##### 



Exhibit 2 managements discussion and analysis Managements Discussion and Analysis of the financial position and results of operations for
the fiscal year ended August 31, 2004 is prepared at October 31, 2004. This should be read in
conjunction with the Companys August 31, 2004 Annual Report and audited consolidated financial
statements and notes therein. The financial information presented herein has been prepared on the basis of Canadian generally
accepted accounting principles (GAAP). Please refer to note 23 of the consolidated financial
statements of the Company for a summary of differences between Canadian and United States (U.S.)
GAAP. All dollar amounts are in Canadian dollars unless otherwise indicated. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this report may constitute forward-looking statements and are subject to
important risks and uncertainties. The results or events predicted in these statements may differ
materially from actual results or events. Factors which could cause results or events to differ
from current expectations include, among other things: our ability to attract and retain
advertising revenues; audience acceptance of our television programs and cable networks; our
ability to recoup production costs, the availability of tax credits and the existence of
co-production treaties; our ability to compete in any of the industries in which we do business;
the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the
entertainment, information and communications industries and technological developments therein;
changes in laws or regulations or the interpretation or application of those laws and regulations;
our ability to integrate and realize anticipated benefits from our acquisitions and to effectively
manage our growth; and, changes in accounting standards. Consequently, all of the forward-looking
statements made in this report are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by us will be realized or, even if
substantially realized, that they will have the expected consequences to, or effects on, us. Unless
otherwise required by applicable securities laws, we disclaim any intention or obligation to
publicly update or revise any forward-looking statements whether as a result of new information,
events or circumstances that arise after the date thereof or otherwise. OVERVIEW Corus Entertainment Inc. (Corus or the Company) commenced operations on September 1, 1999.
On that date, pursuant to a statutory plan of arrangement, Corus was separated from Shaw
Communications Inc. (Shaw) as an independently operated, publicly traded company and assumed
ownership of Shaws radio broadcasting, specialty television, digital audio services and cable
advertising services businesses, as well as certain investments held by Shaw. Corus manages its business in three operating segments: Radio, Television and Content.
Generally, Corus financial results depend on a number of factors, including the strength of the
Canadian national economy and the local economies of Corus served markets, local and national
market competition from other broadcasting stations and other advertising media, government
regulation, market competition from other distributors of childrens animated programming and
Corus ability to continue to provide popular programming.  (a)
    RadioThe Radio segment is comprised of 50 radio stations, primarily situated in eight of the
ten largest Canadian markets by population, and in the densely populated area of Southern
Ontario. Revenues are derived from advertising aired over these stations. Corus is Canadas
leading radio operator in terms of revenues and audience reach.(b)
    TelevisionThe Television segment is composed of the following: specialty television networks YTV, W
Network (formerly WTN, Womens Television Network), Treehouse TV, Corus 80% interest in CMT
(Country Music Television), 50.5% interest in Telelatino, 50% interest in Locomotion and 40%
interest in TELETOON; Corus premium television services of Movie Central and Encore Avenue;
interests in three digital television channels; three conventional television stations; Max
Trax, a digital audio service; and Digital ADventure, a cable advertising service. Revenues
for specialty television networks and digital television channels are generated from affiliate
subscriber fees and advertising. Revenues for premium television and digital audio services are
generated from affiliate subscriber fees. Revenues for the conventional television stations and
cable advertising services are derived from advertising.




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##### 



(c)
    ContentThe Content segment consists of the production and distribution of television programs and
the branded consumer products business (formerly merchandise licensing and publishing
businesses) of Nelvana Limited which was acquired in fiscal 2001. Revenues are generated from
licensing of television programs, merchandise licensing and publishing. KEY PERFORMANCE INDICATORS The Company measures the success of its strategies using a number of key performance
indicators. These have been outlined below, including a discussion as to their relevance,
definitions, calculation methods and underlying assumptions. With the exception of revenues,
operating, general and administrative expenses and segment profit and segment profit margin, the
following key performance indicators are not measurements in accordance with Canadian or U.S.
generally accepted accounting principles (GAAP) and should not be considered as an alternative to
net income or any other measure of performance under Canadian or U.S. GAAP. Revenues Revenue is a measurement defined by Canadian and U.S. GAAP. Revenue is the inflow of
cash, receivables or other consideration arising from the sale of product and services and is net
of items such as trade or volume discounts and certain excise and sales taxes. It is the base on
which free cash flow, a key performance indicator defined below, is determined; therefore, it
measures the potential to deliver free cash flow as well as indicating the level of growth in a
competitive market place. The primary sources of revenues for the Company are outlined in the Overview section above. Corus is well diversified by revenue source with revenue streams for the year ended August 31,
2004 derived primarily from four areas: advertising (55%), subscriber fees (27%), license fees (8%)
and publishing and merchandising (7%). Operating, general and administrative expenses Consolidated operating, general and administrative expenses include amortization of program
and film rights (costs of programming intended for broadcast, from which advertising and subscriber
fee revenues are derived), amortization of film investments (costs associated with internally
produced and acquired television and film programming, from which distribution and licensing
revenues are derived), employee remuneration, regulatory license fees, cost of goods sold relating
to publishing, marketing (research and advertising costs), selling, general administration and
overhead costs. Cost of goods sold relating to publishing include the material cost of the product,
printing, freight, customs and duties and royalties to authors and illustrators based upon sales
and is included in operating, general and administrative expenses. Approximately 27% and 41% of
consolidated operating, general and administrative expenses in fiscal
2004 (2003  31% and 30%,
respectively) were composed of employee remuneration and programming and film costs, respectively. Segment profit and segment profit margin Segment profit is calculated as revenues less operating, general and administrative expenses
as reported in the Companys consolidated statements of income (loss) and retained earnings
(deficit). The Company believes this is an important measure as it allows the Company to evaluate
the operating performance of its business segments and its ability to service and/or incur debt;
therefore, it is calculated before (i) interest on long-term debt, (ii) non-cash expenses such as
depreciation, amortization, loss (gain) on sale of investments, hedge transaction loss, asset write-downs,
and goodwill and intangible impairment loss; and (iii) items not indicative of the Companys core operating
results such as restructuring charges, and other expense (income). Segment profit is also one of the measures
used by the investing community to value the Company and is included in note 16 to the consolidated financial
statements. Segment profit margin is calculated by dividing segment profit by revenues.




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##### 



Free cash flow Free cash flow is calculated as cash provided by (used in) operating activities plus (less)
cash provided by (used in) investing activities as reported in the consolidated statements of cash
flows. Free cash flow measures the Companys ability to repay debt, finance the business and pay
dividends. (thousands of Canadian dollars)
    
    2004
    
    
    2003
    
    
    2002Cash provided by (used in):Operating activities
    
    
    84,912
    
    
    
    64,622
    
    
    
    27,892Investing activities
    
    
    (32,425
    )
    
    
    (27,803
    )
    
    
    49,926Free cash flow
    
    
    52,487
    
    
    
    36,819
    
    
    
    77,818
 Net debt and adjusted net debt Net debt is calculated as long-term debt less cash and cash equivalents as reported in the
consolidated balance sheets. Adjusted net debt is calculated as net debt adjusted for the
unrealized cumulative foreign exchange gains on the Companys senior subordinated notes. Adjusted
net debt is an important measure as it reflects the principal amount of debt owing by the Company
as at a particular date. (thousands of Canadian dollars)
    
    2004
    
    
    2003Long-term debt
    
    
    529,139
    
    
    
    558,437Cash and cash equivalents
    
    
    (95,231
    )
    
    
    (43,874
    )Net debt
    
    
    433,908
    
    
    
    514,563Unrealized cumulative foreign exchange gains
    
    
    111,625
    
    
    
    84,363Adjusted net debt
    
    
    545,533
    
    
    
    598,926
 Adjusted net debt to adjusted segment profit Adjusted net debt to adjusted segment profit is calculated as adjusted net debt divided by
adjusted segment profit. Adjusted segment profit is calculated as segment profit adjusted for items
not considered being in the ordinary course of business. It is one of the key metrics used by the
investing community to measure the Companys ability to repay debt through on-going operations. (thousands of Canadian dollars except ratios)
    
    2004
    
    
    2003
    
    
    2002Adjusted net debt [numerator]
    
    
    545,533
    
    
    
    598,926
    
    
    
    641,811Adjusted segment profitSegment profit
    
    
    90,398
    
    
    
    165,312
    
    
    
    125,571Write-down of investment in film
    
    
    85,000
    
    
    
    
    
    
    
    40,000Adjusted segment profit [denominator]
    
    
    175,398
    
    
    
    165,312
    
    
    
    165,571Adjusted net debt to adjusted segment profit
    
    
    3.1
    
    
    
    3.6
    
    
    
    3.9
 SUPPLEMENTAL EARNINGS MEASURES In addition to providing earnings measures in accordance with GAAP, the Company presents
certain supplemental earnings measures and financial information. These are free cash flow, net
debt, adjusted net debt, and net debt to adjusted segment profit, which are described in the Key
Performance Indicators section, and pro forma information to assist readers in




---



##### 



understanding fiscal 2003. These measures and financial information do not have any
standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar
measures presented by other companies. Pro forma information Pro forma information (including pro forma revenues and pro forma segment profit) is provided
to assist investors in comparing results between periods after giving effect to significant
acquisitions and divestitures. In particular, results from fiscal 2002 have been adjusted to
reflect operating results of all businesses reporting in fiscal 2003 as if the businesses had been
owned for the same number of days in fiscal 2002. Pro forma information is provided on the basis of
the Companys reportable business segments (Radio, Television and Content) for revenues and segment
profit since there were acquisitions and/or dispositions in each of these divisions during fiscal
2002 or fiscal 2003. Pro forma results reconciliation The following table reconciles pro forma revenues and segment profit for the year ended August
31, 2002 to actual results as reported in the consolidated statements of income (loss) and retained
earnings (deficit) for the same period and should be read in conjunction with the preceding
comments on supplemental earnings measures: YEAR ENDED AUGUST 31, 2002(thousands of Canadian dollars)
    
    AS REPORTED
    
    
    ACQUISITIONS
    
    
    DISPOSITIONS
    
    
    PRO FORMARevenues:Radio
    
    
    211,416
    
    
    
    696
    
    
    
    (196
    )
    
    
    211,916Television
    
    
    308,529
    
    
    

    15,184
    
    
    
    (21,892
    )
    
    
    301,821Contentproduction and distribution
    
    
    99,357
    
    
    
    
    
    
    
    
    
    
    
    99,357branded consumer products
    
    
    60,558
    
    
    
    
    
    
    
    (36,356
    )
    
    
    24,202Eliminations
    
    
    (5,357
    )
    
    
    
    
    
    
    
    
    
    
    (5,357
    )674,503
    
    
    
    15,880
    
    
    
    (58,444
    )
    
    
    631,939Segment profit:(1)Radio
    
    
    52,853
    
    
    
    96
    
    
    
    140
    
    
    
    53,089Television
    
    
    99,061
    
    
    
    2,232
    
    
    
    (5,029
    )
    
    
    96,264Contentproduction and distribution
    
    
    (28,797
    )
    
    
    
    
    
    
    
    
    
    
    (28,797
    )branded consumer products
    
    
    7,843
    
    
    
    
    
    
    
    (3,291
    )
    
    
    4,552Corporate
    
    
    (4,750
    )
    
    
    
    
    
    
    
    
    
    
    (4,750
    )Eliminations
    
    
    (639
    )
    
    
    
    
    
    
    
    
    
    
    (639
    )125,571
    
    
    
    2,328
    
    
    
    (8,180
    )
    
    
    119,719




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##### 



ANNUAL SELECTED FINANCIAL INFORMATION The following table presents summary financial information for Corus for each of the listed
years ended August 31: (millions of Canadian dollars except percentages and per share amounts)
    
    
    
    
    
    
    
    
    
    
    
    
    
    % INCREASE (DECREASE)2004
    
    
    2003OVER
    
    
    OVER2004
    
    
    2003
    
    
    2002
    
    
    2003
    
    
    2002Revenues
    
    
    666.8
    
    
    
    643.9
    
    
    
    674.5
    
    
    
    3.6
    
    
    
    (4.6
    )Segment profit(1)
    
    
    90.4
    
    
    
    165.3
    
    
    
    125.6
    
    
    
    (45.3
    )
    
    
    31.6Net income (loss)
    
    
    (23.1
    )
    
    
    40.0
    
    
    
    (168.6
    )Earnings (loss) per shareBasic and diluted
    
    
    (0.54
    )
    
    
    0.94
    
    
    
    (3.96
    )Total assets
    
    
    1,896.9
    
    
    
    1,940.6
    
    
    
    1,940.0Total long-term financial liabilities
    
    
    690.9
    
    
    
    693.5
    
    
    
    731.3Cash dividends declared per shareClass A Voting
    
    
    0.04
    
    
    
    
    
    
    
    Class B Non-Voting
    
    
    0.05
    
    
    
    
    
    
    
    




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##### 



Revenues from operations increased by
4% to $667 million in 2004.Segment profit decreased by 45% to
$90.4 million in 2004 as a result of a
non-cash write-down of film investments
of $85 million in the third quarter.Segment profit margins were 14% in
2004 compared to 26% in 2003.The specialty television networks delivered double-digit segment profit growth
in 2004.Ontario and Quebec Radio outperform
market growth in 2004.2004
    
    Positive cash delivered from Content on
a reduced production slate.

In the first quarter, two strategic deals
for its new Home Entertainment department at Nelvana were announced with
U.S.-based distributor, FUNimation,
acquiring the rights to release 44 back-
catalog titles and Maverick in the U.K.
to market 33 Nelvana library titles, plus
options on new releases.

Non-cash negative impact of $0.42/share
was recognized for changes in Ontario
tax rates in the first quarter.
    
    Free cash flow of $52 million, up 43%
from August 31, 2003.

Adjusted net debt reduced to $546
million at August 31, 2004 from $599
million at August 31, 2003.

Adjusted net debt to adjusted segment
profit target achieved at 3.1 times.



Corus commences payment of semi-
annual dividends for holders of its Class
A and Class B shares of $0.02 and
$0.025 respectively on December 31,
2003 and June 30, 2004.FISCAL HIGHLIGHTS
    
    OPERATIONS
    
    FINANCIAL
    
    REGULATORY2003
    
    Revenue from operations decreased by
5% to $644 million in 2003.

Segment profit increased by 32% to $165
million in 2003.

Segment profit margins were 26% in
2003 compared to 19% in 2002.

Television enjoyed spectacular ratings
growth in the Adult 2554 demographic
with W Network growing by 46%, CMT
by 50% and YTV by 29%. The sales team
capitalized on the strong W Network
ratings and grew advertising revenues
over 35% on a pro forma basis.
    
    Free cash flow of $37 million, exceeding
guidance.

Adjusted net debt reduced to $599
million at August 31, 2003 from $642
million at August 31, 2002.

Adjusted net debt to adjusted segment
profit reduced to 3.6 times.
    
    On March 29, 2003, The Copyright Board
of Canada issued its decision on a
proposal by the Canadian Musical
Reproduction Rights Agency (CMRRA)
and the Société du droit de reproduction
des auteurs, and compositeurs et
éditeurs au Canada (SODRAC) for tariffs
on the reproduction of musical works by
commercial radio stations. The decision
requires licensees to commit up to 0.8%
of revenues, retroactive to 2001, to be
paid in royalties.Content made great progress against
its strategic objectives during the year.
The division was cash flow positive as
a result of the reduction in slate size,
aggressive collection of tax credits and
various cost cutting initiatives. The
success of Beybladeadded not only
to the cash position but also enabled
Content to generate approximately
40% of their revenues from branded
consumer products.Radio remained the Canadian leader
in daily reach, revenues, and share of
tuning with a market share of 29% in
terms of reach, 26% ahead of the next
closest competitor.




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##### 



RESULTS OF OPERATIONS The following table presents summary financial information for Corus operating business
segments and a reconciliation of net income (loss) to segment profit for each of the listed years
ended August 31: % INCREASE DECREASE(millions of Canadian dollars except
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2004 OVER
    
    
    2003 OVERpercentages and per share amounts)
    
    2004
    
    
    %(2)
    
    
    2003
    
    
    %(2)
    
    
    2002
    
    
    %(2)
    
    
    2003
    
    
    2002RevenuesRadio
    
    
    227.9
    
    
    
    34.2
    
    
    
    226.0
    
    
    
    35.1
    
    
    
    211.4
    
    
    
    31.3
    
    
    
    0.8
    
    
    
    6.9Television
    
    
    332.3
    
    
    
    49.8
    
    
    
    306.9
    
    
    
    47.7
    
    
    
    308.5
    
    
    
    45.7
    
    
    
    8.3
    
    
    
    (0.5
    )Content
    
    
    112.6
    
    
    
    16.9
    
    
    
    116.3
    
    
    
    18.0
    
    
    
    159.9
    
    
    
    23.7
    
    
    
    (3.2
    )
    
    
    (27.3
    )Eliminations
    
    
    (6.0
    )
    
    
    (0.9
    )
    
    
    (5.3
    )
    
    
    (0.8
    )
    
    
    (5.3
    )
    
    
    (0.7
    )
    
    
    
    
    
    
    666.8
    
    
    
    100.0
    
    
    
    643.9
    
    
    
    100.0
    
    
    
    674.5
    
    
    
    100.0
    
    
    
    3.6
    
    
    
    (4.6
    )Operating, general and
administrative expensesRadio
    
    
    167.9
    
    
    
    73.7
    
    
    
    167.9
    
    
    
    74.3
    
    
    
    158.5
    
    
    
    75.0
    
    
    
    
    
    
    
    5.9Television
    
    
    207.2
    
    
    
    62.4
    
    
    
    193.5
    
    
    
    63.0
    
    
    
    209.4
    
    
    
    67.9
    
    
    
    7.1
    
    
    
    (7.6
    )Content
    
    
    196.3
    
    
    
    174.3
    
    
    
    113.1
    
    
    
    97.2
    
    
    
    180.9
    
    
    
    113.1
    
    
    
    73.6
    
    
    
    (37.5
    )Corporate
    
    
    11.0
    
    
    
    1.6
    
    
    
    8.8
    
    
    
    1.4
    
    
    
    4.8
    
    
    
    0.7
    
    
    
    25.0
    
    
    
    83.3Eliminations
    
    
    (6.0
    )
    
    
    (0.9
    )
    
    
    (4.7
    )
    
    
    (0.7
    )
    
    
    (4.7
    )
    
    
    (0.7
    )
    
    
    
    
    
    
    576.4
    
    
    
    86.4
    
    
    
    478.6
    
    
    
    74.3
    
    
    
    548.9
    
    
    
    81.4
    
    
    
    20.4
    
    
    
    (12.8
    )Segment profit(1)Radio
    
    
    60.0
    
    
    
    26.3
    
    
    
    58.1
    
    
    
    25.7
    
    
    
    52.9
    
    
    
    25.0
    
    
    
    3.3
    
    
    
    9.8Television
    
    
    125.1
    
    
    
    37.6
    
    
    
    113.4
    
    
    
    37.0
    
    
    
    99.1
    
    
    
    32.1
    
    
    
    10.3
    
    
    
    14.4Content
    
    
    (83.7
    )
    
    
    (74.3
    )
    
    
    3.2
    
    
    
    2.8
    
    
    
    (21.0
    )
    
    
    (13.1
    )
    
    
    (2,715.6
    )
    
    
    115.2Corporate
    
    
    (11.0
    )
    
    
    (1.6
    )
    
    
    (8.8
    )
    
    
    (1.4
    )
    
    
    (4.8
    )
    
    
    (0.7
    )
    
    
    (25.0
    )
    
    
    (83.3
    )Eliminations
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.1
    )
    
    
    (0.6
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    90.4
    
    
    
    13.6
    
    
    
    165.3
    
    
    
    25.7
    
    
    
    125.6
    
    
    
    18.6
    
    
    
    (45.3
    )
    
    
    31.6Depreciation
    
    
    25.7
    
    
    
    3.9
    
    
    
    24.7
    
    
    
    3.8
    
    
    
    26.0
    
    
    
    3.9
    
    
    
    4.0
    
    
    
    (5.0
    )Amortization
    
    
    7.3
    
    
    
    1.1
    
    
    
    9.8
    
    
    
    1.5
    
    
    
    8.6
    
    
    
    1.3
    
    
    
    (25.5
    )
    
    
    14.0Interest on long-term debt
    
    
    55.3
    
    
    
    8.3
    
    
    
    61.0
    
    
    
    9.5
    
    
    
    57.7
    
    
    
    8.6
    
    
    
    (9.3
    )
    
    
    5.7Loss (gain) on sale of investments
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    (18.2
    )Other expense (income), net
    
    
    (5.0
    )
    
    
    
    
    
    
    (9.4
    )
    
    
    
    
    
    
    0.3Restructuring charges
    
    
    
    
    
    
    
    
    
    
    5.0
    
    
    
    
    
    
    
    22.1Hedge transaction loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.4Asset write-downs
    
    
    
    
    
    
    
    
    
    
    2.4
    
    
    
    
    
    
    
    15.3Goodwill and intangible
impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162.8Income (loss)
before income taxes
    
    
    7.1
    
    
    
    
    
    
    
    70.8
    
    
    
    
    
    
    
    (169.4
    )Income tax expense (recovery)
    
    
    26.9
    
    
    
    
    
    
    
    28.6
    
    
    
    
    
    
    
    (2.3
    )Income (loss) before equity
earnings from investees and
non-controlling interest
    
    
    (19.8
    )
    
    
    
    
    
    
    42.2
    
    
    
    
    
    
    
    (167.1
    )Equity earnings from investees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Non-controlling interest
    
    
    (3.3
    )
    
    
    
    
    
    
    (2.2
    )
    
    
    
    
    
    
    (1.6
    )Net income (loss) for the year
    
    
    (23.1
    )
    
    
    
    
    
    
    40.0
    
    
    
    
    
    
    
    (168.6
    )
    (1) As defined in Key Performance Indicators  -  Segment profit.
(2) Operating, general and administrative expenses and segment profit for each business segment are
expressed as a percentage of revenues for the segment. Other items are expressed as a percentage of
total revenues.




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##### 



FISCAL 2004 COMPARED TO FISCAL 2003 Revenues for fiscal 2004 were $666.8 million, up 4% from $643.9 million last year. Television
and Radio experienced increases of 8% and 1%, respectively, while Content was down 3% compared to
the prior year. Operating, general and administrative expenses were $576.4 million, up from $478.6 million in
the prior year. The fiscal 2004 results include a write-down in film investments of $85.0 million.
Excluding the write-down, operating, general and administrative expenses were up 3% from the prior
year. The increase is primarily due to increased selling costs associated with increased revenues
and higher programming costs. Segment profit for fiscal 2004 was $90.4 million, down 45% from $165.3 million last year. The
Radio division achieved segment profit of $60.0 million, an increase of 3% over the prior year. The
Television divisions segment profit of $125.1 million represents a segment profit growth of 10%.
The Content division generated a loss of $83.7 million, after earning a profit of $3.2 million in
the prior year. Segment profit margin for the year ended August 31, 2004 was 14% compared to 26% in
fiscal 2003. Radio Radio revenues for the year were $227.9 million, up 1% from the prior year. The Ontario and
Quebec regions delivered strong performances for both the quarter and year. According to the
Trans-Canada Radio Advertising by Market (TRAM) report for the year ended August 31, 2004,
advertising sales growth for Corus Ontario and Quebec regions exceeded overall market growth for
those regions. This helped to offset weaker results from the western regions as the Company made
changes to address competitive challenges in key markets. While the western region lagged behind
overall market growth for the region in the year, as indicated by the TRAM report, Corus strategy,
which included reformatting several stations, has translated into improved summer Bureau of
Broadcast Measurement ratings. Operating, general and administrative expenses for the year were $167.8 million, essentially
unchanged from the prior year. Segment profit for the year was $60.0 million, 3% higher than the
prior year. Segment profit margin for the year remained unchanged at 26%. Television Television revenues for the year were $332.3 million, up 8% over last year. Advertising and
subscriber revenues increased in the year by 13% and 5%, respectively, with Movie Central, Corus
western-based pay television service, finishing the year with 707,000 subscribers, up 7% from
August 31, 2003. Operating, general and administrative expenses for fiscal 2004 were $207.3 million, up 7% from
the prior year. Amortization of program and film rights increased as a result of increased
programming expenditures at W Network and Movie Central. Selling costs have increased in proportion
to increases in revenues, while savings have been realized in general and administrative expenses. Segment profit for the year was $125.1 million, up 10% from the prior year. Segment profit
margin was 38%, up from 37% last year. Content Content revenues for the year were $112.6 million, a decrease of 3% from the prior year. Production and distribution revenues of $62.8 million represented an 11% decrease from the
prior year. This decrease resulted from a reduced production slate, as 121 episodes and three
direct-to-video features were delivered in the year, compared to 140 episodes and two
direct-to-video features in the prior year. This decrease was offset by an increase in library
revenues, including home video sales. The branded consumer products business delivered revenues for the year of $49.9 million, up 9%
from the prior year reflecting the cyclical nature of the merchandising business. The increase was
primarily driven by the merchandising success of the Beybladebrand. Operating, general and administrative expenses for the year were $196.4 million up from $113.1
million in the prior year, reflecting a write-down of film investments of $85.0 million recorded in
the third quarter of fiscal 2004. This write-down results from a challenging library market and
foreign exchange, specifically a lower U.S. dollar, which caused the Company to lower estimates of
future revenues. Segment loss for the year was $83.7 million, down from a profit of $3.2 million last year.




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##### 



Corporate The Corporate segment results represent the incremental cost of corporate overhead in excess
of the amount allocated to the other operating divisions. Corporate overhead in fiscal 2004 was
$11.0 million, up from $8.8 million in 2003. This was a planned increase due to the Companys
decision to expense stock options, as well as the introduction of the Performance Share Units
(PSU) program in fiscal 2003. The PSU program is designed to restrict and reduce the number of
stock options issued. Payment is linked to prescribed share growth, and a stock purchase and
retention requirement. Depreciation Depreciation expense was $25.7 million, compared to $24.7 million in the same period last
year. The increase is primarily due to increased capital expenditures. Amortization Amortization expense was $7.3 million, down from $9.8 million last year. The decrease was due
to a reduced cost base as deferred pre-operating costs and radio reformatting costs became fully
amortized. Interest on long-term debt Interest expense was $55.3 million, down from $61.0 million last year primarily due to a lower
average debt balance and savings generated by a fixed-to-floating interest rate swap entered into
in the first quarter of fiscal 2004. The effective interest rate for the year was 8.6% compared to
8.7% in the prior year. Loss on sale of investments The loss on sale of investments of $1.0 million in fiscal 2003 related to the disposition of
various non-core assets. Other expense (income), net Other expense (income) for the year was income of $4.9 million, compared to income of $9.4
million in the prior year. The current year includes net derivative transaction gains of $1.0
million and foreign exchange gains of $2.2 million, while the prior year includes foreign exchange
gains of $6.6 million. Restructuring charges The restructuring charges of $5.0 million in fiscal 2003 represented primarily workforce
reductions in the Content division, reflective of the reduced level of production slated for fiscal
2003 and beyond. Income taxes Income tax expense was $26.9 million for the year on income before income taxes of $7.1
million. The first quarter was impacted by the Ontario governments decision to cancel previously
announced reductions to future tax rates and to increase current tax rates. The change in Ontario
tax rates caused an increase in the
Companys non-cash income tax expense and net future tax liability position of $17.8 million. The
third quarter was impacted by the tax benefit recognized on the write-down of film investments. The
effective tax rate for the year excluding the impact of the Ontario tax rate change and the film
investment write-down was 36.7%, in line with the statutory rate of 36.3%. Net income (loss) Net loss for fiscal 2004 was $23.1 million, down from income of $40.0 million last year. Loss
per share for the year was $0.54 basic and diluted, compared with earnings of $0.94 basic and
diluted last year. The after-tax impacts of the write-down in film investments and of the Ontario
tax rate change were a reduction of $1.41 and $0.42 per share, respectively. FISCAL 2003 COMPARED TO FISCAL 2002 Revenues for fiscal 2003 were $643.9 million, down 5% from $674.5 million in fiscal 2002. The
decrease in revenues was attributable to various business divestures in fiscal 2002 and 2003 and
the planned reduction in Nelvanas production slate. On a pro forma basis, revenues increased 2%
from $631.9 million in fiscal 2002 reflecting strong advertising revenue growth from the Radio and
Television divisions.




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##### 



Operating, general and administrative expenses were $478.6 million, down 13% from $548.9
million in fiscal 2002 primarily as a result of the $40.0 million write-down in film investment in
fiscal 2002 offset by increased variable operating expenses in fiscal 2003 associated with
increased revenues. On a pro forma basis, operating, general and administrative expenses decreased
7% from $512.2 million in fiscal 2002. Segment profit for fiscal 2003 was $165.3 million, up 32% from $125.6 million in fiscal 2002.
The Radio division achieved segment profit of $58.1 million, an increase of 10% over the prior
year. The Television divisions segment profit of $113.4 million represents a segment profit growth
of 14% over the prior year. The Content division earned segment profit of $3.2 million, after
incurring a loss of $21.0 million in the prior year. On a pro forma basis, segment profit was up
38% from $119.7 million in fiscal 2002. Television and Radio achieved pro forma segment profit
growth of 18% and 10% respectively. Segment profit margin for the year ended August 31, 2003 was
26% compared to 19% in fiscal 2002. Radio Radio revenues for fiscal 2003 were $226.0 million, up 7% from $211.4 million in fiscal 2002.
On a pro forma basis, there was no significant increase or decrease in revenues. According to the
Trans-Canada Radio Advertising by Market (TRAM) report for the year ended August 31, 2003, total
advertising sales for Corus major market radio stations exceeded overall major market growth. Operating, general and administrative expenses for fiscal 2003 were $167.9 million, up 6% from
$158.5 million in fiscal 2002 reflecting increased variable costs associated with increased
revenues and the new reproduction rights tariff established by the Copyright Board of Canada. The
tariff requires radio licensees to commit up to 0.8% of revenues to be paid in royalties with
retroactive payments to 2001. The impact to Corus in fiscal 2003 was a one-time retroactive payment
of approximately $2.0 million that was charged to operations. Segment profit was $58.1 million for fiscal 2003, up 10% from $52.9 million in fiscal 2002 (up
14% excluding the onetime retroactive payment of the new reproduction rights tariff). Segment
profit margin was 26% in fiscal 2003, compared to 25% in fiscal 2002. Television Television revenues for fiscal 2003 were $306.9 million, down from $308.5 million in fiscal
2002. Fiscal 2003 results reflect the operations of W Network for a full year but do not reflect
the operations of Viewers Choice which was disposed of in fiscal 2002. On a pro forma basis,
revenues were up 2% from $301.8 million in fiscal 2002. The Television division enjoyed impressive
audience growth in fiscal 2003.
The analog specialty television services, YTV, W Network and CMT, posted a 40% increase in the
important Adult 25  54 demographic over the previous year, outpacing the industry trend.
Advertising revenues were up 9% (or 5% for the year on a pro forma basis). The majority of the
advertising revenue gain came from the strong performance at W Network which bettered pro forma
prior year by 36%. Subscriber revenues were flat over the prior year on a pro forma basis. Despite
premium subscriber declines in Spring/Summer 2002 due to pricing activity by broadcast distribution
undertakings, Movie Central, Corus western-based pay television service, finished the year with
658,000 subscribers, up 8% from the prior year. Operating, general and administrative expenses for fiscal 2003 were $193.5 million, down 8%
from $209.4 million in fiscal 2002, reflecting primarily the disposition of Viewers Choice in
fiscal 2002. On a pro forma basis, expenses are down 6% from $205.6 million in fiscal 2002 due to
cost saving initiatives in programming and administrative expenses. Segment profit was $113.4 million for fiscal 2003, up 14% from $99.1 million for fiscal 2002.
On a pro forma basis, segment profit increased 18% from $96.3 million in the prior year. Segment
profit margin was 37% in fiscal 2003, compared to 32% in fiscal 2002. Content Content revenues were $116.3 million in fiscal 2003, down 27% from $159.9 million in fiscal
2002. Fiscal 2003 results do not reflect the operations of Klutz, the U.S. publishing business,
which was disposed of in fiscal 2002. On a pro forma basis, revenues decreased 6% from $123.6
million in the prior year. The production and distribution revenues for fiscal 2003 were $70.5
million, down 29% from the prior year reflecting lower planned production in the current year (140
episodes compared to 252 episodes in fiscal 2002).




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##### 



For the branded consumer products business, revenues for fiscal 2003 were $45.8 million, down
24% from the prior year (up 89% on a pro forma basis excluding Klutz). The tremendous growth in pro
forma revenues was primarily due to the strong merchandising sales from Beybladeand Rescue Heroes. Operating, general and administrative expenses for fiscal 2003 were $113.1 million, down 37%
from $180.9 million in the prior year. On a pro forma basis, expenses are down 23% from $147.8
million in the prior year reflecting the $40.0 million write-down in film investments in fiscal
2002 offset by a higher rate of amortization of film investments and higher cost of sales
associated with increased merchandising revenues in fiscal 2003. Segment profit for fiscal 2003 was $3.2 million, compared to a loss of $21.0 million in the
prior year (a loss of $24.2 million in the prior year on a pro forma basis). Segment profit margin
was 3% for fiscal 2003, compared to a negative margin on a pro forma basis in fiscal 2002. Corporate The Corporate segment results represent the incremental cost of corporate overhead in excess
of the amount allocated to the other operating divisions. Corporate overhead in fiscal 2003 was
$8.8 million, up from $4.8 million in 2002. This was a planned increase due to the centralization
of functional departments such as Human Resources, Communications and Business Affairs, as well as
the introduction of the Performance Share Units (PSU) program. The PSU program is designed to
restrict and reduce the number of stock options issued. Payment is linked to prescribed share
growth, and a stock purchase and retention requirement. Depreciation Depreciation expense was $24.7 million for 2003, down from $26.0 million in 2002. The decrease
was the result of various business divestitures, offset by a higher capital base in the remaining
operations. Amortization Amortization was $9.8 million for 2003, up from $8.6 million in fiscal 2002. The increase is
the result of a write-off of approximately $1.0 million of deferred financing charges related to a
credit facility that was cancelled in fiscal 2003. Interest on long-term debt Interest expense was $61.0 million, up from $57.7 million in fiscal 2002 reflecting higher
interest expense associated with a full years inclusion in fiscal 2003 of the senior subordinated
debt issued in fiscal 2002. The effective interest rate for fiscal 2003 was 8.7% compared to 7.7%
in the prior year. Loss (gain) on sale of investments The loss on sale of investments of $1.0 million in fiscal 2003 relates to the disposition of
the Companys 70% interest in the digital channel Country Canada and the sale of the Companys 100%
interest in Sound Products Limited. The prior years gain of $18.2 million resulted from the
disposal of the Companys interest in The Comedy Network, Klutz, and Viewers Choice, and the sale
of Astral Media Inc. shares. Other expense (income), net Other income for the year was $9.4 million, compared to an expense of $0.3 million in the
prior year. This increase is the result of foreign exchange gains on U.S. dollar denominated bank
debt in fiscal 2003. Restructuring charges In response to the weakened world market for film production and distribution, Corus continued
to streamline operations to ensure the Companys profitability and competitive positioning in all
divisions. Accordingly, restructuring charges of $5.0 million were recorded in the year,
representing primarily workforce reductions in the Content division. This reduced workforce is
reflective of the reduced level of production slated in fiscal 2003 and future years. The results
for fiscal 2002 included restructuring charges of $22.1 million.




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##### 



Hedge transaction loss The hedge transaction loss of $20.4 million in fiscal 2002 reflects the non-cash expense
associated with unwinding U.S. $147.0 million of cross-currency interest rate swaps. Asset write-downs Non-core assets were written down in fiscal 2003 in the amount of $2.4 million. Asset
write-downs of $15.2 million in fiscal 2002 relate primarily to the discontinuation of the
operations of Balmur Corus Music Inc., a music and television production business, and the
write-down of the Companys investments in Liberty Digital Inc. and Local Media Internet Venture to
net realizable value. Goodwill and intangible impairment loss During fiscal 2002, as a result of the adoption of the new accounting pronouncements and
annual impairment testing, Corus recorded a non-cash charge for goodwill and intangible impairment
of $162.8 million primarily in the Content division associated with the production and distribution
business. Income taxes The effective tax rate for the year ended August 31, 2003 was 40.3% compared to the statutory
rate 37.5% primarily due to the difference between tax and accounting treatment of the business
divestitures during the year. Net income (loss) Net income for the fiscal 2003 was $40.0 million, compared to a loss of $168.6 million in the
prior year. Earnings per share were $0.94 basic and diluted, compared with a loss per share of
$3.96 basic and diluted in fiscal 2002. QUARTERLY CONSOLIDATED FINANCIAL INFORMATION The following table sets forth certain unaudited data from the consolidated statements of
income (loss) and retained earnings (deficit) for each of the eight most recent quarters ended
August 31, 2004. The information has been derived from the Companys unaudited consolidated
financial statements that, in managements opinion, have been prepared on a basis consistent with
the audited consolidated financial statements contained elsewhere in this report. SEGMENT
    
    
    NET INCOME
    
    
    EARNINGS (LOSS) PER SHARE(thousands of Canadian dollars)
    
    
    
    REVENUES
    
    
    PROFIT (1)
    
    
    (LOSS)
    
    
    BASIC
    
    
    DILUTED2004      4th Qtr
    
    
    
    $
    162,959
    
    
    
    42,837
    
    
    
    14,018
    
    
    $
    0.33
    
    
    $
    0.333rd Qtr
    
    
    
    
    163,864
    
    
    
    (43,777
    )
    
    
    (51,160
    )
    
    
    (1.20
    )
    
    
    (1.20
    )2nd Qtr
    
    
    
    
    155,019
    
    
    
    34,069
    
    
    
    8,305
    
    
    
    0.19
    
    
    
    0.191st Qtr
    
    
    
    
    184,962
    
    
    
    57,269
    
    
    
    5,700
    
    
    
    0.13
    
    
    
    0.132003     4th Qtr
    
    
    
    $
    175,138
    
    
    
    41,737
    
    
    
    12,432
    
    
    $
    0.29
    
    
    $
    0.293rd Qtr
    
    
    
    
    155,296
    
    
    
    44,186
    
    
    
    12,265
    
    
    
    0.29
    
    
    
    0.292nd Qtr
    
    
    
    
    147,542
    
    
    
    31,431
    
    
    
    7,028
    
    
    
    0.16
    
    
    
    0.161st Qtr
    
    
    
    
    165,942
    
    
    
    47,958
    
    
    
    8,296
    
    
    
    0.19
    
    
    
    0.19
     Seasonal fluctuations Corus operating results are subject to seasonal fluctuations that can significantly impact
quarter-to-quarter operating results. Accordingly, one quarters operating results are not
necessarily indicative of what a subsequent quarters operating results will be. Our broadcasting
businesses (Radio and Television) and our Content business each has unique seasonal aspects.




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For our broadcasting businesses, operating results are dependent on general advertising and
retail cycles associated with consumer spending activity. Accordingly, operating results for the
first quarter tend to be the strongest, reflecting pre-Christmas advertising activity and the
second quarter tends to be the weakest, consistent with lower consumer spending in winter months. For our Content business, operating results are dependent on the timing and number of
television programs made available for delivery in the period, as well as timing of merchandising
royalties received, none of which can be predicted with certainty. Consequently, Contents
operating results may fluctuate significantly from quarter to quarter. As well, cash flows may also
fluctuate and are not necessarily closely related to revenue recognition. Significant items causing variations in quarterly results  
    First quarter fiscal 2004 was impacted by the Ontario governments decision to cancel
previously announced reductions to future tax rates and to increase current tax rates.
This change in Ontario tax rates caused an increase in the Companys non-cash income tax
expense and net future tax liability position of $17.8 million ($0.42/share).
    Third quarter fiscal 2004 was impacted by a non-cash, after-tax write-down in film
investments of $60.3 million ($1.41/share) resulting from the lowering of estimates of
future revenues as a result of a challenging library market and lower U.S. dollar. The
pre-tax write-down of $85.0 million was recorded in operating, general and administrative
expenses. FOURTH QUARTER Revenues for the fourth quarter were $163.0 million, down 7% from $175.1 million last year.
Radio revenues for the fourth quarter were $58.3 million, up 1% from the corresponding period last
year. The Ontario and Quebec regions delivered strong performances for the quarter, while a
competitive environment continues to challenge the western region. Television revenues for the
fourth quarter were $78.3 million, up 4% over the corresponding period last year. Continued growth
in advertising revenue was achieved, up 2% for the quarter, while strong subscriber revenue growth
of 5% over the prior year was also experienced. Content revenues for the fourth quarter were $27.7
million, a decrease of 37% from the prior year. Production and distribution revenues for the fourth
quarter were $21.6 million, down 18% from the prior year. For the fourth quarter, 33 episodes were
delivered compared to 31 in the same period last year. The branded consumer products business
delivered revenues for the fourth quarter of $6.1 million, down 66% from the prior year. This
decrease reflects the cyclical nature of the merchandising business, in particular the Beyblade
property, which was down in the quarter compared to last year when August sales were driven by the
international launch of Beyblade. Operating, general and administrative expenses for the fourth quarter were $120.1 million,
down 10% from $133.4 million in the prior year. Radio expenses for the fourth quarter were $42.1
million, up 3% from the corresponding period last year, as the current years quarter included
costs relating to reformatting stations in several markets. Television expenses were $49.5 million
for the fourth quarter, up 8% from the prior year. This was largely attributed to increases in
programming expenditures as Television ramped up for the important fall launch. Content expenses
for the quarter were $27.6 million, down 39% from the prior year. The decrease is primarily due to
lower film amortization expense and merchandising participation accruals resulting from lower
revenues. Corporate overhead for the fourth quarter was $2.6 million, down from $3.0 million in the
prior year. Depreciation expense for the fourth quarter was $6.4 million, a decrease of $0.3 million from
last year. This change reflects the timing of capital expenditures. Amortization expense for the
fourth quarter was $1.3 million, down from $2.1 million last year. The decrease is a result of
deferred start-up and reformatting costs becoming fully amortized. Interest expense for the fourth
quarter was $13.6 million, down from $14.2 million last year primarily due to savings generated by
a fixed-to-floating interest rate swap. The effective interest rate for the fourth quarter was 8.5%
compared to 8.8% in the prior year. Other expense (income) for the fourth quarter was income of
$3.2 million, compared to an expense of $1.5 million in the prior year. The current years quarter
includes a derivative transaction gain of $2.5 million and foreign exchange gains of $1.4 million,
while the prior years quarter includes foreign exchange losses of $2.4 million. The effective tax
rate for the fourth quarter was 39.2%, compared to the statutory rate of 36.3%. Net income for the fourth quarter was $14.0 million, up from income of $12.4 million last
year. Earnings per share for the fourth quarter was $0.33 basic and diluted, compared with earnings
per share of $0.29 basic and diluted last year.




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##### 



RISKS AND UNCERTAINTIES Impact of regulation on Corus results of operations Radio and Television Corus Radio and Television business activities are regulated by the Canadian Radio-television
and Telecommunications Commission (CRTC) under the Broadcasting Actand, accordingly, Corus
results of operations may be adversely affected by changes in regulations, policies and decisions
by the CRTC. The CRTC, among other things, issues licenses to operate radio and television stations
and regulates the rates Corus may charge for its specialty television services if such services are
distributed as part of the basic service by a cable distributor. Corus radio stations must also
meet technical operating requirements under the Radiocommunication Actand regulations promulgated
under the Broadcasting Act. Changes in the regulation of Corus business activities, including
decisions by the CRTC affecting Corus operations (such as the granting or renewal of licenses,
decisions as to the subscribers fees Corus may charge its customers, or the granting of additional
distribution, broadcasting or programming licenses to competitors in Corus markets) or changes in
interpretations of existing regulations by courts or the CRTC, could materially adversely affect
Corus business and results of operations. In addition, in order to maintain eligibility under the Broadcasting Actand the
Radiocommunication Act, there are limitations on the ownership by non-Canadians of Corus Class A
Voting Shares. Under certain circumstances, Corus Board of Directors may refuse to issue or
register the transfer of Corus Class A Voting Shares to any person that is a non-Canadian or may
sell the Corus Class A Voting Shares of a non-Canadian as if it were the owner of such Corus Class
A Voting Shares. Corus radio, conventional television, specialty television, pay television, and digital audio
undertakings rely upon licenses under the Copyright Act(Canada) in order to make use of the music
component of the programming distributed by these undertakings. Under these licenses, Corus is
required to pay royalties established by the Copyright Board of Canada pursuant to the requirements
of the Copyright Act(Canada) to collecting societies which represent the copyright owners in such
music component. These royalties are paid by these undertakings on a monthly basis in the normal
course of their business. The levels of the royalties payable by Corus are subject to change upon application by the
collecting societies and approval by the Copyright Board of Canada. The Government of Canada may,
from time to time, make amendments to the Copyright Act(Canada) to implement Canadas
international treaty obligations and for other obligations and for other purposes. Any such
amendments could result in Corus broadcasting undertakings being required to pay additional
royalties for these licenses. Content Corus licenses a significant portion of its programming to Canadian conventional television
stations, specialty and premium television networks, which are required by the CRTC to devote a
certain portion of their programming schedules to Canadian productions. In addition to these
scheduling requirements, the CRTC generally requires Canadian specialty services to devote a
certain amount of their revenues to certified Canadian programming. There can be no assurance that
such policies will not be eliminated or scaled back, thereby reducing the advantages that they
currently provide to Corus as a supplier of such programs. Also, there can be no assurance that our
programming will continue to qualify as certified Canadian programming. If Corus programming fails
to so qualify, Canadian broadcasters would not be able to use the programs to meet their Canadian
programming obligations and, as a result, license fees paid to Corus by Canadian broadcasters would
not reflect the current premium paid for certified Canadian programs and Corus would not qualify
for certain Canadian tax credits and industry incentives. Canadian Heritage, the Canadian ministry
that oversees the tax credits, has conducted a review of the definition of Canadian content, as it
applies to film and television production, but no formal changes to the definition have been
announced. Competition Corus encounters aggressive competition in all areas of its business. Corus failure to
compete in these areas could materially adversely affect Corus results of operations.




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##### 



The television production industry, specialty and pay television channel broadcasting and
radio broadcasting have always involved a substantial degree of risk. There can be no assurance of
the economic success of radio stations, television programs or specialty television channels as
revenue derived depends on audience acceptance of other competing programs released into, or
channels existing in, the market place at or near the same time, the availability of alternative
forms of entertainment and leisure time activities, general economic conditions, public tastes
generally and other intangible factors. All of these factors could change rapidly and many are
beyond our control. The lack of audience acceptance for our radio stations, television programs,
specialty and pay television channels would have an adverse impact on our businesses, results of
operations, prospects and financial condition. Radio The financial success of each of Corus radio stations is dependent principally upon its share
of the overall advertising revenue within its geographic market, its promotional and other expenses
incurred to obtain the revenue and the economic strength of its geographic market. Corus radio
advertising revenues are, in turn, highly dependent upon audience share. Other stations may change
programming formats to compete directly with Corus stations for listeners and advertisers or
launch aggressive promotional campaigns in support of already existing competitive formats. If a
competitor, particularly one with substantial financial resources, were to attempt to compete in
either of these fashions, ratings at Corus affected station could be negatively impacted,
resulting in lower net revenues. Radio broadcasting is also subject to competition from electronic and print media. Potential
advertisers can substitute advertising through broadcast television, cable television systems
(which can offer concurrent exposure on a number of cable networks to enlarge the potential
audience), daily, weekly, and free-distribution newspapers, other print media, direct mail, and
online computer services for radio advertising. Competing media commonly target the customers of
their competitors, and advertisers regularly shift dollars from radio to these competing media and
vice versa. Accordingly, there can be no assurance that any of Corus radio stations will be able
to maintain or increase their current audience share and advertising revenue share. Television The financial success of Corus specialty television business depends on obtaining revenue
from advertising as well as from subscription fees. Numerous broadcast and specialty television
networks compete with Corus for advertising revenue, and a failure by Corus to obtain its necessary
share of such revenue could materially adversely affect Corus results of operations. Corus
services also compete with a number of foreign programming services such as A&E and CNN which have
been authorized for distribution in Canada by the CRTC. Moreover, increasingly Corus specialty,
pay and conventional television services are competing with alternative forms of entertainment
which are not regulated by the CRTC, such as the Internet and video and DVD rentals. In addition,
competition among specialty television services in Canada is highly dependent upon the offering of
prices, marketing and advertising support and other incentives to cable operators and other
distributors for carriage so as to favorably position and package the services to subscribers. As
well, the CRTC has licensed a number of specialty services for digital distribution which increases
competition. Any failure by Corus to compete effectively in the area of specialty television
services could materially adversely affect Corus results of operations. Corus pay television services are exclusive providers of premium movies and series, as well as
classical movie offerings to Western Canadian subscribers. These services compete with pay-per-view
movie offerings as well as Video-on-Demand offerings. Content The production and distribution of childrens television, books and other media content is
very competitive. There are numerous suppliers of media content, including vertically integrated
major motion picture studios, television networks, independent television production companies and
childrens book publishers around the world. Many of these competitors are significantly larger
than Corus and have substantially greater resources, including easier access to capital, than Corus
has. Corus competes with other television and motion picture production companies for ideas and
storylines created by third parties as well as for actors, directors and other personnel required
for a production.




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##### 



Further, vertical integration of the television broadcast industry and the creation and
expansion of new networks, which create a substantial portion of their own programming, have
decreased the number of available time slots for programs produced by third party production
companies. There can be no assurances that Corus will be able to compete successfully in the future
or that Corus will continue to produce or acquire rights to additional successful programming or
enter into agreements for the financing, production, distribution or licensing of programming on
terms favorable to us. There continues to be intense competition for the most attractive time slots
offered by those services. There can be no assurances that Corus will be able to increase or
maintain our penetration of broadcast schedules. Risks associated with production of film and television programs Each production is an individual artistic work and its commercial success is determined
primarily by audience acceptance, which cannot be accurately predicted. The success of a program is
also dependent on the type and extent of promotion and marketing activities, the quality and
acceptance of other competing programs, general economic conditions and other factors, all of which
can change rapidly and many of which are beyond Corus control. Production of film and television programs require a significant amount of capital. Factors
such as labour disputes, technology changes or other disruptions affecting aspects of production
may affect Corus or its co-production partners and cause cost overruns and delay or hamper
completion of a production. Financial risks exist in productions relating to tax credits and co-production treaties. The
aggregate amount of government tax credits a project may receive can constitute a material portion
of a production budget and typically can be as much as 20% of total budgeted costs. There is no
assurance that government tax credits and industry funding assistance programs will continue to be
available at current levels or that Corus production projects will continue to qualify for them.
As well, the majority of Corus productions are co-productions involving international treaties
which allow Corus to access foreign financing and reduce production risk as well as qualify for
Canadian government tax credits. If an existing treaty between Canada and the government of one of
the current co-production partners were to be abandoned, one or more co-productions currently
underway may also need to be abandoned. Losing the ability to rely on co-productions would have a
significant adverse effect on Corus production capabilities and production financing. Results of operations for the production and distribution business for any period are
dependent on the number, timing and commercial success of television programs and feature films
delivered or made available to various media, none of which can be predicted with certainty.
Consequently, current revenues from production and distribution may fluctuate materially from
period to period and the results of any one period are not necessarily indicative of results for
future periods. Cash flows may also fluctuate and are not necessarily closely correlated with
revenue recognition. Library revenue from production and distribution can vary substantially from year to year,
both by geographic territory and by year of production. The timing of Nelvanas ability to sell
library product in certain territories will depend on the market outlook in the particular
territory and the availability of product by territory which depends on the extent and term of any
prior sale in that territory. Intellectual property rights Corus trade-marks, copyrights and other proprietary rights are important to the Companys
competitive position. In particular, the Content group must be able to protect its trade-marks,
copyrights and other proprietary rights in order to competitively produce, distribute and license
its television programs and published materials, and market its merchandise. Accordingly, Corus
devotes the Companys resources to the establishment and protection of our trade-marks, copyrights
and other proprietary rights on a worldwide basis. However, from time to time, various third
parties contest or infringe upon the Companys intellectual property rights. The Company reviews
these matters to determine what, if any, actions may be required or should be taken, including
legal action or negotiated settlement. There can be no assurance that the
Companys actions to establish and protect our trade-marks, copyrights and other proprietary rights
will be adequate to prevent imitation or unauthorized reproduction of the Companys products by
others or prevent third parties from seeking to block sales, licensing or reproduction of these
products as a violation of their trade-marks, copyrights and other proprietary rights. Moreover, there can be no assurance that others will not assert rights in, or ownership of,
the Companys trade-marks, copyrights and other proprietary rights, or that the Company will be
able to successfully resolve these conflicts. In addition, the laws of certain foreign countries
may not protect proprietary rights to the same extent as do the laws of the United States or
Canada.




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Technological developments New or alternative media technologies and business models, such as digital radio services,
satellite radio, direct-to-home satellite, wireless and wired cable television and Internet
programming and video programming, and online publications have recently begun to compete, or may
in the future compete, for programming, audiences and advertising revenues. These technologies and
business models may increase audience fragmentation, reduce the Companys ratings or have an
adverse effect on advertising revenues from local and national audiences. These or other
technologies and business models may have a material adverse effect on our business, results of
operations or financial conditions. Interest rate and foreign exchange risk The Company manages its exposure to floating interest rates and U.S. dollar foreign exchange
fluctuation through the use of interest rate and cross-currency exchange agreements or swaps. All
such agreements are used for risk management purposes only. In order to minimize the risk of
counterparty default under its swap agreements, Corus assesses the credit-worthiness of its swap
counterparties. Currently 100% of the Companys total swap portfolio is held by financial
institutions with Standard & Poors ratings (or the equivalent) ranging from A to AA-. Corus has the following financial exposures to risk in its day-to-day operations: Interest rates The Company utilizes long-term financing extensively in its capital structure which includes
banking facilities, and U.S. denominated senior subordinated notes as more fully described in note
12 to the consolidated financial statements. Interest on bank indebtedness is based on floating rates, while the Notes are fixed rate
obligations. Corus utilizes its credit facility to finance day-to-day operations. As at August 31, 2004, approximately 73% of the Companys consolidated long-term debt was
fixed with respect to interest rates. Foreign exchange A significant portion of revenues and expenses for the Content business is in currencies other
than Canadian dollars and, therefore, is subject to fluctuations in exchange rates. Approximately
13% of Corus total revenues were in foreign currencies, the majority of which were U.S. dollars.
The foreign exchange risk is mitigated as the net cash flow from operations acts as a natural hedge
against interest on unhedged U.S. denominated debt. As at August 31, 2004, approximately 94% of the
Companys long-term debt was fixed to exchange rates relative to Canadian dollars. Contingencies The Company and its subsidiaries are involved in litigation arising in the ordinary course and
conduct of its business. The Company recognizes liabilities for contingencies when a loss is
probable and capable of
being estimated. As at August 31, 2004, there were no actions, suits or proceedings pending or
against the Company or its subsidiaries which would, in managements estimation, likely be
determined in such a manner as to have a material adverse effect on the business of the Company. FINANCIAL POSITION Total assets at August 31, 2004 were $1.90 billion compared to $1.94 billion at August 31,
2003. The following discussion describes the significant changes in the consolidated balance sheets
since August 31, 2003. Current assets increased by $57.8 million. Cash and cash equivalents and future tax asset
increased by $51.4 million and $3.5 million, respectively. Accounts receivable decreased by $15.0
million. The increase in future tax asset reflects a net increase in loss carry-forwards resulting
from a tax loss utilization plan implemented in the first quarter of fiscal 2004. The reduction in
accounts receivable is primarily due to timing, and improved cash collections. Non-current assets decreased by $101.5 million. Tax credits receivable decreased by $16.3
million primarily due to tax credits collected during the period. Capital assets decreased by $7.3
million as capital expenditures of $17.4 million were offset by depreciation of $25.7 million.
Program and film rights (current and non-current) increased by $23.8 million, as accruals for
acquired rights of $128.9 million were offset by amortization of $105.5 million. Film investments
decreased by $77.7 million, as net film spending of $47.6 million was exceeded by amortization of
$142.8 million for the year. Included in film amortization is a fair value impairment write-down of
approximately $85.0 million. Deferred charges decreased by $7.3 million due to amortization.




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Current liabilities decreased by $24.0 million. Accounts payable and accrued liabilities
decreased by $12.4 million as a result of lower trade accounts payable and lower accruals for
rights holders participation. Income taxes payable decreased by $11.6 million, as income taxes paid
exceeded the current provision. Non-current liabilities increased by $3.7 million. Long-term debt decreased by $29.3 million,
resulting from foreign exchange translation adjustments. Deferred credits increased by $17.4
million, as payments of $11.5 million for public benefits related to acquisitions were offset by
$27.3 million in deferred foreign exchange gains for the year and other working capital
adjustments. Net future tax liability (including current asset) remained essentially unchanged from
the prior year. Other long-term liabilities increased as a result of accruals for long-term radio
broadcast rights acquisitions. Share capital increased by $2.4 million due primarily to the exercise of employee stock
options. Contributed surplus increased by $1.3 million as a result of expensing stock-based
compensation for the year. Cumulative translation adjustment increased by $1.9 million due to the
effect of exchange rate fluctuation on the translation of the net assets of self-sustaining foreign
operations. LIQUIDITY AND CAPITAL RESOURCES Cash flows Overall, the Companys cash and cash equivalents position increased by $51.4 million in the
year ended August 31, 2004. Cash provided by operating activities for the year was $84.9 million,
compared to $64.6 million in the prior year. This improvement was the result of an increase in cash
flow derived from operations and reduced expenditures related to film investments, offset by
increased expenditures for program rights and increased investment in non-cash working capital.
Cash used in investing activities was $32.4 million for the year, compared to $27.8 million in the
prior year. The increase in cash used reflects an increase in capital expenditures and a decrease
in proceeds from business divestitures. Cash used in financing activities in the year was $1.1
million, compared to $19.6 million in the prior year. This change
reflects the fact that the Company has not increased its bank loans balance in the year. The
Company paid $2.1 million in dividends to shareholders in fiscal 2004. Liquidity In fiscal 2002, Corus issued U.S.$375.0 million aggregate principal amount of 8.75% Senior
Subordinated Notes (the Notes) due 2012 at a price of 99.186% of their aggregate principal
amount. Cross-currency interest rate agreements have fixed the effective interest rates on the
Notes at 9.33% and the exchange rate applicable to the principal portion of the debt has been fixed
at Cdn.$1.6107 or Cdn.$604.0 million. In addition, the Company has available a $25.0 million revolving operating loan facility and a
senior revolving credit facility, which at August 31, 2004 amounted to $195.0 million, all of which
is revolving on a reducing basis until repayment on August 31, 2006. At August 31, 2004, the loan
facility and $158.2 million of the credit facility was not utilized. Interest rates on these bank
loans fluctuate with Canadian bankers acceptances and LIBOR and averaged 3.9% for fiscal 2004 and
4.8% for fiscal 2003. These borrowings combined with cash generated from operations have been the primary funding
sources for operations over the last several years. The nature of the Companys business is such
that significant expenditures are required to acquire program rights for the Television business
and to produce and acquire film assets for the Content business. For the past three years, these
expenditures have been financed from cash generated from operations. The Company has no significant
commitments related to the acquisition of capital assets. Over the past three fiscal years, the
Company has reduced its investment in non-cash working capital. At August 31, 2004, the Company has a cash balance of $95.2 million, and a working capital
balance of $140.2 million. Management believes that cash flow from operations and existing credit
facilities will provide the Company with sufficient financial resources to fund its operations for
fiscal 2005.




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Net debt and adjusted net debt At August 31, 2004, net debt was $433.9 million, down from $514.6 million at August 31, 2003.
Adjusted net debt at August 31, 2004 was $545.5 million, down from $599.0 million at August 31,
2003. Off-balance sheet arrangements and derivative financial instruments The Company has guarantees and general indemnification commitments to counterparties.
Historically, the Company has not made any significant payments with respect to these guarantees
and indemnification provisions, and management believes that the risk of loss is low. The Company uses derivative financial instruments to manage risks from fluctuations in
exchange and interest rates. These instruments include cross-currency and interest rate swap
agreements. All such instruments are only used for risk management purposes. The net receipts or
payments arising from financial instruments relating to the management of interest rate risks are
recognized in interest expense over the term of the instrument. Foreign exchange gains or losses
arising on cross-currency agreements used to hedge U.S. dollar denominated debt are offset against
the corresponding exchange gains or losses on the hedged item. The carrying value of derivative
financial instruments that do not qualify for hedge accounting is adjusted to reflect their current
market value. At August 31, 2004, the consolidated balance sheet includes a fair value liability of $3.3
million related to an interest rate swap agreement. Net derivative transaction gains of $1.0
million are included in Other expense (income), net in the consolidated statements of income
(loss) and retained earnings (deficit) for the year ended August 31, 2004. As at August 31, 2004, the minority shareholders of Telelatino Network Inc. had the right,
through a put option, to require the Company to purchase their shareholdings. This put option
expired November 16, 2004 without being exercised. Contractual commitments Corus has the following
contractual commitments: LESS THAN
    
    
    ONE TO
    
    
    FOUR TO
    
    
    AFTER(thousands of Canadian dollars)
    
    TOTAL
    
    
    ONE YEAR
    
    
    THREE YEARS
    
    
    FIVE YEARS
    
    
    FIVE YEARSLong-term debt
    
    
    640,764
    
    
    
    
    
    
    
    36,764
    
    
    
    
    
    
    
    604,000Operating leases
    
    
    99,046
    
    
    
    19,449
    
    
    
    29,229
    
    
    
    19,991
    
    
    
    30,377Other long-term obligations
    
    
    23,967
    
    
    
    3,693
    
    
    
    5,783
    
    
    
    5,076
    
    
    
    9,415
 TRANSACTIONS WITH RELATED PARTIES The Company has transacted business in the normal course of business with entities which are
subject to common voting control and with entities over which the Company exercises significant
influence. These transactions are measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties and having normal trade terms. During the year, the Company received cable and satellite service subscriber, programming and
advertising fees of $92.3 million [2003  $89.3 million] and production and distribution revenues
of $3.1 million [2003  $2.1 million] from related parties. In addition, the Company paid cable and
satellite system distribution access fees of $4.5 million [2003 $3.6 million] and administrative
and other fees of $1.5 million [2003  $1.1 million] to related parties. As at August 31, 2004, the
Company had $9.9 million [2003  $20.2 million] receivable from related parties. The Company provided related parties with radio and television spots in return for television
advertising. No monetary consideration was exchanged for these transactions and no amounts were
recorded in the accounts. Through an investment in a partnership, Corus and a related party each had an indirect holding
in certain assets, primarily consisting of a real estate property. In 2004, the related partys
interest in the assets was transferred to Corus in exchange for cash of $0.3 million and a
promissory note of $1.1 million. As part of the transaction, Corus and the related party entered
into an agreement effective August 26, 2004 for the related partys use of the remaining assets.
These transactions were measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties. The parties have agreed that the exchange amounts
represent fair value consideration for the transactions.




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Certain officers of the Company are currently indebted to the Company in connection with
the purchase of Class B Non-Voting Shares, Notes and relocation housing loans. The loans granted by
the Company do not bear interest. The aggregate amount of such indebtedness as at August 31, 2004
was $6.8 million. PENDING TRANSACTIONS On March 30, 2004, Corus and Astral Media Inc. announced their intention to exchange a number
of radio assets in the province of Quebec, subject to regulatory approval. The transaction will
bring Corus radio stations total to 53, with presence in nine of Canadas top 10 markets and 15
radio stations in the province of Quebec. As this is a non-monetary transaction at carrying value,
there is no gain or loss anticipated on approval of this transaction. As at October 31, 2004, the
Company is still awaiting regulatory approval for this transaction. IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2004 Hedging relationships In December 2001, the CICA issued Accounting Guideline-13, Hedging Relationships (AcG-13).
AcG-13 establishes new criteria for hedge accounting and applies to all hedging relationships in
effect for the Companys fiscal year commencing on September 1, 2003 under Canadian GAAP. To
qualify for hedge accounting, consistent with U.S. GAAP, the hedging relationship must be
appropriately documented at the inception of the hedge and there must be reasonable assurance, both
at the inception and throughout the term of the hedge, that the hedging relationship will be
effective. Effectiveness requires a high correlation of changes in fair values or cash flows
between the hedged item and the hedge. In June 2002, the Emerging Issues Committee issued EIC-128,
Accounting for Trading, Speculative or Non-Hedging Derivative Financial Instruments, which
establishes that a derivative financial instrument that does not qualify for hedge accounting under
AcG-13 should be recognized on the balance sheet at fair value, with changes to fair value
recognized in net income. The Company has applied the recommendations to its hedging relationships,
and those that qualify continue to be accounted for using hedge accounting. The adoption of this
standard had no impact on the Companys results of operations or financial position. Stock-based compensation and other stock-based payments In October 2003, the CICA issued amended Handbook Section 3870, Stock-based Compensation and
Other Stock-based Payments, which requires that equity instruments awarded to employees be
measured and expensed, thus eliminating the existing provisions which permit a company to only
disclose the fair value. Fair value of the equity instruments would be used to measure compensation
expense. As well, the transitional provisions that apply when a company adopts the fair value
method have been modified to harmonize with U.S. standards, whereby alternative methods of
transition to the fair value method are now permitted. The transitional provisions include both
retroactive and prospective alternatives. However, the prospective method is only available to
enterprises that elect to apply the fair-value based method of accounting for fiscal years
beginning before January 1, 2004. The Company has elected to adopt the prospective approach for its
fiscal year commencing September 1, 2003, and as a result has recorded the $1.3 million in
compensation costs associated with stock options awarded to employees after August 31, 2003 in its
operating, general and administrative expenses for the year ended August 31, 2004. Impairment of long-lived assets In April 2003, the CICA issued Handbook Section 3063, Impairment of Long-lived Assets,
thereby replacing the write-down provisions of Section 3061, Property, Plant and Equipment. This
new Section established standards for the recognition, measurement and disclosure of the impairment
of long-lived assets by profit-oriented enterprises and harmonizes Canadian requirements with the
U.S. impairment provisions of FASB Statement No. 144, Accounting for the Impairment or Disposal of
Long-lived Assets.




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Under the new Section, an impairment loss is measured as the amount by which the long-lived
assets carrying amount exceeds its fair value. This represents a significant change to Canadian
GAAP, which previously measured the amount of the impairment as the difference between the
long-lived assets carrying value and its net recoverable amount (i.e. undiscounted cash flows
plus residual value). The Company has adopted the new Section effective September 1, 2003 and the
application did not have a material impact on the Companys consolidated financial statements. RECENT ACCOUNTING PRONOUNCEMENTS Variable interest entities The CICA has issued a draft guideline on accounting for variable interest entities titled
Accounting Guideline-15, Consolidation of Variable Interest Entities (AcG-15), which proposes
amendments to the guideline to correspond with corresponding guidance in the United States. The
accounting guideline, effective for periods beginning on or after November 1, 2004, provides
guidance on consolidation and disclosure of variable interest entities. The Company will continue
its assessment of the impact of the
accounting guideline and the expected amendments. The Company does not expect a material impact on
its financial position or results of operations in fiscal 2005. GAAP hierarchy and general standards of financial statement presentation In 2005, the Company will adopt the CICA issued new Handbook Sections 1100, Generally
Accepted Accounting Principles, and 1400, General Standards of Financial Statement Presentation.
Section 1100 describes what constitutes Canadian Generally Accepted Accounting Principles (GAAP)
and its sources and provides guidance on sources to consult when selecting accounting policies and
determining appropriate disclosures when a matter is not dealt with explicitly in the primary
sources of generally accepted accounting principles, thereby re-codifying the Canadian GAAP
hierarchy. The effect of any change in accounting policy made on adopting this Section applies only
to events and transactions occurring after the date of the change and to any outstanding related
balances existing at the date of the change. Section 1400 provides general guidance on financial
statement presentation and further clarifies what constitutes fair presentation in accordance with
GAAP. The Company does not expect these recommendations to have a significant impact on its
consolidated financial statements upon adoption. Asset retirement obligations Effective 2005, the Company will adopt the CICA issued Section 3110, Asset Retirement
Obligations. This standard requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable estimate of fair
value can be made. The associated costs are capitalized as part of the carrying value of the
related asset and depreciated over its remaining useful life. Section 3110 is applicable to fiscal
years beginning on or after January 1, 2004 and must be applied retroactively with restatement of
prior periods. The application of this standard is not expected to have a significant impact on the
financial position or results of operations of the Company. CRITICAL ACCOUNTING ESTIMATES The Companys significant accounting policies are described in note 2 to the consolidated
financial statements. The preparation of consolidated financial statements in conformity with
Canadian GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues and expenses during
the reporting periods. The most significant assumptions made by management in the preparation of
the Companys consolidated financial statements include future revenue projections for investments
in film and television programs, provisions for doubtful accounts to reflect credit exposures,
valuation allowances and impairment assessments for various assets including investments in film
and television programs, capital assets, long-term investments, current and future income taxes,
goodwill and broadcast licenses. Actual results could differ from those estimates. The policies
described below are considered to be critical accounting estimates, as they require significant
estimation or judgment.




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Film investments The Company accounts for its production and distribution of film and television programs in
accordance with AICPA Statement of Position 00-2 Accounting by Producers or Distributors of Films
(SOP 00-2). SOP 00-2 requires that film and television costs of production and acquisition are
amortized using the individual film forecast method. Under this method, capitalized costs for an
individual film or television program are amortized in the proportion that current period actual
revenues bear to managements estimates of the total revenue expected to be received from such film
or television program over a period not to exceed ten years from the date of delivery. As a result,
if revenue estimates change with respect to a film or television program, the Company may be
required to write-down all or a portion of the unamortized costs of such film or television
program, therefore impacting operating, selling and administrative
expenses, and profitability. The fiscal 2004 results include a write-down of $85.0 million resulting from lower estimates
of future revenue projections. No assurance can be given that unfavorable changes to revenue
estimates will not continue to occur, which may again result in significant write-downs affecting
our results of operations and financial conditions. Broadcast licenses and goodwill The cost of acquiring media broadcasting, production/distribution and publishing businesses is
allocated to the fair value of related net identifiable tangible and intangible assets acquired.
Net identifiable intangible assets acquired consist primarily of broadcast licenses. The excess of
the cost of acquiring these businesses over the fair value of related net identifiable tangible and
intangible assets acquired is allocated to goodwill. Broadcast licenses are considered to have an indefinite life based on managements intent and
ability to renew the licenses without substantial cost and without material modification of the
existing terms and conditions of the license. No assurance can be given that the Company will be
able to renew its licenses, or that substantial cost or material modification of the existing terms
and conditions will not be incurred. Broadcast licenses and goodwill are tested for impairment annually or more frequently if
events or changes in circumstances indicate that they are impaired. The Company has selected August
31 as the date it performs its annual impairment test. The key assumptions used in the test include
forecasted segment profit and industry multiples. The fair value of the Companys intangible assets
is exposed to future adverse changes if the Company experiences declines in operating results,
significant negative industry or economic trends or if future performance is below historical
trends. Income taxes The liability method of tax allocation is used in accounting for income taxes. Under this
method, future tax assets and liabilities are determined based on differences between the financial
reporting and tax bases of assets and liabilities, and measured using the substantively enacted tax
rates and laws which are expected to be in effect when the differences are expected to reverse.
Certain assumptions are required in order to determine the provision for income taxes, including
filing positions on certain items and the realization of future tax assets. The Company is audited regularly by federal and provincial authorities in the areas of income
taxes and the remittance of sales taxes. These audits consider the timing and amount of deductions
and compliance with federal and provincial laws. To the extent that the Companys filing positions
are challenged, the Companys effective tax rate in a given financial statement period could be
materially affected. The recognition of future tax assets depends on managements assumption that future earnings
will be sufficient to realize the future benefit. No assurance can be given that future earnings
will be sufficient to realize the future benefit. Investments The Companys consolidated balance sheets contain balances related to investments carried at
historical cost. In certain cases, quoted market value has been lower than cost for several years.
In each case management believes that persuasive




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evidence exists to indicate that the financial condition and near term prospects of the issuer are
not impaired and that the Company has the intent and ability to retain its investment in the issuer
until anticipated recovery in market value occurs. Therefore, management believes that the declines
in market value are not other-than-temporary, and no write-down is required. No assurance can be
given that a recovery will occur, and the prospect of a write-down sometime in the future remains
present. At October
31, 2004, the carrying amount of investments held at cost exceeded their market value by $3.9
million. OUTSTANDING SHARE DATA As at year-end, 1,724,929 Class A Voting Shares and 41,014,099 Class B Non-Voting Shares were
issued and outstanding. Class A Voting Shares are convertible at any time into an equivalent number
of Class B Non-Voting Shares. The Class B Non-Voting Shares are convertible into an equivalent
number of Class A Voting Shares in limited circumstances. No changes have occurred to outstanding
share balances since year-end. Additional information relating to the Company, including the Annual Information Form, can be
found on SEDAR at www.sedar.com.