Shaw 2013 Annual Report Download - page 10

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S
haw
C
ommunications Inc
.
MANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
August
,
I. INTR
O
D
UC
TI
O
NT
O
THE B
US
INE
SS
A. Company overview – core business and strategie
s
Shaw Communications Inc. (“Shaw” or the “Company” or “Corporation”) is a diversifie
d
C
anad
i
an commun
i
cat
i
ons and med
i
a com
p
an
y
,
p
rov
i
d
i
n
g
consumers w
i
th broadband cabl
e
t
elev
i
s
i
on, H
i
gh-
S
peed Internet, Home Phone, telecommun
i
cat
i
ons serv
i
ces
(
through
S
ha
w
B
usiness), satellite direct-to-home services (through Shaw Direct) and engaging programmin
g
content
(
throu
g
h
S
haw Med
i
a
)
.
S
haw serves
3
.
3
m
i
ll
i
on customers, throu
g
h a rel
i
able an
d
extens
i
ve
fi
bre network.
S
haw Med
i
a operates one o
f
the largest convent
i
onal telev
i
s
i
on
n
etworks in Canada, Global Television, and numerous specialty networks. It provides customers
w
i
th h
ig
h-
q
ual
i
t
y
enterta
i
nment,
i
n
f
ormat
i
on and commun
i
cat
i
ons serv
i
ces, ut
i
l
i
z
i
n
g
a var
i
et
y
o
f
di
str
i
but
i
on technolog
i
es.
S
haw’s bus
i
ness
i
s enca
p
sulated w
i
th
i
n
i
ts v
i
s
i
on statement:
“
We, the lead
i
n
g
enterta
i
nment
and commun
i
cat
i
ons company, del
i
ver except
i
onal customer exper
i
ence through outstand
i
n
g
people sharing Shaw values.”
Shaw’s strategy is to maximize shareholder value through the generation of free cash flow
.
1
T
he
ke
y
elements of this strate
gy
include: levera
g
in
g
its network infrastructure and
p
ro
g
rammin
g
assets to o
ff
er customers a w
i
der var
i
et
y
o
fp
roducts and serv
i
ces; enhanc
i
n
g
ex
i
st
i
n
gp
roducts
t
o provide greater value to customers; providing exceptional customer service; bundling product
o
fferin
g
sto
p
rovide value to both Shaw and the customer; and focusin
g
on sound ca
p
ita
l
m
ana
g
ement and o
p
erat
i
onal e
ffi
c
i
enc
i
es to ma
i
nta
i
n a com
p
et
i
t
i
ve ed
g
e.
The strate
gy
also
i
ncludes
p
romot
i
n
g
brand awareness, stren
g
then
i
n
g
the
S
haw name
f
rom
coast to coast. The
S
haw brand
i
s synonymous w
i
th d
i
verse product o
ff
er
i
ngs and h
i
gh-qual
i
ty
customer service
.
D
uring 2013 the Company operated three principal business segments: (1) Cable – comprised
o
f cable television, Internet, Digital Phone and Shaw Business operations; (2) Satellite –
com
p
r
i
sed o
f
d
i
rect-to-home
(“
DTH”
)
and
S
atell
i
te
S
erv
i
ces; and
(3)
Med
i
a – com
p
r
i
sed o
f
t
elevision broadcasting. As a percentage of Shaw’s consolidated revenues for the year ended
August 31, 2013, the Cable, Satellite and Media divisions represented approximately 63%,
16%
and
21%
o
fS
haw’s bus
i
ness, res
p
ect
i
vel
y
. Dur
i
n
g 2013 S
haw’s bus
i
nesses
g
enerate
d
consolidated revenues of
$
5.1 billion
.
A
f
ourth bus
i
ness se
g
ment, W
i
reless, was
i
n the develo
p
ment
/
construct
i
on sta
g
e dur
i
n
g 2010
and 2011. During 2008 the Company participated in the Canadian Advanced Wireles
s
S
p
ectrum (“AWS”) auction and was successful in ac
q
uirin
g
20 me
g
ahertz of s
p
ectrum across
m
ost o
fi
ts cable
f
oot
p
r
i
nt. In March
2010
the
C
om
p
an
y
commenced act
i
v
i
t
i
es on a trad
i
t
i
ona
l
wireless infrastructure build and late in 2011, after completing a strategic review of this
initiative, concluded that the economics as a new entrant would be extremel
y
challen
g
in
g
, even
w
i
th the
C
om
p
an
y
’s establ
i
shed base and cons
i
derable stren
g
ths and assets.
S
haw dec
i
ded t
o
n
ot pursue a traditional wireless business and instead is focusing on initiatives that align wit
h
levera
g
in
g
its Media and
p
ro
g
rammin
g
assets, and stren
g
thenin
g
its leadershi
pp
osition in
broadband and v
i
deo. Dur
i
n
g 2013
the
C
om
p
an
y
entered
i
nto an a
g
reement w
i
th Ro
g
er
s
Communications Inc. (“Rogers”) to grant Rogers an option to acquire its wireless spectrum
licenses. The
p
otential o
p
tion exercise for the sale of the wireless s
p
ectrum licenses is sub
j
ec
t
t
o var
i
ous re
g
ulator
y
a
pp
rovals and
i
sex
p
ected to occur
i
n
fi
scal
201
5
.
1
S
ee de
fi
n
i
t
i
ons under key per
f
ormance dr
i
vers on page
20
.
6