Shaw 2015 Annual Report Download - page 37

Shaw Communications Inc.
Management’s Discussion and Analysis
August 31, 2015
SUMMARY OF QUARTERLY RESULTS
Quarter Revenue
Operating
income
before
restructuring
costs and
amortization(1)
Net income
attributable
to equity
shareholders
Net
income(2)
Basic
earnings
per
share
Diluted
earnings
per
share
(millions of Canadian dollars except per share amounts)
2015
Fourth 1,343 573 272 276 0.57 0.57
Third 1,419 643 202 209 0.42 0.42
Second 1,337 557 163 168 0.34 0.34
First 1,389 606 219 227 0.46 0.46
Total 5,488 2,379 856 880 1.80 1.79
2014
Fourth 1,263 525 187 192 0.40 0.40
Third 1,342 601 219 228 0.47 0.47
Second 1,274 528 215 222 0.46 0.46
First 1,362 608 236 245 0.51 0.51
Total 5,241 2,262 857 887 1.84 1.84
(1) Refer to Key performance drivers.
(2) Net income attributable to both equity shareholders and non-controlling interests.
Quarterly revenue and operating income before restructuring costs and amortization are primarily affected by the seasonality of
the Media division and fluctuate throughout the year due to a number of factors including seasonal advertising and viewing
patterns. Typically, the Media division has higher revenue in the first quarter driven by the fall launch of season premieres and
high demand and the third quarter is affected by season finales and mid-season launches. Advertising revenue typically
declines in the summer months of the fourth quarter when viewership is generally lower. Effective the first quarter of the
current year the results reflect the addition of the new Business Infrastructure Services division upon acquisition of ViaWest on
September 2, 2014.
In the fourth quarter of 2015, net income increased by $67 million over the third quarter 2015 due to improved net other
revenue items of $190 million and lower restructuring costs of $10 million, partially offset by lower operating income before
restructuring costs and amortization of $70 million and higher income tax expense of $57 million. The improvement in net
other revenue items was due to the combined effects of the gain on the sale of the wireless spectrum licenses of $158 million
and a write-down of $27 million in respect of a private portfolio investment in the fourth quarter and the $59 million net charge
arising in the third quarter related to an impairment of goodwill, write-down of IPTV assets and proceeds received on the
insurance claim.
In the third quarter of 2015, net income increased $41 million over the second quarter 2015 due to higher operating income
before restructuring costs and amortization of $86 million, lower restructuring costs of $26 million and $11 million of proceeds
related to the Shaw Court insurance claim, partially offset by a charge for impairment of goodwill of $15 million and write-down
of IPTV assets of $55 million as well as the distributions received from a venture capital fund in the second quarter. The
impairment of goodwill was in respect of the Tracking operations in the Business Network Services division and was a result of
the Company’s annual impairment test of goodwill and indefinite-life intangibles in the third quarter. The write-down of IPTV
assets was a result of the Company’s decision to work with Comcast to begin technical trials of their cloud-based X1 platform.
In the second quarter of 2015 net income decreased $59 million over the first quarter 2015 due to lower operating income
before restructuring costs and amortization of $49 million and restructuring expenses of $38 million partially offset by net other
revenue items of $29 million due to aforementioned venture capital fund distributions.
2015 Annual Report Shaw Communications Inc. 35