment costs (net of revenue)                                            
  Cable                                     10         14      35         61
  Satellite                                 18         17      57         63
----------------------------------------------------------------------------
                                            28         31      92        124
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital expenditures and equipment                                          
 costs (net)                                                                
  Cable                                    255        169     571        626
  Satellite                                 46         17      92         67
  Media                                      6          5      16         18
----------------------------------------------------------------------------
                                           307        191     679        711
----------------------------------------------------------------------------
Reconciliation to Consolidated                                              
 Statements of Cash Flows                                                   
  Additions to property, plant and                                          
   equipment                               235        155     545        595
  Additions to equipment costs (net)        26         32     102        137
  Additions to other intangibles            19         14      47         50
----------------------------------------------------------------------------
  Total of capital expenditures and                                         
   equipment costs (net) per                                                
   Consolidated Statements of Cash                                          
   Flows                                   280        201     694        782
  Increase (decrease) in working                                            
   capital related to capital                                               
   expenditures                             26        (7)       -       (47)
  Increase in customer equipment                                            
   financing receivables                     2        (2)    (10)       (14)
  Less: Proceeds on disposal of                                             
   property, plant and equipment             -          -     (3)        (8)
  Less: Satellite equipment profit (2)     (1)        (1)     (2)        (2)
----------------------------------------------------------------------------
  Total capital expenditures and                                            
   equipment costs (net) reported by                                        
   segments                  
              307        191     679        711
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)  The three and nine months ended May 31, 2013 includes $40 and $50,     
     respectively, related to certain capital investments that 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 
Transactions with Rogers Communications Inc. ("Rogers") 
During the second quarter, the Company entered into agreements with
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
sale of Mountain Cable closed on April 30, 2013. The acquisition of
the additional interest in TVtropolis is expected to close in the
fourth quarter while the exercise of the option and the sale of the
wireless spectrum licenses is still subject to regulatory approval
and 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 Company incurred costs of $5 in respect of the transactions with
Rogers. These costs have been expensed and are included in
acquisition and divestment costs in the statement of income. 
Mountain Cable 
Mountain Cable has approximately 40,000 video customers in its
operations based in Hamilton, Ontario. It represented a disposal
group within the cable operating segment and accordingly, is not
presented as discontinued operations in the statement of income.  
The Company received proceeds of $398 in cash on the sale of the
Mountain Cable and recorded a gain of $50. The consideration may be
impacted by settlement of final closing adjustments. The assets and
liabilities disposed of were as follows: 


 
                                                                           $
----------------------------------------------------------------------------
Accounts receivable                                                        2
Property, plant and equipment                                             65
Other long-term assets                                                     3
Intangibles                                                              245
Goodwill                                                                  81
----------------------------------------------------------------------------
                                                                         396
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Accounts payable and accrued liabilities                                   1
Income tax payable                                                         1
Unearned revenue                                                           2
Deferred credits                                                           2
Deferred income taxes                                                     42
----------------------------------------------------------------------------
                                                                          48
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Wireless spectrum licenses 
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.
During the second quarter, the Company received $50 in respect of the
purchase price of the option to acquire the wireless spectrum
licenses. The amount is recorded 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. In the current
quarter, the Company received a $200 refundable deposit in respect of
the option exercise price. The deposit has been recorded 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
refunded to Rogers if the option is not exercised and expires. 
TVtropolis 
The $59 deposit paid to acquire the non-controlling interest in
TVtropolis is included in investments and other assets.  
ENMAX Envision Inc. ("Envision") 
On April 30, 2013, the Company acquired Envision, a wholly-owned
subsidiary of ENMAX Corporation, for $222 in cash. Envision provides
telecommunication services to business customers in Calgary and the
surrounding area. The purpose of the transaction is to expand on the
Company's business initiatives and enhance the profile of its
telecommunications services in the competitive Calgary business
marketplace. 
Envision has contributed approximately $3 of revenue and $1 of net
income for the one month period. If the acquisition had occurred on
September 1, 2012, revenue and net income would have been
approximately $25 and $8, respectively. Acquisition related costs of
$3 to effect the transaction have been incurred and are included in
acquisition and divestment costs in the statement of income. 
The purchase price allocation is preliminary pending finalization of
valuation of net assets acquired and settlement of final closing
adjustments. A summary of net assets and preliminary allocation of
consideration is as follows: 


 
                                                                           $
----------------------------------------------------------------------------
Accounts receivable                                                        3
Other current assets                                                       1
Property, plant and equipment                                             73
Intangibles (1)                                                           87
Goodwill (2)                                                              68
----------------------------------------------------------------------------
                                                                         232
Accounts payable and accrued liabilities                                   1
Unearned revenue                                                           2
Deferred credits                                                           5
Deferred income tax liability                                              2
----------------------------------------------------------------------------
                                                                         222
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)  Intangibles is comprised of customer relationships and are being       
     amortized over 15 years.                                               
                                                                            
(2)  Goodwill represents the combined value of growth expectations, an      
     assembled workforce and expected synergies and efficiencies from       
     integrating the operat
ions with the Company's existing business.       
     Goodwill of $66 is deductible for income tax purposes.                 

 
Transactions with Corus Entertainment Inc. ("Corus") 
During the current quarter, the Company entered into a series of
agreements with Corus, a related party subject to common voting
control, to optimize its portfolio of specialty channels. Effective
April 30, 2013, the Company sold to Corus its 49% interest in ABC
Spark and acquired from Corus its 20% interest in Food Network
Canada. In addition, the Company has agreed to sell to Corus its 50%
interest in its two French-language channels, Historia and Series+.
The sale of Historia and Series+ is expected to occur in the fall of
2013. 
Food Network Canada and ABC Spark 
The acquisition of an additional 20% interest in Food Network Canada
increased the Company's ownership to 71%. The difference between the
consideration of $67 and carrying value of the interest acquired of
$47 has been charged to retained earnings.  
The Company recorded proceeds, including working capital adjustments,
of $22 and gain on sale of associate of $9 on the disposition of its
49% interest in ABC Spark. 
The Company issued a non-interest bearing promissory note in an
initial principal amount of $45 to satisfy the net consideration in
respect of these transactions. The consideration may be impacted by
settlement of final closing adjustments. The promissory note is due
and payable on the earlier of the closing date of the Company's sale
of Historia and Series+ to Corus and September 30, 2013. 
Historia and Series+ 
The assets and liabilities associated with Historia and Series+ and
classified as held for sale in the statement of financial position at
May 31, 2013 are as follows: 


 
                                                                           $
----------------------------------------------------------------------------
Accounts receivable                                                        6
Other current assets                                                       4
Intangibles                                                               93
Goodwill                                                                   4
----------------------------------------------------------------------------
                                                                         107
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Accounts payable and accrued liabilities                                   3
Deferred income tax liability                                             12
----------------------------------------------------------------------------
                                                                          15
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
5. OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES 


 
                                       Three months ended  Nine months ended
                                                  May 31,            May 31,
                                       ------------------ ------------------
                                          2013       2012    2013       2012
                                             $          $       $          $
----------------------------------------------------------------------------
Employee salaries and benefits             224        219     665        630
Purchases of goods and services            517        492   1,507      1,532
----------------------------------------------------------------------------
                                           741        711   2,172      2,162
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
6. LONG-TERM DEBT  


 
                                     May 31, 2013            August 31, 2012
                       -------------------------- --------------------------
                                            Long-                           
                          Long-              term    Long-             Long-
                           term  Adjust-     debt     term              term
                        debt at     ment   repay-  debt at  Adjust-     debt
                         amort-      for  able at   amort- ment for   repay-
                           ized  finance   matur-     ized  finance  able at
                           cost    costs      ity     cost    costs maturity
                              $        $        $        $        $        $
----------------------------------------------------------------------------
Corporate                                                                   
Cdn Senior notes-                                                           
 6.10% due November 16,                                                     
  2012                        -        -        -      450        -      450
 7.50% due November 20,                                                     
  2013                      350        -      350      349        1      350
 6.50% due June 2, 2014     598        2      600      598        2      600
 6.15% due May 9, 2016      296        4      300      295        5      300
 5.70% due March 2,                                                         
  2017                      398        2      400      397        3      400
 5.65% due October 1,                                                       
  2019                    1,243        7    1,250    1,242        8    1,250
 5.50% due December 7,                                                      
  2020                      496        4      500      496        4      500
 6.75% due November 9,                                                      
  2039                     1416       34    1,450    1,416       34    1,450
----------------------------------------------------------------------------
                          4,797       53    4,850    5,243       57    5,300
----------------------------------------------------------------------------
Other                                                                       
Burrard Landing Lot 2                                                       
 Holdings Partnership        19        -       19       20        -       20
----------------------------------------------------------------------------
Total consolidated debt   4,816       53    4,869    5,263       57    5,320
Less current portion                                                        
 (1)                        350        -      350      451        -      451
----------------------------------------------------------------------------
                          4,466       53    4,519    4,812       57    4,869
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)  Current portion of long-term debt at May 31, 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 nine months ended May 31, 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            -   -    2,498,230    56            -    -
Issued pursuant to                                                          
 dividend reinvestment                                                      
 plan                             -   -    4,094,597    91            -    -
----------------------------------------------------------------------------
May 31, 2013             22,520,064   2  427,781,524 2,602   12,000,000  293
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


 
                                      Three months ended   Nine months ended
                                                 May 31,             May 31,
                                     ------------------- -------------------
                                        2013        2012    2013        2012
----------------------------------------------------------------------------
Numerator for basic and diluted                                             
 earnings per share ($)                                                     
Net income                               250         248     667         628
Deduct: net income attributable to                                          
 non-controlling interests              (11)        (10)    (32)        (29)
Deduct: dividends on Preferred Shares    (4)         (4)    (10)        (11)
----------------------------------------------------------------------------
Net income attributable to common                                           
 shareholders                            235         234     625         588
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Denominator (millions of shares)                                            
Weighted average number of Class A                                          
 Shares and Class B Non-Voting Shares                                       
 for basic earnings per share            449         441     447         440
Effect of dilutive securities (1)          2           1       2           1
----------------------------------------------------------------------------
Weighted average number of Class A                                          
 Shares and Class B Non-Voting Shares                                       
 for diluted earnings per share          451         442     449         441
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share ($)                                                      
  Basic                                 0.52        0.53    1.40        1.34
  Diluted                               0.52        0.53    1.39        1.33
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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 nine months ended May 31, 2013,    
     8,448,424 (2012 - 17,545,871) and 7,960,022 (2012 - 14,301,465) options
     were excluded from the diluted earnings per share calculation,         
     respectively.                                                          

 
9. OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER
COMPREHENSIVE LOSS 
Components of other comprehensive income and the related income tax
effects for the nine months ended May 31, 2013 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                      4            (1)    3
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive income and the related income tax
effects for the three months ended May 31, 2013 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                        1             -   1
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive loss and the related income tax
effects for the nine months ended May 31, 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           (1)     1
  Adjustment for hedged items recognized in the                             
   period                                            (2)             1   (1)
  Unrealized gain on available-for-sale                                     
   investment                                          3             -     3
  Reclassification of realized gain on                                      
   available-for-sale investment                     (3)             -   (3)
----------------------------------------------------------------------------
                                                       -             -     -
----------------------------------------------------------------------------
Items that will not be subsequently reclassified                            
 to income                                                                  
  Actuarial losses on employee benefit plans        (76)            19  (57)
----------------------------------------------------------------------------
                                                    (76)            19  (57)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Components of other comprehensive loss and the related income tax
effects for the three months ended May 31, 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           (1)     1
  Adjustment for hedged items recognized in the                             
   period                                            (1)             1     -
  Unrealized gain on available-for-sale                                     
   investment                                          3             -     3
  Reclassification of realized gain on                                      
   available-for-sale investment                     (3)             -   (3)
----------------------------------------------------------------------------
                                                       1             -     1
----------------------------------------------------------------------------
Items that will not be subsequently reclassified                            
 to income                                                                  
  Actuarial losses on employee benefit plans        (76)            19  (57)
----------------------------------------------------------------------------
                                                    (75)            19  (56)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Accumulated other comprehensive loss is comprised of the following: 


 
                                                May 31, 2013 August 31, 2012
                                                           $               $
----------------------------------------------------------------------------
Items that may subsequently be reclassified to                              
 income                                                                     
  Fair value of derivatives                                2             (1)
                                                                            
Items that will not be subsequently                                         
 reclassified to income                                                     
  Actuarial losses on employee benefit plans            (92)            (92)
----------------------------------------------------------------------------
                                                        (90)            (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  Nine months ended
                                                  May 31,            May 31,
                                       ------------------ ------------------
                                          2013       2012    2013       2012
                                             $          $       $          $
----------------------------------------------------------------------------
Net income                                 250        248     667        628
Adjustments to reconcile net income to                                      
 funds flow from operations:                                                
  Amortization                             213        199     634        602
  Program rights                             2        (6)    (63)       (55)
  Deferred income tax expense                                               
   (recovery)                               31       (10)      77       (55)
  Equity income from associates              -          -       -        (1)
  CRTC benefit obligation                    -          2       -          2
  CRTC benefit obligation funding         (13)       (10)    (37)       (31)
  Gain on sale of cablesystem (note 4)    (50)          -    (50)          -
  Divestment costs (note 4)                  5          -       5          -
  Gain on remeasurement of interests in                                     
   equity investments                        -        (6)       -        (6)
  Gain on sale of associate (note 4)       (9)          -     (9)          -
  Share-based compensation                   1          1       3          4
  Defined benefit pension plans              3          3   (292)         11
  Gain on derivative instruments             -          -       -        (1)
  Realized loss on settlement of                                            
   derivative instruments                    -          -       -        (7)
  Accretion of long-term liabilities                                        
   and provisions                            2          4       7         11
  Settlement of amended cross-currency                                      
   interest rate agreements                  -          -       -      (162)
  Other                                      3        (1)       9          4
----------------------------------------------------------------------------
Funds flow from operations                 438        424     951        944
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


 
                                      Three months ended   Nine months ended
                                                 May 31,             May 31,
                                     ------------------- -------------------
                                        2013        2012    2013        2012
                                           $           $       $           $
----------------------------------------------------------------------------
Interest                                 117         131     283         295
Income taxes                               4          53     135         169
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


 
                                      Three months ended   Nine months ended
                                                 May 31,             May 31,
                                     ------------------- -------------------
                                        2013        2012    2013        2012
                                           $           $       $           $
----------------------------------------------------------------------------
Issuance of Class B Non-Voting                                              
 Shares:                                                                    
  Dividend reinvestment plan              34          24      91          71
Issuance of promissory note:                                                
  Transactions with a related party                                         
   (note 4)                               45           -      45           -
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
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 gains (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 $12 in respect of ongoing recovery activities. 
13. SUBSEQUENT EVENT 
On June 11, 2013, the CRTC approved the Company's acquisition of
Rogers' 33.3% interest in TVtropolis. The sale is expected to close
during the fourth quarter.
Contacts:
Shaw Communications Inc.
Shaw Investor Relations
Investor.relations@sjrb.ca
www.shaw.ca