Shaw Announces Fourth Quarter and Full Year Financial and Operating Results and Preliminary Fiscal 2013 Guidance

October 25, 2012

CALGARY, ALBERTA--(Marketwire - Oct 25, 2012) - Shaw Communications Inc. (SJR.B) (SJR) announced consolidated financial and operating results for the fourth quarter and year ended August 31, 2012 and 2011. Consolidated revenue for the three month period of $1.21 billion was up 3% compared to the same period last year while the annual amount of $5.0 billion improved 5%. Total operating income before amortization1for the quarter and annual period of $501 million and $2.13 billion, respectively, each improved 4% over the comparable periods.

Free cash flow1 for the three and twelve month periods were $103 million and $482 million, respectively, compared to $49 million and $617 million for the same periods last year. Increased operating income before amortization and reduced capital investment were the main drivers of the quarterly improvement. On an annual basis improved operating income before amortization was more than offset by increased capital investment, CRTC benefit funding, and cash taxes.

Chief Executive Officer Brad Shaw said, "Our financial performance in the quarter was solid as we balanced subscriber growth and profitability. The competitive environment continues to be intense and we remain focused on strengthening our core business through technology, customer service and value leadership."

"We continue to leverage our advanced network rolling out a number of new products and services this year bringing innovation, choice and value to our customers. Our investments in technology include the ongoing expansion of the WiFi network footprint, our Digital Network Upgrade ("DNU"), broader offers of leading internet speeds, and the first phase of our TV Everywhere service, with the launches of Movie Central Go and NFL Sunday Ticket Go. A significant focus was also improved customer service with investment in our Canadian call centres, additional staffing, and customer care tool enhancements to ensure an exceptional customer experience."

Net income from continuing operations of $133 million or $0.28 per share for the quarter ended August 31, 2012 compared to $167 million or $0.37 per share for the same period last year. Net income from continuing operations for the annual period was $761 million or $1.62 per share compared to $559 million or $1.23 per share in the prior year. All periods included non-operating items which are more fully detailed in Management''s Discussions and Analysis ("MD&A").2 The prior annual period included a charge of $139 million for the discounted value of the CRTC benefit obligation related to the acquisition of Shaw Media, as well as business acquisition, integration and restructuring expenses of $91 million. Excluding the non-operating items, net income from continuing operations for the three and twelve month periods ended August 31, 2012 would have been $153 million and $760 million, respectively, compared to $153 million and $717 million in the same periods last year.

Revenue in the Cable division of $803 million and $3.19 billion for the current three and twelve month periods increased 2% and 3%, respectively, over the comparable periods. Operating income before amortization for the quarter of $396 million was comparable to last year. The annual operating income before amortization of $1.50 billion was down marginally from $1.51 billion in the prior year. Quarterly financial results improved compared to the second and third quarters with margins increasing from 44% to 47% to 49%, respectively, mainly due to improved revenues combined with operational cost controls and disciplined promotional activity.

Satellite revenue of $213 million and $844 million for the three and twelve month periods, respectively, was up 3% and 2%, respectively, compared to the same periods last year. Operating income before amortization for the current quarter and annual period of $77 million and $293 million improved 5% and 1%, respectively.

Revenue in the Media division was up 3% for the quarter to $217 million and operating income before amortization was $28 million compared to $12 million last year. For informational purposes, on a comparative basis to the prior year, Media revenues for the full twelve month period were down 2% and operating income before amortization was up 2%. The revenue decline was due to lower conventional advertising revenues while the improvement in operating income before amortization was due to lower programming costs year-over-year. 

Brad Shaw continued, "As we enter the new fiscal year we expect growth in consolidated revenue and operating income before amortization. Capital investment is expected to marginally decline from 2012 spend levels as we continue to enhance our network, provide innovative product offerings, and launch the new Anik G1 satellite. Combined with higher cash taxes, we expect free cash flow to be comparable to fiscal 2012."

Mr. Shaw concluded, "The business is dynamic and continually evolving. Our growth oriented asset mix, solid investment grade balance sheet and committed employee base position us well to meet the challenges and leverage the opportunities in the year ahead delivering value to all of our stakeholders."

Shaw Communications Inc. is a diversified communications and media company, providing consumers with broadband cable television, High-Speed Internet, Home Phone, telecommunications services (through Shaw Business), satellite direct-to-home services (through Shaw Direct) and engaging programming content (through Shaw Media). Shaw serves 3.4 million customers, through a reliable and extensive fibre network. Shaw Media operates one of the largest conventional television networks in Canada, Global Television, and 19 specialty networks including HGTV Canada, Food Network Canada, History Television and Showcase. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (SJR.B) (SJR).

The accompanying Management''s Discussion and Analysis forms part of this news release and the "Caution Concerning Forward Looking Statements" applies to all forward-looking statements made in this news release.

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) See reconciliation of Net income from continuing operations in Consolidated Overview in MD&A.

MANAGEMENT''S DISCUSSION AND ANALYSIS

AUGUST 31, 2012

October 25, 2012

Certain statements in this report may constitute forward-looking statements. Included herein is a "Caution Concerning Forward-Looking Statements" section which should be read in conjunction with this report.

The following Management''s Discussion and Analysis ("MD&A") should also be read in conjunction with the unaudited interim consolidated Financial Statements and Notes thereto of the current quarter, the 2011 Annual MD&A included in the Company''s August 31, 2011 Annual Report including the Consolidated Financial Statements and the Notes thereto.

The financial information presented herein has been prepared on the basis of International Financial Reporting Standards ("IFRS") for interim financial statements and is expressed in Canadian dollars unless otherwise stated. The amounts in this MD&A and the Company''s interim financial statements for the period ended August 31, 2011 have been restated to reflect the adoption of IFRS, with effect from September 1, 2010. Periods prior to September 1, 2010 have not been restated and are prepared in accordance with Canadian GAAP. Refer to note 15 of the August 31, 2012 interim financial statements for a summary of the differences between the financial statements previously prepared under Canadian GAAP and to those under IFRS.

CONSOLIDATED RESULTS OF OPERATIONS

FOURTH QUARTER ENDING AUGUST 31, 2012

Selected Financial Highlights

  Three months ended August 31,   Year ended August 31,  
          Change           Change  
  2012   2011   %   2012   2011   %  
($millions Cdn except per share amounts)                        
Operations:                        
  Revenue 1,210   1,181   2.5   4,998   4,741   5.4  
  Operating income before amortization (1) 501   481   4.2   2,127   2,051   3.7  
  Operating margin (1) 41.4 % 40.7 % 0.7   42.6 % 43.3 % (0.7 )
  Funds flow from continuing operations (2) 355   356   (0.3 ) 1,299   1,433   (9.4 )
  Net income from continuing operations 133   167   (20.4 ) 761   559   36.1  
Per share data:                        
  Earnings per share from continuing operations                        
  Basic 0.28   0.37       1.62   1.23      
  Diluted 0.28   0.37       1.61   1.23      
  Weighted average participating shares outstanding during period (millions)
443
 
436
     
441
 
435
     

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) Funds flow from continuing operations is before changes in non-cash working capital balances related to continuing operations as presented in the unaudited interim Consolidated Statements of Cash Flows.

Subscriber Highlights

    Growth  
  Total Three months ended August 31,   Year ended August 31,  
  August 31, 2012 2012   2011  
2012
 
2011
 
Subscriber statistics:                  
  Basic cable customers 2,219,072 (16,474 ) (16,207 ) (70,703 ) (50,988 )
  Digital customers 1,917,857 (7,907 ) 49,548   98,469   166,369  
  Internet customers (including pending installs) 1,912,230 6,062   13,528   34,999   54,217  
  Digital phone lines (including pending installs) 1,363,744 24,185   22,776   130,703   136,534  
  DTH customers 910,023 1,155   806   1,140   3,087  

Consolidated Overview

Consolidated revenue of $1.21 billion for the current quarter compares to $1.18 billion for the same period last year. Revenue for the twelve month period of $5.0 billion improved 5.4% over last year. Both current periods benefitted from rate increases in the Cable and Satellite divisions while the annual period also included a full twelve months of revenue from Shaw Media. 

Consolidated operating income before amortization for the three month period of $501 million improved 4.2% compared to the same period last year. The revenue related growth in the Cable and Satellite divisions was partially reduced by higher programming and employee related amounts. Both divisions also benefitted from lower sales and marketing related costs in the current quarter. Media was up due to higher revenues and lower programming costs. On an annual basis operating income before amortization improved 3.7% to $2.13 billion primarily due to the current period including a full twelve months of the Media division.

Net income from continuing operations was $133 million and $761 million for the three and twelve months ended August 31, 2012, respectively, compared to $167 million and $559 million for the same periods last year. Non-operating items affected net income in all periods. The prior quarterly period included a gain on the redemption of US$ senior notes while the prior annual period also included a charge of $139 million for the discounted value of the CRTC benefit obligation related to the Media acquisition, as well as business acquisition, integration and restructuring expenses of $91 million. Outlined below are further details on these and other operating and non-operating components of net income from continuing operations for each period.


($millions Cdn)
Year
ended
          Year
 ended
         
August 31, 2012   Operating   Non-operating   August 31, 2011   Operating   Non-operating  
Operating income 1,319   1,319   -   1,316   1,316   -  
  Amortization of financing costs - long-term debt (5 ) (5 ) -   (4 ) (4 ) -  
  Interest expense (330 ) (330 ) -   (332 ) (332 ) -  
  Gain on redemption of debt -   -   -   33   -   33  
  CRTC benefit obligations (2 ) -   (2 ) (139 ) -   (139 )
  Business acquisition, integration and restructuring expenses -   -   -   (91 ) -   (91 )
  Gain on remeasurement of interests in equity investments 6   -   6   -   -   -  
  Gain (loss) on derivative instruments 1   -   1   (22 ) -   (22 )
  Accretion of long-term liabilities and provisions (14 ) -   (14 ) (15 ) -   (15 )
  Foreign exchange gain on unhedged long-term debt -   -   -   17   -   17  
  Equity income from associates -   -   -   14   -   14  
  Other gains -   -   -   11   -   11  
Income (loss) before income taxes 975   984   (9 ) 788   980   (192 )
  Current income tax expense (recovery) 257   282   (25 ) 220   240   (20 )
  Deferred income tax expense (recovery) (43 ) (58 ) 15   9   23   (14 )
Net income (loss) from continuing operations 761   760   1   559   717   (158 )

($millions Cdn)
Three months ended           Three months ended          
August 31, 2012   Operating   Non-operating   August 31, 2011   Operating   Non-operating  
Operating income 292   292   -   296   296   -  
  Amortization of financing costs - long-term debt (2 ) (2 ) -   (1 ) (1 ) -  
  Interest expense (83 ) (83 ) -   (88 ) (88 ) -  
  Gain on redemption of debt -   -   -   23   -   23  
  Business acquisition, integration and restructuring expenses -   -   -   (1 ) -   (1 )
  Gain on derivative instruments -   -   -   4   -   4  
  Accretion of long-term liabilities and provisions (3 ) -   (3 ) (4 ) -   (4 )
  Foreign exchange loss on unhedged long-term debt -   -   -   (6 ) -   (6 )
  Equity loss from associates (1 ) -   (1 ) -   -   -  
  Other gains 2   -   2   4   -   4  
Income (loss) before income taxes 205   207   (2 ) 227   207   20  
  Current income tax expense (recovery) 60   64   (4 ) 53   46   7  
  Deferred income tax expense (recovery) 12   (10 ) 22   7   8   (1 )
Net income (loss) from continuing operations 133   153   (20 ) 167   153   14  

The changes in net income from continuing operations are outlined in the table below.

  August 31, 2012 net income from continuing
operations compared to:
 
  Three months ended   Year ended  
  May 31, 2012   August 31, 2011   August 31, 2011  
($millions Cdn)            
Increased (decreased) operating income before efore amortization (66 ) 20   76  
Increased amortization (12 ) (25 ) (74 )
Decreased (increased) interest expense (1 ) 5   2  
Change in net other costs and revenue (1) (5 ) (22 ) 183  
Decreased (increased) income taxes (31 ) (12 ) 15  
  (115 ) (34 ) 202  

(1) Net other costs and revenue includes gain on redemption of debt, CRTC benefit obligations, business acquisition, integration and restructuring expenses, gain on remeasurement of interests in equity investments, gain (loss) on derivative instruments, accretion of long-term liabilities and provisions, foreign exchange gain (loss) on unhedged long-term debt, equity income (loss) from associates and other gains as detailed in the unaudited interim Consolidated Statements of Income.

Basic earnings per share were $0.28 and $1.62 for the three and twelve months, respectively, compared to $0.37 and $1.23 in the same periods last year. In the current quarter, improved operating income before amortization of $20 million was offset by increases in amortization, net other costs and revenue, and income taxes, of $25 million, $22 million, and $12 million, respectively. The change in net other costs and revenue related to a gain realized in the prior year on the redemption of certain US$ senior notes and the higher taxes included an amount related to the indefinite postponement of previously enacted tax rate reductions in Ontario. The annual increase was primarily due to the favourable change in net other costs and revenue of $183 million along with improved operating income before amortization of $76 million and lower income taxes of $15 million. The change in net other costs and revenue was primarily due to amounts included in the prior year related to the CRTC benefit obligation and various acquisition, integration and restructuring costs. Operating income before amortization was up in the current period due to the inclusion of Shaw Media for the full twelve months and the lower taxes included a tax recovery related to the resolution of certain tax matters with CRA. These improvements were partially reduced by increased amortization of $74 million.

Net income in the current quarter declined $115 million compared to the third quarter of fiscal 2012 driven by lower operating income before amortization of $66 million primarily due to seasonality in the Media business, and increased income taxes of $31 million. The higher taxes included an amount related to the indefinite postponement of previously enacted tax rate reductions in Ontario.

Free cash flow for the quarter and annual periods of $103 million and $482 million, respectively, compared to $49 million and $617 million in the same periods last year. The improvement in the current quarter was primarily due to reduced capital investment of $61 million as well as improved operating income before amortization. The lower annual amount was mainly due to higher capital investment of $92 million related to the strategic initiatives and customer equipment subsidies, as well as increased cash taxes of $42 million. Annual improved operating income before amortization of $76 million in the current period was offset by various items including higher CRTC benefit funding, interest, preferred share dividends, and non-controlling interest entitlements.

On July 11, 2012 an electrical fire occurred at Shaw Court in Calgary causing significant water damage to the building. No injuries resulted and full operations were resumed within a very short period of time. Also, within days, all 900 displaced employees were relocated to seven Shaw buildings across Calgary, mainly at the Shaw Campus. Due to the extent of the damage, the building is going through an extensive renovation, a portion of which will be funded through insurance recoveries. In the current quarter a loss of $26 million was reflected in Other gains and includes $6 million of costs in respect of restoration and recovery activities, including amounts incurred in the relocation of employees, and an asset write-down of $20 million related to the damages sustained to the building and its contents. Insurance recoveries will be included in Other gains as claims are approved. No insurance recoveries were recorded in the fourth quarter. 

Key Performance Drivers

The Company''s continuous disclosure documents may provide discussion and analysis of non-IFRS financial measures. These financial measures do not have standard definitions prescribed by IFRS and therefore may not be comparable to similar measures disclosed by other companies. The Company''s continuous disclosure documents may also provide discussion and analysis of additional GAAP measures. Additional GAAP measures include line items, headings, and sub-totals included in the financial statements. The Company utilizes these measures in making operating decisions and assessing its performance. Certain investors, analysts and others, utilize these measures in assessing the Company''s operational and financial performance and as an indicator of its ability to service debt and return cash to shareholders. The non-IFRS financial measures and additional GAAP measures have not been presented as an alternative to net income or any other measure of performance required by IFRS.

The following contains a listing of non-IFRS financial measures and additional GAAP measures used by the Company and provides a reconciliation to the nearest IFRS measure or provides a reference to such reconciliation.

Operating income before amortization and operating margin

Operating income before amortization is calculated as revenue less operating, general and administrative expenses and is presented as a sub-total line item in the Company''s unaudited interim Consolidated Statements of Income. It is intended to indicate the Company''s ability to service and/or incur debt, and therefore it is calculated before amortization (a non-cash expense) and interest. Operating income before amortization is also one of the measures used by the investing community to value the business. Operating margin is calculated by dividing operating income before amortization by revenue. 

Free cash flow

The Company utilizes this measure to assess the Company''s ability to repay debt and return cash to shareholders.

Free cash flow is calculated as operating income before amortization, less interest, cash taxes paid or payable, capital expenditures (on an accrual basis and net of proceeds on capital dispositions) and equipment costs (net), adjusted to exclude share-based compensation expense, less cash amounts associated with funding the new and assumed CRTC benefit obligations related to the acquisition of Shaw Media as well as excluding non-controlling interest amounts that are consolidated in the operating income before amortization, capital expenditure and cash tax amounts. Free cash flow also includes changes in receivable related balances with respect to customer equipment financing transactions as a cash item, and is adjusted for cash funding of pension amounts net of pension expense. Dividends paid on the Company''s Cumulative Redeemable Rate Reset Preferred Shares are also deducted.

Commencing in 2012 free cash flow has not been reported on a segmented basis. Certain components of free cash flow including operating income before amortization, capital expenditures (on an accrual basis net of proceeds on capital dispositions) and equipment costs (net), CRTC benefit obligation funding, and non-controlling interest amounts continue to be reported on a segmented basis. Other items, including interest and cash taxes, are not generally directly attributable to a segment, and are reported on a consolidated basis.

Free cash flow is calculated as follows:

  Three months ended August 31,   Year ended August 31,  
  2012   2011(2)   Change
%
 
2012
 
2011(2)
  Change
%
 
($millions Cdn)                        
Revenue                        
  Cable 803   784   2.4   3,193   3,096   3.1  
  Satellite 213   207   2.9   844   827   2.1  
  Media 217   210   3.3   1,053   891   18.2  
  1,233   1,201   2.7   5,090   4,814   5.7  
  Intersegment eliminations (23 ) (20 ) 15.0   (92 ) (73 ) 26.0  
  1,210   1,181   2.5   4,998   4,741   5.4  
Operating income before amortization (1)                        
  Cable 396   396   -   1,502   1,510   (0.5 )
  Satellite 77   73   5.5   293   289   1.4  
  Media 28   12   >100.0   332   252   31.7  
  501   481   4.2   2,127   2,051   3.7  
                         
Capital expenditures and equipment costs (net):                        
  Cable 184   223   (17.5 ) 810   709   14.2  
  Satellite 27   49   (44.9 ) 94   107   (12.1 )
  Media 13   13   -   31   27   14.8  
Total as per Note 3 to the unaudited interim Consolidated Financial Statements 224  
285
  (21.4 )
935
 
843
 
10.9
 
Free cash flow before the following 277   196   41.3   1,192   1,208   (1.3 )
Less:                        
  Interest (83 ) (84 ) (1.2 ) (329 ) (312 ) 5.4  
  Cash taxes (64 ) (46 ) 39.1   (282 ) (240 ) 17.5  
                         
Other adjustments:                        
  Non-cash share-based compensation 1   3   (66.7 ) 6   10   (40.0 )
  CRTC benefit obligation funding (17 ) (15 ) 13.3   (48 ) (30 ) 60.0  
  Non-controlling interests (4 ) (3 ) 33.3   (34 ) (20 ) 70.0  
  Pension adjustment 1   4   (75.0 ) 12   16   (25.0 )
  Customer equipment financing (4 ) (6 ) (33.3 ) (20 ) (15 ) 33.3  
  Preferred share dividends (4 ) -   >100.0   (15 ) -   >100.0  
Free cash flow (1) 103   49   >100.0   482   617   (21.9 )
Operating margin (1)                        
  Cable 49.3 % 50.5 % (1.2 ) 47.0 % 48.8 % (1.8 )
  Satellite 36.2 % 35.3 % 0.9   34.7 % 34.9 % (0.2 )
  Media 12.9 % 5.7 % 7.2   31.5 % 28.3 % 3.2  

(1) See definitions and discussion under Key Performance Drivers in MD&A.

(2) Restated to reflect changes in the calculation related to the pension adjustment and customer equipment financing.

CABLE

FINANCIAL HIGHLIGHTS

  Three months ended August 31,   Year ended August 31,  
  2012   2011   Change
%
 
2012
 
2011
  Change
%
 
($millions Cdn)                        
Revenue 803   784   2.4   3,193   3,096   3.1  
Operating income before amortization (1) 396   396   -   1,502   1,510   (0.5 )
                         
Capital expenditures and equipment costs (net):                        
  New housing development 25   23   8.7   100   88   13.6  
  Success based 42   58   (27.6 ) 250   207   20.8  
  Upgrades and enhancement 79   92   (14.1 ) 322   278   15.8  
  Replacement 9   14   (35.7 ) 41   47   (12.8 )
  Buildings and other 29   36   (19.4 ) 97   89   9.0  
Total as per Note 3 to the unaudited interim Consolidated Financial Statements 184  
 223
  (17.5 )
810
 
709
 
14.2
 
                         
Operating margin (1) 49.3 % 50.5 % (1.2 ) 47.0 % 48.8 % (1.8 )

(1) See definitions and discussion under Key Performance Drivers in MD&A.

Operating Highlights

  • Digital Phone lines increased 24,185 during the three month period to 1,363,744 and Internet customers were up 6,062 totaling 1,912,230 as at August 31, 2012. During the quarter Basic and Digital Cable subscribers decreased 16,474 and 7,907, respectively.

Cable revenue for the three and twelve months of $803 million and $3.19 billion improved 2.4% and 3.1%, respectively, over the comparable periods. Rate increases and customer growth in Internet and Digital Phone, including Business growth, partially offset by lower Basic cable subscribers, accounted for the improvement.

Operating income before amortization of $396 million for the quarter was consistent with the same period last year. Revenue related improvements and lower marketing and sales expenses were offset by higher programming amounts, related to new services and increased rates as contracts were renewed, and higher employee related amounts, mainly related to annual merit increases and employee growth to enhance customer service initiatives.

Operating income before amortization for the annual period declined modestly over the prior year. The revenue related improvement was offset by higher employee related amounts, programming costs, and various other expenses. 

Revenue was up 1.1% compared to the third quarter of fiscal 2012 primarily due to rate increases, lower promotional activity and Digital Phone growth, the total of which was partially offset by lower Basic cable subscribers. Operating income before amortization improved $19 million over this same period due to the revenue related growth and certain lower expenses. Margin improved from 47.5% in the third quarter to 49.3%.

Total capital investment of $184 million in the current quarter decreased $39 million over the same period last year. Annual spend increased $101 million over the comparable period.

Success-based capital declined $16 million compared to the prior year quarter. The decrease was primarily due to lower video equipment rentals partially offset by higher subsidies on video equipment sales. For the annual period, success-based capital was up $43 million over last year. The increase was primarily due to higher subsidies on sales of HDPVRs resulting from increased volumes and lower customer pricing, and investment in DOCSIS 3.0 WiFi internet modems, partially offset by lower HDPVR rentals and phone modem purchases.

Investment in Upgrades and enhancement and Replacement categories combined decreased $18 million compared to the same quarter last year. The decline was due to lower spend on residential telephony infrastructure and licensing, reduced activity on core network capacity upgrades and lower vehicle purchases. Expenditures for the current annual period increased $38 million and included higher spending on hub upgrades, network electronics related to the DNU, Digital Phone infrastructure to support Business growth, as well as investment related to the strategic WiFi build.

Investment in Buildings and other declined $7 million over the comparable three month period while annual spend increased $8 million. The current quarter decrease was primarily due to lower spend on back office infrastructure replacement projects while the annual increase was mainly due to facility investment related to the Calgary data centre, customer service centres and new retail locations. The prior year also benefitted from proceeds from the sale of redundant real estate assets.

Spending in New housing development increased $2 million and $12 million, respectively, over the comparable three and twelve month periods mainly due to higher activity.

Shaw recently introduced content offerings for its TV Everywhere application with the introduction of Shaw Go. The Movie Central Go app for Apple devices provides access to current and library content for Shaw customers who subscribe to Movie Central programming, including HBO Canada titles. The app provides several features that enhance the user experience, including intelligent streaming, which provides the most optimal video quality based on Internet connection speed, and video bookmarking, which allows customers to stop and resume video playback at their convenience. The NFL Sunday Ticket Go app provides Shaw NFL Sunday Ticket subscribers with live broadcasts of up to 14 NFL regular season games along with interactive features, such as instant replay and play-by-play summaries. Shaw customers have the added benefit of being able to access content on Shaw''s WiFi network. 

Subscriber Statistics

          August 31, 2012  
          Three months ended   Year ended  
  August 31, 2012   August 31, 2011   Growth   Change
%
 
Growth
  Change
%
 
CABLE:                        
Basic service:                        
  Actual 2,219,072   2,289,775   (16,474 ) (0.7 ) (70,703 ) (3.1 )
  Penetration as % of homes passed 56.0 % 59.0 %                
Digital customers 1,917,857   1,819,388   (7,907 ) (0.4 ) 98,469   5.4  
                         
INTERNET:                        
Connected and scheduled 1,912,230   1,877,231   6,062   0.3   34,999   1.9  
Penetration as % of basic 86.2 % 82.0 %                
Standalone Internet not included in basic cable 225,639   217,068   9,085   4.2   8,571   3.9  
                         
DIGITAL PHONE:                        
Number of lines (1) 1,363,744   1,233,041   24,185   1.8   130,703   10.6  

(1) Represents primary and secondary lines on billing plus pending installs.

SATELLITE (DTH and Satellite Services)

FINANCIAL HIGHLIGHTS

...
  Three months ended August 31,   Year ended August 31,  
  2012   2011   Change
%
  2012   2011   Change
%
 
($millions Cdn)                        
Revenue                        
  DTH (Shaw Direct) 193   187   3.2   763   745   2.4  
  Satellite Services 20   20   -   81   82   (1.2 )
  213   207   2.9   844   827   2.1  
Operating income before amortization (1)                        
  DTH (Shaw Direct) 68   62   9.7   254