SJR Shaw Communications Inc

SIGNATURE

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

Proposed Transaction

On March 15, 2021, Shaw announced that it entered into an arrangement agreement (the “Arrangement Agreement”) with Rogers Communications Inc. (“Rogers”), under which Rogers will acquire all of Shaw’s issued and outstanding Class A Participating Shares (“Class A Shares”) and Class B Non-Voting Participating Shares (“Class B Shares”) in a transaction valued at approximately $26 billion, inclusive of approximately $6 billion of Shaw debt (the “Rogers-Shaw Transaction”).

¹ Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute or alternative for GAAP measures. Adjusted EBITDA is not a defined term under IFRS and does not have a standardized meaning, and therefore may not be a reliable way to compare us to other companies. Additional information about this measure, including a quantitative reconciliation to the most directly comparable financial measure in the Company’s Consolidated Financial Statements, is included in “Non-GAAP and additional financial measures” in the management’s discussion and analysis (MD&A) dated January 12, 2023 for the three-month period ending November 30, 2022, which section is incorporated by reference herein and is available on SEDAR at www.sedar.com.

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Holders of Class A Shares and Class B Shares (other than the Shaw Family Living Trust, the controlling shareholder of Shaw, and related persons (collectively, the “Shaw Family Shareholders”)) will receive $40.50 per share in cash. The Shaw Family Shareholders will receive 60% of the consideration for their shares in the form of Class B Non-Voting Shares of Rogers (the “Rogers Shares”) on the basis of the volume-weighted average trading price for the Rogers Shares for the 10 trading days ending March 12, 2021, and the balance in cash. As at March 13, 2021, when the Arrangement Agreement was signed, the value of the consideration attributable to the Class A Shares and Class B Shares held by the Shaw Family Shareholders (calculated using the volume-weighted average trading price for the Rogers Shares for the 10 trading days ending March 12, 2021) was equivalent to $40.50 per share.

The Rogers-Shaw Transaction is being implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Alberta). At the special meeting of Shaw shareholders held on May 20, 2021, the Company obtained approval of the plan of arrangement by the holders of Shaw’s Class A Shares and Class B Shares in the manner required by the interim order granted by the Court of King’s Bench of Alberta on April 19, 2021. On May 25, 2021, the Court of King’s Bench of Alberta issued a final order approving the plan of arrangement.

Agreement to Sell Freedom Mobile to Quebecor

On June 17, 2022, Rogers, Shaw and Quebecor Inc. (“Quebecor”) announced their agreement for the sale of Freedom Mobile Inc. (“Freedom”) to Quebecor for a purchase price of $2.85 billion. On August 12, 2022, Rogers, Shaw and Quebecor entered into a definitive agreement (the “Share Purchase Agreement”) for the sale of Freedom to Videotron Ltd. (“Videotron”), a subsidiary of Quebecor, substantially consistent with the terms announced on June 17, 2022 (the “Freedom Transaction”). The Freedom Transaction is subject to regulatory approvals from the Commissioner of Competition (the “Commissioner”) and Innovation, Science and Economic Development Canada (ISED), and is conditional on all the conditions of the Rogers-Shaw Transaction having been satisfied. Subject to satisfaction of all conditions, closing of the Freedom Transaction will take place immediately before the closing of the Rogers-Shaw Transaction. Collectively, the Rogers-Shaw Transaction, the Freedom Transaction and all transactions provided thereunder are referred to as the “Proposed Transaction.”

The Share Purchase Agreement provides that Videotron, a subsidiary of Quebecor, will acquire all of the issued and outstanding shares of Freedom. Accordingly, Videotron will acquire the entire Freedom business, including all Freedom-branded wireless and Internet customers, as well as all of Freedom’s infrastructure, spectrum and retail locations, and all of Freedom’s existing backhaul and backbone arrangements. The Freedom Transaction also includes long-term agreements pursuant to which Rogers will provide Quebecor with transport services (including backhaul and backbone) and roaming services. Rogers and Quebecor will provide each other with customary transition services as are necessary to operate Freedom’s business for a reasonable period of time post-closing and to facilitate the separation of Freedom’s business from the other businesses and operations of Shaw and its affiliates. Pursuant to the Share Purchase Agreement, the Shaw Mobile-branded wireless subscribers will not be transferred to Videotron and will remain with Shaw.

Status of the Proposed Transaction: Regulatory Approvals and Related Proceedings

For the Rogers-Shaw Transaction, consistent with the terms of the Arrangement Agreement, the parties made filings with each of the Canadian Radiotelevision and Telecommunications Commission (CRTC), the Commissioner and ISED beginning in April 2021. For the Freedom Transaction, consistent with the terms of the Share Purchase Agreement, the parties made filings with the Commissioner and ISED beginning in June 2022.

On March 24, 2022, the CRTC completed its comprehensive review and approved the transfer of Shaw’s licenced broadcasting undertakings to Rogers, marking an important milestone towards closing of the Rogers-Shaw Transaction.

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On May 9, 2022, the Commissioner filed applications to the Competition Tribunal (the “Tribunal”) seeking an order to prevent the Rogers-Shaw Transaction from proceeding and an interim injunction to prevent closing until the Commissioner’s case could be heard by the Tribunal. On May 30, 2022, the Commissioner’s interim injunction application was resolved on the basis that Rogers and Shaw agreed to not proceed with closing the Rogers-Shaw Transaction until either a negotiated settlement is agreed with the Commissioner or the Tribunal’s disposition of the Commissioner’s application. The Tribunal hearing began on November 7, 2022, and the parties’ final oral arguments were completed on December 14, 2022.

On December 31, 2022, the Tribunal issued an order dismissing the Commissioner’s application, an initial summary of which was released on December 29, 2022. On December 30, 2022, the Commissioner advised Rogers, Shaw and Quebecor of his intention to appeal the decision to the Federal Court of Appeal and to seek an injunction to prevent the Proposed Transaction from closing pending the disposition of that appeal. The Federal Court of Appeal has scheduled a one-day hearing on January 24, 2023 and issued an order staying (suspending) the Tribunal’s decision and the closing of the Rogers-Shaw Transaction until the Federal Court of Appeal issues its final judgment in the appeal. The Federal Court of Appeal ordered the Commissioner to file his arguments by January 13, 2023, and Shaw, Rogers, and Quebecor, to file their reply by January 17, 2023.

On October 25, 2022, the Minister of Innovation, Science, and Industry (the “Minister”) officially denied the application for the wholesale transfer of Freedom’s spectrum licences to Rogers, which is no longer being proposed. In connection with his ongoing review of the pending application to transfer Freedom’s spectrum licences to Videotron, the Minister gave notice that any spectrum licences acquired by Videotron must remain in Videotron’s possession for at least ten years and the Minister conveyed his expectation that Videotron’s prices for wireless services in Ontario and Western Canada would be comparable to what Videotron is currently offering in Quebec. Videotron subsequently announced that it is willing to accept these conditions. On December 31, 2022, the Minister indicated that he will render his decision on the transfer of Freedom’s spectrum licences to Videotron once there is clarity on the ongoing legal process arising from the Tribunal’s decision.

“The parties remain committed to these pro-competitive transactions that will bring more choice, more affordability and more connectivity to Canadians. The Competition Tribunal’s ruling is comprehensive, thoughtful, well-reasoned and clear in its finding that the Proposed Transaction is not likely to prevent or lessen competition substantially. In fact, the Tribunal found accurately that if the transactions are allowed to proceed, the strengthening of Rogers’ position in Alberta and British Columbia will also likely contribute to an increased intensity of competition in those markets,” said Brad Shaw, Executive Chair and Chief Executive Officer, Shaw Communications Inc.

Given the ongoing legal process and the parties’ continued commitment to the Proposed Transaction, Rogers, Shaw and the Shaw Family Living Trust have agreed to extend the outside date for closing the Rogers-Shaw Transaction to January 31, 2023. The outside date in the Share Purchase Agreement also tracks the outside date in the Arrangement Agreement but can be extended beyond January 31, 2023 only with the consent of Videotron. Nonetheless, the time required for the outcome of the Commissioner’s appeal to the Federal Court of Appeal, as well as for ISED to issue its approval, including any further appeals of the outcomes of any required regulatory process, is uncertain and could result in further delays in or prevent the closing of the Rogers-Shaw Transaction and the Freedom Transaction. (See “Risks and Uncertainties” in this MD&A and “Known Events, Trends, Risks and Uncertainties – Risks Related to the Proposed Transaction” in the Company’s 2022 Annual Report.)

Further information regarding the Rogers-Shaw Transaction is contained in the management information circular filed April 23, 2021 on Shaw’s SEDAR profile at www.sedar.com and EDGAR profile at www.sec.gov/edgar.shtml.

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First Quarter Fiscal 2023

In the first quarter, the Company added approximately 13,800 new Wireless customers, consisting primarily of 12,300 prepaid customers. Postpaid net additions of approximately 1,500 in the quarter were characterized by lower year-over-year Shaw Mobile activity, higher churn, and increased competitive intensity. Wireless service revenue increased 5.4% due to continued subscriber growth, partially offset by lower ARPU². First quarter Wireless ARPU decreased 1.0% from the prior year period to $36.58. Wireless postpaid churn³ increased 19-basis points from the first quarter of fiscal 2022 to 1.89%.

First quarter Wireless revenue increased 3.9% to $345 million and adjusted EBITDA of $121 million increased 11.0% year-over-year. Wireless service revenue increased 5.4% to $252 million due to an increased subscriber base, while Wireless equipment revenue was approximately flat compared to the prior year at $93 million. The increase in adjusted EBITDA is mainly due to continued service revenue growth.

Consumer Wireline RGU⁴ losses of approximately 52,800 improved over the prior year period, led by Internet additions of approximately 10,800 which includes run-rate growth of approximately 4,000 and one-time impacts, combined with fewer Video and Phone losses. In October 2022, the Company launched Shaw Stream, a new video service that allows Shaw Fibre+ Internet customers to access streaming apps, including the recent addition of Disney+, in one place on their TV and makes them easy to navigate with Shaw’s voice remote. In Business, positive Internet and Satellite RGUs were offset by declines in Phone and Video, resulting in Business RGUs increasing by approximately 3,300.

First quarter Wireline revenue and adjusted EBITDA decreased 2.7% and 5.3% to $1.03 billion and $496 million, respectively. Consumer revenue of $867 million decreased 3.2% compared to the prior year as growth in Internet revenue was offset by declines in Video, Satellite and Phone subscribers and revenue. Business revenue of $161 million was approximately flat year-over-year as Internet revenue growth and continued demand for the Smart suite of products was largely offset by the impact of approximately $9 million of revenue related to a financing lease arrangement involving a facility that was designed and built to customer specifications in the prior year. Wireline adjusted EBITDA includes increased year-over-year costs of approximately $5 million primarily related to higher equity-based compensation due to the increase in Shaw’s share price and the impact of employee-related provision releases.

Capital expenditures in the first quarter of $303 million compared to $229 million in the prior year. Wireline capital spending increased by approximately $85 million primarily due to higher success-based investments and increases in combined upgrades, enhancements, and replacement categories. Wireless spending of $28 million decreased by approximately $11 million year-over-year primarily due to lower planned investment in the quarter.

Free cash flow for the quarter of $113 million decreased 55.7% from $255 million in the prior year. The decrease was driven by higher capital expenditures, higher income taxes paid, and lower revenue.

² Average revenue per subscriber unit (ARPU) is a supplementary financial measure which may not be comparable to similar measures presented by other issuers. Additional information about this supplementary financial measure is included in “Key Performance Drivers” in the MD&A dated January 12, 2023 for the three-month period ending November 30, 2022, which section is incorporated by reference herein and is available on SEDAR at www.sedar.com.

³ Wireless postpaid churn is a metric used to measure the Company’s success in retaining Wireless subscribers. Additional information about this metric is included in “Key Performance Drivers” in the MD&A dated January 12, 2023 for the three-month period ending November 30, 2022, which section is incorporated by reference herein and is available on SEDAR at www.sedar.com.

⁴ RGUs is a metric used to measure the count of subscribers in the Company’s Wireline and Wireless segments. Additional information about this metric is included in “Key Performance Drivers” in the MD&A dated January 12, 2023 for the three-month period ending November 30, 2022, which section is incorporated by reference herein and is available on SEDAR at www.sedar.com.

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Funds flow from operations for the first quarter of $487 million decreased 0.8% from $491 million in the first quarter of fiscal 2022 primarily due to the decrease in net income, partially offset by an increase in non-cash future income tax expense.

Net income for the first quarter of fiscal 2023 of $168 million decreased $28 million compared to the first quarter of fiscal 2022 primarily due to the $16 million decrease in adjusted EBITDA and an $18 million increase in Transaction-related costs, partially offset by a $9 million decrease in income tax expense.

As at the end of November 30, 2022, the Company’s net debt leverage ratio was 2.2x⁵.

2023 Annual General Meeting of Shareholders (2023 AGM)

The Company received an extension from the Toronto Stock Exchange to hold its 2023 AGM as late as April 11, 2023. Provided that the Rogers-Shaw Transaction has not closed, the Company expects to hold its 2023 AGM in April 2023 and will provide notice of meeting and record date in accordance with the securities law requirements.

About Shaw

Shaw Communications Inc. is a leading Canadian connectivity company. The Wireline division consists of Consumer and Business services. Consumer serves residential customers with broadband Internet, video and digital phone. Business provides business customers with Internet, data, WiFi, digital phone and video services. The Wireless division provides wireless voice and LTE data services.

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, and TSXV – SJR.A). For more information, please visit www.shaw.ca.

The accompanying MD&A forms part of this news release and the “Caution concerning forward-looking statements” applies to all the forward-looking statements made in this news release.

For more information, please contact:

Shaw Investor Relations

Investor.relations@sjrb.ca

⁵ Net debt leverage ratio, which is a non-GAAP ratio, is defined as the ratio of net debt to adjusted EBITDA, and net debt is a non-GAAP financial measure. Net debt leverage ratio and net debt are not standardized measures under IFRS and may not be a reliable way to compare us to other companies. For more information about this measure and ratio see “Non-GAAP and additional financial measures” in the MD&A dated January 12, 2023 for the three-month period ending November 30, 2022, which section is incorporated by reference herein and is available on SEDAR at www.sedar.com.

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Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended November 30, 2022

January  12, 2023

Contents

Advisories

The following Management’s Discussion and Analysis (MD&A) of Shaw Communications Inc. is dated January 12, 2023 and should be read in conjunction with the condensed interim Consolidated Financial Statements and Notes thereto for the quarter ended November 30, 2022 and the 2022 Annual Consolidated Financial Statements, the Notes thereto and related MD&A included in the Company’s 2022 Annual Report. The financial information presented herein has been prepared on the basis of International Financial Reporting Standards (IFRS) for interim financial statements and is expressed in Canadian dollars unless otherwise indicated. References to “Shaw,” the “Company,” “we,” “us” or “our” mean Shaw Communications Inc. and its subsidiaries and consolidated entities, unless the context otherwise requires.

Caution concerning forward-looking statements

Statements included in this MD&A that are not historic constitute “forward-looking information” within the meaning of applicable securities laws. They can generally be identified by words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “target,” “goal,” and similar expressions (although not all forward-looking statements contain such words). All of the forward-looking statements made in this MD&A are qualified by these cautionary statements. Forward looking statements in this MD&A include, but are not limited to, statements relating to:

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Shaw Communications Inc.

Forward-looking statements are based on assumptions and analyses made by the Company 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 as at the current date. The Company’s management believes that its assumptions and analysis in this MD&A are reasonable and that the expectations reflected in the forward-looking statements contained herein are also reasonable based on the information available on the date such statements are made and the process used to prepare the information.

These assumptions, many of which are confidential, include but are not limited to management expectations with respect to:

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Shaw Communications Inc.

You should not place undue reliance on any forward-looking statements. Many factors, including those not within the Company’s control, may cause the Company’s actual results to be materially different from the views expressed or implied by such forward-looking statements, including, but not limited to:

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Shaw Communications Inc.

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Shaw Communications Inc.

The foregoing is not an exhaustive list of all possible factors.

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 described in the Company’s 2022 Annual MD&A and this first quarter fiscal 2023 MD&A.

Any forward-looking statement speaks only as of the date on which it was originally made and, except as required by law, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect any change in related assumptions, events, conditions or circumstances. All forward-looking statements contained in this MD&A are expressly qualified by this statement.

Additional Information

Additional information concerning the Company, including the Company’s Annual Information Form, is available through the Internet on SEDAR which may be accessed at www.sedar.com. Copies of such information may also be obtained on the Company’s website at www.shaw.ca, or on request and without charge from the Corporate Secretary of the Company, Suite 900, 630 – 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4L4, telephone (403) 750-4500.

Non-GAAP and additional financial measures

Certain measures in this MD&A do not have standard meanings prescribed by GAAP and are therefore considered non-GAAP financial measures. These measures are provided to enhance the reader’s overall understanding of our financial performance or current financial condition. They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a more consistent basis for comparison between periods. These measures are not in accordance with, or an alternative to, GAAP and do not have standardized meanings. Therefore, they are unlikely to be comparable to similar measures presented by other entities.

Please refer to “Non-GAAP and additional financial measures” in this MD&A for a discussion and reconciliation of non-GAAP financial measures, including adjusted EBITDA, free cash flow and net debt as well as net debt leverage ratio and adjusted EBITDA margin, which are non-GAAP ratios.

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Shaw Communications Inc.

Introduction

Proposed Transaction

On March 15, 2021, Shaw announced that it entered into an arrangement agreement (the “Arrangement Agreement”) with Rogers Communications Inc. (“Rogers”), under which Rogers will acquire all of Shaw’s issued and outstanding Class A Participating Shares (“Class A Shares”) and Class B Non-Voting Participating Shares (“Class B Shares”) in a transaction valued at approximately $26 billion, inclusive of approximately $6 billion of Shaw debt (the “Rogers-Shaw Transaction”).

Holders of Class A Shares and Class B Shares (other than the Shaw Family Living Trust, the controlling shareholder of Shaw, and related persons (collectively, the “Shaw Family Shareholders”)) will receive $40.50 per share in cash. The Shaw Family Shareholders will receive 60% of the consideration for their shares in the form of Class B Non-Voting Shares of Rogers (the “Rogers Shares”) on the basis of the volume-weighted average trading price for the Rogers Shares for the 10 trading days ending March 12, 2021, and the balance in cash. As at March 13, 2021, when the Arrangement Agreement was signed, the value of the consideration attributable to the Class A Shares and Class B Shares held by the Shaw Family Shareholders (calculated using the volume-weighted average trading price for the Rogers Shares for the 10 trading days ending March 12, 2021) was equivalent to $40.50 per share.

The Rogers-Shaw Transaction is being implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Alberta). At the special meeting of Shaw shareholders held on May 20, 2021, the Company obtained approval of the plan of arrangement by the holders of Shaw’s Class A Shares and Class B Shares in the manner required by the interim order granted by the Court of King’s Bench of Alberta on April 19, 2021. On May 25, 2021, the Court of King’s Bench of Alberta issued a final order approving the plan of arrangement.

Agreement to Sell Freedom Mobile to Quebecor

On June 17, 2022, Rogers, Shaw and Quebecor Inc. (“Quebecor”) announced their agreement for the sale of Freedom Mobile Inc. (“Freedom”) to Quebecor for a purchase price of $2.85 billion. On August 12, 2022, Rogers, Shaw and Quebecor entered into a definitive agreement (the “Share Purchase Agreement”) for the sale of Freedom to Videotron Ltd. (“Videotron”), a subsidiary of Quebecor, substantially consistent with the terms announced on June 17, 2022 (the “Freedom Transaction”). The Freedom Transaction is subject to regulatory approvals from the Commissioner of Competition (the “Commissioner”) and Innovation, Science and Economic Development Canada (ISED), and is conditional on all conditions of the Rogers-Shaw Transaction having been satisfied. Subject to satisfaction of all conditions, closing of the Freedom Transaction will take place immediately before the closing of the Rogers-Shaw Transaction. Collectively, the Rogers-Shaw Transaction, the Freedom Transaction and all transactions provided thereunder are referred to as the “Proposed Transaction.”

The Share Purchase Agreement provides that Videotron, a subsidiary of Quebecor, will acquire all of the issued and outstanding shares of Freedom. Accordingly, Videotron will acquire the entire Freedom business, including all Freedom-branded wireless and Internet customers, as well as all of Freedom’s infrastructure, spectrum and retail locations, and all of Freedom’s existing backhaul and backbone arrangements. The Freedom Transaction also includes long-term agreements pursuant to which Rogers will provide Quebecor with transport services (including backhaul and backbone) and roaming services. Rogers and Quebecor will provide each other with customary transition services as are necessary to operate Freedom’s business for a reasonable period of time post-closing and to facilitate the separation of Freedom’s business from the other businesses and operations of Shaw and its affiliates. Pursuant to the Share Purchase Agreement, the Shaw Mobile-branded wireless subscribers will not be transferred to Videotron and will remain with Shaw.

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Shaw Communications Inc.

Status of the Proposed Transaction: Regulatory Approvals and Related Proceedings

For the Rogers-Shaw Transaction, consistent with the terms of the Arrangement Agreement, the parties made filings with each of the Canadian Radiotelevision and Telecommunications Commission (CRTC), the Commissioner and ISED beginning in April 2021. For the Freedom Transaction, consistent with the terms of the Share Purchase Agreement, the parties made filings with the Commissioner and ISED beginning in June 2022.

On March 24, 2022, the CRTC completed its comprehensive review and approved the transfer of Shaw’s licenced broadcasting undertakings to Rogers, marking an important milestone towards closing of the Rogers-Shaw Transaction.

On May 9, 2022, the Commissioner filed applications to the Competition Tribunal (the “Tribunal”) seeking an order to prevent the Rogers-Shaw Transaction from proceeding and an interim injunction to prevent closing until the Commissioner’s case could be heard by the Tribunal.

On May 30, 2022, the Commissioner’s interim injunction application was resolved on the basis that Rogers and Shaw agreed to not proceed with closing the Rogers-Shaw Transaction until either a negotiated settlement is agreed with the Commissioner or the Tribunal’s disposition of the Commissioner’s application. The Tribunal hearing began on November 7, 2022, and the parties’ final oral arguments were completed on December 14, 2022.

On December 31, 2022, the Tribunal issued an order dismissing the Commissioner’s application, an initial summary of which was released on December 29, 2022. On December 30, 2022, the Commissioner advised Rogers, Shaw and Quebecor of his intention to appeal the decision to the Federal Court of Appeal and to seek an injunction to prevent the Proposed Transaction from closing pending the disposition of that appeal. The Federal Court of Appeal has scheduled a one-day hearing on January 24, 2023 and issued an order staying (suspending) the Tribunal’s decision and the closing of the Rogers-Shaw Transaction until the Federal Court of Appeal issues its final judgment in the appeal. The Federal Court of Appeal has ordered the Commissioner to file his arguments by January 13, 2023, and Shaw, Rogers, and Quebecor to file their reply by January 17, 2023.

On October 25, 2022, the Minister of Innovation, Science, and Industry (the “Minister”) officially denied the application for the wholesale transfer of Freedom’s spectrum licences to Rogers, which is no longer being proposed. In connection with his ongoing review of the pending application to transfer Freedom’s spectrum licences to Videotron, the Minister gave notice that any spectrum licences acquired by Videotron must remain in Videotron’s possession for at least ten years and the Minister conveyed his expectation that Videotron’s prices for wireless services in Ontario and Western Canada would be comparable to what Videotron is currently offering in Quebec. Videotron subsequently announced that it is willing to accept these conditions. On December 31, 2022, the Minister indicated that he will render his decision on the transfer of Freedom’s spectrum licences to Videotron once there is clarity on the ongoing legal process arising from the Tribunal’s decision.

Given the ongoing legal process and the parties’ continued commitment to the Proposed Transaction, Rogers, Shaw and the Shaw Family Living Trust have agreed to extend the outside date for closing the Rogers-Shaw Transaction to January 31, 2023. The outside date in the Share Purchase Agreement also tracks the outside date in the Arrangement Agreement but can be extended beyond January 31, 2023 only with the consent of Videotron. Nonetheless, the time required for the outcome of the Commissioner’s appeal to the Federal Court of Appeal, as well as for ISED to issue its approval, including any appeals of the outcomes of any required regulatory process, is uncertain and could result in further delays in or prevent the closing of the Rogers-Shaw Transaction and the Freedom Transaction. (See “Risks and Uncertainties” in this MD&A and “Known Events, Trends, Risks and Uncertainties – Risks Related to the Proposed Transaction” in the Company’s 2022 Annual Report.)

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Shaw Communications Inc.

Further information regarding the Rogers-Shaw Transaction is contained in the management information circular filed April 23, 2021 on Shaw’s SEDAR profile at www.sedar.com and EDGAR profile at www.sec.gov/edgar.shtml.

Wireless

Our Wireless division currently operates in Ontario, Alberta, and British Columbia, covering approximately 50% of the Canadian population. The Company has over 800 wireless Freedom Mobile retail locations across Ontario, Alberta, and British Columbia, including corporate, dealer and national retail. Shaw Mobile is being sold at 34 Shaw retail locations, and when combined with our national retail partners, Walmart, Loblaws, and Best Buy, Shaw Mobile is available at over 200 retail locations in Alberta and British Columbia.

In the first quarter, the Company added approximately 13,800 new Wireless customers, consisting primarily of 12,300 prepaid customers. First quarter Wireless revenue increased 3.9% to $345 million and adjusted EBITDA¹ of $121 million increased 11.0% year-over-year. Wireless service revenue increased 5.4% to $252 million due to an increased subscriber base, while Wireless equipment revenue was approximately flat compared to the prior year at $93 million. The increase in adjusted EBITDA is mainly due to continued service revenue growth.

Wireline

Our Wireline Consumer division is focused on enhancing our Fibre+ network and the in-home WiFi experience by continuing to deploy our next generation Fibre+ Gateway 2.0 modem, powered by Comcast, which includes a 2.5 Gbps port and enables speeds beyond 1 Gbps. We also continue to focus on customer experience and satisfaction by streamlining our day-to-day operations, while still providing the necessary in-person engagements to support the customer experience.

Our Wireline Business division provides connectivity solutions to its customers by leveraging our Smart suite products which provide cost-effective enterprise grade managed IT and communications solutions that are increasingly valued by businesses of all sizes as the digital economy grows in scope and complexity. In response to the needs of its customers, Shaw Business offers a suite of collaboration tools and new Smart products, such as Microsoft 365, Smart Remote Office, SmartSecurity and SmartTarget and a 2.0 Gig Internet speed tier providing businesses of all sizes the speed and bandwidth to leverage data-heavy applications and cloud services.

Wireline RGUs² declined by approximately 49,500 in the quarter compared to a loss of approximately 78,100 in the first quarter of fiscal 2022. Consumer Wireline RGU losses of approximately 52,800 improved over the prior year period, led by Internet additions of approximately 10,800 which includes run-rate growth of approximately 4,000 and one-time impacts, combined with fewer Video and Phone losses. In October 2022, the Company launched Shaw Stream, a new video service that allows Shaw Fibre+ Internet customers to access streaming apps, including the recent addition of Disney+, in one place on their TV and makes them easy to navigate with Shaw’s voice remote. In Business, positive Internet and Satellite RGUs were offset by declines in Phone and Video, resulting in Business RGUs increasing by approximately 3,300.

¹ Adjusted EBITDA is a non-GAAP financial measure and should not be considered a substitute or alternative for GAAP measures. Adjusted EBITDA is not a defined term under IFRS and does not have a standardized meaning, and therefore may not be a reliable way to compare us to other companies. Additional information about this measure, including a quantitative reconciliation to the most directly comparable financial measure in the Company’s Consolidated Financial Statements, is included in “Non-GAAP and additional financial measures” in this MD&A.

² RGUs is a metric used to measure the count of subscribers in the Company’s Wireline and Wireless segments. Additional information about this metric is included in “Key Performance Drivers” in this MD&A.

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Shaw Communications Inc.

First quarter Wireline revenue of $1.03 billion was in-line with the prior year while adjusted EBITDA of $496 million decreased 5.3% year-over-year. Consumer revenue of $867 million decreased 3.2% compared to the prior year as growth in Internet revenue was offset by declines in Video, Satellite and Phone subscribers and revenue. Business revenue of $161 million was approximately flat year-over-year as Internet revenue growth and continued demand for the Smart suite of products was largely offset by the impact of approximately $9 million of revenue related to a financing lease arrangement involving a facility that was designed and built to customer specifications in the prior year.

Key Performance Drivers

The Company measures the success of its strategies using a number of key performance drivers which are defined and described under “Key Performance Drivers – Statistical Measures” in the 2022 Annual MD&A and in this MD&A below, which includes a discussion as to their relevance, definitions, calculation methods and underlying assumptions. The following key performance indicators are not measurements in accordance with GAAP, should not be considered alternatives to revenue, net income or any other measure of performance under GAAP and may not be comparable to similar measures presented by other issuers.

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In Wireless, the Company added 13,778 net postpaid and prepaid subscribers in the quarter, consisting of 1,513 postpaid additions and 12,265 prepaid additions. Postpaid net additions were characterized by lower year-over-year Shaw Mobile activity, higher churn, and increased competitive intensity.

Wireline RGUs declined by 49,516 in the quarter compared to a decline of 78,098 in the first quarter of fiscal 2022. Consumer Wireline RGU losses of 52,819 improved over the prior year period, led by Internet additions of 10,841 which includes run-rate growth of approximately 4,000 and one-time impacts, combined with fewer Video and Phone losses. In Business, positive Internet and Satellite RGUs were offset by declines in Phone and Video resulting in Business RGUs increasing by 3,303.

Wireless Postpaid Churn

Wireless postpaid subscriber churn (“postpaid churn”) measures success in retaining subscribers. Wireless postpaid churn is a measure of the number of postpaid subscribers that deactivated during a period as a percentage of the average postpaid subscriber base during a period, calculated on a monthly basis. It is calculated by dividing the number of Wireless postpaid subscribers that deactivated (in a month) by the average number of postpaid subscribers during the month. When used or reported for a period greater than one month, postpaid churn represents the sum of the number of subscribers deactivating for each period incurred divided by the sum of the average number of postpaid subscribers of each period incurred.

Postpaid churn of 1.89% in the first quarter of fiscal 2023 increased 19-basis points from 1.70% in the first quarter of fiscal 2022.

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Shaw Communications Inc.

Wireless average billing per subscriber unit (ABPU)

Wireless ABPU is an industry metric that is useful in assessing the operating performance of a wireless entity. We use ABPU as a measure that approximates the average amount the Company invoices an individual subscriber unit for service on a monthly basis. ABPU helps us to identify trends and measures the Company’s success in attracting and retaining higher lifetime value subscribers. Wireless ABPU is calculated as service revenue (excluding allocations to wireless service revenue under IFRS 15) divided by the average number of subscribers on the network during the period and is expressed as a rate per month.

ABPU of $36.92 in the first quarter of fiscal 2023 decreased by 4.5% from $38.67 in the first quarter of fiscal 2022. The ABPU decrease reflects the increased number of customers that have subscribed to our lower priced Shaw Mobile service and increased competitive intensity.

Wireless average revenue per subscriber unit (ARPU)

Wireless ARPU is calculated as service revenue divided by the average number of subscribers on the network during the period and is expressed as a rate per month. This measure is an industry metric that is useful in assessing the operating performance of a wireless entity. ARPU also helps to identify trends and measure the Company’s success in attracting and retaining higher-value subscribers.

ARPU of $36.58 in the first quarter of fiscal 2023 compares to $36.95 in the first quarter of fiscal 2022, representing a decrease of 1.0%. The ARPU decrease reflects the increased number of customers that have subscribed to our lower priced Shaw Mobile service and increased competitive intensity partially offset by lower device subsidy allocations in the first quarter of fiscal 2023.

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Shaw Communications Inc.

Overview

For detailed discussion of divisional performance see “Discussion of operations.” Highlights of the consolidated first quarter financial results are as follows:

Revenue

Revenue for the first quarter of fiscal 2023 of $1.37 billion decreased $16 million, or 1.2%, from $1.39 billion for the first quarter of fiscal 2022, highlighted by the following:

Compared to the fourth quarter of fiscal 2022, consolidated revenue for the quarter increased 1.0%, or $14 million. The increase in revenue over the prior quarter includes a $20 million increase in the Wireless division driven by a $18 million increase in equipment revenue and a $2 million increase in service revenue which reflects the impact of the increased subscriber base partially mitigated by a decrease in ABPU (down from $37.63 in the fourth quarter of fiscal 2022 to $36.92 in the current quarter). Meanwhile, ARPU decreased quarter-over-quarter (from $37.08 in the fourth quarter of fiscal 2022 to $36.58 in the current quarter). The increase from Wireless was partially offset by Wireline as revenues decreased by $6 million over the prior quarter. This was driven by a $12 million decrease in the Consumer division partially offset by a $6 million increase in the Business division.

Adjusted EBITDA

Adjusted EBITDA for the first quarter of fiscal 2023 of $617 million decreased by $16 million, or 2.5%, from $633 million for the first quarter of fiscal 2022, highlighted by the following:

Consistent with the variances noted above, adjusted EBITDA margin for the first quarter of 45.0% decreased 70-basis points compared to 45.7% in the first quarter of fiscal 2022.

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Shaw Communications Inc.

Compared to the fourth quarter of fiscal 2022, adjusted EBITDA for the current quarter decreased $7 million, or 1.1%, which includes a $5 million decrease in the Wireline division primarily related to higher equity-based compensation due to the increase in Shaw’s share price in the current quarter. Adjusted EBITDA for the Wireless division decreased $2 million, or 1.6%, primarily due to the unfavorable margin impact from higher equipment sales relative to total wireless revenues in the current quarter.

Free cash flow

Free cash flow for the first quarter of fiscal 2023 of $113 million decreased $142 million from $255 million in the first quarter of fiscal 2022, mainly due to a $16 million decrease in adjusted EBITDA, a $74 million increase in capital expenditures and a $53 million increase in income taxes paid.

Funds flow from operations

Funds flow from operations for the first quarter of fiscal 2023 of $487 million decreased $4 million compared to the first quarter of fiscal 2022 primarily due to the decrease in net income, partially offset by an increase in non-cash future income tax expense.

Net income

Net income of $168 million for the three months ended November 30, 2022, compared to a net income of $196 for the same period in fiscal 2022. The changes in net income are outlined in the following table:

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Shaw Communications Inc.

Non-GAAP and additional financial measures

The Company’s continuous disclosure documents may provide discussion and analysis of non-GAAP financial measures or non-GAAP ratios. These financial measures do not have standard definitions prescribed by IFRS and therefore may not be comparable to similar measures disclosed by other companies. The Company’s continuous disclosure documents may also provide discussion and analysis of supplementary financial measures. Certain investors, analysts and others utilize these measures in assessing the Company’s operational and financial performance and as an indicator of its ability to service debt and return cash to shareholders. These non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures have not been presented as an alternative to net income, funds flow from operations, or any other measure of performance or liquidity prescribed by IFRS. The following contains a description of the Company’s use of specified financial measures and for non-GAAP financial measures and non-GAAP ratios provides a reconciliation to the nearest IFRS measure or provides a reference to such reconciliation.

Adjusted EBITDA

Adjusted earnings before interest, income taxes, depreciation and amortization (“adjusted EBITDA”) is calculated as revenue less operating, general and administrative expenses. It is intended to indicate the Company’s ongoing ability to service and/or incur debt and is therefore calculated before items such as restructuring costs, other gains (losses), amortization (a non-cash expense), taxes and interest. Adjusted EBITDA is one measure used by the investing community to value the business.

Adjusted EBITDA has no directly comparable GAAP financial measure. Alternatively, the following table provides a reconciliation of net income to adjusted EBITDA:

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Net debt

The Company uses this measure to perform valuation-related analysis and make decisions about the Company’s capital structure. We believe this measure aids investors in analyzing the value of the business and assessing our leverage. Refer to “Liquidity and capital resources” for further detail.

Net debt leverage ratio

The Company uses this non-GAAP ratio to determine its optimal leverage ratio. Refer to “Liquidity and capital resources” for further detail.

Free cash flow

The Company utilizes this measure to assess the Company’s ability to repay debt and pay dividends to shareholders.

Free cash flow is comprised of adjusted EBITDA less capital expenditures (excluding asset retirement obligations), interest on debt, interest on lease liabilities, income taxes paid (net of refunds), payments relating to lease liabilities, and adjusted to exclude non-cash share-based compensation expense or recovery. The most directly comparable IFRS financial measure to free cash flow is funds flow from operations, and a reconciliation of free cash flow to funds flow from operations is presented below.

Free cash flow has not been reported on a segmented basis. Certain components of free cash flow, including adjusted EBITDA, continue to be reported on a segmented basis, whereas other components such as interest expense and income taxes paid (net of refunds) are not generally directly attributable to a segment and are reported on a consolidated basis.

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The following table provides a reconciliation of free cash flow to funds flow from operations:

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In the first quarter of fiscal 2023, Wireline RGUs declined by 49,516 in the quarter compared to a decline of 78,098 in the first quarter of fiscal 2022. Consumer Wireline RGU losses of 52,819 improved over the prior year period, led by Internet additions of 10,841 which includes run-rate growth of approximately 4,000 and one-time impacts, combined with fewer Video and Phone losses. In Business, positive Internet and Satellite RGUs were offset by declines in Phone and Video resulting in Business RGUs increasing by 3,303.

Revenue highlights include:

Adjusted EBITDA highlights include:

Adjusted EBITDA for the first quarter of fiscal 2023 of $496 million decreased 5.3%, or $28 million, from $524 million in the first quarter of fiscal 2022. The decrease was primarily due to the decrease in Consumer revenue and higher Wireline costs including increased year-over-year costs of approximately $5 million primarily related to higher equity-based compensation due to the increase in Shaw’s share price and the impact of employee-related provision releases.

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The Wireless division added 13,778 net postpaid and prepaid subscribers in the quarter, consisting of 1,513 postpaid additions and 12,265 prepaid additions. Postpaid net additions were characterized by lower year-over-year Shaw Mobile activity, higher churn, and increased competitive intensity.

Revenue highlights include:

Adjusted EBITDA highlights include:

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In the first quarter of fiscal 2023, capital investment of $303 million increased $74 million from the comparable period in fiscal 2022. Wireline capital spending increased by approximately $85 million primarily due to higher success-based investments and increases in combined upgrades, enhancements, and replacement categories. Wireless spending of $28 million decreased by approximately $11 million year-over-year primarily due to lower planned investment in the quarter.

Wireline highlights for the quarter include:

Wireless highlights for the quarter include:

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Amortization of $311 million increased 3.7% for the three months ended November 30, 2022, when compared to the same period in fiscal 2022. The increase in amortization reflects the amortization of new expenditures exceeding the amortization of assets that became fully amortized during the period partially offset by a decrease in deferred equipment costs in the current quarter.

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Shaw Communications Inc.

Financial position

Total assets were $15.7 billion at November 30, 2022 compared to $15.8 billion at August 31, 2022. The following is a discussion of significant changes in the Consolidated Statements of Financial Position since August 31, 2022.

Current assets decreased $61 million primarily due to decreases in cash of $134 million, the current portion of contract assets of $1 million, and inventories of $1 million, partially offset by increases in income taxes recoverable of $56 million, accounts receivables of $12 million and other current assets of $7 million. Cash decreased primarily due to the payment of $148 million in dividends and cash outlays for investing activities, partially offset by funds flow from operations. Refer to “Liquidity and capital resources” for more information.

Accounts receivable increased $12 million mainly due to timing and an increase in receivables related to wireless equipment purchases.

The current portion of contract assets decreased $1 million over the period primarily due to a $2 million decrease in Wireless subscribers participating in the Company’s discretionary wireless handset discount program over the past year partially offset by a $1 million increase in deferred Wireline costs as a result of higher onboarding promotional activity for new subscribers over the past year. Under IFRS 15, up-front promotional offers, such as onboarding or switch credits, offered to new two-year value-plan customers are recorded as a contract asset and amortized over the life of the contract against future service revenues while the portion of the Wireless discount relating to the handset is applied against equipment revenue at the point in time that the handset is transferred to the customer while the portion relating to service revenue is recorded as a contract asset and amortized over the life of the contract against future service revenues.

Property, plant and equipment decreased $5 million as the amortization of capital and right-of-use assets exceeded the capital investments and additions to right-of-use assets in the period.

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Shaw Communications Inc.

Current liabilities increased $308 million during the period primarily due increases in the current portion of long-term debt of $499 million, current portion of derivatives of $2 million, current portion of lease liabilities of $1 million, and current provisions of $2 million. These increases were partially offset by a decrease in accounts payable of $195 million. The current portion of long-term debt increased due to the reclassification of a $500 million senior note coming due in November 2023.

Accounts payable and accrued liabilities decreased due to the timing of payments and fluctuations in various payables including accrued dividends, interest and employee incentive plans. Due to uncertainty around the timing of the close of the Proposed Transaction, the Company had only one month of declared dividends outstanding as at November 30, 2022 compared to four months of dividends declared and payable as at August 31, 2022.

Lease liabilities decreased $27 million mainly due to principal repayments of $31 million in the period, partially offset by a $4 million increase in net new lease liabilities.

Shareholders’ equity increased $174 million mainly due to an increase in retained earnings. Retained earnings increased solely due to the quarterly net income of $168 million as there were no dividends declared in the quarter due to uncertainty around the timing of the close of the Proposed Transaction. Share capital increased $4 million due to the issuance of 143,995 Class B Shares under the Company’s stock option plan. Accumulated other comprehensive loss decreased $3 million primarily due to the remeasurement recorded on employee benefit plans.

As at December 31, 2022, there were 477,364,715 Class B Shares and 22,372,064 Class A Shares issued and outstanding. As at December 31, 2022, 6,590,919 Class B Shares were issuable on exercise of outstanding options. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Trading Symbols: TSX – SJR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca.

Liquidity and capital resources

In the three-month period ended November 30, 2022, the Company generated $113 million of free cash flow. Shaw used its free cash flow along with cash of $134 million and proceeds from the issuance of Class B Shares of $4 million to pay common share dividends of $148 million, pay $20 million in Rogers-Shaw Transaction-related costs, and fund the net working capital change.

Debt structure and financial policy

The Company has an accounts receivable securitization program with a Canadian financial institution which allows it to sell certain trade receivables into the program. As at November 30, 2022, the proceeds of the sales were committed up to a maximum of $200 million (with $200 million drawn under the program as at November 30, 2022). The Company continues to service and retain substantially all of the risks and rewards relating to the trade receivables sold, and therefore, the trade receivables remain recognized on the Company’s Consolidated Statements of Financial Position and the funding received is recorded as a current liability (revolving floating rate loans) secured by the trade receivables. The buyer’s interest in the accounts receivable ranks ahead of the Company’s interest and the program restricts it from using the trade receivables as collateral for any other purpose. The buyer of the trade receivable has no claim on any of the Company’s other assets.

As at November 30, 2022, the net debt leverage ratio for the Company was 2.2x. The terms of the Arrangement Agreement require Shaw to obtain Rogers’ consent prior to incurring certain types of indebtedness.

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Shaw’s credit facilities are subject to customary covenants which include maintaining minimum or maximum financial ratios.

As at November 30, 2022, Shaw is in compliance with these covenants and based on current business plans, the Company is not aware of any condition or event that would give rise to non-compliance with the covenants over the life of the borrowings which currently mature in December of 2024.

As at November 30, 2022, the Company had $287 million of cash on hand and its $1.5 billion bank credit facility was fully undrawn.

Based on the aforementioned financing activities, available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fund operations, obligations and working capital requirements, including maturing debt, during the upcoming year. The terms of the Arrangement Agreement require that the Company maintain sufficient liquidity to pay an $800 million termination fee payable by Shaw in certain circumstances.

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Shaw Communications Inc.

For the three months ended November 30, 2022, funds flow from operations decreased over the comparable period in fiscal 2022 primarily due to a decrease in the net change in non-cash balances related to operations and a slight decrease in the funds flow from operations. The net change in non-cash balances related to operations fluctuated over the comparative period due to changes in accounts receivable, inventory and other current asset balances, and the timing of payments of current income taxes payable and accounts payable and accrued liabilities.

For the three months ended November 30, 2022, the cash used in investing activities increased over the comparable period in fiscal 2022 due primarily to an increase in additions to property, plant and equipment of $59 million, partially offset by a decrease in additions to intangible assets of $9 million.

Contractual Obligations

There has been no material change in the Company’s contractual obligations, including commitments for capital expenditures, between August 31, 2022 and November 30, 2022.

Accounting standards

The MD&A included in the Company’s Annual Report for the year ended August 31, 2022 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 2022 Annual Consolidated Financial Statements. The MD&A also describes significant accounting policies where alternatives exist. See “Critical Accounting Policies and Estimates” in the Company’s 2022 annual MD&A. The condensed interim Consolidated Financial Statements follow the same accounting policies and methods of application as the 2022 Annual Consolidated Financial Statements.

Related party transactions

The Company’s transactions with related parties are discussed in its 2022 annual MD&A under “Related Party Transactions” and under Note 29 of the Consolidated Financial Statements of the Company for the year ended August 31, 2022.

There has been no material change in the Company’s transactions with related parties between August 31, 2022 and November 30, 2022.

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Shaw Communications Inc.

Financial instruments

There has been no material change in the Company’s risk management practices with respect to financial instruments between August 31, 2022 and November 30, 2022. See “Known Events, Trends, Risks and Uncertainties – Interest Rates, Foreign Exchange Rates and Capital Markets” in the Company’s 2022 annual MD&A and the section entitled “Financial Instruments” under Note 30 of the Consolidated Financial Statements of the Company for the year ended August  31, 2022.

Internal controls and procedures

Details relating to disclosure controls and procedures, and internal control over financial reporting (ICFR), are discussed in the Company’s 2022 Annual MD&A under “Certification.”

As at November 30, 2022, the Company’s management, together with its Executive Chair & Chief Executive Officer and Executive Vice President, Chief Financial & Corporate Development Officer, have evaluated the effectiveness of the design and operation of each of the Company’s disclosure controls and procedures and ICFR. Based on these evaluations, the Chief Executive Officer and Executive Vice President, Chief Financial & Corporate Development Officer have concluded that the Company’s disclosure controls and procedures and the Company’s ICFR were not effective due to the existence of two unremediated material weaknesses in the Company’s internal control over financial reporting related to the validation of information produced by the entity (“IPE”) used in the performance of various controls and a deficiency in the operating effectiveness of controls over the capitalization of internal labour. The material weaknesses identified in our internal control over financial reporting were identified in the fourth quarter of fiscal 2022 and are described more fully in the “Certification” section of the Company’s 2022 Annual MD&A.

As discussed above, the Company first identified these material weaknesses in our internal control over financial reporting relating to IPE and capitalized labour in the fourth quarter of fiscal 2022. In response to the identification of these material weaknesses, the Company is taking action to remediate them. Due to the timing of the identification of the weaknesses relative to November 30, 2022, the Company was not able to design and implement new and improved IPE or capitalized labour controls prior to the end of the quarter for all impacted controls however, management will continue to remediate the design of these new controls and monitor and evaluate their operating effectiveness during the first half of fiscal 2023, in preparation for testing these controls. The weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Management has concluded that the weaknesses did not result in any significant misstatements or adjustments in the Company’s unaudited interim consolidated financial statements for the quarter ended November 30, 2022.

There have been no other changes in the Company’s ICFR that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR in fiscal 2023.

Risks and uncertainties

The significant risks and uncertainties affecting the Company and its business are discussed in the Company’s 2022 Annual MD&A under “Known Events, Trends, Risks and Uncertainties.” There have been no material changes in the significant risks and uncertainties since that date.

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Shaw Communications Inc.

Government regulations and regulatory developments

See our MD&A in the Annual Report for the year ended August 31, 2022 (“Annual Report”) for a discussion of the significant regulations that affected our operations as of November 29, 2022. The following is a list of the significant regulatory developments since that date.

For a discussion of the regulatory approval processes related to the Proposed Transaction, see “Proposed Transaction” and “Risks and Uncertainties” in this MD&A and “Known Events, Trends, Risks and Uncertainties – Risks Related to the Proposed Transaction” in the Annual Report.

Broadcasting Act

New or Potential Legislative Changes

On February 2, 2022, the Minister of Heritage introduced a bill to amend the Broadcasting Act (Bill C-11). Bill C-11 completed Second Reading on May 12, 2022. On June 15, 2022, the Standing Committee on Canadian Heritage completed its study of the bill and presented its report to the House of Commons on June 20, 2022. On June 21, 2022, Bill C-11 passed Third Reading in the House of Commons and was sent to the Senate for consideration. The Senate completed First Reading of Bill C-11 on June 21, 2022, and Second Reading on October 25, 2022. On December 14, 2022, the Senate Standing Committee on Transport and Communications completed its study of the Bill and the Committee’s report was adopted in the Senate with proposed amendments. Next, the House of Commons will consider whether to adopt or reject the Senate’s proposed amendments. In its current form, Bill C-11 does not introduce material new obligations applicable to or fees payable by the Company’s cable, Direct-to-Home (DTH), Satellite Relay Distribution or digital media services. However, the Bill remains subject to amendment prior to its passage, pursuant to the parliamentary process. In addition, the Canadian Radio-television and Telecommunications Commission (“CRTC” or “Commission”) will, subsequent to any royal assent to Bill C-11, engage in one or more proceedings to align Canadian broadcasting regulation with the amended Broadcasting Act. Furthermore, the Minister of Heritage has indicated that the Commission’s subsequent regulatory processes will be subject to a Direction by the Governor-in-Council that sets out the Government’s expectations with respect to how the amendments to the Broadcasting Act should be reflected in regulation.

The implementation of new regulatory measures in connection with Bill C-11 could impact the Company’s cable and DTH services if regulatory fees and obligations are not applied symmetrically as between licensed and unlicensed entities.

Telecommunications Act

CRTC Wireless Review

In its Wireless Review Decision, the CRTC determined that the Telecommunications Act does not give it the jurisdiction to adjudicate disputes concerning access to public places for the purposes of constructing, maintaining, and operating mobile wireless transmission facilities. On May 14, 2021, TELUS filed for leave for appeal of the CRTC’s determinations related to seamless roaming and jurisdiction over accept to public places relating to wireless facilities. On August 11, 2021, the FCA granted TELUS leave. On December 12 and 13, 2022, the FCA heard Telus’ appeal of the Wireless Review Decision.

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Shaw Communications Inc.

Radiocommunication Act

New Licence-Exempt Spectrum

In December 2022, ISED published policy decisions confirming the release of spectrum for licence-exempt Wi-Fi use in the 5850-5895 MHz band, as well as for licence-exempt use in various high-frequency ranges above 95 GHz, which is expected to be used to support sensing, positioning and imaging applications, among others. Technical standards for equipment operating in the bands must be developed before the spectrum can be used for these purposes.

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