SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of April 2007

Shaw Communications Inc.

(Translation of registrant’s name into English)

Suite 900, 630 — 3^rd Avenue S.W., Calgary, Alberta T2P 4L4 (403) 750-4500

(Address of principal executive offices)

     Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

     Form 20-F o Form 40-F þ

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

     Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

     Yes o No þ

     If “ Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Shaw Communications Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:		April 13, 2007 Shaw Communications Inc.

By:		/s/ Steve Wilson
		Steve Wilson
		Sr. V.P., Chief Financial Officer
		Shaw Communications Inc.

NEWS RELEASE

Strong continued quarterly growth and dividend increase

Calgary, Alberta (April 13, 2007) – Shaw Communications Inc. announced results for the second quarter ended February 28, 2007. Consolidated service revenue of $685.7 million and $1.36 billion for the three and six month periods improved 12.2% and 13.0%, respectively, over the comparable periods last year. Total service operating income before amortization¹ of $303.0 million and $602.8 million increased by 13.1% and 15.2% respectively, over the same periods. Funds flow from operations² increased to $252.4 million for the quarter and $496.3 million for the year-to-date compared to $208.3 million and $405.5 million in the same periods last year.

During the quarter customer growth continued across all products. Internet and Digital subscribers increased by 40,694 to 1,389,333 and 28,641 to 725,528, respectively. Digital Phone lines increased 41,721 to 292,625. Basic subscribers were up 6,625 to 2,220,082 and DTH customers increased 928 to 872,562.

Jim Shaw, Chief Executive Officer, remarked: “We are pleased with the performance across our divisions and saw strong growth in revenue and service operating income before amortization. This quarter we continued to drive performance through customer growth and as a result delivered solid business metrics to our shareholders.”

Free cash flow¹ for the quarter was $100.4 million bringing the year to date amount to $176.5 million. This compares to $82.0 million and $114.1 million for the same periods last year, an improvement of $18.4 million and $62.4 million, respectively, despite an increase in capital spending of over $20.0 million in each of the current three and six month periods. The growth in free cash flow was primarily related to the increase in service operating income before amortization.

Net income of $79.8 million or $0.37 per share for the second quarter ended February 28, 2007 compared to $45.8 million or $0.21 per share for the same quarter last year. Net income for the first six months of the year was $160.9 million or $0.75 per share compared to $121.5 million and $0.56 per share last year. The current and comparable three and six month periods included non-operating items which are more fully detailed in Management’s Discussions and Analysis (MD&A). These included a tax recovery related to reductions in enacted income tax rates in the comparable six month period. Excluding the non-operating items, net income for the three and six month periods ended February 28, 2007 would have been $78.9 million and $159.9 million compared to net income of $49.5 million and $88.3 million in the comparable periods.³

Shaw continued to roll-out Digital Phone during the quarter and the service is now available to approximately 2.6 million homes, representing over 75% of homes passed. During the quarter the Digital Phone footprint was expanded to include Kelowna, Kamloops and Penticton, all in British Columbia, as well as Fort Saskatchewan and Canmore, both in Alberta. Most recently, the service was rolled-out to Abbotsford and Chilliwack, British Columbia. During the quarter Shaw also introduced a new telephony product, Shaw Digital Phone Lite. This new service includes a local phone line, popular calling features, and long distance anytime calling at competitive per minute rates.

“The success of Digital Phone has been achieved, until this quarter, with one offer in the market. With the introduction of Shaw Digital Phone Lite we now offer broader home phone services which appeal to a larger customer base. This new offering is tailored for light long distance users and gives our customers the opportunity to customize their home phone service to meet their needs.” said Jim Shaw.

Cable service revenue increased 14.5% for the quarter to $514.4 million and 15.1% on a year to date basis to $1.01 billion. The improvement was driven by customer growth and rate increases. Service operating income before amortization increased 14.4% to $244.2 million for the quarter and 14.5% to $481.9 million for the six month period.

Satellite division service revenue increased 5.7% and 7.1% to $171.3 million and $343.1 million, respectively, for the three and six month periods over the same periods last year primarily due to rate increases and customer growth. Service operating income before amortization for the three and six month periods increased 7.9% to $58.9 million and 18.1% to $120.9 million, respectively, largely due to growth in DTH revenues.

Mr. Shaw announced revisions to the guidance: “As a result of our performance for the first half of the year and our outlook for the remaining two quarters, we anticipate service operating income before amortization will exceed $1.2 billion. Consistent with previous guidance, fiscal 2007 free cash flow is expected to be in excess of $310.0 million as we may accelerate certain capital spending in order to ensure that we continue to meet customer demand and maintain the high standards for delivery of services on our network.”

Mr. Shaw continued, “Our Board of Directors increased the equivalent annual dividend rate to $1.12 on Shaw’s Class B Non-Voting Participating shares and $1.115 on Shaw’s Class A Participating shares. This represents an increase of 12% or $0.12 per share. Shaw’s dividends are declared and paid on a monthly basis and this increase will commence June 30, 2007. ”

On March 2, 2007 the Company closed a $400 million offering of 5.70% senior notes due March 2, 2017. The net proceeds were used for debt repayment, working capital and general corporate purposes.

In closing, Mr. Shaw summarized: “We continue to see ongoing demand and prospects for growth across all our products. We believe we are well positioned to capture this growth by offering value to our customers across our triple play of entertainment and communications services. Our focus on strengthening and enhancing current products, developing innovative new

offerings and investing in our network to ensure it is fully capable of delivering these offerings is generating significant operating momentum and improved financial performance. We will continue with this focus through the remainder of the year.”

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, High-Speed Internet, Digital Phone, telecommunications services (through Shaw Business Solutions) and satellite direct-to-home services (through Star Choice) to 3.2 million customers. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX — SJR.B, NYSE — SJR).

This news release contains forward-looking statements, identified by words such as “anticipate”, “believe”, “expect”, “plan”, “intend” and “potential”. These statements are based on current conditions and assumptions and are not a guarantee of future events. Actual events could differ materially as a result of changes to Shaw’s plans and the impact of events, risks and uncertainties. For a discussion of these factors, refer to Shaw’s current annual information form, annual and quarterly reports to shareholders and other documents filed with regulatory authorities.

For more information, please contact:

Shaw Investor Relations Department
Investor.relations@sjrb.ca

1		See definitions and discussion under Key Performance Drivers in MD&A.
2		Funds flow from operations is before changes in non-cash working capital as presented in the unaudited interim Consolidated Statement of Cash Flows.
3		See reconciliation of Net Income in Consolidated Overview in MD&A

Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
FEBRUARY 28, 2007

April 12, 2007

Certain statements in this report may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Included herein is a “Caution Concerning Forward-Looking Statements” section which should be read in conjunction with this report.

The following should also be read in conjunction with Management’s Discussion and Analysis included in the Company’s August 31, 2006 Annual Report and the Consolidated Financial Statements and the Notes thereto and the unaudited interim Consolidated Financial Statements of the current quarter.

CONSOLIDATED RESULTS OF OPERATIONS
SECOND QUARTER ENDING FEBRUARY 28, 2007
SELECTED FINANCIAL HIGHLIGHTS

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn except per share amounts)		2007				2006				%				2007				2006				%
Operations:
Service revenue			685,730				611,197				12.2				1,356,736				1,200,742				13.0
Service operating income before amortization (1)			303,038				267,924				13.1				602,825				523,246				15.2
Funds flow from operations (2)			252,412				208,273				21.2				496,348				405,481				22.4
Net income			79,751				45,790				74.2				160,889				121,471				32.5
Per share data:
Earnings per share – basic		$	0.37			$	0.21							$	0.75			$	0.56
– diluted		$	0.37			$	0.21							$	0.74			$	0.56
Weighted average participating shares outstanding during period (000’s)			215,983				217,620								215,505				218,331

(1)		See definition under Key Performance Drivers in Management’s Discussion and Analysis.
(2)		Funds flow from operations is before changes in non-cash working capital as presented in the unaudited interim Consolidated Statement of Cash Flows.

SUBSCRIBER HIGHLIGHTS

						Growth
						Three months ended								Six months ended
		Total				February 28,								February 28,
		February 28, 2007				2007				2006				2007				2006
Subscriber statistics:
Basic cable customers			2,220,082				6,625				6,838				19,289				36,267
Digital customers			725,528				28,641				18,594				53,972				46,890
Internet customers (including pending installs)			1,389,333				40,694				36,296				76,571				91,020
DTH customers			872,562				928				6,843				3,354				17,042
Digital phone lines (including pending installs)			292,625				41,721				28,018				79,918				62,106

Shaw Communications Inc.

ADDITIONAL HIGHLIGHTS

•

The expansion of Shaw’s Digital Phone footprint continued with roll-outs during the quarter in Kelowna, Kamloops and Penticton, all in British Columbia, as well as Fort Saskatchewan and Canmore, both in Alberta. Most recently, the service was rolled-out to Abbotsford and Chilliwack, British Columbia. As at February 28, 2007 the number of Digital Phone lines, including pending installations, was 292,625.

•

Internet penetration of basic now stands at 62.6% up from 59.6% at August 31, 2006. Shaw added 40,694 Internet customers in the quarter and now has 1,389,333 customers. Customer growth continued across all other business lines with increases of 6,625 for Basic cable, 28,641 for Digital, 41,721 for Digital Phone and 928 for DTH in the second quarter.

•

Consolidated service revenue of $685.7 million and $1.36 billion for the three and six month periods, respectively, improved 12.2% and 13.0% over the comparable periods last year and total service operating income before amortization2 of $303.0 million and $602.8 million increased by 13.1% and 15.2% respectively, over the same periods. Consolidated free cash flow of $100.4 million and $176.5 million year to date compares to $82.0 million and $114.1 million for the same periods last year.

•

Consolidated free cash flow1 of $100.4 million and $176.5 million for the three and six month periods, respectively, improved $18.4 million and $62.4 million over the same periods last year. To date in fiscal 2007, free cash flow has been used to repay debt and pay dividends.

•

The Company increased the equivalent annual dividend rate to $1.12 on Shaw’s Class B Non-Voting Participating shares and $1.115 on Shaw’s Class A Participating shares. This represents an increase of 12% or $0.12 per share and will be payable in monthly installments commencing June 30, 2007.

•

On March 2, 2007 the Company closed a $400 million offering of 5.70% senior notes due March 2, 2017. The net proceeds were used for debt repayment, working capital and general corporate purposes.

•

The Company recently completed the acquisition of several small systems in British Columbia that complement existing cable systems. The acquisition provides synergies with existing operations and represents growing markets.

Consolidated Overview

Consolidated service revenue of $685.7 million and $1.36 billion for the three and six month periods, respectively, improved by 12.2% and 13.0% over the same periods last year. Increased service revenue primarily resulted from customer growth and rate increases. Consolidated service operating income before amortization for the three and six month periods increased by 13.1% and 15.2% over the comparable periods to $303.0 million and $602.8 million primarily due to overall revenue growth. Increased expenditures incurred to support continued growth, the delivery of quality customer service, enhancements to products, and the launch of Digital Phone in new markets in the cable division partially offset these improvements.

Shaw Communications Inc.

Net income was $79.8 million and $160.9 million for the three and six months ended February 28, 2007, compared to $45.8 million and $121.5 million for the same periods last year. A number of non-operating items affected net income in each of the quarters including a future tax recovery recorded during the first quarter of fiscal 2006 related to a reduction in corporate income tax rates which contributed $31.4 million to net income. Outlined below are further details on this and other operating and non-operating components of net income for each quarter.

		Six months ended				Operating net				Non-				Six months ended				Operating net				Non-
($000’s Cdn)		February 28, 2007				of interest				operating				February 28, 2006				of interest				operating
Operating income			367,505												267,051
Interest on long-term debt			(123,438	)											(127,826	)
Operating income after interest			244,067				244,067				—				139,225				139,225				—
Gain on sale of investment			415				—				415				1,690				—				1,690
Write-down of investment			—				—				—				(374	)			—				(374	)
Debt retirement costs			—				—				—				(8,123	)			—				(8,123	)
Foreign exchange gain on unhedged long-term debt			—				—				—				4,352				—				4,352
Fair value loss on foreign currency forward contract			—				—				—				(360	)			—				(360	)
Other gains			562				—				562				4,322				—				4,322
Income before income taxes			245,044				244,067				977				140,732				139,225				1,507
Income tax expense (recovery)			84,356				84,119				237				19,113				50,971				(31,858	)
Income before following			160,688				159,948				740				121,619				88,254				33,365
Equity income (loss) on investees			201				—				201				(148	)			—				(148	)
Net income			160,889				159,948				941				121,471				88,254				33,217

		Three months ended				Operating net				Non-				Three months ended				Operating net				Non-
($000’s Cdn)		February 28, 2007				of interest				operating				February 28, 2006				of interest				operating
Operating income			183,735												141,898
Interest on long-term debt			(61,597	)											(64,384	)
Operating income after interest			122,138				122,138				—				77,514				77,514				—
Write-down of investment			—				—				—				(374	)			—				(374	)
Debt retirement costs			—				—				—				(8,123	)			—				(8,123	)
Foreign exchange gain on unhedged long-term debt			—				—				—				871				—				871
Other gains			1,045				—				1,045				2,191				—				2,191
Income before income taxes			123,183				122,138				1,045				72,079				77,514				(5,435	)
Income tax expense (recovery)			43,530				43,209				321				26,073				28,034				(1,961	)
Income before following			79,653				78,929				724				46,006				49,480				(3,474	)
Equity income (loss) on investees			98				—				98				(216	)			—				(216	)
Net income			79,751				78,929				822				45,790				49,480				(3,690	)

Shaw Communications Inc.

The changes in net income are outlined in the table below.

		Increase (decrease) of February 28, 2007
		net income compared to:
		Three months ended								Six months ended
($millions Cdn)		November 30, 2006				February 28, 2006				February 28, 2006
Increased service operating income before amortization			3,251				35,114				79,579
Decreased (increased) amortization			(3,286	)			6,723				20,875
Decreased interest expense			244				2,787				4,388
Change in net other costs and revenue (1)			1,108				6,794				(181	)
Decreased (increased) income taxes			(2,704	)			(17,457	)			(65,243	)
			(1,387	)			33,961				39,418

(1)		Net other costs and revenue include: gain on sale of investment, write-down of investment, foreign exchange gain on unhedged long-term debt, fair value loss on a foreign currency forward contract, debt retirement costs, other gains and equity income (loss) on investees as detailed in the unaudited interim Consolidated Statements of Income and Deficit.

Earnings per share were $0.37 and $0.75 for the quarter and six months respectively which represents a $0.16 and $0.19 improvement over the same periods last year. The improvement in the current quarter was due to higher net income of $34.0 million and included increased service operating income before amortization of $35.1 million and decreased amortization of $6.7 million. The current quarter also benefited as debt retirement costs of $8.1 million were included in the comparable quarter. These improvements were partially offset by increased income taxes of $17.5 million. The increased income taxes were due to higher service operating income before amortization in the current quarter. On a year-to-date basis, the improvement was due to increased net income of $39.4 million resulting primarily from increased service operating income before amortization of $79.6 million, decreased amortization of $20.9 million and decreased interest expense of $4.4 million. These improvements were partially offset by increased income taxes of $65.2 million that resulted from higher service operating income before amortization in the current period and a tax recovery of $31.4 million in the comparable period related to reductions in corporate income tax rates.

Net income in the current quarter decreased $1.4 million over the first quarter of fiscal 2007.

Funds flow from operations was $252.4 million in the second quarter compared to $208.3 million in the comparable quarter, and on a year-to-date basis was $496.3 million compared to $405.5 million in 2006. The growth over the respective quarterly and year-to-date comparative periods was principally due to increased service operating income before amortization and reduced interest expense.

Consolidated free cash flow for the quarter and year-to-date of $100.4 million and $176.5 million, respectively, increased $18.4 million and $62.4 million over the comparable periods. The improvement came despite increased capital spending of over $20.0 million in each of the current three and six month periods and was primarily due to improved service operating income before amortization. The Cable division generated $70.6 million of free cash flow for the quarter compared to $59.5 million in the comparable period. The Satellite division achieved free cash flow of $29.7 million compared to free cash flow of $22.5 million in the same period last year.

Shaw Communications Inc.

As a result of the Company’s performance for the first half of the year and the outlook for the remaining two quarters, the Company anticipates service operating income before amortization will exceed $1.2 billion. Consistent with previous guidance fiscal 2007 free cash flow is expected to be in excess of $310.0 million as the Company may accelerate certain capital spending in order to meet customer demand and maintain the high standards for delivery of services on our network.”

Today Shaw’s Board of Directors increased the equivalent annual dividend rate to $1.12 on Shaw’s Class B Non-Voting Participating shares and $1.115 on Shaw’s Class A Participating shares. This represents an increase of 12% or $0.12 per share. Shaw’s dividends are declared and paid monthly and this increase will commence June 30, 2007.

On March 2, 2007 the Company closed a $400 million offering of 5.70% senior notes due March 2, 2017. The net proceeds were used for debt repayment, working capital and general corporate purposes.

Key Performance Drivers

The Company’s continuous disclosure documents may provide discussion and analysis of non-GAAP financial measures. These financial measures do not have standard definitions prescribed by Canadian GAAP or US GAAP and therefore may not be comparable to similar measures disclosed by other companies. 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 financial performance and as an indicator of its ability to service debt. These non-GAAP financial measures have not been presented as an alternative to net income or any other measure of performance required by Canadian or US GAAP.

The following contains a listing of the Company’s use of non-GAAP financial measures and provides a reconciliation to the nearest GAAP measurement or provides a reference to such reconciliation.

Service operating income before amortization and operating margin
Service operating income before amortization is calculated as service 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 and Deficit. 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. Service 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 service operating income before amortization by service revenue.

Free cash flow

The Company utilizes this measurement as it measures the Company’s ability to repay debt and return cash to shareholders. Free cash flow for cable and satellite is calculated as service operating income before amortization, less interest, cash taxes on net income, capital expenditures (on an accrual basis) and equipment costs (net). Consolidated free cash flow is calculated as follows:

Shaw Communications Inc.

		Three months ended								Six months ended
		February 28,								February 28,
($000’s Cdn)		2007				2006				2007				2006
Cable free cash flow (1)			70,615				59,461				115,060				91,454
Combined satellite free cash flow (1)			29,735				22,494				61,427				22,604
Consolidated			100,350				81,955				176,487				114,058

(1)		The reconciliation of free cash flow for both cable and satellite is provided in the following segmented analysis.

CABLE
FINANCIAL HIGHLIGHTS

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Service revenue (third party)			514,416				449,195				14.5				1,013,611				880,256				15.1
Service operating income before amortization (1)			244,164				213,383				14.4				481,933				420,898				14.5
Less:
Interest			51,465				53,245				(3.3	)			102,855				106,114				(3.1	)
Cash taxes on net income			—				1,041				(100.0	)			—				2,083				(100.0	)
Cash flow before the following:			192,699				159,097				21.1				379,078				312,701				21.2
Capital expenditures and equipment costs (net):
New housing development			22,632				18,317				23.6				45,125				41,583				8.5
Success based			17,588				24,483				(28.2	)			37,916				47,793				(20.7	)
Upgrades and enhancement			61,051				38,126				60.1				138,199				97,097				42.3
Replacement			9,207				12,040				(23.5	)			18,489				22,175				(16.6	)
Buildings/other			11,606				6,670				74.0				24,289				12,599				92.8
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			122,084				99,636				22.5				264,018				221,247				19.3
Free cash flow (1)			70,615				59,461				18.8				115,060				91,454				25.8
Operating margin			47.5	%			47.5	%			—				47.5	%			47.8	%			(0.3	)

(1)		See definitions and discussion under Key Performance Drivers in Management’s Discussion and Analysis.

OPERATING HIGHLIGHTS

•		The expansion of Shaw’s Digital Phone footprint continued with the service now available to over 75% of homes passed and included roll-outs during the quarter in Kelowna, Kamloops and Penticton, all in British Columbia, as well as Fort Saskatchewan and Canmore, both in Alberta. Most recently, the service was rolled-out to Abbotsford and Chilliwack, British Columbia. During the quarter the Company introduced a new Digital Phone product, Shaw Digital Phone Lite and added 41,721 Digital Phone lines to total 292,625, including pending installations, at February 28, 2007.
•		Customer growth continued in the second quarter with increases of 6,625 for Basic cable, 28,641 for Digital, and 40,694 for Internet. Internet penetration of basic now stands at 62.6% up from 59.6% at August 31, 2006.

Shaw Communications Inc.

•

The Company recently closed the acquisition of several small systems in British Columbia that complement existing cable systems adding approximately 5,000 cable subscribers. The acquisition provides synergies with existing operations and represents growing markets.

Cable service revenue improved 14.5% and 15.1% over the respective quarter and six month period last year. Customer growth, rate increases and the impact of acquisitions completed in the immediately preceding two quarters accounted for the increase. Service operating income before amortization grew 14.4% and 14.5% over the comparable three and six month periods. The increase was driven by revenue growth, partially offset by increased costs resulting from expenditures incurred to support continued growth, the delivery of quality customer service, and the launch of Digital Phone.

Service revenue improved $15.2 million or 3.0% over the first quarter of fiscal 2007 as a result of customer growth, the impact of acquisitions that were completed in the first quarter and rate increases. Service operating income before amortization improved $6.4 million or 2.7% over this same period mainly due to the revenue related growth.

Capital expenditures of $122.1 million and $264.0 million for the quarter and year-to-date respectively, increased $22.4 million and $42.8 million over the comparable periods last year. Shaw invested $23.1 million in the second quarter of 2007 on Digital Phone compared to $17.8 million in the same quarter last year. The increase was mainly due to spending on new launches, increasing softswitch capacity, and projects that will allow Shaw to operate independently as a Competitive Local Exchange Carrier (“CLEC”). Total spending to date on Digital Phone is now $201.0 million.

Spending in the upgrade and enhancement category for the three and six month periods increased $22.9 million and $41.1 million, respectively, over the same periods last year primarily due to projects undertaken to increase network capacity to support digital phone and internet growth, and upgrades to support Video-On-Demand (“VOD”), digital cable and high definition (“HD”) TV initiatives. Spending in Buildings and Other was up $4.9 million and $11.7 million for the quarter and year-to-date, respectively, over the same periods last year primarily due to initiatives to upgrade certain corporate assets and various facilities projects.

Success based capital decreased over the comparable three and six month periods by $6.9 million and $9.9 million, respectively. Digital Phone and Internet success based capital increased during the current quarter as a result of customer growth and increased Internet promotions, however, this was more than offset by reduced success based capital primarily related to digital cable terminal (“DCT”) sales as a result of price increases implemented on sales units during the latter part of fiscal 2006.

Throughout the past quarter Shaw continued to deliver on its strategy of enhancing the various service offerings, and launching new products. In December, the Company introduced a Digital Phone Lite product to the range of service offerings. This new service includes a local phone line, popular calling features, and long distance anytime calling at competitive per minute rates. This new service offering is tailored for light long distance users and gives customers the opportunity to customize their home phone service to meet their needs.

Shaw Communication Inc.

The Company continues to expand its High Definition (“HD”) line-up, adding Showcase HD and National Geographic HD in December. Shaw currently has over 150,000 HD capable cable customers.

SUBSCRIBER STATISTICS

										February 28, 2007
										Three months ended								Six months ended
						August 31,								Change								Change
		February 28, 2007				2006(1)				Growth				%				Growth				%
CABLE:
Basic service:
Actual			2,220,082				2,200,793				6,625				0.3				19,289				0.9
Penetration as % of homes passed			65.2	%			65.4	%
Digital terminals			945,760				855,647				51,131				5.7				90,113				10.5
Digital customers			725,528				671,556				28,641				4.1				53,972				8.0
INTERNET:
Connected and scheduled			1,389,333				1,312,762				40,694				3.0				76,571				5.8
Penetration as % of basic			62.6	%			59.6	%
Standalone Internet not included in basic cable			168,561				157,200				5,239				3.2				11,361				7.2
DIGITAL PHONE:
Number of lines(1)			292,625				212,707				41,721				16.6				79,918				37.6

		Three months ended February 28,								Six months ended February 28,
Churn (3)		2007				2006				2007				2006
Digital customers			3.1	%			3.3	%			6.4	%			6.7	%
Internet customers			2.8	%			3.0	%			6.4	%			6.1	%

Shaw Communication Inc.

SATELLITE (DTH and Satellite Services)

FINANCIAL HIGHLIGHTS

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Service revenue (third party)
DTH (Star Choice)			150,293				141,413				6.3				300,485				279,157				7.6
Satellite Services			21,021				20,589				2.1				42,640				41,329				3.2
			171,314				162,002				5.7				343,125				320,486				7.1
Service operating income before amortization (1)
DTH (Star Choice)			47,579				43,532				9.3				97,261				80,225				21.2
Satellite Services			11,295				11,009				2.6				23,631				22,123				6.8
			58,874				54,541				7.9				120,892				102,348				18.1
Less:
Interest (2)			9,776				10,777				(9.3	)			19,870				20,986				(5.3	)
Cash taxes on net income			—				66				(100.0	)			—				131				(100.0	)
Cash flow before the following:			49,098				43,698				12.4				101,022				81,231				24.4
Capital expenditures and equipment costs (net):
Success based (3)			13,970				19,428				(28.1	)			32,361				49,630				(34.8	)
Transponders and other			5,393				1,776				203.7				7,234				8,997				(19.6	)
Total as per Note 2 to the unaudited interim Consolidated Financial Statements			19,363				21,204				(8.7	)			39,595				58,627				(32.5	)
Free cash flow (1)			29,735				22,494				32.2				61,427				22,604				171.8
Operating Margin			34.4	%			33.7	%			0.7				35.2	%			31.9	%			3.3

OPERATING HIGHLIGHTS

	•		Free cash flow of $29.7 million and $61.4 million for the three and six month periods, respectively, improved $7.2 million and $38.8 million over the same periods last year.
	•		On February 1, 2007 Star Choice implemented rate increases on a number of its packages. The increases, which were fully implemented in March, will generate additional revenue of approximately $0.7 million per month.

Service revenue improved 5.7% over the same quarter last year and 7.1% for the year-to-date primarily as a result of rate increases and customer growth. Service operating income before amortization increased 7.9% and 18.1% over the comparable three and six month periods, respectively, to $58.9 million and $120.9 million. The improvement was primarily due to the growth in service revenue and was partially offset by costs to increase transponder capacity. The year-to-date period also benefited from recovery of provisions related to certain contractual matters.

Shaw Communication Inc.

Service revenue decreased $0.5 million over the first quarter of fiscal 2007 primarily due to increased programming credits. Service operating income before amortization declined $3.1 million over this same quarter primarily due to the reduced revenues and various increased costs.

Capital expenditures of $19.4 million and $39.6 million for the quarter and year-to-date respectively, decreased $1.8 million and $19.0 million over the comparable periods last year. Quarterly and year-to-date success based capital expenditures of $14.0 million and $32.4 million, respectively, declined $5.5 million and $17.3 million over the comparable periods mainly due to favorable pricing on receivers and reduced activations. Current quarter spending in Transponders and Other increased $3.6 million over the same period last year primarily due to current year investments to upgrade certain Satellite Service technology and increased office equipment to support call centre expansions. On a year-to-date basis, spending has decreased $1.8 million mainly due to investments in the comparable period to add additional transponder capacity.

During the quarter, Star Choice announced plans to add a third call centre in Mississauga. The Company currently operates two call centres in Calgary and Montreal. Star Choice also expanded their channel line up with new HD programming adding Showcase HD and National Geographic HD. They now offer 20 HD channels and have over 110,000 HD capable customers.

CUSTOMER STATISTICS

										February 28, 2007
										Three months ended								Six months ended
		February 28, 2007				August 31, 2006				Growth				%				Growth				%
Star Choice customers (1)			872,562				869,208				928				0.1				3,354				0.4

		Three months ended February 28,								Six months ended February 28,
Churn (2)		2007				2006				2007				2006
Star Choice customers			2.4	%			2.2	%			5.6	%			5.6	%

Shaw Communication Inc.

OTHER INCOME AND EXPENSE ITEMS:

Amortization

		Three months ended February 28,														Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Amortization revenue (expense) -
Deferred IRU revenue			3,136				3,136				—				6,273				6,273				—
Deferred equipment revenue			25,771				19,511				32.1				48,989				37,880				29.3
Deferred equipment cost			(50,166	)			(50,326	)			(0.3	)			(99,136	)			(99,903	)			(0.8	)
Deferred charges			(1,236	)			(1,325	)			(6.7	)			(2,473	)			(2,583	)			(4.3	)
Property, plant and equipment			(96,808	)			(97,022	)			(0.2	)			(188,973	)			(197,862	)			(4.5	)

The increase in amortization of deferred equipment revenue over the comparative periods is primarily due to growth in sales of higher priced HD digital equipment commencing in fiscal 2005. Amortization of property, plant and equipment decreased over the comparative six month period as the impact of assets that became fully depreciated in fiscal 2006 exceeded amortization on new capital purchases.

Interest

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Interest			61,597				64,384				(4.3	)			123,438				127,826				(3.4	)

Interest expense decreased over the comparative periods as a result of lower average debt levels.

Investment activity

During the current and comparative six month periods, the Company realized gains of $0.4 million and $1.7 million, respectively, on the sale of minor interests in publicly traded companies.

Foreign exchange gain on unhedged and hedged long-term debt

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Foreign exchange gain on unhedged long-term debt			—				871				(100	)			—				4,352				(100	)

In June 2006, the Company amended its existing credit facility and repaid US dollar denominated bank loans. Until that time Shaw recorded foreign exchange gains on the translation of foreign denominated unhedged bank debt. In addition, the Company recorded a foreign exchange gain on the US $172.5 million COPrS prior to entering into a US dollar forward purchase contract in the first quarter of 2006 to hedge the redemption of the issue.

Shaw Communication Inc.

Currently the Company does not have any foreign denominated unhedged long-term debt and therefore, does not anticipate recording any further foreign exchange gains and losses.

Under Canadian generally accepted accounting principles (“GAAP”), the Company translates long-term debt at period-end foreign exchange rates. Because the Company follows hedge accounting, the resulting foreign exchange gains or losses on translating hedged long-term debt are included in deferred credits or deferred charges. As a result, the amount of hedged long-term debt that is reported under GAAP is often different than the amount at which the hedged debt would be settled under existing cross-currency interest rate agreements. As outlined in Note 4 to the unaudited interim Consolidated Financial Statements, if the rate of translation was adjusted to reflect the hedged rates of the Company’s cross-currency agreements (which fix the liability for interest and principal), long-term debt would increase by $346.5 million (August 31, 2006 — $408.7 million) which represents the corresponding hedged amounts included in deferred credits.

Other gains and losses

This category consists mainly of realized and unrealized foreign exchange gains and losses on US dollar denominated current assets and liabilities, gains and losses on disposal of property, plant and equipment, and the Company’s share of the operations of Burrard Landing Lot 2 Holdings Partnership (“the Partnership”). Due to fluctuations of the Canadian dollar relative to the US dollar, the Company recorded a foreign exchange loss of $0.6 million for the quarter (2006 – nil), and $1.9 million (2006 – gain of $1.2 million) for the six month period.

Income Taxes

Income taxes increased over the comparative periods primarily due to the future income tax recovery of $31.4 million related to reductions in corporate income tax rates recorded in the first quarter of fiscal 2006 and increased income taxes on higher income in the current fiscal year.

RISKS AND UNCERTAINTIES

There have been no material changes in any risks or uncertainties facing the Company since August 31, 2006. A discussion of risks affecting the Company and its business is set forth in the Company’s August 31, 2006 Annual Report under the Introduction to the Business – Known Events, Trends, Risks and Uncertainties in Management’s Discussion and Analysis.

FINANCIAL POSITION

Total assets at February 28, 2007 were $7.7 billion compared to $7.5 billion at August 31, 2006. Following is a discussion of significant changes in the consolidated balance sheet since August 31, 2006.

Current assets increased by $38.5 million due to increases in accounts receivable of $21.7 million and inventory of $15.6 million. Accounts receivable increased mainly due to customer growth, rate increases and timing of equipment shipments to retailers. Inventories increased due to timing of purchases, continued growth and to ensure adequate stock levels are on hand during a supplier’s plant relocation.

Shaw Communication Inc.

Investments and other assets decreased by $9.2 million due to the sale of an interest in a publicly traded company.

Property, plant and equipment increased by $84.1 million as current year capital expenditures exceeded amortization.

Deferred charges increased $10.2 million primarily due to an increase in deferred equipment costs of $8.7 million.

Broadcast licenses increased by $67.4 million due to the acquisition of Whistler and Grand Forks cable systems in British Columbia and the Kenora cable system in Ontario.

Current liabilities (excluding current portion of long-term debt) increased by $26.6 million due to an increase in bank indebtedness of $21.8 million and unearned revenue of $6.2 million. Unearned revenue increased due to customer growth and rate increases.

Total long-term debt decreased by $33.0 million as a result of repayment of bank borrowings and Partnership debt of $95.2 million partially offset by an increase of $62.2 million relating to the translation of hedged US denominated debt.

Deferred credits decreased by $49.3 million principally due to the decrease in deferred foreign exchange gains on the translation of hedged US dollar denominated debt of $62.2 million offset by an increase in deferred equipment revenue of $22.1 million. Future income taxes increased by $99.2 million due to the impact of cable system acquisitions and the future income tax expense recorded in the current year.

Share capital increased by $59.7 million primarily due to the issuance of Class B Non-Voting Shares. During the six months ended February 28, 2007, the Company issued 89,794 Class B Non-Voting Shares for $3.0 million as partial consideration in respect of a cable system acquisition and 1,707,302 Class B Non-Voting Shares were issued for $55.2 million under the Company’s option and warrant plans. As of March 31, 2007, share capital is as reported at February 28, 2007 with the exception of the issuance of 150,056 Class B Non-Voting Shares upon exercise of options subsequent to the quarter end.

LIQUIDITY AND CAPITAL RESOURCES

In the current year, Shaw generated $176.5 million of consolidated free cash flow. Shaw used its free cash flow along with proceeds on issuance of Class B Non-Voting Shares of $55.2 million, proceeds on the sale of various assets of $10.3 million, and other net items of $9.2 million to repay bank debt of 73.2 million, fund the cash component of cable systems acquisitions of $52.9 million, pay common share dividends of $86.2 million, purchase inventory of $15.6 million and fund the net change in working capital requirements of $23.3 million.

On November 14, 2006, Shaw received the approval of the TSX to renew its normal course issuer bid to purchase its Class B Non-Voting Shares for a further one year period. The Company is authorized to acquire up to an additional 15,300,000 Class B Non-Voting Shares, representing approximately 10% of the public float of Class B Non-Voting Shares, during the period November 17, 2006 to November 16, 2007.

Shaw Communication Inc.

On March 2, 2007, Shaw issued $400 million of senior unsecured notes at a rate of 5.7% due March 2, 2017. Net proceeds (after issue and underwriting expenses) of $394.8 million were used for repayment of unsecured bank loans and general working capital purposes. The notes were issued at a discount of $0.9 million.

At February 28, 2007, Shaw had access to $832.4 million of available credit facilities. Based on available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations and obligations during the current fiscal year. On a longer-term basis, Shaw expects to generate free cash flow and have borrowing capacity sufficient to finance foreseeable future business plans and to refinance maturing debt.

CASH FLOW

Operating Activities

		Three months ended February 28,												Six months ended February 28,
										Change												Change
($000’s Cdn)		2007				2006				%				2007				2006				%
Funds flow from operations			252,412				208,273				21.2				496,348				405,481				22.4
Net decrease (increase) in non-cash working capital balances related to operations			37,989				10,991				245.6				(23,356	)			(11,202	)			(108.5	)
			290,401				219,264				32.4				472,992				394,279				20.0

Funds flow from operations increased over comparative periods as a result of growth in service operating income before amortization and lower interest expense. The net change in non-cash working capital balances over the comparative periods is mainly due to the timing of payment of accounts payable and accrued liabilities.

Investing Activities

		Three months ended February 28,												Six months ended February 28,
($000’s Cdn)		2007				2006				Increase				2007				2006				Increase
Cash flow used in investing activities			(166,920	)			(124,670	)			(42,250	)			(368,600	)			(292,437	)			(76,163	)

The cash used in investing activities increased $42.2 million over the comparative quarter due to higher expenditures on capital and inventory, partially offset by lower cash requirements for equipment costs (net). The cash used in investing activities increased $76.2 million over the comparative six month period due to cable system acquisitions and higher capital expenditures, partially offset by lower cash requirements for equipment costs (net).

Shaw Communication Inc.

Financing Activities

The changes in financing activities during the comparative periods were as follows:

		Three months ended								Six months ended
		February 28,								February 28,
(In $millions Cdn)		2007				2006				2007				2006
Bank loans and bank indebtedness – net repayments			(115.8	)			(65.3	)			(73.2	)			(235.7	)
Proceeds on $450 million senior unsecured notes			—				—				—				450.0
Dividends			(54.0	)			(22.3	)			(86.2	)			(44.7	)
Purchase of Class B Non-Voting Shares for cancellation			—				—				—				(58.0	)
Repayment of Partnership debt			(0.1	)			(0.1	)			(0.2	)			(0.2	)
Proceeds on bond forward			—				—				—				2.5
Issue of Class B Non-Voting Shares			46.4				0.1				55.2				0.1
Proceeds on prepayment of IRU			—				0.1				—				0.2
Cost to terminate foreign currency forward contract			—				(15.8	)			—				(15.8	)
Redemption of COPrS			—				(201.9	)			—				(201.9	)
			(123.5	)			(305.2	)			(104.4	)			(103.5	)

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

						Service operating												Funds flow
		Service				income before								Basic earnings				from
( $000’s Cdn except per share amounts)		revenue				amortization(1)				Net income				per share(2)				operations(3)
2007
Second			685,730				303,038				79,751				0.37				252,412
First			671,006				299,787				81,138				0.38				243,936
2006
Fourth			631,888				275,127				210,369				0.97				220,617
Third			626,654				279,544				126,410				0.58				221,099
Second			611,197				267,924				45,790				0.21				208,273
First			589,545				255,322				75,681				0.35				197,208
2005
Fourth			562,958				250,759				69,959				0.31				191,507
Third			559,883				252,899				32,836				0.14				190,144

Generally, service revenue and service operating income before amortization have grown quarter-over-quarter mainly due to customer growth and rate increases. Net income has generally trended positively quarter-over-quarter as a result of the growth in service operating income before amortization described above, reductions of interest expense as a result of debt repayment and retirement, the impact of the net change in non-operating items such as gains on sale of investments, foreign currency fluctuations on unhedged US denominated debt, fair value adjustments on foreign currency forward contracts and the impact of corporate income tax rate reductions. The exceptions to the consecutive quarter-over-quarter increases in net income are the second quarter of 2006 and the first and second quarters of 2007. Net income declined by

Shaw Communication Inc.

$29.9 million in the second quarter of 2006 and by $129.2 million in the first quarter of 2007 due to income tax recoveries primarily related to reductions in corporate income tax rates which contributed $31.4 million and $150.0 million to net income in the first and fourth quarters of 2006, respectively. The decline in the second quarter of 2007 was marginal. As a result of the aforementioned changes in net income, basic and diluted earnings per share have trended accordingly.

ACCOUNTING STANDARDS

Update to critical accounting policies and estimates

The Management’s Discussion and Analysis (“MD&A”) included in the Company’s August 31, 2006 Annual Report outlined critical accounting policies including key estimates and assumptions that management has made under these policies and how they affect the amounts reported in the Consolidated Financial Statements. The MD&A also describes significant accounting policies where alternatives exist. The unaudited interim Consolidated Financial Statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements.

CAUTION CONCERNING FORWARD LOOKING STATEMENTS

Certain statements included and incorporated by reference herein may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used, the words “anticipate”, “believe”, “expect”, “plan”, intend”, “target”, “guideline”, “goal”, and similar expressions generally identify forward-looking statements. These forward-looking statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), financial guidance for future performance, business strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of Shaw’s business and operations, plans and references to the future success of Shaw. These forward-looking statements are based on certain assumptions and analyses made by Shaw in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with expectations and predictions of the Company is subject to a number of risks and uncertainties. These factors include include general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by Shaw; increased competition in the markets in which Shaw operates and from the development of new markets for emerging technologies; changes in laws, regulations and decisions by regulators in Shaw’s industries in both Canada and the United States; Shaw’s status as a holding company with separate operating subsidiaries; changing conditions in the entertainment, information and communications industries; risks associated with the economic, political and regulatory policies of local governments and laws and policies of Canada and the United States; and other factors, many of which are beyond the control of Shaw. Should one or more of these risks materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those as described herein. Consequently, all of the forward-looking statements made in this report and the documents incorporated by reference herein are qualified by these

Shaw Communication Inc.

cautionary statements, and there can be no assurance that the actual results or developments anticipated by Shaw will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company.

You should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement (and such risks, uncertainties and other factors) speaks only as of the date on which it was originally made and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this document to reflect any change in expectations with regard to those statements or any other change in events, conditions or circumstances on which any such statement is based, except as required by law. New factors affecting the Company emerge from time to time, and it is not possible for the Company to predict what factors will arise or when. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any particular factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

Shaw Communications Inc.

CONSOLIDATED BALANCE SHEETS
(Unaudited)

[thousands of Canadian dollars]		February 28, 2007			August 31, 2006
ASSETS
Current
Accounts receivable			159,793				138,142
Inventories			69,564				53,994
Prepaids and other			22,187				20,870
			251,544				213,006
Investments and other assets			8,823				17,978
Property, plant and equipment			2,334,140				2,250,056
Deferred charges			272,096				261,908
Intangibles
Broadcast licenses			4,758,862				4,691,484
Goodwill			88,111				88,111
			7,713,576				7,522,543
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Bank indebtedness			42,163				20,362
Accounts payable and accrued liabilities			459,672				461,119
Income taxes payable			4,985				4,918
Unearned revenue			112,719				106,497
Current portion of long-term debt [note 4]			297,223				449
			916,762				593,345
Long-term debt [note 4]			2,666,183				2,995,936
Other long-term liabilities [note 9]			49,580				37,724
Deferred credits			1,051,643				1,100,895
Future income taxes			1,084,155				984,938
			5,768,323				5,712,838
Shareholders’ equity
Share capital [note 5]			2,036,706				1,976,966
Contributed surplus [note 5]			6,212				5,110
Deficit			(98,021	)			(172,701	)
Cumulative translation adjustment			356				330
			1,945,253				1,809,705
			7,713,576				7,522,543

See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
(Unaudited)

		Three months ended								Six months ended
		February 28,								February 28,
[thousands of Canadian dollars except per share amounts]		2007				2006				2007				2006
Service revenue [note 2]			685,730				611,197				1,356,736				1,200,742
Operating, general and administrative expenses			382,692				343,273				753,911				677,496
Service operating income before amortization [note 2]			303,038				267,924				602,825				523,246
Amortization:
Deferred IRU revenue			3,136				3,136				6,273				6,273
Deferred equipment revenue			25,771				19,511				48,989				37,880
Deferred equipment cost			(50,166	)			(50,326	)			(99,136	)			(99,903	)
Deferred charges			(1,236	)			(1,325	)			(2,473	)			(2,583	)
Property, plant and equipment			(96,808	)			(97,022	)			(188,973	)			(197,862	)
Operating income			183,735				141,898				367,505				267,051
Interest on long-term debt [note 2]			(61,597	)			(64,384	)			(123,438	)			(127,826	)
			122,138				77,514				244,067				139,225
Gain on sale of investment			—				—				415				1,690
Write-down of investment			—				(374	)			—				(374	)
Foreign exchange gain on unhedged long-term debt			—				871				—				4,352
Fair value loss on a foreign currency forward contract			—				—				—				(360	)
Debt retirement costs			—				(8,123	)			—				(8,123	)
Other gains			1,045				2,191				562				4,322
Income before income taxes			123,183				72,079				245,044				140,732
Income tax expense			43,530				26,073				84,356				19,113
Income before the following			79,653				46,006				160,688				121,619
Equity income (loss) on investees			98				(216	)			201				(148	)
Net income			79,751				45,790				160,889				121,471
Deficit, beginning of period			(123,804	)			(410,792	)			(172,701	)			(428,855	)
Reduction on Class B Non-Voting Shares purchased for cancellation			—				—				—				(35,085	)
Amortization of opening fair value loss on a foreign currency forward contract			—				(1,612	)			—				(1,705	)
Dividends -
Class A and Class B Non-Voting Shares			(53,968	)			(22,292	)			(86,209	)			(44,732	)
Deficit, end of period			(98,021	)			(388,906	)			(98,021	)			(388,906	)
Earnings per share [note 6]
Basic			0.37				0.21				0.75				0.56
Diluted			0.37				0.21				0.74				0.56
[thousands of shares]
Weighted average participating shares outstanding during period			215,983				217,620				215,505				218,331
Participating shares outstanding, end of period			216,739				217,623				216,739				217,623

     See accompanying notes

Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three months ended								Six months ended
		February 28,								February 28,
[thousands of Canadian dollars]		2007				2006				2007				2006
OPERATING ACTIVITIES [note 7]
Funds flow from operations			252,412				208,273				496,348				405,481
Net decrease (increase) in non-cash working capital balances related to operations			37,989				10,991				(23,356	)			(11,202	)
			290,401				219,264				472,992				394,279
INVESTING ACTIVITIES
Additions to property, plant and equipment [note 2]			(131,875	)			(105,456	)			(271,250	)			(214,854	)
Additions to equipment costs (net) [note 2]			(19,014	)			(26,632	)			(38,812	)			(65,377	)
Net reduction (addition) to inventories			(15,830	)			1,916				(15,570	)			(17,071	)
Cable business acquisitions [note 3]			(492	)			—				(52,918	)			—
Proceeds on sale of investments and other assets			476				5,799				10,315				13,662
Additions to deferred charges			(185	)			(297	)			(365	)			(8,797	)
			(166,920	)			(124,670	)			(368,600	)			(292,437	)
FINANCING ACTIVITIES
Increase in bank indebtedness			4,164				29,677				21,801				29,677
Increase in long-term debt			25,000				125,000				60,000				650,000
Long-term debt repayments			(145,111	)			(421,999	)			(155,221	)			(667,590	)
Cost to terminate foreign currency forward contract			—				(15,774	)			—				(15,774	)
Issue of Class B Non-Voting Shares, net of after-tax expenses			46,426				116				55,216				116
Proceeds on bond forward			—				—				—				2,486
Proceeds on prepayment of IRU			—				76				—				228
Purchase of Class B Non-Voting Shares for cancellation			—				—				—				(57,954	)
Dividends paid on Class A and Class B Non-Voting Shares			(53,968	)			(22,292	)			(86,209	)			(44,732	)
			(123,489	)			(305,196	)			(104,413	)			(103,543	)
Effect of currency translation on cash balances and cash flows			8				(8	)			21				(12	)
Decrease in cash			—				(210,610	)			—				(1,713	)
Cash, beginning of the period			—				210,610				—				1,713
Cash, end of the period			—				—				—				—

Cash includes cash and term deposits

See accompanying notes

Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

February 28, 2007 and 2006
[all amounts in thousands of Canadian dollars, except per share amounts]

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited interim Consolidated Financial Statements include the accounts of Shaw Communications Inc. and its subsidiaries (collectively the “Company”). The notes presented in these unaudited interim Consolidated Financial Statements include only significant events and transactions occurring since the Company’s last fiscal year end and are not fully inclusive of all matters required to be disclosed in the Company’s annual audited consolidated financial statements. As a result, these unaudited interim Consolidated Financial Statements should be read in conjunction with the Company’s consolidated financial statements for the year ended August 31, 2006.

The unaudited interim Consolidated Financial Statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements.

Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

February 28, 2007 and 2006
[all amounts in thousands of Canadian dollars, except per share amounts]

2. BUSINESS SEGMENT INFORMATION

The Company provides cable television services, high-speed Internet access, Digital Phone and Internet infrastructure services (“Cable”); DTH satellite services (Star Choice); and, satellite distribution services (“Satellite Services”). All of these operations are located in Canada. Information on operations by segment is as follows:

Operating information

		Three months ended								Six months ended
		February 28,								February 28,
		2007				2006				2007				2006
		$				$				$				$
Service revenue
Cable			515,257				449,967				1,015,263				881,718
DTH			151,990				142,662				303,682				281,467
Satellite Services			21,896				21,474				44,390				43,099
Inter segment -			689,143				614,103				1,363,335				1,206,284
Cable			(841	)			(772	)			(1,652	)			(1,462	)
DTH			(1,697	)			(1,249	)			(3,197	)			(2,310	)
Satellite Services			(875	)			(885	)			(1,750	)			(1,770	)
			685,730				611,197				1,356,736				1,200,742
Service operating income before amortization
Cable			244,164				213,383				481,933				420,898
DTH			47,579				43,532				97,261				80,225
Satellite Services			11,295				11,009				23,631				22,123
			303,038				267,924				602,825				523,246
Interest on long-term debt (1)
Cable			51,465				53,245				102,855				106,114
DTH and Satellite Services			9,776				10,777				19,870				20,986
Burrard Landing Lot 2 Holdings Partnership			356				362				713				726
			61,597				64,384				123,438				127,826
Cash taxes (1)
Cable			—				1,041				—				2,083
DTH and Satellite Services			—				66				—				131
			—				1,107				—				2,214