Shaw Announces Second Quarter Results

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.