Disciplinary panel hears thousands of pages of files only turned over last week

http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/law-page-archive/fiasco-over-documents-delays-hearing-for-blacks-lawyers/article1547020/

Quote, " [F]ailed to turn over thousands of pages of files on the sale of the newspapers to CanWest Global Communications Corp., despite being asked for those documents in 2006."

Lobbing Yahoo to relist Canwest's stock quotes; Yahoo Finance relists Canwest mesage board; intrinsic value of Canwest shares increase

Vote Neil M for Canwest's Board of Directors
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
http://finance.yahoo.com/lookup?s=canwest quotes not updated
http://ca.finance.yahoo.com/q?s=CGS-A.TO Yahoo Finance way better than, Yahoo Canada Finance


http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/messagesview?bn=107336

Buyer buying the one vote Canwest shares, smart move

Not buying the multi voting shares, reduces cost of venture -- and the multi voting shares cannot be used to eat up buyer capital -- and the one vote shareholders selling Canwest for pennies, running out of shares, soon be out of shares with over 10 million one vote Canwest shares trading in the last three days. Vote Neil M for Canwest Board of Directors.

http://www.tmx.com/HttpController?GetPage=DelayedMarketByPrice&Market=V&Language=en&SelectedSymbol=CGS.A

Canwest shareholders newspapers are not the internet, and wish to have their stock quotes in our paper newspapers

Industrial sabatoge sanctioned by Canada: matter not settled
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
[Why wouldn't Canwest shareholders post the Canwest stock quote in Canwest's Canada's newspapers?]


"Hello Neil,
Thank you for your email of April 06, 2010 concerning the alleged failure of the monitor appointed in the Companies Creditors Arrangement Act (CCAA) proceedings for Canwest LP to list Canwest stock in three British Columbia newspapers owned by Canwest, The Times Colonist, The Vancouver Sun, and The Province. Our review of the business pages of the websites for these three newspapers indicates that details concerning Canwest stock can be easily found by entering "Canwest" in the "Stock Quote" fields in the upper right hand corner of the pages. The websites are
http://www.theprovince.com/business/index.html, http://www.vancouversun.com/business/index.html, and http://www.timescolonist.com/business/index.html. It should be noted that effective November 16, 2009 Canwest's stock has been listed on the TSX Venture exchange and not the TSX.
We cannot find any evidence of malfeasance on the part of the monitor appointed to these proceedings and consider this matter concluded.

Regards
Office of the Superintendent of Bankruptcy Bureau du surintendant des faillites Canada Small Business and Marketplace Services Services axés sur le marché et les petites entreprises 55 Bay Street, Suite 902 55, rue Bay Nord, Suite 902 Hamilton, Ontario L8R 3P7 dan.marshall@ic.gc.ca Telephone Téléphone: 905 570-8004 Facsimile Télécopieur: 905 572-4210 Government of Canada Gouvernement du Canada"

Again misinformation to say Canada's Banks buying Canwest's Canada newspaper disclosure monopoly

http://www.winnipegfreepress.com/business/breakingnews/torstar-bid-for-canwest-newspapers-in-danger-but-might-pull-together-sources-92511909.html

Quote, "Fairfax had teamed with Torstar to make an offer on the newspapers, which include the National Post and other high-profile dailies like the Vancouver Sun, Calgary Herald, and the Ottawa Citizen. However, Torstar planned to pay for the Canwest papers fully in cash, which would make the offer more attractive to the banks trying to sell the assets. Reports have said that Fairfax prefers an agreement which would include a mix of both cash and bank financing, while the banks Fairfax has approached are reluctant to provide funding for struggling newspapers. The reports said Fairfax refuses to make an offer unless the banks agree to more attractive financing terms."

"Fairfax already owns about 19 per cent of Torstar, though it has lost $175 million on that investment amid the downturn in media company results last year. The firm also owned a 22 per cent stake in Canwest before the company filed for creditor protection. In total, the Canwest chain of newspapers includes 11 dailies and 35 community newspapers. The banks who effectively own Canwest have set a floor price of $950 million for Canwest LP, successor to the former Southam chain of dailies."

"If they get no suitable bid, the banks may decide to bring in new newspaper executives to run the company before they spin it off to the public in a common share offering so they can get their loan money back."
[If the Canadian banks running the show, why is most of the 933 million loan not in Canadian dollars. National Security issue to misrepresent the loan to be Canadian.]

FAB 160 Consolidated Balance sheets must include minority equity statement: canwest balance sheet violates this

Canada must produce a Canwest balance sheet that is in compliance with FAB160
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The public company Canwest, being taken private, and is debt free, with cash in the bank: yet does not have to produce a balance sheet that is shows all of Canwest shareholders cash, as the balance sheet is consolidated and not independent of Goldman Sach's company.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Canwest Atlantis put as a liability out, when Goldman Sach's equity written up into balance sheet, as put liability equity is that equity: Canada must produce a Canwest balance sheet that is in compliance with FAB160.
http://www.canwestglobal.com/investors/investor_documents/F10/q2/CMI_FS_Q2_2010_FINAL.pdf


Canwest auditors response:
Business Combinations and Non-Controlling Interests
The AcSB issued CICA Handbook Section 1582, "Business Combinations" and entities adopting CICA 1582 will also be required to adopt CICA Handbook Sections 1601, "Consolidated Financial Statements”, and 1602, "Non-Controlling Interests". These sections replace the former CICA Handbook Sections 1581, "Business Combinations" and 1600, "Consolidated FinancialStatements" and establish a new section for accounting for a non-controlling interest in a subsidiary. CICA 1582 will require additional use of fair value measurements, recognition of additional assets and liabilities and increased disclosure.

[Company taken private before standard demanded so okay to not disclose minority equity statement: FRAUD]
CICA 1601 and 1602 will require a change in the measurement of non-controlling interest and will require the change to be presented as part of shareholders’ equity. These standards will become effective for business combinations for which the acquisition date is on or after September 1, 2011. The Company is currently considering the impacts of the adoption of such standard.

Little of the newspapers debt is in Canadian funds

Canadian Dollar surging: "The Secured Claim of $925.4 million differs from the recorded amount of $933.8 million due to foreign exchange fluctations on the US denominated debt from January 8, 2010 to February 28,2010."

Canwest Limited Partnership: Canwest unconsolidated balance sheet:
http://www.canwestglobal.com/investors/investor_documents/F10/q2/CLP_FS_Q2_2010_FINAL.pdf


February 28, 2010
Secured Credit Facilities and Secured Hedging Obligations (a) 933,747
Senior Subordinated Unsecured Notes (b) 421,000
Senior Subordinated Unsecured Credit Facility (b) 75,000
Accounts payable and accrued liabilities (b) 52,404
Accrued pension, post-retirement and other liabilities (b) 7,440
1,489,591

Canwest Limited, credit limit limited

How Scotia Bank bettered Canada
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
http://ca.finance.yahoo.com/personal-finance/article/canadianbusiness/1038/the-good-the-bad-and-the-ugly-canwest-global

Canwest only owns 1/3 of CW Media Holdings, yet declares 100 percent of its debt

Notes: Consolidated Balances GAAP rules
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
[Because the CRTC requires a Canadian has voting control, this means minority owned companies are consolidated 100 percent into the controlling company's balance sheet, does not seem right. Canada's GAAP accounting rule and consolidated balance sheets based on voting control, combined with the CRTC voting rules, are a disaster for equity and debt declarations for Canada's public companies. Basically Shaw buying 20 percent of Canwest, yet controlling 80 percent of the vote, has to declare all of Canwest debt on Shaws books, does not seem right. Note, currently Ottawa is debating ownership rules, need to work on reforming GAAP to fix this consolidated balance sheet error !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!]

http://faculty.babson.edu/halsey/acc7500/Off%20balance-sheet%20financing%20-%20transferring%20risk.pdf

2. Non-consolidated subsidiaries: A parent company need not consolidate a subsidiary which is less than 50%-owned and is not subject to the control of the parent company. In this case, the parent company includes the investment in the non-consolidated subsidiary in one line item on the balance sheet (investments). In this way, any debt of the subsidiary is excluded from the liabilities shown in the parent company’s balance sheet. Additionally, only the parent company’s share of the income or loss of the subsidiary is included in the consolidated income statement of the parent, and it is reported separately as one line (equity in income of nonconsolidated subsidiaries). Details regarding the components of the income or loss are excluded from the face of the consolidated income statement of the parent company.

http://www.rotman.utoronto.ca/karen.benzacar/web%20page%20mgt426/Lecture%20notes/Chapter%204%20KB.ppt#347,55,Introduction GAAP and IFRS rules are that the equity of Goldman Sachs must be displayed on Canweest's balance sheet. Canwest balance sheet is absent this required minority ownership equity equation in both the balance sheet and the foot notes.

Quote, "Situations with ownership of more than 20% but less than 50% need to be evaluated on an individual basis to determine if there are additional features sufficient to demonstrate "significant influence" for GAAP accounting purposes. So for GAAP accounting purposes there are two kinds of subsidiaries, majority owned and less than majority owned but where there is significant influence. "

Exeption to rule, for insurance industry. Quote. "Statutory Accounting Principles (SAP) applicable to US insurance companies . For SAP accounting purposes, consolidated ownership is also used, but because entities are not consolidated the term affiliate comes into play when more than one company holds equity interests in an entity that is 10% or more owned by the consolidated group. "

"In GAAP accounting, wholly owned and majority owned subsidiaries are usually consolidated with the parent. However, when they are not consolidated, as in financial statements for the parent company only, the GAAP equity method of accounting for subsidiaries is used. The GAAP equity method of accounting is also used for entities that are less than majority owned where there is "significant influence". Under the GAAP equity method of accounting, the parent company `s financial statements incorporate the parent's equity in the net income, unrealized gains or losses, and any other changes in net worth of the subsidiary, and the parent's equity in the net worth of the subsidiary is carried in the assets of the parent. "

http://findarticles.com/p/articles/mi_6776/is_5_8/ai_n31128511/
Quote, "The Financial Accounting Standards Board issued Statement No. 160 to revise the accounting standards for consolidated financial statements in December 2007. One of the major changes is the establishment of a single and conceptually sound method to account for changes in a parent's ownership interest in a subsidiary that do not result in the parent's loss of controlling interest in the subsidiary. These changes are now all accounted for as equity transactions and, therefore, no gain or loss will be recognized on the consolidation income statement. The only situation that results in gain or loss recognition is when the parent loses its control over its subsidiary. In that case, deconsolidation takes place and gain or loss may result. These provisions are consistent with the requirement under FASB Statement No. 160 that noncontrolling interest in a subsidiary be classified as equity. This paper investigates and presents examples to illustrate these changes."

http://wiki.ifrs.com/Consolidated-and-Separate-Financial-Statements

http://www.thefreelibrary.com/Toward+global+standards+on+consolidation+and+recognition.-a0207841893

Goldmans Sachs ripped of the United States, the European Union, and Canada

SEC Canada in full support of the US SEC probe into Goldman Sachs
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Clearly Goldman Sachs is corrupt. Example, never be reported in Canada's press that Goldman made a 13.5% non arms length loan to Goldman Sachs' CW Media Holdings.

Goldman Sachs deal with Canwest, is a posion pill, to take Canwest private, and keep control of Canada's media disclosure network, using fraud. Goldman Sachs loan of 13.5% and currency swaps made to a Goldman Sachs subsibuary, CW Media Holdings is not disclosed properly in GAAP. Goldman Sachs is liabile for overstatemenst of Canwest debt and goodwill assets in Canwest' balance sheet, to do with CW Media Holding. Goldman Sachs toast.

http://www.theglobeandmail.com/report-on-business/britains-pm-seeks-goldman-probe/article1538539/

http://www.nytimes.com/2008/10/19/business/19gold.html?_r=1

CW Investments owns CW Media Holdings: Goldman Sachs owns 2/3 of CW Investments

Why is Canwest listing 100 percent of the assets of a subsidiary of a Goldman Sachs company? Canwest only owns 1/3 of company of the company that owns CW Media Holding.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. Nature of Operations CW Media Holdings Inc. (the “Company”) is an indirectly wholly owned subsidiary of CW Investments Co. (“CW Investments”) in which Canwest Media Inc. (“Canwest”) holds a 35% equity interest and 67% voting interest with the remaining interests owned by Goldman Sachs Capital Partners.

Goldman Sachs Canwest 2.5 billion put price, is minus debt and Canwest ownership percent: issues with 13.5% loan increasing in size, no interest due

Does the Goldman Sachs 13.5% loan, with bonus currency swaps, to Goldman Sach CW Investments Canada, (with no interest due until after put excercised) decrease the purchase price, as debt is to be minused from put price? Would not the voluntary interest payment in Aug 09 increase the cost then?

[Non arms length loan, should have been described better in the put debt math minus 2.5 billion detail; only two loans, put minus loan definitions should have disclosed the loan with no interest due affects the put price. ]

Canwest financials yet to disclose that any CW Media Holdings principle payments lowers the Atlantis put price total also; if principle payments do not then any principle and interest payments, increases the total cost of Atlantis; As the put purchase price is minus debt, but does not consider equity, a conundrum.



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
[CW Media Holdings, 1/3 owed by Canwest, is not included in CCAA filling, yet the Canwest balance sheet CCAA filing lists all of CW Media Holdings debt.]


CW Media Ho1dins Inc.
INTERIM MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the three months ended November 30, 2009 and 2008
January 12, 2010
http://www.canwestmediasales.com/investors/investor_documents/F10/q1/CWMHI_MDA_Q1_2010_FINAL.pdf
Quote, "Neither our company nor our wholly owned and non-wholly owned subsidiaries are included as part of the CCAA filing."



LIQUIDITY AND CAPITAL RESOURCES
Overview On an ongoing basis, our principal uses of funds are for capital expenditures of approximately$5.0 million to $7.0 million per year, our CRTC benefit obligation of approximately $22.1 million per year and debt servicing. We anticipate meeting these requirements by using cash generated from operating activities and through borrowings under our revolving credit facility. We believe that these sources of funds, together with our cash on hand will be adequate to meet our currently anticipated needs. For the remainder of fiscal 2010, we expect our major cash requirements to include mandatory principal repayments under our Senior Secured Credit facility of $3.6 million, CRTC benefit obligation expenditures of $19.7 million, of which $1.8 million will be funded by Canwest, and capital expenditures of $4.7 million. In addition, based on our current projections, we intend to pay the accrued interest of U.S.$22.8 million under our Senior Unsecured Notes in cash on February 15, 2010, relating to the period from August 16, 2009 to February 15, 2010.

CW Media is Atlantis: Did Goldman Sachs lend funds to Atlantis at 13.5%?

13.5% bonds 2/3 owned by Goldman Sachs?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CW Media financail report: 4. Acquisition
On August 15, 2007, the Company acquired Alliance Atlantis Communications Inc. (“Alliance Atlantis”) and its broadcasting subsidiaries (the “Acquisition”). Alliance Atlantis’ non broadcasting subsidiaries and operations including its entertainment operations and film and television program distribution operations were transferred to other related entities. Transactions related to Alliance Atlantis’ non-broadcasting subsidiaries have been excluded from the Company’s financial statements as the transfers occurred concurrently with the Acquisition. The Company does not have any continuing interest in other Alliance Atlantis operations. The Company’s consolidated financial statements reflect the acquisition of the broadcasting assets.



http://www.canwestglobal.com/investors/investor_documents/F08/CGCCQ32008FS.pdf
canwest quarterly report 08
As agreed between the Company and Goldman Sachs, the purchase price allocated to the broadcast business was $1,183 million, including transaction costs of $55 million. The acquisition was financed through the Company’s investment of $262 million for its 35% equity interest, Goldman Sachs’ contribution of $481 million in exchange for its puttable interest and debt financing of $767 million, net of debt issuance costs of $23 million. The Alliance Atlantis long term debt was assumed by the Company and immediately repaid. CW Media, a wholly owned subsidiary of CW Investments, operates the acquired broadcast business which primarily consists of 18 specialty television channels in Canada.


Disclosure failure, that this loan is a non arms length transaction (kick back)
On July 3, 2008, we entered into U.S.$3 12.0 million Senior Unsecured Notes maturing on August 15, 2015. The Senior Unsecured Notes bear interest at a rate equal to 13.5% per aimum, compounded semi-annually. Interest accrues from the date of issue to August 15, 2011 (the "Cash Interest Date"), however is not payable until maturity, unless we elect to pay interest in cash with respect to any interest period before the Cash Interest Date. After August 15, 2011, interest will accrue on and be paid in respect of the Senior Unsecured Notes in cash, commencing on February 15, 2012. Interest is
payable or compounded, as applicable, on each February 15 and August 15. The Senior Unsecured Notes have a variable prepayment option at a premium of 106.75 in 2011 which declines on a straight-line basis to par in 2013. The prepayment option represents an embedded derivative that is to be accounted for separately at fair value. As at
November 30, 2009 the estimated fair value of the prepayment option was $1.4 million. During the three months ended November 30, 2009, we recorded a recovery of $1.4 million (2008 - nil) in interest expense.



http://www.canwest.com/investors/investor_documents/F09/q3/2009_Q3_CW_Media_Holdings_Inc_Financial_Statements.pdf



Canwest stating that all the debt in companies it only owns part of, as all their debt, yet only owe part of this debt obviosly
http://www.canwestglobal.com/investors/investor_documents/F08/CGCCQ32008FS.pdf
7. LONG TERM DEBT
Due
Date
Principal
Outstanding
($millions)
As at
May 31,
As at
August 31,
2008 2007
Canwest Media Inc.:
Senior secured revolving credit facility(1) 2011 $20 20,000 -
Senior subordinated notes (net of debt
issuance costs of $12 million)(2) 2012 US$761
760,632
829,800
Canwest Limited Partnership:
Senior secured credit facilities- revolver(3) 2012 $87 87,000 85,000
Senior secured credit facilities- credit C (net
of debt issuance costs of $3 million)(3) 2012 $265
261,862
265,000
Senior secured credit facilities-credit D (net
of debt issuance costs of $5 million)(3) 2014 US$462
453,223
491,170
Senior subordinated unsecured credit facility
(net of debt issuance costs of $1 million) 2015 $75
74,132
75,000
Senior subordinated unsecured notes (net of
debt issuance costs of $9 million)(4) 2015 US$400
387,943
422,480
CW Media Holdings:
Senior secured credit facility (net of debt
issuance costs of $13 million)(5) 2015 US$444
428,420
471,518
Senior unsecured notes including accrued
interest (net of debt issuance costs of $9
million)(6) 2008 US$328
315,164
315,429
Ten Network Holdings Limited:
Bank loan(7) 2011 A$285 270,608 211,043
Senior unsecured notes (8) 2013 US$125 124,012 132,050
Senior notes 2013 A$150 142,425 129,210
Other - 4,250
3,325,421 3,431,950
Effect of foreign currency swaps - 170,757
Long term debt 3,325,421 3,602,707
Less portion due within one year (9,379) (12,760)




Hedging for CW Media from the beginning (not from after CCAA filing Oct09, recheck the new hedging dislcosure, Reset the Canadian dollar exchange rate?) (Check, increased in size 1st2010
Hedging derivative instruments 43,763 19,788.)



CW Media has entered into a Senior Secured Credit facility that includes $446.8 million
(US$446 million) ((August 31, 2007 – $475.0 million (US$446 million)) term loan. Unamortized
debt issuance costs related to this debt were $13.3 million at November 30, 2007. CW Media
has entered into a foreign currency interest rate swap that fixes currency exchange of
US$1:$1.064 Canadian dollars until February 2015. This swap was designated a cash flow
hedge and its fair value of $56.7 million is recorded on the balance sheet in Interest rate and
foreign currency swap liabilities on hedging activity.
(6) CW Media has entered into $309.8 million (US$309.7 million) ((August 31, 2007 - $315.4
million (US$298.6 million)) Senior Unsecured Interim Loans. Unamortized debt issuance costs
related to this debt were $8.7 million at November 30, 2007. During the quarter the senior
unsecured notes principal increased by $11.2 million (US$11.1 million) which represents
accrued non cash interest.

United States Securities Commission complaince request: request to halt the trading of Canwest 8% notes

http://www.sec.gov/
Insider trading of bonds going on. Irregularity in the bond purchases of Canwest bonds by Canwest at above market rates; agreement between the noteholders and Canwest to miss the sept 15 09 interest payment. Collusion.

8% noteholders want a deal fast by April 30, or no deal

8% Noteholders GIVE OUR TEN MONEY BACK; fraud to pay dollar per dollar on bonds, when bonds trading on the bond market for .70 cents on the dollar. Irregularity in the bond purchases of Canwest bonds by Canwest at above market rates; agreement between the noteholders and Canwest to miss the sept 15 09 interest payment. Collusion.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
http://www.canwest.com/media/viewNews.asp?NewsroomID=1242

Winnipeg - April 15, 2010) Canwest Global Communications Corp. (“Canwest” or the “Company”) announced today it has agreed with the members of the ad hoc committee (the “Ad Hoc Committee”) of 8% senior subordinated noteholders of Canwest Media Inc. (“CMI”) to finalize and deliver to the Ad Hoc Committee a consensual recapitalization plan (the “Plan”) of the Company, CMI and certain of their subsidiaries (together, the “CMI Entities”), together with an information circular for a creditors’ meeting in respect of the Plan, no later than April 30, 2010. Under the terms of the previously disclosed amended Support Agreement and amended Use of Cash Collateral and Consent Agreement, this new milestone replaces a milestone that required creditor approval of the Plan to occur no later than April 15, 2010. The new milestone also contemplates the Plan containing specific deadlines for receipt of an order of the Ontario Superior Court of Justice (Commercial List) concerning the creditors’ meeting in respect of the Plan and for the holding of such meeting.

Canwest shareholder expropriation is an advertisement

Argyle Communications is writing the communication notices for Catalyst and Asper.
http://www.argylerowland.com/our_services.htm

http://www.youtube.com/watch?v=AdvEa_UB110

Canwest to be taken private, yet the Asper bid uses the word the public company

TORONTO, Feb. 19 /CNW/ -- A group led by Catalyst Capital Group Inc. (the"Catalyst Group") that includes the Asper family and Canadian broadcastingindustry executives, Rael P. Merson and John H. Tory, announced today thatthey have submitted to the Canwest Special Committee a restructuring proposal(the "Proposal") to facilitate the Company's emergence from the CCAA process.

Leonard Asper said, "This proposal will allow the public company to pursue a more focused business strategy that allows it to aggressively pursueopportunities in the rapidly changing media landscape. With respected Canadianpartners, a strong capital base and significant broadcast industry experienceat the helm, the new company has the opportunity to deliver significant valueto its current stakeholders and future public shareholders."


http://www.cnxmarketlink.com/en/releases/archive/February2010/19/c3187.html

Canwest's 13.5 debt part is CW Media's loan?

What? Canwest borrow at 13.5% to obtain the funds to invest in the Atlantis deal; so how it this loan attached to Atlantis (CW Media)?
~~~~~~~~~~~~~~~~~~~~~~~~~
CW Media has a senior secured credit facility, which consists of a $50 million revolving term loan and a US$436 million term loan. The term loan may be repaid at any time without penalty, subject to certain conditions. We may be required to prepay a portion of the term loan facility based on excess cash flows as defined in the credit agreement. This facility is secured by substantially all of the assets of CW Media and, subject to certain limitations, by each of its existing and each subsequently acquired or organized wholly owned subsidiaries.

As at February 28, 2010, CW Media had not drawn any amount under the $50 million revolving term loan and had fully drawn the amount allowed under the term loan. CW Media also has US$338 million senior unsecured notes which bear interest at 13.5% and are due on August 15, 2015.

only change, but Canwest auditor needed the little extras, always pushing the limit

Impairment loss on intangible assets. We recorded impairment losses on intangible assets of $3
million for the six months ended February 28, 2010.


Minority interest. For the six months ended February 28, 2010, we recorded minority interest
charges of $12 million related to certain specialty television stations


Long-term debt payments
CW Media has required repayments of $5 million in annual principal payments on its long-term
debt. In addition, subsequent to February 28, 2010, CW Media made a voluntary principal
repayment on their senior secured credit facility of US$ 23 million.


Restructuring and Recapitalization
As part of the ongoing restructuring and recapitalization process, we are committed to pay certain professional and other fees incurred by us and the other parties involved in the process. In the first six months of fiscal 2010, payments of fees amounted to $43 million. For the remainder of fiscal 2010, we expect to incur approximately $7 million per month in such costs.


In addition, CW Media entered into an agreement dated August 15, 2007 (the “Separation
Agreement”) pursuant to which, certain of the parties to the Separation Agreement agreed to
indemnify CW Media in respect of specified liabilities, including certain tax liabilities, and in some
cases, on a joint and several basis. As at February 28, 2010, we have recorded income tax
liabilities of $29 million which according to the terms of this agreement will be recoverable from
other parties to the Separation Agreement if and when the liabilities are realized. We have
recorded accounts receivable in this amount.

Canwest should not be writing down an asset before they buy it

Canwest says its lost 33 million in an accretion rate of liability in quarter future purchase of Goldman Sachs Atlants
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Accretion of long-term liabilities. For the three months ended February 28, 2010, we have
recorded an accretion expense of $33 million compared to $10 million in the same period in iscal b2009 related to the discounting of certain long-term liabilities which are accreted to their estimated value over the term of these liabilities. The charge is primarily related to the Goldman Sachs puttable interest in CW Media which is classified as a financial liability with an estimated accretion rate of 19%. We estimate the fair value of the puttable interest liability based on management’s forecasts.



Accretion of long-term liabilities. For the six months ended February 28, 2010, we hav recorded an accretion expense of $66 million compared to $38 million in the same period in fiscal 2009 related to the discounting of certain long-term liabilities which are accreted to their estimated value over the term of these liabilities. The charge is primarily related to the Goldman Sachs puttable interest in CW Media which is classified as a financial liability with an estimated accretion rate of 19%. We estimate the fair value of the puttable interest liability based on management’s forecasts.

What? Canwest financial MD&A - English

60 million interest payments missed? Decepetive as missed interest payment in March was paid
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Canwest Media Entities Events
In March and September 2009, Canwest Media Inc. (“Canwest Media”) did not make interest
payments totaling in the aggregate US$60.8 million which were due on its 8% senior subordinated unsecured notes (“8% Notes”) and is in default under the terms of the 8% Notes indenture. The guarantors under the Canwest Media debt obligations include Canwest Global, Canwest Media, Canwest Television Limited Partnership, the National Post Company and other wholly owned subsidiaries (collectively, the “Canwest Media Entities”), but exclude Canwest (Canada) Inc., Canwest Limited Partnership (“Canwest LP”) and its subsidiaries including Canwest Publishing Inc. and National Post Inc., and CW Investments Co. (“CW Media”) and its subsidiaries including CW Media Holdings Inc.













1
CANWEST GLOBAL COMMUNICATIONS CORP.
INTERIM MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2010 AND 2009
APRIL 13, 2010
2
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2010 AND 2009
This Management Discussion and Analysis (“MD&A”) contains certain comments or forwardlooking
statements about our objectives, strategies, financial conditions, results of operations and
businesses. Statements that are not historical facts are forward-looking and are subject to
important risks, uncertainties and assumptions. These statements are based on our current
expectations about our business and the markets we operate in, and on various estimates and
assumptions. The results or events predicted in these forward-looking statements may differ
materially from actual results or events if known or unknown risks, trends or uncertainties affect our
business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no
assurance that the circumstances described in any forward-looking statement will materialize.
Significant and reasonably foreseeable factors that could cause our results to differ materially from
our current expectations are discussed in the section entitled “Risk Factors” contained in our
Annual Information Form for the year ended August 31, 2009 filed by Canwest Global
Communications Corp. with the Canadian Securities Commissions (available on SEDAR at
www.sedar.com). Subject to applicable securities laws, we disclaim any intention or obligation to
update any forward-looking statement even if new information becomes available, as a result of
future events or for any other reason.
TABLE OF CONTENTS
OVERVIEW ................................................................................................................................... 4
Creditor Protection and Recapitalization.......................................................................... 4
KEY FACTORS AFFECTING SEGMENT REVENUE AND OPERATING INCOME...................... 14
Television Broadcast ..................................................................................................... 14
Publishing..................................................................................................................... 14
Seasonality .................................................................................................................... 15
CRITICAL ACCOUNTING ESTIMATES........................................................................................ 15
Claims during the CCAA proceedings ........................................................................... 15
Interest expense ............................................................................................................ 15
Reorganization items ..................................................................................................... 15
CHANGES IN ACCOUNTING POLICIES...................................................................................... 16
Goodwill and Intangible Assets...................................................................................... 16
FORTHCOMING CHANGES IN ACCOUNTING POLICIES.......................................................... 16
Business Combinations ................................................................................................. 16
Multiple Deliverable Revenue Arrangements................................................................. 16
International Financial Reporting Standards.................................................................. 16
CONTROLS AND PROCEDURES................................................................................................ 18
OPERATING RESULTS ............................................................................................................... 18
Introductory Note ........................................................................................................... 18
For the Three Months Ended February 28, 2010........................................................... 19
Consolidated Results ................................................................................................. 19
Segment Results........................................................................................................ 21
For the Six Months Ended February 28, 2010 ............................................................... 23
Consolidated Results ................................................................................................. 23
Segment Results........................................................................................................ 26
CONSOLIDATED QUARTERLY FINANCIAL RESULTS............................................................... 28
LIQUIDITY AND CAPITAL RESOURCES..................................................................................... 28
Sources of Funds........................................................................................................... 28
Uses of Funds................................................................................................................ 29
Debt ............................................................................................................................... 30
FINANCIAL INSTRUMENTS......................................................................................................... 31
3
INDUSTRY RISKS AND UNCERTAINTIES.................................................................................. 32
OFF BALANCE SHEET ARRANGEMENTS AND GUARANTEES................................................ 32
RELATED PARTY TRANSACTIONS............................................................................................ 33
OCTOBER 6, 2009 NEWS RELEASE: PROJECTED CAPITAL EXPENDITURES AND OTHER
FINANCIAL INFORMATION ......................................................................................................... 33
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES...................................................... 36
OTHER........................................................................................................................................ 36
4
OVERVIEW
Canwest Global Communications Corp. (“Canwest Global”, we, us or our) is one of Canada’s
largest media companies. We are Canada’s largest publisher of English language daily
newspapers, and own, operate and/or hold substantial interests in free-to-air and subscriptionbased
television networks, websites and networks in Canada.
Creditor Protection and Recapitalization
Our operating results and cash flows for the six months ended February 28, 2010 reflect continued
weakness in advertising revenue for our Television and Publishing operations reflecting the
weakened economic environment. The reduced advertising revenue has reduced cash flows from
operations. These conditions and other factors contributed to the defaults related to certain of our
credit facilities, note indentures and derivative financial instruments.
Canwest Media Entities Events
In March and September 2009, Canwest Media Inc. (“Canwest Media”) did not make interest
payments totaling in the aggregate US$60.8 million which were due on its 8% senior subordinated
unsecured notes (“8% Notes”) and is in default under the terms of the 8% Notes indenture. The
guarantors under the Canwest Media debt obligations include Canwest Global, Canwest Media,
Canwest Television Limited Partnership, the National Post Company and other wholly owned
subsidiaries (collectively, the “Canwest Media Entities”), but exclude Canwest (Canada) Inc.,
Canwest Limited Partnership (“Canwest LP”) and its subsidiaries including Canwest Publishing Inc.
and National Post Inc., and CW Investments Co. (“CW Media”) and its subsidiaries including CW
Media Holdings Inc.
In May 2009, Canwest Media entered into a new $75 million senior secured asset based loan
facility (the “ABL Facility”) and issued $105 million (US$94 million) 12% secured notes for cash
proceeds of $100 million to certain holders of its 8% Notes. The proceeds were used to pay, in full,
amounts owing under Canwest Media’s previous senior secured credit facilities and certain secured
hedging derivatives, as well as to finance operations.
On September 22, 2009, the Canwest Media Entities entered into a Use of Cash Collateral and
Consent Agreement with an ad hoc committee of holders of 8% Notes representing over 70% of the
8% Notes (the “Ad Hoc Committee”). On October 1, 2009, we sold our interest in Ten Network
Holdings Limited (“Ten Holdings”) for net proceeds of $618 million. In accordance with the Use of
Cash Collateral and Consent Agreement, the net proceeds were advanced to Canwest Media by its
wholly owned Irish subsidiary which held the investment in Ten Holdings and were utilized as
follows: $102 million to repay obligations under the 12% secured notes, $85 million to repay the
ABL Facility and to provide operating liquidity and $431 million to reduce its obligations under its 8%
Notes indenture.
On October 5, 2009, the Canwest Media Entities entered into a CCAA Support Agreement with the
Ad Hoc Committee pursuant to which they are pursuing a proposed recapitalization transaction
related to the Canwest Media Entities. The proposed terms of the recapitalization transaction were
set out in a Recapitalization Term Sheet incorporated into the CCAA Support Agreement (together
with the CCAA Support Agreement, the “Recapitalization Agreement”). See note 4 to our interim
unaudited consolidated financial statements for the three and six months ended February 28, 2010
for further information related to the recapitalization plans of the Canwest Media Entities.
5
On October 6, 2009, as set out in the terms of the Recapitalization Agreement, Canwest Global
and certain of its subsidiaries applied for and obtained an order (as amended, the “Canwest Media
Initial Order”) from the Ontario Superior Court of Justice (Commercial List) (the “Court”) granting
creditor protection under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”). The
Canwest Media Initial Order applies to Canwest Global, Canwest Media, Canwest Television
Limited Partnership, The National Post Company and certain non-operating subsidiaries
(collectively, the “Canwest Media Applicants”). Canwest (Canada) Inc., Canwest LP and its
subsidiaries including Canwest Publishing Inc. and National Post Inc., and CW Media and its
subsidiaries including CW Media Holdings Inc. are not included in this filing. The Canwest Media
Initial Order provided for a general stay of proceedings in respect of the Canwest Media Applicants
for an initial period of 30 days, which was subsequently extended to June 15, 2010 and is subject
to further extension by the Court. The Canwest Media Initial Order may be further amended by the
Court throughout the CCAA proceedings (the “Canwest Media CCAA Proceedings”) based on
motions from the Canwest Media Applicants, their creditors or other interested parties. On October
6, 2009, certain of the Canwest Media Applicants, through their Court-appointed Monitor, also
made a concurrent petition for recognition and ancillary relief under Chapter 15 of the U.S.
Bankruptcy Code in the US Bankruptcy Court (“US Court”). On November 3, 2009, the US Court
granted formal recognition of the Canwest Media CCAA Proceedings.
On October 6, 2009, in the Canwest Media Initial Order, the Court approved the conversion of the
ABL Facility into a debtor-in-possession (“DIP”) financing arrangement. On October 14, 2009, and
as amended on November 30, 2009,the Court approved a claims procedure, which sets out the
process for identifying, barring and valuing claims against the Canwest Media Applicants and the
directors and officers of the Canwest Media Applicants by the creditors affected by the CCAA filing
for both voting and distribution purposes. See the Liquidity and Capital Resources section of this
report for further information about the DIP financing arrangement.
Under the terms of the Canwest Media Initial Order, FTI Consulting Canada Inc. was appointed as
the monitor (the “Monitor”) for the Canwest Media CCAA Proceedings. The Monitor has been
reporting and will continue to report to the Court from time to time on the Canwest Media
Applicants’ financial and operational position and any other matters that may be relevant to the
Canwest Media CCAA Proceedings. In addition, the Monitor may advise the Canwest Media
Applicants on their development of a restructuring plan and, to the extent required, assist the
Canwest Media Applicants with the restructuring.
During the Canwest Media CCAA Proceedings, the Canwest Media Applicants continue to operate
with the assistance of the Monitor and under the supervision of the Court. Pursuant to the Canwest
Media Initial Order, and subject to the conditions set out therein and the requirements set out in the
CCAA, the Canwest Media Applicants are required to pay all amounts due to governmental entities
related to employee deductions, sales taxes, and other taxes and assessments. The Canwest
Media Applicants are permitted to pay outstanding and future employee wages, salaries and
employee benefits and other employee obligations; pay outstanding amounts for goods and
services from suppliers considered critical to the ongoing operations of the Canwest Media
Applicants; and pay future expenses and capital expenditures reasonably necessary to carry on the
operations of the Canwest Media Applicants. The Canwest Media Initial Order also allows the
Canwest Media Applicants, subject to the provisions of the CCAA, to disclaim any arrangement or
agreement. Claims may be allowed related to damages of counterparties arising as a result of such
disclaimers. These claims will be recognized in accordance with our accounting policies.
6
The Canwest Media Applicants are undertaking a financial and corporate restructuring and intend to
propose a plan of compromise and arrangement (the “Recapitalization Plan”) as contemplated by
the Amended Recapitalization Agreement (as defined below) which must be approved by the
requisite majority of affected creditors and sanctioned by the Court. There can be no assurance that
the Recapitalization Plan will be supported by the affected creditors and sanctioned by the Court, or
that the Recapitalization Plan will be implemented successfully.
The Canwest Media Initial Order created a number of new charges against substantially all of the
current and future assets of the Canwest Media Applicants which, subject to the terms of the
Canwest Media Initial Order, may rank in priority to certain other security interests, trusts, liens,
charges and encumbrances. Certain employee and commodity tax obligations are also subject to a
super priority claim under bankruptcy legislation. These charges, in order of priority, include an
administration charge to secure amounts owing to certain restructuring advisors, up to maximum of
$15 million; a DIP Charge to the extent of any obligations outstanding under the DIP financing
arrangement described above; a directors’ charge to secure the indemnity created under the
Canwest Media Initial Order in favour of the directors of the Canwest Media Applicants and a key
employee retention plan (“KERP”) charge, with equal priority, to a maximum of $20 million and $5.9
million, respectively, and an investor charge to secure the Canwest Global’s obligation under the
Subscription Agreement (as defined below) to pay Shaw Communications Inc. (“Shaw”) a
termination fee and to reimburse Shaw’s costs and expenses in certain circumstances, up to a
maximum of $7.5 million. The directors’ charge and the KERP charge are postponed in right of
payment to the extent of the first $85 million payable under the senior secured promissory note
issued to a wholly-owned Irish subsidiary in relation to the receipt of proceeds on the sale of Ten
Holdings.
On October 30, 2009, the Court granted an order approving the orderly transition and subsequent
termination of certain shared services arrangements between the Canwest Media Applicants and
other subsidiaries of Canwest Global. The new shared services arrangement provides for the
orderly termination of shared services on dates ranging from February 28, 2010 to February 28,
2011 and addresses certain employee-related matters including pensions and revises amounts
payable for such services. In addition, substantially all of the assets and certain liabilities of the
National Post were transferred from The National Post Company, a subsidiary of Canwest Media, to
National Post Inc., a wholly owned subsidiary of Canwest LP for consideration of $2.5 million.
The terms of the Recapitalization Agreement required that an equity investment in a restructured
and recapitalized Canwest Global (“Restructured Canwest”) by one or more Canadian investors be
completed on or prior to the completion of a restructuring transaction. An extensive equity
investment solicitation process was carried out by a financial advisor retained by us to identify
potential new investors. On February 11, 2010, the Company entered into a subscription agreement
with Shaw (the “Subscription Agreement”) pursuant to which Shaw agreed to make an equity
investment in Restructured Canwest, a support agreement with Shaw and the Ad Hoc Committee
(the “Shaw Support Agreement”), and an amendment of the Recapitalization Agreement with the Ad
Hoc Committee (the “Amended Recapitalization Agreement”). On February 19, 2010, the Court
granted an order sanctioning these agreements, upon which they became effective.
On March 9, 2010, GS Capital Partners VI Fund L.P. and certain of its affiliates (collectively, the
“Goldman Sachs Parties”) brought a motion in the Ontario Court of Appeal for leave to appeal the
Shaw Approval Order, which has yet to be adjudicated and which has been resisted by the
Company. In the event that the motion for leave to appeal is granted, the Goldman Sachs Parties’
appeal would be permitted to proceed.
7
Together these agreements set out the terms and conditions of the proposed recapitalization of the
Canwest Media Entities. The support of the proposed recapitalization by the Ad Hoc Committee
and by Shaw is subject to the satisfaction of a number of conditions and the agreements may be
terminated under certain circumstances.
Under the Subscription Agreement, Shaw has agreed to purchase $95 million in voting shares of
Restructured Canwest, representing a 20% equity interest and an 80% voting interest upon its
emergence from the Canwest Media CCAA Proceedings.
The amended terms of the Recapitalization Plan, as set out in the Amended Recapitalization
Agreement, contemplate that the affected creditors of the Canwest Media Applicants whose claims
are compromised under the Recapitalization Plan, including the holders of the 8% Notes, will
receive either an equity interest in Restructured Canwest or cash payments in amounts equal to
the value of the equity interest that they would otherwise have received. Affected creditors
(including members of the Ad Hoc Committee) who would otherwise be entitled to receive at least
5% of the equity of Restructured Canwest may elect to receive equity in full satisfaction of their
claims. All other affected creditors, including those eligible to receive shares of Restructured
Canwest but which have elected not to receive shares, will receive cash payments to extinguish
their claims in amounts equal to the value of the equity they would have otherwise received under
the amended transaction involving Shaw. Existing shareholders of Canwest Global will receive
cash payments in exchange for their shares equivalent in the aggregate to 2.3% of the implied
equity value of Restructured Canwest. Shaw has agreed to fund certain of these cash payments to
affected creditors and shareholders in exchange for additional voting shares of Restructured
Canwest which would result in Shaw’s equity interest increasing above the initial 20%. Members of
the Ad Hoc Committee have the right to participate with Shaw in the funding of this additional
commitment.
Based on Shaw’s equity subscription, Restructured Canwest has an implied equity value of $475
million. The implied equity value of Restructured Canwest attributable to affected creditors other
than the holders of the 8% Notes is not to exceed 18.5% of the total outstanding equity of
Restructured Canwest on its emergence from the CCAA protection.
The terms of the Amended Recapitalization Agreement, the Subscription Agreement and the Shaw
Support Agreement contemplate that, upon its emergence from the CCAA protection, Restructured
Canwest would be a private company and that all existing equity settled stock based compensation
plans would be terminated without compensation. Following successful completion of the
recapitalization transaction, Restructured Canwest would be de-listed from the TSX Venture
Exchange and would apply to cease to be a reporting issuer under Canadian securities laws.
Restructured Canwest would be managed and operated as a stand-alone business with its own
board of directors.
The Subscription Agreement contains an exclusivity covenant in favour of Shaw and sets out
liquidity mechanisms to provide equity holders with the ability to divest of their equity interests in
Restructured Canwest. It also sets out the principal terms of a shareholders’ agreement to be
entered into by the shareholders of Restructured Canwest upon its emergence from the CCAA
protection with respect to capital structure, governance, shareholder rights and other matters. The
Subscription Agreement may be terminated by Shaw or Canwest Global in certain circumstances,
including by Canwest Global in the event that the Shaw Support Agreement between the
Company, Shaw and the members of the Ad Hoc Committee is terminated.
8
Under the Amended Recapitalization Agreement, the Subscription Agreement and the Shaw
Support Agreement, there are a number of conditions which must be satisfied in order for the
Recapitalization Plan to be completed, including that, among other things, the resulting equity
structure of Restructured Canwest must comply with the Canadian ownership and control
requirements of the Canadian Radio-television and Telecommunications Commission (the
”CRTC”), the amended and restated shareholders’ agreement concerning CW Media must be
amended and restated or otherwise addressed in a manner agreed to by the Company, Shaw and
the Ad Hoc Committee or disclaimed in accordance with the CCAA, the Company must maintain at
least a 35.33% ownership interest in the equity of CW Media, the Company must be able to secure
financing, the Company must receive the necessary creditor and Court approval of the
Recapitalization Plan to be able to emerge from the Canwest Media CCAA Proceedings and the
Company must use $85 million of the proceeds from Shaw’s equity subscription to reduce amounts
due under the 8% Notes. The Amended Recapitalization Agreement and the Subscription
Agreement may be terminated by the Company, Shaw or the members of the Ad Hoc Committee,
as applicable, upon the occurrence of certain events, including a material adverse change in the
financial condition of the Company, regulatory impediments that would make the completion of the
Recapitalization Plan unlikely or unsatisfactory to the parties, a default under the terms of the DIP
financing or the CW Media debt, absence of the creditor approval of the Recapitalization Plan by
April 15, 2010 (unless such date is extended) and non-completion of the transactions set out in the
Recapitalization Plan by August 11, 2010. The Canwest Media Applicants are currently in
negotiations with the Ad Hoc Committee with respect to the extension of certain of the milestones
set out in the Amended Recapitalization Agreement.
The Subscription Agreement, the Amended Recapitalization Agreement and the Shaw Support
Agreement contain a number of representations, warranties and covenants of the parties. In
certain circumstances, Canwest would be required to pay Shaw a termination fee in the amount of
$5 million and reimburse Shaw for its costs and expenses up to a maximum amount of $2.5 million.
On closing, the Company is required to reimburse Shaw for its costs and expenses up to a
maximum amount of $2.5 million.
The Recapitalization Agreement, the Amended Recapitalization Agreement, the Subscription
Agreement and the Shaw Support Agreement have been filed on the System for Electronic
Document Analysis and Retrieval (SEDAR) and are available at www.sedar.com.
On March 9, 2010, GS Capital Partners VI Fund L.P. and certain of its affiliates (collectively, the
“Goldman Sachs Parties”) brought a motion in the Ontario Court of Appeal for leave to appeal the
Shaw Approval Order, which has yet to be adjudicated and which has been resisted by Canwest
Global. In the event that the motion for leave to appeal is granted, the Goldman Sachs Parties’
appeal would be permitted to proceed.
There is uncertainty related to the completion of the recapitalization transactions as described
above as a result of the number and complexity of the conditions that must be satisfied.
Further information pertaining to the Canwest Media CCAA Proceedings may be obtained through
our website at www.canwest.com. Certain information regarding the Canwest Media CCAA
Proceedings, including the reports of the Monitor, is available at the Monitor’s website at
cfcanada.fticonsulting.com/cmi.
9
LP Entities Events
Canwest LP has not been in compliance with the financial covenants of its senior secured credit
facilities (“Canwest LP Secured Credit Facilities”) since May 31, 2009. From May 2009 to August
2009 Canwest LP did not make interest and principal payments on its senior secured credit facility
and the associated hedging derivative instruments or in respect of its senior subordinated
unsecured credit facility (“Canwest LP Senior Subordinated Credit Facility”) or its senior
subordinated unsecured notes (“Canwest LP Senior Subordinated Notes”). These payments were
not made in order to preserve cash to fund operations while Canwest LP worked to negotiate a
potential recapitalization transaction. As a result of the payment default under the Canwest LP
Secured Credit Facilities, the hedging derivative instrument counterparties terminated the hedging
arrangements and demanded immediate payment of an aggregate of $68.9 million (the “Canwest
LP Secured Hedge Obligations”).
Effective August 31, 2009, the Canwest LP Entities (as defined below) entered into a forbearance
agreement with the administrative agent under the Canwest LP Secured Credit Facilities (the
“Administrative Agent”) under which the lenders agreed to not take any steps with respect to the
defaults under the Canwest LP Secured Credit Facilities and to work with management of Canwest
LP to develop and implement a consensual pre-packaged restructuring, recapitalization, or
reorganization of Canwest LP and its subsidiaries. In accordance with the terms of the forbearance
agreement, the lenders cancelled all undrawn amounts under the revolving credit facility. Canwest
LP agreed to pay the interest owing and the continuing interest on its Canwest LP Secured Credit
Facilities and the interest amounts outstanding under the Canwest LP Secured Hedge Obligations.
The forbearance agreement was subject to a number of conditions and required the achievement
of certain milestones. The forbearance agreement, as extended, expired on November 9, 2009.
Canwest LP continued to pay the interest on the Canwest LP Secured Credit Facilities and the
Canwest LP Secured Hedge Obligations. Canwest LP was also in default under the terms of its
Canwest LP Senior Subordinated Credit Facility and Canwest LP Senior Subordinated Notes and
did not enter into any forbearance arrangements with these unsecured lenders or note holders
thereunder.
On January 8, 2010, the Canwest LP Entities entered into a support agreement with the
Administrative Agent (the “Canwest LP Support Agreement”) which was approved by the Court on
January 8, 2010. The Administrative Agent acts on behalf of the lenders under the Canwest LP
Secured Credit Facilities and the Canwest LP Secured Hedge Obligations (collectively, the
“Canwest LP Senior Lenders”). The Canwest LP Support Agreement requires the Canwest LP
Entities, among other things, (a) to commence CCAA proceedings; (b) to implement and make
effective a plan of compromise and arrangement under the CCAA (the “Canwest LP Senior
Lenders CCAA Plan”); (c) to conduct a sale and investor solicitation process (“SISP”) with a view to
obtaining proposals from prospective purchasers or investors to acquire all or substantially all of
the assets of the Canwest LP Entities or to invest in the Canwest LP Entities or their business; (d) if
the SISP is not successful, to use their best efforts to implement the agreement for a newly
established corporation (“Acquireco”) capitalized by the Canwest LP Senior Lenders to acquire the
operations and substantially all of the assets of the Canwest LP Entities and to assume certain
liabilities of the Canwest LP Entities (the “Credit Acquisition”); and (e) to pay interest on Canwest
LP Secured Credit Facilities and Canwest LP Secured Hedge Obligations, expenses of the
Administrative Agent and its advisors, certain investment banking fees and consent fees to
Canwest LP Senior Lenders committing to the Canwest LP Senior Lenders CCAA Plan.
10
On January 8, 2010, as contemplated by the Canwest LP Support Agreement, Canwest (Canada)
Inc., Canwest Publishing Inc. and Canwest Books Inc. (collectively, the “Canwest LP Applicants”
and, together with Canwest LP, the “Canwest LP Entities”), applied for and obtained an order (as
amended, the “Canwest LP Initial Order”) from the Court granting creditor protection under the
CCAA. The Canwest LP Initial Order applies to the Canwest LP Entities. National Post Inc. is not
included in the filing. For additional information, see note 5, “Canwest LP Creditor Protection and
Plan.” The Canwest LP Initial Order provided for a general stay of proceedings against the
Canwest LP Applicants for an initial period which was subsequently extended to June 30, 2010
and is subject to further extension by the Court. The Canwest LP Initial Order may be further
amended by the Court throughout the CCAA proceedings based on motions from the Canwest LP
Applicants, their creditors and other interested parties.
On January 8, 2010, the Court appointed FTI Consulting Canada Inc. as the monitor (the “Canwest
LP Monitor”) for the Canwest LP CCAA Proceedings. The Canwest LP Monitor has been and will
continue to monitor the activities of the Canwest LP Entities, report to the Court from time to time
on the Canwest LP Entities’ financial and operational position and any other matters that may be
relevant to the Canwest LP CCAA Proceedings, advise the Canwest LP Entities on various
matters, assist the Chief Restructuring Advisor to the Canwest LP Entities (the “CRA”), and
supervise the SISP. CRS Inc. was appointed as the CRA. The CRA is responsible for formulating
and implementing the restructuring and/or recapitalization of all or part of the business and/or
capital structure of the Canwest LP Entities. The Court also approved the engagement of RBC
Dominion Securities Inc. (the “Financial Advisor”) to provide investment banking services to the
Canwest LP Entities related to the SISP.
On January 8, 2010, certain of the Canwest LP Senior Lenders agreed to extend to the Canwest
LP Entities a senior secured debtor-in-possession revolving credit facility (the “Canwest LP DIP
Facility”) in the maximum amount of $25 million, including a letter of credit sub-facility of up to $5
million. On January 8, 2010, the Court approved the Canwest LP DIP Facility and authorized the
Canwest LP Entities to execute definitive agreements related to the Canwest LP DIP Facility. The
definitive agreements were executed on February 5, 2010. See the Liquidity and Capital
Resources section of this report for further information about the Canwest LP DIP Facility.
The Canwest LP Senior Lenders CCAA Plan does not compromise or affect any claims other than
the claims of the Canwest LP Senior Lenders. The Canwest LP Senior Lenders CCAA Plan
requires repayment in full of all claims related to the Canwest LP DIP Facility on the
implementation date of the Canwest LP Senior Lenders CCAA Plan unless consent is received
from the lenders under the Canwest LP DIP Facility for such facility to be assumed in the Credit
Acquisition or a transaction under the SISP. The Canwest LP Senior Lenders CCAA Plan also
addressed the manner in which certain priority claims would be dealt with as further described
under the Credit Acquisition and SISP below. Under the Canwest LP Senior Lenders CCAA Plan,
the claims for the Canwest LP Secured Credit Facility and the Canwest LP Secured Hedge
Obligations are subject to a discount of $25 million. Under the Canwest LP Senior Lenders CCAA
Plan, Canwest LP Senior Lenders are entitled to (a) receive debt and equity of Acquireco in
exchange for their claims less a discount of $25 million and have unpaid interest either paid on the
implementation date or assumed by Acquireco or (b) repayment of their claims less a discount of
$25 million if a transaction is completed under the SISP.
11
On January 8, 2010, the Court approved the SISP to determine whether a successful bid could be
obtained by the Canwest LP Entities to sell substantially all of their assets or to obtain an
investment in the Canwest LP Entities’ business. If a successful bid is not obtained, the Credit
Acquisition, as described below, would proceed. A successful bid is either (a) a credible,
reasonably certain and financially viable offer that would result in a cash distribution to the
Canwest LP Senior Lenders in an aggregate amount equal to the amount of their claims less a
discount of $25 million (“Superior Cash Offer”) or (b) a credible, reasonably certain and financially
viable offer for the purchase of substantially all of the property of the Canwest LP Entities
(including an offer where the cash component of the offer is less than the discounted amount of
Canwest LP Senior Lenders’ claims as determined in (a)) or a reorganization of the Canwest LP
Entities (“Superior Alternative Offer”), in each case as approved by a formal vote of the Canwest
LP Secured Lenders in which at least 66.7% in value of the secured debt under the Canwest LP
Secured Credit Facilities and the Canwest LP Secured Hedge Obligations and at least an absolute
majority in number of the Canwest LP Secured Lenders that participate in such vote approve such
transaction.
If a Superior Cash Offer or a Superior Alternative Offer (collectively, the “Superior Offer”) is
received, the Canwest LP Monitor, after consultation with the financial advisor and CRA, will
recommend to the Special Committee of the board of directors of Canwest Global (the “Canwest
Global Special Committee”) the most favourable Superior Offer be selected and that a definitive
agreement be negotiated and settled, conditional upon Court approval and conditional on the
Superior Offer closing within 60 days after April 30, 2010. If the Canwest Global Special Committee
accepts the Superior Offer, the Canwest LP Monitor, in consultation with the financial advisor and
the CRA, will negotiate and settle a definitive agreement. If the Canwest Global Special Committee
does not wish to proceed with the Superior Offer, the Canwest LP Monitor will seek advice and
direction from the Court with respect to the SISP.
If a Superior Cash Offer is accepted, each of the Canwest LP Senior Lenders will receive its pro
rata share of the claims for the Canwest LP Secured Credit Facilities and the Canwest LP Secured
Hedge Obligations less a discount of $25 million in aggregate. Certain unaffected claims including
the Canwest LP DIP Facility, certain employee benefit claims, cash management obligations and
any secured claims ranking in priority will be paid. If a Superior Alternative Offer is accepted, the
Canwest LP Senior Lenders CCAA Plan will be terminated unless otherwise provided in such
Superior Alternative Offer.
On March 5, 2010, the initial phase of the SISP was completed with potential bidders submitting
non-binding indications of interest. In accordance with the SISP procedures, and following a review
of the non-binding indications of interest, the Canwest LP Monitor determined that there was a
reasonable prospect of obtaining a Superior Offer and on March 12, 2010, made a
recommendation to the Canwest Global Special Committee that the SISP continue for a further
seven weeks (“Phase 2”). The Canwest Global Special Committee accepted the Canwest LP
Monitor’s recommendation, and Phase 2 of the SISP commenced on March 12, 2010. During
Phase 2, qualified bidders will be able to conduct due diligence and, in accordance with the SISP
procedures, may deliver final, binding proposals to the financial advisor on or before April
30, 2010, following which a determination as to whether a Superior Offer has been proposed will
be made in accordance with the terms of the SISP.
12
If a Superior Offer is not obtained through the SISP, then, under the terms of the Canwest LP
Senior Secured Plan, the Canwest LP Entities are required to use all commercially reasonable
efforts to complete the Credit Acquisition. In connection with the Credit Acquisition, the Canwest
LP Senior Lenders would assign their claims under the Canwest LP Secured Credit Facilities and
Canwest LP Secured Hedge Obligations to Acquireco for a pro rata share of debt and equity to be
issued by Acquireco. Acquireco would enforce its security on the assets of the Canwest LP Entities
and acquire substantially all of the assets of the Canwest LP Entities, including the shares of
National Post Inc., and assume certain liabilities and claims of the Canwest LP Entities, unpaid
fees due to the Administrative Agent and unpaid interest due to the Canwest LP Senior Lenders.
Following the completion of the Credit Acquisition, Acquireco will continue to hold an unsecured
claim against the Canwest LP Entities equal to the $25.0 million discount amount described under
the SISP. The Credit Acquisition, if approved, does not provide for any recovery for any equity
holders of any of the Canwest LP Entities. Prior to the transfer of the assets to Acquireco, the
Canwest LP Entities, Acquireco and the Canwest LP Monitor will agree upon (or the Court will
determine) the amount of cash to be reserved to pay certain priority charges, post-filing accounts
payable, certain employment related obligations of the Canwest LP Entities, certain claims of
government entities and the fees and costs of any trustee in bankruptcy of the Canwest LP
Entities.
On April 12, 2010, the Court approved a claims procedure, which sets out the process for
identifying, barring and valuing certain specified claims, other than claims of the Canwest LP
Senior Lenders, against the Canwest LP Entities and the directors and officers of the Canwest
Media Entities by the creditors affected by the CCAA filing for both voting and distribution
purposes.
See note 5 to our interim unaudited consolidated financial statements for the three and six months
ended February 28, 2010 for further information related to the Canwest LP Support Agreement
and Canwest LP Senior Lenders CCAA Plan.
During the Canwest LP CCAA Proceedings, the Canwest LP Entities continue to operate with the
assistance of the Canwest LP Monitor and under the supervision of the Court. Pursuant to the
Canwest LP Initial Order, and subject to the conditions set out therein and the requirements set out
in the CCAA, the Canwest LP Entities are permitted to pay outstanding and future employee
wages, salaries and employee benefits and other employee obligations; pay outstanding amounts
for goods and services from suppliers considered critical to the ongoing operations of the Canwest
LP Entities; and pay future expenses and capital expenditures reasonably necessary to carry on
the operations of the Canwest LP Entities. The Canwest LP Initial Order also allows the Canwest
LP Entities, subject to the provisions of the CCAA, to disclaim any arrangement or agreement.
Claims may be allowed related to damages of counterparties arising as a result of such
disclaimers.
13
The Canwest LP Initial Order created a number of new charges against substantially all of the
current and future assets of the Canwest LP Entities which in accordance with the Canwest LP
Initial Order may rank in priority to certain other security interests, trusts, liens, charges and
encumbrances. These charges, in order of priority, include (i) an administration charge to secure
amounts owing to the Canwest LP Monitor and certain restructuring and financial advisors, up to a
maximum of $3.0 million; (ii) a DIP charge to the extent of any obligations outstanding under the
Canwest LP DIP Facility and the existing security interest granted by the Canwest LP Entities to
secure obligations under the Canwest LP Entities’ centralized cash management system up to $7.5
million, ranked on pari passu basis; (iii) a charge to secure fees payable to the financial advisor
engaged to conduct the SISP, up to a maximum of $10.0 million; and (iv) a directors’ charge to
secure the indemnity created under the Canwest LP Initial Order in favour of the directors and
officers of the Canwest LP Entities and a management incentive plan (“Canwest LP MIP”) charge,
each with equal priority, to a maximum of $35.0 million and $3.0 million, respectively (the Canwest
LP MIP charge was subsequently increased to $4.3 million on March 26, 2010). Certain employee
and commodity tax obligations are also subject to a super priority claim under the CCAA.
Further information pertaining to the Canwest LP CCAA Proceedings may be obtained through our
website at www.canwest.com. Certain information regarding the Canwest LP CCAA Proceedings,
including the reports of the Canwest LP Monitor, is available at the Canwest LP Monitor’s website
at http://cfcanada.fticonsulting.com/clp.
Listing and trading of our common stock
On November 13, 2009, the Toronto Stock Exchange (“TSX”) delisted our subordinate voting and
non voting shares. On November 16, 2009, our shares were listed for trading on the TSX Venture
Exchange.
Basis of presentation and going concern issues
The accompanying interim unaudited consolidated financial statements have been prepared on a
going concern basis in accordance with Canadian generally accepted accounting principles
(“GAAP”) which assumes that we will continue in operation for the foreseeable future and be able to
realize our assets and discharge our liabilities and commitments in the normal course of business.
While Canwest Global, along with the other Canwest Media Applicants, is under creditor protection,
we believe a plan or plans of compromise and arrangement can be developed and implemented
with respect to Canwest Global and the Canwest Media Applicants which will allow us to continue to
operate as a going concern. There is uncertainty as to whether the reorganization transactions will
be structured as a reorganization of Canwest Global. The Subscription Agreement between
Canwest Global and Shaw contemplates that a restructured and recapitalized Canwest Global will
emerge or that alternatively, a new company may be created and the restructuring may include
transfers of assets or shares of subsidiaries of Canwest Global and Canwest Media. If the
transaction involves a newly created company and transfers of assets or shares of subsidiaries of
Canwest Global and Canwest Media, we may not be able to continue to use the going concern
basis of presentation. Because there is a reasonable possibility that the Canwest Global will be
reorganized, we consider the going concern basis of presentation to be appropriate. The
accompanying interim unaudited consolidated financial statements do not reflect the adjustments to
the carrying values of assets and liabilities and the reported revenues and expenses and balance
sheet classifications that would be necessary if we were unable to continue to operate for the
foreseeable future and unable to realize our assets and discharge our liabilities in the normal
course of operations. These adjustments could be material.
14
Other significant subsidiaries
Our subsidiary, CW Media Holdings Inc., has significant debt obligations. These obligations are
subject to financial covenants that are based on operating results, financing expenses and
outstanding debt obligations. CW Media Holdings Inc. was in compliance with its financial
covenants as of February 28, 2010. The ability of this subsidiary to maintain compliance with its
financial covenants in the future is dependent upon various factors, including the advertising
markets on which it relies.
KEY FACTORS AFFECTING SEGMENT REVENUE AND OPERATING INCOME
Television Broadcast
We have two television segments. Our Canadian television segment includes our television
networks in Canada as well as TVtropolis and five other Canadian specialty television channels.
The CW Media television segment includes the operations of Canadian specialty television
channels held by CW Media. As at August 31, 2009, our stations which comprised the E! Networks
were sold or shut down. For the six months ended February 28, 2009, revenues and operating
expenses and operating loss of that network were $44 million, $64 million and $55 million,
respectively.
We generate the majority of our television revenue from the sale of advertising, with the remainder
generated from subscriber revenue earned by our specialty channels. Subscriber revenue is
recorded monthly based on subscriber levels. Demand for television advertising is driven primarily
by advertisers in the packaged goods, automotive, retail and entertainment industries and is
strongly influenced by general economic conditions. The attractiveness of our programs to
advertisers and the rates we charge are primarily a function of the size and demographics of our
viewing audience. The dependence of our advertising revenue on the ratings performance of our
television programs makes our television revenue less predictable than our publishing revenue.
For the remainder of fiscal 2010, given current economic conditions we expect stable to modest
year over year growth in advertising revenue for our Canadian television and CW Media television
operations. In general, we expect to sustain or improve the performance of our television channels
as it relates to our audience and that the performance of our specialty television channels will
continue to outpace that of our conventional television channels. We expect that subscriber
revenue which makes up approximately 6% of our Canadian television revenue and 42% of our
CW Media television revenue, will show modest growth.
Publishing
Our publishing segment includes the publication of a number of newspapers and magazines,
including metropolitan daily newspapers as well as the operation of canada.com and other internet
operations. During the year, we transferred the National Post to a subsidiary of Canwest LP.
Accordingly, at February 28, 2010, all of our publishing operations are held by Canwest LP. Our
publishing revenue is primarily earned from newspaper advertising, circulation revenue from our
newspapers and digital advertising revenue from our internet operations. Our newspaper and
interactive advertising revenues are a function of the volume or linage of advertising sold and the
rates we charge. Circulation revenue is produced from home-delivery subscriptions for our
newspapers and single-copy sales at retail outlets and vending machines. Circulation revenue is a
function of the number of newspapers we sell and the average per copy prices we charge.
For the remainder of fiscal 2010, we expect to continue to experience some recovery in revenues
as a result of continued modest improvements in economic conditions. We expect our expenses to
decrease moderately compared to fiscal 2009.
15
Seasonality
Our advertising revenue is seasonal. Revenue is typically highest in the first and third quarters,
while expenses are relatively constant throughout the year.
CRITICAL ACCOUNTING ESTIMATES
Except as noted below and in the changes in accounting policies section of this MD&A, there are
no significant changes in our critical accounting policies or estimates since August 31, 2009 as
described in the Management’s Discussion and Analysis in our 2009 Annual Report.
Claims during the CCAA proceedings
All claims that become known during the CCAA proceedings are recognized based on the best
estimate of the expected amounts of the allowed claims.
We account for our financial liabilities using the amortized cost method. For all financial liabilities
that are subject to compromise, we adjust the carrying amount to the amount expected to be
allowed under the claim. Any adjustments arising from differences between the carrying amount of
the financial liabilities and the allowed claims are presented as operating expenses if the amount
relates to a change in estimate for the cost of goods and services received by the companies
under the CCAA; otherwise the change has been presented as a Reorganization item.
Interest expense
Interest expense on financial liabilities which have been stayed by the Court is recognized only to
the extent the amounts will be paid during the CCAA proceedings or it is probable that the amounts
will be allowed as a claim in the CCAA proceedings. Interest expense recognized, including
interest and fees related to the DIP financing, are presented as Interest expense and not as
Reorganization items.
Reorganization items
Incremental costs directly related to the CCAA proceedings are recognized as expenses when
incurred and presented as Reorganization items. These costs include professional fees paid to
external parties for legal, financial consulting and appraisal services incurred during the period we
were developing the Recapitalization Plan and up to the date the Recapitalization Plan is
confirmed, and retention bonuses accruing and paid to our employees during the CCAA
proceedings.
Gains and losses realized on the disposal of any assets approved during the CCAA proceedings
and any provisions for losses related to restructuring, exit or disposal activities are presented as
Reorganization items if those activities have been undertaken as a result of the CCAA
proceedings. Gains and losses on other transactions or events occurring prior to the CCAA
proceedings or that would have occurred irrespective of the CCAA proceedings are included in
operating income. These gains, losses and provisions are recognized and measured in
accordance with the respective accounting policies for such items.
16
CHANGES IN ACCOUNTING POLICIES
Goodwill and Intangible Assets
The Accounting Standards Board (“AcSB”) issued CICA Handbook Section 3064, “Goodwill and
Intangible Assets”, which establishes standards for the recognition, measurement, presentation
and disclosure of goodwill and intangible assets. CICA 3064 expands on the criteria for recognition
of intangible assets that can be recognized. CICA 3064 applies to internally generated intangible
assets such as research and development activities and rights under licencing agreements. The
section also indicates that expenditures not meeting the recognition criteria of intangible assets are
expensed as incurred. We have applied this new standard effective September 1, 2009 in
accordance with the transitional provisions which required application of the standard on a
retrospective basis. As a result of adopting this standard, we have classified our broadcast rights
as intangible assets. As a result of classifying broadcast rights as intangible assets, these assets
are classified as non-current assets whereas previously they were classified as current and noncurrent
depending on timing of expected usage of the programs. In addition, broadcast rights are
reviewed and tested for impairment in accordance with the impairment provisions for long-lived
assets or assets to be disposed of by other than sale and are no longer carried at the lower of cost
and net realizable value.
FORTHCOMING CHANGES IN ACCOUNTING POLICIES
Business Combinations
The AcSB issued CICA Handbook Section 1582, "Business Combinations" and entities adopting
CICA 1582 will also be required to adopt CICA Handbook Sections 1601, "Consolidated Financial
Statements”, and 1602, "Non-Controlling Interests". These sections replace the former CICA
Handbook Sections 1581, "Business Combinations" and 1600, "Consolidated Financial
Statements" and establish a new section for accounting for a non-controlling interest in a
subsidiary. CICA 1582 will require additional use of fair value measurements, recognition of
additional assets and liabilities and increased disclosure. CICA 1601 and 1602 will require a
change in the measurement of non-controlling interest and will require the change to be presented
as part of shareholders’ equity. These standards will become effective for business combinations
for which the acquisition date is on or after September 1, 2011. We are currently considering the
impacts of the adoption of such standard.
Multiple Deliverable Revenue Arrangements
In December 2009, the Emerging Issues Committee of the CICA issued EIC 175, “Multiple
Deliverable Revenue Arrangements”. EIC 175 which replaces EIC 142, “Revenue Arrangements
with Multiple Deliverables” addresses some aspects of the accounting by a vendor for
arrangements under which it will perform multiple revenue-generating activities. This new standard
is effective for our interim and annual consolidated financial statements commencing September 1,
2011 with earlier adoption permitted. We are assessing the impact of the new standard on our
consolidated financial statements.
International Financial Reporting Standards
In 2008, the AcSB confirmed that the use of International Financial Reporting Standards (“IFRS”)
will be required for publicly accountable profit-oriented enterprises for fiscal years beginning on or
after January 1, 2011. After that date, IFRS will replace Canadian GAAP for those enterprises. We
will therefore apply IFRS in Fiscal 2012 and will issue our consolidated financial statements in
accordance with IFRS, including Fiscal 2011 comparative figures using the same reporting
standards, starting in the first quarter of that fiscal year.
17
In order to prepare for the transition date on September 1, 2010, we are currently evaluating this
new requirement and we are in the process of creating a detailed plan to converge to IFRS. The
detailed plan will includes an analysis of the appropriate project structure and governance,
resources and training, analysis of key GAAP differences and a phased approach to the
assessment of current accounting policies and implementation. The current status of the key
elements to our detailed plan for adopting IFRS is as follows:
Project Structure and Governance - Each operating segment will be tasked with establishing
independent project structure and governance. The transition process will be monitored by
management of Canwest Global. We continue to evaluate various governance options including
the development of a steering committee and other committees as applicable. Management
updates the Audit Committee of the board of directors of Canwest Global quarterly on the status of
the project.
Resources and Training – We have identified key finance staff to lead the development of a project
team. We continue to evaluate our training needs in order to develop a comprehensive training
plan.
Analysis of Significant GAAP Differences - We have performed a preliminary project scoping
exercise to identify the more significant differences between Canadian GAAP and IFRS. The
detailed plan will cover the IFRS implementation impact on our consolidated financial statements
including an analysis of the differences between IFRS and our current accounting policies to
prioritize key impact areas. We will also analyze all options permitted under IFRS at the transition
date and on an ongoing basis however we have not concluded on these options.
Based on our preliminary project scoping exercise, we have identified the following areas where
changes in accounting policies are expected to impact our consolidated financial statements. The
list is only indicative and should not be considered as exhaustive or final as it is subject to changes
arising from further review and analyses that would be performed as part of the detailed plan:
1. First-time adoption of IFRS (IFRS 1);
2. Presentation and disclosure of Financial Statements (IFRS 1);
3. Income Taxes (IAS 12);
4. Property, Plant and Equipment (IAS 16);
5. Impairment of Assets (IAS 36);
6. Employee benefits (IAS 19);
7. Interest in Joint Ventures (IAS 31); and
8. Provisions and contingencies (IAS 37).
Information technology and data systems – As part of the identification of significant differences
between Canadian GAAP and IFRS, we will evaluate the sufficiency of information technology and
data systems. We have not identified any significant changes required to date.
Internal controls over financial reporting and disclosure controls and processes - We will identify all
internal procedures and systems that must be updated in order for us to comply with IFRS. The
financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.
IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences
in recognition, measurement and disclosures. In the period leading to the changeover, the AcSB
will continue to issue new accounting standards that are aligned with IFRS, which will reduce the
impact of adopting IFRS on the transition date. The International Accounting Standards Board will
also continue to issue new accounting standards during the conversion period. As a result of the
upcoming changes, the final impact of IFRS on our consolidated financial statements can only be
determined once all of the IFRS applicable at the transition date are known.
Additional disclosure on the impact of the adoption of IFRS on our consolidated financial
statements will be provided in future MD&As.
18
CONTROLS AND PROCEDURES
There were no changes in our internal control over financial reporting during the three months
ended February 28, 2010 that have materially affected or are reasonably likely to materially affect
our internal control over financial reporting.
OPERATING RESULTS
Introductory Note
Segment operating profit
In the discussion that follows, we provide information concerning our segment operating profit. See
note 25, Segment Information, to our interim unaudited consolidated financial statements.
Management utilizes segment operating profit as a measure of segment profitability in making
strategic resource allocations.
Operating income before amortization
We also discuss our consolidated operating income before amortization. We provide this measure
because we and our lenders and investors use operating income before amortization to measure
performance against our various leverage covenants. Operating income before amortization is not
a recognized measure of financial performance under GAAP. Investors are cautioned that
operating income before amortization should not be construed as an alternative to net earnings
(loss) determined in accordance with GAAP as an indicator of our performance. Our method of
calculating operating income before amortization may not be comparable to similarly titled
measures used by other companies. A reconciliation of operating income before amortization to
net earnings (loss), which is the most closely comparable GAAP measure, is provided in the
“Reconciliation of Non-GAAP Financial Measures” section of this MD&A.
19
For the Three Months Ended February 28, 2010
Following is a table summarizing segment results for the three months ended February 28, 2010
and 2009. See note 25, Segment Information, to our interim unaudited consolidated financial
statements:
Revenue(1)(2) Segment Operating Profit
2010
$000
2009(3)
$000
2010
$000
2009(3)
$000
Operating Segments
Publishing 254,418 257,729 41,358 32,432
Television
Canada(4) 125,946 148,795 6,648 2,240
CW Media 98,928 87,459 49,846 31,830
Total television 224,874 236,254 56,494 34,070
Intersegment revenue (612) (549) - -
Corporate and other - - (4,159) (7,659)
478,680 493,434 93,693 58,843
Restructuring (expenses) reversals - - 120 (18,189)
Broadcast rights write-downs - - - (29,620)
Settlement of regulatory fees - - - -
Total revenue 478,680 493,434
Operating income before amortization 93,813 11,034
(1) Represents revenue from third parties. In addition, the following segments recorded
intersegment revenue: Publishing - $0.4 million (2009 - $0.3 million), Canadian television –
$0.1 million (2009 – nil), and CW Media television – $0.1 million (2009 – $0.3 million).
(2) Revenue consist of advertising revenue of $363 million (2009 – $373 million) and subscriber
revenue of $116 million (2009 – $114 million).
(3) Revised to reflect the classification of our Australian television and Out-of-home segments as
discontinued operations.
(4) Revenue for fiscal 2009 has been restated to reverse accruals related to retransmission fees
as the amounts were not determinable. The effect of this restatement was to increase segment
revenue and segment operating profit by $2.5 million and to increase the provision for future
income taxes by $1.6 million resulting in a $0.8 million decrease in net loss. The adjustment
decreased the loss per share by less than $0.01.
Consolidated Results
Revenue. Consolidated revenue decreased by $15 million or 3% to $479 million for the three
months ended February 28, 2010 as compared to $494 million for the same period in fiscal 2009.
The decrease reflects a 1% decrease in Publishing and a15% decrease in Canadian television
partly offset by a 13% increase in CW Media. The decrease in Canadian television reflects the
impact of the Winter Olympics in February and the sale/shut-down of the E! network which
contributed $18 million in revenues in the quarter ended February 28, 2009.
Operating expenses. Consolidated operating expenses before amortization decreased by $50
million or 11% to $385 million for the three months ended February 28, 2010 as compared to $435
million for the same period in fiscal 2009. Continued focus on operating expense control and
reduction resulted in operating expense decreases in Canadian television of 19%, CW Media of
12% and Publishing of 5%. For the quarter ended February 28, 2009 we recorded $28 million in
operating expenses related to the E! network which was sold/ shut-down effective August 31,
2009.
20
Restructuring expenses (reversals). In fiscal 2009, we announced initiatives to reduce staffing
levels in our Canadian television, CW Media television and Publishing operations by 600 positions.
During the three months ended February 28, 2009 we accrued $18 million related to these
initiatives. See note 15 of our interim unaudited consolidated financial statements for additional
information.
Broadcast rights write-downs. During the three months ended February 28, 2009, we evaluated
the valuation of broadcast rights of our E! Network stations and wrote down broadcast rights by
$30 million.
Operating income before amortization. Consolidated operating income before amortization
increased by $83 million to $94 million for the three months ended February 28, 2010 as compared
to $11 million for the same period in fiscal 2009. The increase in operating income before
amortization reflects an increase in revenue in our CW Media television segment, reduced
operating expenses in all segments and the elimination of losses from the E! Network which
recorded an operating loss of $40 million in the quarter ended February 28, 2009.
Amortization. Amortization of intangible assets remained consistent at $2 million for the three
months ended February 28, 2010 and 2009. Amortization of property and equipment was $19
million for the three months ended February 28, 2010 compared to $21 million for the same period
in fiscal 2009 due to disposals in fiscal 2009.
Interest expense. Interest expense was $49 million for the three months ended February 28, 2010
compared to $67 million in the same period in fiscal 2009. Upon the filing for CCAA protection, we
stopped accruing interest on the 8% Notes and the Canwest LP Senior Subordinated Notes. The
remaining decrease is due to decreases in outstanding debt and lower effective interest rates.
Accretion of long-term liabilities. For the three months ended February 28, 2010, we have
recorded an accretion expense of $33 million compared to $10 million in the same period in fiscal
2009 related to the discounting of certain long-term liabilities which are accreted to their estimated
value over the term of these liabilities. The charge is primarily related to the Goldman Sachs
puttable interest in CW Media which is classified as a financial liability with an estimated accretion
rate of 19%. We estimate the fair value of the puttable interest liability based on management’s
forecasts.
Interest rate and foreign currency swap gains (losses). For the three months ended February
28, 2009, we recorded a loss of $2 million to adjust the book value of certain swap instruments to
fair value at the balance sheet date. This related to fair value hedge adjustments and swaps that
did not qualify for hedge accounting, primarily because the related debt had been settled or where
hedge accounting had been discontinued. We did not have any remaining swap instruments that
did not qualify for hedge accounting during the three months ended February 28, 2010.
Foreign currency exchange gains (losses). We recorded net foreign exchange gains of $21
million for the three months ended February 28, 2010 primarily related to U.S. dollar denominated
debt that is not hedged. For the three months ended February 28, 2009, we recorded foreign
exchange losses of $16 million primarily related to U.S. dollar denominated debt that is not
hedged.
Investment gains, losses and write-downs. We recorded investment losses of $2 million for the
three months ended February 28, 2009 due to losses recorded on certain investments.
Impairment loss on property and equipment. We recorded impairment losses on property and
equipment of $10 million for the three months ended February 28, 2009 due to an impairment of
property and equipment in the E! Network stations.
21
Impairment loss on intangible assets. We recorded impairment losses on intangible assets of
$185 million for the three months ended February 28, 2009 due to an impairment of broadcast
licences in Canadian television and mastheads in Publishing due to lower future profit expectations
as a result of the outlook for the advertising markets for these operations at that time.
Impairment loss on goodwill. We recorded impairment losses on goodwill of $895 million for the
three months ended February 28, 2009 due to an impairment of the Publishing reporting unit due
to lower future profit expectations as a result of the outlook for the advertising market at the time.
Reorganization items. For the three months ended February 28, 2010, we recorded $57 million of
incremental costs directly related to our CCAA proceedings compared to $2 million in the same
period in fiscal 2009.
Income taxes. For the three months ended February 28, 2010, we recorded an income tax
recovery of $2 million. The effective tax rate was different than our statutory rate of 30% as a result
of adjustments in the income tax expense including: a $9 million increase related to non-deductible
accretion expense and a $9 million increase related to changes in valuation allowance partly offset
by a $7 million decrease related to the effect of uncertain tax positions. See note 16 to the interim
unaudited consolidated financial statements for additional information.
Minority interest. For the three months ended February 28, 2010, we recorded minority interest
charges of $4 million related to certain specialty television stations not wholly owned by Canadian
and CW Media television segments, consistent with the same period in fiscal 2009.
Net loss from continuing operations. Our net loss from continuing operations for the three
months ended February 28, 2010 was $46 million or $0.26 per share, compared to a net loss of
$1,354 million or $7.62 per share for the same period in fiscal 2009.
Discontinued operations. For the three months ended February 28, 2009 the net loss from
discontinued operations was $82 million reflecting earnings from our Australian television and Outof-
home segments which were sold in October 2009, our Turkish radio stations which were sold in
May, 2009 and The New Republic which was sold in February 2009.
Net loss. Our net loss for the three months ended February 28, 2010 was $46 million or $0.26 per
share, compared to a net loss of $1,436 million or $8.08 per share for the same period in fiscal
2009.
Segment Results
Publishing
Revenue. Revenue decreased by $3 million or 1% to $254 million for the three months ended
February 28, 2010 as compared to $258 million for the same period in fiscal 2009. Advertising
revenue decreased by 1% for the three months ended February 28, 2010 compared to the same
period in fiscal 2009 as a result of declines in all advertising categories except online. Circulation
revenue for the three months ended February 28, 2010 decreased by 1% as compared to the
same period in fiscal 2009 as a 6% decrease in circulation volume was partly offset by higher
average per copy prices. Circulation revenue as a percentage of total revenue for the Publishing
segment remained consistent at 24% for the three months ended February 28, 2010 and 2009.
22
Operating expenses. Operating expenses decreased by $12 million or 5% to $213 million for the
three months ended February 28, 2010 as compared to $225 million for the same period in fiscal
2009. The decreases primarily result from cost containment activities that include reductions in
printing costs, distribution costs and marketing and promotions expenses. Expense reductions
included a 22% decrease in newsprint expense, reflecting a 10% decrease in newsprint
consumption and a 26% decrease in newsprint prices.
Segment operating profit. Segment operating profit for the three months ended February 28,
2010 increased by $9 million or 28% to $41 million as compared to $32 million for the same period
in fiscal 2009. The increase resulted primarily from decreased operating expenses as discussed
above.
Canadian television
Revenue. Revenue from our Canadian television operating segment decreased by $23 million or
15% to $126 million for the three months ended February 28, 2010 as compared to $149 million for
the same period in fiscal 2009. This decrease reflects a 2% decline in conventional television
advertising revenue resulting from the Winter Olympics in February and the sale/shut-down of the
E! network which contributed $18 million in revenues in the quarter ended February 28, 2009.
Subscriber revenue from our specialty channels increased 3% for the three months ended
February 28, 2010 as compared to the same period in fiscal 2009 due to increased subscribers.
Operating expenses. For the three months ended February 28, 2010, operating expenses of our
Canadian television operations of $119 million were $27 million or 19% lower than the same period
in fiscal 2009. For the quarter ended February 28, 2009 we recorded $28 million in operating
expenses related to the E! network which was sold/ shut-down effective August 31, 2009.
Segment operating profit. Segment operating profit for the three months February 28, 2010
increased by $4 million or 197%, to $7 million as compared to $2 million for the same period in
fiscal 2009. The increase resulted primarily from the elimination of losses from the E! Network
which recorded an operating loss of $10 million, before restructuring expenses and broadcast
rights write-downs, in the quarter ended February 28, 2009.
CW Media television
Revenue. Revenue from our CW Media television operating segment increased by $12 million or
13% to $99 million for the three months ended February 28, 2010 as compared to $87 million for
the same period in fiscal 2009. This reflected an increase in advertising revenue of 18% due to
strong demand as a result of larger audiences and subscriber revenue of 4% due to growth in
subscriber base.
Operating expenses. For the three months ended February 28, 2010, operating expenses of our
CW Media operations of $49 million were 12% lower compared to the same period in fiscal 2009,
primarily as a result of decreased program amortization, payroll costs, advertising and promotion,
and an overall decrease in discretionary spending.
Segment operating profit. The CW Media television segment operating income of $50 million for
the three months ended February 28, 2010 was $18 million or 57% higher than the same period in
fiscal 2009 primarily reflecting the increase in revenue and expense decreases described above.
Corporate and other. Corporate expenses decreased by $4 million or 46% to $4 million for the
three months ended February 28, 2010 as compared to $8 million for the same period in fiscal
2009. The reduction is primarily a result of lower payroll and benefit costs and a reduction in
discretionary spending.
23
For the Six Months Ended February 28, 2010
Following is a table summarizing segment results for the six months ended February 28, 2010 and
2009. See note 25, Segment Information, to our interim unaudited consolidated financial
statements:
Revenue(1)(2) Segment Operating Profit
2010
$000
2009(3)
$000
2010
$000
2009(3)
$000
Operating Segments
Publishing 540,835 592,704 111,154 106,284
Television
Canada(4) 296,942 342,694 51,753 27,946
CW Media 213,026 193,558 114,181 76,113
Total television 509,968 536,252 165,934 104,059
Intersegment revenue (1,458) (1,178) - -
Corporate and other - - (7,325) (14,863)
1,049,345 1,127,778 269,763 195,480
Restructuring expenses - - (1,722) (32,695)
Broadcast rights write-downs - - (1,737) (29,620)
Settlement of regulatory fees - - 29,416 -
Total revenue 1,049,345 1,127,778
Operating income before amortization 295,720 133,165
(1) Represents revenue from third parties. In addition, the following segments recorded
intersegment revenue: Publishing - $0.9 million (2009 - $0.8 million), Canadian television –
$0.3 million (2009 – nil), and CW Media television – $0.3 million (2009 – $0.4 million).
(2) Revenue consist of advertising revenue of $816 million (2009 – $896 million) and subscriber
revenue of $234 million (2009 – $232 million).
(3) Revised to reflect the classification of our Australian television and Out-of-home segments as
discontinued operations.
(4) Revenue for fiscal 2009 has been restated to reverse accruals related to retransmission fees
as the amounts were not determinable. The effect of this restatement was to decrease segment
revenue and segment operating profit by $3.5 million resulting in a $3.5 million increase in net
loss. The adjustment increased the loss per share by $0.02.
Consolidated Results
Revenue. Consolidated revenue decreased by $78 million or 7% to $1,049 million for the six
months ended February 28, 2010 as compared to $1,128 million for the same period in fiscal 2009.
The decrease reflects a 9% decrease in Publishing and a13% decrease in Canadian television
partly offset by a 10% increase in CW Media. The decrease in Canadian television reflects the
impact of the Winter Olympics in February and the sale/shut-down of the E! network which
contributed $44 million in revenues in the six months ended February 28, 2009.
Operating expenses. Consolidated operating expenses before amortization decreased by $151
million or 16% to $781 million for the six months ended February 28, 2010 as compared to $932
million for the same period in fiscal 2009. Included in operating expenses are operating expense
decreases in Canadian television of 22%, CW Media of 16% and Publishing of 12%. For the six
months ended February 28, 2009 we recorded $64 million in operating expenses related to the E!
network which was sold/ shut-down effective August 31, 2009.
24
Restructuring expenses. In fiscal 2009, we announced initiatives to reduce staffing levels in our
Canadian television, CW Media television and Publishing operations by 600 positions. During the
six months ended February 28, 2010 we accrued $2 million related to these initiatives as compared
to $33 million for the same period in fiscal 2009. See note 15 of our interim unaudited consolidated
financial statements for additional information.
Broadcast rights write-downs. During the six months ended February 28, 2009, we evaluated
the valuation of broadcast rights of our E! Network stations and wrote down broadcast rights by
$30 million.
Settlement of regulatory fees. On October 7, 2009, the Government of Canada and the
Canadian Association of Broadcasters reached a settlement regarding the legal dispute over the
validity of the Part II Licence fees payable annually to the CRTC by television and radio
broadcasters. As a result of this settlement, during the six months ended February 28, 2010 we
reversed into earnings unpaid Part II Licence fees of $23 million and $6 million related to the
Canadian television and CW Media television segment, respectively, which were accrued as at
August 31, 2009.
Operating income before amortization. Consolidated operating income before amortization
increased by $163 million or 122% to $296 million for the six months ended February 28, 2010 as
compared to $133 million for the same period in fiscal 2009. The increase in operating income
before amortization reflects the increase in revenue in our CW Media television segment, reduced
operating expenses in all segments and the elimination of losses from the E! Network which
recorded an operating loss of $55 million in the six months ended February 28, 2009.
Amortization. Amortization of intangible assets increased to $5 million for the six months ended
February 28, 2010 as compared to $3 million for the same period in fiscal 2009 due to the
amortization of a broadcast licence of CW Media television which was previously determined to
have an indefinite life. Amortization of property and equipment was $38 million for the six months
ended February 28, 2010 compared to $41 million the same period in fiscal 2009 due to disposals
made in fiscal 2009.
Interest expense. Interest expense was $102 million for the six months ended February 28, 2010
compared to $137 million in the same period in fiscal 2009. Upon the filing for CCAA protection we
stopped accruing interest on the 8% Notes and the Canwest LP Senior Subordinated Notes. The
remaining decrease is due to decreases in outstanding debt and lower effective interest rates.
Accretion of long-term liabilities. For the six months ended February 28, 2010, we have
recorded an accretion expense of $66 million compared to $38 million in the same period in fiscal
2009 related to the discounting of certain long-term liabilities which are accreted to their estimated
value over the term of these liabilities. The charge is primarily related to the Goldman Sachs
puttable interest in CW Media which is classified as a financial liability with an estimated accretion
rate of 19%. We estimate the fair value of the puttable interest liability based on management’s
forecasts.
Interest rate and foreign currency swap gains. For the six months ended February 28, 2009, we
recorded a gain of $41 million to adjust the book value of certain swap instruments to fair value at
the balance sheet date. This related to fair value hedge adjustments and swaps that did not qualify
for hedge accounting, primarily because the related debt had been settled or where hedge
accounting had been discontinued. We did not have any remaining swap instruments that did not
qualify for hedge accounting during the six months ended February 28, 2010.
25
Foreign exchange gains (losses). We recorded net foreign exchange gains of $86 million for the
six months ended February 28, 2010 compared to foreign exchange losses of $83 million for the
same period in fiscal 2009 primarily related to U.S. dollar denominated debt that is not hedged.
Investment gains, losses and write-downs. We recorded investment gains of $1 million for the
six months ended February 28, 2010, compared to a loss of $4 million for the same prior in fiscal
2009 primarily due to losses recorded on certain investments.
Impairment loss on property and equipment. We recorded impairment losses on property and
equipment of $10 million for the six months ended February 28, 2009 due to an impairment of
property and equipment in our E! Network stations.
Impairment loss on intangible assets. We recorded impairment losses on intangible assets of $3
million for the six months ended February 28, 2010. The loss is due to an impairment of a brand of
CW Media television relating to the rebranding of certain specialty television channels. For the
three months ended February 28, 2009, we recorded impairment losses on intangible assets of
$185 million due to an impairment of broadcast licences of Canadian television and mastheads in
Publishing due to lower future profit expectations as result of the outlook for the advertising market
for these operations at the time.
Impairment loss on goodwill. We recorded impairment losses on goodwill of $895 million for the
six months ended February 28, 2009 due to an impairment of the Publishing reporting unit due to
lower future profit expectations as a result of the outlook for the advertising market at the time.
Reorganization items. For the six months ended February 28, 2010, we recorded $128 million of
incremental costs directly related to our CCAA proceedings compared to $2 million in the same
period in fiscal 2009.
Income taxes. For the six months ended February 28, 2010, we recorded income tax expense of
$2 million. The effective tax rate was lower than our statutory rate of 30% as a result of
adjustments in the income tax expense including: a $19 million decrease related to uncertain tax
positions, a $15 million decrease in valuation allowance on future tax assets, and a $12 million
decrease related to the non-taxable portion of capital gains. These decreases were partly offset by
an $18 million increase related to non-deductible accretion expense, a $15 million change in
expected future tax rates and a $5 million related to non-deductible expenses. See note 16 to the
interim unaudited consolidated financial statements for additional information.
Minority interest. For the six months ended February 28, 2010, we recorded minority interest
charges of $12 million related to certain specialty television stations not wholly owned by Canadian
and CW Media television segments compared to $10 million for the same period in fiscal 2009.
Net earnings (loss) from continuing operations. Our net earnings from continuing operations for
the six months ended February 28, 2010 was $28 million or $0.16 per share, compared to a net
loss of $1,407 million or a loss of $7.92 per share for the same period in fiscal 2009.
Discontinued operations. For the six months ended February 28, 2009 net loss from
discontinued operations was $65 million reflecting earnings from our Australian television and Outof-
home segments which were sold in October 2009, our Turkish radio stations which were sold in
May, 2009 and The New Republic which was sold in February 2009. For the six months ended
February 28, 2010, the sale transaction for the Australian television and Out-of-home segments
and deconsolidation of a non-operating subsidiary resulted in a gain on sale of $578 million.
26
Net earnings (loss). Our net earnings for the six months ended February 28, 2010 was $606
million or $3.41 per share, compared to a net loss of $1,472 million or a loss of $8.29 per share, for
the same period in fiscal 2009.
Segment Results
Publishing
Revenue. Revenue decreased by $52 million or 9% to $541 million for the six months ended
February 28, 2010 as compared to $593 million for the same period in fiscal 2009. Advertising
revenue decreased by 11% for the six months ended February 28, 2010 compared to the same
period in fiscal 2009 as a result of declines in all advertising categories except online. Circulation
revenue for the six months ended February 28, 2010 decreased by 2% as compared to the same
period in fiscal 2009 as a 7% decrease in circulation volume was partly offset by higher average
per copy prices. Circulation revenue as a percentage of total revenue for the Publishing segment
was 23% for the six months ended February 28, 2010 compared to 21% for the same period in
fiscal 2009.
Operating expenses. Operating expenses decreased by $57 million or 12% to $430 million for the
six months ended February 28, 2010 as compared to $486 million for the same period in fiscal
2009. The decreases primarily result from cost containment activities that include lower wage costs
as a result of employee severance, reductions in payroll, printing costs, distribution costs and
marketing and promotions expenses. Expense reductions included a 30% decrease in newsprint
expense, reflecting a 18% decrease in newsprint consumption and a 23% decrease in newsprint
prices.
Segment operating profit. Segment operating profit for the six months ended February 28, 2010
increased by $5 million or 5% to $111 million as compared to $106 million for the same period in
fiscal 2009. The increase resulted primarily from decreased operating expenses as discussed
above.
Canadian television
Revenue. Revenue from our Canadian television operating segment decreased by $46 million or
13% to $297 million for the six months ended February 28, 2010 as compared to $343 million for
the same period in fiscal 2009. This decrease reflects a 2% decline in conventional television
advertising revenue resulting from the Winter Olympics in February and the sale/shut-down of the
E! network which contributed $18 million in revenues for the six months ended February 28, 2009.
Subscriber revenue from our specialty channels increased 2% for the six months ended February
28, 2010 as compared to the same period in fiscal 2009.
Operating expenses. For the six months ended February 28, 2010, operating expenses of our
Canadian television operations of $245 million were $70 million or 22% lower than the same period
in fiscal 2009. For the six months ended February 28, 2009 we recorded $64 million in operating
expenses related to the E! network which was sold/ shut-down effective August 31, 2009.
Segment operating profit (loss). Segment operating profit for the six months February 28, 2010
increased by $24 million or 85% to $52 million as compared to $28 million for the same period in
fiscal 2009. The increase resulted primarily from the elimination of losses from the E! Network
which recorded an operating loss of $20, before restructuring expenses and broadcast rights writedowns,
million in the six months ended February 28, 2009 partially offset by decreased revenue as
discussed above.
27
CW Media television
Revenue. Revenue from our CW Media television operating segment increased by $19 million or
10% to $213 million for the six months ended February 28, 2010 as compared to $194 million for
the same period in fiscal 2009. This reflected an increase in advertising revenue of 13% due to
strong demand as a result of larger audiences and subscriber revenue of 5% due to growth in
subscriber base.
Operating expenses. For the six months ended February 28, 2010, operating expenses of our
CW Media operations of $99 million were 16% lower compared to the same period in fiscal 2009,
primarily as a result of decreased program amortization, payroll costs, advertising and promotion,
and an overall decrease in discretionary spending.
Segment operating profit. The CW Media television segment operating income of $114 million for
the six months ended February 28, 2010 was $38 million or 50% higher than the same period in
fiscal 2009 primarily reflecting the increase in revenue and expense decreases described above.
Corporate and other. Corporate expenses decreased by $8 million or 51% to $7 million for the six
months ended February 28, 2010 as compared to $15 million for the same period in fiscal 2009.
The reduction is primarily a result of lower payroll and benefit costs and a reduction in discretionary
spending.
28
CONSOLIDATED QUARTERLY FINANCIAL RESULTS
For the three month periods ended (in thousands of dollars, except as noted)
(Unaudited)
February 28,
2010
November
30, 2009
August 31,
2009(1)
May 31,
2009(1)
Revenue(2) 478,680 570,665 426,670 543,071
Operating income before amortization 93,813 201,907 28,895 74,330
Earnings (loss) from continuing operations (46,078) 74,481 (109,504) (98,249)
Net earnings (loss) (46,078) 652,540 (105,967) (110,844)
Cash flows from operating activities of continuing
operations before Reorganization items
130,610 (9,055) 9,524 (119,213)
Cash flows from operating activities 101,334 (30,860) 69,376 (152,984)
Earnings (loss) per share from continuing
operations:
Basic $0.26 $0.42 ($0.62) ($0.55)
Diluted $0.26 $0.42 ($0.62) ($0.55)
Earnings (loss) per share:
Basic $0.26 $3.67 ($0.60) ($0.62)
Diluted $0.26 $3.66 ($0.60) ($0.62)
February 28,
2009(1)
November
30, 2008(1)
August 31,
2008(1)
May 31,
2008(1)
Revenue(2) 493,434 634,344 503,644 611,276
Operating income before amortization 11,034 122,131 47,212 141,178
Loss from continuing operations (1,353,657) (53,519) (996,610) (33,727)
Net loss (1,435,514) (36,944) (1,019,080) (28,900)
Cash flows from operating activities of continuing
operations before Reorganization items 9,507 (41,817) 28,752 22,568
Cash flows from operating activities 13,898 (12,560) 56,673 14,908
Loss per share from continuing operations:
Basic ($7.62) ($0.30) ($5.61) ($0.19)
Diluted ($7.62) ($0.30) ($5.61) ($0.19)
Loss per share:
Basic ($8.08) ($0.21) ($5.74) ($0.16)
Diluted ($8.08) ($0.21) ($5.74) ($0.16)
(1) Revised to reflect the classification of our Australian television and Out-of-home segments as
discontinued operations.
(2) Revenue for fiscal 2009 has been restated to reverse accruals related to retransmission fees
as the amounts were not determinable.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Funds
Our principal sources of liquidity are cash and cash equivalents on hand and cash flows from
operating activities. At February 28, 2010, we had cash on hand of $245 million including $39
million at CW Media, $87 million at Canwest LP and $119 million at Canwest Media. In addition,
Canwest Media had cash of $11 million that is restricted to secure banking and cash management
services and to segregate proceeds of certain asset sales during the Canwest Media CCAA
Proceedings.
29
In addition to the above sources of liquidity, Canwest Media had $63 million available under its DIP
financing arrangement, Canwest LP had $25 million available under its Canwest LP DIP Facility
and CW Media had $50 million available under its revolving credit facility at February 28, 2010.
Sale of shares in Ten Holdings
On October 1, 2009, we sold our controlling interest in Ten Holdings, consisting of our Australian
television and Out-of-home operating segments for net proceeds of $618 million. The net proceeds
received from the sale of Ten Holdings were advanced to Canwest Media in the form of a $187
million senior secured promissory note secured by all property, assets and undertakings of
Canwest Media and certain guarantors, and a $431 million unsecured promissory note in each
case by the wholly owned Irish subsidiary that held the shares in Ten Holdings. These notes
eliminate on consolidation.
Recapitalization Plan
On February 11, 2010 we entered into the Subscription Agreement with Shaw pursuant to which
Shaw agreed to make an equity investment of $95 million in Restructured Canwest. $85 million of
the proceeds from this equity investment will be used to repay intercompany loans as noted below.
Uses of Funds
Capital Expenditures
In the first six months of fiscal 2010, our capital expenditures amounted to $10 million. Of these
capital expenditures, $4 million were made by Canwest Media Entities. For the remainder of 2010,
we expect our capital expenditures to be approximately $30 million of which approximately $15
million will relate to Canwest Media Entities.
Long-term debt payments
CW Media has required repayments of $5 million in annual principal payments on its long-term
debt. In addition, subsequent to February 28, 2010, CW Media made a voluntary principal
repayment on their senior secured credit facility of US$ 23 million.
Use of Proceeds of Unsecured Promissory Note
The $431 million in advances under the unsecured promissory note were deposited with The Bank
of New York Mellon, as trustee (the “Trustee”) for Canwest Media's 8% Notes, in a cash collateral
account for the benefit of the holders of the 8% Notes pursuant to a cash deposit agreement (the
“Cash Deposit Agreement”) between Canwest Media and the Trustee. Pursuant to the instructions
of a majority of the holders of the 8% Notes, amounts outstanding under such notes were
accelerated on September 30, 2009 and the funds held by the Trustee pursuant to the Cash
Deposit Agreement were applied by the Trustee to a reduction of such outstanding amounts.
Following the application of such funds and pursuant to further instructions from a majority of the
holders of 8% Notes, the 8% Notes were reinstated with an aggregate outstanding principal
amount of US$393 million.
Use of Proceeds of Senior Secured Promissory Note
The $187 million in advances under the senior secured promissory note were used to repay $105
million of the secured notes, approximately $23 million was utilized to repay advances outstanding
under the Canwest Media revolving secured credit facility and the remainder was retained by
Canwest Media to support its liquidity during the Canwest Media CCAA Proceedings. The
Recapitalization Plan provides that Canwest Media will repay $85 million of the intercompany loan
using the proceeds from the Shaw equity investment.
30
CRTC Benefits
We expect to fund the CRTC benefit obligations created from the acquisition of the CW Media
broadcast operations of $151 million over a seven year period which commenced in fiscal 2008
primarily using cash on hand and cash flow from operations of CW Media. Approximately 10% of
the benefits will be directed to social benefits payable by CW Media to third parties, approximately
10% will be funded by Canwest television segment related to news and public affairs programming
and the remaining 80% will be directed to incremental production of Canadian programming by CW
Media which may be aired on its channels. Our expenditures related to the CRTC benefit
obligations for the six months ended February 28, 2010 were $13 million. The remaining CRTC
benefit obligations payable as at February 28, 2010 was $94 million.
Restructuring and Recapitalization
As part of the ongoing restructuring and recapitalization process, we are committed to pay certain
professional and other fees incurred by us and the other parties involved in the process. In the first
six months of fiscal 2010, payments of fees amounted to $43 million. For the remainder of fiscal
2010, we expect to incur approximately $7 million per month in such costs.
Debt
Credit Facilities
On January 8, 2010, certain of the Canwest LP Senior Lenders agreed to extend to the Canwest
LP Entities the Canwest LP DIP Facility in the maximum amount of $25 million, including a letter of
credit sub-facility of up to $5 million. On January 8, 2010, the Court approved the Canwest LP DIP
Facility and authorized the Canwest LP Entities to execute definitive agreements related to the
Canwest LP DIP Facility. The definitive agreements were executed on February 5, 2010. The
Canwest LP DIP Facility is secured by substantially all of the current and future assets of the
Canwest LP Entities, subject only to a number of priority charges created in the Canwest LP Initial
Order. The Canwest LP DIP Facility is guaranteed by the Canwest LP Entities. Under the Canwest
LP DIP Facility, the availability of funds is determined by a borrowing base based on accounts
receivable of the Canwest LP Entities and the fair value of eligible real property less certain
reserves. The Canwest LP DIP Facility matures, subject to acceleration under certain
circumstances, on the earliest of; (i) July 31, 2010; (ii) the date of a plan of arrangement under
CCAA has been implemented by the Canwest LP Entities; or (iii) the date on which the Canwest
LP Initial Order expires without being extended or on which the Canwest LP CCAA Proceedings
are dismissed or converted into bankruptcy proceedings. In addition, the Canwest LP DIP Facility
is to be repaid with the net cash proceeds of assets sales by the Canwest LP Entities. The
Canwest LP DIP Credit Agreement places certain restrictions on the use of the financing and
contains certain financial and reporting covenants.
In October 2009, on commencement of the Canwest Media CCAA Proceedings the Canwest
Media revolving $75 million secured credit facility was converted to a DIP loan facility and the
maximum availability was increased to $100 million. The facility bears interest at the greater of
prime rate and 2.25% plus an applicable margin. The capacity available under the facility is
calculated based upon the value of certain assets that secure the facility including accounts
receivable and property and equipment, capped at $100 million. The facility is secured by all
current and future assets of Canwest Media and its wholly owned Canadian television operations
but excludes the restricted cash securing its banking and cash management services. The facility
is guaranteed by Canwest Global, Canwest Media and substantially all of the wholly owned
subsidiaries of Canwest Media, excluding the Canwest LP Entities. All deposits of Canwest Media
and the guarantor subsidiaries are applied against amounts outstanding under the revolving facility
daily. The facility is subject to a number of affirmative and negative covenants. As at February 28,
2010 there was an additional $63 million available under the facility net letters of credit of $11
million.
31
In May 2009, Canwest Media issued $105 million (US$94 million) of notes bearing interest at 12%
and received cash of $100 million (US$89 million). These notes were secured by a first charge
against the shares held in Ten Holdings and a second charge on all assets that secure the secured
revolving credit facility of Canwest Media as described above. The notes were guaranteed by
Canwest Global, Canwest Media and substantially all of the wholly owned subsidiaries of Canwest
Media, excluding the Canwest LP Entities. On October 1, 2009 we repaid this facility in full utilizing
proceeds from the sale of our shares in Ten Holdings.
Canwest Media is in default under the terms of its 8% Notes indenture as a result of not making
interest payments that were due in September 2009. See “Creditor Protection and
Recapitalization.” During the six months ended February 28, 2010, amounts outstanding under
these notes were accelerated and reduced. Following the reduction in outstanding amounts the 8%
Notes were reinstated with an aggregate principal amount of US$393 million.
Canwest LP has a senior secured credit facility and unsecured debt. The senior secured credit
facility, which is secured by substantially all the assets of Canwest LP, consists of a $118 million
revolving term loan, a $265 million term loan and a US$458 million term loan. As at February 28,
2010, Canwest LP was in default under the terms of its senior secured credit facility and unsecured
debt. See “Creditor Protection and Recapitalization.”
CW Media has a senior secured credit facility, which consists of a $50 million revolving term loan
and a US$436 million term loan. The term loan may be repaid at any time without penalty, subject
to certain conditions. We may be required to prepay a portion of the term loan facility based on
excess cash flows as defined in the credit agreement. This facility is secured by substantially all of
the assets of CW Media and, subject to certain limitations, by each of its existing and each
subsequently acquired or organized wholly owned subsidiaries. As at February 28, 2010, CW
Media had not drawn any amount under the $50 million revolving term loan and had fully drawn the
amount allowed under the term loan. CW Media also has US$338 million senior unsecured notes
which bear interest at 13.5% and are due on August 15, 2015. Interest on the senior unsecured
notes accrues from the date of issue to August 15, 2011, however is not payable until maturity
unless CW Media elects to pay interest in cash with respect to any interest period before that date.
After August 15, 2011, interest will accrue on and be paid semi-annually in respect of the senior
unsecured notes in cash, commencing on February 15, 2012. The senior unsecured notes have a
variable prepayment option at a premium of 106.75 in 2011 which declines on a straight-line basis
to par in 2013. These notes are guaranteed by CW Media Holdings Inc. and its wholly owned
subsidiaries.
FINANCIAL INSTRUMENTS
Our primary market risk exposures are interest rate and foreign currency exchange rate risk. We
are exposed to interest rate risk and foreign exchange rate fluctuations resulting from the issuance
of floating rate debt and debt denominated in U.S. dollars. In addition to monitoring the ratio of
fixed rate debt to total long-term debt, we use interest rate swaps, when possible, to manage the
proportion of total debt that is subject to variable rates. Foreign currency and interest rate swaps
are used to hedge, when possible, both the interest rate and the currency exposure on debt
originally issued in U.S. dollars. We do not enter into any derivative financial instruments for trading
purposes. As a result of the changes in our credit status, we are no longer in position to utilize
foreign currency and interest rate swaps to manage interest rate and foreign currency exchange
risk at Canwest Media and Canwest LP because these financial instruments are not available to
us.
32
As at February 28, 2010, with the exception of our CW Media senior secured credit facility, we
have not hedged the currency exposure on our U.S. dollar denominated debt. As of February 28,
2010, CW Media had entered into an interest rate swap contract to pay fixed receive floating
foreign currency and interest rate swap contract at a fixed rate of 8.7% on a notional amount of
$464 million and receive floating rate of 6.0% on a notional amount of US$436 million.
The fair value of the swap contracts represents an estimate of the amount that we would receive or
pay if the contracts were closed out at a market price on the balance sheet date. As of February
28, 2010, our outstanding swap contracts were in a net unrealized loss position of $60 million,
recorded in Hedging derivative instruments.
INDUSTRY RISKS AND UNCERTAINTIES
Except as disclosed in this section of our MD&A, our risks and uncertainties have not materially
changed from those described in our Annual Information Form for the year ended August 31, 2009
filed by Canwest Global with the Canadian Securities Commissions (available on SEDAR at
www.sedar.com).
The media industry has recently experienced declines in advertising revenue reflecting a weak
economic environment. The outlook for the advertising market remains uncertain and the
weakness in the advertising market is likely to continue until the economy improves.
OFF BALANCE SHEET ARRANGEMENTS AND GUARANTEES
In connection with the disposition of assets, we have provided customary representations and
warranties that range in duration. In addition, as is customary, we have agreed to indemnify the
buyers of certain assets in respect of certain liabilities pertaining to events occurring prior to the
respective sales relating to taxation, environmental, litigation and other matters. We are unable to
estimate the maximum potential liability for these indemnifications as the underlying agreements
often do not specify a maximum amount and the amounts are dependent upon the outcome of
future contingent events, the nature and likelihood of which cannot be determined.
In connection with the acquisition of Alliance Atlantis, we and the Goldman Sachs Parties entered
into an indemnity agreement dated August 15, 2007 (the "Indemnity Agreement") and the amended
shareholders agreement (the "Shareholders Agreement") governing the manner in which the affairs
of CW Media would be conducted. Pursuant to the Indemnity Agreement, we have agreed to
indemnify the Goldman Sachs Parties with respect to certain representations contained in the
Indemnity Agreement and the Shareholders Agreement for an amount not to exceed $125 million
and subject to a $25 million damages threshold and a $25 million deductible. The indemnity
provided by us will terminate on the delivery of certain audited annual financial statements relating
to CW Media and in any event no later than May 31, 2012 (the "Survival Date"). Also, the Goldman
Sachs Parties agreed to indemnify us with respect to their representations contained in the
Shareholders Agreement for an amount not to exceed $65 million and subject to a $25 million
damages threshold and a $25 million deductible. The indemnity provided by the Goldman Sachs
Parties will also terminate on the Survival Date.
In addition, CW Media entered into an agreement dated August 15, 2007 (the “Separation
Agreement”) pursuant to which, certain of the parties to the Separation Agreement agreed to
indemnify CW Media in respect of specified liabilities, including certain tax liabilities, and in some
cases, on a joint and several basis. As at February 28, 2010, we have recorded income tax
liabilities of $29 million which according to the terms of this agreement will be recoverable from
other parties to the Separation Agreement if and when the liabilities are realized. We have
recorded accounts receivable in this amount.
33
As part of the acquisition of Alliance Atlantis, we and the Goldman Sachs Parties each acquired,
for nominal consideration a 50% equity interest in 4437691 Canada Inc., which holds interests in a
number of limited partnerships. The limited partnerships include various tax shelters which
acquired rights, title and interest in certain film and television programs in return for the exclusive
right to distribute such productions for an extended period. We have determined 4437691 Canada
Inc. is a variable interest entity and that we are not the primary beneficiary. We account for this
investment using the cost basis. In accordance with our agreement with the Goldman Sachs
Parties, we may be required to fund 50% of the entity’s cash flow requirements. We and the
Goldman Sachs Parties expect that the funding requirements of 4437691 Canada Inc. will be
minimal and have agreed that a funding cap of $7.5 million would apply.
RELATED PARTY TRANSACTIONS
A company which is affiliated with our controlling shareholders owns Canwest Place in Winnipeg,
Manitoba, a building in which we are a tenant. Rent paid to this company for the six months ended
February 28, 2010 amounted to $0.6 million (2009 – $0.5 million). The annual obligations under
these operating leases of $0.7 million and $0.4 million continue until August 2010 and until May
2018, respectively.
All the related party transactions have been recorded at the exchange amounts, which are
representative of market rates.
OCTOBER 6, 2009 NEWS RELEASE: PROJECTED CAPITAL EXPENDITURES AND OTHER
FINANCIAL INFORMATION
In June 2009, Canwest Global and Canwest Media entered into confidentiality, non-disclosure and
non-use agreements (the “Confidentiality Agreements”) with certain members of the Ad Hoc
Committee in order to facilitate the discussion of a possible recapitalization transaction. Pursuant
to the Confidentiality Agreements, we disclosed information, including certain non-public
information (the “Non-Public Information”) to certain members of the Ad Hoc Committee through
the Ad Hoc Committee’s financial and legal advisors. The Confidentiality Agreements required that
we would disclose publicly certain of the Non-Public Information which was done by way of news
release on October 6, 2009. We do not, as a matter of course, publish our business plans, budgets
or strategies or make external projections or forecasts of our anticipated financial position, capital
expenditures, capital requirements or results of operations.
In our Management’s Discussion and Analysis for the year ended August 31, 2009 and
Management’s Discussion and Analysis for the three months ended November 30, 2009, we
provided a comparison of certain of our actual results for the year ended August 31, 2009 against
certain of the Non-Public Information contained in our News Release for and as at the same
period. The following is a comparison of our actual results for three and six months ended
February 28, 2010 to the Non-Public Information contained in our News Release. The October 6,
2009 news release contained information about our expected financing requirements and cash
transactions on emergence from the Canwest Media Applicants CCAA filing, projected to be on
February 28, 2010. Because the emergence did not take place on February 28, 2010 this
information is no longer relevant and should be disregarded. We do not intend to provide an
updated projection for emergence financing requirements or cash transactions. Finally, the
following provides an updated projection for certain of our fiscal 2010 Canadian television segment
cash flows. Subsequent to February 28, 2010, management prepared revised projections for the
fiscal year that differed from those provided in the October 6, 2009 news release.
Please refer to page 2 of this report for our statement related to forward-looking financial
information and also to our News Release dated October 6 for comments related to the forwardlooking
financial information in connection with the Non-Public Information.
34
The following relates to the October 6, 2009 projection of cash flows for the Canwest Media
Entities for the three and six months ended February 28, 2010.(1)(2)
For the three months ended
February 28, 2010
For the six months ended
February 28, 2010(3)
Actual
$000
Projection
$000
Variance
$000
Actual
$000
Projection
$000
Variance
$000
Canadian Television
Receipts 170,274 127,127 43,147(4) 305,257 251,818 53,439(4)
Operating Disbursements (122,110) (123,979) 1,869(5) (239,855) (274,366) 34,511(5)
Capital expenditures (1,735) (4,587) 2,852(6) (3,580) (8,760) 5,180(6)
Corporate and Other
Net operating cash flows (6,552) (2,901) (3,651)(7) (7,780) (7,544) (236)(7)
Restructuring disbursements (8,529) (7,156) (1,373)(8) (24,388) (14,805) (9,583)(8)
Advance from proceeds from
sale of Ten Holdings - - - 187,300 190,000 (2,700)(9)
Repayment of secured notes - - - (102,263) (105,000) 2,737(9)
Financing disbursements (277) (384) 107 (2,919) (3,579) 660
Total net cash flow 31,071 (11,880) 42,951 111,772 27,764 84,008
(1) These cash flows reflect the effects of the CCAA filing and are, therefore, not comparable to
normal course operations. These cash flows are affected by seasonal changes in working
capital which include a use of cash for the three months ended November 30, 2009 and a
source of cash for the three months ended February 28, 2010.
(2) These cash flows were derived from weekly cash flow forecasts. The three months ended
February 28, 2010 includes the period from December 7, 2009 to February 28, 2010 and the
six months ended February 28 includes the period from September 7, 2009 to February 28,
2010.
(3) The projection was amended to include a disbursement for the repayment of the secured notes
of $105,000 which was planned but omitted from the projection in the news release.
Variance Analysis
(4) The positive variances in the broadcast cash receipts relate to both to timing, approximately
$37 million for the six months ended February 28, 2010, as well as to higher than forecast
sales.
(5) Most of the positive variances relate to the timing of payment for broadcast rights purchases
and other operating expenses. Approximately $8 million of the positive variance for the six
months ended February 28, 2010, relates to reductions in purchases relative to the projection.
(6) The positive variances in the broadcast capital expenditures result both from reductions in
purchases relative to the projection and from timing of expenditures.
(7) Net cash flow related to the operation of the corporate office for the three months ended
February 28, 2010 reflects the reversal of timing variances from the previous three months.
(8) Expenditures related to professional advisory fees have exceeded the amount in the projection.
(9) The cash payment related to the repayment of the notes was less than that projected because
of the effect of changes in the currency translation rate of Canadian to US dollars. The advance
received from the proceeds from the sale of Ten Holdings was reduced accordingly.
35
The following relates to the October 6, 2009 projection of cash and secured obligations of the
Canwest Media Entities.
February 28, 2010
Actual
$000
Projection
$000
Variance
$000
Cash – unrestricted 119,000 11,397 107,603(1)
Cash – restricted 8,000 2,500 5,500(2)
Secured revolving credit facility - - -
Secured notes - - -
Variance Analysis
(1) The variance results from the positive cash flow variances described above as well as from
positive variances in the August 31, 2009 cash balance which were explained in our
Management’s Discussion and Analysis for the year ended August 31, 2009.
(2) The additional restricted cash balance relates to proceeds from the sale of redundant assets
and the National Post which were not forecast in the October 6, 2009 projection.
The following relates to the October 6, 2009 financial projection for certain operating results and
cash flows of Canwest Television Limited Partnership and Canwest Media Inc. This is not a
consolidated projection, nor does it capture all elements of cash flows. It is prepared on a normal
course basis and as such it excludes reorganization items.
Fiscal year ending August 31, 2010
Canwest Television Limited Partnership
Revised
Projection
$000
Previous
Projection
$000
Variance
$000
Revenue(1) 552,410 557,700 (5,290)
Segment operating profit(1) 43,900 55,700 (11,800)(3)
Corporate and other expenses (14,263) (11,900) (2,363)
Minority interest(2) (2,615) (3,700) 1,085
Other cash flow items:
Canwest Television Limited Partnership
Capital Expenditures(1) (19,216) (22,300) 3,084
Proceeds from sale of property and
equipment 7,000 - 7,000(4)
Change in working capital 10,190 (17,500) 27,690(5)
24,996 300 24,696
(1) The Canadian television segment of Canwest.
(2) Minority share of TVtropolis operating profit.
Variance Analysis
(3) The reduction in segment operating profit as compared to the October 6, 2009 projection
reflects an expectation that broadcast rights amortization expense will be approximately 2%
higher than expected in the previous forecast and that revenues will be approximately 1% lower
than expected in the previous projection.
(4) Proceeds from assets sales include the proceeds from the sale of redundant assets and the
National Post which were not included in the October 6, 2009 projection.
(5) Reflects changes in forecast working capital balances reflecting improved collection of
accounts receivables, the effect of payables stayed during the CCAA, and timing of payment of
broadcast rights payable.
36
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Following is a reconciliation of operating income before amortization, a non-GAAP measure, to net
loss, its most closely comparable GAAP measure:
For the three months ended
February 28 (unaudited)
For the six months ended
February 28 (unaudited)
2010
$000
2009(1)
$000
2010
$000
2009(1)
$000
Net earnings (loss) (46,078) (1,435,514) 606,462 (1,472,458)
Amortization 20,766 22,759 43,316 43,944
Interest and other financing expenses 105,338 69,980 228,978 97,526
Accretion of long-term liabilities 33,091 9,829 65,843 38,062
Impairment loss on property and equipment
and intangible assets - 1,090,551 3,142 1,090,551
Investment gains, losses and interest
income (130) 2,130 (1,674) 3,165
Foreign currency exchange (gains) losses (20,604) 15,878 (86,036) 83,379
Loss (Income) from discontinued operations - 81,857 (578,059) 65,282
Provision for (Recovery of) income tax
expense (2,023) 150,044 2,243 174,467
Interest in earnings of equity accounted
affiliates (194) (340) (94) (555)
Minority interest 3,647 3,644 11,599 9,586
Realized currency translation adjustments - 216 - 216
Operating income before amortization 93,813 11,034 295,720 133,165
(1) Revised to reflect the classification of our Australian television and Out-of home segments as
discontinued operations and to reverse accruals related to retransmission fees. (See notes 19
and 25 to our interim unaudited consolidated financial statements).
OTHER
Share Data
As at April 13, 2010 we had the following number of shares outstanding:
Multiple voting shares 76,785,976
Subordinate voting shares 99,270,114
Non-voting shares 1,590,449
Our Annual Information Form for the year ended August 31, 2009 was filed on SEDAR and is
available at www.sedar.com.