Shaw
    Communications Inc.
    MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS AND
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    August 31, 2010
  November 5,
    2010
  MANAGEMENTS
    RESPONSIBILITY FOR FINANCIAL REPORTING
              MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
     64




---



##### 



Shaw
    Communications Inc.MANAGEMENTS RESPONSIBILITY FOR FINANCIAL
    STATEMENTS AND REPORT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTINGAugust 31, 2010
      [Signed]

[Signed]Jim ShawChief Executive Officer and
    Vice Chair

Steve WilsonSenior Vice President and
    Chief Financial Officer  65




---



##### 



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
    November 5, 2010

-s- Ernst & Young LLPChartered Accountants  66




---



##### 



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
    November 5, 2010

-s- Ernst & Young LLPChartered Accountants  67




---



##### 



Shaw
    Communications Inc.CONSOLIDATED BALANCE SHEETS  2010


2009As at August 31 [thousands of Canadian dollars]

$


$Restated  note 1ASSETSCurrentCash and cash equivalents


216,735



253,862Short-term securities






199,375Accounts receivable [note 3]


196,415



194,483Inventories [note 4]


53,815



52,304Prepaids and other


33,844



35,688Derivative instruments [note 19]


66,718



Future income taxes [note 14]


27,996



21,957595,523



757,669Investments and other assets [note 5]


743,273



194,854Property, plant and equipment [note 6]


3,004,649



2,716,364Deferred charges [note 7]


232,843



256,355Intangibles [note 8]Broadcast rights


5,061,153



4,816,153Spectrum licenses


190,912



Goodwill


169,143



88,111Other intangibles [note 1]


156,469



105,18010,153,965



8,934,686LIABILITIES AND
    SHAREHOLDERS EQUITYCurrentAccounts payable and accrued liabilities [notes 13 and
    17]


623,070



563,110Income taxes payable


170,581



25,320Unearned revenue


145,491



133,798Current portion of long-term debt [note 9]


557



481,739Current portion of derivative instruments [note 19]


79,740



173,0501,019,439



1,377,017Long-term debt [note 9]


3,981,671



2,668,749Other long-term liabilities [notes 17 and 19]


291,500



104,964Derivative instruments [note 19]


6,482



292,560Deferred credits [note 10]


632,482



659,073Future income taxes [note 14]


1,451,859



1,336,8597,383,433



6,439,222Commitments and contingencies[notes 9, 16 and
    17]Shareholders equityShare capital [note 11]Class A Shares


2,468



2,468Class B Non-Voting Shares


2,248,030



2,111,381Contributed surplus [note 11]


53,330



38,022Retained earnings


457,728



382,227Accumulated other comprehensive income (loss)
    [note 12]


8,976



(38,634
)2,770,532



2,495,46410,153,965



8,934,686   See accompanying notes
    [Signed]
    JR Shaw
    Director

[Signed]
    Michael OBrien
    Director  68




---



##### 



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

2010


2009


2008except per share amounts]

$


$


$Restated  note 1


Restated  note 1Service revenue[note 15]


3,717,580



3,390,913



3,104,859Operating, general and administrative expenses


1,958,829



1,850,304



1,693,930Service operating income before amortization[note 15]


1,758,751



1,540,609



1,410,929Amortization Deferred IRU revenue [note 10]


12,546



12,547



12,547Deferred equipment revenue [note 10]


120,639



132,974



126,601Deferred equipment costs [note 7]


(228,714
)


(247,110
)


(228,524
)Deferred charges [note 7]


(1,025
)


(1,025
)


(1,025
)Property, plant and equipment [note 6]


(526,432
)


(449,808
)


(390,778
)Other intangibles [note 8]


(33,285
)


(30,774
)


(23,954
)Operating income


1,102,480



957,413



905,796Amortization of financing costs 
    long-term debt[note 9]


(3,972
)


(3,984
)


(3,627
)Interest [notes 9, 13 and 15]


(248,011
)


(237,047
)


(230,588
)850,497



716,382



671,581Debt retirement costs [note 9]


(81,585
)


(8,255
)


(5,264
)Loss on financial instruments [note 19]


(47,306
)






Other gains [note 1]


5,513



19,644



24,009Income before income taxes


727,119



727,771



690,326Income tax expense [note 14]


183,137



191,197



17,420Income before the following


543,982



536,574



672,906Equity income (loss) on investee [note 5]


(11,250
)


(99
)


295Net income


532,732



536,475



673,201Retained earnings (deficit), beginning of year


384,747



226,408



(68,132
)Adjustment for adoption of new accounting policies
    [note 1]


(2,520
)


(3,756
)


(3,641
)Retained earnings (deficit), beginning of year restated


382,227



222,652



(71,773
)Reduction on Class B Non-Voting Shares purchased for
    cancellation [note 11]


(85,143
)


(25,017
)


(74,963
)Dividends  Class A Shares and Class B
    Non-Voting
    Shares


(372,088
)


(351,883
)


(303,813
)Retained earnings, end of year


457,728



382,227



222,652Earnings per share[note 11]Basic


$    1.23



$    1.25



$    1.56Diluted


$    1.23



$    1.25



$    1.55   See accompanying notes
 69




---



##### 



Shaw
    Communications Inc.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
  2010


2009


2008Years ended August 31 [thousands of Canadian dollars]

$


$


$Restated  note 1


Restated  note 1Net income


532,732



536,475



673,201Other comprehensive income (loss) [note 12]Change in unrealized fair value of derivatives designated as
    cash flow hedges


(43,631
)


22,588



(36,193
)Realized gains on cancellation of forward purchase contracts






9,314



Adjustment for hedged items recognized in the period


13,644



14,443



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


34,940



(27,336
)


(4,796
)Reclassification of remaining losses on hedging derivatives to
    income upon early redemption of hedged US denominated debt


42,658







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


(1
)


31



747,610



19,040



(759
)Comprehensive income


580,342



555,515



672,442Accumulated other comprehensive income (loss), beginning of
    year


(38,634
)


(57,674
)


312Adjustment for adoption of new accounting policy
    [note 1]










(57,227
)Other comprehensive income (loss)


47,610



19,040



(759
)Accumulated other comprehensive income (loss), end of year


8,976



(38,634
)


(57,674
)   See accompanying notes
 70




---



##### 



Shaw
    Communications Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS
  2010


2009


2008Years ended August 31 [thousands of Canadian dollars]

$


$


$Restated  note 1


Restated  note 1OPERATING
    ACTIVITIES[note 20]Funds flow from operations


1,375,403



1,323,840



1,222,895Net decrease in non-cash working capital balances related to
    operations


81,756



59,090



19,3041,457,159



1,382,930



1,242,199INVESTING
    ACTIVITIESAdditions to property, plant and equipment [note 15]


(681,589
)


(623,695
)


(554,387
)Additions to equipment costs (net) [note 15]


(98,308
)


(124,968
)


(121,327
)Additions to other intangibles [note 15]


(60,785
)


(54,223
)


(51,706
)Net customs duty recovery on equipment costs










22,267Proceeds on cancellation of US forward purchase contracts
    [note 15]






13,384



Net decrease (increase) to inventories


(1,261
)


(530
)


8,827Deposits on wireless spectrum licenses [note 5]






(152,465
)


(38,447
)Cable business acquisitions [note 2]


(158,805
)


(46,300
)


Purchase of Government of Canada bond


(158,968
)






Proceeds on sale of Government of Canada bond


159,405







Proceeds on disposal of property, plant and equipment and other
    assets


430



22,081



638Additions to investments [note 5]


(744,096
)






(1,743,977
)


(966,716
)


(734,135
)FINANCING
    ACTIVITIESIncrease (decrease) in bank indebtedness






(44,201
)


44,201Increase in long-term debt, net of discounts


1,891,656



839,839



297,904Senior notes issuance costs


(10,109
)


(4,684
)


Long-term debt repayments


(1,016,711
)


(427,124
)


(640,142
)Payments on cross-currency agreements [note 19]


(291,920
)






Proceeds on bond forward contracts






10,757



Debt retirement costs [note 9]


(79,488
)


(9,161
)


(4,272
)Issue of Class B Non-Voting Shares, net of after-tax
    expenses


47,126



56,996



32,498Purchase of Class B Non-Voting Shares for cancellation
    [note 11]


(118,150
)


(33,574
)


(99,757
)Dividends paid on Class A Shares and Class B
    Non-Voting Shares


(372,088
)


(351,883
)


(303,813
)50,316



36,965



(673,381
)Effect of currency translation on cash balances and cash
    flows






58



7Increase (decrease) in cash


(236,502
)


453,237



(165,310
)Cash, beginning of year


453,237







165,310Cash, end of year


216,735



453,237



     See accompanying notes
 71




---



##### 



Shaw
    Communications Inc.NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
   
  1.
    SIGNIFICANT
    ACCOUNTING POLICIES  Direct-to-home
    Basis
    of consolidation
        2010


2009$


$Working capital


180



369Property, plant and equipment


16,820



17,45117,000



17,820Debt


20,951



21,473Proportionate share of net liabilities


(3,951
)


(3,653
)   2010


2009


2008$


$


$Operating, general and administrative expenses


1,829



1,829



1,829Amortization


(683
)


(688
)


(707
)Interest


(1,326
)


(1,358
)


(1,389
)Other gains


867



879



848Proportionate share of income before income taxes


687



662



581Cash flow provided by operating activities


1,560



1,326



1,608Cash flow used in investing activities


(34
)






Cash flow used in financing activities


(541
)


(509
)


(478
)Proportionate share of increase in cash


985



817



1,130  72




---



##### 



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       73




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  (iii)
    Deferred
    IRU revenue    Cash
    and cash equivalents
    Short-term
    securities
    Allowance
    for doubtful accounts
    Inventories
  first-in,
 74




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Property,
    plant and equipment
    Asset

Estimated useful lifeCable and telecommunications distribution system

6-15 yearsDigital cable terminals and modems

2-7 yearsSatellite audio, video and data network equipment and
    DTH receiving equipment

4-10 yearsBuildings

20-40 yearsData processing

4 yearsOther

3-20 years     Deferred
    charges
    Intangibles
     75




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    Deferred
    credits
    Income
    taxes
    Foreign
    currency translation
        Financial
    instruments other than derivatives
  available-for-sale, held-for-trading
 76




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  held-for-trading available-for-sale Available-for-sale held-to-maturity held-for-trading.
    Derivative
    financial instruments
  held-for-trading
     77




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Employee
    benefit plans
      Stock-based
    compensation
      Earnings
    per share
    Guarantees
   78




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Use
    of estimates and measurement uncertainty
      Adoption
    of recent Canadian accounting pronouncements
  (i)
    Goodwill
    and intangible assets     Increase (decrease)August 31, 2010

August 31, 2009$

$Consolidated balance sheets:Property, plant and equipment


(156,469
)


(105,180
)Deferred charges


(4,266
)


(3,383
)Intangibles


156,469



105,180Future income taxes


(1,077
)


(863
)Retained earnings


(3,189
)


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


(2,520
)


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


(669
)


1,236(3,189
)


(2,520
)   79




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Year ended August 31,2010


2009


2008$


$


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


(883
)


1,659



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


33,285



30,774



23,954Increase in amortization of other intangibles


(33,285
)


(30,774
)


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


214



(423
)


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


(669
)


1,236



1,639Increase (decrease) in earnings per share










     (ii)
    Financial
    instruments     Recent
    Canadian accounting pronouncements
  (i)
    International
    Financial Reporting Standards (IFRS)  80




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  2.
    BUSINESS
    ACQUISITIONS  2010TotalIssuance of Class B

purchaseCash(1)

Non-Voting Shares

price$

$

$(i) Cable system


163,875



120,000



283,875   (1)
    The cash consideration paid, net of cash acquired of $5,070, was
    $158,805.  2009Cashpurchaseprice$(ii) Cable system


46,300     2010


2009$


$Identifiable net assets acquired at assigned fair valuesInvestments


206



Property, plant and equipment


57,796



6,825Broadcast rights [note 8]


245,000



40,075Goodwill, not deductible for tax [note 8]


81,032



384,034



46,900Working capital deficiency


27,397



600Future income taxes


72,762



100,159



600Purchase price


283,875



46,300   (i)
    During 2010, the Company purchased all of the outstanding shares
    of Mountain Cablevision in Hamilton, Ontario. The cable system
    serves approximately 41,000 basic subscribers and results of
    operations have been included commencing November 1, 2009.(ii)
    During 2009, the Company purchased the assets comprising the
    Campbell River cable system in British Columbia which serves
    approximately 12,000 basic subscribers. The acquisition was
    effective February 1, 2009 and results of operations have
    been included from that date. 81




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  3.
    ACCOUNTS
    RECEIVABLE  2010


2009$


$Subscriber and trade receivables


209,817



204,786Due from officers and employees


148



843Due from related parties [note 18]


1,689



682Miscellaneous receivables


3,730



5,333215,384



211,644Less allowance for doubtful accounts


(18,969
)


(17,161
)196,415



194,483     4.
    INVENTORIES  2010


2009$


$Subscriber equipment


50,896



48,639Other


2,919



3,66553,815



52,304     5.
    INVESTMENTS
    AND OTHER ASSETS  2010


2009$


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


200



200Investment, at equity:CW Investments Co. (CW Media)


739,125



Deposits:Wireless spectrum licenses






190,912Other assets:Loan [note 18]


3,600



3,600Other


348



142743,273



194,854   Deposits
   82




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    CW
    Media
        $Indefinite life broadcast rights


181,000Goodwill, not deductible for tax


47,000228,000Long-term debt


(23,000
)Future income taxes


(46,000
)159,000  83




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  6.
    PROPERTY,
    PLANT AND EQUIPMENT  2010


2009Accumulated


Net book





Accumulated


Net bookCost


amortization


value


Cost


amortization


value$


$


$


$


$


$Cable and telecommunications distribution system


4,197,319



2,129,039



2,068,280



3,831,193



1,868,705



1,962,488Digital cable terminals and modems


552,224



223,910



328,314



377,698



150,749



226,949Satellite audio, video and data network equipment and DTH
    receiving equipment


154,156



115,139



39,017



154,916



104,600



50,316Buildings


360,841



121,312



239,529



343,605



106,986



236,619Data processing


53,811



30,679



23,132



57,032



31,651



25,381Other assets


256,910



120,020



136,890



251,925



119,895



132,0305,575,261



2,740,099



2,835,162



5,016,369



2,382,586



2,633,783Land


45,368







45,368



44,860







44,860Assets under construction


124,119







124,119



37,721







37,7215,744,748



2,740,099



3,004,649



5,098,950



2,382,586



2,716,364     7.
    DEFERRED
    CHARGES  2010


2009Accumulated


Net book





Accumulated


Net bookCost


amortization


value


Cost


amortization


value$


$


$


$


$


$Equipment costs subject to a deferred revenue arrangement


687,879



485,449



202,430



710,810



481,591



229,219Financing costs and credit facility arrangement fees


5,039



3,276



1,763



5,039



2,268



2,771Connection and installation costs


88



88







684



641



43Other


28,803



153



28,650



24,458



136



24,322721,809



488,966



232,843



740,991



484,636



256,355    84




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  8.
    INTANGIBLES  Carrying amount2010


2009$


$Broadcast rightsCable systems


4,078,021



3,833,021DTH and satellite services


983,132



983,1325,061,153



4,816,153GoodwillNon-regulated satellite services


88,111



88,111Cable system


81,032



169,143



88,111Wireless spectrum licenses


190,912



Other intangibles


156,469



105,180Net book value


5,577,677



5,009,444       WirelessspectrumBroadcast rights


Goodwill


licenses$


$


$August 31, 2008


4,776,078



88,111



Business acquisition [note 2]


40,075







August 31, 2009


4,816,153



88,111



Business acquisition [note 2]


245,000



81,032



Reclassification from Investments and other assets
    [note 5]










190,912August 31, 2010


5,061,153



169,143



190,912  85




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    2010


2009Accumulated


Net book





Accumulated


Net bookCost


amortization


value


Cost


amortization


value$


$


$


$


$


$Computer software


170,759



86,535



84,224



170,411



80,484



89,927Assets under construction


72,245







72,245



15,253







15,253243,004



86,535



156,469



185,664



80,484



105,180     9.
    LONG-TERM
    DEBT  2010


2009Long-term





Long-term


Translated


Adjustment


Long-termdebt at





debt


at year end


for hedged


debtEffective

amortized


Adjustment for


repayable


exchange


debt and


repayableinterest rates

cost (1)


finance costs
    (1)


at maturity


rate (1)


finance costs
    (1)(2)


at maturity%

$


$


$


$


$


$CorporateSenior notes Cdn 6.50% due June 2, 2014

6.56


594,941



5,059



600,000



593,824



6,176



600,000Cdn 5.70% due March 2, 2017

5.72


396,124



3,876



400,000



395,646



4,354



400,000Cdn 6.10% due November 16, 2012

6.11


447,749



2,251



450,000



446,836



3,164



450,000Cdn 6.15% due May 9, 2016

6.34


292,978



7,022



300,000



291,987



8,013



300,000Cdn 5.65% due October 1, 2019

5.69


1,240,673



9,327



1,250,000











Cdn 6.75% due November 9, 2039

6.80


641,684



8,316



650,000











Cdn 7.50% due November 20, 2013

7.50


347,129



2,871



350,000



346,380



3,620



350,000US $440,000 8.25% due
    April 11,
    2010(2)

7.88














481,198



161,422



642,620US $225,000 7.25% due
    April 6,
    2011(2)

7.68














245,632



110,206



355,838US $300,000 7.20% due December 15,
    2011(2)

7.61














327,512



149,338



476,8503,961,278



38,722



4,000,000



3,129,015



446,293



3,575,308Other subsidiaries and entitiesBurrard Landing Lot 2 Holdings Partnership

6.31


20,950



83



21,033



21,473



101



21,574Total consolidated debt




3,982,228



38,805



4,021,033



3,150,488



446,394



3,596,882Less current portion




557



19



576



481,739



161,422



643,1613,981,671



38,786



4,020,457



2,668,749



284,972



2,953,721   (1)
    Long-term debt is presented net of unamortized discounts,
    finance costs and bond forward proceeds of $38,805
    (August 31, 2009  $27,761). Amortization for
    2010 amounted to $5,312 (2009  $4,466;
    2008  $3,822) 86




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  of which $3,972 (2009 
    $3,984; 2008  $3,627) was recorded as amortization of
    financing costs and $1,340 (2009  $482;
    2008  $195) was recorded as interest expense.  (2)
    Foreign denominated long-term debt was translated at the
    year-end foreign exchange rate of 1.095 Cdn. If the rate of
    translation had been adjusted to reflect the hedged rates of the
    Companys cross-currency interest rate agreements (which
    fixed the liability for interest and principal), long-term debt
    would have increased by $418,633. The US senior notes were
    redeemed in October 2009.    Corporate
  Bank
    loans
        Senior
    notes
      Other
    subsidiaries and entities
  Burrard
    Landing Lot 2 Holdings Partnership
   87




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    Debt
    retirement costs
        Debt
    covenants
    Long-term
    debt repayments
    $2011


5762012


6132013


450,6522014


950,6942015


738Thereafter


2,617,7604,021,033  88




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  10.
    DEFERRED
    CREDITS  2010


2009Accumulated


Net book





Accumulated


Net bookAmount


amortization


value


Amount


amortization


value$


$


$


$


$


$IRU prepayments


629,119



119,251



509,868



629,119



106,705



522,414Equipment revenue


384,580



272,875



111,705



406,609



280,598



126,011Connection fee and installation revenue


19,591



12,317



7,274



23,619



17,560



6,059Deposit on future fibre sale


2,000







2,000



2,000







2,000Other


1,635







1,635



2,589







2,5891,036,925



404,443



632,482



1,063,936



404,863



659,073       11.
    SHARE
    CAPITAL  Authorized
      Number of securities




2010


20092010


2009




$


$22,520,064



22,520,064


Class A Shares


2,468



2,468410,622,001



407,717,782


Class B Non-Voting Shares


2,248,030



2,111,381433,142,065



430,237,846





2,250,498



2,113,849   Class A
    Shares and Class B Non-Voting Shares
   89




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    Class A Shares


Class B Non-Voting SharesNumber


$


Number


$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



2,060,960Class A Share conversions


(30,000
)


(3
)


30,000



3Purchase of shares for cancellation










(1,683,000
)


(8,557
)Stock option exercises










3,488,130



58,975August 31, 2009


22,520,064



2,468



407,717,782



2,111,381Purchase of shares for cancellation










(6,100,000
)


(33,007
)Stock option exercises










2,862,969



49,786Issued in respect of an acquisition [note 2]










6,141,250



120,000Share issue costs














(130
)August 31, 2010


22,520,064



2,468



410,622,001



2,248,030     Stock
    option plan
   90




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    2010

2009

2008Weighted



Weighted



Weightedaverage



average



averageexercise



exercise



exerciseprice



price



priceNumber

$

Number

$

Number

$Outstanding, beginning of year


23,714,667



20.21



23,963,771



19.77



17,574,801



17.08Granted


3,965,000



19.30



4,373,000



19.62



10,486,500



23.73Forfeited


(823,548
)


20.80



(1,133,974
)


20.67



(2,133,939
)


20.04Exercised


(2,862,969
)


16.51



(3,488,130
)


16.34



(1,963,591
)


16.48Outstanding, end of year


23,993,150



20.48



23,714,667



20.21



23,963,771



19.77     Options outstanding

Options exercisableWeighted

Weighted



Weighted

Weightedaverage

average



average

averageNumber

remaining

exercise

Number

remaining

exerciseRange of prices

outstanding

contractual life

price

exercisable

contractual life

price$8.69


20,000



3.14


$
8.69



20,000



3.14


$
8.69$14.85  $22.27


16,067,400



7.19


$
18.53



7,464,544



5.19


$
17.51$22.28  $26.20


7,905,750



7.01


$
24.46



4,089,500



7.00


$
24.39   in-the-money
    2010


2009


2008Dividend yield


4.52%



4.28%



2.92%Risk-free interest rate


2.52%



1.94%



4.21%Expected life of options


5 years



5 years



5 yearsExpected volatility factor of the future expected market price
    of Class B Non-Voting Shares


25.9%



26.5%



24.5%   Other
    stock options
     91




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Contributed
    surplus
    2010


2009$


$Balance, beginning of year


38,022



23,027Stock-based compensation


17,838



16,974Stock options exercised


(2,530
)


(1,979
)Balance, end of year


53,330



38,022     Dividends
    Share
    transfer restriction
    Earnings
    per share
    2010


2009


2008Numerator for basic and diluted earnings per share($)


532,732



536,475



673,201Denominator (thousands of shares)Weighted average number of Class A Shares and Class B
    Non-Voting Shares for basic earnings per share


432,675



429,153



431,070Effect of potentially dilutive securities


1,207



1,628



2,797Weighted average number of Class A Shares and Class B
    Non-Voting Shares for diluted earnings per share


433,882



430,781



433,867Earnings per share($)Basic


1.23



1.25



1.56Diluted


1.23



1.25



1.55  92




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    12.
    OTHER
    COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE
    INCOME (LOSS)    Amount


Income taxes


Net$


$


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


(53,131
)


9,500



(43,631
)Adjustment for hedged items recognized in the period


19,484



(5,840
)


13,644Reclassification of foreign exchange loss on hedging derivatives
    to income to offset foreign exchange gain on US
    denominated debt


40,505



(5,565
)


34,940Reclassification of remaining losses on hedging derivatives to
    income upon early redemption of hedged US denominated debt


50,121



(7,463
)


42,658Unrealized foreign exchange loss on translation of
    a self-sustaining
    foreign operation


(1
)






(1
)56,978



(9,368
)


47,610     Amount


Income taxes


Net$


$


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


26,693



(4,105
)


22,588Proceeds on cancellation of forward purchase contracts


13,384



(4,070
)


9,314Adjustment for hedged items recognized in the period


14,518



(75
)


14,443Reclassification of foreign exchange gain on hedging derivatives
    to income to offset foreign exchange loss on US denominated
    debt


(31,845
)


4,509



(27,336
)Unrealized foreign exchange gain on translation of
    a self-sustaining
    foreign operation


31







3122,781



(3,741
)


19,040  93




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    Amount


Income taxes


Net$


$


$Change in unrealized fair value of derivatives designated 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
)     August 31, 2010

August 31, 2009$

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


349



350Fair value of derivatives


8,627



(38,984
)8,976



(38,634
)   13.
    ACCOUNTS
    PAYABLE AND ACCRUED LIABILITIES  2010


2009$


$Trade


125,517



86,677Accrued liabilities


274,334



269,463Accrued network fees


100,703



103,176Interest


85,211



80,463Related parties [note 18]


35,857



21,883Current portion of pension plan liability [note 17]


1,448



1,448623,070



563,110    94




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  14.
    INCOME
    TAXES    2010


2009$


$Future income tax liabilities:Property, plant and equipment


180,642



152,677Broadcast rights


921,441



868,901Partnership income


373,401



331,0631,475,484



1,352,641Future income tax assets:Non-capital loss carryforwards


8,967



19,687Deferred charges


28,107



10,986Foreign exchange on long-term debt and
    fair value of derivative instruments


14,547



7,06651,621



37,739Net future income tax liability


1,423,863



1,314,902Current portion of future income tax asset


27,996



21,957Future income tax liability


1,451,859



1,336,859      95




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    2010


2009


2008$


$


$Current statutory income tax rate


29.3%



30.2%



32.0%Income tax expense at current statutory rates


213,046



219,787



220,904Increase (decrease) in taxes resulting from:Non-taxable portion of foreign exchange gains or losses and
    amounts on sale/write-down of assets and investments


(1,221
)


(551
)


Decrease in valuation allowance


(11,036
)


(3,463
)


(9,867
)Effect of future tax rate reductions


(17,643
)


(22,582
)


(187,990
)Originating temporary differences recorded at future tax rates
    expected to be in effect when realized


(11,178
)


(9,753
)


(11,601
)Other


11,169



7,759



5,974Income tax expense


183,137



191,197



17,420     2010


2009


2008$


$


$Current income tax expense


167,767



23,300



Future income tax expense related to origination and reversal of
    temporary differences


44,049



193,942



215,277Future income tax recovery resulting from rate changes and
    valuation allowance


(28,679
)


(26,045
)


(197,857
)Income tax expense


183,137



191,197



17,420  96




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  15.
    BUSINESS
    SEGMENT INFORMATION    2010SatelliteCable


Wireless


DTH


Satellite Services


Total


Total$


$


$


$


$


$Service revenue  total


2,931,976







721,952



82,600



804,552



3,736,528Intersegment


(4,565
)






(10,883
)


(3,500
)


(14,383
)


(18,948
)2,927,411







711,069



79,100



790,169



3,717,580Service operating income (expenditures) before
    amortization(6)


1,456,827



(1,396
)


265,016



38,304



303,320



1,758,751Service operating income as % of external revenue


49.8%







37.3%



48.4%



38.4%



47.3%Interest(1)


213,898



6,536



n/a



n/a



26,251



246,685Burrard Landing Lot 2 Holdings Partnership






















1,326248,011Cash
    taxes(2)


136,000







n/a



n/a



44,000



180,000Corporate/other






















(12,233
)167,767Segment assets


7,111,526



287,626



844,502



483,404



1,327,906



8,727,058Corporate assets






















1,426,907Total assets






















10,153,965Capital expenditures and equipment costs (net)
    by segmentCapital expenditures


739,136



96,714



3,139



2,113



5,252



841,102Equipment costs (net)


17,949







80,359







80,359



98,308757,085



96,714



83,498



2,113



85,611



939,410Reconciliation to Consolidated Statements of
    Cash FlowsAdditions to property, plant and equipment






















681,589Additions to equipment costs (net)






















98,308Additions to other intangibles






















60,785Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows






















840,682Increase in working capital related to capital expenditures






















102,232Less: Proceeds on disposal of property, plant and equipment






















(430
)Less: Satellite services equipment
    profit(4)






















(3,040
)Less: Partnership capital
    expenditures(5)






















(34
)Total capital expenditures and equipment costs (net) reported by
    segments






















939,410    97




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  2009SatelliteCable


Wireless


DTH


Satellite Services


Total


Total$


$


$


$


$


$Service revenue  total


2,635,832







684,831



90,205



775,036



3,410,868Intersegment


(4,850
)






(11,605
)


(3,500
)


(15,105
)


(19,955
)2,630,982







673,226



86,705



759,931



3,390,913Service operating income before amortization


1,271,279







223,499



45,831



269,330



1,540,609Service operating income as % of external revenue


48.3%







33.2%



52.9%



35.4%



45.4%Interest(1)


209,438







n/a



n/a



26,251



235,689Burrard Landing Lot 2 Holdings Partnership






















1,358















237,047Cash
    taxes(2)


23,300







n/a



n/a







23,300Segment assets


6,599,120



190,912



855,283



498,720



1,354,003



8,144,035Corporate assets






















790,651Total assets






















8,934,686Capital expenditures and equipment costs (net) by segmentCapital expenditures


658,862







4,907



192



5,099



663,961Equipment costs (net)


35,222







76,362







76,362



111,584694,084







81,269



192



81,461



775,545Reconciliation to Consolidated Statements of Cash FlowsAdditions to property, plant and equipment






















623,695Additions to equipment costs (net)






















124,968Additions to other intangibles






















54,223Total of capital expenditures and equipment costs (net) per
    Consolidated Statements of Cash Flows






















802,886Increase in working capital related to capital expenditures






















11,559Less: Proceeds on disposal of property, plant and equipment






















(22,081
)Less: Realized gains on cancellation of US dollar forward
    purchase
    contracts(3)






















(13,384
)Less: Satellite services equipment
    profit(4)






















(3,435
)Total capital expenditures and equipment costs (net) reported by
    segments






















775,545     98




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  2008SatelliteCable


Wireless


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


1,155,967







206,541



48,421



254,962



1,410,929Service operating income as % of external revenue


48.7%







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






















1,389















230,588Cash
    taxes(2)






















Segment assets


6,460,141



190,912



869,710



523,736



1,393,446



8,044,499Corporate assets






















308,260Total assets






















8,352,759Capital 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






















554,387Additions to equipment costs (net)






















121,327Additions to other intangibles






















51,706Total 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   (1)
    The Company reports interest on a segmented basis for Cable,
    Wireless and combined satellite only. It does not report
    interest on a segmented basis for DTH and Satellite Services.
    Interest is allocated to the Wireless division based on the
    Companys average cost of borrowing to fund the capital
    expenditures and operating costs.(2)
    The Company reports cash taxes on a segmented basis for Cable
    and combined satellite only. It does not report cash taxes on a
    segmented basis for DTH and Satellite Services.(3)
    The Company realized gains totaling $13,384 on cancellation of
    certain of its US dollar forward purchase contracts in respect
    of capital expenditures and equipment costs. The gains were
    included in other comprehensive income and reclassified to the
    initial carrying amount of capital assets or equipment costs
    when the assets were recognized.(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. 99




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
   (5)
    Consolidated capital expenditures include the Companys
    proportionate share of the Burrard Landing Lot 2 Holdings
    Partnership (the Partnership) capital expenditures
    which the Company is required to proportionately consolidate. As
    the Partnerships operations are self funded, the
    Partnerships capital expenditures are subtracted from the
    calculation of segmented capital expenditures and equipment
    costs (net).(6)
    2010 includes the impact of a one-time CRTC Part II fee
    recovery of $48,662 for Cable and $26,570 for combined satellite.  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. During 2006, the Companys traffic on the Anik F1
    was transferred to the Anik F1R under a capacity services
    arrangement which has all of the same substantive benefits and
    obligations as on Anik F1. 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 of which the
    majority are for the maintenance and lease of satellite
    transponders, program related agreements, lease of transmission
    facilities, and lease of premises as follows:  $2011


202,4362012


199,0332013


220,9692014


231,0992015


231,103Thereafter


557,1551,641,795     (iii)
    At August 31, 2010, the Company had capital expenditure
    commitments of approximately $85,000 over the next four years.  Contingencies
   100




---



##### 



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
   101




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Defined
    benefit pension plan
      2010


2009$


$Accrued benefit obligation and plan deficit, beginning of year


195,659



184,795Current service cost


5,448



5,002Past service cost


12,057



Interest cost


13,557



11,817Actuarial losses (gains)


49,321



(4,507
)Payment of benefits to employees


(1,448
)


(1,448
)Accrued benefit obligation and plan deficit, end of year


274,594



195,659   Reconciliation of accrued benefit obligation to Consolidated
    Balance

2010


2009Sheet accrued pension benefit liability

$


$Balance of unamortized pension obligation:Unamortized past service costs


36,043



28,817Unamortized actuarial loss


104,264



60,430140,307



89,247Accrued pension benefit liability recognized in Consolidated
    Balance Sheet:Accounts payable and accrued liabilities


1,448



1,448Other long-term liability


132,839



104,964134,287



106,412Accrued benefit obligation, end of year as above


274,594



195,659     2010


2009Accrued benefit obligation

%


%Discount rate


5.75



6.75Rate of compensation increase


5.00



5.00   2010


2009


2008Benefit cost for the year

%


%


%Discount rate


6.75



6.25



5.50Rate of compensation increase


5.00



5.00



5.00  102




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    2010


2009


2008$


$


$Current service cost


5,448



5,002



4,610Interest cost


13,557



11,817



8,931Past service cost


12,057







Actuarial losses (gains)


49,321



(4,507
)


14,211Difference between amortization of actuarial loss recognized for
    the year and actual actuarial loss on the accrued benefit
    obligation for the year


(43,834
)


10,357



(9,067
)Difference between amortization of past service costs recognized
    for the year and actual past service costs on the accrued
    benefit obligation for the year


(7,226
)


4,831



4,831Pension expense


29,323



27,500



23,516       $2011


1,4482012


1,4312013


5,9932014


7,0562015


12,5272016  2020


63,206   18.
    RELATED
    PARTY TRANSACTIONS    Normal
    course transactions
    Corus
    Entertainment Inc. (Corus)
   103




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
      Burrard
    Landing Lot 2 Holdings Partnership
    CW
    Media
    Other
        Other
    transactions
     104




---



##### 



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)
    Other long-term liabilities  mark-to-market mark-to-market
  (iv)
    Long-term debt    (v)
    Derivative financial instruments  mark-to-market
 105




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    2010


2009Carrying


Estimated


Carrying


Estimatedvalue


fair value


value


fair value$


$


$


$AssetsDerivative financial instruments Cross-currency interest rate exchange agreement


56,716



56,716







US currency forward purchase contracts


10,002



10,002







66,718



66,718







LiabilitiesOther long-term liability


158,661



159,689







Long-term debt


3,982,228



4,353,028



3,150,488



3,394,224Derivative financial instruments Cross-currency interest rate exchange agreements


86,222



86,222



462,273



462,273US currency forward purchase contracts










3,337



3,3374,227,111



4,598,939



3,616,098



3,859,834         Fair
    value measurements
       106




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Level 2
    Inputs for the asset or liability are based on observable market
    data, either directly or indirectly, other than quoted prices.      August 31, 2010Quoted prices inactive markets for

Significant other

SignificantCarrying

identical instrument

observable inputs

unobservable inputsvalue

(Level 1)

(Level 2)

(Level 3)$

$

$

$AssetsCross-currency interest rate exchange agreement


56,716







56,716



US currency forward purchase contracts


10,002







10,002



66,718







66,718



LiabilitiesCross-currency interest rate exchange agreements


86,222







86,222



   August 31, 2009Quoted prices inactive markets for

Significant other

SignificantCarrying

identical instrument

observable inputs

unobservable inputsvalue

(Level 1)

(Level 2)

(Level 3)$

$

$

$LiabilitiesCross-currency interest rate exchange agreements


462,273







462,273



US currency forward purchase contracts


3,337







3,337



465,610







465,610



   Derivative
    instruments and hedging activities
   107




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
        Gain (loss)


Gain (loss) reclassified


Gain (loss) reclassified fromrecognized in other


from other comprehensive


other comprehensivecomprehensive income


income into


income into(effective portion)


income (effective portion)


income (ineffective portion)$


Location

$


Location

$Cross-currency interest rate exchange agreements


(58,657
)

Other gains


(40,505
)

Other gains


Interest expense


(11,671
)

Loss on financial instruments


US currency forward purchase contracts


5,526


Equipment costs


(7,813
)

Other gains


(53,131
)




(59,989
)




  108




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    Gain (loss)


Gain (loss) reclassified


Gain (loss) reclassified fromrecognized in other


from other comprehensive


other comprehensivecomprehensive income


income into


income into(effective portion)


income (effective portion)


income (ineffective portion)$


Location

$


Location

$Cross-currency interest rate exchange agreements


24,799


Other gains


31,845


Other gains


Interest expense


(26,313
)

Loss on financial instruments


US currency forward purchase contracts


15,278


Equipment costs


11,795


Other gains


40,077





17,327





       Gain (loss) recognized inincome2010

2009Location

$

$Cross-currency interest rate exchange agreements

Loss on financial
    instruments


4,958



US currency forward purchase contracts

Other gains






(78
)   Risk
    management
    Currency
    risk
   109




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
      Interest
    rate risk
    day-to-day
  Market
    risk
       110




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Credit
    risk
        A-1.
  Liquidity
    risk
      Trade and





Long-term debtother


Other long


repayable at


Derivative


Interestpayables(1)


term liability


maturity


instruments(2)


payments$


$


$


$


$Within one year


623,070







576



23,183



249,7441 to 3 years






162,150



451,265



6,626



485,6503 to 5 years










951,432







365,278Over 5 years










2,617,760







1,456,800623,070



162,150



4,021,033



29,809



2,557,472   (1)
    Includes trade payables and accrued liabilities.(2)
    The estimated net cash outflow for derivative instruments is
    based on the US dollar foreign exchange rate as at
    August 31, 2010. 111




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  20.
    CONSOLIDATED
    STATEMENTS OF CASH FLOWS    (i)
    Funds flow from operations  2010


2009


2008$


$


$Net income


532,732



536,475



673,201Non-cash items:Amortization Deferred IRU revenue


(12,546
)


(12,547
)


(12,547
)Deferred equipment revenue


(120,639
)


(132,974
)


(126,601
)Deferred equipment costs


228,714



247,110



228,524Deferred charges


1,025



1,025



1,025Property, plant and equipment


526,432



449,808



390,778Other intangibles


33,285



30,774



23,954Financing costs  long-term debt


3,972



3,984



3,627Future income tax expense


15,370



167,897



17,420Equity loss (income) on investee


11,250



99



(295
)Debt retirement costs


81,585



8,255



5,264Stock-based compensation


17,838



16,974



16,894Defined benefit pension plan


27,875



26,052



22,068Loss on financial instruments


47,306







Realized loss on settlement of financial instruments


(26,357
)






Net customs duty recovery on equipment costs










(22,267
)Gain on cancellation of bond forward






(10,757
)


Other


7,561



(8,335
)


1,850Funds flow from operations


1,375,403



1,323,840



1,222,895   (ii)
    Changes in non-cash working capital balances related to
    operations include the following:  2010


2009


2008$


$


$Accounts receivable


(1,217
)


(5,714
)


(32,646
)Prepaids and other


(2,211
)


(14,393
)


(9,900
)Accounts payable and accrued liabilities


(76,608
)


47,781



54,839Income taxes payable


156,748



22,894



(58
)Unearned revenue


5,044



8,522



7,06981,756



59,090



19,304   (iii)
    Interest and income taxes paid and classified as operating
    activities are as follows:  2010

2009

2008$

$

$Interest


237,377



231,594



241,899Income taxes


4,243



404



57  112




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  (iv)
    Non-cash transactions    2010

2009

2008$

$

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


120,000







   21.
    CAPITAL
    STRUCTURE MANAGEMENT    (i)
    to maintain a capital structure which optimizes the cost of
    capital, provides flexibility and diversity of funding sources
    and timing of debt maturities, and adequate anticipated
    liquidity for organic growth and strategic acquisitions;  (ii)
    to maintain compliance with debt covenants; and(iii)
    to manage a strong and efficient capital base to maintain
    investor, creditor and market confidence.    August 31, 2010

August 31, 2009Cash and cash equivalents


(216,735
)


(253,862
)Short-term securities






(199,375
)Long-term debt repayable at maturity


4,021,033



3,596,882Share capital


2,250,498



2,113,849Contributed surplus


53,330



38,022Retained earnings


457,728



382,2276,565,854



5,677,743        113




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
      22.
    UNITED
    STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES    (a)
    Reconciliation
    to US GAAP  2010


2009


2008$


$


$Net income using Canadian GAAP


532,732



536,475



673,201Add (deduct) adjustments for:Deferred charges and
    credits(2)(8)


14,539



4,576



(21,501
)Business acquisition
    costs(3)


(12,739
)






Fair value of
    derivatives(7)


10,002







Capitalized
    interest(10)


8,195



1,337



4,133Income
    taxes(11)


(13,839
)


(3,613
)


(994
)Net income using US GAAP


538,890



538,775



654,839Other comprehensive income (loss) using Canadian GAAP


47,610



19,040



(759
)Fair value of
    derivatives(7)


(8,627
)






Change in funded status of non-contributory defined benefit
    pension
    plan(9)


(38,167
)


11,315



(3,135
)816



30,355



(3,894
)Comprehensive income using US GAAP


539,706



569,130



650,945Earnings per share using US GAAPBasic


$  1.25



$   1.26



$   1.52Diluted


$  1.24



$   1.25



$   1.51  114




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  Consolidated
    Balance Sheet items using US GAAP
 2010


2009Canadian


US


Canadian


USGAAP


GAAP


GAAP


GAAP$


$


$


$Investments(3)


743,273



731,510



194,854



194,854Property, plant and
    equipment(10)


3,004,649



3,010,222



2,716,364



2,720,564Deferred
    charges(2)


232,843



171,093



256,355



170,260Broadcast
    rights(1)(5)(6)


5,061,153



5,035,919



4,816,153



4,790,919Goodwill(3)


169,143



168,167



88,111



88,111Other
    intangibles(10)


156,469



166,804



105,180



108,693Income taxes payable


170,581



149,081



25,320



5,446Current portion of long-term
    debt(2)


557



576



481,739



482,341Long-term
    debt(2)


3,981,671



4,020,457



2,668,749



2,695,908Other long-term
    liabilities(9)


291,500



431,807



104,964



194,211Deferred
    credits(2)(8)


632,482



629,000



659,073



656,830Future income taxes


1,451,859



1,415,442



1,336,859



1,299,244Shareholders equity:Share capital


2,250,498



2,250,498



2,113,849



2,113,849Contributed surplus


53,330



53,330



38,022



38,022Retained earnings


457,728



364,703



382,227



283,044Accumulated other comprehensive income (loss)


8,976



(99,527
)


(38,634
)


(100,343
)Total shareholders equity


2,770,532



2,569,004



2,495,464



2,334,572     2010


2009$


$Shareholders equity using Canadian GAAP


2,770,532



2,495,464Amortization of intangible
    assets(1)


(130,208
)


(130,208
)Deferred charges and
    credits(2)(8)


(6,173
)


(16,847
)Business acquisition
    costs(3)


(12,739
)


Equity in loss of
    investee(4)


(35,710
)


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


16,052



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


50,063



50,063Fair value of
    derivatives(7)


8,627



Capitalized
    interest(10)


11,748



5,619Income
    taxes(11)


5,315



11,848Accumulated other comprehensive loss


(108,503
)


(61,709
)Shareholders equity using US GAAP


2,569,004



2,334,572     2010


2009$


$Fair value of
    derivatives(7)


(8,627
)


Pension
    liability(9)


(99,876
)


(61,709
)Accumulated other comprehensive loss


(108,503
)


(61,709
)  115




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
      (1)
    Amortization of intangible assets    (2)
    Deferred charges and credits      (3)
    Business acquisition costs    (4)
    Equity in loss of investee      (5)
    Gain on sale of subsidiary   116




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    (6)
    Gain on sale of cable systems      (7)
    Fair value of derivatives    (8)
    Subscriber connection fee revenue    (9)
    Pension liability      (10)
    Interest costs    (11)
    Income taxes    (b)
    Advertising
    costs   117




---



##### 



Shaw
    Communications Inc.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
  (c)
    Adoption
    of new accounting pronouncement    section 805-10
  23.
    COMPARATIVE
    CONSOLIDATED FINANCIAL STATEMENTS    24.
    SUBSEQUENT
    EVENTS   118




---



##### 



Shaw
    Communications Inc.FIVE YEARS IN REVIEW
    August 31, 2010
  ($000s except per share amounts)

2010


2009(3)


2008(3)


2007(3)


2006(3)Service revenueCable


2,927,411



2,630,982



2,375,586



2,082,652



1,808,583DTH


711,069



673,226



640,061



605,176



567,807Satellite


79,100



86,705



89,212



86,617



82,8943,717,580



3,390,913



3,104,859



2,774,445



2,459,284Service operating income (expenditures)
    before amortization(1)Cable


1,456,827



1,271,279



1,155,967



1,000,508



858,769DTH


265,016



223,499



206,541



196,404



175,401Satellite


38,304



45,831



48,421



47,527



45,050Wireless


(1,396
)














1,758,751



1,540,609



1,410,929



1,244,439



1,079,220Net income


532,732



536,475



673,201



391,837



459,159Earnings per shareBasic


1.23



1.25



1.56



0.91



1.05Diluted


1.23



1.25



1.55



0.90



1.05Funds flow from
    operations(2)


1,375,403



1,323,840



1,222,895



1,028,363



847,197Balance sheetTotal assets


10,153,965



8,934,686



8,352,759



8,156,004



7,648,994Long-term debt (including current portion)


3,982,228



3,150,488



2,707,043



3,068,554



2,996,385Cash dividends declared per shareClass A


0.858



0.818



0.702



0.462



0.235Class B


0.860



0.820



0.705



0.465



0.238   (1)
    
    See key performance drivers on
    page 21.(2)
    
    Funds flow from operations is
    presented before changes in non-cash working capital as
    presented in the Consolidated Statements of Cash Flows.(3)
    
    Restated as a result of the
    retrospective adoption of CICA Handbook Section 3064,
    Goodwill and Intangible Assets. 119




---



##### 



Shaw
    Communications Inc. SHAREHOLDERS INFORMATIONAugust 31, 2010
  Share
    Capital and Listings
    Trading
    Range of Class B Non-Voting Shares on the Toronto Stock
    Exchange
  TotalQuarter

High Close


Low Close


VolumeSeptember 1, 2009 to August 31, 2010First


20.57



18.72



64,371,356Second


22.02



19.30



55,802,101Third


20.70



18.61



68,581,686Fourth


21.87



18.93



54,730,634Closing price, August 31, 2010

21.87


243,485,777   Share
    Splits
  www.shaw.ca
 120