Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
    August 31, 2010
  November 5,
    2010
  FORWARD
    INDEX
   
  CONTENTS

PageOutlineI.



INTRODUCTION TO THE BUSINESS


6A.

Company overview  core business and
    strategies


6B.

General development of the business


6C.

Description of the business


10D.

Seasonality and other additional information
    concerning the business


15E.

Government regulations and regulatory
    developments


16F.

Key performance drivers


21G.

Critical accounting policies and estimates


23H.

Related party transactions


30I.

New accounting standards


31J.

Known events, trends, risks and uncertainties


36II.



SUMMARY OF QUARTERLY RESULTS


44III.



RESULTS OF OPERATIONS


46IV.



FINANCIAL POSITION


57V.



CONSOLIDATED CASH FLOW ANALYSIS


59VI.



LIQUIDITY AND CAPITAL RESOURCES


60VII.



ADDITIONAL INFORMATION


62VIII.



COMPLIANCE WITH NYSE CORPORATE GOVERNANCE LISTING
    STANDARDS


62IX.



CERTIFICATION


62   CAUTION
    CONCERNING FORWARD LOOKING STATEMENTS
   4




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
       5




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  I.
    INTRODUCTION
    TO THE BUSINESS  A.
    Company
    overview  core business and strategies  direct-to-home
    1 best-in-class 24/7/365
    direct-to-home
        B.
    General
    development of the business  (i)
    Cable 
    1
 6




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
              Pay-Per-View Video-on-Demand
 7




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
          Fibre-to-the-Premises
       8




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        (ii)
    Satellite         
    Shaw Broadcast Services  redistributing television
    and radio signals via satellite to cable operators and other
    multi-channel system operators in Canada and the US, referred to
    as a satellite relay distribution undertaking
    (SRDU,) and providing uplink and network management
    services for conventional, specialty and pay broadcasters on a
    contract basis; and
    Shaw Tracking  provision of satellite tracking and
    messaging services to the Canadian trucking industry, and
    integration and management of satellite data networks with
    land-based telecommunications. 9




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
       (iii)
    Wireless     (iv)
    Media     C.
    Description
    of the business    1.
    Cable   10




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      Video-on-Demand
      Video-on-Demand. 24-48 hour
  Internet
       11




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Fibre-to-the-Premises
        e-mail e-mail
  Digital
    Phone
  E-911 around-the-clock (24/7/365)
  IP-based
     12




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Shaw
    Business Solutions
  end-to-end
  2.
    Satellite    Nature of Satellite ServicesSatellite

Transponders

InterestAnik F2

18 Ku-band

Owned6 Ku-band

Leased2 Ku-band (partial)

LeasedAnik F1R

28 Ku-band

Leased1 C-band

Leased1 C-band (partial)

LeasedIntelsat Galaxy 16

1 Ku-band (partial)

Leased   Shaw
    Direct
  line-up over-the-air
     13




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  back-up
  Shaw
    Broadcast Services
      ,
  Shaw
    Tracking
    3.
    Media     14




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    over-the-air
    Speciality Services Operated

% Equity InterestShowcase


100
%Slice


100
%History Television


100
%HGTV Canada


67
%Food Network Canada


51
%Showcase Action


100
%Showcase Diva


100
%National Geographic Canada


50
%BBC Canada


50
%BBC Kids


50
%Discovery Health Canada


100
%IFC Canada


100
%DIY


67
%TVtropolis


67
%MovieTime


100
%DejaView


100
%Fox Sports World Canada


100
%Mystery


50
%Global Reality


100
%   Speciality Services Not Operated

% Equity InterestHistoria


50
%Series+


50
%ONE: The Body, Mind and Spirit Channel


38
%Dusk


49
%Men TV


49
%   D.
    Seasonality
    and other additional information concerning the
    business  (a)
    Seasonality
    and customer dependency  15




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      (b)
    Environmental
    matters   (c)
    Foreign
    operations     (d)
    Employees   E.
    Government
    regulations and regulatory developments  Broadcasting Act (Canada) Telecommunications Act
    (Canada) Radiocommunication Act (Canada) Copyright Act (Canada)
   16




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
          Licensing
    and ownership
     Rate
    regulation
   The
    potential for new or increased fees through regulation
  17




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    over-the-air over-the-air over-the-air
    over-the-air
  over-the-air
  and/or
   18




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Access
    rights
   Part II
    fees
     out-of-court
  Digital
    Phone, New Media and Internet
 and/or
   19




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
          Digital
    transition
     Vertical
    integration proceeding
 case-by-case
   20




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Commission
    approval of Shaws acquisition of Canwest
   Limits
    on non-Canadian ownership and control for broadcasting
    undertakings
         F.
    Key
    performance drivers   21




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  FINANCIAL MEASURES:
 i)
    Service
    revenue   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 or US GAAP and therefore may not be
    comparable to similar measures disclosed by other companies. The
    Company utilizes these measures in making operating decisions
    and assessing its performance. Certain investors, analysts and
    others utilize these measures in assessing the Companys
    financial performance and as an indicator of its ability to
    service debt and return cash to shareholders. These non-GAAP
    measures have not been presented as an alternative to net income
    or any other measure of performance or liquidity prescribed by
    Canadian or US GAAP. The following contains a listing of the
    Companys use of non-GAAP financial measures and provides a
    reconciliation to the nearest GAAP measurement or provides a
    reference to such reconciliation.
  ii)
    Service
    operating income before amortization and operating
    margin sub-total and/or
    iii)
    Free
    cash flow   ($000s Cdn)

2010


2009(3)


2008(3)Cable free cash
    flow(1)


366,054



344,457



308,031Satellite free cash
    flow(2)


149,086



161,618



147,293Consolidated free cash flow


515,140



506,075



455,324   (1)
    
    The reconciliation of free cash
    flow for cable is provided on page 51.(2)
    
    The reconciliation of free cash
    flow for satellite is provided on page 55.(3)
    
    Free cash flow for 2009 and 2008
    have not been restated to exclude stock based compensation.
    Cable free cash flow for 2009 and 2008 has been restated from
    $342,798 and $305,338 respectively, for the retrospective
    adoption of CICA Handbook Section 3064, Goodwill and
    Intangible Assets. See new accounting standards on page 31.   22




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        STATISTICAL MEASURES:
 Subscriber
    counts, including penetration and bundled
    customers
         G.
    Critical
    accounting policies and estimates   23




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    i)
    Revenue
    and expense recognition   and/or
  Subscriber
    connection fee revenue
   Customer premise
    equipment revenue
    24




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Shaw Tracking
    equipment revenue
     Shaw Business
    Solutions
   Subscriber
    connection and installation costs
   Income statement
    classification
   ii)
    Allowance
    for doubtful accounts  25




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    iii)
    Property,
    plant and equipment and other intangibles 
    capitalization of direct labour and overhead     1.
    Corporate departments such as engineering and information
    technology (IT): Engineering is primarily involved
    in overall planning and development of the
    cable/Internet/Digital Phone and Wireless infrastructure. Labour
    and overhead costs directly related to these activities are
    capitalized as the activities directly relate to the planning
    and design of the construction of the distribution system. Over
    the past several years the IT department has devoted
    considerable efforts towards the development of systems to
    support Digital Phone and projects related to new customer
    management, billing and operating support systems. Most recently
    the IT department also commenced activities related to the
    Wireless infrastructure build. Labour costs directly related to
    these and other projects are capitalized.2.
    Cable regional construction departments, which are principally
    involved in constructing, rebuilding and upgrading the
    cable/Internet/Digital Phone infrastructure: Labour and overhead
    costs directly related to the construction activity are
    capitalized as the activities directly relate to the
    construction or upgrade of the distribution system. Capital
    projects include, but are not limited to, projects such as new
    subdivision builds, increasing network capacity for Internet,
    Digital Phone and VOD by reducing the number of homes fed from
    each node, and upgrades of plant capacity.3.
    Subscriber-related activities such as installation of new drops
    and Internet services. The labour and overhead directly related
    to the installation of new services are capitalized as the
    activity involves the installation of capital assets (i.e.,
    wiring, filters, software, etc.) which enhance the service
    potential of the distribution system through the ability to earn
    future service revenues. Costs associated with service calls,
    collections, disconnects and reconnects that do not involve the
    installation of a capital asset are expensed.   26




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    iv)
    Property,
    plant and equipment  capitalization of
    interest   v)
    Depreciation
    policies and useful lives   vi)
    Intangibles      27




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    
    Cable systems
    DTH and satellite services      vii)
    Asset
    impairment      28




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      Terminal ValueTerminal ServiceOperating Incomebefore AmortizationDiscount Rate

Terminal Growth Rate

MultipleCable systems


9.0
%


2.0
%


5.5
xDTH and satellite services


11.0
%


1.5
%


5.0
xWireless assets


12.0
%


2.0
%


5.5
x     Carrying amount2010


2009$


$Broadcast rightsCable systems


4,078,021



3,833,021DTH and satellite services


983,132



983,1325,061,153



4,816,153GoodwillNon-regulated satellite services


88,111



88,111Cable system


81,032



169,143



88,111Wireless spectrum licenses


190,912



Net book value


5,421,208



4,904,264   viii)
    Employment
    benefit plans  29




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Accrued BenefitObligation at

Pension ExpenseEnd of Fiscal 2010

Fiscal 2010Discount Rate


5.75%



6.75%Impact of: 1% decrease ($000s Cdn)


56,480



4,950   ix)
    Future
    income taxes   x)
    Commitments
    and contingencies   H.
    Related
    party transactions    Normal
    course transactions
  30




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Corus
    Entertainment Inc. (Corus)
   Burrard
    Landing Lot 2 Holdings Partnership
   CW
    Media
   I.
    New
    accounting standards      i)
    Goodwill
    and intangible assets  31




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Increase (decrease)August 31, 2010


August 31, 2009$


$Consolidated balance sheets:Property, plant and equipment


(156,469
)


(105,180
)Deferred charges


(4,266
)


(3,383
)Intangibles


156,469



105,180Future income taxes


(1,077
)


(863
)Retained earnings


(3,189
)


(2,520
)Decrease in retained earnings:Adjustment for change in accounting policy


(2,520
)


(3,756
)Increase (decrease) in net income


(669
)


1,236(3,189
)


(2,520
)   Year ended August 31,2010


2009


2008$


$


$Consolidated statements of income:Decrease (increase) in operating, general and administrative
    expenses


(883
)


1,659



2,693Decrease in amortization of property, plant and equipment


33,285



30,774



23,954Increase in amortization of other intangibles


(33,285
)


(30,774
)


(23,954
)Decrease (increase) in income tax expense


214



(423
)


(1,054
)Increase (decrease) in net income and comprehensive income


(669
)


1,236



1,639Increase (decrease) in earnings per share










     ii)
    Financial
    instruments    32




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    i)
    International
    Financial Reporting Standards (IFRS)   Phase


Description and statusImpact assessment and planning


This phase includes establishment of a project team and
    high-level review to determine potential significant differences
    under IFRS as compared to Canadian GAAP.  This phase has been
    completed and as a result, the Company has developed a
    transition plan and a preliminary timeline to comply with the
    changeover date while recognizing that project activities and
    timelines may change as a result of unexpected developments.Design and development  key elements


This phase includes (i) an in-depth review to identify and
    assess accounting and reporting differences, (ii) evaluation and
    selection of accounting policies, (iii) assessment of impact on
    information systems, internal controls, and business activities,
    and (iv) training and communication with key stakeholders.
    During 2009, the Company completed its preliminary
    identification and assessment of accounting and reporting
    differences.  In addition, training was provided to certain key
    employees involved in or directly impacted by the conversion
    process.
    During the current year, the assessment of the impact on
    information systems and design phase of system changes have been
    completed and the implementation phase has commenced. The
    Company has completed further in-depth evaluations of those
    areas initially identified as being potential accounting and
    reporting differences, as well as the evaluation of IFRS 1
    elections/exemptions which are discussed below.Implementation


This phase includes integration of solutions into processes and
    financial systems that are required for the conversion to IFRS
    and parallel reporting during the year prior to transition
    including proforma financial statements and note disclosures.
    Process solutions will incorporate required revisions to
    internal controls during the changeover and on an on-going
    basis.  33




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      Exemption


Application of exemptionBusiness combinations


The Company expects to apply IFRS 3 prospectively from its
    transition date and elect not to restate any business
    combinations that occurred prior to September 1, 2010.Employee benefits


The Company expects to elect to recognize cumulative actuarial
    gains and losses arising from all of its defined benefit plans
    as at September 1, 2010 in opening retained earnings.Borrowing costs


The Company expects to elect to apply IAS 23 Borrowing
    Costs prospectively from September 1, 2010.      34




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        Key accounting area


Differences from Canadian GAAP, with potential impact for the
    CompanyPresentation of Financial Statements (IAS 1)


IAS 1 requires additional disclosures in the notes to financial
    statements.Share-based Payments (IFRS 2)


IFRS 2 requires cash-settled awards to employees be measured at fair value at the initial grant date and re-measured at fair value at the end of each reporting period.IFRS 2 also requires the fair value of stock-based compensation awards to be recognized using a graded vesting method based on the vesting period of the options.Business Combinations (IFRS 3R)


IFRS 3R requires acquisition-related and restructuring costs to
    be expensed as incurred and contingent consideration recorded at
    its fair value on acquisition date; subsequent changes in fair
    value of contingent consideration classified as a liability is
    recognized in earnings.Income Taxes (IAS 12)


IAS 12 recognition and measurement criteria for deferred tax
    assets and liabilities may differ.Employee Benefits (IAS 19)


IAS 19 requires past service costs of defined benefit plans to be expensed on an accelerated basis, with vested past service costs immediately expensed and unvested past service costs amortized on a straight line basis until benefits become vested.
IAS 19 has an accounting policy choice that allows the Company to recognize actuarial gains and losses using one of the following methods:
  in net income using the corridor approach amortized over the expected average remaining working lives, 35




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    in net income on a systematic basis for faster recognition, including immediate recognition of all actuarial gains and losses, or
  to recognize them in other comprehensive income, as they occur.
The Company is currently reviewing the impact of the accounting policy choice for recognition of actuarial gains and losses.Interests in Joint Ventures (IAS 31)


Although IAS 31 currently permits the use of proportionate
    consolidation for joint venture interests, proposed changes are
    expected to be finalized prior to transition to require these
    interests to be accounted for using the equity method.Impairment of Assets (IAS 36)


IAS 36 uses a one-step approach for the identification and
    measurement of impairment of assets.  The carrying value of
    assets is compared to the greater of its fair value less costs
    to sell and value in use, which is based on the net present
    value of future cash flows.  Impairment of assets, other than
    goodwill, is reversed in a subsequent period if circumstances
    change such that the previously determined impairment is reduced
    or eliminated.Provisions, Contingent Liabilities and Contingent Assets (IAS 37)


IAS 37 uses a different threshold for recognition of a
    contingent liability that could impact the timing of when a
    provision may be recorded.Intangible Assets (IAS 38)


IAS 38 prohibits the amortization of indefinite-lived
    intangibles and reinstatement of previous amortization is
    required.   J.
    Known
    events, trends, risks and uncertainties      
    Competition and technological change, including change in
    regulatory risks
    Interest rate, foreign exchange, capital market and economic
    conditions risks
    Contingencies 36




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  
    Uninsured risks of loss
    Reliance on suppliers
    Programming expenses
    Unionized labour
    Holding company structure
    Control of Shaw by the Shaw family
    Information systems and internal business processes
    Dividend payments
    Acquisitions and other strategic transactions  i)
    Competition
    and technological change   CABLE TELEVISION AND
    DTH
 over-the-air
  line-of-sight
      line-ups,
 37




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        INTERNET
   dial-up dial-up
  dial-up
     38




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      SATELLITE SERVICES
   INTERNET
    INFRASTRUCTURE
   DIGITAL PHONE
       MEDIA
  39




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    IMPACT OF REGULATION
 and/or
  ii)
    Interest
    rate, foreign exchange, capital market and economic conditions
    risks A-1.
  day-to-day
  (a)
    Interest rates: Due to the capital-intensive nature of
    Shaws operations, the Company utilizes long-term financing
    extensively in its capital structure. The primary components of
    this structure are:  1.
    Banking facilities as more fully described in Note 9 to the
    Consolidated Financial Statements.2.
    Various Canadian denominated senior notes and debentures with
    varying maturities issued in the public markets as more fully
    described in Note 9 to the Consolidated Financial
    Statements.  day-to-day
    (b)
    Foreign exchange: As the Company has grown it has accessed US
    capital markets and in addition, some of the companys
    capital expenditures are incurred in US dollars.      
    US $440 million 8.25% senior notes due April 11,
    2010,
    US $225 million 7.25% senior notes due April 6,
    2011, and
    US $300 million 7.20% senior notes due
    December 15, 2011. 40




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
         (c)
    Capital markets: The Company requires ongoing access to capital
    markets to support its operations. Changes in capital market
    conditions, including significant changes in market interest
    rates or lending practices, may have a material adverse effect
    on the Companys ability to raise or refinance short-term
    or long-term debt, and thus on its financial position and
    ability to operate.(d)
    Economic conditions: During 2009 and in early 2010 Canadas
    economic growth trended downward reflecting the uncertainty in
    global financial and equity markets and the slowdown in global
    economic growth. While the Company believes the Western Canadian
    market has started to recover, there can be no assurance that
    these events or any future events caused by volatility in world
    financial and equity markets or a decline in economic growth
    will not have an adverse effect on the Companys business
    and operating results.     iii)
    Contingencies  41




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  iv)
    Uninsured
    risks of loss     back-up
  v)
    Reliance
    on suppliers    42




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  vi)
    Programming
    expenses     vii)
    Unionized
    labour   viii)
    Holding
    company structure   ix)
    Control
    of Shaw by the Shaw family and/or
  x)
    Information
    systems and internal business processes  43




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  xi)
    Dividend
    payments   xii)
    Acquisitions
    and other strategic transactions and/or
  II.
    SUMMARY
    OF QUARTERLY RESULTS  Serviceoperating income



Basic

Funds flow(In $000s  Cdn except per share amounts)

Service

before



earnings

fromQuarter

revenue

amortization(1)(4)

Net
    income(4)

per
    share(2)(4)

operations(3)2010Fourth


938,872



423,152



121,575



0.28



327,435Third


943,632



435,822



158,216



0.37



350,810Second


929,142



424,825



138,712



0.32



358,206First


905,934



474,952



114,229



0.26



338,952Total


3,717,580



1,758,751



532,732



1.23



1,375,4032009Fourth


872,919



394,900



124,265



0.29



321,319Third


861,382



395,547



132,151



0.31



356,046Second


839,144



381,832



156,585



0.37



334,508First


817,468



368,330



123,474



0.29



311,967Total


3,390,913



1,540,609



536,475



1.25



1,323,840   (1)
    See key performance drivers on page 21.(2)
    Diluted earnings per share equals basic earnings per share
    except for the second quarter of 2009 where diluted earnings per
    share is $0.36.(3)
    Funds flow from operations is presented before changes in net
    non-cash working capital as presented in the Consolidated
    Statement of Cash Flows.(4)
    2009 is restated for the retrospective adoption of CICA Handbook
    Section 3064, Goodwill and Intangible Assets. See
    new accounting standards on page 31. 44




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##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
   quarter-over-quarter
  quarter-over-quarter
    Growth
    in subscriber statistics as follows:
  2010


2009Subscriber Statistics

First


Second


Third


Fourth


First


Second


Third


FourthBasic cable customers


(1,416
)


(1,055
)


2,322



2,559



9,198



4,273



9,622



6,374Digital customers


88,259



98,544



87,092



54,946



60,717



106,489



110,810



110,501Internet customers


36,242



26,735



25,661



21,374



31,152



26,130



24,625



27,376Digital Phone lines


61,461



54,922



66,123



51,896



56,597



50,848



54,633



55,708DTH


1,097



1,071



1,856



831



448



3,657



1,580



2,728  45




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Significant
    acquisitions
  
    The acquisition of the Hamilton cablesystem serving
    approximately 41,000 Basic cable customers, including 24,000
    Digital subscribers, 30,000 Internet subscribers and 32,000
    Digital Phone lines was completed in the first quarter of fiscal
    2010. In 2010 this system generated service operating income
    before amortization of approximately $25.0 million.  III.
    RESULTS
    OF OPERATIONS  OVERVIEW
    OF FISCAL 2010 CONSOLIDATED RESULTS
  Change2010


2009(In $000s Cdn except per share amounts)

2010


2009


2008


%


%Operations:Service revenue


3,717,580



3,390,913



3,104,859



9.6



9.2Service operating income before
    amortization(1)(3)


1,758,751



1,540,609



1,410,929



14.2



9.2Service operating
    margin(1)(4)


47.3%



45.4%



45.4%Funds flow from
    operations(2)


1,375,403



1,323,840



1,222,895



3.9



8.3Net
    income(3)


532,732



536,475



673,201



(0.7
)


(20.3
)Free cash
    flow(1)


515,140



506,075



455,324



1.8



11.1Balance sheet:Total assets


10,153,965



8,934,686



8,352,759Long-term financial liabilities (including current portion)Long-term debt


3,982,228



3,150,488



2,707,043Derivative instruments


86,222



465,610



520,205Other long-term liability


291,500



104,964



78,9124,359,950



3,721,062



3,306,160Per share data:Income per share  basic

$
1.23


$
1.25


$
1.56Income per share 
    diluted(3)

$
1.23


$
1.25


$
1.55Weighted average number of participating shares outstanding
    during period (000s)


432,675



429,153



431,070Cash dividends paid per
    shareClass A


0.858



0.818



0.702Class B


0.860



0.820



0.705    (2)
    Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.(3)
    2009 and 2008 have been restated as a result of the
    retrospective adoption of CICA Handbook Section 3064,
    Goodwill and Intangible Assets. For 2009, Service
    operating income before amortization, Net income and Diluted
    earnings per share have been restated from $1,538,950, $535,239
    and $1.24, respectively. For 2008, Service operating income
    before amortization and Net income have been restated from
    $1,408,236 and $671,562, respectively. See new accounting
    standards on page 31.(4)
    Operating margin adjusted to exclude the one-time CRTC
    Part II recovery for 2010 would be 45.3%. 46




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
   Highlights
  
    Net income was $532.7 million for the year compared to
    $536.5 million in 2009 and $673.2 million in 2008.
    Earnings per share were $1.23 compared to $1.25 in 2009 and
    $1.56 in 2008.
    Service revenue for the year improved 9.6% to $3.72 billion
    from $3.39 billion last year and $3.10 billion in 2008.
    Service operating income before amortization of
    $1.76 billion was up 14.2% over last years amount of
    $1.54 billion and $1.41 billion in 2008.
    Consolidated free cash flow increased to $515.1 million
    from $506.1 million in 2009 and $455.3 million in 2008.
    During 2010, the Company increased the dividend rate on
    Shaws Class A Participating Shares and Class B
    Non-Voting Participating Shares to an equivalent dividend rate
    of $0.878 and $0.88 respectively. Dividends paid in 2010
    increased almost 6% over 2009 to $372.1 million.
    The Company repurchased for cancellation 6,100,000 Class B
    Non-Voting Shares for $118.1 million during 2010.
    In October 2009 the Company closed a $1.25 billion offering
    of 5.65% senior notes due October 1, 2019. The net
    proceeds were used to repay near maturing debt including its
    US$440 million senior notes, US$255 million senior
    notes, and US$300 million senior notes.
    On November 9, 2009, the Company issued $650 million
    senior notes as a rate of 6.75% due 2039. The net proceeds were
    used for working capital and general corporate purposes.
    In April 2010 Shaw announced its intention to move forward on
    the rollout of its Wireless strategy with planned launches
    anticipated to commence late in calendar 2011.
    In May 2010 Shaw announced that it had entered into agreements
    to acquire 100% of the broadcasting business of Canwest
    including CW Media, the company that owns the specialty channels
    acquired from Alliance Atlantis Communications Inc. in 2007. The
    total consideration, including debt assumed, is approximately
    $2.0 billion.  Revenue
    and operating expenses
  2010
    vs. 2009
 year-to-date
   47




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  2009
    vs. 2008
     Amortization
  Change2010

2009(In $000s Cdn)

2010

2009

2008

%

%Amortization revenue (expense) Deferred IRU revenue


12,546



12,547



12,547







Deferred equipment revenue


120,639



132,974



126,601



(9.3
)


5.0Deferred equipment costs


(228,714
)


(247,110
)


(228,524
)


(7.4
)


8.1Deferred charges


(1,025
)


(1,025
)


(1,025
)






Property, plant and equipment


(526,432
)


(449,808
)


(390,778
)


17.0



15.1Other intangibles


(33,285
)


(30,774
)


(23,954
)


8.2



28.5         Amortization
    of financing costs and Interest expense
  Change2010

2009(In $000s Cdn)

2010

2009

2008

%

%Amortization of financing costs 
    long-term debt


3,972



3,984



3,627



(0.3
)


9.8Interest


248,011



237,047



230,588



4.6



2.8    48




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Other
    income and expenses
  Decrease in income(In $000s Cdn)

2010

2009

2008

2010

2009Debt retirement costs


(81,585
)


(8,255
)


(5,264
)


(73,330
)


(2,991
)Loss on financial instruments


(47,306
)










(47,306
)


Other gains


5,513



19,644



24,009



(14,131
)


(4,365
)             Equity
    loss on investee
   Income
    tax expense
  49




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Net
    income per share
  Change2010


2009(In $000s Cdn except per share amounts)

2010


2009


2008


%


%Net income


532,732



536,475



673,201



(0.7
)


(20.3
)Weighted average number of participating shares outstanding
    during period (000s)


432,675



429,153



431,070



0.8



(0.4
)Income per share  basic

$
1.23


$
1.25


$
1.56



(1.6
)


(19.9
)Income per share  diluted

$
1.23


$
1.25


$
1.55



(1.6
)


(19.4
)   Net
    income
 year-over-year
      (In $millions Cdn)

2010


2009Increased service operating income before amortization


218.1



129.7Decreased (increased) amortization of deferred equipment costs
    and revenue and IRU revenue


6.1



(12.2
)Increased amortization of deferred charges, financing costs,
    property, plant and equipment, and other intangibles


(79.1
)


(66.2
)Increased interest expense


(11.0
)


(6.5
)Change in other net costs and
    revenue(1)


(145.9
)


(7.7
)Decreased (increased) income taxes


8.1



(173.8
)(3.7
)


(136.7
)   (1)
    Other net costs and revenue include debt retirement costs,
    equity income (loss) on investee, loss on financial instruments
    and other gains as detailed in the Consolidated Statements of
    Income and Retained Earnings (Deficit). 50




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  SEGMENTED
    OPERATIONS REVIEW
  CABLE
  FINANCIAL
    HIGHLIGHTS
  Change2010


2009($000s Cdn)

2010


2009(3)


2008(3)


%


%Service revenue (third party)


2,927,411



2,630,982



2,375,586



11.3



10.8Service operating income before
    amortization(1)


1,456,827



1,271,279



1,155,967



14.6



10.0Less:Interest


213,898



209,438



199,600



2.1



4.9Cash taxes on net income


136,000



23,300







>100.0



100.0Cash flow before the following:


1,106,929



1,038,541



956,367



6.6



8.6Capital expenditures and equipment costs (net)


757,085



694,084



648,336



9.1



7.1Free cash flow before the followingAdd back:


349,844



344,457



308,031



1.6



11.8Non-cash stock-based compensation


16,210











100.0



Free cash
    flow(1)


366,054



344,457



308,031



6.3



11.8Operating
    margin(1)(2)


49.8%



48.3%



48.7%



1.5



(0.4
)   (1)
    See key performance drivers on page 21.(2)
    Operating margin adjusted to exclude the one-time CRTC
    Part II recovery for 2010 would be 48.1%.(3)
    2009 and 2008 have been restated as a result of the
    retrospective adoption of CICA Handbook Section 3064,
    Goodwill and Intangible Assets. For 2009, Service
    operating income before amortization and Free cash flow have
    been restated from $1,269,620, and $342,798, respectively. For
    2008, Service operating income before amortization and Free Cash
    flow have been restated from $1,153,274 and $305,338,
    respectively. See new accounting standards on page 31.  2010
    vs. 2009
  OPERATING
    HIGHLIGHTS
  
    Shaws Digital subscriber base continued to grow adding
    328,841 new customers. Penetration of Basic is now 70.7%, up
    from 56.7% at August 31, 2009.
    Digital Phone lines increased 234,402 during the year to
    1,096,306 lines and Internet was up 110,012 to total 1,818,347
    as at August 31, 2010. Basic cable subscribers were up
    2,410.
    During the year the Company completed the acquisition of
    Mountain Cablevision operating in Hamilton, Ontario adding
    approximately 41,000 Basic cable customers, including 24,000
    Digital subscribers, 30,000 Internet subscribers, and 32,000
    Digital Phone lines.   51




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        Fibre-to-the-Home
  2009
    vs. 2008
  OPERATING
    HIGHLIGHTS
  
    Cable service revenue for the year of $2.63 billion was up
    10.8% over 2008. Service operating income before amortization of
    $1.27 billion increased 10.0%.
    On an annual basis Basic subscribers were up 29,467 to 2,331,028.
    Digital customers increased 388,517 to 1,321,724. Shaws
    Digital penetration of Basic has increased from 40.5% at
    August 31, 2008 to 56.7% at August 31, 2009.
    During 2009 Digital Phone lines increased 217,786 to 861,904
    lines and Internet was up 109,283 to total 1,708,335 as at
    August 31, 2009. Internet penetration of Basic continues to
    be one of the highest in North America and stood at 73.3% up
    from 69.5% at August 31, 2008.
    During 2009 Shaw closed the acquisition of the Campbell River
    cable system in British Columbia. This acquisition is
    complementary to and provides synergies with existing operations.    line-up,
 52




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
      CAPITAL
    EXPENDITURES AND EQUIPMENT COSTS (NET) 
    CABLE
  Change2010


2009(In $000s Cdn)

2010


2009


2008


%


%Capital expenditures and equipment costs (net):New housing
    development(1)


78,451



73,676



93,547



6.5



(21.2
)Success-based(2)


222,246



185,469



102,735



19.8



80.5Upgrades and
    enhancement(3)


289,421



297,651



271,242



(2.8
)


9.7Replacement(4)


66,393



55,798



57,575



19.0



(3.1
)Buildings and other


100,574



81,490



123,237



23.4



(33.9
)757,085



694,084



648,336



9.1



7.1     (1)
    Build out of mainline cable and the addition of drops in new
    subdivisions.(2)
    Capital and equipment costs (net) related to the acquisition of
    new customers, including installation of internet and digital
    phone modems, DCTs, filters and commercial drops for Shaw
    Business Solutions customers.(3)
    Upgrades to the plant and build out of fibre backbone to reduce
    use of leased circuits and costs to decrease node size and
    Digital Phone capital.(4)
    Normal replacement of aged assets such as drops, vehicles and
    other equipment.  2010
    vs. 2009
        53




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  2009
    vs. 2008
           SUBSCRIBER
    STATISTICS
  2010


2009Change





Change2010


2009(1)


2008(1)


Growth


%


Growth


%CABLE:Basic subscribers


2,333,438



2,331,028



2,301,561



2,410



0.1



29,467



1.3Penetration as a % of homes passed


61.4%



62.9%



63.5%Digital customers


1,650,565



1,321,724



933,207



328,841



24.9



388,517



41.6INTERNET:Connected and scheduled installations


1,818,347



1,708,335



1,599,052



110,012



6.4



109,283



6.8Penetration as % of basic


77.9%



73.3%



69.5%Stand-alone Internet not included in basic cable


233,159



238,710



217,339



(5,551
)


(2.3
)


21,371



9.8DIGITAL PHONE:Number of
    lines(2)


1,096,306



861,904



644,118



234,402



27.2



217,786



33.8   (1)
    August 31, 2009 and August 31, 2008 are restated for
    comparative purposes as if the acquisition of the Mountain
    Cablevision system in Hamilton, Ontario had occurred on that
    date.(2)
    Represents primary and secondary lines on billing plus pending
    installs. 54




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
   SATELLITE
    (DTH and Satellite Services)
  FINANCIAL
    HIGHLIGHTS
  Change2010


2009($000s Cdn)

2010


2009


2008


%


%DTH (Shaw Direct)


711,069



673,226



640,061



5.6



5.2Satellite Services


79,100



86,705



89,212



(8.8
)


(2.8
)Service revenue (third party)


790,169



759,931



729,273



4.0



4.2Service operating income before
    amortization(1)DTH (Shaw Direct)


265,016



223,499



206,541



18.6



8.2Satellite Services


38,304



45,831



48,421



(16.4
)


(5.3
)303,320



269,330



254,962



12.6



5.6Less:Interest(2)


26,251



26,251



29,599







(11.3
)Cash taxes on net income


44,000











100.0



Cash flow before the following


233,069



243,079



225,363



(4.1
)


7.9Less capital expenditures and equipment costs (net):Success-based


77,684



73,453



72,512



5.8



1.3Transponders and other


7,927



8,008



5,558



(1.0
)


44.185,611



81,461



78,070



(5.1
)


4.3Free cash flow before the following


147,458



161,618



147,293



(8.8
)


9.7Add back:Non-cash stock-based compensation


1,628











100.0



Free cash
    flow(1)


149,086



161,618



147,293



(7.8
)


9.7Operating
    margin(3)


38.4%



35.4%



35.0%



3.0



0.4   (1)
    See key performance drivers on page 21.(2)
    Interest is allocated to the Satellite division based on the
    actual cost of debt incurred by the Company to repay prior
    outstanding Satellite debt and to fund accumulated cash deficits
    of Satellite Services and Shaw Direct.(3)
    Operating margin adjusted to exclude the one-time CRTC
    Part II fee recovery in 2010 would be 35%.  CUSTOMER
    STATISTICS
  2010


2009


2008Shaw Direct
    customers(1)


905,796



900,941



892,528   (1)
    Including seasonal customers who temporarily suspend their
    service. 55




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
   SATELLITE
    (DTH and Satellite Services)
  2010
    vs. 2009
  OPERATING
    HIGHLIGHTS
  
    During the year Shaw Direct added 4,855 customers and as at
    August 31, 2010 DTH customers total 905,796.
    Free cash flow of $149.1 million for 2010 compares to
    $161.6 million in 2009.
    In March 2010 Shaw Direct entered into agreements with Telesat
    to acquire capacity on a new satellite expected to be available
    in late 2012.          back-up
  2009
    vs. 2008
  OPERATING
    HIGHLIGHTS
  
    Free cash flow of $161.6 million for 2009 compares to
    $147.3 million in the prior year.
    During the year Shaw Direct added 8,413 customers and as at
    August 31, 2009 customers total 900,941.   56




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
        WIRELESS
  FINANCIAL
    HIGHLIGHTS
  ($000s Cdn)

2010Operating expenditures


1,396Interest
    expense(2)


6,536Capital expenditures


96,714Total expenditures on Wireless infrastructure
    build(1)


104,646   (1)
    Excludes the cost of acquiring 20 megahertz of spectrum across
    most of the Companys cable footprint for
    $190.9 million.(2)
    Interest is allocated to the Wireless division based on the
    Companys average cost of borrowing to fund the capital
    expenditures and operating costs.  
    During the year the Company commenced its Wireless
    infrastructure build and invested $104.6 million on this
    strategic initiative.        IV.
    FINANCIAL
    POSITION     57




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
                     58




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
          V.
    CONSOLIDATED
    CASH FLOW ANALYSIS  Operating
    activities
  Change2010


2009(In $000s Cdn)

2010


2009


2008


%


%Funds flow from operations


1,375,403



1,323,840



1,222,895



3.9



8.3Net decrease in non-cash working capital balances related
    to operations


81,756



59,090



19,304



38.4



206.11,457,159



1,382,930



1,242,199



5.4



11.3   year-over-year year-over-year
  Investing
    activities
  Increase(In $000s Cdn)

2010


2009


2008


2010


2009Cash flow used in investing activities


(1,743,977
)


(966,716
)


(734,135
)


(777,261
)


(232,581
)    59




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    Financing
    activities
    (In millions Cdn)

2010


2009


2008Issuance of Cdn $1.25 billion 5.65% senior notes


1,246.0







Issuance of Cdn $650 million 6.75% senior notes


645.6







Issuance of Cdn $600 million 6.50% senior notes






598.2



Senior notes issuance costs


(10.1
)


(4.6
)


Redemption of US $440 million 8.25% senior notes


(465.5
)






Redemption of US $225 million 7.25% senior notes


(238.1
)






Redemption of US $300 million 7.20% senior notes


(312.6
)






Payments on cross-currency agreements


(291.9
)






Repayment of Videon CableSystems Inc. 8.15% senior
    debentures






(130.0
)


Repayment of $296.8 million senior notes










(296.8
)Redemption of COPrS










(100.0
)Bank loans and bank indebtedness  net borrowings
    (repayments)






(99.2
)


99.2Purchase of Class B Non-Voting Shares for cancellation


(118.1
)


(33.6
)


(99.8
)Dividends


(372.1
)


(351.9
)


(303.8
)Debt retirement costs


(79.5
)


(9.2
)


(4.3
)Proceeds on bond forward contracts






10.8



Issuance of Class B Non-Voting Shares


47.1



57.0



32.5Repayment of Partnership debt


(0.5
)


(0.5
)


(0.4
)Cash flow provided by (used in) financing activities


50.3



37.0



(673.4
)   VI.
    LIQUIDITY
    AND CAPITAL RESOURCES     60




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
    
    On March 27, 2009, Shaw issued $600 million of senior
    notes at a rate of 6.50% due June 2, 2014. Net proceeds
    (after issue and underwriting expenses) of $593.6 million
    were used for debt repayment, working capital and general
    corporate purposes. Excess funds were held in cash and
    short-term securities.
    On October 1, 2009, the Company issued $1.25 billion
    of senior notes at a rate of 5.65% due 2019. Net proceeds (after
    issuance at a discount of $4.0 million and, issue and
    underwriting expenses) of $1.24 billion were used to fund
    the majority of the cash requirements, including the make-whole
    premiums and payments in respect of the associated
    cross-currency interest rate agreements relating to the early
    redemption of the US $440 million 8.25% senior notes
    due April 11, 2010, US $225 million 7.25% senior
    notes due April 6, 2011 and US $300 million
    7.20% senior notes due December 15, 2011.
    On November 9, 2009, the Company issued $650 million
    of senior notes at a rate of 6.75% due 2039. Net proceeds (after
    issuance at a discount of $4.4 million and issue and
    underwriting expenses) of $641.6 million were used for
    working capital and general corporate purposes.        Debt
    structure
     61




---



##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
  Off-balance
    sheet arrangement and guarantees
  Guarantees
   Contractual
    obligations
   CONTRACTUAL
    OBLIGATIONS
  Payments due by periodWithin








More than(In $000s Cdn)

Total


1 year


2-3 years


4-5 years


5 yearsLong-term
    debt(1)


6,578,505



250,320



936,915



1,316,710



4,074,560Operating lease
    obligations(2)


1,641,795



202,436



420,002



462,202



557,155Other long-term
    obligations(3)


283,620



24,631



176,200



19,583



63,206   (1)
    Includes interest payments.(2)
    Includes maintenance and lease of satellite transponders,
    program related agreements, lease of transmission facilities and
    lease of premises.(3)
    Includes expected benefit payments under the defined benefit
    pension plan, the liability in respect of amended cross-currency
    interest rate exchange agreements and the estimated net cash
    outflow for derivative instruments based on the US dollar
    foreign exchange rate as at August 31, 2010.  VII.
    ADDITIONAL
    INFORMATION  www.sedar.com
  VIII.
    COMPLIANCE
    WITH NYSE CORPORATE GOVERNANCE LISTING STANDARDS  www.shaw.ca
  IX.
    CERTIFICATION     62




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2010
       63