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 June, 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.

NEWS RELEASE

Shaw Communications announces Third Consecutive Quarter of Positive Earnings,
solid customer growth, and positive free cash flow in the Satellite division

Calgary, Alberta, June 25, 2004 — Shaw Communications Inc. announced today that the Company posted its third consecutive quarter of profitability with net income of $24.8 million or $0.06 per share compared to a net loss of $13.0 million and loss per share of $0.10 for the same period last year. For the nine months ended May 31, 2004, net income was $62.0 million or $0.14 per share versus a net loss of $51.2 million and loss per share of $0.35 for the same period last year.

Jim Shaw, Chief Executive Officer of Shaw Communications Inc. said: “It’s rewarding to see our Shaw team consistently realize a significant milestone of positive earnings for the third quarter in a row. The cable division also delivered strong free cash flow in a quarter of high capital activity and we are extremely pleased with the Satellite division’s delivery of positive free cash flow for the first time.”

The Company also posted strong customer gains across all areas during a quarter historically marked with low or negative growth. The customer growth was as follows: 2,910 in basic cable; 19,173 in Internet; 16,762 in digital; and 12,344 in DTH.

“This third quarter customer growth is noteworthy, not only because it occurred during a typically low growth quarter, but because it occurred in the face of continued intense competition from new video entrants in some of our markets and during a quarter in which we increased subscriber rates across all divisions,” noted Mr. Shaw. “I think this says a lot about our excellent customer service and the value of our product offerings.”

Excluding the US cable systems sold on June 30, 2003, consolidated service revenue (excludes equipment revenue) improved year over year by 8.8 % for the quarter and 7.2% on a year-to-date basis, while service operating income before amortization improved by 19.3% and 19.8% respectively.

“Our double digit growth in service operating income before amortization has resulted from our consistent focus on revenue growth, including marketing and operational efforts directed at customer acquisition and retention, rate increases and a disciplined approach on cost control and capital spending,” noted Mr. Shaw. “This demonstrates our unrelenting commitment to drive shareholder value.”

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From a divisional perspective, the Satellite division, including DTH, increased service revenue (excludes equipment revenue) year over year with a 12.4% increase to $152.7 million for the quarter and a 9.2% increase to $435.8 million for the nine months. Cable service revenue, excluding the US cable systems sold on June 30, 2003, increased by 7.4% to $379.3 million and by 6.4% to $1,112.1 million for the three and nine months respectively.

On a year over year basis, the Satellite division’s service operating income before amortization increased by 72.5% to $42.4 million for the quarter and by 77.6% to $109.4 million for the nine months. Service operating income before amortization of $42.4 million increased 21.7% over the second quarter of 2004. Excluding the US cable systems sold on June 30, 2003, cable service operating income before amortization of $195.2 million increased by 9.1% and by 12.1% to $583.8 million for the three and nine months respectively.

Consolidated cash flow from operations for the quarter increased by 28.5% to $177.7 million or $0.72 per share compared to $138.3 million ($0.55 per share) in the same period last year. For the nine months ended May 31, 2004, cash flow from operations increased by 32.6% to $502.2 million or $2.04 per share compared to $378.6 million or $1.50 per share for the same period last year.

On a consolidated basis, the Company achieved positive free cash flow of $73.7 million in the third quarter, bringing the year-to-date amount to $222.8 million. The satellite division delivered its first quarter of positive free cash flow amounting to $10.5 million. This compares to negative free cash flow of $15.8 million in the same quarter last year and $0.9 million in the previous quarter. The Cable business unit generated $63.2 million of free cash flow for the quarter compared to $60.2 million last year.

“Our cable division and therefore Shaw Communications Inc. is entering a period of transition driven by major changes in the marketplace,” explained Jim Shaw. “The competitive landscape is changing and we can either look at it as a threat or an opportunity. The people of Shaw Communications have chosen to view it as an opportunity. Increased video competition is on our doorstep, so we are accelerating our marketing efforts, fortifying our strong customer relationships through initiatives such as same day, next day service and enhancing the attractiveness of Shaw’s products with new offerings such as voice-over-IP (“VOIP”). This investment in marketing, customer service and product innovation may put some downward pressure on our rate of growth in cable in the short term. However, we believe this aggressive activity and the “triple play” offering of voice, video and data will position Shaw for growth in the near future.”

Shaw plans to decisively pursue new business in the VOIP marketplace. With respect to recent VOIP developments, the Company continues to make good progress in all areas. We are announcing today that we have selected Bell to provide wholesale services for our initial launch of residential telephone service. Bell will provide wholesale services including interconnection to the public switched telephone network (“PSTN”) and long distance termination in order to enable Shaw to provide residential telephone service to its customers in Western Canada. Shaw is developing a reliable, competitive and scaleable digital telephony service based on innovative

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VOIP technology. We have also selected Siemens to provide the softswitch platform for our initial launch. We are now focusing our efforts on preparing our network, customer support, billing and provisioning systems for trials and initial deployment in early 2005.

Pursuant to the normal course issuer bid, during the quarter Shaw repurchased 1,200,000 of its Class B Non-Voting Shares for cancellation for $27.3 million ($22.79 per share) and a year-to-date total of 3,296,500 Class B Non-Voting Shares repurchased and cancelled for $69.2 million ($21.00 per share).

In closing, Mr. Shaw emphasized, “Shaw’s strong management team and our staff across the Company have delivered exceptional growth in free cash flow. This has strengthened the Company’s financial position and facilitated the repayment of $114.4 million of debt year-to-date, stock repurchases of 3.3 million shares or 1.5% of the outstanding Class B Non-Voting Shares and has allowed the Board to increase the quarterly dividends on the Class B Non-Voting Shares from $0.03 per share at September 30, 2003 to $0.07 per share beginning September 30, 2004. During the fourth quarter, Shaw will use its excess free cash flow to reduce debt by either repaying bank loans or repurchasing senior unsecured notes of the Company. This building of shareholder value has been reflected in the value of Shaw stock which has increased by 40% over the nine-months ended May 31, 2004. We are positioned to enhance this value further with continued improvements in our current lines of business and the exciting growth opportunity presented by VOIP.”

“Based on the strength of this quarter and the current outlook for the fourth quarter, Shaw expects to meet or slightly exceed its free cash flow guidance of $275 million. Our preliminary view for fiscal 2005 is free cash flow of approximately $325 million,” added Mr. Shaw.

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 2.9 million customers. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 index. (Symbol: TSX – SJR.B, NYSE – SJR)

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For further information, please contact:

R.D. Rogers
Senior V.P., Chief Financial Officer
Shaw Communications Inc.
403-750-4500

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SHAREHOLDERS REPORT
THIRD QUARTER ENDING MAY 31, 2004

SELECTED FINANCIAL HIGHLIGHTS
CONSOLIDATED RESULTS OF OPERATIONS
THIRD QUARTER ENDING MAY 31, 2004

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Shaw Communications Inc.

OPERATING HIGHLIGHTS

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Shaw Communications Inc.

Our commitment is to increase stakeholder value. We accomplish this on a number of fronts including delivery of excellent financial performance, development of future growth opportunities and through continued maintenance of strong investor confidence. On the first front, we have continued to deliver strong financial results and growth in the customer base across all divisions. Based on our success to date, Shaw expects to meet or slightly exceed our current free cash flow guidance of $275 million and our preliminary view for fiscal 2005 is free cash flow of approximately $325 million. To date in fiscal 2004, the Company has repaid debt of $114.4 million, repurchased 3.3 million of Class B Non-Voting Shares or 1.5% of the outstanding share capital and has increased the quarterly dividend from $0.03 per Class B Non-Voting Share at September 30, 2003 to $0.07 per share beginning September 30, 2004. During the fourth quarter, Shaw intends to use its excess free cash flow to reduce debt by either repaying bank loans or by repurchasing senior unsecured notes of the Company.

This strong financial performance strengthens our ability to focus on the second front, the aggressive pursuit of future growth opportunities. Shaw’s focus of providing our customers with high value services in a cost effective manner lays the groundwork for the development of Shaw’s next high growth opportunity of voice-over-IP (“VOIP”) services next year. In the same way that customers have currently embraced the value of Shaw’s bundling of video and Internet services, we believe that our customers will be eager to do the same with our “triple play” bundle of video, Internet and voice.

Shaw plans to decisively pursue new business in the VOIP marketplace. With respect to recent VOIP developments, the Company continues to make good progress in all areas. We are announcing today that we have selected Bell to provide wholesale services for our initial launch of residential telephone service. Bell will provide wholesale services including interconnection to the public switched telephone network (“PSTN”) and long distance termination in order to enable Shaw to provide residential telephone service to its customers in Western Canada. Shaw is developing a reliable, competitive and scaleable digital telephony service based on innovative VOIP technology. We have also selected Siemens to provide the softswitch platform for our initial launch. We are now focusing our efforts on preparing our network, customer support, billing and provisioning systems for trials and initial deployment in early 2005.

Finally, with respect to maintaining strong investor confidence, during the quarter, the Company appointed the Honourable Don Mazankowski to the role of Lead Director. Mr. Mazankowski is an outstanding Canadian with a long and distinguished career in public service and corporate Canada. The Lead Director is an outside and unrelated director appointed by the Board of Directors to ensure that the Board can perform its duties in an effective and efficient manner independent of management. The appointment of a Lead Director is part of Shaw’s ongoing commitment to good corporate governance.

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Shaw Communications Inc.

MANAGEMENT’S DISCUSSION AND ANALYSIS
MAY 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 the 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 (excludes equipment revenue) increased by 5.2% over the same quarter last year and by 3.5% on a year-to-date basis. Excluding the US cable systems, which were sold effective June 30, 2003, consolidated service revenue improved 8.8% and 7.2% over the same quarter and nine-month period last year. Revenue growth resulted from the continued growth in customer base, rate increases and the acquisition of the Monarch cable systems effective March 31, 2004.

Service operating income before amortization in both the three and nine months ended May 31, 2004 increased 15.6% and 15.7% respectively compared to the same periods last year. Excluding the US cable systems, the litigation settlement in the second quarter of 2004 and the satellite restructuring charge and DTH write-down of inventory in the prior year, the increase in service operating income before amortization was 16.7% and 19.0% for the three and nine months ended respectively. The increase in service operating income before amortization resulted from the growth in revenue and a disciplined approach on spending across all divisions. Cash flow from operations increased by 28.5% and 32.6% for the comparative three and nine-month periods due to increased service operating income before amortization and reduced interest expense.

The cable division is entering a period of transition with the entrance of new video competitors such as Manitoba Tel and Sask Tel in Shaw’s respective territories of 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 and may enter the video market in the near future. In response, Shaw is accelerating its marketing efforts, fortifying its strong customer relationships through initiatives such as same day, next day service and through enhancing the attractiveness of Shaw’s products with new offerings such as voice-over-IP (“VOIP”). This investment in marketing, customer service and product innovation may put some downward pressure on the rate of growth in the cable division in the short term. However, this activity and the “triple play” offering of voice, video and data will position Shaw for growth in the near future.

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Shaw Communications Inc.

Shaw plans to decisively pursue new business in the VOIP marketplace. With respect to recent VOIP developments, the Company continues to make good progress in all areas. Shaw has selected Bell to provide wholesale services for its initial launch of residential telephone service. Bell will provide wholesale services including interconnection to the public switched telephone network (“PSTN”) and long distance termination in order to enable Shaw to provide residential telephone service to its customers in Western Canada. Shaw is developing a reliable, competitive and scaleable digital telephony service based on innovative VOIP technology. Shaw has also selected Siemens to provide the softswitch platform for the initial launch of VOIP. The Company is now focusing its efforts on preparing its network, customer support, billing and provisioning systems for trials and initial deployment in early 2005.

Net income was $24.8 million and $62.0 million for the three and nine months ended May 31, 2004 compared to a loss of $13.0 million and $51.2 million for the same periods last year. The increase in net income of $37.8 million in the third quarter was due to increased service operating income before amortization of $32.0 million, lower amortization of deferred equipment revenues net of deferred equipment costs of $3.7 million, reduced amortization of deferred charges and plant, property and equipment of $2.6 million, and decreased interest expense of $9.0 million offset by $9.7 million of net non-operating adjustments incurred last year, such as the gain on the redemption of SHELS and the write-down of assets. The increase in net income of $113.3 million for the nine-month period is principally comprised of increased service operating income before amortization of $93.2 million, decreased interest expense of $31.1 million, and decreased amortization of deferred charges and plant property and equipment of $23.3 million, less the change in the net non-operating costs of $15.2 million, such as those previously mentioned, and increased income taxes of $21.9 million.

Update to critical accounting policies

In the 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 and notes. The MD&A also describes significant accounting polices where alternatives exist. We focus your attention to the following changes in respect of our discussion of critical accounting polices:

Recent Canadian Accounting Pronouncements

This quarter the Company was required to adopt 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 polices prospectively or retroactively, with restatement of prior periods. The Company 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

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Shaw Communications Inc.

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 its cable, Star Choice and Satellite Services divisions have multiple deliverables comprised of subscriber connection fee revenue, customer premise equipment revenue and related subscription revenue. The Company assessed 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 addition, as permitted by EIC 141, the Company may also defer and amortize incremental costs directly related to the upfront fees over the same term that the related revenue is recognized. These costs would 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, commission, installation costs on reconnections and other costs. Alternatively, the Company may also expense these costs immediately.

The Company has chosen to defer and amortize the related costs as it provides the best matching of the costs of the equipment and subscriber connection costs with the related upfront revenue and future revenue stream of subscription services. 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 impacts 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.

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Finally, the adoption of the policy impacts 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 is not specified for which the customer will receive the subscription services, we have used customer churn and factored in considerations such as an 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 due to the nature of connection costs, the Company has limited its deferral of subscriber connection fee costs to the deferred connection fee revenue. Previously, as per industry practice and in accordance with US GAAP, subscriber connection fees were recognized immediately in 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 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, in addition to the segregated presentation providing consistent treatment as the amortization of IRU revenue, it also provides a clearer distinction within the income statement between cash and non-cash activities and between upfront revenue streams 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 the exception of increases to the profit on sale of equipment in the Satellite Services division of $0.2 million (2003 — $0.4 million) in the current quarter and $0.5 million (2003 — $1.1 million) on a year-to-date basis resulting in an increase to net income of $0.1 million (2003 — $0.2 million) for the quarter and $0.3 million (2003 — $0.7 million) on a year-to-date basis. The increase in net income had no impact on earnings (loss) 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.

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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. The balance sheet reclassification has no impact on earnings.

Cable

FINANCIAL HIGHLIGHTS

HIGHLIGHTS FOR THE QUARTER

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Shaw Communications Inc.

Cable service revenue increased 2.5% and 1.4% over the respective quarter and nine months ended last year. Excluding the US cable systems sold on June 30, 2003, cable service revenue increased 7.4% and 6.4% for the three and nine months, respectively. This was due to rate increases and customer growth in all areas. Service operating income before amortization for the same respective periods increased by 5.3% and 7.9% or 9.1% and 12.1%, excluding the US cable systems. A combination of revenue growth and cost reduction programs, including decreased bandwidth costs in the Big Pipe division, accounted for the improvement. The Big Pipe division has reduced bandwidth costs by approximately two-thirds over the last two years by serving as the primary Internet backbone for Shaw’s broadband Internet customers and through the development of over 400 peering relationships throughout North America.

Despite the rate increases and the acquisition of the Monarch cable systems during the quarter, service operating income before amortization for the quarter remained relatively unchanged from the previous quarter partially due to an adjustment of $1.8 million in respect of the final determination of a new copyright liability that relates to periods from January 2001 to the present. This new copyright tariff will have minimal impact on future results. Further, Shaw was proactive during the quarter and incurred additional costs in preparation for increased competition in video services, the introduction of VOIP and the implementation of section 404 of the Sarbanes-Oxley Act. Additional costs include increased salary expense necessary to increase service levels, outside consulting fees and rate increases from certain of Shaw’s content providers.

In the previous quarter, Shaw successfully negotiated four-year renewals for five of its technical bargaining units in the Lower Mainland. The TWU agreements for Vancouver and Surrey expire March 23, 2008, and the IBW agreements for North Vancouver, White Rock and Fraser expire May 2009. These bargaining units represent approximately 300 technical employees in their regions. The successful extension of these labour contracts will facilitate Shaw’s continued delivery of exceptional customer service and will be key in ensuring the smooth deployment of new services, such as VOIP, and ongoing maintenance and upgrade activity.

Capital expenditures increased 15.8% over the same quarter last year and decreased 16.0% over the nine-month period last year. The decrease in the year-to-date spending is due to decreased spending in all categories with the exception of increased spending in upgrades and enhancements, which also accounts for the increase in the quarter spending. The increased

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spending on upgrades and enhancements includes upgrades to the plant in preparation for VOIP and DOCSIS^TM modem deployment and also includes costs of upgrading the plant to 860 MHz from the current 550/750 MHz capacity. The increase in plant capacity will accommodate future growth of Shaw’s VOD, HDTV and multimedia offerings. The upgrade activity is currently focused in Vancouver. We anticipate that we will complete the system-wide upgrade to 860 MHz over four years while maintaining current levels of capital expenditure spending. Success-based capital spending decreased as a result of the strengthening of the Canadian dollar and due to the lower unit cost of the DOCSIS^TM 2.0 modems deployed in Vancouver, Calgary, Edmonton and Winnipeg. By the end of fiscal 2004, 90% of our systems will be DOCSIS^TM compliant. New housing development and replacement capital spending decreased or remained within range of prior period spending as a result of the divestment of the US cable systems in June 2003, better management of construction projects and changes in new housing activity. Building expenditures decreased as a result of completion of major projects last year. The reduction in capital spending on a year-to-date basis has not impaired customer growth as shown by the subscriber growth achieved during the quarter.

SUBSCRIBER STATISTICS

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Shaw added 2,910 basic subscribers in the current quarter and 7,009 in the same quarter last year. Shaw has reversed the normal seasonal trend of negative growth in the third quarter with innovative service offerings such as its basic and full cable service introductory offer to standalone Internet customers and other potential customers. The intent of this offer was 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 one year and has proven successful as many of these customers are staying with us well after the expiry of the promotional period.

Late in the quarter, Shaw launched a marketing campaign which helped push digital customer additions to 16,762 for the quarter compared to 8,413 in the same quarter last year. Growth was also stimulated by recent initiatives from DTH suppliers in both the US and Canadian markets to deactivate illegal 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. In the fourth quarter, Shaw plans to further enhance its digital offering through the introduction of the 6208 DCT which is the first set top box to incorporate both HDTV and a personal video recorder.

The Internet customer base grew by 19,173 compared to 25,925 in the same period last year. This quarter Shaw launched a new Internet product, Xtreme-I^TM in Calgary, Vancouver, Winnipeg, Edmonton and Saskatoon. Xtreme-I^TM utilizes DOCSIS^TM technology to increase download speeds up to 5 megabit and upload speeds to 1 megabit. Xtreme-I^TM especially appeals to the customer who frequently downloads large files or whose Internet experience includes online gaming and exploring rich multimedia sites. Customers can add Shaw High-Speed Xtreme-I^TM to their existing Shaw Cable and High-Speed Internet bundle for only $10 more per month. There is also exclusive pricing for residential Internet-only customers, as well as SOHO and Professional Business Internet customers.

The continued growth in Shaw’s customer base is noteworthy given that it occurred in the face of intensified competition from the entry of new video competitors in the Winnipeg and Saskatoon markets earlier this year and occurred during a period of rate increases. To maintain growth in this highly competitive market, Shaw continued its focus on delivering excellent customer care, which includes support 24/7/365, and management of its network to deliver a high-quality reliable service to its customers.

At the end of the third quarter, approximately 42.3% of Shaw customers subscribed to bundled services compared to 36.9% in the same quarter last year. The attractiveness of the bundled packages is enhanced by Shaw’s ability to offer services like VOD and new services such as HDTV. Shaw’s bundling strategy is a particularly effective customer retention tool for its digital customers as shown by its churn rates.

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COMBINED SATELLITE (DTH and Satellite Services)

FINANCIAL HIGHLIGHTS

The Satellite division surpassed a significant milestone with its first posting of positive free cash flow in a quarter, which amounted to $10.5 million compared to approximately negative $0.9 million in the previous quarter and negative $15.8 million the same quarter last year. On a year-

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to-date basis the division was cash flow negative $0.9 million compared to negative $90.8 million in the same period last year. The improvement resulted from improved economies of scale on a larger DTH subscriber base, rate increases, reduced success-based expenditures due to lower customer activations, cost reductions 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.

DTH (Star Choice)

FINANCIAL HIGHLIGHTS

Customer Statistics

HIGHLIGHTS FOR THE QUARTER

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Service revenue increased by 15.8% over the same quarter last year and 13.3% for the nine-month period as a result of rate increases and subscriber growth. The growth in revenue plus cost savings, including call center efficiencies and lower sales and marketing expenses, more than doubled service operating income before amortization with increases of 111.8% and 140.7% over the respective quarter and nine months ended last year. The current quarter includes an adjustment of $1.2 million in respect of the final determination of a new copyright liability that relates to periods from January 2001 to the present. This new copyright tariff will have minimal impact on future results.

Star Choice produced solid customer metrics with the addition of 12,344 customers during the quarter compared to 8,259 in the same quarter last year and 6,483 in the previous quarter. Customer churn was 2.9% compared to 3.5% the same quarter last year and 12.4% on a year-to-date basis versus 12.9% last year. The customer growth and reduced churn is a notable accomplishment during a quarter which started with a $3 rate increase.

The increase in customer retention was due to sustained excellent customer service starting with the call center where the percentage of abandoned calls dropped to 1% compared to 47% a year ago. Not only does this reduce churn, but also significantly reduces long distance fees due to lower call wait times. In addition, customer growth is attributable to the attractiveness of Star Choice’s simple and affordable entry offers, where unlike its direct competitor, there are no long-term contracts that lock customers into high end programming packages. The attractiveness of Star Choice’s offer was also enhanced with the introduction of 15 new video services during the quarter. These new services are a value-add to Star Choice customers as they are able to take advantage of more time-shifting opportunities in their TV viewing.

Early next fiscal year, Star Choice intends to further enhance its service offerings. First, Star Choice expects to be operating with additional satellite capacity on Telesat’s Anik F2 which replaces the Anik E2R. This will enable Star Choice to offer its customers a higher number of HDTV channels. Second, Star Choice plans to introduce new receivers. The new receivers will provide a more economical entry point for new customers and will enable existing customers to expand Star Choice services in their homes.

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Satellite Services

FINANCIAL HIGHLIGHTS

Excluding the Business Television business sold effective March 21, 2003, service revenue decreased 3.0% over the same quarter and increased 0.3% over the nine months ended last year. The decrease for the quarter is primarily due to reduced satellite relay distribution undertaking (“SRDU”) revenue as a result of competition. Service operating income before amortization, excluding the Business Television business, increased 9.6% and 10.1%, respectively, due to lower costs as a result of various cost savings initiatives.

OTHER OPERATING COSTS:

Included in 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 for the nine months ended May 31, 2004 is comprised of a settlement of a legal suit in respect of an alleged breach of contract terms. The amount of the settlement in excess of the Company’s provision thereto of $6.5 million was expensed during the second quarter of this year. Other operating costs of $4.4 million in the third quarter of last year is in respect of a write-down of DTH inventory. For the nine months ended May 31, 2003, other operating costs include the aforementioned inventory write-down plus a restructuring charge of $4.8 million in respect of the satellite division. The provision included severance costs of $4 million and $0.8 million of exit costs to centralize operational functions in Calgary. Approximately $3.5 million of severance costs were incurred last year and the remaining severance and exit costs were incurred this year.

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Shaw Communications Inc.

OTHER INCOME AND EXPENSE ITEMS:

Amortization

Amortization of deferred IRU revenue remained relatively unchanged.

As outlined above, in conjunction with the adoption of changes required by EIC 141, the Company segregated the presentation of the amortization of equipment revenue and equipment cost in its income statement. Equipment revenue and cost of equipment on customer premise equipment is deferred and recognized over the anticipated term of the related future revenue with the period of recognition spanning over 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 19.9% and 10.4% in the quarter and nine months ended is primarily the result of lower sales of DTH and truck tracking equipment over the last few years. Accordingly, the recognition of the deferred cost of equipment decreased 13.3% and 4.6% over the quarter and nine months ended respectively.

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 on property, plant and equipment decreased over the comparative nine-month period primarily due to the sale of the US cable systems.

Interest

Interest charges decreased over the same periods last year as a result of reduced consolidated debt levels which occurred primarily in the latter portion of 2003 when Shaw began generating positive free cash flow on a consolidated basis and on repayment of debt with the sale of the US cable systems on June 30, 2003. In addition, Shaw’s weighted average cost of borrowing decreased from 7.6% as at May 31, 2003 to 7.4% as at May 31, 2004 as a result of debt restructuring including the repayment of the US $150 million Senior unsecured notes of Star

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Shaw Communications Inc.

Choice, the $250 million Cancom structured note, the Cancom credit facility and the Cancom subordinated credit facility.

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 May 31, 2004 was comprised of US $51.5 million of bank debt. As a result of fluctuations of the Canadian dollar relative to the US dollar, the Company recorded a foreign exchange loss of $1.5 million for the quarter and a gain of $1.4 million for the nine months ended May 31, 2004. In the comparative quarter and nine months ended last year, the foreign exchange gains of $23.9 million and $39.4 million resulted from the strengthening of the Canadian dollar relative to the US dollar on the translation of foreign denominated unhedged debt, which 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 $159.6 million (2003 — $138.1 million) which represents the corresponding deferred foreign exchange gain included in deferred credits.

Debt restructuring 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 in debt restructuring 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%.

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 May 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.

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Shaw Communications Inc.

Current assets decreased by $39.1 million due to a reduction in accounts receivable of $18.4 million primarily due to timing and improved collection of subscriber receivables and a decrease in cash and term deposits of $20.8 million.

Property, plant and equipment decreased by $109.7 million primarily resulting from current year amortization being in excess of capital expenditures and amounts acquired on business acquisitions.

Deferred charges decreased by $23.6 million resulting primarily from a net decrease in equipment subsidies of $13.8 million and related deferred equipment costs of $13.0 million (offset with a corresponding decrease in related deferred equipment revenues as outlined below).

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

Current liabilities, excluding the current portion of long-term debt, decreased by $14.0 million primarily due to timing of interest payments and was partially offset by increased income taxes payable due to timing of tax installments.

Long-term debt, including current portion, decreased by $123.8 million resulting from the net repayment of Shaw Communications Inc. and Cancom debt of $114.4 million and a decrease of $22.9 million relating to the translation of the U.S. denominated debt. This was offset by an increase in the Burrard Landing Lot 2 Holdings Partnership debt of $13.5 million.

Deferred credits increased by $4.2 million primarily from a $21.5 million increase in deferred foreign exchange gains on the translation of hedged U.S. denominated debt and a $5.7 million prepayment on the grant of a new IRU which was offset by $9.0 million in amortization of prepaid IRU rental revenue and a $13.5 million decrease in deferred equipment revenues (offset with a corresponding decrease in related deferred equipment costs as outlined above). Future income taxes increased by $16.3 million due to the future income tax expense in the current year offset by the future income tax asset recorded on the purchase of cable systems from Monarch Cablesystems Ltd.

Share capital increased by $33.6 million primarily due to $65.0 million on the issuance of 3,737,780 Class B Non-Voting Shares on the acquisition of certain cable systems of Monarch offset by $31.6 million on the repurchase of 3,296,500 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 $96.8 million. Shaw continued its focus on strengthening its financial position with the generation of $222.8 million of free cash flow for the nine months ended May 31, 2004. Shaw used its free cash flow of $222.8 million plus cash of $21.4 million to purchase $69.2 million of Class B Non-Voting Shares for cancellation, pay dividends on Class A and Class B Non-Voting

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Shares of $25.3 million, purchase the Monarch cable systems for a cash component of $24.2 million, pay deferred costs including financing costs of $11.0 million and repay net debt of Shaw Communications Inc. and Cancom of approximately $114.4 million.

Shaw earlier 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 1,200,000 of its Class B Non-Voting Shares for cancellation for $27.3 million for a year-to-date total of 3,296,500 Class B Non-Voting Shares for a total of $69.2 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 expenses and underwriting expenses) from the issuance of the notes were $343.1 million and 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 approximately $1.0 million. As a result of the debt restructuring, Shaw was able to extend $350 million of its credit horizon for another 8 years at a fixed rate of 7.5%. In addition, this 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 the facility to nil at April 30, 2007. The amended facility continues to be unsecured and will rank pari passu with the senior unsecured notes. The amendment provides Shaw with increased flexibility, 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. Shaw has access to approximately $0.8 billion of available credit facilities based on existing bank covenants and will have access to these facilities for the foreseeable future. Based on the existing business performance which generates positive free cash flow after meeting day-to-day operating expenses (including capital expenditures), access to available credit facilities and scheduled long-term debt repayments, Shaw expects to have sufficient liquidity to meet both current and foreseeable future commitments.

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Shaw Communications Inc.

CASH FLOW

Operating Activities

Cash flow from operations increased mainly as a result of the strong growth in profitability in the Cable and DTH divisions and reduced interest expense. Cash flow from working capital decreased in the quarter primarily due to timing of accounts payable and accrued liabilities, including interest payments, and timing of collection of subscriber accounts receivable.

Investing Activities

During the three months ended May 31, 2004 the principal use of cash was for capital expenditures, and equipment subsidies amounting to $90.0 million (2003 — $87.7 million) plus $24.1 million on the purchase of the Monarch cable systems. In the nine months ended May 31, 2004, the principal use of cash was for capital expenditures and equipment subsidies of $270.6 million (2003 — $332.6 million) and $24.2 million on the purchase of the aforementioned cable systems.

Financing Activities

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

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Shaw Communications Inc.

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 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) speak only as of the date on which it was originally made and we expressly disclaim 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 us predict what factors will arise or when. In addition, we cannot assess the impact of each factor on our 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)

Cash includes cash and term deposits

See accompanying notes

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Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

May 31, 2004 and 2003
[all amounts in thousands of Canadian dollars, except per share amounts]

The unaudited interim Consolidated Financial Statements include the accounts of Shaw Communications Inc. and its subsidiaries (collectively the “Company”). The notes presented in these unaudited interim Consolidated Financial Statements include only significant events and transactions occurring since the Company’s last fiscal year and are not fully inclusive of all matters required to be disclosed in the Company’s annual audited consolidated financial statements. As a result, these unaudited interim Consolidated Financial Statements should be read in conjunction with the Company’s consolidated financial statements for the year ended August 31, 2003.

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

Adoption of recent Canadian accounting pronouncements

The Emerging Issues Committee (EIC) recently issued Abstract 142, “Revenue Arrangements with Multiple Deliverables”, which the Company must adopt either prospectively or retroactively with restatement beginning March 1, 2004. This Abstract is consistent with the U.S. standard with the same title, and addresses both when and how an arrangement involving multiple deliverables should be divided into separate units of accounting and how the arrangement’s consideration should be allocated among separate units. The Company determined that in both its cable and satellite divisions it has multiple deliverables of subscriber connection fee revenue, customer premise equipment revenue and related subscription revenue. According to the criteria outlined in EIC 142, management has determined that these should not be considered separate units of accounting. As a result, these multiple revenue streams must be assessed as an integrated package under the guidance of EIC Abstract 141 outlined below.

Concurrent with EIC 142, the EIC issued Abstract 141, “Revenue Recognition”, which the Company must adopt either prospectively or retroactively with restatement beginning March 1, 2004. This Abstract was issued to summarize principles set forth in the SEC’s Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements. The Abstract provides general interpretative guidance on the application of CICA 3400, “Revenue”. As outlined above, the Company has multiple deliverable arrangements of subscriber connection fee revenue, customer premise equipment and related subscription revenue that must be assessed as an integrated package under 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 the additional products or services are earned. The impact of the retroactive adoption of this policy is as follows:

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Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

May 31, 2004 and 2003
[all amounts in thousands of Canadian dollars, except per share amounts]

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Shaw Communications Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

May 31, 2004 and 2003
[all amounts in thousands of Canadian dollars, except per share amounts]

A summary of the above-mentioned reclassifications and adjustments is as follows:

Income statement: