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Shaw Announces Second Quarter Financial and Operating Results

(April 13, 2012)

CALGARY, ALBERTA -- (Marketwire) -- 04/13/12 -- Shaw Communications Inc. (TSX:SJR.B) (NYSE:SJR) announced consolidated financial and operating results for the three and six months ended February 29, 2012 and February 28, 2011. Consolidated revenue for the three and six month periods of $1.23 billion and $2.51 billion, respectively, was up 3% and 10% over the comparable periods last year. Total operating income before amortization(1) of $493 million declined 2% over the comparable quarterly period and the year-to-date amount of $1.06 billion, improved almost 8%.

Free cash flow(1) for the three and six month periods was $57 million and $176 million, respectively, compared to $174 million and $328 million for the same periods last year. Higher capital investment in the current periods related to various strategic initiatives and customer equipment subsidies were the main drivers of the decline.

Chief Executive Officer Brad Shaw said, "We continue to execute on our strategic initiatives in this highly competitive environment, focusing on technology, customer service and value leadership. Our technology initiatives, including our Wi-Fi build and Digital Network Upgrade progressed as planned during the quarter. Through our upgraded network, Shaw EXO(TM), we continue to lead and innovate, providing customers with the best in entertainment and technology offerings. We have made the necessary investments in customer service, adding staff and opening three new customer service centres, to ensure we deliver an exceptional customer experience. We have continued to refine our product packaging and recently implemented new EXO bundles that provide everyday value to our customers. Our focus is showing results as we gained momentum in subscriber growth during the quarter."

Net income from continuing operations of $178 million or $0.38 per share for the quarter ended February 29, 2012 compared to $172 million or $0.38 per share for the same period last year. Net income from continuing operations for the first six months of the year was $380 million or $0.81 per share compared to $189 million or $0.41 per share last year. All periods included non-operating items which are more fully detailed in Management's Discussions and Analysis (MD&A).(2) The prior year-to-date period included a charge of $139 million for the discounted value of the CRTC benefit obligation related to the acquisition of Shaw Media, as well as business acquisition, integration and restructuring expenses of $61 million. Excluding the non-operating items, net income from continuing operations for the three and six month periods ended February 29, 2012 would have been $178 million and $388 million, respectively, compared to $171 million and $335 million in the same periods last year.


Revenue in the Cable division was up 5% for each of the three and six month periods, respectively, to $804 million and $1.60 billion. Operating income before amortization for the quarter of $352 million was down 5% compared to the same quarter last year and the year-to-date period was up 1%, to $729 million.

Revenue in the Satellite division was $211 million and $420 million for the three and six month periods, respectively, up from $204 million and $410 million for the same periods last year. Operating income before amortization for the current quarter and year-to-date period of $71 million and $140 million were comparable to the same periods last year.

Revenue in the Media division for the three and six month periods was $242 million and $541 million, respectively, and operating income before amortization was $70 million and $190 million. For the current quarter this represents an improvement of almost 8% in operating before amortization compared to the same quarter last year. For informational purposes, on a comparative basis to last year, Media revenues and operating income before amortization for the full six month period were each down approximately 2%.

Margin compression occurred in the Cable division during the quarter as new marketing strategies were employed, incremental expenses were incurred getting the new customer service centers on line, and revenue declined for several months mainly due to customer package migration and increased promotional activity. Softness in the advertising market also continued in the Media division due to ongoing global economic concerns. These have put short term pressure on financial results and financial guidance. As a result the Corporation is revising guidance and now expects to deliver consolidated free cash flow of approximately $450 million. Also anticipated is a marginal decline in Cable operating income before amortization year-over-year, modest growth in Satellite, and consistent operating income on a full year-over-year comparative basis in Media.

Brad Shaw concluded, "For the remainder of this year we plan to continue to execute on and invest in our strategic initiatives and focus on sustainable growth. We believe our Digital Network Upgrade and our Wi-Fi build continue to increase the value of our existing services and maintain our technology leadership. We plan to work to exceed the expectations of our existing customers and continue to compete for new subscriber opportunities."

In January the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.97 on Shaw's Class B Non-Voting Participating shares and $0.9675 on Shaw's Class A Participating shares. This new rate was effective commencing with the monthly dividends paid on March 29, 2012.

Shaw Communications Inc. is a diversified communications and media company, providing consumers with broadband cable television, High-Speed Internet, Home Phone, telecommunications services (through Shaw Business), satellite direct-to-home services (through Shaw Direct) and engaging programming content (through Shaw Media). Shaw serves 3.4 million customers, through a reliable and extensive fibre network. Shaw Media operates one of the largest conventional television networks in Canada, Global Television, and 18 specialty networks including HGTV Canada, Food Network Canada, History Television and Showcase. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX - SJR.B, NYSE - SJR).

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

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) See reconciliation of Net income from continuing operations in Consolidated Overview in MD&A.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FEBRUARY 29, 2012

April 13, 2012

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

The following Management's Discussion and Analysis ("MD&A") should also be read in conjunction with the unaudited interim consolidated Financial Statements and Notes thereto of the current quarter, the 2011 Annual MD&A included in the Company's August 31, 2011 Annual Report including the Consolidated Financial Statements and the Notes thereto.

The financial information presented herein has been prepared on the basis of International Financial Reporting Standards ("IFRS") for interim financial statements and is expressed in Canadian dollars unless otherwise stated. The amounts in this MD&A and the Company's interim financial statements for the period ended February 28, 2011 have been restated to reflect the adoption of IFRS, with effect from September 1, 2010. Periods prior to September 1, 2010 have not been restated and are prepared in accordance with Canadian GAAP. Refer to note 13 of the February 29, 2012 interim financial statements for a summary of the differences between the financial statements previously prepared under Canadian GAAP and to those under IFRS.

The unaudited IFRS related disclosures and values in this MD&A have been prepared using the standards and interpretations currently issued and expected to be effective at the end of the Company's first annual IFRS reporting period, August 31, 2012. Certain accounting policies expected to be adopted under IFRS may not be adopted and the application of policies to certain transactions or circumstances may be modified and as a result, the February 29, 2012 and August 31, 2011 underlying values prepared on a basis consistent with IFRS are subject to change.

CONSOLIDATED RESULTS OF OPERATIONS

SECOND QUARTER ENDING FEBRUARY 29, 2012

Selected Financial Highlights

Three months ended Six months ended -------------------------------------------------------- February February February February 29, 28, Change 29, 28, Change 2012 2011 % 2012 2011 % ---------------------------------------------------------------------------- ($millions Cdn except per share amounts) Operations: Revenue 1,231 1,196 2.9 2,510 2,275 10.3 Operating income before amortization (1) 493 505 (2.4) 1,059 984 7.6 Operating margin (1) 40.0% 42.2% (2.2) 42.2% 43.3% (1.1) Funds flow from continuing operations (2) 164 384 (57.3) 520 649 (19.9) Net income from greater continuing than operations 178 172 3.5 380 189 100.0 Per share data: Earnings per share from continuing operations Basic 0.38 0.38 0.81 0.41 Diluted 0.38 0.38 0.80 0.41 ---------------------------------------------------------------------------- Weighted average participating shares outstanding during period (millions) 440 434 439 434 ----------------------------------------------------------------------------

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) Funds flow from continuing operations is before changes in non-cash working capital balances related to continuing operations as presented in the unaudited interim Consolidated Statements of Cash Flows.

Subscriber Highlights

Total Three months ended Six months ended ----------------------------------- ----------------------- February February February February February 29, 29, 28, 29, 28, 2012 2012 2011 2012 2011 ---------------------------------------------------------------------------- Subscriber statistics: Basic cable customers 2,257,061 (9,946) (13,662) (32,714) (21,204) Digital customers 1,925,518 46,564 35,403 106,130 97,619 Internet customers (including pending installs) 1,906,597 18,681 10,772 29,366 29,524 Digital phone lines (including pending installs) 1,310,417 54,407 32,512 77,376 82,354 DTH customers 910,688 1,274 2,176 1,805 637 ----------------------------------------------------------------------------

Additional Highlights

-- Revenue of $1.23 billion and $2.51 billion for the three and six month periods improved 3% and 10% over the comparable periods last year. -- Free cash flow(1) for the quarter and year-to-date periods was $57 million and $176 million, respectively, compared to $174 million and $328 million for the same periods last year. -- In January the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $0.97 on Shaw's Class B Non-Voting Participating shares and $0.9675 on Shaw's Class A Participating shares. This new rate was effective commencing with the monthly dividends paid on March 29, 2012.

Consolidated Overview

Consolidated revenue of $1.23 billion and $2.51 billion for the three and six month periods, respectively, improved 2.9% and 10.3% over the same periods last year. Both the current periods benefited from rate increases in the Cable and Satellite divisions while the year-to-date period also included a full six months of revenue from Shaw Media. Consolidated operating income before amortization for the three month period of $493 million declined 2.4% compared to the same period last year. On a year-to-date basis operating income before amortization was up 7.6% to $1.06 billion. The current year-to-date period included two full quarters of Shaw Media and revenue related growth in the Cable and Satellite divisions, partially offset by higher programming, employee related costs, and sales and marketing expenses.

Net income from continuing operations was $178 million and $380 million for the three and six months ended February 29, 2012, respectively, compared to $172 million and $189 million for the same periods last year. Non-operating items affected net income in both periods. The prior period included a charge of $139 million for the discounted value of the CRTC benefit obligation, net of incremental revenues, related to the Media acquisition, as well as business acquisition, integration and restructuring expenses of $61 million. Outlined below are further details on these and other operating and non-operating components of net income from continuing operations for each period.

(1) See definitions and discussion under Key Performance Drivers in MD&A.

Six Six months months ($millions Cdn) ended ended ---------- ---------- Operating Operating February net February net 29, of Non- 28, of Non- 2012 interest operating 2011 interest operating ---------------------------------------------------------------------------- Operating income 658 612 Amortization of financing costs - long- term debt (2) (2) Interest expense (165) (154) ---------------------------------------------------------------------------- Operating income after interest 491 491 - 456 456 - Gain on repurchase of debt - - - 10 - 10 CRTC benefit obligation - - - (139) - (139) Business acquisition, integration and restructuring expenses - - - (61) - (61) Gain (loss) on derivative instruments 1 - 1 (23) - (23) Accretion of long-term liabilities and provisions (7) - (7) (6) - (6) Foreign exchange gain on unhedged long-term debt - - - 23 - 23 Other gains (losses) (5) - (5) 7 - 7 ---------------------------------------------------------------------------- Income (loss) before income taxes 480 491 (11) 267 456 (189) Current income tax expense (recovery) 146 148 (2) 115 126 (11) Deferred income tax recovery (45) (45) - (23) (5) (18) ---------------------------------------------------------------------------- Income (loss) before following 379 388 (9) 175 335 (160) Equity income from associates 1 - 1 14 - 14 ---------------------------------------------------------------------------- Net income (loss) from continuing operations 380 388 (8) 189 335 (146) ---------------------------------------------------------------------------- Three Three months months ($millions Cdn) ended ended ---------- ---------- Operating Operating February net February net 29, of Non- 28, of Non- 2012 interest operating 2011 interest operating ---------------------------------------------------------------------------- Operating income 286 313 Amortization of financing costs - long- term debt (1) (1) Interest expense (83) (85) ---------------------------------------------------------------------------- Operating income after interest 202 202 - 227 227 - Gain on repurchase of debt - - - 10 - 10 Business acquisition, integration and restructuring expenses - - - (3) - (3) Gain (loss) on derivative instruments 1 - 1 (22) - (22) Accretion of long-term liabilities and provisions (3) - (3) (4) - (4) Foreign exchange gain on unhedged long-term debt - - - 20 - 20 Other gains 1 - 1 5 - 5 ---------------------------------------------------------------------------- Income (loss) before income taxes 201 202 (1) 233 227 6 Current income tax expense (recovery) 62 64 (2) 60 66 (6) Deferred income tax expense (recovery) (38) (40) 2 1 (10) 11 ---------------------------------------------------------------------------- Income (loss) before following 177 178 (1) 172 171 1 Equity income from associates 1 - 1 - - - ---------------------------------------------------------------------------- Net income from continuing operations 178 178 - 172 171 1 ----------------------------------------------------------------------------

The changes in net income from continuing operations are outlined in the table below.

February 29, 2012 net income from continuing operations compared to: -------------------------------------------------- Three months ended Six months ended --------------------------------- ----------------- November 30, February 28, February 28, 2011 2011 2011 ---------------------------------------------------------------------------- ($millions Cdn) Increased (decreased) operating income before before amortization (73) (12) 75 Increased amortization (13) (15) (29) Decreased (increased) interest expense (1) 2 (11) Change in net other costs and revenue (1) 10 (6) 165 Decreased (increased) income taxes 53 37 (9) ---------------------------------------------------------------------------- (24) 6 191 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

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

Basic earnings per share were $0.38 and $0.81 for the quarter and year-to-date, respectively, compared to $0.38 and $0.41 in the same periods last year. In the current quarter, reduced operating income before amortization of $12 million and increased amortization of $15 million were offset by lower income taxes of $37 million. The lower taxes included a tax recovery related to the resolution of certain tax matters with Canada Revenue Agency ("CRA"). The year-to-date increase was primarily due to the favorable change in net other costs and revenue of $165 million along with improved operating income before amortization of $75 million, both of which were partially reduced by increased amortization of $29 million and interest expense of $11 million. The change in net other costs and revenue was primarily due to amounts included in the prior year related to the CRTC benefit obligation and various acquisition, integration and restructuring costs. Operating income before amortization was up in the current period mainly due to the inclusion of Shaw Media for the full six months.

Net income in the current quarter decreased $24 million compared to the first quarter of fiscal 2012 mainly due to lower operating income before amortization of $73 million, due to seasonality in the Media business as well as lower operating income in the Cable division, partially offset by reduced income taxes of $53 million, due to the lower operating income before amortization as well as the tax recovery related to the resolution reached with CRA on certain tax matters.

Free cash flow for the quarter and year-to-date periods of $57 million and $176 million, respectively, compared to $174 million and $328 million in the same periods last year. The decrease in the current quarter was mainly due to higher capital investment of $87 million related to strategic initiatives, including the Digital Network Upgrade ("DNU") and Wi-Fi build, as well as higher customer equipment subsidies. The lower year-to-date amount was mainly due to higher capital investment of $137 million related to the strategic initiatives and customer equipment subsidies, as well as increased interest and cash taxes of $21 million and $22 million, respectively, partially reduced by improved operating income before amortization of $75 million. Operating income before amortization was up primarily due to the full six month inclusion of Media.

Key Performance Drivers

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

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

Operating income before amortization and operating margin

Operating income before amortization is calculated as revenue less operating, general and administrative expenses and is presented as a sub-total line item in the Company's unaudited interim Consolidated Statements of Income. 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 measure to assess the Company's ability to repay debt and return cash to shareholders.

Free cash flow is calculated as operating income before amortization, less interest, cash taxes paid or payable, capital expenditures (on an accrual basis and net of proceeds on capital dispositions) and equipment costs (net), adjusted to exclude share-based compensation expense, less cash amounts associated with funding the new and assumed CRTC benefit obligations related to the acquisition of Shaw Media as well as excluding non-controlling interest amounts that are consolidated in the operating income before amortization, capital expenditure and cash tax amounts. Free cash flow also includes changes in receivable related balances with respect to customer equipment financing transactions as a cash item, and is adjusted for cash funding of pension amounts net of pension expense. Dividends paid on the Company's Cumulative Redeemable Rate Reset Preferred Shares are also deducted.

Commencing in 2012 free cash flow has not been reported on a segmented basis. Certain components of free cash flow including operating income before amortization, capital expenditures (on an accrual basis) net of proceeds on capital dispositions and equipment costs (net), CRTC benefit obligation funding, and non-controlling interest amounts continue to be reported on a segmented basis. Other items, including interest and cash taxes, are not generally directly attributable to a segment, and are reported on a consolidated basis.

Free cash flow is calculated as follows:

Three months ended Six months ended -------------------------------------------------------- February February February 28, Change February 28, 2011 Change 29, 2012 2011 (2) % 29, 2012 (2) % -------------------------------------------------------- ($millions Cdn) Revenue Cable 804 769 4.6 1,596 1,527 4.5 Satellite 211 204 3.4 420 410 2.4 Media 242 244 (0.8) 541 369 46.6 ---------------------------------------------------------------------------- 1,257 1,217 3.3 2,557 2,306 10.9 Intersegment eliminations (26) (21) 23.8 (47) (31) 51.6 ---------------------------------------------------------------------------- 1,231 1,196 2.9 2,510 2,275 10.3 ---------------------------------------------------------------------------- Operating income before amortization (1) Cable 352 369 (4.6) 729 722 1.0 Satellite 71 71 - 140 140 - Media 70 65 7.7 190 122 55.7 ---------------------------------------------------------------------------- 493 505 (2.4) 1,059 984 7.6 ---------------------------------------------------------------------------- Capital expenditures and equipment costs (net): Cable 234 156 50.0 457 334 36.8 Satellite 25 18 38.9 50 42 19.0 Media 7 5 40.0 13 7 85.7 ---------------------------------------------------------------------------- Total as per Note 3 to the unaudited interim Consolidated Financial Statements 266 179 48.6 520 383 35.8 ---------------------------------------------------------------------------- Free cash flow before the following 227 326 (30.4) 539 601 (10.3) Less: Interest (82) (79) 3.8 (164) (143) 14.7 Cash taxes (64) (66) (3.0) (148) (126) 17.5 Other adjustments: Non-cash share- based compensation 1 2 (50.0) 3 5 (40.0) CRTC benefit greater greater obligation funding than than (11) (5) 100.0 (21) (7) 100.0 Non-controlling interests (9) (7) 28.6 (20) (11) 81.8 Pension adjustment 4 3 33.3 8 9 (11.1) Customer equipment greater greater financing than than (5) - 100.0 (13) - 100.0 Preferred share greater greater dividends than than (4) - 100.0 (8) - 100.0 ---------------------------------------------------------------------------- Free cash flow (1) 57 174 (67.2) 176 328 (46.3) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating margin (1) Cable 43.8% 48.0% (4.2) 45.7% 47.3% (1.6) Satellite 33.6% 34.8% (1.2) 33.3% 34.1% (0.8) Media 28.9% 26.6% 2.3 35.1% 33.1% 2.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) Restated to reflect changes in the calculation related to the pension adjustment and customer equipment financing.

CABLE

FINANCIAL HIGHLIGHTS

Three months ended Six months ended -------------------------------------------------------- February February February February 29, 28, Change 29, 28, Change 2012 2011 % 2012 2011 % -------------------------------------------------------- ($millions Cdn) Revenue 804 769 4.6 1,596 1,527 4.5 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating income before amortization (1) 352 369 (4.6) 729 722 1.0 Capital expenditures and equipment costs (net): New housing development 27 20 35.0 49 46 6.5 Success based 75 43 74.4 165 106 55.7 Upgrades and enhancement 91 62 46.8 178 124 43.5 Replacement 10 11 (9.1) 21 23 (8.7) Buildings and other 31 20 55.0 44 35 25.7 ---------------------------------------------------------------------------- Total as per Note 3 to the unaudited interim Consolidated Financial Statements 234 156 50.0 457 334 36.8 ---------------------------------------------------------------------------- Operating margin (1) 43.8% 48.0% (4.2) 45.7% 47.3% (1.6) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

(1) See definitions and discussion under Key Performance Drivers in MD&A.

Operating Highlights

-- Digital Phone lines increased 54,407 during the three month period to 1,310,417 and Internet was up 18,681 to total 1,906,597 as at February 29, 2012. During the quarter Basic cable subscribers decreased 9,946. -- Digital customers increased 46,564 during the quarter to 1,925,518. Shaw's Digital penetration of Basic is now 85.3%, up from 79.5% and 70.7% at August 31, 2011 and 2010, respectively.

Cable revenue for the three and six month periods of $804 million and $1.60 billion improved 4.6% and 4.5%, respectively, over the comparable periods last year. Rate increases and customer growth in Internet and Digital Phone partially offset by lower Basic subscribers accounted for the improvement.

Operating income before amortization of $352 million for the quarter decreased 4.6% over the same period last year. Revenue growth was more than offset by increased sales and marketing costs of $18 million, higher programming amounts of $13 million related to new services and increased rates as contracts renewed, and higher employee related amounts of $10 million mainly related to bringing the new customer service centres on line.

Margin compression occurred during the quarter as new marketing strategies were employed, incremental expenses were incurred related to the new customer service centers, and revenue declined for several months mainly due to customer package migration and increased promotional activity.

Operating income before amortization for the year-to-date period increased modestly over last year. The revenue improvement of $69 million was reduced by higher programming amounts of $21 million related to new services and increased rates as contracts renewed, higher sales and marketing costs of $17 million, increased employee related amounts of $12 million mainly related to bringing the new customer service centres on line, and various other cost increases.

Revenue increased 1.5% over the first quarter of fiscal 2012 primarily due to rate increases. Growth in Internet, VOD and Digital Phone were offset by lower Basic cable subscribers, customer migration to lower priced packages, and higher promotional discounts. Operating income before amortization declined $25 million over this same period primarily due to higher employee related amounts of $12 million mainly related to bringing the new customer service centres on line, increased sales and marketing costs of $12 million, as well as higher programming costs of $5 million related to increased rates as contracts renewed.

Total capital investment of $234 million for the quarter increased $78 million over the same period last year. Capital investment for the six month period of $457 million was $123 million higher than the same period last year.

Success-based capital was up $32 million and $59 million over the comparable three and six month periods, respectively. The increases were primarily due to higher subsidies on sales of HDPVRs resulting from lower customer pricing and increased volumes, deployment of digital set-top boxes related to the DNU, and spend on wireless internet modems in support of new broadband offerings. The increase in the year-to-date success based capital was partially offset by lower HDPVR rentals and phone modem purchases.

Investment in Upgrades and enhancement and Replacement categories combined increased $28 million and $52 million for the quarter and year-to-date periods, respectively, compared to the same periods last year. The current quarter and year-to-date investment included higher spending on hub upgrades and network electronics related to the DNU, Digital Phone infrastructure to support business growth and soft-switch upgrades, and investment related to the Wi-Fi build.

Investment in Buildings and other was up $11 million and $9 million over the comparable three and six month periods last year. The increase was mainly due to higher spend related to back office infrastructure replacement projects, as well as increased facility amounts related to the new Calgary data centre and customer service centres. The year-to-date increase was partially reduced by proceeds on the sale of redundant real estate and other corporate assets.

Spending in New housing development increased $7 million and $3 million over the comparable three and six month periods mainly due to higher activity and the timing of bulk purchases.

During the quarter Shaw announced the launch of its upgraded network - SHAW EXO(TM). With new services like 1080p HD quality on the Shaw Gateway, and On Demand television content from Global, CTV and CityTV, the EXO network delivers the latest in entertainment and technology to customers. Most recently Shaw broadcast coverage of the Masters in 3D-HD, giving subscribers a greenside seat on the back nine holes of Georgia's Augusta National Golf Club. These service offerings have led the way in Shaw exceeding the one million customer milestone in HD capable subscribers.

Shaw Business announced successful bids in the quarter including contracts with the City of Calgary and Snamprogetti Canada. Telecommunication services provided by Shaw Business deliver standard and customized offerings on a competitive basis.

Subscriber Statistics

February 29, 2012 ------------------------------------ Three months ended Six months ended ------------------------------------ February August Change Change 29, 2012 31, 2011 Growth % Growth % ---------------------------------------------------------------------------- CABLE: Basic service: Actual 2,257,061 2,289,775 (9,946) (0.4) (32,714) (1.4) Penetration as % of homes passed 57.7% 59.0% Digital customers 1,925,518 1,819,388 46,564 2.5 106,130 5.8 ---------------------------------------------------------------------------- INTERNET: Connected and scheduled 1,906,597 1,877,231 18,681 1.0 29,366 1.6 Penetration as % of basic 84.5% 82.0% Standalone Internet not included in basic cable 203,535 217,068 (6,726) (3.2) (13,533) (6.2) DIGITAL PHONE: Number of lines (1) 1,310,417 1,233,041 54,407 4.3 77,376 6.3 ----------------------------------------------------------------------------

(1) Represents primary and secondary lines on billing plus pending installs.

SATELLITE (DTH and Satellite Services)

FINANCIAL HIGHLIGHTS

Three months ended Six months ended -------------------------------------------------------- February February February February 29, 28, Change 29, 28, Change 2012 2011 % 2012 2011 % -------------------------------------------------------- ($millions Cdn) Revenue DTH (Shaw Direct) 191 184 3.8 380 369 3.0 Satellite Services 20 20 - 40 41 (2.4) ---------------------------------------------------------------------------- 211 204 3.4 420 410 2.4 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating income before amortization (1) DTH (Shaw Direct) 61 60 1.7 120 119 0.8 Satellite Services 10 11 (9.1) 20 21 (4.8) ---------------------------------------------------------------------------- 71 71 - 140 140 - Capital expenditures and equipment costs (net): Success based (2) 22 17 29.4 45 40 12.5 Buildings and greater greater other than than 3 1 100.0 5 2 100.0 ---------------------------------------------------------------------------- Total as per Note 3 to the unaudited interim Consolidated Financial Statements 25 18 38.9 50 42 19.0 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating margin (1) 33.6% 34.8% (1.2) 33.3% 34.1% (0.8) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) Net of the profit on the sale of satellite equipment as it is viewed as a recovery of expenditures on customer premise equipment.

Operating Highlights

-- During the quarter Shaw Direct had a net gain of 1,274 customers and as at February 29, 2012 DTH customers totaled 910,688.

Revenue of $211 million and $420 million for the three and six month periods, respectively, was up 3.4% and 2.4% over the same periods last year. The improvement was primarily due to rate increases. Operating income before amortization of $71 million and $140 million for the three and six months, respectively, were comparable with the same periods last year.

Operating income before amortization improved $2 million over the first quarter of fiscal 2012 primarily due to the full quarter impact of the November 2011 rate increases.

Total capital investment of $25 million and $50 million for the three and six month periods, respectively, compared to $18 million and $42 million in the same periods last year. The year-to-date increase was mainly due to new customer activations, customer equipment upgrades to new receivers, outfitting outdoor equipment to access triple satellites, and purchases of certain ground equipment to uplink to the Anik G1 satellite. Construction of Anik G1, which will provide capacity to add over 100 HD channels, continues to progress and is on track for a fall launch.

During the quarter Shaw Direct launched Food TV HD and year-to-date has added ten HD channels. Most recently Shaw Direct broadcast coverage of the Masters in 3D-HD. Shaw Direct has over 540,000 HD subscribers representing an HD penetration of approximately 60%.

Subscriber Statistics

February 29, 2012 ---------------------------------------- Three months ended Six months ended ---------------------------------------- February August 31, Change Change 29, 2012 2011 Growth % Growth % ------------------------------------------------------------- DTH customers (1) 910,688 908,883 1,274 0.1 1,805 0.2 ----------------------------------------------------------------------------

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

MEDIA

FINANCIAL HIGHLIGHTS

Period from Six October months 27,2010 Three months ended ended to --------------------------- --------- February February February Change 29, February Change 29, 2012 28, 2011 % 2012 28, 2011 % -------------------------------------------------------- ($millions Cdn) Revenue 242 244 (0.8) 541 369 46.6 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating income before amortization (1) 70 65 7.7 190 122 55.7 Capital expenditures: Broadcast and transmission 3 2 50.0 6 3 100.0 Buildings and other 4 3 33.3 7 4 75.0 ---------------------------------------------------------------------------- Total as per Note 3 to the unaudited interim Consolidated Financial Statements 7 5 40.0 13 7 85.7 ---------------------------------------------------------------------------- Other adjustments: CRTC benefit greater greater obligation funding than than (11) (5) 100.0 (21) (7) 100.0 Non-controlling interests (9) (7) 28.6 (20) (11) 81.8 Operating margin(1) 28.9% 26.6% 2.3 35.1% 33.1% 2.0 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

(1) See definitions and discussion under Key Performance Drivers in MD&A.

Operating Highlights

Revenue and operating income before amortization for the quarter was $242 million and $70 million, respectively. Although revenue was down marginally compared to the same period last year mainly due to lower advertising revenues, operating income improved 7.7% primarily due to lower programming costs and marketing expenses. For the six months ending February 29, 2012 revenue was $541 million and operating income before amortization was $190 million. Advertising revenue in the six months was driven by growth in the media, government, household supplies, and alcohol beverages categories. For informational purposes, on a comparative basis to the full six months ended February 28, 2011, each of Media revenues and operating income before amortization were down approximately 2%, reflecting the softness in the advertising market as a result of the economic uncertainty.

Compared to the first quarter of fiscal 2012, revenue and operating income before amortization decreased $57 million and $50 million, respectively. The declines were primarily due to the cyclical nature of the Media business, with higher advertising revenues in the first quarter driven by the fall launch of season premieres and high demand.

During the current quarter, Global launched Global National Mandarin, the first Mandarin language newscast produced by a national network in Canada, and continued the Morning News show launches with the Winnipeg Morning News. In addition, Global delivered solid programming results, increasing the number of top 10 and 20 positions nationally. Mid-season premieres on Global include Touch, which delivered strong audience in its special premiere that aired in January, and Awake.

Media's Specialty schedule continued to deliver solid results with History, Showcase and HGTV delivering shows in the top 25 entertainment specialty programs. The digital channels also performed well with seven of Media's digital channels positioned in the spring top 10 digital rankers under the adult 25-54 category, with National Geographic and Action holding the number one and two spots, respectively.

Capital investment in the quarter continued on various projects and included upgrading production equipment, infrastructure and facility investments.

OTHER INCOME AND EXPENSE ITEMS

Amortization

Three months ended Six months ended -------------------------------------------------------- February February February February 29, 28, Change 29, 28, Change 2012 2011 % 2012 2011 % ---------------------------------------------------------------------------- ($millions Cdn) Amortizationrevenue (expense) - Deferred equipment revenue 28 26 7.7 56 53 5.7 Deferred equipment costs (57) (50) 14.0 (110) (102) 7.8 Property, plant
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