Shaw 2015 Annual Report Download - page 40

Shaw Communications Inc.
Management’s Discussion and Analysis
August 31, 2015
Commencing in fiscal 2015, Shaw’s residential and enterprise services are reorganized into new Consumer and
Business units, respectively, with no changes to the Media division.
ŠThe Company recorded restructuring costs of $58 million in fiscal 2014 associated with the approximately
400 management and non-customer facing roles which were eliminated by organizational changes in that
year.
ŠIn 2015, the Company recorded $52 million in respect of continued restructuring, primarily related to severance
and employee related costs, which impacted approximately 1,700 employees.
ŠThe Company announced a realignment of its customer care operations into centres of expertise in order to
improve the end-to-end customer service experience. The realignment affected approximately 1,600
employees.
ŠThe Company also continued its organizational structure realignment efforts, including further restructuring
of certain functions within Business Network Services.
ŠThe Media division undertook organizational changes as it redefines itself from a traditional broadcaster to
the broader focus of a media organization. Approximately 100 roles were eliminated and 45 new roles
created.
ŠAs a result of these restructurings, the Company expects to realize aggregate annual cost savings, net of new
hires to support the restructured operations, of approximately $75 million. These efficiencies will phase in
through fiscal 2016 and be fully realized in fiscal 2017.
ŠDuring fiscal 2015 and 2014, the Company entered into a number of transactions as follows:
ŠIn late fiscal 2014, the Company announced it had entered into agreements to acquire 100% of the shares
of ViaWest for an enterprise value of US$1.2 billion. ViaWest is headquartered in Denver, Colorado and has
27 data centres in 8 key Western U.S. markets providing collocation, cloud and managed services. On
September 2, 2014, the Company closed the acquisition 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.
ŠDuring the current year, the Company partnered with Rogers to form shomi, a new subscription video-on-
demand service having the latest most exclusive shows and selections personalized for viewers. The service
was launched in beta in early November 2014 and was made available to all Canadians in August 2015.
ŠDuring 2013, the Company granted Rogers Communications Inc. (“Rogers”) an option to acquire its wireless
spectrum licenses. The exercise of the option and the sale of the wireless spectrum licenses were subject to
various regulatory approvals and therefore, the licenses were not classified as held for sale. During the fiscal
2015, the regulatory reviews concluded at which time Rogers exercised its option and the transfer was
completed. The Company had previously received $50 in respect of the purchase price of the option to
acquire wireless spectrum licenses and a $200 deposit in respect of the option exercise price. The Company
received an additional $100 when the transaction completed and recorded a gain of $158.
ŠDuring 2014, the Company completed sale of its 50% interest in its two French-language channels, Historia
and Series+, to Corus.
ŠDuring 2013, the Company established a notional fund, the accelerated capital fund, of up to $500 million with
proceeds received, and to be received, from the strategic transactions with each of Rogers and Corus. Accelerated
capital initiatives are being funded through this fund and not cash generated from operations. Key investments
include the Calgary data centres, further digitization of the network and additional bandwidth upgrades,
development of IP delivery of video, expansion of the WiFi network, and additional innovative product offerings
related to Shaw Go and other applications to provide an enhanced customer experience. Approximately $110
million was invested in fiscal 2013, $240 million in fiscal 2014, and $150 million in fiscal 2015.
ŠThe Company continued to expand on its TV Everywhere content strategy launching Global Go and a number of
Shaw Go apps during fiscal 2014, giving subscribers on-the-go access to their favorite programming.
ŠShaw also continued to invest in and build awareness of Shaw Go WiFi and as at August 31, 2015 had almost
75,000 access points and 2 million devices authenticated on the network, reflecting the value of the service to
customers.
38 Shaw Communications Inc. 2015 Annual Report