Shaw 2010 Annual Report Download - page 63

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loss on the notional amounts of the derivatives relating to the hedged long-term debt prior to the
redemption dates.
Deferred credits declined $26.6 million due to amortization of deferred IRU revenue of
$12.5 million and a decrease in deferred equipment revenue of $14.3 million.
Future income taxes increased $115.0 million primarily due to the acquisition of Mountain
Cablevision and current year tax expense.
Share capital increased $136.6 million primarily due to the issuance of 6,141,250 Class B Non-
Voting Shares in connection with the acquisition of Mountain Cablevision for $120.0 million and
the issuance of 2,862,969 Class B Non-Voting Shares under the Company’s option plans for
$49.8 million partially offset by the repurchase of 6,100,000 Class B Non-Voting Shares for
$118.1 million of which $33.0 million reduced stated share capital and $85.1 million was charged
against retained earnings. As of October 31, 2010, share capital is as reported at August 31, 2010
with the exception of the issuance of 886,816 Class B Non-Voting Shares upon exercise of options
subsequent to the quarter end. Contributed surplus increased due to stock-based compensation
expense recorded in the current year. Accumulated other comprehensive loss decreased primarily
due to reclassifying the remaining losses on the cross-currency interest rate exchange agreements
into income upon redemption of the underlying US denominated long-term debt.
V. CONSOLIDATED CASH FLOW ANALYSIS
Operating activities
(In $000’s Cdn) 2010 2009 2008
2010
%
2009
%
Change
Funds flow from operations 1,375,403 1,323,840 1,222,895 3.9 8.3
Net decrease in non-cash
working capital balances
related to operations 81,756 59,090 19,304 38.4 206.1
1,457,159 1,382,930 1,242,199 5.4 11.3
Funds flow from operations increased year-over-year due to growth in service operating income
before amortization partially offset by current income tax expense. The year-over-year net change in
non-cash working capital balances is primarily due to timing of collection of accounts receivable
and payment of accounts payable and accrued liabilities in addition to the provision for current
taxes payable as the Company became cash taxable in late 2009.
Investing activities
(In $000’s Cdn) 2010 2009 2008 2010 2009
Increase
Cash flow used in
investing activities (1,743,977) (966,716) (734,135) (777,261) (232,581)
Cash requirements were higher in 2010 due to the cash outlay of $744.1 million and
$158.8 million in respect of the Company’s initial investment in CW Media and the Mountain
Cablevision business acquisition in Hamilton, Ontario, respectively, partially offset by the final cash
outlay of $152.5 million in the prior year in respect of deposits for the wireless spectrum licenses.
59
Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2010