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Shaw Communications Management Discusses Q3 2012 Results - Earnings Call Transcript

Earlier today, we released our Q3 results, and I'll make some brief remarks before we open the call for questions. We believe that results are consistent with the messages we delivered back in April. During the quarter, we focused on discipline, sustainable and profitable customer initiatives. And our Q3 financial performance reflects improvements, in line with our strategic approach regarding operational activities. We delivered on our commitment to reduce our cable cost structure, and our cable EBITDA margin for the 3-month period improved by 370 basis points to 47.5% compared to a quarter ago. Our free cash flow was over $200 million in Q3, and year-to-date free cash flow from our consolidated assets totals almost $380 million.

We continue to make good progress on our strategic priorities and investments, including our Wi-Fi and DNU projects. Our network is a strategic and differentiated advantage, and we continue to make the necessary investments to ensure that this position of leadership is maintained and enhanced. Our broadband product is superior to competitive alternatives, and this represents the foundation for our future success within our Residential Consumer business. Wi-Fi continues to gain attention and credibility regarding its role within the wireless broadband ecosystem, and we are pleased with the results of our network at this stage of the build. Going forward, as additional scale is created, we will begin to actively market this additional Wi-Fi service to Shaw customers.

Our improved user interface, DreamGallery, is currently being tested in 2 markets. And this will be widely deployed by the end of this year. This software is backwards-compatible with approximately 700,000 boxes we currently have deployed across our footprint. We believe this new and modern approach to our guide will be embraced by a large number of our existing customers.

Our Media business continues to be resilient even as the advertising market remains weak. Our portfolio of specialty channels continues to outperform, and our media team has done an exceptional job in proactively reducing costs. Shaw Direct continued to generate attractive amounts of free cash flow, and we recently have announced the strategic partnership with Xplornet and a new VOD service utilizing adaptive streaming technology. Both of these should create incremental revenue opportunities going forward.

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