Shaw 2011 Annual Report Download - page 63

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
2011 vs. 2010
OPERATING HIGHLIGHTS
ŠSatellite revenue of $827.5 million improved 2.9% over the comparable period
ŠOperating income before amortization of $287.6 million improved 2.6%, excluding the
one-time Part II fee recovery last year
ŠFree cash flow for the year was $104.8 million
Revenue of $827.5 million for 2011 was up 2.9% over last year. The improvement was
primarily due to customer rate increases. Operating income before amortization, excluding the
one-time Part II fee recovery of $26.6 million, improved 2.6%.
Total capital investment of $106.8 million increased over last year primarily due to the
payment to Telesat in the current period related to the new Anik G1 satellite under
construction. Shaw Direct has entered into agreements with Telesat to acquire capacity on the
new satellite expected to be available early in fiscal 2013. The capacity will provide bandwidth
for expanded customer choice, including new HD and other advanced services. Customer
satellite dishes recently began to be deployed with new outdoor equipment which will be
capable of receiving signals from three satellites, including Anik G1.
During 2011, Shaw Direct also launched a new entry level HD receiver. With this addition, all
new receivers are HD and MPEG-4 technology capable which allows for additional channels to
be added with existing satellite capacity.
2010 vs. 2009
OPERATING HIGHLIGHTS
ŠDuring 2010 Shaw Direct added 4,855 customers and as at August 31, 2010 DTH
customers total 905,796.
ŠFree cash flow of $152.5 million for 2010 compares to $165.0 million in 2009.
ŠIn March 2010 Shaw Direct entered into agreements with Telesat to acquire capacity on
a new satellite expected to be available late in calendar 2012.
Revenue of $804.6 million for 2010 was up 3.8% over the comparable year. The improvement
was primarily due to rate increases and customer growth the total of which was partially offset
by lower revenues in the Satellite services division related to various contract renegotiations.
Operating income before amortization improved 12.5% over the comparable twelve month
period to $306.7 million. The improvement was due to revenue related growth partially offset
by LPIF costs. The 2010 period included a one-time Part II fee recovery of $26.6 million.
Excluding the recovery, the annual improvement was 2.7%.
Total capital investment of $85.6 million increased over the prior year spend of $81.5 million.
Success based capital was higher mainly due to increased activations as well as lower customer
pricing.
Shaw Direct continually strives to deliver an exceptional customer experience through leading
technology, innovative programming and high quality customer service. During 2010 Shaw
Direct introduced a new HD PVR with advanced features and launched a number of HD
channels including CNN HD and Global Toronto HD. At August 31, 2010 Shaw Direct offered
65 HD channels to its 395,000 HD customers.
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