Shaw 2011 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2011 Shaw annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
The Company’s DRIP allows holders of Class A Shares and Class B Non-Voting Shares who are
residents of Canada to automatically reinvest monthly cash dividends to acquire additional
Class B Non-Voting Shares. During the year, the Company announced that the Class B
Non-Voting Shares distributed under its DRIP would be new shares issued from treasury at a
2% discount from the 5 day weighted average market price immediately preceding the
applicable dividend payment date. Previously, the Class B Non-Voting Shares were acquired on
the open market at prevailing market prices. The change was effective for the May 30, 2011
dividend payment and to August 31, 2011 has resulted in cash savings and incremental Class
B Non-Voting Shares of $39.4 million.
On November 25, 2010 Shaw received the approval of the TSX to renew its normal course
issuer bid to purchase its Class B Non-Voting Shares for a further one year period. The Company
is authorized to acquire up to 37,000,000 Class B Non-Voting Shares during the period
December 1, 2010 to November 30, 2011. No shares were repurchased during the current
year.
At August 31, 2011, the Company held $443.4 million in cash and cash equivalents and had
access to $1 billion of available credit facilities. Based on available credit facilities and
forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations
and obligations during the upcoming fiscal year. On a longer-term basis, Shaw expects to
generate free cash flow and have borrowing capacity sufficient to finance foreseeable future
business plans and refinance maturing debt.
Debt structure
Shaw structures its borrowings generally on a stand-alone basis. The borrowings of Shaw are
unsecured. While certain non-wholly owned subsidiaries are subject to contractual restrictions
which may prevent the transfer of funds to Shaw, there are no similar restrictions with respect
to wholly-owned subsidiaries of the Company.
Shaw’s borrowings are subject to covenants which include maintaining minimum or maximum
financial ratios. At August 31, 2011, Shaw is in compliance with these covenants and based on
current business plans, the Company is not aware of any condition or event that would give rise
to non-compliance with the covenants over the life of the borrowings.
Off-balance sheet arrangement and guarantees
Guarantees
Generally it is not the Company’s policy to issue guarantees to non-controlled affiliates or third
parties; however, it has entered into certain agreements as more fully described in Note 17 to
the Consolidated Financial Statements. As disclosed thereto, Shaw believes it is remote that
these agreements would require any cash payment.
67