SECURITIES AND EXCHANGE COMMISSION

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 October, 2004

Shaw Communications Inc.

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

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

     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.

     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.

By:
/s/ Steve Wilson

NEWS RELEASE

Shaw Communications Inc. announces fourth quarter and full year results,
highlighted by customer and free cash flow growth

Calgary, Alberta, October 20th, 2004 — Shaw Communications Inc. announced net income of $28.9 million or $0.08 per share for the quarter ended August 31, 2004 compared to net income of $4.4 million and a loss of $0.02 per share for the comparable period in 2003. Net income for the year, was $90.9 million which represents $0.22 per share, versus a net loss of $46.9 million ($0.38 per share) last year.

Total service revenue in the fourth quarter was $531.8 million, a 5.9% increase over the fourth quarter of 2003, and on a year-to-date basis, was $2.1 billion compared to $2.0 billion in 2003.

Customer growth occurred in both cable and DTH, with Internet customers reaching the one million mark on June 14, 2004.

“We are pleased with our continued customer growth. The achievement of over one million Internet customers underscores the high quality of our product offering and is a great milestone for our Company,” said Jim Shaw, C.E.O. of Shaw Communications Inc.

Consolidated service operating income before amortization¹ was $239.2 million in the fourth quarter (2003 — $224.1 million), an increase of 6.8%, and was $925.9 million for the year (2003 — $817.6 million), a 13.2% increase over last year. Cash flow from operations of $186.3 million in the fourth quarter and $694.8 million for the year represents growth of 15.8% and 27.7% over the same periods last year.

In fiscal 2003, the Company sold its US cable systems. Excluding the US cable systems, quarterly and annual increases in service revenue over last year, were 7.0% and 7.1%, respectively. Increases in operating income before amortization were 7.6% for the quarter and 16.4% year-to-date.

On a consolidated basis, the Company achieved positive free cash flow¹ of $56.1 million in the fourth quarter (2003 — $56.9 million), bringing the year-to-date amount to $278.9 million (2003 — $98.3 million). For the second consecutive quarter, the satellite division generated positive free cash flow of $7.5 million compared to negative free cash flow of $16.1 million in the same quarter last year. Cable free cash flow was $48.6 million for the quarter compared to $73.0 million last year. The decrease is due to a higher level of capital expenditures in the fourth quarter this year, partly offset by improved operating cash flows.

Customer growth continued during the fourth quarter despite the competitive challenges from new video entrants in some of Shaw’s markets and increases in monthly subscriber rates in both cable and DTH, which were implemented in previous quarters. In the fourth quarter, basic cable subscribers increased by 5,830, digital customers grew by 24,712 and Internet customers increased by 23,488 to 1.02 million. DTH customers grew by 1,506 in the fourth quarter bringing total DTH customers to approximately 828,000.

“We almost tripled our annual consolidated free cash flow over last year. This achievement is the result of a number of factors, the key one being the improvement in service operating income before amortization. In addition, we reduced capital spending and equipment costs by $18 million, or approximately 5%, despite incurring Digital Phone costs during the year of approximately $14 million and while supporting year-to-date customer increases of 30,520 for basic cable, 72,904 for digital customers, 126,006 for Internet and 19,377 for DTH,” noted Jim Shaw.

In terms of divisional results, cable service revenue for the quarter and year-to-date was $379.4 million (2003 — $362.7 million) and $1,491.6 million (2003 — $1,460.0 million), respectively. The increases in quarterly and annual service revenue over 2003 results (adjusted to exclude the US cable systems sold on June 30, 2003) were 6.2% and 6.3%, respectively. On the same basis, quarterly and annual service operating income before amortization of $195.8 million and $779.6 million, increased by 6.2% and 10.5% over the same periods last year. The main drivers of this growth were higher customer levels, rate increases implemented over the last two years and the recent Monarch systems acquisition.

Satellite division quarterly and annual service revenue of $152.4 million and $588.2 million, respectively, grew by approximately 9% over the same periods in 2003, while service operating income before amortization was $43.4 million (45.6% increase) and $152.8 million (67.2% increase). Both of these improvements are primarily the result of growth in DTH customers and rate increases.

“Both divisions have generated strong improvements,” said Jim Shaw. “Bundling, the addition of new services, and the introduction of new technologies, such as cable’s launch of the dual tuner personal video recorder (“PVR”) and HDTV set-top receiver, continue to add value to our service offerings and contribute to growing our customer base. In addition, we’re looking forward to the launch of Digital Phone, our primary line telephone offering, in 2005 as our next growth opportunity.”

The continued strength in Shaw’s operating results and the generation of free cash flow has enabled the Company to improve its financial position and reward shareholders through an increase to the quarterly dividend rate on its Class B Non-Voting Shares. The quarterly dividend, which was $0.03 per share on September 30, 2003, was increased to $0.07 per share commencing September 30, 2004. This increases the dividend from $0.16 per share in fiscal 2004 to a projected annual rate of $0.28 per share in fiscal 2005.

During the fourth quarter, Shaw repurchased 837,500 of its Class B Non-Voting Shares for cancellation, pursuant to the normal course issuer bid, for $16.8 million ($20.00 per share). On a year-to-date basis, the Company has repurchased and cancelled 4,134,000 Class B Non-Voting

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Shares for $86.0 million ($20.80 per share). In addition, Shaw repaid $210.6 million of debt during the year.

In closing, Mr. Shaw stated “The efforts of Shaw’s management and staff have enabled us to meet the free cash flow target and strengthen our financial position. Our strong service offerings continue to generate customer growth and will soon be further enhanced by the addition of Digital Phone. As a result, we believe that shareholder value will continue to improve. As stated in the third quarter release, our preliminary view for fiscal 2005 is free cash flow of approximately $325 million. We intend to continue to use free cash flow to reduce debt, pay dividends and, subject to market conditions, repurchase Class B Non-Voting Shares for cancellation”.

Shaw Communications Inc. is a diversified Canadian communications company whose core business is providing broadband cable television, Internet and satellite direct-to-home (“DTH”) services to approximately 3.0 million customers. Shaw is traded on the Toronto and New York stock exchanges (Symbol: TSX — SJR.B, NYSE — SJR).

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For further information, please contact:

Steve Wilson
Senior Vice President, Chief Financial Officer
Shaw Communications Inc.
403-750-4500

CAUTION CONCERNING FORWARD LOOKING STATEMENTS

Certain statements included and incorporated by reference herein constitute forward-looking statements. When used, the words “anticipate”, “believe”, “expect”, “plan”, “intend”, “target”, “guideline”, “goal”, and similar expressions are intended to 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), 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 the expectations and predictions of Shaw is subject to a number of risks and uncertainties as outlined in Management’s Discussion and Analysis. Consequently, all of the forward-looking statements made in this report and the documents incorporated by reference herein are qualified by these 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, Shaw.

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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 our 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 emerge from time to time, and it is not possible for the Company to predict what factors will arise or when they may arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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SHAREHOLDERS’ REPORT
FOURTH QUARTER ENDING AUGUST 31, 2004

SELECTED FINANCIAL HIGHLIGHTS
CONSOLIDATED RESULTS OF OPERATIONS
FOURTH QUARTER ENDING AUGUST 31, 2004

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Shaw Communications Inc.

OPERATING HIGHLIGHTS

Our objective is to continue to increase stakeholder value. We accomplish this primarily through delivery of strong financial performance and development of future growth opportunities. On the first front, we continued to improve financial results and to grow the customer base across all divisions in fiscal 2004. Shaw exceeded fiscal 2004 free cash flow guidance of $275 million and our preliminary view for fiscal 2005 is free cash flow of approximately $325 million. In fiscal 2004, the Company repaid debt of $210.6 million, repurchased 4.1 million of Class B Non-Voting Shares or 1.9% of the outstanding share capital, and increased the quarterly dividend.

Improved financial performance strengthens our ability to focus on the disciplined pursuit of future growth opportunities. Shaw’s emphasis on providing our customers with high value

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Shaw Communications Inc.

services in a cost effective manner lays the groundwork for the development of our Digital Phone service. In the same way that customers have embraced the value of Shaw’s bundling of video and Internet services, we believe they will be eager to do the same with our “triple play” bundle of video, Internet and voice. To this end, we are working diligently to deploy our Digital Phone service in calendar 2005.

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Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2004

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, 2003 Annual Report and Financial Statements and the Notes thereto.

Consolidated Overview

Consolidated service revenue was $531.8 million in the fourth quarter compared to $502.3 million last year, and on a year-to-date basis was $2.1 billion versus $2.0 billion in 2003. The improved service revenue resulted from growth in the customer base, rate increases and the acquisition of the Monarch cable systems effective March 31, 2004.

Quarterly and annual service operating income before amortization¹ of $239.2 million and $926.0 million respectively increased by 6.8% and 13.2% over last year. The improvements resulted from growth in revenue and cost savings across all divisions.

In fiscal 2003, the Company sold its US cable systems. To present a view of continuing operations excluding the US cable systems, quarterly and annual increases in service revenue over last year, were 7.0% and 7.1%, respectively. The increases in service operating income before amortization were 7.6% and 16.4%, respectively.

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Shaw Communications Inc.

Net income of $28.9 million and $90.9 million increased by $24.5 million and $137.8 million for the quarter and year, respectively, as follows:

Earnings per share were $0.08 and $0.22 for the quarter and year, respectively, compared to losses per share of $0.02 and $0.38 in the respective periods last year.

Cash flow from operations before changes in non-cash working capital was $186.3 million in the fourth quarter compared to $160.8 million last year, and on a year-to-date basis was $694.8 million compared to $544.2 million in 2003. The growth over the respective quarterly and yearly comparative periods was due to increased service operating income before amortization of $15.1 million and $108.3 million, reduced interest expense of $9.1 million and $40.2 million, and decreased current income tax expense of $5.9 million and $9.0 million.

On a consolidated basis, the Company achieved positive free cash flow¹ of $56.1 million in the fourth quarter (2003 — $56.9 million), bringing the year-to-date amount to $278.9 million (2003 — $98.3 million). The satellite division generated positive free cash flow of $7.5 million compared to negative free cash flow of $16.1 million in the same quarter last year. This is the second consecutive quarter that the division generated positive free cash flow. Cable generated $48.6 million of positive free cash flow for the quarter compared to $73.0 million last year. The decrease is due to a higher level of capital expenditures in the fourth quarter this year, partly offset by improved operating cash flows.

Update to critical accounting policies

In Management’s Discussion and Analysis included in the Company’s August 31, 2003 Annual Report, the Company discusses critical accounting policies including key estimates and assumptions that management has made under these principles and how they affect the amounts reported in the Consolidated Financial Statements. The MD&A also describes significant accounting policies where alternatives exist. We focus your attention to the following changes in respect of our discussion of critical accounting policies.

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Shaw Communications Inc.

Recent Canadian Accounting Pronouncements

In the third quarter of 2004, the Company adopted the Emerging Issues Committee (“EIC”) Abstract 142 for revenue arrangements with multiple deliverables and Abstract 141 for revenue recognition. The Company had the choice of adopting the new accounting policies prospectively or retroactively, with restatement of prior periods and chose the latter to assist in the comparison of historical results.

The Abstracts, as they pertain to Shaw, address the accounting treatment for arrangements involving multiple deliverables. Multiple deliverables would include situations where companies provide multiple solutions to their customers’ needs and may involve the delivery or performance of multiple products, services, or rights to use assets, and performance may occur at different points in time or over different periods of time. In some cases, the arrangements include initial installation, initiation, or activation services and involve consideration in the form of a fixed fee or a fixed fee coupled with a continuing revenue stream.

The Company has determined that its Cable, DTH and Satellite Services divisions have multiple deliverables comprised of subscriber connection fee revenue, customer premise equipment revenue and related subscription revenue. The Company determined that the upfront fees charged to customers in respect of connection fees and customer premise equipment (DCTs, modems, DTH equipment and truck tracking equipment) do not constitute separate units of accounting based on the criteria outlined in EIC 142. Accordingly, these revenue streams were assessed as an integrated package as outlined in EIC 141.

Under EIC 141, up-front fees such as subscriber connection fees and amounts charged on customer premise equipment, that have no utility to the purchaser separate and independent of the seller providing additional products or services, must be deferred and recognized systematically over the periods that the fees for additional products or services are earned. Therefore, the Company must defer and amortize connection fees and amounts received on the sale of customer premise equipment over the expected term of the related subscription service.

In conjunction with these up-front fees, the Company also incurs incremental direct costs which include, in the case of equipment revenue, the cost of the equipment and related installation costs, and in the case of subscriber connection fee revenue, commissions, installation costs on reconnections and other costs. There are two alternatives to account for these incremental direct costs. The first alternative is to expense the costs immediately. The second alternative, as permitted by primary sources of GAAP, is to defer and amortize incremental costs directly related to the upfront revenue. EIC-141 states that the costs incurred related to the acquisition or origination of a customer contract should be accounted for on a basis similar to the three criteria set forth in EIC-27, “Revenues and Expenditures during the Pre-operating Period.” The Company has determined that the aforementioned incremental costs identified above meet the criteria for deferral. First, the costs, such as the equipment and installation, are directly related to obtaining the equipment revenue or connection fee revenue from the new customer. Second, the costs are incremental in nature. Third, the costs are recoverable from the related revenues. Historically, the Company has determined that the excess cost of the equipment over the upfront equipment revenue is recoverable from the related revenues of the ongoing subscription revenue.

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Shaw Communications Inc.

The Company has chosen to defer and amortize the related costs as this provides the best matching of the costs of the equipment and subscriber connection costs with the related up-front revenue and future revenue stream of subscription services and is consistent with Canadian accounting standard “Financial Statement Concepts” which recognizes that expenses that are linked to revenue generating activities in a cause and effect relationship are normally matched with the revenue in the accounting period in which the revenue is recognized. This view is consistent with Shaw’s previous policy of deferral and amortization of equipment subsidies as the Company views the sale of the equipment and subscription for services as one transaction; however, the Company must now defer and recognize the equipment revenue and the cost of equipment over the expected term of the ongoing subscription service. Previously, the Company immediately recognized revenue and an equal cost on the sale of the equipment when the customer service was activated. The subsidized portion of the equipment cost of sale was deferred and included in amortization expense over a period of two years.

The adoption of the new accounting policy also affects the Satellite Services division. Under EIC 141, the Company must defer and recognize the revenue and the cost of equipment on the sale of truck tracking equipment over the term of the related service contract for airtime, which is generally five years. Previously, the revenue, cost and profit on truck tracking equipment were recognized immediately when the equipment was shipped. As a result of this accounting change, the Company adjusted its opening purchase equation on the acquisition of Cancom in fiscal 2000 to recognize a deferred charge of $32.3 million, a deferred credit of $46.4 million and a reduction to the future income tax liability of $4.9 million attributable to net deferral on truck tracking equipment sales. The adjustments to the purchase equation resulted in the recognition of additional goodwill of $9.2 million.

Finally, the adoption of the policy affects the recognition of subscriber connection fee revenue and related expenses. Subscriber connection fees must now be deferred and amortized over the anticipated period of the related subscription revenue. As the term for which the customer will receive the subscription services is not specified, we have used customer churn and factored in considerations such as increased competition from new entrants in the video and high-speed Internet markets to determine that an amortization period of two years is reasonable. As permitted under EIC 141, the Company may also defer and recognize the direct and incremental costs related to obtaining the subscriber connection fee over the same period. A review of the costs of connecting a customer indicates that the cost is equal to or greater than the connection fee revenue. As a result of this review and because of the nature of connection costs, the Company has limited its deferral of subscriber connection fee costs to the amount of deferred connection fee revenue. Previously, as per industry practice and in accordance with US GAAP, subscriber connection fees were recognized as revenue when the connection was completed as it was considered a partial recovery of initial selling expenses and related administrative expenses.

In conjunction with the adoption of EIC 141, the Company changed its income statement presentation to distinguish the amortization of deferred equipment revenue and deferred equipment costs from the revenue and expenses recognized from ongoing service activities. The equipment revenue and equipment costs are deferred and recognized over the anticipated term of the related future revenue (i.e., the monthly service revenue) with the period of recognition spanning over two to five years. As a result, the amortization of deferred equipment revenue and

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Shaw Communications Inc.

deferred equipment cost are non-cash items on the income statement, similar to the Company’s amortization of deferred IRU revenue, which the Company also currently separates from ongoing revenue. Further, within the lifecycle of a customer relationship, the customer generally purchases the customer premise equipment only once, at the beginning of that relationship, whereas the subscription revenue represents a continuous revenue stream throughout that customer relationship. Therefore, the segregated presentation provides a clearer distinction within the income statement between cash and non-cash activities and between upfront and continuous revenue streams, which assists financial statement readers to predict future cash flows from operations.

The retroactive adoption of the accounting policy primarily resulted in changes to the income statement presentation as described in Note 1 to the unaudited interim Consolidated Financial Statements, and was neutral with respect to net income, with no impact on earnings per share. Also described in Note 1 to the unaudited interim Consolidated Financial Statements are new accounting principles that the Company will be required to adopt in future periods starting as early as the first quarter of 2005.

Reclassification

As more fully described in Note 1 to the unaudited interim Consolidated Financial Statements, the Company reclassified its DTH customer premise equipment sold to retailers not yet activated, net of working capital, to deferred charges. This balance sheet reclassification had no impact on earnings.

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

The Company utilizes this measurement as it is a widely accepted financial indicator of a company’s ability to service and/or incur debt. In respect of the calculation of consolidated service operating income before amortization, it is presented as a sub-total line item in the Company’s unaudited interim Consolidated Statements of Income (Loss) and Deficit. It is calculated as service revenue less service operating, general and administrative expenses.

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Shaw Communications Inc.

Free cash flow

The Company utilizes this measurement as it measures the Company’s ability to repay debt and return cash to shareholders. Consolidated free cash flow is calculated as follows:

CABLE

FINANCIAL HIGHLIGHTS

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Shaw Communications Inc.

OPERATING HIGHLIGHTS

The quarterly and annual increases in cable service revenue over last year were 4.6% and 2.2% respectively. The year-over-year increases, after adjusting 2003 results to exclude the US cable systems sold in 2003, were 6.2% and 6.3%. The revenue growth is primarily the result of increased customer base, rate increases implemented in the current and prior year and the recent Monarch systems acquisition. Monarch systems generated service revenue of $5.8 million in the fourth quarter and $9.7 million for the year ended August 31, 2004.

Quarterly and annual service operating income before amortization increased by 5.1% and 7.2%, respectively, and by 6.2% and 10.5% after taking the 2003 sale of the US systems into account. The Monarch systems, acquired March 31, 2004, had fourth quarter service operating income before amortization of $3.5 million and $5.6 million for the year. The principal reason for the balance of the increases in service operating income before amortization, is revenue growth arising from a higher customer base, rate increases and reduction of costs, including decreased bandwidth costs.

Despite customer growth and the contribution of the Monarch systems, fourth quarter revenue and service operating income before amortization increased marginally over the third quarter of this year. This occurred because the increase in customers, which more than offset seasonal losses in June and July, took place in the latter part of the quarter. In addition, there was an increase in promotional and bundle discounts over the third quarter as new customers took advantage of various promotional offers.

The cable division has experienced increased competition with the entrance of new video competitors, such as Manitoba Tel and SaskTel in Winnipeg and Saskatoon. In addition, Telus, which operates in Shaw’s Alberta and British Columbia service areas, has also been granted a broadcasting distribution license to enter the video market in the near future. In response, Shaw is solidifying its strong customer relationships through initiatives such as same day, next day service, enhancing the attractiveness of its current products with new features (e.g. HDTV, DVR, a new interactive program guide, Xtreme-I Internet Service^TM), launching Digital Phone and expanding its marketing efforts. This investment in marketing, customer service and product innovation may put some upward pressure on costs in the cable division in the short term. However, this activity and the “triple play” offering of voice, video and data is expected to position Shaw for growth in the near future.

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Shaw Communications Inc.

Although total capital expenditures of $267.1 million in fiscal 2004 increased marginally from $257.3 million last year, the components of spending have changed. The increase in upgrades and enhancements of $50.1 million (80.6%) reflects projects undertaken this year related to 860 MHz upgrades, preparation for Digital Phone and further DOCSIS^TM 2.0 deployments. New housing development decreased $19.1 million (23.0%) as a result of the sale of the US cable systems and better coordination of construction projects with developers. Success based spending decreased $16.8 million (23.5%) despite this year’s net increase of Internet customers of 126,006 and digital terminal growth of 107,879 compared to 125,933 and 57,093, respectively, last year. The decrease in spending reflects the deployment of lower cost DOCSIS^TM modems for Internet customers, the strengthened Canadian dollar and reduced customer churn.

On a quarterly basis, total capital expenditures increased from $47.4 million to $90.9 million this year. Increased upgrade activity as described above accounted for $25.8 million of this increase. Success based spending increased by $7.2 million over the same quarter last year due to net deployment of digital terminals this year of 38,517 compared to 7,870 last year. The remaining increase was mainly due to increases in building expenditures including leasehold additions to Shaw’s office space in Vancouver and renovations to three other properties.

SUBSCRIBER STATISTICS

Shaw added 5,830 basic subscribers in the current quarter compared to 2,197 in the same quarter last year, and on a year-to-date basis added 30,520 customers versus 18,935 in 2003. Shaw continued its innovative service offerings such as its basic and full cable service introductory offer to standalone Internet and other potential customers. The intent of this offer is to encourage these customers to develop viewing habits that recognize the value of a monthly cable subscription and to continue as customers at the end of the promotional period. This program has been in place for over a year and has proven successful.

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Shaw Communications Inc.

During the quarter, Shaw launched a marketing campaign which helped push digital customer additions to 24,712 for the quarter compared to 5,475 in the same quarter last year. Growth has also been stimulated by recent initiatives from DTH suppliers in both the US and Canadian markets to crack-down on illegal satellite systems. In addition, the introduction of HDTV in most major centers as well as the offering of time-shifting channels and VOD have increased the attractiveness of Shaw’s digital product. Shaw has further enhanced its digital offering through the introduction of the DCT 6208 digital terminal, the first set top box to incorporate both HDTV and a personal video recorder, as well as the launch of a new interactive program guide that provides significant improvements over the previous version.

The Internet customer base grew by 23,488 during the fourth quarter compared to 18,929 in the same period last year, and year-to-date growth was approximately 126,000, consistent with last year. Total Internet customers surpassed the one million mark in June, and stood at 1,020,938 at August 31, 2004. Internet penetration as a percentage of basic was 48.1% compared to 42.8% last year. Shaw continues to be the most successful North American cable operator in this regard. The recent addition of Xtreme-I^TM to the Internet product line in a number of major systems has been successful. Xtreme-I^TM uses DOCSIS^TM technology to significantly increase download and upload speeds, which is appealing to customers who download large files or visit online gaming and “content-rich” multimedia sites.

The continued growth in Shaw’s customer base is noteworthy given that it more than offset declines in customers as a result of intensified competition from the entry of new video competitors and it occurred during a period in which Shaw implemented rate increases. To maintain growth in this highly competitive market, the Company continues to deliver high-quality, reliable service with excellent customer care, which includes support 24/7/365.

At the end of the fourth quarter, approximately 42.4% of Shaw customers subscribed to bundled services compared to 37.9% last year. The attractiveness of the bundled packages is enhanced by Shaw’s ability to offer services such as VOD, HDTV and, in the near future, Digital Phone. Shaw’s bundling strategy has proven to be an effective customer retention tool for its digital and Internet customers as shown by churn rates in the table below.

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COMBINED SATELLITE (DTH and Satellite Services)

FINANCIAL HIGHLIGHTS

The Satellite division increased quarterly and annual service revenue by approximately 9% over the same periods in 2003, and service operating income before amortization grew by 45.6% and 67.2%, respectively. These improvements resulted mainly from customer growth and rate increases in DTH.

The Satellite division achieved its second consecutive quarter of positive free cash flow of $7.5 million compared to negative $16.1 million in the same quarter last year. The outlook for free cash flow remains positive; however, due to one-time capital costs of approximately $10.3 million in connection with the launch of Anik F2, it is expected that the Satellite division will report negative free cash flow in the first quarter of fiscal 2005. In addition, the division will likely incur higher success-based capital expenditures during the first quarter in preparation for the Christmas season.

The improvement in free cash flow over comparative periods primarily resulted from increased service operating income before amortization in the DTH (Star Choice) segment, reduced success-based expenditures due to lower customer activations, and reduced interest expense as a result of last year’s redemption of the US $150 million senior secured notes of Star Choice and this year’s repayment of the $250 million Cancom structured note.

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DTH (Star Choice)

FINANCIAL HIGHLIGHTS

CUSTOMER STATISTICS

OPERATING HIGHLIGHTS

Service revenue increased by 9.7% over the same quarter last year and 12.3% for the year as a result of rate increases and subscriber growth. The growth in service revenue combined with cost savings, including call center efficiencies and lower sales and marketing expenses, resulted in

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service operating income before amortization increasing by 61.9% and 110.5% over the comparable periods last year.

Although the rate of customer growth has declined in relation to last year, it is encouraging that DTH was able to grow its customer base despite the competitive challenges from the “black market” and other service providers and the monthly rate increase of $3 implemented on February 1, 2004. Customer churn rates increased marginally in the fourth quarter compared to last year partially due to the repackaging of certain programming services in early August. On an annual basis churn rates improved marginally over 2003.

The annual increase in customer retention was enhanced by improvements in customer service starting with the call center, where the percentage of abandoned calls during the fourth quarter dropped to 2.1% compared to 31.4% a year ago. Not only does this reduce churn, but telecom costs are significantly reduced as a result of lower call waiting times. In addition, customer growth is enhanced as a result of Star Choice’s simple and affordable entry offers, in which, unlike its direct competitor, there are no long-term contracts that lock customers into high-end programming packages. Star Choice’s lineup was also bolstered by the introduction of 15 new video services during the third quarter, which represents a significant value-add to customers as they are able to take advantage of more time-shifting opportunities.

In early fiscal 2005, Star Choice further enhanced its service offerings. First, Star Choice is operating with additional capacity on Telesat’s Anik F2 satellite, which replaced the Anik E2R satellite. This has enabled Star Choice to offer its customers more HDTV channels. Second, Star Choice introduced new receivers which have provided a more economical entry point for new customers and have enabled existing customers to expand Star Choice services in their homes.

Satellite Services

FINANCIAL HIGHLIGHTS

The year over year decline in service revenue of approximately $5.9 million is due to the March 2003 sale of Business Television, which had revenue of $7.2 million in 2003. Excluding the Business Television unit, service operating income before amortization increased by 10.3% mainly due to improvements in the Truck Tracking division.

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OTHER OPERATING COSTS:

Included in consolidated service operating income before amortization are other operating costs as outlined in Note 2 to the unaudited interim Consolidated Financial Statements. Other operating costs of $6.5 million recorded in the second quarter of 2004 represent the excess of the cost of settling an alleged breach of contract claim over the amount which had previously been provided. For the year ended August 31, 2003, other operating costs included a fourth quarter corporate restructuring charge offset by the reversal of a $12.0 million litigation accrual, as well as a DTH inventory writedown of $4.4 million and the satellite division restructuring charge of $4.8 million recorded in the first nine months of 2003. The 2003 restructuring charges totaling $8.8 million included severance costs of $8.0 million and $0.8 million of exit costs related to centralization of operational functions in Calgary. Approximately $7.0 million of severance costs were incurred in 2003, and the remaining severance and exit costs were incurred this year.

OTHER INCOME AND EXPENSE ITEMS:

Amortization

As outlined under “Recent Canadian Accounting Pronouncements”, in conjunction with the adoption of changes required by EIC 141, the Company has segregated the presentation of the amortization of equipment revenue and equipment cost in its income statement. Equipment revenue and cost of equipment on customer premises is deferred and recognized over the anticipated term of the related future revenue with the period of recognition spanning two years for cable and DTH equipment and five years for Satellite Services equipment. The year-over-year decrease in the amortization of the deferred equipment revenue of 8.4% in the fourth quarter and 10.0% for the year is primarily the result of lower truck tracking and DTH equipment sales over the last few years. Due to the lower sales and as a result of Star Choice retaining ownership to the Satellite dishes from September 2001 to February 2003, the fourth quarter and year-to-date amortization of the deferred cost of equipment decreased 19.6% and 8.8%, respectively, compared to 2003.

Amortization of deferred charges decreased over the comparative periods primarily due to marketing launch costs becoming fully amortized in the prior year and lower amortization of deferred financing costs resulting from the repayment of the Big Pipe and Cancom bank facilities. Amortization of property, plant and equipment decreased over the comparative year due to the sale of the US cable systems effective June 30, 2003.

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Shaw Communications Inc.

Interest

Interest charges decreased over the same periods last year as a result of reduced consolidated debt levels and lower average cost of borrowing in fiscal 2004. Debt reduction commenced in the latter portion of 2003 as Shaw generated consolidated positive free cash flow and utilized the proceeds from sale of the US cable systems in June, 2003.

Foreign exchange gain (loss) on unhedged and hedged long-term debt

Shaw records foreign exchange gains and losses on the translation of foreign denominated unhedged long-term debt, which at August 31, 2004 was comprised of US $51.5 million of bank loans. As a result of fluctuations of the Canadian dollar relative to the US dollar, the Company recorded foreign exchange gains of $2.6 million for the quarter and $4.0 million for the year ended August 31, 2004. In the same periods last year, a foreign exchange loss of $6.8 million and a gain of $32.6 million resulted from the strengthening of the Canadian dollar relative to the US dollar on the translation of US dollar denominated unhedged debt, which in 2003 included the Star Choice US $150 million Senior unsecured notes.

As required by generally accepted accounting principles (“GAAP”) the Company is required to translate long-term debt at the period-end and year-end foreign exchange rates. 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 final amounts that the hedged debt would be settled at 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 interest rate agreements (which fix the liability for interest and principal) long-term debt would increase by $208.3 million (2003 — $138.1 million) which represents the corresponding deferred foreign exchange gain included in deferred credits.

Debt retirement costs

During the current quarter, the Company repurchased $3.2 million of the $300 million Senior unsecured notes due October 17, 2007 and incurred $0.2 million in costs.

In November 2003, the Company issued $350 million of Senior unsecured notes at 7.5% and used the net proceeds to repay its $350 million credit facility due February 10, 2006. The Company incurred $2.4 million of costs in connection with the repayment comprised of approximately $1.0 million on the cancellation of a related interest rate hedge on the $350 million and approximately $1.4 million on the write-off of deferred financing charges on the credit facility. The debt restructuring resulted in the extension of Shaw’s credit horizon for another 8 years on $350 million of debt at a fixed rate of 7.5%.

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Other revenue

Other revenue decreased over the comparative quarter and year mainly due to foreign exchange gains realized on the settlement of US denominated accounts payable in fiscal 2003.

RISKS AND UNCERTAINTIES

There have been no material changes in any risks or uncertainties facing the Company since the year ended August 31, 2003.

FINANCIAL POSITION

Overview

Total assets at August 31, 2004 were $7.6 billion compared to $7.7 billion at August 31, 2003. The following discussion describes the significant changes in the consolidated balance sheet since August 31, 2003.

Current assets decreased by $57.4 million due to a reduction in accounts receivable of $24.4 million, a reduction in inventory of $12.4 million and a decrease in cash and term deposits of $20.8 million. The decrease in receivables is primarily due to timing and improved collection of subscriber receivables, such as an increase in number of customers on preauthorized payment plans. The decrease in inventory is mainly due to write-off of obsolete DTH equipment.

Property, plant and equipment decreased by $123.3 million due to current year amortization being in excess of capital expenditures and amounts assigned to property, plant and equipment on business acquisitions during the year.

Deferred charges decreased by $25.6 million due to a decrease in deferred equipment costs of $27.2 million.

Broadcast licenses increased by $57.9 million due to the acquisition of cable systems from Monarch.

Current liabilities, excluding the current portion of long-term debt, increased by $20.6 million due to increases in accounts payable and accrued liabilities of $5.7 million, income taxes payable of $3.8 million, unearned revenue of $6.7 million and bank indebtedness of $4.3 million. Accounts payable and accrued liabilities increased due to timing of bonus payments. The increase was partly offset by the settlement of litigation in the current year. Unearned revenue increased primarily due to an increase in prepayments on cable subscriber accounts. Income taxes payable increased by $3.8 million due to income tax refunds received in the current year.

Long-term debt, including current portion, decreased by $266.4 million resulting from the net repayment of Shaw Communications Inc. and Cancom debt of $210.6 million and a decrease of $74.1 million relating to the translation of the US dollar denominated debt. This was offset by an increase in the Burrard Landing Lot 2 Holdings Partnership debt of $18.4 million.

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Shaw Communications Inc.

Other long-term liability, which is the provision for the Company’s defined benefit pension plan, increased by $7.5 million primarily due to the current year pension expense of $8.7 million.

Deferred credits increased by $48.0 million primarily from a $70.2 million increase in deferred foreign exchange gains on the translation of hedged US dollar denominated debt and a $5.7 million prepayment on the grant of a new IRU, which was offset by $12.1 million in amortization of prepaid IRU rental revenue and a $15.1 million decrease in deferred equipment revenues. Future income taxes increased by $43.0 million due to the future income tax expense of $48.0 million recorded in the current year offset by the future income tax asset of $5.4 million recorded on the purchase of cable systems from Monarch. The current year income tax expense includes a $22.9 million valuation allowance in respect of capital losses offset by provincial income tax rate reductions of $14.1 million.

Share capital increased by $25.5 million primarily due to $65.0 million on the issuance of 3,737,780 Class B Non-Voting Shares on the acquisition of Monarch cable systems offset by $39.7 million on the repurchase of 4,134,000 Class B Non-Voting Shares for cancellation.

LIQUIDITY AND CAPITAL RESOURCES

Last year, Shaw strengthened its financial position through the sale of non-strategic assets, including the sale of the US cable assets, and through the generation of consolidated free cash flow of $98.3 million. Shaw continued its focus on strengthening its financial position with the generation of $278.9 million of free cash flow for the year ended August 31, 2004. Shaw used its free cash flow of $278.9 million plus cash of $25.1 million, working capital and inventory reduction of $51.6 million and other cash items of $2.2 million to purchase $86.0 million of Class B Non-Voting Shares for cancellation, pay dividends on Class A and Class B Non-Voting Shares of $36.9 million, pay the cash component of the Monarch cable systems acquisition of $24.3 million and repay long-term debt of Shaw Communications Inc. and Cancom of $210.6 million.

Shaw received approval from The Toronto Stock Exchange (“TSX”) to make a normal course issuer bid to purchase its Class B Non-Voting Shares for the period November 7, 2003 to November 6, 2004. Under the bid, Shaw is authorized to acquire up to 11,000,000 Class B Non-Voting Shares, representing approximately 5% of the issued and outstanding Class B Non-Voting Shares. The purchase and cancellation of outstanding Class B Non-Voting Shares under the bid may represent an opportunity to provide capital appreciation and market stability for the benefit of Shaw’s shareholders. Pursuant to the normal course issuer bid, during the quarter Shaw repurchased 837,500 of its Class B Non-Voting Shares for cancellation for $16.8 million for a year-to-date total of 4,134,000 Class B Non-Voting Shares for a total of $86.0 million.

The Company also improved its financial flexibility in fiscal 2004 through the continued reorganization of its debt. During the first quarter, Shaw issued $350 million in Senior unsecured notes at a rate of 7.5% due November 20, 2013. The net proceeds (after issue and underwriting expenses) from the issuance of the notes were $343.1 million which were used to repay the $350 million credit facility due February 10, 2006. Shaw cancelled its interest rate hedge for the $350 million facility incurring costs of $1.0 million. As a result of the debt restructuring, Shaw was

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Shaw Communications Inc.

able to extend $350 million of its credit horizon for another 8 years at a fixed rate of 7.5%. In addition, in the third quarter Shaw amended its revolving credit facility such that $910 million will be available through to April 30, 2009. Previously, the revolving facility was subject to an amortization schedule which reduced it to nil by April 30, 2007. The amended facility requires no amortization. It continues to be unsecured and ranks pari passu with the senior unsecured notes. The amendment provides Shaw with increased flexibility, a longer debt horizon and underscores the significant credit support that Shaw has from its existing banking syndicate.

On December 15, 2003, Shaw repaid the $250 million Cancom Structured Note with $22 million in cash and the drawdown of its own credit facility. At August 31, 2004, Shaw had access to $859 million of available credit facilities based on existing bank covenants. Based on available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations and obligations during the next fiscal year. On a longer-term basis, Shaw expects to generate adequate free cash flow and to have sufficient borrowing capacity to finance foreseeable future business plans and refinance maturing debt.

CASH FLOW

Operating Activities

Cash flow from operations increased over comparative periods as a result of growth in service operating income before amortization and due to decreased interest and current income tax expenses. The year-over-year increase in cash flow from working capital of $41.9 million is a result of the repayment of current vendor financing of approximately $40 million last year. The quarter-over-quarter increase in cash flow from working capital of $40.2 million is mainly due to the portion of the vendor financing that was due in the fourth quarter of last year.

Investing Activities

The cash from investing activities was $269.6 million higher in the comparative quarter primarily due to US cable systems sale proceeds of $257.4 million and lower capital expenditures and equipment subsidies of $30.3 million. For the year ended August 31, 2004, the principal use of cash was for capital expenditures and equipment subsidies of $388.8 million and $24.3 million on the purchase of the Monarch cable systems, while in the comparative year, the cash required to fund capital expenditures and equipment subsidies of $420.6 million was mainly

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Shaw Communications Inc.

offset by the US cable systems sale proceeds of $257.4 million and reduction in inventory of $59.7 million.

Financing Activities

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

CAUTION CONCERNING FORWARD LOOKING STATEMENTS

Certain statements included and incorporated by reference herein constitute forward-looking statements. When used, the words “anticipate”, “believe”, “expect”, “plan”, intend”, “target”, “guideline”, “goal”, and similar expressions are intended to 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), 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 the expectations and predictions of Shaw is subject to a number of risks and uncertainties, including, but not limited to, 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, our actual results may vary materially from those as

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Shaw Communications Inc.

described herein. Consequently, all of the forward-looking statements made in this report and the documents incorporated by reference herein are qualified by these 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, Shaw.

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 our 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 emerge from time to time, and it is not possible for the Company to predict what factors will arise or when they may arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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Shaw Communications Inc.

CONSOLIDATED BALANCE SHEETS
(Unaudited)

See accompanying notes

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Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND DEFICIT
(Unaudited)

See accompanying notes

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Shaw Communications Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)