Shaw 2012 Annual Report Download - page 44

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2012
lower operating income before amortization of $66 million and increased income tax expense of
$31 million. The fourth quarter also included a loss of $26 million in respect of the electrical
fire at the Company’s head office offset by a pension curtailment gain of $25 million. In the
third quarter of 2012, net income increased by $70 million due to higher operating income
before amortization of $74 million and lower amortization of $9 million partially offset by
increased income tax expense of $17 million. In the second quarter of 2012, net income
decreased by $24 million due to a decline in operating income before amortization of $73
million partially offset by lower income tax expense of $53 million. Net income increased by
$118 million in the first quarter of 2012 due to the combined impact of higher operating
income before amortization of $85 million and income tax expense of $18 million in the first
quarter and the loss from discontinued operations of $84 million and gain on redemption of
debt of $23 million recorded in the preceding quarter. The first and second quarters of 2011
were impacted by the Media acquisition. As a result, net income increased $153 million in the
second quarter of 2011 due to the impact of the CRTC benefit obligation of $139 million and
acquisition, integration and restructuring costs of $58 million recorded in the first quarter and
higher operating income before amortization and foreign exchange gain on unhedged long-term
debt in the second quarter, 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 $32 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 $117
million due to lower operating income before amortization of $105 million and the loss of $83
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. 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:
2012 2011
Subscriber Statistics First Second Third Fourth First Second Third Fourth
Basic cable customers (22,768) (9,946) (21,515) (16,474) (7,542) (13,662) (13,577) (16,207)
Digital customers 59,566 46,564 246 (7,907) 62,216 35,403 19,202 49,548
Internet customers 10,685 18,681 (429) 6,062 18,752 10,772 11,165 13,528
Digital Phone lines 22,969 54,407 29,142 24,185 49,842 32,512 31,404 22,776
DTH customers 531 1,274 (1,820) 1,155 (1,539) 2,176 1,644 806
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