Shaw 2009 Annual Report Download - page 42

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Highlights
kNet income was $535.2 million for the year compared to $671.6 million in 2008 and
$388.5 million in 2007.
kEarnings per share were $1.25 compared to $1.56 in 2008 and $0.90 in 2007.
kService revenue for the year improved 9.2% to $3.39 billion from $3.10 billion last year
and $2.77 billion in 2007.
kService operating income before amortization of $1.54 billion was up 9.3% over last
year’s amount of $1.41 billion and $1.24 billion in 2007.
kConsolidated free cash flow increased to $504.4 million from $452.6 million in 2008
and $356.2 million in 2007.
kDuring 2009, the Company increased the dividend rate on Shaw’s Class A Participating
Shares and Class B Non-Voting Participating Shares to an equivalent dividend rate of
$0.84 and $0.8375, respectively. Dividends paid in 2009 increased almost 16% over
2008 to $352 million.
kOn March 27, 2009 the Company closed a $600 million offering of 6.50% senior notes
due June 2, 2014 and on April 15, 2009 Shaw redeemed $130.0 million of Videon
CableSystems Inc. senior debentures.
kThe Company repurchased for cancellation 1,683,000 Class B Non-Voting Shares for
$33.6 million during 2009.
kIn October 2009 the Company closed a $1.25 billion offering of 5.65% senior notes
due October 1, 2019. The net proceeds were used to repay near maturing debt
including its US$440 million senior notes, US$255 million senior notes, and
US$300 million senior notes.
kMost recently on November 9, 2009, the Company issued $650 million senior notes at
a rate of 6.75% due 2039. Estimated net proceeds (after issuance at a discount of
$4.4 million and issue and underwriting expenses) of $642 million will be used for
general corporate purposes, working capital, capital expenditures and wireless
investments.
Revenue and operating expenses
2009 vs. 2008
Consolidated service revenue of $3.39 billion for the year improved 9.2% over the prior year. The
improvement was primarily due to customer growth and rate increases. Consolidated service
operating income before amortization improved 9.3% over the comparable period to $1.54 billion.
The increase was driven by the revenue improvements partially offset by higher employee and other
costs related to growth.
Throughout 2009 subscriber growth was solid. The Company’s focus on Digital deployment,
combined with the consumers increased demand for HDTV, drove record Digital growth during
the year. Shaw added over 388,000 new subscribers increasing its Digital penetration of Basic from
40% at August 31, 2008 to almost 57% at August 31, 2009.
2008 vs. 2007
Consolidated service revenue of $3.10 billion for 2008 improved 11.9% over 2007. The increase
was primarily due to customer growth and rate increases. Consolidated service operating income
before amortization was up 13.6% over the comparable period to $1.41 billion. The increase was
driven by the revenue improvements partially offset by higher employee and other costs related to
growth.
38
Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2009