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Shaw Communications


ANNUAL REPORT


August 31, 2006


SHAW COMMUNICATIONS INC.


ANNUAL REPORT


|                                                                                                                     |  |      |    | 
|-------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|CONTENTS                                                                                                             |  | Page |   
|Report to Shareholders                                                                                               |  |      | 1  | 
|Managements Discussion and
    Analysis                                                                             |  |      | 4  | 
|Managements Responsibility for
    Financial Statements and Report on Internal Control
    over Financial Reporting |  |      | 46 | 
|Independent Auditors Reports                                                                                        |  |      | 47 | 
|Consolidated Financial Statements                                                                                    |  |      | 49 | 
|Notes to the Consolidated Financial
    Statements                                                                   |  |      | 52 | 
|Five Years in Review                                                                                                 |  |      | 96 | 
|Shareholders Information                                                                                            |  |      | 97 | 
|Corporate Information                                                                                                |  |      | 98 | 







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##### Table of Contents



Shaw Communications Inc.





REPORT TO SHAREHOLDERS


August 31, 2006








FINANCIAL HIGHLIGHTS






|  |                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------
| | Consolidated service revenue increased 11% over last year to
    $2.5 billion.                                        
| 
| | Total consolidated service operating income before
    amortization1
    increased 10% over last year to $1.1 billion.
| 
| | Funds flow from
    operations2
    grew to $847 million.                                                             
| 
| | Capital investment totaled $558 million, up
    $120 million over last year.                                          
| 
| | Despite increased capital investment, free cash
    flow1
    remained strong at $265 million.                        



A CUSTOMER-FOCUSED STRATEGY




We the leading entertainment and communications
company, deliver exceptional customer experience through
outstanding people sharing Shaw values.








|  |                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | improve and leverage our network infrastructure to offer
    customers a wider range of products and services 
    this year with particular emphasis on the expansion of Shaw
    Digital Phone,



|  |                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------
| | enhance our existing products and services to provide greater
    value for customers,                     
| 
| | continuously improve on our 24/7/365 service commitments,                                                  
| 
| | provide bundled product offers that enhance value for customers
    and shareholders, and                  
| 
| | sharpen our competitive edge with operational efficiencies and
    sound financial and resource management.





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Shaw Communications Inc.


REPORT TO SHAREHOLDERS


August 31, 2006


THIS YEARS SUCCESSES






Xtreme-I




.








OUTLOOK FOR THE FUTURE












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Shaw Communications Inc.


REPORT TO SHAREHOLDERS


August 31, 2006




|                         |  |                         
|------------------------ |  | ------------------------
|[Signed]                 |  | [Signed]                
|                        
|JR Shaw                  |  | Jim Shaw                
|Executive Chair          |  | Chief Executive Officer 
|Shaw Communications Inc. |  | Shaw Communications Inc.






|  |                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|1 | See definitions and discussion under Key performance drivers in
    Managements Discussion and Analysis.                                            
| 
| 
|2 | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.





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##### Table of Contents



Shaw Communications Inc.





MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


November 20, 2006


FORWARD






INDEX


|         |  |    |  |                                                                 |  |     
|-------- |  | -- |  | --------------------------------------------------------------- |  | ----
|CONTENTS |  |    |  |                                                                 |  | Page
|Outline  |  |    |  |                                                                 |  |     
|I.       |  |    |  | INTRODUCTION TO THE BUSINESS                                    |  | 6   
|         |  | A. |  | Company overview  core business
    and strategies             |  | 6   
|         |  | B. |  | Seasonality                                                     |  | 8   
|         |  | C. |  | Key performance drivers                                         |  | 8   
|         |  | D. |  | Critical accounting policies and
    estimates                  |  | 10  
|         |  | E. |  | Related party transactions                                      |  | 15  
|         |  | F. |  | New accounting standards                                        |  | 16  
|         |  | G. |  | Known events, trends, risks and
    uncertainties               |  | 18  
|II.      |  |    |  | SUMMARY OF QUARTERLY RESULTS                                    |  | 25  
|III.     |  |    |  | RESULTS OF OPERATIONS                                           |  | 27  
|IV.      |  |    |  | FINANCIAL POSITION                                              |  | 39  
|V.       |  |    |  | CONSOLIDATED CASH FLOW ANALYSIS                                 |  | 41  
|VI.      |  |    |  | LIQUIDITY AND CAPITAL RESOURCES                                 |  | 42  
|VII.     |  |    |  | ADDITIONAL INFORMATION                                          |  | 44  
|VIII.    |  |    |  | COMPLIANCE WITH NYSE CORPORATE GOVERNANCE
    LISTING STANDARDS |  | 45  
|IX.      |  |    |  | CERTIFICATION                                                   |  | 45  

CAUTION CONCERNING FORWARD LOOKING STATEMENTS








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006










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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006





I.     INTRODUCTION TO THE
BUSINESS





A.     Company overview 
core business and strategies


i)     Shaw Communications
Inc.




1




ii)     Cable






tm tm





|  |                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------
|1 | See definitions and discussion under Key performance drivers in
    Managements Discussion and Analysis.





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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






tm












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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




iii)    Satellite











B.     Seasonality







C.     Key performance drivers








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




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





iii)    Free cash flow




|                                |  |      |         |  |      |  |         |      |  |  |         |  |  | 
|------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | 
|                                |  | 2006 |         |  | 2005 |  |         | 2004 |  |  |        
|                               
|($000s Cdn)                    |  |      |         |  |      |  |         |      |  |  |         |  |  | 
|Cable free cash
    flow(1)     |  |      | 193,398 |  |      |  | 228,617 |      |  |  | 272,250 |  |  | 
|Satellite free cash
    flow(2) |  |      | 72,047  |  |      |  | 48,702  |      |  |  | 6,631   |  |  | 
|                               
|Consolidated free cash flow     |  |      | 265,445 |  |      |  | 277,319 |      |  |  | 278,881 |  |  | 
|                               



|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(1) | The reconciliation of free cash flow for cable is provided on
    page 32.    
|   
|(2) | The reconciliation of free cash flow for satellite is provided
    on page 37.







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






i)     Subscriber counts,
including penetration and bundled customers










ii)     Customer churn







D.     Critical accounting policies
and estimates








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




i)     Revenue and expense
recognition












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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006








Income statement classification




Subscriber connection and installation costs




ii)     Allowance for doubtful
accounts








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




iii)    Property, plant and
equipment  capitalization of direct labour and
overhead








|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Corporate departments such as engineering and information
    technology. Engineering is primarily involved in overall
    planning and development of the cable/ Internet/ Digital Phone
    infrastructure. Labour and overhead costs directly related to
    this activity are capitalized as the activities directly relate
    to the planning and design of the construction of the
    distribution system. In fiscal 2006, 2005 and 2004, the
    information technology department has devoted considerable
    efforts towards the development of systems to support Digital
    Phone. Labour costs directly related to this and other projects
    were capitalized.
|  
|2. | Cable regional construction departments, which are principally
    involved in constructing, rebuilding and upgrading the cable/
    Internet 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 the
    plant to 860 MHz 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 (e.g.
    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.                                                                                   









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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


iv)    Property, plant and
equipment  capitalization of interest






|   |                                       
|-- | --------------------------------------
|v) | Depreciation policies and useful lives





|    |                 
|--- | ----------------
|vi) | Asset impairment





|     |                         
|---- | ------------------------
|vii) | Employment benefit plans







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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




|              |                        |                    |       |        |                 |  |       |     |  |  | 
|------------- | ---------------------- | ------------------ | ----- | ------ | --------------- |  | ----- | --- |  |  | 
|              |                        | Accrued Benefit    |       |        |                 |  |      
|              |                        | Obligation at      |       |        | Pension Expense |  |       |    
|              |                        | End of Fiscal 2006 |       |        | Fiscal 2006     |  |       |    
|             
|($000s Cdn)  |                        |                   
|Discount Rate |                        |                    | 5.25% |        |                 |  | 5.00% |     |  | 
|              | Impact of: 1% decrease |                    |       | 22,168 |                 |  |       | 747 |  |  | 
|             



|      |                    
|----- | -------------------
|viii) | Future income taxes



ix)    Commitments and
contingencies







E.     Related party transactions




Normal course transactions








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Corus Entertainment Inc. (Corus)




Burrard Landing Lot 2 Holdings Partnership




Other transactions









F.     New accounting standards




(i)     Equity Instruments








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




|                                                      |  |                     |         |   |      |  |          |   |  | 
|----------------------------------------------------- |  | ------------------- | ------- | - | ---- |  | -------- | - |  | 
|                                                      |  | Increase (decrease) |         |   |     
|                                                      |  |                     |         |   |     
|                                                      |  | 2006                |         |   | 2005 |  |          |  
|                                                      |  | $                   |         |   | $    |  |          |  
|                                                     
|($000s Cdn)                                          |  |                    
|Consolidated balance sheets:                          |  |                     |         |   |      |  |          |   |  | 
|Deferred charges                                      |  |                     | 793     |   |      |  | 13,247   |   |  | 
|Long-term debt                                        |  |                     | 100,000 |   |      |  | 454,775  |   |  | 
|Future income taxes                                   |  |                     | 267     |   |      |  | 14,033   |   |  | 
|Share capital                                         |  |                     | (98,467 | ) |      |  | (498,194 | ) |  | 
|Deficit                                               |  |                     | 1,007   |   |      |  | (42,633  | ) |  | 
|                                                     
|Decrease in deficit:                                  |  |                     |         |   |      |  |          |   |  | 
|Adjusted for change in accounting policy              |  |                     | (42,633 | ) |      |  | (36,403  | ) |  | 
|Decrease in equity entitlements (net of income taxes) |  |                     | (16,788 | ) |      |  | (31,318  | ) |  | 
|Decrease in gain on redemption of COPrS               |  |                     | 40,484  |   |      |  | 12,803   |   |  | 
|Decrease in gain on settlement of Zero Coupon Loan    |  |                     |        |   |      |  | 4,921    |   |  | 
|Decrease in net income                                |  |                     | 19,944  |   |      |  | 7,364    |   |  | 
|                                                     
|                                                      |  |                     | 1,007   |   |      |  | (42,633  | ) |  | 
|                                                     

|                                                                 |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|---------------------------------------------------------------- |  | ------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | 
|                                                                 |  | Increase (decrease) |         |   |     
|                                                                 |  | in net income       |         |   |     
|                                                                 |  |                     |         |   |     
|                                                                 |  | 2006                |         |   | 2005 |  |         | 2004 |  |  |        
|                                                                 |  | $                   |         |   | $    |  |         | $    |  |  |        
|                                                                
|($000s Cdn except per share amounts)                            |  |                    
|Consolidated statements of income:                               |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|Increase in amortization                                         |  |                     | (206    | ) |      |  | (258    | )    |  |  | (312    | ) |  | 
|Increase in interest                                             |  |                     | (25,341 | ) |      |  | (48,541 | )    |  |  | (62,302 | ) |  | 
|Increase in foreign exchange gain on unhedged long-term debt     |  |                     | 2,881   |   |      |  | 34,258  |      |  |  | 24,559  |   |  | 
|Increase in debt retirement costs                                |  |                     | (12,248 | ) |      |  | (6,311  | )    |  |  |        |   |  | 
|Decrease in fair value loss on foreign currency forward contract |  |                     | 2,415   |   |      |  |        |      |  |  |        |   |  | 
|Decrease in income tax expense                                   |  |                     | 12,555  |   |      |  | 13,488  |      |  |  | 18,016  |   |  | 
|                                                                
|Decrease in net income                                           |  |                     | (19,944 | ) |      |  | (7,364  | )    |  |  | (20,039 | ) |  | 
|                                                                
|Increase (decrease) in earnings per share:                       |  |                     | (0.01   | ) |      |  | 0.03    |      |  |  | 0.09    |   |  | 
|                                                                

|                         |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|------------------------ |  | ------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | 
|                         |  | Increase (decrease) |         |   |     
|                         |  |                     |         |   |     
|                         |  | 2006                |         |   | 2005 |  |         | 2004 |  |  |        
|                         |  | $                   |         |   | $    |  |         | $    |  |  |        
|                        
|($000s Cdn)             |  |                    
|Statement of cash flows: |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|Operating activities     |  |                     | (20,724 | ) |      |  | (41,468 | )    |  |  | (38,343 | ) |  | 
|Financing activities     |  |                     | 20,724  |   |      |  | 41,468  |      |  |  | 38,343  |   |  | 
|                        





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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




|     |                          
|---- | -------------------------
|(ii) | Non-monetary Transactions







|      |                      
|----- | ---------------------
|(iii) | Financial Instruments






G.    Known events, trends, risks and
uncertainties








|  |                                                                               
|- | ------------------------------------------------------------------------------
| | Competition and technological change, including change in
    regulatory risks
| | Interest rate, foreign exchange, market value and capital market
    risks    
| | Contingencies                                                                 
| | Uninsured risks of loss                                                       
| | Reliance on suppliers                                                         
| | Holding Company structure                                                     
| | Control of Shaw by the Shaw family                                            
| | Information systems and internal business processes                           
| | Dividend payments                                                             



|   |                                     
|-- | ------------------------------------
|i) | Competition and technological change













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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






line-of-sight
















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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






High-speed dial-up


















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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




non-facilities-based














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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






|    |                                                                           
|--- | --------------------------------------------------------------------------
|ii) | Interest rate, foreign exchange, market value and capital
    market risks

cross-currency 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 and US denominated senior notes and debentures
    with varying maturities issued in the public and private markets
    as more fully described in Note 9 to the Consolidated
    Financial Statements.
|
| | 3. | Canadian Originated Preferred Securities (COPrS)
    issued in Canadian dollars with an original term of
    30 years as more fully described in Note 9 to the
    Consolidated Financial Statements.                 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Interest on bank indebtedness is based on floating rates, while
    the senior notes, debentures and COPrS are fixed-rate
    obligations. Shaw utilizes its credit facility to finance
    day-to-day operations and, depending on market conditions,
    periodically converts the bank loans to fixed-rate instruments
    through public market debt issues. Shaw also uses interest rate
    swap transactions to fix the interest rates on a portion of its
    bank debt. At August 31, 2006 Shaw had swapped
    out $59.0 million of its $280.0 million Canadian
    floating-rate bank indebtedness by means of a Canadian interest
    rate swap transaction entered into with a major Canadian
    chartered bank. The swap fixes interest on a notional amount of
    bank debt of $59.0 million at an effective rate, which at
    August 31, 2006 was 8.89%. The interest rate swap fully
    terminates on April 30, 2007.
|
| | As at August 31, 2006, approximately 93% of Shaws
    consolidated long-term debt was fixed with respect to interest
    rates. Based on the variable rate debt outstanding at
    August 31, 2006, a 1% increase in interest rates would
    result in an annual increase in interest expense of
    approximately $2.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Foreign exchange: As the Company has grown it has accessed US
    capital markets for a portion of its borrowings. Since
    Shaws revenues and assets are primarily denominated in
    Canadian dollars, it faces significant potential foreign
    exchange risks in respect of the servicing of the interest and
    principal components of its US dollar denominated debt. In view
    of this, the Companys policy with respect to US debt is
    that at least 70% of the amounts maturing within the next ten
    years be hedged to protect against exchange fluctuations, and at
    August 31, 2006, 100% of such maturities were hedged. The
    Company





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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




| |  |                                                                                                                                           
| |  | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | utilizes cross-currency swaps, where appropriate, to hedge its
    exposures on US dollar denominated bank and debenture
    indebtedness.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In addition, some of the Companys capital expenditures are
    incurred in US dollars, while its revenue is primarily
    denominated in Canadian dollars. Decreases in the value of the
    Canadian dollar relative to the US dollar could have a material
    adverse effect on the Companys cash flows. To mitigate
    some of the uncertainty in respect to capital expenditures, the
    Company regularly enters into forward contracts in respect of US
    dollar commitments. In respect of 2006, the Company entered into
    forward contracts providing for monthly or quarterly US dollar
    purchases under which the Company purchased approximately
    US $83 million at an average exchange rate of
    1.2146 Cdn. With respect to 2007, the Company has entered
    into forward contracts to purchase approximately
    US $129 million over a period of 12 months
    commencing in September 2006 at an average exchange rate 1.1426
    Cdn.
|
| | Further information concerning the policy and use of derivative
    financial instruments is contained in Note 1 to the
    Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



| |     |                                                                                                                                                                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | Market value: The Company has $18.0 million of investments
    of which $9.4 million represents publicly traded
    securities. The value of the Companys investments is
    subject to market risk. The market value of publicly traded
    investments at August 31, 2006 is $9.6 million.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | 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.

iii)    Contingencies




iv)    Uninsured risks of loss








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






v)     Reliance on
suppliers






vi)    Holding company
structure




vii)    Control of Shaw by the Shaw
family








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




viii)   Information systems and internal
business processes




ix)    Dividend payments







II.    SUMMARY OF QUARTERLY RESULTS


|                                         |  |         |           |                  |                 |  |           |            |          |     |          |            |      |               |      |  |  |  |         |  |  | 
|---------------------------------------- |  | ------- | --------- | ---------------- | --------------- |  | --------- | ---------- | -------- | --- | -------- | ---------- | ---- | ------------- | ---- |  |  |  | ------- |  |  | 
|                                         |  |         |           | Service          |                 |  |           |            | Basic    |     |          |            |      |              
|                                         |  |         |           | operating income |                 |  |           |            | earnings |     |          | Funds flow |      |               |     
|                                         |  | Service |           |                  | before          |  |           |            |          | per |          |            | from |               |      | 
|Quarter                                  |  | revenue |           |                  | amortization(1) |  |           | Net income |          |     | share(2) |            |      | operations(3) |      |  | 
|                                        
|(In $000s Cdn except per share amounts) |  |         |           |                  |                 |  |           |            |          |     |          |            |      |              
|2006                                     |  |         |           |                  |                 |  |           |            |          |     |          |            |      |               |      |  |  |  |         |  |  | 
|Fourth                                   |  |         | 631,888   |                  |                 |  | 275,127   |            |          |     | 210,369  |            |      |               | 0.97 |  |  |  | 220,617 |  |  | 
|Third                                    |  |         | 626,654   |                  |                 |  | 279,544   |            |          |     | 126,410  |            |      |               | 0.58 |  |  |  | 221,099 |  |  | 
|Second                                   |  |         | 611,197   |                  |                 |  | 267,924   |            |          |     | 45,790   |            |      |               | 0.21 |  |  |  | 208,273 |  |  | 
|First                                    |  |         | 589,545   |                  |                 |  | 255,322   |            |          |     | 75,681   |            |      |               | 0.35 |  |  |  | 197,208 |  |  | 
|                                        
|Total                                    |  |         | 2,459,284 |                  |                 |  | 1,077,917 |            |          |     | 458,250  |            |      |               | 2.11 |  |  |  | 847,197 |  |  | 
|                                        
|2005                                     |  |         |           |                  |                 |  |           |            |          |     |          |            |      |               |      |  |  |  |         |  |  | 
|Fourth                                   |  |         | 562,958   |                  |                 |  | 250,759   |            |          |     | 69,959   |            |      |               | 0.31 |  |  |  | 191,507 |  |  | 
|Third                                    |  |         | 559,883   |                  |                 |  | 252,899   |            |          |     | 32,836   |            |      |               | 0.14 |  |  |  | 190,144 |  |  | 
|Second                                   |  |         | 549,919   |                  |                 |  | 244,311   |            |          |     | 5,721    |            |      |               | 0.02 |  |  |  | 176,557 |  |  | 
|First                                    |  |         | 537,050   |                  |                 |  | 234,024   |            |          |     | 44,705   |            |      |               | 0.19 |  |  |  | 170,316 |  |  | 
|                                        
|Total                                    |  |         | 2,209,810 |                  |                 |  | 981,993   |            |          |     | 153,221  |            |      |               | 0.67 |  |  |  | 728,524 |  |  | 
|                                        



|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 8.                                                                                                                                              
|   
|(2) | Diluted earnings per share equals basic earnings per share
    except in 2006 where diluted earnings per share is $0.96 and
    $2.09 for the fourth quarter and year, respectively.
|   
|(3) | Funds flow from operations is presented before changes in net
    non-cash working capital as presented in the Consolidated
    Statement of Cash Flows.                            







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006








Growth in subscriber statistics as follows:


|                      |  |       |        |  |        |  |        |       |  |  |        |  |  |       |        |  |        |  |        |       |  |  |        |   |  |  |        |  |  |  |        |  |  | 
|--------------------- |  | ----- | ------ |  | ------ |  | ------ | ----- |  |  | ------ |  |  | ----- | ------ |  | ------ |  | ------ | ----- |  |  | ------ | - |  |  | ------ |  |  |  | ------ |  |  | 
|                      |  | 2006  |        |  | 2005   |  |        |      
|                      |  |       |        |  |        |  |        |      
|Subscriber Statistics |  | First |        |  | Second |  |        | Third |  |  | Fourth |  |  | First |        |  | Second |  |        | Third |  |  | Fourth |   |  | 
|                     
|Basic cable customers |  |       | 29,429 |  |        |  | 6,838  |       |  |  | 2,248  |  |  |       | 2,766  |  |        |  | 17,109 |       |  |  | (1,707 | ) |  |  | 1,338  |  |  |  | 3,733  |  |  | 
|Digital customers     |  |       | 28,296 |  |        |  | 18,594 |       |  |  | 14,733 |  |  |       | 9,630  |  |        |  | 21,501 |       |  |  | 15,517 |   |  |  | 9,764  |  |  |  | 11,167 |  |  | 
|Internet customers    |  |       | 54,724 |  |        |  | 36,296 |       |  |  | 21,654 |  |  |       | 25,907 |  |        |  | 47,748 |       |  |  | 32,539 |   |  |  | 27,034 |  |  |  | 39,804 |  |  | 
|Digital Phone Lines   |  |       | 34,088 |  |        |  | 28,018 |       |  |  | 50,294 |  |  |       | 43,744 |  |        |  | N/A    |       |  |  | 3,512  |   |  |  | 18,938 |  |  |  | 34,113 |  |  | 
|DTH                   |  |       | 10,199 |  |        |  | 6,843  |       |  |  | 4,283  |  |  |       | 3,221  |  |        |  | (3,068 | )     |  |  | 4,815  |   |  |  | 6,252  |  |  |  | 8,760  |  |  | 
|                     

Significant acquisitions and divestitures:


| |   |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The acquisition of cable systems serving approximately 40,000
    customers was completed effective March 31, 2004. In 2005,
    these systems generated service operating income of
    approximately $3.5 million and $3.7 million in the
    first and second quarter respectively, and in the third quarter
    generated an additional $1.8 million over the amounts
    reported in the third quarter of 2004.

New Product Launch:


| |   |                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The initial product launch of Shaw Digital Phone service was in
    Calgary on February 14, 2005. During 2005 the Company did
    additional launches in Edmonton and Winnipeg and in 2006 added
    Victoria, Vancouver and Fort McMurray and other smaller
    areas including the surrounding areas of Calgary and Edmonton.
| |  | During 2005 the Company launched on-screen ordering of VOD
    content in Calgary, Edmonton, Winnipeg, Saskatoon, Red Deer,
    Fort McMurray and Vancouver and during 2006 launched the
    service on Vancouver Island.                                                                                                      





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006





III.   RESULTS OF OPERATIONS


OVERVIEW OF FISCAL 2006 CONSOLIDATED RESULTS


|                                         |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   |  | 
|---------------------------------------- | ------------------------------------------------------------------------------------- | ---- | - | --------- | ---- |  | - | --------- |  |  | ---- | --------- |  | - |  | ----- | - |  |  | ----- | - |  | 
|                                         |                                                                                       |      |   |           |      |  |   | Change   
|                                         |                                                                                       |      |   |           |      |  |   |          
|                                         |                                                                                       |      |   |           |      |  |   | 2006      |  |  | 2005 |           |  |  
|                                         |                                                                                       | 2006 |   |           | 2005 |  |   | 2004      |  |  | %    |           |  | % |  |       |  
|                                        
|(In $000s Cdn except per share amounts) |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   | 
|Operations:                              |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   | 
|                                         | Service revenue                                                                       |      |   | 2,459,284 |      |  |   | 2,209,810 |  |  |      | 2,079,749 |  |   |  | 11.3  |   |  |  | 6.3   |   |  | 
|                                         | Service operating income before amortization
    (1)                                  |      |   | 1,077,917 |      |  |   | 981,993   |  |  |      | 925,935   |  |   |  | 9.8   |   |  |  | 6.1   |   |  | 
|                                         | Service operating margin                                                              |      |   | 43.8%     |      |  |   | 44.4%     |  |  |      | 44.5%     |  |   |  |       |   |  |  |       |   |  | 
|                                         | Funds flow from
    operations(2)                                                     |      |   | 847,197   |      |  |   | 728,524   |  |  |      | 654,585   |  |   |  | 16.3  |   |  |  | 11.3  |   |  | 
|                                         | Net income                                                                            |      |   | 458,250   |      |  |   | 153,221   |  |  |      | 70,870    |  |   |  | 199.1 |   |  |  | 116.2 |   |  | 
|                                         | Free cash
    flow(1)                                                                 |      |   | 265,445   |      |  |   | 277,319   |  |  |      | 278,881   |  |   |  | (4.3  | ) |  |  | (0.6  | ) |  | 
|Balance sheet:                           |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   | 
|                                         | Total assets                                                                          |      |   | 7,522,543 |      |  |   | 7,430,185 |  |  |      | 7,576,720 |  |   |  |       |   |  |  |       |   |  | 
|                                         | Long-term financial liabilities (including current portion of
    long-term debt)     |      |   | 2,996,385 |      |  |   | 3,199,542 |  |  |      | 3,344,258 |  |   |  |       |   |  |  |       |   |  | 
|Per share data:                          |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   | 
|                                         | Income per share  basic                                                              |      | $ | 2.11      |      |  | $ | 0.67      |  |  | $    | 0.31      |  |   |  |       |   |  |  |       |   |  | 
|                                         | Income per share  diluted                                                            |      | $ | 2.09      |      |  | $ | 0.67      |  |  | $    | 0.31      |  |   |  |       |   |  |  |       |   |  | 
|                                         | Weighted average number of participating shares outstanding
    during period (000s) |      |   | 217,666   |      |  |   | 228,210   |  |  |      | 231,605   |  |   |  |       |   |  |  |       |   |  | 
|Cash dividends paid per share            |                                                                                       |      |   |           |      |  |   |           |  |  |      |           |  |   |  |       |   |  |  |       |   | 
|                                         | Class A                                                                               |      |   | 0.470     |      |  |   | 0.305     |  |  |      | 0.155     |  |   |  |       |   |  |  |       |   |  | 
|                                         | Class B                                                                               |      |   | 0.475     |      |  |   | 0.310     |  |  |      | 0.160     |  |   |  |       |   |  |  |       |   |  | 
|                                        



|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 8.                                                                                                               
|   
|(2) | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.

Highlights




| |   |                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net income was $458.3 million for the year compared to
    income of $153.2 million in 2005 and $70.9 million in
    2004.                                                                                                                                                                                             
| |  | Earnings per share were $2.11 compared to $0.67 in 2005 and
    $0.31 in 2004.                                                                                                                                                                                                                                         
| |  | Service revenue for the year improved to $2.5 billion from
    $2.2 billion last year and $2.1 billion in 2004.                                                                                                                                                                                                        
| |  | Service operating income before amortization of
    $1.08 billion was up over last years amount of
    $982.0 million in 2005 and $925.9 million in 2004.                                                                                                                                                             
| |  | Consolidated free cash flow was $265.4 million compared to
    $277.3 million in 2005 and $278.9 million in 2004.                                                                                                                                                                                                      
| |  | The footprint of Digital Phone continued to expand with the
    Company adding Victoria, Vancouver and Fort McMurray and
    other smaller areas, including the surrounding areas of Calgary
    and Edmonton. At August 31, 2006, the number of Digital
    Phone lines, including pending installations, was 212,707.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Shaw customer base continued to grow with increases of
    41,281 for basic cable (2005  20,473); 71,253 for
    digital (2005  57,949); 138,581 for Internet
    (2005  147,125); and 24,546 (2005  16,759)
    for DTH.                                                                                                                                                                                                          
| |  | In November, 2005 the Company closed a $450 million
    offering of 6.1% senior unsecured notes due November 16,
    2012 and in May, 2006 closed a $300 million offering of
    6.15% senior unsecured notes due May 9, 2016. During 2006 the
    Company redeemed two series of Canadian Originated Preferred
    Securities (COPrS) including the Series B
    US$172.5 million 8.5% COPrS and the Cdn.
    $150.0 million 8.875% COPrS.
| |  | Dividends paid in 2006 increased 55% over 2005 and the Company
    has increased the equivalent annual dividend rate on its
    Class A Participating Share and Class B Non-Voting
    Participating Shares by $0.40 to $0.995 and $1.00, respectively.                                                                                                                                                                                    
| |  | The Company repurchased 5,119,900 Class B Non-Voting Shares
    for cancellation, pursuant to a normal course issuer bid for
    $146.6 million ($28.64 per share) during 2006.                                                                                                                                                                                                                                                            

Revenue and operating expenses


2006 vs. 2005






2005 vs. 2004












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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Amortization


|                                 |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   |  | 
|-------------------------------- | ----------------------------- | ---- |  | -------- | ---- |  |  | -------- | - |  | ---- | -------- | - | - |  | ----- | - |  |  | ----- | - |  | 
|                                 |                               |      |  |          |      |  |  | Change   |   |  |     
|                                 |                               |      |  |          |      |  |  |          |   |  |     
|                                 |                               |      |  |          |      |  |  | 2006     |   |  | 2005 |          |   |  
|                                 |                               | 2006 |  |          | 2005 |  |  | 2004     |   |  | %    |          |   | % |  |       |  
|                                
|(In $000s Cdn)                  |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   | 
|Amortization revenue (expense)  |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   | 
|                                 | Deferred IRU revenue          |      |  | 12,546   |      |  |  | 12,999   |   |  |      | 12,098   |   |   |  | (3.5  | ) |  |  | 7.4   |   |  | 
|                                 | Deferred equipment revenue    |      |  | 80,256   |      |  |  | 71,677   |   |  |      | 82,711   |   |   |  | 12.0  |   |  |  | (13.3 | ) |  | 
|                                 | Deferred equipment costs      |      |  | (200,218 | )    |  |  | (210,477 | ) |  |      | (229,013 | ) |   |  | (4.9  | ) |  |  | (8.1  | ) |  | 
|                                 | Deferred charges              |      |  | (5,328   | )    |  |  | (6,595   | ) |  |      | (8,108   | ) |   |  | (19.2 | ) |  |  | (18.7 | ) |  | 
|                                 | Property, plant and equipment |      |  | (385,607 | )    |  |  | (408,866 | ) |  |      | (403,395 | ) |   |  | (5.7  | ) |  |  | 1.4   |   |  | 
|                                





Interest on long-term debt


|                |  |      |         |  |      |  |         |        |  |  |         |  |  |   |      |   |  |  |      |   |  | 
|--------------- |  | ---- | ------- |  | ---- |  | ------- | ------ |  |  | ------- |  |  | - | ---- | - |  |  | ---- | - |  | 
|                |  |      |         |  |      |  |         | Change |  |  |        
|                |  |      |         |  |      |  |         |        |  |  |        
|                |  |      |         |  |      |  |         | 2006   |  |  | 2005    |  |  |  
|                |  | 2006 |         |  | 2005 |  |         | 2004   |  |  | %       |  |  | % |      |   | 
|               
|(In $000s Cdn) |  |      |         |  |      |  |         |        |  |  |         |  |  |   |      |   |  |  |      |   |  | 
|Interest        |  |      | 254,303 |  |      |  | 262,949 |        |  |  | 281,774 |  |  |   | (3.3 | ) |  |  | (6.7 | ) |  | 
|               



Investment activity gains and losses


|                            |  |      |        |   |      |  |        |                     |  |  |      |   |  |      |        |  |  |  |        |   |  | 
|--------------------------- |  | ---- | ------ | - | ---- |  | ------ | ------------------- |  |  | ---- | - |  | ---- | ------ |  |  |  | ------ | - |  | 
|                            |  |      |        |   |      |  |        | Increase (decrease) |  |  |     
|                            |  |      |        |   |      |  |        | in income           |  |  |     
|                            |  |      |        |   |      |  |        |                     |  |  |     
|                            |  | 2006 |        |   | 2005 |  |        | 2004                |  |  | 2006 |   |  | 2005 |        |  | 
|                           
|(In $000s Cdn)             |  |      |        |   |      |  |        |                     |  |  |      |   |  |      |        |  |  |  |        |   |  | 
|Gain on sale of investments |  |      | 50,315 |   |      |  | 32,163 |                     |  |  | 356  |   |  |      | 18,152 |  |  |  | 31,807 |   |  | 
|Write-down of investments   |  |      | (519   | ) |      |  | (1,937 | )                   |  |  | (651 | ) |  |      | 1,418  |  |  |  | (1,286 | ) |  | 
|                           





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Gain on sale of investments




Write-down of investments




Other income and expenses


|                                                      |  |      |         |   |      |  |         |                     |  |  |        |   |  |      |         |   |  |  |         |   |  | 
|----------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------- | ------------------- |  |  | ------ | - |  | ---- | ------- | - |  |  | ------- | - |  | 
|                                                      |  |      |         |   |      |  |         | Increase (decrease) |  |  |       
|                                                      |  |      |         |   |      |  |         | in income           |  |  |       
|                                                      |  |      |         |   |      |  |         |                     |  |  |       
|                                                      |  | 2006 |         |   | 2005 |  |         | 2004                |  |  | 2006   |   |  | 2005 |         |   | 
|                                                     
|(In $000s Cdn)                                       |  |      |         |   |      |  |         |                     |  |  |        |   |  |      |         |   |  |  |         |   |  | 
|Debt retirement costs                                 |  |      | (12,248 | ) |      |  | (6,311  | )                   |  |  | (2,598 | ) |  |      | (5,937  | ) |  |  | (3,713  | ) |  | 
|Foreign exchange gain on unhedged long-term debt      |  |      | 5,369   |   |      |  | 40,518  |                     |  |  | 28,522 |   |  |      | (35,149 | ) |  |  | 11,996  |   |  | 
|Fair value loss on forward currency forward contracts |  |      | (360    | ) |      |  | (19,342 | )                   |  |  |       |   |  |      | 18,982  |   |  |  | (19,342 | ) |  | 
|Other gains                                           |  |      | 6,724   |   |      |  | 11,016  |                     |  |  | 3,753  |   |  |      | (4,292  | ) |  |  | 7,263   |   |  | 
|                                                     















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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Income tax expense




Equity income (loss) on investees




Investment in Burrard Landing Lot 2 Holdings Partnership




Net income per share


|                                                                                                 |  |      |         |  |      |  |         |        |  |  |         |  |  |   |       |   |  |  |       |   |  | 
|------------------------------------------------------------------------------------------------ |  | ---- | ------- |  | ---- |  | ------- | ------ |  |  | ------- |  |  | - | ----- | - |  |  | ----- | - |  | 
|                                                                                                 |  |      |         |  |      |  |         | Change |  |  |        
|                                                                                                 |  |      |         |  |      |  |         |        |  |  |        
|                                                                                                 |  |      |         |  |      |  |         | 2006   |  |  | 2005    |  |  |  
|                                                                                                 |  | 2006 |         |  | 2005 |  |         | 2004   |  |  | %       |  |  | % |       |   | 
|                                                                                                
|(In $000s Cdn except per share amounts)                                                         |  |      |         |  |      |  |         |        |  |  |         |  |  |   |       |   |  |  |       |   |  | 
|Net income                                                                                       |  |      | 458,250 |  |      |  | 153,221 |        |  |  | 70,870  |  |  |   | 199.1 |   |  |  | 116.2 |   |  | 
|Divided by weighted average number of participating shares
    outstanding during period (000s) |  |      | 217,666 |  |      |  | 228,210 |        |  |  | 231,605 |  |  |   | (4.6  | ) |  |  | (1.5  | ) |  | 
|Income per share  basic                                                                         |  |      | $2.11   |  |      |  | $0.67   |        |  |  | $0.31   |  |  |   | 214.9 |   |  |  | 116.1 |   |  | 
|Income per share  diluted                                                                       |  |      | $2.09   |  |      |  | $0.67   |        |  |  | $0.31   |  |  |   | 211.9 |   |  |  | 116.1 |   |  | 
|                                                                                                



Net income








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


|                                                                                             |  |      |       |   |      |  |       |   |  | 
|-------------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | - |  | 
|                                                                                             |  | 2006 |       |   | 2005 |  |       |  
|                                                                                            
|(In $millions Cdn)                                                                           |  |      |       |   |      |  |       |   |  | 
|Increased service operating income before amortization                                       |  |      | 95.9  |   |      |  | 56.1  |   |  | 
|Decreased amortization of deferred net equipment cost and
    revenue and IRU revenue        |  |      | 18.4  |   |      |  | 8.4   |   |  | 
|Decreased (increased) amortization of deferred charges and
    property, plant and equipment |  |      | 24.5  |   |      |  | (4.0  | ) |  | 
|Decreased interest expense                                                                   |  |      | 8.6   |   |      |  | 18.8  |   |  | 
|Change in other net costs and
    revenue(1)                                                 |  |      | (6.4  | ) |      |  | 26.7  |   |  | 
|Decreased (increased) income taxes                                                           |  |      | 164.0 |   |      |  | (23.7 | ) |  | 
|                                                                                            
|                                                                                             |  |      | 305.0 |   |      |  | 82.3  |   |  | 
|                                                                                            



|    |                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Other net costs and revenue include gain on sale of investments,
    write-down of investments, debt retirement costs, foreign
    exchange gain on unhedged long-term debt, fair value loss on
    foreign currency forward contracts, equity income (loss) on
    investees and other gains as detailed in the Consolidated
    Statements of Income and Deficit.

SEGMENTED OPERATIONS REVIEW


CABLE


FINANCIAL HIGHLIGHTS


|                                                |                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |       |       |   |  | 
|----------------------------------------------- | ------------------------ | ---- | --------- | ------- | ---- |  | --------- | ------- |  |  | --------- | ------- |  | - | ----- | ----- | - |  | ----- | ----- | - |  | 
|                                                |                          |      |           |         |      |  |           | Change  |  |  |          
|                                                |                          |      |           |         |      |  |           |         |  |  |          
|                                                |                          |      |           |         |      |  |           | 2006    |  |  | 2005      |         |  |  
|                                                |                          | 2006 |           |         | 2005 |  |           | 2004    |  |  | %         |         |  | % |       |       |  
|                                               
|($000s Cdn)                                    |                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |       |       |   | 
|Service revenue (third party)                   |                          |      | 1,808,583 |         |      |  | 1,598,369 |         |  |  | 1,491,569 |         |  |   | 13.2  |       |   |  | 7.2   |       |   | 
|                                               
|Service operating income before amortization(1) |                          |      | 857,466   |         |      |  | 797,583   |         |  |  | 779,579   |         |  |   | 7.5   |       |   |  | 2.3   |       |   | 
|Less:                                           |                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |       |       |   | 
|                                                | Interest                 |      |           | 210,758 |      |  |           | 220,388 |  |  |           | 237,290 |  |   |       | (4.4  | ) |  |       | (7.1  | ) |  | 
|                                                | Cash taxes on net income |      |           | 1,761   |      |  |           | 5,410   |  |  |           | 2,926   |  |   |       | (67.4 | ) |  |       | (84.9 | ) |  | 
|                                               
|Cash flow before the following:                 |                          |      | 644,947   |         |      |  | 571,785   |         |  |  | 539,363   |         |  |   | 12.8  |       |   |  | 6.0   |       |   | 
|Capital expenditures and equipment subsidies    |                          |      | 451,549   |         |      |  | 343,168   |         |  |  | 267,113   |         |  |   | 31.6  |       |   |  | 28.5  |       |   | 
|                                               
|Free cash
    flow(1)                           |                          |      | 193,398   |         |      |  | 228,617   |         |  |  | 272,250   |         |  |   | (15.4 | )     |   |  | (16.0 | )     |   | 
|                                               
|Operating
    margin(1)                         |                          |      | 47.4%     |         |      |  | 49.9%     |         |  |  | 52.3%     |         |  |   | (2.5  | )     |   |  | (2.4  | )     |   | 
|                                               



|    |                                       
|--- | --------------------------------------
|(1) | See Key performance drivers on page 8.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


2006 vs. 2005


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During the year the Company added 43,744 Digital Phone lines and
    at August 31, 2006, the number of Digital Phone lines,
    including pending installations, was 212,707. The expansion of
    Shaws Digital Phone footprint continued with the service
    rolled out during the year in Victoria, Vancouver,
    Fort McMurray and other smaller areas including the
    surrounding areas of Calgary and Edmonton.
| | Internet penetration of basic is now at almost 60%, up from
    54.5% at August 31, 2005. Shaw has in excess of
    1.3 million Internet customers having added 138,581 in the
    year. Digital subscribers were up 71,253 in the year and Basic
    cable posted a 41,281 increase.                                                                                                                                     
| | Commencing in October 2005, Shaw introduced rate increases on
    most stand-alone services, packages, and on specialty services.
    The increases generated additional revenue of approximately
    $3.8 million per month once fully implemented in November
    2005.                                                                                                                                                 
| | Shaw announced the acquisition of several cable systems that
    complement existing operations including Pemberton Cable,
    Saltspring Cablevision, Whistler Cable, and Grand Forks, all
    operating in British Columbia as well as Norcom
    Telecommunications Limited operating in Kenora, Ontario. These
    cable systems provide synergies with existing operations and
    represent growing markets.        





Xtreme-I, Xtreme-I






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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




2005 vs. 2004


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Shaw launched Digital Phone in Calgary, Edmonton and Winnipeg
    and as at August 31, 2005 pending and installed Digital
    Phone lines totaled 56,563.                                                                                                                                 
| 
| | Customer base grew across all products and penetration of
    customers who subscribe to bundled services increased to 48.2%
    up from 42.4% in 2004.                                                                                                                                   
| 
| | Effective November 26, 2004, Shaw introduced rate increases
    of approximately $1 per month on most of its packages. The
    increases generated additional monthly revenue of approximately
    $2.0 million per month when they were fully implemented at
    the end of January 2005.











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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


CAPITAL EXPENDITURES AND EQUIPMENT SUBSIDIES 
CABLE


|                                              |                                 |      |         |         |      |  |         |         |  |  |         |         |  |   |      |      |   |  |      |      |  |  | 
|--------------------------------------------- | ------------------------------- | ---- | ------- | ------- | ---- |  | ------- | ------- |  |  | ------- | ------- |  | - | ---- | ---- | - |  | ---- | ---- |  |  | 
|                                              |                                 |      |         |         |      |  |         | Change 
|                                              |                                 |      |         |         |      |  |         |        
|                                              |                                 |      |         |         |      |  |         | 2006    |  |  | 2005    |         |  |  
|                                              |                                 | 2006 |         |         | 2005 |  |         | 2004    |  |  | %       |         |  | % |      |      |  
|                                             
|(In $000s Cdn)                               |                                 |      |         |         |      |  |         |         |  |  |         |         |  |   |      |      |   |  |      |      |  | 
|Capital expenditures and equipment subsidies: |                                 |      |         |         |      |  |         |         |  |  |         |         |  |   |      |      |   |  |      |      |  | 
|                                              | New housing
    development(1)  |      |         | 79,230  |      |  |         | 79,656  |  |  |         | 63,906  |  |   |      | (0.5 | ) |  |      | 24.7 |  |  | 
|                                              | Success-based(2)                |      |         | 87,365  |      |  |         | 60,320  |  |  |         | 54,540  |  |   |      | 44.8 |   |  |      | 10.6 |  |  | 
|                                              | Upgrades and
    enhancement(3) |      |         | 192,875 |      |  |         | 140,776 |  |  |         | 112,223 |  |   |      | 37.0 |   |  |      | 25.4 |  |  | 
|                                              | Replacement(4)                  |      |         | 38,807  |      |  |         | 30,181  |  |  |         | 16,070  |  |   |      | 28.6 |   |  |      | 87.8 |  |  | 
|                                              | Buildings and other             |      |         | 53,272  |      |  |         | 32,235  |  |  |         | 20,374  |  |   |      | 65.3 |   |  |      | 58.2 |  |  | 
|                                             
|                                              |                                 |      | 451,549 |         |      |  | 343,168 |         |  |  | 267,113 |         |  |   | 31.6 |      |   |  | 28.5 |      |  | 
|                                             





|    |                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Build out of mainline cable and the addition of drops in new
    subdivisions.                                                                                                                                                                   
|   
|(2) | Capital and equipment subsidies related to the acquisition of
    new customers, including installation of modems, digital cable
    terminals (DCTs), filters and commercial drops for
    Shaw Business Solutions customers.                 
|   
|(3) | Upgrades to the plant from 550 MHz to 750 MHz in 2003
    and 750 MHz to 860 MHz in 2004, build out of fiber
    backbone to reduce use of leased circuits and costs to decrease
    node sizes and Digital Phone capital in 2004, 2005 and 2006.
|   
|(4) | Normal replacement of aged assets such as drops, vehicles and
    other equipment.                                                                                                                                                               

2006 vs. 2005




2005 vs. 2004








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




SUBSCRIBER STATISTICS


|                                                 |                                    |      |           |         |         |  |           |         |  |        |           |       |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  |  | 
|------------------------------------------------ | ---------------------------------- | ---- | --------- | ------- | ------- |  | --------- | ------- |  | ------ | --------- | ----- |  | - | ------- | ------- | ------ |  | ---- | ----- |  |  | ------- | ------ |  |  | ---- | - |  |  | 
|                                                 |                                    |      |           |         |         |  |           | 2006    |  |        | 2005     
|                                                 |                                    |      |           |         |         |  |           |         |  |        |          
|                                                 |                                    |      |           |         |         |  |           |         |  | Change |           |       |  |   | Change  |         |        | 
|                                                 |                                    | 2006 |           |         | 2005(1) |  |           | 2004(1) |  |        | Growth    |       |  | % |         |         | Growth |  |      | %     |  |  |        
|                                                
|CABLE:                                           |                                    |      |           |         |         |  |           |         |  |        |           |       |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  | 
|Basic subscribers                                |                                    |      | 2,186,091 |         |         |  | 2,144,810 |         |  |        | 2,124,337 |       |  |   | 41,281  |         |        |  | 1.9  |       |  |  | 20,473  |        |  |  | 1.0  |   |  | 
|                                                 | Penetration as a % of homes passed |      |           | 65.6%   |         |  |           | 66.1%   |  |        |           | 67.2% |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  |  | 
|Digital customers                                |                                    |      | 669,787   |         |         |  | 598,534   |         |  |        | 540,585   |       |  |   | 71,253  |         |        |  | 11.9 |       |  |  | 57,949  |        |  |  | 10.7 |   |  | 
|Digital deployment (DCTs)                      |                                    |      | 853,160   |         |         |  | 739,783   |         |  |        | 641,033   |       |  |   | 113,377 |         |        |  | 15.3 |       |  |  | 98,750  |        |  |  | 15.4 |   |  | 
|                                                
|INTERNET:                                        |                                    |      |           |         |         |  |           |         |  |        |           |       |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  | 
|Connected and scheduled installations            |                                    |      | 1,306,991 |         |         |  | 1,168,410 |         |  |        | 1,021,285 |       |  |   | 138,581 |         |        |  | 11.9 |       |  |  | 147,125 |        |  |  | 14.4 |   |  | 
|                                                 | Penetration as % of basic          |      |           | 59.8%   |         |  |           | 54.5%   |  |        |           | 48.1% |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  |  | 
|Stand-alone Internet not included in basic cable |                                    |      | 156,018   |         |         |  | 135,697   |         |  |        | 114,884   |       |  |   | 20,231  |         |        |  | 15.6 |       |  |  | 20,813  |        |  |  | 18.1 |   |  | 
|DIGITAL PHONE                                    |                                    |      |           |         |         |  |           |         |  |        |           |       |  |   |         |         |        |  |      |       |  |  |         |        |  |  |      |   |  | 
|                                                 | Number of
    lines(2)             |      |           | 212,707 |         |  |           | 56,563  |  |        |           |      |  |   |         | 156,144 |        |  |      | 276.1 |  |  |         | 56,563 |  |  |      |  |  |  | 
|                                                



|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | August 31, 2005 and 2004 are restated for comparative
    purposes as if the acquisition of the Salt Spring and Pemberton
    cable systems in British Columbia had occurred on that date.
|   
|(2) | Represents primary and secondary lines on billing plus pending
    installs.                                                                                                              





|                   |  |      |      |   |      |  |      |      |  |  |      |   |  | 
|------------------ |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | - |  | 
|Churn(1)           |  | 2006 |      |   | 2005 |  |      | 2004 |  |  |     
|                  
|Digital customers  |  |      | 14.7 | % |      |  | 15.1 | %    |  |  | 15.5 | % |  | 
|Internet customers |  |      | 14.9 | % |      |  | 15.1 | %    |  |  | 17.7 | % |  | 
|                  



|    |                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Calculated as the number of new customer activations less the
    net gain of customers during the period divided by the average
    of the opening and closing customers for the applicable period.
    See Key performance drivers page 8.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


SATELLITE (DTH and Satellite Services)


FINANCIAL HIGHLIGHTS


|                                                    |                          |      |         |        |      |  |         |        |  |  |         |        |  |   |      |       |   |  |       |       |   |  | 
|--------------------------------------------------- | ------------------------ | ---- | ------- | ------ | ---- |  | ------- | ------ |  |  | ------- | ------ |  | - | ---- | ----- | - |  | ----- | ----- | - |  | 
|                                                    |                          |      |         |        |      |  |         | Change
|                                                    |                          |      |         |        |      |  |         |       
|                                                    |                          |      |         |        |      |  |         | 2006   |  |  | 2005    |        |  |  
|                                                    |                          | 2006 |         |        | 2005 |  |         | 2004   |  |  | %       |        |  | % |      |       |  
|                                                   
|($000s Cdn)                                        |                          |      |         |        |      |  |         |        |  |  |         |        |  |   |      |       |   |  |       |       |   | 
|DTH (Star Choice)                                   |                          |      | 567,807 |        |      |  | 530,729 |        |  |  | 505,637 |        |  |   | 7.0  |       |   |  | 5.0   |       |   | 
|Satellite Services                                  |                          |      | 82,894  |        |      |  | 80,712  |        |  |  | 82,543  |        |  |   | 2.7  |       |   |  | (2.2  | )     |   | 
|                                                   
|Service revenue (third party)                       |                          |      | 650,701 |        |      |  | 611,441 |        |  |  | 588,180 |        |  |   | 6.4  |       |   |  | 4.0   |       |   | 
|                                                   
|Service operating income before
    amortization(1) |                          |      |         |        |      |  |         |        |  |  |         |        |  |   |      |       |   |  |       |       |   | 
|DTH (Star Choice)                                   |                          |      | 175,401 |        |      |  | 141,687 |        |  |  | 111,150 |        |  |   | 23.8 |       |   |  | 27.5  |       |   | 
|Satellite Services                                  |                          |      | 45,050  |        |      |  | 42,723  |        |  |  | 41,690  |        |  |   | 5.4  |       |   |  | 2.5   |       |   | 
|                                                   
|                                                    |                          |      | 220,451 |        |      |  | 184,410 |        |  |  | 152,840 |        |  |   | 19.5 |       |   |  | 20.7  |       |   | 
|Less:                                               |                          |      |         |        |      |  |         |        |  |  |         |        |  |   |      |       |   |  |       |       |   | 
|                                                    | Interest(2)              |      |         | 42,100 |      |  |         | 41,384 |  |  |         | 44,484 |  |   |      | 1.7   |   |  |       | (7.0  | ) |  | 
|                                                    | Cash taxes on net income |      |         | 98     |      |  |         | 334    |  |  |         | 1,692  |  |   |      | (70.7 | ) |  |       | (80.3 | ) |  | 
|                                                   
|Cash flow before the following                      |                          |      | 178,253 |        |      |  | 142,692 |        |  |  | 106,664 |        |  |   | 24.9 |       |   |  | 33.8  |       |   | 
|                                                   
|Less capital expenditures and equipment subsidies:  |                          |      |         |        |      |  |         |        |  |  |         |        |  |   |      |       |   |  |       |       |   | 
|                                                    | Success-based            |      |         | 85,341 |      |  |         | 82,780 |  |  |         | 95,958 |  |   |      | 3.1   |   |  |       | (13.7 | ) |  | 
|                                                    | Transponders and other   |      |         | 20,865 |      |  |         | 11,210 |  |  |         | 4,075  |  |   |      | 86.1  |   |  |       | 175.1 |   |  | 
|                                                   
|                                                    |                          |      | 106,206 |        |      |  | 93,990  |        |  |  | 100,033 |        |  |   | 13.0 |       |   |  | (6.0  | )     |   | 
|                                                   
|Free cash
    flow(1)                               |                          |      | 72,047  |        |      |  | 48,702  |        |  |  | 6,631   |        |  |   | 47.9 |       |   |  | 634.5 |       |   | 
|                                                   
|Operating margin                                    |                          |      | 33.8%   |        |      |  | 30.2%   |        |  |  | 26.0%   |        |  |   | 3.6  |       |   |  | 4.2   |       |   | 
|                                                   



|    |                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 8.                                                                                                                                                                                                     
|   
|(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 Star Choice.

CUSTOMER STATISTICS


|                             |  |      |         |  |      |  |         |      |  |  |         |  |  | 
|---------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | 
|                             |  | 2006 |         |  | 2005 |  |         | 2004 |  |  |        
|                            
|Star Choice
    Customers(1) |  |      | 869,208 |  |      |  | 844,662 |      |  |  | 827,903 |  |  | 
|                            



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

|                      |  |      |       |  |      |  |       |      |  |  |       |  |  | 
|--------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | 
|Churn(2)              |  | 2006 |       |  | 2005 |  |       | 2004 |  |  |      
|                     
|Star Choice customers |  |      | 11.5% |  |      |  | 14.6% |      |  |  | 16.8% |  |  | 
|                     



|    |                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Calculated as the number of new customer activations less the
    net gain of customers during the period divided by the average
    of the opening and closing customers for the applicable period.
    See Key performance drivers page 8.





---



##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


SATELLITE (DTH and Satellite Services)


2006 vs. 2005


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Free cash flow for the year was $72.0 million compared to
    $48.7 million for the prior year.                                                                                                                                                                                                                                                                      
| | DTH added 24,546 customers in 2006 compared to 16,759
    last year.                                                                                                                                                                                                                                                                                                 
| | Star Choice received the SQM Group Inc 2005 award for
    the highest customer satisfaction rating, for customer contact
    in a call centre, within the Telecommunications and
    TV Industry.                                                                                                                                                                    
| | Rate increases were implemented on most of DTHs
    programming packages. The rate increases were effective
    September 1, 2005 for some package types and
    February 1, 2006 for others. Each of the September and
    February rate increases generated additional revenue of
    approximately $0.8 million per month effective in the month
    implemented.
| | Customer churn decreased to 11.5% compared to 14.6% in 2005.                                                                                                                                                                                                                                                                                                         





Ku-band


Drive-In


2005 vs. 2004


OPERATING HIGHLIGHTS




|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
| | Free cash flow for the year increased to $48.7 million
    compared to $6.6 million in 2004.
| | Star Choice added 16,759 customers in 2005 compared
    to 19,377 in the previous year.     
| | DTH customer churn decreased to 14.6% from 16.8%
    in 2004.                               





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006




|  |                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On February 1, 2005 Star Choice implemented a rate increase
    on most of its programming packages ranging from $1.00 to $3.00
    per month for a total average increase of approximately $1.50
    per month.

write-down


Ku-band









|    |                   
|--- | ------------------
|IV. | FINANCIAL POSITION

















---



##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006















V.     CONSOLIDATED CASH FLOW
ANALYSIS


Operating activities


|                                                                                   |  |      |         |   |      |  |         |        |  |  |         |  |  |   |        |   |  |  |        |   |  | 
|---------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------- | ------ |  |  | ------- |  |  | - | ------ | - |  |  | ------ | - |  | 
|                                                                                   |  |      |         |   |      |  |         | Change |  |  |        
|                                                                                   |  |      |         |   |      |  |         |        |  |  |        
|                                                                                   |  |      |         |   |      |  |         | 2006   |  |  | 2005    |  |  |  
|                                                                                   |  | 2006 |         |   | 2005 |  |         | 2004   |  |  | %       |  |  | % |        |   | 
|                                                                                  
|(In $000s Cdn)                                                                    |  |      |         |   |      |  |         |        |  |  |         |  |  |   |        |   |  |  |        |   |  | 
|Funds flow from operations                                                         |  |      | 847,197 |   |      |  | 728,524 |        |  |  | 654,585 |  |  |   | 16.3   |   |  |  | 11.3   |   |  | 
|Decrease (increase) in non-cash working capital balances
    related to operations |  |      | (324    | ) |      |  | (86     | )      |  |  | 38,025  |  |  |   | (276.7 | ) |  |  | (100.2 | ) |  | 
|                                                                                  
|                                                                                   |  |      | 846,873 |   |      |  | 728,438 |        |  |  | 692,610 |  |  |   | 16.3   |   |  |  | 5.2    |   |  | 
|                                                                                  







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Investing activities


|                                       |  |      |          |   |      |  |          |                     |  |  |          |   |  |      |          |   |  |  |        |  |  | 
|-------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | ------------------- |  |  | -------- | - |  | ---- | -------- | - |  |  | ------ |  |  | 
|                                       |  |      |          |   |      |  |          | Increase (decrease) |  |  |         
|                                       |  |      |          |   |      |  |          | in cash flow        |  |  |         
|                                       |  |      |          |   |      |  |          |                     |  |  |         
|                                       |  | 2006 |          |   | 2005 |  |          | 2004                |  |  | 2006     |   |  | 2005 |          |   | 
|                                      
|(In $000s Cdn)                        |  |      |          |   |      |  |          |                     |  |  |          |   |  |      |          |   |  |  |        |  |  | 
|Cash flow used in investing activities |  |      | (489,096 | ) |      |  | (380,032 | )                   |  |  | (407,223 | ) |  |      | (109,064 | ) |  |  | 27,191 |  |  | 
|                                      





Financing activities




|                                                                   |  |      |        |   |      |  |        |      |  |  |        |   |  | 
|------------------------------------------------------------------ |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | 
|                                                                   |  | 2006 |        |   | 2005 |  |        | 2004 |  |  |       
|                                                                  
|(In $millions Cdn)                                                 |  |      |        |   |      |  |        |      |  |  |        |   |  | 
|Redemption of COPrS                                                |  |      | (351.9 | ) |      |  | (172.4 | )    |  |  |       |   |  | 
|Cost to terminate foreign currency forward contract                |  |      | (15.8  | ) |      |  | (12.2  | )    |  |  |       |   |  | 
|Repayment of $275 million Senior notes                             |  |      |       |   |      |  | (275.0 | )    |  |  |       |   |  | 
|Settlement of Zero Coupon Loan                                     |  |      |       |   |      |  | (27.9  | )    |  |  |       |   |  | 
|Repayment of $350 million credit facility                          |  |      |       |   |      |  |       |      |  |  | (350.0 | ) |  | 
|Repayment of $250 million Structured Note                          |  |      |       |   |      |  |       |      |  |  | (250.0 | ) |  | 
|Partial repayment of $300 million Senior notes                     |  |      |       |   |      |  |       |      |  |  | (3.2   | ) |  | 
|Issue of $350 million Senior notes                                 |  |      |       |   |      |  |       |      |  |  | 350.0  |   |  | 
|Bank loans and bank indebtedness  net borrowings
    (repayments) |  |      | (496.3 | ) |      |  | 505.6  |      |  |  | 47.0   |   |  | 
|Purchase of Class B Non-Voting Shares for cancellation             |  |      | (146.6 | ) |      |  | (287.1 | )    |  |  | (86.0  | ) |  | 
|Dividends                                                          |  |      | (103.3 | ) |      |  | (70.5  | )    |  |  | (36.9  | ) |  | 
|Debt retirement costs                                              |  |      |       |   |      |  |       |      |  |  | (1.1   | ) |  | 
|Proceeds on bond forward                                           |  |      | 2.5    |   |      |  |       |      |  |  |       |   |  | 
|Issuance of Class B Non-Voting Shares                              |  |      | 2.3    |   |      |  | 0.2    |      |  |  |       |   |  | 
|Proceeds on prepayments of IRU                                     |  |      | 0.2    |   |      |  | 1.2    |      |  |  | 5.7    |   |  | 
|Increase (decrease) in Partnership debt                            |  |      | (0.4   | ) |      |  | (8.6   | )    |  |  | 18.4   |   |  | 
|Proceeds on $300 million senior unsecured notes                    |  |      | 300.0  |   |      |  |       |      |  |  |        |   |  | 
|Proceeds on $450 million senior unsecured notes                    |  |      | 450.0  |   |      |  |       |      |  |  |       |   |  | 
|Repayment of long-term debt acquired on business acquisition       |  |      | (0.2   | ) |      |  |       |      |  |  |       |   |  | 
|                                                                  
|Cash flow used in financing activities                             |  |      | (359.5 | ) |      |  | (346.7 | )    |  |  | (306.1 | ) |  | 
|                                                                  




VI.    LIQUIDITY AND CAPITAL RESOURCES








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






















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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006






Debt structure






Off-balance sheet arrangement and guarantees


Guarantees




Financial instruments








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006


Contractual obligations




CONTRACTUAL OBLIGATIONS


|                                                                                                                                              |  |                        |           |        |        |  |         |           |           |  |           |  |  |         |           |  |  |  |           |  |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | ------ | ------ |  | ------- | --------- | --------- |  | --------- |  |  | ------- | --------- |  |  |  | --------- |  |  | 
|                                                                                                                                              |  | Payments due by period
|                                                                                                                                              |  |                       
|                                                                                                                                              |  |                        |           | Within |        |  |         |           | More than |  |           | 
|                                                                                                                                              |  | Total                  |           |        | 1 year |  |         | 2-3 years |           |  | 4-5 years |  |  | 5 years |           |  | 
|                                                                                                                                             
|(In $000s Cdn)                                                                                                                               |  |                        |           |        |        |  |         |           |           |  |           |  |  |         |           |  |  |  |           |  |  | 
|Long-term debt                                                                                                                                |  |                        | 2,996,385 |        |        |  | 449     |           |           |  | 297,747   |  |  |         | 1,146,143 |  |  |  | 1,552,046 |  |  | 
|Operating lease obligations (maintenance and lease of satellite
    transponders, lease of transmission facilities and lease of
    premises) |  |                        | 986,879   |        |        |  | 107,077 |           |           |  | 196,273   |  |  |         | 184,629   |  |  |  | 498,900   |  |  | 
|Purchase obligations                                                                                                                          |  |                        | 26,596    |        |        |  | 5,636   |           |           |  | 20,960    |  |  |         |          |  |  |  |          |  |  | 
|Other long-term obligations                                                                                                                   |  |                        | 38,061    |        |        |  | 1,088   |           |           |  | 2,656     |  |  |         | 6,916     |  |  |  | 27,401    |  |  | 
|                                                                                                                                             
|                                                                                                                                              |  |                        | 4,047,921 |        |        |  | 114,250 |           |           |  | 517,636   |  |  |         | 1,337,688 |  |  |  | 2,078,347 |  |  | 
|                                                                                                                                             




VII.   ADDITIONAL INFORMATION


www.sedar.com





VIII.  COMPLIANCE WITH NYSE CORPORATE GOVERNANCE
LISTING STANDARDS


www.shaw.ca





IX.    CERTIFICATION










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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2006










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##### Table of Contents



Shaw Communications Inc.





MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS AND
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING


August 31, 2006


November 20, 2006


















|                        |  |                          
|----------------------- |  | -------------------------
|[Signed]                |  | [Signed]                 
|                       
|Jim Shaw                |  | Steve Wilson             
|Chief Executive Officer |  | Senior Vice President and
|                        |  | Chief Financial Officer  





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##### Table of Contents



Shaw Communications Inc.





INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENTS






Shaw Communications Inc.


Shaw
Communications Inc.








|                 |  |                      
|---------------- |  | ---------------------
|Calgary, Canada  |  | -s- Ernst & Young    
|October 16, 2006 |  | Chartered Accountants





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##### Table of Contents



Shaw Communications Inc.


INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROLS






Shaw Communications Inc.












|                 |  |                      
|---------------- |  | ---------------------
|Calgary, Canada  |  | -s- Ernst & Young    
|October 16, 2006 |  | Chartered Accountants





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##### Table of Contents



Shaw Communications Inc.





CONSOLIDATED BALANCE SHEETS




|                                                   |                           |             |           |           |      |  |           |           |  |  | 
|-------------------------------------------------- | ------------------------- | ----------- | --------- | --------- | ---- |  | --------- | --------- |  |  | 
|                                                   |                           | 2006        |           |           | 2005 |  |           |          
|[thousands of Canadian dollars]                    |                           | $           |           |           | $    |  |           |          
|                                                  
|                                                   |                           | (Restated 
|                                                   |                           | note 1     
|ASSETS[note 9]                                     |                           |             |           |           |      |  |           |           |  | 
|Current                                            |                           |             |           |           |      |  |           |           |  | 
|Cash                                               |                           |             |          |           |      |  | 1,713     |           |  | 
|Accounts receivable [note 3]                       |                           |             | 138,142   |           |      |  | 114,664   |           |  | 
|Inventories [note 4]                               |                           |             | 53,994    |           |      |  | 45,224    |           |  | 
|Prepaids and other                                 |                           |             | 20,870    |           |      |  | 19,116    |           |  | 
|                                                  
|                                                   |                           |             | 213,006   |           |      |  | 180,717   |           |  | 
|Investments and other assets [notes 5 and 11]      |                           |             | 17,978    |           |      |  | 36,229    |           |  | 
|Property, plant and equipment [note 6]             |                           |             | 2,250,056 |           |      |  | 2,189,235 |           |  | 
|Deferred charges [note 7]                          |                           |             | 261,908   |           |      |  | 251,246   |           |  | 
|Intangibles [note 8]                               |                           |             |           |           |      |  |           |           |  | 
|                                                   | Broadcast licenses        |             |           | 4,691,484 |      |  |           | 4,684,647 |  |  | 
|                                                   | Goodwill                  |             |           | 88,111    |      |  |           | 88,111    |  |  | 
|                                                  
|                                                   |                           |             | 7,522,543 |           |      |  | 7,430,185 |           |  | 
|                                                  
|LIABILITIES AND SHAREHOLDERS EQUITY               |                           |             |           |           |      |  |           |           |  | 
|Current                                            |                           |             |           |           |      |  |           |           |  | 
|Bank indebtedness [note 9]                         |                           |             | 20,362    |           |      |  |          |           |  | 
|Accounts payable and accrued liabilities [note 13] |                           |             | 461,119   |           |      |  | 408,033   |           |  | 
|Income taxes payable                               |                           |             | 4,918     |           |      |  | 6,263     |           |  | 
|Unearned revenue                                   |                           |             | 106,497   |           |      |  | 98,420    |           |  | 
|Current portion of long-term debt [note 9]         |                           |             | 449       |           |      |  | 51,380    |           |  | 
|                                                  
|                                                   |                           |             | 593,345   |           |      |  | 564,096   |           |  | 
|Long-term debt [note 9]                            |                           |             | 2,995,936 |           |      |  | 3,148,162 |           |  | 
|Other long-term liabilities [notes 17 and 19]      |                           |             | 37,724    |           |      |  | 40,806    |           |  | 
|Deferred credits [note 10]                         |                           |             | 1,100,895 |           |      |  | 1,010,723 |           |  | 
|Future income taxes [note 14]                      |                           |             | 984,938   |           |      |  | 1,068,849 |           |  | 
|                                                  
|                                                   |                           |             | 5,712,838 |           |      |  | 5,832,636 |           |  | 
|                                                  
|Commitments and contingencies[notes 9, 16 and 17]  |                           |             |           |           |      |  |           |           |  | 
|Shareholders equity                               |                           |             |           |           |      |  |           |           |  | 
|Share capital [note 11]                            |                           |             |           |           |      |  |           |           |  | 
|                                                   | Class A Shares            |             |           | 2,475     |      |  |           | 2,487     |  |  | 
|                                                   | Class B Non-Voting Shares |             |           | 1,974,491 |      |  |           | 2,021,686 |  |  | 
|Contributed surplus [note 11]                      |                           |             | 5,110     |           |      |  | 1,866     |           |  | 
|Deficit                                            |                           |             | (172,701  | )         |      |  | (428,855  | )         |  | 
|Cumulative translation adjustment [note 12]        |                           |             | 330       |           |      |  | 365       |           |  | 
|                                                  
|                                                   |                           |             | 1,809,705 |           |      |  | 1,597,549 |           |  | 
|                                                  
|                                                   |                           |             | 7,522,543 |           |      |  | 7,430,185 |           |  | 
|                                                  

See accompanying notes




|                                  |  |                                          
|--------------------------------- |  | -----------------------------------------
|[Signed]
    JR Shaw
    Director |  | [Signed]
    Don Mazankowski
    Director





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##### Table of Contents



Shaw Communications Inc.


CONSOLIDATED STATEMENTS OF INCOME


AND DEFICIT




|                                                                                            |                                        |           |           |          |           |  |           |          |       |  |           |          |       |  |  | 
|------------------------------------------------------------------------------------------- | -------------------------------------- | --------- | --------- | -------- | --------- |  | --------- | -------- | ----- |  | --------- | -------- | ----- |  |  | 
|[thousands of Canadian dollars                                                              |                                        | 2006      |           |          | 2005      |  |           | 2004     |       |  |          
|except per share amounts]                                                                   |                                        | $         |           |          | $         |  |           | $        |       |  |          
|                                                                                           
|                                                                                            |                                        | (Restated |           |          | (Restated |  |           |         
|                                                                                            |                                        |          |           |          |          |  |           |         
|                                                                                            |                                        | note 1    |           |          | note 1    |  |           |         
|Service revenue[note 15]                                                                    |                                        |           | 2,459,284 |          |           |  | 2,209,810 |          |       |  | 2,079,749 |          |       | 
|Operating, general and administrative expenses                                              |                                        |           | 1,381,367 |          |           |  | 1,227,817 |          |       |  | 1,153,814 |          |       | 
|                                                                                           
|Service operating income before amortization[note 15]                                       |                                        |           | 1,077,917 |          |           |  | 981,993   |          |       |  | 925,935   |          |       | 
|Amortization                                                                               |                                        |           |           |          |           |  |           |          |       |  |           |          |       | 
|                                                                                            | Deferred IRU revenue [note 10]         |           |           | 12,546   |           |  |           | 12,999   |       |  |           | 12,098   |       |  | 
|                                                                                            | Deferred equipment revenue [note 10]   |           |           | 80,256   |           |  |           | 71,677   |       |  |           | 82,711   |       |  | 
|                                                                                            | Deferred equipment costs [note 7]      |           |           | (200,218 | )         |  |           | (210,477 | )     |  |           | (229,013 | )     |  | 
|                                                                                            | Deferred charges [note 7]              |           |           | (5,328   | )         |  |           | (6,595   | )     |  |           | (8,108   | )     |  | 
|                                                                                            | Property, plant and equipment [note 6] |           |           | (385,607 | )         |  |           | (408,866 | )     |  |           | (403,395 | )     |  | 
|                                                                                           
|Operating income                                                                            |                                        |           | 579,566   |          |           |  | 440,731   |          |       |  | 380,228   |          |       | 
|Interest [notes 7,9, 10 and 13]                                                             |                                        |           | (254,303  | )        |           |  | (262,949  | )        |       |  | (281,774  | )        |       | 
|                                                                                           
|                                                                                            |                                        |           | 325,263   |          |           |  | 177,782   |          |       |  | 98,454    |          |       | 
|Gain on sale of investments [note 5]                                                        |                                        |           | 50,315    |          |           |  | 32,163    |          |       |  | 356       |          |       | 
|Write-down of investments [note 5]                                                          |                                        |           | (519      | )        |           |  | (1,937    | )        |       |  | (651      | )        |       | 
|Debt retirement costs [notes 7 and 9]                                                       |                                        |           | (12,248   | )        |           |  | (6,311    | )        |       |  | (2,598    | )        |       | 
|Foreign exchange gain on unhedged long-term debt                                            |                                        |           | 5,369     |          |           |  | 40,518    |          |       |  | 28,522    |          |       | 
|Fair value loss on foreign currency forward contracts                                       |                                        |           | (360      | )        |           |  | (19,342   | )        |       |  |          |          |       | 
|Other gains [note 1]                                                                        |                                        |           | 6,724     |          |           |  | 11,016    |          |       |  | 3,753     |          |       | 
|                                                                                           
|Income before income taxes                                                                  |                                        |           | 374,544   |          |           |  | 233,889   |          |       |  | 127,836   |          |       | 
|Income tax expense (recovery) [note 14]                                                     |                                        |           | (83,662   | )        |           |  | 80,382    |          |       |  | 56,716    |          |       | 
|                                                                                           
|Income before the following                                                                 |                                        |           | 458,206   |          |           |  | 153,507   |          |       |  | 71,120    |          |       | 
|Equity income (loss) on investees [note 5]                                                  |                                        |           | 44        |          |           |  | (286      | )        |       |  | (250      | )        |       | 
|                                                                                           
|Net income                                                                                  |                                        |           | 458,250   |          |           |  | 153,221   |          |       |  | 70,870    |          |       | 
|Deficit beginning of year, as previously reported                                           |                                        |           | (471,488  | )        |           |  | (369,194  | )        |       |  | (336,695  | )        |       | 
|Adjustment for change in accounting policy [note 1]                                         |                                        |           | 42,633    |          |           |  | 36,403    |          |       |  | 16,257    |          |       | 
|                                                                                           
|Deficit, beginning of year, restated                                                        |                                        |           | (428,855  | )        |           |  | (332,791  | )        |       |  | (320,438  | )        |       | 
|                                                                                           
|                                                                                            |                                        |           | 29,395    |          |           |  | (179,570  | )        |       |  | (249,568  | )        |       | 
|Reduction on Class B Non-Voting Shares purchased for
    cancellation [note 11]             |                                        |           | (97,056   | )        |           |  | (175,575  | )        |       |  | (46,313   | )        |       | 
|Amortization of opening fair value loss on a foreign currency
    forward contract [note 7] |                                        |           | (1,705    | )        |           |  | (3,195    | )        |       |  |          |          |       | 
|Dividends  Class A and Class B Non-Voting
    Shares                                       |                                        |           | (103,335  | )        |           |  | (70,515   | )        |       |  | (36,910   | )        |       | 
|                                                                                           
|Deficit, end of year                                                                        |                                        |           | (172,701  | )        |           |  | (428,855  | )        |       |  | (332,791  | )        |       | 
|                                                                                           
|Earnings per share[note 11]                                                                 |                                        |           |           |          |           |  |           |          |       |  |           |          |       | 
|                                                                                            |                                        | Basic     |           |          | $2.11     |  |           |          | $0.67 |  |           |          | $0.31 |  |  | 
|                                                                                            |                                        | Diluted   |           |          | $2.09     |  |           |          | $0.67 |  |           |          | $0.31 |  |  | 
|                                                                                           

See accompanying notes






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##### Table of Contents



Shaw Communications Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS




|                                                                                       |  |           |            |   |          |  |          |      |  |  |          |   |  | 
|-------------------------------------------------------------------------------------- |  | --------- | ---------- | - | -------- |  | -------- | ---- |  |  | -------- | - |  | 
|                                                                                       |  | 2006      |            |   | 2005     |  |          | 2004 |  |  |         
|[thousands of Canadian dollars]                                                        |  | $         |            |   | $        |  |          | $    |  |  |         
|                                                                                      
|                                                                                       |  | (Restated |            |   | (Restate |  |          | d   
|                                                                                       |  | note 1    |            |   | note 1   |  |          |     
|OPERATING ACTIVITIES[note 20]                                                          |  |           |            |   |          |  |          |      |  |  |          |   |  | 
|Funds flow from operations                                                             |  |           | 847,197    |   |          |  | 728,524  |      |  |  | 654,585  |   |  | 
|Net decrease (increase) in non-cash working capital
    balances related to operations |  |           | (324       | ) |          |  | (86      | )    |  |  | 38,025   |   |  | 
|                                                                                      
|                                                                                       |  |           | 846,873    |   |          |  | 728,438  |      |  |  | 692,610  |   |  | 
|                                                                                      
|INVESTING ACTIVITIES                                                                   |  |           |            |   |          |  |          |      |  |  |          |   |  | 
|Additions to property, plant and equipment [note 15]                                   |  |           | (423,855   | ) |          |  | (336,888 | )    |  |  | (256,136 | ) |  | 
|Additions to equipment costs (net) [note 15]                                           |  |           | (107,929   | ) |          |  | (115,668 | )    |  |  | (132,711 | ) |  | 
|Net (increase) reduction to inventories                                                |  |           | (8,770     | ) |          |  | (1,648   | )    |  |  | 7,898    |   |  | 
|Cable business acquisitions [note 2]                                                   |  |           | (5,829     | ) |          |  |         |      |  |  | (24,298  | ) |  | 
|Proceeds on sale of investments and other assets                                       |  |           | 88,143     |   |          |  | 79,899   |      |  |  | 9,530    |   |  | 
|Costs to terminate IRU                                                                 |  |           |           |   |          |  | (283     | )    |  |  |         |   |  | 
|Acquisition of investments                                                             |  |           | (9,392     | ) |          |  | (5,265   | )    |  |  | (495     | ) |  | 
|Additions to deferred charges [note 7]                                                 |  |           | (21,464    | ) |          |  | (179     | )    |  |  | (11,011  | ) |  | 
|                                                                                      
|                                                                                       |  |           | (489,096   | ) |          |  | (380,032 | )    |  |  | (407,223 | ) |  | 
|                                                                                      
|FINANCING ACTIVITIES                                                                   |  |           |            |   |          |  |          |      |  |  |          |   |  | 
|Increase (decrease) in bank indebtedness                                               |  |           | 20,362     |   |          |  | (4,317   | )    |  |  | 4,317    |   |  | 
|Proceeds on pre-payment of IRU                                                         |  |           | 228        |   |          |  | 1,216    |      |  |  | 5,700    |   |  | 
|Debt retirement costs [note 9]                                                         |  |           |           |   |          |  |         |      |  |  | (1,134   | ) |  | 
|Increase in long-term debt                                                             |  |           | 1,295,000  |   |          |  | 755,566  |      |  |  | 666,873  |   |  | 
|Long-term debt repayments                                                              |  |           | (1,414,067 | ) |          |  | (729,592 | )    |  |  | (859,142 | ) |  | 
|Cost to terminate foreign currency forward contract
    [note 9]                       |  |           | (15,774    | ) |          |  | (12,200  | )    |  |  |         |   |  | 
|Proceeds on bond forward                                                               |  |           | 2,486      |   |          |  |         |      |  |  |         |   |  | 
|Issue of Class B Non-Voting Shares, net of after-tax
    expenses                      |  |           | 2,274      |   |          |  | 228      |      |  |  | 133      |   |  | 
|Purchase of Class B Non-Voting Shares for cancellation
    [note 11]                   |  |           | (146,640   | ) |          |  | (287,063 | )    |  |  | (85,968  | ) |  | 
|Dividends paid on Class A and Class B Non-Voting Shares                                |  |           | (103,335   | ) |          |  | (70,515  | )    |  |  | (36,910  | ) |  | 
|                                                                                      
|                                                                                       |  |           | (359,466   | ) |          |  | (346,677 | )    |  |  | (306,131 | ) |  | 
|                                                                                      
|Effect of currency translation on cash balances and cash
    flows                     |  |           | (24        | ) |          |  | (16      | )    |  |  | (9       | ) |  | 
|                                                                                      
|Increase (decrease) in cash                                                            |  |           | (1,713     | ) |          |  | 1,713    |      |  |  | (20,753  | ) |  | 
|Cash, beginning of the year                                                            |  |           | 1,713      |   |          |  |         |      |  |  | 20,753   |   |  | 
|                                                                                      
|Cash, end of the year                                                                  |  |           |           |   |          |  | 1,713    |      |  |  |         |   |  | 
|                                                                                      

See accompanying notes






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##### Table of Contents



Shaw Communications Inc.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






1.      SIGNIFICANT ACCOUNTING
POLICIES






Basis of consolidation








|                                                |  |  |  |      |  |  |        |   |  |  |        | 
|----------------------------------------------- |  |  |  | ---- |  |  | ------ | - |  |  | ------ | 
|                                                |  |  |  | 2006 |  |  | 2005   |  
|                                                |  |  |  | $    |  |  | $      |  
|                                                | 
|Working capital                                 |  |  |  |      |  |  | 1,103  |   |  |  | 344    | 
|Deferred charges                                |  |  |  |      |  |  | 158    |   |  |  | 185    | 
|Property, plant and equipment                   |  |  |  |      |  |  | 19,495 |   |  |  | 27,293 | 
|                                               
|                                                |  |  |  |      |  |  | 20,756 |   |  |  | 27,822 | 
|Debt                                            |  |  |  |      |  |  | 23,010 |   |  |  | 23,432 | 
|                                               
|Proportionate share of net assets (liabilities) |  |  |  |      |  |  | (2,254 | ) |  |  | 4,390  | 
|                                               





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                     |  |      |        |   |      |  |        |      |  |  |         |  
|---------------------------------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------- | -
|                                                     |  | 2006 |        |   | 2005 |  |        | 2004 | 
|                                                     |  | $    |        |   | $    |  |        | $    | 
|                                                     | 
|Operating, general and administrative expenses       |  |      | 1,829  |   |      |  | 1,464  |      |  |  |        |  
|Amortization                                         |  |      | (714   | ) |      |  | (579   | )    |  |  |        |  
|Interest                                             |  |      | (1,445 | ) |      |  | (1,177 | )    |  |  |        |  
|Other gains                                          |  |      | 2,588  |   |      |  | 7,470  |      |  |  |        |  
|                                                    
|Proportionate share of income before income taxes    |  |      | 2,258  |   |      |  | 7,178  |      |  |  |        |  
|                                                    
|Cash flow provided by operating activities           |  |      | 74     |   |      |  | 1,310  |      |  |  |        |  
|Cash flow provided by (used in) investing activities |  |      | 8,848  |   |      |  | 18,023 |      |  |  | (18,373 | )
|Cash flow provided by (used in) financing activities |  |      | (422   | ) |      |  | (8,637 | )    |  |  | 18,373  |  
|                                                    
|Proportionate share of increase in cash              |  |      | 8,500  |   |      |  | 10,696 |      |  |  |        |  
|                                                    

Investments






Revenue and expenses




|    |                
|--- | ---------------
|(i) | Service revenue









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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS












|     |                                                       
|---- | ------------------------------------------------------
|(ii) | Deferred equipment revenue and deferred equipment cost









|      |                     
|----- | --------------------
|(iii) | Deferred IRU revenue





|     |                  
|---- | -----------------
|(iv) | Advertising costs



Inventories








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Property, plant and equipment




|                                                                                  |  |                       |  | 
|--------------------------------------------------------------------------------- |  | --------------------- |  | 
|Asset                                                                             |  | Estimated useful life |  | 
|                                                                                 
|Cable and telecommunications distribution system                                  |  | 10-15 years           |  | 
|Digital cable terminals and modems                                                |  | 5-7 years             |  | 
|Satellite audio, video and data network equipment and DTH
    receiving equipment |  | 2-10 years            |  | 
|Buildings                                                                         |  | 20-40 years           |  | 
|Data processing                                                                   |  | 4 years               |  | 
|Other                                                                             |  | 3-10 years            |  | 
|                                                                                 



Deferred charges




Intangibles










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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Deferred credits




Interest capitalization




Income taxes




Foreign currency translation














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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Derivative financial instruments






Employee Benefit Plans










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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Stock-based compensation






Earnings per share


Non-Voting


Guarantees




Use of estimates and measurement uncertainty










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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Adoption of recent Canadian accounting pronouncements


(i)     Equity Instruments


period-end


|                                                      |  |                     |         |   |      |  |          |   |  | 
|----------------------------------------------------- |  | ------------------- | ------- | - | ---- |  | -------- | - |  | 
|                                                      |  | Increase (decrease) |         |   |     
|                                                      |  |                     |         |   |     
|                                                      |  | 2006                |         |   | 2005 |  |          |  
|                                                      |  | $                   |         |   | $    |  |          |  
|                                                     
|Consolidated balance sheets:                          |  |                     |         |   |      |  |          |   |  | 
|Deferred charges                                      |  |                     | 793     |   |      |  | 13,247   |   |  | 
|Long-term debt                                        |  |                     | 100,000 |   |      |  | 454,775  |   |  | 
|Future income taxes                                   |  |                     | 267     |   |      |  | 14,033   |   |  | 
|Share capital                                         |  |                     | (98,467 | ) |      |  | (498,194 | ) |  | 
|Deficit                                               |  |                     | 1,007   |   |      |  | (42,633  | ) |  | 
|                                                     
|Decrease in deficit:                                  |  |                     |         |   |      |  |          |   |  | 
|Adjusted for change in accounting policy              |  |                     | (42,633 | ) |      |  | (36,403  | ) |  | 
|Decrease in equity entitlements (net of income taxes) |  |                     | (16,788 | ) |      |  | (31,318  | ) |  | 
|Decrease in gain on redemption of COPrS               |  |                     | 40,484  |   |      |  | 12,803   |   |  | 
|Decrease in gain on settlement of Zero Coupon Loan    |  |                     |        |   |      |  | 4,921    |   |  | 
|Decrease in net income                                |  |                     | 19,944  |   |      |  | 7,364    |   |  | 
|                                                     
|                                                      |  |                     | 1,007   |   |      |  | (42,633  | ) |  | 
|                                                     





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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                                 |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|---------------------------------------------------------------- |  | ------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | 
|                                                                 |  | Increase (decrease) |         |   |     
|                                                                 |  | in net income       |         |   |     
|                                                                 |  |                     |         |   |     
|                                                                 |  | 2006                |         |   | 2005 |  |         | 2004 |  |  |        
|                                                                 |  | $                   |         |   | $    |  |         | $    |  |  |        
|                                                                
|Consolidated statements of income:                               |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|Increase in amortization of deferred charges                     |  |                     | (206    | ) |      |  | (258    | )    |  |  | (312    | ) |  | 
|Increase in interest on long-term debt                           |  |                     | (25,341 | ) |      |  | (48,541 | )    |  |  | (62,302 | ) |  | 
|Increase in foreign exchange gain on unhedged long-term debt     |  |                     | 2,881   |   |      |  | 34,258  |      |  |  | 24,559  |   |  | 
|Increase in debt retirement costs                                |  |                     | (12,248 | ) |      |  | (6,311  | )    |  |  |        |   |  | 
|Decrease in fair value loss on foreign currency forward contract |  |                     | 2,415   |   |      |  |        |      |  |  |        |   |  | 
|Decrease in income tax expense                                   |  |                     | 12,555  |   |      |  | 13,488  |      |  |  | 18,016  |   |  | 
|                                                                
|Decrease in net income                                           |  |                     | (19,944 | ) |      |  | (7,364  | )    |  |  | (20,039 | ) |  | 
|                                                                
|Increase (decrease) in earnings per share:                       |  |                     | (0.01   | ) |      |  | 0.03    |      |  |  | 0.09    |   |  | 
|                                                                

|                         |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|------------------------ |  | ------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | 
|                         |  | Increase (decrease) |         |   |     
|                         |  |                     |         |   |     
|                         |  | 2006                |         |   | 2005 |  |         | 2004 |  |  |        
|                         |  | $                   |         |   | $    |  |         | $    |  |  |        
|                        
|Statement of cash flows: |  |                     |         |   |      |  |         |      |  |  |         |   |  | 
|Operating activities     |  |                     | (20,724 | ) |      |  | (41,468 | )    |  |  | (38,343 | ) |  | 
|Financing activities     |  |                     | 20,724  |   |      |  | 41,468  |      |  |  | 38,343  |   |  | 
|                        



|     |                          
|---- | -------------------------
|(ii) | Non-monetary Transactions





|   |                                       
|-- | --------------------------------------
|2. | BUSINESS ACQUISITIONS AND DIVESTITURES

Cable business acquisitions


|                                       |  |      |       |          |         |  |          |       |  |  |       |  |  | 
|-------------------------------------- |  | ---- | ----- | -------- | ------- |  | -------- | ----- |  |  | ----- |  |  | 
|                                       |  | 2006 |       |          |        
|                                       |  |      |       |          |        
|                                       |  |      |       | Total    |         |  |         
|                                       |  |      |       | Accounts |         |  | purchase |       |  | 
|                                       |  | Cash |       |          | payable |  |          | price |  |  |      
|                                       |  | $    |       |          | $       |  |          | $     |  |  |      
|                                      
|(i)  Cable systems in British Columbia |  |      | 5,829 |          |         |  | 25       |       |  |  | 5,854 |  |  | 
|                                      





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|             |  |      |        |             |         |  |            |        |  |          |        |  |  |  |        |  |  | 
|------------ |  | ---- | ------ | ----------- | ------- |  | ---------- | ------ |  | -------- | ------ |  |  |  | ------ |  |  | 
|             |  | 2004 |        |             |        
|             |  |      |        |             |        
|             |  |      |        | Issuance of |         |  |            |        | 
|             |  |      |        | Class B     |         |  | Total      |        |  |         
|             |  |      |        | Accounts    |         |  | Non-Voting |        |  | purchase |        |  | 
|             |  | Cash |        |             | payable |  |            | Shares |  |          | price  |  |  | 
|             |  | $    |        |             | $       |  |            | $      |  |          | $      |  |  | 
|            
|(ii) Monarch |  |      | 24,122 |             |         |  | 198        |        |  |          | 65,000 |  |  |  | 89,320 |  |  | 
|(iii) Other  |  |      | 176    |             |         |  |           |        |  |          |       |  |  |  | 176    |  |  | 
|            
|             |  |      | 24,298 |             |         |  | 198        |        |  |          | 65,000 |  |  |  | 89,496 |  |  | 
|            



|                                                         |  |      |       |  |      |  |   |      |  |  |        |  |  | 
|-------------------------------------------------------- |  | ---- | ----- |  | ---- |  | - | ---- |  |  | ------ |  |  | 
|                                                         |  | 2006 |       |  | 2005 |  |   | 2004 |  |  |       
|                                                         |  | $    |       |  | $    |  |   | $    |  |  |       
|                                                        
|Identifiable net assets acquired at assigned fair values |  |      |       |  |      |  |   |      |  |  |        |  |  | 
|Property, plant and equipment                            |  |      | 957   |  |      |  |  |      |  |  | 27,146 |  |  | 
|Deferred charges                                         |  |      |      |  |      |  |  |      |  |  | 450    |  |  | 
|Broadcast licenses                                       |  |      | 6,837 |  |      |  |  |      |  |  | 57,854 |  |  | 
|Future income taxes                                      |  |      |      |  |      |  |  |      |  |  | 5,400  |  |  | 
|                                                        
|                                                         |  |      | 7,794 |  |      |  |  |      |  |  | 90,850 |  |  | 
|                                                        
|Working capital deficiency                               |  |      | 129   |  |      |  |  |      |  |  | 1,354  |  |  | 
|Long-term debt                                           |  |      | 218   |  |      |  |  |      |  |  |       |  |  | 
|Future income taxes                                      |  |      | 1,593 |  |      |  |  |      |  |  |       |  |  | 
|                                                        
|                                                         |  |      | 1,940 |  |      |  |  |      |  |  | 1,354  |  |  | 
|                                                        
|Purchase price                                           |  |      | 5,854 |  |      |  |  |      |  |  | 89,496 |  |  | 
|                                                        



|      |                                                                                                                                                                                                                                                                                                                                                                                                                             
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)   | Effective June 30, 2006 and July 31, 2006, the Company
    purchased two cable systems serving approximately 1,800 basic
    subscribers in British Columbia.                                                                                                                                                                                                                                                               
|     
|(ii)  | Effective March 31, 2004, the Company purchased certain
    cable systems of Monarch Cablesystems Ltd.
    (Monarch). The cable systems service approximately
    40,000 basic subscribers in the Medicine Hat
    (Medicine Hat, Taber, Brooks), Canmore (Canmore, Banff,
    Lake Louise) and southern B.C. (Hope, Fernie, Kimberley)
    regions. Monarch is controlled by a Director of the Company (see
    note 18).
|     
|(iii) | Effective September 1, 2003, the Company purchased a cable
    television system serving approximately 200 subscribers in
    the interior of British Columbia from a Director of the Company
    (see note 18).                                                                                                                                                                                                            

Divestiture








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|   |                    
|-- | -------------------
|3. | ACCOUNTS RECEIVABLE

|                                                    |  |      |         |   |      |  |         |   |  | 
|--------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------- | - |  | 
|                                                    |  | 2006 |         |   | 2005 |  |         |  
|                                                    |  | $    |         |   | $    |  |         |  
|                                                   
|Subscriber and trade receivables                    |  |      | 155,583 |   |      |  | 138,082 |   |  | 
|Due from officers and employees                     |  |      | 339     |   |      |  | 170     |   |  | 
|Due from related parties [note 18]                  |  |      | 1,318   |   |      |  | 2,278   |   |  | 
|Miscellaneous receivables including commodity taxes |  |      | 8,981   |   |      |  | 6,067   |   |  | 
|                                                   
|                                                    |  |      | 166,221 |   |      |  | 146,597 |   |  | 
|Less allowance for doubtful accounts                |  |      | (28,079 | ) |      |  | (31,933 | ) |  | 
|                                                   
|                                                    |  |      | 138,142 |   |      |  | 114,664 |   |  | 
|                                                   





|   |            
|-- | -----------
|4. | INVENTORIES

|                     |  |      |        |  |      |  |        |  |  | 
|-------------------- |  | ---- | ------ |  | ---- |  | ------ |  |  | 
|                     |  | 2006 |        |  | 2005 |  |        | 
|                     |  | $    |        |  | $    |  |        | 
|                    
|Subscriber equipment |  |      | 51,203 |  |      |  | 42,799 |  |  | 
|Other                |  |      | 2,791  |  |      |  | 2,425  |  |  | 
|                    
|                     |  |      | 53,994 |  |      |  | 45,224 |  |  | 
|                    





|   |                             
|-- | ----------------------------
|5. | INVESTMENTS AND OTHER ASSETS

|                                                                                     |  |      |        |  |      |  |        |  |  | 
|------------------------------------------------------------------------------------ |  | ---- | ------ |  | ---- |  | ------ |  |  | 
|                                                                                     |  | 2006 |        |  | 2005 |  |        | 
|                                                                                     |  | $    |        |  | $    |  |        | 
|                                                                                    
|Investments, at cost net of write-downs:                                             |  |      |        |  |      |  |        |  |  | 
|Canadian Hydro Developers, Inc. (Canadian Hydro)
    (market value 2005  $58,920) |  |      |       |  |      |  | 24,432 |  |  | 
|Q9 Networks Inc. (Q9 Networks) (market value
    2005  $2,731)                    |  |      |       |  |      |  | 1,074  |  |  | 
|Investments in publicly traded companies (market value
    2006  $9,645)            |  |      | 9,392  |  |      |  |       |  |  | 
|Investments in private technology companies                                          |  |      | 1,295  |  |      |  | 2,126  |  |  | 
|Investments at equity:                                                               |  |      |        |  |      |  |        |  |  | 
|Investments in specialty channel networks                                            |  |      |       |  |      |  | 668    |  |  | 
|Other assets:                                                                        |  |      |        |  |      |  |        |  |  | 
|Employee home relocation mortgages and loans
    [note 18]                           |  |      | 5,446  |  |      |  | 6,246  |  |  | 
|Other                                                                                |  |      | 1,845  |  |      |  | 1,683  |  |  | 
|                                                                                    
|                                                                                     |  |      | 17,978 |  |      |  | 36,229 |  |  | 
|                                                                                    





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Canadian Hydro




Q9 Networks




Write-down of investments


|                          |  |      |     |  |      |  |       |      |  |  |     |  |  | 
|------------------------- |  | ---- | --- |  | ---- |  | ----- | ---- |  |  | --- |  |  | 
|                          |  | 2006 |     |  | 2005 |  |       | 2004 |  |  |    
|                          |  | $    |     |  | $    |  |       | $    |  |  |    
|                         
|Specialty channel network |  |      |    |  |      |  |      |      |  |  | 401 |  |  | 
|Private companies         |  |      | 519 |  |      |  | 1,937 |      |  |  | 250 |  |  | 
|                         
|                          |  |      | 519 |  |      |  | 1,937 |      |  |  | 651 |  |  | 
|                         

Investments at equity






|                           |  |      |     |   |      |  |      |      |  |  |      |   |  | 
|-------------------------- |  | ---- | --- | - | ---- |  | ---- | ---- |  |  | ---- | - |  | 
|                           |  | 2006 |     |   | 2005 |  |      | 2004 |  |  |     
|                           |  | $    |     |   | $    |  |      | $    |  |  |     
|                          
|Specialty channel networks |  |      | (91 | ) |      |  | (346 | )    |  |  | (272 | ) |  | 
|Other                      |  |      | 135 |   |      |  | 60   |      |  |  | 22   |   |  | 
|                          
|                           |  |      | 44  |   |      |  | (286 | )    |  |  | (250 | ) |  | 
|                          

Motorola




Other








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|   |                              
|-- | -----------------------------
|6. | PROPERTY, PLANT AND EQUIPMENT

|                                                                                  |  |      |           |             |              |  |           |       |  |  |           |             |  |              |           |  |       |  |           |  |  |  |           |  |  | 
|--------------------------------------------------------------------------------- |  | ---- | --------- | ----------- | ------------ |  | --------- | ----- |  |  | --------- | ----------- |  | ------------ | --------- |  | ----- |  | --------- |  |  |  | --------- |  |  | 
|                                                                                  |  | 2006 |           |             | 2005        
|                                                                                  |  |      |           |             |             
|                                                                                  |  |      |           | Accumulated |              |  | Net       |       |  |  |           | Accumulated |  |              | Net book  |  |       | 
|                                                                                  |  | Cost |           |             | amortization |  |           | book  |  |  | Cost      |             |  | amortization |           |  | value |  |           | 
|                                                                                  |  | $    |           |             | $            |  |           | value |  |  | $         |             |  | $            |           |  | $     |  |           | 
|                                                                                 
|Cable and telecommunications distribution system                                  |  |      | 3,046,373 |             |              |  | 1,371,765 |       |  |  | 1,674,608 |             |  |              | 2,932,741 |  |       |  | 1,314,268 |  |  |  | 1,618,473 |  |  | 
|Digital cable terminals and modems                                                |  |      | 410,637   |             |              |  | 303,959   |       |  |  | 106,678   |             |  |              | 443,051   |  |       |  | 350,677   |  |  |  | 92,374    |  |  | 
|Satellite audio, video and data network equipment and DTH
    receiving equipment |  |      | 348,119   |             |              |  | 255,277   |       |  |  | 92,842    |             |  |              | 338,204   |  |       |  | 214,925   |  |  |  | 123,279   |  |  | 
|Buildings                                                                         |  |      | 254,048   |             |              |  | 70,068    |       |  |  | 183,980   |             |  |              | 244,172   |  |       |  | 58,478    |  |  |  | 185,694   |  |  | 
|Data processing                                                                   |  |      | 104,900   |             |              |  | 50,883    |       |  |  | 54,017    |             |  |              | 89,902    |  |       |  | 42,911    |  |  |  | 46,991    |  |  | 
|Other assets                                                                      |  |      | 187,323   |             |              |  | 104,953   |       |  |  | 82,370    |             |  |              | 183,856   |  |       |  | 100,743   |  |  |  | 83,113    |  |  | 
|                                                                                 
|                                                                                  |  |      | 4,351,400 |             |              |  | 2,156,905 |       |  |  | 2,194,495 |             |  |              | 4,231,926 |  |       |  | 2,082,002 |  |  |  | 2,149,924 |  |  | 
|Land                                                                              |  |      | 33,112    |             |              |  |          |       |  |  | 33,112    |             |  |              | 32,103    |  |       |  |          |  |  |  | 32,103    |  |  | 
|Assets under construction                                                         |  |      | 22,449    |             |              |  |          |       |  |  | 22,449    |             |  |              | 7,208     |  |       |  |          |  |  |  | 7,208     |  |  | 
|                                                                                 
|                                                                                  |  |      | 4,406,961 |             |              |  | 2,156,905 |       |  |  | 2,250,056 |             |  |              | 4,271,237 |  |       |  | 2,082,002 |  |  |  | 2,189,235 |  |  | 
|                                                                                 





|   |                 
|-- | ----------------
|7. | DEFERRED CHARGES

|                                                           |  |      |         |             |              |  |          |       |  |  |         |             |  |              |          |  |       |  |         |  |  |  |         |  |  | 
|---------------------------------------------------------- |  | ---- | ------- | ----------- | ------------ |  | -------- | ----- |  |  | ------- | ----------- |  | ------------ | -------- |  | ----- |  | ------- |  |  |  | ------- |  |  | 
|                                                           |  | 2006 |         |             | 2005        
|                                                           |  |      |         |             |             
|                                                           |  |      |         | Accumulated |              |  | Net book |       |  |  |         | Accumulated |  |              | Net book |  |       | 
|                                                           |  | Cost |         |             | amortization |  |          | value |  |  | Cost    |             |  | amortization |          |  | value |  |         | 
|                                                           |  | $    |         |             | $            |  |          | $     |  |  | $       |             |  | $            |          |  | $     |  |         | 
|                                                          
|Equipment costs                                            |  |      | 616,627 |             |              |  | 409,060  |       |  |  | 207,567 |             |  |              | 664,599  |  |       |  | 463,293 |  |  |  | 201,306 |  |  | 
|Financing costs and credit facility arrangement fees       |  |      | 66,486  |             |              |  | 29,985   |       |  |  | 36,501  |             |  |              | 76,961   |  |       |  | 43,909  |  |  |  | 33,052  |  |  | 
|Connection and installation costs                          |  |      | 40,214  |             |              |  | 27,388   |       |  |  | 12,826  |             |  |              | 45,377   |  |       |  | 31,266  |  |  |  | 14,111  |  |  | 
|Fair value adjustment on foreign currency forward contract |  |      | 4,900   |             |              |  | 4,900    |       |  |  |        |             |  |              | 4,900    |  |       |  | 3,195   |  |  |  | 1,705   |  |  | 
|Other                                                      |  |      | 5,370   |             |              |  | 356      |       |  |  | 5,014   |             |  |              | 4,542    |  |       |  | 3,470   |  |  |  | 1,072   |  |  | 
|                                                          
|                                                           |  |      | 733,597 |             |              |  | 471,689  |       |  |  | 261,908 |             |  |              | 796,379  |  |       |  | 545,133 |  |  |  | 251,246 |  |  | 
|                                                          







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|   |            
|-- | -----------
|8. | INTANGIBLES

|                                            |                            |                 |           |         |      |  |           |         |  |  | 
|------------------------------------------- | -------------------------- | --------------- | --------- | ------- | ---- |  | --------- | ------- |  |  | 
|                                            |                            | Carrying amount |           |         |     
|                                            |                            |                 |           |         |     
|                                            |                            | 2006            |           |         | 2005 |  |           |        
|                                            |                            | $               |           |         | $    |  |           |        
|                                           
|Broadcast licenses
    Cable systems        |                            |                 | 3,708,352 |         |      |  | 3,701,515 |         |  | 
|                                            | DTH and satellite services |                 |           | 983,132 |      |  |           | 983,132 |  |  | 
|                                           
|                                            |                            |                 | 4,691,484 |         |      |  | 4,684,647 |         |  | 
|Goodwill  non-regulated satellite services |                            |                 | 88,111    |         |      |  | 88,111    |         |  | 
|                                           
|Net book value                              |                            |                 | 4,779,595 |         |      |  | 4,772,758 |         |  | 
|                                           



|                                      |  |                    |           |   |          |  |        |  |  | 
|------------------------------------- |  | ------------------ | --------- | - | -------- |  | ------ |  |  | 
|                                      |  | Broadcast licenses |           |   | Goodwill |  |        | 
|                                      |  | $                  |           |   | $        |  |        | 
|                                     
|August 31, 2004                       |  |                    | 4,685,582 |   |          |  | 88,111 |  |  | 
|Business divestiture [notes 2 and 18] |  |                    | (935      | ) |          |  |       |  |  | 
|                                     
|August 31, 2005                       |  |                    | 4,684,647 |   |          |  | 88,111 |  |  | 
|Business acquisitions [note 2]        |  |                    | 6,837     |   |          |  |       |  |  | 
|                                     
|August 31, 2006                       |  |                    | 4,691,484 |   |          |  | 88,111 |  |  | 
|                                     





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






9.      LONG-TERM DEBT


|                                                                                   |                                    |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |         |            |            |           |           |  |  |         |         |  |  |           |         |  |  | 
|---------------------------------------------------------------------------------- | ---------------------------------- | -------------- | ------------------ | ----------- | -------- |  | ---------- | ---------- | ---------- | ---------- | --------- | ------- | ----------- | -------- | --------- | ------- | ---------- | ---------- | --------- | --------- |  |  | ------- | ------- |  |  | --------- | ------- |  |  | 
|                                                                                   |                                    |                |                    | 2006        |          |  | 2005       |            |            |           
|                                                                                   |                                    |                |                    |             |          |  |            |            |            |           
|                                                                                   |                                    |                |                    | Translated  |          |  |            |            | Translated |            |           |         |             |         
|                                                                                   |                                    |                |                    | at year end |          |  | Adjustment |            |            | Translated |           |         | at year end |          |           |         |            | Translated |           |           | 
|                                                                                   |                                    | Effective      |                    |             | exchange |  |            | for hedged |            |            | at hedged |         |             | exchange |           |         | Adjustment |            |           | at hedged |  |  |        
|                                                                                   |                                    | interest rates |                    |             | rate     |  |            | debt(1)    |            |            | rate      |         |             | rate     |           |         | for hedged |            |           | rate      |  |  |        
|                                                                                   |                                    | %              |                    |             | $        |  |            | $          |            |            | $         |         |             | $        |           |         | debt(1)    |            |           | $         |  |  |        
|                                                                                  
|Corporate                                                                          |                                    |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |         |            |            |           |           |  |  |         |         |  |  |           |         |  | 
|Bank loans                                                                         |                                    |                | Fixed and variable |             |          |  | 280,000    |            |            |            |          |         |             |          | 280,000   |         |            |            | 799,023   |           |  |  |        |         |  |  | 799,023   |         |  | 
|Senior notes                                                                      |                                    |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |         |            |            |           |           |  |  |         |         |  |  |           |         |  | 
|                                                                                   | Due November 16, 2012              |                |                    | 6.11        |          |  |            | 450,000    |            |            |           |        |             |          |           | 450,000 |            |            |           |          |  |  |         |        |  |  |           |        |  |  | 
|                                                                                   | Due May 9, 2016                    |                |                    | 6.34        |          |  |            | 300,000    |            |            |           |        |             |          |           | 300,000 |            |            |           |          |  |  |         |        |  |  |           |        |  |  | 
|                                                                                   | Due October 17, 2007               |                |                    | 7.40        |          |  |            | 296,760    |            |            |           |        |             |          |           | 296,760 |            |            |           | 296,760   |  |  |         |        |  |  |           | 296,760 |  |  | 
|                                                                                   | US $440,000 due April 11, 2010     |                |                    | 7.88        |          |  |            | 486,332    |            |            |           | 156,288 |             |          |           | 642,620 |            |            |           | 522,324   |  |  |         | 120,296 |  |  |           | 642,620 |  |  | 
|                                                                                   | US $225,000 due April 6, 2011      |                |                    | 7.68        |          |  |            | 248,693    |            |            |           | 107,145 |             |          |           | 355,838 |            |            |           | 267,098   |  |  |         | 88,740  |  |  |           | 355,838 |  |  | 
|                                                                                   | US $300,000 due December 15, 2011  |                |                    | 7.61        |          |  |            | 331,590    |            |            |           | 145,260 |             |          |           | 476,850 |            |            |           | 356,130   |  |  |         | 120,720 |  |  |           | 476,850 |  |  | 
|                                                                                   | Due November 20, 2013              |                |                    | 7.50        |          |  |            | 350,000    |            |            |           |        |             |          |           | 350,000 |            |            |           | 350,000   |  |  |         |        |  |  |           | 350,000 |  |  | 
|COPrS                                                                             |                                    |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |         |            |            |           |           |  |  |         |         |  |  |           |         |  | 
|                                                                                   | Due September 30, 2027             |                |                    | 8.54        |          |  |            | 100,000    |            |            |           |        |             |          |           | 100,000 |            |            |           | 100,000   |  |  |         |        |  |  |           | 100,000 |  |  | 
|                                                                                   | Due September 28, 2049             |                |                    | 8.875       |          |  |            |           |            |            |           |        |             |          |           |        |            |            |           | 150,000   |  |  |         |        |  |  |           | 150,000 |  |  | 
|                                                                                   | US $172,500 due September 30, 2097 |                |                    | 8.5         |          |  |            |           |            |            |           |        |             |          |           |        |            |            |           | 204,775   |  |  |         |        |  |  |           | 204,775 |  |  | 
|                                                                                  
|                                                                                   |                                    |                |                    |             |          |  | 2,843,375  |            |            |            | 408,693   |         |             |          | 3,252,068 |         |            |            | 3,046,110 |           |  |  | 329,756 |         |  |  | 3,375,866 |         |  | 
|                                                                                  
|Other subsidiaries and entities                                                    |                                    |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |         |            |            |           |           |  |  |         |         |  |  |           |         |  | 
|Videon CableSystems Inc. 8.15% Senior Debentures
    Series A due April 26, 2010 |                                    |                | 7.63               |             |          |  | 130,000    |            |            |            |          |         |             |          | 130,000   |         |            |            | 130,000   |           |  |  |        |         |  |  | 130,000   |         |  | 
|Burrard Landing Lot 2 Holdings Partnership                                         |                                    |                | 6.31               |             |          |  | 23,010     |            |            |            |          |         |             |          | 23,010    |         |            |            | 23,432    |           |  |  |        |         |  |  | 23,432    |         |  | 
|                                                                                  
|                                                                                   |                                    |                |                    |             |          |  | 153,010    |            |            |            |          |         |             |          | 153,010   |         |            |            | 153,432   |           |  |  |        |         |  |  | 153,432   |         |  | 
|                                                                                  
|Total consolidated debt                                                            |                                    |                |                    |             |          |  | 2,996,385  |            |            |            | 408,693   |         |             |          | 3,405,078 |         |            |            | 3,199,542 |           |  |  | 329,756 |         |  |  | 3,529,298 |         |  | 
|Less current portion                                                               |                                    |                |                    |             |          |  | 449        |            |            |            |          |         |             |          | 449       |         |            |            | 51,380    |           |  |  |        |         |  |  | 51,380    |         |  | 
|                                                                                  
|                                                                                   |                                    |                |                    |             |          |  | 2,995,936  |            |            |            | 408,693   |         |             |          | 3,404,629 |         |            |            | 3,148,162 |           |  |  | 329,756 |         |  |  | 3,477,918 |         |  | 
|                                                                                  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Foreign denominated long-term debt is translated at the year-end
    rate. If the rate of translation was adjusted to reflect the
    hedged rates of the Companys cross-currency interest rate
    agreements (which fix the liability for interest and principal),
    long-term debt would increase by $408,693 (2005 
    $329,756) representing the amount of the corresponding deferred
    foreign exchange gain in deferred credits (see note 10).







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Corporate


Bank loans








Senior notes














---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|               |         |             |  |               |      |               |  |  |      |  |  |  |        |  |  | 
|-------------- | ------- | ----------- |  | ------------- | ---- | ------------- |  |  | ---- |  |  |  | ------ |  |  | 
|US Senior      |         |             |  | Effective     |      |               |  | 
|note principal |         | Coupon rate |  | interest rate |      | Exchange rate |  | 
|$              |         | %           |  | %             |      | Cdn $ vs US $ |  | 
|              
|               | 440,000 |             |  |               | 8.25 |               |  |  | 7.88 |  |  |  | 1.4605 |  |  | 
|               | 225,000 |             |  |               | 7.25 |               |  |  | 7.68 |  |  |  | 1.5815 |  |  | 
|               | 300,000 |             |  |               | 7.20 |               |  |  | 7.61 |  |  |  | 1.5895 |  |  | 
|              

COPrS






Shaw Satellite Services Inc. (Satellite
Services)




Other subsidiaries and entities


Videon CableSystems Inc. (Videon)










---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Burrard Landing Lot 2 Holdings Partnership




Debt retirement costs


COPrS








Senior notes




Bank Loans








---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Debt covenants




Long-term debt repayments




|           |  |               |           |               |              |  |           | 
|---------- |  | ------------- | --------- | ------------- | ------------ |  | --------- | 
|           |  |               |           | Exchange rate |             
|           |  | At year-end   |           |               | adjusted for | 
|           |  | exchange rate |           |               | hedged rates | 
|           |  | $             |           |               | $            | 
|           | 
|2007       |  |               | 449       |               |              |  | 449       | 
|2008       |  |               | 297,238   |               |              |  | 297,238   | 
|2009       |  |               | 509       |               |              |  | 509       | 
|2010       |  |               | 616,874   |               |              |  | 773,162   | 
|2011       |  |               | 529,269   |               |              |  | 636,414   | 
|Thereafter |  |               | 1,552,046 |               |              |  | 1,697,306 | 
|          
|           |  |               | 2,996,385 |               |              |  | 3,405,078 | 
|          



|    |                 
|--- | ----------------
|10. | DEFERRED CREDITS

|                                                            |  |        |           |             |              |  |          |       |  |  |           |             |  |              |           |  |       |  |         |  |  |  |           |  |  | 
|----------------------------------------------------------- |  | ------ | --------- | ----------- | ------------ |  | -------- | ----- |  |  | --------- | ----------- |  | ------------ | --------- |  | ----- |  | ------- |  |  |  | --------- |  |  | 
|                                                            |  | 2006   |           |             | 2005         |  |          |      
|                                                            |  |        |           |             |              |  |          |      
|                                                            |  |        |           | Accumulated |              |  | Net book |       |  |  |           | Accumulated |  |              | Net book  |  |       | 
|                                                            |  | Amount |           |             | amortization |  |          | value |  |  | Amount    |             |  | amortization |           |  | value |  |         | 
|                                                            |  | $      |           |             | $            |  |          | $     |  |  | $         |             |  | $            |           |  | $     |  |         | 
|                                                           
|IRU prepayments                                             |  |        | 629,119   |             |              |  | 69,064   |       |  |  | 560,055   |             |  |              | 629,005   |  |       |  | 56,518  |  |  |  | 572,487   |  |  | 
|Foreign exchange gains on translating hedged long-term debt |  |        | 408,693   |             |              |  |         |       |  |  | 408,693   |             |  |              | 329,756   |  |       |  |        |  |  |  | 329,756   |  |  | 
|Equipment revenue                                           |  |        | 277,317   |             |              |  | 165,972  |       |  |  | 111,345   |             |  |              | 263,295   |  |       |  | 174,509 |  |  |  | 88,786    |  |  | 
|Connection fee and installation revenue                     |  |        | 42,797    |             |              |  | 28,600   |       |  |  | 14,197    |             |  |              | 46,061    |  |       |  | 31,437  |  |  |  | 14,624    |  |  | 
|Fair value adjustment on debt assumed on acquisition        |  |        | 6,084     |             |              |  | 3,684    |       |  |  | 2,400     |             |  |              | 6,084     |  |       |  | 3,014   |  |  |  | 3,070     |  |  | 
|Bond forward proceeds                                       |  |        | 2,486     |             |              |  | 281      |       |  |  | 2,205     |             |  |              |          |  |       |  |        |  |  |  |          |  |  | 
|Deposit on future fiber purchase                            |  |        | 2,000     |             |              |  |         |       |  |  | 2,000     |             |  |              | 2,000     |  |       |  |        |  |  |  | 2,000     |  |  | 
|                                                           
|                                                            |  |        | 1,368,496 |             |              |  | 267,601  |       |  |  | 1,100,895 |             |  |              | 1,276,201 |  |       |  | 265,478 |  |  |  | 1,010,723 |  |  | 
|                                                           









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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








11.     SHARE CAPITAL


Authorized






|                     |             |  |      |  |             |      |  |                           |      |  |           |  |  |  |           |  |  | 
|-------------------- | ----------- |  | ---- |  | ----------- | ---- |  | ------------------------- | ---- |  | --------- |  |  |  | --------- |  |  | 
|                     |             |  |      |  |             | 2006 |  |                           | 2005 |  |           | 
|                     |             |  |      |  |             | $    |  |                           | $    |  |           | 
|                    
|Number of securities |             |  |      |  |            
|                     |             |  |      |  |            
|2006                 |             |  | 2005 |  |             |      |  |                          
|                     |             |  |      |  |             |      |  |                          
|                     | 11,291,932  |  |      |  | 11,344,932  |      |  | Class A Shares            |      |  | 2,475     |  |  |  | 2,487     |  |  | 
|                     | 203,649,904 |  |      |  | 208,634,005 |      |  | Class B Non-Voting Shares |      |  | 1,974,491 |  |  |  | 2,021,686 |  |  | 
|                    
|                     | 214,941,836 |  |      |  | 219,978,937 |      |  |                           |      |  | 1,976,966 |  |  |  | 2,024,173 |  |  | 
|                    

Class A and Class B Non-Voting Shares








---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                         |  |                |            |                    |        |  |       |        |  |  |             |   |  |  |           |   |  | 
|---------------------------------------- |  | -------------- | ---------- | ------------------ | ------ |  | ----- | ------ |  |  | ----------- | - |  |  | --------- | - |  | 
|                                         |  |                |            | Class B Non-Voting
|                                         |  | Class A Shares |            |                    | Shares
|                                         |  |                |            |                    |       
|                                         |  | Number         |            |                    | $      |  |       | Number |  |  | $           |   |  | 
|                                        
|August 31, 2003                          |  |                | 11,360,432 |                    |        |  | 2,491 |        |  |  | 220,496,092 |   |  |  | 2,107,464 |   |  | 
|Class A Share conversions                |  |                | (500       | )                  |        |  | (1    | )      |  |  | 500         |   |  |  | 1         |   |  | 
|Purchase of shares for cancellation      |  |                |           |                    |        |  |      |        |  |  | (4,134,000  | ) |  |  | (39,655   | ) |  | 
|Stock option plans exercises             |  |                |           |                    |        |  |      |        |  |  | 9,000       |   |  |  | 164       |   |  | 
|Issued in respect of Monarch acquisition |  |                |           |                    |        |  |      |        |  |  | 3,737,780   |   |  |  | 65,000    |   |  | 
|Share issue costs                        |  |                |           |                    |        |  |      |        |  |  |            |   |  |  | (31       | ) |  | 
|                                        
|August 31, 2004                          |  |                | 11,359,932 |                    |        |  | 2,490 |        |  |  | 220,109,372 |   |  |  | 2,132,943 |   |  | 
|Class A Share conversions                |  |                | (15,000    | )                  |        |  | (3    | )      |  |  | 15,000      |   |  |  | 3         |   |  | 
|Purchase of shares for cancellation      |  |                |           |                    |        |  |      |        |  |  | (11,505,500 | ) |  |  | (111,488  | ) |  | 
|Stock option plans exercises             |  |                |           |                    |        |  |      |        |  |  | 15,133      |   |  |  | 228       |   |  | 
|                                        
|August 31, 2005                          |  |                | 11,344,932 |                    |        |  | 2,487 |        |  |  | 208,634,005 |   |  |  | 2,021,686 |   |  | 
|Class A Share Conversions                |  |                | (53,000    | )                  |        |  | (12   | )      |  |  | 53,000      |   |  |  | 12        |   |  | 
|Purchase of shares for cancellation      |  |                |           |                    |        |  |      |        |  |  | (5,119,900  | ) |  |  | (49,584   | ) |  | 
|Stock option plans exercises             |  |                |           |                    |        |  |      |        |  |  | 82,799      |   |  |  | 2,377     |   |  | 
|                                        
|August 31, 2006                          |  |                | 11,291,932 |                    |        |  | 2,475 |        |  |  | 203,649,904 |   |  |  | 1,974,491 |   |  | 
|                                        



Stock option plan








---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                 |  |        |            |          |      |  |       |        |          |  |            |   |  |          |       |  |   |  |           |   |  |  |       |  |  | 
|-------------------------------- |  | ------ | ---------- | -------- | ---- |  | ----- | ------ | -------- |  | ---------- | - |  | -------- | ----- |  | - |  | --------- | - |  |  | ----- |  |  | 
|                                 |  | 2006   |            |          | 2005 |  |       | 2004   |          |  |           
|                                 |  |        |            |          |      |  |       |        |          |  |           
|                                 |  |        |            | Weighted |      |  |       |        | Weighted |  |            |   |  | Weighted |       |  |  
|                                 |  |        |            | average  |      |  |       |        | average  |  |            |   |  | average  |       |  |  
|                                 |  |        |            | exercise |      |  |       |        | exercise |  |            |   |  | exercise |       |  |  
|                                 |  |        |            | price    |      |  |       |        | price    |  |            |   |  | price    |       |  |  
|                                 |  | Shares |            |          | $    |  |       | Shares |          |  | $          |   |  | Shares   |       |  | $ |  |           |  
|                                
|Outstanding at beginning of year |  |        | 8,452,250  |          |      |  | 32.59 |        |          |  | 7,847,000  |   |  |          | 32.55 |  |   |  | 7,607,500 |   |  |  | 32.58 |  |  | 
|Granted                          |  |        | 2,769,500  |          |      |  | 32.62 |        |          |  | 1,783,000  |   |  |          | 32.62 |  |   |  | 1,216,750 |   |  |  | 32.49 |  |  | 
|Forfeited                        |  |        | (1,608,000 | )        |      |  | 32.64 |        |          |  | (1,177,750 | ) |  |          | 32.38 |  |   |  | (977,250  | ) |  |  | 32.68 |  |  | 
|Exercised                        |  |        | (54,949    | )        |      |  | 31.83 |        |          |  |           |   |  |          |      |  |   |  |          |   |  |  |      |  |  | 
|                                
|Outstanding at end of year       |  |        | 9,558,801  |          |      |  | 32.60 |        |          |  | 8,452,250  |   |  |          | 32.59 |  |   |  | 7,847,000 |   |  |  | 32.55 |  |  | 
|                                



|                |  |                     |           |  |                     |  |      |          |  |  |               |  |  |          |           |  |  |  |       |  |  | 
|--------------- |  | ------------------- | --------- |  | ------------------- |  | ---- | -------- |  |  | ------------- |  |  | -------- | --------- |  |  |  | ----- |  |  | 
|                |  | Options outstanding |           |  | Options exercisable |  |      |         
|                |  |                     |           |  |                     |  |      |         
|                |  | Number              |           |  | Weighted            |  |      | Weighted |  |  | Number        |  |  | Weighted |           |  | 
|                |  | outstanding at      |           |  | average             |  |      | average  |  |  | exercisable   |  |  | average  |           |  | 
|                |  | August 31,          |           |  | remaining           |  |      | exercise |  |  | at August 31, |  |  | exercise |           |  | 
|Range of prices |  | 2006                |           |  | contractual life    |  |      | price    |  |  | 2006          |  |  | price    |           |  | 
|               
|$17.37          |  |                     | 10,000    |  |                     |  | 7.14 |          |  |  | 17.37         |  |  |          | 5,000     |  |  |  | 17.37 |  |  | 
|$29.70  $34.70 |  |                     | 9,548,801 |  |                     |  | 6.23 |          |  |  | 32.62         |  |  |          | 5,959,802 |  |  |  | 32.61 |  |  | 
|               





|                                    |  |      |         |  |      |  |         |      |  |  |        |  |  | 
|----------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------ |  |  | 
|                                    |  | 2006 |         |  | 2005 |  |         | 2004 |  |  |       
|                                    |  | $    |         |  | $    |  |         | $    |  |  |       
|                                   
|Net income                          |  |      | 458,250 |  |      |  | 153,221 |      |  |  | 70,870 |  |  | 
|Fair value of stock option grants   |  |      | 1,870   |  |      |  | 5,772   |      |  |  | 16,696 |  |  | 
|                                   
|Proforma net income                 |  |      | 456,380 |  |      |  | 147,449 |      |  |  | 54,174 |  |  | 
|Proforma basic earnings per share   |  |      | 2.10    |  |      |  | 0.65    |      |  |  | 0.23   |  |  | 
|Proforma diluted earnings per share |  |      | 2.08    |  |      |  | 0.65    |      |  |  | 0.23   |  |  | 
|                                   







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                                    |  |      |         |  |      |  |         |      |  |  |         |  |  | 
|--------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | 
|                                                                                                    |  | 2006 |         |  | 2005 |  |         | 2004 |  |  |        
|                                                                                                   
|Dividend yield                                                                                      |  |      | 1.91%   |  |      |  | 1.47%   |      |  |  | 0.94%   |  |  | 
|Risk-free interest rate                                                                             |  |      | 3.98%   |  |      |  | 3.54%   |      |  |  | 3.70%   |  |  | 
|Expected life of options                                                                            |  |      | 4 years |  |      |  | 4 years |      |  |  | 4 years |  |  | 
|Expected volatility factor of the future expected market
    price
    of Class B Non-Voting Shares |  |      | 20.4%   |  |      |  | 36.7%   |      |  |  | 39.7%   |  |  | 
|                                                                                                   



Other stock options






Warrants






Dividends








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










Share transfer restriction




Earnings per share




|                                                                                                               |         |      |             |      |      |  |             |      |  |  |             |      |  |  | 
|-------------------------------------------------------------------------------------------------------------- | ------- | ---- | ----------- | ---- | ---- |  | ----------- | ---- |  |  | ----------- | ---- |  |  | 
|                                                                                                               |         | 2006 |             |      | 2005 |  |             | 2004 |  |  |            
|                                                                                                               |         | $    |             |      | $    |  |             | $    |  |  |            
|                                                                                                              
|Net income                                                                                                     |         |      | 458,250     |      |      |  | 153,221     |      |  |  | 70,870      |      |  | 
|                                                                                                              
|Earnings per share                                                                                             |         |      |             |      |      |  |             |      |  |  |             |      |  | 
|                                                                                                               | Basic   |      |             | 2.11 |      |  |             | 0.67 |  |  |             | 0.31 |  |  | 
|                                                                                                               | Diluted |      |             | 2.09 |      |  |             | 0.67 |  |  |             | 0.31 |  |  | 
|                                                                                                              
|Weighted average number of Class A and Class B
    Non-Voting Shares used as denominator in above calculations |         |      | 217,666,000 |      |      |  | 228,210,000 |      |  |  | 231,605,000 |      |  | 
|                                                                                                              











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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                                                   
|--- | --------------------------------------------------
|12. | FOREIGN CURRENCY CUMULATIVE TRANSLATION ADJUSTMENT

|                                               |  |      |     |   |      |  |     |   |  | 
|---------------------------------------------- |  | ---- | --- | - | ---- |  | --- | - |  | 
|                                               |  | 2006 |     |   | 2005 |  |     |  
|                                               |  | $    |     |   | $    |  |     |  
|                                              
|Balance, beginning of year                     |  |      | 365 |   |      |  | 444 |   |  | 
|Current years deferred translation adjustment |  |      | (35 | ) |      |  | (79 | ) |  | 
|                                              
|Balance, end of year                           |  |      | 330 |   |      |  | 365 |   |  | 
|                                              



|    |                                         
|--- | ----------------------------------------
|13. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

|                                          |  |      |         |  |      |  |         |  |  | 
|----------------------------------------- |  | ---- | ------- |  | ---- |  | ------- |  |  | 
|                                          |  | 2006 |         |  | 2005 |  |         | 
|                                          |  | $    |         |  | $    |  |         | 
|                                         
|Trade                                     |  |      | 63,374  |  |      |  | 48,368  |  |  | 
|Accrued liabilities                       |  |      | 188,242 |  |      |  | 163,150 |  |  | 
|Accrued network fees                      |  |      | 116,077 |  |      |  | 110,539 |  |  | 
|Interest                                  |  |      | 75,412  |  |      |  | 67,894  |  |  | 
|Related parties [note 18]                 |  |      | 16,926  |  |      |  | 16,994  |  |  | 
|Current portion of pension plan liability |  |      | 1,088   |  |      |  | 1,088   |  |  | 
|                                         
|                                          |  |      | 461,119 |  |      |  | 408,033 |  |  | 
|                                         



|    |             
|--- | ------------
|14. | INCOME TAXES



|                                |                                |      |           |           |      |  |           |           |  |  | 
|------------------------------- | ------------------------------ | ---- | --------- | --------- | ---- |  | --------- | --------- |  |  | 
|                                |                                | 2006 |           |           | 2005 |  |           |          
|                                |                                | $    |           |           | $    |  |           |          
|                               
|Future income tax liabilities:  |                                |      |           |           |      |  |           |           |  | 
|                                | Property, plant and equipment  |      |           | 101,670   |      |  |           | 137,456   |  |  | 
|                                | Broadcast licenses             |      |           | 1,012,448 |      |  |           | 1,157,966 |  |  | 
|                                | Deferred charges               |      |           |          |      |  |           | 10,870    |  |  | 
|                                | Partnership income             |      |           | 259,475   |      |  |           | 263,904   |  |  | 
|                               
|                                |                                |      | 1,373,593 |           |      |  | 1,570,196 |           |  | 
|                               
|Future income tax assets:       |                                |      |           |           |      |  |           |           |  | 
|                                | Non-capital loss carryforwards |      |           | 381,756   |      |  |           | 497,663   |  |  | 
|                                | Deferred charges               |      |           | 5,335     |      |  |           |          |  |  | 
|                                | Investments                    |      |           | 1,564     |      |  |           | 3,684     |  |  | 
|                               
|                                |                                |      | 388,655   |           |      |  | 501,347   |           |  | 
|                               
|Net future income tax liability |                                |      | 984,938   |           |      |  | 1,068,849 |           |  | 
|                               





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS












|                                              |                                                                                                                      |      |         |          |      |  |        |        |   |  |        |         |   |  | 
|--------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ---- | ------- | -------- | ---- |  | ------ | ------ | - |  | ------ | ------- | - |  | 
|                                              |                                                                                                                      | 2006 |         |          | 2005 |  |        | 2004   |   |  |       
|                                              |                                                                                                                      | $    |         |          | $    |  |        | $      |   |  |       
|                                             
|Current statutory income tax rate             |                                                                                                                      |      | 33.75%  |          |      |  | 35.5%  |        |   |  | 35.5%  |         |   | 
|                                             
|Income tax expense at current statutory rates |                                                                                                                      |      | 126,409 |          |      |  | 83,031 |        |   |  | 45,382 |         |   | 
|Increase (decrease) in taxes resulting from:  |                                                                                                                      |      |         |          |      |  |        |        |   |  |        |         |   | 
|                                              | Large corporations tax                                                                                               |      |         | 1,859    |      |  |        | 5,730  |   |  |        | 6,249   |   |  | 
|                                              | Non-taxable portion of foreign exchange gains or losses and
    amounts on sale/write-down of assets and investments |      |         | (9,077   | )    |  |        | (9,903 | ) |  |        | (2,851  | ) |  | 
|                                              | Valuation allowance                                                                                                  |      |         | (29,091  | )    |  |        |       |   |  |        | 22,932  |   |  | 
|                                              | Effect of future tax rate reductions                                                                                 |      |         | (175,752 | )    |  |        |       |   |  |        | (14,089 | ) |  | 
|                                              | Originating temporary differences recorded at future tax rates
    expected to be in effect when realized            |      |         | 750      |      |  |        | (67    | ) |  |        | (610    | ) |  | 
|                                              | Other                                                                                                                |      |         | 1,240    |      |  |        | 1,591  |   |  |        | (297    | ) |  | 
|                                             
|Income tax expense (recovery)                 |                                                                                                                      |      | (83,662 | )        |      |  | 80,382 |        |   |  | 56,716 |         |   | 
|                                             



|                                                                                             |  |      |          |   |      |  |        |      |  |  |        |  |  | 
|-------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- |  | ------ | ---- |  |  | ------ |  |  | 
|                                                                                             |  | 2006 |          |   | 2005 |  |        | 2004 |  |  |       
|                                                                                             |  | $    |          |   | $    |  |        | $    |  |  |       
|                                                                                            
|Current tax expense                                                                          |  |      | 1,859    |   |      |  | 5,744  |      |  |  | 4,618  |  |  | 
|Future income tax expense related to origination and reversal of
    temporary differences   |  |      | 119,322  |   |      |  | 74,638 |      |  |  | 43,255 |  |  | 
|Future income tax expense (recovery) resulting from rate
    changes and valuation allowance |  |      | (204,843 | ) |      |  |       |      |  |  | 8,843  |  |  | 
|                                                                                            
|Income tax expense (recovery)                                                                |  |      | (83,662  | ) |      |  | 80,382 |      |  |  | 56,716 |  |  | 
|                                                                                            



|    |                             
|--- | ----------------------------
|15. | BUSINESS SEGMENT INFORMATION







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|----------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | ------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                      |  | 2006  |           |           |    
|                                                                                                      |  |       |           |           |    
|                                                                                                      |  |       |           | Satellite |     |  |         |                    | 
|                                                                                                      |  |       |           |           |     |  |         |                    | 
|                                                                                                      |  | Cable |           |           | DTH |  |         | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                      |  | $     |           |           | $   |  |         | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                     
|Service revenue  total                                                                               |  |       | 1,811,579 |           |     |  | 573,100 |                    |  |  | 86,434  |   |  |       | 659,534   |   |  |  | 2,471,113 |   |  | 
|Inter segment                                                                                         |  |       | (2,996    | )         |     |  | (5,293  | )                  |  |  | (3,540  | ) |  |       | (8,833    | ) |  |  | (11,829   | ) |  | 
|                                                                                                     
|                                                                                                      |  |       | 1,808,583 |           |     |  | 567,807 |                    |  |  | 82,894  |   |  |       | 650,701   |   |  |  | 2,459,284 |   |  | 
|                                                                                                     
|Service operating income before amortization                                                          |  |       | 857,466   |           |     |  | 175,401 |                    |  |  | 45,050  |   |  |       | 220,451   |   |  |  | 1,077,917 |   |  | 
|                                                                                                     
|Service operating income as % of external revenue                                                     |  |       | 47.4%     |           |     |  | 30.9%   |                    |  |  | 54.3%   |   |  |       | 33.9%     |   |  |  | 43.8%     |   |  | 
|                                                                                                     
|Segment
    interest(1)                                                                               |  |       | 210,758   |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 42,100    |   |  |  | 252,858   |   |  | 
|Burrard Landing Lot 2 Holdings Partnership                                                            |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 1,445     |   |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total interest                                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 254,303   |   |  | 
|                                                                                                     
|Cash
    taxes(1)                                                                                     |  |       | 1,761     |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 98        |   |  |  | 1,859     |   |  | 
|                                                                                                     
|Segment assets                                                                                        |  |       | 5,891,103 |           |     |  | 859,941 |                    |  |  | 536,044 |   |  |       | 1,395,985 |   |  |  | 7,287,088 |   |  | 
|                                                                                                      |  |       |           |           |     |  |        
|Corporate assets                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 235,455   |   |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total assets                                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 7,522,543 |   |  | 
|                                                                                                     
|Capital expenditures and equipment subsidies by segment                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                  |  |       | 432,156   |           |     |  | 5,598   |                    |  |  | 12,072  |   |  |       | 17,670    |   |  |  | 449,826   |   |  | 
|Equipment subsidies                                                                                   |  |       | 19,393    |           |     |  | 88,536  |                    |  |  |        |   |  |       | 88,536    |   |  |  | 107,929   |   |  | 
|                                                                                                     
|                                                                                                      |  |       | 451,549   |           |     |  | 94,134  |                    |  |  | 12,072  |   |  |       | 106,206   |   |  |  | 557,755   |   |  | 
|                                                                                                     
|Reconciliation to Consolidated Statements of Cash Flows                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                            |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 423,855   |   |  | 
|Additions to equipment costs (net)                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 107,929   |   |  | 
|                                                                                                     
|Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 531,784   |   |  | 
|Decrease in working capital related to capital expenditures                                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 31,343    |   |  | 
|Less: Partnership capital
    expenditures(2)                                                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (1,803    | ) |  | 
|Less: IRU
    prepayments(3)                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (281      | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (3,288    | ) |  | 
|                                                                                                     
|Total capital expenditures and equipment subsidies reported by
    segments                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 557,755   |   |  | 
|                                                                                                     







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|----------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | ------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                      |  | 2005  |           |           |    
|                                                                                                      |  |       |           |           |    
|                                                                                                      |  |       |           | Satellite |     |  |         |                    | 
|                                                                                                      |  |       |           |           |     |  |         |                    | 
|                                                                                                      |  | Cable |           |           | DTH |  |         | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                      |  | $     |           |           | $   |  |         | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                     
|Service revenue  total                                                                               |  |       | 1,601,126 |           |     |  | 535,333 |                    |  |  | 90,152  |   |  |       | 625,485   |   |  |  | 2,226,611 |   |  | 
|Inter segment                                                                                         |  |       | (2,757    | )         |     |  | (4,604  | )                  |  |  | (9,440  | ) |  |       | (14,044   | ) |  |  | (16,801   | ) |  | 
|                                                                                                     
|                                                                                                      |  |       | 1,598,369 |           |     |  | 530,729 |                    |  |  | 80,712  |   |  |       | 611,441   |   |  |  | 2,209,810 |   |  | 
|                                                                                                     
|Service operating income before amortization                                                          |  |       | 797,583   |           |     |  | 141,687 |                    |  |  | 42,723  |   |  |       | 184,410   |   |  |  | 981,993   |   |  | 
|                                                                                                     
|Service operating income as % of external revenue                                                     |  |       | 49.9%     |           |     |  | 26.7%   |                    |  |  | 52.9%   |   |  |       | 30.2%     |   |  |  | 44.4%     |   |  | 
|                                                                                                     
|Segment
    interest(1)                                                                               |  |       | 220,388   |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 41,384    |   |  |  | 261,772   |   |  | 
|Burrard Landing Lot 2 Holdings Partnership                                                            |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 1,177     |   |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total interest                                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 262,949   |   |  | 
|                                                                                                     
|Cash
    taxes(1)                                                                                     |  |       | 5,410     |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 334       |   |  |  | 5,744     |   |  | 
|                                                                                                     
|Segment assets                                                                                        |  |       | 5,788,468 |           |     |  | 877,397 |                    |  |  | 534,278 |   |  |       | 1,411,675 |   |  |  | 7,200,143 |   |  | 
|                                                                                                      |  |       |           |           |     |  |        
|Corporate assets                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 230,042   |   |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total assets                                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 7,430,185 |   |  | 
|                                                                                                     
|Capital expenditures and equipment subsidies by segment                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                  |  |       | 313,056   |           |     |  | 2,049   |                    |  |  | 6,385   |   |  |       | 8,434     |   |  |  | 321,490   |   |  | 
|Equipment subsidies                                                                                   |  |       | 30,112    |           |     |  | 85,556  |                    |  |  |        |   |  |       | 85,556    |   |  |  | 115,668   |   |  | 
|                                                                                                     
|                                                                                                      |  |       | 343,168   |           |     |  | 87,605  |                    |  |  | 6,385   |   |  |       | 93,990    |   |  |  | 437,158   |   |  | 
|                                                                                                     
|Reconciliation to Consolidated Statements of Cash Flows                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                            |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 336,888   |   |  | 
|Additions to equipment costs (net)                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 115,668   |   |  | 
|                                                                                                     
|Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 452,556   |   |  | 
|Decrease in working capital related to capital expenditures                                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 4,378     |   |  | 
|Less: Partnership capital
    expenditures(2)                                                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (15,045   | ) |  | 
|Less: IRU
    prepayments(3)                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (1,198    | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (3,533    | ) |  | 
|                                                                                                     
|Total capital expenditures and equipment subsidies reported by
    segments                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 437,158   |   |  | 
|                                                                                                     







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|----------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | ------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                      |  | 2004 
|                                                                                                      |  |      
|                                                                                                      |  |       |           | Satellite |     |  |        
|                                                                                                      |  |       |           |           |     |  |        
|                                                                                                      |  | Cable |           |           | DTH |  |         | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                      |  | $     |           |           | $   |  |         | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                     
|Service revenue  total                                                                               |  |       | 1,494,176 |           |     |  | 510,386 |                    |  |  | 96,543  |   |  |       | 606,929   |   |  |  | 2,101,105 |   |  | 
|Inter segment                                                                                         |  |       | (2,607    | )         |     |  | (4,749  | )                  |  |  | (14,000 | ) |  |       | (18,749   | ) |  |  | (21,356   | ) |  | 
|                                                                                                     
|                                                                                                      |  |       | 1,491,569 |           |     |  | 505,637 |                    |  |  | 82,543  |   |  |       | 588,180   |   |  |  | 2,079,749 |   |  | 
|                                                                                                     
|Service operating income before amortization and litigation
    settlement                            |  |       | 779,579   |           |     |  | 111,150 |                    |  |  | 41,690  |   |  |       | 152,840   |   |  |  | 932,419   |   |  | 
|Litigation settlement                                                                                 |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (6,484    | ) |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Service operating income before amortization                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 925,935   |   |  | 
|                                                                                                     
|Service operating income as % of external revenue                                                     |  |       | 52.3%     |           |     |  | 22.0%   |                    |  |  | 50.5%   |   |  |       | 26.0%     |   |  |  | 44.5%     |   |  | 
|                                                                                                     
|Interest(1)                                                                                           |  |       | 237,290   |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 44,484    |   |  |  | 281,774   |   |  | 
|                                                                                                     
|Cash
    taxes(1)                                                                                     |  |       | 2,926     |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 1,692     |   |  |  | 4,618     |   |  | 
|                                                                                                     
|Segment assets                                                                                        |  |       | 5,842,338 |           |     |  | 926,478 |                    |  |  | 558,402 |   |  |       | 1,484,880 |   |  |  | 7,327,218 |   |  | 
|                                                                                                      |  |       |           |           |     |  |        
|Corporate assets                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 249,502   |   |  | 
|                                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total assets                                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 7,576,720 |   |  | 
|                                                                                                     
|Capital expenditures and equipment subsidies by segment                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                  |  |       | 223,665   |           |     |  | 11,656  |                    |  |  | (886    | ) |  |       | 10,770    |   |  |  | 234,435   |   |  | 
|Equipment subsidies                                                                                   |  |       | 43,448    |           |     |  | 89,263  |                    |  |  |        |   |  |       | 89,263    |   |  |  | 132,711   |   |  | 
|                                                                                                     
|                                                                                                      |  |       | 267,113   |           |     |  | 100,919 |                    |  |  | (886    | ) |  |       | 100,033   |   |  |  | 367,146   |   |  | 
|                                                                                                     
|Reconciliation to Consolidated Statements of Cash Flows                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                            |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 256,136   |   |  | 
|Additions to equipment costs (net)                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 132,711   |   |  | 
|                                                                                                     
|Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 388,847   |   |  | 
|Decrease in working capital related to capital expenditures                                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 2,097     |   |  | 
|Less: Partnership capital
    expenditures(2)                                                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (18,373   | ) |  | 
|Less: IRU
    prepayments(3)                                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (1,420    | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (4,005    | ) |  | 
|                                                                                                     
|Total capital expenditures and equipment subsidies reported by
    segments                           |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 367,146   |   |  | 
|                                                                                                     



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company reports interest and cash taxes on a segmented basis
    for Cable and combined satellite only. It does not report
    interest and cash taxes on a segmented basis for DTH and
    Satellite Services.                                                                                                                                                                                                                                             
|   
|(2) | Consolidated capital expenditures include the Companys
    proportionate share of the Partnerships capital
    expenditures which the Company is required to proportionately
    consolidate (see note 1). As the Partnership is financed by
    its own debt facility with limited recourse to the Company, the
    Partnerships capital expenditures are subtracted from the
    calculation of segmented capital expenditures and equipment
    subsidies.
|   
|(3) | Prepayments on IRUs in amounts not exceeding the costs to build
    the fiber subject to the IRUs are subtracted from the
    calculation of segmented capital expenditures and equipment
    subsidies.                                                                                                                                                                                                                                                        





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The profit from the sale of satellite equipment is subtracted
    from the calculation of segmented capital expenditures and
    equipment subsidies as the Company views the profit on sale as a
    recovery of expenditures on customer premise equipment.

16.     COMMITMENTS AND
CONTINGENCIES


Commitments




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)  | During prior years, the Company, through its subsidiaries,
    purchased 28 Ku-band
    transponders on the Anik F1 satellite and
    16 Ku-band
    transponders on the Anik F2 satellite from Telesat Canada.
    During the current year, the Company purchased two additional
    Ku-band transponders on the Anik F2. In addition, the
    Company leases a number of
    C-band and
    Ku-band transponders.
    Under the
    Ku-bandF1 and F2
    transponder purchase agreements, the Company is committed to
    paying an annual transponder maintenance fee for each
    transponder acquired from the time the satellite becomes
    operational for a period of fifteen years.
|    
|(ii) | The Company has various long-term commitments for the
    maintenance and lease of satellite transponders, lease of
    transmission facilities, and lease of premises as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|           |  |   |         |  |  | 
|---------- |  | - | ------- |  |  | 
|           |  | $ |         |  | 
|          
|2007       |  |   | 107,077 |  |  | 
|2008       |  |   | 101,018 |  |  | 
|2009       |  |   | 95,255  |  |  | 
|2010       |  |   | 92,423  |  |  | 
|2011       |  |   | 92,206  |  |  | 
|Thereafter |  |   | 498,900 |  |  | 
|          
|           |  |   | 986,879 |  |  | 
|          





|      |                                                                                                               
|----- | --------------------------------------------------------------------------------------------------------------
|(iii) | At August 31, 2006, the Company had capital expenditure
    commitments of $26,596 covering a two year period.

Contingencies




Guarantees








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Indemnities








Irrevocable standby letters of credit and performance
bonds






|    |              
|--- | -------------
|17. | PENSION PLANS

Defined contribution pension plans




Defined benefit pension plan








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










|                                              |  |      |          |   |      |  |          |   |  | 
|--------------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | - |  | 
|                                              |  | 2006 |          |   | 2005 |  |          |  
|                                              |  | $    |          |   | $    |  |          |  
|                                             
|Accrued benefit obligation, beginning of year |  |      | 100,004  |   |      |  | 61,888   |   |  | 
|Current service cost                          |  |      | 2,271    |   |      |  | 996      |   |  | 
|Interest cost                                 |  |      | 5,088    |   |      |  | 3,930    |   |  | 
|Actuarial losses                              |  |      | 4,811    |   |      |  | 34,330   |   |  | 
|Past service cost                             |  |      |         |   |      |  |         |   |  | 
|Payment of benefits to employees              |  |      | (1,088   | ) |      |  | (1,140   | ) |  | 
|                                             
|Accrued benefit obligation, end of year       |  |      | 111,086  |   |      |  | 100,004  |   |  | 
|Plan value of assets, end of year             |  |      |         |   |      |  |         |   |  | 
|                                             
|Plan deficit, end of year                     |  |      | (111,086 | ) |      |  | (100,004 | ) |  | 
|                                             

|                                                               |  |      |         |  |      |  |         |  |  | 
|-------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- |  |  | 
|Reconciliation of accrued benefit obligation to balance sheet  |  | 2006 |         |  | 2005 |  |         | 
|accrued pension benefit liability                              |  | $    |         |  | $    |  |         | 
|                                                              
|Balance of unamortized pension obligation:                     |  |      |         |  |      |  |         |  |  | 
|Unamortized past service costs                                 |  |      | 20,275  |  |      |  | 22,842  |  |  | 
|Unamortized actuarial loss                                     |  |      | 51,999  |  |      |  | 50,963  |  |  | 
|                                                              
|                                                               |  |      | 72,274  |  |      |  | 73,805  |  |  | 
|                                                              
|Accrued pension benefit liability recognized in balance sheet: |  |      |         |  |      |  |         |  |  | 
|Accounts payable and accrued liability                         |  |      | 1,088   |  |      |  | 1,088   |  |  | 
|Long-term liability                                            |  |      | 37,724  |  |      |  | 25,111  |  |  | 
|                                                              
|                                                               |  |      | 38,812  |  |      |  | 26,199  |  |  | 
|                                                              
|Accrued benefit obligation, end of year as above               |  |      | 111,086 |  |      |  | 100,004 |  |  | 
|                                                              





|                              |  |      |      |  |      |  |      |  |  | 
|----------------------------- |  | ---- | ---- |  | ---- |  | ---- |  |  | 
|                              |  | 2006 |      |  | 2005 |  |      | 
|Accrued benefit obligation    |  | %    |      |  | %    |  |      | 
|                             
|Discount rate                 |  |      | 5.25 |  |      |  | 5.00 |  |  | 
|Rate of compensation increase |  |      | 5.00 |  |      |  | 4.00 |  |  | 
|                             





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                              |  |      |      |  |      |  |      |      |  |  |      |  |  | 
|----------------------------- |  | ---- | ---- |  | ---- |  | ---- | ---- |  |  | ---- |  |  | 
|                              |  | 2006 |      |  | 2005 |  |      | 2004 |  |  |     
|Benefit cost for the year     |  | %    |      |  | %    |  |      | %    |  |  |     
|                             
|Discount rate                 |  |      | 5.00 |  |      |  | 6.25 |      |  |  | 6.50 |  |  | 
|Rate of compensation increase |  |      | 4.00 |  |      |  | 3.00 |      |  |  | 3.00 |  |  | 
|                             



|                                                                                                                                                                   |  |      |        |   |      |  |         |      |  |  |        |   |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------ | - | ---- |  | ------- | ---- |  |  | ------ | - |  | 
|                                                                                                                                                                   |  | 2006 |        |   | 2005 |  |         | 2004 |  |  |       
|                                                                                                                                                                   |  | $    |        |   | $    |  |         | $    |  |  |       
|                                                                                                                                                                  
|Current service cost                                                                                                                                               |  |      | 2,271  |   |      |  | 996     |      |  |  | 1,743  |   |  | 
|Interest cost                                                                                                                                                      |  |      | 5,088  |   |      |  | 3,930   |      |  |  | 3,202  |   |  | 
|Past service cost                                                                                                                                                  |  |      |       |   |      |  |        |      |  |  |       |   |  | 
|Actuarial losses                                                                                                                                                   |  |      | 4,811  |   |      |  | 34,330  |      |  |  | 9,495  |   |  | 
|Difference between amortization of actuarial loss recognized for
    the year and actual actuarial loss on the accrued benefit
    obligation for the year         |  |      | (1,036 | ) |      |  | (32,579 | )    |  |  | (8,321 | ) |  | 
|Difference between amortization of past service costs recognized
    for the year and actual past service costs on the accrued
    benefit obligation for the year |  |      | 2,567  |   |      |  | 2,567   |      |  |  | 2,567  |   |  | 
|                                                                                                                                                                  
|Pension expense                                                                                                                                                    |  |      | 13,701 |   |      |  | 9,244   |      |  |  | 8,686  |   |  | 
|                                                                                                                                                                  



|            |  |   |        |  |  | 
|----------- |  | - | ------ |  |  | 
|            |  | $ |        |  | 
|           
|2007        |  |   | 1,088  |  |  | 
|2008        |  |   | 1,081  |  |  | 
|2009        |  |   | 1,575  |  |  | 
|2010        |  |   | 3,474  |  |  | 
|2011        |  |   | 3,442  |  |  | 
|2012  2016 |  |   | 27,401 |  |  | 
|           



|    |                           
|--- | --------------------------
|18. | RELATED PARTY TRANSACTIONS



Normal course transactions








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Corus Entertainment Inc. (Corus)






Specialty Channels




Burrard Landing Lot 2 Holdings Partnership




Other














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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Other transactions


















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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                      
|--- | ---------------------
|19. | FINANCIAL INSTRUMENTS

Fair values






|    |                                       
|--- | --------------------------------------
|(i) | Current assets and current liabilities



| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of financial instruments included in current
    assets and liabilities approximates their carrying amount due to
    their short-term nature.



|     |                             
|---- | ----------------------------
|(ii) | Investments and other assets



| |    |                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------
| | a) | The fair value of publicly traded shares included in this
    category is determined by the closing market values for those
    investments.
|
| | b) | The carrying value of other investments in this category
    approximates their fair value.                                                 



|      |                 
|----- | ----------------
|(iii) | Long  term debt



| |    |                                                                                                                                                                                                                                                    
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | The carrying value of bank loans approximates their fair value
    because interest charges under the terms of the bank loans are
    based upon current Canadian bank prime and bankers
    acceptance rates and on US bank base and LIBOR rates.
|
| | b) | The fair value of publicly traded notes is based upon current
    trading values. Other notes and debentures are valued based upon
    current trading values for similar instruments.                                                             



|     |                                 
|---- | --------------------------------
|(iv) | Derivative financial instruments





|                                   |                                                    |          |           |   |            |  |           |          |  |  |            |        |  |  |           |         |  |  | 
|---------------------------------- | -------------------------------------------------- | -------- | --------- | - | ---------- |  | --------- | -------- |  |  | ---------- | ------ |  |  | --------- | ------- |  |  | 
|                                   |                                                    | 2006     |           |   | 2005       |  |           |         
|                                   |                                                    |          |           |   |            |  |           |         
|                                   |                                                    | Carrying |           |   | Estimated  |  |           | Carrying |  |  | Estimated  |        |  | 
|                                   |                                                    | amount   |           |   | fair value |  |           | amount   |  |  | fair value |        |  | 
|                                   |                                                    | $        |           |   | $          |  |           | $        |  |  | $          |        |  | 
|                                  
|Long-term debt                     |                                                    |          | 2,996,385 |   |            |  | 3,087,729 |          |  |  | 3,199,542  |        |  |  | 3,362,164 |         |  | 
|Derivative financial instruments  |                                                    |          |           |   |            |  |           |          |  |  |            |        |  |  |           |         |  | 
|                                   | Interest exchange agreements                       |          |           |  |            |  |           | 1,996    |  |  |            |       |  |  |           | 8,509   |  |  | 
|                                   | Cross-currency interest rate exchange agreements   |          |           |  |            |  |           | 517,121  |  |  |            |       |  |  |           | 451,495 |  |  | 
|                                   | US currency purchase and purchase option contracts |          |           |  |            |  |           | 14,408   |  |  |            | 15,695 |  |  |           | 30,093  |  |  | 
|                                  
|                                   |                                                    |          | 2,996,385 |   |            |  | 3,621,254 |          |  |  | 3,215,237  |        |  |  | 3,852,261 |         |  | 
|                                  







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










Credit risks








|    |                         
|--- | ------------------------
|20. | STATEMENTS OF CASH FLOWS





|    |                           
|--- | --------------------------
|(i) | Funds flow from operations

|                                                      |                               |      |         |         |      |  |         |         |   |  |         |         |   |  | 
|----------------------------------------------------- | ----------------------------- | ---- | ------- | ------- | ---- |  | ------- | ------- | - |  | ------- | ------- | - |  | 
|                                                      |                               | 2006 |         |         | 2005 |  |         | 2004    |   |  |        
|                                                      |                               | $    |         |         | $    |  |         | $       |   |  |        
|                                                     
|Net income                                            |                               |      | 458,250 |         |      |  | 153,221 |         |   |  | 70,870  |         |   | 
|Non-cash items:                                       |                               |      |         |         |      |  |         |         |   |  |         |         |   | 
|Amortization                                         |                               |      |         |         |      |  |         |         |   |  |         |         |   | 
|                                                      | Deferred IRU revenue          |      |         | (12,546 | )    |  |         | (12,999 | ) |  |         | (12,098 | ) |  | 
|                                                      | Deferred equipment revenue    |      |         | (80,256 | )    |  |         | (71,677 | ) |  |         | (82,711 | ) |  | 
|                                                      | Deferred equipment costs      |      |         | 200,218 |      |  |         | 210,477 |   |  |         | 229,013 |   |  | 
|                                                      | Deferred charges              |      |         | 5,328   |      |  |         | 6,595   |   |  |         | 8,108   |   |  | 
|                                                      | Property, plant and equipment |      |         | 385,607 |      |  |         | 408,866 |   |  |         | 403,395 |   |  | 
|Future income tax expense (recovery)                  |                               |      | (85,521 | )       |      |  | 74,638  |         |   |  | 52,098  |         |   | 
|Write-down of investments                             |                               |      | 519     |         |      |  | 1,937   |         |   |  | 651     |         |   | 
|Gain on sale of investments                           |                               |      | (50,315 | )       |      |  | (32,163 | )       |   |  | (356    | )       |   | 
|Equity loss (income) on investees                     |                               |      | (44     | )       |      |  | 286     |         |   |  | 250     |         |   | 
|Debt retirement costs                                 |                               |      | 12,248  |         |      |  | 6,311   |         |   |  | 2,598   |         |   | 
|Fair value loss on foreign currency forward contracts |                               |      | 360     |         |      |  | 19,342  |         |   |  |        |         |   | 
|Foreign exchange gain on unhedged long-term debt      |                               |      | (5,369  | )       |      |  | (40,518 | )       |   |  | (28,522 | )       |   | 
|Stock option expense                                  |                               |      | 3,272   |         |      |  | 1,454   |         |   |  | 412     |         |   | 
|Defined benefit pension plan                          |                               |      | 12,612  |         |      |  | 8,178   |         |   |  | 7,524   |         |   | 
|Other                                                 |                               |      | 2,834   |         |      |  | (5,424  | )       |   |  | 3,353   |         |   | 
|                                                     
|Funds flow from operations                            |                               |      | 847,197 |         |      |  | 728,524 |         |   |  | 654,585 |         |   | 
|                                                     





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|     |                                                                                              
|---- | ---------------------------------------------------------------------------------------------
|(ii) | Changes in non-cash working capital balances related to
    operations include the following:

|                                         |  |      |         |   |      |  |        |      |  |  |        |  
|---------------------------------------- |  | ---- | ------- | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                         |  | 2006 |         |   | 2005 |  |        | 2004 | 
|                                         |  | $    |         |   | $    |  |        | $    | 
|                                         | 
|Accounts receivable                      |  |      | (23,561 | ) |      |  | 4,907  |      |  |  | 24,865 |  
|Prepaids and other                       |  |      | (5,741  | ) |      |  | (2,043 | )    |  |  | (144   | )
|Accounts payable and accrued liabilities |  |      | 22,338  |   |      |  | (5,965 | )    |  |  | 3,923  |  
|Income taxes payable/ recoverable        |  |      | (1,348  | ) |      |  | 690    |      |  |  | 4,308  |  
|Unearned revenue                         |  |      | 7,988   |   |      |  | 2,325  |      |  |  | 5,073  |  
|                                        
|                                         |  |      | (324    | ) |      |  | (86    | )    |  |  | 38,025 |  
|                                        



|      |                                                                                          
|----- | -----------------------------------------------------------------------------------------
|(iii) | Interest and income taxes paid and classified as operating
    activities are as follows:

|             |  |      |         |  |      |  |         |      |  |  |         | 
|------------ |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|             |  | 2006 |         |  | 2005 |  |         | 2004 | 
|             |  | $    |         |  | $    |  |         | $    | 
|             | 
|Interest     |  |      | 245,404 |  |      |  | 287,906 |      |  |  | 272,772 | 
|Income taxes |  |      | 3,203   |  |      |  | 5,091   |      |  |  | 51      | 
|            



|     |                      
|---- | ---------------------
|(iv) | Non-cash transactions



|                                                              |  |      |   |  |      |  |   |      |  |  |        | 
|------------------------------------------------------------- |  | ---- | - |  | ---- |  | - | ---- |  |  | ------ | 
|                                                              |  | 2006 |   |  | 2005 |  |   | 2004 | 
|                                                              |  | $    |   |  | $    |  |   | $    | 
|                                                              | 
|Class B Non-Voting shares issued on acquisitions
    [note 2] |  |      |  |  |      |  |  |      |  |  | 65,000 | 
|                                                             



|    |                                    
|--- | -----------------------------------
|21. | UNITED STATES ACCOUNTING PRINCIPLES







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|(a) | Reconciliation to accounting principles generally accepted in
    the United States

|                                                                                                                           |                                                                          |      |         |         |      |  |          |          |   |  |         |         |  
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ---- | ------- | ------- | ---- |  | -------- | -------- | - |  | ------- | ------- | -
|                                                                                                                           |                                                                          | 2006 |         |         | 2005 |  |          | 2004     |  
|                                                                                                                           |                                                                          | $    |         |         | $    |  |          | $        |  
|                                                                                                                           |                                                                         
|Net income using Canadian GAAP                                                                                             |                                                                          |      | 458,250 |         |      |  | 153,221  |          |   |  | 70,870  |        
|                                                                                                                           | Add (deduct) adjustments for:                                            |      |         |         |      |  |          |          |   |  |         |         |  
|                                                                                                                           | Deferred charges (2)                                                     |      |         | 15,362  |      |  |          | 28,371   |   |  |         | 14,736  |  
|                                                                                                                           | Foreign exchange gains on hedged long-term debt (3)                      |      |         | 78,937  |      |  |          | 121,494  |   |  |         | 70,156  |  
|                                                                                                                           | Reclassification of hedge losses from other comprehensive
    income (8) |      |         | (78,937 | )    |  |          | (121,494 | ) |  |         | (70,156 | )
|                                                                                                                           | Fair value loss on foreign currency forward contract (8)                 |      |         |        |      |  |          | (7,700   | ) |  |         |        |  
|                                                                                                                           | Income tax effect of adjustments                                         |      |         | (4,724  | )    |  |          | (7,375   | ) |  |         | (2,439  | )
|                                                                                                                           | Effect of future income tax rate reductions on differences               |      |         | (4,266  | )    |  |          |         |   |  |         | (682    | )
|                                                                                                                          
|Net income using US GAAP                                                                                                   |                                                                          |      | 464,622 |         |      |  | 166,517  |          |   |  | 82,485  |        
|                                                                                                                          
|Unrealized foreign exchange loss on translation of
    self-sustaining foreign operations                                  |                                                                          |      | (35     | )       |      |  | (79      | )        |   |  | (38     | )      
|Unrealized gains on available-for-sale securities, net of
    tax (7)
    Unrealized holding gains arising during the year |                                                                          |      |        |         |      |  | 26,923   |          |   |  | 4,091   |        
|                                                                                                                           | Less: reclassification adjustments for gains included in net
    income  |      |         | (30,045 | )    |  |          | (21,074  | ) |  |         | (1,055  | )
|                                                                                                                          
|                                                                                                                           |                                                                          |      | (30,080 | )       |      |  | 5,770    |          |   |  | 2,998   |        
|Adjustment to fair value of derivatives (8)                                                                                |                                                                          |      | (51,033 | )       |      |  | (186,398 | )        |   |  | (67,408 | )      
|Reclassification of derivative losses to income to offset
    foreign exchange gains on hedged long-term debt (8)          |                                                                          |      | 66,802  |         |      |  | 99,930   |          |   |  | 57,704  |        
|Minimum liability for pension plan (10)                                                                                    |                                                                          |      | 4,118   |         |      |  | (11,433  | )        |   |  | (3,864  | )      
|Effect of future income tax rate reductions on differences                                                                 |                                                                          |      | (4,933  | )       |      |  |         |          |   |  | (63     | )      
|                                                                                                                          
|                                                                                                                           |                                                                          |      | (15,126 | )       |      |  | (92,131  | )        |   |  | (10,633 | )      
|                                                                                                                          
|Comprehensive income using US GAAP                                                                                         |                                                                          |      | 449,496 |         |      |  | 74,386   |          |   |  | 71,852  |        
|                                                                                                                          
|Earnings per share  basic and diluted                                                                                     |                                                                          |      |         |         |      |  |          |          |   |  |         |        
|                                                                                                                           | Net income per share using US GAAP                                       |      |         | 2.13    |      |  |          | 0.73     |   |  |         | 0.36    |  
|                                                                                                                           | Comprehensive income per share using US GAAP                             |      |         | 2.07    |      |  |          | 0.33     |   |  |         | 0.31    |  
|                                                                                                                          





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Balance sheet items using US GAAP


|                                    |  |          |           |  |      |  |           |          |  |  |           |  |  |  |           |  |  | 
|----------------------------------- |  | -------- | --------- |  | ---- |  | --------- | -------- |  |  | --------- |  |  |  | --------- |  |  | 
|                                    |  | 2006     |           |  | 2005 |  |           |         
|                                    |  |          |           |  |      |  |           |         
|                                    |  | Canadian |           |  | US   |  |           | Canadian |  |  | US        |  |  | 
|                                    |  | GAAP     |           |  | GAAP |  |           | GAAP     |  |  | GAAP      |  |  | 
|                                    |  | $        |           |  | $    |  |           | $        |  |  | $         |  |  | 
|                                   
|Investments and other assets (7)    |  |          | 17,978    |  |      |  | 17,978    |          |  |  | 36,229    |  |  |  | 72,374    |  |  | 
|Deferred charges (2)(9)(10)         |  |          | 261,908   |  |      |  | 164,053   |          |  |  | 251,246   |  |  |  | 137,590   |  |  | 
|Broadcast licenses (1)(5)(6)        |  |          | 4,691,484 |  |      |  | 4,666,250 |          |  |  | 4,684,647 |  |  |  | 4,659,413 |  |  | 
|Other long-term liabilities (8)(10) |  |          | 37,724    |  |      |  | 612,306   |          |  |  | 40,806    |  |  |  | 564,779   |  |  | 
|Deferred credits (3)(9)             |  |          | 1,100,895 |  |      |  | 679,652   |          |  |  | 1,010,723 |  |  |  | 667,114   |  |  | 
|Future income taxes                 |  |          | 984,938   |  |      |  | 933,990   |          |  |  | 1,068,849 |  |  |  | 1,004,206 |  |  | 
|Shareholders equity                |  |          | 1,809,705 |  |      |  | 1,584,225 |          |  |  | 1,597,549 |  |  |  | 1,379,083 |  |  | 
|                                   



|                                                                        |  |      |           |   |      |  |           |   |  | 
|----------------------------------------------------------------------- |  | ---- | --------- | - | ---- |  | --------- | - |  | 
|                                                                        |  | 2006 |           |   | 2005 |  |           |  
|                                                                        |  | $    |           |   | $    |  |           |  
|                                                                       
|Shareholders equity using Canadian GAAP                                |  |      | 1,809,705 |   |      |  | 1,597,549 |   |  | 
|Amortization of intangible assets (1)                                   |  |      | (130,208  | ) |      |  | (124,179  | ) |  | 
|Deferred charges (2)                                                    |  |      | (8,171    | ) |      |  | (17,521   | ) |  | 
|Equity in loss of investees (4)                                         |  |      | (35,710   | ) |      |  | (35,710   | ) |  | 
|Gain on sale of subsidiary (5)                                          |  |      | 16,052    |   |      |  | 15,309    |   |  | 
|Gain on sale of cable systems (6)                                       |  |      | 50,063    |   |      |  | 47,745    |   |  | 
|Derivative not accounted for as a hedge (8)                             |  |      |          |   |      |  | (1,805    | ) |  | 
|Foreign exchange gains on hedged long-term debt(3)                      |  |      | 345,860   |   |      |  | 271,226   |   |  | 
|Reclassification of hedge losses from other comprehensive
    income(8) |  |      | (345,860  | ) |      |  | (271,226  | ) |  | 
|Accumulated other comprehensive income                                  |  |      | (117,176  | ) |      |  | (101,940  | ) |  | 
|Cumulative translation adjustment                                       |  |      | (330      | ) |      |  | (365      | ) |  | 
|                                                                       
|Shareholders equity using US GAAP                                      |  |      | 1,584,225 |   |      |  | 1,379,083 |   |  | 
|                                                                       





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                          |  |      |          |   |      |  |          |   |  | 
|----------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | - |  | 
|                                                                                          |  | 2006 |          |   | 2005 |  |          |  
|                                                                                          |  | $    |          |   | $    |  |          |  
|                                                                                         
|Unrealized foreign exchange gain on translation of
    self-sustaining foreign operations |  |      | 330      |   |      |  | 365      |   |  | 
|Unrealized gains on investments (7)                                                       |  |      |         |   |      |  | 29,729   |   |  | 
|Fair value of derivatives (8)                                                             |  |      | (103,114 | ) |      |  | (114,794 | ) |  | 
|Minimum liability for pension plan (10)                                                   |  |      | (14,392  | ) |      |  | (17,240  | ) |  | 
|                                                                                         
|                                                                                          |  |      | (117,176 | ) |      |  | (101,940 | ) |  | 
|                                                                                         





|    |                                  
|--- | ---------------------------------
|(1) | Amortization of intangible assets



| |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Until September 1, 2001, under Canadian GAAP amounts
    allocated to broadcast licenses were amortized using an
    increasing charge method which commenced in 1992. Under US GAAP,
    these intangibles were amortized on a straight-line basis over
    forty years. Effective September 1, 2001, broadcast
    licenses are considered to have an indefinite life and are no
    longer amortized under Canadian and US GAAP.



|    |                 
|--- | ----------------
|(2) | Deferred charges



| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Marketing costs to launch new services and equipment subsidies
    are deferred and amortized under Canadian GAAP. Under US GAAP,
    these costs are expensed as incurred.



|    |                                                
|--- | -----------------------------------------------
|(3) | Foreign exchange gains on hedged long-term debt



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Foreign exchange gains on translation of hedged long-term debt
    are deferred under Canadian GAAP but included in income for US
    GAAP.



|    |                            
|--- | ---------------------------
|(4) | Equity in loss of investees



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The earnings of investees determined under Canadian GAAP have
    been adjusted to reflect US GAAP.                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Under Canadian GAAP, the investment in Star Choice was accounted
    for using the cost method until CRTC approval was received for
    the acquisition. When the Company received CRTC approval, the
    amount determined under the cost method became the basis for the
    purchase price allocation and equity accounting commenced. Under
    US GAAP, equity accounting for the investment was applied
    retroactively to the date the Company first acquired shares in
    Star Choice.





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                           
|--- | --------------------------
|(5) | Gain on sale of subsidiary



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 1997, the Company acquired a 54% interest in Star Choice in
    exchange for the shares of HomeStar Services Inc., a
    wholly-owned subsidiary at that time. Under Canadian GAAP the
    acquisition of the investment in Star Choice was a non-monetary
    transaction that did not result in the culmination of the
    earnings process, as it was an exchange of control over similar
    productive assets. As a result, the carrying value of the Star
    Choice investment was recorded at the book value of assets
    provided as consideration on the transaction. Under US GAAP the
    transaction would have been recorded at the fair value of the
    shares in HomeStar Services Inc. This would have resulted in a
    gain on disposition of the consideration the Company exchanged
    for its investment in Star Choice and an increase in the
    acquisition cost for Star Choice.



|    |                              
|--- | -----------------------------
|(6) | Gain on sale of cable systems



| |                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The gain on sale of cable systems determined under Canadian GAAP
    has been adjusted to reflect the lower net book value of
    broadcast licenses under US GAAP as a result of item (1)
    adjustments.                                                                                                                                                                     
|
| | Under Canadian GAAP, no gain was recorded in 1995 on an exchange
    of cable systems with Rogers Communications Inc. on the basis
    that this was an exchange of similar productive assets. Under US
    GAAP the gain net of applicable taxes is recorded and
    amortization adjusted as a result of the increase in subscriber
    base upon the recognition of the gain.



|    |                                         
|--- | ----------------------------------------
|(7) | Unrealized gains (losses) on investments



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under US GAAP, equity securities having a readily determinable
    fair value and not classified as trading securities are
    classified as available-for-sale securities and
    reported at fair value, with unrealized gains and losses
    included in comprehensive income and reported as a separate
    component of shareholders equity net of related future
    income taxes. Gains and losses on the sale of available-for-sale
    securities are determined using the specific identification
    method. Declines in the fair value of individual
    available-for-sale securities below their cost that are other
    than temporary result in write-downs of the individual
    securities to their fair value. The related write-downs are
    included in earnings as realized losses.
|
| | Under Canadian GAAP, available-for-sale securities are carried
    at cost and written down only when there is evidence that a
    decline in value, that is other than temporary, has occurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



|    |                                              
|--- | ---------------------------------------------
|(8) | Derivative instruments and hedging activities



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under US GAAP, all derivatives are recognized in the balance
    sheet at fair value. Derivatives that are not hedges are
    adjusted to fair value through income. Derivatives that are
    hedges are adjusted through income or other comprehensive income
    until the hedged item is recognized in income depending on the
    nature of the hedge. Under Canadian GAAP, only speculative
    derivative financial instruments and those that do not qualify
    for hedge accounting are recognized in the balance sheet.



|    |                                                    
|--- | ---------------------------------------------------
|(9) | Subscriber connection fee revenue and related costs



| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subscriber connection fee revenue and related costs are deferred
    and amortized under Canadian GAAP. Under US GAAP, the revenue
    and costs are recognized into income and expense immediately.





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|     |                                   
|---- | ----------------------------------
|(10) | Minimum liability for pension plan



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys unfunded non-contributory defined benefit
    pension plan for certain of its senior executives has an
    accumulated benefit obligation of $79,902 (2005 
    $75,770). Under US GAAP, an additional minimum liability is to
    be recorded for the difference between the accumulated benefit
    obligation and the accrued pension liability. The additional
    liability is offset in deferred charges up to an amount not
    exceeding the unamortized past service costs. The remaining
    difference is recognized in other comprehensive income, net of
    tax. Under Canadian GAAP, the accumulated benefit obligation and
    additional minimum liability are not recognized.



|    |                         
|--- | ------------------------
|(b) | Stock-based compensation



|                              |  |             |  |         |  |      |         |  |      |  |        |  |  | 
|----------------------------- |  | ----------- |  | ------- |  | ---- | ------- |  | ---- |  | ------ |  |  | 
|                              |  |             |  | 2006    |  | 2005 |         |  | 2004 |  |        | 
|                              |  |             |  | $       |  | $    |         |  | $    |  |        | 
|                             
|Net income, US GAAP           |  | As reported |  | 464,622 |  |      | 166,517 |  |      |  | 82,485 |  |  | 
|                              |  | Pro forma   |  | 462,752 |  |      | 160,745 |  |      |  | 65,789 |  |  | 
|Net income per share, US GAAP |  | As reported |  | 2.13    |  |      | 0.73    |  |      |  | 0.36   |  |  | 
|                              |  | Pro forma   |  | 2.13    |  |      | 0.70    |  |      |  | 0.28   |  |  | 
|                             





|    |                                 
|--- | --------------------------------
|(c) | Recent accounting pronouncements



|    |                    
|--- | -------------------
|(1) | Share-Based Payment





|    |                                                                                             
|--- | --------------------------------------------------------------------------------------------
|(2) | Employers Accounting for Defined Benefit Pension and Other
    Postretirement Benefit Plans





|    |                                           
|--- | ------------------------------------------
|(3) | Accounting for Uncertainty in Income Taxes







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










|    |                                              
|--- | ---------------------------------------------
|22. | COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS







---



##### Table of Contents



Shaw Communications Inc.





FIVE YEARS IN REVIEW


August 31, 2006


|                                                           |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   |  | 
|---------------------------------------------------------- | ------- | ---- | --------- | ---- | ---- |  | --------- | ---- |  |  | --------- | ---- |  | ---- | --------- | ----- | - |  | --------- | ----- | - |  | 
|                                                           |         | 2006 |           |      | 2005 |  |           | 2004 |  |  | 2003      |      |  | 2002 |           |       |  
|                                                          
|($000s except per share amounts)                          |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|Service revenue                                            |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|Cable                                                      |         |      | 1,808,583 |      |      |  | 1,598,369 |      |  |  | 1,491,569 |      |  |      | 1,459,833 |       |   |  | 1,367,563 |       |   | 
|DTH                                                        |         |      | 567,807   |      |      |  | 530,729   |      |  |  | 505,637   |      |  |      | 450,176   |       |   |  | 361,116   |       |   | 
|Satellite                                                  |         |      | 82,894    |      |      |  | 80,712    |      |  |  | 82,543    |      |  |      | 88,412    |       |   |  | 95,870    |       |   | 
|                                                          
|                                                           |         |      | 2,459,284 |      |      |  | 2,209,810 |      |  |  | 2,079,749 |      |  |      | 1,998,421 |       |   |  | 1,824,549 |       |   | 
|                                                          
|Service operating income (loss) before
    amortization(1) |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|Cable                                                      |         |      | 857,466   |      |      |  | 797,583   |      |  |  | 779,579   |      |  |      | 727,458   |       |   |  | 608,916   |       |   | 
|DTH                                                        |         |      | 175,401   |      |      |  | 141,687   |      |  |  | 111,150   |      |  |      | 52,814    |       |   |  | (14,103   | )     |   | 
|Satellite                                                  |         |      | 45,050    |      |      |  | 42,723    |      |  |  | 41,690    |      |  |      | 38,619    |       |   |  | 40,203    |       |   | 
|Corporate restructuring and inventory write-down           |         |      |          |      |      |  |          |      |  |  |          |      |  |      | (13,250   | )     |   |  | (4,600    | )     |   | 
|Litigation settlements                                     |         |      |          |      |      |  |          |      |  |  | (6,484    | )    |  |      | 12,000    |       |   |  |          |       |   | 
|                                                          
|                                                           |         |      | 1,077,917 |      |      |  | 981,993   |      |  |  | 925,935   |      |  |      | 817,641   |       |   |  | 630,416   |       |   | 
|                                                          
|Net income (loss)                                          |         |      | 458,250   |      |      |  | 153,221   |      |  |  | 70,870    |      |  |      | (37,177   | )     |   |  | (315,794  | )     |   | 
|                                                          
|Earnings (loss) per share                                  |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|                                                           | Basic   |      |           | 2.11 |      |  |           | 0.67 |  |  |           | 0.31 |  |      |           | (0.16 | ) |  |           | (1.36 | ) |  | 
|                                                           | Diluted |      |           | 2.09 |      |  |           | 0.67 |  |  |           | 0.31 |  |      |           | (0.16 | ) |  |           | (1.36 | ) |  | 
|                                                          
|Funds flow from
    operations(2)                          |         |      | 847,197   |      |      |  | 728,524   |      |  |  | 654,585   |      |  |      | 494,573   |       |   |  | 289,778   |       |   | 
|                                                          
|Balance sheet                                              |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|Total assets                                               |         |      | 7,522,543 |      |      |  | 7,430,185 |      |  |  | 7,576,720 |      |  |      | 7,730,929 |       |   |  | 8,644,926 |       |   | 
|Long-term debt (including current portion)                 |         |      | 2,996,385 |      |      |  | 3,199,542 |      |  |  | 3,344,258 |      |  |      | 3,635,205 |       |   |  | 4,433,869 |       |   | 
|                                                          
|Cash dividends declared per share                          |         |      |           |      |      |  |           |      |  |  |           |      |  |      |           |       |   |  |           |       |   | 
|Class A                                                    |         |      | 0.470     |      |      |  | 0.305     |      |  |  | 0.155     |      |  |      | 0.045     |       |   |  | 0.045     |       |   | 
|Class B                                                    |         |      | 0.475     |      |      |  | 0.310     |      |  |  | 0.160     |      |  |      | 0.050     |       |   |  | 0.050     |       |   | 
|                                                          



|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 8.                                                                                                               
|   
|(2) | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.





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##### Table of Contents



Shaw Communications Inc.





SHAREHOLDERS INFORMATION


August 31, 2006


Share Capital and Listings




Trading Range of Class B Non-Voting Shares on The
Toronto Stock Exchange


|                                     |  |            |       |  |             |       |       |        |  |  |            |  |  | 
|------------------------------------ |  | ---------- | ----- |  | ----------- | ----- | ----- | ------ |  |  | ---------- |  |  | 
|                                     |  |            |       |  |             | Total |       |        | 
|Quarter                              |  | High Close |       |  | Low Close   |       |       | Volume |  |  |           
|                                    
|September 1, 2005 to August 31, 2006 |  |            |       |  |             |       |       |        |  |  |            |  |  | 
|First                                |  |            | 25.55 |  |             |       | 23.18 |        |  |  | 37,566,242 |  |  | 
|Second                               |  |            | 31.73 |  |             |       | 23.46 |        |  |  | 42,162,990 |  |  | 
|Third                                |  |            | 32.75 |  |             |       | 27.17 |        |  |  | 34,771,782 |  |  | 
|Fourth                               |  |            | 34.25 |  |             |       | 29.50 |        |  |  | 42,009,818 |  |  | 
|                                    
|Closing price, August 31, 2006       |  | 33.20      |       |  | 156,510,832 |       |       |       
|                                    

Share Splits


www.shaw.ca/investors






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##### Table of Contents



Shaw Communications Inc.





CORPORATE INFORMATION


August 31, 2006


|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|DIRECTORS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | SENIOR OFFICERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | CORPORATE OFFICE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | DEBENTURE TRUSTEES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|JR
    Shaw(4)Executive Chair,
    Shaw Communications Inc.Adrian L.
    Burns(3)Corporate DirectorJames F.
    Dinning(3)Non-Executive Chairman
    Western Financial Group Inc.George F. Galbraith(1)(4)Corporate DirectorRonald V.
    Joyce(4)Corporate DirectorRt. Hon. Donald F.
    Mazankowski(3)(4)Corporate DirectorMichael W.
    OBrien(1)Corporate DirectorHarold A.
    Roozen(1)President and Chief
    Executive Officer,
    CCI Thermal
    Technologies Inc.Jeffrey C.
    Royer(2)Corporate DirectorBradley S. ShawSenior Vice President,
    Operations,
    Shaw Communications Inc.Jim ShawChief Executive Officer
    Shaw Communications Inc.JC
    Sparkman(2)(4)Corporate DirectorCarl E.
    Vogel(1)President and Vice Chairman
    EchoStar Communications CorporationWillard (Bill) H. Yuill(2)Chairman
    The Monarch Corporation |  | JR ShawExecutive ChairJim ShawChief Executive OfficerRhonda D. BashnickVice President, FinancePeter J. BissonnettePresidentMichael DAvellaSenior Vice President, PlanningBradley S. ShawSenior Vice President, OperationsKen C.C. SteinSenior Vice President,
    Corporate and Regulatory AffairsSteve WilsonSenior Vice President and
    Chief Financial Officer
    CORPORATE SECRETARY:Douglas J. Black, QCHONORARY SECRETARY:Louis Desrochers, CM,
    AOE, QC, LLD(1) Audit Committee
    (2) Human Resources Committee
    (3) Corporate Governance Committee
    (4) Executive Committee |  | Shaw Communications Inc.
    Suite 900, 630 
    3rdAvenue
    S.W., Calgary, Alberta
    Canada T2P 4L4
    Phone: (403) 750-4500
    Fax: (403) 750-4501
    Website: www.shaw.caCORPORATE GOVERNANCEInformation concerning Shaws corporate governance
    policies are contained in the Information Circular and is also
    available on Shaws website, www.shaw.ca.
    Information concerning Shaws compliance with the corporate
    governance listing standards of the New York Stock Exchange is
    available in the investor relations section on Shaws
    website, www.shaw.ca.INTERNET HOME PAGEShaws Annual Report, Annual Information Form,
    Quarterly Reports, Press Releases and other relevant investor
    relations information are available electronically on the
    Internet at www.shaw.ca.AUDITORSErnst & Young LLPPRIMARY BANKERThe Toronto-Dominion BankTRANSFER AGENTSCIBC Mellon Trust Company
    Calgary, AB
    Phone: 1-800-387-0825
    Chase Mellon Shareholder
    Services, LLC
    New York, NY
    Phone: 1-800-526-0801 |  | Computershare Trust
    Company of Canada
    100 University Avenue,
    9th Floor
    Toronto, ON M5J 2Y1
    service@computershare.com
    Phone: 1-800-564-6253
    Fax: 1-888-453-0330 or
    416-263-9394
    Bank of New York
    101 Barclay Street, Floor 21F
    New York, NY 10288
    Phone 1-800-438-5473
    Fax: 212-815-5802FURTHER INFORMATIONFinancial analysts, portfolio managers, other investors and
    interested parties may contact the Company at
    (403) 750-4500 or visit Shaws website at
    www.shaw.cafor further information.
    To receive additional copies of this Annual Report, please fax
    your request to (403) 750-7469 or email
    investor.relations@sjrb.caFor further inquiries relating to Shaws philanthropic
    practices, please call (403) 750-7498.
    All trademarks used in this annual report are used with the
    permission of the owners of such trademarks.





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