Play Corus Entertainment Annual Report 2006 Revenues Segment Profit Table of Contents (In Millions) (In Millions) Great Plays in Television 2 Radio’S Winning Plays 4
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P l a y Fair play How we play is just as important as what we accomplish. Our Core Values define our corporate culture, unite us and guide us in the work we do. As the old adage goes, it’s not just whether you win or lose, but how you play the game. Our Core Values: Knowledge Initiative Innovation Teamwork Accountability C o r We believe in continuous We empower We are committed to We believe the greatest We do what we say u s learning and the sharing employees to make creative thinking that value is realized when we’ll do – no excuses E n t of our insights and ideas great things happen leads to breakthrough we work together e r t ideas and superior results a i n m e n t I n c . A n n u a l R e p o r t 2 0 0 www.corusent.com 6 Play Corus Entertainment Annual Report 2006 Revenues Segment profit Table of contents (in millions) (in millions) Great plays in Television 2 Radio’s winning plays 4 750 726.3 225 214.1 Breakout plays in Content 6 Message to shareholders 8 200 625 The play makers 12 175 Playing up our great Canadian talent 14 The new fields of play 16 500 150 Levelling the playing field 18 Financial section 20 125 375 Management’s discussion and analysis 21 100 Management’s responsibility for financial reporting 46 Auditors’ report 47 250 75 Consolidated balance sheets 48 50 Consolidated statements 125 of income (loss) and retained earnings (deficit) 49 25 Consolidated statements of cash flows 50 Notes to consolidated financial statements 51 0 0 Officers and directors 78 02 03 04 05 06 02 03 04 05 06 Corporate information 79 List of assets 80 Financial highlights (millions of Canadian dollars except per share amounts) 2006 2005 2004 2003 2002 REVENUES 726.3 683.1 666.8 643.9 674.5 SEGMENT PROFIT 1 214.1 195.3 90.4 165.3 125.6 NET INCOME (LOSS) 35.5 71.1 (23.1) 40.0 (168.6) EARNINGS (LOSS) PER SHARE Basic $0.84 $1.66 $(0.54) $0.94 $(3.96) Diluted $0.82 $1.65 $(0.54) $0.94 $(3.96) Total assets 1,842.2 1,928.4 1,871.9 1,940.6 1,940.0 Total long-term financial liabilities 650.5 660.4 690.9 693.5 761.3 CASH DIVIDENDS DECLARED PER SHARE Class A Voting $0.4525 $0.065 $0.04 –– Class B Non-Voting $0.4650 $0.075 $0.05 –– 1 As defined in “Key performance indicators – Segment profit and segment profit margin” in management’s discussion and analysis. Like a great game, a great year is marked by four quarters filled with amazing plays. And in 2006, Corus Entertainment had a great year. Corus Radio remained Canada’s number one radio network in terms of both audience reach and tune-in. Specialty channels YTV, Treehouse and W Network were all number one with their respective target audiences. Nelvana demonstrated the inter- national strength of its brands when it struck a deal to launch a new kids channel in the U.S. The year was capped by a truly outstanding achievement: In 2006, thanks to the hard work of our employees and partners, and the support of our customers, Corus Entertainment enjoyed record-high revenues and segment profit. A great way to end a year of great plays. Corus Entertainment Annual Report 2006 1 Great plays in Television By developing original series like The Smart Woman Survival Guide and This is Emily Yeung and making savvy programming decisions that reflect our audiences’ interests, Corus gives viewers plenty of reasons to press play. Jane and the Dragon and Di-Gata and Two Weeks Notice , have made Defenders . On YTV, we also added W Network the country’s number family favourites such as Malcolm one specialty channel for women, in the Middle and The Fresh Prince with an average of almost Movie Central is where fans of HBO’s Entourage of Bel-Air . The range and quality of 11 million viewers a month. can catch the latest episode of this hit comedy programming we offer makes series about a group of buddies sharing the Corus networks kid-favoured and Corus Entertainment is also a highs and lows of life in the Hollywood fast lane. parent-approved destinations. leader in pay television. Movie Central provides viewers in Western No broadcaster entertains more Corus is tops with Canadian Canada with top Hollywood Canadian kids than Corus women, too. Compelling series like movies, Canadian feature films and Entertainment . Through YTV, Divine Design , Gilmore Girls and series and the best-rated programs Treehouse, Discovery Kids and Style by Jury , and movies such as from HBO and Showtime. In 2006, TELETOON, we reach 93% of kids Legally Blonde 2 , Mona Lisa Smile we added HBO programming to aged two to 11 and broadcast 16 of our video-on-demand service, the top 20 kids programs. In 2006, Movie Central On Demand. kids hits Dora the Explorer , Max & Ruby , SpongeBob SquarePants and 6TEEN were joined by new shows such as Elmo’s World , Captain Flamingo , Inspired by the W Her Report research, The Smart Woman Survival Guide is an innovative half-hour show that combines the best elements of the lifestyle and sitcom genres into a brand -new format. 2 Corus Entertainment Annual Report 2006 Combining live action with animation to create an exciting and distinctive look, YTV’s Dark Oracle was awarded an International Emmy in the Children and Young People category. Based on the bestselling books by David Kirk, Nelvana’s stunning 3-D animated series Miss Spider’s Sunny Patch Friends debuted on Treehouse in March 2006. By providing an unparalleled level of programming and giving customers more control over their The Documentary Channel, viewing schedules, SCREAM, Telelatino, Corus Movie Central Custom Networks, Max Trax digital increased its music service and three local over- subscribers the-air television stations. With by 10%. strong brands, a commitment to research, innovative marketing In addition to and great programming, Corus YTV, Treehouse, really did give audiences plenty Discovery Kids, of reasons to press play in 2006. TELETOON, W Network and Movie Central, our television assets include CMT Canada, Launched on Treehouse in fall 2006, This is Emily Yeung features Emily hosting Country superstar Reba McEntire stars in the her very own show for preschool children. hilarious family sitcom Reba , seen on CMT. Corus Entertainment Annual Report 2006 3 Radio’s winning plays Corus Entertainment is the clear major market news-talk stations Also in 2006, Winnipeg’s CJOB 68 leader in Canadian radio. With launched a helicopter traffic celebrated two remarkable 51 stations, primarily in nine of service that helped improve local achievements: It became the fifth Canada’s top 10 markets, Corus traffic and news reporting, and Corus news-talk station to mark Radio reached 8.3 million people contributed to community safety a 60th anniversary, and its daily in 2006. On average, Canadians by making those helicopters talk show Adler on Line was tuned in to Corus radio stations available to police, fire and syndicated nationally to 14 cities 46% more often than those of our medical services for emergencies. across Canada. nearest competitor. And as always, Corus radio stations Corus’ 16-station news-talk contributed to their communities network plays an integral role in by donating millions of dollars in the cities it serves. Each station cash, gifts-in-kind and public provides an interactive forum for service announcements to local discussing and debating the issues Winnipeg’s CJOB 68 became the fifth and national charities. that matter most to the community, Corus news-talk station to celebrate a 60th anniversary. while delivering local news, sports, Throughout 2006 we continued to weather and traffic. In 2006 our deliver exceptional client service Far left: Liam Gallagher of Oasis fame with staff from Deep Sky and Corus Radio Toronto. Gallagher was in-studio for the unveiling of Oasis’ new album, Don’t Believe the Truth , as part of Deep Sky’s World Album Premiere series. The Tragically Hip’s Gord Downie with The Jeff O’Neil Show morning team in 99.3 The FOX’s mobile studio, broadcasting live from downtown Vancouver. 4 Corus Entertainment Annual Report 2006 Number one in audience reach and tune-in, and a leader in both community and client service, Corus Radio keeps Q107 Toronto’s morning man making the winning plays. John Derringer with Meat Loaf, in-studio to promote his new CD, Bat Out of Hell 3 . by honouring our Corus Radio Sales Guarantee and our Corus Radio Sales Professional Code of Ethics. Deep Sky, our national marketing and programming arm, raised our level of client service by building vertically integrated client campaigns which leveraged the power of our national network. Our commitment to client service helped deliver a 6% increase in sales and a 50% growth in our stations’ online advertising business. With a commitment to informing and entertaining our audiences, delivering best-in-class service to our clients, and giving back to the communities we serve, Corus Radio continues to make the winning plays. Deep Sky partnered with MindShare Canada on a promotional campaign for the theatrical release of 20th Century Fox’s Walk the Line . A lucky winner received a rare Martin guitar – one of only 12 in the world – modelled after one of Johnny Cash’s favourite guitars. 5 Breakout plays in Content Nelvana continued to build strong brands and provide engaging animated programming for children around the globe.