Shaw 2014 Annual Report Download - page 19

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2014
fourth quarter. Expenses are incurred more evenly throughout the year. The Specialty services
are dependent on a small number of broadcast distribution undertakings (“BDUs”) for
distribution of the services.
(b) Environmental matters
Shaw’s operations are subject to environmental regulations, including those related to
electronic waste, printed paper and packaging. A number of provinces have enacted regulations
providing for the diversion of certain types of electronic and other waste through product
stewardship programs (“PSP”). Under a PSP, companies who supply designated products in or
into a province are required to participate in or develop an approved program for the collection
and recycling of designated materials and, in some cases, pay a per-item fee. Such regulations
have not had, and are not expected to have, a material effect on the Company’s earnings or
competitive position.
(c) Foreign operations
Shaw Business U.S. Inc., a wholly-owned subsidiary of the Company, has entered into an
indefeasible right of use (“IRU”) with respect to a portion of a United States fibre network and
owns certain other fibre and facilities in the United States. Shaw Business U.S. Inc.
commenced revenue-generating operations in the United States in 2002. Its revenues for the
year ended August 31, 2014 were not material.
In September 2014, the Company closed the acquisition of 100% of the shares of ViaWest, a
US-based provider of data centre infrastructure, cloud technology and managed IT solutions, for
an enterprise value of US $1.2 billion which was funded through a combination of cash on
hand, assumption of ViaWest debt, and a drawdown of US $330 million on the Company’s
credit facility. The ViaWest acquisition provides the Company with a growth platform in the
North American data centre sector and is another step in expanding technology offerings for
mid-market enterprises in Western Canada. ViaWest is headquartered in Denver, Colorado and
has 27 data centres in 8 key Western US markets.
(d) Employees
As at August 31, 2014, the Company employed approximately 14,000 people.
D. Government regulations and regulatory developments
Substantially all of the Corporation’s business activities are subject to regulations and policies
established under various Acts (Broadcasting Act (Canada) (“Broadcasting Act”),
Telecommunications Act (Canada) (“Telecommunications Act”), Radiocommunication Act
(Canada) (“Radiocommunication Act”) and Copyright Act (Canada) (“Copyright Act”)).
Broadcasting and telecommunications are generally administered by the CRTC under the
supervision of the Department of Canadian Heritage (“Canadian Heritage”) and Department of
Industry (“Industry Canada”), respectively.
Pursuant to the Broadcasting Act, the CRTC is mandated to supervise and regulate all aspects
of the broadcasting system in a flexible manner. The Broadcasting Act requires BDUs to give
priority to the carriage of Canadian services and to provide efficient delivery of programming
services. The Broadcasting Act also sets out requirements for television broadcasters with
respect to Canadian content. Shaw’s businesses are dependent upon licenses (or operate
pursuant to an exemption order) granted and issued by the CRTC and Industry Canada.
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