Shaw 2011 Annual Report Download - page 49

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
the total of which was partially offset by increases in interest expense, loss on derivative
instruments and income tax expense. During the third quarter of 2011 net income increased by
$35.4 million due to higher operating income before amortization and a lower loss on derivative
instruments partially offset by increased income taxes, a lower foreign exchange gain on
unhedged long-term debt and the impact of the restructuring activities undertaken by the
Company. In the fourth quarter of 2011 net income declined $120.2 million due to lower
operating income before amortization of $104.8 million and the loss of $82.4 million in
respect of the wireless discontinued operations partially offset by the gain on redemption of
debt and the aforementioned restructuring activities in the previous quarter. Net income
increased $24.5 million in the second quarter of 2010 mainly due to items recorded in the first
quarter which included debt retirement costs of $81.6 million in respect of the US senior note
redemptions, a loss on derivative instruments of $44.4 million, the one-time Part II fee
recovery of $75.3 million and an income tax recovery of $17.6 million related to reductions in
corporate income tax rates. During the third quarter of 2010 net income increased $19.5
million mainly due to higher operating income before amortization and lower amortization. Net
income declined $36.6 million in the fourth quarter of 2010 due to lower operating income
before amortization of $11.5 million and higher amortization expense of $14.7 million. As a
result of the aforementioned changes in net income, basic and diluted earnings per share have
trended accordingly.
The following further assists in explaining the trend of quarterly revenue and operating income
before amortization:
Growth in subscriber statistics as follows:
2011 2010
Subscriber Statistics First Second Third Fourth First Second Third Fourth
Basic cable customers (7,542) (13,662) (13,577) (16,207) (1,416) (1,055) 2,322 2,559
Digital customers 62,216 35,403 19,202 49,548 88,259 98,544 87,092 54,946
Internet customers 18,752 10,772 11,165 13,528 36,242 26,735 25,661 21,374
Digital Phone lines 49,842 32,512 31,404 22,776 61,461 54,922 66,123 51,896
DTH customers (1,539) 2,176 1,644 806 1,097 1,071 1,856 831
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