Shaw 2015 Annual Report Download - page 36

Shaw Communications Inc.
Management’s Discussion and Analysis
August 31, 2015
programming content, changes in viewer preferences and other developments could impact both the availability and cost of
programming content. Although we have processes to effectively manage these costs, programming content may be purchased
for broadcasting one to two years in advance, making it more difficult to predict how such content will perform, and if content
fails to perform as expected there may be a material adverse effect on Shaw, its operations and/or its financial results.
Unionized labour
Approximately 50% of our Media division employees are employed under one of five collective agreements represented by three
unions. If labour disruptions occur, it is possible large numbers of employees may be involved and that our Media business may
be disrupted. Shaw is currently preparing to negotiate one collective agreement and the remaining four agreements have been
renewed and are in effect for the next one to three years.
Acquisitions and other strategic transactions
Shaw may from time to time make acquisitions to expand its existing businesses or to enter into sectors in which Shaw does not
currently operate, dispositions to focus on core offerings or enter into other strategic transactions. Such acquisitions,
dispositions and/or strategic transactions may fail to realize the anticipated benefits, result in unexpected costs and/or Shaw
may have difficulty incorporating or integrating the acquired business, any of which may have a material adverse effect on
Shaw, its operations and/or its financial results.
Holding company structure
Substantially all of Shaw’s business activities are operated by our subsidiaries. As a holding company, our ability to meet our
financial obligations is dependent primarily upon the receipt of interest and principal payments on intercompany advances,
management fees, cash dividends and other payments from our subsidiaries together with proceeds raised by the Company
through the issuance of equity and the incurrence of debt, and from proceeds received on the sale of assets. The payment of
dividends and the making of loans, advances and other payments to Shaw by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business and other
considerations.
Control of the Company
Class A Shares are the only shares entitled to vote on all shareholder matters. Voting control of the Company is held by the
Shaw Family Living Trust (“SFLT”) which holds, for the benefit of descendants of JR and Carol Shaw, 17,562,400 Class A
Shares, being approximately 78% of the issued and outstanding shares of such class. The sole trustee of SFLT is a private
company owned by JR Shaw and having a board comprised of seven directors, including JR Shaw as chair and five other
members of his family. Accordingly, JR Shaw, through SFLT and its trustee, is able to elect a majority of the Board of Directors
of the Company and to control any vote by the holders of Class A Shares.
Dividend payments
Shaw currently pays monthly common share dividends in amounts approved on a quarterly basis by the Board of Directors. At
the current approved dividend amount, the Company would pay approximately $565 million in common share dividends during
fiscal 2016 (before taking into account the Company’s dividend reinvestment plan (“DRIP”), as further described in “Financial
Position”). While the Company expects to generate sufficient free cash flow in fiscal 2016 to fund these dividend payments,
actual results may differ from expectations and there can be no assurance that the Company will continue common share
dividend payments at the current level.
34 Shaw Communications Inc. 2015 Annual Report