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Shaw
    Communications Inc.
    REPORT TO SHAREHOLDERS
    August 31, 2008  Dear fellow
    Shareholders:
  direct-to-home
    OUR
    CUSTOMER DRIVES OUR STRATEGY
        OPERATIONAL
    SUCCESS AND FINANCIAL RESULTS
    
    Consolidated service revenue increased 12% to $3.10 billion.
    Total consolidated service operating income before
    amortization1

    improved 14% to $1.41 billion.
    Free cash
    flow1

    improved 27% to $453 million, after taking into account
    over $85 million of increased capital investment.
    Our operating
    margins1,

    which are
    best-in-class
    in North America, improved further this year.    CUSTOMER
    GROWTH DRIVES RESULTS
    
    Basic cable customers increased to 2.25 million and we now
    have more than 900,000 Digital subscribers; our Digital customer
    base increased by over 140,000 this fiscal year driven largely
    by demand for high definition services, which our network is
    ideally positioned to deliver.
    Internet customers now exceed 1.5 million and our 70%
    penetration of basic customers is one of the highest in the
    North American industry, driven by the continued positive
    customer response to our range of value and speed options,
    service enhancements and reliability. 1




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##### Table of Contents



Shaw
    Communications Inc.
    REPORT TO SHAREHOLDERS
    August 31, 2008
  
    Digital phone lines surpassed 610,000, reflecting the expansion
    of service options, steady growth of our service area, and
    continued confidence in the dependability and value of the
    product.
    DTH added 13,000 subscribers and generated strong free cash flow.    CONTINUOUS
    IMPROVEMENT AND INNOVATION
        STRENGTHENING
    OUR FINANCIAL POSITION
    
    We repurchased $100 million of our Class B Non-Voting
    Participating Shares this year for cancellation.
    We paid out more than $300 million in dividends to
    shareholders in the past year. This represents an increase of
    over 50% compared to the prior year. With the most recent
    increase, the current equivalent annual dividend rate is $0.80
    on Shaws Class B Non-Voting Participating Shares.
    We continue to lead the North American cable industry in
    dividend yield and currently rank in the top quartile of
    high-yielding corporations included in the S&P/TSX 300
    Index.
    Our debt leverage metrics continue to improve and our balance
    sheet has never been stronger.    CONTINUED
    EVOLUTION
   2




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##### Table of Contents



Shaw
    Communications Inc.
    REPORT TO SHAREHOLDERS
    August 31, 2008
    [Signed]

[Signed]JR Shaw

Jim ShawExecutive Chair

Chief Executive Officer and Vice Chair      1
    
    See definitions under key
    performance drivers in Managements Discussion and Analysis. 3




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##### 



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  November 25,
    2008
  FORWARD
    INDEX
   
  CONTENTS

PageOutlineI.



INTRODUCTION TO THE BUSINESS


6A.

Company overview  core business and
    strategies


6B.

Seasonality


9C.

Key performance drivers


9D.

Critical accounting policies and estimates


11E.

Related party transactions


16F.

New accounting standards


17G.

Known events, trends, risks and uncertainties


19II.



SUMMARY OF QUARTERLY RESULTS


27III.



RESULTS OF OPERATIONS


29IV.



FINANCIAL POSITION


40V.



CONSOLIDATED CASH FLOW ANALYSIS


41VI.



LIQUIDITY AND CAPITAL RESOURCES


42VII.



ADDITIONAL INFORMATION


44VIII.



COMPLIANCE WITH NYSE CORPORATE
    GOVERNANCE LISTING STANDARDS


44IX.



CERTIFICATION


44    CAUTION
    CONCERNING FORWARD LOOKING STATEMENTS
   4




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
     5




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  I.
    INTRODUCTION
    TO THE BUSINESS  A.
    Company
    overview  core business and strategies  i)
    Shaw
    Communications Inc.   1 best-in-class 24/7/365
    ii)
    Cable   Video-on-Demand
    tm
    1
 6




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  tm
    tm tm
  E-911, 24/7/365
     7




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
          iii)
    Satellite  8




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        B.
    Seasonality    C.
    Key
    performance drivers    FINANCIAL MEASURES:
 i) Service
    revenue
   The Companys continuous disclosure documents may
    provide discussion and analysis of non-GAAP financial measures.
    These financial measures do not have standard definitions
    prescribed by Canadian or US GAAP and therefore may not be
    comparable to similar measures disclosed by other companies. The
    Company utilizes these measures in making operating decisions
    and assessing its performance. Certain investors, analysts and
    others utilize these measures in assessing the Companys
    financial performance
 9




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  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
 and/or
    iii) Free
    cash flow
   ($000s Cdn)

2008


2007


2006Cable free cash
    flow(1)


305,338



237,601



193,398Satellite free cash
    flow(2)


147,293



118,591



72,047Consolidated free cash flow


452,631



356,192



265,445   (1)
    The reconciliation of free cash flow for cable is provided on
    page 34.(2)
    The reconciliation of free cash flow for satellite is provided
    on page 38.     10




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    STATISTICAL MEASURES:
 Subscriber
    counts, including penetration and bundled
    customers
        D. Critical
    accounting policies and estimates    i) Revenue
    and expense recognition
  11




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  and/or
       12




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
      Income statement
    classification
   Subscriber
    connection and installation costs
   ii) Allowance
    for doubtful accounts
   iii) Property,
    plant and equipment  capitalization of direct labour
    and overhead
  13




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
      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. Over the past several years the information
    technology department has devoted considerable efforts towards
    the development of systems to support Digital Phone and projects
    related to new customer management, billing and operating
    support systems. Labour costs directly related to these and
    other projects are capitalized.2.
    Cable regional construction departments, which are principally
    involved in constructing, rebuilding and upgrading the
    cable/Internet/Digital Phone infrastructure. Labour and overhead
    costs directly related to the construction activity are
    capitalized as the activities directly relate to the
    construction or upgrade of the distribution system. Capital
    projects include, but are not limited to, projects such as new
    subdivision builds, increasing network capacity for internet,
    Digital Phone and VOD by reducing the number of homes fed from
    each node, and upgrades of plant capacity.3.
    Subscriber-related activities such as installation of new drops
    and Internet services. The labour and overhead directly related
    to the installation of new services are capitalized as the
    activity involves the installation of capital assets (i.e.,
    wiring, filters, software, etc.) which enhance the service
    potential of the distribution system through the ability to earn
    future service revenues. Costs associated with service calls,
    collections, disconnects and reconnects that do not involve the
    installation of a capital asset are expensed.      iv) Property,
    plant and equipment  capitalization of
    interest
  14




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    v) Depreciation
    policies and useful lives
   vi) Asset
    impairment
   vii) Employment
    benefit plans
  15




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    Accrued BenefitObligation at


Pension ExpenseEnd of Fiscal 2008


Fiscal 2008Discount Rate


6.25%



5.50%Impact of: 1% decrease ($000s Cdn)


36,778



4,498   viii) Future
    income taxes
   ix) Commitments
    and contingencies
  E. Related
    party transactions    Normal
    course transactions
   Corus
    Entertainment Inc. (Corus)
  16




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    Burrard
    Landing Lot 2 Holdings Partnership
  F. New
    accounting standards      (i) Financial
    Instruments
          17




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        Increase (decrease)August 31,


September 1,2008


2007$


$Consolidated balance
    sheets:Deferred charges


(24,852
)


(30,746
)Current portion of derivative instruments


1,349



5,119Long-term debt


(24,870
)


(29,681
)Derivative instruments


518,856



521,560Deferred credits


(453,033
)


(459,656
)Future income taxes


(10,953
)


(12,615
)Retained earnings


1,792



1,754Accumulated other comprehensive loss


57,993



57,227Increase in retained
    earnings:Adjusted for adoption of new accounting policy


1,754



1,754Increase in net income


38



1,792



1,754   Increase (decrease)in net incomeAugust 31, 2008$Consolidated statement of
    income:Decrease in amortization of deferred charges


3,839Increase in amortization of financing
    costs  long-term debt


(3,627
)Decrease in interest expense  debt


94Increase in debt retirement costs


(252
)Increase in income tax expense


(16
)Increase in net income


38Increase in earnings per
    share:


  18




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  (ii) Accounting
    changes
     (iii)
    Inventories   (iv) Financial
    instruments
   (v)
    Capital
    disclosures   (vi)
    Goodwill
    and intangible assets  G. Known
    events, trends, risks and uncertainties      
    Competition and technological change, including change in
    regulatory risks
    Interest rate, foreign exchange, capital market and economic
    conditions risks
    Contingencies
    Uninsured risks of loss
    Reliance on suppliers
    Holding Company structure
    Control of Shaw by the Shaw family 19




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  
    Information systems and internal business processes
    Dividend payments  i) Competition
    and technological change
   CABLE TELEVISION AND
    DTH
         line-ups,
 20




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        INTERNET
   dial-up dial-up
  dial-up
     21




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
      SATELLITE SERVICES
   INTERNET
    INFRASTRUCTURE
   DIGITAL PHONE
        22




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        IMPACT OF REGULATION
         ii) Interest
    rate, foreign exchange, market value, capital market and
    economic conditions risks
  23




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  A-1.
    (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.      (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, 2008, 100% of such maturities were hedged. The
    Company utilizes cross-currency swaps, where appropriate, to
    hedge its exposures on US dollar denominated bank and debenture
    indebtedness.      (c)
    Capital markets: The Company requires ongoing access to capital
    markets to support its operations. Changes in capital market
    conditions, including significant changes in market interest
    rates or lending practices, may have a material adverse effect
    on the 24




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Companys ability to raise or refinance short-term or
    long-term debt, and thus on its financial position and ability
    to operate.  (d)
    Economic conditions: Recent forecasts for Canadas economic
    growth have trended downward reflecting the uncertainty in
    global financial and equity markets and the slowdown in global
    economic growth. While the Company believes the Western Canadian
    market will remain relatively stable and has assumed no
    significant deterioration in economic conditions, there can be
    no assurance that these events or any future events caused by
    volatility in world financial and equity markets or a decline in
    economic growth will not have an adverse effect on the
    Companys business and operating results.  iii) Contingencies
   iv) Uninsured
    risks of loss
      25




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  back-up
  v) Reliance
    on suppliers
     vi) Holding
    company structure
   vii) Control
    of Shaw by the Shaw family
 and/or
  viii) Information
    systems and internal business processes
   ix) Dividend
    payments
  26




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
   II. SUMMARY
    OF QUARTERLY RESULTS  Service





Basicoperating income





earnings


Funds flowService


before





per


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

revenue


amortization(1)


Net income


share(2)


operations(3)2008Fourth


805,700



369,527



132,378



0.31



321,276Third


792,149



356,089



128,113



0.30



310,984Second


763,182



349,711



298,848



0.69



304,293First


743,828



332,909



112,223



0.26



286,342Total


3,104,859



1,408,236



671,562



1.56



1,222,8952007Fourth


715,471



326,052



135,932



0.31



272,545Third


702,238



310,748



91,658



0.21



259,470Second


685,730



303,038



79,751



0.18



252,412First


671,006



299,787



81,138



0.19



243,936Total


2,774,445



1,239,625



388,479



0.90



1,028,363    (1)
    See key performance drivers on page 9.(2)
    Diluted earnings per share equals basic earnings per share
    except for total fiscal 2008 and 2007 where diluted earnings per
    share is $1.55 and $0.89, 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.     27




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    Growth
    in subscriber statistics as follows:
  2008


2007Subscriber Statistics

First


Second


Third


Fourth


First


Second


Third


FourthBasic cable customers


8,138



6,524



2,495



4,122



12,664



6,625



3,289



(2,057
)Digital customers


39,496



48,006



32,658



23,020



25,331



28,641



20,875



15,709Internet customers


34,719



31,517



23,185



24,785



35,877



40,694



27,873



29,857Digital Phone Lines


50,339



56,536



57,700



61,999



38,197



41,721



51,128



41,604DTH


1,544



4,977



4,686



1,736



2,426



928



5,337



1,686   New
    Product Launch:
 
    The initial product launch of Shaw Digital Phone service was in
    Calgary on February 14, 2005. Since this initial launch
    Shaw has continued to expand its Digital Phone service area and
    at the end of fiscal 2008 the service was available to over 90%
    of homes passed. 28




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  III. RESULTS
    OF OPERATIONS  OVERVIEW
    OF FISCAL 2008 CONSOLIDATED RESULTS
  Change2008


2007(In $000s Cdn except per share amounts)

2008


2007


2006


%


%Operations:Service revenue


3,104,859



2,774,445



2,459,284



11.9



12.8Service operating income before
    amortization(1)


1,408,236



1,239,625



1,077,917



13.6



15.0Service operating
    margin(1)


45.4%



44.7%



43.8%Funds flow from
    operations(2)


1,222,895



1,028,363



847,197



18.9



21.4Net income


671,562



388,479



458,250



72.9



(15.2
)Free cash
    flow(1)


452,631



356,192



265,445



27.1



34.2Balance sheet:Total assets


8,357,801



8,163,739



7,661,543Long-term financial liabilities (including current portion of
    long-term debt)


2,785,955



3,125,398



3,034,109Per share data:Income per share  basic

$
1.56


$
0.90


$
1.05Income per share  diluted

$
1.55


$
0.89


$
1.05Weighted average number of participating shares outstanding
    during period (000s)


431,070



432,493



435,332Cash dividends paid per
    shareClass A


0.702



0.462



0.235Class B


0.705



0.465



0.238   (1)
    
    See key performance drivers on
    page 9.(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 $671.6 million for the year compared to
    income of $388.5 million in 2007 and $458.3 million in
    2006.
    Earnings per share were $1.56 compared to $0.90 in 2007 and
    $1.05 in 2006.
    Service revenue for the year improved 11.9% to
    $3.10 billion from $2.77 billion last year and
    $2.46 billion in 2006.
    Service operating income before amortization of
    $1.41 billion was up 13.6% over last years amount of
    $1.24 billion in 2007 and $1.08 billion in 2006.
    Consolidated free cash flow increased to $452.6 million
    from $356.2 million in 2007 and $265.4 million in 2006. 29




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  
    During 2008, the Company increased the dividend rate on
    Shaws Class A Participating Shares and Class B
    Non-Voting Participating Shares to an equivalent dividend rate
    of $0.7975 and $0.80, respectively. Dividends paid in 2008
    increased over $100 million, or 52%, over 2007.
    On January 30, 2008, the Company redeemed all of its
    outstanding $100 million 8.54% Series B Canadian
    Originated Preferred Securities (COPrS).
    The footprint of Digital Phone continued to expand with the
    service now being available to over 90% of homes passed. During
    2008 the Company added 226,574 Digital Phone lines and at
    August 31, 2008, the number of Digital Phone lines,
    including pending installations, was 611,931.
    Shaws customer base continued to grow with increases of
    21,279 for basic cable (2007  20,521); 143,180 for
    digital (2007  90,556); 114,206 for Internet
    (2007  134,301); and 12,943 (2007  10,377)
    for DTH.
    Shaw was successful in acquiring 20 megahertz of spectrum across
    most of its cable operating footprint in the recent Advanced
    Wireless Spectrum (AWS) auction for a cost of
    approximately $190.0 million.
    The Company repurchased for cancellation 4,898,300 Class B
    Non-Voting Shares for $99.8 million ($20.37 per share)
    during 2008.  Revenue
    and operating expenses
  2008
    vs. 2007
     2007
    vs. 2006
    30




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Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Amortization
  Change2008


2007(In $000s Cdn)

2008


2007


2006


%


%Amortization revenue (expense) Deferred IRU revenue


12,547



12,547



12,546







Deferred equipment revenue


126,601



104,997



80,256



20.6



30.8Deferred equipment costs


(228,524
)


(203,597
)


(200,218
)


12.2



1.7Deferred charges


(1,025
)


(5,153
)


(5,328
)


(80.1
)


(3.3
)Property, plant and equipment


(414,732
)


(381,909
)


(385,607
)


8.6



(1.0
)         Amortization
    of financing costs and Interest expense
  Change2008


2007(In $000s Cdn)

2008


2007


2006


%


%Amortization of financing costs  long-term debt


3,627











100.0



Interest


230,588



245,043



254,303



(5.9
)


(3.6
)       Gain
    on sale of investments
  Decreasein income(In $000s Cdn)

2008


2007


2006


2008


2007Gain on sale of investments






415



50,315



(415
)


(49,900
)    31




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Other
    income and expenses
  Increase(decrease)in income(In $000s Cdn)

2008


2007


2006


2008


2007Debt retirement costs


(5,264
)






(12,248
)


(5,264
)


12,248Foreign exchange gain on unhedged long-term debt










5,369







(5,369
)Other gains


24,009



9,105



5,845



14,904



3,260         Income
    tax expense
     Investment
    in Burrard Landing Lot 2 Holdings Partnership
  32




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Net
    income per share
  Change2008


2007(In $000s Cdn except per share amounts)

2008


2007


2006


%


%Net income


671,562



388,479



458,250



72.9



(15.2
)Divided by weighted average number of participating shares
    outstanding during period (000s)


431,070



432,493



435,332



(0.3
)


(0.7
)Income per share  basic

$
1.56


$
0.90


$
1.05



73.3



(14.3
)Income per share  diluted

$
1.55


$
0.89


$
1.05



74.2



(15.2
)   Net
    income
       (In $millions Cdn)

2008


2007Increased service operating income before amortization


168.6



161.7Decreased (increased) amortization of deferred net equipment
    costs and revenue and IRU revenue


(3.3
)


21.3Decreased (increased) amortization of deferred charges,
    financing costs and property, plant and equipment


(32.4
)


3.8Decreased interest expense


14.5



9.3Change in other net costs and
    revenue(1)


9.2



(39.4
)Decreased (increased) income taxes


126.5



(226.5
)283.1



(69.8
)   (1)
    Other net costs and revenue include gain on sale of investments,
    debt retirement costs, foreign exchange gain on unhedged
    long-term debt, equity income on investees and other gains as
    detailed in the Consolidated Statements of Income and Retained
    Earnings (Deficit). 33




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  SEGMENTED
    OPERATIONS REVIEW
  CABLE
  FINANCIAL
    HIGHLIGHTS
  Change2008


2007($000s Cdn)

2008


2007


2006


%


%Service revenue (third party)


2,375,586



2,082,652



1,808,583



14.1



15.2Service operating income before
    amortization(1)


1,153,274



995,694



857,466



15.8



16.1Less:Interest


199,600



205,062



210,758



(2.7
)


(2.7
)Cash taxes on net income










1,761







(100.0
)Cash flow before the following:


953,674



790,632



644,947



20.6



22.6Capital expenditures and equipment costs (net)


648,336



553,031



451,549



17.2



22.5Free cash
    flow(1)


305,338



237,601



193,398



28.5



22.9Operating
    margin(1)


48.5%



47.8%



47.4%



0.7



0.4   (1)
    See key performance drivers on page 9.  2008
    vs. 2007
  OPERATING
    HIGHLIGHTS
  
    During the year the Company added 226,574 Digital Phone lines
    and as at August 31, 2008 had 611,931 lines. Digital Phone
    line penetration stands at over 30% of Basic customers who have
    the service available to them.
    Digital customers increased during the year by 143,180 to
    906,320. Basic cable subscribers grew by 21,279 to 2,248,120.
    During the year Shaw added 114,206 Internet customers to total
    1,565,962 as at August 31, 2008. Internet penetration of
    Basic now stands at 69.7% up from 65.2% at August 31, 2007.
    Shaw recently announced the acquisition of the Campbell River
    cable system in British Columbia. This acquisition is
    complementary to and will provide synergies with existing
    operations. The transaction is valued at approximately
    $46.0 million and is expected to close during the first
    half of fiscal 2009.     34




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        2007
    vs. 2006
  OPERATING
    HIGHLIGHTS
  
    Digital Phone lines grew by 172,650 to 385,357. Service
    expansion continued in the year with the service being available
    to over 80% of homes passed.
    Internet penetration of Basic exceeds 65% and as at
    August 31, 2007 Shaw had 1,451,756 customers, adding
    134,301 in the year. Digital customers increased by 90,556 to
    763,140 and Basic cable subscribers were up by 20,521 to
    2,226,841.
    During 2007, the Company completed acquisitions of several cable
    systems that complement existing operations, adding
    approximately 20,000 cable subscribers.
    Free cash flow for 2007 of $237.6 million compared to
    $193.4 million in 2006.      line-up,
   35




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    CAPITAL
    EXPENDITURES AND EQUIPMENT COSTS (NET) 
    CABLE
  Change2008


2007(In $000s Cdn)

2008


2007


2006


%


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


93,547



90,016



79,230



3.9



13.6Success-based(2)


102,735



82,238



87,365



24.9



(5.9
)Upgrades and
    enhancement(3)


271,242



254,786



192,875



6.5



32.1Replacement(4)


57,575



44,489



38,807



29.4



14.6Buildings and other


123,237



81,502



53,272



51.2



53.0648,336



553,031



451,549



17.2



22.5     (1)
    Build out of mainline cable and the addition of drops in new
    subdivisions.(2)
    Capital and equipment costs (net) related to the acquisition of
    new customers, including installation of internet and digital
    phone modems, DCTs, filters and commercial drops for Shaw
    Business Solutions customers.(3)
    Upgrades to the plant and build out of fiber backbone to reduce
    use of leased circuits and costs to decrease node size and
    Digital Phone capital.(4)
    Normal replacement of aged assets such as drops, vehicles and
    other equipment.  2008
    vs. 2007
         2007
    vs. 2006
  36




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##### Table of Contents



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


2007Change





Change2008


2007


2006(1)


Growth


%


Growth


%CABLE:Basic subscribers


2,248,120



2,226,841



2,206,320



21,279



1.0



20,521



0.9Penetration as a % of homes passed


63.5%



64.6%



65.4%Digital customers


906,320



763,140



672,584



143,180



18.8



90,556



13.5INTERNET:Connected and scheduled installations


1,565,962



1,451,756



1,317,455



114,206



7.9



134,301



10.2Penetration as % of basic


69.7%



65.2%



59.7%Stand-alone Internet not included in basic cable


214,127



182,569



158,475



31,558



17.3



24,094



15.2DIGITAL PHONENumber of
    lines(2)


611,931



385,357



212,707



226,574



58.8



172,650



81.2   (1)
    August 31, 2006 is restated for comparative purposes as if
    the acquisition of cable systems in British Columbia and Ontario
    had occurred on that date.(2)
    Represents primary and secondary lines on billing plus pending
    installs.  line-up pay-per-view
     37




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  SATELLITE
    (DTH and Satellite Services)
  FINANCIAL
    HIGHLIGHTS
  Change2008


2007($000s Cdn)

2008


2007


2006


%


%DTH (Star Choice)


640,061



605,176



567,807



5.8



6.6Satellite Services


89,212



86,617



82,894



3.0



4.5Service revenue (third party)


729,273



691,793



650,701



5.4



6.3Service operating income before
    amortization(1)DTH (Star Choice)


206,541



196,404



175,401



5.2



12.0Satellite Services


48,421



47,527



45,050



1.9



5.5254,962



243,931



220,451



4.5



10.7Less:Interest(2)


29,599



38,563



42,100



(23.2
)


(8.4
)Cash taxes on net income










98







(100.0
)Cash flow before the following


225,363



205,368



178,253



9.7



15.2Less capital expenditures and equipment costs (net):Success-based


72,512



73,504



85,341



(1.3
)


(13.9
)Transponders and other


5,558



13,273



20,865



(58.1
)


(36.4
)78,070



86,777



106,206



(10.0
)


(18.3
)Free cash
    flow(1)


147,293



118,591



72,047



24.2



64.6Operating margin


35.0%



35.3%



33.9%



(0.3
)


1.4   (1)
    See key performance drivers on page 9.(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
  2008


2007


2006Star Choice
    Customers(1)


892,528



879,585



869,208   (1)
    Including seasonal customers who temporarily suspend their
    service. 38




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  SATELLITE
    (DTH and Satellite Services)
  2008
    vs. 2007
  OPERATING
    HIGHLIGHTS
  
    Free cash flow of $147.3 million for the year compares to
    $118.6 million last year and $72.0 million in 2006.
    During the year Star Choice added 12,943 customers and as at
    August 31, 2008 customers now total 892,528.            2007
    vs. 2006
  OPERATING
    HIGHLIGHTS
  
    Free cash flow of $118.6 million for 2007 increased from
    $72.0 million in 2006.
    During the year Star Choice added 10,377 customers and as at
    August 31, 2007 customers now total 879,585.       39




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
    IV.
    FINANCIAL
    POSITION                   40




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
      Non-Voting
  V.
    CONSOLIDATED
    CASH FLOW ANALYSIS  Operating
    activities
 Change2008


2007(In $000s Cdn)

2008


2007


2006


%


%Funds flow from operations


1,222,895



1,028,363



847,197



18.9



21.4Net increase in non-cash working capital balances related to
    operations


19,304



(28,350
)


(324
)


168.3



(>100.0
)1,242,199



1,000,013



846,873



24.2



18.1     Investing
    activities
 Increase(In $000s Cdn)

2008

2007

2006

2008

2007Cash flow used in investing activities


(734,135
)


(719,777
)


(489,096
)


(14,358
)


(230,681
)      41




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Financing
    activities
    (In millions Cdn)

2008


2007


2006Redemption of COPrS


(100.0
)






(351.9
)Cost to terminate foreign currency forward contracts






(0.4
)


(15.8
)Repayment of $296.8 million Senior notes


(296.8
)






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


99.2



(300.4
)


(496.3
)Purchase of Class B Non-Voting Shares for cancellation


(99.8
)


(104.8
)


(146.6
)Dividends


(303.8
)


(201.2
)


(103.3
)Debt retirement costs


(4.3
)






Proceeds on bond forward contracts






0.2



2.5Issuance of Class B Non-Voting Shares


32.5



92.1



2.3Proceeds on prepayments of IRU










0.2Repayment of Partnership debt


(0.4
)


(0.4
)


(0.4
)Proceeds on $300 million senior unsecured notes










300.0Proceeds on $450 million senior unsecured notes










450.0Proceeds on $400 million senior unsecured notes






400.0



Repayment of long-term debt acquired on a business acquisition










(0.2
)Cash flow used in financing activities


(673.4
)


(114.9
)


(359.5
)   VI.
    LIQUIDITY
    AND CAPITAL RESOURCES       42




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
        Debt
    structure
      Off-balance
    sheet arrangement and guarantees
  Guarantees
  43




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
  Contractual
    obligations
   CONTRACTUAL
    OBLIGATIONS
  Payments due by periodWithin








More than(In $000s Cdn)

Total


1 year


2-3 years


4-5 years


5 yearsLong-term debt


2,731,913



509



837,347



824,865



1,069,192Operating lease obligations (maintenance and lease of satellite
    transponders, lease of transmission facilities and lease of
    premises)


874,442



110,152



204,439



195,028



364,823Purchase obligations


15,602



12,706



2,896







Other long-term obligations


66,598



1,448



2,863



6,984



55,3033,688,555



124,815



1,047,545



1,026,877



1,489,318   VII.
    ADDITIONAL
    INFORMATION  www.sedar.com
  VIII.
    COMPLIANCE
    WITH NYSE CORPORATE GOVERNANCE LISTING STANDARDS  www.shaw.ca
  IX.
    CERTIFICATION     44




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##### Table of Contents



Shaw
    Communications Inc.
 MANAGEMENTS
    DISCUSSION AND ANALYSIS
 August 31,
    2008
     45




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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, 2008
  November 25,
    2008
  MANAGEMENTS
    RESPONSIBILITY FOR FINANCIAL REPORTING
              MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
     46




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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, 2008
      [Signed]

[Signed]Jim Shaw

Steve WilsonChief Executive Officer and
    Vice Chair

Senior Vice President and
    Chief Financial Officer  47




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##### Table of Contents



Shaw
    Communications Inc.
    INDEPENDENT AUDITORS REPORT ON FINANCIAL
    STATEMENTS

Under Canadian Generally Accepted
    Auditing Standards and the Standards of the Public Company
    Accounting Oversight Board (United States)   Shaw
    Communications Inc.
            Calgary, Canada
    October 21, 2008

-s- Ernst & Young LLPChartered Accountants  48




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##### Table of Contents



Shaw
    Communications Inc.
    INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER
    FINANCIAL REPORTING
 Under the Standards of the Public
    Company Accounting Oversight Board (United States)
   Shaw
    Communications Inc.
              Calgary, Canada
    October 21, 2008

-s- Ernst & Young LLPChartered Accountants  49




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##### Table of Contents



Shaw
    Communications Inc.CONSOLIDATED BALANCE SHEETS
  2008


2007As at August 31 [thousands of Canadian dollars]

$


$ASSETSCurrentCash and cash equivalents






165,310Accounts receivable [note 3]


188,145



155,499Inventories [note 4]


51,774



60,601Prepaids and other


27,328



23,834Future income taxes [note 14]


137,220



185,000404,467



590,244Investments and other assets [note 5]


197,979



7,881Property, plant and equipment [note 6]


2,616,500



2,422,900Deferred charges [note 7]


274,666



278,525Intangibles [note 8]Broadcast rights


4,776,078



4,776,078Goodwill


88,111



88,1118,357,801



8,163,739LIABILITIES AND
    SHAREHOLDERS EQUITYCurrentBank indebtedness [note 9]


44,201



Accounts payable and accrued liabilities [notes 13 and
    17]


655,756



441,444Income taxes payable


2,446



4,304Unearned revenue


124,384



118,915Current portion of long-term debt [note 9]


509



297,238Current portion of derivative instruments [notes 1 and
    19]


1,349



828,645



861,901Long-term debt [note 9]


2,706,534



2,771,316Other long-term liability [note 17]


78,912



56,844Derivative instruments [notes 1 and 19]


518,856



Deferred credits [note 10]


687,836



1,151,724Future income taxes [note 14]


1,281,826



1,327,9146,102,609



6,169,699Commitments and contingencies[notes 9, 16 and
    17]Shareholders
    equityShare capital [note 11]Class A Shares


2,471



2,473Class B Non-Voting Shares


2,060,960



2,050,687Contributed surplus [note 11]


23,027



8,700Retained earnings (deficit)


226,408



(68,132
)Accumulated other comprehensive income (loss)
    [note 12]


(57,674
)


3122,255,192



1,994,0408,357,801



8,163,739   See accompanying notes
    [Signed]

[Signed]JR Shaw

Don MazankowskiDirector

Director  50




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##### Table of Contents



Shaw
    Communications Inc.
 CONSOLIDATED
    STATEMENTS OF INCOME AND RETAINED EARNINGS (DEFICIT)
  Years ended August 31 [thousands of Canadian dollars

2008


2007


2006except per share amounts]

$


$


$Service revenue[note 15]


3,104,859



2,774,445



2,459,284Operating, general and administrative expenses


1,696,623



1,534,820



1,381,367Service operating income before amortization[note 15]


1,408,236



1,239,625



1,077,917Amortization Deferred IRU revenue [note 10]


12,547



12,547



12,546Deferred equipment revenue [note 10]


126,601



104,997



80,256Deferred equipment costs [note 7]


(228,524
)


(203,597
)


(200,218
)Deferred charges [note 7]


(1,025
)


(5,153
)


(5,328
)Property, plant and equipment [note 6]


(414,732
)


(381,909
)


(385,607
)Operating income


903,103



766,510



579,566Amortization of financing costs  long-term debt


(3,627
)






Interest [notes 7, 9, 10 and 13]


(230,588
)


(245,043
)


(254,303
)668,888



521,467



325,263Gain on sale of investments [note 5]






415



50,315Debt retirement costs [notes 7 and 9]


(5,264
)






(12,248
)Foreign exchange gain on unhedged long-term debt










5,369Other gains [note 1]


24,009



9,105



5,845Income before income taxes


687,633



530,987



374,544Income tax expense (recovery) [note 14]


16,366



142,871



(83,662
)Income before the following


671,267



388,116



458,206Equity income on investees [note 5]


295



363



44Net income


671,562



388,479



458,250Deficit, beginning of year


(68,132
)


(172,701
)


(428,855
)Adjustment for adoption of new accounting policy
    [note 1]


1,754







Reduction on Class B Non-Voting Shares purchased for
    cancellation [note 11]


(74,963
)


(82,702
)


(97,056
)Amortization of opening fair value loss on a foreign currency
    forward contract [note 7]










(1,705
)Dividends  Class A Shares and Class B
    Non-Voting Shares


(303,813
)


(201,208
)


(103,335
)Retained earnings (deficit), end of year


226,408



(68,132
)


(172,701
)Earnings per share[note 11]Basic

$
1.56


$
0.90


$
1.05Diluted

$
1.55


$
0.89


$
1.05   See accompanying notes
 51




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##### Table of Contents



Shaw
    Communications Inc.
 CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME AND ACCUMULATED OTHER
    COMPREHENSIVE INCOME (LOSS)
  2008


2007


2006Years ended August 31 [thousands of Canadian dollars]

$


$


$Net income


671,562



388,479



458,250Other comprehensive income (loss) [note 12]Change in unrealized fair value of derivatives designed as cash
    flow hedges


(36,193
)






Adjustment for hedged items recognized in the period


40,223







Reclassification of foreign exchange gain on hedging derivatives
    to income to offset foreign exchange loss on US denominated debt


(4,796
)






Unrealized foreign exchange gain (loss) on translation of a
    self- sustaining foreign operation


7



(18
)


(35
)(759
)


(18
)


(35
)Comprehensive income


670,803



388,461



458,215Accumulated other comprehensive income, beginning of
    period


312



330



365Adjustment for adoption of new accounting policy
    [note 1]


(57,227
)






Other comprehensive loss


(759
)


(18
)


(35
)Accumulated other comprehensive income (loss), end of
    period


(57,674
)


312



330   See accompanying notes
 52




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##### Table of Contents



Shaw
    Communications Inc.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS
   2008


2007


2006Years ended August 31 [thousands of Canadian dollars]

$


$


$OPERATING
    ACTIVITIES[note 20]Funds flow from operations


1,222,895



1,028,363



847,197Net increase in non-cash working capital balances related to
    operations


19,304



(28,350
)


(324
)1,242,199



1,000,013



846,873INVESTING
    ACTIVITIESAdditions to property, plant and equipment [note 15]


(606,093
)


(554,565
)


(423,855
)Additions to equipment costs (net) [note 15]


(121,327
)


(96,516
)


(107,929
)Net customs duty recovery on equipment costs


22,267







Net decrease (increase) to inventories


8,827



(6,607
)


(8,770
)Deposits on wireless spectrum licenses


(38,447
)






Cable business acquisitions [note 2]






(72,361
)


(5,829
)Proceeds on sale of investments and other assets


638



15,970



88,143Acquisition of investments










(9,392
)Additions to deferred charges [note 7]






(5,698
)


(21,464
)(734,135
)


(719,777
)


(489,096
)FINANCING
    ACTIVITIESIncrease (decrease) in bank indebtedness


44,201



(20,362
)


20,362Proceeds on prepayment of IRU










228Increase in long-term debt


297,904



460,000



1,295,000Long-term debt repayments


(640,142
)


(340,449
)


(1,414,067
)Cost to terminate forward contracts [note 9]






(370
)


(15,774
)Proceeds on bond forward contracts






190



2,486Debt retirement costs


(4,272
)






Issue of Class B Non-Voting Shares, net of after-tax
    expenses


32,498



92,058



2,274Purchase of Class B Non-Voting Shares for cancellation
    [note 11]


(99,757
)


(104,763
)


(146,640
)Dividends paid on Class A Shares and Class B
    Non-Voting Shares


(303,813
)


(201,208
)


(103,335
)(673,381
)


(114,904
)


(359,466
)Effect of currency translation on cash balances and cash
    flows


7



(22
)


(24
)Increase (decrease) in cash and cash equivalents


(165,310
)


165,310



(1,713
)Cash and cash equivalents, beginning of year


165,310







1,713Cash and cash equivalents, end of year






165,310



   See accompanying notes
 53




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  1.
    SIGNIFICANT
    ACCOUNTING POLICIES      Basis
    of consolidation
        2008


2007$


$Working capital


345



720Deferred charges


120



139Property, plant and equipment


18,120



18,80818,585



19,667Debt


22,083



22,561Proportionate share of net liabilities


(3,498
)


(2,894
)   2008


2007


2006$


$


$Operating, general and administrative expenses


1,829



1,829



1,829Amortization


(707
)


(707
)


(714
)Interest


(1,389
)


(1,418
)


(1,445
)Other gains


848



735



2,588Proportionate share of income before income taxes


581



439



2,258Cash flow provided by operating activities


1,608



1,284



74Cash flow provided by investing activities










8,848Cash flow used in financing activities


(478
)


(449
)


(422
)Proportionate share of increase in cash


1,130



835



8,500  54




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Investments
    and other assets
  and/or
    Revenue
    and expenses
  (i)
    Service
    revenue        (ii)
    Deferred
    equipment revenue and deferred equipment costs       55




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  (iii)
    Deferred
    IRU revenue    Cash
    and cash equivalents
    Allowance
    for doubtful accounts
    Inventories
  first-in,
  Property,
    plant and equipment
    Asset

Estimated useful lifeCable and telecommunications distribution system

6-15 yearsDigital cable terminals and modems

4-7 yearsSatellite audio, video and data network equipment and DTH
    receiving equipment

4-10 yearsBuildings

20-40 yearsData processing

4 yearsOther

3-10 years  56




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    Deferred
    charges
    Intangibles
      Deferred
    credits
    Interest
    capitalization
    Income
    taxes
   57




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    Foreign
    currency translation
        Derivative
    financial instruments
       58




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Employee
    benefit plans
      Stock-based
    compensation
      Earnings
    per share
   59




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Guarantees
    Use
    of estimates and measurement uncertainty
      Adoption
    of recent Canadian accounting pronouncements
  (i)
    Financial
    instruments        60




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
          Increase (decrease)August 31, 2008


September 1, 2007$


$Consolidated balance
    sheets:Deferred charges


(24,852
)


(30,746
)Current portion of derivative instruments


1,349



5,119Long-term debt


(24,870
)


(29,681
)Derivative instruments


518,856



521,560Deferred credits


(453,033
)


(459,656
)Future income taxes


(10,953
)


(12,615
)Retained earnings


1,792



1,754Accumulated other comprehensive loss


57,993



57,227Increase in retained
    earnings:Adjusted for adoption of new accounting policy


1,754



1,754Increase in net income


38



1,792



1,754   61




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Increase (decrease)in net incomeAugust 31, 2008$Consolidated statement of
    income:Decrease in amortization of deferred charges


3,839Increase in amortization of financing costs 
    long-term debt


(3,627
)Decrease in interest expense  debt


94Increase in debt retirement costs


(252
)Increase in income tax expense


(16
)Increase in net income


38Increase in earnings per
    share:


   (ii)
    Accounting
    changes   Recent
    Canadian accounting pronouncements
  (i)
    Inventories   (ii)
    Financial
    instruments   (iii)
    Capital
    disclosures   (iv)
    Goodwill
    and intangible assets  62




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  2.
    BUSINESS
    ACQUISITIONS  2007TotalpurchaseCash

Accounts payable

price$

$

$(i) Cable systems


72,336



3,000



75,336   2006TotalpurchaseCash

Accounts payable

price$

$

$(ii) Cable systems


5,829



25



5,854     2007


2006$


$Identifiable net assets acquired at assigned fair valuesProperty, plant and equipment


8,232



957Broadcast rights [note 8]


84,594



6,83792,826



7,794Working capital deficiency


2,973



129Long-term debt






218Future income taxes


14,517



1,59317,490



1,940Purchase price


75,336



5,854   (i)
    During 2007, the Company purchased four cable systems serving
    approximately 20,200 basic subscribers in British Columbia and
    Ontario. The $3,000 value of the 179,588 Class B Non-Voting
    Shares, issued as partial consideration for one of the
    acquisitions, was determined based upon the average market price
    over a short period prior to the date the terms of the purchase
    were agreed to and announced.(ii)
    Effective June 30, 2006 and July 31, 2006, the Company
    purchased two cable systems serving approximately 1,800 basic
    subscribers in British Columbia. 63




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
   3.
    ACCOUNTS
    RECEIVABLE  2008


2007$


$Subscriber and trade receivables


197,163



161,765Due from officers and employees


841



230Due from related parties [note 18]


875



841Miscellaneous receivables


4,662



7,842203,541



170,678Less allowance for doubtful accounts


(15,396
)


(15,179
)188,145



155,499     4.
    INVENTORIES  2008


2007$


$Subscriber equipment


49,317



57,628Other


2,457



2,97351,774



60,601     5.
    INVESTMENTS
    AND OTHER ASSETS  2008


2007$


$Investments, at cost net of write-downs:Investment in a private technology company


1,295



1,295Deposits:Wireless spectrum licenses


190,912



Other assets:Employee home relocation mortgages and loans
    [note 18]


3,600



4,746Other


2,172



1,840197,979



7,881   Canadian
    Hydro
   64




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Q9
    Networks
    Deposits
    Investments
    at equity
      2008


2007


2006$


$


$Specialty channel networks










(91
)Other


295



363



135295



363



44   Other
    6.
    PROPERTY,
    PLANT AND EQUIPMENT  2008


2007Accumulated


Net book





Accumulated


Net bookCost


amortization


value


Cost


amortization


value$


$


$


$


$


$Cable and telecommunications distribution system


3,664,151



1,784,014



1,880,137



3,336,559



1,562,989



1,773,570Digital cable terminals and modems


258,141



112,794



145,347



283,215



153,746



129,469Satellite audio, video and data network equipment and DTH
    receiving equipment


153,352



90,453



62,899



176,809



99,177



77,632Buildings


327,641



96,108



231,533



268,475



83,141



185,334Data processing


152,929



78,107



74,822



126,672



58,147



68,525Other assets


208,302



119,754



88,548



195,793



105,686



90,1074,764,516



2,281,230



2,483,286



4,387,523



2,062,886



2,324,637Land


44,354







44,354



34,109







34,109Assets under construction


88,860







88,860



64,154







64,1544,897,730



2,281,230



2,616,500



4,485,786



2,062,886



2,422,900  65




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    7.
    DEFERRED
    CHARGES  2008


2007Accumulated


Net book





Accumulated


Net bookCost


amortization


value


Cost


amortization


value$


$


$


$


$


$Equipment costs


686,406



438,831



247,575



622,811



399,695



223,116Financing costs and credit facility arrangement fees


5,039



1,260



3,779



56,573



21,037



35,536Connection and installation costs


24,290



19,073



5,217



32,349



24,187



8,162Other


18,214



119



18,095



11,814



103



11,711733,949



459,283



274,666



723,547



445,022



278,525     8.
    INTANGIBLES  Carrying amount2008


2007$


$Broadcast rightsCable systems


3,792,946



3,792,946DTH and satellite services


983,132



983,1324,776,078



4,776,078Goodwill  non-regulated satellite services


88,111



88,111Net book value


4,864,189



4,864,189     Broadcast rights


Goodwill$


$August 31, 2006


4,691,484



88,111Business acquisitions [note 2]


84,594



August 31, 2007 and 2008


4,776,078



88,111  66




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  9.
    LONG-TERM
    DEBT  2008


2007Translated








Translatedat year-end


Adjustment


Translated


at year-end


Adjustment


TranslatedEffective

exchange


for hedged


at hedged


exchange


for hedged


at hedgedinterest rates

rate (1)


debt (2)


rate


rate


debt (2)


rate%

$


$


$


$


$


$CorporateBank loans

Variable


55,000







55,000











Senior notes Cdn $400,000 5.70% Senior notes due March 2, 2017

5.72


395,196







395,196



400,000







400,000Cdn $450,000 6.10% Senior notes due November 16, 2012

6.11


445,997







445,997



450,000







450,000Cdn $300,000 6.15% Senior notes due May 9, 2016

6.34


291,059







291,059



300,000







300,000Cdn $296,760 7.40% Senior notes due October 17, 2008

7.40














296,760







296,760US $440,000 8.25% Senior notes due April 11, 2010

7.88


465,711



175,340



641,051



464,728



177,892



642,620US $225,000 7.25% Senior notes due April 6, 2011

7.68


237,781



116,888



354,669



237,645



118,193



355,838US $300,000 7.20% Senior notes due December 15, 2011

7.61


317,222



158,250



475,472



316,860



159,990



476,850Cdn $350,000 7.50% Senior notes due November 20, 2013

7.50


345,685







345,685



350,000







350,000COPrS Cdn $100,000 Due September 30, 2027

8.54














100,000







100,0002,553,651



450,478



3,004,129



2,915,993



456,075



3,372,068Other subsidiaries and entitiesVideon CableSystems Inc.  Cdn $130,000 8.15%Senior Debentures Series A due April 26, 2010

7.63


131,429







131,429



130,000







130,000Burrard Landing Lot 2 Holdings Partnership

6.31


21,963







21,963



22,561







22,561153,392







153,392



152,561







152,561Total consolidated debt




2,707,043



450,478



3,157,521



3,068,554



456,075



3,524,629Less current portion




509







509



297,238







297,2382,706,534



450,478



3,157,012



2,771,316



456,075



3,227,391   (1)
    Long-term debt, excluding bank loans, is presented net of
    unamortized discounts, finance costs, fair value adjustment on
    debt and bond forward proceeds of $24,870. Amortization for 2008
    amounted to $3,822 of which $3,627 was recorded as amortization
    of financing costs and $195 was recorded as interest expense.(2)
    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 $450,478 (2007 
    $456,075) representing the amount of the corresponding amount in
    derivative instruments (see note 1).   67




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Corporate
  Bank
    loans
        Senior
    notes
      US Senior




Effectivenote principal

Coupon rate


interest rate


Exchange rate$

%


%


Cdn $ vs US$440,000


8.25



7.88



1.4605225,000


7.25



7.68



1.5815300,000


7.20



7.61



1.5895   Satellite
    Services
   68




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Other
    subsidiaries and entities
  Videon
    CableSystems Inc. (Videon)
      Burrard
    Landing Lot 2 Holdings Partnership
    Debt
    retirement costs
        Debt
    covenants
   69




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Long-term
    debt repayments
    Exchange rateAt year-end


adjusted forexchange rate


hedged rates$


$2009


509



5092010


597,821



773,1612011


239,526



356,4142012


374,213



532,4632013


450,652



450,652Thereafter


1,069,192



1,069,1922,731,913



3,182,391   10.
    DEFERRED
    CREDITS  2008


2007Accumulated


Net book





Accumulated


Net bookAmount


amortization


value


Amount


amortization


value$


$


$


$


$


$IRU prepayments


629,119



94,158



534,961



629,119



81,611



547,508Foreign exchange gains on translating hedged long-term debt














456,075







456,075Equipment revenue


392,458



252,027



140,431



331,980



199,252



132,728Connection fee and installation revenue


33,247



24,403



8,844



37,007



27,174



9,833Fair value adjustment on debt assumed on acquisition














6,084



4,354



1,730Bond forward proceeds














2,486



636



1,850Deposit on future fiber sale


2,000







2,000



2,000







2,000Other


1,600







1,600











1,058,424



370,588



687,836



1,464,751



313,027



1,151,724        70




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    11.
    SHARE
    CAPITAL  Authorized
      Number of securities




2008


20072008

2007




$


$22,550,064


22,563,064


Class A Shares


2,471



2,473405,882,652


408,770,759


Class B Non-Voting Shares


2,060,960



2,050,687428,432,716


431,333,823





2,063,431



2,053,160   Class A
    Shares and Class B Non-Voting Shares
      Class A Shares


Class B Non-Voting SharesNumber


$


Number


$August 31, 2005


22,689,864



2,487



417,268,010



2,021,686Class A Share conversions


(106,000
)


(12
)


106,000



12Purchase of shares for cancellation










(10,239,800
)


(49,584
)Stock option exercises










165,598



2,377August 31, 2006


22,583,864



2,475



407,299,808



1,974,491Class A Share conversions


(20,800
)


(2
)


20,800



2Purchase of shares for cancellation










(4,408,400
)


(22,061
)Stock option exercises










5,678,963



95,398Issued in respect of acquisition










179,588



3,000Share issue costs














(143
)August 31, 2007


22,563,064



2,473



408,770,759



2,050,687Class A Share conversions


(13,000
)


(2
)


13,000



2Purchase of shares for cancellation










(4,898,300
)


(24,794
)Stock option exercises










1,997,193



35,065August 31, 2008


22,550,064



2,471



405,882,652



2,060,960  71




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    Stock
    option plan
      2008


2007


2006Weighted





Weighted





Weightedaverage





average





averageexercise





exercise





exerciseprice





price





priceNumber


$


Number


$


Number


$Outstanding, beginning of year


17,574,801



17.08



19,117,602



16.30



16,904,500



16.30Granted


10,486,500



23.73



6,693,500



19.03



5,539,000



16.31Forfeited


(2,133,939
)


20.04



(2,594,140
)


17.56



(3,216,000
)


16.32Exercised


(1,963,591
)


16.48



(5,642,161
)


16.28



(109,898
)


15.92Outstanding, end of year


23,963,771



19.77



17,574,801



17.08



19,117,602



16.30     Options outstanding


Options exercisableNumber


Weighted


Weighted


Number


Weighted


Weightedoutstanding at


average


average


exercisable at


average


averageAugust 31,


remaining


exercise


August 31,


remaining


exerciseRange of prices

2008


contractual life


price


2008


contractual life


price$8.69


20,000



5.14


$
8.69



20,000



5.14


$
8.69$14.85  $22.27


15,413,271



5.69


$
17.20



8,802,799



3.74


$
16.47$22.28  $26.20


8,530,500



9.01


$
24.44



197,000



8.75


$
22.32      72




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    2007


2006$


$Net income


388,479



458,250Fair value of stock option grants


119



1,870Pro forma net income


388,360



456,380Pro forma basic earnings per share


0.90



1.05Pro forma diluted earnings per share


0.89



1.04       2008


2007


2006Dividend yield


2.92%



2.79%



1.91%Risk-free interest rate


4.21%



4.12%



3.98%Expected life of options


5 years



4 years



4 yearsExpected volatility factor of the future expectedmarket price of Class B Non-Voting Shares


24.5%



26.0%



20.4%   Other
    stock options
      Warrants
     73




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Contributed
    surplus
    2008


2007$


$Balance, beginning of year


8,700



5,110Stock-based compensation


16,894



6,787Stock options exercised


(2,567
)


(3,197
)Balance, end of year


23,027



8,700     Dividends
      Share
    transfer restriction
   74




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Earnings
    per share
    2008


2007


2006Numerator for basic and diluted earnings per share($)


671,562



388,479



458,250Denominator (thousands of shares)Weighted average number of Class A Shares and Class BNon-Voting Shares for basic earnings per share


431,070



432,493



435,332Effect of potentially dilutive securities


2,797



3,249



Weighted average number of Class A Shares and Class BNon-Voting Shares for diluted earnings per share


433,867



435,742



435,332Earnings per share($)Basic


1.56



0.90



1.05Diluted


1.55



0.89



1.05     12.
    OTHER
    COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE
    INCOME (LOSS)    Amount


Income Taxes


Net$


$


$Change in unrealized fair value of derivatives designed as cash
    flow hedges


(43,327
)


7,134



(36,193
)Adjustment for hedged items recognized in the period


49,801



(9,578
)


40,223Reclassification of foreign exchange gain on hedging derivatives
    to income to offset foreign exchange loss on US denominated debt


(5,597
)


801



(4,796
)Unrealized foreign exchange gain on translation of a
    self-sustaining
    foreign operation


7







7884



(1,643
)


(759
)  75




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    August 31, 2008


August 31, 2007$


$Unrealized foreign exchange gain on translation of a
    self-sustaining
    foreign operation


319



312Fair value of derivatives


(57,993
)


(57,674
)


312   13.
    ACCOUNTS
    PAYABLE AND ACCRUED LIABILITIES  2008


2007$


$Trade


61,980



41,871Accrued liabilities


388,870



192,435Accrued network fees


103,150



100,468Interest


75,064



86,504Related parties [note 18]


18,712



18,718Short-term financing


6,532



Current portion of pension plan liability [note 17]


1,448



1,448655,756



441,444    76




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  14.
    INCOME
    TAXES    2008


2007$


$Future income tax liabilities:Property, plant and equipment


143,965



133,225Broadcast rights


879,660



1,015,800Partnership income


271,157



281,2081,294,782



1,430,233Future income tax assets:Non-capital loss carryforwards


137,220



280,628Deferred charges


2,792



6,691Foreign exchange on long-term debt and fair value of derivative
    instruments


10,164



150,176



287,319Net future income tax liability


1,144,606



1,142,914Current portion of future income tax asset


137,220



185,000Future income tax liability


1,281,826



1,327,914      77




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    2008


2007


2006$


$


$Current statutory income tax rate


32.0%



33.75%



33.75%Income tax expense at current statutory rates


220,043



179,208



126,409Increase (decrease) in taxes resulting from:Large corporations tax










1,859Non-taxable portion of foreign exchange gains or losses and
    amounts on sale/write-down of assets and investments






(95
)


(9,077
)Valuation allowance


(9,867
)


(9,941
)


(29,091
)Effect of future tax rate reductions


(187,990
)


(25,535
)


(175,752
)Originating temporary differences recorded at future tax rates
    expected to be in effect when realized


(11,794
)


(3,040
)


750Other


5,974



2,274



1,240Income tax expense (recovery)


16,366



142,871



(83,662
)     2008


2007


2006$


$


$Current tax expense










1,859Future income tax expense related to origination and reversal of
    temporary differences


214,223



178,347



119,322Future income tax recovery resulting from rate changes and
    valuation allowance


(197,857
)


(35,476
)


(204,843
)Income tax expense (recovery)


16,366



142,871



(83,662
)  78




---



##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  15.
    BUSINESS
    SEGMENT INFORMATION      2008SatelliteCable


DTH


Satellite Services


Total


Total$


$


$


$


$Service revenue  total


2,379,361



650,653



92,712



743,365



3,122,726Intersegment


(3,775
)


(10,592
)


(3,500
)


(14,092
)


(17,867
)2,375,586



640,061



89,212



729,273



3,104,859Service operating income before amortization


1,153,274



206,541



48,421



254,962



1,408,236Service operating income as% of external revenue


48.5%



32.3%



54.3%



35.0%



45.4%Interest(1)


199,600



n/a



n/a



29,599



229,199Burrard Landing Lot 2 Holdings Partnership


















1,389230,588Cash
    taxes(1)


















Segment assets


6,465,183



869,710



523,736



1,393,446



7,858,629Corporate assets


















499,172Total assets


















8,357,801Capital expenditures and equipment costs (net) by segmentCapital expenditures


602,848



2,997



(766
)


2,231



605,079Equipment costs (net)


45,488



75,839







75,839



121,327648,336



78,836



(766
)


78,070



726,406Reconciliation to Consolidated Statements of Cash FlowsAdditions to property, plant and equipment


















606,093Additions to equipment costs (net)


















121,327Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows


















727,420Increase in working capital related to capital expenditures


















2,608Less: Satellite services equipment
    profit(4)


















(3,622
)Total capital expenditures and equipment costs (net) reported by
    segments


















726,406     79




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  2007SatelliteCable


DTH


Satellite Services


Total


Total$


$


$


$


$Service revenue  total


2,086,066



611,713



90,117



701,830



2,787,896Intersegment


(3,414
)


(6,537
)


(3,500
)


(10,037
)


(13,451
)2,082,652



605,176



86,617



691,793



2,774,445Service operating income before amortization


995,694



196,404



47,527



243,931



1,239,625Service operating income as% of external revenue


47.8%



32.5%



54.9%



35.3%



44.7%Interest(1)


205,062



n/a



n/a



38,563



243,625Burrard Landing Lot 2 Holdings Partnership


















1,418245,043Cash
    taxes(1)


















Segment assets


6,300,834



894,893



529,411



1,424,304



7,725,138Corporate assets


















438,601Total assets


















8,163,739Capital expenditures and equipment costs (net) by segmentCapital expenditures


533,485



3,958



5,849



9,807



543,292Equipment costs (net)


19,546



76,970







76,970



96,516553,031



80,928



5,849



86,777



639,808Reconciliation to Consolidated Statements of Cash FlowsAdditions to property, plant and equipment


















554,565Additions to equipment costs (net)


















96,516Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows


















651,081Decrease in working capital related to capital expenditures


















(7,678
)Less: IRU
    prepayments(3)


















(7
)Less: Satellite services equipment
    profit(4)


















(3,588
)Total capital expenditures and equipment costs (net) reported by
    segments


















639,808     80




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  2006SatelliteCable


DTH


Satellite Services


Total


Total$


$


$


$


$Service revenue  total


1,811,579



573,100



86,434



659,534



2,471,113Intersegment


(2,996
)


(5,293
)


(3,540
)


(8,833
)


(11,829
)1,808,583



567,807



82,894



650,701



2,459,284Service operating income before amortization


857,466



175,401



45,050



220,451



1,077,917Service 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



252,858Burrard Landing Lot 2 Holdings Partnership


















1,445Total interest


















254,303Cash
    taxes(1)


1,761



n/a



n/a



98



1,859Segment assets


5,965,103



896,941



564,044



1,460,985



7,426,088Corporate assets


















235,455Total assets


















7,661,543Capital expenditures and equipment costs (net) by segmentCapital expenditures


432,156



5,598



12,072



17,670



449,826Equipment costs (net)


19,393



88,536







88,536



107,929451,549



94,134



12,072



106,206



557,755Reconciliation to Consolidated Statements of Cash FlowsAdditions to property, plant and equipment


















423,855Additions to equipment costs (net)


















107,929Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows


















531,784Increase in working capital related to capital expenditures


















31,343Less: Partnership capital
    expenditures(2)


















(1,803
)Less: IRU
    prepayments(3)


















(281
)Less: Satellite services equipment
    profit(4)


















(3,288
)Total capital expenditures and equipment costs (net) reported by
    segments


















557,755   (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 81




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  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
    costs (net).  (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
    costs (net).(4)
    The profit from the sale of satellite equipment is subtracted
    from the calculation of segmented capital expenditures and
    equipment costs (net) 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
    18 Ku-band transponders on the Anik F2 satellite from Telesat
    Canada. In addition, the Company leases a number of C-band and
    Ku-band transponders. Under the Ku-band F1 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
    15 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:  $2009


110,1522010


103,6082011


100,8312012


98,2312013


96,797Thereafter


364,823874,442     (iii)
    At August 31, 2008, the Company had capital expenditure
    commitments of $15,602 covering a two-year period.  Contingencies
   82




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Guarantees
    Indemnities
        Irrevocable
    standby letters of credit and performance bonds
    17.
    PENSION
    PLANS  Defined
    contribution pension plans
   83




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Defined
    benefit pension plan
      2008


2007$


$Accrued benefit obligation, beginning of year


158,491



111,086Current service cost


4,610



2,956Interest cost


8,931



6,129Actuarial losses


14,211



13,881Past service cost






25,767Payment of benefits to employees


(1,448
)


(1,328
)Accrued benefit obligation, end of year


184,795



158,491Plan value of assets, end of year






Plan deficit, end of year


(184,795
)


(158,491
)   Reconciliation of accrued benefit obligation to Consolidated
    Balance

2008


2007Sheet accrued pension benefit liability

$


$Balance of unamortized pension obligation:Unamortized past service costs


33,648



38,479Unamortized actuarial loss


70,787



61,720104,435



100,199Accrued pension benefit liability recognized in Consolidated
    Balance Sheet:Accounts payable and accrued liabilities


1,448



1,448Long-term liability


78,912



56,84480,360



58,292Accrued benefit obligation, end of year as above


184,795



158,491     2008


2007Accrued benefit obligation

%


%Discount rate


6.25



5.50Rate of compensation increase


5.00



5.00   84




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  2008


2007


2006Benefit cost for the year

%


%


%Discount rate


5.50



5.25



5.00Rate of compensation increase


5.00



5.00



4.00     2008


2007


2006$


$


$Current service cost


4,610



2,956



2,271Interest cost


8,931



6,129



5,088Past service cost






25,767



Actuarial losses


14,211



13,881



4,811Difference between amortization of actuarial loss recognized for
    the year and actual actuarial loss on the accrued benefit
    obligation for the year


(9,067
)


(9,721
)


(1,036
)Difference between amortization of past service costs recognized
    for the year and actual past service costs on the accrued
    benefit obligation for the year


4,831



(18,204
)


2,567Pension expense


23,516



20,808



13,701       $2009


1,4482010


1,4352011


1,4282012


1,4202013


5,5642014  2018


55,303   18.
    RELATED
    PARTY TRANSACTIONS    (i)  Normal
    course transactions
   85




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Corus
    Entertainment Inc. (Corus)
      Burrard
    Landing Lot 2 Holdings Partnership
    Other
        (ii)  Other
    transactions
       86




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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    (ii)
    Investments and other assets    (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      2008


2007Carrying


Estimated


Carrying


Estimatedvalue


fair value


value


fair value$


$


$


$Long-term debt


2,707,043



2,743,250



3,068,554



3,101,732Derivative financial instruments 
    Cross-currency
    interest rate exchange agreements


513,385



513,385







510,731US currency purchase and purchase option contracts


6,820



6,820







15,9483,227,248



3,263,455



3,068,554



3,628,411    87




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
      Credit
    risks
      Interest
    rate risks
     88




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  20.
    CONSOLIDATED
    STATEMENTS OF CASH FLOWS      2008


2007


2006$


$


$Net income


671,562



388,479



458,250Non-cash items:Amortization Deferred IRU revenue


(12,547
)


(12,547
)


(12,546
)Deferred equipment revenue


(126,601
)


(104,997
)


(80,256
)Deferred equipment costs


228,524



203,597



200,218Deferred charges


1,025



5,153



5,328Property, plant and equipment


414,732



381,909



385,607Financing costs  long term debt


3,627







Future income tax expense (recovery)


16,366



142,871



(85,521
)Write-down of investments










519Gain on sale of investments






(415
)


(50,315
)Equity income on investees


(295
)


(363
)


(44
)Debt retirement costs


5,264







12,248Fair value loss on foreign currency forward contracts










360Foreign exchange gain on unhedged long-term debt










(5,369
)Stock-based compensation


16,894



6,787



3,272Defined benefit pension plan


22,068



19,120



12,612Net customs duty recovery on equipment costs


(22,267
)






Other


4,543



(1,231
)


2,834Funds flow from operations


1,222,895



1,028,363



847,197   (ii)
    Changes in non-cash working capital balances related to
    operations include the following:  2008


2007


2006$


$


$Accounts receivable


(32,646
)


(16,435
)


(23,561
)Prepaids and other


(9,900
)


(9,563
)


(5,741
)Accounts payable and accrued liabilities


54,839



(14,435
)


22,338Income taxes payable


(58
)


661



(1,348
)Unearned revenue


7,069



11,422



7,98819,304



(28,350
)


(324
)   (iii)
    Interest and income taxes paid (recovered) and classified as
    operating activities are as follows:  2008

2007

2006$

$

$Interest


241,899



231,513



245,404Income taxes


57



(717
)


3,203  89




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  (iv)
    Non-cash transactions    2008


2007


2006$


$


$Class B Non-Voting Shares issued on an acquisition
    [note 2]






3,000



   21.
    UNITED
    STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES    (a)
    Reconciliation
    to US GAAP  2008


2007


2006$


$


$Net income using Canadian GAAP


671,562



388,479



458,250Add (deduct) adjustments for:Deferred charges and
    credits(2)


(18,808
)


5,672



15,362Foreign exchange gains on hedged long-term
    debt(3)






47,382



78,937Reclassification of hedge losses from other comprehensive
    income(8)






(47,382
)


(78,937
)Capitalized
    interest(11)


4,133



2,244



Income
    taxes(12)


(2,048
)


(10,461
)


(8,990
)Net income using US GAAP


654,839



385,934



464,622Unrealized foreign exchange loss on translation of a
    self-sustaining
    foreign operation






(18
)


(35
)Reclassification adjustments for gains on available-for-sale
    securities included in net
    income(7)










(29,728
)Adjustment to fair value of
    derivatives(8)






5,730



(62,843
)Reclassification of derivative losses to income to offset
    foreign exchange gains on hedged long-term
    debt(8)






40,215



74,632Change in funded status of non-contributory defined pension
    plan(10)


(3,135
)






Minimum liability for pension
    plan(10)






5,813



2,848(3,135
)


51,740



(15,126
)Comprehensive income using US GAAP


651,704



437,674



449,496Earnings per share using US GAAPBasic


1.52



0.89



1.07Diluted


1.51



0.89



1.07  90




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  Consolidated
    Balance Sheet items using US GAAP
  2008


2007Canadian


US


Canadian


USGAAP


GAAP


GAAP


GAAP$


$


$


$Property, plant and
    equipment(11)


2,616,500



2,622,877



2,422,900



2,425,144Deferred
    charges(2)(9)


274,666



175,818



278,525



170,881Broadcast
    rights(1)(5)(6)


4,776,078



4,750,844



4,776,078



4,750,844Long-term
    debt(2)


2,706,534



2,731,404



2,771,316



2,771,316Other long-term
    liability(10)


78,912



183,347



56,844



157,043Derivative
    instruments(8)


518,856



518,856







526,679Deferred
    credits(2)(3)(9)


687,836



685,349



1,151,724



687,913Future income taxes


1,281,826



1,215,566



1,327,914



1,271,791Shareholders equity:Share capital


2,063,431



2,063,431



2,053,160



2,053,160Contributed surplus


23,027



23,027



8,700



8,700Retained earnings (deficit)


226,408



121,169



(68,132
)


(178,652
)Accumulated other comprehensive income (loss)


(57,674
)


(130,698
)


312



(126,746
)Total shareholders equity


2,255,192



2,076,929



1,994,040



1,756,462     2008


2007$


$Shareholders equity using Canadian GAAP


2,255,192



1,994,040Amortization of intangible
    assets(1)


(130,208
)


(130,208
)Deferred charges and
    credits(2)


(19,989
)


(4,215
)Equity in loss of
    investees(4)


(35,710
)


(35,710
)Gain on sale of
    subsidiary(5)


16,052



16,052Gain on sale of cable
    systems(6)


50,063



50,063Foreign exchange gains on hedged long-term
    debt(3)






386,075Reclassification of hedge losses from other comprehensive
    income(8)






(386,075
)Capitalized
    interest(11)


4,623



1,566Income
    taxes(12)(13)


9,930



(8,068
)Accumulated other comprehensive loss


(73,024
)


(127,058
)Shareholders equity using US GAAP


2,076,929



1,756,462  91




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
    2008


2007$


$Fair value of
    derivatives(8)






(57,169
)Pension
    liability(10)


(73,024
)


(69,889
)Accumulated other comprehensive loss


(73,024
)


(127,058
)     (1)
    Amortization of intangible assets    (2)
    Deferred charges and credits      (3)
    Foreign exchange gains on hedged long-term debt    (4)
    Equity in loss of investees     92




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
   (5)
    Gain on sale of subsidiary    (6)
    Gain on sale of cable systems      (7)
    Gains (losses) on investments      (8)
    Derivative instruments and hedging activities     93




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
   (9)
    Subscriber connection fee revenue and related costs    (10)
    Pension liability        (11)
    Under US GAAP, interest costs are capitalized as part of the
    historical cost of acquiring certain qualifying assets which
    require a period of time to prepare for their intended use.
    Interest capitalization is not required under Canadian GAAP.(12)
    Income taxes reflects the impact of future income tax rate
    reductions on the differences identified above and an adjustment
    for the tax benefit related to capital losses that cannot be
    recognized for US GAAP.(13)
    The Company adopted FASB Interpretation No. 48
    Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement No 109 effective
    September 1, 2007. This interpretation clarifies the
    accounting for uncertainty in income taxes by prescribing a
    minimum recognition threshold that a tax position is required to
    meet before being recognized for US GAAP. The adoption of this
    interpretation did not have a material impact on the results of
    the Company for US GAAP purposes.  (b)
    Stock-based
    compensation    94




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##### Table of Contents



Shaw
    Communications Inc.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
  2007


2006$


$Net income, US GAAP

As reported


385,934



464,622Pro forma


385,815



462,752Net income per share, US GAAP

As reported


0.89



1.07Pro forma


0.89



1.06   (c)
    Advertising
    costs    (d)
    Recent
    accounting pronouncements  (i)
    Fair
    Value Measurements    (ii)
    Business
    Combinations    22.
    COMPARATIVE
    CONSOLIDATED FINANCIAL STATEMENTS   95




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##### Table of Contents



Shaw
    Communications Inc.FIVE YEARS IN REVIEW
    August 31, 2008
  ($000s except per share amounts)

2008


2007


2006


2005


2004Service revenueCable


2,375,586



2,082,652



1,808,583



1,598,369



1,491,569DTH


640,061



605,176



567,807



530,729



505,637Satellite


89,212



86,617



82,894



80,712



82,5433,104,859



2,774,445



2,459,284



2,209,810



2,079,749Service operating income (loss) before
    amortization(1)Cable


1,153,274



995,694



857,466



797,583



779,579DTH


206,541



196,404



175,401



141,687



111,150Satellite


48,421



47,527



45,050



42,723



41,690Litigation settlement


















(6,484
)1,408,236



1,239,625



1,077,917



981,993



925,935Net income


671,562



388,479



458,250



153,221



70,870Earnings per shareBasic


1.56



0.90



1.05



0.34



0.16Diluted


1.55



0.89



1.05



0.34



0.16Funds flow from
    operations(2)


1,222,895



1,028,363



847,197



728,524



654,585Balance sheetTotal assets


8,357,801



8,163,739



7,661,543



7,430,185



7,576,720Long-term debt (including current portion)


2,707,043



3,068,554



2,996,385



3,199,542



3,344,258Cash dividends declared per shareClass A


0.702



0.462



0.235



0.153



0.078Class B


0.705



0.465



0.238



0.155



0.080   (1)
    See key performance drivers on page 9.(2)
    Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows. 96




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##### Table of Contents



Shaw
    Communications Inc.SHAREHOLDERS INFORMATIONAugust 31, 2008
  Share
    Capital and Listings
    Trading
    Range of Class B Non-Voting Shares on the Toronto Stock
    Exchange
  TotalQuarter

High Close


Low Close


VolumeSeptember 1, 2007 to August 31, 2008First


26.38



23.04



1,546,195,780Second


25.35



18.19



1,898,847,775Third


22.20



17.42



1,617,588,781Fourth


23.04



19.25



1,479,350,926Closing price, August 31, 2008

22.90


6,541,983,262   Share
    Splits
  www.shaw.ca.
 97




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##### Table of Contents



Shaw
    Communications Inc.CORPORATE INFORMATIONAugust 31, 2008
  DIRECTORS
  JR Shaw (4)
 Executive Chair
 Shaw Communications Inc.
  Adrian L.
    Burns (3)
 Corporate Director
  George F.
    Galbraith (3)
 Corporate Director
  Dr. Lynda
    Haverstock (3)
 President and Chief Executive
    Officer Tourism Saskatchewan
  Ronald V.
    Joyce (4)
 Corporate Director
  Gregory John
    Keating (1)
 Chairman and Chief Executive Officer
 Altimax Venture Capital
  Rt. Hon. Donald
    F.
 Mazankowski (3)(4)
 Corporate Director
  Michael W.
    OBrien (1)
 Corporate Director
  Paul K.
    Pew (1)
 Founder and Co-CEO G3 Capital
    Corp.
  Harold A.
    Roozen (2)
 Chairman and Chief
 Executive Officer
 CCI Thermal
 Technologies Inc.
  Jeffrey C.
    Royer (2)
 Corporate Director
 and Private Investor
  Bradley S. Shaw
 Senior Vice President,
 Operations
 Shaw Communications Inc.
  Jim Shaw
 Chief Executive Officer and
 Vice Chair
 Shaw Communications Inc.
  JC
    Sparkman (2) (4)
 Corporate Director
  Carl E.
    Vogel (1)
 Vice Chairman
 DISH Network
    Corporation & Vice Chairman Echostar Corp.
 Willard (Bill) H.
    Yuill (2)
 Chairman and Chief Executive Officer
 The Monarch Corporation
  SENIOR OFFICERS
  JR Shaw
 Executive Chair
  Jim Shaw
 Chief Executive Officer and Vice
    Chair
  Rhonda D. Bashnick
 Vice President, Finance
  Peter J. Bissonnette
 President
  Michael DAvella
 Senior Vice President, Planning
  Bradley S. Shaw
 Senior Vice President, Operations
  Ken C.C. Stein
 Senior Vice President,
 Corporate and Regulatory Affairs
  Steve Wilson
 Senior Vice President and
 Chief Financial Officer
  CORPORATE SECRETARY:
 Douglas J. Black, QC
  HONORARY SECRETARY:
 Louis Desrochers, CM, AOE, QC,
    LLD
  (1)
    Audit Committee(2)
    Human Resources Committee(3)
    Corporate Governance Committee(4)
    Executive Committee  CORPORATE OFFICE
  Shaw Communications Inc.
 Suite 900, 630 
    3rd Avenue

    S.W., Calgary, Alberta
 Canada T2P 4L4
 Phone:
    (403) 750-4500
 Fax:
    (403) 750-4501
 Website: www.shaw.ca
  CORPORATE GOVERNANCE
  Information 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 PAGE
  Shaw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
  AUDITORS
  Ernst & Young LLP
  PRIMARY BANKER
  The Toronto-Dominion Bank
  TRANSFER AGENTS
  CIBC Mellon Trust
    Company, Calgary, AB
 Phone:
    1-800-387-0825
  The Bank of New York Mellon
 Jersey City, NJ
 Phone:
    1-800-387-0825
  DEBENTURE TRUSTEES
  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 4E
 New York, NY 10288
 Phone
    1-800-438-5473
 Fax:
    212-815-5802
  FURTHER INFORMATION
  Financial analysts, portfolio
    managers, other investors and interested parties may contact the
    Company at
    (403) 750-4500
    or visit Shaws website at www.shaw.ca for further
    information.
  To receive additional copies of
    this Annual Report, please fax your request to
    (403) 750-7469
    or email
 investor.relations@sjrb.ca
  For 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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