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Shaw Communications' CEO Discusses Q4 2011 Results - Earnings Call Transcript

As we face the realities of the competitive environment within our industry, we are focused on profitability and we are very pleased to report that we delivered on our fiscal 2011 guidance. During the year, we renewed our focus on operational efficiencies and implemented restructuring initiatives. Consolidated EBITDA, including the 10-month contribution from the Media asset, exceeded $2 billion, and excluding the impact of the CRTC Part II decision in fiscal 2010, our Cable EBITDA increased by over 6% to almost $1.5 billion. Our Cable margin for the year exceeded 48%, and in the fourth quarter, our margin was one of the highest on record, whereby we achieved a Cable margin in excess of 50%.

Shaw Media had an exceptional year, and on a 12-month basis, revenue increased 7%. EBITDA increased 25% to $325 million, and free cash flow from the division was approximately $145 million for the year ending August 31. Consolidated free cash flow for fiscal 2011, which includes 10 months of the Media result, was over $600 million despite a $60 million increase in cash taxes and acceleration of certain capital investment in the fourth quarter. The accelerated investments relate mostly to our digital network upgrade, as well as deposit on the new Anik G1 satellite, which is set to launch towards the end of 2012.

The initiatives we undertook this year, the decisions we executed on, have us well positioned to move forward in this rapidly evolving landscape. We are starting the new fiscal year with a number of strategic initiatives on the agenda, including our digital network upgrade and our Wi-Fi build. We expect continued growth in revenue and EBITDA across all divisions in 2012. Investments in our various strategic party are expected to increase capital within our Cable business, and combined with a higher CRTC benefit obligation funding and cash taxes, we expect free cash flow to decline moderately to approximately $550 million.

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