TVA Group Inc.
TSX : TVA.B

TVA Group Inc.

August 07, 2012 09:52 ET

TVA Group Reports $23.7 Million Net Income Attributable to Shareholders in Second Quarter Ended June 30, 2012

MONTREAL, CANADA--(Marketwire - Aug. 7, 2012) - TVA Group Inc. (the "Corporation") (TSX:TVA.B) announces that it recorded net income attributable to shareholders in the amount of $23.7 million, or $1.00 per share, for the second quarter of 2012, compared with $13.8 million, or $0.58 per share, in the same quarter of 2011.

The Corporation's sale of its 51% interest in the specialty service "The Cave" and its 50% interest in the specialty service "Mystery TV" closed on May 31, 2012. The Corporation realized a gain on disposal of businesses of $12.9 million or $0.54 per share.

Second quarter operating highlights:

- Operating income1 in the Television sector down $2,253,000 to $17,039,000, mainly because of:

  • operating loss of the new "TVA Sports" service;

Partially offset by:

  • 62.3% increase in operating income at the other French-language specialty services;
  • 21.0% decrease in the operating loss of SUN News because of subscription fees now collected for the service; and
  • 1.9% increase in operating income at TVA Network despite the decrease in advertising revenues.

- Operating income in the Publishing sector down $450,000 to $2,622,000, primarily due to a decrease in operating revenues caused largely by lower newsstand sales and advertising revenues.

1 Refer to definition of operating income (loss) below.

"As expected, the operating loss of the new 'TVA Sports' specialty service negatively affected the Television sector's financial results for the second quarter of 2012. However, all our other French-language specialty services continued to grow, registering a 17% increase in subscription revenues and a 4% increase in advertising revenues. In the second quarter of 2012, we signed a number of affiliation agreements with Canada's leading broadcasting distribution undertakings with respect to all of our French-language specialty services. With these agreements, we expect to generate significant subscription revenue growth going forward. With respect to TVA Network, we are pleased that we were able to grow its operating income despite an 8% decline in its advertising revenues. We are also very proud of our fall schedule and remain optimistic about the advertising revenues it will generate for the remainder of the Corporation's financial year," said Pierre Dion, President and CEO of the Corporation.

"In the Publishing sector, operating revenues declined by 3.5% compared with the same quarter of the previous year, which largely accounts for the decrease in the sector's operating income. At the same time, the growth of the TVA Studio division, which specializes in customized publishing, commercial printed productions and premedia services, augurs well for the expansion of this line of business in the coming quarters. We are also in the process of implementing a series of operational improvements in the Publishing sector in order to realize additional savings and offset the decrease in newsstand sales and advertising revenues," said Mr. Pierre Dion.

Cash flows provided by operating activities amounted to $1.4 million for the quarter, compared with nil in the same quarter of 2011. The $1.4 million increase was essentially due to changes in non-cash items, namely variances in accounts receivable.

The unaudited consolidated financial statements for the three-month and six-month periods ending June 30, 2012, with notes and the interim Management's Discussion and Analysis, can be consulted on the Corporation's website at http://groupetva.ca.

Definition

Operating income (loss)

In its analysis of operating results, the Corporation defines operating income (loss) as net income (net loss) before amortization of property, plant and equipment and intangible assets, financial expenses, impairment of goodwill, gain on disposal of businesses, restructuring costs of operations, impairment of assets and other costs, income taxes, share of income of associated corporation and net loss attributable to non-controlling interest. Operating income (loss) as defined above is not a measure of results that is consistent with IFRS. Neither is it intended to be regarded as an alternative to other financial performance measures or to the statement of cash flows as a measure of liquidity. This measure is not intended to represent funds available for debt service, dividend payment, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. Operating income (loss) is used by the Corporation because management believes it is a meaningful measure of performance.

This measure is used by management and the Board of Directors to evaluate the consolidated results of the Corporation and the results of its segments. Measurements such as operating income (loss) are also commonly used by the investment community to analyze and compare the performance of companies in the industries in which the Corporation is active. The Corporation's definition of operating income (loss) may not be identical to similarly titled measures reported by other companies.

Forward-looking Information Disclaimer

The statements in this news release that are not historical facts may be forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements generally can be identified by the use of the conditional, the use of forward-looking terminology such as "propose," "will," "expect," "may," "anticipate," "intend," "estimate," "plan," "foresee," "believe" or the negative of these terms or variations of them or similar terminology. Certain factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors), programming content and production costs risks, credit risk, government regulation risks, governmental assistance risks, changes in economic conditions, fragmentation of the media landscape and labour relations risks. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause the Corporation's actual results to differ from current expectations please refer to the Corporation's public filings available at www.sedar.com and http://groupetva.ca including, in particular, the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended December 31, 2011.

The forward-looking statements in this news release reflect the Corporation's expectations as of August 7, 2012, and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.

TVA Group

TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company involved in the creation, production, broadcast and distribution of audiovisual products, and in magazine publishing. TVA Group Inc. is the largest broadcaster of French-language entertainment, information and public affairs programming and publisher of French-language magazines in North America, and one of the largest private-sector producers of French-language content in North America. The Corporation's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

TVA GROUP INC.
Consolidated Statements of Income (Loss)
(unaudited)
(in thousand of dollars, except per share amounts)
Three-month periods
ended June 30
Six-month periods
ended June 30
Note 2012 2011 2012 2011
Revenues 2 $ 115,379 $ 117,548 $ 233,191 $ 224,645
Operating, selling and administrative expenses 3 95,718 95,184 219,284 197,721
Amortization of property, plant and equipment and intangible assets
5,242

4,211

10,459

8,248
Financial expenses 4 1,431 1,442 2,950 2,908
Impairment of goodwill 6 32,200
Gain on disposal of businesses 12 (12,881 ) (12,881 )
Restructuring costs of operations, impairmentof assets and other costs
5


321

117

321
Income (loss) before income taxes and share of income of associated corporation
25,869

16,390

(18,938
)
15,447
Income taxes 12 4,572 5,626 1,469 5,797
After-tax share of income of associated corporation
(142
)
(201
)
(328
)
(471
)
Net income (loss) $ 21,439 $ 10,965 $ (20,079 ) $ 10,121
Net income (loss) attributable to:
Shareholders $ 23,676 $ 13,795 $ (15,665 ) $ 14,127
Non-controlling interest 10 (2,237 ) (2,830 ) (4,414 ) (4,006 )
Basic and diluted earnings per share attributable to shareholders
8 d
)
$

1.00

$

0.58

$

(0.66
)
$

0.59
See accompanying notes to condensed consolidated financial statements.
TVA GROUP INC.
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
(in thousands of dollars)
Three-month periods
ended June 30
Six-month periods
ended June 30
Note 2012 2011 2012 2011
Net income (loss) $ 21,439 $ 10,965 $ (20,079 ) $ 10,121
Other comprehensive loss:
Defined benefit plans:
Net change in asset limit or in minimum funding liability

(141
)

(282
)
Deferred income taxes 38 76
(103 ) (206 )
Comprehensive income (loss) $ 21,439 $ 10,862 $ (20,079 ) $ 9,915
Comprehensive income (loss) attributable to:
Shareholders $ 23,676 $ 13,692 $ (15,665 ) $ 13,921
Non-controlling interest 10 (2,237 ) (2,830 ) (4,414 ) (4,006 )
See accompanying notes to condensed consolidated financial statements.
TVA GROUP INC.
Consolidated Statements of Equity
(unaudited)
(in thousands of dollars)
Equity attributable to shareholders
Capital
stock
(note 8)
Contributed surplus Retained earnings Equity attributable to non-controlling interest Total
equity
Balance as of December 31, 2010 $ 98,647 $ − $ 170,784 $ 4,511 $ 273,942
Net income (loss) 14,127 (4,006 ) 10,121
Other comprehensive loss (206 ) (206 )
Dividends (2,377 ) (2,377 )
Contributions related to non-controlling interest (note 10) 2,940 2,940
Balance as of June 30, 2011 98,647 182,328 3,445 284,420
Net income (net loss) 11,476 (5,161 ) 6,315
Other comprehensive loss (16,811 ) (16,811 )
Contributions related to non-controlling interest (note 10) 7,105 7,105
Balance as of December 31, 2011 98,647 176,993 5,389 281,029
Net loss (15,665 ) (4,414 ) (20,079 )
Contributions related to non-controlling interest (note 10) 3,528 3,528
Disposal of interest in SUN News (note 10) 581 (4,503 ) (3,922 )
Balance as of June 30, 2012 $ 98,647 $ 581 $ 161,328 $ − $ 260,556
See accompanying notes to condensed consolidated financial statements.
TVA GROUP INC.
Consolidated Balance Sheets
(unaudited)
(in thousands of dollars)

Note
June 30,
2012
December 31,
2011
Assets
Current assets
Cash $ $ 1,756
Accounts receivable 118,423 117,644
Current income tax assets 6,441 4,014
Programs, broadcast and distribution rights and inventories 63,558 61,954
Prepaid expenses 5,159 2,690
Assets held for sale 12 8,370
193,581 196,428
Non-current assets
Broadcast and distribution rights 38,459 35,488
Investments 10 17,696 12,865
Property, plant and equipment 96,635 102,007
Licences and other intangible assets 112,548 114,539
Goodwill 6 39,781 71,981
Deferred income taxes 568 545
305,687 337,425
Total assets $ 499,268 $ 533,853
Liabilities and equity
Current liabilities
Bank overdraft $ 4,943 $ 3,980
Accounts payable and accrued liabilities 85,978 82,086
Current income tax liabilities 104 503
Broadcast and distribution rights payable 19,617 15,778
Provisions 1,055 1,533
Deferred revenues 5,816 6,535
Current portion of long-term debt 7 17,756
Liabilities held for sale 12 1,538
117,513 129,709
Non-current liabilities
Long-term debt 7 74,973 74,635
Other liabilities 36,601 39,696
Deferred income taxes 9,625 8,784
121,199 123,115
Equity
Capital stock 8 98,647 98,647
Contributed surplus 10 581
Retained earnings 161,328 176,993
Equity attributable to shareholders 260,556 275,640
Non-controlling interest 10 5,389
260,556 281,029
Total liabilities and equity $ 499,268 $ 533,853
See accompanying notes to condensed consolidated financial statements.

On August 7, 2012, the Board of Directors approved the condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2012 and 2011.

TVA GROUP INC.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands of dollars)
Three-month periods
ended June 30
Six-month periods
ended June 30
Note 2012 2011 2012 2011
Cash flows related to operating activities
Net income (loss) $ 21,439 $ 10,965 $ (20,079 ) $ 10,121
Non-cash items:
Amortization 5,349 4,300 10,667 8,427
Restructuring costs of operations, impairment of assets and other costs
5


330


330
Impairment of goodwill 6 32,200
Gain on disposals of businesses 12 (12,881 ) (12,881 )
After-tax share of income of associated corporation
(142
)
(201
)
(328
)
(471
)
Deferred income taxes 571 1,128 806 1,805
Cash flows provided by current operations 14,336 16,522 10,385 20,212
Net change in non-cash items (12,957 ) (16,486 ) (5,951 ) (9,934 )
Cash flows provided by operating activities 1,379 36 4,434 10,278
Cash flows related to investing activities
Additions to property, plant and equipment (6,828 ) (6,532 ) (12,102 ) (14,990 )
Additions to intangible assets (737 ) (1,141 ) (1,303 ) (1,948 )
Disposal of businesses, net of cash 12 17,898 17,898
Cash of SUN News at the date of deconsolidation
10

(430
)

(430
)
Net change in investments 10
Cash flows provided by (used in) investing activities
9,903

(7,673
)
4,063

(16,928
)
Cash flows related to financing activities
Net change in bank overdraft 4,661 307 963 (2,200 )
Net change in revolving term loan (22,285 ) 4,398 (17,282 ) 4,094
Financing costs 7 (344 )
Non-controlling interest 10 1,764 3,528 2,940
Dividends paid (2,377 ) (2,377 )
Cash flows (used in) provided by financing activities
(15,860
)
2,328

(13,135
)
2,457
Net change in cash (4,578 ) (5,309 ) (4,638 ) (4,193 )
Cash at beginning of period 4,578 6,721 4,638 5,605
Cash at end of period $ $ 1,412 $ $ 1,412
Interest and income taxes reflected as operating activities
Interest paid $ 2,358 $ 2,337 $ 2,740 $ 2,670
Income taxes paid 1,185 1,932 3,472 639
See accompanying notes to condensed consolidated financial statements.
TVA GROUP INC.
Notes to Condensed Consolidated Financial Statements
Three-month and six-month periods ended June 30, 2012 and 2011 (unaudited)
(Tabular amounts are expressed in thousands of dollars, except per share and per option amounts)

TVA Group Inc. ("TVA Group" or the "Corporation") is governed by the Quebec Business Corporations Act. TVA Group is an integrated communications company with two operating segments: Television and Publishing (note 11). The Corporation is a subsidiary of Quebecor Media Inc. ("Quebecor Media" or the "parent corporation") and the ultimate parent corporation is Quebecor Inc. ("Quebecor"). The Corporation's head office is located at 1600 De Maisonneuve Blvd. East, Montreal, Quebec, Canada.

The Corporation's businesses experience significant seasonality due, among other factors, to seasonal advertising patterns and influences on people's viewing, reading and listening habits. Because the Corporation depends on the sale of advertising for a significant portion of its revenue, operating results are also sensitive to prevailing economic conditions, including changes in local, regional and national economic conditions, particularly as they may affect advertising expenditures. Furthermore, the Corporation is investing in the launch of new specialty services in the Television segment. During the period immediately following the launch of a new specialty service, subscription revenues are always relatively modest, while initial operating expenses may prove more substantial. Accordingly, the results of operations for interim periods should not necessarily be considered indicative of full-year results.

1. Basis of presentation

These consolidated financial statements were prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. In particular, these consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting, and accordingly, they are condensed consolidated financial statements because they do not include all disclosures required under IFRS for annual consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Corporation's 2011 annual consolidated financial statements and the notes thereto. The same accounting policies described in the annual consolidated financial statements have been used herein.

Comparative figures for the three-month and six-month periods ended June 30, 2011, have been reclassified to conform to the presentation adopted for the six-month period ended June 30, 2012.

2. Revenues

The breakdown of revenues between services rendered and product sales is as follows:

Three-month periods
ended June 30
Six-month periods
ended June 30
2012 2011 2012 2011
Services rendered $ 89,535 $ 91,626 $ 181,106 $ 173,217
Product sales 25,844 25,922 52,085 51,428
$ 115,379 $ 117,548 $ 233,191 $ 224,645

3. Operating, selling and administrative expenses

The main components are as follows:

Three-month periods
ended June 30
Six-month periods
ended June 30
2012 2011 2012 2011
Employee and sales commission costs $ 40,631 $ 37,405 $ 83,883 $ 73,644
Royalties, rights and production costs 33,530 34,144 84,882 76,455
Printing and distribution 4,523 5,317 12,442 10,642
Marketing, advertising and promotion 4,061 3,414 9,376 8,023
Transmission and microwave expenses 1,603 1,426 3,565 2,571
Other 11,370 13,478 25,136 26,386
$ 95,718 $ 95,184 $ 219,284 $ 197,721

4. Financial expenses

Three-month periods
ended June 30
Six-month periods
ended June 30
2012 2011 2012 2011
Interest on long-term debt $ 1,282 $ 1,349 $ 2,698 $ 2,716
Amortization of financing costs 107 89 208 179
Other 42 4 44 13
$ 1,431 $ 1,442 $ 2,950 $ 2,908

5. Restructuring costs of operations, impairment of assets and other costs

In the six-month period ended June 30, 2012, the Corporation recorded $117,000 in restructuring costs of operations following the elimination of a number of positions in the Publishing segment.

During the three-month period ended June 30, 2011, the Corporation recorded an impairment expense related to its broadcast rights inventories in the amount of $330,000 following the discontinuation of the operations of the over-the-air station "SUN TV."

6. Impairment of goodwill

As a result of new fees adopted in 2012 for 2010, 2011 and 2012 with respect to business contributions for costs related to waste recovery services provided by Quebec municipalities, the operating costs of the Corporation's Publishing segment are adversely affected. Accordingly, the Corporation reviewed its business plan for these activities and performed an impairment test on the Publishing segment's cash-generating unit ("CGU"). The Corporation concluded that the recoverable amount based on value in use was less than the carrying amount of the Publishing CGU and a goodwill impairment charge of $32,200,000 was recorded during the first quarter of 2012. The Corporation used a pre-tax discount rate of 16.26% (15.89% as of April 1, 2011) and a perpetual growth rate of 1.00% (1.00% as of April 1, 2011) to calculate the recoverable amount.

7. Long-term debt

On February 24, 2012, the Corporation completed the renewal of its revolving term loan of $100,000,000 for a five-year term with similar conditions, except for the borrowing cost, which is more favourable for the Corporation. The loan matures on February 23, 2017 and is repayable in full on that date. Given the maturity of the revolving term loan as of December 31, 2011, the Corporation had presented the loan as a current liability.

The costs associated with the renewal of the revolving term loan in the first quarter of 2012 totalled $344,000 and were recorded as financing costs in reduction of long-term debt.

8. Capital stock

(a) Authorized capital stock

An unlimited number of Class A common shares, participating, voting, without par value.

An unlimited number of Class B shares, participating, non-voting, without par value.

An unlimited number of preferred shares, non-participating, non-voting, with a par value of $10 each, issuable in series.

(b) Issued and outstanding capital stock

June 30,
2012
December 31,
2011
4,320,000 class A common shares $ 72 $ 72
19,450,906 class B shares 98,575 98,575
$ 98,647 $ 98,647

c) Share redemption

On March 17, 2011, the Corporation filed a normal course issuer bid to redeem for cancellation, between March 21, 2011 and March 20, 2012, a maximum of approximately 5% of the Corporation's issued and outstanding Class B shares at the offer date. The Corporation redeems its Class B shares at the market price at the time of redemption, plus brokerage fees. No Class B shares were repurchased for cancellation in the first halves of 2012 and 2011.

(d) Earnings per share attributable to shareholders

The following table sets forth the computation of basic and diluted earnings per share attributable to shareholders:

Three-month periods
ended June 30
Six-month periods
ended June 30
2012 2011 2012 2011
Net income (loss) attributable to shareholders
$

23,676

$

13,795

$

(15,665
)
$

14,127
Weighted average number of basic and diluted shares outstanding
23,770,906

23,770,906

23,770,906

23,770,906
Basic and diluted earnings per share attributable to shareholders (in dollars)

$


1.00


$


0.58


$


(0.66
)

$


0.59

The diluted earnings per share calculation does not take into consideration the potential dilutive effect of stock options of the Corporation since their impact is anti-dilutive. During the three-month and six-month periods ended June 30, 2012, 819,421 stock options of the Corporation's plan (833,610 in 2011) were excluded from the diluted earnings per share calculation.

9. Stock-based compensation and other stock-based payments

Six-month period ended June 30, 2012
Class B stock options Quebecor Media stock options
Number Weighted average exercise price Number Weighted average exercise price
Balance as of December 31, 2011 833,610 $ 16.35 393,252 $ 46.66
Cancelled (14,189 ) 16.84
Options related to SUN News' corporate executive (note 10) (11,000 ) 50,10
Balance as of June 30, 2012 819,421 $ 16.34 382,252 $ 46.56

Of the number of options outstanding as at June 30, 2012, 706,077 Class B stock options at an average exercise price of $16.58 and 175,449 Quebecor Media stock options at an average price of $46.24 could be exercised.

During the three-month and six-month periods ended June 30, 2012, none of the Quebecor Media stock options were exercised (during the six-month period ended June 30, 2011, 15,230 stock options were exercised for $108,000).

During the three-month and six-month periods ended June 30, 2012, the Corporation recorded compensation expense reversals of $250,000 and $245,000 respectively (compared with reversals of $826,000 and $741,000 respectively in the same periods of 2011) in relation to the Corporation's Class B stock options as well as a compensation expense reversal of $50,000 and a compensation charge of $546,000 respectively (compared with compensation charge reversals of $636,000 and $261,000 respectively for the same periods of 2011) in relation to Quebecor Media stock options.

10. Related party transactions

Capital contributions to SUN News

During the three-month period ended June 30, 2012, the partners in SUN News made a capital contribution of $3,600,000 (nil in 2011), including $1,836,000 from the Corporation and $1,764,000 from Sun Media Corporation, a company under common control. During the six-month period ended June 30, 2012, the partners in SUN News made a capital contribution of $7,200,000 ($6,000,000 in 2011), including $3,672,000 from the Corporation ($3,060,000 in 2011) and $3,528,000 from Sun Media Corporation ($2,940,000 in 2011).

Disposal of interest in SUN News

On June 30, 2012, the Corporation sold a 2% interest in SUN News to Sun Media Corporation for a $765,000 consideration. The Corporation now holds a 49% interest in SUN News and Sun Media Corporation owns 51%. The difference between the amount paid and the book value of the interest yielded a $581,000 gain, which was accounted for in contributed surplus. Following the loss of control, SUN News' results will no longer be consolidated as of July 1, 2012 and the investment in SUN News is now accounted for using the equity method.

The following table shows details of the net assets of SUN News, which were reclassified as an investment using the equity method at the date of deconsolidation:

Current assets
Cash $ 430
Accounts receivable and other current assets 2,792
3,222
Non-current assets
Property, plant and equipment 8,873
Intangible assets 650
12,745
Current liabilities
Accounts payable and accrued liabilities 3,555
Net assets 9,190
Corporation Sun Media interest (4,687 )
Investment using equity method $ 4,503

11. Segmented information

The Corporation's operations consist of the following segments:

- The Television segment includes the activities of TVA Network (including the subsidiaries and divisions TVA Productions Inc., TVA Ventes et Marketing Inc., TVA Accès, TVA Création, TVA Nouvelles, TVA Interactif), specialty services, the national English-language specialty service SUN News Network, the marketing of the digital products of the different televisual brands, the TVA Boutiques division's home and online shopping services and the TVA Films division's audiovisual products distribution operations.

- The Publishing segment includes the operations of TVA Publications Inc., a content producer specializing in the publication of French-language magazines in various fields, including arts, entertainment, television, fashion and decoration; marketing of the digital products of the different brands related to the magazines and the operations of the TVA Studio division, which specializes in customized publishing, commercial print productions and premedia services.

The intersegment items represent the elimination of normal course business transactions between the Corporation's business segments regarding revenues and expenses.

Three-month periods
ended June 30
Six-month periods
ended June 30
2012 2011 2012 2011
Revenues
Television $ 99,132 $ 100,734 $ 201,952 $ 192,007
Publishing 17,213 17,829 33,119 34,698
Intersegment items (966 ) (1,015 ) (1,880 ) (2,060 )
115,379 117,548 233,191 224,645
Operating, selling and administrative expenses
Television 82,093 81,442 188,639 169,849
Publishing 14,591 14,757 32,525 29,932
Intersegment items (966 ) (1,015 ) (1,880 ) (2,060 )
95,718 95,184 219,284 197,721
Income before amortization, financial expenses, impairment of goodwill, gain on disposals of businesses, restructuring costs of operations, impairment of assets and other costs, income taxes and share of income of associated corporation
Television 17,039 19,292 13,313 22,158
Publishing 2,622 3,072 594 4,766
$ 19,661 $ 22,364 $ 13,907 $ 26,924
June 30,
2012
December 31,
2011
Total assets
Television $ 444,048 $ 449,943
Publishing 55,220 83,910
$ 499,268 $ 533,853
Goodwill
Television $ 2,539 $ 2,539
Publishing 37,242 69,442
$ 39,781 $ 71,981

12. Disposal of businesses

On December 22, 2011, the Corporation announced an agreement to sell its 51% interest in The Cave and its 50% interest in Mystery TV to the other partner in the joint ventures, Shaw Media Global Inc. The sale closed on May 31, 2012, following Canadian Radio-television and Telecommunications Commission approval, and a gain on disposal of businesses of $12,881,000 before income taxes was recorded. The transaction did not give rise to any income tax charge because the Corporation used unrecorded capital losses to eliminate the capital gains tax on disposal of businesses. The sale generated net cash flows in the amount of $17,898,000; proceeds from disposal of $20,963,000 less $3,065,000 in cash the time of the sale.

Contact Information

  • Denis Rozon, CPA, CA
    Vice-President and Chief Financial Officer
    (514) 598-2808