Shaw Announces Second Quarter Results

Market Wire, April, 2009

Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR) 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 amortization(1) of $381 million and $749 million, respectively, improved 9% and 10% over the comparable periods. Funds flow from operations(2) 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 flow(1) 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."