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Shaw Communications


ANNUAL REPORT


August 31, 2005


SHAW COMMUNICATIONS INC.


ANNUAL REPORT


|                                                    |  |      |    | 
|--------------------------------------------------- |  | ---- | -- | 
|CONTENTS                                            |  | Page |   
|Report to Shareholders                              |  |      | 1  | 
|Managements Discussion and Analysis                |  |      | 4  | 
|Managements Responsibility for Financial Reporting |  |      | 45 | 
|Auditors Report                                    |  |      | 46 | 
|Consolidated Financial Statements                   |  |      | 47 | 
|Notes to Consolidated Financial Statements          |  |      | 50 | 
|Five Years in Review                                |  |      | 96 | 
|Shareholders Information                           |  |      | 97 | 
|Corporate Information                               |  |      | 98 | 







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Shaw Communications


REPORT TO SHAREHOLDERS


August 31, 2005






FINANCIAL HIGHLIGHTS






|  |                                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Total service revenue for the year was $2.2 billion, up
    6.3% over last year.                                                                                      
| 
| | Consolidated service operating income before
    amortization1
    was $982 million, up 6.1% over last year.                                                          
| 
| | Funds flow from
    operations2
    was $763 million, up 10% over last year.                                                                                          
| 
| | Free cash
    flow1
    for the year was $277 million, consistent with last year
    despite the increased investment made to support the launch of
    Digital Phone.
| 
| | Net income for the year was $161 million or $0.64 per
    share, up from $91 million or $0.22 per share last year.                                                    

STRATEGIC FOCUS






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






|  |                                                                                                     
|- | ----------------------------------------------------------------------------------------------------
| | leverage our network infrastructure to offer customers a wider
    variety of products and services;
| 
| | enhance existing products to provide greater value for customers;                                   
| 
| | provide best-in-class, 24/7/365 service;                                                            
| 
| | bundle our product offerings to provide value both to Shaw and
    the customer; and,               
| 
| | focus on sound capital management and operational efficiencies
    to keep our competitive edge.    





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Shaw Communications


REPORT TO SHAREHOLDERS


August 31, 2005


THIS YEARS SUCCESSES














CONCLUSION AND OUTLOOK












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Shaw Communications


REPORT TO SHAREHOLDERS


August 31, 2005






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








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

|  |                                                                                                                                                     
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statement of Cash Flows.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


November 21, 2005


FORWARD


Certain statements in this report may constitute
forward-looking statements. Such forward-looking statements
involve risks, uncertainties and other factors which may cause
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Included herein is a Caution Concerning
Forward-Looking Statements section which should be read in
conjunction with this report.




INDEX


|         |  |    |  |                                                             |  |     
|-------- |  | -- |  | ----------------------------------------------------------- |  | ----
|CONTENTS |  |    |  |                                                             |  | Page
|Outline  |  |    |  |                                                             |  |     
|I.       |  |    |  | INTRODUCTION TO THE BUSINESS                                |  |     
|         |  | A. |  | Company overview  core business and strategies             |  | 5   
|         |  | B. |  | Seasonality                                                 |  | 7   
|         |  | C. |  | Key performance drivers                                     |  | 7   
|         |  | D. |  | Critical accounting policies and estimates                  |  | 9   
|         |  | E. |  | Related party transactions                                  |  | 14  
|         |  | F. |  | New accounting standards                                    |  | 14  
|         |  | G. |  | Known events, trends, risks and uncertainties               |  | 16  
|II.      |  |    |  | SUMMARY OF QUARTERLY RESULTS                                |  | 23  
|III.     |  |    |  | RESULTS OF OPERATIONS                                       |  | 25  
|IV.      |  |    |  | FINANCIAL POSITION                                          |  | 38  
|V.       |  |    |  | CONSOLIDATED CASH FLOW ANALYSIS                             |  | 39  
|VI.      |  |    |  | LIQUIDITY AND CAPITAL RESOURCES                             |  | 40  
|VII.     |  |    |  | ADDITIONAL INFORMATION                                      |  | 43  
|VIII.    |  |    |  | COMPLIANCE WITH NYSE CORPORATE GOVERNANCE LISTING STANDARDS |  | 43  
|IX.      |  |    |  | CAUTION CONCERNING FORWARD LOOKING STATEMENTS               |  | 43  





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


I.     INTRODUCTION TO THE
BUSINESS


A.     Company overview 
core business and strategies


i)     Shaw Communications
Inc.




1




ii)     Cable











|  |                                                                                          
|- | -----------------------------------------------------------------------------------------
|1 | See definitions under Key performance drivers in Managements
    Discussion and Analysis.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005












iii)    Satellite








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005










B.     Seasonality




C.     Key performance drivers






i)     Service revenue








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


The Companys continuous disclosure documents may
provide discussion and analysis of non-GAAP financial measures.
These financial measures do not have standard definitions
prescribed by Canadian or US GAAP and therefore may not be
comparable to similar measures disclosed by other companies. The
Company utilizes these measures in making operating decisions
and assessing its performance. Certain investors, analysts and
others utilize these measures in assessing the Companys
financial performance and as an indicator of its ability to
service debt and return cash to shareholders. These non-GAAP
measures have not been presented as an alternative to net income
or any other measure of performance by Canadian or US GAAP.
The following contains a listing of the Companys use of
non-GAAP financial measures and provides a reconciliation to the
nearest GAAP measurement or provides a reference to such
reconciliation.




|    |                                                                      
|--- | ---------------------------------------------------------------------
|ii) | Service operating income before amortization and operating
    margin





iii)    Free cash flow




|                                |  |      |         |  |      |  |         |      |  |  |          |   |  | 
|------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | -------- | - |  | 
|                                |  | 2005 |         |  | 2004 |  |         | 2003 |  |  |         
|                               
|($000s Cdn)                    |  |      |         |  |      |  |         |      |  |  |          |   |  | 
|Cable free cash
    flow(1)     |  |      | 228,617 |  |      |  | 272,250 |      |  |  | 205,178  |   |  | 
|Satellite free cash
    flow(2) |  |      | 48,702  |  |      |  | 6,631   |      |  |  | (106,919 | ) |  | 
|                               
|Consolidated free cash flow     |  |      | 277,319 |  |      |  | 278,881 |      |  |  | 98,259   |   |  | 
|                               



|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(1) | The reconciliation of free cash flow for cable is provided on
    page 31.    
|   
|(2) | The reconciliation of free cash flow for satellite is provided
    on page 36.







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005






i)     Subscriber counts,
including penetration












ii)     Customer churn




D.     Critical accounting policies
and estimates








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




i)     Revenue and expense
recognition














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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005








Income statement classification




Subscriber connection and installation costs




ii)     Allowance for doubtful
accounts








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


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








|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Corporate departments such as engineering and information
    technology. Engineering is primarily involved in overall
    planning and development of the cable/ Internet/ Digital Phone
    infrastructure. Labour and overhead costs directly related to
    this activity are capitalized as the activities directly relate
    to the planning and design of the construction of the
    distribution system. In fiscal 2005 and 2004, the information
    technology department has devoted considerable efforts towards
    the development of a provisioning system for Digital Phone.
    Labour costs directly related to this and other projects were
    capitalized.
|  
|2. | Cable regional construction departments, which are principally
    involved in constructing, rebuilding and upgrading the cable/
    Internet infrastructure. Labour and overhead costs directly
    related to the construction activity are capitalized as the
    activities directly relate to the construction or upgrade of the
    distribution system. Capital projects include, but are not
    limited to, projects such as new subdivision builds, decrease of
    node sizes, and upgrades of the plant to 860 MHz capacity.                                                                                                                                         
|  
|3. | Subscriber-related activities such as installation of new drops,
    satellite dishes and Internet services. The labour and overhead
    directly related to the installation of new services are
    capitalized as the activity involves the installation of capital
    assets (e.g. wiring, dishes, 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








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




v)     Depreciation policies and
useful lives




vi)    Asset impairment




vii)    Employment benefit
plans








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




viii)   Future income taxes




ix)    Commitments and
contingencies




E.  Related party transactions




F.     New accounting standards






|    |                             
|--- | ----------------------------
|(i) | Asset retirement obligations







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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




|     |                                                                             
|---- | ----------------------------------------------------------------------------
|(ii) | GAAP Hierarchy and General Standards of Financial
    Statement Presentation





|      |                                            
|----- | -------------------------------------------
|(iii) | Consolidation of Variable Interest Entities







|    |                   
|--- | ------------------
|(i) | Equity Instruments



|                                                      |  |                     |          |   |      |  |          |   |  | 
|----------------------------------------------------- |  | ------------------- | -------- | - | ---- |  | -------- | - |  | 
|                                                      |  | Increase (decrease) |          |   |     
|                                                      |  | 2005                |          |   | 2004 |  |          |  
|                                                     
|($000s Cdn except per share amounts)                  |  |                     |          |   |      |  |          |   |  | 
|Consolidated balance sheets:                          |  |                     |          |   |      |  |          |   |  | 
|Deferred charges                                      |  |                     | 13,247   |   |      |  | 19,816   |   |  | 
|Long-term debt                                        |  |                     | 454,775  |   |      |  | 693,578  |   |  | 
|Future income taxes                                   |  |                     | 14,033   |   |      |  | 14,758   |   |  | 
|Equity instruments                                    |  |                     | (498,194 | ) |      |  | (724,923 | ) |  | 
|Deficit                                               |  |                     | (42,633  | ) |      |  | (36,403  | ) |  | 
|                                                     
|Decrease in deficit:                                  |  |                     |          |   |      |  |          |   |  | 
|Adjusted for change in accounting policy              |  |                     | (36,403  | ) |      |  | (16,257  | ) |  | 
|Decrease in equity entitlements (net of income taxes) |  |                     | (31,318  | ) |      |  | (40,185  | ) |  | 
|Decrease in gain on redemption of COPrS               |  |                     | 12,803   |   |      |  |         |   |  | 
|Decrease in gain on settlement of Zero Coupon Loan    |  |                     | 4,921    |   |      |  |         |   |  | 
|Decrease in net income                                |  |                     | 7,364    |   |      |  | 20,039   |   |  | 
|                                                     
|                                                      |  |                     | (42,633  | ) |      |  | (36,403  | ) |  | 
|                                                     





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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


|                                                             |  |                     |         |   |      |  |         |   |  | 
|------------------------------------------------------------ |  | ------------------- | ------- | - | ---- |  | ------- | - |  | 
|                                                             |  | Increase (decrease) |         |   |     
|                                                             |  | in net income       |         |   |     
|                                                             |  | 2005                |         |   | 2004 |  |         |  
|                                                            
|($000s Cdn except per share amounts)                         |  |                     |         |   |      |  |         |   |  | 
|Consolidated statements of income:                           |  |                     |         |   |      |  |         |   |  | 
|Increase in amortization                                     |  |                     | (258    | ) |      |  | (312    | ) |  | 
|Increase in interest                                         |  |                     | (48,541 | ) |      |  | (62,302 | ) |  | 
|Increase in foreign exchange gain on unhedged long-term debt |  |                     | 34,258  |   |      |  | 24,559  |   |  | 
|Increase in debt retirement costs                            |  |                     | (6,311  | ) |      |  |        |   |  | 
|Decrease in income tax expense                               |  |                     | 13,488  |   |      |  | 18,016  |   |  | 
|                                                            
|Decrease in net income                                       |  |                     | (7,364  | ) |      |  | (20,039 | ) |  | 
|                                                            
|Increase in earnings per share (in $):                       |  |                     | 0.03    |   |      |  | 0.09    |   |  | 
|                                                            

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



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



G.    Known events, trends, risks and
uncertainties








|  |                                                                               
|- | ------------------------------------------------------------------------------
| | Competition and technological change, including change in
    regulatory risks
| | Interest rate, foreign exchange and market value risks                        
| | Contingencies                                                                 
| | Uninsured risks of loss                                                       
| | Reliance on suppliers                                                         
| | Holding company structure                                                     
| | Control of Shaw by the Shaw family                                            

i)     Competition and
technological change








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005






















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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005
























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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005






















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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




ii)     Interest rate, foreign
exchange and market value risks








| |     |                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Interest rates: Due to the capital-intensive nature of
    Shaws operations, the Company utilizes long-term financing
    extensively in its capital structure. The primary components of
    this structure are:



| |    |                                                                                                                                                                                                                         
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | Banking facilities as more fully described in Note 9 to the
    Consolidated Financial Statements.                                                                                                                      
|
| | 2. | Various Canadian and US denominated senior notes and debentures
    with varying maturities issued in the public and private markets
    as more fully described in Note 9 to the Consolidated
    Financial Statements.
|
| | 3. | Equity instruments issued in Canadian and US dollars with
    original terms of 5  99 years as more fully
    described in Note 11 to the Consolidated Financial
    Statements.                                       



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Interest on bank indebtedness is based on floating rates, while
    the senior notes, debentures and Canadian Originated Preferred
    Securities (COPrS) are fixed-rate obligations. Shaw
    utilizes its credit facility to finance day-to-day operations
    and, depending on market conditions, periodically converts the
    bank loans to fixed-rate instruments through public market debt
    issues. Shaw also uses interest rate swap transactions to fix
    the interest rates on a portion of its bank debt. At
    August 31, 2005 Shaw had swapped out
    $118.0 million of its $799.0 million Canadian
    floating-rate bank indebtedness by means of a Canadian interest
    rate swap transaction entered into with a major Canadian
    chartered bank. The swap fixes interest on a notional amount of
    bank debt of $118.0 million at an effective rate, which at
    August 31, 2005 was 8.89%. The interest rate swap reduces
    by $59 million on April 30, 2006 and fully terminates
    on April 30, 2007.
|
| | As at August 31, 2005, approximately 75% of Shaws
    consolidated long-term debt was fixed with respect to interest
    rates. Based on the variable rate debt outstanding and foreign
    exchange rate at August 31, 2005, a 1% increase in interest
    rates would result in an annual increase in interest expense of
    approximately $6.8 million. The equity instruments are also
    fixed with respect to entitlement rates, but are subject to the
    foreign exchange fluctuations described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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, 2005, 97% of such
    maturities were hedged. The Company





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | There is also an exchange risk present with respect to the
    US dollar denominated COPrS included in equity instruments
    which require quarterly interest payments and potential
    redemption in US dollars. However, because of the long
    period of time until mandatory redemption (92 years), it is
    not practical to hedge these requirements. In respect of the
    quarterly interest payments, Shaw has entered into a forward
    US dollar purchase contract with a major Canadian bank
    whereby it buys US dollars at a fixed rate on the quarterly
    interest payment dates to make these payments. The current
    agreement requires Shaw to purchase US dollars at an
    exchange rate of $1.4078 Cdn. until March 31, 2010.                                                                                                                                                                                                           
|
| | In addition, some of the Companys capital expenditures are
    incurred in US dollars, while its revenue is primarily
    denominated in Canadian dollars. Decreases in the value of the
    Canadian dollar relative to the US dollar could have a
    material adverse effect on the Companys cash flows. To
    mitigate some of the uncertainty in respect to capital
    expenditures, the Company regularly enters into forward
    contracts in respect of US dollar commitments. In respect
    of 2005, the Company entered into forward contracts providing
    for monthly or quarterly US dollar purchases under which
    the Company purchased approximately US $58 million at
    an average exchange rate of 1.2629 Cdn. With respect
    to 2006, the Company has entered into forward contracts to
    purchase approximately US $82 million over a period of
    12 months commencing in September 2005 at an average
    exchange rate 1.2122 Cdn.
|
| | Further information concerning the policy and use of derivative
    financial instruments is contained in Note 1 to the
    Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | The following tables summarize the impact of changes in the
    Cdn/US dollar exchange rate on the unhedged portion of
    Shaws US denominated debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                                            |  |           |      |  |           |  |     |           |  |  |            |  |  |  |       |  |  | 
|------------------------------------------- |  | --------- | ---- |  | --------- |  | --- | --------- |  |  | ---------- |  |  |  | ----- |  |  | 
|                                            |  |           |      |  |           |  |     | Impact on |  |  |           
|                                            |  | Change in |      |  | Change in |  |     | Change in |  |  | income     |  |  | 
|                                            |  | Cdn $ vs. |      |  | principal |  |     | interest  |  |  | (loss) per |  |  | 
|                                            |  | US $      |      |  | amount    |  |     | expense   |  |  | share(1)   |  |  | 
|                                           
|(In $millions Cdn except per share amounts) |  |           |      |  |           |  |     |           |  | 
|Debt                                        |  | $         | 0.01 |  |           |  | 0.3 |           |  |  |           |  |  |  | 0.001 |  |  | 
|                                            |  | $         | 0.03 |  |           |  | 0.9 |           |  |  |           |  |  |  | 0.003 |  |  | 
|                                            |  | $         | 0.05 |  |           |  | 1.4 |           |  |  |           |  |  |  | 0.005 |  |  | 
|                                           



| |     |                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Assumes income tax recovery of 35.5% and includes the impact of
    foreign exchange gain or loss, interest and dividend
    entitlements.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Canadian GAAP, equity instruments such as the COPrS are
    classified as equity and are measured using historical values;
    therefore the principal amount stated in the financial
    statements does not change with foreign exchange rate
    fluctuations. Under US GAAP, equity instruments are classified
    as debt and are translated at the year-end rate of exchange;
    therefore the principal amount would fluctuate by
    $1.7 million for each one cent change in the Canadian
    dollar versus the US dollar.



| |     |                                                                                                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | Market value: The Company has $36.2 million of investments
    of which $25.5 million represents publicly traded
    securities. The value of the Companys investments is
    subject to market risk. The market value of publicly traded
    investments at August 31, 2005 is $61.7 million.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


iii)    Contingencies




iv)    Uninsured risks of loss






v)     Reliance on
suppliers










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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


vi)    Holding company
structure




vii)    Control of Shaw by the Shaw
family




II.    SUMMARY OF QUARTERLY RESULTS


|                                        |  |         |           |                  |                 |  |         |            |           |          |           |            |      |               |      |  |  |  |         |  |  | 
|--------------------------------------- |  | ------- | --------- | ---------------- | --------------- |  | ------- | ---------- | --------- | -------- | --------- | ---------- | ---- | ------------- | ---- |  |  |  | ------- |  |  | 
|                                        |  |         |           | Service          |                 |  |         |            | Basic and |          |           |            |      |              
|                                        |  |         |           | operating income |                 |  |         |            | diluted   |          |           | Funds flow |      |               |     
|                                        |  | Service |           |                  | before          |  |         |            |           | earnings |           |            | from |               |      | 
|Quarter                                 |  | revenue |           |                  | amortization(1) |  |         | Net income |           |          | per share |            |      | operations(2) |      |  | 
|                                       
|(In $000s Cdn except per share amounts) |  |         |           |                  |                 |  |         |            |           |          |           |            |      |              
|2005                                    |  |         |           |                  |                 |  |         |            |           |          |           |            |      |               |      |  |  |  |         |  |  | 
|Fourth                                  |  |         | 562,958   |                  |                 |  | 250,759 |            |           |          | 66,382    |            |      |               | 0.29 |  |  |  | 198,889 |  |  | 
|Third                                   |  |         | 559,883   |                  |                 |  | 252,899 |            |           |          | 43,266    |            |      |               | 0.16 |  |  |  | 197,685 |  |  | 
|Second                                  |  |         | 549,919   |                  |                 |  | 244,311 |            |           |          | 32,122    |            |      |               | 0.16 |  |  |  | 185,943 |  |  | 
|First                                   |  |         | 537,050   |                  |                 |  | 234,024 |            |           |          | 18,815    |            |      |               | 0.04 |  |  |  | 180,766 |  |  | 
|                                       
|Total                                   |  |         | 2,209,810 |                  |                 |  | 981,993 |            |           |          | 160,585   |            |      |               | 0.64 |  |  |  | 763,283 |  |  | 
|                                       
|2004                                    |  |         |           |                  |                 |  |         |            |           |          |           |            |      |               |      |  |  |  |         |  |  | 
|Fourth                                  |  |         | 531,821   |                  |                 |  | 239,212 |            |           |          | 28,882    |            |      |               | 0.08 |  |  |  | 186,311 |  |  | 
|Third                                   |  |         | 532,015   |                  |                 |  | 237,659 |            |           |          | 24,828    |            |      |               | 0.06 |  |  |  | 179,260 |  |  | 
|Second                                  |  |         | 513,541   |                  |                 |  | 224,102 |            |           |          | 17,191    |            |      |               | 0.03 |  |  |  | 163,068 |  |  | 
|First                                   |  |         | 502,372   |                  |                 |  | 224,962 |            |           |          | 20,008    |            |      |               | 0.04 |  |  |  | 166,131 |  |  | 
|                                       
|Total                                   |  |         | 2,079,749 |                  |                 |  | 925,935 |            |           |          | 90,909    |            |      |               | 0.22 |  |  |  | 694,770 |  |  | 
|                                       



|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 7.                                                                                                                  
|   
|(2) | Funds flow from operations is presented before changes in net
    non-cash working capital as presented in the Consolidated
    Statement of Cash Flows.







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005








Growth in subscriber statistics as follows:


|                      |  |       |        |   |        |  |        |       |  |  |        |  |  |       |        |  |        |  |        |       |  |  |        |   |  |  |        |  |  |  |        |  |  | 
|--------------------- |  | ----- | ------ | - | ------ |  | ------ | ----- |  |  | ------ |  |  | ----- | ------ |  | ------ |  | ------ | ----- |  |  | ------ | - |  |  | ------ |  |  |  | ------ |  |  | 
|                      |  | 2005  |        |   | 2004  
|                      |  |       |        |   |       
|Subscriber statistics |  | First |        |   | Second |  |        | Third |  |  | Fourth |  |  | First |        |  | Second |  |        | Third |  |  | Fourth |   |  | 
|                     
|Basic cable customers |  |       | 17,109 |   |        |  | (1,707 | )     |  |  | 1,338  |  |  |       | 3,733  |  |        |  | 21,894 |       |  |  | (114   | ) |  |  | 2,910  |  |  |  | 5,830  |  |  | 
|Digital customers     |  |       | 21,501 |   |        |  | 15,517 |       |  |  | 9,764  |  |  |       | 11,167 |  |        |  | 15,652 |       |  |  | 15,778 |   |  |  | 16,762 |  |  |  | 24,712 |  |  | 
|Internet customers    |  |       | 47,748 |   |        |  | 32,539 |       |  |  | 27,034 |  |  |       | 39,804 |  |        |  | 48,040 |       |  |  | 35,305 |   |  |  | 19,173 |  |  |  | 23,488 |  |  | 
|Digital Phone Lines   |  |       | N/A    |   |        |  | 3,512  |       |  |  | 18,938 |  |  |       | 34,113 |  |        |  | N/A    |       |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A    |  |  | 
|DTH                   |  |       | (3,068 | ) |        |  | 4,815  |       |  |  | 6,252  |  |  |       | 8,760  |  |        |  | (956   | )     |  |  | 6,483  |   |  |  | 12,344 |  |  |  | 1,506  |  |  | 
|                     

Other operating costs:


| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | In February 2004, the Company settled certain litigation which
    resulted in a $6.5 million charge against income.

Significant acquisitions and divestitures:


| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The acquisition of cable systems serving approximately 40,000
    customers was completed effective March 31, 2004. These
    systems generated service revenue of approximately
    $3.9 million and $5.8 million in the third and fourth
    quarters of 2004, respectively, and service operating income
    before amortization of $2.1 million and $3.5 million
    in the third and fourth quarters, respectively. In 2005, these
    systems generated service operating income of approximately
    $3.5 million and $3.7 million in the first and second
    quarter respectively, and in the third quarter generated an
    additional $1.8 million over the amounts reported in the
    third quarter of 2004.

New Product Launch:


| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On February 14, 2005, the Company launched Shaw Digital
    Phone service in Calgary. The Company launched the product in
    Edmonton on April 25 and in Winnipeg on July 26.
| |  | During 2005 the Company launched on-screen ordering of VOD
    content in Calgary, Edmonton, Winnipeg, Saskatoon, Red Deer,
    Fort McMurray and Vancouver.                  





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


III.   RESULTS OF OPERATIONS


OVERVIEW OF FISCAL 2005 CONSOLIDATED RESULTS


|                                         |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  |  | 
|---------------------------------------- | --------------------------------------------------------------------------------- | ---- | - | --------- | ---- |  | - | --------- |  |  | ---- | --------- | - | - |  | ---- | - |  |  | ----- |  |  | 
|                                         |                                                                                   |      |   |           |      |  |   | Change   
|                                         |                                                                                   |      |   |           |      |  |   |          
|                                         |                                                                                   |      |   |           |      |  |   | 2005      |  |  | 2004 |           |   |  
|                                         |                                                                                   | 2005 |   |           | 2004 |  |   | 2003      |  |  | %    |           |   | % |  |      |  
|                                        
|(In $000s Cdn except per share amounts) |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  | 
|Operations:                              |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  | 
|                                         | Service revenue                                                                   |      |   | 2,209,810 |      |  |   | 2,079,749 |  |  |      | 1,998,421 |   |   |  | 6.3  |   |  |  | 4.1   |  |  | 
|                                         | Service operating income before
    amortization(1)                               |      |   | 981,993   |      |  |   | 925,935   |  |  |      | 817,641   |   |   |  | 6.1  |   |  |  | 13.2  |  |  | 
|                                         | Service operating margin                                                          |      |   | 44.4%     |      |  |   | 44.5%     |  |  |      | 40.9%     |   |   |  |      |   |  |  |       |  |  | 
|                                         | Funds flow from
    operations(2)                                                 |      |   | 763,283   |      |  |   | 694,770   |  |  |      | 544,175   |   |   |  | 9.9  |   |  |  | 27.7  |  |  | 
|                                         | Net income (loss)                                                                 |      |   | 160,585   |      |  |   | 90,909    |  |  |      | (46,864   | ) |   |  | 76.6 |   |  |  | 294.0 |  |  | 
|                                         | Free cash
    flow(1)                                                             |      |   | 277,319   |      |  |   | 278,881   |  |  |      | 98,259    |   |   |  | (0.6 | ) |  |  | 183.8 |  |  | 
|Balance sheet:                           |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  | 
|                                         | Total assets                                                                      |      |   | 7,416,938 |      |  |   | 7,556,904 |  |  |      | 7,710,801 |   |   |  |      |   |  |  |       |  |  | 
|                                         | Long-term financial liabilities (including current portion of
    long-term debt) |      |   | 2,744,767 |      |  |   | 2,650,680 |  |  |      | 2,917,068 |   |   |  |      |   |  |  |       |  |  | 
|Per share data:                          |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  | 
|                                         | Income (loss) per share  basic and
    diluted(3)                                |      | $ | 0.64      |      |  | $ | 0.22      |  |  | ($   | 0.38      | ) |   |  |      |   |  |  |       |  |  | 
|                                         | Weighted average number of participating shares                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  |  | 
|                                         | outstanding during period (000s)                                                 |      |   | 228,210   |      |  |   | 231,605   |  |  |      | 231,848   |   |   |  |      |   |  |  |       |  |  | 
|Cash dividends paid per share            |                                                                                   |      |   |           |      |  |   |           |  |  |      |           |   |   |  |      |   |  |  |       |  | 
|                                         | Class A                                                                           |      |   | 0.305     |      |  |   | 0.155     |  |  |      | 0.045     |   |   |  |      |   |  |  |       |  |  | 
|                                         | Class B                                                                           |      |   | 0.310     |      |  |   | 0.160     |  |  |      | 0.050     |   |   |  |      |   |  |  |       |  |  | 
|                                        



|    |                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 7.                                                                                                                                                                                                                                                                                                                 
|   
|(2) | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.                                                                                                                                                                                                  
|   
|(3) | After deducting after-tax entitlements on equity instruments of
    $31,318 or $0.14 per share (2004  $40,185 or $0.17
    per share; 2003  $40,193 or $0.17 per share) and
    including after-tax gains on redemption of COPrS and settlement
    of the Zero Coupon Loan of $17,724 or $0.08 per share
    (2004   Nil, 2003  Nil) for the year.

Highlights




| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net income was $160.6 million for the year compared to
    income of $90.9 million in 2004 and a loss of
    $46.9 million in 2003.        
| |  | Earnings per share were $0.64 compared to $0.22 in 2004 and loss
    of $0.38 in 2003.                                                     
| |  | Service revenue for the year improved to $2.2 billion from
    $2.1 billion last year and $2.0 billion in 2003.                            
| |  | Service operating income before amortization of $982.0 was up
    over last years amount of $925.9 million and
    $817.6 million in 2003.
| |  | Consolidated free cash flow was $277.3 million compared to
    $278.9 million in 2004 and $98.3 million in 2003.                           





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




| |   |                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Launched Shaw Digital Phone in three major markets. At
    August 31, 2005, the number of Digital Phone lines,
    including pending installations, was 56,563.                                                                  
| |  | Dividends paid in 2005 almost doubled over 2004.                                                                                                                                                                                 
| |  | The Shaw customer base continued to grow with increases of
    20,473 for basic cable (2004  30,520); 57,949 for
    digital (2004  72,904); 147,125 for Internet
    (2004  126,006); and 16,759 (2004  19,377)
    for DTH.
| |  | The Company repurchased 11,505,500 Class B Non-Voting
    Shares for cancellation, pursuant to a normal course issuer bid
    for $287.1 million ($24.95 per share) during 2005.                                                 

Revenue and operating expenses


2005 vs. 2004








2004 vs. 2003










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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


Amortization


|                                 |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   |  | 
|-------------------------------- | ----------------------------- | ---- |  | -------- | ---- |  |  | -------- | - |  | ---- | -------- | - | - |  | ----- | - |  |  | ----- | - |  | 
|                                 |                               |      |  |          |      |  |  | Change  
|                                 |                               |      |  |          |      |  |  |         
|                                 |                               |      |  |          |      |  |  | 2005     |   |  | 2004 |          |   |  
|                                 |                               | 2005 |  |          | 2004 |  |  | 2003     |   |  | %    |          |   | % |  |       |  
|                                
|(In $000s Cdn)                   |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   | 
|Amortization revenue (expense)  |                               |      |  |          |      |  |  |          |   |  |      |          |   |   |  |       |   |  |  |       |   | 
|                                 | Deferred IRU revenue          |      |  | 12,999   |      |  |  | 12,098   |   |  |      | 11,984   |   |   |  | 7.4   |   |  |  | 0.9   |   |  | 
|                                 | Deferred equipment revenue    |      |  | 71,677   |      |  |  | 82,711   |   |  |      | 91,863   |   |   |  | (13.3 | ) |  |  | (10.0 | ) |  | 
|                                 | Deferred equipment costs      |      |  | (210,477 | )    |  |  | (229,013 | ) |  |      | (251,103 | ) |   |  | (8.1  | ) |  |  | (8.8  | ) |  | 
|                                 | Deferred charges              |      |  | (6,337   | )    |  |  | (7,796   | ) |  |      | (21,125  | ) |   |  | (18.7 | ) |  |  | (63.1 | ) |  | 
|                                 | Property, plant and equipment |      |  | (408,866 | )    |  |  | (403,395 | ) |  |      | (413,381 | ) |   |  | 1.4   |   |  |  | (2.4  | ) |  | 
|                                







Interest on long-term debt


|               |  |      |         |  |      |  |         |        |  |  |         |  |  |   |      |   |  |  |       |   |  | 
|-------------- |  | ---- | ------- |  | ---- |  | ------- | ------ |  |  | ------- |  |  | - | ---- | - |  |  | ----- | - |  | 
|               |  |      |         |  |      |  |         | Change
|               |  |      |         |  |      |  |         |       
|               |  |      |         |  |      |  |         | 2005   |  |  | 2004    |  |  |  
|               |  | 2005 |         |  | 2004 |  |         | 2003   |  |  | %       |  |  | % |      |   | 
|              
|(In $000s Cdn) |  |      |         |  |      |  |         |        |  |  |         |  |  |   |      |   |  |  |       |   |  | 
|Interest       |  |      | 214,408 |  |      |  | 219,472 |        |  |  | 259,702 |  |  |   | (2.3 | ) |  |  | (15.5 | ) |  | 
|              







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


Investment activity gains and losses


|                            |  |      |        |   |      |  |      |                     |  |  |         |   |  |      |        |   |  |  |          |   |  | 
|--------------------------- |  | ---- | ------ | - | ---- |  | ---- | ------------------- |  |  | ------- | - |  | ---- | ------ | - |  |  | -------- | - |  | 
|                            |  |      |        |   |      |  |      | Increase (decrease)
|                            |  |      |        |   |      |  |      | in income          
|                            |  |      |        |   |      |  |      |                    
|                            |  | 2005 |        |   | 2004 |  |      | 2003                |  |  | 2005    |   |  | 2004 |        |   | 
|                           
|(In $000s Cdn)              |  |      |        |   |      |  |      |                     |  |  |         |   |  |      |        |   |  |  |          |   |  | 
|Gain on sale of investments |  |      | 32,163 |   |      |  | 356  |                     |  |  | 1,957   |   |  |      | 31,807 |   |  |  | (1,601   | ) |  | 
|Write-down of investments   |  |      | (1,937 | ) |      |  | (651 | )                   |  |  | (15,000 | ) |  |      | (1,286 | ) |  |  | 14,349   |   |  | 
|Gain on redemption of SHELS |  |      |       |   |      |  |     |                     |  |  | 119,521 |   |  |      |       |   |  |  | (119,521 | ) |  | 
|                           

Gain on sale of investments




Write-down of investments




Gain on redemption of Variable Rate Equity Linked Debentures
(SHELS)




Other income and expenses


|                                                      |  |      |         |   |      |  |        |                     |  |  |          |   |  |      |         |   |  |  |         |   |  | 
|----------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------ | ------------------- |  |  | -------- | - |  | ---- | ------- | - |  |  | ------- | - |  | 
|                                                      |  |      |         |   |      |  |        | Increase (decrease)
|                                                      |  |      |         |   |      |  |        | in income          
|                                                      |  |      |         |   |      |  |        |                    
|                                                      |  | 2005 |         |   | 2004 |  |        | 2003                |  |  | 2005     |   |  | 2004 |         |   | 
|                                                     
|(In $000s Cdn)                                        |  |      |         |   |      |  |        |                     |  |  |          |   |  |      |         |   |  |  |         |   |  | 
|Loss on sale of satellite assets                      |  |      |        |   |      |  |       |                     |  |  | (3,800   | ) |  |      |        |   |  |  | 3,800   |   |  | 
|Debt retirement costs                                 |  |      |        |   |      |  | (2,598 | )                   |  |  | (10,634  | ) |  |      | 2,598   |   |  |  | 8,036   |   |  | 
|Foreign exchange gain on unhedged long-term debt      |  |      | 6,260   |   |      |  | 3,963  |                     |  |  | 32,617   |   |  |      | 2,297   |   |  |  | (28,654 | ) |  | 
|Fair value loss on forward currency forward contracts |  |      | (19,342 | ) |      |  |       |                     |  |  |         |   |  |      | (19,342 | ) |  |  |        |   |  | 
|Loss on sale and write-down of assets                 |  |      |        |   |      |  |       |                     |  |  | (124,674 | ) |  |      |        |   |  |  | 124,674 |   |  | 
|Other gains                                           |  |      | 11,016  |   |      |  | 3,753  |                     |  |  | 9,338    |   |  |      | 7,263   |   |  |  | (5,585  | ) |  | 
|                                                     









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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005












Income tax expense




Equity loss on investees




Investment in Burrard Landing Lot 2 Holdings
Partnership








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


Net income (loss) per share


|                                                                                                 |  |      |         |   |      |  |         |        |  |  |         |   |  |   |       |   |  |  |       |   |  | 
|------------------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- |  | ------- | ------ |  |  | ------- | - |  | - | ----- | - |  |  | ----- | - |  | 
|                                                                                                 |  |      |         |   |      |  |         | Change
|                                                                                                 |  |      |         |   |      |  |         |       
|                                                                                                 |  |      |         |   |      |  |         | 2005   |  |  | 2004    |   |  |  
|                                                                                                 |  | 2005 |         |   | 2004 |  |         | 2003   |  |  | %       |   |  | % |       |   | 
|                                                                                                
|(In $000s Cdn except per share amounts)                                                          |  |      |         |   |      |  |         |        |  |  |         |   |  |   |       |   |  |  |       |   |  | 
|Net income (loss)                                                                                |  |      | 160,585 |   |      |  | 90,909  |        |  |  | (46,864 | ) |  |   | 76.6  |   |  |  | 294.0 |   |  | 
|After-tax equity entitlements                                                                    |  |      | (31,318 | ) |      |  | (40,185 | )      |  |  | (40,193 | ) |  |   | (22.1 | ) |  |  |      |   |  | 
|After-tax gain on Redemption of COPrS and Settlement of Zero
    Coupon Loan                     |  |      | 17,724  |   |      |  |        |        |  |  |        |   |  |   |      |   |  |  |      |   |  | 
|                                                                                                
|Net income (loss) used for earning (loss) per share
    calculation                              |  |      | 146,991 |   |      |  | 50,724  |        |  |  | (87,057 | ) |  |   | 189.8 |   |  |  | 158.3 |   |  | 
|Divided by weighted average number of participating shares
    outstanding during period (000s) |  |      | 228,210 |   |      |  | 231,605 |        |  |  | 231,848 |   |  |   | (1.5  | ) |  |  | (0.1  | ) |  | 
|Income (loss) per share  basic and diluted                                                      |  |      | $0.64   |   |      |  | $0.22   |        |  |  | ($0.38  | ) |  |   | 190.9 |   |  |  | 157.9 |   |  | 
|                                                                                                



Net income (loss)










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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




|                                                                                             |  |      |       |   |      |  |       |   |  | 
|-------------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | - |  | 
|                                                                                             |  | 2005 |       |   | 2004 |  |       |  
|                                                                                            
|(In $millions Cdn)                                                                           |  |      |       |   |      |  |       |   |  | 
|Increased service operating income before amortization                                       |  |      | 56.0  |   |      |  | 108.3 |   |  | 
|Decreased amortization of deferred net equipment cost and IRU
    revenue                    |  |      | 8.4   |   |      |  | 13.0  |   |  | 
|Decreased (increased) amortization of deferred charges and
    property, plant and equipment |  |      | (4.0  | ) |      |  | 23.3  |   |  | 
|Decreased interest expense                                                                   |  |      | 5.1   |   |      |  | 40.2  |   |  | 
|Change in other net costs and
    revenue(1)                                                 |  |      | 23.3  |   |      |  | (4.5  | ) |  | 
|Increased income taxes                                                                       |  |      | (19.1 | ) |      |  | (44.2 | ) |  | 
|Decreased equity loss on investees                                                           |  |      |      |   |      |  | 1.7   |   |  | 
|                                                                                            
|                                                                                             |  |      | 69.7  |   |      |  | 137.8 |   |  | 
|                                                                                            



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

SEGMENTED OPERATIONS REVIEW




CABLE


FINANCIAL HIGHLIGHTS


|                                                    |                                                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |      |       |   |  | 
|--------------------------------------------------- | -------------------------------------------------------- | ---- | --------- | ------- | ---- |  | --------- | ------- |  |  | --------- | ------- |  | - | ----- | ----- | - |  | ---- | ----- | - |  | 
|                                                    |                                                          |      |           |         |      |  |           | Change 
|                                                    |                                                          |      |           |         |      |  |           |        
|                                                    |                                                          |      |           |         |      |  |           | 2005    |  |  | 2004      |         |  |  
|                                                    |                                                          | 2005 |           |         | 2004 |  |           | 2003    |  |  | %         |         |  | % |       |       |  
|                                                   
|($000s Cdn)                                        |                                                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |      |       |   | 
|Service revenue (third party)                       |                                                          |      | 1,598,369 |         |      |  | 1,491,569 |         |  |  | 1,459,833 |         |  |   | 7.2   |       |   |  | 2.2  |       |   | 
|                                                   
|Service operating income before
    amortization(1) |                                                          |      | 797,583   |         |      |  | 779,579   |         |  |  | 727,458   |         |  |   | 2.3   |       |   |  | 7.2  |       |   | 
|Less:                                               |                                                          |      |           |         |      |  |           |         |  |  |           |         |  |   |       |       |   |  |      |       |   | 
|                                                    | Interest                                                 |      |           | 171,847 |      |  |           | 174,988 |  |  |           | 190,002 |  |   |       | (1.8  | ) |  |      | (7.9  | ) |  | 
|                                                    | Entitlements on equity instruments, net of current taxes |      |           | 31,318  |      |  |           | 40,185  |  |  |           | 40,193  |  |   |       | (22.1 | ) |  |      |      |   |  | 
|                                                    | Cash taxes on net income                                 |      |           | 22,633  |      |  |           | 25,043  |  |  |           | 34,809  |  |   |       | (9.6  | ) |  |      | (28.1 | ) |  | 
|                                                   
|Cash flow before the following:                     |                                                          |      | 571,785   |         |      |  | 539,363   |         |  |  | 462,454   |         |  |   | 6.0   |       |   |  | 16.6 |       |   | 
|Capital expenditures and equipment subsidies        |                                                          |      | 343,168   |         |      |  | 267,113   |         |  |  | 257,276   |         |  |   | 28.5  |       |   |  | 3.8  |       |   | 
|                                                   
|Free cash
    flow(1)                               |                                                          |      | 228,617   |         |      |  | 272,250   |         |  |  | 205,178   |         |  |   | (16.0 | )     |   |  | 32.7 |       |   | 
|                                                   
|Operating
    margin(1)                             |                                                          |      | 49.9%     |         |      |  | 52.3%     |         |  |  | 49.8%     |         |  |   | (2.4  | )     |   |  | 2.5  |       |   | 
|                                                   



|    |                                       
|--- | --------------------------------------
|(1) | See Key performance drivers on page 7.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


2005 vs. 2004


OPERATING HIGHLIGHTS




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







2004 vs. 2003


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cable generated free cash flow of $272.3 million in 2004,
    which represents a 32.7% increase over 2003 free cash flow of
    $205.2 million.                                                                                                                      
| | Effective March 31, 2004, Shaw acquired cable systems from
    Monarch Cablesystems Ltd. which served approximately 40,000
    customers in Banff, Canmore and the Medicine Hat region in
    Alberta as well as the Kimberley and Hope area in British
    Columbia.
| | Commencing in February 2004, Shaw applied rate increases of $1
    to $2 per month to most of its packages. The increases generated
    additional monthly revenue of approximately $1.5 million
    when they were fully implemented at the end of May 2004.        





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005






CAPITAL EXPENDITURES AND EQUIPMENT SUBSIDIES 
CABLE


|                                              |                                 |      |         |         |      |  |         |         |  |  |         |        |  |   |      |      |  |  |     |       |   |  | 
|--------------------------------------------- | ------------------------------- | ---- | ------- | ------- | ---- |  | ------- | ------- |  |  | ------- | ------ |  | - | ---- | ---- |  |  | --- | ----- | - |  | 
|                                              |                                 |      |         |         |      |  |         | Change 
|                                              |                                 |      |         |         |      |  |         |        
|                                              |                                 |      |         |         |      |  |         | 2005    |  |  | 2004    |        |  |  
|                                              |                                 | 2005 |         |         | 2004 |  |         | 2003    |  |  | %       |        |  | % |      |      | 
|                                             
|(In $000s Cdn)                                |                                 |      |         |         |      |  |         |         |  |  |         |        |  |   |      |      |  |  |     |       |   | 
|Capital expenditures and equipment subsidies: |                                 |      |         |         |      |  |         |         |  |  |         |        |  |   |      |      |  |  |     |       |   | 
|                                              | New housing
    development(1)  |      |         | 79,656  |      |  |         | 63,906  |  |  |         | 83,009 |  |   |      | 24.7 |  |  |     | (23.0 | ) |  | 
|                                              | Success-based(2)                |      |         | 60,320  |      |  |         | 54,540  |  |  |         | 71,301 |  |   |      | 10.6 |  |  |     | (23.5 | ) |  | 
|                                              | Upgrades and
    enhancement(3) |      |         | 140,776 |      |  |         | 112,223 |  |  |         | 62,133 |  |   |      | 25.4 |  |  |     | 80.6  |   |  | 
|                                              | Replacement(4)                  |      |         | 30,181  |      |  |         | 16,070  |  |  |         | 15,016 |  |   |      | 87.8 |  |  |     | 7.0   |   |  | 
|                                              | Buildings other                 |      |         | 32,235  |      |  |         | 20,374  |  |  |         | 25,817 |  |   |      | 58.2 |  |  |     | (21.1 | ) |  | 
|                                             
|                                              |                                 |      | 343,168 |         |      |  | 267,113 |         |  |  | 257,276 |        |  |   | 28.5 |      |  |  | 3.8 |       |   | 
|                                             





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

2005 vs. 2004








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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




2004 vs. 2003






SUBSCRIBER STATISTICS


|                                                 |                                    |      |           |        |      |  |           |         |  |        |           |       |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  |  | 
|------------------------------------------------ | ---------------------------------- | ---- | --------- | ------ | ---- |  | --------- | ------- |  | ------ | --------- | ----- |  | - | ------- | ------ | ------ |  | ---- | - |  |  | ------- | - |  |  | ---- | - |  |  | 
|                                                 |                                    |      |           |        |      |  |           | 2005    |  |        | 2004     
|                                                 |                                    |      |           |        |      |  |           |         |  |        |          
|                                                 |                                    |      |           |        |      |  |           |         |  | Change |           |       |  |   | Change  |        |        | 
|                                                 |                                    | 2005 |           |        | 2004 |  |           | 2003(1) |  |        | Growth    |       |  | % |         |        | Growth |  |      | % |  |  |        
|                                                
|CABLE:                                           |                                    |      |           |        |      |  |           |         |  |        |           |       |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  | 
|Basic subscribers                                |                                    |      | 2,142,961 |        |      |  | 2,122,488 |         |  |        | 2,091,968 |       |  |   | 20,473  |        |        |  | 1.0  |   |  |  | 30,520  |   |  |  | 1.5  |   |  | 
|                                                 | Penetration as a % of homes passed |      |           | 66.1%  |      |  |           | 67.2%   |  |        |           | 68.1% |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  |  | 
|Digital customers                                |                                    |      | 598,484   |        |      |  | 540,535   |         |  |        | 467,631   |       |  |   | 57,949  |        |        |  | 10.7 |   |  |  | 72,904  |   |  |  | 15.6 |   |  | 
|Digital deployment (DCTs)                      |                                    |      | 739,725   |        |      |  | 640,975   |         |  |        | 533,096   |       |  |   | 98,750  |        |        |  | 15.4 |   |  |  | 107,879 |   |  |  | 20.2 |   |  | 
|                                                
|INTERNET:                                        |                                    |      |           |        |      |  |           |         |  |        |           |       |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  | 
|Connected and scheduled installations            |                                    |      | 1,168,063 |        |      |  | 1,020,938 |         |  |        | 894,932   |       |  |   | 147,125 |        |        |  | 14.4 |   |  |  | 126,006 |   |  |  | 14.1 |   |  | 
|                                                 | Penetration as % of basic          |      |           | 54.5%  |      |  |           | 48.1%   |  |        |           | 42.8% |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  |  | 
|Stand-alone Internet not included in basic cable |                                    |      | 135,580   |        |      |  | 114,767   |         |  |        | 103,894   |       |  |   | 20,813  |        |        |  | 18.1 |   |  |  | 10,873  |   |  |  | 10.5 |   |  | 
|DIGITAL PHONE                                    |                                    |      |           |        |      |  |           |         |  |        |           |       |  |   |         |        |        |  |      |   |  |  |         |   |  |  |      |   |  | 
|                                                 | Number of
    lines (2)            |      |           | 56,563 |      |  |           |        |  |        |           |      |  |   |         | 56,563 |        |  |      |  |  |  |         |  |  |  |      |  |  |  | 
|                                                



|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | August 31, 2003 statistics are restated for comparative
    purposes to adjust subscribers as if the 2004 cable system
    acquisitions had occurred on that date.
|   
|(2) | Represents primary and secondary lines on billing plus pending
    installs.                                                                                      









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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005










|                   |  |      |      |   |      |  |      |      |  |  |      |   |  | 
|------------------ |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | - |  | 
|Churn(1)           |  | 2005 |      |   | 2004 |  |      | 2003 |  |  |     
|                  
|Digital customers  |  |      | 14.5 | % |      |  | 15.5 | %    |  |  | 21.8 | % |  | 
|Internet customers |  |      | 15.1 | % |      |  | 17.7 | %    |  |  | 20.1 | % |  | 
|                  



|    |                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Calculated as the number of new customer activations less the
    net gain of customers during the period divided by the average
    of the opening and closing customers for the applicable period.
    See Key performance drivers page 7.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


SATELLITE (DTH and Satellite Services)


FINANCIAL HIGHLIGHTS


|                                                    |                          |      |         |        |      |  |         |        |  |  |          |         |  |   |       |       |   |  |       |       |   |  | 
|--------------------------------------------------- | ------------------------ | ---- | ------- | ------ | ---- |  | ------- | ------ |  |  | -------- | ------- |  | - | ----- | ----- | - |  | ----- | ----- | - |  | 
|                                                    |                          |      |         |        |      |  |         | Change
|                                                    |                          |      |         |        |      |  |         |       
|                                                    |                          |      |         |        |      |  |         | 2005   |  |  | 2004     |         |  |  
|                                                    |                          | 2005 |         |        | 2004 |  |         | 2003   |  |  | %        |         |  | % |       |       |  
|                                                   
|($000s Cdn)                                         |                          |      |         |        |      |  |         |        |  |  |          |         |  |   |       |       |   |  |       |       |   | 
|DTH (Star Choice)                                   |                          |      | 530,729 |        |      |  | 505,637 |        |  |  | 450,176  |         |  |   | 5.0   |       |   |  | 12.3  |       |   | 
|Satellite Services                                  |                          |      | 80,712  |        |      |  | 82,543  |        |  |  | 88,412   |         |  |   | (2.2  | )     |   |  | (6.6  | )     |   | 
|                                                   
|Service revenue (third party)                       |                          |      | 611,441 |        |      |  | 588,180 |        |  |  | 538,588  |         |  |   | 4.0   |       |   |  | 9.2   |       |   | 
|                                                   
|Service operating income before
    amortization(1) |                          |      | 184,410 |        |      |  | 152,840 |        |  |  | 91,433   |         |  |   | 20.7  |       |   |  | 67.2  |       |   | 
|DTH (Star Choice)                                   |                          |      | 141,687 |        |      |  | 111,150 |        |  |  | 52,814   |         |  |   | 27.5  |       |   |  | 110.5 |       |   | 
|Satellite Services                                  |                          |      | 42,723  |        |      |  | 41,690  |        |  |  | 38,619   |         |  |   | 2.5   |       |   |  | 8.0   |       |   | 
|Less:                                               |                          |      |         |        |      |  |         |        |  |  |          |         |  |   |       |       |   |  |       |       |   | 
|                                                    | Interest(2)              |      |         | 41,384 |      |  |         | 44,484 |  |  |          | 69,700  |  |   |       | (7.0  | ) |  |       | (36.2 | ) |  | 
|                                                    | Cash taxes on net income |      |         | 334    |      |  |         | 1,692  |  |  |          | 897     |  |   |       | (80.3 | ) |  |       | 88.6  |   |  | 
|                                                   
|Cash flow before the following                      |                          |      | 142,692 |        |      |  | 106,664 |        |  |  | 20,836   |         |  |   | 33.8  |       |   |  | 411.9 |       |   | 
|                                                   
|Less capital expenditures and equipment subsidies:  |                          |      |         |        |      |  |         |        |  |  |          |         |  |   |       |       |   |  |       |       |   | 
|                                                    | Success-based            |      |         | 82,780 |      |  |         | 95,958 |  |  |          | 122,419 |  |   |       | (13.7 | ) |  |       | (21.6 | ) |  | 
|                                                    | Transponders             |      |         | 4,800  |      |  |         |       |  |  |          |        |  |   |       | 100.0 |   |  |       |      |   |  | 
|                                                    | Other                    |      |         | 6,410  |      |  |         | 4,075  |  |  |          | 5,336   |  |   |       | 57.3  |   |  |       | (23.6 | ) |  | 
|                                                   
|                                                    |                          |      | 93,990  |        |      |  | 100,033 |        |  |  | 127,755  |         |  |   | (6.0  | )     |   |  | (21.7 | )     |   | 
|                                                   
|Free cash
    flow(1)                               |                          |      | 48,702  |        |      |  | 6,631   |        |  |  | (106,919 | )       |  |   | 634.5 |       |   |  | 106.2 |       |   | 
|                                                   



|    |                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 7.                                                                                                                                                                                         
|   
|(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 Cancom and Star Choice.

CUSTOMER STATISTICS


|                             |  |      |         |  |      |  |         |      |  |  |         |  |  | 
|---------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | 
|                             |  | 2005 |         |  | 2004 |  |         | 2003 |  |  |        
|                            
|Star Choice
    Customers(1) |  |      | 844,662 |  |      |  | 827,903 |      |  |  | 808,526 |  |  | 
|                            



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

|                      |  |      |       |  |      |  |       |      |  |  |       |  |  | 
|--------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | 
|Churn(2)              |  | 2005 |       |  | 2004 |  |       | 2003 |  |  |      
|                     
|Star Choice customers |  |      | 14.6% |  |      |  | 16.8% |      |  |  | 17.2% |  |  | 
|                     



|    |                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Calculated as the number of new customer activations less the
    net gain of customers during the period divided by the average
    of the opening and closing customers for the applicable period.
    See Key performance drivers page 7.





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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


SATELLITE (DTH and Satellite Services)


2005 vs. 2004


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Free cash flow for the year increased to $48.7 million
    compared to $6.6 million for the prior year.                                                                                                         
| | Star Choice added 16,759 customers in 2005 compared to
    19,377 last year.                                                                                                                                    
| | DTH customer churn decreased to 14.6% from 16.8% in 2004.                                                                                                                                                       
| | On February 1, 2005 Star Choice implemented a rate increase
    on most of its programming packages ranging from $1.00 to $3.00
    per month for a total average increase of approximately
    $1.50 per month.







2004 vs. 2003


OPERATING HIGHLIGHTS




|  |                                                                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | DTH added 19,377 customers in 2004 compared to 48,502 in 2003.                                                                                                                                                                      
| | First year Satellite generates free cash flow reporting
    $6.6 million compared to negative $106.9 million in
    2003.                                                                                                           
| | Service operating income before amortization at Star Choice was
    $111.2 million in 2004 versus $52.8 million in 2003.                                                                                                            
| | Effective February 1, 2004, the monthly fee on most
    programming packages increased by $3. This resulted in an
    increase in revenue of approximately $2 million per month
    when fully implemented by the end of March 2004.







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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005












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

















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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005






V.  CONSOLIDATED CASH FLOW ANALYSIS


Operating activities


|                                                                                   |  |      |         |  |      |  |         |        |  |  |         |   |  |   |       |   |  |  |       |  |  | 
|---------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ------ |  |  | ------- | - |  | - | ----- | - |  |  | ----- |  |  | 
|                                                                                   |  |      |         |  |      |  |         | Change
|                                                                                   |  |      |         |  |      |  |         |       
|                                                                                   |  |      |         |  |      |  |         | 2005   |  |  | 2004    |   |  |  
|                                                                                   |  | 2005 |         |  | 2004 |  |         | 2003   |  |  | %       |   |  | % |       |   | 
|                                                                                  
|(In $000s Cdn)                                                                     |  |      |         |  |      |  |         |        |  |  |         |   |  |   |       |   |  |  |       |  |  | 
|Funds flow from operations                                                         |  |      | 763,283 |  |      |  | 694,770 |        |  |  | 544,175 |   |  |   | 9.9   |   |  |  | 27.7  |  |  | 
|Decrease (increase) in non-cash working capital balances related
    to operations |  |      | 6,623   |  |      |  | 36,183  |        |  |  | (5,734  | ) |  |   | (81.7 | ) |  |  | 731.0 |  |  | 
|                                                                                  
|                                                                                   |  |      | 769,906 |  |      |  | 730,953 |        |  |  | 538,441 |   |  |   | 5.3   |   |  |  | 35.8  |  |  | 
|                                                                                  



Investing activities


|                                       |  |      |          |   |      |  |          |                     |  |  |         |   |  |      |        |  |  |  |          |   |  | 
|-------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | ------------------- |  |  | ------- | - |  | ---- | ------ |  |  |  | -------- | - |  | 
|                                       |  |      |          |   |      |  |          | Increase (decrease)
|                                       |  |      |          |   |      |  |          | in cash flow       
|                                       |  |      |          |   |      |  |          |                    
|                                       |  | 2005 |          |   | 2004 |  |          | 2003                |  |  | 2005    |   |  | 2004 |        |  | 
|                                      
|(In $000s Cdn)                         |  |      |          |   |      |  |          |                     |  |  |         |   |  |      |        |  |  |  |          |   |  | 
|Cash flow used in investing activities |  |      | (380,032 | ) |      |  | (407,223 | )                   |  |  | (95,037 | ) |  |      | 27,186 |  |  |  | (312,186 | ) |  | 
|                                      









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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




Financing activities




|                                                                   |  |      |        |   |      |  |        |      |  |  |        |   |  | 
|------------------------------------------------------------------ |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | 
|                                                                   |  | 2005 |        |   | 2004 |  |        | 2003 |  |  |       
|                                                                  
|(In millions Cdn)                                                  |  |      |        |   |      |  |        |      |  |  |        |   |  | 
|Redemption of COPrS                                                |  |      | (172.4 | ) |      |  |       |      |  |  |       |   |  | 
|Cost to terminate foreign currency forward contract                |  |      | (12.2  | ) |      |  |       |      |  |  |       |   |  | 
|Repayment of $275 million Senior notes                             |  |      | (275.0 | ) |      |  |       |      |  |  |       |   |  | 
|Settlement of Zero Coupon Loan                                     |  |      | (27.9  | ) |      |  |       |      |  |  |       |   |  | 
|Repayment of $350 million credit facility                          |  |      |       |   |      |  | (350.0 | )    |  |  |       |   |  | 
|Repayment of $250 million Structured Note                          |  |      |       |   |      |  | (250.0 | )    |  |  |       |   |  | 
|Partial repayment of $300 million Senior notes                     |  |      |       |   |      |  | (3.2   | )    |  |  |       |   |  | 
|Issue of $350 million Senior notes                                 |  |      |       |   |      |  | 350.0  |      |  |  |       |   |  | 
|Bank loans and bank indebtedness  net borrowings
    (repayments) |  |      | 505.7  |   |      |  | 47.0   |      |  |  | (140.5 | ) |  | 
|Purchase of Class B Non-Voting Shares for cancellation             |  |      | (287.1 | ) |      |  | (86.0  | )    |  |  |       |   |  | 
|Dividends and equity entitlements                                  |  |      | (112.0 | ) |      |  | (75.3  | )    |  |  | (50.6  | ) |  | 
|Debt retirement costs                                              |  |      |       |   |      |  | (1.1   | )    |  |  | (17.1  | ) |  | 
|Issuance of Class B Non-Voting Shares                              |  |      | 0.2    |   |      |  |       |      |  |  |       |   |  | 
|Proceeds on prepayments of IRU                                     |  |      | 1.2    |   |      |  | 5.7    |      |  |  | 0.2    |   |  | 
|Increase (decrease) in Partnership debt                            |  |      | (8.6   | ) |      |  | 18.4   |      |  |  | 10.4   |   |  | 
|Repayment of US $150 million Star Choice Senior notes              |  |      |       |   |      |  |        |      |  |  | (211.0 | ) |  | 
|Proceeds on term loan                                              |  |      |       |   |      |  |       |      |  |  | 350.0  |   |  | 
|Repayment of Cancom credit facilities                              |  |      |       |   |      |  |       |      |  |  | (364.0 | ) |  | 
|                                                                  
|Cash flow used in financing activities                             |  |      | (388.1 | ) |      |  | (344.5 | )    |  |  | (422.6 | ) |  | 
|                                                                  

VI.    LIQUIDITY AND CAPITAL RESOURCES












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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


















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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005




Debt structure






Off-balance sheet arrangement and guarantees


Guarantees




Financial instruments








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005


Contractual obligations




CONTRACTUAL OBLIGATIONS


|                                                                                                                                    |  |                        |           |        |        |  |         |           |           |  |           |  |  |         |           |  |  |  |           |  |  | 
|----------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | ------ | ------ |  | ------- | --------- | --------- |  | --------- |  |  | ------- | --------- |  |  |  | --------- |  |  | 
|                                                                                                                                    |  | Payments due by period
|                                                                                                                                    |  |                       
|                                                                                                                                    |  |                        |           | Within |        |  |         |           | More than |  |           | 
|                                                                                                                                    |  | Total                  |           |        | 1 year |  |         | 2-3 years |           |  | 4-5 years |  |  | 5 years |           |  | 
|                                                                                                                                   
|(In $000s Cdn)                                                                                                                      |  |                        |           |        |        |  |         |           |           |  |           |  |  |         |           |  |  |  |           |  |  | 
|Long-term debt                                                                                                                      |  |                        | 2,744,767 |        |        |  | 51,380  |           |           |  | 399,602   |  |  |         | 1,299,525 |  |  |  | 994,260   |  |  | 
|Operating lease obligations (maintenance of satellite
    transponders, lease of transmission facilities and lease of
    premises) |  |                        | 1,001,381 |        |        |  | 102,625 |           |           |  | 184,066   |  |  |         | 166,262   |  |  |  | 548,428   |  |  | 
|Purchase obligations                                                                                                                |  |                        | 4,387     |        |        |  | 4,387   |           |           |  |          |  |  |         |          |  |  |  |          |  |  | 
|Other long-term obligations                                                                                                         |  |                        | 37,465    |        |        |  | 1,088   |           |           |  | 2,141     |  |  |         | 4,939     |  |  |  | 29,297    |  |  | 
|                                                                                                                                   
|                                                                                                                                    |  |                        | 3,788,000 |        |        |  | 159,480 |           |           |  | 585,809   |  |  |         | 1,470,726 |  |  |  | 1,571,985 |  |  | 
|                                                                                                                                   

VII.   ADDITIONAL INFORMATION




VIII.  COMPLIANCE WITH NYSE CORPORATE GOVERNANCE
LISTING STANDARDS




IX. CAUTION CONCERNING FORWARD LOOKING STATEMENTS








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Shaw Communications Inc.


MANAGEMENTS DISCUSSION AND ANALYSIS


August 31, 2005










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##### Table of Contents



Shaw Communications Inc.


MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING


August 31, 2005


November 21, 2005














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





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##### Table of Contents



Shaw Communications Inc.


AUDITORS REPORT




Shaw Communications Inc.


Shaw
Communications Inc.






|                 |  |                      
|---------------- |  | ---------------------
|                
|Calgary, Canada  |  | -s- Ernst & Young    
|October 13, 2005 |  | Chartered Accountants





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##### Table of Contents



Shaw Communications Inc.


CONSOLIDATED BALANCE SHEETS




|                                                      |                           |      |           |           |      |  |           |           |  |  | 
|----------------------------------------------------- | ------------------------- | ---- | --------- | --------- | ---- |  | --------- | --------- |  |  | 
|                                                      |                           | 2005 |           |           | 2004 |  |           |          
|[thousands of Canadian dollars]                       |                           | $    |           |           | $    |  |           |          
|                                                     
|ASSETS[note 9]                                        |                           |      |           |           |      |  |           |           |  | 
|Current                                               |                           |      |           |           |      |  |           |           |  | 
|Cash                                                  |                           |      | 1,713     |           |      |  |          |           |  | 
|Accounts receivable [note 3]                          |                           |      | 114,664   |           |      |  | 119,519   |           |  | 
|Inventories [note 4]                                  |                           |      | 45,224    |           |      |  | 42,973    |           |  | 
|Prepaids and other                                    |                           |      | 19,116    |           |      |  | 16,975    |           |  | 
|                                                     
|                                                      |                           |      | 180,717   |           |      |  | 179,467   |           |  | 
|Investments and other assets [notes 5 and 11]         |                           |      | 36,229    |           |      |  | 43,965    |           |  | 
|Property, plant and equipment [note 6]                |                           |      | 2,189,235 |           |      |  | 2,292,340 |           |  | 
|Deferred charges [note 7]                             |                           |      | 237,999   |           |      |  | 267,439   |           |  | 
|Intangibles [note 8]                                  |                           |      |           |           |      |  |           |           |  | 
|                                                      | Broadcast licenses        |      |           | 4,684,647 |      |  |           | 4,685,582 |  |  | 
|                                                      | Goodwill                  |      |           | 88,111    |      |  |           | 88,111    |  |  | 
|                                                     
|                                                      |                           |      | 7,416,938 |           |      |  | 7,556,904 |           |  | 
|                                                     
|LIABILITIES AND SHAREHOLDERS EQUITY                  |                           |      |           |           |      |  |           |           |  | 
|Current                                               |                           |      |           |           |      |  |           |           |  | 
|Bank indebtedness [note 9]                            |                           |      |          |           |      |  | 4,317     |           |  | 
|Accounts payable and accrued liabilities [note 13]    |                           |      | 408,033   |           |      |  | 410,037   |           |  | 
|Income taxes payable                                  |                           |      | 6,263     |           |      |  | 5,563     |           |  | 
|Unearned revenue                                      |                           |      | 98,420    |           |      |  | 96,095    |           |  | 
|Current portion of long-term debt [note 9]            |                           |      | 51,380    |           |      |  | 343,097   |           |  | 
|                                                     
|                                                      |                           |      | 564,096   |           |      |  | 859,109   |           |  | 
|Long-term debt [note 9]                               |                           |      | 2,693,387 |           |      |  | 2,307,583 |           |  | 
|Other long-term liabilities [notes 17 and 19]         |                           |      | 40,806    |           |      |  | 16,933    |           |  | 
|Deferred credits [note 10]                            |                           |      | 1,010,723 |           |      |  | 898,980   |           |  | 
|Future income taxes [note 14]                         |                           |      | 1,054,816 |           |      |  | 982,281   |           |  | 
|                                                     
|                                                      |                           |      | 5,363,828 |           |      |  | 5,064,886 |           |  | 
|                                                     
|Commitments and contingencies[notes 9, 16 and
    17] |                           |      |           |           |      |  |           |           |  | 
|Shareholders equity                                  |                           |      |           |           |      |  |           |           |  | 
|Share capital [note 11]                              |                           |      |           |           |      |  |           |           |  | 
|                                                      | Class A Shares            |      |           | 2,487     |      |  |           | 2,490     |  |  | 
|                                                      | Class B Non-Voting Shares |      |           | 2,021,686 |      |  |           | 2,132,943 |  |  | 
|                                                      | Equity instruments        |      |           | 498,194   |      |  |           | 724,923   |  |  | 
|Contributed surplus [note 11]                         |                           |      | 1,866     |           |      |  | 412       |           |  | 
|Deficit                                               |                           |      | (471,488  | )         |      |  | (369,194  | )         |  | 
|Cumulative translation adjustment [note 12]           |                           |      | 365       |           |      |  | 444       |           |  | 
|                                                     
|                                                      |                           |      | 2,053,110 |           |      |  | 2,492,018 |           |  | 
|                                                     
|                                                      |                           |      | 7,416,938 |           |      |  | 7,556,904 |           |  | 
|                                                     

See accompanying notes




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





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##### Table of Contents



Shaw Communications Inc.


CONSOLIDATED STATEMENTS OF INCOME (LOSS)


AND DEFICIT




|                                                                                            |                                        |                                          |           |          |         |   |           |          |         |   |           |          |         |   |  | 
|------------------------------------------------------------------------------------------- | -------------------------------------- | ---------------------------------------- | --------- | -------- | ------- | - | --------- | -------- | ------- | - | --------- | -------- | ------- | - |  | 
|[thousands of Canadian dollars                                                              |                                        | 2005                                     |           |          | 2004    |   |           | 2003     |         |   |          
|except per share amounts]                                                                   |                                        | $                                        |           |          | $       |   |           | $        |         |   |          
|                                                                                           
|Service revenue [note 15]                                                                   |                                        |                                          | 2,209,810 |          |         |   | 2,079,749 |          |         |   | 1,998,421 |          |         |  
|Operating, general and administrative expenses                                              |                                        |                                          | 1,227,817 |          |         |   | 1,153,814 |          |         |   | 1,180,780 |          |         |  
|                                                                                           
|Service operating income before amortization
    [note 15]                                  |                                        |                                          | 981,993   |          |         |   | 925,935   |          |         |   | 817,641   |          |         |  
|Amortization                                                                               |                                        |                                          |           |          |         |   |           |          |         |   |           |          |         |  
|                                                                                            | Deferred IRU revenue [note 10]         |                                          |           | 12,999   |         |   |           | 12,098   |         |   |           | 11,984   |         |   | 
|                                                                                            | Deferred equipment revenue [note 10]   |                                          |           | 71,677   |         |   |           | 82,711   |         |   |           | 91,863   |         |   | 
|                                                                                            | Deferred equipment costs [note 7]      |                                          |           | (210,477 | )       |   |           | (229,013 | )       |   |           | (251,103 | )       |   | 
|                                                                                            | Deferred charges [note 7]              |                                          |           | (6,337   | )       |   |           | (7,796   | )       |   |           | (21,125  | )       |   | 
|                                                                                            | Property, plant and equipment [note 6] |                                          |           | (408,866 | )       |   |           | (403,395 | )       |   |           | (413,381 | )       |   | 
|                                                                                           
|Operating income                                                                            |                                        |                                          | 440,989   |          |         |   | 380,540   |          |         |   | 235,879   |          |         |  
|Interest [notes 7, 9, 10 and 13]                                                            |                                        |                                          | (214,408  | )        |         |   | (219,472  | )        |         |   | (259,702  | )        |         |  
|                                                                                           
|                                                                                            |                                        |                                          | 226,581   |          |         |   | 161,068   |          |         |   | (23,823   | )        |         |  
|Gain on sale of investments [note 5]                                                        |                                        |                                          | 32,163    |          |         |   | 356       |          |         |   | 1,957     |          |         |  
|Write-down of investments [note 5]                                                          |                                        |                                          | (1,937    | )        |         |   | (651      | )        |         |   | (15,000   | )        |         |  
|Gain on redemption of SHELS [note 5]                                                        |                                        |                                          |          |          |         |   |          |          |         |   | 119,521   |          |         |  
|Loss on sale of satellite assets [note 2]                                                   |                                        |                                          |          |          |         |   |          |          |         |   | (3,800    | )        |         |  
|Debt retirement costs [note 9]                                                              |                                        |                                          |          |          |         |   | (2,598    | )        |         |   | (10,634   | )        |         |  
|Foreign exchange gain on unhedged long-term debt                                            |                                        |                                          | 6,260     |          |         |   | 3,963     |          |         |   | 32,617    |          |         |  
|Fair value loss on forward currency forward contracts                                       |                                        |                                          | (19,342   | )        |         |   |          |          |         |   |          |          |         |  
|Loss on sale and write-down of assets [note 8]                                              |                                        |                                          |          |          |         |   |          |          |         |   | (124,674  | )        |         |  
|Other gains [note 1]                                                                        |                                        |                                          | 11,016    |          |         |   | 3,753     |          |         |   | 9,338     |          |         |  
|                                                                                           
|Income (loss) before income taxes                                                           |                                        |                                          | 254,741   |          |         |   | 165,891   |          |         |   | (14,498   | )        |         |  
|Income tax expense [note 14]                                                                |                                        |                                          | 93,870    |          |         |   | 74,732    |          |         |   | 30,445    |          |         |  
|                                                                                           
|Income (loss) before the following                                                          |                                        |                                          | 160,871   |          |         |   | 91,159    |          |         |   | (44,943   | )        |         |  
|Equity loss on investees [note 5]                                                           |                                        |                                          | (286      | )        |         |   | (250      | )        |         |   | (1,921    | )        |         |  
|                                                                                           
|Net income (loss)                                                                           |                                        |                                          | 160,585   |          |         |   | 90,909    |          |         |   | (46,864   | )        |         |  
|Deficit beginning of year                                                                   |                                        |                                          | (369,194  | )        |         |   | (336,695  | )        |         |   | (238,102  | )        |         |  
|Gain on redemption of COPrS [note 11]                                                       |                                        |                                          | 12,803    |          |         |   |          |          |         |   |          |          |         |  
|Gain on settlement of Zero Coupon Loan [note 11]                                            |                                        |                                          | 4,921     |          |         |   |          |          |         |   |          |          |         |  
|Reduction on Class B Non-Voting Shares purchased for
    cancellation [note 11]             |                                        |                                          | (175,575  | )        |         |   | (46,313   | )        |         |   |          |          |         |  
|Amortization of opening fair value loss on a foreign currency
    forward contract [note 7] |                                        |                                          | (3,195    | )        |         |   |          |          |         |   |          |          |         |  
|Dividends                                                                                  |                                        |                                          |           |          |         |   |           |          |         |   |           |          |         |  
|                                                                                            |                                        | Class A and Class B Non-Voting Shares    |           |          | (70,515 | ) |           |          | (36,910 | ) |           |          | (11,536 | ) |  | 
|                                                                                            |                                        | Equity instruments (net of income taxes) |           |          | (31,318 | ) |           |          | (40,185 | ) |           |          | (40,193 | ) |  | 
|                                                                                           
|Deficit, end of year                                                                        |                                        |                                          | (471,488  | )        |         |   | (369,194  | )        |         |   | (336,695  | )        |         |  
|                                                                                           
|Income (loss) per share[note 11]                                                            |                                        |                                          |           |          |         |   |           |          |         |   |           |          |         |  
|                                                                                            |                                        | Basic and diluted                        |           |          | $0.64   |   |           |          | $0.22   |   |           |          | ($0.38  | ) |  | 
|                                                                                           

See accompanying notes






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##### Table of Contents



Shaw Communications Inc.-


CONSOLIDATED STATEMENTS OF CASH FLOWS




|                                                                                       |                                          |      |          |         |      |  |          |         |   |  |          |         |   |  | 
|-------------------------------------------------------------------------------------- | ---------------------------------------- | ---- | -------- | ------- | ---- |  | -------- | ------- | - |  | -------- | ------- | - |  | 
|                                                                                       |                                          | 2005 |          |         | 2004 |  |          | 2003    |   |  |         
|[thousands of Canadian dollars]                                                        |                                          | $    |          |         | $    |  |          | $       |   |  |         
|                                                                                      
|OPERATING ACTIVITIES[note 20]                                                          |                                          |      |          |         |      |  |          |         |   |  |          |         |   | 
|Funds flow from operations                                                             |                                          |      | 763,283  |         |      |  | 694,770  |         |   |  | 544,175  |         |   | 
|Net decrease (increase) in non-cash working capital
    balances related to operations |                                          |      | 6,623    |         |      |  | 36,183   |         |   |  | (5,734   | )       |   | 
|                                                                                      
|                                                                                       |                                          |      | 769,906  |         |      |  | 730,953  |         |   |  | 538,441  |         |   | 
|                                                                                      
|INVESTING ACTIVITIES                                                                   |                                          |      |          |         |      |  |          |         |   |  |          |         |   | 
|Additions to property, plant and equipment [note 15]                                   |                                          |      | (336,888 | )       |      |  | (256,136 | )       |   |  | (257,683 | )       |   | 
|Additions to equipment subsidies [note 15]                                             |                                          |      | (115,668 | )       |      |  | (132,711 | )       |   |  | (162,876 | )       |   | 
|Net (increase) reduction to inventories                                                |                                          |      | (1,648   | )       |      |  | 7,898    |         |   |  | 59,708   |         |   | 
|Cable acquisitions [note 2]                                                            |                                          |      |         |         |      |  | (24,298  | )       |   |  | (3,634   | )       |   | 
|Proceeds on sale of satellite assets [note 2]                                          |                                          |      |         |         |      |  |         |         |   |  | 6,461    |         |   | 
|Proceeds on sale of cable systems [note 2]                                             |                                          |      |         |         |      |  |         |         |   |  | 257,435  |         |   | 
|Proceeds on sale of investments and other assets                                       |                                          |      | 79,899   |         |      |  | 9,530    |         |   |  | 22,469   |         |   | 
|Costs to terminate IRU                                                                 |                                          |      | (283     | )       |      |  |         |         |   |  |         |         |   | 
|Costs on redemption of SHELS                                                           |                                          |      |         |         |      |  |         |         |   |  | (2,113   | )       |   | 
|Acquisition of investments                                                             |                                          |      | (5,265   | )       |      |  | (495     | )       |   |  | (9,662   | )       |   | 
|Additions to deferred charges                                                          |                                          |      | (179     | )       |      |  | (11,011  | )       |   |  | (5,142   | )       |   | 
|                                                                                      
|                                                                                       |                                          |      | (380,032 | )       |      |  | (407,223 | )       |   |  | (95,037  | )       |   | 
|                                                                                      
|FINANCING ACTIVITIES                                                                   |                                          |      |          |         |      |  |          |         |   |  |          |         |   | 
|(Decrease) increase in bank indebtedness                                               |                                          |      | (4,317   | )       |      |  | 4,317    |         |   |  | (2,303   | )       |   | 
|Proceeds on pre-payment of IRU                                                         |                                          |      | 1,216    |         |      |  | 5,700    |         |   |  | 235      |         |   | 
|Debt retirement costs [note 9]                                                         |                                          |      |         |         |      |  | (1,134   | )       |   |  | (17,134  | )       |   | 
|Increase in long-term debt                                                             |                                          |      | 755,566  |         |      |  | 666,873  |         |   |  | 505,599  |         |   | 
|Long-term debt repayments                                                              |                                          |      | (529,353 | )       |      |  | (859,142 | )       |   |  | (858,510 | )       |   | 
|Redemption of COPrS                                                                    |                                          |      | (172,364 | )       |      |  |         |         |   |  |         |         |   | 
|Repayment of Zero Coupon Loan                                                          |                                          |      | (27,875  | )       |      |  |         |         |   |  |         |         |   | 
|Cost to terminate foreign currency forward contract                                    |                                          |      | (12,200  | )       |      |  |         |         |   |  |         |         |   | 
|Issue of Class B Non-Voting Shares, net of after-tax
    expenses                      |                                          |      | 228      |         |      |  | 133      |         |   |  | 95       |         |   | 
|Purchase of Class B Non-Voting Shares for cancellation                                 |                                          |      | (287,063 | )       |      |  | (85,968  | )       |   |  |         |         |   | 
|Dividends paid                                                                        |                                          |      |          |         |      |  |          |         |   |  |          |         |   | 
|                                                                                       | Class A and Class B Non-Voting Shares    |      |          | (70,515 | )    |  |          | (36,910 | ) |  |          | (11,536 | ) |  | 
|                                                                                       | Equity instruments, net of current taxes |      |          | (41,468 | )    |  |          | (38,343 | ) |  |          | (39,084 | ) |  | 
|                                                                                      
|                                                                                       |                                          |      | (388,145 | )       |      |  | (344,474 | )       |   |  | (422,638 | )       |   | 
|                                                                                      
|Effect of currency translation on cash balances and cash
    flows                     |                                          |      | (16      | )       |      |  | (9       | )       |   |  | (13      | )       |   | 
|                                                                                      
|Increase (decrease) in cash                                                            |                                          |      | 1,713    |         |      |  | (20,753  | )       |   |  | 20,753   |         |   | 
|Cash, beginning of the year                                                            |                                          |      |         |         |      |  | 20,753   |         |   |  |         |         |   | 
|                                                                                      
|Cash, end of the year                                                                  |                                          |      | 1,713    |         |      |  |         |         |   |  | 20,753   |         |   | 
|                                                                                      

See accompanying notes






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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






1.      SIGNIFICANT ACCOUNTING
POLICIES






Basis of consolidation








|                                                     |  |      |        |   |      |  |         |   |  | 
|---------------------------------------------------- |  | ---- | ------ | - | ---- |  | ------- | - |  | 
|                                                     |  | 2005 |        |   | 2004 |  |         |  
|                                                     |  | $    |        |   | $    |  |         |  
|                                                    
|Working capital                                      |  |      | 344    |   |      |  |        |   |  | 
|Deferred charges                                     |  |      | 185    |   |      |  |        |   |  | 
|Property, plant and equipment                        |  |      | 27,293 |   |      |  | 43,645  |   |  | 
|                                                    
|                                                     |  |      | 27,822 |   |      |  | 43,645  |   |  | 
|Debt                                                 |  |      | 23,432 |   |      |  | 36,442  |   |  | 
|                                                    
|Proportionate share of net assets                    |  |      | 4,390  |   |      |  | 7,203   |   |  | 
|                                                    
|Operating, general and administrative expenses       |  |      | 1,464  |   |      |  |        |   |  | 
|Amortization                                         |  |      | (579   | ) |      |  |        |   |  | 
|Interest                                             |  |      | (1,177 | ) |      |  |        |   |  | 
|Other gains                                          |  |      | 7,470  |   |      |  |        |   |  | 
|                                                    
|Proportionate share of income before income taxes    |  |      | 7,178  |   |      |  |        |   |  | 
|                                                    
|Cash flow provided by operating activities           |  |      | 1,310  |   |      |  |        |   |  | 
|Cash flow provided by (used in) investing activities |  |      | 18,023 |   |      |  | (18,373 | ) |  | 
|Cash flow (used in) provided by financing activities |  |      | (8,637 | ) |      |  | 18,373  |   |  | 
|                                                    
|Proportionate share of increase in cash              |  |      | 10,696 |   |      |  |        |   |  | 
|                                                    





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Investments






Revenue and expenses




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











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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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









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





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



Inventories




Property, plant and equipment








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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



Deferred charges




Intangibles






Deferred credits








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Interest capitalization




Income taxes




Equity instruments




Foreign currency translation














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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Financial instruments






Employee Benefit Plans










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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Stock-based compensation






Guarantees




Use of estimates and measurement uncertainty






Adoption of recent Canadian accounting pronouncements


(i)     Asset Retirement
Obligations








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






(ii)    GAAP Hierarchy and General
Standards of Financial Statement Presentation




(iii)   Consolidation of Variable Interest
Entities




Recent Canadian accounting pronouncements


(i)     Equity Instruments








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                      |  |                     |          |   |      |  |          |   |  | 
|----------------------------------------------------- |  | ------------------- | -------- | - | ---- |  | -------- | - |  | 
|                                                      |  | Increase (decrease) |          |   |     
|                                                      |  |                     |          |   |     
|                                                      |  | 2005                |          |   | 2004 |  |          |  
|                                                      |  | $                   |          |   | $    |  |          |  
|                                                     
|Consolidated balance sheets:                          |  |                     |          |   |      |  |          |   |  | 
|Deferred charges                                      |  |                     | 13,247   |   |      |  | 19,816   |   |  | 
|Long-term debt                                        |  |                     | 454,775  |   |      |  | 693,578  |   |  | 
|Future income taxes                                   |  |                     | 14,033   |   |      |  | 14,758   |   |  | 
|Equity instruments                                    |  |                     | (498,194 | ) |      |  | (724,923 | ) |  | 
|Deficit                                               |  |                     | (42,633  | ) |      |  | (36,403  | ) |  | 
|                                                     
|Decrease in deficit:                                  |  |                     |          |   |      |  |          |   |  | 
|Adjusted for change in accounting policy              |  |                     | (36,403  | ) |      |  | (16,257  | ) |  | 
|Decrease in equity entitlements (net of income taxes) |  |                     | (31,318  | ) |      |  | (40,185  | ) |  | 
|Decrease in gain on redemption of COPrS               |  |                     | 12,803   |   |      |  |         |   |  | 
|Decrease in gain on settlement of Zero Coupon Loan    |  |                     | 4,921    |   |      |  |         |   |  | 
|Decrease in net income                                |  |                     | 7,364    |   |      |  | 20,039   |   |  | 
|                                                     
|                                                      |  |                     | (42,633  | ) |      |  | (36,403  | ) |  | 
|                                                     

|                                                             |  |                     |         |   |      |  |         |   |  | 
|------------------------------------------------------------ |  | ------------------- | ------- | - | ---- |  | ------- | - |  | 
|                                                             |  | Increase (decrease) |         |   |     
|                                                             |  | in net income       |         |   |     
|                                                             |  |                     |         |   |     
|                                                             |  | 2005                |         |   | 2004 |  |         |  
|                                                             |  | $                   |         |   | $    |  |         |  
|                                                            
|Consolidated statements of income:                           |  |                     |         |   |      |  |         |   |  | 
|Increase in amortization                                     |  |                     | (258    | ) |      |  | (312    | ) |  | 
|Increase in interest                                         |  |                     | (48,541 | ) |      |  | (62,302 | ) |  | 
|Increase in foreign exchange gain on unhedged long-term debt |  |                     | 34,258  |   |      |  | 24,559  |   |  | 
|Increase in debt retirement costs                            |  |                     | (6,311  | ) |      |  |        |   |  | 
|Decrease in income tax expense                               |  |                     | 13,488  |   |      |  | 18,016  |   |  | 
|                                                            
|Decrease in net income                                       |  |                     | (7,364  | ) |      |  | (20,039 | ) |  | 
|                                                            
|Increase in earnings per share:                              |  |                     | 0.03    |   |      |  | 0.09    |   |  | 
|                                                            

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





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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



2.      BUSINESS ACQUISITIONS
AND DIVESTITURES


Cable business acquisitions


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

|                          |  |      |       |          |         |  |          |       |  |  |       |  |  | 
|------------------------- |  | ---- | ----- | -------- | ------- |  | -------- | ----- |  |  | ----- |  |  | 
|                          |  | 2003 |       |          |        
|                          |  |      |       |          |        
|                          |  |      |       | Total    |         |  |         
|                          |  |      |       | Accounts |         |  | purchase |       |  | 
|                          |  | Cash |       |          | payable |  |          | price |  |  |      
|                          |  | $    |       |          | $       |  |          | $     |  |  |      
|                         
|(iii) Cable systems in US |  |      | 3,634 |          |         |  |         |       |  |  | 3,634 |  |  | 
|                         



|                                                         |  |      |        |  |      |  |       |  |  | 
|-------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ----- |  |  | 
|                                                         |  | 2004 |        |  | 2003 |  |       | 
|                                                         |  | $    |        |  | $    |  |       | 
|                                                        
|Identifiable net assets acquired at assigned fair values |  |      |        |  |      |  |       |  |  | 
|Property, plant and equipment                            |  |      | 27,146 |  |      |  |      |  |  | 
|Deferred charges                                         |  |      | 450    |  |      |  |      |  |  | 
|Broadcast licenses                                       |  |      | 57,854 |  |      |  | 3,634 |  |  | 
|Future income taxes                                      |  |      | 5,400  |  |      |  |      |  |  | 
|                                                        
|                                                         |  |      | 90,850 |  |      |  | 3,634 |  |  | 
|                                                        
|Working capital deficiency                               |  |      | 1,354  |  |      |  |      |  |  | 
|                                                        
|Purchase price                                           |  |      | 89,496 |  |      |  | 3,634 |  |  | 
|                                                        





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|      |                                                                                                                                                                                                                                                                                                                                                                                                                         
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)   | Effective March 31, 2004, the Company purchased certain
    cable systems of Monarch Cablesystems Ltd.
    (Monarch). The cable systems service approximately
    40,000 basic subscribers in the Medicine Hat (Medicine Hat,
    Taber, Brooks), Canmore (Canmore, Banff, Lake Louise) and
    southern B.C. (Hope, Fernie, Kimberley) regions. Monarch is
    controlled by a Director of the Company (see note 18).
|     
|(ii)  | Effective September 1, 2003, the Company purchased a cable
    television system serving approximately 200 subscribers in the
    interior of British Columbia from a Director of the Company (see
    note 18).                                                                                                                                                                                                        
|     
|(iii) | The Company purchased 854 subscribers in Florida in 2003.                                                                                                                                                                                                                                                                                                                                                               

Divestitures




|      |                                                                                                                                                                                                                                                                                                                                                         
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)   | Effective October 1, 2004, the Company sold the cable
    television advertising business, originally acquired as part of
    the purchase of the Monarch cable systems in 2004, to Corus
    Entertainment Inc., a company subject to common voting control
    (see note 18).                                                                         
|     
|(ii)  | Effective June 30, 2003, the Company sold its US cable
    systems for net proceeds of $257,435. Prior to the sale, the
    Company had written down the US cable system broadcast licences
    by $80,000. Subsequent to the write-down, a recovery of the US
    dollar relative to the Canadian dollar reduced the final loss on
    sale to $74,674.
|     
|(iii) | Effective March 21, 2003 the Company sold its Star Choice
    Business Television division for $6,461 which resulted in a
    pre-tax loss of $3,800.                                                                                                                                                                                                   
|     
|(iv)  | During 2003, 360networks acquired GT. The transaction did not
    result in any recovery for the shareholders of GT.                                                                                                                                                                                                                                    



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

|                                                    |  |      |         |   |      |  |         |   |  | 
|--------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------- | - |  | 
|                                                    |  | 2005 |         |   | 2004 |  |         |  
|                                                    |  | $    |         |   | $    |  |         |  
|                                                   
|Subscriber and trade receivables                    |  |      | 136,852 |   |      |  | 131,737 |   |  | 
|Officers and employees                              |  |      | 170     |   |      |  | 225     |   |  | 
|Due from related parties [note 18]                  |  |      | 2,278   |   |      |  | 2,780   |   |  | 
|Miscellaneous receivables including commodity taxes |  |      | 7,297   |   |      |  | 7,772   |   |  | 
|                                                   
|                                                    |  |      | 146,597 |   |      |  | 142,514 |   |  | 
|Less allowance for doubtful accounts                |  |      | (31,933 | ) |      |  | (22,995 | ) |  | 
|                                                   
|                                                    |  |      | 114,664 |   |      |  | 119,519 |   |  | 
|                                                   







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

|                     |  |      |        |  |      |  |        |  |  | 
|-------------------- |  | ---- | ------ |  | ---- |  | ------ |  |  | 
|                     |  | 2005 |        |  | 2004 |  |        | 
|                     |  | $    |        |  | $    |  |        | 
|                    
|Subscriber equipment |  |      | 42,799 |  |      |  | 40,299 |  |  | 
|Other                |  |      | 2,425  |  |      |  | 2,674  |  |  | 
|                    
|                     |  |      | 45,224 |  |      |  | 42,973 |  |  | 
|                    





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

|                                                                                              |  |      |        |  |      |  |        |  |  | 
|--------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ |  |  | 
|                                                                                              |  | 2005 |        |  | 2004 |  |        | 
|                                                                                              |  | $    |        |  | $    |  |        | 
|                                                                                             
|Investments, at cost net of write-downs:                                                      |  |      |        |  |      |  |        |  |  | 
|Canadian Hydro Developers, Inc. (Canadian Hydro)
    (market value $58,920; 2004  $26,033) |  |      | 24,432 |  |      |  | 19,267 |  |  | 
|Motorola, Inc. (Motorola) (market value 
    2004  $44,113 )                              |  |      |       |  |      |  | 8,925  |  |  | 
|Q9 Networks Inc. (Q9 Networks) (market
    value  $2,731; 2004  $3,710)                   |  |      | 1,074  |  |      |  | 2,500  |  |  | 
|Investments in private technology companies                                                   |  |      | 2,126  |  |      |  | 4,063  |  |  | 
|Investments at equity:                                                                        |  |      |        |  |      |  |        |  |  | 
|Investments in specialty channel networks                                                     |  |      | 668    |  |      |  | 702    |  |  | 
|Other assets:                                                                                 |  |      |        |  |      |  |        |  |  | 
|Employee home relocation mortgages and loans
    [note 18]                                    |  |      | 6,246  |  |      |  | 6,899  |  |  | 
|Other                                                                                         |  |      | 1,683  |  |      |  | 1,609  |  |  | 
|                                                                                             
|                                                                                              |  |      | 36,229 |  |      |  | 43,965 |  |  | 
|                                                                                             

Canadian Hydro




|                                            |  |                    |            |  |      |  |            |  |  | 
|------------------------------------------- |  | ------------------ | ---------- |  | ---- |  | ---------- |  |  | 
|                                            |  | 2005               |            |  | 2004 |  |            | 
|                                           
|                                            |  | (number of shares/ |            |  |     
|                                            |  | warrants)          |            |  |     
|Shares                                      |  |                    | 12,430,364 |  |      |  | 10,330,364 |  |  | 
|Warrants  vested  exercise price of $2.35 |  |                    |           |  |      |  | 1,100,000  |  |  | 
|                                           
|                                            |  |                    | 12,430,364 |  |      |  | 11,430,364 |  |  | 
|                                           

Motorola








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Q9 Networks




Write-downs of investments at cost


|                          |  |      |       |  |      |  |     |      |  |  |        |  |  | 
|------------------------- |  | ---- | ----- |  | ---- |  | --- | ---- |  |  | ------ |  |  | 
|                          |  | 2005 |       |  | 2004 |  |     | 2003 |  |  |       
|                          |  | $    |       |  | $    |  |     | $    |  |  |       
|                         
|Canadian Hydro            |  |      |      |  |      |  |    |      |  |  | 4,925  |  |  | 
|Other public companies    |  |      |      |  |      |  |    |      |  |  | 27     |  |  | 
|Specialty channel network |  |      |      |  |      |  | 401 |      |  |  |       |  |  | 
|Private companies         |  |      | 1,937 |  |      |  | 250 |      |  |  | 10,048 |  |  | 
|                         
|                          |  |      | 1,937 |  |      |  | 651 |      |  |  | 15,000 |  |  | 
|                         

Investments at equity






|                           |  |      |      |   |      |  |      |      |  |  |        |   |  | 
|-------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ------ | - |  | 
|                           |  | 2005 |      |   | 2004 |  |      | 2003 |  |  |       
|                           |  | $    |      |   | $    |  |      | $    |  |  |       
|                          
|Specialty channel networks |  |      | (346 | ) |      |  | (272 | )    |  |  | (1,898 | ) |  | 
|Other                      |  |      | 60   |   |      |  | 22   |      |  |  | (23    | ) |  | 
|                          
|                           |  |      | (286 | ) |      |  | (250 | )    |  |  | (1,921 | ) |  | 
|                          

Gain on redemption of SHELS




|                      |  |                                                    |  |      |   |  |      |   |      |         |  | 
|--------------------- |  | -------------------------------------------------- |  | ---- | - |  | ---- | - | ---- | ------- |  | 
|                      |  | Delivery of                                        |  | 2005 |   |  | 2004 |   | 2003 |         | 
|Equity instrument     |  | underlying security                                |  | $    |   |  | $    |   | $    |         | 
|                     
|Series III & IV SHELS |  | 1,452,506 shares of Liberate Technologies          |  |      |  |  |      |  |      | 75,342  |  | 
|Series V SHELS        |  | 5,326,827 shares of Terayon Communications Systems |  |      |  |  |      |  |      | 44,179  |  | 
|                     
|                      |  |                                                    |  |      |  |  |      |  |      | 119,521 |  | 
|                     





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

|                                                                                  |  |      |           |             |              |  |           |       |  |  |           |             |  |              |           |  |       |  |           |  |  |  |           |  |  | 
|--------------------------------------------------------------------------------- |  | ---- | --------- | ----------- | ------------ |  | --------- | ----- |  |  | --------- | ----------- |  | ------------ | --------- |  | ----- |  | --------- |  |  |  | --------- |  |  | 
|                                                                                  |  | 2005 |           |             | 2004        
|                                                                                  |  |      |           |             |             
|                                                                                  |  |      |           | Accumulated |              |  | Net       |       |  |  |           | Accumulated |  |              | Net       |  |       | 
|                                                                                  |  | Cost |           |             | amortization |  |           | book  |  |  | Cost      |             |  | amortization |           |  | book  |  |           | 
|                                                                                  |  | $    |           |             | $            |  |           | value |  |  | $         |             |  | $            |           |  | value |  |           | 
|                                                                                 
|Cable and telecommunications distribution system                                  |  |      | 2,932,741 |             |              |  | 1,314,268 |       |  |  | 1,618,473 |             |  |              | 2,740,234 |  |       |  | 1,119,735 |  |  |  | 1,620,499 |  |  | 
|Digital cable terminals and modems                                                |  |      | 443,051   |             |              |  | 350,677   |       |  |  | 92,374    |             |  |              | 426,308   |  |       |  | 291,910   |  |  |  | 134,398   |  |  | 
|Satellite audio, video and data network equipment and DTH
    receiving equipment |  |      | 338,204   |             |              |  | 214,925   |       |  |  | 123,279   |             |  |              | 296,020   |  |       |  | 166,006   |  |  |  | 130,014   |  |  | 
|Buildings                                                                         |  |      | 244,172   |             |              |  | 58,478    |       |  |  | 185,694   |             |  |              | 221,774   |  |       |  | 47,309    |  |  |  | 174,465   |  |  | 
|Data processing                                                                   |  |      | 89,902    |             |              |  | 42,911    |       |  |  | 46,991    |             |  |              | 51,678    |  |       |  | 24,690    |  |  |  | 26,988    |  |  | 
|Other assets                                                                      |  |      | 183,856   |             |              |  | 100,743   |       |  |  | 83,113    |             |  |              | 196,476   |  |       |  | 107,575   |  |  |  | 88,901    |  |  | 
|                                                                                 
|                                                                                  |  |      | 4,231,926 |             |              |  | 2,082,002 |       |  |  | 2,149,924 |             |  |              | 3,932,490 |  |       |  | 1,757,225 |  |  |  | 2,175,265 |  |  | 
|Land                                                                              |  |      | 32,103    |             |              |  |          |       |  |  | 32,103    |             |  |              | 29,060    |  |       |  |          |  |  |  | 29,060    |  |  | 
|Satellite transponders under construction                                         |  |      |          |             |              |  |          |       |  |  |          |             |  |              | 43,200    |  |       |  |          |  |  |  | 43,200    |  |  | 
|Shaw Tower under construction                                                     |  |      | 7,208     |             |              |  |          |       |  |  | 7,208     |             |  |              | 44,815    |  |       |  |          |  |  |  | 44,815    |  |  | 
|                                                                                 
|                                                                                  |  |      | 4,271,237 |             |              |  | 2,082,002 |       |  |  | 2,189,235 |             |  |              | 4,049,565 |  |       |  | 1,757,225 |  |  |  | 2,292,340 |  |  | 
|                                                                                 





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

|                                                           |  |      |         |             |              |  |         |       |  |  |         |             |  |              |         |  |       |  |         |  |  |  |         |  |  | 
|---------------------------------------------------------- |  | ---- | ------- | ----------- | ------------ |  | ------- | ----- |  |  | ------- | ----------- |  | ------------ | ------- |  | ----- |  | ------- |  |  |  | ------- |  |  | 
|                                                           |  | 2005 |         |             | 2004        
|                                                           |  |      |         |             |             
|                                                           |  |      |         | Accumulated |              |  | Net     |       |  |  |         | Accumulated |  |              | Net     |  |       | 
|                                                           |  | Cost |         |             | amortization |  |         | book  |  |  | Cost    |             |  | amortization |         |  | book  |  |         | 
|                                                           |  | $    |         |             | $            |  |         | value |  |  | $       |             |  | $            |         |  | value |  |         | 
|                                                          
|Equipment costs                                            |  |      | 664,599 |             |              |  | 463,293 |       |  |  | 201,306 |             |  |              | 689,625 |  |       |  | 465,547 |  |  |  | 224,078 |  |  | 
|Financing costs and credit facility arrangement fees       |  |      | 55,284  |             |              |  | 35,479  |       |  |  | 19,805  |             |  |              | 61,970  |  |       |  | 37,292  |  |  |  | 24,678  |  |  | 
|Connection and installation costs                          |  |      | 45,377  |             |              |  | 31,266  |       |  |  | 14,111  |             |  |              | 45,582  |  |       |  | 29,582  |  |  |  | 16,000  |  |  | 
|Fair value adjustment on foreign currency forward contract |  |      | 4,900   |             |              |  | 3,195   |       |  |  | 1,705   |             |  |              |        |  |       |  |        |  |  |  |        |  |  | 
|Other                                                      |  |      | 4,542   |             |              |  | 3,470   |       |  |  | 1,072   |             |  |              | 4,579   |  |       |  | 1,896   |  |  |  | 2,683   |  |  | 
|                                                          
|                                                           |  |      | 774,702 |             |              |  | 536,703 |       |  |  | 237,999 |             |  |              | 801,756 |  |       |  | 534,317 |  |  |  | 267,439 |  |  | 
|                                                          







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

|                                            |                            |                 |           |           |      |  |           |           |  |  | 
|------------------------------------------- | -------------------------- | --------------- | --------- | --------- | ---- |  | --------- | --------- |  |  | 
|                                            |                            | Carrying amount |           |           |     
|                                            |                            |                 |           |           |     
|                                            |                            | 2005            |           |           | 2004 |  |           |          
|                                            |                            | $               |           |           | $    |  |           |          
|                                           
|Broadcast licenses                          |                            |                 |           |           |      |  |           |           |  | 
|                                            | Cable systems              |                 |           | 3,701,515 |      |  |           | 3,702,450 |  |  | 
|                                            | DTH and satellite services |                 |           | 983,132   |      |  |           | 983,132   |  |  | 
|                                           
|                                            |                            |                 | 4,684,647 |           |      |  | 4,685,582 |           |  | 
|Goodwill  non-regulated satellite services |                            |                 | 88,111    |           |      |  | 88,111    |           |  | 
|                                           
|Net book value                              |                            |                 | 4,772,758 |           |      |  | 4,773,693 |           |  | 
|                                           



|                                     |  |                    |           |   |          |  |        |  |  | 
|------------------------------------ |  | ------------------ | --------- | - | -------- |  | ------ |  |  | 
|                                     |  | Broadcast licenses |           |   | Goodwill |  |        | 
|                                     |  | $                  |           |   | $        |  |        | 
|                                    
|August 31, 2003                      |  |                    | 4,627,728 |   |          |  | 88,111 |  |  | 
|Business acquisitions [note 2]       |  |                    | 57,854    |   |          |  |       |  |  | 
|                                    
|August 31, 2004                      |  |                    | 4,685,582 |   |          |  | 88,111 |  |  | 
|Business divestiture [note 2 and 18] |  |                    | (935      | ) |          |  |       |  |  | 
|                                    
|August 31, 2005                      |  |                    | 4,684,647 |   |          |  | 88,111 |  |  | 
|                                    

Loss on sale and write-down of assets








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|   |               
|-- | --------------
|9. | LONG-TERM DEBT

|                                           |                                                           |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |            |            |  |            |           |  |  |         |        |  |  |           |         |  |  | 
|------------------------------------------ | --------------------------------------------------------- | -------------- | ------------------ | ----------- | -------- |  | ---------- | ---------- | ---------- | ---------- | --------- | ------- | ----------- | -------- | --------- | ---------- | ---------- |  | ---------- | --------- |  |  | ------- | ------ |  |  | --------- | ------- |  |  | 
|                                           |                                                           |                |                    | 2005        |          |  | 2004      
|                                           |                                                           |                |                    |             |          |  |           
|                                           |                                                           |                |                    | Translated  |          |  |            |            | Translated |            |           |        
|                                           |                                                           |                |                    | at year end |          |  | Adjustment |            |            | Translated |           |         | at year end |          |           | Adjustment |            |  | Translated |           |  | 
|                                           |                                                           | Effective      |                    |             | exchange |  |            | for hedged |            |            | at hedged |         |             | exchange |           |            | for hedged |  |            | at hedged |  |  |        
|                                           |                                                           | interest rates |                    |             | rate     |  |            | debt(1)    |            |            | rate      |         |             | rate     |           |            | debt(1)    |  |            | rate      |  |  |        
|                                           |                                                           | %              |                    |             | $        |  |            | $          |            |            | $         |         |             | $        |           |            | $          |  |            | $         |  |  |        
|                                          
|Corporate                                  |                                                           |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |            |            |  |            |           |  |  |         |        |  |  |           |         |  | 
|Bank loans                                 |                                                           |                | Fixed and variable |             |          |  | 799,023    |            |            |            |          |         |             |          | 799,023   |            |            |  | 295,433    |           |  |  |        |        |  |  | 295,433   |         |  | 
|Senior notes                              |                                                           |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |            |            |  |            |           |  |  |         |        |  |  |           |         |  | 
|                                           | Due April 11, 2005                                        |                |                    | 7.05        |          |  |            |           |            |            |           |        |             |          |           |           |            |  |            | 275,000   |  |  |         |       |  |  |           | 275,000 |  |  | 
|                                           | Due October 17, 2007                                      |                |                    | 7.40        |          |  |            | 296,760    |            |            |           |        |             |          |           | 296,760    |            |  |            | 296,760   |  |  |         |       |  |  |           | 296,760 |  |  | 
|                                           | US$440,000 due April 11, 2010                             |                |                    | 7.88        |          |  |            | 522,324    |            |            |           | 120,296 |             |          |           | 642,620    |            |  |            | 577,720   |  |  |         | 64,900 |  |  |           | 642,620 |  |  | 
|                                           | US$225,000 due April 6, 2011                              |                |                    | 7.68        |          |  |            | 267,098    |            |            |           | 88,740  |             |          |           | 355,838    |            |  |            | 295,425   |  |  |         | 60,413 |  |  |           | 355,838 |  |  | 
|                                           | US$300,000 due December 15, 2011                          |                |                    | 7.61        |          |  |            | 356,130    |            |            |           | 120,720 |             |          |           | 476,850    |            |  |            | 393,900   |  |  |         | 82,950 |  |  |           | 476,850 |  |  | 
|                                           | Due November 20, 2013                                     |                |                    | 7.50        |          |  |            | 350,000    |            |            |           |        |             |          |           | 350,000    |            |  |            | 350,000   |  |  |         |       |  |  |           | 350,000 |  |  | 
|                                          
|                                           |                                                           |                |                    |             |          |  | 2,591,335  |            |            |            | 329,756   |         |             |          | 2,921,091 |            |            |  | 2,484,238  |           |  |  | 208,263 |        |  |  | 2,692,501 |         |  | 
|                                          
|Other subsidiaries and entities            |                                                           |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |            |            |  |            |           |  |  |         |        |  |  |           |         |  | 
|Videon CableSystems Inc.                   |                                                           |                |                    |             |          |  |            |            |            |            |           |         |             |          |           |            |            |  |            |           |  |  |         |        |  |  |           |         |  | 
|                                           | 8.15% Senior Debentures Series A due
    April 26, 2010 |                |                    | 7.63        |          |  |            | 130,000    |            |            |           |        |             |          |           | 130,000    |            |  |            | 130,000   |  |  |         |       |  |  |           | 130,000 |  |  | 
|Burrard Landing Lot 2 Holdings Partnership |                                                           |                | Fixed and variable |             |          |  | 23,432     |            |            |            |          |         |             |          | 23,432    |            |            |  | 36,442     |           |  |  |        |        |  |  | 36,442    |         |  | 
|                                          
|                                           |                                                           |                |                    |             |          |  | 153,432    |            |            |            |          |         |             |          | 153,432   |            |            |  | 166,442    |           |  |  |        |        |  |  | 166,442   |         |  | 
|                                          
|Total consolidated debt                    |                                                           |                |                    |             |          |  | 2,744,767  |            |            |            | 329,756   |         |             |          | 3,074,523 |            |            |  | 2,650,680  |           |  |  | 208,263 |        |  |  | 2,858,943 |         |  | 
|Less current portion                       |                                                           |                |                    |             |          |  | 51,380     |            |            |            |          |         |             |          | 51,380    |            |            |  | 343,097    |           |  |  |        |        |  |  | 343,097   |         |  | 
|                                          
|                                           |                                                           |                |                    |             |          |  | 2,693,387  |            |            |            | 329,756   |         |             |          | 3,023,143 |            |            |  | 2,307,583  |           |  |  | 208,263 |        |  |  | 2,515,846 |         |  | 
|                                          



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Foreign denominated long-term debt is translated at the year-end
    rate. If the rate of translation was adjusted to reflect the
    hedged rates of the Companys cross-currency interest rate
    agreements (which fix the liability for interest and principal),
    long-term debt would increase by $329,756
    (2004  $208,263) representing the amount of the
    corresponding deferred foreign exchange gain in deferred credits
    (see note 10).



Corporate


Bank loans








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










Senior notes










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

Canadian Satellite Communications Inc.
(Cancom)








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##### 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


Senior secured notes redemption




Bank Loans








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Debt covenants




Long-term debt repayments




|           |  |               |           |               |              |  |           | 
|---------- |  | ------------- | --------- | ------------- | ------------ |  | --------- | 
|           |  |               |           | Exchange rate |             
|           |  | At year-end   |           |               | adjusted for | 
|           |  | exchange rate |           |               | hedged rates | 
|           |  | $             |           |               | $            | 
|           | 
|2006       |  |               | 51,380    |               |              |  | 51,380    | 
|2007       |  |               | 102,364   |               |              |  | 102,364   | 
|2008       |  |               | 297,238   |               |              |  | 297,238   | 
|2009       |  |               | 646,659   |               |              |  | 646,659   | 
|2010       |  |               | 652,866   |               |              |  | 773,162   | 
|Thereafter |  |               | 994,260   |               |              |  | 1,203,720 | 
|          
|           |  |               | 2,744,767 |               |              |  | 3,074,523 | 
|          



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

|                                                            |  |        |           |             |              |  |         |       |  |  |           |             |  |              |           |  |       |  |         |  |  |  |         |  |  | 
|----------------------------------------------------------- |  | ------ | --------- | ----------- | ------------ |  | ------- | ----- |  |  | --------- | ----------- |  | ------------ | --------- |  | ----- |  | ------- |  |  |  | ------- |  |  | 
|                                                            |  | 2005   |           |             | 2004         |  |         |      
|                                                            |  |        |           |             |              |  |         |      
|                                                            |  |        |           | Accumulated |              |  | Net     |       |  |  |           | Accumulated |  |              | Net       |  |       | 
|                                                            |  | Amount |           |             | amortization |  |         | book  |  |  | Amount    |             |  | amortization |           |  | book  |  |         | 
|                                                            |  | $      |           |             | $            |  |         | value |  |  | $         |             |  | $            |           |  | value |  |         | 
|                                                           
|IRU agreements                                              |  |        | 629,005   |             |              |  | 56,518  |       |  |  | 572,487   |             |  |              | 627,958   |  |       |  | 43,519  |  |  |  | 584,439 |  |  | 
|Foreign exchange gains on translating hedged long-term debt |  |        | 329,756   |             |              |  |        |       |  |  | 329,756   |             |  |              | 208,263   |  |       |  |        |  |  |  | 208,263 |  |  | 
|Equipment revenue                                           |  |        | 263,295   |             |              |  | 174,509 |       |  |  | 88,786    |             |  |              | 285,888   |  |       |  | 201,350 |  |  |  | 84,538  |  |  | 
|Connection fee and installation revenue                     |  |        | 46,061    |             |              |  | 31,437  |       |  |  | 14,624    |             |  |              | 45,582    |  |       |  | 29,582  |  |  |  | 16,000  |  |  | 
|Fair value adjustments on debt assumed on acquisitions      |  |        | 6,084     |             |              |  | 3,014   |       |  |  | 3,070     |             |  |              | 6,084     |  |       |  | 2,344   |  |  |  | 3,740   |  |  | 
|Deposit on future fiber purchase                            |  |        | 2,000     |             |              |  |        |       |  |  | 2,000     |             |  |              | 2,000     |  |       |  |        |  |  |  | 2,000   |  |  | 
|                                                           
|                                                            |  |        | 1,276,201 |             |              |  | 265,478 |       |  |  | 1,010,723 |             |  |              | 1,175,775 |  |       |  | 276,795 |  |  |  | 898,980 |  |  | 
|                                                           









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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








11.     SHARE CAPITAL


Authorized






|                     |             |  |      |  |             |      |  |                             |                                                    |  |           |         |  |  |           |         |  |  | 
|-------------------- | ----------- |  | ---- |  | ----------- | ---- |  | --------------------------- | -------------------------------------------------- |  | --------- | ------- |  |  | --------- | ------- |  |  | 
|                     |             |  |      |  |             | 2005 |  |                             | 2004                                               |  |           |        
|                     |             |  |      |  |             | $    |  |                             | $                                                  |  |           |        
|                    
|Number of securities |             |  |      |  |            
|                     |             |  |      |  |            
|2005                 |             |  | 2004 |  |             |      |  |                            
|                     |             |  |      |  |             |      |  |                            
|                     | 11,344,932  |  |      |  | 11,359,932  |      |  | Class A Shares              |                                                    |  | 2,487     |         |  |  | 2,490     |         |  | 
|                     | 208,634,005 |  |      |  | 220,109,372 |      |  | Class B Non-Voting Shares   |                                                    |  | 2,021,686 |         |  |  | 2,132,943 |         |  | 
|                    
|                     | 219,978,937 |  |      |  | 231,469,304 |      |  |                             |                                                    |  | 2,024,173 |         |  |  | 2,135,433 |         |  | 
|                    
|                     |             |  |      |  |             |      |  | EQUITY INSTRUMENTS COPrS-   |                                                    |  |           |         |  |  |           |         |  | 
|                     |            |  |      |  | 5,700,000   |      |  |                             | 8.45% Series A US $142,500, due September 30, 2046 |  |           |        |  |  |           | 192,871 |  |  | 
|                     | 100,000     |  |      |  | 100,000     |      |  |                             | 8.54% Series B, due September 30, 2027             |  |           | 98,467  |  |  |           | 98,467  |  |  | 
|                     | 6,900,000   |  |      |  | 6,900,000   |      |  |                             | 8.50% Series US $172,500, due September 30, 2097   |  |           | 252,525 |  |  |           | 252,525 |  |  | 
|                     | 6,000,000   |  |      |  | 6,000,000   |      |  |                             | 8.875% Series, due September 28, 2049              |  |           | 147,202 |  |  |           | 147,202 |  |  | 
|                     |             |  |      |  |             |      |  | Zero Coupon Loan US $22,835 |                                                    |  |          |         |  |  | 33,858    |         |  | 
|                    
|                     |             |  |      |  |             |      |  |                             |                                                    |  | 498,194   |         |  |  | 724,923   |         |  | 
|                    
|                     |             |  |      |  |             |      |  |                             |                                                    |  | 2,522,367 |         |  |  | 2,860,356 |         |  | 
|                    





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Class A and Class B Non-Voting Shares






|                                         |  |                |            |                    |        |  |       |        |  |  |             |   |  |  |           |   |  | 
|---------------------------------------- |  | -------------- | ---------- | ------------------ | ------ |  | ----- | ------ |  |  | ----------- | - |  |  | --------- | - |  | 
|                                         |  |                |            | Class B Non-Voting
|                                         |  | Class A Shares |            |                    | Shares
|                                         |  |                |            |                    |       
|                                         |  | Number         |            |                    | $      |  |       | Number |  |  | $           |   |  | 
|                                        
|August 31, 2002                          |  |                | 11,373,972 |                    |        |  | 2,493 |        |  |  | 220,473,552 |   |  |  | 2,107,367 |   |  | 
|Class A Share conversions                |  |                | (13,540    | )                  |        |  | (2    | )      |  |  | 13,540      |   |  |  | 2         |   |  | 
|Stock option plans issuances             |  |                |           |                    |        |  |      |        |  |  | 9,000       |   |  |  | 95        |   |  | 
|                                        
|August 31, 2003                          |  |                | 11,360,432 |                    |        |  | 2,491 |        |  |  | 220,496,092 |   |  |  | 2,107,464 |   |  | 
|Class A Share conversions                |  |                | (500       | )                  |        |  | (1    | )      |  |  | 500         |   |  |  | 1         |   |  | 
|Purchase of shares for cancellation      |  |                |           |                    |        |  |      |        |  |  | (4,134,000  | ) |  |  | (39,655   | ) |  | 
|Stock option plans issuances             |  |                |           |                    |        |  |      |        |  |  | 9,000       |   |  |  | 164       |   |  | 
|Issued in respect of Monarch acquisition |  |                |           |                    |        |  |      |        |  |  | 3,737,780   |   |  |  | 65,000    |   |  | 
|Share issue costs                        |  |                |           |                    |        |  |      |        |  |  |            |   |  |  | (31       | ) |  | 
|                                        
|August 31, 2004                          |  |                | 11,359,932 |                    |        |  | 2,490 |        |  |  | 220,109,372 |   |  |  | 2,132,943 |   |  | 
|Class A Share conversions                |  |                | (15,000    | )                  |        |  | (3    | )      |  |  | 15,000      |   |  |  | 3         |   |  | 
|Purchase of shares for cancellation      |  |                |           |                    |        |  |      |        |  |  | (11,505,500 | ) |  |  | (111,488  | ) |  | 
|Stock option plans issuances             |  |                |           |                    |        |  |      |        |  |  | 15,133      |   |  |  | 228       |   |  | 
|                                        
|August 31, 2005                          |  |                | 11,344,932 |                    |        |  | 2,487 |        |  |  | 208,634,005 |   |  |  | 2,021,686 |   |  | 
|                                        



Equity instruments


COPrS








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS














Zero Coupon Loan








Stock option plan








---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                 |  |        |            |          |      |  |       |        |          |  |           |   |  |          |       |  |   |  |            |   |  |  |       |  |  | 
|-------------------------------- |  | ------ | ---------- | -------- | ---- |  | ----- | ------ | -------- |  | --------- | - |  | -------- | ----- |  | - |  | ---------- | - |  |  | ----- |  |  | 
|                                 |  | 2005   |            |          | 2004 |  |       | 2003   |          |  |          
|                                 |  |        |            |          |      |  |       |        |          |  |          
|                                 |  |        |            | Weighted |      |  |       |        | Weighted |  |           |   |  | Weighted |       |  |  
|                                 |  |        |            | average  |      |  |       |        | average  |  |           |   |  | average  |       |  |  
|                                 |  |        |            | exercise |      |  |       |        | exercise |  |           |   |  | exercise |       |  |  
|                                 |  |        |            | price    |      |  |       |        | price    |  |           |   |  | price    |       |  |  
|                                 |  | Shares |            |          | $    |  |       | Shares |          |  | $         |   |  | Shares   |       |  | $ |  |            |  
|                                
|Outstanding at beginning of year |  |        | 7,847,000  |          |      |  | 32.55 |        |          |  | 7,607,500 |   |  |          | 32.58 |  |   |  | 8,303,000  |   |  |  | 32.58 |  |  | 
|Granted                          |  |        | 1,783,000  |          |      |  | 32.62 |        |          |  | 1,216,750 |   |  |          | 32.49 |  |   |  | 1,093,250  |   |  |  | 32.62 |  |  | 
|Forfeited                        |  |        | (1,177,750 | )        |      |  | 32.38 |        |          |  | (977,250  | ) |  |          | 32.68 |  |   |  | (1,788,750 | ) |  |  | 32.64 |  |  | 
|                                
|Outstanding at end of year       |  |        | 8,452,250  |          |      |  | 32.59 |        |          |  | 7,847,000 |   |  |          | 32.55 |  |   |  | 7,607,500  |   |  |  | 32.58 |  |  | 
|                                



|                |  |                     |           |  |                     |  |     |          |  |  |               |  |  |          |           |  |  |  |       |  |  | 
|--------------- |  | ------------------- | --------- |  | ------------------- |  | --- | -------- |  |  | ------------- |  |  | -------- | --------- |  |  |  | ----- |  |  | 
|                |  | Options outstanding |           |  | Options exercisable |  |     |         
|                |  |                     |           |  |                     |  |     |         
|                |  | Number              |           |  | Weighted            |  |     | Weighted |  |  | Number        |  |  | Weighted |           |  | 
|                |  | outstanding at      |           |  | average             |  |     | average  |  |  | exercisable   |  |  | average  |           |  | 
|                |  | August 31,          |           |  | remaining           |  |     | exercise |  |  | at August 31, |  |  | exercise |           |  | 
|Range of prices |  | 2005                |           |  | contractual life    |  |     | price    |  |  | 2005          |  |  | price    |           |  | 
|               
|$17.37          |  |                     | 10,000    |  |                     |  | 8.1 |          |  |  | 17.37         |  |  |          | 2,500     |  |  |  | 17.37 |  |  | 
|$29.70  $34.70 |  |                     | 8,442,250 |  |                     |  | 6.6 |          |  |  | 32.61         |  |  |          | 5,409,750 |  |  |  | 32.59 |  |  | 
|               





|                                   |  |      |         |  |      |  |        |      |  |  |         |   |  | 
|---------------------------------- |  | ---- | ------- |  | ---- |  | ------ | ---- |  |  | ------- | - |  | 
|                                   |  | 2005 |         |  | 2004 |  |        | 2003 |  |  |        
|                                   |  | $    |         |  | $    |  |        | $    |  |  |        
|                                  
|Net income (loss)                  |  |      | 160,585 |  |      |  | 90,909 |      |  |  | (46,864 | ) |  | 
|Proforma net income (loss)         |  |      | 154,813 |  |      |  | 74,213 |      |  |  | (67,700 | ) |  | 
|Proforma earnings (loss) per share |  |      | 0.62    |  |      |  | 0.15   |      |  |  | (0.47   | ) |  | 
|                                  







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                                |  |      |          |  |      |  |          |      |  |  |          |  |  | 
|----------------------------------------------------------------------------------------------- |  | ---- | -------- |  | ---- |  | -------- | ---- |  |  | -------- |  |  | 
|                                                                                                |  | 2005 |          |  | 2004 |  |          | 2003 |  |  |         
|                                                                                               
|Dividend yield                                                                                  |  |      | 1.47%    |  |      |  | 0.94%    |      |  |  | 0.33%    |  |  | 
|Risk-free interest rate                                                                         |  |      | 3.54%    |  |      |  | 3.70%    |      |  |  | 3.19%    |  |  | 
|Expected life of options                                                                        |  |      | 4  years |  |      |  | 4  years |      |  |  | 4  years |  |  | 
|Expected volatility factor of the future expected market price
    of Class B Non-Voting Shares |  |      | 36.7%    |  |      |  | 39.7%    |      |  |  | 40.4%    |  |  | 
|                                                                                               



Other stock options






Warrants






Dividends








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Share transfer restriction




Earnings (loss) per share






|                                                                                                               |  |      |             |   |      |  |             |      |  |  |             |   |  | 
|-------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- |  |  | ----------- | - |  | 
|                                                                                                               |  | 2005 |             |   | 2004 |  |             | 2003 |  |  |            
|                                                                                                               |  | $    |             |   | $    |  |             | $    |  |  |            
|                                                                                                              
|Net income (loss)                                                                                              |  |      | 160,585     |   |      |  | 90,909      |      |  |  | (46,864     | ) |  | 
|Gain on redemption of COPrS                                                                                    |  |      | 12,803      |   |      |  |            |      |  |  |            |   |  | 
|Gain on settlement of Zero Coupon Loan                                                                         |  |      | 4,921       |   |      |  |            |      |  |  |            |   |  | 
|Equity entitlements, net of tax                                                                                |  |      | (31,318     | ) |      |  | (40,185     | )    |  |  | (40,193     | ) |  | 
|                                                                                                              
|                                                                                                               |  |      | 146,991     |   |      |  | 50,724      |      |  |  | (87,057     | ) |  | 
|                                                                                                              
|Earnings (loss) per share  basic and diluted                                                                  |  |      | 0.64        |   |      |  | 0.22        |      |  |  | (0.38       | ) |  | 
|                                                                                                              
|Weighted average number of Class A and Class B
    Non-Voting Shares used as denominator in above calculations |  |      | 228,210,000 |   |      |  | 231,605,000 |      |  |  | 231,848,000 |   |  | 
|                                                                                                              







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

|                                               |  |      |     |   |      |  |     |   |  | 
|---------------------------------------------- |  | ---- | --- | - | ---- |  | --- | - |  | 
|                                               |  | 2005 |     |   | 2004 |  |     |  
|                                               |  | $    |     |   | $    |  |     |  
|                                              
|Balance, beginning of year                     |  |      | 444 |   |      |  | 482 |   |  | 
|Current years deferred translation adjustment |  |      | (79 | ) |      |  | (38 | ) |  | 
|                                              
|Balance, end of year                           |  |      | 365 |   |      |  | 444 |   |  | 
|                                              



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

|                                          |  |      |         |  |      |  |         |  |  | 
|----------------------------------------- |  | ---- | ------- |  | ---- |  | ------- |  |  | 
|                                          |  | 2005 |         |  | 2004 |  |         | 
|                                          |  | $    |         |  | $    |  |         | 
|                                         
|Trade                                     |  |      | 48,368  |  |      |  | 44,219  |  |  | 
|Accrued liabilities                       |  |      | 163,150 |  |      |  | 158,302 |  |  | 
|Accrued network fees                      |  |      | 110,539 |  |      |  | 100,580 |  |  | 
|Interest and dividends                    |  |      | 67,894  |  |      |  | 89,045  |  |  | 
|Due to related parties [note 18]          |  |      | 16,994  |  |      |  | 16,729  |  |  | 
|Current portion of pension plan liability |  |      | 1,088   |  |      |  | 1,162   |  |  | 
|                                         
|                                          |  |      | 408,033 |  |      |  | 410,037 |  |  | 
|                                         







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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



|                                |                                |      |           |           |      |  |           |           |  |  | 
|------------------------------- | ------------------------------ | ---- | --------- | --------- | ---- |  | --------- | --------- |  |  | 
|                                |                                | 2005 |           |           | 2004 |  |           |          
|                                |                                | $    |           |           | $    |  |           |          
|                               
|Future income tax liabilities:  |                                |      |           |           |      |  |           |           |  | 
|                                | Property, plant and equipment  |      |           | 137,456   |      |  |           | 142,002   |  |  | 
|                                | Broadcast licenses             |      |           | 1,157,966 |      |  |           | 1,156,369 |  |  | 
|                                | Deferred charges               |      |           |          |      |  |           | 8,252     |  |  | 
|                                | Partnership income             |      |           | 263,904   |      |  |           | 263,653   |  |  | 
|                               
|                                |                                |      | 1,559,326 |           |      |  | 1,570,276 |           |  | 
|                               
|Future income tax assets:       |                                |      |           |           |      |  |           |           |  | 
|                                | Non-capital loss carryforwards |      |           | 497,663   |      |  |           | 581,791   |  |  | 
|                                | Deferred charges               |      |           | 3,163     |      |  |           |          |  |  | 
|                                | Investments                    |      |           | 3,684     |      |  |           | 6,204     |  |  | 
|                               
|                                |                                |      | 504,510   |           |      |  | 587,995   |           |  | 
|                               
|Net future income tax liability |                                |      | 1,054,816 |           |      |  | 982,281   |           |  | 
|                               









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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                        |                                                                                                                      |      |        |        |      |  |        |         |   |  |        |        |  |  | 
|------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ---- | ------ | ------ | ---- |  | ------ | ------- | - |  | ------ | ------ |  |  | 
|                                                        |                                                                                                                      | 2005 |        |        | 2004 |  |        | 2003    |   |  |       
|                                                        |                                                                                                                      | $    |        |        | $    |  |        | $       |   |  |       
|                                                       
|Current statutory income tax rate                       |                                                                                                                      |      | 35.5%  |        |      |  | 35.5%  |         |   |  | 38.0%  |        |  | 
|                                                       
|Income tax expense (benefit) at current statutory rates |                                                                                                                      |      | 90,433 |        |      |  | 58,891 |         |   |  | (5,509 | )      |  | 
|Increase (decrease) in taxes resulting from:            |                                                                                                                      |      |        |        |      |  |        |         |   |  |        |        |  | 
|                                                        | Large corporations tax                                                                                               |      |        | 5,730  |      |  |        | 6,249   |   |  |        | 8,632  |  |  | 
|                                                        | Non-taxable portion of foreign exchange gains or losses and
    amounts on sale/write-down of assets and investments |      |        | (3,817 | )    |  |        | 1,656   |   |  |        | 5,268  |  |  | 
|                                                        | Writedown of non-deductible goodwill                                                                                 |      |        |       |      |  |        |        |   |  |        | 19,000 |  |  | 
|                                                        | Valuation allowance                                                                                                  |      |        |       |      |  |        | 22,932  |   |  |        |       |  |  | 
|                                                        | Effect of future tax rate reductions                                                                                 |      |        |       |      |  |        | (14,089 | ) |  |        |       |  |  | 
|                                                        | Originating temporary differences recorded at future tax rates
    expected to be in effect when realized            |      |        | (67    | )    |  |        | (610    | ) |  |        | 1,620  |  |  | 
|                                                        | Other                                                                                                                |      |        | 1,591  |      |  |        | (297    | ) |  |        | 1,434  |  |  | 
|                                                       
|Income tax expense                                      |                                                                                                                      |      | 93,870 |        |      |  | 74,732 |         |   |  | 30,445 |        |  | 
|                                                       



|                                                                                                     |  |      |        |  |      |  |        |      |  |  |        |   |  | 
|---------------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | - |  | 
|                                                                                                     |  | 2005 |        |  | 2004 |  |        | 2003 |  |  |       
|                                                                                                     |  | $    |        |  | $    |  |        | $    |  |  |       
|                                                                                                    
|Current tax expense                                                                                  |  |      | 22,967 |  |      |  | 26,735 |      |  |  | 35,706 |   |  | 
|Future income tax expense (benefit) related to origination
    and reversal of temporary differences |  |      | 70,903 |  |      |  | 39,154 |      |  |  | (5,261 | ) |  | 
|Future income tax expense resulting from rate changes and
    valuation allowance                    |  |      |       |  |      |  | 8,843  |      |  |  |       |   |  | 
|                                                                                                    
|Income tax expense                                                                                   |  |      | 93,870 |  |      |  | 74,732 |      |  |  | 30,445 |   |  | 
|                                                                                                    





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







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|--------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | ------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                    |  | 2005  |           |           |    
|                                                                                                    |  |       |           |           |    
|                                                                                                    |  |       |           | Satellite |     |  |         |                    | 
|                                                                                                    |  |       |           |           |     |  |         |                    | 
|                                                                                                    |  | Cable |           |           | DTH |  |         | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                    |  | $     |           |           | $   |  |         | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                   
|Service revenue  total                                                                             |  |       | 1,601,126 |           |     |  | 535,333 |                    |  |  | 90,152  |   |  |       | 625,485   |   |  |  | 2,226,611 |   |  | 
|Inter segment                                                                                       |  |       | (2,757    | )         |     |  | (4,604  | )                  |  |  | (9,440  | ) |  |       | (14,044   | ) |  |  | (16,801   | ) |  | 
|                                                                                                   
|                                                                                                    |  |       | 1,598,369 |           |     |  | 530,729 |                    |  |  | 80,712  |   |  |       | 611,441   |   |  |  | 2,209,810 |   |  | 
|                                                                                                   
|Service operating income before amortization                                                        |  |       | 797,583   |           |     |  | 141,687 |                    |  |  | 42,723  |   |  |       | 184,410   |   |  |  | 981,993   |   |  | 
|                                                                                                   
|Service operating income as % of external revenue                                                   |  |       | 49.9%     |           |     |  | 26.7%   |                    |  |  | 52.9%   |   |  |       | 30.2%     |   |  |  | 44.4%     |   |  | 
|                                                                                                   
|Segment
    interest(1)                                                                             |  |       | 171,847   |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 41,384    |   |  |  | 213,231   |   |  | 
|Burrard Landing Lot 2 Holdings Partnership                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 1,177     |   |  | 
|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total interest                                                                                      |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 214,408   |   |  | 
|                                                                                                   
|Cash
    taxes(1)                                                                                   |  |       | 22,633    |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 334       |   |  |  | 22,967    |   |  | 
|                                                                                                   
|Segment assets                                                                                      |  |       | 5,788,468 |           |     |  | 877,397 |                    |  |  | 534,278 |   |  |       | 1,411,675 |   |  |  | 7,200,143 |   |  | 
|                                                                                                    |  |       |           |           |     |  |        
|Corporate assets                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 216,795   |   |  | 
|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total assets                                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 7,416,938 |   |  | 
|                                                                                                   
|Capital expenditures and equipment subsidies by segment                                             |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                |  |       | 313,056   |           |     |  | 9,921   |                    |  |  | (1,487  | ) |  |       | 8,434     |   |  |  | 321,490   |   |  | 
|Equipment subsidies                                                                                 |  |       | 30,112    |           |     |  | 85,556  |                    |  |  |        |   |  |       | 85,556    |   |  |  | 115,668   |   |  | 
|                                                                                                   
|                                                                                                    |  |       | 343,168   |           |     |  | 95,477  |                    |  |  | (1,487  | ) |  |       | 93,990    |   |  |  | 437,158   |   |  | 
|                                                                                                   
|Reconciliation to Consolidated Statements of Cash Flows                                             |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 336,888   |   |  | 
|Additions to equipment costs (net)                                                                  |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 115,668   |   |  | 
|                                                                                                   
|Total of capital expenditures and equipment subsidies per
    Consolidated Statements of Cash Flows |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 452,556   |   |  | 
|Decrease in working capital related to capital expenditures                                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 4,378     |   |  | 
|Less: Partnership capital
    expenditures(2)                                                       |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (15,045   | ) |  | 
|Less: IRU
    prepayments(3)                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (1,198    | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (3,533    | ) |  | 
|                                                                                                   
|Total capital expenditures and equipment subsidies reported by
    segments                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 437,158   |   |  | 
|                                                                                                   







---



##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|--------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | ------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                    |  | 2004  |           |           |    
|                                                                                                    |  |       |           |           |    
|                                                                                                    |  |       |           | Satellite |     |  |         |                    | 
|                                                                                                    |  |       |           |           |     |  |         |                    | 
|                                                                                                    |  | Cable |           |           | DTH |  |         | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                    |  | $     |           |           | $   |  |         | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                   
|Service revenue  total                                                                             |  |       | 1,494,176 |           |     |  | 510,386 |                    |  |  | 96,543  |   |  |       | 606,929   |   |  |  | 2,101,105 |   |  | 
|Inter segment                                                                                       |  |       | (2,607    | )         |     |  | (4,749  | )                  |  |  | (14,000 | ) |  |       | (18,749   | ) |  |  | (21,356   | ) |  | 
|                                                                                                   
|                                                                                                    |  |       | 1,491,569 |           |     |  | 505,637 |                    |  |  | 82,543  |   |  |       | 588,180   |   |  |  | 2,079,749 |   |  | 
|                                                                                                   
|Service operating income before amortization and litigation
    settlement                          |  |       | 779,579   |           |     |  | 111,150 |                    |  |  | 41,690  |   |  |       | 152,840   |   |  |  | 932,419   |   |  | 
|Litigation settlement                                                                               |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (6,484    | ) |  | 
|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Service operating income before amortization                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 925,935   |   |  | 
|                                                                                                   
|Service operating income as % of external revenue                                                   |  |       | 52.3%     |           |     |  | 22.0%   |                    |  |  | 50.5%   |   |  |       | 26.0%     |   |  |  | 44.5%     |   |  | 
|                                                                                                   
|Interest(1)                                                                                         |  |       | 174,988   |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 44,484    |   |  |  | 219,472   |   |  | 
|                                                                                                   
|Cash
    taxes(1)                                                                                   |  |       | 25,043    |           |     |  | n/a     |                    |  |  | n/a     |   |  |       | 1,692     |   |  |  | 26,735    |   |  | 
|                                                                                                   
|Segment assets                                                                                      |  |       | 5,842,338 |           |     |  | 926,478 |                    |  |  | 558,402 |   |  |       | 1,484,880 |   |  |  | 7,327,218 |   |  | 
|                                                                                                    |  |       |           |           |     |  |        
|Corporate assets                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 229,686   |   |  | 
|                                                                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   | 
|Total assets                                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 7,556,904 |   |  | 
|                                                                                                   
|Capital expenditures and equipment subsidies by segment                                             |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                |  |       | 223,665   |           |     |  | 11,656  |                    |  |  | (886    | ) |  |       | 10,770    |   |  |  | 234,435   |   |  | 
|Equipment subsidies                                                                                 |  |       | 43,448    |           |     |  | 89,263  |                    |  |  |        |   |  |       | 89,263    |   |  |  | 132,711   |   |  | 
|                                                                                                   
|                                                                                                    |  |       | 267,113   |           |     |  | 100,919 |                    |  |  | (886    | ) |  |       | 100,033   |   |  |  | 367,146   |   |  | 
|                                                                                                   
|Reconciliation to Consolidated Statements of Cash Flows                                             |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                          |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 256,136   |   |  | 
|Additions to equipment costs (net)                                                                  |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 132,711   |   |  | 
|                                                                                                   
|Total of capital expenditures and equipment subsidies per
    Consolidated Statements of Cash Flows |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 388,847   |   |  | 
|Decrease in working capital related to capital expenditures                                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 2,097     |   |  | 
|Less: Partnership capital
    expenditures(2)                                                       |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (18,373   | ) |  | 
|Less: IRU
    prepayments(3)                                                                        |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (1,420    | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                    |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | (4,005    | ) |  | 
|                                                                                                   
|Total capital expenditures and equipment subsidies reported by
    segments                         |  |       |           |           |     |  |         |                    |  |  |         |   |  |       |           |   |  |  | 367,146   |   |  | 
|                                                                                                   







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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                                                                                                     |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|---------------------------------------------------------------------------------------------------- |  | ----- | --------- | --------- | --- |  | --------- | ------------------ |  |  | ------- | - |  | ----- | --------- | - |  |  | --------- | - |  | 
|                                                                                                     |  | 2003 
|                                                                                                     |  |      
|                                                                                                     |  |       |           | Satellite |     |  |          
|                                                                                                     |  |       |           |           |     |  |          
|                                                                                                     |  | Cable |           |           | DTH |  |           | Satellite Services |  |  | Total   |   |  | Total |           |   | 
|                                                                                                     |  | $     |           |           | $   |  |           | $                  |  |  | $       |   |  | $     |           |   | 
|                                                                                                    
|Service revenue  total                                                                              |  |       | 1,462,440 |           |     |  | 455,343   |                    |  |  | 106,413 |   |  |       | 561,756   |   |  |  | 2,024,196 |   |  | 
|Inter segment                                                                                        |  |       | (2,607    | )         |     |  | (5,167    | )                  |  |  | (18,001 | ) |  |       | (23,168   | ) |  |  | (25,775   | ) |  | 
|                                                                                                    
|                                                                                                     |  |       | 1,459,833 |           |     |  | 450,176   |                    |  |  | 88,412  |   |  |       | 538,588   |   |  |  | 1,998,421 |   |  | 
|                                                                                                    
|Service operating income before amortization, restructuring
    charges and DTH inventory write-down |  |       | 727,458   |           |     |  | 52,814    |                    |  |  | 38,619  |   |  |       | 91,433    |   |  |  | 818,891   |   |  | 
|                                                                                                     |  |       |           |           |     |  |          
|Satellite restructuring charge                                                                       |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (4,850    | ) |  | 
|Corporate restructuring charge                                                                       |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (4,000    | ) |  | 
|DTH write-down of inventory                                                                          |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (4,400    | ) |  | 
|Recovery of Cable litigation accrual                                                                 |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 12,000    |   |  | 
|                                                                                                    
|Service operating income before amortization                                                         |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 817,641   |   |  | 
|                                                                                                    
|Service operating income as % of external revenue                                                    |  |       | 49.8%     |           |     |  | 11.7%     |                    |  |  | 43.7%   |   |  |       | 17.0%     |   |  |  | 40.9%     |   |  | 
|                                                                                                    
|Interest(1)                                                                                          |  |       | 190,002   |           |     |  | n/a       |                    |  |  | n/a     |   |  |       | 69,700    |   |  |  | 259,702   |   |  | 
|                                                                                                    
|Cash
    taxes(1)                                                                                    |  |       | 34,809    |           |     |  | n/a       |                    |  |  | n/a     |   |  |       | 897       |   |  |  | 35,706    |   |  | 
|                                                                                                    
|Segment assets                                                                                       |  |       | 5,891,064 |           |     |  | 1,002,951 |                    |  |  | 587,085 |   |  |       | 1,590,036 |   |  |  | 7,481,100 |   |  | 
|                                                                                                     |  |       |           |           |     |  |          
|Corporate assets                                                                                     |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 229,701   |   |  | 
|                                                                                                    
|Total assets                                                                                         |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 7,710,801 |   |  | 
|                                                                                                    
|Capital expenditures and equipment subsidies by segment                                              |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Capital expenditures                                                                                 |  |       | 189,648   |           |     |  | 35,038    |                    |  |  | (2,531  | ) |  |       | 32,507    |   |  |  | 222,155   |   |  | 
|Equipment subsidies                                                                                  |  |       | 67,628    |           |     |  | 95,248    |                    |  |  |        |   |  |       | 95,248    |   |  |  | 162,876   |   |  | 
|                                                                                                    
|                                                                                                     |  |       | 257,276   |           |     |  | 130,286   |                    |  |  | (2,531  | ) |  |       | 127,755   |   |  |  | 385,031   |   |  | 
|                                                                                                    
|Reconciliation to Consolidated Statements of Cash flows                                              |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  |           |   |  | 
|Additions to property, plant and equipment                                                           |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 257,683   |   |  | 
|Additions to equipment costs (net)                                                                   |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 162,876   |   |  | 
|                                                                                                    
|Total of capital expenditures and equipment subsidies per
    Consolidated Statements of Cash Flows  |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 420,559   |   |  | 
|Increase in working capital related to capital expenditures                                          |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (20,109   | ) |  | 
|Less: Partnership capital
    expenditures(2)                                                        |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (10,976   | ) |  | 
|Less: Satellite services equipment
    profit(4)                                                     |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | (4,443    | ) |  | 
|                                                                                                    
|Total capital expenditures and equipment subsidies reported by
    segments                          |  |       |           |           |     |  |           |                    |  |  |         |   |  |       |           |   |  |  | 385,031   |   |  | 
|                                                                                                    



|    |                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company reports interest and cash taxes on a segmented basis
    for Cable and combined satellite only. It does not report
    interest and cash taxes on a segmented basis for DTH and
    Satellite Services.                                            
|   
|(2) | Consolidated capital expenditures include the Companys
    proportionate share of the Partnerships capital
    expenditures which the Company is required to proportionately
    consolidate (see note 1). As the Partnership is financed by
    its own debt





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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|    |                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | facility with limited recourse to
    the Company, the Partnerships capital expenditures are
    subtracted from the calculation of segmented capital
    expenditures and equipment subsidies.                                                                 
|   
|(3) | Prepayments on IRUs in amounts not
    exceeding the costs to build the fiber subject to the IRUs are
    subtracted from the calculation of segmented capital
    expenditures and equipment subsidies.                                                         
|   
|(4) | The profit from the sale of
    satellite equipment is subtracted from the calculation of
    segmented capital expenditures and equipment subsidies as the
    Company views the profit on sale as a recovery of expenditures
    on customer premise equipment.

16.  COMMITMENTS AND CONTINGENCIES


Commitments




|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)  | During 2001 the Company, through one of its subsidiaries,
    purchased 28 Ku-band transponders and leased 3 C-band
    transponders on the Anik F1 satellite from Telesat Canada
    (Telesat). The Company has posted a letter of credit
    with Telesat to secure the monthly lease payments for the term
    of the lease, which is five years. The posting of this letter of
    credit, which expires in November 2005, reduces the available
    funds that can be drawn under Cancoms operating line of
    credit (see note 9). During the current year, the Company
    entered into an agreement with Telesat to purchase 2 additional
    Ku-band transponders on the Anik F2 at a cost of $4,387. The
    transaction closed subsequent to year end. 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 fifteen years.
|    
|(ii) | The Company has various long-term commitments for the
    maintenance of satellite transponders, lease of transmission
    facilities, and lease of premises as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|           |  |   |           |  |  | 
|---------- |  | - | --------- |  |  | 
|           |  | $ |           |  | 
|          
|2006       |  |   | 102,625   |  |  | 
|2007       |  |   | 93,721    |  |  | 
|2008       |  |   | 90,345    |  |  | 
|2009       |  |   | 84,168    |  |  | 
|2010       |  |   | 82,094    |  |  | 
|Thereafter |  |   | 548,428   |  |  | 
|          
|           |  |   | 1,001,381 |  |  | 
|          



Contingencies








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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








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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Defined benefit pension plan




|                                              |  |      |          |   |      |  |         |   |  | 
|--------------------------------------------- |  | ---- | -------- | - | ---- |  | ------- | - |  | 
|                                              |  | 2005 |          |   | 2004 |  |         |  
|                                              |  | $    |          |   | $    |  |         |  
|                                             
|Accrued benefit obligation, beginning of year |  |      | 61,888   |   |      |  | 47,718  |   |  | 
|Current service cost                          |  |      | 996      |   |      |  | 1,743   |   |  | 
|Interest cost                                 |  |      | 3,930    |   |      |  | 3,202   |   |  | 
|Actuarial losses                              |  |      | 34,330   |   |      |  | 9,495   |   |  | 
|Past service cost                             |  |      |         |   |      |  |        |   |  | 
|Payment of benefits to employees              |  |      | (1,140   | ) |      |  | (270    | ) |  | 
|                                             
|Accrued benefit obligation, end of year       |  |      | 100,004  |   |      |  | 61,888  |   |  | 
|Plan value of assets, end of year             |  |      |         |   |      |  |        |   |  | 
|                                             
|Plan deficit, end of year                     |  |      | (100,004 | ) |      |  | (61,888 | ) |  | 
|                                             



|                                                               |  |      |         |  |      |  |        |  |  | 
|-------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------ |  |  | 
|Reconciliation of accrued benefit obligation to balance sheet  |  | 2005 |         |  | 2004 |  |        | 
|accrued pension benefit liability                              |  | $    |         |  | $    |  |        | 
|                                                              
|Balance of unamortized pension obligation:                     |  |      |         |  |      |  |        |  |  | 
|Unamortized past service costs                                 |  |      | 22,842  |  |      |  | 25,409 |  |  | 
|Unamortized actuarial loss                                     |  |      | 50,963  |  |      |  | 18,384 |  |  | 
|                                                              
|                                                               |  |      | 73,805  |  |      |  | 43,793 |  |  | 
|                                                              
|Accrued pension benefit liability recognized in balance sheet: |  |      |         |  |      |  |        |  |  | 
|Accounts payable and accrued liability                         |  |      | 1,088   |  |      |  | 1,162  |  |  | 
|Long-term liability                                            |  |      | 25,111  |  |      |  | 16,933 |  |  | 
|                                                              
|                                                               |  |      | 26,199  |  |      |  | 18,095 |  |  | 
|                                                              
|Accrued benefit obligation, end of year as above               |  |      | 100,004 |  |      |  | 61,888 |  |  | 
|                                                              



|                              |  |      |      |  |      |  |      |  |  | 
|----------------------------- |  | ---- | ---- |  | ---- |  | ---- |  |  | 
|                              |  | 2005 |      |  | 2004 |  |      | 
|Accrued benefit obligation    |  | %    |      |  | %    |  |      | 
|                             
|Discount rate                 |  |      | 5.00 |  |      |  | 6.25 |  |  | 
|Rate of compensation increase |  |      | 4.00 |  |      |  | 3.00 |  |  | 
|                             





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






|                              |  |      |      |  |      |  |      |      |  |  |      |  |  | 
|----------------------------- |  | ---- | ---- |  | ---- |  | ---- | ---- |  |  | ---- |  |  | 
|                              |  | 2005 |      |  | 2004 |  |      | 2003 |  |  |     
|Benefit cost for the year     |  | %    |      |  | %    |  |      | %    |  |  |     
|                             
|Discount rate                 |  |      | 6.25 |  |      |  | 6.50 |      |  |  | 6.75 |  |  | 
|Rate of compensation increase |  |      | 3.00 |  |      |  | 3.00 |      |  |  | 3.00 |  |  | 
|                             



|                                                                                                                                                                   |  |      |         |   |      |  |        |      |  |  |         |   |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- |  | ------ | ---- |  |  | ------- | - |  | 
|                                                                                                                                                                   |  | 2005 |         |   | 2004 |  |        | 2003 |  |  |        
|                                                                                                                                                                   |  | $    |         |   | $    |  |        | $    |  |  |        
|                                                                                                                                                                  
|Current service cost                                                                                                                                               |  |      | 996     |   |      |  | 1,743  |      |  |  | 1,546   |   |  | 
|Interest cost                                                                                                                                                      |  |      | 3,930   |   |      |  | 3,202  |      |  |  | 2,166   |   |  | 
|Past service cost                                                                                                                                                  |  |      |        |   |      |  |       |      |  |  | 3,400   |   |  | 
|Actuarial losses                                                                                                                                                   |  |      | 34,330  |   |      |  | 9,495  |      |  |  | 10,063  |   |  | 
|Difference between amortization of actuarial loss recognized for
    the year and actual actuarial loss on the accrued benefit
    obligation for the year         |  |      | (32,579 | ) |      |  | (8,321 | )    |  |  | (10,063 | ) |  | 
|Difference between amortization of past service costs recognized
    for the year and actual past service costs on the accrued
    benefit obligation for the year |  |      | 2,567   |   |      |  | 2,567  |      |  |  | 2,567   |   |  | 
|                                                                                                                                                                  
|Pension expense                                                                                                                                                    |  |      | 9,244   |   |      |  | 8,686  |      |  |  | 9,679   |   |  | 
|                                                                                                                                                                  



|            |  |   |        |  |  | 
|----------- |  | - | ------ |  |  | 
|            |  | $ |        |  | 
|           
|2006        |  |   | 1,088  |  |  | 
|2007        |  |   | 1,077  |  |  | 
|2008        |  |   | 1,064  |  |  | 
|2009        |  |   | 1,529  |  |  | 
|2010        |  |   | 3,410  |  |  | 
|2011  2015 |  |   | 29,297 |  |  | 
|           



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



Normal course transactions








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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Corus Entertainment Inc. (Corus)






GT Group Telecom Inc.






Specialty Channels






Burrard Landing Lot 2 Holdings Partnership




Other










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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS










Other transactions


















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Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

Fair values






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



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



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



| |    |                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | The fair value of publicly traded shares included in this
    category is determined by the closing market values for those
    investments. The fair value of investments subject to forward
    sale agreements, which are pledged as collateral for the Zero
    Coupon Loan and match the maturity of the loan, are valued at
    the proceeds received on the loan plus accrued interest thereon.
|
| | b) | The carrying value of other investments in this category
    approximates their fair value.                                                                                                                                                                                                                                                                                                           



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



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



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





|                                   |                                                    |          |           |        |            |  |           |          |  |  |            |   |  |  |           |         |  |  | 
|---------------------------------- | -------------------------------------------------- | -------- | --------- | ------ | ---------- |  | --------- | -------- |  |  | ---------- | - |  |  | --------- | ------- |  |  | 
|                                   |                                                    | 2005     |           |        | 2004      
|                                   |                                                    |          |           |        |           
|                                   |                                                    | Carrying |           |        | Estimated  |  |           | Carrying |  |  | Estimated  |   |  | 
|                                   |                                                    | amount   |           |        | fair value |  |           | amount   |  |  | fair value |   |  | 
|                                   |                                                    | $        |           |        | $          |  |           | $        |  |  | $          |   |  | 
|                                  
|Long-term debt                     |                                                    |          | 2,744,767 |        |            |  | 2,907,389 |          |  |  | 2,650,680  |   |  |  | 2,823,790 |         |  | 
|Derivative financial instruments  |                                                    |          |           |        |            |  |           |          |  |  |            |   |  |  |           |         |  | 
|                                   | Interest exchange agreements                       |          |           |       |            |  |           | 8,509    |  |  |            |  |  |  |           | 17,395  |  |  | 
|                                   | Cross-currency interest rate exchange agreements   |          |           |       |            |  |           | 451,495  |  |  |            |  |  |  |           | 215,598 |  |  | 
|                                   | US currency purchase and purchase option contracts |          |           | 15,695 |            |  |           | 30,093   |  |  |            |  |  |  |           | 17,167  |  |  | 
|                                  
|                                   |                                                    |          | 2,760,462 |        |            |  | 3,397,486 |          |  |  | 2,650,680  |   |  |  | 3,073,950 |         |  | 
|                                  





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS












Credit risks










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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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





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

|                                                      |                               |      |         |         |      |  |         |         |   |  |          |         |   |  | 
|----------------------------------------------------- | ----------------------------- | ---- | ------- | ------- | ---- |  | ------- | ------- | - |  | -------- | ------- | - |  | 
|                                                      |                               | 2005 |         |         | 2004 |  |         | 2003    |   |  |         
|                                                      |                               | $    |         |         | $    |  |         | $       |   |  |         
|                                                     
|Net income (loss)                                     |                               |      | 160,585 |         |      |  | 90,909  |         |   |  | (46,864  | )       |   | 
|Non-cash items:                                       |                               |      |         |         |      |  |         |         |   |  |          |         |   | 
|Amortization                                         |                               |      |         |         |      |  |         |         |   |  |          |         |   | 
|                                                      | Deferred IRU revenue          |      |         | (12,999 | )    |  |         | (12,098 | ) |  |          | (11,984 | ) |  | 
|                                                      | Deferred equipment revenue    |      |         | (71,677 | )    |  |         | (82,711 | ) |  |          | (91,863 | ) |  | 
|                                                      | Deferred equipment costs      |      |         | 210,477 |      |  |         | 229,013 |   |  |          | 251,103 |   |  | 
|                                                      | Deferred charges              |      |         | 6,337   |      |  |         | 7,796   |   |  |          | 21,125  |   |  | 
|                                                      | Property, plant and equipment |      |         | 408,866 |      |  |         | 403,395 |   |  |          | 413,381 |   |  | 
|Future income tax expense (recovery)                  |                               |      | 70,903  |         |      |  | 47,997  |         |   |  | (5,261   | )       |   | 
|Write-down of investments                             |                               |      | 1,937   |         |      |  | 651     |         |   |  | 15,000   |         |   | 
|Gain on redemption of SHELS                           |                               |      |        |         |      |  |        |         |   |  | (119,521 | )       |   | 
|Gain on sale of investments                           |                               |      | (32,163 | )       |      |  | (356    | )       |   |  | (1,957   | )       |   | 
|Loss on sale of satellite assets                      |                               |      |        |         |      |  |        |         |   |  | 3,800    |         |   | 
|Equity loss on investees                              |                               |      | 286     |         |      |  | 250     |         |   |  | 1,921    |         |   | 
|Debt retirement costs                                 |                               |      |        |         |      |  | 2,598   |         |   |  | 10,634   |         |   | 
|Fair value loss on foreign currency forward contracts |                               |      | 19,342  |         |      |  |        |         |   |  |         |         |   | 
|Foreign exchange gain on unhedged long-term debt      |                               |      | (6,260  | )       |      |  | (3,963  | )       |   |  | (32,617  | )       |   | 
|Loss on sale and write-down of assets                 |                               |      |        |         |      |  |        |         |   |  | 124,674  |         |   | 
|Stock option expense                                  |                               |      | 1,454   |         |      |  | 412     |         |   |  |         |         |   | 
|Defined benefit pension plan                          |                               |      | 8,178   |         |      |  | 7,524   |         |   |  | 9,409    |         |   | 
|Other                                                 |                               |      | (1,983  | )       |      |  | 3,353   |         |   |  | 3,195    |         |   | 
|                                                     
|Funds flow from operations                            |                               |      | 763,283 |         |      |  | 694,770 |         |   |  | 544,175  |         |   | 
|                                                     



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

|                                         |  |      |        |   |      |  |        |      |  |  |         |  
|---------------------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------- | -
|                                         |  | 2005 |        |   | 2004 |  |        | 2003 | 
|                                         |  | $    |        |   | $    |  |        | $    | 
|                                         | 
|Accounts receivable                      |  |      | 4,907  |   |      |  | 24,865 |      |  |  | 49,864  |  
|Prepaids and other                       |  |      | (2,043 | ) |      |  | (144   | )    |  |  | 3,369   |  
|Accounts payable and accrued liabilities |  |      | 6,344  |   |      |  | 1,067  |      |  |  | (76,494 | )
|Income taxes payable/recoverable         |  |      | (4,910 | ) |      |  | 5,322  |      |  |  | 8,655   |  
|Unearned revenue                         |  |      | 2,325  |   |      |  | 5,073  |      |  |  | 8,872   |  
|                                        
|                                         |  |      | 6,623  |   |      |  | 36,183 |      |  |  | (5,734  | )
|                                        





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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

|             |  |      |         |  |      |  |         |      |  |  |         | 
|------------ |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|             |  | 2005 |         |  | 2004 |  |         | 2003 | 
|             |  | $    |         |  | $    |  |         | $    | 
|             | 
|Interest     |  |      | 225,621 |  |      |  | 213,326 |      |  |  | 272,110 | 
|Income taxes |  |      | 5,091   |  |      |  | 51      |      |  |  | 3,151   | 
|            



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



|                                                              |  |      |   |  |      |  |        |      |  |  |   | 
|------------------------------------------------------------- |  | ---- | - |  | ---- |  | ------ | ---- |  |  | - | 
|                                                              |  | 2005 |   |  | 2004 |  |        | 2003 | 
|                                                              |  | $    |   |  | $    |  |        | $    | 
|                                                              | 
|Class B Non-Voting shares issued on acquisitions
    [note 2] |  |      |  |  |      |  | 65,000 |      |  |  |  | 
|                                                             





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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





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

|                                                                                          |                                                                         |      |          |         |      |  |         |         |   |  |          |         |  
|----------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ---- | -------- | ------- | ---- |  | ------- | ------- | - |  | -------- | ------- | -
|                                                                                          |                                                                         | 2005 |          |         | 2004 |  |         | 2003    |  
|                                                                                          |                                                                         | $    |          |         | $    |  |         | $       |  
|                                                                                          |                                                                        
|Net income (loss) using Canadian GAAP                                                     |                                                                         |      | 160,585  |         |      |  | 90,909  |         |   |  | (46,864  | )      
|                                                                                          | Add (deduct) adjustments for:                                           |      |          |         |      |  |         |         |   |  |          |         |  
|                                                                                          | Deferred charges (2)                                                    |      |          | 21,802  |      |  |         | 14,424  |   |  |          | (9,849  | )
|                                                                                          | Foreign exchange gains (3)                                              |      |          | 38,146  |      |  |         | 22,899  |   |  |          | 54,527  |  
|                                                                                          | Equity in losses of investees (4)                                       |      |          |        |      |  |         |        |   |  |          | 2,001   |  
|                                                                                          | Entitlement payments on equity instruments (8)                          |      |          | (48,541 | )    |  |         | (62,302 | ) |  |          | (64,827 | )
|                                                                                          | Fair value loss on foreign currency forward contract (9)                |      |          | (7,700  | )    |  |         |        |   |  |          |        |  
|                                                                                          | Income tax effect of adjustments                                        |      |          | 5,411   |      |  |         | 15,724  |   |  |          | 18,005  |  
|                                                                                          | Effect of future income tax rate reductions on differences              |      |          |        |      |  |         | (534    | ) |  |          |        |  
|                                                                                         
|Net income (loss) using US GAAP                                                           |                                                                         |      | 169,703  |         |      |  | 81,120  |         |   |  | (47,007  | )      
|                                                                                         
|Unrealized foreign exchange loss on translation of
    self-sustaining foreign operations |                                                                         |      | (79      | )       |      |  | (38     | )       |   |  | (1,031   | )      
|Unrealized gains on available-for-sale securities, net of
    tax (7)                     |                                                                         |      |          |         |      |  |         |         |   |  |          |        
|                                                                                          | Unrealized holding gains arising during the year                        |      |          | 23,737  |      |  |         | 5,456   |   |  |          | 1,361   |  
|                                                                                          | Less: reclassification adjustments for gains included in net
    income |      |          | (21,074 | )    |  |         | (1,055  | ) |  |          | (95,879 | )
|                                                                                         
|                                                                                          |                                                                         |      | 2,584    |         |      |  | 4,363   |         |   |  | (95,549  | )      
|Adjustment to fair value of derivatives (9)                                               |                                                                         |      | (186,398 | )       |      |  | (67,408 | )       |   |  | (224,341 | )      
|Foreign exchange gains on hedged long-term debt (10)                                      |                                                                         |      | 99,930   |         |      |  | 57,704  |         |   |  | 136,975  |        
|Minimum liability for pension plan (12)                                                   |                                                                         |      | (11,433  | )       |      |  | (3,864  | )       |   |  | (1,928   | )      
|Effect of future income tax rate reductions on differences                                |                                                                         |      |         |         |      |  | (63     | )       |   |  |         |        
|                                                                                         
|                                                                                          |                                                                         |      | (95,317  | )       |      |  | (9,268  | )       |   |  | (184,843 | )      
|                                                                                         
|Comprehensive income (loss) using US GAAP                                                 |                                                                         |      | 74,386   |         |      |  | 71,852  |         |   |  | (231,850 | )      
|                                                                                         
|Earnings (loss) per share  basic and
    diluted                                         |                                                                         |      |          |         |      |  |         |         |   |  |          |        
|                                                                                          | Net income (loss) per share using US GAAP                               |      |          | 0.74    |      |  |         | 0.35    |   |  |          | (0.20   | )
|                                                                                          | Comprehensive income (loss) per share using US GAAP                     |      |          | 0.33    |      |  |         | 0.31    |   |  |          | (1.00   | )
|                                                                                         





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






Balance sheet items using US GAAP


|                                    |  |          |           |  |      |  |           |          |  |  |           |  |  |  |           |  |  | 
|----------------------------------- |  | -------- | --------- |  | ---- |  | --------- | -------- |  |  | --------- |  |  |  | --------- |  |  | 
|                                    |  | 2005     |           |  | 2004 |  |           |         
|                                    |  |          |           |  |      |  |           |         
|                                    |  | Canadian |           |  | US   |  |           | Canadian |  |  | US        |  |  | 
|                                    |  | GAAP     |           |  | GAAP |  |           | GAAP     |  |  | GAAP      |  |  | 
|                                    |  | $        |           |  | $    |  |           | $        |  |  | $         |  |  | 
|                                   
|Investments and other assets (7)    |  |          | 36,229    |  |      |  | 72,374    |          |  |  | 43,965    |  |  |  | 72,998    |  |  | 
|Deferred charges (2)(10)(11)        |  |          | 237,999   |  |      |  | 137,590   |          |  |  | 267,439   |  |  |  | 147,353   |  |  | 
|Broadcast licenses (1) (5) (6)      |  |          | 4,684,647 |  |      |  | 4,659,413 |          |  |  | 4,685,582 |  |  |  | 4,660,348 |  |  | 
|Other long-term liabilities (9)(12) |  |          | 40,806    |  |      |  | 564,779   |          |  |  | 16,933    |  |  |  | 301,505   |  |  | 
|Deferred credits (10)(11)           |  |          | 1,010,723 |  |      |  | 667,114   |          |  |  | 898,980   |  |  |  | 674,718   |  |  | 
|Future income taxes                 |  |          | 1,054,816 |  |      |  | 1,004,206 |          |  |  | 982,281   |  |  |  | 943,531   |  |  | 
|Long-term debt (8)                  |  |          | 2,693,387 |  |      |  | 3,148,162 |          |  |  | 2,307,583 |  |  |  | 3,001,161 |  |  | 
|Shareholders equity                |  |          | 2,053,110 |  |      |  | 1,379,083 |          |  |  | 2,492,018 |  |  |  | 1,660,593 |  |  | 
|                                   



|                                            |  |      |           |   |      |  |           |   |  | 
|------------------------------------------- |  | ---- | --------- | - | ---- |  | --------- | - |  | 
|                                            |  | 2005 |           |   | 2004 |  |           |  
|                                            |  | $    |           |   | $    |  |           |  
|                                           
|Shareholders equity using Canadian GAAP    |  |      | 2,053,110 |   |      |  | 2,492,018 |   |  | 
|Amortization of intangible assets (1)       |  |      | (124,179  | ) |      |  | (124,179  | ) |  | 
|Deferred charges (2)                        |  |      | (17,519   | ) |      |  | (35,817   | ) |  | 
|Equity in loss of investees (4)             |  |      | (35,710   | ) |      |  | (35,710   | ) |  | 
|Gain on sale of subsidiary (5)              |  |      | 15,309    |   |      |  | 15,309    |   |  | 
|Gain on sale of cable systems (6)           |  |      | 47,745    |   |      |  | 47,745    |   |  | 
|Equity instruments (3)(8)                   |  |      | (455,563  | ) |      |  | (688,520  | ) |  | 
|Derivative not accounted for as a hedge (9) |  |      | (1,805    | ) |      |  |          |   |  | 
|Accumulated other comprehensive income      |  |      | (101,940  | ) |      |  | (9,809    | ) |  | 
|Cumulative translation adjustment           |  |      | (365      | ) |      |  | (444      | ) |  | 
|                                           
|Shareholders equity using US GAAP          |  |      | 1,379,083 |   |      |  | 1,660,593 |   |  | 
|                                           





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|                                                                                          |  |      |          |   |      |  |          |   |  | 
|----------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | - |  | 
|                                                                                          |  | 2005 |          |   | 2004 |  |          |  
|                                                                                          |  | $    |          |   | $    |  |          |  
|                                                                                         
|Unrealized foreign exchange gain on translation of
    self-sustaining foreign operations |  |      | 365      |   |      |  | 444      |   |  | 
|Unrealized gains on investments (7)                                                       |  |      | 29,729   |   |      |  | 23,880   |   |  | 
|Fair value of derivatives (9)                                                             |  |      | (386,020 | ) |      |  | (199,622 | ) |  | 
|Foreign exchange gains on hedged long-term debt (10)                                      |  |      | 271,226  |   |      |  | 171,296  |   |  | 
|Minimum liability for pension plan (12)                                                   |  |      | (17,240  | ) |      |  | (5,807   | ) |  | 
|                                                                                         
|                                                                                          |  |      | (101,940 | ) |      |  | (9,809   | ) |  | 
|                                                                                         





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



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



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



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



|    |                                                      
|--- | -----------------------------------------------------
|(3) | Foreign exchange gains (losses) on equity instruments



| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | US GAAP requires exchange gains (losses) on translation of
    equity instruments treated as debt as described in item 8
    below, to be included in income or expense.



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



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





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








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



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



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



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



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



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



|    |                   
|--- | ------------------
|(8) | Equity instruments



| |                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Equity instruments are classified as equity under Canadian GAAP
    and interest thereon net of taxes is recorded as dividends.
    Under US GAAP, these instruments would be classified as debt and
    interest thereon recorded as interest expense.



|    |                                              
|--- | ---------------------------------------------
|(9) | Derivative instruments and hedging activities



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





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##### Table of Contents



Shaw Communications Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








|     |                                                         
|---- | --------------------------------------------------------
|(10) | Foreign exchange gains (losses) on hedged long-term debt



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



|     |                                                    
|---- | ---------------------------------------------------
|(11) | Subscriber connection fee revenue and related costs



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



|     |                                   
|---- | ----------------------------------
|(12) | Minimum liability for pension plan



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys unfunded non-contributory defined benefit
    pension plan for certain of its senior executives has an
    accumulated benefit obligation of $75,770 (2004 
    $52,507). Under US GAAP, an additional minimum liability is to
    be recorded for the difference between the accumulated benefit
    obligation and the accrued pension liability. The additional
    liability is offset in deferred charges up to an amount not
    exceeding the unamortized past service costs. The remaining
    difference is recognized in other comprehensive income, net of
    tax. Under Canadian GAAP, the accumulated benefit obligation and
    additional minimum liability are not recognized.



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



|                                     |  |             |  |         |  |      |        |  |      |  |         |   |  | 
|------------------------------------ |  | ----------- |  | ------- |  | ---- | ------ |  | ---- |  | ------- | - |  | 
|                                     |  |             |  | 2005    |  | 2004 |        |  | 2003 |  |         |  
|                                     |  |             |  | $       |  | $    |        |  | $    |  |         |  
|                                    
|Net income (loss), US GAAP           |  | As reported |  | 169,703 |  |      | 81,120 |  |      |  | (47,007 | ) |  | 
|                                     |  | Pro forma   |  | 163,931 |  |      | 64,424 |  |      |  | (67,843 | ) |  | 
|Net income (loss) per share, US GAAP |  | As reported |  | 0.74    |  |      | 0.35   |  |      |  | (0.20   | ) |  | 
|                                     |  | Pro forma   |  | 0.72    |  |      | 0.28   |  |      |  | (0.29   | ) |  | 
|                                    





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





|    |                  
|--- | -----------------
|23. | SUBSEQUENT EVENTS







---



##### Table of Contents



Shaw Communications Inc.


FIVE YEARS IN REVIEW


August 31, 2005


|                                                 |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|------------------------------------------------ |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | - |  | ---- | --------- | - |  |  | --------- | - |  | 
|                                                 |  | 2005 |           |  | 2004 |  |           | 2003 |  |  | 2002      |   |  | 2001 |           |   | 
|                                                
|($000s except per share amounts)                |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|Service revenue                                  |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|Cable                                            |  |      | 1,598,369 |  |      |  | 1,491,569 |      |  |  | 1,459,833 |   |  |      | 1,367,563 |   |  |  | 1,120,244 |   |  | 
|DTH                                              |  |      | 530,729   |  |      |  | 505,637   |      |  |  | 450,176   |   |  |      | 361,116   |   |  |  | 257,912   |   |  | 
|Satellite                                        |  |      | 80,712    |  |      |  | 82,543    |      |  |  | 88,412    |   |  |      | 95,870    |   |  |  | 97,695    |   |  | 
|                                                
|                                                 |  |      | 2,209,810 |  |      |  | 2,079,749 |      |  |  | 1,998,421 |   |  |      | 1,824,549 |   |  |  | 1,475,851 |   |  | 
|                                                
|Service operating income
    (loss)(1)           |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|Cable                                            |  |      | 797,583   |  |      |  | 779,579   |      |  |  | 727,458   |   |  |      | 608,916   |   |  |  | 470,700   |   |  | 
|DTH                                              |  |      | 141,687   |  |      |  | 111,150   |      |  |  | 52,814    |   |  |      | (14,103   | ) |  |  | (58,512   | ) |  | 
|Satellite                                        |  |      | 42,723    |  |      |  | 41,690    |      |  |  | 38,619    |   |  |      | 40,203    |   |  |  | 44,898    |   |  | 
|Corporate restructuring and inventory write-down |  |      |          |  |      |  |          |      |  |  | (13,250   | ) |  |      | (4,600    | ) |  |  |          |   |  | 
|Litigation settlements                           |  |      |          |  |      |  | (6,484    | )    |  |  | 12,000    |   |  |      |          |   |  |  |          |   |  | 
|                                                
|                                                 |  |      | 981,993   |  |      |  | 925,935   |      |  |  | 817,641   |   |  |      | 630,416   |   |  |  | 457,086   |   |  | 
|                                                
|Net income (loss)                                |  |      | 160,585   |  |      |  | 90,909    |      |  |  | (46,864   | ) |  |      | (284,629  | ) |  |  | (156,067  | ) |  | 
|                                                
|Earnings (loss) per share  basic and diluted    |  |      | 0.64      |  |      |  | 0.22      |      |  |  | (0.38     | ) |  |      | (1.41     | ) |  |  | (0.89     | ) |  | 
|                                                
|Funds flow from
    operations(2)                |  |      | 763,283   |  |      |  | 694,770   |      |  |  | 544,175   |   |  |      | 332,109   |   |  |  | 210,514   |   |  | 
|                                                
|Balance sheet                                    |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|Total assets                                     |  |      | 7,416,938 |  |      |  | 7,556,904 |      |  |  | 7,710,801 |   |  |      | 8,622,061 |   |  |  | 8,891,329 |   |  | 
|Long-term debt (including current portion)       |  |      | 2,744,767 |  |      |  | 2,650,680 |      |  |  | 2,917,068 |   |  |      | 3,469,637 |   |  |  | 3,010,348 |   |  | 
|                                                
|Cash dividends declared per share                |  |      |           |  |      |  |           |      |  |  |           |   |  |      |           |   |  |  |           |   |  | 
|Class A                                          |  |      | 0.305     |  |      |  | 0.155     |      |  |  | 0.045     |   |  |      | 0.045     |   |  |  | 0.045     |   |  | 
|Class B                                          |  |      | 0.310     |  |      |  | 0.160     |      |  |  | 0.050     |   |  |      | 0.050     |   |  |  | 0.050     |   |  | 
|                                                



|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See Key performance drivers on page 7.                                                                                                               
|   
|(2) | Funds flow from operations is presented before changes in
    non-cash working capital as presented in the Consolidated
    Statements of Cash Flows.





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Shaw Communications Inc.


SHAREHOLDERS INFORMATION


August 31, 2005


Share Capital and Listings




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


|                                     |  |            |       |  |             |       |       |        |  |  |            |  |  | 
|------------------------------------ |  | ---------- | ----- |  | ----------- | ----- | ----- | ------ |  |  | ---------- |  |  | 
|                                     |  |            |       |  |             | Total |       |        | 
|Quarter                              |  | High Close |       |  | Low Close   |       |       | Volume |  |  |           
|                                    
|September 1, 2004 to August 31, 2005 |  |            |       |  |             |       |       |        |  |  |            |  |  | 
|First                                |  |            | 22.55 |  |             |       | 20.07 |        |  |  | 20,050,796 |  |  | 
|Second                               |  |            | 22.53 |  |             |       | 20.15 |        |  |  | 18,545,790 |  |  | 
|Third                                |  |            | 27.16 |  |             |       | 22.90 |        |  |  | 42,245,645 |  |  | 
|Fourth                               |  |            | 27.03 |  |             |       | 24.25 |        |  |  | 28,675,933 |  |  | 
|                                    
|Closing price, August 31, 2005       |  | 25.08      |       |  | 109,518,164 |       |       |       
|                                    

Share Splits


www.shaw.ca/investors






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Shaw Communications Inc.


CORPORATE INFORMATION


August 31, 2005


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





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