2008 Annual Report 1
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W h a t ’ s O n ? C o r u s E n t e r t a i n m e n t I n c We have a strong set of Core Values and believe . 2 0 0 8 that honouring them drives our success. A n n u a l R e Initiative p o r We empower employees to make great things happen t Innovation We are committed to creative thinking that leads to breakthrough ideas and superior results Teamwork We believe the greatest value is realized when we work together Accountability We do what we say we’ll do – no excuses Knowledge We believe in continuous learning and the sharing of our insights and ideas 2008 Annual Report Ce rt no. XX- XXX-XXX Revenues Segment profit (in millions) (in millions) 1 . 2 2 9 . 5 0 7 7 2 . 4 8 8 3 1 2 . 7 . 6 6 7 4 1 2 . 1 8 7 3 . 3 2 . 8 6 5 6 6 9 6 1 4 . 0 9 8 8 07 07 0 06 0 06 0 05 0 05 04 2 04 2 Financial highlights (in millions of Canadian dollars, except per share amounts) 2008 2007 2006 2005 2004 Revenues 787.2 768.7 726.3 683.1 666.8 Segment profi t(1) 252.1 240.9 214.1 195.3 90.4 Net income (loss) 129.8 107.0 35.5 71.1 (23.1) Earnings (loss) per share Basic $1.57 $1.27 $0.42 $0.83 $(0.27) Diluted $1.54 $1.23 $0.41 $0.83 $(0.27) Total assets 2,033.7 1,937.0 1,842.2 1,928.4 1,871.9 Total long-term debt 692.8 610.7 596.4 445.2 529.1 Cash dividends declared per share Class A Voting $0.570015 $0.501250 $0.22625 $0.0325 $0.020 Class B Non-Voting $0.574995 $0.506655 $0.23250 $0.0375 $0.025 (1) As defined in “Key performance indicators – Segment profit and segment profit margin” in management’s discussion and analysis. Front cover images (clockwise from bottom of page): Host Josie Dye and correspondents Wilder Weir Based on Eric Rohmann’s award-winning book, produced Carlos and Joyce host The Zone , YTV’s popular after- and Jacqui Skeete are the faces of Oh So Cosmo , by Nelvana Studio and broadcast in Canada on Treehouse, school block, featuring top-ranked kids shows. Highly CosmoTV’s magazine-style TV show that offers fun, two furry heroes, Mouse and Rabbit, teach preschoolers interactive both on air and online, Carlos and Joyce fearless stories and segments celebrating the about caring, friendship and how to problem-solve in entertain kids across the country with celebrity lifestyle of hip, urban women. the 2-D animated series, My Friend Rabbit. interviews, sketch comedy, cool contests and all Since its introduction to North America in January Page 1 things pop culture. 2008, the Bakugan toy line – launched with the Scaredy Squirrel has left his tree and taken the world For irreverence, wit and humour mixed with morning animated television series of the same name – has by storm, with nearly 300,000 copies of this Kids Can coffee, Q107 listeners tune in to Derringer in the created a frenzy with kids and parents, selling out at Press book series sold in North America alone, plus Morning with Maureen Holloway – Toronto’s favourite retailers across Canada and the U.S. plans for more books, animated content from Nelvana way to wake up. Studio and branded merchandise. Driven by innovative, customer-focused approaches to programming and partnerships, Corus Entertainment’s brands, shows and personalities are on TV, on radio and online. We’re on CDs and DVDs, and in books and games. We’re on at home, at work and on the road, across Canada and around the world. In fact, when you really think about it, in today’s 24-7 multiplatform media environment, sometime, somehow, we’re on everywhere. Table of contents 2. Television 4. Radio 6. Content 8. Message to shareholders 12 . Employees 14. Canadiana 16. New platforms 18. Philanthropy 21. Management’s discussion and analysis 43. Management’s responsibility for financial reporting 44. Report of independent registered public accounting firm 46. Consolidated balance sheets 47. Consolidated statements of income and comprehensive income 48. Consolidated statements of changes in shareholders’ equity 49. Consolidated statements of cash flows 50. Notes to consolidated financial statements 74. Officers and directors 75. Corporate information 76. List of assets Corus Entertainment 2008 Annual Report 1. 1. 2. 3. 4. In 2008, audiences turned to Corus to see what’s on television. With channels that focus on women and kids, Corus is the viewing choice for millions of Canadians. 5. 1. Gok Wan from W Network’s How to Look Good Naked , 4. TELETOON Retro presents classic cartoons all day, 6. Jacqui Skeete, Josie Dye and Wilder Weir from the fashion and consumer series that shows women every day. Since launching in September 2007 in CosmoTV’s flagship original series Oh So Cosmo , how to look great with their clothes on and off. over two million homes, the channel quickly grew a magazine-style TV show that offers fun, fearless 2. CMT hosts Elissa Lansdell, Casey Clarke, Ashley Kranz to become the largest digital specialty channel in stories and segments celebrating the lifestyle of hip, and Paul McGuire entertain Canadian audiences as they the country. With the addition of TELETOON Retro urban women. go shoulder-to-shoulder with country music’s hottest French in October 2008, the channel is now available 7. Michael C. Hall stars as Dexter Morgan, who names, keeping viewers up-to-date with entertainment in nearly six million households. moonlights as a serial killer, ridding the world of those news, music videos and celebrity interviews. 5. The recently acquired Canadian Learning Television (CLT) who have slipped through the cracks of justice in 3. YTV’s The Next Star became a fan favourite and a relaunched as VIVA, a network targeting Boomer women, Dexter , Showtime’s critically acclaimed series, seen ratings success as kids across the country competed to representing a new growth opportunity for Corus. on Movie Central. become Canada’s next singing star. 2. Corus Entertainment 2008 Annual Report Television In 2008, Corus remained a force in women’s television. Building on the success of W Network, Canada’s #1 specialty channel for women, Corus introduced Cosmopolitan TV to over five million households. Created in partnership with Movie Central delivered Hearst Corporation, CosmoTV targets women aged 18 to 34. In November 2008, premium content to almost Corus relaunched Canadian Learning Television (CLT) as VIVA, Canada’s first channel dedicated to Boomer-aged women. 900,000 Treehouse, Discovery Kids, YTV and TELETOON deliver the highest combined households in audience of Canadian kids between the ages of 2 and 11. Parent-trusted preschool Western Canada programming from Treehouse continues to delight kids with hits such as The Backyardigans and My Friend Rabbit from Nelvana and Canadian favourites Are We There Yet?: World Adventure and Roll Play . Seen in over 10 million homes, YTV adds to our #1 status among kids with winners such as The Next Star and iCarly . TELETOON Retro, now in nearly six million households, brought new life to classics like The Tom and Jerry Show and Scooby-Doo . Movie Central, home to the best of HBO and Showtime, continues to grow. Boasting critically acclaimed dramas like Californication , Entourage and Dexter , Movie Central delivers premium content in standard, high-definition and on -demand formats to almost 900,000 households in Western Canada. Movie Central’s partnership with HBO was extended with the debut of the new service HBO Canada in October 2008. 6. 7. With these specialty and pay services as well as CMT, Telelatino, SCREAM, Corus Custom Networks, Max Trax digital music, and three over-the-air local TV stations, wha t’s on television has never looked so good. Corus Entertainment 2008 Annual Report 3. 1. 2. 3. Whether news-talk, new rock, country or classic rock, when listeners want to know what’s on air they tune in to Corus Entertainment. 1. Morning drive host Paul Arcand from Montreal’s 2. With the acquisition of contemporary hit music #1 French news-talk leader 98,5 FM (CHMP) was station 91.5 The Beat (CKBT) in Kitchener, Ontario, joined by new hosts: Isabelle Maréchal in mid-morning, we strengthened our market position, adding another midday host Benoît Dutrizac and afternoon drive host FM station to serve a growing Ontario region. Paul Houde as the station revamped its on-air lineup 3. Q107 in Toronto remained #1 with males 25 with well-known journalists for increased news and to 54, and Kim Mitchell’s show also maintained issue reporting. its #1 ranking with this key demographic in its afternoon drive timeslot. 4. Corus Entertainment 2008 Annual Report Radio In 2008, our 53 radio stations continued to connect with listeners by showing them that our radio stations are their radio stations. We broke new ground with Edmonton’s iNews880, Canada’s first Internet-based, 24-hour, all-news station, Corus Radio connected with setting the bar for truly interactive news-talk radio. Through blogs, regional news listeners each week through coverage and i -reports, iNews880 helped listeners to become citizen journalists and to build an online community by allowing them to share their perspectives 53 on local, provincial, national and global news with other listeners – around the stations across city and around the globe. the country With intelligent and provocative hosts such as Charles Adler, Christy Clark, Bill Good, John Oakley and Dave Rutherford, Corus Radio’s network of news-talk stations was the destination for the best in information and analysis.