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 April, 2009

Shaw Communications Inc.

 

(Translation of registrant’s name into English)

Suite 900, 630 – 3^rd Avenue S.W., Calgary, Alberta T2P 4L4 (403) 750-4500

(Address of principal executive offices)

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

Form 20-F   o		Form 40-F   þ

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

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

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

Yes   o		No   þ

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

 

 

SIGNATURE

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

Date:

April 8, 2009 Shaw Communications Inc.

By:

/s/  Steve Wilson Steve Wilson
Sr. V.P., Chief Financial Officer
Shaw Communications Inc.

NEWS RELEASE

Shaw announces second quarter results

Calgary, Alberta (April 8, 2009) — Shaw Communications Inc. announced results for the second quarter ended February 28, 2009. Consolidated service revenue for the three and six month periods of $839 million and $1.66 billion, respectively, was up 10% over the same periods last year. Service operating income before amortization¹ of $381 million and $749 million, respectively, improved 9% and 10% over the comparable periods. Funds flow from operations² increased to $335 million and $646 million for the quarter and year-to-date periods, respectively, compared to $304 million and $591 million in the same periods last year.

Subscriber growth was solid during the quarter. Basic cable subscribers increased 4,273 to 2,273,904, Digital and Internet customers grew by 106,489 to 1,076,373 and 26,130 to 1,626,334, respectively, and Digital Phone lines were up 50,848 to 719,376. DTH customers increased 3,657 to 896,633.

Chief Executive Officer and Vice Chair Jim Shaw commented “We continue to thrive in this dynamic, highly competitive and rapidly evolving marketplace by focusing on our relationship with our customer and leveraging our infrastructure with new and improved product offerings. During the quarter Digital growth continued to gain momentum with a record gain of over 100,000 customers. We also enhanced our internet offerings, increasing the speed of all High Speed services by 50% or greater and launched High-Speed Nitro, a new 100 Mbps service utilizing DOCSIS 3.0 technology.”

Free cash flow¹ for the quarter and year-to-date periods was $138 million and $251 million, respectively, compared to $138 million and $228 million for the same periods last year. The improvement in free cash flow was achieved through higher service operating income before amortization and after increased capital investment.

Net income of $156 million or $0.36 per share compared to $299 million or $0.69 per share for the same period last year. Net income for the first six months of the year was $279 million or $0.65 per share compared to $411 million or $0.95 per share last year.³ The current and comparable three and six month periods included non-operating items which are more fully detailed in Management’s Discussions and Analysis (MD&A). The current three and six month periods included a tax recovery of approximately $23 million, while the comparable periods included a tax recovery of approximately $188 million. These tax recoveries were related to reductions in enacted income tax rates. The prior six month period also benefitted from a net duty recovery of approximately $22 million before income taxes related to the importation of satellite receivers. Excluding the non-operating items, net income for the current three and six month periods ended February 28, 2009 would have been $128 million and $250 million compared to $113 million and $210 million in the same periods last year. ³

Service revenue in the Cable division was up almost 12% for the quarter and year-to-date periods to $650 million and $1.28 billion. The improvement was primarily driven by customer growth and rate increases. Service operating income before amortization improved 10% to $313 million for the quarter and was up 11% on a year-to-date basis to $616 million.

Service revenue in the Satellite division was $190 million and $378 million for the three and six month periods respectively, up 5% over the comparable periods last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization for the quarter increased 4% to $68 million, and the year-to-date was up 6% to $133 million.

In January 2009 the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.84 on Shaw’s Class B Non-Voting Participating shares and $0.8375 on Shaw’s Class A Participating shares. This new rate was effective commencing with the monthly dividend paid on March 30, 2009.

In February 2009 the Company closed the acquisition of the Campbell River cable system in British Columbia. The acquisition is complementary to and will provide synergies with existing operations.

In March 2009 Shaw’s corporate debt rating was upgraded by Moody’s to investment grade. This follows Standard and Poor’s upgrade to investment grade in December 2008 and DBRS’s upgrade to this status in February 2007. On March 27, 2009 the Company closed a $600 million offering of 6.50% senior notes due June 2, 2014. The net proceeds will be used for debt repayment, working capital and general corporate purposes.

In closing, Mr. Shaw commented “We believe the resilience of our business and the strength of our strategy should continue to produce solid operational and financial results even in the face of these weaker economic conditions. Customers will continue to demand exceptional service, value and reliability and we will deliver. We remain on track to achieve our financial guidance for the year, which includes generating free cash flow of at least $500 million.”

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, High-Speed Internet, Digital Phone, telecommunications services (through Shaw Business Solutions) and satellite direct-to-home services (through Star Choice). The Company serves 3.4 million customers, including over 1.6 million Internet and 700,000 Digital Phone customers, through a reliable and extensive network, which comprises 625,000 kilometres of fibre. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX — SJR.B, NYSE — SJR).

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

For more information, please contact:

Shaw Investor Relations
Investor.relations@sjrb.ca

1		See definitions and discussion under Key Performance Drivers in MD&A.
2		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.
3		See reconciliation of Net Income in Consolidated Overview in MD&A.

Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
FEBRUARY 28, 2009

April 2, 2009

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

The following should also be read in conjunction with Management’s Discussion and Analysis included in the Company’s August 31, 2008 Annual Report and 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
SECOND QUARTER ENDING FEBRUARY 28, 2009

Selected Financial Highlights

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn except per share amounts)
Operations:
Service revenue			839,144				763,182				10.0				1,656,612				1,507,010				9.9
Service operating income before amortization(1)			381,355				349,711				9.0				749,152				682,620				9.7
Operating margin(1)			45.4	%			45.8	%			(0.4	)			45.2	%			45.3	%			(0.1	)
Funds flow from operations (2)			334,508				304,293				9.9				646,475				590,635				9.5
Net income			156,229				298,848				(47.7	)			279,306				411,071				(32.1	)
Per share data:
Earnings per share — basic		$	0.36			$	0.69							$	0.65			$	0.95
— diluted		$	0.36			$	0.69							$	0.65			$	0.94
Weighted average participating shares outstanding during period (000’s)			428,833				431,844								428,295				431,797

(1)		See definition under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		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								Six months ended
		February 28,				February 28,				February 29,				February 28,				February 29,
		2009				2009				2008				2009				2008
Subscriber statistics:
Basic cable customers			2,273,904				4,273				6,524				13,471				14,662
Digital customers			1,076,373				106,489				48,006				167,206				87,502
Internet customers (including pending installs)			1,626,334				26,130				31,517				57,282				66,236
DTH customers			896,633				3,657				4,977				4,105				6,521
Digital phone lines (including pending installs)			719,376				50,848				56,536				107,445				106,875

Shaw Communications Inc.

Additional Highlights

•		Consolidated service revenue of $839.1 million and $1.66 billion for the three and six month periods, respectively, improved 10.0% and 9.9% over the comparable periods last year. Total service operating income before amortization of $381.4 million and $749.2 million was up 9.0% and 9.7% over the same periods.
•		Consolidated free cash flow1 for the quarter and year-to-date periods was $137.9 million and $251.4 million, respectively, compared to $138.4 million and $228.2 million for the same periods last year.
•		In January 2009 the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.84 on Shaw’s Class B Non-Voting Participating shares and $0.8375 on Shaw’s Class A Participating shares. This new rate was effective commencing with the monthly dividend paid on March 30, 2009.
•		In March 2009 Shaw’s corporate debt rating was upgraded by Moody’s to investment grade. On March 27, 2009 the Company closed a $600 million offering of 6.50% senior notes due June 2, 2014. The net proceeds will be used for debt repayment, working capital and general corporate purposes.

Consolidated Overview

Consolidated service revenue of $839.1 million and $1.66 billion for the three and six month periods, respectively, improved 10.0% and 9.9% over the same periods last year. The improvement was primarily due to customer growth and rate increases. Consolidated service operating income before amortization for the three month and six month periods improved 9.0% and 9.7% over the comparable periods to $381.4 million and $749.2 million. The increase was driven by the revenue improvements partially offset by higher employee and other costs related to growth. The current periods also included increased CRTC Part II fees as the Company had stopped accruing for these in October 2007 and reinstated the accrual in May 2008.

Net income was $156.2 million and $279.3 million for the three and six months ended February 28, 2009 compared to $298.8 million and $411.1 million for the same periods last year. Non-operating items affected net income in all periods, the most significant of which was a tax recovery of approximately $188.0 million in each of the prior periods related to reductions in enacted income tax rates. The prior six month period also benefitted from a net duty recovery related to satellite importations of $22.3 million. The current quarter includes a tax recovery of $22.6 million related to reductions in enacted income tax rates. Outlined below are further details on this and other operating and non-operating components of net income for each period.

Shaw Communications Inc.

		Six months ended												Six months ended
						Operating net												Operating net
($000’s Cdn)		February 28, 2009				of interest				Non-operating				February 29, 2008				of interest				Non-operating
Operating income			470,916												430,023
Amortization of financing costs — long-term debt			(1,892	)											(1,863	)
Interest expense — debt			(113,564	)											(117,227	)
Operating income after interest			355,460				355,460								310,933				310,933				—
Debt retirement costs			—				—				—				(5,264	)			—				(5,264	)
Other gains			8,994				—				8,994				25,518				—				25,518
Income before income taxes			364,454				355,460				8,994				331,187				310,933				20,254
Income tax expense (recovery)			85,161				105,230				(20,069	)			(79,820	)			101,322				(181,142	)
Income before following			279,293				250,230				29,063				411,007				209,611				201,396
Equity income on investee			13				—				13				64								64
Net income			279,306				250,230				29,076				411,071				209,611				201,460

		Three months ended												Three months ended
						Operating net												Operating net
($000’s Cdn)		February 28, 2009				of interest				Non-operating				February 29, 2008				of interest				Non-operating
Operating income			238,180												224,142
Amortization of financing costs — long-term debt			(946	)											(884	)
Interest expense — debt			(56,354	)											(57,511	)
Operating income after interest			180,880				180,880				—				165,747				165,747				—
Debt retirement costs			—				—				—				(5,264	)			—				(5,264	)
Other gains			7,312				—				7,312				1,983				—				1,983
Income (loss) before income taxes			188,192				180,880				7,312				162,466				165,747				(3,281	)
Income tax expense (recovery)			31,843				52,425				(20,582	)			(136,402	)			52,625				(189,027	)
Income before following			156,349				128,455				27,894				298,868				113,122				185,746
Equity loss on investee			(120	)			—				(120	)			(20	)			—				(20	)
Net income			156,229				128,455				27,774				298,848				113,122				185,726

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.

		February 28, 2009 net income compared to:
		Three months ended								Six months ended
		November 30, 2008				February 29, 2008				February 29, 2008
(000’s Cdn)
Increased service operating income before amortization			13,558				31,644				66,532
Increased amortization			(8,114	)			(17,668	)			(25,668	)
Decreased interest expense			856				1,157				3,663
Change in net other costs and revenue (1)			5,377				10,493				(11,311	)
Decreased (increased) income taxes			21,475				(168,245	)			(164,981	)
			33,152				(142,619	)			(131,765	)

(1)		Net other costs and revenue includes debt retirement costs, other gains and equity income on investee as detailed in the unaudited interim Consolidated Statements of Income and Retained Earnings (Deficit).

Shaw Communications Inc.

Basic earnings per share were $0.36 and $0.65 for the quarter and six months, respectively, compared to $0.69 and $0.95 in the same periods last year. The current three and six month periods benefitted from higher service operating income before amortization of $31.6 million and $66.5 million, respectively. These improvements were more than offset by lower income taxes in each of the comparable periods as a result of a $188.0 million future tax recovery related to reductions in corporate income tax rates as compared to a current quarter similar tax recovery of $22.6 million. The prior six month period also benefitted from improved net other costs and revenue due to a $22.3 million net duty recovery related to satellite receiver importations.

Net income in the current quarter was up $33.2 million over the first quarter of fiscal 2009 as a result of lower income taxes and higher service operating income before amortization. Service operating income improved $13.6 million in the current quarter mainly due to customer growth and income taxes were lower due to the tax recovery of $22.6 million related to reductions in corporate income tax rates.

Funds flow from operations was $334.5 million in the second quarter compared to $304.3 million in the comparable quarter, and on a year-to-date basis was $646.5 million compared to $590.6 million in 2008. The improvement over the comparative periods was principally due to increased service operating income before amortization.

Consolidated free cash flow for the quarter of $137.9 million compared to $138.4 million in the same period last year. Improved service operating income of $31.6 million in the current quarter was offset by increased capital investment. For the six month period free cash flow was up $23.2 million over last year to $251.4 million. The year-to-date growth was principally due to increased service operating income before amortization of $66.5 million partially offset by increased capital investment of $47.0 million. The Cable division generated $95.2 million of free cash flow for the quarter compared to $98.0 million in the comparable period. The Satellite division achieved free cash flow of $42.7 million for the quarter compared to $40.4 million in the same period last year.

In January 2009 the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.84 on Shaw’s Class B Non-Voting Participating shares and $0.8375 on Shaw’s Class A Participating shares. Shaw’s Board of Directors determined that a dividend increase was an appropriate use of the Company’s free cash flow. This new rate was effective commencing with the monthly dividend paid on March 30, 2009.

Coincident with the expiry of Shaw’s shelf prospectus on March 17, 2009, Shaw filed a short form base shelf prospectus with securities regulators in Canada and the U.S. on March 11, 2009 to allow for timely access to capital markets. The shelf prospectus allows for the issue of up to an aggregate $2.5 billion of debt and equity securities over a 25 month period. On March 27, 2009 the Company closed a $600 million offering of 6.50% senior notes due June 2, 2014. The net proceeds will be used for debt repayment, working capital and general corporate purposes.

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

Shaw Communications Inc.

disclosed by other companies. The Company utilizes these measures in making operating decisions and assessing its performance. Certain investors, analysts and others, utilize these measures in assessing the Company’s operational and financial performance and as an indicator of its ability to service debt and return cash to shareholders. These non-GAAP financial measures have not been presented as an alternative to net income or any other measure of performance required by Canadian or US GAAP.

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

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

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

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

Commencing in 2009, for the purpose of determining free cash flow, the Company revised its calculation of capital expenditures to net proceeds on capital dispositions. Historically, the proceeds received on the sale of property, plant and equipment were not included in the free cash flow calculation as they were generally nominal. The Company expects these will be more material on a prospective basis as it commences to consolidate its operating groups at its new campus style facility in Calgary, disposes of redundant assets, and replaces various operating assets as it continues to upgrade and improve competitiveness. The definition of free cash flow is more fully described in the Company’s August 31, 2008 Annual Report on page 10.

Consolidated free cash flow is calculated as follows:

		Three months ended								Six months ended
		February 28,				February 29,				February 28,				February 29,
		2009				2008				2009				2008
($000’s Cdn)
Cable free cash flow (1)			95,217				97,976				170,964				158,402
Combined satellite free cash flow (1)			42,731				40,427				80,424				69,785
Consolidated			137,948				138,403				251,388				228,187

(1)		Reconciliations of free cash flow for both cable and satellite are provided under “Cable — Financial Highlights” and “Satellite — Financial Highlights”.

Shaw Communications Inc.

CABLE
FINANCIAL HIGHLIGHTS

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn)
Service revenue (third party)			649,559				581,849				11.6				1,278,913				1,147,327				11.5
Service operating income before amortization (1)			313,078				284,020				10.2				616,253				556,767				10.7
Less:
Interest expense			49,453				49,709				(0.5	)			99,757				100,712				(0.9	)
Cash flow before the following:			263,625				234,311				12.5				516,496				456,055				13.3
Capital expenditures and equipment costs (net):
New housing development			16,633				20,413				(18.5	)			40,740				49,283				(17.3	)
Success based			43,744				19,612				123.0				77,181				43,448				77.6
Upgrades and enhancement			84,387				64,876				30.1				153,519				139,863				9.8
Replacement			10,658				14,555				(26.8	)			25,798				29,350				(12.1	)
Buildings/other			12,986				16,879				(23.1	)			48,294				35,709				35.2
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			168,408				136,335				23.5				345,532				297,653				16.1
Free cash flow (1)			95,217				97,976				(2.8	)			170,964				158,402				7.9
Operating margin			48.2	%			48.8	%			(0.6	)			48.2	%			48.5	%			(0.3	)

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

Operating Highlights

•		Shaw had a record quarterly Digital gain, adding 106,489 customers. As at February 28, 2009 Digital customers totaled 1,076,373 representing 47.3% penetration of Basic compared to 40.2% penetration at August 31, 2008.
•		Digital Phone lines increased 50,848 during the quarter to 719,376 lines at February 28, 2009. The Digital Phone footprint grew in the quarter with continued launches in various smaller centres in British Columbia.
•		During the quarter the Company enhanced Internet speeds and launched a new 100 Mbps service. Shaw added 26,130 Internet customers during the three month period to total 1,626,334 as at February 28, 2009. Internet penetration of Basic now stands at 71.5% up from 69.4% at August 31, 2008.
•		Basic customers increased 4,273 during the quarter to 2,273,904 at February 28, 2009.
•		In February 2009 the Company closed the acquisition of the Campbell River cable system in British Columbia. The acquisition is complementary to and will provide synergies with existing operations.

Shaw Communications Inc.

Cable service revenue for the three and six month periods of $649.6 million and $1.28 billion, respectively, was up 11.6% and 11.5% over the same periods last year. Customer growth and rate increases accounted for the improvement. Service operating income before amortization of $313.1 million and $616.3 million, respectively, increased 10.2% and 10.7% over the comparable three and six month periods. The improvement was driven by revenue related growth and additional contribution from Digital Phone, partially offset by higher employee related costs and other expenses related to business growth, including equipment maintenance and support. The current three and six month periods also included higher CRTC Part II fees as the Company had stopped accruing for these in October 2007 and reinstated the accrual in May 2008.

Service revenue was up $20.2 million or 3.2% over the first quarter of fiscal 2009 primarily due to customer growth. Service operating income before amortization improved $9.9 million or 3.3% over this same period due to the revenue related growth partially reduced by various expenses related to business growth.

Total capital investment of $168.4 million and $345.5 million for the quarter and year-to-date period, respectively, increased $32.1 and $47.9 over the comparable periods last year.

Success-based capital increased $24.1 million and $33.7 million over the comparable three and six month periods, respectively. Digital success-based capital was up in both periods mainly due to increased customer activations associated with the new rental strategy as well as reduced customer pricing for a specified time period on certain digital equipment.

Investment in the Upgrades and enhancement category was up $19.5 million and $13.7 million for the quarter and year-to-date periods, respectively, compared to the same periods last year. The current periods included higher spending on Internet projects to enhance the speed of Shaw’s various Internet offerings. The comparable six month period included higher investment on Digital Phone capital mainly related to the expansion of softswitch and network capacity to accommodate continued growth which partially offset the increase. Shaw implemented Internet speed enhancements and launched a new 100 Mbps service, High-Speed Nitro, during the quarter.

Investment in the current quarter in Buildings and other declined $3.9 million compared to the same period last year. On a year-to-date basis spending was up $12.6 million. The current periods included higher spending on IT related projects to upgrade back office and customer support systems while the current six month period also included increased investment in facilities projects related to the relocation of certain Calgary employees to the new Shaw facility. The increased investment was more than offset in the current quarter and partially offset on a year-to-date basis by proceeds of $20.7 million received in the quarter on the sale of certain redundant facilities.

Spending in New housing development for the three and six month periods declined $3.8 million and $8.5 million, respectively, over the same periods last year mainly due to reduced activity.

Shaw Communications Inc.

Subscriber Statistics

										February 28, 2009
										Three months ended								Six months ended
		February 28,				August 31,								Change								Change
		2009				2008(1)				Growth				%				Growth				%
CABLE:
Basic service:
Actual			2,273,904				2,260,433				4,273				0.2				13,471				0.6
Penetration as % of homes passed			63.2	%			63.5	%
Digital customers			1,076,373				909,167				106,489				11.0				167,206				18.4
INTERNET:
Connected and scheduled			1,626,334				1,569,052				26,130				1.6				57,282				3.7
Penetration as % of basic			71.5	%			69.4	%
Standalone Internet not included in basic cable			230,568				214,315				2,740				1.2				16,253				7.6
DIGITAL PHONE:
Number of lines(2)			719,376				611,931				50,848				7.6				107,445				17.6

(1)		August 31, 2008 figures are restated for comparative purposes as if the acquisition of the Campbell River cable system in British Columbia had occurred on that date.
(2)		Represents primary and secondary lines on billing plus pending installs.

Shaw continues to leverage its infrastructure for growth and new and improved product offerings. The Company saw solid growth in all product lines in the quarter due to the resilience of the business and it’s disciplined approach in managing the operations.

In late October 2008 Shaw launched a new Digital rental program and is focusing on growing its Digital customer base over the next several years. Digital growth continued to gain momentum during the quarter, with a record quarterly gain of over 100,000 customers. As at February 28, 2009, Digital penetration of Basic stands at 47.3% compared to 40.2% at August 31, 2008.

Internet speed increases of 50 per cent or greater were implemented during the quarter at no additional cost to customers. Shaw High Speed was upgraded from 5 Mbps to 7.5 Mbps and High-Speed Xtreme-I was upgraded from 10 Mbps to 15 Mbps. Also, with the deployment of DOCSIS 3.0 technology, Shaw introduced a new 100 Mbps service, High-Speed Nitro, the fastest residential Internet speed available in Canada. The new 100 Mbps service will be rolled out to Shaw’s systems over the coming months.

Shaw’s Digital Phone footprint continued to expand during the quarter with launches in various smaller centres in British Columbia including Prince George, Peachland and Williams Lake.

Shaw Communications Inc.

SATELLITE (DTH and Satellite Services)
FINANCIAL HIGHLIGHTS

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn)
Service revenue (third party)
DTH (Star Choice)			168,084				159,296				5.5				333,860				315,563				5.8
Satellite Services			21,501				22,037				(2.4	)			43,839				44,120				(0.6	)
			189,585				181,333				4.6				377,699				359,683				5.0
Service operating income before amortization (1)
DTH (Star Choice)			57,026				53,522				6.5				109,515				101,472				7.9
Satellite Services			11,251				12,169				(7.5	)			23,384				24,381				(4.1	)
			68,277				65,691				3.9				132,899				125,853				5.6
Less:
Interest expense (2)			6,561				7,454				(12.0	)			13,124				15,817				(17.0	)
Cash flow before the following:			61,716				58,237				6.0				119,775				110,036				8.9
Capital expenditures and equipment costs (net):
Success based (3)			17,387				16,310				6.6				36,868				37,854				(2.6	)
Transponders and other			1,598				1,500				6.5				2,483				2,397				3.6
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			18,985				17,810				6.6				39,351				40,251				(2.2	)
Free cash flow (1)			42,731				40,427				5.7				80,424				69,785				15.2
Operating Margin			36.0	%			36.2	%			(0.2	)			35.2	%			35.0	%			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 actual cost of debt incurred by the Company to repay Satellite debt and to fund accumulated cash deficits of Shaw Satellite Services and Star Choice.
(3)		Net of the profit on the sale of satellite equipment as it is viewed as a recovery of expenditures on customer premise equipment.

Operating Highlights

•		Free cash flow of $42.7 million for the quarter compares to $40.4 million in the same period last year.
•		During the quarter Star Choice added 3,657 customers and as at February 28, 2009 DTH customers now total 896,633.

Service revenue of $189.6 million and $377.7 million for the three and six month periods, respectively, was up 4.6% and 5.0% over the same periods last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization improved 3.9% and 5.6% over the comparable three and six month periods respectively, to $68.3 million and $132.9 million. The increase was mainly due to the revenue related growth partially offset by higher employee related and other costs to support customer service and growth. The current periods also included higher CRTC Part II fees as the Company had stopped accruing for these in October 2007 and reinstated the accrual in May 2008.

Service operating income before amortization increased $3.7 million over the first quarter. The increase was mainly due to rate increases implemented in the current quarter.

Shaw Communications Inc.

Total capital investment of $19.0 million and $39.4 million for the quarter and year-to-date periods, respectively, were comparable to the prior year spends of $17.8 million and $40.3 million, respectively.

During the quarter Star Choice increased HD services adding Big 10, a number of regional Rogers SNET services, and several Centre Ice channels. Star Choice now offers HD programming from 52 HD services and has almost 300,000 HD subscribers.

Subscriber Statistics

										February 28, 2009
										Three months ended								Six months ended
		February 28,				August 31,								Change								Change
		2009				2008				Growth				%				Growth				%
Star Choice customers (1)			896,633				892,528				3,657				0.4				4,105				0.5

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

OTHER INCOME AND EXPENSE ITEMS:

Amortization

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn)
Amortization revenue (expense) —
Deferred IRU revenue			3,136				3,136				—				6,273				6,273				—
Deferred equipment revenue			33,941				31,525				7.7				66,978				61,104				9.6
Deferred equipment costs			(62,962	)			(55,468	)			13.5				(123,391	)			(112,339	)			9.8
Deferred charges			(256	)			(256	)			—				(512	)			(512	)			—
Property, plant and equipment			(117,034	)			(104,506	)			12.0				(227,584	)			(207,123	)			9.9

The increase in amortization of deferred equipment revenue and deferred equipment costs over the comparative periods is primarily due to continued growth in higher priced HD digital equipment.

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

Amortization of financing costs and Interest expense

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn)
Amortization of financing costs — long-term debt			946				884				7.0				1,892				1,863				1.6
Interest expense — debt			56,354				57,511				(2.0	)			113,564				117,227				(3.1	)

Shaw Communications Inc.

Interest expense decreased over the comparative periods as a result of a decrease in the average cost of borrowing.

Other gains

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

Future income taxes

Future income taxes fluctuated over the comparative periods due to income tax recoveries in respect of reductions in the enacted corporate income tax rates of $22.6 million and $188.0 million in the second quarters of fiscal 2009 and 2008, respectively.

RISKS AND UNCERTAINTIES

There have been no material changes in any risks or uncertainties facing the Company since August 31, 2008. A discussion of risks affecting the Company and its business is set forth in the Company’s August 31, 2008 Annual Report under the Introduction to the Business — Known Events, Trends, Risks and Uncertainties in Management’s Discussion and Analysis.

FINANCIAL POSITION

Total assets at February 28, 2009 were $8.5 billion compared to $8.4 billion at August 31, 2008. Following is a discussion of significant changes in the consolidated balance sheet since August 31, 2008.

Current assets declined $40.9 million due to a decrease in future income taxes of $70.9 million which was partially offset by increases in accounts receivable of $11.8 million and inventories of $12.6 million. Future income taxes declined due to the use of non-capital loss carryforwards. Inventories increased due to timing of equipment purchases while accounts receivable were up due to subscriber growth and rate increases.

Property, plant and equipment increased $110.2 million as current year capital investment exceeded amortization.

Deferred charges were up $25.7 million mainly due to an increase in deferred equipment costs of $18.5 million.

Broadcast rights increased by $40.3 million due to the acquisition of the Campbell River cable system in British Columbia.

Shaw Communications Inc.

Current liabilities (excluding current portion of long-term debt and derivative instruments) decreased $99.7 million due to decreases in bank indebtedness of $30.4 million and accounts payable of $73.9 million partially offset by an increase and unearned revenue of $4.9 million. Accounts payable and accrued liabilities declined due to funding the remaining amount owing in respect of wireless spectrum licenses partially offset by an increase in trade payables. Unearned revenue increased primarily due to customer growth.

Total long-term debt increased $264.6 million as a result of a net increase in bank borrowings of $60.0 million and an increase of $202.9 million relating to the translation of hedged US denominated debt.

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

Derivative instruments (including current portions) decreased $231.3 million of which $202.9 million was in respect of the foreign exchange gain on the notional amounts of the derivatives relating to hedges on long-term debt.

Future income taxes increased by $21.8 million due to the current year future income tax expense partially offset by an income tax recovery related to reductions in corporate income tax rates.

Share capital increased by $42.6 million primarily due to the issuance of 3,041,132 Class B Non-Voting Shares under the Company’s option plans for $51.1 million partially offset by the repurchase of 1,683,000 Class B Non-Voting Shares for $33.6 million of which $8.6 million reduced stated share capital and $25.0 million was charged against retained earnings. As of March 31, 2009, share capital is as reported at February 28, 2009 with the exception of the issuance of 79,950 Class B Non-Voting Shares upon exercise of options subsequent to the quarter end. Contributed surplus increased due to stock-based compensation expense recorded in the current year. Accumulated other comprehensive loss decreased due to a decline in the unrealized losses on derivative instruments related to US denominated long-term debt and the realized gains on cancellation of certain US dollar forward purchase contracts in respect of capital expenditures and equipment costs.

LIQUIDITY AND CAPITAL RESOURCES

In the current year, the Company generated $251.4 million of consolidated free cash flow. Shaw used its free cash flow along with a net increase in debt and bank indebtedness of $29.6 million, proceeds on cancellation of US dollar forward purchase contracts and a bond forward contract of $24.1 million, proceeds on issuance of Class B Non-Voting Shares of $49.7 million, net working capital and inventory reduction of $45.9 and other net items of $3.1 million to purchase $33.6 million of Class B Non-Voting Shares for cancellation, pay common share dividends of $171.3 million, fund the final cash payment of $152.5 million related to deposits on wireless spectrum licenses and purchase the Campbell River cable system for $46.4 million.

To allow for timely access to capital markets, Shaw filed a short form base shelf prospectus with securities regulators in Canada and the U.S. on March 11, 2009. The shelf prospectus allows for the issue of up to an aggregate $2.5 billion of debt and equity securities over a 25 month period.

Shaw Communications Inc.

Pursuant to this shelf prospectus, on March 27, 2009, Shaw issued $600 million of Senior notes at a rate of 6.5% due June 2, 2014. Net proceeds (after estimated issue and underwriting expenses) of $594.0 million will be used for debt repayment, working capital and general corporate purposes. On April 1, 2009, the Company gave notice to redeem the Videon CableSystems Inc. Cdn $130,000 Senior Debentures.

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

At February 28, 2009, Shaw had access to $920.6 million of available credit facilities. Based on available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations and obligations during the current fiscal year. On a longer-term basis, Shaw expects to generate free cash flow and have borrowing capacity sufficient to finance foreseeable future business plans and refinance maturing debt.

CASH FLOW

Operating Activities

		Three months ended												Six months ended
		February 28,				February 29,				Change				February 28,				February 29,				Change
		2009				2008				%				2009				2008				%
($000’s Cdn)
Funds flow from operations			334,508				304,293				9.9				646,475				590,635				9.5
Net decrease (increase) in non-cash working capital balances related to operations			63,068				(3,539	)			>100.0				56,121				(3,726	)			>100.0
			397,576				300,754				32.2				702,596				586,909				19.7

Funds flow from operations increased over comparative periods primarily due to growth in service operating income before amortization. The net change in non-cash working capital balances over the comparative periods is due to timing of payment of accounts payable and accrued liabilities.

Investing Activities

		Three months ended												Six months ended
		February 28,				February 29,								February 28,				February 29,
		2009				2008				Increase				2009				2008				Increase
($000’s Cdn)
Cash flow used in investing activities			(261,214	)			(155,807	)			105,407				(587,635	)			(298,347	)			289,288

The cash used in investing activities was up over the comparative periods primarily due to the acquisition of the Campbell River cable system and higher cash outlays for capital expenditures partially offset by increased proceeds on disposal of property, plant and equipment. The current six-month period also included the final cash outlay in respect of deposits for the wireless spectrum licenses partially offset by proceeds on cancellation of certain US dollar forward purchase contracts while the prior year benefitted from a customs duty recovery on equipment costs.

Shaw Communications Inc.

Financing Activities

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

		Three months ended								Six months ended
		February 28,				February 29,				February 28,				February 29,
		2009				2008				2009				2008
(In $millions Cdn)
Bank loans and bank indebtedness — net borrowings (repayments)			(92.7	)			62.9				29.6				107.7
Repayment of senior unsecured notes			—				—				—				(296.8	)
Redemption of Cdn 8.54% Series B COPrS			—				(100.0	)			—				(100.0	)
Dividends			(85.7	)			(77.7	)			(171.3	)			(149.0	)
Repayment of Partnership debt			(0.2	)			(0.1	)			(0.3	)			(0.2	)
Debt retirement costs			—				(4.3	)			—				(4.3	)
Issue of Class B Non-Voting Shares			42.2				6.3				49.7				20.8
Purchase of Class B Non-Voting Shares for cancellation			—				(32.0	)			(33.6	)			(32.0	)
Proceeds on cancellation of bond forward contract			—				—				10.8				—
			(136.4	)			(144.9	)			(115.1	)			(453.8	)

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

						Service operating												Funds flow
		Service				income before								Basic and diluted				from
		revenue				amortization(1)				Net income				earnings per share				operations(2)
($000’s Cdn except per share amounts)
2009
Second			839,144				381,355				156,229				0.36				334,508
First			817,468				367,797				123,077				0.29				311,967
2008
Fourth			805,700				369,527				132,378				0.31				321,276
Third			792,149				356,089				128,113				0.30				310,984
Second			763,182				349,711				298,848				0.69				304,293
First			743,828				332,909				112,223				0.26				286,342
2007
Fourth			715,471				326,052				135,932				0.31				272,545
Third			702,238				310,748				91,658				0.21				259,470

(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.

Generally, service revenue and service operating income before amortization have grown quarter-over-quarter mainly due to customer growth and rate increases. Net income has generally trended positively quarter-over-quarter as a result of the growth in service operating income before amortization described above, reductions of interest expense as a result of debt repayment and retirement and lower average costs of borrowing, the impact of the net change in

Shaw Communications Inc.

non-operating items such as other gains and debt retirement costs and the impact of corporate income tax rate reductions. The exceptions to the consecutive quarter-over-quarter increases in net income are the first and third quarters of 2008 and first quarter of 2009. Net income declined by $23.7 million in the first quarter of 2008 and by $170.7 million in the third quarter of 2008 due to income tax recoveries primarily related to reductions in corporate income tax rates which contributed $35.5 million and $188.0 to net income in the fourth quarter of 2007 and second quarter of 2008, respectively. The decline related to income taxes in the first quarter of 2008 was partially offset by a net customs duty recovery of $22.3 million in respect of satellite receiver importations in prior years. The second quarter of 2009 also benefitted from reductions in corporate income tax rates amounting to $22.6 million. The decline in net income in the first quarter of 2009 of $9.3 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, 2008 Annual Report outlined critical accounting policies including key estimates and assumptions that management has made under these policies and how they affect the amounts reported in the Consolidated Financial Statements. The MD&A also describes significant accounting policies where alternatives exist. Also described therein were several new accounting policies that the Company was required to adopt in fiscal 2009 as a result of changes in Canadian accounting pronouncements. The unaudited interim Consolidated Financial Statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements other than as set out below.

Inventories

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

Capital disclosures

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

Financial instruments

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

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 would require the Company to begin reporting under IFRS in the first quarter of fiscal 2012 with comparative data for the prior year. The Company is assessing the potential impacts of transition to IFRS and developing its plan accordingly.

2009 GUIDANCE

The Company’s preliminary view with respect to 2009 guidance was provided coincident with the release of its fourth quarter 2008 results on October 23, 2008. It called for service operating income before amortization in the Cable division to increase approximately 10%, modest growth in the Satellite division, and free cash flow of at least $500 million. There are no revisions to the guidance at this time.

Certain important assumptions for 2009 guidance purposes include: customer growth continuing generally in line with historical trends; stable pricing environment for Shaw’s products relative to today’s rates; no significant market disruption or other significant changes in competition or regulation that would have a material impact; cash income taxes to be paid or payable in 2009; and a stable regulatory fee and rate environment, with CRTC Part II fees payable. While the Company does anticipate weakening economic conditions in Western Canada, it does not see any material changes to its business at this time.

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

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

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

Shaw Communications Inc.

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.

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]		February 28, 2009				August 31, 2008
ASSETS
Current
Accounts receivable			199,993				188,145
Inventories			64,325				51,774
Prepaids and other			31,108				27,328
Derivative instruments			1,792				—
Future income taxes			66,310				137,220
			363,528				404,467
Investments and other assets			197,746				197,979
Property, plant and equipment			2,726,720				2,616,500
Deferred charges			300,399				274,666
Intangibles
Broadcast rights			4,816,381				4,776,078
Goodwill			88,111				88,111
			8,492,885				8,357,801
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Bank indebtedness [note 4]			13,827				44,201
Accounts payable and accrued liabilities			581,819				655,756
Income taxes payable			2,094				2,446
Unearned revenue			129,315				124,384
Current portion of long-term debt [note 4]			525				509
Derivative instruments			1,728				1,349
			729,308				828,645
Long-term debt [note 4]			2,971,146				2,706,534
Other long-term liability [note 9]			91,938				78,912
Derivative instruments			288,938				518,856
Deferred credits			691,294				687,836
Future income taxes			1,303,598				1,281,826
			6,076,222				6,102,609
Shareholders’ equity
Share capital [note 5]			2,105,990				2,063,431
Contributed surplus [note 5]			29,937				23,027
Retained earnings			309,384				226,408
Accumulated other comprehensive loss [note 7]			(28,648	)			(57,674	)
			2,416,663				2,255,192
			8,492,885				8,357,801

See accompanying notes

Shaw Communications Inc.

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

		Three months ended								Six months ended
		February 28,				February 29,				February 28,				February 29,
[thousands of Canadian dollars except per share amounts]		2009				2008				2009				2008
Service revenue [note 2]			839,144				763,182				1,656,612				1,507,010
Operating, general and administrative expenses			457,789				413,471				907,460				824,390
Service operating income before amortization [note 2]			381,355				349,711				749,152				682,620
Amortization:
Deferred IRU revenue			3,136				3,136				6,273				6,273
Deferred equipment revenue			33,941				31,525				66,978				61,104
Deferred equipment costs			(62,962	)			(55,468	)			(123,391	)			(112,339	)
Deferred charges			(256	)			(256	)			(512	)			(512	)
Property, plant and equipment			(117,034	)			(104,506	)			(227,584	)			(207,123	)
Operating income			238,180				224,142				470,916				430,023
Amortization of financing costs — long-term debt			(946	)			(884	)			(1,892	)			(1,863	)
Interest expense — debt [note 2]			(56,354	)			(57,511	)			(113,564	)			(117,227	)
			180,880				165,747				355,460				310,933
Debt retirement costs			—				(5,264	)			—				(5,264	)
Other gains			7,312				1,983				8,994				25,518
Income before income taxes			188,192				162,466				364,454				331,187
Future income tax expense (recovery)			31,843				(136,402	)			85,161				(79,820	)
Income before the following			156,349				298,868				279,293				411,007
Equity income (loss) on investee			(120	)			(20	)			13				64
Net income			156,229				298,848				279,306				411,071
Retained earnings (deficit), beginning of period			238,899				(25,378	)			226,408				(68,132	)
Adjustment for adoption of new accounting policy			—				—				—				1,754
Reduction on Class B Non-Voting Shares purchased for cancellation [note 5]			—				(23,336	)			(25,017	)			(23,336	)
Dividends — Class A Shares and Class B Non-Voting Shares			(85,744	)			(77,731	)			(171,313	)			(148,954	)
Retained earnings, end of period			309,384				172,403				309,384				172,403
Earnings per share [note 6]
Basic			0.36				0.69				0.65				0.95
Diluted			0.36				0.69				0.65				0.94
[thousands of shares]
Weighted average participating shares outstanding during period			428,833				431,844				428,295				431,797
Participating shares outstanding, end of period			429,791				430,876				429,791				430,876

See accompanying notes

Shaw Communications Inc.

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

		Three months ended								Six months ended
		February 28,				February 29,				February 28,				February 29,
		2009				2008				2009				2008
Net income			156,229				298,848				279,306				411,071
Other comprehensive income (loss) [note 7]
Change in unrealized fair value of derivatives designated as cash flow hedges			34,307				(19,222	)			187,789				(77,710	)
Realized gains on cancellation of forward purchase contracts			—				—				9,314				—
Adjustment for hedged items recognized in the period			(1,065	)			6,683				6,023				21,190
Reclassification of foreign exchange loss (gain) on hedging derivatives to income to offset foreign exchange adjustments on US denominated debt			(29,493	)			13,447				(174,213	)			59,378
Unrealized foreign exchange gain (loss) on translation of self- sustaining foreign operations			19				(8	)			113				(32	)
			3,768				900				29,026				2,826
Comprehensive income			159,997				299,748				308,332				413,897
Accumulated other comprehensive income (loss), beginning of period			(32,416	)			(54,989	)			(57,674	)			312
Adjustment for adoption of new accounting policy			—				—				—				(57,227	)
Other comprehensive income			3,768				900				29,026				2,826
Accumulated other comprehensive loss, end of period			(28,648	)			(54,089	)			(28,648	)			(54,089	)

See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three months ended								Six months ended
		February 28,				February 29,				February 28,				February 29,
[thousands of Canadian dollars]		2009				2008				2009				2008
OPERATING ACTIVITIES [note 8]
Funds flow from operations			334,508				304,293				646,475				590,635
Net decrease (increase) in non-cash working capital balances related to operations			63,068				(3,539	)			56,121				(3,726	)
			397,576				300,754				702,596				586,909
INVESTING ACTIVITIES
Additions to property, plant and equipment [note 2]			(193,594	)			(121,582	)			(341,704	)			(260,798	)
Additions to equipment costs (net) [note 2]			(35,126	)			(26,375	)			(69,553	)			(57,483	)
Net customs duty recovery on equipment costs			—				—				—				22,267
Proceeds on cancellation of US forward purchase contracts			—				—				13,384				—
Net addition to inventories			(6,913	)			(8,158	)			(12,551	)			(2,694	)
Deposits on wireless spectrum licenses			—				—				(152,465	)			—
Cable business acquisitions [note 3]			(46,330	)			—				(46,366	)			—
Proceeds on disposal of property, plant and equipment [note 2]			20,749				308				21,620				361
			(261,214	)			(155,807	)			(587,635	)			(298,347	)
FINANCING ACTIVITIES
Increase (decrease) in bank indebtedness			(57,691	)			17,943				(30,374	)			37,630
Increase in long-term debt			70,000				70,000				241,615				170,000
Long-term debt repayments			(105,126	)			(125,118	)			(181,865	)			(496,995	)
Proceeds on cancellation of bond forward contract			—				—				10,757				—
Debt retirement costs			—				(4,272	)			—				(4,272	)
Issue of Class B Non-Voting Shares [note 5]			42,189				6,276				49,695				20,787
Purchase of Class B Non-Voting Shares for cancellation [note 5]			—				(32,038	)			(33,574	)			(32,038	)
Dividends paid on Class A Shares and Class B Non-Voting Shares			(85,744	)			(77,731	)			(171,313	)			(148,954	)
			(136,372	)			(144,940	)			(115,059	)			(453,842	)
Effect of currency translation on cash balances and cash flows			10				(7	)			98				(30	)
Decrease in cash and cash equivalents			—				—				—				(165,310	)
Cash and cash equivalents, beginning of the period			—				—				—				165,310
Cash and cash equivalents, end of the period			—				—				—				—
Cash includes cash and term deposits