Shaw 2011 Annual Report Download - page 67

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
Other long-term liabilities were up $59.6 million mainly due to the non-current portion of CRTC
benefit obligations and benefit plans as a result of the Media acquisition as well as current year
defined benefit pension plan expense partially offset by the aforementioned reclassification of
the obligation in respect of the principal component of the US $300 million amended cross-
currency interest rate agreements.
Derivatives decreased $6.5 million as amounts have been reclassified to current liabilities
based on settlement dates.
Future income taxes increased $247.5 million primarily due to the Media acquisition partially
offset by current year tax recovery in respect of discontinued operations.
Share capital increased $383 million due to the issuance of 12,000,000 Preferred Shares for
net proceeds of $290.9 million as well as issuance of 4,594,347 Class B Non-Voting Shares
under the Company’s option plan and Dividend Reinvestment Plan (“DRIP”) for $89.8 million.
As of November 22, 2011, share capital is as reported at August 31, 2011 with the exception
of the issuance of 1,208,779 Class B Non-Voting Shares under the DRIP and upon exercise of
options subsequent to year end. Contributed surplus increased due to stock-based
compensation expense recorded in the current year. Accumulated other comprehensive income
decreased due settlement of the forward purchase contracts in respect of the closing of the
acquisition of the broadcasting business. Non-controlling interests arose in the current year due
to a number of non-wholly owned specialty channels acquired as part of the Media acquisition.
V. CONSOLIDATED CASH FLOW ANALYSIS
Operating activities
Change
(In $000’s Cdn) 2011 2010 2009
2011
%
2010
%
Funds flow from continuing
operations 1,443,179 1,376,799 1,323,840 4.8 4.0
Net decrease (increase) in non-cash
working capital balances related
to continuing operations (201,528) 81,852 59,090 >(100.0) 38.5
1,241,651 1,458,651 1,382,930 (14.9) 5.5
Funds flow from continuing operations increased in 2011 over 2010 due to the combined
impact of higher operating income before amortization adjusted for non-cash program rights
expenses partially offset by higher interest expense, funding of CRTC benefit obligations, the
realized loss on the mark-to-market payments to terminate the cross-currency interest rate
exchange agreements in conjunction with repayment of the CW Media term loan, higher current
income taxes and the acquisition, integration and restructuring costs in the current year. In
2010, funds flow from continuing operations increased due to growth in operating income
before amortization partially offset by higher current income tax expense.
The year-over-year net change in non-cash working capital balances is primarily due to the
seasonal advertising impact of the new Media division on accounts receivable in 2011, the
timing of payment of accounts payable and accrued liabilities and current taxes payable.
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