/C O R R E C T I O N from source - CanWest Global Communications
Corp./ In TO104 transmitted today at 14:38e an error occurred.
Please note this release has been amended to reflect a
reclassification of expenses in the consolidated statements of
earnings. This reclassification has no effect on total expenses
segment operation profit or net income. Corrected copy follows:
WINNIPEG, Nov. 2 /PRNewswire-FirstCall/ -- CanWest Global
Communications Corp. today reported financial results for its
fourth quarter and for its fiscal year ended August 31, 2004.
Consolidated net earnings from continuing operations for the year
were $194 million, or $1.10 per share, an increase of 69% as
compared to net earnings from continuing operations of $115
million, or $0.60 per share, for the prior year. Net earnings for
the year reflected a number of one-time transactions, including
gains of approximately $117 million in the fourth quarter on the
sale of CanWest's shares in Ulster TV and the effective disposition
of a 30% interest in CanWest's New Zealand broadcasting assets. As
a result of the early retirement of certain indebtedness, CanWest
recorded foreign currency exchange gains of $36 million, the
write-off of deferred financing costs of $5 million, interest rate
and foreign currency swap losses of $111 million. In addition, a
net loss of $208 million from Fireworks Entertainment was recorded
in losses of discontinued operations. The net loss for the year was
$13 million versus net earnings of $46 million last year. In its
public reporting, the Company provides revenue and EBITDA results
on both a consolidated basis and a combined basis. The consolidated
financial results reflect the Company's investment in the TEN Group
on an equity accounted basis, including CanWest's share of TEN's
net earnings, but excluding revenues and EBITDA of TEN from
consolidated revenues and EBITDA. The combined results include the
Company's 56.6% proportionate share of TEN's revenue and EBITDA.
Consolidated and combined net earnings are the same. Financial
Highlights on a consolidated and combined basis For the twelve
months ended August 31, 2004: - The Company's consolidated revenues
for the year were $2,113 million compared to consolidated pro forma
revenues of $2,100 million for the same period in 2003. Pro forma
2003 results provide a comparison based upon the same asset base as
existed during the year ended August 31, 2004. Pro forma results
for 2003 exclude the revenue and EBITDA contributions of newspaper
operations that were sold in February 2003. - Consolidated earnings
before interest, taxes, depreciation and amortization (EBITDA) for
the year were $447 million compared to pro forma consolidated
EBITDA of $469 million for the prior year. - Consolidated and
combined net earnings from continuing operations were $194 million,
or $1.10 per share, for the year, up 69% from the $115 million, or
$0.60 per share, reported for fiscal 2003. - Combined revenues
increased by 4% to $2,566 million from pro forma combined revenues
of $2,473 million for the prior fiscal year. - Combined EBITDA of
$600 million in fiscal 2004 reflected an increase of 6% from the
$568 million combined pro forma result for the prior year. For the
three months ended August 31, 2004: - Consolidated revenues for the
fourth quarter, traditionally a weaker quarter for the media
industry, were $470 million compared to $464 million for the same
period in 2003. - Consolidated earnings before interest, taxes,
depreciation and amortization (EBITDA) for the quarter ended August
31, 2004 were $58 million compared to consolidated EBITDA of $66
million for the corresponding quarter in 2003. - Consolidated and
combined net earnings from continuing operations for the fourth
quarter were $60 million, or $0.34 per share, compared to $8
million, or $0.05 per share, reported for the same period in fiscal
2003. - Consolidated and combined net earnings for the quarter were
$62 million, or $0.35 per share, compared to a loss of $45 million
or $0.25 per share for the same period in fiscal 2003. - Combined
revenues for the fourth quarter were $580 million, an increase of
3% from combined revenues of $563 million for same quarter of the
previous year. - Combined EBITDA were $94 million for the fourth
quarter, 9% higher than the $86 million for the fourth quarter of
fiscal 2003. Results from continuing operations exclude revenues
from Fireworks Entertainment for both years, as Fireworks was
classified as a discontinued operation during fiscal 2004. The
Company's financial results for prior periods have been
reclassified on this basis. The Company recorded a net loss from
discontinued operations of $208 million in 2004, compared to $69
million for the prior year. Commenting on the year-end and fourth
quarter results, Leonard Asper, CanWest's President and Chief
Executive Officer, said "CanWest made important progress on many
fronts in 2004 that together resulted in a significant improvement
in overall results and that should contribute to positive financial
results going forward. All of our international operations,
including TV3 Ireland, the TEN Group in Australia and our New
Zealand television and radio operations recorded their best ever
financial results in 2004, with all of those operations generating
substantial improvements in their respective EBITDA. Our newspaper
operations also achieved a significant EBITDA gain in a still
difficult Canadian advertising market. Together, these strong
results more than offset disappointing results from our Canadian
television operations and underscore the significant benefit
derived from CanWest's diversified international mix of media
assets." "The Company's balance sheet strengthened substantially in
2004 as a result of a combination of asset sales, re-financings and
the successful IPO of CanWest MediaWorks (NZ) Limited in New
Zealand. In October, the Company announced an exchange offer for
Hollinger Participation Trust Notes that, if successful, will
further improve our balance sheet. All in all, 2004 was a very good
year for CanWest," added Mr. Asper. "While debt reduction remains a
top priority, our much improved balance sheet now positions us to
re-focus on growth, including organic expansion of our existing
operations, and through prudent acquisitions, either in growth
markets or where we can identify synergies with our existing
operations." Segmented Results for Fiscal 2004 Revenues for the
Company's newspaper and online operations for the year were $1,194
million, 2% higher than pro forma revenues of $1,168 million for
the same newspaper assets in fiscal 2003. Newspaper and online
EBITDA for the year increased by 8% to $267 million, compared to a
pro forma result of $248 million for the previous year. The EBITDA
improvement was primarily attributable to increased revenues and
operating cost reductions. Total circulation was down slightly, but
newsprint costs, a major component of total operating costs, were
stable over the year. We were encouraged during the year by the
take-up of paid subscriptions to the new electronic newspapers that
are now available online for all CanWest major metropolitan
newspapers, as well as the National Post. TEN's contribution to
CanWest's combined EBITDA increased by 36% to $145 million for the
year, the best ever result from TEN. TEN's television network
retained its ratings leadership in the 16-39 young adult market and
moved into second place in both the older 25-54 demographic and all
viewers. Eye Corp, TEN's out-of-home advertising operation, also
recorded substantial growth compared to the previous year, with
revenues up by 19% and EBITDA by 221%. CanWest MediaWorks (NZ)
Limited in New Zealand also booked impressive growth during the
year. Revenues at TVWorks were up 14%, and resulted in EBITDA of
$23 million in fiscal 2004, an increase of 131% from EBITDA of $10
million in fiscal 2003. RadioWorks' EBITDA was up 32% to $27
million, compared to $21 million last year. TV3 Ireland also
maintained a consistent positive growth trend, with CanWest's share
of its EBITDA increasing to $11 million for the year, up from $10
million last year. The strong revenue growth trends of F2004
continued at all CanWest's international operations as we moved
into F2005. Revenues for the Company's Canadian broadcasting
operations for fiscal 2004 declined by 5% to $690 million from $730
million in fiscal 2003. EBITDA for the year was $147 million, a
decline of 32% from the $216 million recorded the prior year. The
combined effects of lower ratings in 2003, and increased
competition for advertising revenues accounted for the decline.
However, strong spring ratings arrested the downward trend and
there are indications of year-on-year revenue growth at Global
Television as we move into the first quarter of fiscal 2005.
Segmented Results for the 4th Quarter ended August 31, 2004
Newspaper and online operations recorded a 2% gain in revenues to
$281 million for the quarter, compared to revenues of $276 million
for the fourth quarter of fiscal 2003. EBITDA increased by 3% to
$53 million from $52 million last year. The gains were attributable
to a combination of a modest improvement in advertising markets and
operating cost reductions. CanWest's non-Canadian operations all
registered substantial year-over-year gains for the quarter.
CanWest's 56.6% share of results of TEN reflected a 12% increase in
EBITDA to $33 million for the quarter. Eye Corp. continued its
strong recovery in the fourth quarter, reporting revenue gains of
30% to $11 million and an increase of more than 400% in EBITDA.
Fourth quarter EBITDA at TVWorks in New Zealand increased by 86% to
$6 million for the quarter on a 12% gain in revenues to $30
million. RadioWorks registered similar positive momentum, with a
17% gain in EBITDA to $7 million for the quarter on an increase of
14% in radio revenues. CanWest's share of EBITDA from TV3 Ireland
increased by 59% to $2 million for the quarter. Fourth quarter
revenues from Canadian television operations declined by 5% to $131
million compared to $137 million last year. Television operations
reported a small EBITDA loss for the quarter. The Athens Olympics,
which were carried by another network, also had a detrimental
impact on revenues in August. Other highlights of the fourth
quarter and for the period following the end of the fiscal year
include the following: - CanWest received distributions from
Network TEN of A$110 million in fiscal 2004 CanWest will receive
interest on its outstanding subordinated debentures of
approximately A$39 million in December 2004 as a consequence of
TEN's June 2004 dividend distribution. TEN's first distribution of
interest and dividends for fiscal 2005, which will be based upon
its earnings from July 1, 2004 to December 31, 2004, is expected to
be received in January 2005. - In June, the Company successfully
refinanced approximately $911 million of its existing senior
secured credit facility at current favorable market terms. The
refinancing will result in annual interest cost savings of
approximately $4.5 million and extends maturity of the facilities
until August 2009. The refinancing also included a number of
amendments to financial covenants that increase the Company's
future financial flexibility. - Also in June, the Company sold its
29.9% shareholding in Ulster Television Plc. The cash proceeds of
$144 million were used to reduce bank debt. CanWest recorded a gain
on the sale of the UTV shares of approximately $52 million in the
fourth quarter. - CanWest MediaWorks (NZ) Limited completed a
successful IPO of its shares, raising $84 million (NZ$100 million),
and listed on the New Zealand Stock Exchange in July. It used the
funds raised from the share issue, together with a concurrent $173
million (NZ$200 million) bank financing and further issuance of
158.7 million shares to CanWest, to acquire all of CanWest's New
Zealand television and radio operations. CanWest continues to hold
70% of the new company. Cash proceeds received by the Company of
$257 million (NZ$300 million) were used to reduce bank debt.
CanWest recorded a gain on the transaction of $66 million in its
fourth quarter. - In October, the Company announced an exchange
offer for Hollinger Participation Trust Notes that, if successful,
will further strengthen the Company's balance sheet. - Also in
October, the Company announced the re-alignment of its Canadian and
international operations under the CanWest MediaWorks and CanWest
MediaWorks International banners. Rick Camilleri was appointed as
President of CanWest MediaWorks and Tom Strike was named President
of CanWest MediaWorks International. Several other CanWest
MediaWorks' senior executive appointments were announced in
October, including a new President for Canadian Television and
Radio, a new President for CanWest Publications and a new President
of Sales and Marketing. CanWest Announces Appointment to Board of
Directors Following the regular meeting of the Board on November 2,
the Company announced the appointment of Frank King of Calgary to
its Board of Directors. Mr. King is President and Chief Executive
Officer of Metropolitan Investment Corporation and is the former
Chairman and Chief Executive Officer of the XV Olympic Winter
Games, which were held in Calgary in 1988. Mr. King, 67, is a
Director of the Calgary Chamber of Commerce, Acclaim Energy Inc.,
Networc Health Inc., The Westaim Corporation, Agrium Inc., and
Wi-Lan Inc. and is a Trustee of Rio-Can Real Estate Investment
Trust. The Company also announced that it had accepted the
resignations of two of its non-independent directors. Leaving the
Board are Thomas C. Strike, President of CanWest MediaWorks
International and Richard C. Camilleri, President of CanWest
MediaWorks, both of whom were elected to the Board on an interim
basis in January 2004. This press release contains certain comments
or forward-looking statements that are based largely upon the
Company's current expectations and are subject to certain risks,
trends and uncertainties. These factors could cause actual future
performance to vary materially from current expectations. The
Company's financial statements are available on the corporate
website: http://www.canwestglobal.com/. CanWest Global
Communications Corp. (NYSE: CWG; TSX: CGS.SV and CGS.NV,
http://www.canwestglobal.com/) is an international media company,
and also Canada's largest media company. In addition to owning the
Global Television Network, CanWest is Canada's largest publisher of
daily newspapers, and also owns, operates and/or holds substantial
interests in conventional television, out-of-home advertising,
specialty cable channels, Web sites and radio networks in Canada,
New Zealand, Australia and Ireland. CANWEST GLOBAL COMMUNICATIONS
CORP.(1) BUSINESS SEGMENT INFORMATION (unaudited) (in thousands of
Canadian dollars) For the three months ended August 31
-------------------- 2004 2003 REVENUE Television Canada 130,590
136,946 Australia - Network TEN 99,284 90,366 New Zealand - 3 and
C4 29,682 26,426 Ireland - TV3 7,110 5,970 --------- ---------
266,666 259,708 Radio - New Zealand 21,418 18,746 Publications and
online - Canada 280,807 276,290 Outdoor - Australia 11,301 8,715
--------- --------- TOTAL COMBINED REVENUE(1) 580,192 563,459
Elimination of equity accounted affiliates(2) (110,585) (99,081)
--------- --------- TOTAL CONSOLIDATED REVENUE 469,607 464,378
--------- --------- --------- --------- OPERATING PROFIT Television
Canada (20) 9,513 Australia - Network TEN 33,054 29,511 New Zealand
- 3 and C4 5,630 3,032 Ireland - TV3 1,712 1,078 ---------
--------- 40,376 43,134 Radio - New Zealand 6,544 5,583
Publications and online - Canada 53,348 51,986 Outdoor - Australia
2,330 454 --------- --------- SEGMENT OPERATING PROFIT 102,598
101,157 Corporate expenses 6,453 6,016 Restructuring and film and
television program impairment expenses 2,445 9,169 ---------
--------- COMBINED OPERATING PROFIT (EBITDA)(1) 93,700 85,972
Elimination of equity accounted affiliates(2) (35,384) (19,649)
--------- --------- CONSOLIDATED OPERATING PROFIT (EBITDA) 58,316
66,323 --------- --------- --------- --------- (1) Segmented
results include the Company's 56.6% economic interest in Network
TEN. (2) Elimination of proportionate interest in Australia's
Network TEN and Outdoor, which are equity accounted in the
consolidated financial statements. CANWEST GLOBAL COMMUNICATIONS
CORP.(1) BUSINESS SEGMENT INFORMATION (unaudited) (in thousands of
Canadian dollars) For the year ended August 31
-------------------------------- 2004 2003 2003 Proforma(2) REVENUE
Television Canada 690,302 730,407 730,407 Australia - Network TEN
409,204 336,362 336,362 New Zealand - 3 and C4 108,236 95,055
95,055 Ireland - TV3 34,152 32,490 32,490 ---------- ----------
---------- 1,241,894 1,194,314 1,194,314 Radio - New Zealand 86,717
73,400 73,400 Publications and online - Canada 1,193,627 1,208,180
1,168,224 Outdoor - Australia 43,742 36,656 36,656 ----------
---------- ---------- TOTAL COMBINED REVENUE(1) 2,565,980 2,512,550
2,472,594 Elimination of equity accounted affiliates(3) (452,946)
(373,018) (373,018) ---------- ---------- ---------- TOTAL
CONSOLIDATED REVENUE 2,113,034 2,139,532 2,099,576 ----------
---------- ---------- ---------- ---------- ---------- OPERATING
PROFIT Television Canada 147,430 216,346 216,346 Australia -
Network TEN 145,328 106,975 106,975 New Zealand - 3 and C4 23,291
10,095 10,095 Ireland - TV3 10,591 9,729 9,729 ----------
---------- ---------- 326,640 343,145 343,145 Radio - New Zealand
27,488 20,751 20,751 Publications and online - Canada 267,343
258,496 248,391 Outdoor - Australia 8,215 2,560 2,560 ----------
---------- ---------- SEGMENT OPERATING PROFIT 629,686 624,952
614,847 Corporate expenses 27,110 23,213 23,213 Restructuring and
film and television program impairment expenses 2,445 23,305 23,305
---------- ---------- ---------- COMBINED OPERATING PROFIT
(EBITDA)(1) 600,131 578,434 568,329 Elimination of equity accounted
affiliates(3) (153,543) (99,219) (99,219) ---------- ----------
---------- CONSOLIDATED OPERATING PROFIT (EBITDA) 446,588 479,215
469,110 ---------- ---------- ---------- ---------- ----------
---------- (1) Segmented results include the Company's 56.6%
economic interest in Network TEN. (2) Proforma results exclude the
results of community newspapers sold February 14, 2003. (3)
Elimination of proportionate interest in Australia's Network TEN
and Outdoor, which are equity accounted in the consolidated
financial statements. CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands of
Canadian dollars except as otherwise noted) For the three months
ended For the year ended --------------------------
---------------------- August 31, August 31, August 31, August 31,
2004 2003 2004 2003 Revenue 469,607 464,378 2,113,034 2,139,532
Operating expenses(x) 277,409 280,043 1,124,543 1,115,849 Selling,
general and administrative expenses(x) 131,437 119,159 539,458
531,479 Restructuring expenses 2,445 (1,147) 2,445 12,989
---------- ---------- ---------- ---------- 58,316 66,323 446,588
479,215 Amortization of intangibles 4,375 4,375 17,500 17,500
Amortization of property, plant and equipment 14,826 15,917 71,179
70,688 Other amortization 1,365 1,922 5,035 7,087 ----------
---------- ---------- ---------- Operating income 37,750 44,109
352,874 383,940 Interest expense (72,822) (84,464) (310,572)
(352,966) Interest income 2,899 - 9,141 - Amortization of deferred
financing costs (2,002) (1,062) (7,864) (8,247) Interest rate swap
(losses) (100,660) (9,381) (110,860) (23,015) Foreign exchange
gains 41,338 4,477 45,104 3,918 Investment gains and losses net of
write-down 113,254 (10,591) 110,794 9,240 Dividend income - - 3,738
3,532 ---------- ---------- ---------- ---------- 19,757 (56,912)
92,355 16,402 Provision (recovery) for income taxes (22,971)
(12,770) (10,181) 2,533 ---------- ---------- ---------- ----------
Earnings before the following 42,728 (44,142) 102,536 13,869
Minority interest (478) - (478) - Interest in earnings of Network
TEN 22,724 52,250 99,889 101,339 Interest in loss of other equity
accounted affiliates (69) (297) (625) (1,332) Realized currency
translation adjustments (5,138) 229 (7,023) 922 ----------
---------- ---------- ---------- Net earnings from continuing
operations 59,767 8,040 194,299 114,798 Earnings (loss) from
discontinued operations 2,199 (52,752) (207,777) (68,710)
---------- ---------- ---------- ---------- Net earnings (loss) for
the period 61,966 (44,712) (13,478) 46,088 ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Earnings per share from continuing operations: Basic $0.34 $0.05
$1.10 $0.60 Diluted $0.34 $0.05 $1.10 $0.60 Earnings (loss) per
share: Basic $0.35 ($0.25) ($0.08) $0.22 Diluted $0.35 ($0.25)
($0.08) $0.22 (x) as amended DATASOURCE: CanWest Global
Communications Corp. CONTACT: Geoffrey Elliot, Vice President,
Corporate Affairs, Tel: (204) 956-2025, Fax: (204) 947-9841, ; John
Maguire, Chief Financial Officer, Tel: (204) 956-2025, Fax: (204)
947-9841,
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