SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

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

For the month of January 2011

Commission File Number: 001-14684

Shaw Communications Inc.

(Translation of registrant’s name into English)

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

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

Form 20-F ¨ Form 40-F þ

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

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

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

Yes o No þ

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

The information contained in this report on Form 6-K and any exhibits hereto shall be deemed filed with the Securities and Exchange Commission (“SEC”) solely for purpose of being and hereby are incorporated by reference into and as part of the Registration Statement on Form F-10 (File No. 333-170416) filed by the registrant under the Securities Act of 1933, as amended.

 

 

SIGNATURE

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

		Shaw Communications Inc.
Date: January 13, 2011		By:		/s/ Steve Wilson
				Name: Steve Wilson
				Title: Sr. V.P., Chief Financial Officer

Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
NOVEMBER 30, 2010

January 13, 2011

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

The following should also be read in conjunction with Management’s Discussion and Analysis included in the Company’s August 31, 2010 Annual Report including the Consolidated Financial Statements and the Notes thereto and the unaudited interim Consolidated Financial Statements and the Notes thereto of the current quarter.

CONSOLIDATED RESULTS OF OPERATIONS
FIRST QUARTER ENDING NOVEMBER 30, 2010

Selected Financial Highlights

		Three months ended November 30,
										Change
($000’s Cdn except per share amounts)		2010				2009				%
Operations:
Revenue			1,078,905				905,934				19.1
Operating income before amortization (1)			473,354				474,952				(0.3	)
Operating margin (1) (2)			43.9	%			44.1	%			(0.2	)
Funds flow from operations (3)			264,380				338,952				(22.0	)
Net income			20,332				114,229				(82.2	)
Per share data:
Earnings per share — basic and diluted		$	0.04			$	0.26
Weighted average participating shares outstanding during period (000’s)			433,792				432,507

(1)		See definition under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Operating margin is adjusted to exclude the one-time CRTC Part II recovery for the three months ended November 30, 2009. Including the one-time CRTC Part II recovery, the operating margin would be 52.4%.
(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

						Growth
		Total				Three months ended November 30,
		November 30, 2010				2010				2009
Subscriber statistics:
Basic cable customers			2,326,766				(7,542	)			(1,416	)
Digital customers			1,713,135				62,216				88,259
Internet customers (including pending installs)			1,837,618				18,752				36,242
Digital phone lines (including pending installs)			1,146,148				49,842				61,461
DTH customers			904,257				(1,539	)			1,097

Shaw Communications Inc.

Additional Highlights

•		Revenue of $1.08 billion for the three month period improved 19.1% over the comparable period last year.
•		Free cash flow1 for the quarter was $145.0 million compared to $165.4 million for the same period last year.
•		During the quarter the Corporation’s Board of Directors announced the orderly transition of executive management responsibilities and effective November 17, 2010 Brad Shaw was appointed Chief Executive Officer.
•		Shaw launched the “Together is Amazing” movement as an opportunity for every Canadian to extend him/herself. Together is Amazing gives momentum to ideas by allowing people to join together to accomplish more as a group than they could ever do alone. Fill the Food Banks was the first campaign launched and ran from September 20 to November 15, 2010.
•		On October 27, 2010 Shaw completed the final steps in the Canwest acquisition transaction funding additional payments of approximately $500 million, which paid Canwest bondholders, other affected creditors of Canwest and Canwest shareholders, as well as other transaction costs.
•		On December 7, 2010 Shaw closed an offering of $900 million in senior unsecured notes, including $500 million principal amount of 5.50% notes due 2020, as well as an additional $400 million of its reopened offering of 6.75% notes due 2039.
•		Today the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.92 on Shaw’s Class B Non-Voting Participating shares and $0.9175 on Shaw’s Class A Participating shares. This new rate will be effective commencing with the monthly dividends to be paid on March 30, 2011.

Consolidated Overview

Consolidated revenue of $1.08 billion for the quarter improved 19.1% over the same period last year. The improvement was primarily due to the acquisition of Shaw Media, as well as customer growth and rate increases in the Cable and Satellite divisions. Consolidated operating income before amortization for the three month period of $473.4 million was comparable to the same period last year. The current period included Shaw Media from the acquisition closing date on October 27, 2010 and also improved revenue related growth, partially offset by higher employee related and other costs in the Cable and Satellite divisions. The prior three month period benefitted from a one-time CRTC Part II fee recovery of $75.3 million. Excluding this one-time recovery, the current year improvement was 18.4%.

Shaw Communications Inc.

Net income was $20.3 million for the three months ended November 30, 2010 compared to $114.2 million for the same period last year. Non-operating items affected net income in both periods. The current period included a charge of $139.1 million for the discounted value of the $180.0 million CRTC benefit obligation, net of incremental revenues, related to the Media acquisition, as well as business acquisition, integration and restructuring expenses of $58.1 million. The prior period included debt retirement costs and amounts related to financial instruments of $81.6 million and $44.6 million, respectively. Outlined below are further details on these and other operating and non-operating components of net income for each period.

		Three months ended												Three months ended
						Operating net				Non-								Operating net				Non-
($000’s Cdn)		November 30, 2010				of interest				operating				November 30, 2009				of interest				operating
Operating income			292,612												315,854
Amortization of financing costs — long-term debt			(1,020	)											(1,101	)
Interest expense — debt			(68,695	)											(62,064	)
Operating income after interest			222,897				222,897				—				252,689				252,689				—
Debt retirement costs			—				—				—				(81,585	)			—				(81,585	)
CRTC benefit obligation			(139,098	)							(139,098	)
Business acquisition, integration and restructuring expenses			(58,104	)			—				(58,104	)			—				—				—
Loss on derivative instruments			(1,411	)			—				(1,411	)			(44,432	)			—				(44,432	)
Accretion of long-term liabilities			(1,933	)			—				(1,933	)			(213	)			—				(213	)
Foreign exchange gain on unhedged long-term debt			3,318				—				3,318				—				—				—
Other gains			2,429				—				2,429				8,717				—				8,717
Income (loss) before income taxes			28,098				222,897				(194,799	)			135,176				252,689				(117,513	)
Current income tax expense (recovery)			55,342				59,600				(4,258	)			94,578				67,006				27,572
Future income tax expense (recovery)			(33,951	)			4,066				(38,017	)			(73,631	)			5,551				(79,182	)
Income (loss) before following			6,707				159,231				(152,524	)			114,229				180,132				(65,903	)
Equity income on investees			13,625				—				13,625				—				—				—
Net income (loss)			20,332				159,231				(138,899	)			114,229				180,132				(65,903	)

1		See definitions and discussion under Key Performance Drivers in Management’s Discussion and Analysis.

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

		November 30, 2010 net income compared to:
		Three months ended
(000’s Cdn)		August 31, 2010				November 30, 2009
Increased (decreased) operating income before amortization			50,202				(1,598	)
Increased amortization			(7,536	)			(21,563	)
Increased interest expense			(6,191	)			(6,631	)
Change in net other costs and revenue (1)			(169,769	)			(63,661	)
Decreased (increased) income taxes			32,051				(444	)
			(101,243	)			(93,897	)

(1)		Net other costs and revenue includes debt retirement costs, the CRTC benefit obligation, business acquisition, integration and restructuring expenses, loss on derivative instruments, accretion of long-term liabilities, foreign exchange gain on unhedged long-term debt, other gains and equity income on investees as detailed in the unaudited interim Consolidated Statements of Income and Retained Earnings.

Shaw Communications Inc.

Basic earnings per share were $0.04 for the quarter compared to $0.26 in the same period last year. The decrease was primarily due to higher net other costs and revenue of $63.7 million and increased amortization of $21.6 million. The change in net other costs and revenue was primarily due to amounts related to the CRTC benefit obligation and various acquisition, integration and restructuring costs in the current period partially offset by debt retirement costs and amounts related to financial instruments associated with the early redemption of the three series of US senior notes in the prior year. Operating income before amortization was comparable over both periods. In the prior three month period operating income before amortization included a one-time CRTC Part II fee recovery of $75.3 million which was offset in the current period by amounts related to Shaw Media and growth in the Cable and Satellite divisions.

Net income in the current quarter decreased $101.2 million compared to the fourth quarter of fiscal 2010 mainly due to increased net other costs and revenue of $169.8 million resulting from the CRTC benefit obligation and various acquisition, integration and restructuring costs partially offset by improved operating income before amortization of $50.2 million due to the Media acquisition.

Free cash flow for the quarter of $145.0 million compared to $165.4 million in the same period last year. The decrease was mainly due to higher capital investment of $18.6 million in the current period. Operating income was comparable over both periods due to the one-time CRTC Part II fee recovery last year being offset by amounts in the current period from Shaw Media and growth in the Cable and Satellite divisions. The Cable division generated $77.9 million of free cash flow for the quarter compared to $121.0 million in the comparable period. The Satellite division achieved free cash flow of $27.1 million for the three month period compared to $44.4 million last year. The Media division generated $40.0 million of free cash flow for the period from October 27 to November 30, 2010.

In May 2010 Shaw announced that it had entered into agreements to acquire 100% of the broadcasting business of Canwest including all the equity interest in CW Media, the company that owns the specialty channels acquired from Alliance Atlantis Communications Inc. in 2007. The total consideration of approximately $2.0 billion included approximately $815.0 million of net debt at CW Media. During 2010, the Company completed certain portions of the acquisition and funded $743.0 million, including acquisition costs, with cash on hand. Also during 2010 the Competition Bureau cleared Shaw’s acquisition of Canwest’s broadcasting business and the Ontario Superior Court of Justice issued a sanction order approving the restated consolidated plan of compromise, arrangement and reorganization. In late September the CRTC held a public hearing to consider Shaw’s application to assume control of Canwest and approval was given on October 22, 2010. Shaw completed the transaction on October 27, 2010 and funded total payments of approximately $500.0 million, which paid Canwest bondholders, other affected creditors of Canwest and Canwest shareholders, as well as other transaction costs. Shaw assumed approximately $815.0 million of debt outstanding in CW Media, including a term loan and the 2015 Notes. Immediately after the closing Shaw refinanced the CW Media term loan, including breakage of related currency swaps, which will generate significant interest savings.

In September Shaw launched the Together is Amazing movement aiming to harness the power of the Shaw network across Canada to inspire people and communities to come together to do something amazing. Fill the Food Banks was the first campaign launched and ran from September 20 to November 15, 2010. Demonstrating the power of togetherness, Shaw along with partnering organizations and community members across Canada more than doubled their goal of one million pounds of food, raising in excess of two and a half million pounds of food for food banks across Canada.

Shaw Communications Inc.

On December 7, 2010 Shaw closed an offering of $900 million in senior unsecured notes, including $500 million principal amount of 5.50% notes due 2020, as well as an additional $400 million from its reopened offering of 6.75% notes due 2039. The net proceeds were used for repayment of debt incurred under Shaw’s credit facility to complete the acquisition of the broadcasting assets of Canwest and effect the subsequent related debt refinancing.

On December 21, 2010 Shaw announced that it completed the repurchase of US $51.6 million of the 2015 Notes. As a result of a change of control triggered due to the acquisition of the Media business, an offer to purchase all of the 2015 Notes outstanding was required. An aggregate of US $51.6 million face amount of the 2015 Notes was tendered to the Change of Control Offer and were purchased for cancellation for an aggregate price of approximately $60.0 million, including accrued interest. The Change of Control Offer expired on December 15, 2010 and no further purchases are required.

Key Performance Drivers

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

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

Operating income before amortization and operating margin

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

Free cash flow

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

Shaw Communications Inc.

Free cash flow for cable and satellite 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 equipment costs (net) and adjusted to exclude stock-based compensation expense.

Commencing in 2011 with respect to the new Media segment, free cash flow will be determined as detailed above and in addition, Shaw will deduct cash amounts associated with funding the new and assumed CRTC benefit obligation related to the acquisition of Shaw Media as well as exclude the non-controlling interest amounts that are consolidated in the operating income before amortization, capital expenditure and cash tax amounts.

Free cash flow is calculated as follows:

		Three months ended November 30,
($000’s Cdn)		2010				2009 (2)
Cable free cash flow (1)			77,914				121,010
Combined satellite free cash flow (1)			27,092				44,418
Media free cash flow (1)			40,015				—
Free cash flow			145,021				165,428

(1)		Reconciliations of free cash flow for cable, satellite and media are provided under “Cable — Financial Highlights”, “Satellite — Financial Highlights” and “Media — Financial Highlights”.
(2)		The presentation of segmented free cash flow has been adjusted to reflect on a gross basis to include intersegment transactions. As a result, Cable free cash flow has decreased and Combined satellite free cash flow has increased by $850.

Shaw Communications Inc.

CABLE
FINANCIAL HIGHLIGHTS

		Three months ended November 30,
										Change
($000’s Cdn)		2010				2009 (3)				%
Revenue			757,831				709,747				6.8
Operating income before amortization (1)			347,855				380,252				(8.5	)
Capital expenditures and equipment costs (net):
New housing development			25,624				21,730				17.9
Success based			62,975				50,350				25.1
Upgrades and enhancement			61,533				62,169				(1.0	)
Replacement			11,739				12,578				(6.7	)
Buildings/other			15,509				13,258				17.0
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			177,380				160,085				10.8
Free cash flow before the following			170,475				220,167				(22.6	)
Less:
Interest expense			(50,947	)			(55,166	)			(7.6	)
Cash taxes			(45,375	)			(48,005	)			(5.5	)
Other adjustments:
Non-cash stock based compensation			3,761				4,014				(6.3	)
Free cash flow (1)			77,914				121,010				(35.6	)
Operating margin (2)			45.9	%			46.7	%			(0.8	)

(1)		See definitions and discussion under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Operating margin is adjusted to exclude the one-time CRTC Part II fee recovery in the three months ended November 30, 2009. Including the one-time CRTC Part II recovery, operating margin would be 53.6%.
(3)		The presentation of segmented free cash flow has been adjusted to reflect on a gross basis to include intersegment transactions. As a result, revenue has increased by $1,237 and operating income before amortization and free cash flow have decreased by $850.

Operating Highlights

•

Digital customers increased 62,216 during the quarter to 1,713,135. Shaw’s Digital penetration of Basic is now 73.6%, up from 70.7% and 56.7% at August 31, 2010 and 2009, respectively.

•

Digital Phone lines increased 49,842 during the three month period to 1,146,148 lines and Internet was up 18,752 to total 1,837,618 as at November 30, 2010. During the quarter Basic cable subscribers decreased 7,542.

Cable revenue improved 6.8% for the three month period to $757.8 million over the comparable period last year. Rate increases and customer growth, including acquisitions, partially offset by higher promotional activity, accounted for the improvement. Operating income, excluding the one-time CRTC Part II fee recovery last year of $48.7 million, increased approximately 5% over the comparable quarter. The revenue related growth was partially reduced by higher employee related amounts, mainly due to employee growth and annual merit increases, and increased programming costs. The current period also included a charge related to a recent CRTC decision approving a retroactive rate increase in support structure charges by ILECs. Excluding the Part II fee recovery and the support structure charge, the annual improvement was almost 7.0%.

Shaw Communications Inc.

Revenue increased $15.4 million over the fourth quarter of fiscal 2010 primarily due to rate increases and customer growth partially offset by increased promotional activity. Operating income before amortization declined $7.8 million over this same period primarily due to increased expenses including employee costs, mainly due to annual merit increases, support structure amounts, programming fees, and marketing and sales expenses.

Total capital investment of $177.4 million for the quarter increased $17.3 million over the same period last year.

Success-based capital increased $12.6 million over the comparable three month period due to higher HDPVR rental activity.

Investment in Upgrades and Enhancement and Replacement categories are comparable to the same period last year. The current quarter included higher spending on network capacity offset by lower spending on fibre expansion, upgrades and node segmentation. Shaw continues to invest in technology initiatives to optimize its network and expand capacity.

Investment in Buildings and Other was up modestly in the current three month period. The increase was mainly due to increased investment in various facilities projects and costs related to upgrading billing and provisioning systems partially offset by proceeds on the sale of certain redundant real estate assets.

Spending in new housing development increased $3.9 million over the comparable quarter last year mainly due to higher activity.

During the quarter the Company closed the acquisition of the Lake Broadcasting cable system in British Columbia. The acquisition is complementary to and will provide synergies with existing operations.

As at November 30, 2010 Shaw had 1,146,148 Digital Phone lines which represents a 49.3% penetration of Basic. Shaw also continued to grow its Digital customer base and Digital penetration of Basic at November 30, 2010 was 73.6%, up from 70.7% at August 31, 2010. Shaw now has approximately 790,000 HD capable customers who have access to over 50 HD channels and even greater choice through VOD HD programming.

Shaw Communications Inc.

Subscriber Statistics

										Three months ended
										November 30, 2010
														Change
		November 30, 2010				August 31, 2010(1)				Growth				%
CABLE:
Basic service:
Actual			2,326,766				2,334,308				(7,542	)			(0.3	)
Penetration as % of homes passed			60.9	%			61.4	%
Digital customers			1,713,135				1,650,919				62,216				3.8
INTERNET:
Connected and scheduled			1,837,618				1,818,866				18,752				1.0
Penetration as % of basic			79.0	%			77.9	%
Standalone Internet not included in basic cable			225,078				233,426				(8,348	)			(3.6	)
DIGITAL PHONE:
Number of lines (2)			1,146,148				1,096,306				49,842				4.5

(1)		August 31, 2010 figures are restated for comparative purposes as if the acquisition of the Lake Broadcasting cable system in British Columbia had occurred on that date.
(2)		Represents primary and secondary lines on billing plus pending installs.

Shaw Communications Inc.

SATELLITE (DTH and Satellite Services)
FINANCIAL HIGHLIGHTS

		Three months ended November 30,
										Change
($000’s Cdn)		2010				2009 (5)				%
Revenue
DTH (Shaw Direct)			185,379				179,764				3.1
Satellite Services			20,794				20,947				(0.7	)
			206,173				200,711				2.7
Operating income before amortization (1)
DTH (Shaw Direct)			59,073				83,726				(29.4	)
Satellite Services			10,436				10,974				(4.9	)
			69,509				94,700				(26.6	)
Capital expenditures and equipment costs (net):
Success based (3)			23,552				23,040				2.2
Buildings and other			788				2,084				(62.2	)
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			24,340				25,124				(3.1	)
Free cash flow before the following			45,169				69,576				(35.1	)
Less:
Interest expense (2)			(6,265	)			(6,563	)			(4.5	)
Cash taxes			(12,225	)			(19,001	)			(35.7	)
Other adjustments:
Non-cash stock option expense			413				406				1.7
Free cash flow (1)			27,092				44,418				(39.0	)
Operating Margin (4)			33.7	%			33.9	%			(0.2	)

(1)		See definitions and discussion under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Interest is allocated to the Satellite division based on the cost of debt incurred by the Company to repay Satellite debt and to fund accumulated cash deficits of Shaw Satellite Services and Shaw Direct.
(3)		Net of the profit on the sale of satellite equipment as it is viewed as a recovery of expenditures on customer premise equipment.
(4)		Operating margin is adjusted to exclude the one-time CRTC Part II fee recovery in the three months ended November 30, 2009. Including the one-time CRTC Part II fee recovery, operating margin would be 47.2%.
(5)		The presentation of segmented free cash flow has been adjusted to reflect on a gross basis to include intersegment transactions. As a result, revenue has increased by $3,287 and operating income before amortization and free cash flow have increased by $850.

Operating Highlights

•

During the quarter Shaw Direct had a net loss of 1,539 customers and as at November 30, 2010 DTH customers total 904,257.

•

Free cash flow for the quarter of $27.1 million compares to $44.4 million in the same period last year.

Revenue of $206.2 million for the three month period was up 2.7% over the same period last year. The improvement was primarily due to rate increases. Operating income before amortization, excluding the one-time Part II fee recovery of $26.6 million in the prior period, improved 2% over the comparable quarter.

Operating income before amortization improved $0.7 million compared to the fourth quarter primarily due to rate increases partially offset by expenses related to customer growth including higher programming costs.

Shaw Communications Inc.

Total capital investment of $24.3 million for the quarter compared to $25.1 million in the same period last year. Other capital was lower mainly due to the expenditures in the prior year related to call centre expansion.

Shaw Direct continually strives to deliver an exceptional customer experience through leading technology, innovative programming and high quality customer service. During the quarter Shaw Direct introduced a new HD receiver with advanced features, launched 13 HD channels including Movie Central 2, Super Ecran 2 and Sportsnet One and as at November 30, 2010 offered 78 HD channels to its 415,000 HD customers.

Subscriber Statistics

										Three months ended
										November 30, 2010
														Change
		November 30, 2010				August 31, 2010				Growth				%
DTH customers (1)			904,257				905,796				(1,539	)			(0.2	)

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

Shaw Communications Inc.

MEDIA
FINANCIAL HIGHLIGHTS

		October 27, 2010 to
($000’s Cdn)		November 30, 2010
Revenue			125,397
Operating income before amortization (1)			56,772
Capital expenditures:
Broadcast and transmission			1,082
Buildings/other			1,042
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			2,124
Free cash flow before the following			54,648
Less:
Interest expense (2)			(6,484	)
Cash taxes			(2,000	)
Other adjustments:
CRTC benefit obligation funding			(2,308	)
Non-controlling interest			(3,841	)
Free cash flow (1)			40,015
Operating margin			45.3	%

(1)		See definitions and discussion under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Interest includes an allocation to the Media division based on the cost of debt incurred by the Company to repay Media debt.

Operating Highlights

On October 27, 2010 Shaw completed the final steps in its purchase of all of the broadcasting assets of Canwest. Collectively these assets, including the Global Television Network and 24 Specialty services, now form Shaw Media, a new division of Shaw.

These assets generate the majority of their revenue from advertising sales and subscription based services. The acquisition of the assets was completed at an attractive point in time of the economic cycle, Canwest was operating under creditor protection and had undergone a restructuring process in advance of Shaw’s acquisition. Significant costs had been removed from the business and assets had been rationalized, including closure of the E! channel. Considering the improving economic conditions within Canada and the restructuring process that Canwest had undertaken, Shaw is positioned to benefit from these assets as the economy continues to improve.

The aggregate purchase price for the Canwest broadcasting assets, including the amounts paid to acquire the shares of CW Media from affiliates of Goldman Sachs Capital Partners and the debt assumed at CW Media, was approximately $2.0 billion.

As part of the CRTC decision approving the acquisition, Shaw is required to contribute approximately $180.0 million in new benefits to the broadcasting system over the next seven years. Most of this contribution will be used to create new programming on Shaw Media services, construct digital transmission towers and provide a satellite solution for over-the-air viewers whose local television stations do not convert to digital. Shaw will also continue to fund the remaining CRTC benefit obligation of approximately $95.0 million related to the Canwest purchase of Specialty services from Alliance Atlantis in 2007.

Shaw Communications Inc.

No new targeted safeguards were imposed on Shaw by the CRTC in connection with the acquisition. Any issues of increased concentration and integration arising from overall industry consolidation will be the focus of an industry-wide hearing currently scheduled for June 2011.

Revenue in the Media division for the period October 27, 2010 to November 30, 2010 was $125.4 million and operating income before amortization was $56.8 million. In fiscal 2010 the Canwest broadcasting assets generated solid financial results and reflected the general improvement in the Canadian advertising market and the restructuring initiatives undertaken by Canwest. For informational purposes, on a comparative basis to Q1 last year, Media revenues for the full quarter were up approximately 8% and operating income before amortization, excluding the impact of the one-time Part II fee recovery last year, improved 19%.

In December 2010, in an innovative way for customers to access content whenever and wherever they want, Shaw released its Global App for the iPad. It was the number one free download on the Canadian App Store during the entire first week of launch. The Global App for iPad offers viewers another exciting way to access the network’s blockbuster library of premium content, including full episodes of House, The Good Wife, NCIS: LA, The Office, Rookie Blue and Survivor.

WIRELESS
FINANCIAL HIGHLIGHTS

		Three months ended
($000’s Cdn)		November 30, 2010
Operating expenditures			782
Interest expense (1)			4,673
Capital expenditures (as per Note 2 to the unaudited interim Consolidated Financial Statements)			23,341
Total expenditures on Wireless infrastructure build			28,796

(1)		Interest is allocated to the Wireless division based on the Company’s average cost of borrowing to fund the capital expenditures and operating costs.

•

During the quarter the Company continued its Wireless infrastructure build and invested $24.1 million on this strategic initiative.

During the quarter Shaw was active in equipment purchasing, site acquisition and physical construction of cell sites. Core network components are in the process of installation and an initial lab system is activated with certain test functionality.

The Company is taking a disciplined approach to wireless to ensure delivery of an exceptional customer experience and now expects to roll out these services in the first major market early in calendar year 2012.

Shaw Communications Inc.

OTHER INCOME AND EXPENSE ITEMS

Amortization

		Three months ended November 30,
										Change
($000’s Cdn)		2010				2009				%
Amortization revenue (expense) —
Deferred IRU revenue			3,137				3,137				—
Deferred equipment revenue			27,318				31,261				(12.6	)
Deferred equipment costs			(52,106	)			(59,509	)			(12.4	)
Deferred charges			(256	)			(256	)			—
Property, plant and equipment			(148,829	)			(124,639	)			19.4
Other intangibles			(10,006	)			(9,092	)			10.1

Amortization of deferred equipment revenue and deferred equipment costs decreased over the comparative period due to the sales mix of equipment, changes in customer pricing on certain equipment and the impact of rental programs.

Amortization of property, plant and equipment and other intangibles increased over the comparable period as the amortization of capital expenditures exceeded the impact of assets that became fully depreciated.

Amortization of financing costs and Interest expense

		Three months ended November 30,
										Change
($000’s Cdn)		2010				2009				%
Amortization of financing costs — long-term debt			1,020				1,101				(7.4	)
Interest expense — debt			68,695				62,064				10.7

Interest expense increased over the comparative period as a result of the Canwest broadcasting business acquisition. Approximately $1 billion was required to complete the transaction including repayment of the CW Media term loan and breakage of related currency swaps. In addition, US $338.3 million 13.5% senior unsecured notes were assumed as part of the acquisition.

Debt retirement costs

During the first quarter of the prior year, the Company redeemed all of its outstanding US $440 million 8.25% senior notes due April 11, 2010, US $225 million 7.25% senior notes due April 6, 2011 and US $300 million 7.20% senior notes due December 15, 2011. In connection with the early redemption, the Company incurred costs of $79.5 million and wrote-off the remaining discount and finance costs of $2.1 million. The Company used proceeds from its $1.25 billion senior notes issuance in early October 2009 to fund the cash requirements for the redemptions.

Shaw Communications Inc.

CRTC benefit obligation

As part of the CRTC decision approving the Media acquisition, the Company is required to contribute approximately $180 million in new benefits to the Canadian broadcasting system over the next seven years. Most of this contribution will be used to create new programming on Shaw Media services, construct digital transmission towers and provide a satellite solution for over-the-air viewers whose local television stations do not convert to digital. The fair value of the obligation of $139.1 million has been recorded in the income statement and was determined by discounting future net cash flows using a 5.75% discount rate.

Business acquisition, integration and restructuring expenses

During the first quarter, the Company recorded $58.1 million of costs in respect of the acquisition of the broadcasting businesses of Canwest and organizational restructuring. Amounts include acquisition related costs to effect the acquisition, such as professional fees paid to lawyers and consultants. The integration and restructuring costs relate to integrating the new businesses and increasing organizational effectiveness for future growth. The amount also includes package costs for the former CEO of $25.5 million, which represents 3 years total compensation of $8.5 million per annum. This is in line with standards and practices for a CEO of his long tenure.

Loss on derivative instruments

For derivative instruments where hedge accounting is not permissible or derivatives are not designated in a hedging relationship, the Company records changes in the fair value of derivative instruments in the income statement. The total amount recorded in respect of all such derivative instruments was a loss of $1.4 million and $44.4 million for the three months ended November 30, 2010 and 2009, respectively. The comparative period included a loss of $50.1 million which was reclassified from accumulated other comprehensive loss in respect of the cross-currency interest rate exchange agreements that no longer qualified as cash flow hedges when the US senior notes were redeemed in October 2009.

Accretion of long-term liabilities

The Company recorded accretion expense of $1.9 million in respect of the discounting of certain long-term liabilities which are accreted to their estimated value over their respective terms. The expense is primarily in respect of CRTC benefit obligations as well as the liability which arose in 2010 when the Company entered into amended agreements with the counterparties to certain cross-currency agreements to fix the settlement of the principal portion of the swaps in December 2011.

Foreign exchange gain on unhedged long-term debt

In conjunction with the acquisition of the broadcasting businesses of Canwest, the Company assumed a US $389.6 million term loan and US $338.3 million senior unsecured notes. Shortly after closing the acquisition, the Company repaid the term loan including breakage of the related cross currency interest rate swaps. As a result of fluctuations of the Canadian dollar relative to the US dollar, a net foreign exchange gain of $3.3 million was recorded.

Shaw Communications Inc.

Other gains

This category generally includes realized and unrealized foreign exchange gains and losses on US dollar denominated current assets and liabilities, gains and losses on disposal of property, plant and equipment and the Company’s share of the operations of Burrard Landing Lot 2 Holdings Partnership (“the Partnership”).

Income taxes

Income taxes were comparable to the same period last year as the impact of lower net income before income taxes in the current period was offset by an income tax recovery of $17.6 million related to reductions in corporate income tax rates recorded in the first quarter of 2010.

Equity income on investees

During the current quarter, the Company recorded income of $13.4 million in respect of its 49.9% equity interest in CW Media for the period September 1 to October 26, 2010. On October 27, 2010, the Company acquired the remaining equity interest in CW Media as part of its purchase of all the broadcasting assets of Canwest. Results of operations are consolidated effective October 27, 2010. The equity income was comprised of approximately $19.6 million of operating income before amortization partially offset by interest expense of $4.5 million and other net costs of $1.7 million. The remaining equity income on investees of $0.2 million is in respect of interests in several specialty channels.

RISKS AND UNCERTAINTIES

The significant risks and uncertainties affecting the Company and its business are discussed in the Company’s August 31, 2010 Annual Report under the Introduction to the Business — Known Events, Trends, Risks and Uncertainties in Management’s Discussion and Analysis. Developments of note since then are as follows:

Access rights — Support Structure Rates

On December 2, 2010 the CRTC issued its decision on rates for third party use of telecommunication carrier support structures and generally approved rate increases, retroactive to July 2009, for the majority of the ILECs that participated.

FINANCIAL POSITION

Total assets at November 30, 2010 were $12.3 billion compared to $10.2 billion at August 31, 2010. Following is a discussion of significant changes in the consolidated balance sheet since August 31, 2010.

Current assets increased by $225.2 million primarily due to increases in accounts receivable of $334.7 million, inventories of $26.6 million and prepaids and other of $34.4 million all of which were partially offset by a decrease in cash and cash equivalents of $174.7 million. Accounts receivable and prepaids and other increased primarily as a result of the Media acquisition while inventories were higher due to timing of equipment purchases to ensure sufficient supply for the holiday season. Cash and cash equivalents decreased due to funding of income tax amounts in the first quarter.

Shaw Communications Inc.

The derivative instrument is in respect of the CW Media US $338.3 million senior unsecured notes assumed by the Company as part of the Media acquisition. The notes are due in 2015 and have a variable prepayment option at a premium of 106.75 in August 2011 which declines on a straight-line basis to par in 2013.

Investments and other assets decreased by $722.4 million due to the acquisition of remaining equity interest in CW Media which is now consolidated as a 100% owned subsidiary and expensing of acquisition related costs partially offset by investments in several specialty channels purchased in the Media acquisition.

Property, plant and equipment and other intangibles increased by $163.0 million and $76.9 million, respectively as current year capital investment and amounts acquired on the Media acquisition exceeded amortization.

Deferred charges increased by $7.3 million due to prepaid maintenance and support contracts.

Broadcast rights and licenses, and goodwill increased $1.4 billion and $670.6 million, respectively, due to the acquisition of the Canwest broadcasting businesses.

Program rights and advances of $318.2 million arose on the acquisition of the Canwest broadcasting businesses.

Current liabilities (excluding current portion of long-term debt and derivative instruments) were up $47.8 million due to increases in accounts payable of $183.6 million and unearned revenue of $5.5 million partially offset by a decrease in income taxes payable of $141.3 million. Accounts payable and accrued liabilities increased primarily due to impact of the Media acquisition. Unearned revenue was up mainly due to rate increases. Income taxes payable decreased due to funding income tax amounts partially offset by current year tax expense and amounts assumed on the Media acquisition.

Total long-term debt increased $1.4 billion as approximately $1 billion was required to complete the Canwest broadcasting business acquisition, including repayment of the CW Media term loan and breakage of related currency swaps, and the assumption of CW Media’s US $338.3 million 13.5% senior unsecured notes.

Other long-term liabilities increased by $243.1 million primarily due to the non-current portion of CRTC benefit obligations as well as defined benefit pension plans as a result of the Media acquisition.

Future income taxes increased $259.6 million due to the Media acquisition partially offset by current year tax recovery.

Shaw Communications Inc.

Share capital increased $19.3 million due to the issuance of 1,036,241 Class B Non-Voting Shares under the Company’s option plan. As of December 31, 2010, share capital is as reported at November 30, 2010 with the exception of the issuance of 221,794 Class B Non-Voting Shares upon exercise of options subsequent to the quarter end. Contributed surplus increased due to stock-based compensation expense recorded in the current year. Accumulated other comprehensive income decreased due settlement of the forward purchase contracts in respect of the closing of the acquisition of the Canwest broadcasting businesses. Non-controlling interests arose in the current quarter due to a number of non-wholly owned specialty channels acquired as part of the Media acquisition.

LIQUIDITY AND CAPITAL RESOURCES

In the current quarter, the Company generated $145.0 million of free cash flow. Shaw used its free cash flow along with $1 billion of borrowings under its revolving credit facility, cash of $257.8 million and proceeds on issuance of Class B Non-Voting Shares of $17.6 million to pay $981.2 million to complete the Canwest broadcasting business acquisition including repayment of the CW Media term loan and breakage of related currency swaps, fund the net change in working capital requirements and inventory of approximately $317 million, pay common share dividends of $95.4 million, fund $23.3 million of Wireless capital expenditures and purchase the Lake Broadcasting cable system for $3.5 million.

Within thirty days of closing of the Media acquisition, a subsidiary of CW Media was required to make a change of control offer at a cash price equal to 101% of the obligations under the US 13.5% senior unsecured notes due 2015 issued by it in accordance with a related indenture dated as of July 3, 2008. As a result, on November 15, 2010, an offer was made to purchase all of the notes for an effective purchase price of US $1,145.58 for each US $1,000 face amount. An aggregate of US $51.6 million face amount was tendered under the offer and purchased by the Company for cancellation for an aggregate price of approximately $60 million, including accrued interest. The change of control offer expired on December 15, 2010 and no further purchases are required.

On December 7, 2010 the Company issued $500 million senior notes at a rate of 5.5% due December 7, 2020 and $400 million senior notes at a rate of 6.75% due November 9, 2039. The effective rate on the $500 million senior notes and $400 million senior notes is 5.548% and 6.963%, respectively, due to discounts on the issuances. The net proceeds from the notes issuances were used to repay borrowings under the Company’s $1 billion revolving credit facility. In conjunction with the senior notes issuances, the unsecured $500 million revolving credit facility was cancelled. No amounts had been drawn under this facility.

On November 25, 2010 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 37,000,000 Class B Non-Voting Shares during the period December 1, 2010 to November 30, 2011.

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.

Shaw Communications Inc.

CASH FLOW

Operating Activities

		Three months ended November 30,
($000’s Cdn)		2010				2009				Change %
Funds flow from operations			264,380				338,952				(22.0	)
Net increase in non-cash working capital balances related to operations			(202,493	)			(5,393	)			>100.0
			61,887				333,559				(81.4	)

Funds flow from operations decreased over the comparative quarter primarily due to the realized loss on the mark-to-market payments to terminate the cross-currency interest rate exchange agreements in conjunction with repayment of the CW Media term loan and the Media acquisition, integration and restructuring costs partially offset by lower current taxes in the current period. The net change in non-cash working capital balances over the comparable period is primarily due to funding of income tax amounts in the current period partially offset by the timing of payment of various trade and other payables.

Investing Activities

		Three months ended November 30,
($000’s Cdn)		2010				2009				Increase
Cash flow used in investing activities			(763,690	)			(519,898	)			243,792

The cash used in investing activities increased over the comparable quarter due to amounts paid to complete the acquisition of the broadcasting businesses of Canwest and higher capital expenditures partially offset by the cash outlay in the comparative quarter for the Mountain Cablevision acquisition and investing certain excess funds in a Government of Canada bond.

Shaw Communications Inc.

Financing Activities

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

		Three months ended November 30,
(In $millions Cdn)		2010				2009
Bank loans and bank indebtedness — net borrowings			1,000.0				—
Issuance of Cdn $1.25 billion 5.65% senior notes			—				1,246.0
Issuance of Cdn $650 million 6.75% senior notes			—				645.6
Senior notes issuance costs			—				(9.0	)
Redemption of US $440 million 8.25% senior notes			—				(465.5	)
Redemption of US $225 million 7.25% senior notes			—				(238.1	)
Redemption of US $300 million 7.20% senior notes			—				(312.6	)
Repayment of CW Media US $389.6 million term loan			(395.0	)			—
Payments on cross-currency agreements			—				(291.9	)
Debt retirement costs			—				(79.5	)
Dividends			(95.4	)			(90.8	)
Repayment of Partnership debt			(0.1	)			(0.1	)
Issue of Class B Non-Voting Shares			17.6				7.9
Purchase of Class B Non-Voting Shares for cancellation			—				(27.9	)
			527.1				384.1

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

						Operating income												Funds flow
						before								Basic earnings				from
($000’s Cdn except per share amounts)		Revenue				amortization (1)				Net income (4)				per share (3)				operations (2)
2011
First			1,078,905				473,354				20,332				0.04				264,380
2010
Fourth			938,872				423,152				121,575				0.28				327,435
Third			943,632				435,822				158,216				0.37				350,810
Second			929,142				424,825				138,712				0.32				358,206
First			905,934				474,952				114,229				0.26				338,952
2009
Fourth			872,919				394,900				124,265				0.29				321,319
Third			861,382				395,547				132,151				0.31				356,046
Second			839,144				381,832				156,585				0.37				334,508

(1)		See definition and discussion under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Funds flow from operations is presented before changes in net non-cash working capital balances related to operations as presented in the unaudited interim Consolidated Statements of Cash Flows.
(3)		Diluted earnings per share equals basic earnings per share except for the second quarter of 2009 where diluted earnings per share is $0.36.
(4)		Net income attributable to common shareholders is the same as net income except in the first quarter of 2011 where it is $16,642.

Generally, revenue and operating income before amortization have grown quarter-over-quarter mainly due to customer growth and rate increases with the exception of the second and fourth quarters of 2010. In the fourth quarter of 2010, revenue and operating income before amortization declined by $4.8 million and $12.7 million, respectively due to customer growth offset by timing of On-Demand events, increased promotional activity and timing of certain expenses including maintenance and costs related to customer growth. Operating income before amortization decreased by $50.1 million in the second quarter of 2010 due to the impact of the one-time Part II fee recovery of $75.3 million recorded in the previous quarter.

Shaw Communications Inc.

Net income has fluctuated quarter-over-quarter primarily as a result of the growth in operating income before amortization described above, the impact of the net change in non-operating items such as debt retirement costs, loss on derivative instruments, and the impact of corporate income tax rate reductions. The first quarter of the current year was also impacted by the acquisition of the Canwest broadcasting businesses. As a result, net income declined by $101.2 million in the first quarter of 2011 as the higher operating income before amortization of $50.2 million due to the contribution from the new Media division and lower income taxes of $32.1 million were offset by the CRTC benefit obligation of $139.1 million and acquisition, integration and restructuring costs of $58.1 million. Net income declined by $10.0 million in the first quarter of 2010 mainly due to debt retirement costs of $81.6 million in respect of the US senior note redemptions, the loss on derivative instruments of $44.4 million, the total of which was partially offset by higher operating income before amortization of $80.1 million (which includes the impact of the one-time Part II fee recovery of $75.3 million) and lower income taxes of $28.9 million. The lower income taxes were due to lower net income before taxes and an income tax recovery of $17.6 million related to reductions in corporate income tax rates in the first quarter of 2010. Net income increased by $24.5 million in the second quarter of 2010 due to the aforementioned items recorded in the previous quarter and the impact of customer growth, the Mountain Cablevision acquisition and lower costs including employee related and marketing expenses all of which were partially offset by increased taxes on higher net income before taxes. During the third quarter of 2010, net income increased by $19.5 million mainly due to higher operating income before amortization and lower amortization. Net income declined by $36.6 million in the fourth quarter of 2010 due to lower operating income before amortization of $12.7 million and higher amortization expense of $14.7 million. During the second quarter of 2009, the Company recorded a future tax recovery related to reduction in corporate income tax rates which contributed $22.6 million to net income. Net income declined by $24.4 million in the third quarter of 2009 primarily due to the tax recovery recorded in the immediately preceding quarter. The decline in net income in the fourth quarter of 2009 of $7.9 million is mainly due to an increase in amortization expense. As a result of the aforementioned changes in net income, basic and diluted earnings per share have trended accordingly.

ACCOUNTING STANDARDS

Update to critical accounting policies and estimates

The Management’s Discussion and Analysis (“MD&A”) included in the Company’s August 31, 2010 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 unaudited interim Consolidated Financial Statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements other than as set out as follows.

Shaw Communications Inc.

Adoption of accounting policies for Shaw Media

The following accounting policies have been adopted for the Company’s new television broadcasting operations (Shaw Media).

Revenue

Subscriber revenue is recognized monthly based on subscriber levels. Advertising revenues are recognized in the period in which the advertisements are broadcast and recorded net of agency commissions as these amounts are paid directly to the agency or advertiser. When a sales arrangement includes multiple advertising spots, the proceeds are allocated to individual advertising spots under the arrangement based on relative fair values.

Program Rights and Advances

Program rights represent licensed rights acquired to broadcast television programs on the Company’s conventional and specialty television channels and program advances are in respect of payments for programming prior to the window license start date. For licensed rights, the Company records a liability for program rights and corresponding asset when the license period has commenced and all of the following conditions have been met: (i) the cost of the program is known or reasonably determinable, (ii) the program material has been accepted by the Company in accordance with the license agreement and (iii) the material is available to the Company for telecast. Program rights are expensed on a systematic basis over the estimated exhibition period as the programs are aired and are included in operating, general and administrative expenses. If program rights are not scheduled, they are considered impaired and are written off.

CRTC Benefit Obligations

The fair value of CRTC benefit obligations committed as part of business acquisitions are initially recorded, on a discounted basis, at the present value of amounts to be paid net of any expected incremental cash inflows. The obligation is subsequently adjusted for the incurrence of related expenditures, the passage of time and for revisions to the timing of the cash flows. Changes in the obligation due to the passage of time are recorded as accretion of long-term liabilities in the income statement.

Asset Retirement Obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred, on a discounted basis, with a corresponding increase to the carrying amount of property and equipment. This cost is amortized on the same basis as the related asset. The liability is subsequently increased for the passage of time and the accretion is recorded in the income statement as accretion of long-term liabilities. Revisions due to the estimated timing of cash flows or the amount required to settle the obligation may result in an increase or decrease in the liability. Actual costs incurred upon settlement of the obligation are charged against the liability to the extent recorded.

Shaw Communications Inc.

Embedded Derivative Instruments

Derivatives embedded in other financial instruments or contracts are separated from their host contracts and separately accounted for as derivatives when their economic characteristics and risks are not closely related to the host contract, they meet the definition of a derivative and the combined instrument or contract is not measured at fair value. The Company records embedded derivatives at fair value with changes recognized in the income statement as loss/gain on derivative instruments.

Adoption of recent accounting pronouncements

Business Combinations

Effective September 1, 2010, the Company early adopted CICA Handbook Section 1582 “Business Combinations”, which replaces Section 1581 “Business Combinations”. The differences which arise from the new accounting standard relate to details in applying the acquisition method. The significant changes that result include (i) a change in the measurement date for equity instruments issued by the acquirer from a few days before and after the announcement date to the acquisition date, (ii) contingent consideration is recognized at fair value and subsequently remeasured at each reporting date until settled, (iii) future adjustments to income tax estimates are recorded in income whereas previously, certain changes were recorded in goodwill, (iv) acquisition related costs, other than costs to issue debt or equity instruments, and acquisition related restructuring costs must be expensed, (v) for business combinations completed in stages, identifiable net assets are recognized at fair value when control is obtained and a gain or loss is recognized for the difference in fair value and carrying value of the previously held equity interests, (vi) the fair value of identifiable assets and liabilities attributable to non-controlling interests must be recognized, and (vii) non-controlling interests are recorded at either fair value or their proportionate share of the fair value of identifiable net assets acquired.

Consolidated Financial Statements and Non-controlling Interests

Effective September 1, 2010, the Company early adopted CICA Handbook Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-controlling Interests” which replace Section 1600 “Consolidated Financial Statements”. The new standards provide guidance for the preparation of financial statements and accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. For presentation and disclosure purposes, non-controlling interests are classified as a separate component of shareholders’ equity. In addition, net income and comprehensive income is attributed to the Company’s shareholders and to non-controlling interests rather than reflecting the non-controlling interests as a deduction to arrive at net income and comprehensive income.

Shaw Communications Inc.

Recent accounting pronouncements:

International Financial Reporting Standards (IFRS)

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

Phase		Description and status
Impact assessment and planning		This phase includes establishment of a project team and high-level review to determine potential significant differences under IFRS as compared to Canadian GAAP. This phase has been completed and as a result, the Company has developed a transition plan and a preliminary timeline to comply with the changeover date while recognizing that project activities and timelines may change as a result of unexpected developments.
Design and development — key elements		This phase includes (i) an in-depth review to identify and assess accounting and reporting differences, (ii) evaluation and selection of accounting policies, (iii) assessment of impact on information systems, internal controls, and business activities, and (iv) training and communication with key stakeholders.
		During 2009, the Company completed its preliminary identification and assessment of accounting and reporting differences. In addition, training was provided to certain key employees involved in or directly impacted by the conversion process.
		During 2010, the assessment of the impact on information systems and design phase of system changes have been completed and the implementation phase has commenced. The Company has completed further in-depth evaluations of those areas initially identified as being potential accounting and reporting differences, as well as the evaluation of IFRS 1 elections/exemptions which are discussed below.
Implementation		This phase includes integration of solutions into processes and financial systems that are required for the conversion to IFRS and parallel reporting during the year prior to transition including proforma financial statements and note disclosures. Process solutions will incorporate required revisions to internal controls during the changeover and on an on-going basis.

In the period leading up to the changeover, the AcSB will continue to issue accounting standards that are converged with IFRS, thus mitigating the impact of the adoption of IFRS at the changeover date. The International Accounting Standards Board (“IASB”) will also continue to issue new accounting standards during the conversion period and, as a result, the final impact of IFRS on the Company’s consolidated financial statements will only be measured once all IFRS applicable at the conversion date are known.

Shaw Communications Inc.

The Company’s adoption of IFRS will require the application of IFRS 1, First-Time Adoption of International Financial Reporting Standards (“IFRS 1”), which provides guidance for an entity’s initial adoption of IFRS. IFRS 1 generally requires that an entity apply all IFRS effective at the end of its first IFRS reporting period retrospectively. However, IFRS 1 does include certain mandatory exceptions and limited optional exemptions in specified areas of certain standards from this general requirement. Management is assessing the exemptions available under IFRS 1 and their impact on the Company’s future financial position. On adoption of IFRS, the significant optional exemptions being considered by the Company are as follows:

Exemption		Application of exemption
Business combinations		The Company expects to apply IFRS 3 prospectively from its transition date and elect not to restate any business combinations that occurred prior to September 1, 2010.
Employee benefits		The Company expects to elect to recognize cumulative actuarial gains and losses arising from all of its defined benefit plans as at September 1, 2010 in opening retained earnings.
Borrowing costs		The Company expects to elect to apply IAS 23 “Borrowing Costs” prospectively from September 1, 2010.

Management is in the process of quantifying the expected material differences between IFRS and the current accounting treatment under Canadian GAAP. Set out below are the key areas where changes in accounting policies are expected that may impact the Company’s consolidated financial statements. The list and comments should not be regarded as a complete list of changes that will result from the transition to IFRS. It is intended to highlight those areas management believes to be most significant. However, the IASB has significant ongoing projects that could affect the ultimate differences between Canadian GAAP and IFRS and their impact on the Company’s consolidated financial statements. Consequently, management’s analysis of changes and policy decisions have been made based on its expectations regarding the accounting standards that we anticipate will be effective at the time of transition. The future impacts of IFRS will also depend on the particular circumstances prevailing in those years. At this stage, management is not able to reliably quantify the impacts expected on the Company’s consolidated financial statements for these differences. Please see the section entitled “Cautionary statement regarding forward-looking statements”.

The following significant differences between Canadian GAAP and IFRS have been identified that are expected to impact the Company’s financial statements. This is not an exhaustive list of all of the changes that could occur during the transition to IFRS. At this time, the comprehensive impact of the changeover on the Company’s future financial position and results of operations is not yet determinable.

Shaw Communications Inc.

The Company continues to monitor and assess the impact of evolving differences between Canadian GAAP and IFRS, since the IASB is expected to continue to issue new accounting standards during the transition period. As a result, the final impact of IFRS on the Company’s consolidated financial statements can only be measured once all the applicable IFRS at the conversion date are known.

Differences with respect to recognition, measurement, presentation and disclosure of financial information are expected to be in the following key accounting areas:

		Differences from Canadian GAAP, with
Key accounting area		potential impact for the Company
Presentation of Financial Statements (IAS 1)		IAS 1 requires additional disclosures in the notes to financial statements.
Share-based Payments (IFRS 2)		IFRS 2 requires cash-settled awards to employees be measured at fair value at the initial grant date and re-measured at fair value at the end of each reporting period. IFRS 2 also requires the fair value of stock-based compensation awards to be recognized using a graded vesting method based on the vesting period of the options.
Income Taxes (IAS 12)		IAS 12 recognition and measurement criteria for deferred tax assets and liabilities may differ.
Employee Benefits (IAS 19)		IAS 19 requires past service costs of defined benefit plans to be expensed on an accelerated basis, with vested past service costs immediately expensed and unvested past service costs amortized on a straight line basis until benefits become vested. IAS 19 has an accounting policy choice that allows the Company to recognize actuarial gains and losses using one of the following methods:

	•		in net income using the corridor approach amortized over the expected average remaining working lives,
	•		in net income on a systematic basis for faster recognition, including immediate recognition of all actuarial gains and losses, or
	•		to recognize them in other comprehensive income, as they occur. The Company is currently reviewing the impact of the accounting policy choice for recognition of actuarial gains and losses.

Interests in Joint Ventures (IAS 31)		Although IAS 31 currently permits the use of proportionate consolidation for joint venture interests, proposed changes are expected to be finalized prior to transition to require joint venture interests to be accounted for using the equity method.

Shaw Communications Inc.

		Differences from Canadian GAAP, with
Key accounting area		potential impact for the Company
Impairment of Assets (IAS 36)		IAS 36 uses a one-step approach for the identification and measurement of impairment of assets. The carrying value of assets is compared to the greater of its fair value less costs to sell and value in use, which is based on the net present value of future cash flows. Impairment of assets, other than goodwill, is reversed in a subsequent period if circumstances change such that the previously determined impairment is reduced or eliminated.
Provisions, Contingent Liabilities and Contingent Assets (IAS 37)		IAS 37 uses a different threshold for recognition of a contingent liability that could impact the timing of when a provision may be recorded.
Intangible Assets (IAS 38)		IAS 38 prohibits the amortization of indefinite-lived intangibles and reinstatement of previous amortization is required.

2011 GUIDANCE

With respect to 2011 guidance, the Company expects continued growth in the core Cable and Satellite business and on a preliminary basis, expects that the growth rate of core consolidated operating income before amortization will decline modestly compared to last year’s organic growth rate of approximately 7.5% as a result of competitive market pressures and higher programming costs. Capital investment is expected to decline and cash taxes are estimated to increase.

Overall, preliminary 2011 free cash flow guidance of approximately $550 million provided on October 22, 2010 for the core Cable and Satellite business has not changed. It is expected that the new Media assets will generate approximately $75 million of free cash flow for the 10 month period of inclusion during fiscal 2011, before considering cash funding of the CRTC benefit obligation amounts. Over the next 7 years the benefit obligation funding is approximately $275 million comprising $180 million from the Shaw acquisition and $95 million remaining from the Canwest acquisition of the Specialty services in 2007. After considering the estimated 2011 CRTC benefit obligation cash funding, Media is expected to contribute approximately $50 million of free cash flow and consolidated fiscal 2011 free cash flow is estimated to approximate $600 million.

The investment associated with the Wireless build is being tracked and reported separately from the free cash flow generated from ongoing operations. The Company plans to invest approximately $150 — $200 million during 2011 on its Wireless initiative.

Certain important assumptions for 2011 guidance purposes include: customer growth continuing generally in line with historical trends; stable pricing environment for Shaw’s products relative to today’s rates; no significant market disruption or other significant changes in competition or regulation that would have a material impact; stable advertising demand and rates; cash income taxes to be paid or payable in 2011; and a stable regulatory environment.

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

Shaw Communications Inc.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

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

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

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

Shaw Communications Inc.

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

Shaw Communications Inc.

CONSOLIDATED BALANCE SHEETS
(unaudited)

[thousands of Canadian dollars]		November 30, 2010				August 31, 2010
ASSETS
Current
Cash and cash equivalents			42,065				216,735
Accounts receivable			531,075				196,415
Inventories			80,459				53,815
Prepaids and other			68,213				33,844
Derivative instruments			67,095				66,718
Future income taxes			31,809				27,996
			820,716				595,523
Derivative instrument			15,907				—
Investments and other assets			20,857				743,273
Property, plant and equipment			3,167,682				3,004,649
Deferred charges			240,154				232,843
Intangibles
Broadcast rights and licenses[note 3]			6,448,169				5,061,153
Program rights and advances			318,205				—
Spectrum licenses			190,912				190,912
Goodwill [note 3]			839,710				169,143
Other intangibles			233,399				156,469
			12,295,711				10,153,965
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities			806,685				623,070
Income taxes payable			29,305				170,581
Unearned revenue			150,967				145,491
Current portion of long-term debt [note 4]			566				557
Current portion of derivative instruments			80,904				79,740
			1,068,427				1,019,439
Long-term debt [note 4]			5,394,410				3,981,671
Other long-term liabilities [note 9]			534,590				291,500
Derivative instruments			6,938				6,482
Deferred credits			628,910				632,482
Future income taxes			1,711,452				1,451,859
			9,344,727				7,383,433
Shareholders’ equity
Share capital [note 5]			2,269,757				2,250,498
Contributed surplus [note 5]			56,089				53,330
Retained earnings			378,945				457,728
Accumulated other comprehensive income [note 7]			1,039				8,976
Non-controlling interests			245,154				—
			2,950,984				2,770,532
			12,295,711				10,153,965

See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(unaudited)

		Three months ended November 30,
[thousands of Canadian dollars except per share amounts]		2010			2009
Revenue [note 2]			1,078,905				905,934
Operating, general and administrative expenses			605,551				430,982
Operating income before amortization [note 2]			473,354				474,952
Amortization:
Deferred IRU revenue			3,137				3,137
Deferred equipment revenue			27,318				31,261
Deferred equipment costs			(52,106	)			(59,509	)
Deferred charges			(256	)			(256	)
Property, plant and equipment			(148,829	)			(124,639	)
Other intangibles			(10,006	)			(9,092	)
Operating income			292,612				315,854
Amortization of financing costs — long-term debt			(1,020	)			(1,101	)
Interest expense — debt [note 2]			(68,695	)			(62,064	)
			222,897				252,689
Debt retirement costs			—				(81,585	)
CRTC benefit obligation [note 3]			(139,098	)			—
Business acquisition, integration and restructuring expenses [note 3]			(58,104	)			—
Loss on derivative instruments			(1,411	)			(44,432	)
Accretion of long-term liabilities			(1,933	)			(213	)
Foreign exchange gain on unhedged long-term-debt			3,318				—
Other gains			2,429				8,717
Income before income taxes			28,098				135,176
Current income tax expense [note 2]			55,342				94,578
Future income tax expense (recovery)			(33,951	)			(73,631	)
Income before the following			6,707				114,229
Equity income on investees			13,625				—
Net income			20,332				114,229
Net income attributable to:
Common shareholders			16,642				114,229
Non-controlling interests			3,690				—
			20,332				114,229
Retained earnings, beginning of period			457,728				382,227
Net income attributable to common shareholders			16,642				114,229
Reduction on Class B Non-Voting Shares purchased for cancellation			—				(19,789	)
Dividends — Class A Shares and Class B Non-Voting Shares			(95,425	)			(90,815	)
Retained earnings, end of period			378,945				385,852
Earnings per share [note 6]
Basic and diluted			0.04				0.26
[thousands of shares]
Weighted average participating shares outstanding during period			433,792				432,507
Participating shares outstanding, end of period			434,178				435,363

See accompanying notes

Shaw Communications Inc.

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

		Three months ended November 30,
[thousands of Canadian dollars]		2010				2009
Net income			20,332				114,229
Other comprehensive income (loss) [note 7]
Change in unrealized fair value of derivatives designated as cash flow hedges			(606	)			(51,435	)
Adjustment for hedged items recognized in the period			(7,383	)			9,444
Reclassification of foreign exchange loss on hedging derivatives to income to offset foreign exchange adjustments on US denominated debt			—				34,940
Reclassification of remaining losses on hedging derivatives to income upon early redemption of hedged US denominated debt			—				42,658
Unrealized gain on available-for-sale investment			53				430
Unrealized foreign exchange loss on translation of a self- sustaining foreign operation			(1	)			(1	)
			(7,937	)			36,036
Comprehensive income			12,395				150,265
Comprehensive income attributable to:
Common shareholders			8,705				150,265
Non-controlling interests			3,690				—
			12,395				150,265
Accumulated other comprehensive income (loss), beginning of period			8,976				(38,634	)
Other comprehensive income (loss)			(7,937	)			36,036
Accumulated other comprehensive income (loss), end of period			1,039				(2,598	)

See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

		Three months ended November 30,
[thousands of Canadian dollars]		2010				2009
OPERATING ACTIVITIES [note 8]
Funds flow from operations			264,380				338,952
Net decrease in non-cash working capital balances related to operations			(202,493	)			(5,393	)
			61,887				333,559
INVESTING ACTIVITIES
Additions to property, plant and equipment [note 2]			(258,058	)			(158,820	)
Additions to equipment costs (net) [note 2]			(28,537	)			(27,760	)
Additions to other intangibles [note 2]			(36,128	)			(9,528	)
Net addition to inventories			(26,644	)			(9,555	)
Business acquisitions [note 3]			(420,442	)			(155,334	)
Purchase of Government of Canada bond			—				(158,968	)
Proceeds on disposal of property, plant and equipment [note 2]			6,596				67
Addition to investments and other assets			(477	)			—
			(763,690	)			(519,898	)
FINANCING ACTIVITIES
Increase in long-term debt, net of discounts			1,000,000				1,891,656
Senior notes issuance costs			—				(9,057	)
Senior notes repayments			—				(1,016,170	)
Other debt repayments [note 3]			(395,076	)			(132	)
Payments on cross-currency agreements			—				(291,920	)
Debt retirement costs			—				(79,488	)
Issue of Class B Non-Voting Shares, net of after-tax expenses [note 5]			17,634				7,870
Purchase of Class B Non-Voting Shares for cancellation			—				(27,892	)
Dividends paid on Class A Shares and Class B Non-Voting Shares			(95,425	)			(90,815	)
			527,133				384,052
Increase (decrease) in cash			(174,670	)			197,713
Cash, beginning of the period			216,735				453,237
Cash, end of the period			42,065				650,950

Cash includes cash and cash equivalents

See accompanying notes

Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

November 30, 2010 and 2009
[all amounts in thousands of Canadian dollars, except per share amounts]

1.

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited interim Consolidated Financial Statements include the accounts of Shaw Communications Inc. and its subsidiaries (collectively the “Company”). The notes presented in these unaudited 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 in the Company’s annual audited consolidated financial statements. As a result, these unaudited interim Consolidated Financial Statements should be read in conjunction with the Company’s consolidated financial statements for the year ended August 31, 2010.

The unaudited 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 accounting policies for Shaw Media

The following accounting policies have been adopted for the Company’s new television broadcasting operations (Shaw Media).

Revenue

Subscriber revenue is recognized monthly based on subscriber levels. Advertising revenues are recognized in the period in which the advertisements are broadcast and recorded net of agency commissions as these amounts are paid directly to the agency or advertiser. When a sales arrangement includes multiple advertising spots, the proceeds are allocated to individual advertising spots under the arrangement based on relative fair values.

Program Rights and Advances

Program rights represent licensed rights acquired to broadcast television programs on the Company’s conventional and specialty television channels and program advances are in respect of payments for programming prior to the window license start date. For licensed rights, the Company records a liability for program rights and corresponding asset when the license period has commenced and all of the following conditions have been met: (i) the cost of the program is known or reasonably determinable, (ii) the program material has been accepted by the Company in accordance with the license agreement and (iii) the material is available to the Company for telecast. Program rights are expensed on a systematic basis over the estimated exhibition period as the programs are aired and are included in operating, general and administrative expenses. If program rights are not scheduled, they are considered impaired and are written off.

CRTC Benefit Obligations

The fair value of CRTC benefit obligations committed as part of business acquisitions are initially recorded, on a discounted basis, at the present value of amounts to be paid net of any expected incremental cash inflows. The obligation is subsequently adjusted for the incurrence of related expenditures, the passage of time and for revisions to the timing of the cash flows. Changes in the obligation due to the passage of time are recorded as accretion of long-term liabilities in the income statement.

Asset Retirement Obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred, on a discounted basis, with a corresponding increase to the carrying amount of property and equipment. This cost is amortized on the same basis as the related asset. The liability is subsequently increased for the passage of time and the accretion is recorded in the income statement as accretion of long-term liabilities. Revisions due to the estimated timing of cash flows or the amount required to settle the obligation may result in an increase or decrease in the liability. Actual costs incurred upon settlement of the obligation are charged against the liability to the extent recorded.

Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

November 30, 2010 and 2009
[all amounts in thousands of Canadian dollars, except per share amounts]

Embedded Derivative Instruments

Derivatives embedded in other financial instruments or contracts are separated from their host contracts and separately accounted for as derivatives when their economic characteristics and risks are not closely related to the host contract, they meet the definition of a derivative and the combined instrument or contract is not measured at fair value. The Company records embedded derivatives at fair value with changes recognized in the income statement as loss/gain on derivative instruments.

Adoption of recent accounting pronouncements

Business Combinations

Effective September 1, 2010, the Company early adopted CICA Handbook Section 1582 “Business Combinations”, which replaces Section 1581 “Business Combinations”. The differences which arise from the new accounting standard relate to details in applying the acquisition method. The significant changes that result include (i) a change in the measurement date for equity instruments issued by the acquirer from a few days before and after the announcement date to the acquisition date, (ii) contingent consideration is recognized at fair value and subsequently remeasured at each reporting date until settled, (iii) future adjustments to income tax estimates are recorded in income whereas previously, certain changes were recorded in goodwill, (iv) acquisition related costs, other than costs to issue debt or equity instruments, and acquisition related restructuring costs must be expensed, (v) for business combinations completed in stages, identifiable net assets are recognized at fair value when control is obtained and a gain or loss is recognized for the difference in fair value and carrying value of the previously held equity interests, (vi) the fair value of identifiable assets and liabilities attributable to non-controlling interests must be recognized, and (vii) non-controlling interests are recorded at either fair value or their proportionate share of the fair value of identifiable net assets acquired.

Consolidated Financial Statements and Non-controlling Interests

Effective September 1, 2010, the Company early adopted CICA Handbook Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-controlling Interests” which replace Section 1600 “Consolidated Financial Statements”. The new standards provide guidance for the preparation of financial statements and accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. For presentation and disclosure purposes, non-controlling interests are classified as a separate component of shareholders’ equity. In addition, net income and comprehensive income is attributed to the Company’s shareholders and to non-controlling interests rather than reflecting the non-controlling interests as a deduction to arrive at net income and comprehensive income.

Recent accounting pronouncements

International Financial Reporting Standards (IFRS)

In February 2008, the CICA Accounting Standards Board (AScB) confirmed that Canadian publicly accountable enterprises will be required to adopt International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), for fiscal periods beginning on or after January 1, 2011. These standards require the Company to begin reporting under IFRS in the first quarter of fiscal 2012 with comparative data for the prior year. The Company has developed its plan and has completed the preliminary identification and assessment of the accounting and reporting differences under IFRS as compared to Canadian GAAP. Evaluation of accounting policies is in progress; however, at this time, the full impact of adopting IFRS is not reasonably estimable or determinable.

Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

November 30, 2010 and 2009
[all amounts in thousands of Canadian dollars, except per share amounts]

2.

BUSINESS SEGMENT INFORMATION

The Company provides cable television services, high-speed Internet access, Digital Phone and Internet infrastructure services (“Cable”); television broadcasting (Shaw Media); DTH satellite services (Shaw Direct); and, satellite distribution services (“Satellite Services”). 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 these operations are substantially located in Canada. Information on operations by segment is as follows:

Operating information

		Three months ended November 30,
		2010				2009
		$				$
Revenue
Cable			757,831				709,747
DTH			185,379				179,764
Satellite Services			20,794				20,947
Media			125,397				—
			1,089,401				910,458
Intersegment eliminations			(10,496	)			(4,524	)
			1,078,905				905,934
Operating income (expenditures) before amortization (1) (4)
Cable			347,855				380,252
DTH			59,073				83,726
Satellite Services			10,436				10,974
Media			56,772				—
Wireless			(782	)			—
			473,354				474,952
Interest (2)
Cable			50,947				55,166
DTH and Satellite Services			6,265				6,563
Media			6,484				—
Wireless			4,673				—
Burrard Landing Lot 2 Holdings Partnership			326				335
			68,695				62,064
Cash taxes (3)
Cable			45,375				48,005
DTH and Satellite Services			12,225				19,001
Media			2,000				—
Other/non-operating			(4,258	)			27,572
			55,342				94,578