Shaw 2012 Annual Report Download - page 56

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2012
Funds flow from continuing operations decreased over the comparative year as higher operating
income before amortization adjusted for non-cash program rights expenses in the current year
and charges in the prior year for termination of swap contracts and business acquisition,
integration and restructuring expenses were more than offset by the combined impact of the
settlement of the amended cross-currency interest rate agreements as well as increased current
income taxes, program rights purchases and CRTC benefit obligation funding in the current
year. The net change in non-cash working capital balances related to continuing operations
fluctuated over the comparative period due to fluctuations in accounts receivable and the
timing of payment of current income taxes payable and accounts payable and accrued
liabilities.
Investing activities
(In $millions Cdn) 2012 2011 Decrease
Cash flow used in investing activities (983) (1,350) 367
Cash requirements for investing activities decreased over the comparable year due to amounts
paid to complete the Media business acquisition in 2011 and fluctuations in inventory levels
partially offset by the higher capital expenditures in the current year.
Financing activities
The changes in financing activities during 2012 and 2011 were as follows:
(In $millions Cdn) 2012 2011
Bank credit facility arrangement costs (4) –
Issuance of Cdn $500 million 5.50% senior notes –498
Issuance of Cdn $800 million 6.75% senior notes –779
Issuance of Preferred Shares –300
Senior notes and Preferred Shares issuance costs (17)
Repayment of CW Media US $390 million term loan (395)
Redemption of CW Media US $338 million 13.5% senior notes (334)
Dividends (333) (352)
Distributions paid to non-controlling interests (26) (22)
Senior notes prepayment premium –(19)
Issuance of Class B Non-Voting Shares 17 46
Repayment of Partnership debt (1) (1)
Cash flow provided by financing activities (347) 483
VI. LIQUIDITY AND CAPITAL RESOURCES
In the current year, the Company generated $482 million of free cash flow. Shaw used its free
cash flow along with cash of $16 million, proceeds on issuance of Class B Non-Voting Shares of
$17 million and other net items of $25 million to pay common share dividends of $318
million, fund the $162 million on settlement of amended cross-currency interest rate
agreements, invest an additional net $42 million in program rights and purchase the remaining
interests in two specialty channels for $18 million.
52